WASHINGTON BUREAU — The National Conference of Insurance Legislators has endorsed an annuity suitability model developed by state insurance regulators and approved a health insurance balance billing model of its own.

The National Conference of Insurance Legislators (NCOIL) has endorsed an annuity suitability model developed by state insurance regulators and approved a health insurance balance billing model of its own.

Suitability in Annuity Transactions Model Regulation

Members of NCOIL, Troy, N.Y., approved the Suitability in Annuity Transactions Model Regulation this weekend at a national meeting in Washington.

The model was developed by the National Association of Insurance Commissioners, Kansas City, Mo.

“Suitability” refers to the steps insurance agents are supposed to take to verify whether the annuities they are selling to customers appear to meet those customers’ needs.

The NAIC model:

Increases producer training requirements.

States that insurers are responsible for producer compliance.

Requires reviews of all recommended annuity transactions.

Authorizes state regulators to take action against unsuitable recommendations.

NCOIL approval of the NAIC model is “in line with state legislators’ efforts to promote transparency and accountability in the sale of life insurance products,” says North Dakota state Rep. George Keiser R-N.D. “Now, more than ever, we feel that disclosure is paramount for consumers, who are struggling to secure their and their families’ present and future financial well-being.”

NCOIL hopes to achieve further consensus and will work to support the model’s enactment in the states, Keiser says.

Balance Billing

NCOIL members also approved at a new model law that is supposed to protect consumers who seek in-network care from being surprised with big bills from out-of-network radiologists, out-of-network anesthesiologists and other out-of-network providers.

“Balance billing” is the practice of a doctor or hospital billing a patient for the difference between what the provider say a service really costs and what the insurer says the service should cost.

Managed care companies usually forbid providers from balance billing in-network patients.

Out-of-network providers face few constraints on balance billing, and patients tend to have an especially hard time staying in network when they enter a hospital and get care from many different doctors.

The NCOIL model establishes standards for disclosures that must be made before and after treatment regarding insurance networks, balance billing and financial responsibility, and warnings by in-network facilities that some providers in the facility might be outside the patient’s network.

The model also requires facilities to offer patients provider listings and detailed billing statements.

Other NCOIL news from National Underwriter Life & Health: