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MOB PRESENTATION
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Other Issues Associated with
switching to MOB Insurance
- Creditor needs to re-tool and retrofit existing processing system.
- Have enough "buckets" to handle a variable/level "other charge".
- The status of "coverage" if a payment(s) is missed, especially with A&H.
- What to do with quoted payment if insurance is cancelled by consumer.
- Coupon books vs. monthly statements.
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Other Issues Associated with switching
to MOB Insurance (cont.)
- Loss of investment income.
- Does creditor/producer remit on accrued or collected premiums?
- Future operations will need to accommodate a "dual policy" of processing MOB transactions and still refunding existing single premium transactions.
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Options and Issues to think about
- Creditor should view move to MOB coverage in the same light as moving financing transaction from pre-computed to interest bearing (simple interest).
- Treat accrued premiums like interest.
- Establish a daily factor for life and A&H accrual.
- "Missed" payments not a continual question of coverage issue, they continue to accrue an insurance charge.
- Quantify savings realized from not having to perform future refund operations and balance that against lost income estimates.
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