Life Insurance Law Blog : New York Life Insurance Compliance Lawyer & Attorney : Currin Compliance Services LLC : Annuity Compliance & Insurance Regulation

As many of you know who file life and annuity products in NY on a certified basis, there are only two NY Insurance Department employees who currently review these submissions. And soon there will be just one, as Ann Mone, an incredibly dedicated and hard worker, is expected to retire this year. And this year is rapidly moving towards its last quarter. Already there are signs that the inevitable slowdown is coming as she begins to make that transition. Her departure will be felt throughout those companies who do business in NY. It seems unlikely that she will be replaced, so the only possible outcome is a significant increase in review times as Ms. DiNola does her best to keep up with the submissions single-handedly.

On a personal level, I have tremendous respect and admiration for Ms. Mone and I will miss seeing her on visits to the NY Department. On a professional level her departure is a hugely important development as she does so much for all of the attorneys in the Life Bureau now. Even as she uses her accrued time it can be felt. I can only imagine what will happen to turnaround times when she leaves for good!

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Tom Hartman of the New York State Insurance Department recently reported these approval statistics for 2009:

Prior approval where only legal review was necessary: 45 days

Prior approval where both legal and actuarial review was necessary: 126 days

There has been a marked improvement in these times and it was noted that a significant number of the legal staff are relatively new and that over the last couple of years they have gotten more experienced and able to review forms more quickly and efficiently.

Certified (CL6): 8.2 days. Out of the approximately 1200 files received, there was a 22% rejection rate.

Note that these are average time periods - outlier information was not available.

Mr. Hartman also reported that there has been an increase in the election to use prior approval over 2008. From 20% of all submissions in 2008 up to 30% in 2009.

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It has been quite a while since I have posted our experience with approval times in NY.  Guess what? Unbelievably fast!   Four days is pretty standard for a CL6 approval.  Yes, 4 days.  

We are also seeing a lot more movement on product files generally, prior approval files are being picked up more quickly and PARs are moving towards resolution more consistently!  That makes everyone happy.  Having files sit and sit with no movement makes for a lot of frustration.  While movement on many projects makes for hectic days, I feel very lucky to be so busy when so many are losing their jobs.  

It looks to us as though companies are moving much more of their compliance work to consultants these days as they are compelled to trim full-time employees.    At our staff meeting today, we discussed hiring another person to help keep up with the workload.  

So to those who have been laid-off and have compliance experience:  If you want to send a resume our way, we'd be happy to consider you in any expansion decisions for our NY or Iowa locations!    

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Yesterday I posted an entry questioning how new filings for 3211 compliance would be expedited within an already expedited (CL6) process.  Today I got at least part of an answer...within 3 hours an approval came back on one of these filings that had many different forms! 

 While not all of these conforming approvals have been approved quite so fast, expedited appears to really mean expedited!!  This is encouraging!  

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We have certainly noticed a big change in the turn around time for certified filings!  While we used to be able to count on getting approvals back within a few  days, our office now has some that have been pending for a couple of weeks and it is unclear just when they might be looked at.  I was recently advised that half (2)  of the staff that used to review these certified filings have left the Department for promotions in other state agencies!  No matter how hard the 2 remaining staff members work, they can't pick up a doubled work load! 

While the state's financial situation has an impact, I'm sure, let's hope those administrative positions are filled quickly because their loss is being directly felt in the longer approval times!!   With new laws, 2001 CSO filings and major product development efforts keeping us all busy,  we need to be able to count on full staffing at the Department to get the industry's new products to market in a timely manner!  

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In this morning's mail, I had 5 approvals!  That is a great way to start a Friday.  All of them were CL6 submissions and all 5 had been submitted less than 2 weeks ago!!!   It is very nice to see that the recent faster turnarounds on CL6 submissions seem to be lasting.  In the past we have had some really great periods but they were often followed by very slow times.   These days, the turn around is predictable and consistent, which makes it so much easier for planning submissions in relation to product launches! 

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Disclaimer:  I speak only for myself here.  I do not purport to speak for "the industry."  I do not purport to speak for my clients.  This is just me.  So....

In the policy forms meeting with the Department today there was an extended discussion  about the process for making fund changes and a good deal of dissatisfaction expressed.  I can understand wanting more flexibility in Variable Material, particularly with respect to fund changes.  However, as of today, we have a clear process.  We know what to do, the guidance is easy to comply with and it is fast!  For me, this is the definition of a good process.  We can argue around and around about what is necessary from a legal and regulatory viewpoint, but on a day-to-day basis, this process is a good one because it is clear.   I like knowing that within 5-10 days of getting final fund change information I can have documented approval for them to be used because I know exactly what to do and how long it will take. 

What I am very concerned about is opening up a protracted discussion which will, by definition, create uncertainty.   But not only that, most importantly, who is going to be involved in this discussion?  At the Department, it is going to be the people we need to have spending time on other, in my personal view, more important matters.  I would like Kathy, Ralph, Deb, Dennis and Tom and the people who report to them, spending time on innovative products, on revising the outlines, on new regulations, on wrapping up post-approval reviews and on the myriad of other things that need their attention so that life insurers can do their business in New York.  They will likely spend hours internally - and with us - talking about Variable Material and fund changes - all to fix something that may not be perfect, but it works!  At least we know how to get fund changes approved! 

Who can get an "innovative product" approved quickly?  And we won't be able to if the staff is spending all their time debating fund change nuances and other items already dealt with in the recently posted guidance.  Some may not have gotten everything they want, that rarely happens in a regulated industry.  But can't we pick our battles, deal with it and get on to more pressing issues?  After all, there are only so many hours in a day.....

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Several of my recent filings have had just incredible turn arounds.  Today I received an approval dated December 5 on a filing that the NY Department received on December 4!!!  Just 1 day from submission to approval! 

More typical of recent submissions is 4-5 days, but when a week seems like a long turn around time, it is truly amazing!  Thanks so much to all those at the NYSID who have worked to improve the systems and get us to the place where certified filings can turn around in a week.  Even if not all of them do, it is certainly an incentive to make clean filings!

What a thrill it is to get a 1-day turn around!  (OK, I guess I need to get some more excitement into my life, but until I do, this is great!!!)

 

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On Saturday, I received the approval for my then longest-pending CL6 submission.  It was submitted in early April. 

Experience continues to support my recommendation to go small with submissions, when possible.  This submission was not substantively complicated, but involved many forms and variability.   The only explanation for why it took so much longer than so many others was that there was more to review and check/double check for form number consistency and accuracy.    

The good news is that it was approved!  It is always great  to start a Monday with an approval!  I am hopeful there will be more to come as the week progresses!! 

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Yesterday I received approval of an application that I sent out by overnight mail on 7/6.  The Department would have received it on 7/7.  I got an approval dated 7/11.  I don't think we can ask for more than that! 

Once again this experience confirmed for me that simple is better.  Of course everything still needs to be right, but it is much easier for the Department to make sure that a simple filing is right -- and the rewards are sweet!!!

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This week I received approval of the oldest CL6 that I had pending for any company.  That filing was 5 months old and was a complicated one.  I have recently received several more recent approvals that indicate a much faster turnaround time.  My very recent experience is that complicated filings take 60-90 days and simpler filings take 1-2 weeks. 

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While there are still some files that are not moving quickly at all  - those seem to be more complicated ones  with questions identified by new staff for more senior members who are pulled in many directions.  For more typical filings, there does seem to be progress!  And dramatic progress at that! 

Today I received an approval of a filing made on May 22, 2007.  It was approved in 8 days!  I don't think we can ask for more than that!  What a great way to start the weekend!!! 

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On page 35 of the NYSID's 2006 Annual Report, the report states that:  "During the year, the Life Bureau received 1,044 Circular Letter No. 6 (2004) certified files consisting of 4,281 policy forms....the Life Bureau processed 3,845 Circular Letter  No. 6 (2004) policy forms in an average of 47 days...approximately 2,639 were approved, 1,068 were rejected and 101 were withdrawn. "

CL6 filings constitued 57.7% of all files and 48.8% of all forms submitted in 2006. 

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I recently posted my thoughts on small submissions given my experience with so many different types and styles of submissions to the New York State Insurance Department.  This morning my new strategy seems to be panning out as I thought it would... I received two approvals in this morning's mail, both dated May 11.  One was submitted on May 3rd and one on May 4th.  Those are incredible turnaround times!!   Thanks to the Department for the amazingly fast work!    I know I will be making as many submissions as I can using this strategy!   If I make it easy for them, they respond with speed.  I can't ask for more than that! 

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I have now seen multiple letters from the NYSID warning companies that their CL6 privileges may be suspended due to problems with their companies' previous CL6 filings. 

In these cases, the letters were addressed to, and were based on filings from, a single unit of the company and one that was other than the unit bringing the letter to my attention.  However, the Department's warning applies to a company's filings across the board.  In some cases, the unit bringing the letter to me did not realize that a temporary hold had been placed on their submissions until it had been lifted! 

Of course, the NYSID doesn't know which unit generates which filings, so they are not in a position to clearly differentiate, but when companies have separate and distinct areas that generate filings and when those units may have very different policies and procedures in effect, these company-wide actions cause particular problems for large, decentralized companies.   

Continue Reading...

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Over the last few months, I have been paying close attention to the many varied submissions that I have done on behalf of client companies and have come away with a clear strategy - keep it simple! 

Continue Reading...

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The New York State Insurance Department has announced that they plan to start sending warning letters to companies that submit deficient filings.  Continue Reading...

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At the New England chapter of the AICP E-day (www.aicp.net/chapters/newengland.cfm)  held yesterday in Hartford CT, Deborah Kahn, Associate Insurance Attorney at the New York State Insurance Department provided information about approval times.  Continue Reading...

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While the NY Department staff appears to look at certified, i.e. CL6 ( www.ins.state.ny.us/cl04_06.htm )submissions in the order in which they are received - whether by paper or SERFF - from there things get a little less clear. 

Continue Reading...

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