Advertising
    Oregon has issued two bulletins governing insurance advertisements:
    • Bulletin 2009-03 tells of new filing and self-certification procedures for life and annuity advertisements.
    • Bulletin 2009-01, sent out earlier this month, outlined new filing procedures for health insurance advertising.
 
 
Annual Statements & Financial Reporting
    Connecticut is proposing two rule changes dealing with financial reporting. One notice deals with revising Regulation 38a-54 dealing with annual audited financial reports. tells of plans to make Regulation 38a-53 substantially similar to the NAIC Model Law on the Statement of Actuarial Opinion on Reserves and Supporting Documentation for Property/Casualty Companies. Another
 
    A new West Virginia rule, 114-41-1 to -6, Actuarial Opinion and Memorandum, went into effect May 14.
 
 
Automobile Insurance
    Indiana HB 1090 says an automobile owner’s motor vehicle insurance policy is considered primary for any claim and a passenger may not recover under any other motor vehicle insurance coverage until the owner’s policy pays its limits first.
 
    A legislative insurance committee has advanced Louisiana HB 208, which would prevent insurers from offering “step-down” limits on auto insurance policies. A “step-down” provision provides maximum coverage to the vehicle’s owner and family members, but if the vehicle is loaned to a friend or neighbor and they cause an accident, their insurance provides some of the coverage. “The practical affect of this legislation is that insurance companies are prevented from offering consumers policy options that may help them control or reduce costs,” said Greg LaCost, an assistant vice president and regional manager for the Property Casualty Insurers Association of America. The bill, however, has the support of the Insurance Department.
 
    Two new Maryland statutes impact automobile insurance:
    • HB 164 prohibits automobile insurers from imposing a surcharge, retiring a risk, or removing or reducing a discount because of events that occurred more than three years before the effective date of the policy or renewal.
   • HB 165 requires there to be misrepresentation or fraud in connection with the application, policy, presentation of a claim, change in risk or nonpayment of premium before a policy can be canceled. It also allows auto insurance cancellation in the case of license or registration revocation, or arson in the case of homeowner’s insurance.
 
    New York Circular Letter 13 (2009) tells how to apply a new subsection of insurance law that requires insurers to charge and collect an annual $10 motor vehicle law enforcement fee for each vehicle covered by an automobile liability policy.
 
    Utah is repealing rule R590-211, Underinsured Motorist Insurer Notification, because of the passage of a new law, SB 172.
 
    West Virginia SB 631 allows insurers, after providing notice, to cancel an automobile liability insurance policy if the insured:
    • fails to pay the premium when due;
    • obtains the policy through material misrepresentation;
    • violates any of the policy terms or conditions;
    • suffers from certain medical conditions; or
    • is convicted of vehicular assault or homicide, leaving an accident, theft of a motor vehicle, driver’s license fraud or certain DUI offenses.
 
 
Claims
    Maine’s Joint Committee on Insurance and Financial Services has voted unanimously against LD 1305, which would have provided a private right of action against insurers for third-party claimants. The bill would have allowed third-party claimants to sue insurance companies for violations of law that were not intended to trigger such private actions, according to the National Association of Mutual Insurance Companies. NAMIC Northeast state affairs manager Paul Tetrault warned the bill “would set an extremely low threshold for litigation.” The American Insurance Association, NAMIC and the Property Casualty Insurers Association of America all testified against the legislation. The trade organization said six states – California, Florida, Massachusetts, Kentucky, Montana and West Virginia – have some form of a third-party, bad faith cause of action and that each has “experienced negative effects including a significant increase in the cost of insurance and significant increase in the number of uninsured people as the cost of insurance rises.” Bad-faith bills have also been deeated in Connecticut, Iowa, Montana, New Mexico and Oregon.
 
    North Carolina Bulletin 09-B-01 outlines procedures for adjusters to follow after a catastrophic event.
 
 
Complaints
    Connecticut Bulletin IC-23 reminds insurers they have 10 business days to respond to any Insurance Department inquiry about a consumer complaint – and puts companies on notice that it will be monitoring response times. A company will be notified electronically, but it must request an extension if it can’t meet the deadline. Failing to respond to complaint inquiries within 10 calendar days without just cause will be deemed sufficient cause for administrative action.
 
  
Data Calls
    Texas has issued two data calls:
    • Bulletin B-0024-09 is a data call for 2008 title insurance information (but not experience for personal property title insurance). Carriers must e-mail an acknowledgment of the call by May 18 and provide the statistical report by June 24.  
    • Bulletin B-0026-09 is a data call for individual long-term care rate information. Carriers should use the online reporting form and respond by May 29.
 
 
Health Insurance
    Idaho Bulletin 09-05 tells of a new state law that changes the definition of “dependent” for health insurance purposes to include “an unmarried child under the age of 25 years and who receives more than one-half of his financial support from the parent.” The changes are in HB 108, and will apply to all new and renewed health coverage issued on or after July 1. Carriers with outstanding contracts affected by HB 108 have the option of issuing amended contract forms to policyholders or issuing their policyholders a notice that clearly informs the policyholder of the change in law. Any notice or corrected policy forms must be filed with the Insurance Department.
 
    An Illinois May 14 notice provides details of a new state law, HB 5285, that allows parents to maintain health insurance for qualifying family members up to age 26, and up to age 30 for qualifying family members who are military veterans.
 
    A new Iowa rule, 191—15.11(4), makes violation of the federal Genetic Information Nondiscrimination Act of 2008 a violation of state law as well. The federal law went into effect in May 2008 and compliance with the federal law is required on and after May 22, 2009. Health insurance is under the jurisdiction of both federal and state law, and the intent of the rule amendment is to provide consistent regulation.  
 
    Louisiana Directive 200 says health insurers and managed care organizations must provide coverage and pay the claims of any provider who provides emergency health care services, regardless of whether the provider or facility has a contract with the insurer or managed care organization.
 
    Maryland Bulletin 09-11 states that, given the passage of HB 1071/SB 854, Definition of Coverage Decisions, during the 2009 legislative session, the state has rescinded Bulletin 08-31.
 
    Nebraska is proposing to adopt a new regulation, Chapter 86, Regulation to Implement The American Recovery And Reinvestment Act for Purposes of Continuation of Coverage for Small Group Insurance. The proposed rule would allow insureds in employer groups in the small group market to obtain a subsidy for continuation of coverage if they are involuntarily terminated. A June 18 hearing is scheduled.
 
    Utah is proposing to revise rule R590-247, Universal Health Insurance Application Rule. Affected are applications for individual and small employer policies. A hearing is scheduled for June 1.
 
    Washington is proposing changes to WAC 284-53-005 and -010 so those rules conform with federal law. That law requires large group plans providing mental health and substance abuse benefits to use the same financial requirements and treatment limitations for those benefits that are used for the plan’s medical-surgical benefits.
 
 
Insurance Fraud
The Coalition Against Insurance Fraud has updated us about several California developments related to insurance fraud:
    • Government agencies can strengthen their anti-fraud intelligence-gathering if they can freely meet with insurers and other fraud fighters, the coalition said in written testimony supporting California SB 156. The measure would give insurers broad immunity to meet with the insurance department and prosecutors to discuss fraud trends. “This would also help government agencies get a better handle on developing fraud trends and ultimately better allocate resources more efficiently,” the coalition wrote. “It would increase the intelligence needed by government to get out in front of major insurance fraud trends, especially fraud by organized criminal enterprises. This legislation will be an excellent tool for fraud fighters in their ongoing efforts against insurance schemes. Allowing more dialogue about fraud trends will help focus more resources against these crimes,” the coalition wrote to the sponsor. But trial lawyers oppose the measure and SB 156 faces an uncertain future.
    • The California legislature is looking at a bill to expand the state’s reporting law. AB 802 would require insurers to report evidence of any crime to law enforcement. Current law requires insurers to divulge info when requested for investigating suspected insurance fraud schemes.
 
    A health fraud bill has flat-lined in Florida. HB 1487 would have tightened licensing requirements for health-care providers in the Miami area by requiring license applicants to be U.S. residents for at least five years or to post a bond of at least $500,000. South Florida is one of the nation’s epicenters of medical fraud– including widespread staged accidents and Medicare schemes.
 
    After several years of attempts, the Hawaii legislature passed HB 262, which expands the jurisdiction of the state’s insurance fraud unit to all lines except workers’ compensation. The unit had been restricted to auto schemes, leaving a large gap in fraud investigations.
 
    The Texas House passed HB 148, which would set criminal penalties for medical providers who solicit accident victims for treatment within 31 days of a crash. Shady providers are trying to recruit victims for bogus treatment, and the works to block access to victims. In a related matter, a Texas Senate committee held a hearing on a bill recently passed by the House that would restrict access to police auto accident reports. HB 1634 would help reduce insurance fraud by ensuring that only parties to the accident have immediate access.
 
    The Washington legislature adjourned for the year without passing legislation that would have allowed insurers to try to recover investigative expenses from convicted insurance cheaters. HB 5893 passed the House but died in a Senate committee when the legislature shut down.
 
 
Life Insurance & Annuities
    Georgia has two new law affecting life insurance:
    • HB 80 reduces, from 100 to two, the number of employees that must be covered by an insurance contract for a corporation to have corporate-owned life insurance on its employees. For purposes of the law, the corporation can count any employee of a group of corporations consisting of a parent corporation and its directly or indirectly owned subsidiaries.
    • SB 61 contains license requirements for providers and registration requirements for viatical settlement brokers. It also has requirements for life settlement contracts, disclosures, reporting requirements, privacy requirements and the examination of licensees, as well as other details.
 
    Idaho Bulletin 09-06 explains requirements in a new state law, HB 75, the Life Settlement Act. Starting July 1, if the owner of the life insurance policy is an Idaho resident, the law requires that any person acting as a life settlement broker or provider be licensed as a life insurance producer in Idaho and meet a number of other requirements. The Insurance Department is developing a registration process for life settlement providers and brokers.
 
    Nebraska is proposing changes to three rules governing life insurance operations. Affected would be:
    • Chapter 71, which addresses the valuation of life insurance policies;
    • Chapter 84, which addresses the use of mortality tables; and
    • Chapter 85, which addresses group health, dental, accident and life insurance.
 
    Four new Rhode Island life insurance rules will go into effect this year:
    • Regulation 41, Annuity Disclosure, is effective Sept. 30;
    • Regulation 52, Advertisements of Life Insurance and Annuities, is effective Sept. 30;
    • Regulation 112, Senior Specification, is effective May 26; and
    • Regulation 113, Life Insurance Illustrations, is effective Sept. 30.
 
    Utah is proposing to revise rule R590-222, Viatical Settlements. A June 1 hearing will consider the rule and associated products like the Initial Application Checklist, Provider Annual Report, Provider Renewal Application, Antifraud Plan Content Checklist and Certification, Selling Your Life Insurance Policy Brochure and Verification of Coverage for Life Insurance Policies.
 
    Two new West Virginia rules went into effect May 14. They are:
    • rule 114-80-1 to -12, Viatical Settlements; and
    • rule 114-86-1 to 06, Preneed Life Insurance Minimum Standards for Determining Reserve Liabilities and Nonforfeiture Values.
 
    Wisconsin has repealed and recreated rule Ins. 2-07, which addresses the replacement of life insurance or annuity contracts and disclosure requirements. The rules are effective July 1.
 
 
Long-Term Care Insurance
    South Carolina Bulletin 2009-04 provides details about the state’s long-term care partnership program.
 
    South Dakota Bulletin 09-02 reminds carriers and producers that lead cards inviting recipients to get more information about the state’s long-term care partnership program must follow all applicable statutes and rules. The notice advises lead cards cannot:
    • use of the state seal in the lead card or otherwise create a direct or indirect impression that the insurance plan is approved, endorsed or accredited by the state or another governmental entity;
    • fail to disclose that the lead is an insurance solicitation;
    • fail to disclose in the lead card that an insurance agent may contact the recipient; or
    • misrepresent the purpose of the lead card.
 
    West Virginia has filed a proposed rule, 114-32-1 to -31, Long-Term Care Insurance, with the intent of having it go into effect July 1.
 
 
Medicare Supplement Insurance
    Four states are revising their rules governing Medicare supplement policies to standardize coverage, simplify terms, eliminate provisions that could be misleading or confusing and to conform rules to federal law and/or NAIC models. Details are in:
    • a Connecticut notice to revise Regulation 38a-495a-1 to -21;
    • proposed Delaware amendments to proposed Regulation 1501;
    • an Iowa notice of rule changes that would go into effect Aug. 19; and
    • several Oregon proposed rules and amendments – OAR 836-052-0132, -0141 and -0192, and OAR 836-052-0119, -0129, -0133, -0134 and -0142.
  
    Oregon Bulletin 2009-2 reminds insurers that it is illegal to reduce Medicare supplement sales commissions based on the age of the applicant.
 
 
Producers
    Kansas is amending KAR 40-7-20a to provide new standards for online continuing education courses.
 
    Montana SB 176 provides a limited exemption from continuing education requirements for individuals licensed to act as an insurance producer only for surety bail bonds.
 
    Nebraska Title 210 NAC Chapter 38 amends rules concerning continuing education requirements for insurance producers and consultants.
 
    Rhode Island Regulation 112 sets standards for the use of senior-specific certifications and professional designations in the solicitation or sale or purchase of life insurance or annuities. The regulation goes into effect May 26.
 
    A new West Virginia rule, 114-42-1 to -8, dealing with continuing education requirements for producers, went into effect May 14.
 
 
Property/Casualty Insurance
    Connecticut Bulletin PC-63-01 extends a pilot program to exempt certain commercial lines filings until further notice. Companies must continue to provide the commercial forms, rates and rule filings and any amendments or endorsements exempted by the bulletin. Other details are in the bulletin and its Appendix A, which has been revised and expanded. The current guidance replaces Bulletin PC-63, issued Jan. 17, 2008.
 
    Maryland HB 162 requires an insurer to send a specified notice to the named insured and insurance producer when there is an increase in the renewal policy premium for commercial insurance and workers’ compensation insurance policies. The requirement does not apply when the premium increase results from:
    • an increase in the units of exposure;
    • the application of an experience rating plan;
    • the application of a retrospective rating plan; or
    • a change made by the insured that increases the insurer’s exposure; or
    • an audit of the insured.
 
    A bill introduced in New Jersey, SB 2766, would prohibit personal lines insurers from using credit-based insurance scores to set rates. If the bill becomes law, the ban would be in effect three months days after passage until June 30, 2011 (see related article, elsewhere in this edition).
 
 
Rates, Forms & Filings
    In a May 13 notice, Washington says it is considering new filing procedures for health care service contractors and health maintenance organizations to file rates and forms electronically through SERFF. As part of the rule-making process, the state will develop rate and form filing procedures that are required by SERFF and compatible with electronic filings. It will evaluate and consider all general rate and form filing procedures, and may propose rules to modify current rate and form filing requirements.
 
 
Underwriting
    Maine LD 1020 authorizes marriage between any two persons that meet the other requirements of law, recognizes a valid marriage between two people of the same sex in another state and authorizes marriage between first cousins with a physician’s certificate of genetic counseling.
 
 
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)
 
Copyright 2009 ProBusiness Publishing LLC

Publish date May 18 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.