Assurant 2011 Annual Report Download - page 30

ASSURANT, INC.2011 Form10-K22
PARTI
ITEM 1A Risk Factors
and claims practices; certain transactions between a liates; content of
disclosures to consumers; type, amount and valuation of investments;
assessments or other surcharges for guaranty funds and companies’
ability to recover assessments through premium increases; and market
conduct and sales practices.
For a discussion of various laws and regulations a ecting our business,
please see Item1, “Business—Regulation.”
If regulatory requirements impede our ability to conduct certain
operations, our results of operations and  nancial condition could
be materially adversely a ected. In addition, we may be unable to
maintain all required licenses and approvals and our business may not
fully comply with the wide variety of applicable laws and regulations,
or the relevant regulators’ interpretation of these laws and regulations.
In such events, the insurance regulatory authorities could preclude
or temporarily suspend us from operating, limit some or all of our
activities, or  ne us.  ese types of actions could materially adversely
a ect our results of operations and  nancial condition.
Our business is subject to risks related to litigation
and regulatory actions.
From time to time, we may be subject to a variety of legal and regulatory
actions relating to our current and past business operations, including,
but not limited to:
• disputes over coverage or claims adjudication including, but not
limited to, pre-existing conditions in individual medical contracts
and rescissions of policies;
•
disputes over our treatment of claims, where states or insured may
allege that we failed to make required payments or to meet prescribed
deadlines for adjudicating claims;
• disputes regarding sales practices, disclosures, premium refunds,
licensing, regulatory compliance, underwriting and compensation
arrangements;
• disputes with agents, brokers or network providers over compensation
and termination of contracts and related claims;
• actions by state regulatory authorities that may challenge our ability
to increase or maintain our premium rates and/or require us to reduce
current premium rates;
•disputes alleging packaging of credit insurance products with other
products provided by  nancial institutions;
• disputes with tax and insurance authorities regarding our tax liabilities;
• disputes relating to customers’ claims that the customer was not
aware of the full cost or existence of the insurance or limitations on
insurance coverage; and
• industry-wide investigations regarding business practices including,
but not limited to, the use and the marketing of certain types of
insurance policies or certi cates of insurance.
Because our business is heavily regulated at the state level, we are in constant
communication with state regulators. For example, in the fall of 2011,
Assurant, along with a number of other insurers, received a request for
information from the New York Department of Financial Services (the
“NYDFS”) regarding its lender-placed insurance business. More recently,
on February7,2012, the Company and two of its wholly owned insurance
subsidiaries, American Security Insurance Company and American
Bankers Insurance Company of Florida, each received a subpoena from
the NYDFS requesting information regarding the lender-placed business
and related document retention practices. We cooperate with regulators
to provide responses to all relevant requests in a timely manner.
Unfavorable outcomes in litigation or regulatory proceedings, or
signi cant problems in our relationships with regulators, could materially
adversely a ect our results of operations and  nancial condition, our
reputation, and our ability to continue to do business.  ey could also
expose us to further investigations or litigations. In addition, certain of
our clients in the mortgage industry are the subject of various regulatory
investigations and/or litigation regarding mortgage lending practices,
which could indirectly a ect our business.
Changes in regulation may reduce our profi tability
and limit our growth.
Legislation or other regulatory reform that increases the regulatory
requirements imposed on us or that changes the way we are able to do
business may signi cantly harm our business or results of operations
in the future. For example, some states have imposed new time limits
for the payment of uncontested covered claims and require health
care and dental service plans to pay interest on uncontested claims
not paid promptly within the required time period. Some states have
also granted their insurance regulatory agencies additional authority to
impose monetary penalties and other sanctions on health and dental
plans engaging in certain unfair payment practices. If we were unable
for any reason to comply with these requirements, it could result in
substantial costs to us and may materially adversely a ect our results
of operations and  nancial condition.
In addition, new interpretations of existing laws, or new judicial decisions
a ecting the insurance industry, could adversely a ect our business.
Legislative or regulatory changes that could signi cantly harm our
subsidiaries and us include, but are not limited to:
• imposed reductions on premium levels, limitations on the ability to
raise premiums on existing policies, or new minimum loss ratios;
• increases in minimum capital, reserves and other  nancial viability
requirements;
• enhanced or new regulatory requirements intended to prevent future
 nancial crises or to otherwise ensure the stability of institutions;
•new licensing requirements;
•
restrictions on the ability to o er certain types of insurance products;
• prohibitions or limitations on provider  nancial incentives and
provider risk-sharing arrangements;
• more stringent standards of review for claims denials or coverage
determinations;
• guaranteed-issue requirements restricting our ability to limit or deny
coverage;
•new bene t mandates;
•increased regulation relating to lender-placed insurance;
•
limitations on our ability to build appropriate provider networks and,
as a result, manage health care and utilization due to “any willing
provider” legislation, which requires us to take any provider willing
to accept our reimbursement;