Self-Insureds Report Difficulties In Getting Quotes, Closing Claims

By

Caroline McDonald

Chicago

Self-insured health plans are finding it harder to get insurance quotes and to settle claims, a survey has found.

Preliminary survey results found the majority of respondents had changed quoting relationships two or three times this year, yet received fewer quotes on average, according to Jack Zoeller, president of AtlantiCare, Inc., who discussed the study here at the Self-Insurance Institute of America’s annual meeting.

In addition, more underwriters declined to quote and there was an upturn in claims disputes, Zoeller noted.

The “2001 Stop-Loss Industry Survey” was mailed recently to 600 firms representing a wide assortment of players in the self-insurance business, including third-party administrators, brokers, reinsurers and consultants, according to Zoeller.

He said the survey would be concluded online at the Vienna, Va.-based managing general underwriters Web site at the end of this month (www.AtlantiCare.com). AtlantiCare specializes in medical and life insurance benefits for employer groups.

Zoeller said 56% of respondents reported changing two or more quoting relationships this year, yet one-third of the respondents reported getting two or fewer quotes on average because underwriters declined to quote, a trend noted by 95% of those responding.

This trend, he said, could be explained because some managing general underwriters are no longer in business. Zoeller also said producers are “more likely to go to alternative managing general underwriters and control the presentation to the client.”

He said 82% of those surveyed reported more problems with claims disputes. The survey found MGUs and primary carriers are “caught in a squeeze between their reinsurers and their producers,” he said.

Zoeller noted a comment from one survey respondent who said the greatest problem facing the insurance industry today is “over-reacting to almost everything.” He added that from the perspective of self-insureds, “I think the year 2001 might, indeed, deserve the label, the year of over-reacting,” but only time and a fully developed claims history “will tell the whole story.”

Several survey respondents “decried the lack of true partnership” in what they felt had become a commodity business, Zoeller explained. Respondents said brokers, MGUs and carriers are “not being true partners,” he said.

Almost 70% of those surveyed, however, preferred dealing with carriers directly to MGUs.

According to the survey, 80% of all quotes have included an average rate increase of 36% over in-force premiums, Zoeller said.

When increases seemed “unreasonably high,” he said, repondents said they ask the underwriter for a requote, seek an additional quote from another source, and recommend a higher deductible.

Caroline McDonald is an associate editor of NU’s Property & Casualty edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, October 22, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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