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AIRC 421 Module 1 Lesson 1 Lesson Summary

Insurers follow a five-step process for developing new life or annuity products, which includes idea generation, feasibility analysis, technical design, product introduction, and monitoring. States regulate premium rates and underwriting guidelines, requiring insurers to file policy forms through the System for Electronic Rate and Form Filing (SERFF) with specific documentation. The Interstate Insurance Product Regulation Compact facilitates compliance for insurers operating in multiple states by providing uniform standards and a central filing point.

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39 views1 page

AIRC 421 Module 1 Lesson 1 Lesson Summary

Insurers follow a five-step process for developing new life or annuity products, which includes idea generation, feasibility analysis, technical design, product introduction, and monitoring. States regulate premium rates and underwriting guidelines, requiring insurers to file policy forms through the System for Electronic Rate and Form Filing (SERFF) with specific documentation. The Interstate Insurance Product Regulation Compact facilitates compliance for insurers operating in multiple states by providing uniform standards and a central filing point.

Uploaded by

Shiji Mathew
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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AIRC 421 Module 1 Lesson 1

Regulation of Product Development


Summary of Key Points

Insurers create new products in different ways. But usually a product development team follows five
stages, or steps, when developing a new individual life or annuity product:
 Idea generation
 Feasibility analysis
 Technical product design
 Product introduction
1. Product implementation
2. Product launch
 Monitoring, evaluation and feedback

States indirectly regulate premium rates and directly regulate underwriting guidelines.

Insurers must file policy forms with the state insurance department. Three types of filing requirements:
 Prior approval requirement—often includes a deemer provision
 File and use requirement
 Filing for information requirement

In most states, insurers file policy forms using the System for Electronic Rate and Form Filing
(SERFF).

Insurers typically must include the following items in a policy form filing:
 Transmittal letter
 Policy form
 Filing fees—states with a retaliation law can charge a retaliatory fee
 Readability score—many insurers use the Flesch reading ease test to help meet requirements
set by the Life and Health Insurance Policy Language Simplification Act
 Premium rate filings—most states do not require insurers to file premium rates but do require
them to provide an actuarial memorandum
 Certification forms

If a state insurance department objects to a policy form, the insurer may:


 Modify the policy form
 Try to overcome the objections
 Withdraw the policy form

If the state insurance department approves a policy form, the form is maintained within SERFF, where
both the insurer and appropriate insurance department can access it.

Insurers that operate in multiple states must comply with the filing requirements specific to each state. To
make this process easier, most states have entered into a voluntary agreement, or interstate compact,
known as the Interstate Insurance Product Regulation Compact, which created the Interstate
Insurance Product Regulation Commission (IIPRC). The IIPRC provides member states with a vehicle
to
 Develop uniform national product standards
 Establish a central point of policy form filing
 Review product filings and make regulatory decisions based on the uniform product standards

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