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Accelerated Death Benefits in CA

 AICP Western Chapter E-Day in San Francisco

During the AICP Western Chapter E-Day held in San Francisco on May 3rd, we had a session on accelerated death benefits in CA presented by Leslie Tick, Emily Smith, and Ryan Delatorre of the CDI, and it was a VERY informative! The session was titled 10295 Accelerated Death Benefits: How to Get Your 10295 Filing to Sail Through the Policy Approval Process.

While I won’t provide all the information that was shared, I have included here what might be helpful to those contemplating a 10295 filing or waiting for one to be reviewed.

As the name of the session implies, the focus of the session was accelerated death benefits for chronic illness under 10295.

Before I jump into the tips shared in the presentation, there was discussion regarding the current review time being experienced by all with a filing in the queue. The following is a summary of that discussion:

There are a limited number of reviewers for 10295 benefits who are also responsible for LTC review, and their queue currently has a backlog. While they are making good progress getting caught up, there is an understandable delay in what would be considered the normal turn-around time. Without the backlog, the goal to have the first set of reviewer comments out to the company 4 months after submission. Progress is being made on the backlog, but filings from 2017 are still being reviewed, and they couldn’t say when the review of 2018 submissions would begin. It was clear to me that they understand the concerns of the carriers with filings still in the queue, and this is where their presentation began.

The following is a summary of the tips shared by the CDI for those who are planning on submitting a 10295 filing. You will see that the theme is focused on ways to make your filing cleaner, resulting in shorter review time, and hopefully quicker approvals for all:

  1. Review 10295 in its entirety to ensure that your benefit complies (easy enough, but many of the objections written are a result of this oversight).
  2. DO NOT submit the Compact version in CA. CA law is different, resulting in a CA version of the form. (Apparently this happens quite often as well.)
  3. The compulsory provisions set forth in 10271(c) should also be included.
  4. Do not require that a rider be inforce for a claim to be submitted. (Your general exclusions section should be reviewed to ensure there are no conflicts with 10295.16.)
  5. Explain the process for certification of chronic illness as outlined in 10295(b)(2)(B)(ii)(I)-(IV).
  6. Include lump sum and periodic payment options 10295.1(a)(3).
  7. Allow multiple accelerations on the same and different qualifying events 10295.1(b)(2) & (3).
  8. Include an explanation and a numeric illustration of how the insured will pay for the acceleration per 10295.1(e). (This can be included in the rider or in an attachment to the rider.)
  9. Identify the specific forms the rider will be used with (policies, applications, notices). Do not include a statement that it will be used with forms in the future.
  10. Section headings, page numbers, and tables of contents are very helpful to your reviewer.

If your filing is in the queue, and after reviewing this list, you feel that some changes to your forms are necessary, here is what you should do:

  1. Send a note to your assigned reviewer to ask the status of your review. Basically, if they haven’t started yet, you can make changes to your filing without losing your place in line. Include a clear explanation of why you made the changes. For example: “Rider form replaced prior to review to comply with payment options as described in 10295.1.”
  2. If you had a previously approved form and now you are submitting an updated version with few changes, let the reviewer know by describing the changes in your filing description and include a redline comparison to the previously approved form.
  3. If you are responding to objections, always include redlines. Be sure you are not making changes that are not explained and that you have included the correct redlined version. The redlines seem to be a place where some carriers can be a bit sloppy, causing delays in review.

If you have serious deadlines, you can include them in your filing description along with an explanation. Filings are reviewed in the order they are received, but an understanding of the carrier’s intentions is helpful to your reviewer.

If you have questions or need assistance with your filing, please let us know; as always we are happy to help! Call (518) 692-2494 or send us an email.