We are wrapping up our discussion of regulatory compliance in the property and casualty insurance industry. Every state has an agency that monitors insurance companies’ financial and service records. When the results are a little out of whack, the departments — in Florida, it’s the Office of Insurance Regulation — conduct a full examination of the company’s operations.
A recent review of examinations from across the country turned up some interesting results. The most common single issue, discussed in our last post, is policy cancelation and nonrenewal. A few other processes appear on the list (discussed below), but the review found, too, that when the various elements of handling claims are considered together, most compliance problems occur in that area.
After nonrenewal and cancelation, the second most common problem area was using approved rates and forms, and calculating rates appropriately. Depending on the state, insurance companies must either file rates and insurance forms before using them or file them within 30, 60 or 90 days of using them.
Licensing requirements of agents and adjusters came in third. Also on the list was adhering to underwriting and disclosure regulations.
As for claims, a number of different issues appeared on the list: disclosing information during the claim process as required by rule or statute; documenting claim issues correctly; processing claims correctly when the policyholder has suffered a total loss; and, something many of us are familiar with, paying the correct amount for the claim.
Irony has its place on the list, as well. The tenth most common compliance error insurers make is not providing information to examiners.
Source: Sun Sentinel, “Claims-handling among top 10 beefs regulators have with insurers,” Julie Patel, Aug. 19, 2011Share