A&H Policy Experience Exhibit Cross Check Error

[RobM-BCBSMI]

On the A&H Policy Experience Exhibit we have always reported stop loss business on page 210.3, Line C.2 which is also summarized on page 210.4 Part 3-Credit Policies, Line 1-US Forms. This year we are getting a validation cross check error that is comparing page 210.4, Part 3, Line 1 to page 210.3, Line C.01. Should the Stop Loss business be reported on Page 210.4, Part 3-Credit Policies, Line 2-Other Forms? Or is the cross check validation rule incorrectly set up?

[Glenn]

Hello RobM,
First, let's start with a few excerpts from the 2019 NAIC instructions from the A&H Policy Experience Exhibit:
I am doing this so we are on the same page as far as definitions

ACCIDENT AND HEALTH POLICY EXPERIENCE EXHIBIT

2. The Exhibit will show information concerning direct business written on policy forms approved for use in the United States with a final total for all policy forms (including non-U.S. policy forms) on the bottom line of the Exhibit. The Exhibit will show information for each listed product for Individual, Group, and Other business categories. Subtotals by product within the individual category are required for all columns

DEFINITIONS

Credit

Individual or group policies that provide benefits to a debtor for full or partial repayment of debt associated with a specific loan or other credit transaction upon disability or involuntary unemployment of debtor, except in connection with first mortgage loans. In some states, involuntary unemployment credit insurance is not included in health insurance. This category should not include that type of credit insurance in those states.
Other Business

Any business that is not included in the Individual Business or Group Business listed above, including credit insurance, stop loss/excess loss, administrative services only and administrative services contract.

Other Group Business

Group policies providing health insurance benefits that are not included in any other group business category of this exhibit should be reported as other group business.

Other Individual Business

Individual policies providing health insurance benefits that are not included in any other individual business category of this exhibit should be reported as other individual business.

I specifically noted the items you should re-read from the standpoint of definitions
I say this because you noted in your question the following:
Rob M question:

"On the A&H Policy Experience Exhibit we have always reported stop loss business on page 210.3, Line C.2 which is also summarized on page 210.4 Part 3-Credit Policies, Line 1-US Forms.
This year we are getting a validation cross check error that is comparing page 210.4, Part 3, Line 1 to page 210.3, Line C.01.
Should the Stop Loss business be reported on Page 210.4, Part 3-Credit Policies,Line 2-Other Forms?
GS Response : No, see detailed reasoning below

Or is the cross check validation rule incorrectly set up?
GS Response: I believe the NAIC needs to revisit this crosscheck. See my reasoning below
I agree with the reporting of the Stop Loss on page 210.3 Section C line 2 as that specifically calls for the Stop Loss to be reported here

I would, however, question your reporting of the Stop Loss on the Summary page 210.4 with Credit? Stop Loss is not Credit business. Why would you show this way?
The Summary on page 210.4 calls for Individual, Group, and Credit business. I do not see where they call for the Stop Loss on the Summary page 210.4 ( yes, it is reported in Other Section C2).

This I believe is the flaw in the Summary and the NAIC crosschecks.
I would recommend you rethink where you report the Stop Loss. Section C2 - Other Stop Loss is correct given the instructions.
I would not include in the Summary as Credit. I actually would recommend excluding Stop Loss from the Summary and if a crosscheck fails due to Stop Loss you explain it as such because it doesn't really allow for it today.

I have other clients with Stop Loss having this same issue since they added the new crosscheck between SHCE and A&H Policy Experience Exhibit.
I believe the industry needs to speak out in this one ( Interested Parties )
I see two options as proposal :

1. Remove the new crosscheck
2. Write to NAIC about the issue and they either need to amend the Summary to bring in Stop Loss ( and amend Instructions to A&H Policy Experience Exhibit)

Bottom line if the NAIC is to requiring you to report your Stop Loss business in the A&H Policy Experience Exhibit on page 210.3 section C2 then the summary needs to have a way to pull it in give the definitions and instructions today

Regards,
Glenn S Sackett

[AnnC-BCBSMI]

Hi Glenn, Thank you for the response to RobM.

We are proposing reporting the StopLoss U.S. direct business (reported in page 210.3 Other Business, Section C, line 2) in line 1 of page 210.4 part 4 and not reporting the StopLoss U.S. direct business in page 210.4 part 3, Credit Policies.

We are relying on the A&H instruction noted below:

"3. A Summary Page shows a reconciliation with Schedule H for Individual, Group and Credit policies separately and in total for companies filing the Life, Accident and Health, Fraternal and Property/Casualty Annual Statement, and a reconciliation of these policies in total only with the specified exhibits of the Health Annual Statement for companies filing that statement."

Since we are a Health Annual Statement company we only need to summarize our activity in total only.

Do you agree?

[Glenn]

Hello Anne,

From your question with GS Booke advice
"We are proposing reporting the Stop Loss U.S. direct business (reported in page 210.3 Other Business, Section C, line 2) in line 1 of page 210.4 part 4 and not reporting the Stop Loss U.S. direct business in page 210.4 part 3, Credit Policies. "

GS - no do not put on line 1

A suggestion from another client experience ( National General Ins Co - NGIC). They dealt with a couple crosscheck errors similar to yours last year.

Yes, Stop Loss definitely should be in page 210.3 Other - Stop Loss Section C line 2

and then to solve the crosscheck the NAIC advised NGIC to put Stop Loss on page 210.4 Summary as Part 2 - Group - Other Forms so that is the Summary Part 2 - line 2 - Other Forms - get off of line 1

If Individual Stop Loss then use the Summary Part 1 , line 2 Other Forms

in grand totals of Summary these will add into Part 4, line 2 Other Forms

That's my advice

We are relying on the A&H instruction noted below:

"3. A Summary Page shows a reconciliation with Schedule H for Individual, Group and Credit policies separately and in total for companies filing the Life, Accident and Health, Fraternal and Property/Casualty Annual Statement, and a reconciliation of these policies in total only with the specified exhibits of the Health Annual Statement for companies filing that statement."

Since we are a Health Annual Statement company we only need to summarize our activity in total only.

Do you agree? See above detailed advice