The New York State Insurance Department posted an [interim report] of the Insurance Filings Modernization Initiative on April 21. The specific recommendations this report discusses that are particularly relevant to life insurers are: the updated [product outlines]; the use of SERFF for post-approval reviews; significant contact with the industry (See our www.currincompliance.com for information on the upcoming Life and Health Compliance Association meeting at which representatives of both the Life Bureau and Health Bureaus will be speaking); and the use of sanctions against companies that do not use the certified process appropriately.
This last item is one that virtually all companies that use the certified process fear. However, it was one of the recommendations of the Life Committee, because the only way to keep the process working well is to make sure that the requirements for certified filings are clear and then to enforce those requirements consistently. One of the constant tensions with the process is that companies want two things that are naturally in conflict with one another. Fast approvals and assistance with their own filings when there are deficiencies rather than having the filing closed. Clearly, the more time spent providing assistance, the less time there is for processing approvals.
Updated guidance on standards and mandates is essential for giving companies the information necessary to make high quality filings. The report references updates to the outlines that are in progress and those are clearly needed for companies to use the certified process confidently. My personal opinion on the usefulness of the outlines, is that prompt updates to reflect current Department positions is more important for users of the certified process than is a full debate over the positions themselves. Personally, I would like to see the outlines posted quickly and updated often, followed by a different process - a post-posting process - to discuss and debate the merits of any controversial positions taken in them.
As indicated above, this interim report reminds us that one conclusion of the Life Committee was that when companies have a pattern of using the certified process inappropriately. they should be precluded from using it. This interim report states: “the Department temporarily suspended an insurer from using an expedited filing process because the insurer used the expedited process to submit a filing despite a directive not to do so.”
I expect there will be more such suspensions in the future.