Insurers Can Speed LAH Form Approval
Myths and Realities
Tips for Faster Policy Review
- Use the right filing checklist. You must use both the Expedited Review Filing Transmittal Checklist and the Multi-Use Certification when submitting a form that qualifies for expedited review. Forms that qualify for expedited review are forms that are substantially similar to previously approved forms, corrections to pending forms, exempt forms, prototype forms, exact copies of and substitutes for previously approved forms and resubmissions of previously disapproved forms. Use the Regular and General Review Transmittal Checklist only when submitting new forms (not similar to previously approved forms) for TDI approval. If a form is new, and the company wants to issue it before TDI's approval, the Multi-Use Certification is required with an Article 3.42(c) file-and-use submission.
- Underline all changes on resubmissions, corrections and "similar to approved" forms. TDI requires this, and staff will return filings on which corrections have not been underlined.
- Do not highlight changes. Highlighted portions are illegible when a form is microfilmed.
- When resubmitting a form, list the changes in the same order in which the analyst listed the problems in the disapproval letter.
If you filed a similar product before and know what corrections were needed, don't start all over by filing a generic product. Also, tell us in your submission that you already have similar forms on file. This can avoid time-consuming duplication of effort.
- Familiarize yourself with Texas requirements that differ from those of other states. For instance, in Texas, life policies generally may not be contested for any reason other than non-payment of premium after two years.
- Wherever possible, use TDI's prototype language on small employer health plans, and notify us by completing and submitting the Certification Form for Prototype Forms, Figure No. 45. The figure may be found at 28 TAC § 26.27(6)(45).
- When submitting any type of group product, provide enough information to establish the group's eligibility. On the General and Expedited Review checklist, complete boxes 7 and 13 to specify the group type. Failure to do so will cause the filing to be returned. Separate forms must be filed for different types of groups.
A small collection of myths about Texas policy approval requirements seem to lead many insurers into making mistakes that delay approval of their filings. Here are some of them -- along with the corresponding realities.
Myth
Exempt filings don't have to comply with all Texas' life and health policy requirements.
Reality
Exempt forms must meet the same requirements as all other life and health forms. Company officials who certify that an exempt form meets Texas' standards should carefully read what they are certifying.
Myth
Exempt filings are never reviewed.
Reality
TDI audits exempt filings. An audit of filings between March 1997 and February 1998 showed that only 68 percent of the total filings, and only 50 percent of the life filings, were in compliance. In such cases, we require the companies to stop issuing the policies while they make the necessary corrections and to file correction endorsements and/or replacement forms with TDI. If any of the non-compliant forms already have been issued in Texas, the company will have to issue replacement forms or correcting endorsements to the policyholders. Because of the problems disclosed by the audit, TDI staff is not inclined to recommend any additions to the list of exempt forms in the near future.
Myth
Article 3.42(c) filings are the same as exempt.
Reality
There's a big difference. TDI rules (28 TAC § 3.4004) specify the types of forms that are exempt from review. Companies must submit such forms as exempt filings. An exempt form is not subject to routine review. A form submitted under Texas Insurance Code Article 3.42(c) is "file and use" but still must undergo a full review. When a company files a form under Article 3.42(c), it may start issuing the form without waiting for TDI approval, provided a company attorney licensed in Texas, actuary, president or other officer designated by the CEO certifies the form complies in every respect with Texas requirements. Article 3.42(c) requires an insurer to immediately stop issuing or using a form upon receiving written notice of disapproval. If a non-compliant form has been issued in Texas, it may be necessary for the company to either (1) replace the issued form with a new form or (2) develop a correcting endorsement to be attached to all new issues and sent to all existing policyholders.
Myth
TDI reviews 3.42(c) filings faster than others.
Reality
Each non-exempt form undergoes a full TDI review. Filing a form under Article 3.42(c) does not expedite review and might, in fact, slow it down. A company should not file a form under 3.42(c) unless it is 99 percent sure the form complies with all Texas rules and regulations. If TDI finds problems, the company is required to make the adjustments described above.
Myth
If it's not on the exempt list, it still might be exempt.
Reality
The exempt list contains no wiggle room. If a policy form doesn't match a category on the exempt list, it's not exempt. If in doubt, call the Filings Intake Group at 512 322-4245.
Myth
New and unusual forms can be exempt if similar to an exempt form (e.g., Roth IRA and simple IRA endorsements).
Reality
A form that contains provisions that could be construed as new, uncommon or unusual is not eligible to be filed as an exempt form. Roth IRAs, for example, contain new provisions that make them non-exempt; traditional IRAs are exempt.
By working together, TDI and insurers can continue to reduce processing time and put new products into the marketplace more quickly than ever before.
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Last updated: 01/26/2012
