To help companies determine if they are susceptible to noncompliance citations, Wolters Kluwer Financial Services has released an annual list of the top 10 reasons insurers are found to be in violation during market conduct examinations. To compile the list, the company's Insurance Compliance Solutions group reviewed and analyzed the content in last year's market conduct exams from all over the U.S. The categories with the most criticisms comprise the top 10 lists for both property and casualty insurance and life and health insurance.
"This research can serve as a checklist for insurers so they can assess noncompliance risks," said Kathy Donovan, manager of government relations for Insurance Compliance Solutions at Wolters Kluwer Financial Services. "If regulators were to conduct an audit today, these are the key areas that would be examined."
As determined by the research, the 10 most common market conduct compliance criticisms for property and casualty insurance are:
1.Failure to acknowledge, pay or deny claims within specified time frames.
2.Failure to properly terminate a policy, including inadequate notice and omitted required language.
3.Improperly documenting claim files.
4.Using unapproved or unfiled rates and/or rating errors.
5.Failure to provide required disclosures, such as selection/rejection or coverage notices in the underwriting process or notices such as statute of limitations; reasons for denials; and bill of rights in the claim process.
6.Failure to provide notification of producer appointments or terminations.
7.Insufficiently documenting underwriting and policy files.
8.Failure to communicate a settlement delay in writing.
9.Using unapproved or unfiled forms.
10.Failure to produce requested records for an examination.
David Evans, vice president and general manager of Insurance Compliance Solutions at Wolters Kluwer Financial Services, acknowledged that monitoring the regulatory environment and continually adhering to the compliance requirements governing the industry represents an ongoing challenge for insurers. He also emphasized that the company's "top 10" list is intended as a valuable resource for insurance companies so that they may avoid common violations.
"This research can help insurers identify potential problem areas and prevent the negative impact of noncompliance on their organization and their customers," Evans said.
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