Rules, Regs & Bulletins
|
||
|
Recent Compliance Bulletins from Insurance Compliance Insight | from February 23, 2009 Prior Issues |
|
Advertising
28 TAC 1.21.B.21.103, .114 changes rules
for the required form and content of insurance advertisements
for life insurance and annuity contracts.
Annual
Statements
Hawaii Commissioner’s Memorandum
2009-1C has reporting instructions for
captive insurers.
New York Circular Letter 4 (2009)
directs insurers to exclude the effects of capital and surplus
exceptions granted in other states when filing New York
financial statements. Those statements are due March 1.
Rhode Island is proposing to update
Regulation 87 to
bring the regulation in line with the current NAIC model. A
hearing is scheduled for Feb 24.
Automobile Insurance
Connecticut HB 6444 would specify the ratio
of individual territorial loss cost data to the statewide
average loss cost data, ban credit-based insurance scoring and
direct the insurance commissioner to adopt regulations
concerning rating plans. It would also mandate rate reductions
for Vehicle Identification Number (VIN) etching, and prohibit
insurers from providing consumers with better warranties or
waived deductibles during the repair process.
“While we appreciate the underlying
motivation of this legislation, the fact is that it will harm
- not help - the vast majority of Connecticut auto insurance
consumers,” said Dave Snyder, AIA vice president and assistant
general counsel.
AIA, the National Association of
Mutual Insurance Companies and the Property Casualty Insurers
Association of America all oppose the bill. "Only one group
would benefit from this bill – auto repair shops that would be
protected from competition," said Paul Magaril, PCI’s regional
manager and counsel.
Proposed legislation in Minnesota,
HF 417, would
allow consumers to collect legal fees and interest of 12
percent per year in lawsuits involving commercial or
professional coverage, even if the claimant loses on most
aspects of the case. The insurance company would have to
prevail on all aspects of litigation to escape payment,
although the proposal does not impose the same requirement of
claimants.
NAMIC is working to defeat the
proposal. “As the bill is written, a claimant has an incentive
to pursue litigation with little merit as it knows that it can
inflict costs on the other side with the knowledge that it
need not worry about having the cost shifted back to it,” Mark
Johnston, NAMIC’s Midwest state affairs manager, recently
testified. “In many cases, claims for amounts less than the
cost of defense will be pursued for nuisance settlement
only.”
New York Circular Letter 3 (2009) reminds insurers and self-insurers of their
obligations with respect to the notice of claim provisions
under New York’s no-fault insurance law and provides further
guidance for those requirements. For example, an insurer
cannot deny a claim on the grounds that the claimant failed to
return a completed Form NF-2, when the claimant has otherwise
submitted timely written notice within 30 days of the
accident. Also, the written notice requirement can be met in a
number of ways other than the insurer’s receipt of a Form NF-2
or completed hospital facility Form NF-5. In addition,
the 30-day written notice requirement must be excused if the
claimant submits written proof of clear and reasonable
justification for the failure to comply, according to the
guidance.
New York Statute 2350 and
Regulation 153
cover flexible rating for nonbusiness
automobile insurance policies.
A New York report about
motor vehicle repairs shows insurers reimbursement policies
aren’t systemically violating state law. Nevertheless, the
report suggests insurers clearly tell insureds that they have
a right to choose the location for both the inspection and
repair of the damaged vehicle. Further, insurers should take
“all necessary measures” to assure that their claim
representatives do not recommend a repair facility unless
requested by the insured.
Rhode Island Regulation 42 and
Regulation 15 adopt new
standards of conduct for appraisers and auto repair body
shops.
Wisconsin Gov. Jim
Doyle is proposing to increase the minimum amounts of
liability coverage required for drivers the current liability
limits of $25,000 for each person, $50,000 for each accident,
and $10,000 for property damage per accident to
$100,000/$300,000/$25,000. The idea is included in his budget
proposal. NAMIC says those minimum limits would be the highest
in the nation, and would increase premiums by 40 percent or
more. It says changes of this magnitude should be vetted
through the usual legislative process, and not the governor’s
budget where they are less likely to be give proper analysis
and public comment.
Data
Calls
New York has issued a liquidity and severe mortality
inquiry to assess the stress liquidity exposure and
financial flexibility of life insurers and reinsurers for
coping with both expected and unexpected cash demands.
It is to be completed by the chief financial officer,
or the highest ranking financial officer, of the insurer.
Responses are due May 1 using an online application.
Virginia is telling carriers
that write credit life and credit accident and sickness
insurance to report 2008 rate information by April 1. The
questionnaire to be used for the data
call is online. Data will be used to
set rates for the triennium beginning Jan. 1, 2010.
Health
Insurance
Connecticut Rule 38a-192-1 to -3 covers high-deductable health plans for health care
centers. The rules went into effect last September, but are
just now being posted to the Insurance Department’s Web site.
Michigan Bulletin 2009-05-INS sets the new minimum substance abuse benefit level
effective at $3,919 for the period April 1,2009 through March
31, 2010. The current level in effect through March 31, is
$3,774. The bulletin also provides limits for previous periods
dating to 2003.
The Oregon Insurance Division has
posted a number of health insurance bills it, and others, are
sponsoring during the current session:
• HB 2128 would require that
insurers, third-party administrators and others report
health-related information.
• HB 2130 would require insurers
to report claims to a state database and would mandate that
the state approve increases in insurer administrative expense,
establish uniform standards for insurer administrative
functions such as claims handling, and collect and report
insurers' contracted rates for hospitals and
providers.
• HB 2361 would require a health
benefit plan to cover drug containing pseudoephedrine for
allergy symptoms if plan covers prescription drugs for
allergies.
• HB 2506 would require health
plans to cover the services of professional counselors and
marriage and family therapists if certain other services are
covered by the plan.
• HB 2589 would mandate coverage
of hearing aids for those under age 18.
• HB 2604 would require insurers
to file annual reports about their safeguards for protecting
confidentiality of individually identifiable health
information.
• HB
2608 would allow insurers to offer health insurance
policies that exclude certain benefits or coverage otherwise
required by law.
• HB
2656 would make mandated health insurance coverage of
biological and adopted children the same.
• SB
9 would make permanent a requirement that health insurers
cover certain diseases involving disorders of metabolism under
specified conditions.
• SB
24 and SB
468 would require insurers to reimburse providers for
services delivered by video conference when those services are
medically necessary, evidence-based and a covered
benefit.
• SB 316 would require insurers
to cover routine costs of care in qualifying clinical trials,
subject to co-pays and other cost-sharing requirements. It
would also limit an insurer’s liability for adverse effects of
a clinical trial.
• SB 381 would require health
benefit plan to cover medically necessary treatment for
traumatic brain injury.
• SB 454 would establish certain
data reporting requirements for carriers offering health
benefit plans and for third-party administrators. Insurers
would also have to explain changes in administrative expenses
in rate filings.
Insurance Fraud
The New Mexico Senate has approved a
bill allowing courts to aggregate the amount of fraud to
stiffen sentences of convicted fraudsters. “Fraud rings
…usually target several entities and unless the totality of
the activity is considered, the penalty might be a fraction
compared to the total fraud,” said Howard Goldblatt,
government affairs director for the Coalition Against
Insurance Fraud. The House is considering SB 117, but the measure has
only a short time window before the legislature shuts down for
the year in mid-March.
The New York legislature is looking
at a bill that would give law enforcement access to
information contained in automobile event data recorders –
so-called black boxes – for accident and crime investigations.
AB 3059 also
would let vehicle owners suppress the information under strict
guidelines.
The Florida legislature soon will
consider whether to increase protection of seniors against
predators who sell them annuities. SB 1372 would
give seniors 60 days to unconditionally cancel an annuity.
Current Florida law allows 14 days to cancel, but SB 1372 is
specific to seniors. Also, agents would face a third-degree
felony conviction and a $40,000 fine for willfully twisting or
churning a client’s account, and a $5,000 fine for non-willful
acts. The bill has been pre-filed, with the legislature
scheduled to open in early March.
Life
Insurance
An undated Connecticut notice says the
state intends to modify Rule 38a-78-33, to allow the 2001 CSO
Preferred Class Mortality Table to be used with contracts
based on that table and issued prior to Jan. 1, 2007. The
Insurance Department is encouraging comments about the
proposed amendment.
Michigan Bulletin 2009-03-INS allows a life insurer to write a life insurance policy
or annuity contract which is subject to an assignment of the
proceeds of the insurance policy or annuity contract as
payment for cemetery services or goods or funeral services or
goods. The limit is adjusted annually. The cemetery/funeral
assignment maximum for contracts effective from June 1, 2009
through May 31, 2010 will be $9,450. The current maximum, in
effect through May 31, is $9,238.
New Hampshire rule Ins 305 has
standards and procedures for making recommendations to
consumers that result in an annuity transaction. The intent is
to have producers appropriately address the insurance needs
and financial objectives of consumers at the time of the
transaction.
New York Regulation 192,
adopted on an emergency basis, has minimum standards for
determining reserve liabilities and nonforfeiture values for
preneed life insurance.
Ohio Bulletin 2009-02 permits
use of the 2001 CSO Preferred
Class Structure Table to Determine Basic and Minimum
Reserve Liabilities.
Long-Term Care Insurance
New Jersey has adopted new rules for
long-term care insurance training requirements and general
requirements for partnership policies. The new rules are at
NJAC 11:4-34.29 and 34.30; and 11:4-34, Appendices J and K.
NJAC 11:4-34.2 was also amended. The changes became effective
Feb. 17.
Medicare
Supplement Insurance
Delaware Forms and Rates Bulletin 32 requires
that Medicare supplement policies be made available to any
applicant under age 65 who is eligible for Medicare because of
end-stage renal disease.
Producers
Arkansas Bulletin 2-2009 reminds
insurers to file their annual lists of renewal appointments.
By law, each appointment shall remain in effect until
terminated, but insurers must indicate that they have reviewed
the producer’s background and fitness to continue to act as an
agent of the company. The bulletin lists the procedures apply
in 2009 for appointment renewals and
terminations.
Hawaii has posted new forms to
add or remove someone from a business entity
license, add or remove classes of insurance from an insurance
license, add or remove trade names and add assumed (DBA)
names, and file changes of address.
South Dakota HB 1047 provides that no
employer insurance assistance program may be offered by an
agent unless the program is specified in writing to the
employer.
Property/Casualty Insurance
Colorado has updated a document with
answers to consumer questions about how insurance companies
use credit scores.
Rhode Island is proposing to amend
two regulations:
• Regulation 15,
the Basic Property Insurance Inspection and Placement Program,
would be changed to incorporate recent changes to state law
that expand the definition of basic property insurance offered
through the Rhode Island Joint Reinsurance Association. The
proposed amendment also incorporates a provision for assessing
member insurers in a rate hearing proceeding. A hearing is
schedule for March 11.
• Regulation
20, Consent to Rate, would
specifically identify all statutes concerning consent to rate
and to update the requirements under those statutes. That
hearing is set for March 23.
Texas Bulletin B-0007-09 tells of regulators’ concerns about applying the
pollution exclusion contained in various liability insurance
policies. A recent court filing (Great American Insurance
Company vs. Boxer Property Management Company, Southern
District of Texas, Houston Division, CV–03464) raised concerns
as to the potential application of the pollution exclusion to
be used to deny coverage for a claim in the absence of a
pollution incident. The department is concerned that the
language in pollution exclusions could be interpreted by a
court or insurer to apply to situations and claims that are
not intended to be excluded. It wants insurers and others
to develop a uniform method of addressing these concerns
within a reasonable time. At the same time, the Insurance
Department is reviewing previously approved policy forms and
endorsements that contain pollution exclusions to make sure
the application of those pollution exclusions is consistent
with public policy.
Washington has repealed rule WAC
284-30-800 and adopted rule WAC 284-29-200 to
define the things of value that a title company can give to
induce the referral of title insurance business.
Rates,
Forms & Filings
A Colorado notice says the state is
putting off its process to amend Regulation 5-1-10, Rate and Rule Filing Submission Requirements,
Property/Casualty Insurance. Amendments to the rule will be
reheard in the spring. Until then, the regulation remains in
effect.
New York Circular Letter 5 (2009) addresses filing procedures for filings submitted
using SERFF, provides a new transmittal document to be used
for property/casualty paper filings and revises the Rate
Filing Sequence Checklist.
South Dakota HB 1029 states that a rate in
excess of that provided by a filing otherwise applicable may
be used on any specific risk. The application for approval of
this rate must be filed prior to the effective date of the
policy being issued, and the insurance director can waive the
requirement of prior filing if a special need or circumstance
can be demonstrated.
Virginia has updated its Property/Casualty Filing Guidelines
Handbook.
Sales
and Marketing
Illinois rule 50 IAC 930.40, .50, .80 permits the
use of the NAIC’s Life Insurance Buyer's Guide as a substitute for the state’s buyer’s guide.
New York Legal Opinion 09-01-01 allows
electronic delivery of insurance policies using the
Internet.
State
Regulation of Insurance
Connecticut Rule 38a-8-1 to -126 updates the Insurance Department’s method of
organization and it rules of practice. The changes went into
effect last September, but are just now being posted to the
Insurance Department’s Web site.
Maine Bulletin 353 reminds insurers
that the payment of post-judgment interest in Maine is
considered an independent legal obligation of the insurer, not
a policy benefit.
The Oregon Insurance Division has
posted a number of legislative bills that it, and others, are
sponsoring during the current session:
• HB 2190 requires insurers to provide
vehicle owners with a written explanation of how “total loss”
vehicles are valued and, in a dispute, pay the owner the
amount not in dispute while negotiations continue. It also
allows the owner to recover reasonable appraisal costs from
insurer when final appraised value is greater than insurer's
final offer.
• HB 2198 would,
starting Jan. 1, 2010, require life producers to meet the same
continuing education requirements as producers who sell
health, property and casualty insurance. The bill also would
eliminate an exemption from continuing education requirements
for some retired producers who only service existing life
policies.
• HB 2432 would give the public a
30-day comment period whenever an insurer files a rate
change.
• HB 2433 lists the factors that
the state could consider in deciding premium rate requests and
requires insurers to justify administrative expenses that
exceed the cost of living. The bill would also allow the
Insurance Department to consider such factors as insurers'
investment income, profits and surplus levels as well as
historical and projected trends in medical costs and
historical and projected loss ratio (percent of premium spent
on claims). It also specifies that, without sufficient
justification, the department could not approve increases in
administrative expenses that exceed the cost of living for the
previous calendar year.
Rhode Island is proposing to repeal
Regulation 70, the Insurance Company Licensing Notification
Program, because the statute on which it is based has been
repealed. The regulation provided a way for interested persons
to inquire about an insurer’s license, but that information is
routinely provided on the Insurance Department’s Web site and
on informal inquiry to any inquiring party. A hearing is
scheduled for March 11.
(RR&B is produced with the assistance of The Clear
Report and The Coalition Against Insurance
Fraud.)
Publish date Feb 23 2009
Prior Issues
Reprinted with permission from Insurance Compliance Insight.
Copyright © 2009 ProBusiness Publishing LLC
Licensed from ProBusiness Publishing LLC. All rights reserved.