Dennis Quinn

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Dennis Quinn is a partner in the New York and Los Angeles offices of Barger & Wolen LLP. He has 17 years of experience as a corporate and regulatory attorney specializing in insurance and reinsurance transactions and regulatory law.
Mr. Quinn has provided counsel to clients on a wide variety of corporate matters, including stock and asset acquisitions, mergers, “spin offs,” bulk reinsurance and assumption agreements, renewal rights deals, loss portfolio transfers and the organization and licensing of insurance companies. He has also regularly assisted clients in structuring their agreements, investments and transactions (both third party and affiliate) to comply with state insurance laws and obtaining regulatory approval thereof. In addition, Mr. Quinn has extensive experience in handling complex reinsurance matters.
Prior to joining the firm in 2006, Mr. Quinn held various senior positions in the legal departments of a global reinsurer and a primary insurer.


Articles By This Author

New York Department of Financial Services Launches Industry-wide Audit of Health Insurance Rates

The New York Department of Financial Services “DFS”) will audit the accuracy of the data used by insurers and health maintenance organizations to request health insurance rate increases (see press release). 

In connection therewith, health insurers must submit their rate increase proposals to the DFS for “prior approval.” The DFS can approve, reduce or reject the requests.

The audits will, among other things, allow the regulators to:

  1. ascertain if insurers are accurately allocating administrative costs and producer commissions;
  2. ensure that insurers have proper controls and oversight in place to make certain that data is reliable and accurate; and
  3. assist in identifying areas where action can be taken to help control costs.

The DFS will conduct on-site audits of health insurers and HMOs selling health insurance plans regulated by the state – employer, small group and individual policies.

The DFS has announced that:

[t]he audits will review selected rate requests that have already been filed. Insurers will not know beforehand whether their proposals will be the subject of an audit. Data regarding claims, insurer administrative expenses, premiums and claims reserves will be examined. The Department will hire a private accounting firm to assist DFS personnel in conducting the audits.”

 

Life Insurer "Death Master" Investigation Leads to Multi-State Regulatory Settlement

Insurance regulators across the nation from time-to-time focus their efforts on pursuing the joint investigation of a legal issue (e.g., brokers’ fees or title insurance matters) that is perceived by the regulators as representing an industry-wide compliance problem that is common to all states.

The latest subject of such a multi-jurisdiction investigation targets life insurance settlements. Regulators are in the midst of an extensive investigation and prosecution of life insurers’ practices with respect to the payment and settlement of life benefits.

The California Department of Insurance has just announced that it has negotiated a $17 million multi-state Regulatory Settlement Agreement with Prudential Insurance Company of America.

The settlement relates to Prudential’s alleged failure to pay benefits “even though they had knowledge of policyholder deaths from the Death Master file.” 

The settlement stems from a joint examination of Prudential’s settlement practices that was undertaken by a number of jurisdictions, including California, Florida, Illinois, New Hampshire, New Jersey, North Dakota and Pennsylvania. 

State insurance regulators have taken the position that life insurers are required by law to monitor the United States Social Security Administration’s Death Master File and other databases on a regular basis to ensure that beneficiaries receive prompt payment of their contract benefits when the holder of a life insurance policy or annuity dies. It is our understanding that similar settlements are to follow from the Florida Office of Insurance Regulation

In connection with the settlement, Prudential is required, among other things, to:

  • Revise its business practices to better utilize the Death Master File.
  • Return monies promptly to beneficiaries when located through revised search efforts.
  • Report funds to the Unclaimed Property Bureau of the appropriate state when a beneficiary cannot be located after a thorough search.
  • Provide quarterly reports to regulators for the next three years.

We are advising a number of life insurers related to their efforts to revise their settlement practices to comply with these developments. That includes responding to regulatory inquiries, developing records review procedures, conducting records reviews and handling benefit settlements and payments strategies.

NAIC Working Group Proposes Controversial Plan for Implementing ORSA Reporting Requirement

On November 2nd, the Group Solvency Issues Working Group (“GSIWG”) met at the National Association of Insurance Commissioners' (NAIC) Fall National Meeting to discuss the latest exposure draft of the NAIC Own Risk and Solvency Assessment (“ORSA”) Guidance Manual (the “Manual”), and regulators’ controversial plan to implement the ORSA requirement by incorporating it into the Form B Insurance Holding Company System Annual Registration Statement (“Form B”) that each insurer is required to file annually with its domiciliary regulator. 

Once implemented, ORSA would require each non-exempt insurer (or insurance group on behalf of a subsidiary insurer) to

assess the adequacy of its risk management and current, and likely future, solvency position, internally document the process and results, and provide a high level summary report annually to the domiciliary regulator, if requested.” See Manual, Exposure Draft, dated October 14, 2011. 

An insurer would be exempt from the ORSA requirement if:

  1. it has less than $500 million in annual direct written premium and
  2. it is not a member of a group of affiliated insurers that has $1 billion or more in annual direct written premium.   

One of the primary objectives of ORSA is to provide state regulators with a means of assessing on a group wide – instead of merely on a legal entity – basis the enterprise risk management framework and capital adequacy of an insurance group. 

In effect, regulators are seeking various tools (ORSA among them) that will assist them in preventing another AIG-type scenario where risks generated by non-insurers in the group potentially pose an existential threat to the insurer legal entity.

At the meeting, the GSIWG accepted proposed revisions to the Manual that were generally non-substantive in nature and then voted to adopt the Manual (as revised) for the Financial Condition (E) Committee to implement as part of the U.S. Solvency Framework

However, the GSIWG’s proposal to utilize the Form B requirement as the legal vehicle for imposing the ORSA requirement was met with firm opposition by the industry.

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Producer Groups Critical of Proposed New York Producer Compensation Transparency Regulation

Certain producer group representatives have publicly criticized the current version of the proposed Producer Compensation Transparency Regulation (the “Proposed Regulation”) that was forwarded recently by the New York Insurance Department (“NYID”) to the Governor’s Office of Regulatory Reform (“GORR”) for review. As discussed in our September 14, 2009, Client Alert, if the Proposed Regulation becomes effective it will apply to all insurance producers that transact business in New York. 

In a September 15, 2009, P&C National Underwriter article N.Y. Comp Regulation Proposal Unacceptable, Says IIABNY, the Independent Insurance Agents & Brokers of New York  objected, among other things, to the Proposed Regulation’s requirement that producers explain to their customers whether they are functioning as an agent or a broker and how these legal classifications affect the producer’s compensation, saying such a technical discussion would engender confusion amongst consumers. Representatives of IIABNY have also criticized the Proposed Regulation’s ambiguity regarding the disclosure rules that apply to policy renewals.

 

The spokesman for IIABNY raised the possibility that producer groups might institute legal action if the State did not agree to make necessary revisions to the Proposed Regulation.

In addition to IIABNY, spokespersons for the Independent Insurance Agents & Brokers of America, the National Association of Professional Insurance Agents and the Council of Insurance Agents & Brokers have also criticized certain aspects of the Proposed Regulation.

Proposed New York insurance regulation would require mandatory disclosures to purchasers

On September 10, 2009, the New York Insurance Department (NYID) announced that it had sent the long anticipated Producer Compensation Transparency Regulation (the Proposed Regulation) to the Governor’s Office of Regulatory Reform (GORR) for review. Following GORR approval, the Proposed Regulation will be published in the New York Register and will be subject to a forty-five day period of public comment. After reviewing any comments received during such public comment period, the NYID may adopt, revise or withdraw the Proposed Regulation.

Assuming the current form of the Proposed Regulation becomes effective, it would require insurance producers selling or renewing an insurance contract in New York to make certain mandatory disclosures to purchasers regarding the compensation the producer will receive related to the sale of the insurance. Such disclosures are required to be provided to the purchaser no later than the time the application for insurance is submitted.

More notable among the various required disclosure items are the following:

  • The producer must disclose to the purchaser that the purchaser has the right to obtain information about the compensation expected to be received by the producer for the sale and for any alternative quotes obtained by the producer by requesting this information from the producer.
  • If the purchaser, in fact, requests more information regarding the producer’s compensation, the producer is required to provide, among other mandatory disclosures, a description of any alternative quotes obtained by the producer, including the coverage, premium and compensation that the insurance producer or any parent, subsidiary or affiliate would have received based, in whole or in part, upon any such alternative quotes.

In addition, the Proposed Regulation would require that insurance producers maintain records evidencing that they have provided the disclosures required by the regulation for a period of three years subsequent to the date of such disclosures.

In anticipation of the likely adoption of the Proposed Regulation, insurance producers may wish to begin developing a compliance process, including the preparation of disclosure forms, which is designed to satisfy the regulation’s requirements.

If you have any questions regarding the Proposed Regulation, please contact Dennis C. Quinn at (212) 655-3878 or dquinn@bargerwolen.com.

New CMS Model Language Leaves Critical Questions Unanswered

Medicare Secondary Payer Mandatory Reporting Requirements Applicable to All Liability, No-Fault and Workers’ Compensation Insurers

On August 31, 2009, the Centers for Medicare & Medicaid Services (“CMS”) posted an “ALERT” entitled “Compliance Regarding Obtaining Individual HICNs and/or SSNs” and an accompanying Model Language Form (the “Model Form”) to the CMS web site that is intended to provide liability, no-fault and workers' compensation insurers (collectively, “NGHP Insurers”) with guidance from the agency concerning how such entities may collect the personal information from injured claimants that each NGHP Insurer, in its capacity as a Responsible Reporting Entity (“RRE”), is required to begin reporting to CMS pursuant to The Medicare, Medicaid and SCHIP Extension Act of 2007 (the “Act”).

The Act requires all NGHP Insurers to file specified data electronically with CMS with respect to all claims involving an injury to a Medicare beneficiary where the judgment, settlement, award or other payment date is January 1, 2010, or subsequent. Such NGHP Insurers are likewise obligated by the Act to report claims for which the insurer possesses an ongoing responsibility to pay for medical services (“ORM”), existing as of July 1, 2009, and subsequent, even if the date of the initial acceptance of ORM occurred prior to July 1, 2009. Please note that each NGHP Insurer has until September 30, 2009, to complete its registration with CMS as an RRE pursuant to the Act.

The newly published ALERT states that the Model Form is intended to create a safe harbor for NGHP Insurers reporting under the Act in that

CMS will consider the reporting entity compliant for purposes of its next Section 111 file submission if . . . a signed copy of the  . . . [Model Form] is obtained (even if the individual is later discovered to be a Medicare beneficiary . . . .

Problematic Aspects

  • The ALERT does not address the situation (likely to be fairly common) when an injured claimant simply declines to return the Model Form to the reporting NGHP Insurer. The clear implication of the ALERT is that the safe harbor would not apply in such a scenario, thus creating a compliance risk for the reporting NGHP Insurer.
  • The ALERT requires the NGHP Insurer to continue to obtain an additional executed Model Form from each ORM claimant at least once every 12 months to ensure the continued applicability of the safe harbor to such ORM claim. Again, this places the reporting NGHP Insurer in the uncomfortable position of requiring performance by the claimant to maintain its safe harbor status.   

We note that these issues, as well as other aspects of the Act’s reporting requirements, are complex and present difficult interpretative issues.

For further information regarding NGHP Insurers’ obligations under the Act, please contact Dennis C. Quinn at 212-655-3878 or dquinn@bargerwolen.com.

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