Claims, Rating & Underwriting Examination Issues
We routinely are retained to assist insurers in connection with Claims or Rating and Underwriting Examinations. We have been involved in all aspects of such examinations whether the exam is a routine examination, a targeted examination, or a follow-up examination, and whether it is a full-blown and exam or desk exam. We have vast experience assisting insurers with claims handling practices, focusing on preventing problems or solving issues uncovered by regulators with regard to compliance with unfair competition laws and fair claims settlement practice rules and regulations. We have assisted clients faced with allegations of inconsistent adherence to internal procedures, failure to document loss settlements and reserve calculations, failure to pay claims promptly or fairly including improper interest calculations, findings of delay, denial or improper calculations of loss settlements, improper post-mortem interest payments and improper rescissions to name a few. We also have vast experience assisting insurers with rating and underwriting examinations focusing on compliance with prior approval laws (where applicable) and conformity and consistency with adopted rating plans and rules. We have assisted clients faced with allegations of unfair discrimination, lack of documentation to support credits or discounts, inadequate statistical data to support adopted rating plans, and adoption of unapproved or unfiled rating plans or policy forms to name a few.
We also have been retained to assist companies in connection with their response to consumer complaints and counsel such companies on the potential resulting examinations.
Market Conduct Issues
We regularly advise clients on regulatory, product development and market conduct issues regarding life insurance and annuity products. We provide advice regarding the structure of products, regulatory pitfalls, product placement and sale activities and related matters that are necessary for speed to market. Because claims examination reports are posted on the California Department of Insurance public website, insurers must have a thorough understanding of the examination process and the legal and regulatory consequences of admissions and settlement terms.
Financial Examination Issues
We regularly advise clients in connection with financial examination issues concerning propriety of investments, admitted assets, proper statement credit for reinsurance, proper payment of premium taxes, posting of required security or adequacy of security posted, and late filing penalties.
Sales practice issues
We regularly advise clients on sales practice issues. This advice has involved suitability issues surrounding the sale of annuities and other financial products, replacement issues, issues surrounding the sales of insurance products to seniors (including rules with regard to in-home sales), disclosure issues including rules involving free-look periods and Medi-Cal eligibility, and advertisement issues including use of testimonials and price comparisons. We also have experience analyzing and structuring programs so as to avoid the anti-rebate and anti-inducement laws that exist in most states, as well as to avoid “free insurance” (using free insurance to induce the sale of a good or service) prohibitions. We also have a lot of experience advising clients with regard to discrimination rules. We have vast experience assisting clients respond to regulators inquiries relating to consumer complaints and requests for assistance.
As insurers most likely will uncover issues one their own we routinely are consulted with regarding self-reporting issues to regulators. We provide strategic and tactical advice with regard to such self-reporting. We also routinely are asked to assess risk and potential penalties as well as to assist with the creation and presentation to regulators of the problem and remediation plans. We also provide advice with regard to the “self-audit privilege” that exist in many states and provide exposure analysis in connection therewith with regard to whether self-reporting is subject to discovery in future civil, criminal or administrative proceedings or subject to freedom of information laws. We also are routinely involved in negotiating and documenting administrative settlements of matters that are self-reported.