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I mentioned the other day that I was doing battle with a company on their decision to bump a client one rate class because they say he doesn’t meet their underwriting criteria.

This will give you a bit of insight into underwriting logic. It kind of falls in the same vein as an attempt to baffle with BS. After explaining several times why my client fit into the preferred category, I got this response from the chief underwriter.

“I took a look at the case and see the cholesterol of 253 and ratio of 5.1.  If the ratio would have been 5.0, we could have made it happen. We have some internal adjustments we can look at, but this profile does not fit in those either.  I know how frustrating this can be as it is so close.  One of the reasons we are required to maintain the guidelines so tightly on our Preferred criteria has to do with our philosophy on the definition of Standard.  We now have great opportunity to extend more Preferred offers on cases that fit a clean Standard definition(+0-+25).  If we do not use any credits to get a client to Standard and they are no higher than 25 debits, we can extend what ever Preferred rate class they would otherwise qualify for.  That means that a well controlled, older age diabetic could possibly qualify for Super Preferred, or an individual with mild, well controlled depression could do the same.

As much as it is frustrating to not be able to make any exceptions on the Preferred criteria, I do appreciate the ability to so consistently offer our Preferred rate classes.  It all comes down to pricing and making sure we are consistently sticking with the mortality expectations for the different Preferred rate classes.  This is especially true with the tight pricing on the Term products.

We do have one option on this case, since he is so close.  If the client has another lab study from within the last 6 months that shows his HDL/Cholesterol ratio at a lower level, we could average the two and try and get there.”

My response. “I was just forwarded your long awaited response to the question of why, if a person’s cholesterol and cholesterol ratio fall within your preferred guidelines, they don’t qualify for preferred.

Since you didn’t answer the question, please clarify for me which guideline you are using to bump him to select. Is it that he was over 240 and under 5.5.or was it that he was under 260, but over 5.0? Either way, why is it that given the fact that his numbers fall under a line between those criteria, you are still saying that he is close, but in the wrong direction?
Mrs Gill, this isn’t frustrating because it’s close. It’s frustrating because it’s wrong. You say you can get diabetics and depressed folks to preferred plus from standard, but you can’t get this case from preferred to preferred.
You talk about credits and about meeting standard criteria. This guy has no health issues, great family history, is 27 pounds under the max for his height of 6’2, has great blood pressure and pulse rate and a chest to waist ratio to die for. And you’re looking for enough credits to get him from preferred to preferred?
It took Rich and Irv almost two years to get me to step back on board with ING after a previous horrible experience, but with so many companies that truly look for ways to give clients the best rate possible, I can’t see why I would want to write for a company that is using the most pathetic logic imagineable to make somene pay 30% more than they should have to.
Please forgive me for the emotional outburst, but my clients deserve and ultimately get better treatment than this.”
The underwriters response. “Thanks for your email and additional questions.  I apologize that I did not do a very good job in explaining our approach on the Preferred criteria breaking points.  You raise some very good points about this particular client’s overall underwriting profile.  He has a lot of positive factors.
I would like to try and do a better job of explaining our Preferred guidelines on the lipids and the thought process around the inability to make an exception.
Medical studies do show that the HDL cholesterol and ratio are a much better predictor of mortality than the total cholesterol.  The way the HDL and ratio are measured and how it correlates to mortality prediction leave a much smaller window for variability than the total cholesterol measurements.
The pricing is determined by the overall mortality results for large numbers of applicants who overall have an average cholesterol or cholesterol/hdl ratio in the mid point of the lipid range that is included in that rate class which is considerably lower than the breaking point.  We make an allowance beyond that level to allow for a range.  At some point we need to have a cutoff and the 5.0 is the HDL/cholesterol cutoff point for our Preferred rate class that was strictly set by our actuaries to fit the pricing of our products.
As a company we really do want to underwrite each individual based on their overall health and risk profile.  However, there are certain parameters as I detailed above that we must abide by to do our best as underwriters to make sure we are pricing the clients according to our mortality expectations.  In order to accomplish this on a large scale basis, we do need to follow our Preferred guidelines very closely.
I am happy to try and field any additional questions that you might have on the above information.  Your business is very important to us.  For this particular client the Select NT rates would be the best offer we could make.  As I indicated to Rich, if the client has lab studies from the last six months that show a lower HDL/cholesterol ratio result, we would be happy to average the two in an effort to try and get to the Preferred rate class.”
My response. “Let me see if I can paint a clearer picture. Beginning with your stated guidelines, total cholesterol/ratio 240/5.5 and 260/5.0. Given those two numbers I don’t think you can disagree that 250/5.25 is also acceptable. It gives exactly the same weight to HDL and the ratio as your top and bottom guidelines. Not more or less. Exactly.
If you’re with me that far then it follows that:
240/5.5 is ok – your  guideline
241/5.475 is ok
242/ 5.450 is ok
243/5.425 is ok
244/5.4 is ok
245/5.375 is ok
246/5.350 is ok
247/5.325 is ok
248/5.3 is ok
249/5.275 is ok
250/5.25 is ok
251/5.225 is ok
252/5.2 is ok
253/5.175 is ok*******253/5.13******My Client is ok
254/5.150 is ok
255/5.125 is ok
256/5.1 is ok
257/5.075 is ok
258/5/050 is ok
259/5.025 is ok and
260/5.0 is ok – your guideline
If your guidelines of 240/5.5 and 260/5.0 reflect a preferred risk, there is simply no logic that can conclude that my client is anything but a preferred risk. I am putting exactly the same weight on HDL as you are. I am not trying to fudge anything. There is no variability needed as my client isn’t outside your own guidelines. I’m not asking for an exception, but rather for ING to simply approve the case in the category it fits into. Please take this to the medical director and/or the president of the company.
If I was wrong on this I would simply go to another company, but nothing in any of your explanations or arguments has indicated that the client is outside of your preferred rate guidelines.”
Bottom line. There are plenty of real mortality concerns out there for underwriters to carefully consider and I do all I can to provide them with the information they need to accompish that. What is disconcerting is when they can’t even clearly see what is within their own guidelines.