Sunday, February 6, 2011

Issues to Watch

Several interesting items this past week point to two issues that will be worth following throughout the year: whether the new federal health care law is whittled away bit by bit; and just how much traction U.S. insurers will have in making their voices heard before insurance contract accounting changes are put in place later this year.

On the first point, this past week Senate leaders passed a repeal of the 1099 provision of the Patient Protection and Affordable Care Act. Insurers including the Property Casualty Insurers Association of America (PCI), Des Plaines, Ill., contend that a repeal of the 1099 tax-reporting provision will remove a “crushing provision” for insurers.

Additionally, press reports describe how Sen. Ben Nelson, D-Neb., talked about how a requirement that individuals have health insurance needs to be changed. The remarks were made during a “Day on the Hill” event by the National Association of Insurance and Financial Advisors, Falls Church, Va., according to press reports.

On the latter issue, U.S. insurers are waiting to see whether the International Accounting Standards Board, London, and the Financial Accounting Standards Board, Norwalk, Conn., will listen to their concerns when they discuss the insurance contracts paper during the mid-February joint IASB/FASB meeting and beyond. The discussions are a prelude to finalizing the IASB’s exposure draft and the FASB’s discussion paper.

Saturday, February 5, 2011

AACII, Gen Re Releases Results from Critical Illness Survey

Men are more likely to purchase critical illness policies before the age of 45 than women, according to the 2011 Critical Illness Insurance Buyer Study conducted by the American Association for Critical Illness Insurance (AACII), Los Angeles, and Gen Re, Stamford, Conn.

Fifty-four percent of men purchasing critical illness policies last year were younger than 45 compared with 49 percent of women who bought policies in 2010. Researchers analyzed data for over 20,500 purchasers of individual critical illness insurance policies made between January 1 and December 31, 2010.

According to the survey, 21 percent of male buyers and 19 percent of female buyers were between the ages of 25 and 34. Women tended to buy this protection at slightly older ages. The age band 55-or older had the widest spread, with some 18 percent of male and 22 percent of female buyers.

Critical illness insurance pays a tax-free, lump-sum cash benefit generally upon diagnosis of a covered critical illness such as cancer, heart attack or stroke. The first policies became available in the United States in 1996 and today some 900,000 individuals have such protection, according to the AACII and Gen Re.