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Top 10 Criticisms of Insurance Companies

Wolters Kluwer Financial Services studied market conduct exams in both P&C and life to find out what pain points are most common in dealings with insurance carriers.

Waltham, Mass.-based Wolters Kluwer Financial Services studied insurance market conduct exams to come up with a top 10 lists of criticisms found there.

"Managing compliance risk is difficult at best, given all the regulatory requirements governing insurers' claims, underwriting and distribution processes," said Kathy Donovan, senior compliance counsel, Insurance, at Wolters Kluwer Financial Services, in a statement. "However, understanding where the greatest problems exist can assist insurers in prioritizing audits of internal processes."

The investigation shows that "fundamental processing areas within insurance companies continue to have challenges that cross claims, licensing and underwriting," according to a Wolters Kluwer statement. For P&C, the top 10 criticisms are:

  1. Failure to acknowledge, to pay, or deny claims within specified time frames

  2. Using unapproved forms, unfiled rates and/or misapplication of rating factors

  3. Failure to cancel policies or non-renew policies in accordance with requirements

  4. Failure to provide required compliant disclosures in underwriting processes

  5. Failure to process total loss claims properly

  6. Failure to provide required compliant disclosures in claims processing

  7. Improper documentation of underwriting files

  8. Failure to adhere to producer appointment, termination and/or licensing requirements and adjuster licensing requirements

  9. Failure to pay correct amount under policy

  10. Improper documentation of claim files

      And, for life and health insurers:

      1. Failure to pay claims properly in accordance with policy provisions

      2. Failure to use compliant policy forms and/or compliant plans

      3. Failure to properly acknowledge, pay, investigate, or deny claims within specified time frames

      4. Improper documentation of underwriting files

      5. Failure to use licensed and appointed producers and to provide proper notification of producer appointments or terminations, including maintenance of producer registers

      6. Failure to provide required disclosures including coverage issues, fraud warnings, and free-look periods

      7. Failure to adhere to required claims appeal processes

      8. Using unapproved/unfiled rates or forms and rating errors

      9. Improper documentation of claim files

      10. Failure to adhere to replacement requirements

      Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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