Small Employer Plans Want Richer Group Life and LTD Benefits, RGA Finds

Business Wire

MINNEAPOLIS--(BUSINESS WIRE)-- RGA Reinsurance Company, a subsidiary of Reinsurance Group of America, Incorporated (RGA), is seeing pressures continue to build on maximum underwriting guidelines for group life and group long-term disability (LTD) policies in the small case marketplace (i.e., employers with <200 lives).

According to a report released today by the company, group life and LTD guaranteed issue (GI) and plan maximum amounts requested can be as much as 40% or higher than the carriers’ standard practice. These requests, which can stem from several causes, can yield unbalanced plan structures, where high-salaried employees at small firms are receiving rich GI and plan maximums that are not appropriate for the small case marketplace.

RGA’s awareness of this ongoing trend comes from the high number of facultative underwriting requests received over the past few years for small case plans from the majority of client carriers.

RGA expects to see continued pressure on underwriting guidelines for both group life and group LTD in the U.S. marketplace. Requests for high GI and plan maximums will continue to drive facultative underwriting requests, which means carriers will increasingly have to balance competitive pressures and underwriting decisions.

For the full report, please visit: http://www.rgare.com/knowledgecenter

About RGA

RGA Reinsurance Company is the principal operating subsidiary of Reinsurance Group of America, Incorporated (RGA), a FORTUNE 500 company. RGA is among the leading global providers of life reinsurance and financial solutions, with approximately $3.1 trillion of life reinsurance in force and assets of $52.2 billion as of March 31, 2016. Founded in 1973, RGA today is recognized for its deep technical expertise in risk and capital management, innovative solutions, and commitment to serving its clients. With headquarters in St. Louis, Missouri and operations in 27 countries, RGA delivers expert solutions in individual life reinsurance, individual living benefits reinsurance, group reinsurance, health reinsurance, facultative underwriting, product development, and financial solutions. To learn more about RGA and its businesses, visit the company’s website at www.rgare.com.