Hartford Life Must Reduce Premiums, Issue Credits Totaling $24 Million

[Crabcake Johnny]

Hartford will issue the credits because it didn’t comply with the 60% MLR required under New York law for plans such as the company’s accidental death and dismemberment (ADD) coverage, according to the DFS.

The period in question predates Lawsky's stewardship. A review conducted by the New York State Insurance Department for the period January, 2007 through December, 2010, revealed that The Hartford did not achieve the 60% loss ratio as provided in 11 NYCRR 59.5(b), according to the stipulation.

“Hartford reported the lower than required MLR to the Department of Financial Services (DFS) and has submitted a corrective action plan,” the Superintendent stated.

The DFS said that Hartford had failed to meet the 60% level because it overestimated the amount of money that would be spent to pay claims when the policies were priced by the insurer. This actuarial miscalculation can of course go both ways.

Hartford Life Must Reduce Premiums, Issue Credits Totaling $24 Million | LifeHealthPro

 

[VolAgent]

So if they had been wrong the other way, could they have levied a special assessment on the policyholders?

 

[somarco]

So if they had been wrong the other way, could they have levied a special assessment on the policyholders?

Yeah, sure, right, uh-huh . . .

 

[Crabcake Johnny]

UnitedHealth Group Inc. had no complaints about the effects of the new medical loss ratio (MLR) on first-quarter earnings.

UnitedHealth, Minnetonka, Minn. (NYSE:UNH), says an MLR-related adjustment added $130 million to its profits for the quarter.

UnitedHealth: PPACA Rebate Shift Helps Earnings | LifeHealthPro

 

[Guest]

so, seems Hartford life is up in the air, will or did you guys still use them?

 

[somarco]

Hartford is selling off their life division to concentrate on P&C.

 

[VolAgent]

Yeah, sure, right, uh-huh . . .

I hope your sarcasm sensor isn't in the shop again.

 

[AllenChicago]

Very last sentence from the Hartford story:

"The audit is being financed through a $4.4 million grant won by the DFS in September from the U.S. Department of Health and Human Services."

HHS gets involved with LIFE insurance companies? Is Sebelius obsessed with making them miserable (or non-existent) too?!?

I thought life insurance companies had to keep a cash reserve large enough to pay all claims in the unlikely event every policyholder died at the same time?
-AC

 

[VolAgent]

I thought life insurance companies had to keep a cash reserve large enough to pay all claims in the unlikely event every policyholder died at the same time?
-AC

Hardly. Just as an example, NWM has about $1,300 billion in life insurance in force, but just under $200 billion in assets. If all their policyholders were to die at once, actuarial science would become a joke. Some of these companies are large enough and spread out well enough across the country, it would take an epidemic to kill all their policyholders at once.

Life insurance doesn't work if companies had to reserve in that manner.

 

[HomeService]

UnitedHealth Group Inc. had no complaints about the effects of the new medical loss ratio (MLR) on first-quarter earnings.

UnitedHealth, Minnetonka, Minn. (NYSE:UNH), says an MLR-related adjustment added $130 million to its profits for the quarter.

UnitedHealth: PPACA Rebate Shift Helps Earnings | LifeHealthPro

Goldman Sachs and Obama are happy.