Insurers on transgender health cover, and more daily news

The availability of health insurance for transgender individuals was brought forward to the Finance and Expenditure Committee in June 2019 in the form of a petition. Elizabeth Poucher, the driver of the petition, stated that transgender women are unable to get the same level of cover as cisgender women.

“Elizabeth Poucher brought a petition asking for the House to conduct an inquiry into the availability of health insurance for transgender people's care related to transitioning.

She said that transgender people were often unable to get cover for things such as breast cancer, which were affected by hormone treatment, although a male-to-female transgender person was no more at risk than a cisgender woman. Poucher said that while people could sometimes get cover for other pre-existing conditions if they were willing to pay a premium loading, that was not the case for transgender people.”

In response, Roger Styles, Health Funds Association CEO has said that insurers look to offer affordable products and that transgender care was often excluded due to high costs associated with transitioning. For this reason, Styles says that exclusions are not discrimination against the transgender community.

“Health Funds Association chief executive Roger Styles said insurers had to be able to offer an affordable product that was appealing to people to voluntarily purchase.

Transgender care was excluded because of the high cost of the transition process, he said, and the risk of adverse selection. People who thought they might transition would take out cover that would pay for it, loading insurers with extra risk.

He said insurers did not agree with Poucher that this was discrimination.” Click here to read more

In other news

AA Insurance: AA Insurance is a finalist in 2020 Diversity Awards NZ

Southern Cross: Southern Cross celebrated Matariki

RBNZ: RBNZ announced that it will publish data from the Credit Conditions Survey for the June 2020 quarter on Tuesday 14 July. Usually run biannually in March and Sept, the Credit Conditions Survey asks banks qualitative questions about changes in credit conditions in bank lending markets. The RBNZ decided to conduct an interim Credit Conditions Survey for June 2020 to understand how domestic credit conditions have changed post-lockdown.

Cigna: David Haak has joined Cigna.


Partners Life: Mini adviser conference

Partners Life announce that they are hosting a mini adviser conference online on the 30th of April.

It has been split into two sections:

Business section: Naomi Ballantyne interviews Chief Underwriter Clayton Gardner about his Chief Underwriter role and delve into some of the more interesting underwriting issues he has experienced over his career to date. Register here.

Social section: Compete against your peers in the gigantic Partners Life Adviser pub quiz. Register here.

 


Income protection: a potential casualty of COVID-19

There is a difficulty in rating income protection products at the moment - the market is changing fast, and not all the changes being implemented by the market are yet formal policy. Decision-making is emergent, cases are being reviewed as they arrive. Economic data which may have an effect on the views of underwriters contemplating, say, the financial underwriting aspects of cover on self-employed businesses (even if the case were submitted weeks ago) is not yet available. Just how substantial the impact on the economy has been is yet to be revealed. We are all, to some extent, guessing. 

Insurers are conservative in their views - they must be - and have to protect first and foremost the interests of existing customers, who expect them to meet claims. Income protection is not, for example, a form of redundancy insurance. What that means is that they are taking considerably more care with underwriting new cases than they would. Partners Life has made the most detailed announcements about their treatment of income protection policies and Quality Product Research Limited has adjusted ratings showing (for subscribers) on Quotemonster. However, this plainly fails to take into account the attitudes of underwriters to the cover across the market: Advisers tell me that variety of measures are being employed on a case-by-case basis: referring cover to reinsurers, reducing cover amounts, substituting indemnity contracts for other contract types, applying exclusions by endorsement, seeking additional financial information, deferring, and declining cases. The extent to which this all remains fluid over the next few weeks or coalesces into a new normal which becomes formalised in changes to income protection product ranges will very much depend on events: how soon we emerge from level four restrictions, more data about the impact on the local economy, and because we are a relatively open trading nation, the state of the economies of our main trading partners.

COVID-19 is most serious for people who already had underlying health impairments. Income protection is similar in that it already had serious problems before the COVID-19 pandemic, and the ensuing economic problems. It is in very bad shape now and we cannot say for sure how the product will fare over the next few weeks. It may never be the same again. 


Partners Life: Underwriting for COVID-19 financial risks

Partners Life are remaining open to new business during this uncertain time of COVID-19 but have announced a number of restrictions to IP, MP, and TPD, while placing a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. Stating ‘As soon as we are able to remove these restrictions for new business, we will contact those advisers and clients affected directly to review and/or remove these restrictions for any policies issued during this interim period.’

Here is more information:

  1. No new Loss of Revenue Cover or Variable Loss of Revenue Cover benefits will be issued. The cover will be deferred.
     
  2. No new Agreed Value benefits based on Income will be issued. This includes Income Covers, Mortgage Repayment and Household Expenses benefit which are to be based on income. Indemnity Loss of Earnings Income Cover will be offered as an alternative by way of Offer of Terms.
     
  3. MRC and HEC based on actual mortgage repayments and expenses will still be allowed.
     
  4. Disability benefits of any kind will have a Mental health exclusion applied by way of Offer of Terms. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.
     
  5. Disability benefits of any kind will have a restriction for disability first arising while a life assured is unemployed or is on a period of leave without pay. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.

    These lives assured will instead be considered an Occupation Class 5 immediately they stop work rather than after the usual 12 month period. This restriction will be achieved by way of an Offer of Terms.
     
  6. All new policies to be issued will include a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. This restriction which will be achieved by way of Offer of Terms.

Reinsurers putting pressure on Life Insurers over vaping health risks

There are a number of global reinsurers putting pressure on underwriters to charge certain people who vape even more than they charge smokers, or to exclude them all together from getting cover. This is following that announcement that there were 47 vape related deaths in the US last year and global research is indicating that vaping is not good.

Click here to read more. 


Partners Life: Chief Underwriter

Partners Life have announced that Clayton Gardner will return to the role of Chief Underwriter after spending several years as Chief Technical Underwriter. 

Naomi writes 'I am personally delighted that Clayton will once again be the public face of underwriting at Partners Life, and I am sure the many advisers who have had the pleasure of dealing with Clayton over the years will be equally delighted. 
As one of Partners Life’s founding employees, Clayton has demonstrated a loyalty and commitment to the company which is second to none, and his agreement to step back into the Chief Underwriter role is further evidence of this commitment.'


Good to see: actively managing exclusions and loadings

nib has announced that from February they will pro-actively manage exclusions and loadings: 

We’re taking proactive steps by reviewing existing members policies’ exclusions and loadings

For nib, our purpose is our members’ better health. Up until now, nib has relied on our members or their adviser to seek a review of any exclusions or loadings that have been applied to their policy. Starting February 2020, nib is changing our business process to proactively contact members who have special terms on their policies to encourage them to request a review if their health has improved, to ensure they are getting the best value from their health insurance.

Members who are eligible for an exclusion or loading review will be contacted by nib. We will offer them the opportunity to provide updated test results and disclose any new information relevant to their assessment.

Our underwriting team will seek confirmation of whether relevant symptoms still exist and whether the member has been treatment free for the period required. As part of the review, we will also be referring any members that could benefit from our nib Wellness Programs.

If you have any questions please don’t hesitate to contact our Adviser Partner Manager team.

Any other insurers that are taking this approach, I would love to hear from you. 


The industry, versus companies in the industry

The New Zealand Herald coverage of RBNZ research and recent media releases reminds me of one of my favourite jokes about economists:

Three economists are taking a day off at the archery range. Being largely desk-based folks they aren't very good, but they're having fun. One draws their longbow shakily, aims, shoots, and misses the target by a metre to the left. The next draws their bow with effort, aims to the right, shoots, and misses the target by a metre to the right...
...the third economist then shouts "bulls-eye". 

So when a report worries about both high levels of profitability (applicable to some companies) and lower solvency margin (applicable to different companies) and the media reports about both talking about 'the industry' it is this use of an 'average' that is confusing for readers. How can the sector make too much money and run down solvency capital? It doesn't. Some companies have low margin businesses and tend to have falling margins of capital above minimums and others have big margins and have stable or rising levels of capital. The story is different for each company.  

The question of insurer efficiency, and in aggregate insurance industry efficiency, is an important one. It is complicated too. Unpacking it is hard and unlikely to be done in consumer-focused articles. Take just one issue: underwriting information. Major gains in insurer efficiency could be made is access to medical information, much like banking information, could be made more available at the discretion of each customer. If permission were granted to access ministry of health databases the results could make underwriting so much easier, and therefore quicker, and cheaper. It could be convenient, fast, and accurate. Usually we only get one, or sometimes two, of those three. But when the question of enhanced access to medical information is raised, even if that were controlled by the customer, the reaction from media is usually negative. So we are stuck with memory-test questionnaires that place disclosure burdens most heavily on the customer.