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In highlights from the First Monday series, A.M. Best Senior Financial Analysts Kate Stefanelli and Michael Adams discuss the precarious funding of the Social Security Disability Income program and the potential impact on disability insurers.

The Social Security Board of Trustees has projected that funding for the Social Security Disability Income program will run empty in 2016. According to Ms. Stefanelli, the Democratic Party is in favor of a short-term solution, which would involve allocation of funds for the Old Age Survivors fund and the Social Security Fund. The Republican Party is looking for a long-term fix, which would involve a complete reform of the program.

Because of the many different proposals, Mr. Adams says it is impossible for insurers to determine which scenario will play out. While the insurers don’t think that Congress will let the program become insolvent, insurers preparing by “looking at contract language, reviewing reinsurance needs, examining the impact on claims systems and looking at how they communicate all of this to policyholders and distribution partners….”

Communication is important. Mr. Adams says disability insurers are looking to educate the public on the importance of income protection and disability, while promoting new products and services. It also give insurers a voice at the table with Congress.

We’d like to thank A.M. Best for their contribution to our program.  If you’d like to see more of the First Monday Series, visit the A.M. Best website.

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