In 2021, nearly 25% of all carriers were subject to an exam with states collecting nearly $208 million in fines and penalties.
The insurance industry is behind the curve in terms of the modernization of its compliance processes. Frequently, compliance is erroneously viewed as a cost center, with the insurer’s focus on how to reduce expenses rather than on optimizing the function. In some cases, this means foregoing a software or vendor upgrade that can improve compliance. Sometimes the decisions that make the balance sheet look good are not the best for compliance, and generally, insurers do not budget for fines and regulatory penalties.
Vice President of Strategic Services, Kingston Koser, was featured in PropertyCasualty360 shining a light on the true cost of non-compliance in the insurance sector.