CHANGING YOUR BUSINESS PROFILE
Guidelines on Company Withdrawals
Plans of Withdrawal/Transition
To assist the Department in responding to public inquiries, ensuring statutory compliance and orderly withdrawal/transition of insurance business in the Commonwealth, the completion of a plan of withdrawal/transition is requested.
A Plan of withdrawal/transition should be submitted under any of the following circumstances:
- The insurer intends to discontinue the issuance of a policy at the end of the policy term
- The insurer intends to transition business from its company to an affiliated or non-affiliated insurer
- The insurer does not intend to offer renewal to a block of insurance business for a specific reason
- The insurer intends to reduce coverage at renewal by imposing caps, limits, exclusions etc
The plan is to be submitted to the Department prior to the commencement of any withdrawal activity.
The plan provides the Department with, among other things, the specific reason for the insurer's action; the number of policyholders affected; copies of the correspondence that will be used to communicate the insurer's intentions to both the policyholders and agents; description of how the policyholders will be serviced during the process and a number of other items for the purpose of assuring that the transaction will be accomplished lawfully and orderly.
In some instances there are more specific guidelines that health insurers must follow. For example, the Health Insurance Portability and Accountability Act (HIPAA) requires health insurers to provide 180-day notice for market withdrawals and 90-day notice for product withdrawals. The proposed notices should be submitted in advance for Department review.
The information contained in the plan is used by the Department to evaluate the insurer's statutory compliance during the course of the withdrawal/transition. For example, an insurer withdrawing its private passenger auto business in the Commonwealth, with the intent to provide replacement coverage with an affiliated insurer, is expected to demonstrate compliance with the statute and regulation governing the nonrenewal of such coverages in the Commonwealth. Therefore, the plan of withdrawal must contain a sample of the nonrenewal notice and other communications explaining the nonrenewal and offer. Any compliance issues are brought to the insurer's attention, resolved and the plan finalized.