Cancer and Dread Disease Insurance Expertise

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1. Expertise as to Cancer Insurance and Dread Disease Insurance Policies.

Cancer policies, in addition to covering cancer, also often cover so-called dread diseases and such policies are often referred to in the aggregate as “Cancer” policies or “Dread Disease” policies. Of course, what is covered under any policy is a matter of that particular policy’s coverage language.

Watch insurance expert Bill Hager discuss cancer insurance and dread disease policy issues.

Typical dread disease coverage language one might find in a cancer insurance policy often runs along the following lines: any of the following listed diseases, the symptoms of which are first manifested after the date of issue are also covered. The disease must be positively diagnosed by a physician based on generally accepted diagnostic criteria. The dread diseases are then named.

In any event, because many cancer policies often include coverage per the policy for so-called dread diseases, I include with my cancer policy discussion, also discussion of dread diseases and dread disease policies. To the point, my expertise extends to both so-called cancer policies and dread disease policies. So as to keep the discussion below efficient then, reference here to cancer and cancer policies is simultaneous reference to dread disease policies.

Typical so-called dread diseases covered under such policies often include the following: Addison’s Disease, Amyotrophic Lateral Sclerosis, Diphtheria, Encephalitis, Epilepsy, Meningitis, Legionnaire’s Disease, Lupus, Multiple Sclerosis, Muscular Dystrophy, Myasthenia Dystrophy, Myasthenia Gravis, Niemann-Pick Disease, Osteomyelitis. Poliomyelitis, Reye’s Syndrome, Rheumatic Fever, Rocky Mountain Spotted Fever, Sickle Cell Anemia, Tay-Sachs Disease, Tetanus, Toxic Epidermal Necrolysis, Toxic Shock Syndrome, Tuberculosis, Tularemia, Typhoid Fever and Whipple’s Disease.

A. Cancer (and Dread Disease) Insurance Policy Expertise as an Insurance Regulator. I have had extensive and substantive experience relating directly to cancer insurance policies including interpreting policy language and determining the insurer’s obligations under such policies. As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance and (iii) Commissioner of Insurance), along with my staff, I approved (or disapproved) of the language of cancer insurance policies used by each of the 500 life insurance companies doing business in the state, many (but not all) of whom sold cancer insurance. This regulatory action also included the approval of policy application forms. In addition, I regularly served as an Administrative Law Judge (then known as a “Hearing Officer”) in matters relating directly to cancer insurance policies.

B. Cancer (and Dread Disease) Insurance Policy Expertise: NAIC. While Commissioner, I also served as a member of the National Association of Insurance Commissioners (“NAIC”), (including membership on its Executive Committee), the nationwide organization of all state insurance commissioners. That organization has responsibilities for establishing model insurance administrative regulations and model statutes for consideration by all of the states. While with the NAIC, I served, among other things, as a Member of the Executive Committee, The Executive Committee had and has responsibility for all of the underlying NAIC committees, including the A Committee (Life Insurance and Annuities, including life actuarial issues), the B Committee (Health insurance and Managed Care, including cancer policies and related issues), the C Committee (Property and Casualty Insurance), the D Committee (Market Regulation and Consumer Affairs), the E Committee (Financial Condition), the F Committee (Financial Regulation Standards and Accreditation), the G Committee (International Insurance Relations) and the H Committee (Information Resources management.

C. Cancer (and Dread Disease) Insurance Policy Expertise: American Academy of Actuaries. Along these same lines, I served as general counsel and chief lobbyist to the American Academy of Actuaries, Washington D.C. The Academy is the national professional association for actuaries. These professionals establish premium levels for policies, among other responsibilities. In addition, because policy language dictates premium levels, actuaries are also active in determining policy language.

D. Cancer (and Dread Disease) Insurance Policy Expertise: CEO of A Major US Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer for the National Council on Compensation Insurance (“NCCI”), New York City, a nationwide industry owned organization with about 1,500 employees with annual revenues of about $150 million that did (and does) business in about 40 states. NCCI was domiciled in Florida and did business throughout most of the U.S.

This means while CEO, NCCI was subject to the full authority of the various State Departments of Insurance throughout the U.S. (“DOIs”) and subject as well to the Insurance Codes of each of these states and subject as well as the jurisdiction of all of the state and federal courts of the various states.

Among my responsibilities at NCCI was (together with my staff) to formulate all workers compensation insurance policy forms as used in our 40 states of operation. This work included drafting all policy language (tailored to the specific state’s insurance code) as well as drafting all endorsements and all other policy forms. In addition, my responsibilities included gaining state insurance department approval of all such policy forms as a condition precedent to their use as submitted by some 600 insurance companies. I am very familiar with the meaning and relevance of specific state approval of policy forms, endorsements and applications and related documents and matters.

E. Cancer (and Dread Disease) Insurance Policy Expertise: Reinsurance Arbitrator. I am also one of about 200 certified reinsurance arbitrators (by ARIAS-US) and have sat as an arbitrator on cancer insurance issues in disputes about policy language between reinsurers and their insurers.

2. Cancer (and Dread Disease) Claims: Expertise as to Duties of Cancer Insurance Companies.

A. Cancer Claims: Expertise as to Duties of Cancer Insurance Companies As Commissioner of Insurance. I have also had significant experience and responsibility in connection with determining and passing judgment on insurers’ responsibilities as to insurance agents and as to applicants, insureds, owners and beneficiaries. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 500 life insurers (many of whom sold cancer insurance) for their related obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

1. Cancer Claims: NAIC Market Regulation Handbook. As Commissioner, I had as an available tool, the NAIC Market Regulation Handbook (“Examiners Handbook” or “Handbook”). Among other things, this Handbook sets forth standards to assess cancer insurer behavior relating to (i) policy application, (ii) policy issuance and (iii) responsibilities relating to their agents. The Handbook also sets forth standards of review as to agent contracts and appointments by insurers of agents. The Handbook is used by every department of insurance in the United States. The standards have been universally promulgated by all of the nation’s Commissioners of Insurance and adopted formally by them through the NAIC. The standards of the Handbook are universally recognized as appropriate standards against which to judge cancer insurer behavior.

2. Cancer Claims: Market Conduct Examinations. On a regular basis, my regulatory agency conducted Market Conduct Examinations of cancer insurers utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate policy behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

3. Cancer Claims: NAIC Financial Examiners Handbook. As Commissioner, I had available another tool, namely the NAIC Financial Examiners Handbook (“Financial Examiners Handbook”). Among other things, the Financial Examiners Handbook sets forth standards to assess cancer insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are agent contracts and policyholder matters. As with the Market Conduct Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge cancer insurer behavior.

4. Cancer Claims: Financial Examinations. On a regular basis, my Department conducted financial examinations of cancer insurers utilizing the Financial Examiners Handbook to determine whether in fact the insurer was, and would likely remain, solvent. As with market conduct exams, financial examinations entailed physically going into the insurers’ operations and studying files and other items to (i) assure compliance with agent and policyholder duties and (ii) to assure that financial reporting as to agent and policyholder matters were properly carried out. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

5. Cancer Claims: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to cancer insurance company practices. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally importantly, determined whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to the cancer insurance company’s potential behavior across the board.

6. Cancer Claims: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such cancer insurers under the state’s civil Administrative Procedures Act. In connection with such prosecutions, I served in various capacities during my eight years as a regulator, including serving as (i) prosecutor (as Assistant Attorney General), (ii) as the decision maker as to whether to initiate prosecution in the first instance (while First Deputy and Commissioner of Insurance) and (iii) as the Administrative Law Judge (“ALJ”) who presided over the prosecution and entered findings of fact and conclusions of law as to insurer coverage determinations and claim settlement practices. I have served as an ALJ in scores of such cases where the cancer insurer’s (i) agent, (ii) policy form, (iii) policy application and (iv) overall conduct were the primary issues and I entered final decisions and orders in such matters.

B. Cancer Claims: Expertise As to Duties of Cancer Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization. I discuss my executive experience at NCCI under this section because in addition to expertise as to policies (discussed above), my experience at NCCI also resulted in expertise as to insurer responsibilities as to applications, policy issuance and their agents.

While I was President and CEO, NCCI was subject to the full range of authority of the various state DOIs as discussed above. I am very familiar with the duties of insurers relating to their obligations and responsibilities and the regulatory scheme in place in the various states as to such matters.

While President and CEO of NCCI, I visited and physically toured and reviewed in excess of 400 insurance companies and gained direct exposure to the procedures and processes and standard industry practices of the U.S. insurance community including the cancer insurance community in that any number of those insurers had cancer insurance operations.

C. Cancer (and Dread Disease) Claims: Expertise as to Duties of Cancer Insurance Companies: General Counsel to the American Academy of Actuaries. As stated above, I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. I mention it again here in connection with insurer agent and policy obligations because Academy members included affiliation with virtually every cancer insurance company in America. Among other things, such actuaries had duties relating to policy language and policy pricing. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such cancer insurance companies.

D. Expertise as to Duties of Cancer (and Dread Disease) Insurance Companies: Attorney in Private Practice Iowa.As an attorney in private practice, I represented a number of agent and insurer interests and became familiar with applicable cancer industry standards of practice, including insurer responsibilities toward their agents. Those interests also included intimate involvement with insurance forms such as those at issue here, as counsel to the (i) Professional Insurance Agents of Iowa and (ii) the Iowa Association of Life Underwriters (life, health (including cancer) and annuity insurance agents).

3. Expertise as to Cancer (and Dread Disease) Insurance Underwriting.

A. Expertise as to Underwriting Duties and Responsibilities of Cancer Insurance Companies As Commissioner of Insurance. Consistent with the discussion immediately above, I have also had significant experience and responsibility in connection with determining and passing judgment on cancer insurance companies’ underwriting duties and responsibilities.

In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 500 life insurance companies for their underwriting obligations (many but not all of whom wrote cancer insurance). As I did in connection with the general duties of cancer companies (discussed above), I did so as well as to underwriting through a series of action steps and tools. The action steps and tools included the following:

1. Underwriting: NAIC Market Regulation Handbook. As Commissioner, consistent with the prior discussion, I also utilized the NAIC Examiners Handbook in that it sets forth standards to assess the underwriting behavior of insurance companies relating to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time. As discussed above, the standards are utilized by every state department of insurance and the standards of the Examiners Handbook are universally recognized as appropriate standards against which to judge the underwriting duties and responsibilities of cancer insurance companies.

2. Underwriting: Market Conduct Examinations. Also as discussed above, on a regular basis, Market Conduct Examinations of cancer insurers were conducted utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others as to underwriting issues. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate underwriting behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

3. Underwriting: NAIC Financial Examiners Handbook. As above, I had available another tool, namely the Financial Examiners Handbook, which (parallel to the above discussion) sets forth standards to assess cancer insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are insurer underwriting files and matters. These standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC and are universally recognized as appropriate standards against which to judge cancer insurer behavior, including underwriting.

4. Underwriting: Financial Examinations. As above, my Department conducted financial examinations of cancer insurers utilizing the Financial Examiners Handbook to determine, as with market conduct exams, among others things, (i) assurance of compliance underwriting duties and (ii) assurance that financial reporting matters were properly carried out. As further discussed below (and above), errant insurers were warned, disciplined and prosecuted as required.

5. Underwriting: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to underwriting practices of cancer insurance companies. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally importantly, were trained to determine whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to an insurance company’s potential underwriting behavior across the board.

6. Underwriting: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such insurance companies under the state’s civil Administrative Procedures Act consistent with the discussion in the prior section.

B. Expertise As to Underwriting Duties and Responsibilities of Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization with Major Underwriting Duties. I discuss my executive experience at NCCI under this section because my experience at NCCI also resulted in expertise as to insurer responsibilities as to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time.

The Gold Standard of Underwriting. While I was CEO, NCCI had the responsibility to formulate and submit for approval to most all of the Insurance Commissioners in the U.S., the underwriting standards used for underwriting most all of the workers compensation policies in this nation. Underwriting for workers compensation is routinely recognized throughout the industry as involving the most intense underwriting of all lines of insurance. This is so because there are over 600 officially designated workers compensation classification codes an employee may be placed in based on their principal job duties.

NCCI authored and maintained a detailed, word-by-word, phrase by phrase description as to each of these 600 classification codes, as to which insurers were required to adhere. That entire intense underwriting process inclusive of its classifications is encompassed in an industry wide recognized and used document called the Scopes Manual and is recognized as the Gold Standard for underwriting workers compensation insurance. Furthermore, the underwriting process, regardless of the line of insurance is fundamentally the same. This is because most all insurers (including cancer insurers) are about the business in the underwriting process of selecting the most favorable risks and rejecting the least favorable risks, regardless of the line of insurance. As such, it is the same process brought to bear on different lines of insurance – always with the same goal: identifying good risks and rejecting bad risks.

C. Expertise as to the Underwriting Duties of Cancer Insurance Companies: General Counsel to the American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. Academy members included affiliation with virtually every insurance company in America. Among other things, such actuaries had duties relating to the underwriting duties and responsibilities of insurance companies. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such insurance companies.

D. Expertise as to the Underwriting Duties and Responsibilities of Cancer Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of insurer interests and became familiar with applicable cancer industry standards of practice, including insurer responsibilities toward the underwriting process, including working directly with the Iowa Association of Life Underwriters (whose duties included among others, the first line of underwriting).

4. Expertise as to Cancer (and Dread Disease) Insurance Agents.

A. Expertise as to Insurance Agents as a Regulator: Licensure. I have had extensive and substantive experience relating directly to the duty of care that comes to bear on insurance agents and agencies in their various relationships with cancer insurance companies. As an Assistant Attorney General (see above), I have prosecuted cancer insurance agents for violations relating to their duty of care. As an insurance regulator (see above), along with my staff, I have screened hundreds of thousands of agents for character and background (separate and apart from subject matter testing). As to subject matter, I have formulated agent-licensing exams in the first instance. Upon passage of the exam, I have licensed hundreds of thousands of insurance agents.

B. Expertise as to Insurance Agents as a Regulator: Prosecution and CE. I have had full responsibility for continuing education for licensed cancer insurance agents (approving CE courses in the first instance for acceptable content; overseeing the administration of such courses and granting and denying credit for such courses). I have initiated agent revocation actions and prosecuted those actions to completion.

C. Expertise as to Insurance Agents as a Regulator: ALJ. I have sat as the Administrative Law Judge in such actions and entered findings of facts and conclusions of law in scores of cases in which agents were prosecuted for violations relating to standards of care in connection with cancer insurance matters and I have had direct responsibility for the appointment process by cancer insurance companies (some 500 life insurance companies, many of whom sold cancer insurance) of all of their cancer agents. I have supervised as well the ongoing relationship of all cancer insurance companies in the state with all of their appointed agents.

D. Expertise as to Insurance Agents: Legal Representation. As a lawyer, I have defended cancer insurance agents and brokers against allegations (in administrative law forums) of violations of their duty of care.

E. Expertise as to Insurance Agents: Industry CEO. As President and Chief Executive Officer of a major Florida domiciled and U.S. licensed insurance entity (NCCI) doing business in some 40 states, I have had substantial working relationships with the U.S. insurance agent and agency community.

5. Expertise as to Actuarial Issues.

A. Expertise as to Actuarial Issues as a Regulator. As Insurance Commissioner, my agency was responsible for solvency oversight, insurance company examinations and financial and accounting matters of insurance companies. In particular, that oversight included the responsibility of overseeing practices of insurers, agents and actuaries who formulated their rates. In addition, I oversaw the state regulation of the securities industry with Iowa’s Superintendent of Securities reporting directly to me.

As a member of the NAIC, I served as both Vice Chairman and Chairman of the NAIC Life Insurance Committee. The charge of this Committee was oversight of all issues relating to life insurance products as well as life insurers, including practices such as underwriting. This Committee’s work included considerations relating to underlying actuarial issues as to the pricing and unfolding of this product.

B. Expertise as to Actuarial Issues as a CEO. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 – $15 billion of workers compensation insurance in 39 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies and then used that data to project necessary premium changes. NCCI carried out its intense pricing work though the professional efforts of an actuarial division of about 150 personnel. These individuals included support staff; statisticians; actuarial students and qualified actuaries. This staff produced about 40 major rate filings annual covering 40 states, pricing some $12 to $15 billion of insurance (workers compensation); and included the responsibility to advocate those rate changes before state government.

C. Expertise as to Actuarial Issues: American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries, including advising on admissions, discipline, federal antitrust and general corporate law. I represented the 10,000-member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies.

The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers. Academy members included affiliation with virtually every property casualty insurance company and actuarial consulting company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such companies.

D. Expert Experience and Authorship on Actuarial Issues. I have served in a number of cases as an expert on actuarial issues, including in Arizona, Florida and California. I am also the author of a number of articles on the actuarial profession.

E. Actuarial Issues as Reinsurance Arbitrator. I am certified by ARIAS as one of about 200 U.S. certified reinsurance arbitrators and sit as an arbitrator on disputes between insurers and their reinsurers; actuarial issues routinely arise in such disputes in the form of pricing disputes including information (and misinformation) supplied by the ceding company and that information’s (and misinformation’s) positive or adverse effect on the pricing that was agreed to at the time of the initial reinsurance agreement.

Contact Bill Hager at 561-306-5072 or via email to discuss your case.