My LexisNexis Insurance Compliance colleagues conducted a peer poll at the Association of Insurance Compliance Professionals’ annual meeting in Portland, Oregon last month. Their mission was to ferret out the issues that are having the most significant impact on various segments of the compliance community. The results of this poll are somewhat surprising.
The first thing I noticed was a strikingly low level of participation by representatives from the specialty lines and workers’ compensation companies. Of the 100 conference attendees that took the poll, only two respondents listed specialty or workers’ compensation as their company’s primary line of business. In spite of the regulatory focus on captive insurance in numerous states (like Vermont, Hawaii and Colorado) and regulatory developments in the workers’ compensation arena (especially in California and Texas), these poll results appear to belie the active participation of specialty lines and workers’ compensation companies in a compliance organization like AICP. The relatively small universe of participants does limit the scope of the conclusions that I can draw here, but I suspect it’s safe to say that specialty lines and workers’ compensation writers were noticeably absent from AICP’s compliance arena. [49 percent of poll participants were primarily engaged in property & casualty lines, 26 percent were associated with companies primarily engaged in life insurance lines, and 16 percent listed health insurance as their company’s primary line of business.]
The survey also asked poll participants—regardless of their stated line of business—to select the biggest issue in the major coverage areas of property & casualty insurance, life insurance and health insurance. These survey responses also generated some unexpected results.
Although the reinsurance market has cast a very wide umbrella over claims arising from Hurricanes Rita and Katrina and California hadn’t started burning when the AICP conference took place, a full 59 percent of poll participants chose catastrophe coverage as the biggest issue facing property and casualty insurers. In spite of the excruciatingly detailed regulations enacted during 2007 and on regulators’ calendars for 2008 with respect to producer licensing, training, education and fingerprinting, only 13 percent selected producer licensing as a big ticket issue. Climate change (11 percent ), toxins (9 percent ) and loss related to acts of terrorism (8 percent ) showed a surprisingly low response rate, especially when one considers the daily attention that the media gives to melting polar ice caps and terrorist threats, not to mention developments relating to TRIA as that soon-to-sunset legislation meanders its way through the House and Senate.
Survey results on the big ticket issues facing life insurers were a little more in line with my expectations. Responses were split—both across the board and with respect to life industry participants only—between the optional federal charter (28 percent of all responses and 31 percent of life industry responses) and suitability in annuity transactions (24 percent of all responses and 35 percent of life industry responses). A lesser number of life industry representatives (18 percent) selected viatical settlements and stranger-owned life insurance as the most important issue facing life insurers, and only 15 percent of life industry respondents chose principles based reserving, even though that concept will soon alter the universe in which life insurers operate in a very significant way. Travel underwriting gets a lot of press, but a mere 8 percent of poll participants marked this politically explosive topic as a hot issue. Credentialing was also on the list of selections, but only 7 percent of respondents picked this topic as a big issue for life insurers.
The health insurance industry respondents were a small but vocal bunch with a much more diverse viewpoint than their AICP conference colleagues. A plurality of all survey participants (51 percent) selected privacy as the biggest issue facing health insurers today. And while a plurality of all health care participants (31 percent) also selected privacy as the health industry’s big ticket item, half of all health care respondents split their choice between the issues of group insurance modernization (25 percent) and utilization review (25 percent). The issues of managed care liability (6 percent) and disability income as it relates to discretionary clauses and drug/alcohol exclusions (13 percent) drew very little interest from health insurance respondents, and mental health coverage and services was a complete non-issue (0 percent), as far as this segment of respondents was concerned.
What about the rest of the compliance professionals out there? Let us hear your views on the big ticket issues facing the property/casualty, life and health segments of the insurance industry.