Lowering the cycle time and increasing placement rates for selling long term care insurance policies can result in immediate bottom-line impact for brokerage general agencies and the carriers they represent.
Advisors struggle daily with the frustration of using different forms and administrative procedures for different carriers. This ultimately drags out the cycle time of the sales process. Such hassles can make the LTC insurance selling experience exasperating for agents and clients, causing some producers to question whether they should even sell LTC insurance.
The good news is that solutions are being developed to simplify the quantity and complexity of the paperwork bottleneck in today’s LTC insurance industry. These solutions can help encourage increased sales production by streamlining operational processes and create more consistency to eliminate the frustrations that people in the industry currently face.
LTC insurance lags behind other segments of the insurance business in standardization because it is still relatively young compared to other insurance areas. Property and casualty carriers have been using standardized forms for several decades. The Life Insurance Forms Working Group of the Association for Cooperative Operations Research and Development (ACORD) also has been developing standardized forms for several years.
As the LTC insurance industry moves on the road to standardization, some questions need to be considered. These include:
1. What are the successes and disappointments for other insurance industry segments that have moved to standardize forms?
2. How does the LTC insurance industry draw from the practices used in other lines of insurance?
3. What can the LTC insurance industry do to help this movement towards consistency?
To facilitate the process of moving to standardization, the Long Term Care Forms Working Group was formed in 2006 under ACORD to address these questions and help make a start toward the industry’s overdue need for universal data standards and forms.
Based in Pearl River, N.Y., ACORD is a global, nonprofit insurance association with the mission to help the development and use of standards for the insurance, reinsurance and related industries. ACORD standards and services improve efficiencies and expand market reach. Hundreds of insurance and reinsurance companies, as well as thousands of agents and brokers, related financial services organizations, software providers and industry organizations worldwide are affiliated with ACORD.
The ACORD Long Term Care Working Forms Group has several individuals participating from all aspects of the LTC insurance industry, including the top LTC carriers, vendors and distributors.
Carriers have supported this project by appointing individuals from their compliance, new business, information technology and claims departments to ensure the group addresses their branding and marketing needs. The group holds teleconferences twice a month to analyze different aspects of the business, with the goal of developing and adopting uniform documents. It also meets face-to-face as needed.
The group’s first order of business was to develop a list of potential forms that would be important in setting the bar for standardization. From that list, it then prioritized the documents in order of necessity.
In the short time since its inception, the group created a standard electronic fund transfer and credit card payment form. It is also preparing to release standardized policy delivery receipt and Health Insurance Portability and Accountability Act forms. After these are adopted, the group will work with ACORD to get them filed with each state for approval, on behalf of the carriers that choose to adopt them. LTC insurance agents would then be able to use one form for any state and any carrier. That will simplify paperwork and eliminate much of the confusion the agent may have experienced before the forms were standardized.
To date, the 800-pound gorilla in the room that everyone wants to tackle, but has lacked the commitment to do so, is the actual LTC insurance application itself. This is a huge project to undertake. However, if the industry were truly dedicated to its goal of streamlining the sales process, it would accept that this is the one item desperately needed. Adopting a universal form ultimately could have an enormous impact on LTC insurance sales.
The future of standardization
Many carriers are either working on or have already completed some type of LTC insurance electronic application to ease the sales process and reduce the number of applications that come in “not in good order.” Data exchanges are happening all over the country in many industries, including LTC insurance. It is not feasible to think that each distribution partner, insurance carrier or vendor can remain unique in the way it sends and receives such data.
When feeding data from one application to another, the information eventually will need to be mapped to a paper layout. As a result, the entire LTC insurance filing process comes back to the need for a standard application alongside a set of electronic data standards–both built to complement each other. Data is knowledge, and knowledge provides the LTC insurance industry as a whole an opportunity for greater success.
Visionary carriers have dedicated resources to the ACORD Long-Term Care Working Forms Group. I also encourage others in the LTC insurance industry to become part of this vision and help work toward standardizing solutions that can have positive outcomes for all. The Long Term Care Forms Working Group hopes to make the industry as a whole more aware of its work, address all unanswered questions, and move forward with this highly valuable, long-overdue project.
Sandra Latham is the chairman of the ACORD Long Term Care Working Forms Group. She is also chief administrative officer and a partner in LTCI Partners LLC, Libertyville, Ill. She can via email at