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Humor: It's all relative!

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This Investment News article’s headline about a regulatory attorney caught my eye:  “Giachetti adds humor to compliance.” At CCS, we talk about bringing humor to compliance all the time, but it isn’t easy. There is laughter in the office, but not too much of it relates to our work. After reading the article, and no offense to Mr. Giachetti, I think humor may be relative. The article refers to the possibility of an alternative universe in which there is a comedy club for “financial regulatory wonks.” I think that is very alternative. I do not think, in this universe, there is such a demand. I am not one to talk: my family tells me I am generally only funny once a month. As the end of the month approaches, there is often discussion about whether I have been funny yet.

That said, there is a specific comment from the article that is very consistent with our experience – though it is not humorous at all: “firms will hire marketing consultants, most of whom haven’t got a clue about the business. And they will spend an exorbitant amount of money on a marketing campaign, but they won’t spend an hour to pay me to review the proposed material to make sure that they can actually use this stuff.” So often, with advertising review, we are brought in too late to avoid the compliance problem – we can only try to minimize the regulatory impact after the fact. Don’t be like that. Pay for the hour up front… it is worth it.

AICP Wrap-Up: Don’t Go Sleepless in Seattle – Hot Topics in Advertising

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Another wonderful AICP National Conference is in the books! Seattle delivered with beautiful weather, and AICP delivered with great content, networking, and compliance insights.

I was honored to be a part of a panel featuring Maureen Perry, Product Reviewer with the Interstate Compact, and Ted Newton, Advertising Review with Mass Mutual. Together we selected what we saw as four overarching issues to be on the lookout for within the world of advertising review for life, health, and annuities.

  1. Consumer Confusion – Who is Offering What?
  2. Carrier Confusion – What is advertising?
  3. Electronic vs. Printed Advertising – Capabilities and Challenges
  4. Consumer Engagement – Plain Language, Disclosure, Engagement

Now, each of these topics could be broken down further and have their own dedicated sessions to really dig into how issues show up and how to tackle them. Still, we were able to discuss lots of ways to manage these hot topics and enjoyed an engaging conversation with the audience.

So how can you address these issues? Here are some of the key takeaways for each category:

  1. The issuing carrier must be made clear and prominent. Some states have more specific requirements about what this means than others, but there should be no question about who is issuing the policy.
  2. The definition of “advertising” is broad, and it’s best to cast a wide net to make sure your company is catching all the ads. If you don’t know if something is considered an ad or not, start with this question, “What is the intent of this flyer/tweet/brochure/tv commercial, etc.” Is it to promote insurance (generally, or specific products), your products, your services, your agents/agencies? If the answer is yes (and there’s a lot of times it’s going to be a yes) – then it’s an ad and needs to be handled as such.
  3. When it comes to electronic vs. printed ads, there are pros and cons on both sides. We talked a lot about space restrictions and how specific you can get in a limited space ad. Rule of thumb – less space, less specific.
  4. Finally, we rounded out our discussion with a big trend, which is the use of “plain language” or “plain English” in both insurance ads and in the contracts, themselves. We expect to see challenges to the traditional language and terminology that’s used in the insurance space for lots of reasons – target markets, selling products direct to consumer are just a couple of the drivers – while the idea of having language that’s familiar and understandable is certainly appealing from a compliance perspective (we want people to clearly understand how it works, what they’re buying). What that looks like while still having protection measures in place against litigation and/or regulatory violations is still very much up in the air. That said, it’s important for compliance professionals and regulators to keep an open mind here and work with others on what makes sense. There’s lots of room at the table to make insurance more accessible and understandable, it just needs open minds and discussions to make sure it stays reasonable and not simplified to the point it creates expectations that aren’t accurate.

If you’re interested in hearing more about these topics, drop us a line with any questions or comments you have or advertising issues you’re struggling with!!

Where are they now?

While at the AICP National Conference in Seattle last week, our booth was bustling with a stream of visitors looking for information and the latest Currin Compliance swag—often with stories of the adventures of their “buddies” collected in previous years. If you haven’t had the pleasure of attending an event where we had an exhibit booth, you’ve missed out on our very popular giveaways. Over the years our items have included the Compliance Hero, the Currin Cow, the happy yellow cell phone holder, the fuzzy bobble-head pen, the talking stress reliever, and the list goes on.

So many of the visitors who stopped by our booth last week made comments about their buddies from previous years, as if giving us an update on what our little friends have been up to since leaving our booth at a conference. It may sound silly now, but the stories were always warm and heartfelt. Whether lined up on their desk at work, on the top of their TV at home, or passed along to children or grandchildren, the buddies seem to make their way around, spreading a little happiness wherever they go.

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During a break at AICP, one of our long-time CCS fans, Ken Bach, shared a story about two bobble-head pens he collected several years ago. Ken took them home and eventually ended up planting them in his yard. He sent a picture of them to his daughter, as in “look what just popped up today” like a tulip or a daffodil. Now Ken regularly sends an updated picture to his daughter as a way to say hello and to put a smile on her face. Amazingly, the pens have survived the Connecticut weather and are not looking too bad! He shared this picture with me, and I agree, the buddies look pretty darn cute.

If you have a story or a picture of one of your CCS buddies that you would like to share, please send them to us via email. We would love to include them in our newsletter as they're sure to put a smile on a face or two!

Another fabulous AICP National Conference

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I began my October 2017 at the 30th Annual AICP National Conference in Seattle, Washington. This conference is always my favorite, and it did not disappoint this year! Some of my favorite parts included:

  • Delicious chicken parm dinner at Palomino, the Italian restaurant across the street from the hotel.
  • Meeting with fellow chapter officers at the chapter officer training and hearing from AICP leadership about their plans for the year.
  • Giving out our CCS cows with “Seattle raincoats,” aka our yellow eye glass cleaners, and meeting so many conference attendees. 
  • Hearing different perspectives on health care reform from commissioners from WA, WI, and ID during the View from the Top, Life Annuity and Health session.
  • The fact that the View from the Top session was held on the top floor of the hotel with amazing views!
  • The beautiful tribute to Rick Guggolz, former AICP Executive Director, who passed away unexpectedly this year.
  • Amazing views of the city from the Puget Sound aboard the Spirit of Seattle ship during the multi-chapter event.
  • Presenting with Hazel Delane of Milliman, Inc. on Combination Products.

This list could go on and on, the AICP Conference is always jam packed! Now that I have returned to the east coast, I also have a newfound appreciation for our Executive VP and COO, Machael Heise, who travels coast-to-coast every month. Jet lag is for real! As is the AICP National Conference. Next year’s conference is scheduled for September 23-26 in Nashville, Tennessee, mark it on your calendar!

Symposium agenda update

Our one-day Currin Insurance Compliance Symposium on November 3rd in Hartford, CT is fast approaching. There's still time to register but space is limited.

When we created the original agenda for our upcoming symposium on NY issues, Regulation 210 was proposed, but not yet finalized. Now that we have a final regulation, effective March 19, 2018, we are expanding the amount of time we will spend on this major change in NY. We hope you'll join us in Hartford for two full sessions (3 hours) talking about non-guaranteed elements in NY and the requirements of Regulation 210.

This is a fantastic opportunity to deepen your understanding of these new mandates and become a resource for your company as you move toward the effective date.

AGENDA

8:30-9:00: Gather, welcome and introductions

9:00-10:15: Non-Guaranteed Elements in NY before Regulation 210

10:15-10:30: BREAK

10:30-12:00: Regulation 210: a deep dive

12:00-1:30: LUNCH, informal discussions and networking

1:30-2:30: Hot topics and common objections on annuities

2:30-2:45: BREAK

2:45-3:45: Hot topics and common objections on life insurance

3:45-5:00: Individual 15 minute consultations with Cailie (scheduled in advance)

White Paper: Rebates, Gifts, and Inducements

Most states prohibit rebates and have made many inducements illegal. That is paying, allowing, giving, or offering something that is not specified in the contract as a way to induce the purchase of an insurance contract. When something is considered a rebate or inducement varies from state to state. Some states provide additional guidance about what the statutory language means, but not all states do. For many, the law is the only guidance.

There are two states that are the big exceptions to the rule when it comes to rebating. Florida and California. These two states do not prohibit rebating, although there are differences between them.

There are some innovative programs under discussion and in the early stages of implementation that may test some of these long-standing rules and norms of the industry. This is likely to result in re-thinking some of these old standards. If a new idea for a program lands on your desk, we've provided some analytical tools in this white paper that may be helpful to you as you grapple to determine whether such a program fits within the regulatory framework. The biggest challenge is the lack of specific guidance in many states.

Download our free white paper to learn more.

Regulation 210 final and effective March 19, 2018

With an announcement on its website on September 19, 2017, DFS posted the final Regulation 210. The headline of the release is: “DFS Issues Final Regulation to Protect New Yorkers from Unjustified Life Insurance Premium Increases.” From the website:

The final regulation provides DFS the ability to review increases prior to implementation and ensure compliance with law, by requiring life insurers to notify DFS at least 120 days prior to an adverse change in non-guaranteed elements of an in-force life insurance policy. Annuity issuers must now file annually with DFS to inform the Department of any adverse changes to annuity policies made in the prior year. New York Insurance Law prohibits life insurers from changing non-guaranteed elements in a discriminatory way for members of the same class of policyholders. Only certain enumerated factors, which do not include profit, can be considered when seeking to change non-guaranteed elements. 

Watch this space for more discussion of the final regulation and don’t miss the in-depth session we have scheduled at our November 3, 2017 symposium in Hartford, CT. March 19 will be here before we know it so implementation efforts must begin quickly. Make sure you are on the right track in November!

 
 

Guidance from NY: Filing 2017 CSO Mortality Table

As you probably know by now, on May 2, 2017, NY released guidance on the filing requirements for insurers and fraternal benefit societies wanting to use the 2017 CSO mortality table. The Department began accepting submissions of policy forms referencing the 2017 CSO Table on May 17th, 2017. It appears that adoption is, not surprisingly, somewhat slow, so we thought it might make sense to provide a bit of a reminder of these rules:

Below is a summary of when the 2017 CSO table can and must be used for reserve and nonforfeiture calculations as well as what to do for previously approved forms that use the 2001 CSO Table. Note that in addition to the information listed here, policy form submissions must comply with all usual and substantive requirements set forth in the product outline applicable to the product type being submitted.

Key Dates for Reserve and Nonforfeiture Calculations

  • May use for reserve and nonforfeiture calculations for policies issued on or after 1/1/2017
  • Must use for policies issued on or after 1/1/2020

Previously Approved Form: References 2001 CSO Table

A change in the mortality basis - that is, a change in the underlying assumptions on consumer life expectancies that is used to base policy costs and project payouts - to the 2017 CSO Table cannot be accomplished without filing a new version of the policy form for approval.

  • The new version of the policy form will need a unique form number.
  • The previously approved forms that do not themselves reference the table (e.g., application) may be used with the new version of the policy form without needing to re-file. Only those forms that themselves reference the mortality table must be re-filed.
    • The filing description should identify previously approved forms that will be used with the policy form submitted for approval. For example, the application referenced in the bullet above.

Previously Approved Form: Does Not Reference 2001 CSO Table

For example, a term life insurance with no cash value and company wishes to change the mortality basis, the company must:

  • Send a letter - NOTE: it’s our understanding that this means either a physical letter or entering a letter into the Filing Description in SERFF - and supporting material to the Dept. stating intentions to revise the table and, if applicable, indicate whether or not change is retroactive for all policies issued in 2017.
    • When submitting via SERFF, select the “Other” filing mode and enter an Explanation of “Election of 2017 CSO.”
    • In SERFF, use the Filing Description field to enter the letter. If you also include an actual letter be sure to check and double check that the filing description field and the uploaded document are consistent since version control can become an issue if choosing to repeat the information in multiple places.
  • Note that the reserve and nonforfeiture basis must be the same.
  • A certification of nonforfeiture compliance must be included with the election.
  • If the 2001 CSO Mortality Table was only mentioned in the actuarial memo accompanying the original policy form filing, then an updated actuarial memo must accompany the election submission.
  • The election must be received by 12/31/17 in order to elect a retroactive change in the mortality basis for year-end 2017.
  • The 2017 CSO Table may only be used for policies issued on or after 1/1/17 and then only if the company files an actuarial opinion in the annual statement based on asset adequacy analysis as specified in 95.8 of Reg. 126. See 100.5(d) of Reg. 179 for more details.

Send election and supporting materials to William Carmello, Chief Actuary via SERFF or the address below.

  • If using SERFF, the “Other” filing mode should be selected with an Explanation of “Election of 2017 CSO.”
  • Address for Submissions not via SERFF:

New York State Department of Financial Services
Life Bureau – 19th Floor
One Commerce Plaza
Albany, New York 12557

Congratulations to . . .

. . . our very own Sarah Huffer and Machael Heise for being elected as AICP leaders for 2017-2018.

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Sarah will continue as treasurer for the New England Chapter and Machael is the newly elected treasurer for the Western Chapter.

We are very proud to have these two woman on our own CCS team as well as representing AICP in their elected positions.

Same-Same, but Different . . . Referrals vs. Rebate

Have you ever been to a website that offers you a deal - a coupon code, a gift card - just for signing up for their email list? Or maybe you’ve made a purchase from your favorite online retailer, and as a thank you, you get a discount on your next purchase, as well as a coupon to send to your BFF? Everyone likes a little freebie and to feel appreciated and rewarding customers is one of the ways brands build loyalty. In exchange for a small gift, the brand not only has happy customers, they get free PR as well. Everybody wins!

Well what about in the insurance space? After all, the industry knows that it must continue to modernize in order to stay competitive as consumer shopping trends shift. Whether you’re offering a thank you in-person or online, it’s worth looking into the differences between a referral and a rebate, and what some potential compliance issues are for both.

Definitions

Let’s start with some general definitions. Keep in mind I’m using my own broad descriptions here, since each state's specific language may vary. TIP: If you’re looking for state specific information, a great starting place is the state’s unfair trade practices, as well as any compensation laws.

Referral: an act of referring someone or something for consultation, review, or further action

Rebate: returning a portion of the premium or the agent’s/broker’s commission on the premium to the insured, or other inducements to place business

Potential Issues

By “potential issues” I mean “practices that may end up causing compliance problems for agents, marketing organizations, agencies, and/or insurers, either from regulators, or possibly in the form of litigation.” While state specifics vary on what is, or isn’t allowed, I want to lay out broad categories under each practice (referrals and rebates) that need compliance attention. Note that rebates and referrals are not the same thing - they’re different! However, they can be related to one another in that you may be considering a referral program that also provides an inducement to the individual who is being referred. Additionally, while state rules regarding referrals often live in the compensation laws, they typically reference a state’s trade practices laws as well, as it’s usually a requirement that the referral fee doesn’t violate a state’s trade practice laws.

First up, let’s talk a little about a referral program; A program in which you compensate existing clients who refer a prospect to you. For this discussion, let’s say a referral means a policyholder provides their insurance agent with a list of three people they think would be a good fit for the insurance services. For many states, compensating an unlicensed individual for a referral is ok, as long as the compensation is a fixed dollar amount and the compensation is not contingent upon the sale of insurance.

The two things to keep in mind when developing a client referral program are content and conditions. Here, I’m focusing specifically on the content of the discussions the referrer is having with the referee and the conditions for obtaining the fee.

I’ll touch on content first. In order to be compensated for the sale, solicitation, and negotiation of insurance, an individual must be licensed. Like I stated above, many states do allow the compensation of an unlicensed person as long as the compensation is a fixed dollar amount and is not dependent upon the purchase of insurance. If the referral program you want to use compensates policyholders for a list of names, the policyholders are not acting as unlicensed agents. Where I believe things become grey, and where I think licensing may become an issue, is when a program functions more like a lead generation service.

For example, if the program is designed so that a policyholder can advertise to the masses, say through their social media accounts or a blog, or by distributing promotional content to their communities, then it may be viewed that a line has been crossed. Depending on what the content of those messages say and what the compensation is, it may no longer be viewed as a simple refer a friend program.

The other issue is if there is a condition that in order to get the referral fee, there must be the purchase of an insurance policy. Most states prohibit requiring a purchase to be made in order to compensate for referrals, so having the actual purchase be a condition of receiving compensation is a violation in those states.

Our recommendation is, if you’re considering using a referral program that offers compensation, do not require business to be placed in order for someone to earn the fee, ensure that the fee doesn’t violate state trade practice laws, and if you’re going to design a program where your policyholders are marketing to the masses on your behalf, understand that you’re taking on more risk than if your program simply is asking policyholders for a list of names.

If you’re using policyholders as a more robust lead generation system, carefully review any messaging you provide so you can confidently explain how those individuals are not participating in the sale, solicitation, and negotiation of insurance. Also consider how the policyholder is being compensated. It’s one thing if they receive a free tchotchke every time a referral meets with an agent, if they start receiving $30 a head, and they are pushing out messaging to 1000 of their closest Facebook friends and family, it may be viewed by regulators as a violation.

How about rebates? Unlike in the case or referral fees, in most states, rebates and inducements are illegal. What exactly constitutes as a rebate or an inducement, and at what point any given threshold is crossed, is where we find quite a bit of variety from state to state. For the answer to that question, you can purchase our 50 State Gifting and Rebating Survey here. To give you an idea of the differences and limits, check out this information provided by NY, as well as this one by Florida. For this blog post, the big takeaway I want you to get, is that there are often many more restrictions on what types of things can be offered, and what the value of those items can be. In general, cash or cash equivalents, even for small amounts of money, can be a violation of a state’s laws.

Our recommendation is, if you’re going to offer anything to prospects or clients that isn’t specifically stated in the contract, review your state unfair trade practice laws to ensure you’re not offering an illegal inducement or rebate. If it’s still unclear if your offer is a violation or not, ask yourself this question, “Is this offer something that would induce someone to enter into an insurance contract?” This is obviously a judgement call, but this is the type of questioning a regulator would likely apply when evaluating an inducement. You should be prepared to explain why what you’re offering isn’t impacting someone’s decision to purchase insurance.

As you work to reward customers and spread awareness of your products and company, be sure to review your plans with a fine-toothed comb, as compliance issues can easily get tangled together, and result in unexpected and multiple types of compliance - and potentially litigation - exposure.

Searching for Lost Policies

Lost Policies

I believe I spend way too much time searching for things: my wallet, my reading glasses, an overdue library book, my 14-year-old’s soccer knee pads, my 16-year-old’s mouth guard for lacrosse, and the like. But it appears that the NY Department of Financial Services (DFS) thinks life insurers doing business in the state should be devoting more time and more resources to searching for one thing: lost insurance policies.

Like many states, DFS is working on a project that will coordinate its Lost Policy Finder Service with the NAIC’s Life Insurance Policy Locator Service. While insurers currently volunteer to participate in NAIC’s service, an insurer’s participation in the NY service is not voluntary, it’s mandatory.

Under the current system, when a request comes into NY’s Lost Policy Finder, NY domestics are required to search their electronic records of all policies, no matter the state it was issued in. Insurers domiciled outside of NY are required to search only those policies, contracts and certificates issued in NY. Once the coordination with the NAIC is complete, there could be a significant increase in NY requests, because all requests going to the NAIC service will come to NY also.

James Regalbuto, NY’s deputy superintendent for life insurance, said at a recent LICONY forum that the NAIC has done more promotion of its locator service to the general public and it seems that more people know about the NAIC service than the NY service. Because participation by insurers in NY’s service is compulsory, he expects that more requests will result in the identification of a greater number of lost policies.

It’s not yet clear how often NAIC-received requests will be pushed out to insurers licensed in NY, but it will probably be done daily or weekly. Insurers have 30 days to respond if they maintain their own records, or 45 days if they contract with a third-party to maintain records. If an insurer participates in the NAIC service, it does not have to search again when NY sends the NAIC-received requests.

Regalbuto said the market conduct fines issued by DFS have been driven up lately because of companies’ non-compliance with §3240, NY’s Unclaimed Benefits statute, which includes law relating to the Lost Policy Finder.

There is still an outstanding question of how NY wants to handle all of the requests that have come into the NAIC over the past year or so, since the NAIC’s service was established, Regalbuto indicated in response to a specific question that he is not willing to ignore all of the previous requests, but has not yet decided how insurers will be required to address them.

Another upcoming change to coordinate with the NAIC service is that NY will no longer require a certified copy of the death certificate to accompany a request, as the NAIC does not require one. As I was writing this article, I decided to submit a policy locator request on the NAIC website for my father, who passed away in March last year. I would not have done so if I’d been required to submit a death certificate. 

New York Paid Family Leave Update

New York Paid Family Leave Update

I have started to see things creep up in my personal facebook feed about paid family leave. There has been local news coverage this month about the fact that employers can start taking deductions from employee’s wages to cover the premiums. The rate was set by NY Department of Financial Services (DFS) and maxes out at $1.64 per week, which is intended to fully fund the coverage. 

Meanwhile, insurers are still waiting to submit form filings to provide for this coverage. At the LICONY and DFS seminar that was held on July 11, representatives from the Health Bureau stated that they have put ample resources into drafting model language for the program, which they will require to be used. The language is drafted to be a rider that is added to an existing Disability Benefits Law (DBL) policy. The language has also been pre-approved by the Worker’s Compensation Board, which means insurers will only need to submit filings to DFS. At the time of publication, the model language has still not been released, but it was promised to be available soon. Department staff also promised that there will be a checklist that includes detailed filing instructions to aid in these submissions. Given the circumstances, I am hopeful that there will be a very quick turnaround on these filings. 

I am most interested to find out what happens January 1, 2019 after the first year of the program is complete. The rate regulation requires detailed reporting from all insurers and a complete levelling of all experience, categorized by group size. Will it be a loss? Are the premiums adequate?

Technology is The Topic at ACLI Legal and Compliance Meeting

Coeur D’Alene, Idaho

As I traveled back from the beautiful city of Coeur D’Alene, Idaho after the ACLI Legal and Compliance Meeting, I was struck by how the topics have changed recently. At this year’s conference, the DOL rule was certainly present as a topic, but not nearly so much in the foreground as it has been in recent years. Technology, on the other hand, was at least part of every session.

Cybersecurity not only had its own session: it also crept into almost all the others in one way or another. Innovation was equally prominent, as the need to innovate made its way into most conversations. Frustrations with the challenges of regulatory efforts to both allow and restrict innovation were also on many lips.

There were no clear solutions to the challenges posed by these issues, but it was clear that internal legal and compliance efforts, as well as regulatory resources, are being pulled and strained by both. It is an interesting and demanding time. So many more meetings and discussions are to be had as we, collectively as an industry, begin to do more than merely identify the issue, but we continue to dig in and do the work.

Revised Reg 210: Where are we now?

NYDFS Reg 210

On May 24, 2017, DFS posted the revised second version of Regulation 210, Life Insurance and Annuity Non-Guaranteed Elements. The shorter comment period on this version just ended on June 23, 2017.

Some of the significant changes include:

Without question, the most surprising aspect of the latest proposal is that it still applies to annuity contracts, though with some changes in the applicable mandates. In the assessment of public comment, DFS stated:

The Department acknowledges that the problems uncovered over the years have primarily, but not exclusively, involved life insurance and has substantially revised the proposed rules for annuities to limit reporting on annuities to an annual reporting to the Department of adverse changes in non-guaranteed elements that took place in the prior year, as well as the 60-day notice to policyholders of adverse changes in non-guaranteed elements. The Department believes that this reporting is necessary to protect annuitants’ interest.

Another type of product that many thought should be excluded from Reg 210 is group products, especially when they are not subject to individual standards. Here DFS offered:

The Department narrowed the scope of the regulation with respect to group business but some groups not subject to individual rules are still subject to the regulation if the Department continues to have concerns about fair treatment of the participants. For example, the regulation would still be applicable to certain group annuities subject to ERISA that are not subject to individual standards in which case the insurer would be required to report annually on adverse changes to non-guaranteed elements.

One of the most controversial aspects of this regulation is that for the first time, and with unclear legal authority, DFS regulates insurer profit margins. Changes sought by commenters on the first public draft of the regulation were not made:

The Department believes in order to ensure that changes to non-guaranteed elements are based solely on changes in expected future experience, the profit margin must be fixed. Otherwise, if an insurer may change the profit margin, the various sections of the law requiring reasonable assumptions and equitable treatment of policyholders could easily be violated and bait and switch pricing could occur.

On a related issue – rate regulation – the Department notes that several commenters asserted that advance filing of changes in non-guaranteed elements is “tantamount to rate regulation.” In its assessment, DFS did not specifically address the rate regulation assertion, and instead responded as follows: 

The Department believes prior approval is not necessary to ensure fair treatment of policyholders but advance notice of adverse changes is important because it helps avoid situations where improper changes in non-guaranteed elements results in fines and the need for the insurer to make restitution to harmed policyholders.

This suggests that advance filing may be rate regulation, but it is a better alternative, in the Department’s thinking, than waiting and only seeing those situations that the Department may find after the fact and where there has been a violation of law. It may be that the Department prefers that method of enforcement, but it remains an open issue if, without rate regulation authority, they have that option open to them. I believe we will hear more about this in the future.

A change that reduces filings is the removal of the requirement that board criteria be filed within 30 days of adoption. As the second public version reads the board criteria would fall in §48.4(f) as a record required by the regulation, and so it would need to be provided to the Superintendent upon request.

Another major positive change in this version is that DFS removed the policy form requirements. Several commenters on the first published draft indicated that the result of that version’s mandates would be overly burdensome. This change is very welcome and will make implementation easier than it would have if policy forms had to be filed.

The effective date of the regulation is now set to be 180 days after publication of the final rule. As indicated above, the second comment period ended on June 23rd, so now we wait to see if there will be any additional changes. It always seems likely that changes will be made the second time around – especially when there was active participation in the first. However, perhaps new statements of previous concerns will be persuasive this time around. It is always possible that comments will be raised on the revised language, making them essentially new comments. We will have to see. 

Be sure to take a look at our November 3rd symposium in Hartford, CT; Regulation 210 and NY Issues - A look at solutions and new ways to approach your filings! Space is limited. Register today and get the early bird price.

Inciting Smiles

I don’t know about you, but I find that after I have been looking at the same insurance policy forms for the past several hours, it takes very little to amuse me.

The other day I was humming along, reviewing application forms for individual corporate-owned life insurance, when I saw in the COLI checklist a reference to § 4216, which is one of the most important sections of the NY Insurance Law for the review of group life insurance policies, but one I do not have printed at my desk.

So, acting almost on auto-pilot, I dutifully logged in to Westlaw, entered my search terms of 4216 and New York, hit enter, waited for the results (which always, irritatingly, defaults to case law), clicked on Statutes, waited again, then automatically moved my mouse toward the first hit: Section 4216.

But then, I really smiled. Not quite an LOL, but close.

This statute that came up first on the list was from the Public Health Law, not the Insurance Law.

It read: § 4216 -- Body Stealing.

Of course I had to read the statute, which, fortunately, was only one paragraph. It turns out that removing any part of a dead body without having the authority to do so, from graveyards or vaults or really anywhere, for the purpose of selling it, or dissecting it, or because you’re feeling malicious or wanton, is a class D felony in New York.

As I said, some days it doesn’t take much.

If you’re wondering, the correct cite is §4216 -- Group life insurance; premium requirements; notice of conversion; filing of compensation. It’s 14 pages long. No body parts or felonies are mentioned. I noted that the employee has to be notified if the employer will be the beneficiary of the policy he’s applying for. But now I also know that even if the employee dies, and even if the employer gets the death benefit, the employer is still under no circumstances allowed to steal his body parts.