Accident & Health

New Ideas for Supplemental Health

by Jennifer Choe

By: Jennifer Choe and Juliann Schiano

March 2023 marked ten years since the Affordable Care Act (ACA) was signed into law, and much has changed over the last decade. Health coverage has evolved in response to ACA-related regulation, challenges associated with COVID-19, and a new post-pandemic “normal” that has impacted everything from employee working conditions to vacation plans. 

States are changing their requirements for health-related insurance products – and your company’s portfolio should reflect current regulations. For example, the excepted benefits in your current benefit structure may no longer be considered “excepted.” Another example is that rates in Washington state must be refiled every seven years.

As the leading providers of life and health actuarial consulting and product development to insurance companies throughout the nation, we are seeing some key trends in supplemental health coverage. If your company has not updated these products lately, now is the time to take another look.

Critical Illness

Health insurance providers are broadening the suite of what critical illness covers. Here are some opportunities that might enhance your portfolio:

  • Extended hospital expense coverage
  • Transportation benefits for travel to and from a hospital
  • Reconstructive Surgery benefits if certain conditions are met

Accident

Supplemental health benefits due to accidents have changed in recent years as people are vacationing and working differently. Here are some emerging product types that our product design and actuarial consulting experts have identified:

  • Accidental Death Recreational Vehicle Travel benefit if death occurs as a result of an injury while the insured is a driver or passenger in a recreational vehicle, while in a vehicle pulling a fifth wheel, or while at a campground
  • Work From Home benefits such as alternative workspace, psychological trauma counseling, and temporary childcare
  • Telecommuting Coverage benefit for insureds when they telecommute and work from home

Hospital Indemnity

New hospital indemnity coverages are also gaining traction:

  • Pregnancy Indemnity coverage when the insured becomes confined in a hospital due to pregnancy

Life

Today’s supplemental products for life insurance further ease some of the burden on loved ones after a death. Here are some products that are gaining in popularity:

  • Charitable Giving benefit that allows the owner to select a charitable beneficiary to receive a charitable gift amount defined as a percentage of the policy death benefit
  • Final Expense coverage that provides a set death benefit and fixed premiums through a type of whole life insurance coverage and is intended to cover funeral and burial costs and medical bills such as hospital stays and nursing home expenses
  • Travel or Reunion Expenses coverage for benefits or reimbursement for travel expenses so that family members may be able to attend the funeral

Other Supplemental Health Benefits

Finally, here are some additional emerging supplemental health benefits identified by our insurance product development experts that reflect the changing times:

  • Telemedicine benefit to provide coverage for remote or virtual care from a physician
  • Inflation Protection benefit, which automatically increases the benefit amounts with a certain percentage for each insured
  • Military Pilot coverage, which provides a benefit for loss that occurs from a flight in a military airplane while the insured is acting in the capacity of pilot or crew member
  • Firearm Accident benefit, which is paid when death or injury is caused by a firearm accident
  • Term Life rider, which allows the insured to purchase additional term coverage on top of an existing life insurance policy

Partner with Experts to Update Your Portfolio

Updating your portfolio can be a time-consuming, detail-heavy process, especially if your company writes policies in multiple jurisdictions. Working with life and health actuarial consulting experts and experienced insurance product development teams like those at Perr&Knight can streamline your path to approvals.

Here are some of the services we offer to support insurance companies, insurtechs, and those looking to expand their product offerings in the A&H space.

Competitor studies: We have access to the most comprehensive filing database in the industry, enabling us to check policies and rates against comparable competitor filings. We use this insight to ensure coverages and rates align with industry standards and that our clients offer the most competitive programs possible.

Developing new forms and rates: We have resources that can help with creating appropriate policy forms and associated forms, as well as pricing benefits, including those for whole and term life.

Filing: Our state filings teams possess unmatched experience in filing forms and updates in all fifty-one jurisdictions. We can provide support to your filing department at whatever level you require.

Whether you want to refresh your company’s portfolio with new products to increase your competitive edge or update existing filings to ensure regulatory compliance, our life and health actuarial consulting teams can support the entire process of insurance product development, filing, and beyond. 

Contact Perr&Knight today to start the conversation. 

What You Should Know About Accident & Health Data Call Reporting

by Jim Vallee

By: James A. Vallee, FSA, MAAA

Property & Casualty (“P&C”) companies entering the Accident & Health (“A&H”) marketplace often have questions about reporting policy, premium and claims data. It makes sense: as mandated by the NAIC, admitted P&C insurance carriers are required to submit data for statistical reporting for various commercial and personal lines products. However, though product filing requirements for P&C and A&H are similar, reporting premium and claims data is very different.

Here are answers to some of the most common questions our insurance data services experts receive when working with insurance companies looking to start offering supplemental A&H products as part of their portfolios.

Who are the statistical bureaus that monitor A&H insurance products?

Unlike P&C, there are no statistical agents or rating bureaus that require data to be reported for A&H coverages. Insurance companies with admitted P&C products must submit statistical data in greater frequency and detail to a bureau based on the specific line of business, such as ISO and NCCI. A&H doesn’t have the same requirements.

Certain lines of business like major medical (including stop-loss) and Senior market products (e.g. Medicare supplement, long-term care, and medical stop-loss) do have some reporting requirements, but it’s a much lighter lift with much less granularity than what must be captured for P&C coverages.

In addition, some states do issue data call requirements, such as California’s covered lives and Alaska’s yearly health insurance survey. Other states, like Washington, often have ad hoc data calls. Therefore, depending on where your insurance company conducts A&H business, you should be prepared for some data reporting requirements.

How to prepare for ad hoc data calls?

Preparing for potential state data calls means staying on top of tracking basic information, such as the number of policies and the amounts of written premiums and claims. Tracking this information throughout the year will ensure that you are ready with the required current data in the event of regulators’ published and ad hoc data call requests.

What are the statutory financial reporting differences for A&H?

When it comes to statutory reporting the Yellow Book’s annual blank, the Type of Insurance (“TOIs”) under which A&H products are filed do not match up to the Annual Statement Lines of Business like the P&C TOIs do. So, it’s not obvious where they should be reported. In general, A&H products need to be reported based upon market (Group vs. Individual) and policy renewability provision. To report the financials accurately for A&H products requires a depth of understanding these products.

How can Perr&Knight help?

We have an insurance data services team comprised of experienced actuaries and data analysts who have been helping P&C clients successfully manage complex reporting for decades. When P&C clients want to move into the A&H space, they often voice concerns about reporting and are surprised that the requirements are much less stringent than those to which they’re accustomed. Perr&Knight’s A&H product development expertise and data reporting makes us perfectly suited to provide the clarity your company needs to feel confident about meeting A&H data reporting requirements.

That said, there’s no substitute for basic data modeling, tracking and governance. Implementing a framework and best practice to capture and keep baseline data up to date throughout the year is not only smart preparation in case of an ad hoc A&H data call, but it’s also just good business practice.

Our experienced insurance data services team can help make your A&H data reporting seamless. Contact Perr&Knight today.

P&C Carriers: A Strategy for Entering the A&H Market

by Susan Cornett

By Susan Cornett, FMLI, AIRC, CFE and James Vallee, FSA, MAAA

P&C insurance carriers recognize the opportunity to expand product lines and increase revenue by expanding into Accident & Health products. However, the differences between P&C and A&H product development are significant and what applies to P&C may not apply to A&H from a regulatory standpoint. Understanding those differences will allow P&C carriers to enter the A&H market with faster speed-to-market along with high-quality products.

During decades of providing insurance product development and actuarial support for insurance companies across the US, Perr&Knight has zeroed in on a low-risk A&H entry product for P&C: blanket accident policies.

Why develop a blanket accident policy?

Commercial entities, schools, universities, and other organizations often need supplemental blanket A&H policies to fill gaps in medical coverage to further support their staff or students. With fewer mandated benefits, these policies are the perfect starting place for P&C companies looking to break into the A&H market and provide additional coverage options to existing clients. Blanket Accident policies also fit nicely with General Liability policies and allow brokers/agents to offer comprehensive insurance protection from a single carrier.

Differences between P&C and A&H product development

Established P&C carriers may think they have the requisite experience to develop A&H coverages. However, a few significant differences between these two types of insurance product development are worth noting.

  • Rate support: Rate support requirements in A&H are different than P&C, usually requiring an actuarial memorandum describing the benefit in the rate structure as well as a signed certification attesting that the rates are reasonable in relation to benefits.
  • Forms and rates standards: On the P&C side, rates tend to receive more scrutiny. On the A&H side, regulators examine policy forms more closely. Though some states are outliers, we find this is a reliable trend.
  • Bureau forms: Many P&C carriers adopt ISO or other bureau forms as part of their P&C portfolio. For most lines, A&H doesn’t have this option. Most insurers rely upon proprietary forms.
  • Statistical reporting: Data reporting is important on the P&C side. But except for a few lines of business, statistical reporting requirements aren’t widespread on the A&H side. Besides ad hoc data calls, most supplemental A&H coverages don’t require such detailed stat reporting.
  • Rate certifications: Although a few states require certification of the rates or rate filings on the P&C side, some states require carriers to attest to their ability to meet target loss ratios for A&H lines.
  • Variable benefits: A&H policies typically rely on the use of variable language to allow inclusion or exclusion of benefits, terms and conditions. It’s not unusual for a blanket A&H policy to be 50+ pages because the benefits are included in the policy and not attached as optional endorsements. From an implementation perspective, this means programming one form with many options instead of 75 forms with no options — another way these policies diverge from P&C.
  • Verbiage differences: Terms and definitions vary between A&H and P&C. For example, P&C uses the phrase “loss costs” while A&H calls these “claim costs”. Unfamiliarity with terms could lead to filing errors.

Commonly asked questions

P&C carriers eager to enter A&H should know a few basic things before moving forward. Here are the most commonly asked questions from P&C insurers.

“Does our license cover A&H?” Short answer, maybe. P&C carriers may already have the ability to write A&H lines of business depending on what is included in their Certificate of Authority. Licensing requirements vary by state. Our licensing experts can help determine whether anything additional is needed. There are important differences in insurance product development and approvals, even for supplemental health policies, so P&C carriers should proceed with caution even if currently licensed to write the business.

“Can we offer blanket A&H on a non-admitted basis?” Simply, no. In the world of A&H, the concept of surplus lines is virtually non-existent. Companies may develop an A&H program thinking it will be available under surplus coverage guidelines, but state export lists rarely include any A&H coverage. The consequences for non-compliance can be steep and may jeopardize a company’s good reputation with state regulators.

“Can we ‘me too’ our A&H policy development?” Unlike P&C, “me too”-ing rating information from competitors’ existing programs is generally not acceptable. Different requirements for rate filing and support are a prime example of a P&C process that has no transferable correlation to A&H.

Start with blanket accident, then expand

After developing a blanket accident policy, companies can easily expand into other supplemental health lines. After getting your feet wet with blanket accident, product lines such as hospital indemnity, critical illness, disability income insurance, and gap medical generally follow the same product development process.

Work with experts

Developing a blanket accident policy may seem straightforward on the surface, but there are lots of opportunities to fall into little-known traps. Partnering with experienced insurance product development partners like Perr&Knight can save P&C carriers from wasting time and money on mistakes.

With our deep experience providing insurance product development and actuarial support services for carriers across both P&C and A&H lines, our professionals act as the “decoder ring” between the two. Working with knowledgeable professionals helps insurance companies step into a new world with greater confidence and ease.

Ready to test the A&H waters with a blanket accident policy? Contact Perr&Knight for help.

The Time Is Now: The American Rescue Plan’s Impact on Supplemental Health Insurance

by Jim Vallee

If your company hasn’t reviewed your supplemental health products lately, now is the time to refresh your portfolio. The Biden-Harris administration’s American Rescue Plan reduces healthcare costs and expands access to coverage for millions of Americans. The subsidies are technically temporary (in place for 2021-2022), but we anticipate these popular provisions may ultimately remain in place for the foreseeable future, regardless of administration.
The plan provides fresh assurance to individuals buying their or their family’s health insurance through a marketplace that they will receive a premium-reducing tax credit. As more buyers enter the health market, the need for supplemental products will expand. Marketplace-insured Americans may still be facing moderate to significant out-of-pocket costs that supplemental health insurance plans can help alleviate.

Start laying the groundwork

As the supplemental health product marketplace has expanded over the last decade, these products have faced increasing regulatory pushback. Meeting this evolving regulatory challenge requires doing your homework ahead of time. Conducting comprehensive competitive analyses, market surveys, and evaluating existing competitor pricing puts you in a stronger position to release Gap medical and other supplemental health products that match state department of insurance (DOI) requirements directly out of the gate.

Accelerate time-to-market by partnering with experts

There are no shortcuts when it comes to insurance product development, but working with experienced actuaries, product development experts, and state filing experts can help you make up for lost time. Their access to historical filings, knowledge of region-specific requirements, and particulars of each state’s DOI protect you from costly, time-consuming mistakes that are likely to delay approval. Additional support means shifting from a reactive to a proactive position.
At Perr&Knight, we have experience developing limited medical/hospital indemnity plans, gap medical coverage products, and critical illness products that are more relevant – and necessary – to today’s marketplace than ever. We can help you gauge the interest to see if augmenting your portfolio with these products is worth the investment.

Changes are likely here to stay

It’s tempting to “play it safe” and hold off on investing in insurance product development because you believe the ARP’s health insurance provisions will be undone in the event of an administration change. But if the past is any indicator, even politically fraught plans like the Affordable Care Act (ACA) have withstood a barrage of threats, remaining popular with the American people.
As the saying goes, the best defense is a good offense. Failure to begin in earnest means your company is already behind other carriers who have either recently refreshed their portfolios with updated gap medical or other supplemental health products, or those who have started the insurance product development process. The time to get started is now.
Read more: New Trends in Accident & Health Insurance.

Ready to reevaluate the role of supplemental health coverage in your portfolio? Our actuarial and state filings experts are here to help.

From Our Actuarial Experts: New Trends in Accident & Health

by Jennifer Choe

Last year was a major disruptor for consumers, insurance companies, and state departments of insurance (DOI). The ripple effects of the COVID-19 pandemic are still playing out, causing changes to consumer behavior and influencing how insurance companies serve them.
Here are some of the recent trends we’ve seen in accident & health coverage – and how insurance companies can respond more effectively to these changing times.

Pandemic-related coverages

Businesses are re-opening, employees are returning to in-person work, and international travel is increasing in popularity. Despite the near-universal desire to return to normalcy, COVID-19-related interruptions are still part of the equation. Insurance companies are faced with new opportunities to provide coverage for COVID-related medical care and travel changes.
Some of the emerging products we have seen include:

  • Coverage for work-related vaccine mandates
  • Coverage for mandatory quarantine
  • Trip cancellation or trip interruption coverage in case of pandemics or COVID infections
  • Coverage for telemedicine or other virtual care

Self-insured companies are under greater pressure to determine the cost of things like testing or vaccination-related expenses for their employees. Support from experienced actuaries can help accurately estimate these costs.

Younger consumers entering the market

The population of people purchasing insurance is shifting. This is a trend we have seen gain momentum over the previous few years with no sign of slowing down. More millennials (aged approximately 25-40) and Gen Z (age 24 and younger) consumers are buying insurance products. This shift in consumer base has a two-pronged effect: what products they seek, and how they are purchasing.
Older generations were content to work with a trusted insurance agent and prioritized a person-to-person relationship. Millennial and Gen Z consumers are more focused on instant information and instant gratification. Their digital-first consumption habits are causing insurance companies to re-evaluate how they offer products and are opening opportunities for Insurtech companies to fill the gap.
While Insurtech companies may have the technology covered, many have limited experience in the insurance space. Meanwhile, established insurance companies may have the knowledge of insurance product development but must partner with a technology provider to deliver products to consumers. Working with experienced insurance product development partners can help bridge the gap to make sure all products conform to regulatory standards.

The workforce is changing

As the gig economy continues going strong, more workers are tasked with securing coverage on their own. The federal insurance mandate is no longer in place, so consumers can be more creative with their health coverage. They want greater flexibility to choose plans and coverages that align with their needs and budget.
Some workers may not want or need full-blown health insurance plans, instead opting for more cost-effective coverages such as accident-only, major medical, critical illness, gap insurance coverage, or other supplemental plans.
Now is the time to revisit the scope of your medical products to determine if there are areas to offer products that align with today’s self-empowered purchaser. Insurance product development experts like Perr&Knight can provide insight into correct pricing and assist with rate and forms filings to bring these products to market as quickly as possible.

Short-term accident products

More and more insurance companies are offering lifestyle-related products that cover insureds under specific conditions for short periods of time. We’re seeing companies develop medical expense or accident indemnity products related to adventure sports, certain vacation activities, and equipment usage (ex. electric scooters).

Partner with insurance product development experts

Today’s trends unlock new possibilities for insurers to offer coverages that align with the times and evolving consumer expectations. However, everyone in the industry knows that product development, rate development, form filing, and approvals take time. Working with experienced actuaries and insurance product development specialists can accelerate your process and ensure you are not overlooking any critical elements that could slow your time to market.

Develop new products that match consumer expectations. Contact our insurance product development experts to start a conversation.

Supplemental A&H Group vs Blanket Filings: An Overview

by Jim Vallee

Authors: James Vallee, FSA, MAAA and Susan Cornett, FLMI, AIRC, CFE
At Perr&Knight, our insurance consultants help many clients develop group and individual supplemental health products. We are often approached by insurance companies with confusion about what group policyholder types to use and where a client should use group vs. blanket. When an employer policyholder is not appropriate, insurance companies look to other group types such as associations, trusts, or discretionary groups.

UNDERSTANDING GROUP POLICYHOLDER TYPES

Many clients want to rely on the outdated practice that, by using association or trust filings, a situs state approval means automatic approvals in other states and rating can be more flexible. While that was once the case, it no longer holds true. As associations became more popular, regulators noted that many of the associations lacked a common purpose and thought that the associations were used primarily to circumvent form and rate requirements.
Associations, trusts and discretionary groups often have to be approved by state regulators before a policy can be issued or, in some circumstances, before policy solicitation. Single case filings for these groups are required more often. Approvals for discretionary groups are particularly difficult to gain when the policyholder/insured relationship is not clear.

GROUP VERSUS BLANKET POLICIES

Another area of confusion is how a blanket policy is different from a group policy. On the surface they appear similar; there is a master policyholder and groups of individuals are covered. However, blanket coverage is usually offered to institutions (e.g. schools or camps) that provide excess or secondary accident/medical coverage to individuals participating in activities under their purview. While a few states require blanket coverage to have underlying certificates (like group), the people covered under these policies are often not aware that they have coverage under a blanket program.

HOW TO CHOOSE BETWEEN GROUP AND BLANKET POLICIES

Depending on the needs of the insurance company, policyholder and the individuals to be insured, insurance companies can utilize either a group or blanket policyholder format. Many jurisdiction handle non-employer groups and blanket programs differently. Some states will provide greater latitude to blanket products than group products simply due to the types of groups that may be insured.
Selecting a group type can be confusing so let our insurance consultants guide you. Our accident & health product development consulting team has ample experience in helping companies find success with non-employer groups.

Contact Perr&Knight today to schedule a consultation.

A&H Insurance Advertising: Rules & Compliance Overview

by Susan Cornett

Advertisements are an integral part of any A&H insurance marketing plan. Insurance companies must find ways to get and keep the attention of a prospective insured. Given that the average American sees more than 4,000 advertisements each day, insurance companies look for creative ways to attract prospective insureds. However, it’s not as simple as writing a clever ad. Insurance companies are subject to various levels of regulation and process requirements.

What is an advertisement?

An advertisement is any material that is published, printed, scripted, or displayed to a consumer. This includes, but is not limited to, postcards, electronic communications, billboards, radio or TV ads, and websites. It can also include sales talks and presentations for use by agents, brokers, producers, and solicitors.
Advertisement includes advertising material sent with a policy when the policy is delivered and material used in the solicitation of renewals and reinstatements. It also extends to the use of all media for communications to the general public, to the use of all media for communications to specific members of the general public, and to the use of all media for communications by agents, brokers, producers and solicitors. The definition of advertisement casts a wide net.

What rules apply?

Insurance advertisements are subject to federal, state, and in some cases, local statutes, regulations, and ordinances. At the federal level, insurance companies must review HIPAA marketing regulations and the CAN-SPAM Act.
The HIPAA regulation defines marketing materials as a communication about a product or service that encourages recipients of the communication to purchase or use the product or service. Applicability of the act depends on the recipient and the service or product in the communication.
CAN-SPAM sets the rules for commercial email, establishes requirements for commercial messages, and provides penalties for violations.
In addition to the federal requirements, most states have adopted some version of the NAIC’s Advertisements of Accident and Sickness Insurance Model Regulation. This regulation defines advertisements and sets forth requirements for content, control, and filing requirements. Most states require insurance companies to file Medicare Supplement and long-term care ads, but some states require that all advertisements be filed. At the local level, city and county ordinances control signage, such as those seen in traffic medians or attached to light poles.

Who controls advertisements?

Insurance companies have a duty to maintain control of their advertisements, whether those ads are created by a home office employee, a broker, or an independent agent. Insurance companies must have procedures in place to establish and maintain a system of control over the content, form, and method of dissemination of all of its advertisements.
According to our insurance support services experts, best practices include a formal advertising approval process, tracking, and record retention. States rely on insurance companies to self-monitor their advertising procedures and require a signed certification of compliance each year with the annual statement filing.
While A&H advertising requirements can be overwhelming, it’s also important to note that most states have adopted the same basic requirements with respect to content. It’s usually not necessary to create 51 versions of an ad, although there are almost always state variations.

Next steps

Whether the advertising campaign is one jurisdiction or fifty-one jurisdictions, insurance companies must understand requirements for content, filing, and distribution. Contact the insurance consultants at Perr&Knight to learn how we can provide insurance support services for advertising review and the development of processes and procedures to manage advertising.

The Impact of COVID-19 on the Travel Insurance Industry

by Crystal London

Authors: Crystal London, FSA, MAAA, Consulting Actuary, and Susan Cornett, FLMI, AIRC, CFE, Manager A&H Product Design
Coronavirus Disease 2019 (COVID-19) has had a dramatic impact on the travel industry – likewise the travel insurance industry – since it first made landfall in the U.S. in January. Travel ground to a near-halt in record time as state and federal governments ordered non-essential businesses to shut down, international borders to be closed, and shelter-in-place measures to be adopted, usually with little advance notice.
According to the TSA, airline travel has decreased by approximately 90% from mid-March to mid-May compared to the same period in 2019. This lack of movement has in turn resulted in a dramatic decrease in the need for travel insurance over the past two months, creating serious consequences for the travel insurance industry.

Lessons from the past

The SARS outbreak of 2002-2004 sheds some light on the role of pandemics in the travel insurance industry. After that event, most carriers updated their policies with exclusions and limitations specifically related to pandemics and epidemics. This has led to some confusion among insureds, as those who purchased travel insurance recently automatically assumed their canceled or interrupted trips would be covered. For many carriers, as of January, COVID-19 has fallen into the category of a “foreseen event” as a result of a pandemic, thereby disqualifying it from coverage applying to trip cancelation or trip interruption. However, an exception to this is if the policy includes Cancel for Any Reason or Interruption for Any Reason. As the benefit name implies, the cancelation or interruption is covered under any circumstance. Therefore, insureds who have purchased this “any reason” benefit are covered and could recoup a least a portion of their trip.
That said, most carriers are still offering trip cancelation/interruption coverage as well as medical expense and emergency evacuation coverage if an insured becomes ill, even if due to coronavirus.
However, if insureds cancel or interrupt their travel due to fear of the pandemic (not illness as a result of the pandemic), this reason may not be covered. Given marketing needs and distribution channels, there is no uniform policy across carriers as to when or why these benefits are not covered. Insureds are receiving multiple answers from multiple sources, further adding to their confusion.

What’s next for the travel insurance industry?

Company business is down significantly right now, with some travel insurance carriers seeing double digit decreases in business. Travel insurance coverage isn’t selling because no one is traveling. On the other hand, this decrease in travel has led to a significant decrease in claims payments, so some balancing is occurring.
Some carriers have responded to the pandemic by offering refunds outside the normal free look period or a change of coverage effective date if insureds postpone or reschedule their trip due to coronavirus. The hope is to keep the business on the books, not cancel outright.
Insurers may also face difficultly obtaining reinsurance for travel, especially for catastrophic events. Reinsurance companies, too, are trying to mitigate their risk. Given the current circumstances, reinsurers might be warier, especially due to recent medical models not anticipating a vaccine for another 12-18 months, or travel restrictions remaining in place until testing is widespread or a vaccine is available.

New state filings considerations

Going forward, we anticipate new regulatory compliance hurdles as a result of COVID-19, but to what extent is not yet clear.
Some states have fast-tracked regulatory measures dictating how carriers must address refunds. New York introduced state bill S8124B in March requiring travel insurance companies to refund premiums for COVID-19 related cancelations, but only in the circumstance that no payable claim has been filed already. Additionally, New York Department of Financial Services issued Insurance Circular Letter No. 4 in March allowing carriers to offer cancel for any reason benefits, which it previously did not allow in the state.
We anticipate additional hurdles and delays in future filings for travel insurance. Not just because many Departments of Insurance are operating with a reduced capacity (many are working from home, too), but because there will likely be added scrutiny on travel policies. We also anticipate questions regarding, and possible objections to, the use of epidemic and pandemic exclusions. We have yet to see the full scope of changes regulators will introduce in the coming weeks and months. The travel insurance industry is still adjusting to changes following the 2017 Market Analysis Working Group, subsequent regulatory settlement agreements, and introduction of model travel laws by both NAIC and NCOIL. Those states that have not yet adopted a version of the model law may take the opportunity to address pandemics and epidemics in the legislation at such time as it is adopted.
Make sure your state filings department or insurance support services partner keeps abreast of each state’s updated regulations and statutes. Pay close attention to the release of applicable new bills and circulars. Continuously monitor updates to make sure you follow the new guidelines produced by state DOIs as this unprecedented event continues to unfold.

Opportunities for the future

The news isn’t all bad. After weeks in quarantine, people are beginning to plan vacations and future travel again. They’ve had plenty of time to brainstorm a dream vacation and government stimulus checks have supplied an infusion of cash. In an attempt to generate revenue, travel suppliers like airlines and cruises are offering deep discounts, enticing people to book now for travel in the future.
For many travelers, trip cancelation insurance has never been top-of-mind ­– until now.  People who have never thought of purchasing travel insurance are seeing the value of coverage and may opt for the added peace of mind when booking.
We are also seeing emerging opportunities for carriers to offer policies reflecting a changing travel landscape. Insurance carriers are reassessing coverage options, some opting to include additional pandemic and epidemic perils within their policy. Conversely, instead of added exclusions or limitations, some carriers are weighing options to offer coverage specifically for COVID-19 related issues.
We anticipate a flurry of new state filings in the coming months as carriers rush to reshape their policies to conform to changing customer demands and updated regulatory requirements that are part of this “new normal.”
Right now, our best advice to mitigate the effects of the pandemic is to remain flexible. Prepare to give up a benefit or “unforeseen reason” clause in favor of keeping your eye on the big picture.  As DOIs update regulations to adapt to changing circumstances, carriers, too, will need to remain open-minded and ready to make necessary adjustments as we all write a new future for the travel insurance industry.

Need help navigating the fallout from COVID-19? Our actuarial and product design experts are here to answer your questions and develop a solid plan to move forward.

InsurTech: The New Frontier for A&H

by Jim Vallee

As troves of data and lightning-fast processing capabilities become increasingly available to insurance companies, cumbersome manual processes are being replaced with faster, more advanced data capture and analysis. The applications for property and casualty insurance, particularly with personal home and auto coverage, were evident straight away; therefore, P&C providers quickly began utilizing innovative technologies from InsurTechs to streamline their workflows, increase rating accuracy, and improve the customer experience.
These technologies are now starting to expand to additional insurance types, ushering in an exciting new era for accident and health coverage providers as well.

InsurTech’s new tools and new opportunities

As millennials and Gen Z buy homes, start families and advance their careers, their needs for insurance increase. However, these emerging customers are unwilling to compromise on the speed and accessibility of any products they buy – including insurance. Therefore, the traditional method of over-the-phone insurance sales or person-to-person broker relationships no longer apply. These customers demand control, transparency, and ease. They want to complete transactions with a few clicks.
They are also accustomed to an unprecedented level of control and customization in their own lives. Non-traditional career trajectories, home-ownership as a second income stream, greater flexibility with travel and work schedules…all add up to a clientele that demands fast, flexible coverage that conforms to their specific needs. This often means shorter coverage periods, specific add-on coverage, and instant payment – again, all accessible via website or smart phone app.

The changing face of A&H

Traditionally, insurance product development for accident, health and travel has adopted a “one size fits” all approach, offering protection that covers a wide variety of scenarios over an extended period of time. However, new technologies enable A&H coverage to achieve an entirely new level of customizability that can provide customers with exactly what they need, only when they need it. Some forward-thinking examples of InsurTech applications for A&H that we have seen include:

  • Travel Insurance
  • Short-term Accidental Injury coverage for specific activities
  • Customizable Supplemental Health Insurance plans such as Critical Illness
  • Major Medical price transparency comparisons
  • Health benefits packages for gig economy workers

This level of tailoring serves customers more effectively, generates new product potentials, and creates efficiencies that ultimately lower internal operations costs for insurance companies.

Apps, IoT and AI – oh my!

InsurTechs have evolved many aspects of today’s insurance industry, but we have seen the most advancement to A&H in the areas of smartphone apps, the Internet of Things (“IoT”), and Artificial Intelligence.
Insurance companies are finally beginning to recognize the value of smart phone apps in connecting with their customers. Mobile technologies are invaluable to insurers, enabling more efficient product marketing, a direct point of sale, and the ability to collect data from wearables. These streamlined products and advanced data collection can reduce or even eliminate the need for underwriting. The result for insurance companies: more efficiency for a lower cost.
“Smart devices” that connect to the internet and transmit data over a network are known collectively as the Internet of Things. These devices work quietly in the background to collect and transmit data that can help insurers provide more accurate premiums to customers. Some major medical insurance companies offer incentives such as premium discounts or gift cards for meeting exercise goals while wearing specific devices (think: Fitbit trackers). Insurers can now tie premiums and rewards to real data, not theoretical projections.
Finally, artificial intelligence (or “AI”) is releasing insurers from burdensome manual processes. These technologies have the ability to learn and reason, freeing up their human counterparts to focus on areas that require more complex reasoning or subtle discretion. Insurance companies have successfully used AI to develop chatbots that streamline the customer service experience and applied machine learning to build more accurate algorithms and models for analyzing data. By applying machine learning to predictive analytics, insurance companies can analyze key consumer data claims risk, fraud detection, anticipated demand for a new product, claims processing and underwriting. This could lead to better rate adequacy and a better overall risk profile.

Control the risks

Emerging technologies are already transforming the insurance industry, but regulation is still woefully behind the curve. Though coverage offerings are more flexible than ever, insurance product development is still subject to a rigid regulatory environment. Regulation of coverage periods, marketing materials, and underwriting processes are still rooted in traditional ways of thinking.
Additionally, InsurTechs may bring the technological expertise, but they often lack industry-specific knowledge. They usually do not even have an underwriting company or reinsurer to take on the insurance risk. This can come back to haunt you if you’re not careful. With this in mind, it’s smart to connect with an experienced independent insurance product development partner to manage regulatory requirements as you incorporate new technologies into your product suite. Their expertise regarding the jurisdiction-by-jurisdiction requirements will be invaluable as you head into the approvals process.
InsurTechs are set to make sweeping changes across the insurance industry as their technologies provide opportunities for insurance companies to respond to never-before-seen coverage needs. These innovations are not trends – they’re here to stay. As data collection and analysis evolve, A&H insurers are positioned to develop systems and products that feature faster policy uptake and fulfillment,  greater flexibility in coverage, and increasingly targeted customer service.

Want to know more about how technology can advance your A&H offerings? Our team of insurance and actuarial experts can help.

Expert Tips to Avoid Accident & Health State Filings Form Rejections

by Susan Cornett

State filings form rejections waste your company’s time and money. When you are forced to resubmit your forms, your company is on the hook to resubmit state filing fees (where applicable) and SERFF fees. These fees might be nominal in some cases, but if you are required to resubmit multiple forms in multiple states, they can range from a few hundred to thousands of dollars. Depending on the state, when you resubmit, you also run the risk of re-starting the approval clock from zero. This can result in delays of weeks or months, and lost revenue due to delayed insurance product releases.
During our decades providing state filings services, we’ve seen almost every reason a form is likely to be rejected. We also know that many of these setbacks are avoidable. Here are some of the most common mistakes that lead to rejection–and what you can do to prevent them.

Tip #1: Pick the appropriate type of insurance (TOI)

When you file through SERFF, you must specify the correct code for the exact type of policy you are submitting. In most cases, a sub-TOI is also required. These codes are crucial because they let the department know what to expect when reviewing your forms. The reviewer evaluates your form through the lens of your selected TOI, looking for particular information. A wrong TOI code subjects your form to review under the wrong classification and may result in unnecessary objections. It can also make your submission look sloppy. Submitting a filing under an incorrect TOI is one of the fastest ways to get your form rejected outright.
NAIC publishes updated codes every January. Each state’s DOI has the authority to control the number and types of insurance codes that they accept each year. Depending on the types of policies issued in their states, commissioners can “turn on and turn off” codes at their discretion. Insurance consulting companies that offer state filing services regularly review these changes, looking for new codes that apply to emerging products and codes that are no longer in use.
But what if your policy doesn’t exactly fit a particular TOI? No matter whether your product is an exact fit or not, you must pick a TOI code. For policies that don’t exactly match a particular state’s TOI code in SERFF, select the code that most closely aligns with your policy, then address individual points of variation in the filing description. Unfortunately, there are no guarantees that a reviewer will read your description, but it’s your best course of action. If you’re unsure about which TOI to select, work with an experienced insurance consulting company that specializes in state filing services. They’ll help you evaluate the code that most closely applies to your form.

Tip #2: For group policies, correctly identify your market

Selecting the correct group designation (“employer,” “union,” “association,” etc.) is hugely important. Your form is subject to rejection if the designation is incorrect or does not match what is allowed in a particular state. As with correct identification of TOI, the self-designation sets the lens through which the reviewer will check your forms. If you are missing required accompanying forms (i.e., association by-laws) for a particular type of group designation, your filing is likely to be rejected.

Tip #3: Pay close attention to the requirements of each state and line of business

Checklists, transmittals and certification requirements vary by state and by line of business. Health-specific plans that are subject to the Affordable Care Act (ACA) require additional considerations, including form and rate requirements and other ancillary forms. It’s easy to get lost in the weeds. You must have a clear understanding of the questionnaires and filing certifications required by each state. These requirements are usually­–but not always–listed on SERFF. Pay attention to these details. Missing or incomplete information will stop your filing in its tracks.

Tip #4: Include required information–and nothing more

Pay close attention to the specific information that should accompany each filing. Include what is required by SERFF but do not include additional information. Doing so can open your filing up to questions and confusion.
The sheer volume of work required to track filing requirements that change frequently and vary by state can present challenges for internal departments at most insurance companies. We recommend working with an insurance services partner who provides detailed content reviews as part of their state filings services. Their breadth of experience and deep understanding of all specific statewide filings can save you time, money and runaround.
When it comes to avoiding state filings form rejection, the most important thing is to take your time. Hasty work leads to oversights and careless mistakes that can set your filing back to square one.
Have questions about your state filings process? Contact us today to speak to our state filings experts.