Update from the AICP Conference

Blog Post by Kathleen Moyer, Managing Partner – Compliance Services

Last month I had the opportunity to speak at the Association of Insurance Compliance Professionals (AICP) annual conference in San Antonio, Texas.  Recent headlines have given the reputation of the insurance industry a big black eye.  Whether the negative headlines were deserved or not will continue to be a topic of discussion for months.  However, a concern I heard voiced by the attendees again and again was the level of effort required to perform the Social Security Death Master File (SSDMF) matches required by the states. 

There is a consensus that the same level of effort used to determine whether periodic payments should be terminated should also be used to determine if a policyholder is deceased.  The challenge to the insurers is how to accomplish this, when internal resources are already strained.  Few options are available, either hire and train the necessary resources or seek assistance from a vendor to perform the matches.  Although there are vendors currently providing the service, insurers are reporting fee estimates in excess of $1 million to perform the matches.  These fees are prohibitive to some insurers.  In addition to the fees, experience and demonstrated results are part of the evaluation process.  There are few vendors who have a demonstrated track record and expertise in this area.             

While the vendors, states, and third party auditors are the big winners.  The policyholders and insurance company’s stockholders are the big losers, because ultimately they will be the ones who will bear the additional administrative cost associated with complying with the new cross checking requirements imposed by the states.