Top 10 market conduct issues for US insurers

For the 10^th consecutive year Wolters Kluwer Financial Services has unveiled the top criticisms for both Property/Casualty and Life/Health insurance.

Some of the results may surprise professionals and will surely shed light on the appropriate business strategies going forward.

“Our research consistently reveals that implementing regulatory requirements in the claims, underwriting and distribution processes is a challenge for insurers,” said Kathy Donovan, senior compliance counsel, Insurance, at Wolters Kluwer Financial Services. “However, conducting internal audits is an excellent way to monitor the effectiveness of regulatory implementation in company systems and help ensure consistently compliant results.”

Here are some of the company’s findings:

The top 10 most common market conduct compliance criticisms for property and casualty insurers are:

1. Failure to acknowledge, pay, or deny claims within specified time frames
2. Using unapproved/unfiled rates and rules or misapplying rating factors
3. Failure to cancel or non-renew policies in accordance with requirements
4. Failure to process total loss claims properly
5. Improper/incomplete documentation of claim files
6. Failure to adhere to producer appointment, termination and/or licensing requirements and adjuster and appraiser licensing requirements
7. Failure to provide required compliant disclosures in claims processing
8. Failure to provide required compliant disclosures in underwriting processes
9. Improper documentation of underwriting files
10. Failure to process and pay claims in accordance with policies

The top 10 most common criticisms for life and health insurers are:

1. Failure to properly acknowledge, pay, investigate, or deny claims within specified time frames
2. Failure to adhere to advertising requirements
3. Failure to use licensed and/or appointed producers and to provide proper notification of producer appointments or terminations
4. Failure to provide required claims and underwriting disclosures including those concerning coverage issues, policy replacements and fraud warnings
5. Improper documentation of underwriting and claim files
6. Failure to adhere to required claims appeal processes including timeframes and disclosures
7. Failure to pay claims properly in accordance with policy provisions
8. Failure to use compliant policy forms and/or maintain compliant plans
9. Noncompliant claim denial notices
10. Failure to issue correct Explanation of Benefits

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