As the 2027 renewal cycle approaches, high-cost claims, specialty drugs, biologics, and gene and cell therapies are increasing claim volatility and making timely, accurate disclosure more important than ever. Summit Re partners with clients to conduct a thorough disclosure review while minimizing disruption to their organizations.
Disclosure is a critical final step in securing reinsurance, medical excess, or provider excess coverage, which protects the insurer or provider from catastrophic claims. It captures claimant information that may have emerged after underwriting began but before coverage is bound, helping ensure that final terms reflect the most current risk profile. The review focuses on the latest claim, pharmacy, utilization management, and care management activity available when the coverage binder is signed.
Why is disclosure important?
When preparing a quote for coverage, the reinsurer performs a careful analysis of reinsurance claim costs and trends, including current-year claim activity, emerging large claims, pharmacy experience, specialty drug utilization, and known or anticipated high-cost therapies. A critical assumption is the degree to which this data can be considered complete. Disclosure helps the reinsurer validate the accuracy of this assumption before final terms are confirmed.
The disclosure identifies claimants with high-cost, chronic, or predictable utilization and costs. For 2027, this includes complex inpatient, neonatal, transplant, oncology, and chronic-condition claims, as well as specialty drugs, biologics, and gene and cell therapies that may create concentrated, multi-million-dollar exposure. If possible, Summit may recommend a cost reduction or care management strategy to assist you in managing these claimants. In some cases, this strategy may include the common practice of “lasering” some members by placing higher deductibles on these individuals or excluding them from coverage if a reinsurance claim is already anticipated.
Accurate disclosure helps protect you from the possible denial of a reinsurance claim. Because the disclosure statement becomes part of the signed binder and, ultimately, the policy or agreement, the reinsurer may exclude a serious loss that the client knew or should have known about but did not disclose when the binder was signed.
What to disclose?
The disclosure statement outlines the information required for the 2027 underwriting review. To expedite the process, provide Summit Re with information limited to individuals who represent a potential serious loss, including every such individual known to you or any delegated authority. Confer with your utilization management, case management, pharmacy, transplant, specialty drug, and complex care teams because they may have received a recent request for high-cost care, specialty medication, gene or cell therapy evaluation, transplant services, facility admission, or other treatment not yet known to the finance and claims departments.
What are the possible outcomes?
In most cases, disclosure confirms a normal level of acute catastrophic claim activity, allowing the reinsurer to confirm the terms as originally priced.
Another possible outcome is the identification of a significant claim that is highly likely to continue into the 2027 coverage period or a member who is a known candidate for an identifiable high-cost therapy. If the claim is likely to exceed the retention, a separate deductible may be assigned. Because the claim and its expected costs are then known to both you and the reinsurer, they may be considered uninsurable under the basic reinsurance principle that known events with predictable costs are not insurable.
A third possible outcome occurs when the disclosed claim information differs materially from the information presented during the quotation process. In that circumstance, the reinsurer may revise the quoted rates or terms or withdraw the quote. Summit Re works closely with clients throughout disclosure to minimize the likelihood of this outcome.
The following applicant disclosure statement summarizes the information required to complete the disclosure review and will support underwriting decisions.
Disclosure Statement by Applicant
This Applicant Disclosure Statement (“Disclosure”) must be completed by the Applicant and returned to Summit Re. Completion and execution of this Disclosure by an authorized officer of the Applicant, is a warranty that a diligent review for potential Serious Losses was completed by consulting with your administrator, utilization review, case management, pharmacy, and claims unit(s), either internally or from any delegated authority, to review claim information including, but not limited to pre-certification, medical and pharmacy information, disability and/or utilization review data, case management records, hospital inpatient logs and transplant waiting list(s). Further, as part of any Disclosure it is the Applicant’s duty to provide current information for Members who may have been included in the information exchange during the underwriting process and who meet the definition of Serious Losses at the time of signing the Offer.
Serious Losses mean any potential Member expected to incur claims that may reasonably be assumed will reach seventy-five percent (75%) of the Specific Retention in the current or the upcoming Agreement Period based on their:
primary diagnosis or diagnoses, if significant co-morbidities;
current physical condition, treatment plan, prognosis, and facility confinement status (e.g. acute hospital, long term acute care, skilled nursing facility, etc.);
referral for or undergoing a transplant evaluation;
potential for receiving specialty drugs (oral, injectable, or infusion), gene and cell therapies, blood factor products or blood derivatives, including those that are covered under the medical benefit; or
chronic high-cost treatment, planned surgeries, and prolonged facility admissions. “Chronic” shall mean the illness, condition or disease is continuing or occurring again and again for more than three (3) months.
Serious Losses known by the Applicant, either internally or from any delegated authority such as an administrator, pharmacy benefit manager, utilization review or case management company, as of the date the Offer is executed, will be excluded from coverage unless fully Disclosed to and accepted by Summit Re.
Disclose or Disclosed means the following information has been provided to Summit Re:
1. A paid claim detail report of all Members who have exceeded fifty percent (50%) of the Specific Retention for the current Agreement Period;
2. A report for all Members considered Serious Losses, which contains the following:
a. Member ID/Name (or other unique identifier) and date of birth;
b. Admission date and estimated discharge date, if applicable;
c. Diagnosis, current status, and treatment plan;
d. Expenses incurred to date & estimated expenses to be incurred/paid within the Agreement Period;
e. Anticipated hospital admissions or planned surgeries that have potential to exceed the Specific Retention; and
f. For each Member identified as receiving, or having the potential to receive, specialty drugs (oral, injectable, or infusion), blood factor products or blood derivatives including those covered under the medical benefit:
i. Whether the Member is receiving the drug or product prophylactically or on an as needed basis;
ii. Drug or product name, dosage, frequency and cost per treatment;
iii. Expected duration of treatment;
iv. Site of administration (i.e. inpatient, outpatient, physician office, home, self-administered); and
v. Response to additional questions on the attached document entitled “Summit Re Underwriting Questions: High-Cost Therapies”.
Preparing for a Successful 2027 Disclosure
A timely and complete disclosure helps protect your organization, supports informed underwriting decisions, and reduces the risk of unexpected coverage limitations or claim denials. Early coordination among claims, pharmacy, utilization management, case management, and other delegated partners is essential to identifying serious losses before coverage is bound. Summit Re is committed to working with you throughout the process to clarify requirements, evaluate emerging risks, and help secure appropriate coverage for the 2027 agreement period.
Article by Kathy Clark, RN, BSN, CMCN, RIT, Vice President, Director of Managed Care. For more information about how the impact on your plan, please contact your Summit ReSources care specialist.