Life insurance companies oppose disclosure bill

[private]Insurance industry lobbyists told a House study committee they oppose legislation that would require insurers to disclose more information to consumers about the provisions that are included in their life insurance policies.

“They already pay a premium tax that is one of the highest in the country,” said Ragen Marsh of Troutman Sanders, who represents Prudential and the Georgia Association of Life Insurance Companies.

“Any additional cost is a concern for them and because of that, they oppose the bill that’s proposed,” Marsh said.

Insurance giant AIG told the committee that the proposed disclosure law “significantly expands government regulation of insurers by adding new recordkeeping and notice requirements yet with no track record of adding meaningful value to a great majority of consumers.”

The cost of re-engineering the company’s data system to comply with the new requirements would be “prohibitive, particularly the policyholder’ health condition,” said Greg Erath of AIG in a statement submitted to the committee.

The study committee chaired by state Rep. Carl Rogers (R-Gainesville) is reviewing legislation that would require life insurance companies to disclose more information about the “living benefits” and other options that are available to policyholders.

The committee has heard testimony that consumers who can’t afford to pay their premiums or are being compelled to drop their policies often don’t know about alternatives such as a life settlement contract in which they could sell the policy value in return for a cash payout.

Rogers introduced a bill, HB 193, that would require life insurers to provide written notice to older policyholders that life settlements and other alternatives are available to them.

Trey Sivley, an assistant to state Insurance Commissioner Ralph Hudgens, said the insurance department supported the concept of providing more information to policyholders.

“That ought to be the object of any policy,” Sivley said. “Anyone making a decision on a policy . . . all of these decisions should be made with as much information as possible.”

State Rep. Jesse Petrea (R-Savannah), who operates several assisted living facilities, said policyholders should be informed about their ability to convert a life insurance policy to a contract that pays for long-term care in a nursing home. He has introduced HB 306, which would facilitate these policy conversions.

“Every consumer needs to know they have the opportunity (to convert their policies),” said Petrea. “This is about the simplest, most common-sense thing we can do (to save Medicaid dollars).”

Rep. Richard Smith (R-Columbus), chairman of the House Insurance Committee, chaired Tuesday’s hearing because Rogers was not able to attend. Smith said Rogers may decide to call one more hearing by the committee before it makes its recommendations on legislation.

© 2015 by The Georgia Report


Tags: Carl Rogers , consumer disclosure , Jesse Petrea , life insurance , Richard Smith