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As state legislators and regulators kick into gear for 2012, here are some recent items of note for disability carriers …. NJ AB 1562 proposal would replace existing language in a current law requiring disclosure of broker commissions in “health insurance policies or contracts” with a more narrow reference to “health benefit plans”, thereby exempting disability policies….MA SB 452 proposal would require a conversion provision in all group health, accident and sickness policies, including STD and LTD .… GA HB 736 wins the award for first 2012 state proposal aiming to ban discretionary clauses in disability policies…. CA Insurance Department just announced the formation of a new unit within the Policy Approval Bureau to focus solely on health insurance policy reviews. The CA DOI also affirmed its commitment to improving its organizational effectiveness. The department is scheduled to meet today with industry representatives regarding ongoing policy form review and approval issues
Tuesday, January 24, 2012
Tuesday, December 20, 2011
MA and RI Regulatory News
A number of disability-related proposals have been languishing on the MA state legislative docket since early 2011. These included prohibitions on Social Security offsets, behavioral health disorder limitations and discretionary clauses in group LTD policies. Now it looks like the MA Joint Committee on Financial Services will hold hearings on these proposals January 24, 2012. For some time, MA has been a state that does not require filing for approval of new group disability products, and has very few regulations for such products. Stay tuned.
On another New England state regulatory note, we want to congratulate Phil Sheridan of the RI Insurance Division for receiving the Arlene Violet Award for Consumer Protection. Phil is one of the truly good people in the insurance regulatory world and a deserving recipient of this award. Way to go Phil!
On another New England state regulatory note, we want to congratulate Phil Sheridan of the RI Insurance Division for receiving the Arlene Violet Award for Consumer Protection. Phil is one of the truly good people in the insurance regulatory world and a deserving recipient of this award. Way to go Phil!
Wednesday, November 23, 2011
Notes From The State Filing Desk
As we head into the holiday season, here are a couple recent news items on the topic of state filings:
CA - The Department of Insurance (CDI) has a hearing scheduled for next week on its proposal to increase filing fees for most product lines. The proposed new fees for group disability filings will more than double the current filing fees for those products. The CDI last month also announced the retirement of the assistant chief counsel who had been overseeing the Policy Approval Bureau for the last several years, and appointed attorney Leslie Tick as the acting chief.
IN - In a letter to the Interstate Compact dated October 27, 2011, Insurance Commissioner Stephen Robertson advised that the Compact’s recently adopted uniform standards for individual disability income products “do not provide sufficient protections to the citizens of Indiana” and informed the Compact that IN planned to “opt-out” of those standards. Under Interstate Compact rules, a state such as IN that has approved the Compact may still “opt-out” of the Compact for specific products. in the event of an “opt-out”, insurers would still be required to submit their product for approval by the state that opted out, instead of deeming that state approved once the compact has approved the product filing.
Interstate Compact – a Compact representative stated at last week’s annual meeting of the National Conference of Insurance Legislators (NCOIL) that the Compact has completed the uniform standards for individual products ands will now begin development of uniform standards for group products. It is anticipated that group life will be the first product on the Compact’s docket.
CA - The Department of Insurance (CDI) has a hearing scheduled for next week on its proposal to increase filing fees for most product lines. The proposed new fees for group disability filings will more than double the current filing fees for those products. The CDI last month also announced the retirement of the assistant chief counsel who had been overseeing the Policy Approval Bureau for the last several years, and appointed attorney Leslie Tick as the acting chief.
IN - In a letter to the Interstate Compact dated October 27, 2011, Insurance Commissioner Stephen Robertson advised that the Compact’s recently adopted uniform standards for individual disability income products “do not provide sufficient protections to the citizens of Indiana” and informed the Compact that IN planned to “opt-out” of those standards. Under Interstate Compact rules, a state such as IN that has approved the Compact may still “opt-out” of the Compact for specific products. in the event of an “opt-out”, insurers would still be required to submit their product for approval by the state that opted out, instead of deeming that state approved once the compact has approved the product filing.
Interstate Compact – a Compact representative stated at last week’s annual meeting of the National Conference of Insurance Legislators (NCOIL) that the Compact has completed the uniform standards for individual products ands will now begin development of uniform standards for group products. It is anticipated that group life will be the first product on the Compact’s docket.
Friday, October 21, 2011
Social Security Administration Announces Cost of Living Increases
For the first time since 2009, Social Security beneficiaries will receive a cost of living adjustment (COLA) increase to their benefit amount. Starting in January 2012, SS benefits will be upped by 3.6%, for an average increase of $39 per month for recipients of SS disability and retirement benefits. The annual COLA provision of Social Security is tied to certain inflation indices, but because inflation ran low in 20010 and 2011, there were no COLA increases for SS beneficiaries in those years.
Group Long Term Disability policies typically reduce (“offset”) the LTD benefit amount payable by the amount of Social Security disability benefits the insured receives. However, LTD policies do not offset for amounts received as a result of COLA increases.
The down side for SS recipients, though, is that Medicare is expected to announce increases in Medicare B premiums shortly. Those premiums are deducted automatically from monthly SS checks.
Group Long Term Disability policies typically reduce (“offset”) the LTD benefit amount payable by the amount of Social Security disability benefits the insured receives. However, LTD policies do not offset for amounts received as a result of COLA increases.
The down side for SS recipients, though, is that Medicare is expected to announce increases in Medicare B premiums shortly. Those premiums are deducted automatically from monthly SS checks.
Thursday, October 6, 2011
NY Pre-Existing Conditions Provisions
The New York Insurance Department sent shock waves through the LTD industry in 2007 with Circular Letter 14, which followed close on the heels of the New York Court of Appeals decision in the “Benesowitz” case. The circular letter advised that pre-existing conditions provisions in LTD policies were not a permanent bar to payment of any benefits for disability caused by a pre-existing condition during the limitation period (i.e. most often the 1st 12 or 24 months of a person’s coverage), but should instead serve to merely delay or “toll” the time until which benefits for that pre-existing condition should be payable. This interpretation was at odds with the prevailing approach to pre-existing conditions provisions in the LTD industry and resulted in many carriers adjusting rates accordingly, passing along to employers the increased cost associated with the NY directive.
Now comes news that the NY state senate has passed S. 2557, a legislative proposal that would require insurers to offer employers the industry standard, pre-Benesowitz version of the pre-ex provision alongside the version that was mandated by Circular Letter 14. We have been watching this bill for some time, but had given it little chance of moving ahead in the legislature. It will be interesting to see if the proposal picks up any steam in the coming weeks.
Now comes news that the NY state senate has passed S. 2557, a legislative proposal that would require insurers to offer employers the industry standard, pre-Benesowitz version of the pre-ex provision alongside the version that was mandated by Circular Letter 14. We have been watching this bill for some time, but had given it little chance of moving ahead in the legislature. It will be interesting to see if the proposal picks up any steam in the coming weeks.
Wednesday, September 14, 2011
Upcoming AICP Meeting in Orlando
The annual meeting of the Association of Insurance Compliance Professionals (AICP) kicks off on September 25th in Orlando at the Peabody Hotel, famous for the ducks that mark the hotel décor in various forms and keynote the hotel’s brand. Thomas Hampton, former commissioner of the DC Insurance Department and now a senior advisor at SNR Denton US, and I will be sharing a panel at the conference for a presentation on “Hot Topics in Disability Income.”
On the state compliance front, a number of state insurance departments issued bulletins in the wake of Hurricane Irene cautioning insurers with regard to premium collection time frames and other policy requirements. Some of this activity pertained to property and casualty insurance matters, but bulletins from CT, NJ, NC and RI pertained to similar matters that arise in the administration of disability policies as well.
On the state compliance front, a number of state insurance departments issued bulletins in the wake of Hurricane Irene cautioning insurers with regard to premium collection time frames and other policy requirements. Some of this activity pertained to property and casualty insurance matters, but bulletins from CT, NJ, NC and RI pertained to similar matters that arise in the administration of disability policies as well.
Thursday, August 11, 2011
8th Circuit Court Decision - Polich v. Prudential Life
Saw an interesting decision from the 8th Circuit Court of Appeals last week. In Polich v. Prudential Life, the circuit court upheld the district court’s ruling that the insurer was justified in denying a group LTD claim because the claimant refused to attend an independent medical exam (IME) the insurer had scheduled as part of its 2nd appeal review and also declined the insurer’s subsequent request that he provide “raw data” from his treating neuropsychologist regarding the condition that was the basis for his claim.
In this instance, the policy language allowed the insurer to deny or terminate a claim if the claimant refuses to be examined as reasonably required by the insurer or does not submit appropriate information requested by the insurer in support of the claim.
The claimant contended the request for the IME and the raw data from his treating physician were unreasonable, since the insurer should have requested all that as part of its prior review of the claim and initial appeal, especially since a medical professional the insurer consulted with on the initial claim had recommended obtaining the raw data.
The circuit court took a different view, holding that the claimant “was not required to pursue a second administrative appeal but when he continued to dispute the insurer’s conclusion and asked again for reconsideration, it surely was reasonable for Prudential to gather additional relevant information as part of its reexamination of the earlier decisions.”
In this instance, the policy language allowed the insurer to deny or terminate a claim if the claimant refuses to be examined as reasonably required by the insurer or does not submit appropriate information requested by the insurer in support of the claim.
The claimant contended the request for the IME and the raw data from his treating physician were unreasonable, since the insurer should have requested all that as part of its prior review of the claim and initial appeal, especially since a medical professional the insurer consulted with on the initial claim had recommended obtaining the raw data.
The circuit court took a different view, holding that the claimant “was not required to pursue a second administrative appeal but when he continued to dispute the insurer’s conclusion and asked again for reconsideration, it surely was reasonable for Prudential to gather additional relevant information as part of its reexamination of the earlier decisions.”
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