With recent state mandates and audits on the rise, the following steps will help insurance companies who want to ensure compliance with these newly passed death matching requirements.
- Assign an Internal Champion and Get Informed: Each company needs a dedicated project manager who “owns” compliance with death matching regulations. Someone on your compliance team will most likely be the ideal candidate for the job. Empower this advocate to reach across different groups and business lines within your company so that they can leverage the appropriate resources as needed. They will need access to a team with representation from each Line of Business (LOB) including operations, claims, technology, legal and eventually procurement. Once the team is in place, it is time to start the research process. Obtain copies of all recent legislation including those from New York, Alabama, Maryland and Kentucky. You should also monitor blogs, conduct internet searches and closely follow announcements from NCOIL and other industry groups. Carefully review all of the publically available Global Resolution Agreements (GRA) and Regulatory Settlement Agreements (RSA) as requirements in the NY Reg-200 were directly drawn from these documents. This information will provide a terrific road-map as to the logic needed for compliance.
- Develop a Project Plan: Each project plan should include the identification of key stakeholders, information gathering on each LOB, the evaluation as to whether to outsource processing, as well as instituting a plan for ongoing compliance as rules continue to change. Include your deadline for when you must have a solution in place while allowing a buffer for the inevitable delays that may occur throughout the process.
- Interview Key Stakeholders and Consult Legal Counsel! Since there is a great deal of ambiguity in the different requirements, it is important to get legal counsel involved with this effort from the start. Begin with a thorough interpretation of each regulation. Speak to decision makers overseeing each LOB and find out what they have done in the past and what they are doing today. How do they handle the claims process? Do they proactively conduct research to see if existing annuitants or insureds are deceased? Are any of your groups already licensing the SSA DMF? If so, how is it being used? Take nothing for granted. Don’t assume that because someone is using a given vendor or a particular tool that it means they are in compliance. Most likely they are not. Review the findings from these internal meetings with counsel to determine where regulations are being met and where they are not.
- Know Thy Data. The age of insurance policies and the disparate source systems they have been maintained in over the years often leaves books and records data in poor condition. This is further complicated by decades of acquisitions and software migrations. Most solutions designed to match your data to the Social Security Administration Death Master File (SSA DMF) assume a clean, complete and well formatted input file. The reality is that this is not usually the case and therefore these traditional approaches are destined to fail. Know Thy Data! How many records do you have? What percentage of each field is missing data? How many policies are missing Social Security Numbers (SSNs) or have calculated Dates of Birth? Are there mixed format issues with name and date fields, etc.? An in-house assessment is required to answer these questions and prepare for the processing phase.
- Get Outside Input: Even if the ultimate goal is to perform the processing in-house, it is prudent to develop a formal RFP as a precursor which will help organize your approach and ensure that you are thinking about all of the crucial decision points. This will help ensure that your ultimate provider – internal or external – fully understands and is committed to meeting all requirements. If you are not sure which regulation you need to comply with, specify one of the recent RSAs as a baseline for required fuzzy matching and then request that respondents clearly delineate how they will address this logic. Ask if the solution has been fully tested and ask for verification. Will the processor have the flexibility to evolve as new legislation is introduced? What is their prior experience and do they understand the insurance vertical? What, if any, volume or frequency of processing constraints exists? Legal should review and sign-off on any RFP prior to issuance. Evaluate and rank the proposals received and include interviews and demos, where applicable, with finalists. Many insurance providers are also requesting an initial test pilot to assist with the decision making process. This is an excellent way to experience a vendor and evaluate their processing but adds to your timeline, ultimately delaying your delivery date for the first live production run.
The best thing you can do is to start today. The States are becoming more aggressive and each step taken will get you closer to where you need to be.