Regulatory Impacts on Insurance Industry
Ten recent and future regulations in the United States (U.S) that are significantly impacting insurance providers and providing consumers leverage or more control over insurance policies and premiums include the Supplementary and Short-term Health Insurance Minimum Standards Model Act of 2019, Life and Health Insurance Guaranty Association Model Act of 2018, Individual Coverage HRAs (ICHRAs) of 2019, Limited Long-term Care Insurance Model Regulation of 2018, Medicare Supplement Insurance Minimum Standards Model Act of 2019, Life Insurance Disclosure Model Regulation of 2018, Travel Insurance Model Act of 2018, Credit for Reinsurance Model Regulation of 2019, Insurance Contracts Standard (IFRS 17) of 2023, and the Benefit and Payment Parameters Rule of 2021.
Recent Regulations (2018-2020)
#1: Supplementary and Short-term Health Insurance Minimum Standards Model Act of 2019
- The Supplementary and Short-term Health Insurance Minimum Standards Model Act of 2019 standardizes and simplifies the terms and coverages to "facilitate public understanding and comparison, eliminate provisions that may be misleading or unreasonably confusing in connection either with the purchase of these coverages or with the settlement of claims, and to provide for full disclosure in the sale of supplementary and short-term health insurance."
- This regulation guides consumers on how they can review the policy to understand what it covers and does not cover, exclusions related to pre-existing conditions, and treatment limitations on health benefits outside the scope of coverage.
#2: Life and Health Insurance Guaranty Association Model Act of 2018
- The Life and Health Insurance Guaranty Association Model Act of 2018 protects the beneficiaries, assignees, or payees against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or group annuity contracts due to either impairment or insolvency of the member insurer that issued the policies, plans, or contracts.
- The regulation ensures that the insurance consumers (original payee and his or her family members) are entitled to the structured settlement annuity benefits to which they retain the rights.
#3: ICHRAs of 2019
- Another newly issued regulation is the ICHRA, which transforms the way employers pay for employee health care coverage.
- ICHRA ensures consumers (employers and employees) have access to more options for health care coverage that better meets their needs.
- The regulation was issued by the departments of Health and Human Services, Labor and the Treasury on June 13, 2019.
#4: Limited Long-term Care Insurance Model Regulation of 2018
- The Limited Long-Term Care Insurance Model Regulation of 2018 promotes the availability of limited long-term care insurance coverages. Besides, it facilitates flexibility and innovation in the development of limited long-term care insurance.
- The regulation protects the consumers (applicants for limited long-term care insurance) from misleading enrollment practices. It also helps consumers in understanding and comparing limited long-term care insurance coverages.
#5: Medicare Supplement Insurance Minimum Standards Model Act of 2019
- The Medicare Supplement Insurance Minimum Standards Model Act of 2019 provides reasonable standardization of coverage and simplification of terms and benefits of Medicare supplement policies.
- This regulation helps consumers (the public) understand and compare Medicare supplement policies. It also guides consumers on how to avoid misleading provisions during the purchase of policies or settlement of claims.
#6: Life Insurance Disclosure Model Regulation of 2018
- The Life Insurance Disclosure Model Regulation of 2018 requires insurers to disclose all information deemed necessary to the buyer when evaluating the most appropriate life insurance plan.
- This regulation improves the consumer's (buyer's) understanding of the fundamental features of the policy under consideration.
#7: Travel Insurance Model Act of 2018
- The Travel Insurance Model Act of 2018 creates a comprehensive legal framework that stipulates how travel insurance may be sold.
- The regulation entitles consumers to a full description of the coverage, price, application process, and means of collecting premiums.
#8: Credit for Reinsurance Model Regulation of 2019
- The Credit for Reinsurance Model Regulation of 2019 outlines the laws and procedural requirements that are deemed necessary and appropriate for reinsurance.
- The Credit for Reinsurance Model Law protects the interests of the insureds, claimants, ceding insurers, and assuming insurers. It protects the interests of the consumers (insured) by ensuring adequate regulation of insurers and reinsurers.
Future Regulations (2021-2030)
#9: Insurance Contracts Standard, IFRS 17
- The new insurance contracts standard, IFRS 17, will increase transparency and reduce diversity in accounting for insurance contracts.
- With the regulation's enactment, the consumers (policyholders) will enjoy better pricing of the insurance contracts and enhanced protection.
- The proposed effective date for the new insurance contracts standard, IFRS 17, is January 1, 2023.
#10: Benefit and Payment Parameters Rule
- The benefit and payment parameters rule will not only update regulatory and financial standards applied to issuers (for example, insurance companies) and exchanges but will also set parameters for risk adjustment programs.
- The consumers will enjoy more affordable health coverage choices and lower premiums. The lowered consumers' premiums will reflect the full benefits of prescription drug rebates, which are not artificially inflated by outsourcing expenses.
- The Benefit and Payment Parameters Rule to be effected in 2021.
We scanned our proprietary research database of over 1 million sources and were unable to find any specific research report on the impacts of recent and future regulations on the insurance industry. After being unable to identify any recent or future regulations, we scoured through various Federal agencies such as the Centers for Medicare & Medicaid Services (CMS), standard-setting and regulatory support organizations like the National Association of Insurance Commissioners (NAIC), and peer-reviewed journals such as Health Affairs. After an extensive research, we were able to identify eight recent and two future regulations that are significantly impacting insurance providers and providing consumers leverage or more control over insurance policies and premiums.