WALTHAM, Mass.--(EON: Enhanced Online News)--Today Wolters Kluwer Financial Services unveiled its annual top 10 lists of criticisms found on U.S. insurance market conduct exams, which serve as checklists for insurers in helping them minimize compliance risk exposure.
“Strong regulatory change management processes and frequent self-audits are extremely effective in helping stay on top of these changes.”
The company’s regulatory experts carefully review and analyze results from the previous year’s state market conduct exams to identify areas with the most criticisms in the property and casualty and life and health markets. Now in its ninth year, the data from the company’s research show that a number of key issues continue to dominate the lists of exam criticisms by insurance departments across the U.S. These include claims-handling, licensing and underwriting issues.
“The regulatory landscape is getting more complex as industry requirements, laws and regulations change constantly under the direction of government and industry oversight, making it extremely challenging to embed regulatory requirements into claims, underwriting and distribution processes,” said Kathy Donovan, senior compliance counsel, Insurance, at Wolters Kluwer Financial Services. “Strong regulatory change management processes and frequent self-audits are extremely effective in helping stay on top of these changes.”
In addition to those criticisms on the “top 10” lists, insurers were also frequently criticized for the manner in which they maintained complaint handling, their failure to provide requested data to market conduct examiners, as well as the failure to conduct business in their “own name.” Companies can use this “criticism” information in evaluating their own regulatory compliance controls to help ensure that they are adequate and error-free.
Wolters Kluwer Financial Services’ industry research shows that the top 10 most common market conduct compliance criticisms for property and casualty insurance are:
1. Failure to acknowledge, to pay, or deny claims within specified time frames
2. Using unapproved/unfiled forms and rates
3. Failure to provide required compliant disclosures in claims processing
4. Improper documentation of underwriting files
5. Failure to maintain claims documentation
6. Failure to process/pay total loss claims properly
7. Failure to provide required compliant disclosures in underwriting processing
8. Failure to adhere to producer appointment, termination and/or licensing requirements and adjuster licensing requirements
9. Failure to issue compliant adverse action underwriting notices
10. Failure to apply rates, rules and guidelines correctly
The top 10 most common criticisms for life and health insurance are:
1. Failure to use compliant policy forms and/or maintain compliant plans
2. Failure to properly acknowledge, pay, investigate, or deny claims within specified time frames
3. Failure to use licensed and/or appointed producers and to provide proper notification of producer appointments or terminations, including maintenance of producer registers
4. Failure to provide required claims and underwriting disclosures including those concerning coverage issues, policy replacements and fraud warnings
5. Failure to issue correct Explanation of Benefits
6. Failure to pay claims properly in accordance with policy provisions
7. Improper documentation of underwriting and claim files
8. Failure to adhere to required claims appeal processes including timeframes and disclosures
9. Failure to adhere to advertising requirements
10. Noncompliant claim denials
For more information about how Wolters Kluwer Financial Services can help with insurance regulatory compliance and risk management, visit https://insurance.wolterskluwerfs.com.
About Wolters Kluwer Financial Services
Wolters Kluwer Financial Services provides more than 15,000 customers worldwide with risk management, compliance, finance and audit solutions that help them successfully navigate regulatory complexity, optimize risk and financial performance, and manage data to support critical decisions. With more than 30 offices in 20 countries, our prominent brands include: Summix®, FRSGlobal, FinArch, ARC Logics®, TeamMate®, Bankers Systems, VMP® Mortgage Solutions, AppOne®, GainsKeeper®, Capital Changes, NILS®, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services is part of Wolters Kluwer, a leading global information services and solutions provider with annual revenues of (2012) €3.6 billion ($4.6 billion) and approximately 19,000 employees worldwide.