OLDWICK, N.J.--(BUSINESS WIRE)--In this AMBestTV episode, Kate Steffanelli, senior financial analyst, and Christopher Lewis, industry analyst, both of AM Best, said a decision by the U.S. Department of Labor (DOL) to allow employers to auto-enroll employees in long-term disability coverage should widen awareness of that product line and provide opportunities for disability writers to expand their business. Click on http://www.ambest.com/v.asp?v=longtermdisability519 to view the entire program.
Lewis highlighted exactly what this rule clarification by the DOL does.
“In essence, this action by the DOL confirms and affirms a rule that allows employers to auto-enroll their employees in long-term disability insurance programs on an opt-out basis,” said Lewis. “For example, if an employer offers a comprehensive benefits package that includes long-term disability insurance, and they want to increase the enrollment level of the employees working for them, they can auto-enroll these employees in the program without the employee affirmatively declaring it as part of their election period.”
Steffanelli does not believe this program will promote any risks to long-term disability writers.
“We really do not see any material risks near term. There may be some increases throughout the market as penetration rates increase, but then the spread will typically be across a greater population. AM Best will continue to talk to the companies it rates concerning how they are utilizing the program,” she said.
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