Unum Using a Trust

[insurehound]

So I noticed on Unum's Group Benefits contract that they use a Trust called the Select Group Insurance Trust. The contract wording says that the client is "under" this Trust.

What does this mean? If the Trust goes down while a claim is in motion, what happens?

 

[ABC]

I do not know that particular trust and I do have some Unum LTD/STD on the books.


What I have seen with other carriers using a trust is they use it to charge the client more money so they can offset their admin fee's with each state's DOI.
I would call your rep on that.

 

[EBC-MO]

I do not know that particular trust and I do have some Unum LTD/STD on the books.


What I have seen with other carriers using a trust is they use it to charge the client more money so they can offset their admin fee's with each state's DOI.
I would call your rep on that.

Insurance carriers use trusts to get around what ever state's laws are a nuisance to them. Example, an insurance carrier will create a policy in Delaware (lax insurance laws and quick to push stuff through) and run groups in New York (tough insurance laws, long backlog) through without any problems.

 

[somarco]

Some states don't allow certificates to be issued via a trust. When a trust is used to issue coverage it is usually done under deemer provisions.

There are administrative savings in using a trust, such as not having to rewrite, file and appeal provisions in the coverage. Some agents think coverage issued via trusts have higher premiums and renewals but I have never seen any evidence of that.

It is a fairly common practice, particularly for ancillary group lines such as life and DI products. Less so for medical coverage.

I don't ever recall seeing a trust based product in NY and I do not believe they are a deemer state.

 

[arnguy]

What's a deemer, Bob? Does it have any relation to a "beemer?"

 

[somarco]

No relation.

Several states have deemer provisions on the books. Essentially, if a policy is filed and approved in state A, and state B has a reciprocal deemer agreement with state A, then the policy is deemed to be approved in state B.

Obviously it would also work in reverse where a policy is approved in B, it would be deemed to be approved in A.

 

[stormtracker]

What's a deemer, Bob? Does it have any relation to a "beemer?"

That's the switch that makes your headlights go bright, or deemer...

 

[VacantHomeIns]

does the dimmer come with a switch?