MARKET CONDUCT ANNUAL STATEMENT BLANKS (D) … · 2019. 12. 16. · October Nickel Idaho Letha Tate West Virginia Lori Cunningham Kentucky Jo LeDuc Wisconsin NAIC Support Staff: Tressa

© 2019 National Association of Insurance Commissioners 1

Date: 12/11/19

Conference Call

MARKET CONDUCT ANNUAL STATEMENT BLANKS (D) WORKING GROUP Tuesday, December 17, 2019

11:00 a.m. ET / 10:00 a.m. CT / 9:00 a.m. MT / 8:00 a.m. PT

ROLL CALL

Maria Ailor, Chair Arizona Paul Hanson Minnesota Angela Dingus, Vice Chair Ohio Brent Kabler/Teresa Kroll Missouri Jimmy Harris/Ryan James/ Arkansas Katie Dzurec Pennsylvania Russ Galbraith Michael Bailes South Carolina Kurt Swan Connecticut Lisa Borchert/Ned Gaines/ Washington Amy Groszos/Pamela Lovell Florida John Haworth October Nickel Idaho Letha Tate West Virginia Lori Cunningham Kentucky Jo LeDuc Wisconsin NAIC Support Staff: Tressa Smith/Teresa Cooper

AGENDA

1. Consider Adoption of its Nov. 21 Minutes—Maria Ailor (AZ) Attachment 1 2. Discuss the Review of the Life and Annuity Market Conduct Annual Statement (MCAS)

—Maria Ailor (AZ) Attachment 2

3. Discuss the Review of the Homeowners and Private Passenger Auto MCAS —Maria Ailor (AZ)

4. Discuss Vendor Special Interest Concerns for the Lender-Placed Insurance MCAS —Maria Ailor (AZ) Attachment 3

5. Discuss Other Health MCAS Data Call Approved by the Market Analysis Procedures (D) Working

Group—Maria Ailor (AZ) Attachment 4 6. Discuss Extenuating Circumstance Definition for Health Extension Requests—Maria Ailor (AZ)

7. Discuss Any Other Matters Brought Before the Working Group—Maria Ailor (AZ) 8. Adjournment W:\National Meetings\2019\Fall\Cmte\D\MCAS WG\11 21 Meeting\MCAS Blanks WG Agenda 1217.Docx

Attachment 1


Draft: 11/26/19

Market Conduct Annual Statement Blanks (D) Working Group Conference Call

November 21, 2019 The Market Conduct Annual Statement Blanks (D) Working Group of the Market Regulation and Consumer Affairs (D) Committee met via conference call Nov. 21, 2019. The following Working Group members participated: Maria Ailor, Chair (AZ); Angela Dingus, Vice Chair (OH); Melissa Grisham (AR); Kurt Swan (CT); Scott Woods (FL); October Nickel (ID); Lori Cunningham (KY); Teresa Fischer (MN); Teresa Kroll and Cynthia Amann (MO); Katie Dzurec (PA); Ned Gaines and John Haworth (WA); Jo LeDuc (WI); and Letha Tate (WV). Also participating were: Laura Arp and Martin Swanson (NE). 1. Adopted its Oct. 23 Minutes The Working Group met Oct. 23 and took the following action: 1) adopted its May 2 minutes; 2) heard an update on the Life and Annuity Market Conduct Annual Statement (MCAS) Data Element Review Project; 3) heard an update on the Other MCAS Lines of Business Data Element Review Project; and 4) heard an update on the health MCAS industry questions meetings. Ms. Dingus made a motion, seconded by Mr. Haworth to adopt the Working Group’s Oct. 23 minutes (Attachment ___-A). The motion passed. 2. Agreed to Change MCAS Due Dates Occurring on Weekends and Federal Holidays Ms. Ailor advised concerns were expressed to the Working Group related to when an MCAS due date falls on the weekend. It was asked if the due date could be moved to a weekday. The Working Group discussed this concern and agreed that if the due date falls on a weekend or a federal holiday, the due date will be moved to the next business day. 3. Extended the Health MCAS Filing Deadline for 2020, 2021 and 2022 Ms. Ailor advised a letter was received requesting the health MCAS filing due date be permanently changed from April 30 to June 30. The letter is attached to the minutes for reference (Attachment ___-B). Joseph Zolecki (Blue Cross and Blue Shield Association—BCBSA) provided the Working Group with a summary of the request. He went through the points outlined in the letter and explained that one of the concerns health carriers have with an April 30 filing deadline instead of a June 30 deadline is that certain health MCAS data may not be complete or entirely reliable due to the numerous health claim adjustments that occur in the beginning of the year and the year-end claim submissions in the first and second quarters. He advised that based on carrier experiences in the first two years of health MCAS filings, a June 30 filing date will allow for adequate time to pull and process this information and will result in more accurate and useful health MCAS filings. He advised the amount of external data required for health MCAS reporting compared to the life and property/casualty MCAS reporting is disproportionate, yet the filing dates are similar. He explained there is not currently an automated way to compile the data into the health MCAS because health data is received from so many different sources, and, as a result, health carriers are required to manually compile the data. He advised it would likely be several years before full automation is possible, noting that a June 30 filing date should minimize and/or eliminate extension requests. He stated that unless there are extraordinary circumstances, June 30 would be the firm due date. Prior to requesting comments and/or questions from the Working Group, Ms. Ailor explained that any decision by the Working Group to amend the due date would need to be considered and approved by the Market Regulation and Consumer Affairs (D) Committee at the Fall National Meeting. Ms. Nickel expressed concern with getting corrections from health carriers made within the next data year for Idaho. She said Idaho has a small department and a small market conduct section. She explained that getting all carriers and lines of business together at once to evaluate the MCAS data in a consistent manner and have enough time to analyze those carriers and provide companies with letters and/or contact information when irregularities/outliers are seen is already going into the next year. Then, after adding in time for responses and re-evaluations, many times the next data year is already underway. To review if there are violations going on, the department would like to cure that as soon as possible. Mr. Gaines said Washington has the same issue as Idaho, noting that the department is required to review all domestic companies. Most of the domestic companies that must report happen to be health carriers, and, with a June 30 date, the

Attachment 1


department cannot even start reviews until August at the earliest, which puts staff in a bind to get everything completed by the end of the year. If reviewing data at the end of the year, it makes it difficult to go back to the carrier and try to get any corrections, as so much time has passed and the carrier is already looking at submitting new data for the next year. Ms. Dingus advised she understands the issues with companies trying to get data and she is not opposed to extending the deadline but not on a permanent basis. She advised a period of three years would be acceptable, with the understanding the due date would be reevaluated. Mr. Haworth asked for clarification on what would be considered extraordinary circumstances. He advised that Washington often gets requests for extension the day of or day before the due date, claiming the carrier was unable to get data from a third-party vendor and wants to know if this would qualify. Ms. Dingus added the example of carriers requesting extensions because the person who was handling the data left the company and did not think this should qualify as an extraordinary circumstance. Ms. Arp said she believes three years is fair, with the understanding that this due date will be reevaluated in three years. Mr. Swanson said he envisions that an extraordinary circumstance would be a fire or an “Act of God,” not a staffing issue. Ms. Arp said changes in personnel should be excluded. Ms. Nickel suggested a May 30 deadline, explaining the Working Group cannot really define “extraordinary” and, if an extension is requested, trying to qualify “extraordinary” could become problematic. Ms. Ailor asked Mr. Zolecki what he considers to be “extraordinary,” and he agreed it would not be a change of personnel. He asked if he could go back to the carriers and send some examples for consideration, but said he agrees something like an Act of God is a reasonable parameter. Birny Birnbaum (Center for Economic Justice—CEJ) asked that the deadline be kept at April 30 and enforced because the purpose is not to be aligned with other reporting dates, but to provide data to regulators in a timely fashion. He advised that routine reporting requirements enables insurers to develop procedures for timely reporting. He advised the annual financial statement is far more complex than the health MCAS and insurers are able to report just two months following the end of the experience period, as insurers have developed the tools and resources to meet this reporting deadline despite the complexity, noting that regulators have confirmed the importance of this data for regulatory purposes. Ms. Ailor expressed her understanding of the concerns presented from all parties and advised she supports extending the deadline to June 30 or May 30 with a reevaluation date in the future, such as three years as previously discussed. She asked how the Working Group would like to move forward with this request. Ms. Dingus made a motion, seconded by Ms. Dzurec, to extend the health MCAS deadline to June 30 for three reporting periods of 2020, 2021 and 2022, to be reevaluated in 2022, only if companies request the reevaluation. If companies do not request reevaluation of the due date in 2022, the due date will roll back to April 30. The motion passed. Tressa Smith (NAIC) confirmed with the Working Group that this motion is for the 2019 data to be reported in 2020, the 2020 data to be reported in 2021, and the 2021 data to be reported in 2022. 4. Discussed Other Matters Ms. Amann advised that regarding the life MCAS, there was not enough desire from the small group to expand the life and annuity MCAS due to time and staff limitations. Mr. Haworth advised the State Ahead initiative is taking a lot of NAIC resources and adding extra data fields may not be feasible at this time. Teresa Cooper (NAIC) advised that while the State Ahead initiative is taking a lot of resources, the Working Group should not let that be a factor in this decision and to make changes as needed.

Attachment 1


Mr. Birnbaum asked who the members of the small group are, noting that such information is not readily available. He then asked if the NAIC was specifically asked if this request would be a burden or conflict with the State Ahead initiative, and Ms. Amann confirmed the NAIC was not asked that question. Mr. Birnbaum then asked for clarification on why this would be difficult for regulators. Ms. Amann advised the difficulty is collecting data they are not able to analyze because they either do not have the time or they have limitations on the data being accurate. Mr. Birnbaum then asked that a more robust report be provided from the small group and that a discussion take place about it. Having no further business, the Market Conduct Annual Statement Blanks (D) Working Group adjourned. W:\National Meetings\2019\Fall\Cmte\D\MCAS WG\11 21 Meeting.docx

59.38% 19

40.63% 13

Q1 Would it be beneficial to have the Life MCAS data reported at a moregranular level (i.e., broken down and reported by more specific product

categories)?Answered: 32 Skipped: 0

TOTAL 32

Yes

No

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

ANSWER CHOICES RESPONSES

Yes

No

Life and Annuity MCAS Usage Survey SurveyMonkeyAttachment 2

56.25% 9

81.25% 13

43.75% 7

81.25% 13

87.50% 14

81.25% 13

68.75% 11

68.75% 11

12.50% 2

Q2 An example of “a more granular level” could include the followingproduct categories. Which of the following product categories would be

useful to you? [Check all that apply.]Answered: 16 Skipped: 16

Total Respondents: 16

# OTHER (PLEASE SPECIFY) DATE

IndividualTerm Life...

IndividualPre-Need /...

OtherIndividual L...

IndividualVariable Lif...

IndividualUniversal Li...

IndividualVariable...

IndividualWhole Life...

IndividualEquity Index...

Other (pleasespecify)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Individual Term Life Insurance with no Cash Value

Individual Pre-Need / Funeral / Final Expense Life Insurance

Other Individual Life Insurance with no Cash Value

Individual Variable Life Insurance

Individual Universal Life Insurance

Individual Variable Universal Life Insurance

Individual Whole Life Insurance

Individual Equity Indexed Life Insurance

Other (please specify)


1 We recommend further discussion. We see value in being able to separate preneed contracts andother types of life insurance contracts. We would point out that these categories are not mutuallyexclusive. For instance, equity indexed universal life insurance is likely a subset of universal lifeinsurance and could be reported under both lines. We need to make sure these are defined sothat there is no double counting.

10/9/2018 4:37 PM

2 Maybe Credit/Other with no cash value?? 10/2/2018 12:19 PM


Q3 Do you have any comments or concerns regarding any of the productcategories listed above or have additional comments related to the

product categories?Answered: 5 Skipped: 27

# RESPONSES DATE

1 This may not require such a detailed breakdown, but at a minimum, it would be recommended toseparate out the Final expense/pre-need/funeral from other life insurance and because of thepossible volatility that could occur in the marketplace, separating out those tied to the marketwould also be recommended, variable and equity indexed products. This may not require such adetailed breakdown, but at a minimum, it would be recommended to separate out the Finalexpense/pre-need/funeral from other life insurance and because of the possible volatility that couldoccur in the marketplace, separating out those tied to the market would also be recommended,variable and equity indexed products.

10/11/2018 5:41 PM

2 There are other products like endowments that are not included. Some consideration should likelybe given to the product matrix and the financial annual statement. Whatever changes areconsidered should also consider how to make the lines of business comport between these twodocuments.

10/9/2018 4:37 PM

3 No. 10/3/2018 10:47 AM

4 These policies tend to have post underwriting verses initial underwriting. It might be helpful toidentify those policies and look at denied claims etc.

10/2/2018 1:25 PM

5 None 9/28/2018 11:02 AM


86.96% 20

13.04% 3

Q4 Which, if any, specific Life MCAS data elements currently reportedare not useful to you and why.

Answered: 23 Skipped: 9

TOTAL 23

# PLEASE LIST DATA ELEMENTS AND ANY OTHER COMMENTS. DATE

1 We do not use the rankings much, although those are not data elements submitted by thecompanies, they do display on the MAPT full reports. Also the national data is helpful if we arereviewing a domestic, but overall we put more weight on criteria that is state specific.

10/11/2018 5:42 PM

2 I believe most are useful. 10/2/2018 1:27 PM

3 Surrenders broken out by year, is useful if we also knew if surrender fees were applicable. 9/27/2018 3:45 PM

None

Please listdata element...

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None

Please list data elements and any other comments.


78.26% 18

21.74% 5

Q5 Are there any data elements that could be added or modified to makethe Life MCAS more useful?


TOTAL 23


1 It would be nice to add percentage change on business written for that line of business betweenthe three years, as it can help analysts easily identify aggressive movement within a line. Could weadd calculated columns for % change of premiums written in the state to the MCAS MAPTreports?

10/11/2018 5:42 PM

2 There is no definition of inforce and it may be subject to different interpretations. For example, wehave noticed variances based on issue date or effective date.

10/9/2018 4:48 PM

3 Under both ICVP and INCVP sections: 1. Definition of Policies/Contracts Applied for - might behelpful to include not-taken policies(which should be formal offers) in the definition. Currently itstates apps that are a formal offer or formal declination. However, I've had confusion withcompanies reporting data and not including not-taken policies. 2. In addition to above, include asubcategory capturing the # of policies that were not taken. That may provide a more accuratepicture of the companies conduct. 3. In addition to the current Death Claims Denied, Resisted orCompromised during the period and Number of Death Claims Denied during the period, whichoccurred within the contestability period, add more data elements such as: Number of DeathClaims Denied, Resisted or Compromised for material misrepresentation. Number of Death ClaimsDenied where policies were rescinded. Number of Resisted claims remaining open and inforcebeyond 1 year. Under ICVP section suggest adding: 4. Number of policies during the year in non-forfeiture status that is involuntarily(by consumer) terminated during the year. 5. Number of policiesduring the year in non-forfeiture status that voluntarily(by consumer) surrenders the policy prior tothe end of the policy term. I've seen many complaints relating to extended term insurance which isthe most common non-forfeiture option offered by insurers, didn't know if other states wereexperiencing the same thing.

10/2/2018 1:27 PM

4 Just additional granularity as previously noted 10/1/2018 3:10 PM

5 Perhaps add a line to the MCAS for number of policies surrendered where a surrender fee wasapplied. Policy lapses would be a useful add. This could highlight some billing issues, or concernswhen a company merges and the policyholder is not aware of new company name when awithdrawal from their bank goes through, or billing envelopes change etc. Unfair or deceptivelapse notice concerns could also be identified.

9/27/2018 3:45 PM

None


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None



82.61% 19

17.39% 4

Q6 What, if any, other information would you like to see collected as aLife MCAS interrogatory question, why and what benefit would be derived

from collecting the information?Answered: 23 Skipped: 9

TOTAL 23


1 It is recommended to request if the company utilizes a TPA for the line of business, the name(s) ofthe TPA and what the TPA does (claims administration, customer service, EFT’s, sales,marketing, etc.) If a problem (software, data breach, etc.) was identified with a specific TPA, itwould be easier to identify which companies utilize that TPA.

10/11/2018 5:42 PM

2 We find that most companies do not have comments about being a potential outlier because theydo not have any basis for comparison to state and national averages at the time of their filing.

10/10/2018 10:21 AM

3 In addition to the ratios created by the NAIC for reviewing the scorecards. I also use the followingratios to compare companies: 1. # of policies surrendered during the period compared to # ofinforce policies at the end of the PY period. 2. # of denied death claims during the contestabilityperiod compared to Death claims denied, resisted or compromised during the period. 3. # of freelooks during the period compared to policies applied for during the period 4. # of policies appliedfor during the period compared to # of policies issued during the period

10/2/2018 1:27 PM

4 I support the efforts to incorporate illustration certification fields. 10/1/2018 8:51 AM

None


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None



34.78% 8

65.22% 15

Q7 Do you supplement the Life MCAS analysis with any internalinformation or data, such as consumer complaints, market share reports,

etc.?Answered: 23 Skipped: 9

TOTAL 23

# YES, PLEASE PROVIDE WHAT OTHER DATA YOU USED AND A BRIEF EXPLANATION OFHOW YOU USED IT.

DATE

1 Other than the complaints data in CDS and generating percentage change for that line ofbusiness, we generally wait until the Level 1 to extract additional information. It might beadvantageous to provide the interrogatory comments as the last cell of the MCAS MAPT report sowe could use that to help determine if we need to conduct further review before we get to the L1stage. (This could require limiting that field to 256 characters? Perhaps they could do a summaryto be used for the MCAS MAPT report and then a details explanation that would display from theMCAS app?) We do get consumer complaint data frequently or sometimes as a result ofconducting the L1 after the baseline. It really depends on the specific company, findings, patternsand urgency.

10/11/2018 5:43 PM

2 We would look at the number and content of complaints. If it is a domestic company we mightcontact our Financial unit to obtain their thoughts on a company.

10/11/2018 4:58 PM

3 We review the complaints received by the Department, as well as compared to those the companyreceives directly and will contact the company for an explanation if there is a significant increase indirect complaints or when the Department has not received complaints any or a much smallernumber than the company. We review the company's premium and market share for anysignificant increases or decreases. We review for referrals from other sections within theDepartment that may have found areas of concern in a review of financial information, complaintsor filings, etc. We also review whether the Department has previously conducted analysis orexams and the outcome of those actions.

10/11/2018 4:33 PM

4 We gather as much available information to determine which companies should be reviewed usingthe MARS. This includes state complaints, market share, MAPT reports, bulletin boards, andinternal discussion with rate and form analysts and management.

10/10/2018 10:28 AM

5 This depends on the circumstances surrounding the Company and Line of business. Dependingon if a carrier is an outlier, we may review and trend complaints, look at market share, policyforms, etc.

10/9/2018 4:56 PM

No

Yes, pleaseprovide what...

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


No

Yes, please provide what other data you used and a brief explanation of how you used it.


6 Consumer complaints, complaint index, market share, market analysis profiles, MAPT. 10/3/2018 10:52 AM

7 Score additional data such as premium growth, number of policies written, complaints, RIRS, priorexam findings, etc...

10/2/2018 12:22 PM

8 complaints referrals 10/1/2018 3:11 PM

9 Consumer complaints submitted to the Department & market share reports Company websites &publications Product filings for a better understanding of the company profile AM Best and otherrating agencies Web-based searches for

10/1/2018 9:00 AM

10 During baseline analysis, we use MAPT scores, consumer complaints, and market shareinformation with the Life MCAS analysis to prioritize companies for level 1 reviews and possibleexam candidates.

9/28/2018 11:13 AM

11 We use internal consumer complaints to determine if there are any trends. 9/28/2018 9:34 AM

12 Consumer complaints reported directly to the bureau and agent/agency licensing and policy formfiling activity.

9/28/2018 8:11 AM

13 We always look at internal Insurance Department complaints when analyzing data. 9/28/2018 6:37 AM

14 Consumer complaints, financial reports, Rate & Form filings 9/27/2018 4:02 PM

15 Market share and premium growth over the last year, complaint counts, and state loss claim score- derived from MAPT. We also reach out to other areas of the department for feedback related tocompany issues that they have identified to take those into consideration when compiling theprioritization list.

9/27/2018 3:45 PM


60.87% 14

39.13% 9

Q8 Do you supplement your Life MCAS analysis with any externalinformation/data, such as data calls made by the department? Note: the

reference to data calls does not include data calls or requests forinformation that are submitted during a market conduct examination.


TOTAL 23


DATE

1 There are occasions where we will conduct a data call on a company as the first step prior toconducting the baseline or doing an L1, it depends on the specific situation.

10/11/2018 5:43 PM

2 We review information available from the financial statement, such as the Management'sDiscussion and Analysis for any indication of changes in the company's operations in the state,recent activity in the news, as well as the MAPT, complaints received by other states, statecomplaint ratios, and analysis, exams or initiatives by other states shared through iSite, BulletinBoards or in RIRS, MATS and MARS. We have sent data calls to companies based upon higherthan average MCAS ratios or due to a significant increase in direct complaints.

10/11/2018 4:33 PM

3 yes, we will look at external complaint bulletin boards, producer blogs, class action litigationbulletin boards and other info.

10/9/2018 4:56 PM

4 When lead in that direction. 10/3/2018 10:52 AM

5 Once the MCAS Data is reviewed I write to the company in question and ask for explanationsabout the data.

10/2/2018 1:28 PM

6 Health insurance survey data is used for a more detailed information about companies' healthinsurance business and compliance with prompt payment of claims statutes

10/1/2018 9:00 AM

7 We review rating agency (i.e. AM Best, Moody's) reports for companies selected for level 1s. 9/28/2018 8:11 AM

8 Yes, if we have knowledge of a another program area that is conducting a data call or analysis,Market Analysis will make an inquiry.

9/28/2018 6:37 AM

9 A.M. Best reports, company websites, news articles 9/27/2018 4:02 PM

No


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


No



Q9 If you use a state specific data call, please provide a brief descriptionof the data call, whether or not it is required by statute or regulation and

how the data is used in the Life MCAS analysis process.Answered: 4 Skipped: 28

# RESPONSES DATE

1 None at this time. 10/11/2018 5:43 PM

2 We do not have any regularly used data calls for life. 10/11/2018 4:33 PM

3 We have a state specific supplement that requires premium and claim reporting by line ofbusiness.

10/9/2018 4:56 PM

4 I totally depends on the data call but we would definitely be looking at claims details. 9/28/2018 6:37 AM


Q10 Please provide any additional comments regarding the Life MCASthat you think would be useful.


# RESPONSES DATE

1 The calculation of the ratio 4 for policies surrendered under 10 years is not a proven ratio,however the underlying data broken out by under two years from issuance and 2-5 years fromissuance could be a better indicator of potential issues as that is when most consumers (especiallywith annuity products) would incur fees (surrender and other fees.) Perhaps change this ratio to besurrenders under 5 years from issuance to all surrenders and another ratio that looks at surrendersunder 2 years from issuance to all surrenders. Also, see the comment above about recommendinga calculation for percentage change in premiums written for the line of business for the last threeyears as part of the MCAS MAPT. Ratio 3 (Policies surrendered to policies issued) for individuallife should be recalculated or reported differently as it often produces outliers based on companiesnot issuing a lot of policies within the state.

10/11/2018 5:44 PM

2 It may be beneficial to capture information on MCAS related to contract state and state ofresidence.

10/9/2018 4:59 PM

3 MCAS guide that offers suggestions on what each ratio may indicate and what might be anacceptable deviation from the standard ratio.

10/2/2018 1:32 PM

4 Maybe additional dialogue on blanks and interrogatories if tracked by type of life insurance (eg.credit/final expense) to make the blanks more meaningful

10/2/2018 12:23 PM

5 No additional comment. 10/1/2018 9:20 AM

6 None 9/28/2018 11:13 AM

7 I can only speak for [state redacted] but since the inception of Life and Annuity MCAS both Individual and Group, finding outliers is few and far between. It appears the industry is getting better.

9/28/2018 6:39 AM


50.00% 11

50.00% 11

Q11 Would it be beneficial to have the Annuity MCAS data reported at amore granular level (i.e., broken down and reported by more specific

product categories)?Answered: 22 Skipped: 10

TOTAL 22

Yes

No

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Yes

No


80.00% 8

80.00% 8

80.00% 8

100.00% 10

90.00% 9

70.00% 7

70.00% 7

10.00% 1

Q12 An example of “a more granular level” could include the followingproduct categories. Which of the following product categories would be

useful to you? [Check all that apply.]Answered: 10 Skipped: 22

Total Respondents: 10

# OTHER (PLEASE SPECIFY) DATE

1 we have seen a company consider annuities issued to individuals under a trust created by acompany as group contracts. We suggest that we find some way to make sure these type ofannuities are captured in the individual MCAS data, since the sale occurred to individuals.

10/9/2018 5:03 PM

IndividualImmediate Fi...

IndividualDeferred Fix...

IndividualQualified...

IndividualEquity Index...

IndividualVariable...

IndividualFixed/Variab...

Individual orGroup...

Other (pleasespecify)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Individual Immediate Fixed Annuities

Individual Deferred Fixed Annuities (other than Qualified Longevity Annuities)

Individual Qualified Longevity Annuities

Individual Equity Indexed Annuities

Individual Variable Annuities

Individual Fixed/Variable Annuities

Individual or Group Contingent Deferred Annuities

Other (please specify)


Q13 Do you have any comments or concerns regarding any of theproduct categories listed above or have additional comments related to

the product categories?Answered: 5 Skipped: 27

# RESPONSES DATE

1 Is there concern in collecting group contingent deferred annuities? (Could this be perceived asexpanding from the individual to group annuities products when MCAS has previously only focusedon individual annuities? (Technically group annuities were part of the initial pilot for MCAS but werethen eliminated at one point.)

10/11/2018 5:47 PM

2 It would be helpful to know more about the other types of products and how much consumer harmor what types of complaints are generated by those products.

10/11/2018 4:37 PM

3 Unfortunately, I don't have a lot of experience in the annuity market. 10/2/2018 1:36 PM

4 The more granular the better as long as this level of specificity remains large enough to beworthwhile to use.

10/1/2018 9:25 AM

5 None 9/28/2018 11:15 AM


86.36% 19

13.64% 3

Q14 Which, if any, specific Annuity MCAS data elements currentlyreported are not useful to you and why.


TOTAL 22


1 We do not rely too much on the rankings within the MCAS MAPT which is a calculation and notreally considered a data element the companies report. The same thing goes for the number ofzero rankings. Although the national data is nice to have, especially if it is a domestic, we generallylook more at the state specific data.

10/11/2018 5:48 PM

2 I defer to other states 10/2/2018 1:37 PM

3 Surrender totals are not useful unless we know if there were applicable surrender fees applied tothe surrender. Many annuity products have adjusted surrender periods, or surrender periods thatcan be selected by the owner/annuitant. Knowing that the company had a high number ofsurrenders between 6-10 years may not be as meaningful.

9/27/2018 3:46 PM

None


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None



68.18% 15

31.82% 7

Q15 Are there any data elements that could be added or modified tomake the Annuity MCAS more useful?


TOTAL 22


1 Would it be possible to either further define internal vs. external replacements or perhaps createan internal, external and a sister company external? The reason is that from a consumerperspective, there is no difference between when a policy is replaced externally or from anexternal sister company, consumers still incur the potential to pay surrender fees, newcommissions, etc. A sister company external (feel free to rename) would be technically within thesame group of companies, but a different company within that group. This could be an indicator ofchurning.

10/11/2018 5:48 PM

2 we recommend a definition for inforce. 10/9/2018 5:05 PM


4 Just the additional granularity as noted previously 10/1/2018 3:12 PM

5 Elements regarding surrender charges imposed may be helpful. 10/1/2018 9:03 AM

6 Number of Death Claims Closed With Payment, During the Period, within 30 Days Number ofDeath Claims Closed With Payment, During the Period, within 31-60 Days Number of DeathClaims Closed With Payment, During the Period, Beyond 60 Days

9/28/2018 11:18 AM

7 Add a line requesting number of contracts surrender where a surrender fee was assessed. (Seerationale in question 14 response.)

9/27/2018 3:46 PM

None


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None



86.36% 19

13.64% 3

Q16 What, if any, other information would you like to see collected as anAnnuity MCAS interrogatory question, why and what benefit would be

derived from collecting the information?Answered: 22 Skipped: 10

TOTAL 22


1 Request if the company utilizes a TPA for the line of business, the name(s) of the TPA and whatthe TPA does (claims administration, customer service, EFT’s, sales, marketing, etc.) If a problem(software, data breach, etc.) was identified with a specific TPA, it would be easier to identify whichcompanies utilize that TPA.

10/11/2018 5:48 PM

2 See life response. 10/10/2018 10:37 AM


None


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


None



27.27% 6

72.73% 16

Q17 Do you supplement the Annuity MCAS analysis with any internalinformation or data, such as consumer complaints, market share reports,

etc.?Answered: 22 Skipped: 10

TOTAL 22


DATE

1 We do bring in complaints from the CDS. 10/11/2018 5:49 PM

2 We would look at complaints. 10/11/2018 4:59 PM

3 The same information listed in response to this question for the Life MCAS. 10/11/2018 4:38 PM

4 See life response. 10/10/2018 10:37 AM

5 see life response 10/9/2018 5:07 PM

6 Consumer complaints, complaint index, market share, MAPT, market analysis profiles. 10/3/2018 10:53 AM

7 Internal documentation such as complaints, prior exam findings, etc. 10/2/2018 12:25 PM

8 Complaints Referrals 10/1/2018 3:13 PM

9 Complaints AND market share. 10/1/2018 9:27 AM

10 Similar information to that identified in the life section 10/1/2018 9:04 AM

11 During baseline analysis, we use MAPT, consumer complaints and market share information withthe Annuity MCAS analysis to prioritize companies for level 1 analysis and possible examcandidates.

9/28/2018 11:19 AM

12 We analyze internal consumer complaints to determine if there are any trends. 9/28/2018 9:36 AM

13 Consumer complaints reported directly to the bureau and agent/agency licensing and policy formfiling activity.

9/28/2018 8:11 AM

14 Internal Insurance Department Compaints. 9/28/2018 6:41 AM

15 Consumer complaints, Financial reports, Rate & Form filings 9/27/2018 4:03 PM

No


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


No



16 We utilize the internal information provided in the MAPT report and calculate premium/marketshare growth over the last year, and number of complaint both confirmed and complete reported.We also request information from all other areas of the department to determine if a companyshould be added to the prioritization list.

9/27/2018 3:46 PM


63.64% 14

36.36% 8

Q18 Do you supplement your Annuity MCAS analysis with any externalinformation/data, such as data calls made by the department? Note: the

reference to data calls does not include data calls or requests forinformation that are submitted during a market conduct examination.


TOTAL 22


DATE

1 Not at the time, but we often conduct interrogatories after we conduct the baseline analysis andLevel 1 to obtain further clarification on the MCAS data.

10/11/2018 5:49 PM

2 The same information listed in response to this question for the Life MCAS. 10/11/2018 4:38 PM


4 When lead in that direction. 10/3/2018 10:53 AM

5 Similar information to that identified in the life section 10/1/2018 9:04 AM

6 Rating agency reports 9/28/2018 8:11 AM

7 It depends on the data call. 9/28/2018 6:41 AM

8 A.M. Best reports, company websites, news articles 9/27/2018 4:03 PM

No


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


No



Q19 If you use a state specific data call, please provide a brief descriptionof the data call, whether or not it is required by statute or regulation and

how the data is used in the Annuity MCAS analysis process. Answered: 4 Skipped: 28

# RESPONSES DATE

1 Not at this time. 10/11/2018 5:49 PM

2 We do not have any regularly used data calls for Annuity products. 10/11/2018 4:38 PM


4 I t depends on the data call but would definitely look at claims related data. 9/28/2018 6:41 AM


Q20 Please provide any additional comments regarding the AnnuityMCAS that you think would be useful.


# RESPONSES DATE

1 The calculation of the ratio 4 for policies surrendered under 10 years is not a proven predictor ofpotential concerns, however the underlying data broken out by under two years from issuance and2-5 years from issuance is valuable as that is when most consumers (especially with annuityproducts) would incur fees (surrender and other fees.) Perhaps change this ratio to be surrendersunder 5 years from issuance to all surrenders and another ratio that looks at surrenders under 2years from issuance to all surrenders. Also, see the comment above about recommending acalculation for percentage change in premiums written for the line of business for the last threeyears as part of the MCAS MAPT.

10/11/2018 5:49 PM

2 It may be useful to collect information based upon the contract state and resident state. 10/9/2018 5:09 PM

3 Nothing further to add. 10/1/2018 9:27 AM

4 None 9/28/2018 11:19 AM

5 Life and Annuity MCAS data has been getting much better since its inception. 9/28/2018 6:43 AM


CCIAConsumer Credit Industry Association

Consumer Credit Industry Association Tom Keepers 1300 Pennsylvania Ave., NW Executive Director & EVP 190 #327 608.848.4484 Washington, DC 20004 [email protected]

October 11, 2019

Mr. John Haworth, Chair, and Ms. Rebecca Rebholz, Vice-Chair, Market Analysis Procedures (D) Working Groupc/o Mr. Randy Helder, Assistant Director Market Regulation, NAICSubmitted via email: [email protected]

Re: Blanket VSI and NAIC MCAS Reporting

Dear Mr. Haworth and Ms. Rebholz,

The Consumer Credit Industry Association (“CCIA”) offers this material to help address an issue with the reporting of Blanket VSI data in the NAIC Market Conduct Annual Statement (“MCAS”). Blanket VSI was included in scope for reporting data under the Lender-Place Home and Auto MCAS umbrella. As a new process, it’s only natural that some issues can arise. We believe this issue can be easily remedied.

Blanket VSI protects the lender’s financial interest in secured collateral against damage. It is characterized by:

• A commercial insurance policy issued to a lender, covering all eligible collateral• No individual certificates are issued• Exposure management services (e.g., tracking) are not applied to individual loans in the

portfolio• One-time nominal borrower fee may be included at loan closing -- regulated and disclosed

pursuant to lending laws (e.g., TILA)

Since no certificates are issued under Blanket VSI, the Lender-Placed Data Call and Definitions inquire into areas that are not applicable to Blanket VSI, specifically 17 Underwriting Elements, spanning from certificates in-force to number of flat cancellations on individual policies to average gross placement rate.

Despite the inapplicability of these 17 data elements to Blanket VSI, some state insurance departments are asking CCIA members for this data. Industry is thus experiencing varied feedback from state insurance regulators with respect to treatment of Blanket VSI in the LP Blank. We all share the same goal of having consistency and accuracy for data reporting.

To resolve this issue, we respectfully propose providing some basic information to state insurance department staff overseeing the MCAS process, to include:

Attachment 3

NAIC MCAS Blank Form for Disability Income Insurance CCIA Comments | August 31, 2017 P a g e | 2

• Basic information on Blanket VSI (leveraging the bullet points above) • Insurers are reporting zero (0) for the 17 Underwriting Elements that do not apply to

Blanket VSI

In this way, data will be treated consistently across the states and the industry, thereby supporting the MCAS objective of enabling state insurance analysts to identify trends and anomalies. We would be happy to assist in the development of this brief material for the state insurance departments. Thank you for your consideration. Sincerely,

Tom Keepers About CCIA. CCIA fosters consumer financial security by assuring a healthy market for consumer asset and debt protection products. Made available through lenders, retailers and auto dealers, the products help consumers meet their loan or payment obligations should an unforeseen event arise such as disability, job loss, death, total loss of a vehicle, auto mechanical repairs, or failure to secure primary insurance coverage.

Attachment 3

Attachment 4

Attachment 4

Attachment 4

Attachment 4

Attachment 4

Attachment 4

Attachment 4

Attachment 4

Documents

MARKET CONDUCT ANNUAL STATEMENT BLANKS (D) … · 2019. 12. 16. · October Nickel Idaho Letha Tate West Virginia Lori Cunningham Kentucky Jo LeDuc Wisconsin NAIC Support Staff: Tressa