In the competitive property and casualty insurance market, underwriters must constantly keep an eye on product development in order to meet evolving consumer needs. In the past decade, policy language has been rewritten in response to diverse factors such as terrorism, the popularity of portable electronics and domestic partnerships. In some cases, existing policy language can be updated to encompass changing coverage needs; in other cases, new and innovative product design is needed.
What is a new product? The Oregon Division of Insurance website contains relevant regulatory guidance. (Kudos to the Oregon Division of Insurance for providing one of the most informative regulatory websites available. It is a treasure trove of useful industry information.) The Division’s view is that new product designs are those “that are not defined by statute, are out of the ordinary, or may not fit into a particular category of insurance.”
Once new product design is complete, it must pass regulatory review before being brought to market. At this point, it is extremely important for the state filer to work closely with the regulator to expedite the regulatory process. Oregon suggests that filers follow an informal review process that appears to be good advice on introducing a product in any jurisdiction. Essentially, the insurer needs to open a conversation with the regulator and provide the following information prior to filing:
- Type of product, how it differs from products currently in the market, and why it doesn’t fit into a category, and the need for the product in the market
- Any applicable, completed state-specific Review Requirements Checklist that is related to the new product
- How the product complies or doesn’t comply with existing state statutes and applicable Checklist requirements
- Explanation of the company’s targeted market
- Other jurisdictions where the product has been filed and approved for use
California, New Jersey and Texas are among other states providing specific written regulatory guidance on new product filings. In our experience, most regulators prefer to receive this kind of information in advance as it allows them to question, understand and troubleshoot potential compliance problems, and to ultimately expedite the filing review and approval process.
Editor’s Recommendation: Research new product filing requirements easily with AuthenticWeb for State Filing.
