Ethics and Compliance - Going Above the Bottom Line

Connecticut RCSA 38a-54-1 thru -14 are new rules for annual financial reports and RCSA 38a-78-1-5, -7 and -9 and 38a-459-17 have rules for actuarial opinions and memoranda; 38a-78-1-6, -8 and -10 have been repealed.

Iowa Bulletin 09-01 says the state will allow life and property/casualty companies to determine the admitted amount of deferred income taxes in a manner that departs from those prescribed in the NAIC accounting manual.

Arizona Bulletin 2009-01 puts limits on an insurer’s ability to cancel or nonrenew a personal auto policy after it has been in force for 60 days. Among them is the provision that those actions are limited to 0.5 percent of its policies each year. Additionally, there is a $2,370 threshold for the amount of property damages insurers may use to nonrenew private passenger automobile policies.

Minnesota has new licensing information for Risk Retention Groups, Accredited Reinsurers, and Foreign Surplus Lines companies, plus a new checklist for the Minnesota-specific forms.

• Bulletin B-0005-09 says the Insurance Department has adopted two forms – Form LHL608 (Health Benefit Plan/Provider Contracting Practices Survey) and Form LHL609 (Health Benefit Plan Issuer Hospital Grid) – it wants insurers to use for a study of the adequacy of health benefit plans. The information and data is due by Feb. 27. The forms shall be filed electronically by e-mailing the completed forms to networkadequacy@tdi.state.tx.us.

• Bulletin B-0008-09 wants information from selected carriers writing new personal auto and/or residential property business. The bulletin includes instructions and an Excel spreadsheet to be used for reporting. Criteria for the sample rates hasn’t changed from the 2008 data call. Data is due May 15 for rates effective June 1.

• Bulletin 2009-06, a revision of Bulletin 94-8, looks at claims payment practices of insurers that have negotiated discount prices with health care providers. Under those circumstances, any co-payment paid by an individual must be calculated, and the method of calculation must be disclosed to the individual. Additionally, when a policy provision sets annual or lifetime maximum benefit limits, then must be calculated on actual payments.

• Bulletin 2009-07, a revision of Bulletin 97-1, says infertility procedures such as in vitro fertilization, gamete intrafallopian transfers and zygote intrafallopian transfers aren’t essential for the protection of a person’s health and aren’t mandated by law, but can be provided by health insurance policies. However, diagnostic and exploratory procedures to determine infertility should be covered as basic health care services.

Texas Bulletin B-0006-09 says new American Cancer Society guidelines recommend that the stool DNA test and the computed tomography (CT) colonography (also known as virtual colonoscopy) are now acceptable forms of colon cancer screening for average-risk adults. Texas Insurance Code Section 1363.003 requires a medically recognized screening examination for the detection of colorectal cancer in certain situations. A health benefit plan that provides coverage for screening medical procedures must also provide colorectal cancer detection coverage to individuals enrolled in the plan 50 years of age or older and at normal risk for developing colon cancer. The coverage must include expenses incurred in conducting a medically recognized screening examination for the detection of colorectal cancer.

The Coalition Against Insurance Fraud and the National Insurance Crime Bureau say in a joint letter that New Jersey Gov. Jon Corzine should not to sign SB 787, which would allow medical providers to refer patients to outpatient surgical centers in which the provider has a financial interest. A provision of the bill, which has cleared the legislature, would retroactively legalize the referrals. The groups say that would threaten criminal convictions, lawsuits and ongoing investigations.

Washington HB 1707 would expand the state’s insurance fraud law to let insurers sue suspects in civil court for compensatory damages, plus all reasonable investigation and litigation expenses, including reasonable attorneys' fees.

Maine LD 14 would make it illegal for body shops and others to steal airbags from vehicles, or install unsafe defective airbags. The bill is similar to laws in Florida and Vermont.

A bill being considered in Georgia, HB 273, would create a database to track physicians and pharmacies that prescribe addictive prescription narcotics. That would allow law enforcement can track providers and pharmacies that steal prescription narcotics. Insurance fraud is a major financier of this drug-diversion epidemic, the coalition says.

A Florida rule that went into effect last month requires a determination be made about the suitability of an annuity when selling to individuals age 65 or older. The new law also requires certain disclosures and an objective comparison of annuity contracts when recommending the exchange or replacement of a senior’s annuity. Two forms – an Annuity Disclosure Comparison Form and an Annuity Suitability Questionnaire Form – are being finalized through formal rulemaking. Use of the forms will become mandatory 60 days after the rule is adopted. Direct questions by e-mail to AskDFS@MyFloridaCFO.com or by phone to (850) 413-5697.

Alabama Bulletin 2009-01 is 19 pages packed with details about implementing the state’s LTC partnership program. Certification forms and disclosure notices are included as attachments.

Several sets of rule changes alter LTC coverage in Texas. The state has repealed 28TAC 3.3848 to .3850 which have LTC standards under individual and group policies and has adopted 28 TAC 3.3801 to .3874, which have standards for LTC insurance, and for non-partnership and partnership LTC insurance coverage under individual and group policies, and for annuity contracts and life insurance policies that provide long-term care benefits within the policy.

North Dakota has filed a notice it intends to modify Medicare supplement rules in NDAC 45-96-01.1 to conform to federal standards and the NAIC’s Model Regulation to Implement the Medicare Supplement Insurance Minimum Standards Model Act.

Washington WAC 284-66-068 brings state rules in line with the federal Genetic Information Nondiscrimination Act. The law prohibits insurers and employers from using genetic information when making coverage or employment decisions. That includes collecting genetic information for underwriting or other purposes prior to enrollment in Medicare supplement insurance. The rule, adopted Feb. 4, goes into effect March 7.

Kansas Proposed Rule KAR 40-4-37v would require agents who sell long-term care partnership policies to have four hours of initial continuing education dealing with those policies, then an additional hour of CE every two years after that. Proposed Rule KAR 40-7-20a changes some requirements for approving continuing education courses.

Louisiana Bulletin 09-02 is a reminder that a certificate of insurance cannot amend, alter, modify or misrepresent the actual coverage provided by an insured's policy. The Insurance Department has made that position clear since 1981, and the bulletin lays out the criminal penalties for those offenses.

Louisiana Bulletin 09-01 requires insurers to provide a premium discount for insureds who build or retrofit a structure to comply with the State Uniform Construction Code and/or install mitigation improvements or retrofit their property using construction that reduce the amount of loss from a windstorm or hurricane. The document also provides approved language an insurer can use on the survey form to allow a wind mitigation supervisor to perform the inspection and certify that the insured is entitled to the discount. Here’s the approved language:

I certify that I am a Building Code Enforcement Officer, registered architect, registered engineer, or registered Third-Party Provider as defined by Louisiana Revised Statute or applicable Administrative Rule. I am registered with the Louisiana State Uniform Construction Code Council and authorized, by that registry, to perform residential building inspections for compliance with the Louisiana State Uniform Construction Code or to perform wind mitigation surveys. I have conducted an inspection of the structure, and reviewed all construction documents and building product specifications necessary to accurately answer the questions in this inspection survey, and certify that, to the best of my knowledge, all questions are answered truthfully and correctly.

• Bulletin 09-03 says the Insurance Department, rather than the old Louisiana Insurance Rating Commission, will now review and approve schedule rating plans for commercial p/c insurers. The document also lists the factors it will consider to determine if a schedule rating plan is reasonable.

• Bulletin 09-04 reminds insurers of the maximum limit for installment plan fees for commercial lines: 11 installment payments with a maximum charge of $10 per installment, totaling $110 annually.

Minnesota Bulletin 2009-1 says that, starting May 1, the state will require carriers to use SERFF to file long-term care and Medicare supplement advertisements intended for use in Minnesota.

Rhode Island Proposed Regulation 20, to identify the statutes concerning consent to rate and to update requirements under those statutes. A hearing is set for March 23.

Idaho has posted a list of legislation it wants to have considered by the 2009 Idaho Legislature. It includes pending rules that have been adopted in final form by the Insurance Department, but need legislative approval before becoming final and effective.

New York says in Circular Letter 2 (2009) that it is imposing an additional assessment on domestic insurers as part of the State’s Deficit Reduction Plan. Payment will due within 30 days of receipt of the bill and late fees may be assessed after March 13.

South Dakota Bulletin 09-01 clarifies South Dakota rebating laws, which hold that rebates generally aren’t permitted. The guidance looks at several hypothetical rebating situations covering free gifts for quotes, money on renewal, quarterly drawings, free lunches and gasoline giveaways.