Insurance Agent Forum

[HealthGuy]

I don't want to turn this thread into a throwing rocks session at any one carrier but want to analyze WHY one carrier may do more post claims underwriting and policy recinding than another. Who nationally out of the largest carriers has statistically the worst record of doing this, and WHY? I don't want answers like "if it happens, you aren't asking your clients the right prescreen questions." I am looking for solid reasons as to why this happens more frequently with particular carriers and what is it about those companies that sets up policyholders to have policies pulled and claims not paid. Again, I don't want a particular carrier knocking session, just an analysis of which companies do it more often and WHY it may be happening. Its important because I can't think of a more terrible thing in this business for either me as an agent or a policyholder that is my client.

[ger5]

Obviously, a well-funded (and difficult) study would need to be done....Maybe
You can get a few million in grants to do it. Otherwise, you're just going to get anecdotal responses, which probably
Differ greatly from what a REPRESENTATIVE, carefully controlled statistical study would show.
I've read media accounts (anecdotal) of that "recinding" issue, but never saw any reference to an actual study.

Originally Posted by HealthGuy

I don't want to turn this thread into a throwing rocks session at any one carrier but want to analyze WHY one carrier may do more post claims underwriting and policy recinding than another. Who nationally out of the largest carriers has statistically the worst record of doing this, and WHY? I don't want answers like "if it happens, you aren't asking your clients the right prescreen questions." I am looking for solid reasons as to why this happens more frequently with particular carriers and what is it about those companies that sets up policyholders to have policies pulled and claims not paid. Again, I don't want a particular carrier knocking session, just an analysis of which companies do it more often and WHY it may be happening. Its important because I can't think of a more terrible thing in this business for either me as an agent or a policyholder that is my client.

[Dave020]

In CA, it has been the carriers with the least amount of money. They have poor underwriting to begin with (no financial ability to take on risk) and couple that with rescisions that, in some cases, are quite a stretch.

One of said CA carriers is currently doing phone interviews with an RN on ALL applications 30-39. Same carrier did away with all of their ST health plans after getting hammered by Poizner for 12.6M and apparently a DA in LA is going after them for 2B (LOL).

Big Honking CA carrier also does it, but not to the same extent. And big honking CA carrier paid DMHC $1M to "make this go away".

Also, Big Rich National Carrier who owns a broke-assed CA carrier now, got hit with 1.2B fine thanks to the activities of the little CA "acquisition" LOL.

So, in my humble opinion, probably big rich carriers rescind more policies by number since they have many more subscribers, but on percentage, it probably comes in lower.

No way to prove it since carriers won't release that information.

[ABC]

This is a good topic.

I have only had this happen to me one time.

If the client is honest on their application then this should not happen.

My bet is it would be with a national carrier because they are write higher volume of policies.

The client I had this happen to it was on his dependent which was not living with him but he was required to cover his medical. He did not the true ongoing health conditions of his kid. So a red flag claim came in and a 4 month inquire began and at the end the carrier rescinded the policy. Then he got stuck with $1,000's in claims but they did refund the premium portion for the dependent and we were able to negotiate the network discount on the claims.

[Peelerinsurance.com]

I recall reading and clipping an article a year or so ago that said Unicare had a "recension unit" for this very purpose... dont know where the article is, but i know for a fact i read it... and snce it was in the paper it must be true

[HealthGuy]

"and since it was in the paper it must be true"
Unless you happen to be citing 'facts' from Michael Moore.

[moonlightandmargaritas]

Some as old as I may remember newspaper headlines from the early seventies:

"Nixon - I'm Not A Crook"

[dgoldenz]

What is the typical recision period for most carriers?

[CPACINS]

Originally Posted by moonlightandmargaritas

Some as old as I may remember newspaper headlines from the early seventies:

"Nixon - I'm Not A Crook"

Or this one from the nineties

Clinton- "I did not sleep with that woman, Miss Lewinsky"

[Peelerinsurance.com]

Or. bushie? .... to many lies to post...

[moonlightandmargaritas]

Originally Posted by Peelerinsurance.com

or. bushie? .... to many lies to post...

"Mission Accomplished"

[bill3173]

Originally Posted by dgoldenz

What is the typical recision period for most carriers?

Somarco may know the answer, I've only had one policy fully rescinded in the last 5 years, and it was during the first 6 months of active status.

I think a recision is nearly impossible after 2 years.

[retread]

Originally Posted by dgoldenz

What is the typical recision period for most carriers?

It is usually established by the state DOI. In Kansas and Missouri it is 2 years. You might check with NAIC... I think it is pretty much the same in all states.