Annual review of Top 10 market conduct issues provides key insights for insurers
BOSTON–(BUSINESS WIRE)–#WoltersKluwer–The U.S. insurance industry’s top market conduct compliance challenges continue to relate to various claims handling requirements, including timeliness, required disclosures, along with payments and grievance and appeal processes—as well as underwriting, rating, marketing and producer requirements. This annual, comprehensive review by Wolters Kluwer Compliance Solutions of U.S. insurers’ market conduct enforcement actions is based on public regulatory data from 2021, examining the market conduct actions of U.S. property and casualty, life, and health insurers, including exams and other enforcement actions.
Now in its 18th year, the Top 10 market conduct actions review serves as a reminder of the ongoing challenges insurers face in managing the risk of noncompliance. Insurers can use the results of this annual review as a compliance aid in their own internal compliance audits.
“Managing compliance risk is a significant concern for insurers,” said Steven Meirink, Executive Vice President and General Manager for Wolters Kluwer Compliance Solutions. “However, monitoring the changing regulatory requirements and the enforcement action environment using a compliance program management approach can be instrumental in fostering insurers’ market conduct compliance.”
The following are listings of recent, top compliance issues determined in market conduct actions across the U.S. by state insurance regulators. As in prior years, these issues are primarily found in insurers’ claims, underwriting, and sales processes:
Failure to acknowledge, pay, investigate or deny claims within specified timeframes
Failure to provide required compliant notices and disclosures in claims processing
Using unapproved/unfiled rates and rules, rating errors
Failure to process total loss claims properly
Failure to issue correct payments and/or compliant denial notices
Failure to cancel, non-renew, decline, or increase premium in accordance with requirements
Failure to adhere to producer appointment, termination, records, reporting and/or licensing requirements
Failure to provide required compliant notices and disclosures in underwriting processes
Improper/incomplete documentation of claim files
Improper/incomplete documentation of underwriting files
Failure to adhere to required claims utilization review, grievance and appeal processes, including timeframes and disclosures
Failure to pay claims properly in accordance with policy provisions and comply with claim denial requirements
Failure to acknowledge, pay, investigate, or deny claims within specified timeframes
Failure to provide required and compliant claims, underwriting and policyholder disclosures and notices
Failure to use licensed and/or appointed producers, provide proper notification of producer appointments or terminations, or to maintain appropriate documentation
Use of unfiled/unapproved or noncompliant forms; unfiled/unapproved rates
Failure to adhere to replacement requirements
Failure to maintain adequate/complete claims, underwriting and complaint documentation
Failure to adhere to suitability requirements
Failure to adhere to advertising requirements
While these Top 10 lists provide insight into insurers’ continuing compliance risk challenges, other noncompliance issues include failure to perform required audits of third-party administrators, complaint handling timeframes and policyholder service.
The market conduct examination process for insurance companies is complex, time-consuming and costly. To learn more, access Wolters Kluwer’s September 2022 webinars, which focused on Top 10 property and casualty market conduct actions as well as Top 10 life and health market conduct actions. Wolters Kluwer’s Exam & Management solutions help insurance companies in managing these compliance challenges.
Wolters Kluwer Compliance Solutions is a market leader and trusted provider of risk management and regulatory compliance solutions and services to U.S. banks, credit unions, insurers and securities firms. The business, which sits within Wolters Kluwer’s Governance, Risk & Compliance (GRC) division, helps these financial institutions efficiently manage risk and regulatory compliance obligations, and gain the insights needed to focus on better serving their customers and growing their business.
About Wolters Kluwer Governance, Risk & Compliance
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