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Concurrent Breakouts…Hot topics drill-down and a local perspective
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Attendees of the Life & Health breakout session participate in discussing issues of importance to consumers, insurers and regulators. |
A traditional, and productive, feature of every ICAE Exchange has been the breakout sessions where insurers and regulators discuss hot topics and best practices developed to address the topics. Coming from the panel presentation where hot topics were reviewed from the association perspective, the breakouts gave participants the opportunity to drill down with a product focus and a local perspective. Once again, the concurrent breakouts proved that the industry knowledge gathered by ICAE is truly phenomenal.
The process
The facilitated session for the P & C sector attracted approximately 45 insurers and regulators and began with a roll call of hot topics from participants. After generating an extensive list, the participants voted on the topics they were most concerned with (the number behind the topic indicates the vote tally for that subject):
- Credit scoring for insurance (25)
- Complaint disposition—communications from DOI to company (22)
- Non-renewals when consumer doesn’t meet criteria (14)
- Insured value review for inflation (12)
- One strike you’re out; use it/lose it (9)
- Multiple requests from DOI to company for information (9)
- Differences in total loss value (6)
- Unexplained/unauthorized move to a sister company with higher premium (7)
- Withdrawal from market (6)
- Diminished value, even with documentation (5)
- Coastal rates (4)
- Can a company be a consumer advocate? (4)
- Companies using artificial intelligence for complaint processing (3)
- Hail damage (3)
- Hurricane-wind deductible (3)
- Replacement value vs. actual cost (2)
- Various quotations from same company via different channels
- Loyalty-Insurance co to insured (1)
- Tolerance levels of DOI – disaster planning (1)
The P & C session generated such a robust and time consuming list of hot topics, that little time was left for discussion of best practices. However, a limited discussion on credit did ensue.
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Carol Crosson (standing - Guardian Life Ins. Co. of America) and Barbara Fitch (National Life Ins. Co.) lead the San Diego Life and Health breakout session. |
Credit Scoring: Not all bad; not all good
In general, the group agreed that credit (or insurance) scoring had significant positives to contribute to the industry. Positive attributes sited include that credit scoring, or the use of credit scoring, helps companies:
- Open up markets in a cost-effective manner,
- Provides an important tool for accurate pricing,
- Helps generate accurate loss predictability, and
- Provides for low-cost underwriting because it’s a ready source for information.
Even the best pricing and information tool can have negatives. Those identified and agreed upon by insurers and regulators include:
- The use of credit scores make little sense to the consumer, and
- Over the long-term, the value of the credit score as a tool for pricing is diminished because the correlation between findings and the long-term customer is less verifiable.
Credit scoring: Best practices shared
Both industry and regulator professionals came away with a better view of the uses and limitations of credit scores. Motivated by the common ground of working for the consumer, participants reached consensus on specific best practices that would produce a better sentiment for the practice of credit scoring. The best practices are:
- Give non-proprietary information to the consumer so the consumer had more/better information about how credit scores are used and what consumer actions impact the interpretation of credit scores for insurance industry purposes.
- Create educational programs in all states; the program in Oregon was singled out as being both successful and complete.
On the other side of the partition: Health and Life product issues
This group took a more specific route to discussing hot topics and best practices. As a topic was proposed, the group took the time to fully vet the hot-topic-of-the-moment. Because, after all, when you’re hot, you’re…
Hot topic: Should DOI enquiries be coded as complaints?
This breakout group spent a significant amount of time discussing, and being educated about, the NAIC coding project; and discussing this project’s importance to the insurance industry as a whole. Participants were encouraged to remember specific options available to help all stakeholders, including:
- NAIC online training, including consumer assistance training, and
- Reviewing the NAIC Web site at www.NAIC.org for resources and information.
The best practice agreed upon was that DOIs and companies should work in concert with the NAIC to develop coding interpretations and alternatives that help all stakeholders generate useful data.
Hot topic: Electronic transmission security issues for confidential data
The group discussed the issue that encrypting email can be an issue for departments of insurance. After significant discussion, the group agreed that company representatives should simply call the DOIs with questions and issues as many can be worked out or clarified , limiting the amount of confidential information that has to be sent. Not only does this best practice help the consumer because the amount of information passed is limited, it also should save time for the regulators and the companies’ as they pursue the greater good for the consumer.
Hot topic: Differing response times from DOIs to companies
Although this would be a topic for the uniformity discussion later in the Exchange, the breakout group chose to discuss it in this venue as well. The best practice solution proposed proved to be quite simple: DOIs should incorporate an exact response date when working with companies.
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Marty Fisher (Martha Fisher & Associates) and Sandy Anderson (NY DOI) lead the San Diego Property Casualty breakout session. |
Hot topic: Ethical marketing to seniors (all product lines)
This hot topic was touched on in the Panel Presentation—The World of Insurance—session (see recap article in this edition of Catalyst). Of special note were the predatory marketing practices of some companies. Interestingly, the best practice solution proposed was requesting that DOIs probe more intensely when a complaint involving predatory practices is filed. It was generally agreed that no stakeholder wins when unethical practices are allowed to go unchecked in the marketplace.
Hot topic: Use of home equity to finance other products
The group agreed that some producers are creating products and situations so complex that the transaction is difficult to unwind and almost impossible to monitor and regulate. Although no actual best practice solution gained consensus, it was agreed that this was a topic worth further review.
Hot topics conclusion
The give-and-take of opinions, concerns and best practices captured by both groups during the breakout sessions further emphasized the importance of ICAE in providing a forum where insurance industry issues can be vetted in a safe, inclusive atmosphere and where companies and regulators can work together to learn from each other. |
