Weekly Tip: Using Generic Language In Compact Filings

 

Weekly Tips

Using Generic Language In Compact Filings

12/19/2012

One of the fundamental principles of the Insurance Compact is that Uniform Standards apply as Compacting States law for Compact-approved products. State product content requirements usually found in state laws, regulations, bulletins, and desk-drawer rules do not apply to Compact-approved products. Unfair trade/claims practice state laws still apply to sale and administration of Compact-approved products. Filers need to remember that when drafting product language for Compact filings, state specific product content requirements, with a few exceptions, do not need to be addressed in order to be compliant with the Insurance Compact Uniform Standards. Required state specific disclosures fall outside the scope of the Compact. However, these may be attached to your Compact filing for informational purposes under the Supporting Documentation tab.

When the Member States drafted the UniformStandards they did defer to some state-specific laws, such as:

  • Civil unions and domestic partnerships;
  • Fraud exception to incontestability clause;
  • Right to examine on replacement if law is longer than 30 days; and
  • LTC daily minimum benefits, maximum elimination periods, minimum benefit periods.

When looking to address these requirements filers should use generic language to do so and not the state specific references. Filers should incorporate "where required" as opposed to "as required in (specific state)". The provision within Compact-approved forms is generic, but must be administered in accordance with these state-specific laws above.

Companies may choose to incorporate certain state specific features, disclosures and other language into their Compact forms. There are a couple of things to remember when doing this. First, there is no need to include a reference to the state or states. Second, the language will be applicable in every state included in the filing.

Additionally, all permissible variables must be contained on the specifications page. Variable items in the applicable provisions in the policy or contract should not be included. Remember that the Uniform Standards specify what may be a variable.

If you have any questions regarding the Uniform Standards or while preparing a Compact filing, please contact the IIPRC Office.