It’s a word that can strike fear into the hearts of any insurance professional, whether a broker, agent, or even an insurer. But far from a dreaded submission to a department for checking and cross checking, evidence of compliance in an insurance application by an insured is a good thing. Essentially it is the client showing an underwriter that his care is good, and that he has taken all steps to present himself as a better than average risk to a company evaluating his application.
With a given impairment, compliance involves regular checks to a physician to make sure than the condition has adequate surveillance and proper treatment. In the case of a cardiac event for instance, it may involve regular checks with the cardiologist to minimize future complications and insure the event was a singular happening. At a certain point, that care may be passed on to an internist. But the concept of physician follow-up is key. Someone who had a heart attack or a coronary bypass for example and then hasn’t seen a physician in several years is looked upon far less favorably than someone who has kept regular check-ups. In these cases, a big APS is more likely a good one rather than a sign of a problem.
Often physicians request follow-up by a specialist for a condition that could have an adverse outcome. Take sleep apnea for instance. A client’s wife may complain her husband actually stops breathing during sleep. A sleep study is recommended. If the client goes in and has it done, even if it results in treatment such as CPAP, it is a treated condition and considered favorably. Much more so than when the client blows off the suggestion, and the underwriter has no idea of what the severity of the condition is. In these cases, the worst outcome is assumed and the underwriting consequence is usually worse than it would have been no matter what the consultation turned up.
There are regular health surveillance events that are recommended as proper follow-up at certain ages. Mammography, colonoscopy, PAP smears, cholesterol and blood pressure screenings are all included in these categories. While most insurers will not penalize applicants whose health care is irregular, the majority will actually credit a client who keeps regular physical exams and health maintenance. This can mean the difference between preferred issue and standard for instance, and significant premium savings. Insurers are even starting to move toward evaluating healthy living choices, and a display of these in an insurance application will result in better classes of preferred issue and significant discounts for participating insureds.
Some conditions have to have compliance as a necessary part of issue. Someone who has had cancer for instance must participate in regular checks to see that the cancer has not recurred. Those with precancerous conditions, such as known genetic disorders or dysplastic nevi syndrome (of the skin) for instance can’t be lost to follow-up without consequences. An insulin dependent diabetic who never sees his physician is likely not going to be looked upon favorably, and sometimes outright declined. “New” EKG changes may be quite serious, but even abnormal EKGs that have shown stability over time may not result in an adverse consequence. The theme is simple—what an insurer knows to be a stable, non-progressive condition (through compliance by the insured in seeking regular medical care) is always a good thing.
Again, compliance isn’t always the follow up of a disease with checks and rechecks. The trend in insurers is to reward those in good health with better premiums, and to recruit that population when possible. Compliance to good diet, prescribed health maintenance, exercise, and regular periodic physical exams has positive consequences. As in any situation in an insurance company, compliance requires taking a few extra steps to insure a good outcome. But in underwriting, it may result in even better than expected consequences.
