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LOMA / Resource Special Report
Part Two:
Life/Health Insurers Act
to Ease Burden on Policyholders Affected by Hurricane Katrina, Offer
Premium Flexibility, Other Arrangements
By Mallory
Eldridge, LOMA
Information Center
In
addition to providing millions of dollars in relief-fund assistance to those in
the disaster area, life and health insurers have stepped in to ease the
financial strain on policyholders affected by Hurricane Katrina, which struck
the
U.S. Gulf
Coast
on August 29, 2005. This is the second
part of a special report. Part One discusses charitable contributions to
the relief effort.
Following are
some of the responses gathered by the LOMA Information Center:
Life Insurers
Pan American Life, based in
New Orleans, has re-opened the Pan-American Life Center at 601 Poydras
Street. According to José Suquet, President and CEO of Pan-American
Life, "We believe the Pan-American Life Center is among the first major
office buildings in New Orleans' Central Business District (CBD) to re-open, if
not the very first. We were able to achieve a goal of re-opening in less than
six weeks mainly because wind damage to the building was not extensive, and our
repair crews went to work quickly and did their jobs well."
Previously, Pan American said it had
achieved "mostly normal" operations by implementing a comprehensive
recovery plan from a series of remote locations.
AFLAC
(http://www.aflac.com): The insurer announced on August 31 that the company will
allow a 90-day grace period for premium payments due from its policyholders in
counties and parishes proclaimed disaster areas by the Federal Emergency
Management Agency (FEMA) due to Hurricane Katrina (counties in Alabama, Florida
and Mississippi, and parishes in Louisiana.)
New York
Life (http://www.newyorklife.com):
For customers in immediate financial need, NYL is offering quickly
processed emergency loans against the cash value of current policies.
The insurer is also pledging assistance for those who need payment
extensions or those whose policy documents have been lost or destroyed.
Policyholders are instructed to call their local New York Life insurance
office or a toll-free number provided on NYL's Web site.
Prudential Financial
(http://www.prudential.com): Prudential
has put in place a number of steps to assist its clients who have been affected
by Hurricane Katrina and/or Hurricane Rita.
For those who have an immediate need for cash, Prudential is providing
quick access to the cash value of existing individual life insurance policies
with a loan or withdrawal.
Grace periods for life insurance premium due dates have been extended
through November 28, and the company is providing replacements for lost or
destroyed life insurance policies.
Prudential has posted an emergency 800 number on its Web site for clients
to use when they need to request these expedited policy loans, withdrawals, or
policy-document replacements, or if they have questions on the premium-payment
extensions.
MetLife, Inc. (http://www.metlife.com):
MetLife will not cancel any coverage for non payment of premiums for a 90-day
period ending on December 1, 2005, for all policyholders in the FEMA-designated
disaster area. The 90-day period
covers all products including life, disability, long-term care, dental, auto and
homeowners insurance policies. MetLife
has also established two 800 numbers for individual and group customers, as well
as a
Hurricane
Information
Center
on the MetLife Web site.
Genworth Financial (http://www.genworth.com):
Genworth Financial announced on
September 2 that it will extend grace periods for life and long-term care
premium payments and take other measures to assist customers and distributors in
portions of
Louisiana
,
Mississippi
and
Alabama
that have been declared disaster areas by FEMA.
Genworth will extend grace
periods, limit policy cancellations and non-renewals, and provide additional
time for new-business delivery requirements for life and long-term care
insurance premiums. Genworth is also instituting special handling arrangements
for the payment of life and long-term care claims to ensure timely delivery in
affected areas. For
customers using Genworth's mortgage insurance products, the company is working
with lenders and investors to coordinate relief that may take the form of
reduction or suspension of mortgage payments or creation of longer payment
schedules.
Northwestern Mutual (http://www.nmfn.com):
The company is prepared to handle special circumstances for policyowners and
customers relating to benefit payments, premium payments, or other servicing
needs in the affected regions of
Alabama
,
Louisiana
and
Mississippi
. Northwestern Mutual has
temporarily suspended automatic policy lapses and insurance account terminations
for affected customers. In addition, special arrangements have been made to
expedite payment of policy loans, and all FedEx and bank wire fees for loan and
benefit payments will be waived for customers in these areas.
AXA Equitable (http://www.axa-equitable.com):
The company has extended a 60-day grace period to all policyholders for
the purpose of premium payments and other policy-related transactions such as
policy conversions and reinstatements. A
print and radio campaign is currently running in the impacted states featuring
Chairman and CEO Christopher "Kip" Condron.
The campaign features a special toll-free contact number and e-mail
address for a dedicated customer service team.
AXA Equitable has pledged to provide priority processing for clients
needing quick access to cash value from life insurance policies by expediting
loan or withdrawal requests. Minimum
loan and withdrawal restrictions have been lowered to $100.
Several other ease-of-doing-business procedures have been established,
including:
* fee-free express mail for financial disbursements
* no-minimum outbound wire transfer limits
*free replacement of lost or damaged insurance policies or checking
account books associated with AXA Equitable's Retained Asset Program
*relaxed requirements for stop-payment requests
System edits have been placed on certain policy plans to ensure termination
notices are not generated until the grace relief period has expired.
All general correspondence such as premium notices, payment confirmations
and annual reports continue to be released to clients in the impacted areas;
however, data files are being retained for regeneration purposes, as determined
necessary or as required. Consistent
practices have been coordinated and are being offered by all AXA Financial
insurance companies (AXA Equitable Life
Insurance Company, AXA Life and Annuity Company, MONY Life Insurance Company, and
MONY Life Insurance Company of
America
).
Massachusetts Mutual Life Insurance Company
(http://www.massmutual.com): The
premium paying grace period for MassMutual life insurance, long-term care
insurance, disability income insurance, and certain annuity contracts has been
extended by 62 days. This includes contracts issued by MassMutual,
MML Bay State Life Insurance Company, and CM Life Insurance Company.
The Phoenix Companies Inc. (http://www.phoenixwm.com):
The company has extended the premium payment grace period for all life insurance
contracts until October 30, 2005, and will continue to monitor the situation.
For all life, annuity and asset management customers, Phoenix is closely
monitoring mail delivery to the affected areas and is working with United States
Postal Service to handle returned mail and redirect correspondence to new,
validated addresses. Requests for wire transfers are being handled on a
case-by-case basis, balancing service with safeguarding of assets. The
special provisions are in effect for customers located in zip codes that begin
with: 365-366; 369-396; 700-701; 703-704.
John Hancock Financial Services
(http://www.johnhancock.com): The
company has extended grace periods for premium payments on insurance contracts
and taken steps to try to simplify the process for clients in the affected areas
needing assistance with their insurance policies and/or other John Hancock
products. Clients with questions or
concerns about extending or receiving payments for their policies or products,
changing their address or any other service issue, are encouraged to contact
John Hancock at the toll-free numbers listed on the company's web site.
Jefferson
Pilot Financial (http://www.jpfnet.com):
On its Web site, JFP discusses efforts to work with policyholders on a
case-by-case basis to ensure that their coverage will remain in force and not
lapse due to nonpayment of premium.
Primerica (http://www.primerica.com):
The company has directed customers to toll-free numbers for life
insurance products (to discuss banking interruption, change of
address/telephone, or payment relief due to job or home loss) and securities
products (to request holds of their monthly pre-authorized checking drafts).
The Principal Financial Group (http://www.principal.com):
On September 14, The
Principal Financial Group announced that Principal Life will extend an
additional grace period on insurance premium payments due from policyholders in
the proclaimed disaster areas. The
company lists a toll-free number, thorugh which individuals are connected to
service specialists. The number can
also be used to report address changes. (See health insurance section for
further details.)
TIAA-CREF (http://www.tiaa-cref.org):
The financial services provider has implemented procedures to streamline
approvals, processing and repayment of loans, as well as other transactions.
Customers are directed to call the
TIAA-CREF
Telephone
Counseling
Center
to speak to a representative, or to communicate through the Web site by secure
e-mail.
Standard Insurance Company (http://www.stancorpfinancial.com):
The Portland, Oregon-based insurer has formed a dedicated Hurricane Katrina
response team to answer questions from affected customers regarding group
insurance policies, individual insurance policies, annuities and retirement
plans; assistance is available through a toll-free number.
The Standard is also providing flexible options to customers who may be
unable to pay their premiums on time or to receive benefit payments through the
United States Postal Service due to delivery disruptions. In
addition, the insurer will allow policyholders' employees who volunteer for the
relief effort to maintain coverage during their period of approved leave.
Penn Mutual (http://www.pennmutual.com):
For contract holders in areas directly affected by Katrina, the insurer has
extended the grace period for premium payments to 90 days from the time the
payment is due. This extension will
remain in effect until December 31, 2005. In
addition, the company assembled dedicated service professionals, accessible
through a toll-free number, to provide assistance with: 1) loans
or withdrawals against the cash value of existing contracts; 2) payment
extensions; 3) contract information; and 4) changes of payment address.
National Teachers Associates Life Insurance Company (NTA Life, http://www.ntalife.com):
The Addison, Texas-based life
insurer announced that no policies will be allowed to lapse due to nonpayment of
premiums for a period of at least 90 days for its
policyholders in those counties and parishes
proclaimed disaster areas. In
addition to the 90-day grace period, NTA Life has established a special
toll-free customer service telephone number, extended the time period for filing
claims, and eased the normal requirements for obtaining medical records to
support claims for its policyholders in the disaster areas if medical records
cannot be obtained.
Guardian Life Insurance Company of
America
(http://www.guardianlife.com):
On September 8, Guardian announced that for the next 30 days, it will
waive overnight delivery and wire transfer charges for impacted customers
requesting funds and for claims handling. For
life insurance customers in immediate financial need, the insurer is offering
emergency loans against the cash value of current policies.
Guardian is also providing premium-payment extensions and assistance with
lost or destroyed policies.
USAA (http://www.usaa.com): To provide
for the need for emergency funds for its affected members, USAA is offering such
services as cash advances, low-interest credit card, automobile and personal
loans, and waived late fees and finance charges. On
its Web site, the company has a link to the special products and services that
it has developed in response to the hurricane, broken down by product type.
Mutual of
Omaha
(http://www.mutualofomaha.com):
The insurer has established special hotlines staffed by trained service
representatives and has extended the premium grace period on life, disability,
long-term care and Medicare Supplement policies. (See health insurance section
for further details.)
Conseco
Insurance Group (http://www.conseco.com):
For policyholders in the FEMA-declared disaster area, Conseco is providing a
grace period until January 1, 2006, for premium payments due.
The insurer will take no actions on premiums due, overdue, or
cancellations until after that date, and policyholders may disregard any premium
notices that may be automatically generated before that date.
After January 1, 2006, Conseco will work with individual affected
policyholders on a case-by-case basis to bring their premiums current in a
method financially feasible for them. For
the foreseeable future, the insurer will process – on an expedited basis,
before all other pending business – any requests for loans, withdrawals, or
cancellations from affected policyholders. A
special team has been assembled to respond to service requests from the affected
areas.
Thrivent Financial for Lutherans
(http://www.thrivent.com):
The organization is extending premium due dates and grace periods
on life, health (including disability income, long-term care, hospital
confinement/family hospital and Medicare supplement insurance contracts) and
universal life/variable universal life contracts for members in counties
impacted by Hurricane Katrina. Funds
for death claims will be sent electronically, if possible.
More specifically, Thrivent is:
*extending
premium due dates for contracts that would otherwise have had a premium due
between Aug. 26 and Dec. 28, 2005. The
premium due date for all of these contracts will be extended to Dec. 29, 2005.
The grace period on these contracts starts thereafter per specific
contract provisions.
* renewing
grace periods for contracts that were already in the grace period as of Aug. 26
and would otherwise be scheduled to lapse before year end.
The new grace period start date for all these contracts will be Dec. 29,
2005.
* sending notification approximately 30 days prior to the new premium due
date or new grace period start date, as applicable, of Dec. 29, 2005.
The premium due date and grace period extensions apply to members in the
following counties:
Louisiana
: All parishes.
Mississippi
: All counties.
Alabama
: All counties.
Florida
:
Monroe
, Broward, and Miami-Dade counties.
Owners of mutual funds and annuities may have checks mailed to addresses other
than the address of record. Checks
will be made payable to the contract owner.
Members will be asked for additional authentication information when
requesting a check to a different address. Fees
for wire transfers and next day ACH fees are waived.
For loans against contracts, the fee for electronically transmitting a loan to a
Thrivent member's financial institution is waived.
If a member wants to pay a premium due by loan against the contract, no
interest will be charged until the extended due date.
However, interest for the time of the loan until that date will be
charged at that time. (See health
section for further details.)
CUNA Mutual Group
(http://www.cunamutual.com): The
Madison, Wisconsin-based financial services group has implemented several
measures to assist credit unions and credit union members in counties declared
disaster areas by FEMA:
*
Premium grace period extension – CUNA Mutual has adopted an
extended grace period for insurance premium payments (and some annuities) for
policyowners in areas severely affected by Hurricane Katrina.
The premium-paying grace period for CUNA Mutual has been extended by a
total of 60 days. CUNA Mutual will consider additional extensions as the
recovery situation develops.
* Claim
payments – CUNA Mutual will continue to make claim payments as
follows: Previously scheduled
electronic payments will be made to credit unions, until or unless the credit
union requests another arrangement. The U.S. Postal Service will hold mailings
that contain paper checks until they are deliverable.
* Claims processing -- All claims that originate from Hurricane
Katrina will be handled as quickly and efficiently as possible, and will be
evaluated in accordance with the provisions of the insurance contract. On an
individual claim basis, every effort will be made to limit requirements to
expedite the disbursement of funds.
* Policy renewals – If CUNA Mutual cannot contact a
credit union or individual policyowner to renew an insurance contract, an
automatic renewal will occur for that product. Any necessary changes to coverage
limits or deductibles, etc., will be made once contact is restored with the
insured.
*
Standard billings and mailings, scheduled promotions in affected areas
–CUNA Mutual is reviewing all scheduled billings and mailings intended for
distribution in affected areas. The company is temporarily suspending mailings
to these areas to ease the burden for credit unions and members.
Bankers Life and Casualty (http://www.bankers.com):
The Conseco subsidiary announced a series of initiatives to provide special help
to its policyholders in
Alabama
,
Louisiana
and
Mississippi
who have been affected by the hurricanes, as requested by the state insurance
departments:
*After January 1, 2006, Bankers Life will work with
individual affected policyholders on a case-by-case basis to bring their
premiums current in a method financially feasible for them.
* For the foreseeable future, the insurer
will process – on an expedited basis, before all other pending business –
any requests for loans, withdrawals, or cancellations from affected
policyholders.
*
Bankers Life will make every effort to modify its normal administrative
practices to accommodate affected policy owners.
* A special team has been established to respond to service
requests from the affected areas.
The
Hartford (http://www.hartfordinvestor.com)
has established processes to extend 60-day grace periods to life insurance
policyholders in the impacted areas of
Louisiana
,
Mississippi
,
Alabama
,
Texas
and
Florida
. The company will extend grace periods, limit policy cancellations and
non-renewals, and provide additional time for new business delivery requirements
for those impacted by the hurricanes. Affected clients (and their financial
advisors) were encouraged to contact The Hartford with questions or concerns
about extending payment, changing their address or other service issues at the
toll-free numbers listed on the website. This includes contracts issued by
Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company.
Health Insurers
Aetna (http://www.aetna.com): Through
at least September 30, 2005, the insurer temporarily modied certain
procedures and requirements for members in
Alabama
,
Louisiana
,
Mississippi
and the Florida Panhandle (Bay, Escambia, Holmes, Okaloosa,
Santa Rosa
, Walton and
Washington
counties). Members who cannot go to
Aetna participating physicians, hospitals and other health care professionals
can seek care out of their network or in another
Aetna
coverage area. Displaced members in
plans that require the use of a primary care physician (PCP) will be able to
seek care from other PCPs or specialists. To avoid delays in accessing care,
Aetna
is waiving requirements for medical pre-certification, referrals, medical
necessity reviews and notification of hospital admissions.
In addition, Aetna members in
Alabama
,
Louisiana
,
Mississippi
and
Florida
can refill prescriptions even if they are not due to be filled for 30 days. For
members who receive prescriptions from Aetna Rx Home Delivery (the company
mail-order pharmacy), the insurer will replace any lost or damaged
prescriptions.
BlueCross
BlueShield of
Louisiana
(http://www.bcbsla.com):
Customers who need to refill a drug prescription early will be allowed to do so,
assuming the prescription can be refilled. The
health insurer has also waived prior-notification requirements for participants
in 14 affected parishes. A grace
period on premiums due will be extended to its small-group (up to 35 members)
business and individual customers located in the same parishes.
CIGNA (http://www.cigna.com):
Special service measures for members have been implemented through
September 30. In terms of medical
services, CIGNA has modified certain standard claim approval requirements,
including requirements for pre-certification, referrals, medical necessity
determinations and hospital admission procedures.
For members who cannot access participating physicians, hospitals or
other providers, CIGNA is providing coverage at the in-network benefit level.
In addition, CIGNA Behavioral
Health (CBH) has expanded its telephone helpline to help residents of the
Gulf
Coast
communities affected by the hurricane cope with disaster-related stress. Phone
lines are staffed with trained counselors who are available to speak with
individuals about how to cope with grief, anxiety, stress or other issues in the
aftermath of the disaster. Any member of the public residing in the affected
areas may use the telephone help lines, regardless of CIGNA membership.
Mutual of
Omaha
: (http://www.mutualofomaha.com):
Individuals covered under Mutual of Omaha PPO policies are encouraged to
seek medical care as necessary and where most conveniently provided. All
services will be treated as in-network care until Nov. 1, 2005.
In addition, medical pre-certification penalties have been waived until
Nov. 1, 2005 for customers within FEMA-designated disaster areas.
Mutual of
Omaha
customers who have lost their medications are eligible for early refill of the
prescriptions.
The Principal Financial Group
(http://www.principal.com): On September
14, the insurer announced that, for those
customers directly impacted by the hurricane, the requirement to call for
preauthorization or pre-certification of medical services will be temporarily
waived.
Highmark Inc. (http://www.highmark.com):
The Pennsylvania-based health
insurer has temporarily modified cost-sharing and coverage rules for members who
reside in or have been displaced from areas affected by the hurricane. The
following changes remain in effect through Oct. 31, 2005: 1) Highmark
will pay all medical claims as in-network, regardless of whether or not the
provider is in the Blue Cross Blue Shield networks; 2) Highmark will waive the
requirement for pre-certification of inpatient admissions; 3) members can have
mail order prescriptions shipped to a temporary alternate address or can
transfer prescriptions to a retail pharmacy; 4) members who may be in need of
behavioral or mental health support can call the insurer's behavioral health
service specialists.
Thrivent (http://www.thrivent.com):
For health claims, any provision where an individual has to take
action under the contract is waived until October 29, 2005. Details concerning
requirements for claims, premiums, non-renewals, and other actions under the
contract will be communicated to the business areas once the
Louisiana
rules are final.
*****************
Human
Resources Issues
LOMA surveyed human resources
officials and committees concerning their policies on continuing
pay for employees in the area affected by Hurricane Katrina. Most said this did
not apply to them, but a few did. Here is a summary of those policies:
“We are paying our employees
in the damaged areas indefinitely. We don't have many employees that are
affected; they were able to locate temporary residences so I am not aware
of any special requests at this time.”
“Two offices are closed due
to Hurricane Katrina. We plan to continue pay for both exempt and
non-exempt employees until we can re-establish operations in other
offices/areas.”
“We do not have offices
affected, however we do have a crisis and business continuity plan. In the
event of business interruption, we would provide full pay employees for up to 30
days. We would look at reduced pay after that, depending on the projected
length of disruption. We would pay for the cost of transportation and
housing of selected employees to our contracted “hotsite” in a different
geographic area. We have a plan which includes critical
functions/employees and a plan to rotate employees if a disruption were longer
than 30 days.”
*****
NOTE: LOMA member companies who
wish more information on this topic may contact the
LOMA
Information
Center
at infoctr@loma.org or
call
1-800-ASK-LOMA or 770-984-3720 (phone); or
770-984-6422 (fax).
Part
One discusses charitable contributions to the relief effort.
The information contained in this brief is a summary of current source
material available at the time of publication and is presented for general
educational purposes only. It is not designed or intended to provide
expert advice, for which the services of a competent professional should be
sought. Contact the LOMA Information Center at infoctr@loma.org
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