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Old 05-18-2002, 11:15 PM
090301 090301 is offline
 
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Default Discretionary Groups

I recently heard about a Missouri company that established what was called a Discretionary Group within their state of domicile. The group was defined as people in New Jersey (and a few other states). They then issued individual policies through this group to people within New Jersey; policy forms that they could not get approved in New Jersey(so I was lead to believe). This sounds too good to be true. Actually, it sounds illegal. What am I missing? Does anyone know the details of such an arrangement?
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Old 05-19-2002, 01:34 PM
urysohn
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Default Re: Discretionary Groups

Quote:
Originally Posted by 090301
I recently heard about a Missouri company that established what was called a Discretionary Group within their state of domicile. The group was defined as people in New Jersey (and a few other states). They then issued individual policies through this group to people within New Jersey; policy forms that they could not get approved in New Jersey(so I was lead to believe). This sounds too good to be true. Actually, it sounds illegal. What am I missing? Does anyone know the details of such an arrangement?
They probably didn't issue individual policies. They were technically issued certificates to a group contract. The group contract is really non-existent. The certificate is otherwise identical to the individual policies sold elsewhere, only with the word "Certificate" replacing the word "Policy" or "Contract" throughout the policy, errr certificate. And it's probably even better than that. They probably filed this "Group" contract in Rhode Island. Once RI approves a Group contract, it can be automatically used in 9 states, one of which is New Jersey.

The key is that New Jersey had to approve the "discretionary group" in advance. They used to be relatively lax with this, but I understand they are tightening their requirements so that the group needs to reasonably be seen as a group. "All people who reside, work, or drive through NJ" would probably not get approval as a discretionary group today. "All customers of Company X", where Company X is not your insurance company, probably would. I don't think they have fixed guidelines on it, but you can probably come up with something that approximates "all residents of NJ" with a little bit of effort.
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Old 09-03-2018, 12:19 AM
Actuary321 Actuary321 is offline
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I know this is a really old thread but I wonder if anyone knows which are the "9 states" that urysohn referenced?

TIA
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Old 09-04-2018, 05:26 PM
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urysohn urysohn is offline
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Well, I know that I do not know (any more). Sorry.
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Old 09-05-2018, 02:04 PM
echo echo is offline
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Quote:
Originally Posted by Actuary321 View Post
I know this is a really old thread but I wonder if anyone knows which are the "9 states" that urysohn referenced?

TIA
5,951 days between posts in this thread, that's over 16 years. Is that some kind of record?
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Old 09-05-2018, 11:41 PM
Actuary321 Actuary321 is offline
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When I saw this thread while searching for Discretionary Groups, I was a little surprised I had not posted in it when it was new.
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