LTC, NARAB Work Progresses At NAIC

Regulators looking at changes to the Long-Term Care Insurance model regulation are trying to create a tool that would allow them to help measure claim denials with industry data without creating a costly IT hurdle, according to a discussion by an LTC subgroup of the Senior Issues “B” Task Force during a conference call this afternoon of the National Association of Insurance Commissioners, Kansas City, Mo. The intention is to begin using the changes for the 2010 reporting period after the work is presented to the Senior Issues Task Force at the September NAIC meeting in Washington next month. The work would also be shared with the NAIC’s Market Conduct Analysis working group.

There are two ways that regulators and industry say are being used to measure claim denials: per person or per transaction. According to industry representatives, roughly half of LTC companies use each method to track claims denial. But they also say that if they are made to report under both methods or the method that they are not using, there would be great cost to change systems. A discussion was made about whether there should be cross-referencing of methods or whether companies should be measured against complaint data according to the method they use.

There was agreement that both state and nationwide data which is available in the blue book financial statutory filings could be used in Appendix E because it would place it in one centralized place. And there was discussion about how there are other factors in claims denial which need to be examined including whether the denial was because the facility was not a qualified institution.

Regulators also adopted a timeline for a checklist that would measure whether states are in compliance with the National Association of Registered Agents and Brokers provision of the Gramm-Leach-Bliley Act of 1999. The provision required the NAIC to come up with standards that 26 states had to adopt to prevent federal oversight of producer licensing. To date, 47 states and jurisdictions are in compliance with those provisions. Four states, according to the conversation, are not yet in compliance: California, Florida, New York and Washington state, the four corners. However, it was noted that Florida maintains that it is largely in compliance. Regulators also discussed how every state can be encouraged to be compliant with the standards.

In 2007, the NAIC started a review to make sure that states are still in compliance. Toward that end, a reciprocity report was recently adopted and could become official NAIC policy if approved by the executive committee and full NAIC plenary. A vote on a timeline on a compliance checklist was advanced by NARAB working group of the NAIC’s Producer Licensing (EX) Task Force. The checklist would have to be completed by no later than July 2010 although earlier compliance would be encouraged.
Wes Bissett, a representative with the Independent Insurance Agents and Brokers of America, Alexandria, Va., recommended that the checklist be turned in sooner rather than later because there would be work needed after the checklist are turned in. That work will take time, he noted. In fact, after the timeline was advanced, the discussion turned to details of the checklist.