NAIC Looks at Disability Insurance Best Practices
The National Association of Insurance Commissioners ("NAIC") is considering the adoption of disability claims best practices guidelines to augment its Unfair Claims Settlement Practices Model Act. The Consumer Protections & Innovations Working Group held a public hearing at the NAIC Winter National Meeting. Consumers groups, lawyers representing insureds and the industry, the ACLI, various disability insurers and several states have offered their views and proposals. Not unexpectedly, a split has emerged over the proposed disability claims best practices list. At a recent meeting sponsored by the NAIC, plaintiffs attorneys, such as Mark DeBofsky, advocated for the creation of formal claims guidelines because “a substantial number of claimants … are not having positive experiences,” while representatives of the insurance industry point out that a variety of legislated claims guidelines already exist (e.g., the Unfair Claims Settlement Practices Act) and therefore a national “best practices list” is unnecessary. Industry representatives further warn that a best practices list would create de facto regulation and act as a “template for trial lawyers.”
Should a best practices list be adopted by the NAIC, Maine Insurance Director Mila Kofman said she would give insurers about a year to implement the best practices list before attempting to codify the list into law. As a carrot to the insurers, Kofman noted that adoption of the list could act as a “shield against lawsuits.”
The latest version of the best practices guidlines were developed late last year and will continue to be developed this year.
