Policy Delivery State Requirements

I saw an industry reference tool this week showing state requirements on time frames for delivery of policies.

With no small amount of nostalgia, I was reminded of my early years as a group life and disability benefits analyst, where I was close to the “hand to hand combat” that seemed to break out in haggling with the broker and the employer’s Benefits/HR rep over the wording of provisions in the new policy we were issuing vs. the one they had just terminated. In extreme examples, the process could drag on for months, with multiple iterations of the policy being swapped back and forth in what sometimes came to resemble a hostage exchange.

In fact, the laws of most states require that a policy be delivered “within a reasonable amount of time” after it is issued, “except where a condition required by the insurer has not been met.”

FL requires mail or delivery of a policy “not later than 60 days after the effective date of coverage.”

KY requires the policyholder’s agreement for delivery of the policy in electronic form, a common practice in the group world these days.

MD requires delivery of individual health insurance policies (including long term care) within 60 days of the effective date of the policy.

MN requires that agents deliver a policy, certificate or other evidence of coverage to the insured within 30 working days of the agent’s receipt, unless the insured agrees in writing that the agent may retain it.

NJ requires that agents deliver a policy, certificate or other evidence of coverage to the insured within 10 calendar days of the agent’s receipt, unless the insured agrees in writing that the agent may retain it for a longer period.

In addition, many states have laws requiring long term care policies to be issued within 30 days after approval of the application.

Interstate Compact Soon To Develop Group Disability Product Standards

Having completed development of the Product Standards for individual disability income products, it looks like the Interstate Insurance Product Regulation Commission (IIPRC) will soon begin work to draft and refine the Product Standards for group disability income products. As noted in prior posts here, approvals of product filings submitted to the IIPRC are extended to all the states that belong to the IIPRC for that product. I am looking forward to being part of the group working with IIPRC staff in the effort to develop the group disability standards that will serve as the guide to future state filings of group disability products.

There are presently 39 states that belong to the IIPRC (plus PR and DC), with legislation pending in several other states. Holdouts include AR, AZ, CA, CT, DC, DE, FL, MT, ND, NY and SD.