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Successful LHCA Meeting in Portland, OR

LHCA Portland OR

I am sitting in the Delta Sky Club in Portland, OR after a great LHCA meeting here.  I have had really positive experiences at LHCA meetings and some that are not so great. The meetings tend to be small, which is a great thing if the people there are excited to both ask questions and share information. This was one of those. The meetings that are not as good are the ones where the people in attendance don’t get up to the mic and share. If there are only a couple of people answering all the questions and many questions with minimal input, it is hard to feel great about the time spent. This meeting was the kind that makes it more than worthwhile to be there. In our office we have some new staff that are really talented and excited about the work and I see that we are not alone- the new attendees at this LHCA meeting shared that excitement and passion for the work we do. I am going home upbeat and invigorated to keep doing the work! 

I presented on NY’s Reg 187 as it relates to life insurance.  There were fabulous questions and comments about how the various company’s implementation efforts are going. I got great feedback on the presentation and that is always nice to hear.  The slides are being made available to LHCA attendees and are posted in our Standard of Care Center for members’ reference.  

My next presentation on Reg 187 will be at AICP’s E-day in Springfield, MA on June 12. That one will focus on the intersections and conflicts between Reg 187, Reg 210 and Reg 60.  I am sure that, too, will be a lively discussion and I am really looking forward to it.  I hope to see you there.  Of course, that deck will also be available for members at in the Standard of Care Center.  

- Cailie

106th Life and Health Compliance Association Meeting

Hello from the 106th Life and Health Compliance Association (LHCA) meeting in Alexandria, VA! LHCA has been around since 1979 and hosts two meetings every year. The format of each meeting is like no other conference we attend, based on industry compliance individuals coming together to help each other. Attendees submit questions in advance and sessions involve reading these questions and volunteers standing up and providing insight based on their experience. Regulators are not allowed in the room during the Q&A sessions! It is a true community and provides a lot of useful information about what others are doing, as well as the opportunity to connect with people who genuinely understand what you do. In recent years, LHCA leadership has also added sessions with prepared speakers to discuss particular issues of interest as well as a session presented by regulators in states nearby where the meeting is held. This meeting’s regulator panel includes representatives from VA, MD, DC, and PA. Sessions this meeting include topics on what’s happening in NY and CA, cybersecurity, group extraterritoriality, portability, corporate governance, IIPRC updates, updates to NAIC models, Medicare Supplement, ACA exchanges and supplemental health products, DOL Fiduciary Rules, and QLACs.

I was honored to speak on the panel for the “What’s Happening in NY and CA” session along with Ralph Spaulding of Hinman, Straub and Keith Woodeshick of Dentons. I discussed recent supplemental health objections from NY, including:

  • Specified disease issues based on the definition in Section 52.15(a) of Regulation 62, requiring benefit triggers to be based on diagnosis of a disease only (e.g., major organ transplant benefit is not allowed because it is based on placement on the transplant waiting list, it must instead be a benefit based on diagnosis of major organ failure).
  • Requirement that all accident benefits be available if loss occurs within 90 days of the accident based on Section 52.18(b)(3) of Regulation 62 – this requirement is being applied to all accident benefits, not just AD&D.
  • Hospital confinement indemnity maximum ($240 in metro area, $165 outside metro area) have been recently applied by the Department for increased level of care benefits, such as ICU confinement.

I am looking forward to the remainder of this LHCA meeting tomorrow and more meetings to come!

Spring Conference Season

It has been a week since the IAdCA annual conference in Seattle ended. As always, it was a great event and the board, with Murray Vassar as President, did a great job making it an educational and fun time for everyone. I enjoyed the two sessions that I presented—Market Conduct Issues & Developments and Producer-Generated Advertising. I am looking forward to seeing the participant feedback, hoping attendees found the sessions useful and informative.

In the Producer-Generated Advertising session, one of the main topics of discussion was Kansas Bulletin 2012-1. I had picked the topic several months earlier and it was a welcome addition to have a Bulletin—so directly on point—be issued so close to my presentation on the topic. The bulletin leads with:

Due to a growing problem with advertising practices by third-party marketing entities, the Department issued in January 1991 Bulletin 1991-4 in order to remind insurers authorized to transact life and/or accident and health insurance in Kansas of the applicability of K.A.R. 40-9-100 and K.A.R. 40-9-118 to the marketing activities conducted by third-party entities. Over the last couple of years the Department has experienced a similar increasing trend in the number of complaints regarding life and health insurance advertisements produced and distributed by third-party marketing firms.

Some session attendees were very much aware of the bulletin, while others were not. But there was a lot of interest from both groups. Since I am leading a similar session at the New England Chapter of the AICP Education Day in Springfield MA on May 11, I realized that it would greatly enhance the value to have the Kansas regulators co-present/discuss the issues related to advertising produced and distributed by third-party marketing firms. I am pleased to announce that Ms. Jennifer Sourk, an attorney with the Kansas Insurance Department and Mr. Jason Lapham of the Life Division will both be attending E-day and will be sharing the panel with me. I am quite sure our discussion will be a lively one.

In between IAdCA and E-day is IRES. LHCA, the Life and Health Compliance Association, wrapped up yesterday on an altered schedule because of the religious holidays. E-Reg is coming, too. In the spring and fall, there are so many conferences; it sometimes feels that they are right on top of each other. I always look forward to the opportunity to share information and rekindle connections in person when so much of our interactions are by e-mail and telephone. At the end of each conference season I feel a sense of relief but also a bit of sadness as my work world again pulls inward. To those of you I will see soon, I am looking forward to it! To those of you who will not be at this round, perhaps I will see you during the fall conference season?

Changes to New York’s Market Conduct Profile for 2011 Reporting

On March 2, 2012, the New York Department of Financial Services posted changes for the Market Conduct Profile due later this year, to be completed with data from 2011 on its website. There were only two changes indicated from last year:

  1. Question 7 in the Compliance Section is added. These questions relate to the Company’s AML Program and the specific products that are covered under the AML Program.
  2. In question 12 of the Compliance Section (formerly question 11), the question concerning membership in IMSA has been replaced with question concerning the membership with The Compliance & Ethics Forum for Life Insurers (CEFLI) or other similar organizations.

It is the second one that I found particularly interesting. As we have discussed here previously, the change from IMSA to CEFLI was a very big change and one that eliminated the compliance assessment and certification requirement for membership. I was a qualified independent assessor under IMSA, so I have a bias, but I do not think that membership in an organization that hosts webinars and conferences on general compliance topics is the same as one that mandates an exhaustive in-house assessment process and then has an outside assessor review that work.

Membership in CEFLI is not the same as membership was in IMSA. That is not to say that CEFLI doesn’t provide important information or the opportunity for significant discussions on insurance compliance topics. However it does not reflect the significant commitment to a process of assessment and evaluation of a large number of company policies and procedures the way IMSA membership used to. I am sure that the New York Department of Financial Services knows that and they do indicate that other similar organizations can be included in the response. I am, therefore, hopeful that membership in all the other organizations that support life insurance companies in their compliance efforts (e.g., the Association of Insurance Compliance Professionals, the Insurance Advertising Compliance Association, and the Life and Health Compliance Association) are given similar weight to CEFLI membership.

What made IMSA different was the rigorous assessment process. Without that in CEFLI, there are a number of equivalent organizations to which companies may turn to obtain information and compliance support. In my opinion, all should “count” in their favor on the market conduct profile.

"Insurance Compliance Insight" has Interesting Articles on Compliance Challenges for 2011

I find ProBusiness Publishing LLC, publication [Insurance Compliance Insight] (“ICI”) a great resource for information and I look forward to its weekly arrival in my inbox. Alan Prochoroff, Editor and Publisher, regularly discusses the issues that are most important to those of us who are engaged in insurance compliance. The January 10, 2011 edition of ICI has several articles that, taken together, point out some of the significant challenges facing the insurance industry from a compliance and regulatory perspective in 2011.

The lead story is about changes in commissioners around the country. All together, he identifies five new heads of Insurance Departments: in Minnesota (Michael Rothman), Ohio (New Commissioner is Unknown and Chief Policy Officer resigned one day after Mary Jo Hudson), Oklahoma (John Doak), Texas (Unknown) and Wisconsin (Ted Nickel). In the same article, he discusses our New York Governor’s proposal to combine Banking, Insurance and the Consumer Protection Board into a single regulator of financial services. Of course anytime there is a change of leadership in an insurance department there are changes to the regulatory climate in the state. Sometimes it is subtle and sometimes it is quite obvious, but there are always differences that need to be learned and understood.

Prochoroff’s article “CEFLI Opens for Business - Here’s What You Can Expect” offers some very interesting new insights into CEFLI. As many readers will know, IMSA dissolved late last year and became CEFLI. With the new website and public discussion of the new organization’s mission, the differences between the two organizations are becoming more clear. Also more clear is how CEFLI intends to position itself differently from AICP, LHCA and other compliance organizations: First CEFLI is focusing on Ethics as much as Compliance and the differentiation between the two. CEFLI is also looking to engage C-suite professionals rather than the more front-line compliance professionals who are the life-blood of both AICP and LHCA. CEFLI wants to engage with Chief Compliance Officers and Chief Ethics Officers. I agree that is a different focus than either AICP or LHCA has, but it is not as different from the ACLI’s Legal and Compliance Section and I would expect that group and CEFLI to work closely together. I am very interested to see how CEFLI evolves into its niche.

A later ICI article points to one of the challenges that CCOs and Chief Ethics Officers face. In “Best Practices Collide with Resources” a couple of Life insurance CCOs discuss with Prochoroff the challenges they face in this time of scarce resources but increasing compliance demands. The conclusion is exactly what CEFLI seems to want to address. When the number of rules governing insurance compliance is exploding, it becomes more and more difficult to maintain anything other than an exclusively rules-based system inside an insurer. If “ethics” goes beyond “mere compliance” to a higher, non-rules based system of and culture within a company, if all hands are on deck trying to comply with the multitude of new rules, there is little left over for more esoteric “ethics.” Not that anyone is saying ethics are not important, quite the contrary, just easily squeezed out in an effort to meet increasingly complex compliance demands. ICI discusses three specific examples of these increased demands in 2011: an annual doubling of data calls, the new annuity suitability regulation and Regulation 194 in NY, which mandates that producers disclose their compensation.

All this leads me to be very sure that there are enough issues related to ethics and compliance discussion and work to keep those of us who do it on a daily basis extremely busy.