Annual Statements
    Michigan HB 5722 requires insurers to have an annual audit performed by an independent public accountant and file its report for the preceding calendar year by June 1. The law also spells out other requirements for the annual audited financial reports.

    Various paragraphs of Montana regulation ARM 6.6 amend rules relating to annual audited reports and establish accounting practices and procedures to be used in annual statements and actuarial opinions. Details are in ARM 6.6.3504, .3506, .6501, .6502, .6503, .6504, .6505, .6506, .6507, .6508, .6509, .6510 and .6811. They have not yet been posted to the state’s administrative rules Web site. 

    Puerto Rico has posted reporting forms and general instructions to be used for 2009 reporting of financial statements.

Auto Insurance
    Louisiana issued three bulletins dealing with automobile insurance Dec. 31, 2008. Bulletin 08-04 rescinds a number of bulletins relating to the old, and now defunct, Louisiana Insurance Rating Commission. Also, Bulletin 08-05 addresses changes to automobile insurance regulation resulting from the change of rate regulation from the LIRC to the Insurance Department. Finally, Bulletin 08-08 revises compulsory liability minimum limits for vehicles weighing more than 20,000 pounds. 

    A New Hampshire Jan. 2 notice has a list of valuation guides and methodologies approved for determining total loss auto settlements.

    South Carolina Bulletin 2008-20 reminds insurers they were to stop collecting a recoupment surcharge on new and renewal automobile insurance policies with an effective date on or after Dec. 15, 2008. The bulletin sets forth the expedited filing procedures necessary for insurers to comply with the termination of the surcharge.

Data Calls
    Two Texas bulletins seek information from insurers. Bulletin B-0076-08 asks for information for several data calls, all of which are due by Feb. 15. One is a call for 4th Quarter experience and another deals with workers’ comp deductible plans. The forms for the call are in a fill-in electronic format using interactive PDF forms. Carriers are encouraged to use them because they contain internal edit checks to minimize errors. Another notice, Bulletin B-0001-09, requires companies to report the number of policies in force as of Dec. 31, 2008. Reports should be made no later than Feb. 6 using a form included with the bulletin.

    Missouri Bulletin 08-14 says the state is waiving the 2008 mortality experience reporting requirements for insurers using the 2001 CSO Preferred Class Structure Table.

Health Insurance
    Two states require coverage for treating autism. An Illinois notice reminds insurers of the requirement, starting Dec. 12, 2008, to provide coverage for the diagnosis and treatment of autism spectrum disorders for children under 21. A new state law provides for an annual benefit of $36,000 for those services. Louisiana Bulletin 08-10 discusses a new state law that requires coverage for autism treatment to age 17. 

    New Hampshire Bulletin INS 08-067-AB looks at health insurance categories of coverage. It identifies specific categories of coverage and describes the legal requirements that apply to each category. Of particular note is a requirement for carriers submitting form filings and rate filings to identify the category of coverage and the policy type.

    New Jersey SB 467 requires coverage for the purchase of a hearing aid for each ear, when medically necessary, for persons 15 years and younger. A draft of the law is on the legislature’s Web site, but a final version has not yet been posted.

    Utah rule R590-249 gives examples of limitations or exclusions from coverage, including related secondary medical conditions. The rule requires an insurer to provide a clear written statement that discloses the policy limitations and exclusions, including related secondary medical conditions, at the time of application and when requested by the insured.

Insurance Fraud
    Utah regulation R590-248 describes the required elements in a mandatory fraud report and establishes a reporting process for fraud reports. The rule requires that a mandatory fraud report be in writing, that it provide information in detail relating to the fraudulent act and the perpetrator, and that it state whether the fraud has been reported in writing to prosecutors or law enforcement. It will be enforced starting in mid-February.

Life Insurance
    California and Wisconsin have approved the use of the 1980 Commissioners Standard Ordinary Life Valuation Mortality Table for determining the minimum standard of valuation of reserves and the minimum standard for nonforfeiture values for preneed funeral insurance products. Details are in California Bulletin 2008-2 and a Wisconsin Jan. 6 bulletin. 

    Iowa Bulletin 08-18 looks at accounting for derivatives used to hedge indexed insurance products. It will allow insurance companies, once certain criteria is met, to:
    • change the accounting for option assets that hedge insurance companies indexed insurance products to the amortized cost method; and 
    • change the indexed annuity reserve calculation methodology such that index credit returns will be included in the reserve only after crediting to the policy. 
    The Insurance Department says the change will result in a better match of the asset and reserve accounting as it relates to the indexed interest crediting and will also allow for a more true and fair representation of an insurance company’s capital position.

Producers
    Missouri Bulletin 08-15 requires producers seeking to sell prepaid legal services to be licensed under the prepaid legal services line of authority by March 31. The bulletin spells out the criteria that will be used to evaluate anyone seeking to sell or currently selling prepaid legal services. Due to the limited number of testing sites and/or testing dates, the department strongly advises individuals to act promptly in scheduling the required testing in order to satisfy the licensing requirements prior to the March 31 deadline.

Professional Liability Insurance
    Massachusetts SB 2215 prohibits discrimination against physical therapists and their assistants seeking medical malpractice insurance. The law is effective March 30.

Rate & Form Filings
    Colorado Bulletin B-1.19 states that all rate and form filings must be submitted using SERFF. The requirement started Jan. 1. 

    Louisiana Bulletin 08-03 says that all insurers writing fire insurance must adhere to the rates promulgated by the Property Insurance Association of Louisiana. However, upon written request to the Insurance Department, an insurer may use loss experience to specifically modify, or even exclude, reference to the fire protection grades in rate classification plans filed by the PIAL. 

    Louisiana Bulletin 08-06 requires insurers writing insurance for pleasure boats up to 26 feet in length to file rates and rules with the Insurance Department.

State Regulation of Insurance
    Connecticut Bulletin S-12 puts a $15 limit on gifts of nominal value that are not conditioned upon the purchase of insurance – calendars, pens, promotional items, inexpensive items relating to life events, inexpensive meals and similar items. Any gift having a fair market value that exceeds the $15 limit is considered an inducement for consumers and will not be not permitted. 

    Two recent legal opinions from the Texas attorney general deal with insurance issues. Legal Opinion OR2008-16096 replies to a request the Department of Insurance received for information about a specific individual and a specific corporation that is being investigated for possible violations of the state’s insurance code. The department said the information was exempt from disclosure and the attorney general, citing the possibility of litigation agreed. But the opinion also states that information that has either been obtained from, or provided to, the opposing party in the anticipated litigation is not exempt and must be disclosed. Further, disclosure must be made once the litigation has been concluded or is no longer reasonably anticipated. In another action, Legal Opinion OR2008-16374 deals with how the department should handle requests for company information that might contain proprietary information.

(Produced with the assistance of The Clear Report)

Copyright 2009 ProBusiness Publishing LLC
January 12, 2009

Publish date Jan 12 2009
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Reprinted with permission from Insurance Compliance Insight.
Copyright © 2009 ProBusiness Publishing LLC
Licensed from ProBusiness Publishing LLC. All rights reserved.