Insurance Center

Wolters Kluwer Financial Services, the company that recently released its report regarding the compliance of property and casualty insurance companies and life and health insurance companies indicating that much of the available information regarding these non-complying companies when it comes to claims activity is not available on the web sites of state insurance agencies, has come up with a list of ten major reasons that generally lead to non-compliance with regard to claims activity on the part of property and casualty insurance companies and life and health insurance companies. Two separate guides have been set up by Wolters Kluwer Financial Services’ compliance experts that highlight the availability with regard to enforcement activity on state department of insurance web sites. There is one guide that has been set up as regards property and casualty insurance companies and another that relates to life and health insurance companies.

According to the report released by the industry surveyor Wolters Kluwer Financial Services results of their study indicate that of all the compliance criticisms mentioned by respondents, the top 10 most criticisms for reported for those dealing with property and casualty insurance companies are:

1. A refusal to accept, compensate for or deny claims within the time frame specified.
2. A lack of proper procedure when terminating a policy, and this includes not giving the required number of days’ notice, inadequate reasons and a lack of required language.
3. Refusal to properly pay claims including compensation for taxes, loss of sales, and loss of use.
4. Unacceptable and not proper documentation procedures for claims filed.
5. The utilization of unapproved or unlisted rates or errors in the rating.
6. A refusal or lack of providing the required and/or the appropriate disclosures, for example, notices of selection or rejection or notice of coverage, during the underwriting process, or provision of such notices as the statute of limitations, causes for denial, and the customer’s bill of rights as a part of the claims process.
7. A lack of the use of licensed producers and proper notification of producer appointments or terminations, including failures in the maintenance of the producer register.
8. A failure or lack of communication when it comes to announcing delays in the settlement of claims in writing.
9. The use of unapproved or unlisted forms.
10. The utilization of claims adjusters or appraisers who are not licensed.
As regards the ten most named complaints reported by the Wolters Kluwer Financial Services' industry study, results indicate the following most common market conduct compliance criticisms being directed at life and health insurance companies:
1. A lack of adherence to advertising requirements.
2. A breakdown in the adherence to replacement requirements.
3. The lack of use of licensed and appointed producers, and a failure to provide the proper required notification with regard to producer appointments or terminations, including mistakes and oversights in the maintenance of producer registers.
4. Shortfalls as regards the use of required grievance and appeals and utilization review procedures.
5. A lack of procedural usage with respect to the proper documentation of files.
6. Shortfalls in the proper termination of policies, including adherence to policy conversion requirements.
7. Mistakes in procedures as regards steps to properly acknowledge, pay, investigate or deny claims within a required specified time frame.
8. The use of forms that lack proper approval, or are not properly filed or are noncompliant.
9. Mistakes and failures relating to the proper provision of required disclosures, examples being statements of explanation of benefits, issues regarding coverage, warnings of possible fraud, a free-look periods, the right of appeal with regard to claim settlements, or notices of guaranty funds.
10. A lack of proper procedure in the payment of claims.