SIIA Engages NAIC Officials on Conference Call Discussing Application of Medical Loss Ratio Standards
SIIA told a group of NAIC officials on a conference call yesterday that stop-loss insurance carriers should not be subject to medical loss ratio (MLR) requirements as established by the recently-passed Patient Protection and Affordable Care Act. While many of the NAIC participants seemed to agree with SIIA’s position based on the resulting dialogue, others did not concede the point. PPACA tasked the NAIC with development of guidelines for the enacted Medical Loss Ratio (MLR) limitation provisions and yesterday’s workgroup conference call is part of this development process.
SIIA supported its position by stating that it has been involved from the early stages with the principal drafters of the PPACA, noting that it was not Congress’s intention to apply MLR limitations on insurers who do not provide direct medical coverage. In fact, the drafters of the PPACA specifically excluded self-insurance from having to comply with MLR.
The question was also raised whether to apply the MLR limitations on reinsurance policies of affiliated carriers. On this matter, SIIA stressed that there is a clear distinction between the definition of stop-loss insurance and that of reinsurance purchased by affiliated carriers to guard against their own risk exposure. As it seems probable that the NAIC will ultimately recommend that the MLR requirements be applicable to such reinsurance, it became abundantly clear that the regulators must understand that stop-loss is significantly different and should not be joined in with how such reinsurance is governed.
As a follow-up to yesterday’s call, SIIA submitted comments to the NAIC’s working group this morning. To read the full comments, please click here.
SIIA will continue to actively engage the NAIC on this matter. Please watch for additional updates in the coming weeks and months. Should you have any questions in the meantime, please contact SIIA’s government relations office at 202/463-8161.