To help insurance companies avoid noncompliance violations, Wolters Kluwer Financial Services has released its annual list of the top 10 reasons insurers are found to be out of compliance during market conduct examinations.

Wolters Kluwer Financial Services’ Insurance Compliance Solutions group reviewed and analyzed the content in last year’s market conduct exams from across the United States, and assigned the criticisms to various categories. The categories with the most criticisms comprise the top 10 lists for property/casualty insurance and life and health insurance.

“This research helps serve as a checklist for insurers so they can assess noncompliance risks,” said Kathy Donovan, manager of government relations for Insurance Compliance Solutions at Wolters Kluwer Financial Services. “If regulators were to conduct an audit today, these are the key areas that would be looked at. So insurers need to ask, ‘How would our organization fare?’”

Wolters Kluwer Financial Services’ industry research shows that the top 10 most common market conduct compliance criticisms for property/casualty insurance are:

1. Failure to acknowledge, pay, or deny claims within specified time frames.
2. Failure to properly terminate a policy, including inadequate days’ notice and omitted required language.
3. Improper documentation of claim files.
4. Using unapproved or unfiled rates and/or rating errors.
5. Failure to provide required disclosures (such as the selection, rejection, or coverage notices in the underwriting process or notices such as statute of limitations, reasons for denials, and bill of rights in the claims process).
6. Failure to provide notification of producer appointments or terminations.
7. Improper documentation of underwriting and policy files.
8. Failure to communicate a delay in the settlement of claims in writing.
9. Using unapproved or unfiled forms.
10. Failure to produce requested records for an examination.

“It’s a challenging, ongoing task for insurers to monitor the regulatory environment and make sure they are continually in compliance with requirements governing the industry,” said David Evans, vice president and general manager of Insurance Compliance Solutions at Wolters Kluwer Financial Services. “This research is yet another tool we can offer insurers to help them identify potential problem areas and prevent the negative impact of noncompliance on their organization and their customers.”

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Source: Wolters Kluwer Financial Services

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