BestWeek: Insurers, Regulators Left With Questions After Oral Arguments in PPACA Case

OLDWICK, N.J.--(BUSINESS WIRE)-- Now that the U.S. Supreme Court has finished hearing oral arguments in the closely watched health care reform case, the industry is wondering how the high court's decision might affect the new status quo that has emerged since the law went into effect in 2010, according to the latest issue of BestWeek U.S./Canada.

The justices are expected to issue a ruling in U.S. Department of Health and Human Services v. Florida in June. Insurers, their brokers and regulators have many questions—particularly on the issue of how those with pre-existing conditions will be covered.

Through the Patient Protection and Affordable Care Act, Congress sought to address that problem by creating a mandate requiring all Americans to obtain health insurance or face a financial penalty. The thinking was if more healthy people were required to enter the risk pool, they would help to offset the increased risk associated with pre-existing condition consumers and to lower health insurance premiums. Three days of video coverage are included in the package.

In BestWeekEurope, European life insurers are being forced to adjust their business plans and capital management strategies in response to the eurozone credit crisis and regulatory changes including Solvency II, according to a new market review from A.M. Best Europe — Rating Service Ltd.

Also in BestWeek U.S./Canada, under fire for being too profitable and charging unreasonable rates, lender-placed insurance has been hit with a flurry of consumer complaints and several federal lawsuits.

Proponents say there would be no mortgages without an insurance safety net and rates higher than voluntary insurance reflect the broad risk that's insured without companies ever seeing the property, BestWeek said.

Gene Mergelmeyer, president and chief executive officer of Assurant Speciality Property, told BestWeek lender-placed insurance policies don’t go through an underwriting process because they aren’t individually written. He said his company contracts with lenders to insure all uninsured properties in the lender’s portfolio.

“Literally on all the lapsed properties; without underwriting, without inspection, without knowing the property’s condition or whether anyone is even living there,” Mergelmeyer said.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit www.ambest.com/sales/BestWeek. BestWeek can be accessed on iPads and mobile devices. Go to www.bestweek.com on your iPad or mobile device, click on BestWeek digital to log in.

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Source: A.M. Best Company, Inc.