Jumbo treaty limit violations can be a costly challenge for both carriers and reinsurers. Until recently, the life insurance industry lacked a way to share and monitor in force face amounts and pending application information, resulting in exposure to high value fraud risk. In a roundtable discussion published in the March edition of On The Risk Magazine, Trey Reynolds, Executive Vice President, Strategy & New Business Development at MIB, Tom Freitas, former CEO of TAI, Chris Noyes, Vice President of Business Development for U.S. Mortality Markets at RGA, Jordan Carreira, Chief Underwriter at Lincoln Financial, and John Valickus, Deputy Chief Underwriter at Lincoln Financial came together to discuss the impact of Jumbo breach risk, and how MIB together with TAI have been collaborating with industry members to solve this problem. Read the full article, which has been reprinted by RGA on their website.
Carrier and reinsurance underwriters rely on applicants and agents to disclose their intended total line of coverage on applications. The inability to verify this information has led to an industry blind spot that can result in costly jumbo treaty breaches. Often not discovered until a claim is filed, these breaches can cost millions of dollars and have significant impact to a carrier’s financial results.
Together with TAI, MIB has developed the only data solution in the industry providing insight into both in force and pending application activity, closing this blind spot. The MIB Jumbo Service℠ uses this data to enable underwriters to identify potential jumbo treaty breaches during the underwriting process or before the contestability period ends. Early results have shown that the service can generate savings of more than 10 times the cost of the tool.
The contributory database MIB and TAI have developed has the potential to address many industry challenges, jumbo treaty violations being the first, and has significant potential to provide the industry with unique and incremental insights in a reliable aggregate fashion. Our next product will be similar to the Jumbo Service, but provide information for all coverage levels, not just high face amounts. We also will be able to capture data related to claims and lapses as we maintain the database, enabling us to provide greater insights to the industry in the future.
Learn more about MIB In Force Data Solutions and the MIB Jumbo Service. Ready to discuss how MIB can use in force and pending application data to help your organization? Contact us for more information.