Insurers Can and must improve their claims-handling andunderwriting practices in several key areas. that's the messagemarket conduct regulators are sending to both life and health andproperty & casualty insurers.

When the regulatory experts at Wolters Kluwer Financial Servicesreviewed and analyzed the results of last year's statemarket-conduct exams, two criticisms were cited most frequently:P&C insurers' failure to handle claims within specified timeframes and their use of unapproved forms and rates.

The Waltham, Mass.-based compliance and risk management servicesprovider condensed the findings of its annual report to a “top 10”list in order to create an easy reference to assist insurersseeking to minimize their compliance-risk exposure.

When asked to explain what may be preventing insurers fromstaying compliant, Kathy Donovan, senior compliance counsel ofinsurance at Wolters Kluwer Financial Services, said, “Theregulatory landscape is getting more complex as industryrequirements and laws change constantly under the direction ofgovernment and industry oversight. [This makes] it extremelychallenging to embed regulatory requirements into claims,underwriting, and distribution processes. Strong regulatory changemanagement processes and frequent self-audits, however, areextremely effective in helping [insurers] stay on top of thesechanges.”

In addition to the complaints noted below, regulators criticizedinsurers for the manner in which they maintain complaint handling;their failure to provide requested data to market conductexaminers; and a failure to conduct business in their “ownname.”

The report's 10 most common compliance criticisms of P&Cinsurers:

1. Failure to acknowledge, to pay, or to deny claims withinspecified time frames

2. Using unapproved/unfiled forms and rates

3. Failure to provide required compliant disclosures in claimsprocessing

4. Improper documentation of underwriting files

5. Failure to maintain claims documentation

6. Failure to process/pay total-loss claims properly

7. Failure to provide required compliant disclosures inunderwriting processing

8. Failure to adhere to producer appointment, termination and/orlicensing requirements and adjuster licensing requirements

9. Failure to issue compliant adverse action underwritingnotices

10. Failure to apply rates, rules and guidelines correctly