Insurance consumer advocates are wondering if they are pressing in vain for SERFF (System for Electronic Rate and Form Filing) electronic public access to rate and form filings for life insurance, long-term care insurance and other lines beyond those now permitted for the Patient Protection and Affordable Care Act (PPACA), but many in the industry are opposing it, citing potential competitive harm.
It’s just an anachronism not to make them public and accessible on one desktop. They are up on some state sites sooner than later, and going from state to state is burdensome and costly, they say.
Birny Birnbaum, Center for Economic Justice, an economist and former insurance regulator from Texas, argues that the position to keep the filings private makes no sense in these times because it is cheaper and much more efficient for regulators to provide electronic filings publicly. Many states already file publicly on the Internet, meaning that insurers already have access and that the argument to guard the filings is inconsistent with economic principles.
“There is no evidence that public access through the Internet has harmed competition,” Birnbaum said, in reference to rate filings already public from state insurance departments. And it is already done for health care filings, Birnbaum pointed out, so it is doable. In order for industry health filers to correctly report PPACA-related filings to the states, SERFF has implemented three field values which can be found on a PPACA-eligible SERFF filing.
The SERFF board is comprised of members of the insurance industry in addition to state regulators, and requires a supermajority vote to pass something. Birnbaum worried that with the amount of industry members on the board, there is no way to get public access to state form filings by regulators even if all wanted it, because industry board members would all oppose.
According to the SERFF website, the board is comprised of seven state regulators and six industry members from companies like United Healthcare’s Golden Rule, Ace Group, Tramsamerica and Zurich North America.
The original concept for SERFF was developed in the early 1990s by the NAIC with an intent is to provide a cost-effective method for handling insurance policy rate and form filings between regulators and insurance companies. In June 1996, the SERFF Consortium, an unincorporated group of interested states and companies, was formed in response to the demand for an automated system, the website explains.
Consumer advocates, in a letter to the chief regulator overseeing the process, stated that the SERFF approach was anachronistic.
“Instead, individuals in the vast majority of states must follow one of two expensive and inconvenient procedures: 1) many states require consumers to either physically visit the insurance department or hire a private company to do so; or 2) states may require consumers to submit a request for records directly to the department,” stated the comments, submitted to about a dozen key NAIC consumer representatives including Birnbaum, and Professor Timothy Jost, a health insurance policy expert and law professor.
“What makes this particularly unreasonable is that individuals have no means of checking filings prior to a request to ensure that they actually contain relevant information. Thus, individuals who do choose to incur the costs required by the current system cannot even be sure that they will receive the information they are seeking.
“This lack of transparency has two principal negative effects. First, it undermines the market discipline of insurers. … In many cases, the mere threat of scrutiny by market intermediaries may have a substantial effect on firms, deterring them from imposing new fees or adding hidden unfair terms…
Second, the lack of public availability also undermines regulatory accountability…For instance, numerous studies using Home Mortgage Disclosure Act data have helped to identify discriminatory lending practices and prompted initiatives to make credit more available in traditionally under-served areas,” the consumer comments stated.
The American Council of Life Insurers (ACLI) member companies “are very concerned that if public access through SERFF is expanded, the current competitive advantage of companies that may have invested significant resources in the development of innovative new products may be significantly jeopardized,” the ACLI stated.
As Birnbaum and ACLI officials noted, the electronic access to filings would make it much easier and much quicker for the public and insurers to access rates, although sometimes the lag time is only three days in some states to get filings up on the state’s Web site, visible to all.
The majority of states do not allow public access until the filing is approved, noted Miriam Krol, an ACLI vice president, policy.
About nine or 10 states that are extremely technology-friendly do provide immediate access to rates, but SERFF was not built to provide access, she said.
With the Department of Health and Human Services (HHS), the architecture was adapted to provide access for (major medical) health care filings.
But now some regulators are saying, ‘we would like that for all filings,’ the industry noted.
Much of the public comment was voiced before or at the Aug. 13 Public Hearing on Leveraging SERFF in Support of Public Access to Product Filings convened by New Hampshire Commissioner Roger Sevigny, chair of the NAIC Speed to Market (EX) Task Force and SERFF board member, in Atlanta.
SERFF was founded, developed and funded by the industry and by regulators, and advocates of keeping rate and form information unavailable publicly say that carefully discussed and longstanding commitments were already made specifically preclude SERFF and/or the NAIC from playing any role in the legitimate state public access function.
Even the healthcare industry, which participated in the discussions over the last year regarding adapting SERFF public access to assist states with implementation of the new federal requirements established under the Affordable Care Act (ACA), came out opposed to public disclosure.
America’s Health Care Plans said that SERFF was being designed “to allow only those health filings impacted under the new federal law to be accessed but not for rates for Long Term Care /nursing home, limited scope dental and vision plans, automobile medical payment plans, and supplemental plans for specified disease…”
“This limited purpose is also reflected in the SERFF- related charges for the NAIC Speed to Market (EX) Task Force. We are not comfortable extending an ACA-developed solution to products that are not subject to the federal law,” stated the AHIP letter from Betsy Pelovitz vice president, product policy, to Sevigny.
Emails to Sevigny and other regulators were not returned by press time.