NAIFA has adopted a new policy position to address an important gap in how consumers are informed of changes to their insurance policies. The position holds that when a company is permitted under law or regulation to raise a premium or any expense charge on an in-force policy, that increase should only take effect after timely and clear notice is given to the policyowner, and only when a copy of that same notice is sent at the same time to the policy’s writing and/or servicing agent. This position reflects NAIFA’s long-standing commitment to ensuring consumers have both the information and professional support they need to make sound financial decisions.
NAIFA President Christopher L. Gandy, LACP, said the position also addresses a real and persistent gap in the regulatory landscape. “States require insurers to notify policyholders of relevant increases in premiums or other charges, but not all require that notice to also reach the agent. When an agent is left out of important communications, a policyholder who receives notice of an increase has nowhere to turn to understand what the change means, how it affects the policy’s long-term outlook, or what options may be available. The result is that consumers are often forced to interpret the correspondence on their own, at precisely the moment when professional guidance is needed the most,” Gandy said.
Notice to the agent will help protect the client-advisor relationship that policyholders rely on to navigate difficult decisions. Agents are frequently the first call a policyholder makes when they do not understand information from their insurer, and licensed professionals can only provide timely, informed guidance when they know a change has occurred. Without such notice, agents are left playing catch-up after they hear from clients or, even worse, unaware that a policy has changed at all until it’s too late to help them respond effectively.
With this policy position, NAIFA is calling on state legislators and regulators to close this important gap and require that agents receive notice of policy increases at the same time as their clients. Closing this notice gap will protect consumers and preserve their access to professional guidance.
