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Regulation and compliance: a global challenge

The regulatory framework for global health care insurance is necessarily complex with countries and regions independently governing how insurance companies must operate within their legislative boundaries.

And while some overriding principles of customer care apply equally all over the world, such as the requirement to treat customers fairly, when it comes to the fine detail, legislation differs widely, from region to region. Similarly, enforcement authority roles and powers vary greatly between countries, with all players in the insurance process potentially answerable to more than one authority, and different styles of regulation.

Brokers, in particular, need to know the international private medical insurers they are promoting meet legal obligations in every territory in which cover is required. And they will want to be satisfied that the insurers have in-depth expertise and knowledge of the countries and regions where cover is being applied.

Keeping ahead of compliance

The challenge? The rules vary from region to region, country to country, and are often subject to change with limited notice.

Regulating insurance worldwide

In the case of expat health care insurance, Aetna International serves customers who are globally mobile — living and working in more than one country and travelling to others. Our challenge is how to satisfy a variety of rules and principles across multiple territories.

The basic principles of dealing with customers honestly and fairly apply wherever Aetna International operates — it forms part of our core values. But responsible insurers must also be prepared to respond to regulatory changes when they occur.

In some markets, regulatory change comes after a period of consultation with stakeholders. The route towards a new regulatory environment is defined and timetabled, and likely to be achievable. But in other markets, changes can be more enforced than negotiated, and come with tighter deadlines. And though we might expect that changes are introduced more slowly in developed markets, recent political outcomes have demonstrated there is potential for rapid change anywhere in the world.

Supporting intermediaries in an international arena

In addition to the regulations that govern our working practices, Aetna International also has its own core values, which dictate how we interact with brokers, and how we support them in marketing our insurance products to their clients.

These values of ‘integrity', 'excellence', 'inspiration' and 'caring' govern all our actions as we strive to make better health care available to all of our customers, worldwide.

“We help bring strategy and market awareness into the big national brokers and the smaller regional firms that major in the international benefits arena,” notes Kevin Swanson, Aetna International’s Sales Vice President.”

Global regulations — a perspective

The regimes in the United Kingdom (UK), Singapore and United Arab Emirates (UAE) are just three examples of how greatly the regulatory environment can vary around the world. 

The regulatory framework in the UK

Since 1 April 2013, two regulatory bodies have had responsibility for regulating financial services in the UK1. The Prudential Regulatory Authority (PRA) monitors key aspects of the financial strength of a firm, and The Financial Conduct Authority (FCA) holds these firms accountable for how they behave. Large firms, such as Aetna International, are regulated by both. Smaller financial services firms, such as financial advisers and asset managers, are only regulated by the FCA who not only control how they behave but all aspects of their financial strength.

There are a number of other bodies with responsibilities over the financial services sector, including the Financial Ombudsman Service (which deals with unresolved complaints), and the Financial Services Compensation Scheme (a scheme of last resort).

The PRA was created as part of the Bank of England, and is responsible for the prudential regulation and supervision of insurers, as well as banks, building societies, credit unions, and major investment firms. The PRA has three statutory objectives2:

  1. To promote the safety and soundness of the firms it regulates;
  2. An objective specific to insurance firms: to contribute to the securing of an appropriate degree of protection for those who are or may become policyholders; and
  3. A secondary objective: to facilitate effective competition.

The Financial Conduct Authority is the conduct regulator for 56,000 financial services firms and financial markets in the UK and the prudential regulator for over 24,000 of those (smaller) firms. Its strategic objective is to ensure relevant markets function well. Its operational objectives are to:

  1. Protect consumers — secure an appropriate degree of protection. 
  2. Protect financial markets — protect and enhance the integrity of the UK financial system.
  3. Promote competition — promote effective competition in the interests of consumers.

An independent public body funded entirely by the firms it regulates, the FCA is itself accountable to the Treasury, which is responsible for the UK’s financial system, and to Parliament. Its approach towards regulation is far reaching, working with consumer groups, trade associations and professional bodies, domestic regulators, EU legislators and a wide range of other stakeholders. With this extensive remit, the FCA states that, "we use a proportionate approach to regulation, prioritising the areas and firms which pose a higher risk to our objectives."3

The leading regulatory authorities in the UAE

In the United Arab Emirates, we work to closely monitor the requirements issued by two robust regulatory authorities in particular. In Abu Dhabi, the health care insurance industry is regulated by the Health Authority — Abu Dhabi (HAAD) and, in Dubai, it is regulated by the Dubai Health Authority (DHA).

Health Authority Abu Dhabi

Unlike the UK, HAAD is not a financial services regulator, but a health services regulator. So its remit also covers health providers, health care professionals, and its own role as regulator.

Local law requires expatriate employers to provide employees with health care insurance, at no cost to the employee. The Abu Dhabi health service is entirely funded by insurance and, alongside its role in regulating insurers, much of HAAD's work is focused on improving the quality and accessibility of health care provision.

Nonetheless, HAAD plays a key role in relation to the management of an efficient private health insurance system and is responsible for:  

  • enforcing the provisions of the Law and the Regulations,
  • administering and overseeing the operation of the Health Insurance Scheme,
  • licensing, registering and inspecting Authorised Insurance Providers and Authorised Healthcare Providers, in relation to the Health Insurance Scheme,
  • prescribing and collecting fees for the registration and licensing of Authorised Insurance Providers and Authorised Healthcare Providers,
  • setting the reimbursement rates (Standard Tariff), rules and mechanism for the Health Insurance Scheme,
  • determining and enforcing the implementation of applicable standards to be met by Authorised Insurance Providers and Authorised Healthcare Providers relating to the Health Insurance Scheme,
  • investigating and resolving disputes, suspected cases of fraud and abuse, and complaints regarding other parties in the Health Insurance Scheme,
  • conducting inspections and investigations to ensure that all participants in the Health Insurance Scheme comply with the Law and the Regulations, HAAD Circulars and any Executive Decisions,
  • overseeing and conducting the appointment of authorised inspection officers, and working (where appropriate) with other emirate and federal authorities to ensure compliance with the Law and Regulations.

In addition, HAAD collects and publishes statistical data on the rates of participation in and utilisation of the Health Insurance Scheme, and collects and disseminates information about private health insurance to enable consumers to make informed choices.

Dubai Health Authority

In Dubai, the DHA is responsible for regulation of health care insurance and all residents must have cover in place to pay for emergency and curative health care6. Nationals are eligible to receive cover via a government-funded scheme, whereas residents must have private health insurance. Employers are required to pay for employees, and expected (though not obliged) to pay for spouses and dependants. Two types of plan may be offered — essential and enhanced - and insurers must hold a Dubai Health Insurance Permit (HIP). To hold a HIP, the insurer must meet several requirements covering finance, data security, licensing and customer service, as well as technical requirements around claims processing.

To give some idea of what compliance requirements exist in Dubai, when insurance companies applied for Health Insurance Permits at the end of 2015, they gave written commitments to comply with all DHA regulations during 2016 and with a number of specific HIP requirements.  These included:

  • Uploading details of all health insurance packages to the eClaimlink portal
  • Uploading and updating on a monthly basis the Person Register of insured members
  • Compliance with eClaims and ePrescriptions
  • Collecting complaints data throughout 2014
  • Submitting quarterly reports on call centre performance
  • Submitting quarterly reports on member communication activities

Singapore’s regulatory governance

Singapore's regulatory authority is the Monetary Authority of Singapore (MAS). One of the functions of MAS is to conduct integrated supervision of financial services and financial stability surveillance. This gives MAS the role of supervisor rather than a regulator.

In brief, MAS describes “supervision” as the monitoring and assessment of the risk profile, financial strength, governance, risk management and control procedures, regulatory compliance, and business conduct of an institution. This is distinct from “regulation”, which is interpreted as the establishment of specific rules of behaviour for financial institutions and licensed representatives, and in particular to the creation and application of legally enforceable rules that are implemented through legislation, regulations, directions and notices.

The Insurance Department of MAS administers the Insurance Act (IA), which protects the interests of policyholders and regulates insurers’ activities, including registration and licensing requirements. Periodically, MAS provides directions and practice notes for regulating insurance activities. 

Insurers are licensed and governed under the Insurance Act (Cap. 142) ("IA"), and may carry on insurance business in Singapore as licensed insurers or foreign insurers. Licensed insurers can carry on direct life and/or general business, life and/or general reinsurance business, or captive insurance. Foreign insurers operate in Singapore under a foreign insurer scheme, established under Part IIA of the IA. Currently there are two foreign insurer schemes in Singapore: The Lloyd's Scheme and the Lloyd’s Asia Scheme.

Keeping up with the challenge

It’s clear the regulatory and licensing framework for health care insurance varies widely from territory to territory. Keeping abreast of what’s required by region, and ensuring that Aetna International is complying with its obligations, is an objective we’re constantly working hard to achieve. Continuously meeting the demands of compliance ensures our customers receive the right cover to meet their health care needs in whichever territory it’s needed. And our brokers can be confident that, when they work with us, they’re offering their clients policies that meet stringent regulations in whichever territory they’re covering.

As Kevin Swanson notes, the key element that Aetna International brings to brokers and plan sponsors is the depth of Aetna's global experience. “Given the sixty years we’ve been in this business, we’ve got an enormous amount of understanding, awareness and knowledge. We can help plan sponsors and brokers develop international health care packages that take into account differences in global legislation and compliance, giving their employees and clients the support they need when they’re working abroad.”

To find out more about our international private medical insurance policies for groups and individuals, contact one of our expert consultants in your region. And for more information on how Aetna International works with its partners, read Health care collaboration: working with brokers and clients.

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