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FAQs
2009
Enhancements
to the IMSA Process
1.
Mandatory Use of
Topic Based Approach
1.1.
Optional
previously, required in 2010
1.2.
10 Topics with
15 Subtopics grouped by Topic: Needs Analysis/
1.3.
Suitability;
Laws & Regulations; Policy Making; Agent Appointments;
1.4.
Training;
Replacement; Advertising; Complaints; IMSA Principles and
1.5.
Code;
Supervision/Monitoring.
1.6.
More efficient,
less redundant
1.7.
Reformatting of
previous information
2.
Mandatory Use of
IMSA Templates for New Companies
2.1.
Standardized
format for all new companies
2.2.
Gives better
quality control
2.3.
Consistency from
all companies
2.4.
Templates on
line at IMSA site
2.5.
Format based on
Elements of Compliance a la KP4 IMSA
3.
Consulting Role
for Independent Assessors
3.1.
Assessors may
work with company during self-assessment
3.2.
Restructuring of
assessment process making it more interactive
3.3.
Facilitates
understanding of the process for new companies
3.4.
Return to
pre-2003 practice
4.
Limited offering
of Streamlined Assessments for former Member Companies
4.1.
Limited
eligibility for recent members
4.2.
Must be used by
December 31, 2010
4.3.
Must attest to
compliance with all IMSA standards
4.4.
Must engage
Qualified Independent Assessor for testing
4.5.
Testing of
limited number of standards, 4 of 5 sampling standards, 3
4.6.
chosen by QIA
5.
Optional
Attestation Alternative for Membership Renewal for
Qualifying Companies
5.1.
Alternative
approach to regular process
5.2.
At least two
cycles of IMSA membership
5.3.
CEO and CCO must
attest to compliance with all IMSA standards for
5.4.
full period.
5.5.
Must comply with
IMSA’s Emerging Issues and so attest.
5.6.
Submit all
regulatory reports to IMSA.
5.7.
File Appendix to
Attestation
5.8.
Systems or
programs in place to manage compliance risk.
5.9.
Compliance with
IMSA standards reviewed on on-going basis and
5.10.
policies and
procedures updated to remain in compliance.
5.11.
Compliance
trends must be regularly reported to management.
5.12.
Description of
how corrective actions are handled.
6.
Updated
Assessment Handbook and Manual
6.1.
Handbook
revision completed in topic-based approach format
6.2.
New optional
attestation approach documents part of appendix
6.3.
Manual revisions
ongoing by IMSA Standards Development Committee
Ken Kalis continues to serve on the IMSA Standards
Development Committee which developed these changes and is
available at any time to answer any questions or to
facilitate your Company’s work on getting the most from your
IMSA experience.
Just call at 352-505-0705 or email kkalis@kkalis.com.
Streamlined
Reinstatement
Extended Through 2010
As many of you know, IMSA has created a streamlined reinstatement process
for former members. Due to the economic downturn, this new
expedited approach will be available through the end of
2010.
To renew your IMSA membership this way, you need to:
• Perform due
diligence to determine you meet the IMSA standards.
•
Prepare a CEO / CCO signed Reinstatement Attestation
•
Attach all required examination reports
•
Demonstrate compliance with the IMSA standards for the past
90 days
•
Engage a Qualified Independent Assessor to do an abbreviated
assessment
of 7 or
the 25 IMSA standards
•
complete the process by December of 2010.
Ken Kalis was a member of IMSA’s Working Group that created this cost
effective way to renew IMSA membership and to minimize or
eliminate external assessment costs in the future. A good
first step is to call your Qualified Independent Assessor
and start to formulate a strategy. We
are talking with a number of companies who are interested in using this
approach to renew their membership, and we would be
interested in talking with you about it too. If you are
interested, please call us at 352-505-0705 or email to
kkalis@kkalis.com.
Frequently
Asked Questions:
What is IMSA?
IMSA stands for Insurance Marketplace
Standards Association. IMSA promotes high ethical standards
in the sale and service of life insurance, annuity and
long-term care products.
IMSA is the mark of excellence in the
life insurance industry.
IMSA is the premier market conduct and compliance
organization serving the life insurance marketplace.
What Are the IMSA Standards?
Each IMSA-member life insurance company commits itself in
all matters affecting the sale of individually-sold life,
annuity, and long-term care products.
There are 25 specific standards organized under the
following 6 principles:
1. To conduct business according to high standards of
honesty and fairness and to render that service to its
customers which, in the same circumstances, it would apply
to or demand for itself.
2. To provide competent and customer-focused sales and
service.
3. To engage in active and fair competition.
4. To provide advertising and sales materials that are clear
as to purpose and honest and fair as to content.
5. To provide for fair and expeditious handling of customer
complaints and disputes.
6. To maintain a system of supervision and review that is
reasonably designed to achieve compliance with these
Principles of Ethical Market Conduct.
Who
are its members?
Around 100 companies ranging from small
through medium sized to very large, representing about 50%
of new business premium sales for individual life and
annuity products.
According to the July issue of Best’s Review, 14 of
the top 25 life and annuity writers are members.
Another 8 were recent drop out eligible for
streamlined reinstatement.
How
does the membership process work?
Companies seeking IMSA membership are required to
demonstrate that they are committed to becoming IMSA
qualified by adopting IMSA standards.
IMSA qualification is a two-step process:
Step 1. The company conducts a self-assessment by
comparing its current policies and procedures to IMSA
standards (found within the Elements of Compliance chapter
of the IMSA Assessment Handbook). In order to comply with
IMSA standards, the company may establish new policies and
procedures and/or make modifications to current policies and
procedures, as appropriate. Once the company concludes that
it can demonstrate compliance with IMSA standards, it moves
to the next stage.
Step 2. A Qualified Independent Assessor, selected
from a list of IMSA-approved
Qualified Independent Assessors, reviews the company's
self-assessment evidence and performs an independent
assessment to evaluate whether there is a reasonable basis
for the company's determination that it has complied with
IMSA standards.
Satisfactory conclusion of the two-step assessment
process will allow IMSA, upon the company's completion of
the application process, to confer membership in IMSA for a
period of three years. During the three-year membership
period, members are encouraged to review, modify and improve
their market conduct practices consistent with IMSA's
"continuous improvement" concept. At the end of the
three-year period, members must repeat both the self and
independent assessments to renew their IMSA qualification.
How much does membership
cost?
There is an annual membership fee based upon the size of the company and
calculated in a way similar to that used for ACLI
membership. The
annual fee ranges from $5000 for a small company to $185,000
for the largest companies.
There are also fees for the independent assessment
which differ widely by provider and by company size, product
line and number of distribution channels (career agents,
Independent agents, direct marketing, third party
distribution, etc.).
In our experience, these fees range from $20,000 to
$30,000+ per distribution channel but again depending on the
size and complexity of the company.
How long does it take to become a member?
The time line will vary by company, but a good estimate is six months.
If your company’s marketing and compliance policies
and procedures are well-organized and up to date, that time
could be considerably less.
Request our article on “90 Days to IMSA Membership”
to get an idea of the steps.
How long have you been doing this work?
We were active in the formation of IMSA and in the first group of
Qualified Independent Assessors back in 1997.
We have worked with more than 50 companies on IMSA
issues.
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