Jumbo breaches, while infrequent, can cost millions of dollars and have significant impact to a carrier’s financial results. In 2020, we conducted a study and found that roughly 2 percent of all in force policies involved potential jumbo violations. Across the industry, this equates to approximately $72B at risk.
Since the industry has lacked a way to share in force face amounts and pending application information, carriers are often unaware of jumbo treaty risk exposure. Carriers who do not identify breaches until after the contestability period is over have little recourse. In addition, when a jumbo violation is discovered only after a claim is filed, resolution can involve extensive resources to negotiate a settlement with a reinsurer.
Together with TAI, MIB has developed a solution in recognition of a major challenge facing the life insurance industry – the need to identify jumbo treaty violation risk proactively. The MIB Jumbo Service will help you identify in force and pending data on applications for large face amounts, so you can proactively take action to manage any jumbo breach risk. Who better than two industry names you know and trust to develop a new way for the industry to share data and help manage risk.
By combining two industry leading data sources, we are able to offer the only data solution in the industry providing insight into both in force and pending application activity.
With this data, carriers and reinsurers alike can identify and work to prevent potential breaches before they occur.
Note: If you are not a TAI software customer, MIB and TAI have an alternative process to receive carrier data directly.
The MIB Jumbo Service alerts insurers of potential breaches for investigation by underwriters. You will receive Fair Credit Reporting Act (FCRA) compliant reports to help you identify your jumbo breach risk:
Semi-annual report to identify potential jumbo violations during the contestable period. Currently available.
Alerts that can be integrated into your new business/underwriting system to identify jumbo treaty breach risk as part of the underwriting process. Planned for 2022.
Details on the value of the MIB Jumbo Service
Find out how we can help you proactively identify and manage jumbo treaty breach risk.Contact MIB Sales