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Old 10-02-2017, 08:53 AM
californiakrazy californiakrazy is offline
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Default thoughts on confidentiality?

should filings (for ex on SERFF) be made public or confidential in general to promote innovation? thoughts on this? if you say yes or no, please explain your reasoning..

thank you

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Old 10-02-2017, 09:02 AM
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Some states will not allow confidentiality at all, or the bar is set so high as to discourage it.
That being said, I've always operated on the assumption that everything is public, but you don't have to reveal everything. What does the state require? Give them that and nothing more.
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Old 10-02-2017, 09:30 AM
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Kind of depends on the company you work for. If you are filing something innovative, then there is a reason to file as little as possible publically, and try to go for confidentiality. But if your company tends to follow beaten paths, it may not be worth the regulatory ill will to be opaque. It's not that hard to find out what other companies are doing so don't waste a lot of time and money trying to protect stuff that isn't really unusual.

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Old 10-02-2017, 11:59 AM
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If the OP is addressing the philosophical "should" rather than the pragmatic, how is it done "should", then of course full disclosure of every detail on a non-confidential SERFF filing should be made if the goal is to promote innovation and the adoption of innovative techniques.

Good luck with that though.
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Old 10-08-2017, 09:47 AM
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Quote:
Originally Posted by Ron Weasley View Post
If the OP is addressing the philosophical "should" rather than the pragmatic, how is it done "should", then of course full disclosure of every detail on a non-confidential SERFF filing should be made if the goal is to promote innovation and the adoption of innovative techniques.

Good luck with that though.
That's certainly how it should be done for the goal of widespread adoption of innovative techniques, Mr Wizard, but it could stifle some innovation itself.

If every detail is fully disclosed, it could erase or minimize potential competitive advantage* the innovative company would have in the marketplace, rendering the required "R&D" for innovation too costly for the limited benefit.

So promoting innovation and also its widespread adoption can be conflicting goals, for which OP is trying to strike an appropriate balance.


*Not all innovation is designed to gain an advantage relative to competitors. Non-competitive innovations are more likely to be disclosed willingly.
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Old 10-08-2017, 09:52 AM
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PS. For those responding: IIRC, OP works for a state regulator and is therefore likely exploring the "philosophical should," as Mr Wizard put it, from the regulatory, not the company, point of view.
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Old 10-08-2017, 01:51 PM
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Quote:
Originally Posted by Marcie View Post
PS. For those responding: IIRC, OP works for a state regulator and is therefore likely exploring the "philosophical should," as Mr Wizard put it, from the regulatory, not the company, point of view.
If the OP works for the CA state insurance regulator, the simplest way to encourage innovation would be to do the opposite of everything they are doing today.
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Old 10-08-2017, 02:46 PM
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If the OP works for the CA state insurance regulator, the simplest way to encourage innovation would be to do the opposite of everything they are doing today.


...but I will concede that the CDI is constrained by state law and ballot initiatives.
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Old 10-08-2017, 03:06 PM
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Quote:
Originally Posted by californiakrazy View Post
should filings (for ex on SERFF) be made public or confidential in general to promote innovation? thoughts on this? if you say yes or no, please explain your reasoning..
I can read this a couple of ways:

1. Do I want to share with my competitors that I'm making X, Y, and/or Z changes to my product/program? No...but given the fact that agents talk and consumer-facing websites can be queried, I don't see much is lost by my filings being public.

And for states where staff or uniquely-interpreted regs introduce quirks to the filing process, having filings and correspondence be public record facilitates industry's understanding of how to work with the department in question.

2. Do I want to share my new magic black pricing/underwriting box with competitors through filings? Absolutely not, especially if it is a better mousetrap, novel, or something that I might wish to secure a business-method patent on. Fortunately, in most states, there are provisions to submit such information confidentially, permitting regulators to do their due diligence in reviewing the new widget, while protecting it from competitors' scrutiny.

In those states where that confidentiality is not permitted...well, there's a pretty good chance that I won't bring my new toy to that jurisdiction (and my best customers in that state will pay more as a result).

3. This isn't quite so much about confidentiality, but... when I've worked on new product/program launches, I have generally preferred to seek out markets where E&S is a viable option, or to focus my energy on states that have been deregulated for rates, if only because having the flexibility to quickly adapt as I learn is a big safety net. When working on such projects, there are a handful of states that I am likely to either delay or completely skip over because the regulatory hurdles are too great to justify going after that state's market.
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Old 10-08-2017, 03:41 PM
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Quote:
Originally Posted by Marcie View Post
PS. For those responding: IIRC, OP works for a state regulator and is therefore likely exploring the "philosophical should," as Mr Wizard put it, from the regulatory, not the company, point of view.
I'll admit that as a believer in the free market, I sometimes have trouble seeing things from a regulator's point of view. Philosophically, I believe that the notion of regulating against "excessive" rates doesn't really work in an environment where the free market is operational.

That disclaimer aside...perhaps the question of confidentiality should be viewed within the context of a regulator's legitimate duties: assessing whether the insurer is taking actions that don't jeopardize its ability to meet the contractual obligations it seeks to take on, and confirming whether the practices of the carrier are harmonious with the statutes, regulations, and public policy of the jurisdiction in question.

Ignoring constraints that may be imposed by local sunshine laws, can a regulator do that job if a carrier seeks confidentiality? I'd have to say "yes". I have, a couple of times in my career, had meetings with state regulators where I've opened up a black box to let them assess whether it was compliant with local regs, with either a formal confidentiality agreement in place, or with a "look, but don't touch and don't make written notes" show-and-tell.

I'm not aware of any state where the DOI has a rule that would prohibit a review along those lines. In my experience, once you get above the level of intake staff, the only reason I've seen a regulator object to a request for confidentiality has been the presence of a state sunshine law phrased in such a way as to leave no room for the protection of proprietary information.

Beyond those states, it's generally overly-stringent statutes and regulations (or overly-stringent interpretations of laws and regs) that impair innovation....along with some Departments being so short-staffed as to make their review significantly slower than peer states'.
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