IMSAs Executive Director Responds To Bobo Column
To The Editor:
In the June 10 issue of National Underwriter, Jack Bobos column entitled “Why IMSA?” poses a valid question Im happy to address. However, the body of that article was littered with inaccuracies.
Mr. Bobo is correct to be concerned about the insurance industrys vulnerability to questionable market conduct practices. The Insurance Marketplace Standards Association certainly is concerned. It is the reason we exist: to serve the consumer, and the marketplace as a whole, by helping our member companies scrutinize their own marketing, sales and customer service practices to assure a fair marketplace for consumersand by helping our members help their distributors do the same.
Mr. Bobo questioned IMSAs ability to achieve that mission. He questioned the adequacy of our standards, the qualifications of those conducting IMSA assessments and whether IMSA membership, once achieved, is meaningful. Id like to address these three areas in turn.
IMSA Standards. IMSAs Principles and Code of Ethical Conduct are a rigorous set of criteria that insurers must meet and adhere to in order to attain and maintain IMSA membership. Within the framework of six broad principles, there are many questions and subquestions totaling over 190 specific indicators of compliance to provide objective measurements. Insurers must be able to demonstrate compliance with these indicators in order to earn and maintain membership.
IMSAs standards do not pertain exclusively to marketing functions. IMSA standards also cover the entire spectrum of marketing, sales and service of life insurance, long term care insurance and annuity products, including such related issues as customer service, complaint handling and agent background screening. It is a complex and comprehensive assessment.
IMSA Independent Assessors. Such detailed assessments must be conducted by knowledgeable and well-trained independent assessors. Mr. Bobo raises the concern of IMSA assessments being conducted by accountants unfamiliar with insurance business practices, or who may be influenced by existing relationships between the insurer and the accounting firm. IMSA independent assessors have varied backgrounds. Accountants, attorneys, marketers, actuarial consultants and independent consultants have all trained to perform IMSA assessments. However, the majority of independent assessments of IMSA member companies are conducted by assessors not affiliated with accounting firms.
Further, if an IMSA member company selects an assessor affiliated with an accounting firm with which the company has an existing relationship, that relationship must be disclosed in the insurers application for membership.
IMSA is very selective in granting credentials to independent assessors. Consistent with IMSAs core concept of “continuous improvement,” IMSA decided to conduct a review of its independent assessment practices prior to the announcement of the recent difficulties at Enron and Arthur Andersen. We are currently reviewing our independent assessment standards to assure the highest standards of independence and quality. IMSA members dedicate considerable time, effort and expense to meet and maintain compliance with IMSA standards and we want to be sure the full weight of that achievement is acknowledged without doubt.