Cultural differences: limited access to medical records and testing requirements can make it difficult for insurers to do business in other countries. (Briefing).

Life insurance companies trying to expand into countries outside the United States are finding more problems than just the language or the currency. Limited access to medical records, testing requirements and cultural differences can create stumbling blocks for companies looking to foreign shores for business.

The attending physician's statement, which industry representatives say can provide vital information for a life underwriter, isn't always available in other countries for an insurance company to review.

In the United Kingdom, the GPR, as the physician's statement is called, is the gold standard for life underwriting--often providing all the information needed to review an application and assess the mortality risk, according to Paul Gyseman, an underwriter with ERG Group. However, costs for these reports continue to increase because health records in the United Kingdom are stored centrally and are slow to be returned, Gyseman said. Companies expect to pay [pounds sterling]50 to [pounds sterling]60 (US$72 to US$86) for a report, and the applicant has the right to review the file before it is sent to the insurance company--further delaying the process, Gyseman said. Government regulations require all medical information received by an insurance company be kept in a locked room and closely guarded or on a secure electronic network, for privacy reasons, Gyseman said.

By contrast, medical histories from physicians are almost unheard of in India, since it doesn't have a centralized health-care system, and individuals visit new physicians almost every visit, said Melanie Slack, a chief underwriter at Swiss Re. It is difficult for an underwriter to get a continuous medical history over a long period of time to assess the mortality risk, Slack said.

Challenges in Asia

The Asian market also provides a challenge for underwriters, as medical reports also are hampered by a lack of centralized health systems and strict government regulations on storage of information by insurance companies, said David Rosier, vice president of risk management for Asia at Canada's ManuLife Financial. In the Hong Kong and Singapore areas, in particular, people can access a number of doctors for the same complaint, and government control of physicians, hospitals and medical information is rudimentary at best, Rosier said. In addition, requests for information from physicians, particularly specialists, often have a high cost, since there are no set fee schedules, Rosier said.

In China, Hong Kong and Taiwan, additional problems arise as patients often obtain modern medical care along with older, traditional methods, with both sets of treatment undocumented and occasionally contradictory, Rosier said.

In Colombia, requests for medical information must be accompanied by an authorization from the patient that is signed "on time," meaning within a limited time period, said Amalia Toro Posada, an underwriter with Suramericana in Columbia. The problem in many cases is physicians and hospitals place their own limits on the time frames, requiring a new authorization be signed by the applicant, which causes delays in the underwriting process.

In Europe, underwriters who operate in multiple countries also must deal with multiple languages, said Anne MantzBoesiger, an underwriter with Swiss Re. Documents come from many countries with no medical summaries and no translations, MantzBoesiger said.

In the United States, much of the medical process on a life insurance application is completed by paramedical services--nurses or doctors hired to perform exams for employment or insurance purposes. While paramedical services are in place in many countries--Australia, New Zealand, Malaysia, Japan, Hong Kong, Korea, Singapore, South Africa, the United Kingdom and Spain--not all are up to standards expected by U.S. companies, said Hank George, senior vice president for LabOne Inc. and chairman of the first International Underwriting Congress in 2000.

In Asian markets such as China, Vietnam, Indonesia and Thailand, companies have less trouble recruiting qualified physicians and have even set up their own clinics and laboratories to get detailed information for large-case reviews, Rosier said. Doctors often are employed in the role of underwriters and as claims assessors in these areas, Rosier said. Lab facilities available through the general business community are often available only at high cost and with limited quality controls, he said.

High Face Amounts

Underwriting higher-amount cases usually involves much more information than a general exam or a simple medical report. In the United States, at face amounts starting above $100,000, underwriters often request more involved blood testing, electrocardiograms, urine testing, chest x-rays or stress tests. The testing U.S. life companies take for granted is absent almost everywhere else in the world, according to underwriters overseas.

However, U.K. lab testing is at almost the same level of sophistication, Gyseman said, although blood profiles usually are requested only for very high face amounts--above [pounds sterling]1 million. In addition, testing for drug abuse is used only for high-risk cases, rather than routinely as is done in the United States, he said.

In Australia, blood testing for HIV--the virus that could cause AIDS--begins at a policy face amount of A$500,000 (US$276, 200), said Petar Peric, an underwriter for General-Cologne Reinsurance. Insurers in Australia also take the customer's word regarding smoking habits and don't test for drugs of abuse, he said.

In India, blood testing is available but very costly, thus limiting its use, said Slack. Nicotine and alcohol markers aren't used, limiting an underwriter's ability to evaluate some risks, and PSA tests, which provide markers for prostate cancer in males over age 55, aren't common, she said.

Regulatory requirements vary from country to county as well, sometimes making an underwriter's task more difficult. In New Zealand, insurance companies are prohibited by the local Human Rights Act from declining any applicant for insurance, said Peric. As a result of this regulation, life insurers must evaluate the risk and offer policies at heavily substandard premium rates, he said. While policies may be offered at premiums of 800% to 1,000% of standard mortality for some highly substandard risks, very few of these policies actually are accepted, he said.

Sometimes the regulations work in an underwriter's favor. In Iceland, there's no government regulation regarding nondisclosure of personal medical information, said Slack. The communities are so interrelated and their members so well known to each other, few can successfully conceal a medical history, she said. This helps underwriters, since the incidence of hereditary diseases is high in this area, she said.

RELATED ARTICLE: Global Customs

Business executives who hope to profit from their travel should learn about the history, culture and customs of the countries to be visited. Flexibility and cultural adaptation should be the guiding principles for traveling abroad on business. Business manners and methods, religious customs, dietary practices, humor and acceptable dress vary widely from country to country. For example, consider the following:

* Never touch the head of a Thai or pass an object over it; the head is considered sacred in Thailand.

* Avoid using triangular shapes in Hong Kong, Korea and Taiwan; the triangle is considered a negative shape.

* The number 7 is considered bad luck in Kenya and good luck in Czechoslovakia, and it has magical connotations in Benin. The number 10 is bad luck in Korea, and 4 means death in Japan.

* Red is a positive color in Denmark, but it represents witchcraft and death in many African countries.

* A nod means no in Bulgaria, and shaking the head from side to side means yes.

* The "OK" sign commonly used in the United States and the United Kingdom (thumb and index finger forming a circle and the other fingers raised) means zero in France, is a symbol for money in Japan, and carries a vulgar connotation in Brazil.

* The use of a palm-up hand and moving index finger signals "come here" in the United States and in some other countries, but it is considered vulgar in others.

* In Ethiopia, repeatedly opening and closing the palm-down hand means "come here."

Source: Excerpted from www.bizmove.com