Speed To Market Strategy: Tailor Product Filings To Each State
In our fast paced world and changing financial environment, the pressure to get insurance products to market faster continues to grow.
Everyone–agents as well as company executives and even regulators–wants to see that new products get into the marketplace quickly.
This pressure was behind the development of the “speed to market” initiatives that have been launched by state insurance regulators.
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Still, the process takes longer than some people anticipate. This article will shed light on why, and what can be done to improve things.
In the area of product approvals, delays often occur in the complicated process of making filings and negotiating with regulators to achieve compliance when regulations vary from state to state.
Often, the cause of the delays has been the “top drawer” rules of the various insurance departments. A “top drawer” rule is one that resides in the regulators top drawer, to be referenced when reviewing a new product filing. It represents the insurance departments interpretation of the rules, regulations and codes for the state. Such rules have previously not been available to company compliance staff.
Another cause of delay has been product filing strategies that are self-defeating. If the filing strategy is to get the filing “out the door” as soon as possible, without configuring it to meet each states requirements, a long, drawn out negotiation process often results. Such a strategy may also result in return of the filing to the company–with a note saying the filing is inadequate.
Fortunately, the impediment to “speed to market” caused by top drawer rules is quickly disappearing. In the past year, at least 30 of the 50 states have changed or modified their filing requirements and more (Maryland and Minnesota, for example) have announced that changes are forthcoming. Their goal is to support the “speed to market” initiative.
In particular, most states have taken the steps shown in the chart on this page.
This speed to market initiative has shifted the burden of compliance to insurers. The product outlines and checklists are not necessarily required to be included in the submission package, but if they are included, it helps.
If regulators see that compliance personnel have put in a good faith effort to bring their products into compliance in the initial filing, it will speed the review process. Then, any negotiating should be on unique aspects of the product that may not be covered in the product outlines or checklists.