Contact Us
Plans and Services Health and Wellness About Wellmark Member Employer Broker Provider
Home About Wellmark Newsroom News Releases
» Promises MatterTM
» Careers
» Community
» Company Information
» Contact Us
» Health Care Reform
» Newsroom
» Privacy and Legal
» Public Policy
 Printer-Friendly Page
Wellmark's reserves confirmed as "reasonable and prudent" following Iowa Insurance Division's review

Independent firm, Risk and Regulatory Consulting, LLC, conducted the study and analysis

February 26, 2014

DES MOINES, Iowa (Feb. 26, 2014) – Wellmark Blue Cross and Blue Shield announced today it has received the report from the Iowa Insurance Division (IID) that was commissioned to determine the appropriateness of its financial reserves.

 

The review confirmed Wellmark's reserves are "reasonable and prudent" given the risk the company incurs and its current mix of business. The review was conducted by Risk and Regulatory Consulting, LLC, an independent accounting, financial and regulatory consulting group. The final report concluded:  

  • The current level of reserves for Wellmark is "reasonable and prudent."
  • Wellmark "has done a very good job at managing its administrative cost."
  • The current capital and liquidity provide adequate resources to deal with potential shocks without having a disruptive impact on its policyholders in Iowa and South Dakota.

"This review confirms that Wellmark is running our business in the best interest of our members," said David Brown, Wellmark’s chief financial officer.   

 

Although an independent review was coordinated by the IID, payment for the review is passed onto Wellmark and its policyholders. This year's review cost in excess of $250,000. A similar review of Wellmark's reserves was commissioned by the IID in 2011. That study, conducted by Invotex Group, also confirmed that Wellmark's reserves were proper, if not too low, given the impact of health care reform.


"Wellmark's reserves are a critical safety net for our policyholders," said Brown. "Reserve funds are security against the unknown; they ensure our stability against a fluctuating economy and other unexpected threats. Our customers expect that if they get sick, their insurance company will be able to pay their medical bills. Our reserves ensure we can always pay those bills, even if there is a major health crisis like a pandemic or natural disaster."

 

Wellmark provides coverage for more than 2 million policyholders in Iowa and South Dakota and pays out approximately $5 billion in claims each year. Wellmark's reserves at the end of 2012 were approximately $1.3 billion – essentially enough to cover around three months worth of claims.

 

"As one of Iowa’s largest integrated multi-specialty clinics, our number one priority is serving our patients and their families," said Ed Brown, CEO, The Iowa Clinic. "With consolidation in the health insurance industry, it is important that we have a local health insurance company that has the financial stability to weather these uncertainties and still adapt to reflect our state's provider and consumer market issue."

 

Another community leader agrees. "The health insurance industry, like the banking industry, is in the midst of unprecedented change. Members from each of our organizations want to be reassured that the company in which they have placed their trust, money, and health, has the resources needed to ensure their future safety and security," said Suku Radia, CEO and president, Bankers Trust. "Reserves help to bring financial stability – and security – when the environment in which you work is ever-changing and unpredictable."

 

"Reserve funds are a sound business practice and part of our fiduciary obligation to our policyholders to run our business effectively," said Wellmark's Brown. "Wellmark is satisfied with the review process and pleased to have third-party validation of our business practices."

 

About Wellmark

Wellmark, Inc. (www.wellmark.com ) does business as Wellmark Blue Cross and Blue Shield of Iowa. Wellmark and its subsidiaries and affiliated companies, including Wellmark Blue Cross and Blue Shield of South Dakota and Wellmark Health Plan of Iowa, Inc., insure or pay health benefit claims for more than 2 million members in Iowa and South Dakota. Wellmark Blue Cross and Blue Shield of Iowa, Wellmark Blue Cross and Blue Shield of South Dakota, and Wellmark Health Plan of Iowa, Inc. are independent licensees of the Blue Cross and Blue Shield Association.

Contact Wellmark Media Relations

Traci McBee
Phone: 515-376-4338
mcbeet@wellmark.com

 

Teresa Roof
Phone: 515-376-5869
rooft@wellmark.com

 

1331 Grand Avenue
Des Moines, IA 50309-2901

Follow Wellmark on Twitter

Quick Links

» Who We Are
» Fast Facts
» Financials
» Officers
» Board
» History
FacebookTwitterInstagrampinterestLinked InYou Tube