Compliance with regulatory requirements continues to present challenges to insurers during the market conduct exam process. Key hot spot areas in which these challenges and potential problems exist can be found by looking at our recently released “Top Ten” lists from 2008.
Developed through a review and analysis of the market conduct exam content from last year, our compliance analysts assign criticisms to various categories identifying the noncompliance areas. What we found was a trend over the last 5 years that suggests that insurers’ trouble spots lay mostly with core processes:
- Claims processing-related violations continue to dominate both the property & casualty and the life and health lines of business. Ranging from insurers’ failure to acknowledge, pay, or deny claims within specified time frames to using the services of unlicensed claims adjusters or appraisers, it is clear that there are many opportunities for processing systems to fail.
- Problems also exist in the area of policy issuance, with the use of unfiled or unapproved forms crossing all lines of business as well.
- Violations listed in the “Top Ten” also include areas unique to the life and health insurance industry, such as failure to adhere to replacement requirements and failure to adhere to grievance and appeals processes.
By using these lists, insurers can easily see not only the areas of significant interest to state regulators, but also the areas of noncompliance by others in the industry. Taking the lists a step further, insurers can focus on identifying possible business practices that may be placing them at risk during future market conduct exams and implement corrective action now.
Editor’s Recommendation
Download your copy of the Top Ten: Life & Health, Property & Casualty. Wondering what market conduct information is available online from the states? Click here to find out for Life & Health or for Property & Casualty.
Market Conduct examination tools can help you better manage compliance risks with access to cross-referenced and searchable market conduct criticisms content and features to help you proactively and efficiently manage exams and research.
