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Why Aren't More Insurers Using CARFRA For Filings?

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Why Aren’t More Insurers Using CARFRA For Filings?



Regulators and insurers met here to discuss why a pilot program for a single point of filing is not being used by more insurers and how the system can be improved in the coming year to make it more appealing for companies with new product filings.

The Coordinated Advertising Rate and Form Review Authority, a speed-to-market initiative of the National Association of Insurance Commissioners, is a project that establishes a single point of filing for products. To date, the 10-state pilot has had one product filing, a term product filed by Prudential Financial, Newark, N.J.

Michigan Commissioner Frank Fitzgerald, a co-chair of the CARFRA working group with Pennsylvania Commissioner Diane Koken, said there is concern that a system will be built and no one will come to it, but he believes the project will be a success with further work. That work, he said, includes determining how laws and regulations deviate from national standards.

Among the areas he said need to be reviewed are statutes, regulations and rules and desk drawer rules, which are unofficial requirements created by departments.

Patricia Parachini, representing the American Council of Life Insurers in Washington, said ACLI recently surveyed members to see why they are not using CARFRA.

Responses, according to Parachini, suggest that state deviations companies have to follow when filing a product with CARFRA are discouraging insurers from making such filings.

Other concerns named in the survey, Parachini said, include the need to add more complex products such as variable annuities and universal life to the existing CARFRA stable of products.

Confidentiality is another issue, according to Parachini, who said the public release of “trade secret” information made companies reluctant to use the system.

The survey found companies want more states to be added to the pilot and further work done to refine technology to facilitate CARFRA.

Parachini told regulators that ACLI is drafting a model law that would outsource the filing and approval process to CARFRA. The proposal should be ready by January 2002, she added.

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 17, 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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