New York, aware of the mandates of the federal government’s Patient Protection and Affordable Care Act and Dodd-Frank’s marshaling of insurance information, and under the scrutiny of the Treasury Department’s Federal Insurance Office (FIO), is wasting no time in highlighting the efficiency of its own regulatory efforts to make insurers stay accountable to consumers.
The state Department of Financial Services (DFS) trumpeted its win in having health insurers publicly disclose rate increases and in having life insurers return tens of millions of dollars in unpaid death benefits to consumers as part of its statutorily required report to Gov. Andrew Cuomo and the state legislature at year-end.
The report shows the DFS, in existence since Oct. 3, 2011, acted aggressively in working towards its goals, which cover all aspects of insurance and banking regulation. Work began in May 2011 to integrate the state’s Banking and Insurance Departments.
Much of the reason for the merger was budget-driven, and the report, sent DFS Superintendent Benjamin Lawsky, noted that the department is now on track to reduce spending by more than 10% in its first year.
Last October, the DFS ordered that all rate applications submitted by health insurers as part of the prior approval process be made public to consumers. Initially, health insurers claimed that their requests for health insurance premium increases should be confidential, but, after discussions with Lawsky, the health insurance industry withdrew its objections to the Department’s order and agreed to make details of rate increase requests public.
For more on the DFS’ efforts to make health rate increase requests public, see: http://www.lifehealthpro.com/2011/10/17/ny-attempting-end-to-health-insurers-rate-secrecy.
On the Social Security death master file front (a sore spot for the life insurance industry) DFS investigations prompted life insurers to now regularly match life insurance policies against a reliable death list, rather than simply waiting for beneficiaries to file claims, the report said. DFS found that many insurers had used the death file to stop annuity payments once a contract holder died, but had not used it to determine if death benefit payments were owed to beneficiaries under life insurance policies, annuity contracts, or retained asset accounts. See: http://www.lifehealthpro.com/2011/11/04/unclaimed-property-probe-escalates.
The DFS required life insurers to perform cross-checks of all life insurance policies, annuity contracts and retained asset accounts using the latest updated version of the death file, or another database or service at least as comprehensive as the SSA-DMF, to identify any death benefit payments.