Readability

The NAIC Spring meeting scheduled for late March in Denver will include a public hearing to focus on readability and plain language of insurance contracts and other consumer materials distributed by insurance companies, across all lines of business. I have not seen an agenda for the hearing. Maybe they intend to focus on some of the more exotic contracts that came to prominence in the financial meltdown (credit default swaps etc). But I do think there is a growing regulatory sense that insurers’ policies need to do more than just achieve minimum “reading ease” (Flesch) test scores or re-package the same wording and provisions into a Q and A format. Maybe we are seeing the start of another regulatory cycle of legislative action to make insurance policies more understandable to lay person purchasers, similar to the movement that swept the insurance industry about a generation ago. Such regulatory efforts would no doubt have substantial impacts on disability policy language drafting and product development efforts in general.