NAIC Defends State Filing Processes

And NAIC President Sandy Praeger is making sure the public knows that the AIA and its lobbyists should be the last group of people to complain about slow processes.

"High-paid insurance lobbyists consistently criticize and attempt to undermine state insurance regulators for what they consider to be slow filing processes," said Praeger, who is also the Kansas Insurance Commissioner. "It is ironic that as they complain about process delays, consumers tell us that some insurance companies are slow to pay claims."

Praeger noted that 60 percent of consumer complaints that states report to the NAIC stem from claims-handling problems caused by insurance companies-and a large majority of them are due to slow claims payment processes or outright denials, she noted.

NAIC says that state regulators have increased market efficiencies while maintaining consumer protections. State regulators use the NAIC's System for Electronic Rate and Form Filing (SERFF) to receive and process insurance product filings. When regulators use SERFF, the average turnaround time for home and auto insurance product filings is less than 32 days. The average for life and health products is under 46 days. To date, nearly 3,000 companies are licensed to file products in all 50 states, the District of Columbia and Puerto Rico through SERFF.

According to NAIC, state regulators will not give up their obligation to protect consumers just to quicken the product-filing process.

As Praeger points out, the complexity of insurance products slows down that process.

"They contain separate premium rates for every zip code, application forms with confusing questions, and an abundance of advertising materials promising everything from peace of mind to health and wealth," Praeger said. "When insurers carefully review their requirements and submit good applications, the approval process is very fast. When companies fail to comply with state laws or offer questionable products, it takes time to review and correct their work to make sure that products deliver the benefits promised to consumers."

As state regulators invest in tools like SERFF to help carriers get their products to market to remain competitive, the industry should do the same for consumers, Praeger said.

"It is time for the industry to address speed-of-payment to consumers," she added.