Ethics and Compliance - Going Above the Bottom Line

Illinois Bulletin 2009-02 tells of the procedures and guidelines respecting applications for permitted statutory accounting practices. The state says it won’t broadly or, by blanket application, reduce accounting standards governing capital and surplus adequacy, but it will accept and evaluate individual company applications for variances from statutory accounting practices. That consideration will be based on the specific applicant’s substantive explanation in support of the requested practice and the consumer impact of the variance, if approved.

Michigan Bulletin 2009-06-CF adjusts the maximum amount of the documentary preparation fee to reflect the cumulative percentage in the consumer price index.

• HB 2325 would modify the amount of reimbursement due personal injury protection providers when total benefits exceed damages.

• HB 2326 would increase motor vehicle liability coverage required for property damage and certain personal injury protection benefits.

• HB 2369 would prohibit motor vehicle liability insurers from settling with injured individuals until 60 days after motor vehicle accident. The bill also provides that the settlement agreement cannot restrict the ability of the insurer to recover personal injury protection benefits from a third party responsible for the loss.

• SB 354 would require insurers to disclose the legal consequences of motor vehicle claim settlements. Also, an insured would have 14 days to rescind a signed settlement.

• SB 411 would allow a motor vehicle liability insurance policy to limit coverage of an insured or a member of the insured's household to the minimum coverage required by law.

• Bulletin 2009-05-INS says group and individual health policies must, at issuance or renewal, provide coverage for intermediate and outpatient care for substance abuse.

• Bulletin 2009-07-INS tells how the Office of Financial and Insurance Regulation will consider a request from an HMO to change or expand its service area, either to expand a partial county to the entire county or to gain approval for a new full county.

New Jersey is seeking comments about Proposed Rules NJAC 11:20-3A, -6, -7 and -18, and Appendix Exhibits E and J. They would deal with individual health insurance policy forms, informational rate filing requirements, loss ratio and refund reporting requirements, withdrawals of carriers from the individual market and the withdrawal of plan, plan option or deductible/copayment options. Comments are due by March 6.

A Tennessee Feb. 23 Bulletin restates the Insurance Department’s position that if an insurer pays for medical treatment provided by a physician, it must pay for treatment of that condition by a chiropractor.

West Virginia is seeking to modify its Series 28 rules governing coordination of health insurance benefits. Affected are rules for calculating benefits and paying a claim, notices to covered persons and miscellaneous provisions. Also part of the changes: a new Consumer Explanatory Booklet. In addition, new Series 83 rules would set standards for discount medical plan organizations and discount prescription drug plan organizations.

The Maryland House passed HB 160, which would make it insurance fraud to act as a public adjuster without a proper license. The bill now is in the Senate.

A number of Mississippi anti-fraud bills backed by the attorney general are stalled, or have died, in committee. The package includes:

• HB 1595, which would have enhanced the attorney general’s ability to receive proceeds from monetary fraud penalties.

The Coalition Against Insurance Fraud reports the attorney general is trying to revive the package by piggy-backing the bills on other legislation.

Texas HB 148 would make it a crime for a chiropractor, physician or private investigator to contact crash victims in person or by phone for 31 days following the accident. Swindlers often try to recruit crash victims for fake treatment at shady clinics. The governor vetoed a similar bill in 2007.

A state constitutional amendment would give the Texas attorney general prosecutorial authority over insurance fraud and certain other crimes. HJRes 66 is the constitutional amendment, and HB 1400 would legislatively expand the AG’s powers if it is approved.

The Utah House has defeated a bill that would have increased funding of the state fraud bureau. HB 263 would have slightly increased the annual insurer assessment, which funds the unit.

A new anti-fraud regulation, WAC 284-83-800, -803 and -806, strengthens restrictions on taking out life policies on juveniles in Washington State. Starting July 1, life insurers must document that the applicant has an insurable interest in the juvenile’s life; justify selling a policy that pays out more than a juvenile’s funeral or mental health expenses; and include the signature of juveniles 15 years and older.

New Jersey is seeking comments about proposed amendments to NJAC 11:4-43.2 and 43.6. They would expand the circumstances under which an annuity contract’s waiver of surrender fees would be permitted to include the confinement of spouses and civil union partners to nursing homes. The amendments also define “civil union partner.” Comments are due by March 6.

West Virginia is seeking to amend several life insurance rules: Series 80, dealing with viatical settlements, and Series 86, dealing with preneed life insurance minimum standards for determining reserve liabilities and nonforfeiture values.

Wisconsin rule Ins 2.19 defines practices relating to the sale of life insurance and annuities to the military that are misleading and unfair trade practices. It goes into effect April 1.

West Virginia is seeking to amend Series 32 rules, which govern long-term care insurance. The changes address unintentional lapses, required consumer disclosures of rating practices, initial filing requirements, premium increases, the availability of new services or providers, the right to reduce coverage or lower premiums, nonforfeiture benefit requirements and standards for benefit triggers.

Maine Bulletin 354 says that reopening Medicare supplement paid claims and seeking recovery from providers long after the services were provided is permitted only in “highly unusual cases.” Both state and federal law require the insurer to decide these claims on the basis of the information submitted with the underlying Medicare claim. That decision should be final, unless the Medicare claim is denied in whole or part. Any retrospective denial of a Medicare supplement claim, when permitted at all, must be done promptly – within one year after the date of the claim, in most cases.

Arkansas Bulletin 2-2009 has instructions for updating producer appointments, filing the required annual report of renewals and terminations and paying the June 1 invoice for annual renewal fees covering a company’s active appointments.

Kentucky 806 KAR 9:220 has procedures for approving continuing education courses and for obtaining credit after attending a CE class. The state has also updated its listing of approved ethics courses for company providers and independent providers, and has posted a new listing of flood insurance CE courses for company providers.

A New Hampshire notice says the Insurance Department will stop printing and mailing paper licenses April 1. The notice tells of other advantages of the state’s state-based system Connect Service.

New Jersey has adopted NJAC 11:4-34.2 and amended NJAC 11:4-34.29-.30, and Appendix J and K, which address training requirements for producers that sell, solicit or negotiate long-term care insurance.

Utah rule R590-252 sets standards for the use of senior-specific certifications and professional designations. It went into effect Feb. 25.

Mississippi Regulation 2007-1 has additional procedures and requirements for the state’s Policyholder Bill of Rights to make sure homeowner policyholders understand their rights as a policyholder. The provisions are effective March 13.

• SB 263 would increase the amount of non-economic damages that may be awarded in civil action seeking damages for bodily injury.

• SB 377 would prohibit a personal lines insurer from increasing a consumer's premium after rerating a policy at the consumer's request.

• Mississippi Proposed Regulation 2009-1 sets out basic responsibilities of insurance companies and producers as to the extension or restriction of property/casualty insurance by the use of a binder, certificate or insurance, indemnity agreement or some other instrument. A hearing is scheduled for March 12.

• Pennsylvania Notice 2009-02 discusses the acceptable use of certificates of insurance for property/casualty policies by saying they should not amend, extend or alter coverage of the insurance policy. The notice give several examples of uses of certificates that are not permitted.

New Jersey is seeking comments about proposed rules that would require insurers use SERFF for property/casualty filings. SERFF is currently used for more than four of five such filings. Comments are due by March 21.

Arkansas SB 53/Act 149 now has the insurance commissioner serving at the pleasure of the governor, rather than for a specified four-year term.