In a recent letter to the US Treasury (FIO), the National Governors Association (NGA) has declared their support of the current model of state-run insurance regulations. Their letter comes in response to a proposed regulatory change that FIO recommended earlier this year. The NGA worries this will institute a dual regulatory process and has stated they “stand ready to defend and protect the state system.”Read More
The Director of the Federal Insurance Office (FIO), Michael McRaith, spoke before the House Financial Services Committee's Insurance and Housing Subcommittee on Thursday, once again asserting that the FIO’s long-awaited report on insurance regulatory modernization would be issued “soon.” McRaith said that he hoped to have it completed this summer. Just the day before, on June 12th, the FIO released its first annual report to Congress, required as part of the Dodd-Frank Act, to report on the state of the U.S. insurance industry. The report included an industry financial overview, legal and regulatory developments, and current issues and emerging trends.Read More
One of the most common challenges that compliance professionals face is how to justify rates for a new program or coverage to the state insurance department’s satisfaction.Read More
UPDATE: The Washington Office of the Insurance Commissioner (OIC) held a hearing on September 25, 2012, for comments on its proposed rate stability rules. The only difference between these rules and the version proposed in April is the removal of the policyholder disclosure requirement by insurers. Due to the continued concerns expressed by insurers that this requirement would be unduly burdensome even after a template notice was provided for insurers to use, the OIC decided to remove the disclosure rules altogether.Read More
For those of you who follow the goings-on (or lack thereof) at the US Capitol, one of the least-reported-on-but-crucial-to-our-industry lobbying efforts is the push for increased federal regulation of insurance.
In 1945, Congress expressly acknowledged that regulation of “the business of insurance” was best left to the individual states. Since that time, the argument is regularly made that state regulation is “inefficient, costly and burdensome.” It is asserted that the 50+ individual jurisdictions a nationwide carrier has to work with represent a “patchwork” of rules and standards - an agonizingly difficult and redundant regulatory system, one that adds costs and denies consumers the creativity of the free market to quickly develop and market innovative insurance products.Read More
The Washington Office of the Insurance Commissioner (OIC) canceled the April 24, 2012, hearing on its proposed rate stability rules. In its place, the OIC held a stakeholder meeting where a draft revision to the proposed rules was introduced.
According to the OIC, it received several comments in the weeks leading up to the scheduled rule hearing which caused it to reconsider the originally proposed policyholder disclosure requirements in the rule and make revisions. Some insurers stated that requiring them to produce a different, custom form for each policyholder would be unduly burdensome. Therefore, the OIC amended the disclosure section in the rule to now include a template notice that insurers may provide to each policyholder affected by premium capping rules.Read More
Rate stability rules, also known as “rate capping” or “transition rating” rules, have become increasingly popular in recent years primarily due to advanced predictive modeling methods. When an insurer implements revised rating plans that utilize the output from those sophisticated methods, it can produce significant premium changes for its book of business. Similar disruptions may also occur when a book of business is moved from one insurer to another. To mitigate the impact on policyholders, insurers often propose rating rules or formulas that reduce the magnitude of the premium changes for certain policyholders.Read More