Navigating a California Claims or Rating and Underwriting Exam

Transcription

1 Navigating a California Claims or Rating and Underwriting Exam Association of Insurance Compliance Professionals WELCOME!

2 Who Are We? Field Rating & Underwriting Bureau (FRUB) Field Claims Bureau (FCB)

3 What Do We Do? Statutory Examinations Routine Examinations Data Data-Only Examinations Target Examinations Reexaminations

4 How Are Exam Costs Recouped? Prop 103 assessment (All FRUB P&C Exams) Direct Billed to Insurer (All FCB, and non (All FCB, and non-prop 103) Rate is $152 per hour Recalculated on an annual basis

5 How are Companies Selected? Statutory Requirements Market Analysis Complaints Market Conduct Annual Statement (MCAS) Financial Info Info From Other Units (Investigations, Financial, etc.) Premium Writings Lines of Business and Type of Exam Marketplace Info

6 How Do We Do It? Notification of Exam Examiner In Charge Contact Opening Meeting File Review Exit Meeting Non-Compliance Letter (FRUB) Draft Report Adopted Report

7 What Are We Looking For? Statutory Compliance Internal Compliance Unfair Discrimination Documentation Notices to Policyholders Compliance w/ New Laws or Changes in Law Compliance with Filed Rates Eligibility Guidelines Advertising and Marketing

8 What Happens From There? Resolved Without Further Action Resolved With Ongoing Insurer Action Direct Enforcement Action Legal Division Action

9 What Do We Commonly Find?

10 Private Passenger Automobile At-Fault Regulations CCR % of legal cause Bodily injury or death PD excess $1,000 None of the statutory exceptions apply

11 POP QUIZ How many points may an insurer charge for an accident if the insured fails to respond to a request for additional information?

12 Notice of 3 rd Party Designee Auto, HO, Disability Income CIC 396 Effective January 1, 2016 Upon New Business Notification at least Every 2 Years

13 Loss Exchange Reports CCR (f)(2) Policyholder s address Driver s Name Date of Incident At-fault Indicator Property Damage Bodily Injury/Death Statutory Exceptions Were Considered

14 Private Passenger Automobile Second Mandatory Rating Factor Annual Mileage CCR (c)(2) Estimated vs. Verified Insured s Estimate New Business Renewal Third Party Reports

15 What do you think? Is there a 60 day underwriting period in Private Passenger Automobile?

16 Effective January 1, 2013, CIC 661(b) was removed from the California Insurance Code.

17 Allowable Reasons For Cancellation Substantial Increase in Hazard Insured Against Fraud or Material Misrepresentation Non-payment of Premium

18 Homeowners Losses Substantial Relationship to Loss Exposure Underwriting Rating

19 POP QUIZ #2! Can an insurer have a rule that any additional or return premiums due less than $10 may be waived?

20 CIC requires that all unearned premium be returned to the policyholder upon termination or if there is a reduction in coverage.

21 Commercial Lines DOCUMENT, DOCUMENT, DOCUMENT!!!

22 Schedule Rating Plan DOCUMENT, DOCUMENT, DOCUMENT!!! Subjective vs. Objective Criteria Characteristics of a risk not otherwise contemplated in the rating plan

23 Prior Approval of Rates Adhere to filed rating plan a rating Rate Ranges Document!

24 Required Mail Time Additional Mail Time Based on Location Code of Civil Procedures 1013(a) Add 5/10/20 Days Private Passenger Automobile CIC 662 Cancellations CIC 663 Notice of Renewal/Non-Renewal Homeowners CIC Cancellations CIC 678 Notice of Renewal/Non-Renewal Commercial Insurance CIC 677.2(c) Cancellations CIC Non-renewal (Commercial/Excess Umbrella) CIC 676.2(c)(1) Midterm premium change, Reduction in Coverage, Change in conditions Workers Compensation CIC Cancellations CIC 11664(c) Non-renewal

25 Annuity Sales - Suitability CIC

26 Life & Annuity Free Look Notices What are the required timeframes? 30 DAYS for Group Life Seniors age 65 + [CIC 786] DAYS for Ind. Life/Annuities [CIC ] 30 DAYS for Ind. Life/Annuities age 60+ [CIC ] 30 DAYS for Replacements [CIC ]

27 Life Insurance 3 rd Party Designee CIC Upon New Business Annual Notification

28 Electronic Transmission Life and Annuity Records CIC 38.6 Effective January 1, 2016 Opt-in Consent Disclosure Two Standards of Delivery

29 Claim Handling Automobile In total loss settlements, were all required taxes and fees included and was any deduction for salvage value based on a guaranteed bid? [CCR (b)] Does the company have procedures for identifying if there was a child passenger restraint system damaged or in use in the accident? [CIC ] Property Is the basis for depreciation documented in the file, explained in writing to the claimant, and determined considering the age, condition, and useful life of the item?[ccr (f)]

30 Claim Handling General All lines: Although there may be different specifics in timeline, etc., for certain lines and products, the following points are valuable to keep in mind overall: Does acknowledgment of claim occur promptly and are claimant contacts and inquiries responded to promptly? Are investigations thorough and diligent? Are procedures in place to prevent duplicate requests, or requests not pertinent to resolving the claim? (Special focus for health and disability income claims) Are claims paid timely once liability is determined? Is appropriate interest included when claims payments do not meet regulatory requirements for promptness? (Especially relevant to life and health claims)

31 Life Insurance CIC (a) Was the payment made within 30 days after date of death? If no, was interest included in the death proceeds? CIC (c) Disclosure of interest rate CCR (a) Were all available settlement options disclosed?

32 Health Insurance CIC (a), (b), (c) Paid within 30 working days Late Payment - Uncontested claim interest Late Payment Contested claim interest

33 Disability Income Long Term Care INVESTIGATION - CCR (d) State Disability Income (SDI) Offsets

34 Salvage Certificate Fee Increased to $20 effective 01/01/2015

35 Reminders Documentation is Key Transparency is a Plus Meetings Are Welcome We are here to help

36 THANK YOU!