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Panel backs streamline for experience-rated group disability filings; OIC and insurers support bill
Summary
House Bill 1230 would require experience-rated group disability insurers to include full rating formulas, factors and credibility calculations in filings and allow a single annual filing for all group clients; the Office of the Insurance Commissioner and major insurers backed the change as a consumer- and regulator-friendly simplification.
The Consumer Protection & Business Committee heard testimony Jan. 24 on House Bill 1230, which would require insurers that issue experience-rated group disability income policies to include their experience-rating formulas, all rating factors and credibility formulas in rate manual filings and to provide enough detail so the insurance commissioner can replicate a group's premium given that group's experience and demographics.
Tyler Langford, policy analyst with the Office of the Insurance Commissioner, told the committee the bill would simplify filings by allowing an insurer to submit one annual filing for its experience-rating methodology rather than separate single-case filings for every experience-rated group. Langford said the change would reduce administrative burden while preserving the level of actuarial detail the commissioner needs to review rates.
John Mangan, regional vice president for the American Council of Life Insurers, testified in support and said the change helps insurers deliver competitive, customized rates when a group's experience is credible. "Our companies are able to provide a customized rate to the employer that is often more favorable than just a pooled rate," Mangan told the committee, adding that the OIC retains authority to review and audit filings.
OIC staff and industry witnesses said the revision is a technical, narrowly targeted change intended to maintain regulatory oversight while reducing unnecessary administrative work. They noted that insurers remain accountable to the commissioner for the actuarial details in filings and that the proposed approach should expand competitive options for employer-sponsored coverage without reducing consumer protections.
No vote was conducted; the committee closed the public hearing and indicated staff and stakeholders had reached a working understanding on the bill's language.
