**I am not OP**. OP is u/whistle_blow, who originally posted in r/insurance.
Fun fact to hide the spoilers: Slime molds have *very* sophisticated intelligence for something without a brain. They have even been shown to calculate risk and reward-- In one experiment, when given a choice between high-quality food in slightly unfavorable conditions and low-level food in absolutely safe ones, they went for the higher quality food!
Trigger Warnings: No major triggers
Mood spoiler: >!THEY BLOW THE WHISTLE AUTHORITIES LISTEN THE COMPANY CHANGES ITS POLICIES AND THE MONEY'S REFUNDED TO EVERYONE AND OP GETS A PROMOTION HELL YEAH LET'S GOOOOO!
*\[Editor's note: I found this post a little difficult to understand at first. I've provided a plain-text explanation I believe is correct at the end of the post in \[\] brackets if you get lost like I did, lol.\]*
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**Should I Blow the Whistle?!?! The insurance company I work for is doing some shady business.**
*November 21, 2017*
I work for an insurance company that operates principally in the United States. A while ago, I noticed that the company refunds less money than it should when a policy holder cancels a policy.
The company provides coverage beyond the contractual surrender date and effective 'use-up' the remaining premium; sometimes entirely.
Personally, I feel this is very unethical and I am very against it. Those reasons are influencing my decision to report this outside of the company.
I escalate my concerns through the available avenues a couple of times.
The first time the compliance department deems that it is not a notable risk, or at least that's how my boss coneys it to me.
The second time I speak directly with those who process cancellations and refunds. They tell me that a computer limitation is the root cause. I learn that in order to automate the 'cancellation process' , we pend-out the cancellation until a certain day of the month. They say it's how the computer does it and IT will not fix it. This prevents us from refunding the correct amount because the refund amount changes daily.
This may seem typical for most people because this is typical of many insurance policies; you pay one month at a time. However, the contract specifically defines the surrender date as the date the company receives the request. I thought maybe we would phase out this contract language, but sure enough, our brand new policies we just created ALSO have the exact same verbiage.
Furthermore, we have an IT department of over 1000 individuals. It shouldn't take but more than a handful to modify the system to accurately calculate the cancellation date.
So, what do I do? Can I, or should I report this to an outside source? If so, who would that be? The company is headquarter within the US.
Thank you ALL for reading and any insight you might bring :\]
***Relevant Comments***
* *November 21, 2017*
*Not illegal though. They probably work around this by stating their refund policy processes in small print somewhere. Similar to 'minimum retained premium'. Agree it's shady as F though. What happens if the client buys a new policy and now you have two? They are asking for trouble, and I don't buy the IT excuse.*
i wish that were the case, however the contract language is quite clear. what we do is extend the coverage to the nearest month and refund entire months. this might seem minimal to those with smaller premiums. for those who pay 150 a month, this could amount to a loss of over 100!
# most importantly
this, on any scale, is unethical. the cumulative gains the company has been stealing add up to thousands if not millions of dollars. For that reason, i am drafting a letter and i am sending it come new year
"the surrender date will be determined as the date we receive the form in our office... refund of premiums will be calculated as of the surrender date"
* *November 21, 2017*
*"The company provides coverage beyond the contractual surrender date and effective 'use-up' the remaining premium; sometimes entirely."*
*I want to make sure I'm understanding this correctly. Is this in situations in which a policyholder calls and gives an explicit date for cancellation or is this when a policy renews or lapses? The first part of what you are saying makes it sound like the former but the response from the people who cancel policies makes it sound like the latter.*
*Either way, if this is something that needs to be addressed, contact your state's insurance commissioner.*
appreciate your feedback.
to address your question:
The cancellation date is explicitly defined in the contract. it is the date we receive the signed and dated cancellation form.
We are supposed to process cancellation (stop cov/refund prems) as of the date we got that form in the mail/fax. however, if the policy's PTD (paid to date) is less than one month in the future, we extend the coverage to that PTD.
the only way a policy holder can get that refund of premium is to either call and complain about it or to include an additional note on the original form.
If these additional instructions were included in the policy, then i'd be fine with it. however, we only provide this information on a reactionary basis and that is just wrong
⨂
**I did it. I finally blew the whistle on my employer (life insurance company)**
*November 21, 2017*
# I did it. I finally blew the whistle.
To be honest, I was sick and tired of having to cover for my company when the contract said one thing and we did another. So I reported them in early 2018. I did not anticipate that I would still be employed and this company when 'shit hit the fan', but god-willing I was... and I still am! As a result, I now get a front row seat to the shit-show that attempting to recover from this egregious 'over-sight'.
If you're unaware of my situation, let me bring you up to speed. Last year I posted seeking advice regarding the misdoings of my company.Thanks for those to responded! My company was refunding individuals a pro-rated amount of money back upon cancellation of their policy. This is all fine and dandy, except for the fact that we were not using the correct date to calculate the refund . And because we were using the wrong date(a date in the future), the refund that policy holders received was less than it should have been.
I voiced my concerns a few times through the appropriate channels, but to no result. They didn't want to listen to me. I knew I had no other option.
# preparation
First I reached out to different insurance regulatory agencies across the US. Some states had an arduous complaint process while others were very simple to navigate. After many phone calls and internet research, I settled on Iowa and Missouri. They were friendly, go figure, and had a simple process.
I wrote a formal complaint and provided copies of some of the insurance certificates. During this time, I also started researching supreme court decisions based on refund of premium when cancelling insurance policies. My findings were that 'premiums may be retained if services were also being provided.' However, this only applies if the terms of the cancellation/refund are either absent or ambiguous within the contract. In my scenario, this was not the case. The contract explicitly stated the cancellation date the is the date we receive the signed surrender form.
# results
Two months later, I have an hour long meeting with the assistant to our consul general and the director of governance, risk & assurance. They acknowledge to me for the first time that they are being investigated by the state for concerns similar to mine(hmmmm?). They also informed me that actions were being taken to better the situation, but don't fully disclose what those actions will be.
Two months later after that.... My company changes how we cancel policies to be in alignment with the contract language.(yes! this is what I fought for) This impacts nearly 2 million policies on our books.
Four months after those changes (today).... my company announces it will retroactively refund the correct amount to policy holders who have cancelled within the past five years(213-2018)
This end result is exactly what I was seeking. For myself, I no longer need to feel that we are not being honest when describing cancellation with a policy holder. Furthermore, the company is doing the right thing by acknowledging their errors, fixing them going forward, and finally paying restitution to those who deserve it.
fin
Thanks for reading!
***Relevant Comments***
*November 21, 2017*
*You are black balled for sure. They won’t fire you. You will be right in the middle of all raises, etc you are due but I Promise you they know who you are and what you did. If you ever give them reasonable grounds you will be out.*
*Find a new home where they won’t know you are a moral person rather than a person loyal to the corporation no matter what.*
That may be the case.However, I have since then received two promotions and been recognized company wide for my courageous efforts advocating for our consumers. I do not feel that this is my last stop in my professional career but I'll ride it out until that next opportunity comes along.
*November 21, 2017*
*Good on you. I sure hope they treat you well.*
Thank you. I got a pen valued at around $16 out of it, so at least I got that goin for me
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*\[The problem as I understand it:*
*tl;dr: Policy holders were being charged an extra month*
*The price for insurance is called a premium. Some insurance premiums are paid month-to-month, but with some you can pay a lump sum up front. In the latter case, the insurance company would deduct your monthly bill from the lump sum you gave them. If a policy holder (person buying the insurance) pays this lump sum and then cancels, they are supposed to get whatever remains back.*
*The day the policy is paid for is the "Paid to Date," or PTD. When a cancellation is issued by the policy holder, the last bill they get is supposed to be the last one they paid, their last PTD. In this case, when the policy holders canceled, they were meant to receive the rest of their pre-paid premium. However, because OP's company would move many people's pay to date into the next month if it was "close enough", they were taking an extra month out of those people's premiums before giving it back to them.\]*
Also, I don't know which insurance company this was. Any sleuths out there what wanna give it a crack, be my guest :\\\^)
*WAY TO FUCKING GO OP!*