| News
February,
2004 Electronic Update on IMSA Issues
Dear
IMSA Friends: I
hope your month was a good one. Ours has been busy. We're on the road most of
the time working with many of you on renewing your IMSA memberships. Here are
a few items that may be of interest to you.
How Are the Assessments
Going Using the More Rigorous Independent Assessment Manual Testing Standards?
I'm
glad you asked. We've completed the process for a couple of companies and are
mid-stream with half-a-dozen more. The mandatory sampling and Supplemental Report
have been the biggest challenges and have added some more time to the process.
The results, though, have been very positive. Instead of now walking away from
the assessment and leaving the Company with our KP4 IMSA Report and the signed
attestation/membership papers, we are able to give the company the detailed Supplemental
Report (ours are running about 25-30 pages), the Responsibility Matrix, and the
Sampling/Testing Worksheets (another 25-30 pages)  The
great thing about this is that every Independent Assessor will be doing the same,
so that Regulators will know what to expect when they ask for IMSA documentation
and will have clear evidence as to the nature and extent of the testing performed.
Of course, the Company has to decide whether to make these materials available
to the Regulators or not, but if they do their chances for relief during market
conduct exams is much better than it has been in the past.
How
are the companies receiving this? They've been cautious but very positive. Our
companies tell us the more rigorous testing and the resultant documentation gives
them a higher comfort level with the process and a greater sense of value in their
IMSA membership. After this encouraging start, we are expecting things to get
even better as more and more companies go through the renewal cycle. Good
New From Texas
Last quarter we had good news from New York. This quarter
from Texas. In a news release dated February 4, 2004, IMSA commended the DOI in
Texas "for issuing a Commissioner's Bulletin affirming that its examiners
routinely use information provided by IMSA-member companies." Commissioner
Jose Montemayor is quoted as saying: "The
Department examiners currently utilize information and data obtained from certain
best practices organizations, such as the Insurance Marketplace Standards Association
(IMSA), as they examine licensees that are members of such organizations.Consideration
may be given to the documentation in determining the frequency of examinations;
the scope of an ongoing examination, and/or the marketing and sales practices
of a company, including such areas as; agent licensing, training, replacements,
and advertising. The examiners may also make use of the documentation required
by a best practices organization in reviews of other areas such as consumer complaint
handling." Great
news indeed. Let's hope for more of the same in a snowballing effect that gives
IMSA membership the recognition it deserves and the regulatory relief member companies
have earned. For the full release see the IMSA website at www.IMSAethics.org
Company
Reporting Of Public Market Conduct Findings. Did
you know that as a company you are required by IMSA to report any public findings
by regulators on market conduct that pointing to material weakness? I didn't know
that and asked IMSA for the document (relevant portions of which are reproduced
below. IMSA is
asking Qualified Independent Assessor's to ask companies for any such documents
when they conduct an assessment. They are also asking us to remind companies of
this requirement issued to all member companies in a letter dated March 24, 2003
and now incorporated into Appendix D which you can find on the IMSA website at
www.imsathics.org
Mark
Your Calendars
- May 12-14
IMSA's 2004 Compliance Best Practices
Workshop will be held May 12-14 at the Westin Michigan Avenue, Chicago. - May
19-21
LHCA Meeting in Newport Beach, California, hosted by Pacific
Life and Transamerica Occidental Life - July 13 15
ACLI Compliance Section Annual Meeting in Baltimore at Baltimore Marriott.
In conjunction with this meeting, the Kenneth J. Kalis Company will be honoring
the recipients of it Excelsior Awards for Industry Best Practices.
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