Weekly Tip: Conformity Provision

 

Weekly Tips

Conformity Provision

7/23/2015

As part of the ongoing five-year review process, the Uniform Standards are being amended to clarify the original meaning and intent of the Conformity provision which is a general provision found in policy Uniform Standards across the product lines.  This week the Insurance Compact is going to provide an explanation as to the intent behind the amendments.

During Phase 1 of the five-year review, the members of the Industry Advisory Committee provided comments stating that there is confusion about the effect of this provision in terms of whether it results in amendments to approved product filings if the Uniform Standards were amended after product approval.  The Insurance Compact Office noted that the meaning of this particular provision is the subject of questions from filers who think that it means automatic, retroactive application of changes or amendments to Uniform Standards to previously-approved product filings. This provision is not intended and does not relate to how changes to Uniform Standards apply – prospectively or retroactively. Any changes to Uniform Standards will include a statement about how the changes apply – similar to the manner in which changes in state regulations are handled.  The intent of the Conformity provision is to serve as a backstop to IIPRC review and approval in the event a policy provision inadvertently made it through the approval process but was not compliant with a provision of the applicable Uniform Standards in effect at the time of approval. The Insurance Compact recommended, and the Product Standards Committee agreed, that this provision should be edited to clarify the original meaning and purpose. 

The amendments made to the conformity provision are as follows:

The policy shall state that it was approved under the authority of the Interstate Insurance Product Regulation Commission and issued under the Commission standards. The policy shall also state that any provision of the policy that on the provision’s effective date is in conflict with the applicable Interstate Insurance Product Regulation Commission standards in effect as of the provision’s effective date for this product type is hereby amended to conform to the applicable Interstate Insurance Product Regulation Commission standards in effect as of the provision’s effective date for this product type as of the provision’s effective date.

The Product Standards Committee made the recommendation to amend the language to the Management Committee.  The Management Committee approved this amendment on August 15, 2014 and the Commission adopted the approved amendment the same day.  This amendment will be made to all Uniform Standards subject to the five-year review so that the conformity provision of all Uniform Standards is consistent. 

We hope that this Weekly Tip is helpful and will make your filing process more efficient to enhance your filing experience with the Insurance Compact.  If you have any questions regarding this Weekly Tip or the Insurance Compact, please contact the office.