This was a message from world insurance (health insurance carrier)
With the changes in the major medical insurance marketplace and the resulting uncertainties brought on by the regulatory environment, I need to inform you that World Insurance Company/American Republic Insurance Company has made a decision to exit the individually underwritten comprehensive major medical insurance business. As a result, we will be cancelling our individually underwritten comprehensive major medical policies,
subject to and in accordance with applicable law. This decision was made after much deliberation and planning; it was not an easy decision to make because of the impact on customers, agents and employees. We are no longer able to provide the kind of major medical insurance protection our customers have come to expect.
Two very important factors in reaching this decision were our ability to provide a guaranteed issue option to as many as possible of our individually underwritten comprehensive major medical policyholders and the potential for ongoing payment of meaningful agent compensation on business placed under the guaranteed issue option.
We have negotiated an arrangement with Celtic Insurance Company (“Celtic”), a wholly-owned subsidiary of Centene
Corporation, a multi-billion dollar health services organization. We are pleased to provide most of our policyholders in states where Celtic has product available with this important guaranteed issue option to elect replacement coverage from Celtic.
To provide this offer, Celtic has a prescribed set of conditions and processes for policyholders to follow. The process will begin on the date policyholders are notified their policy will be cancelled. During an initial defined offer period of up to 60-days (but shorter in some cases), policyholders will have a guaranteed option to obtain coverage from Celtic without undergoing a new underwriting process or providing evidence of insurability. This offer will be based on Celtic’s benefits and premium.
Similar waivers and rate-ups on policyholders’ current coverage will be carried over to the replacement coverage. Policyholders that do not take the guaranteed option during the initial offer period will have an additional 30 days to apply for new coverage through Celtic’s normal business process. However, it is very important policyholders take action within the initial offer period to ensure continuation of coverage on a guaranteed issue basis to protect against catastrophic events—the reason they purchased their existing policies.
Renewal commissions will be paid on existing business placed with Celtic. In addition, commissions will be paid on any new business issued as a result of a policyholder’s choice to go through Celtic’s new business process. However, the amount available for agent compensation due to regulatory changes has been reduced consistent with the lower compensation amounts built into these products. To ensure the quality of the risk pool, the level of the commissions will depend upon the percentage of existing policyholders that convert their policies to Celtic. Because new policies will be issued, agents are required to be appointed in the policyholder’s state of residence to receive compensation on any business placed with Celtic.
Although we have no legal obligation to negotiate a guaranteed issue option for our policyholders, our policyholders and agents are important to us. By providing this offer to our policyholders, they can choose to have the major medical protection they need.
You are a valued business partner, and we appreciate the relationship we’ve had with you. Please do what you can to ensure continuation of coverage for these policyholders; we will do what we can to assist in the appointment process for any agent or agency that wants to be appointed.
