While excitement about speed-to-market initiatives like the interstate compact and federal charter continues to build, many insurers have seen little or no change in the speed of new-product availability. What’s happening and why?
One of the most anticipated speed-to-market initiatives is the interstate insurance compact. Started in June 2006, the Interstate Insurance Product Regulation Commission worked with state insurance regulators and the industry to create 48 uniform standards. So far, 32 have been adopted.
In an ideal world, the compact allows a company to file a single submission and get it approved in all 31 participating compact states. Those states represent half of all total U.S. premium volume.
Turnaround time for compact approvals should be 60 days, but actually averages about 38 days. As great as this may sound, so far only 22 of nearly 1,000 North American life insurance companies have registered with the compact.
Registration involves paying a $5,000-per-company annual fee, another $500 fee for each compact filing, the usual state filing and retaliatory fees, and System for Electronic Rates and Form Filing (SERFF) submission fees. Compact filings must be made electronically via SERFF.
Since the compact started accepting filings in July 2007, 48 individual life products have been filed; most are universal life products.
Why the “ho-hum” when it comes to industry compact involvement?