NAIC Accelerated Underwriting Working Group To Take It Slow

The Accelerated Underwriting Working Group got started today by rejecting a plea to speed up its schedule.

The group was formed during the National Association of Insurance Commissioners' summer meeting in August. It will "Consider the use of external data and data analytics in accelerated life underwriting, including consideration of the ongoing work of the Life Actuarial (A) Task Force on the issue and, if appropriate, drafting guidance for the states."

During a get-to-know-you conference call today, the group discussed a comment letter from Birny Birnbaum, executive director of the Center for Economic Justice. In it, Birnbaum asked the group to move faster.

"The regulatory and consumer protection issues arising from insurers' use of Big Data analytics, generally, and from insurers' use of (accelerated underwriting), specifically, are well known and have been known for several years," he wrote. "There is no need to take 10 months to learn what is already known."

The working group plans a leisurely pace, which will start by hearing from academics, stakeholders and states "to gain a better understanding of accelerated underwriting in life insurance and the different perspectives on the pros, cons and concerns," according to its work plan.

Working group chairman Robert Murial, director of the Illinois Department of Insurance, noted that he is new to insurance and has been on the job since the spring. Murial was a successful trial lawyer prior to his appointment.

"I do think that level setting is important, especially for someone like myself, who is new to the industry," he said. "I also think it’s important that we all get on the same page so we all have the same information."

'Where The Industry Is'

Veteran regulator Doug Ommen, Iowa insurance commissioner, agreed.

"This is not just to where the industry is going," he said of accelerated underwriting. "This is, to a large degree, where the industry is and so, both the working quickly, but also doing it right, is very important."

Murial agreed to retain the option to speed up the agenda if the group is amenable to doing so at any point.

Patrick L. Brockett, professor of mathematics and finance at the University of Texas, will make a presentation to the working group during the NAIC fall meeting in December.

The working group will hold monthly conference calls and identify issues and a "potential work product" throughout 2020. Tentative plans call for that work product to be delivered to the Annuities Committee "at or before the 2020 fall national meeting," the work plan stated.

Annual Milliman surveys show a steadily increasing shift to accelerated underwriting. For example, Milliman found that 24.6% of indexed universal life sales were made with accelerated underwriting for the fiscal year ending Sept. 30, 2018. That figure is up from 16.8% during the fiscal year 2017.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.