Illinois Insurance Director Michael McRaith addressed a number of pressing issues including new life settlement guidance, implementation of health care reform and a recent regulatory hearing on stranger-originated annuity transactions.
McRaith says that a bulletin will be issued within seven to 10 days at the latest to provide guidance for a new life settlement law that takes effect on July 1. The bulletin will provide sufficient guidance so that life settlement companies will be able to comply with the law’s requirements, he said during an interview.
Part of the implementation requires providers to state their intention of doing business in a letter to be filed with the Department by June 1. When asked about the tight time frame, McRaith said that during the law’s implementation phase, “it is not the department’s intent to be punitive” as efforts are made to develop clarity around the new requirements. He explained that during the transition period, the department is willing to accommodate reasonable requests but it will not accommodate non-compliance of any new requirements.
When asked how the industry should prepare for these new requirements, he recommended that “the industry should become very well acquainted with the terms of the law and expectations in the law.”
On the issue of health care, McRaith says that the department is making good progress in implementing guidance such as one on endorsements which will in effect on September 23. McRaith says that there has been an increase in unreasonable rate increases including high deductible plans which he says was designed with the objective of providing affordable, consumer-driven health care.
Illinois has not had the authority to regulate rate increases based on state law, he said. But the new federal law, the Patient Protection and Affordable Care Act, gives the department greater authority to control rates, McRaith continued. The Department is in the process of developing a process to receive rate increases from health insurers and review those requests, he added. The state has a file and use process which he says works for some lines of insurance such as property-casualty coverage. However, “it is completely dysfunctional in the health care market,” he added.
On his take away from a recent hearing held by the National Association of Insurance Commissioners, Kansas City, Mo., McRaith said that “as regulators, we need to continue to explore and learn about this issue. We need to see if this is a one-off event or a pattern of abuse.”