Florida may be the latest state to join the Interstate Insurance Product Compact, a program established in 2006 in order to improve consumer protection and hasten the accreditation process for new insurance products. Currently, 41 states have joined the program, all of which have adopted universal standards regarding application procedures concerning life insurance and long-term disability coverage products. The program does not account for health insurance, but Florida legislators may seek to include these products into the program if the state joins.
The Insurance Product Regulation Commission, a multi-state agency that oversees the compact, is currently working on a plan to introduce further standards that would make filing claims and introducing new insurance products much easier. The agency aims to help quell confusion of insurance terms, as well, by encouraging insurers to use language that is easily understood. The standards approved by the Commission are adopted by the 41 states in the compact.
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The Florida Insurance Council believes that joining the compact will have a profound impact on consumers. As the state adopts the standards set up by the compact, consumers will benefit from new protections and will see more speed in processing claims and communication with insurers. Insurers will have to make some changes to their products in order to adhere to the Commission’s standards. For some companies, these changes will be minor. For small insurers, the changes could put an end to some of the products they offer.