Annual Statements & Financial Reporting
    New York has adopted, on an emergency basis, the seventh amendment to Regulation 172, Financial Statement Filings and Accounting Practices and Procedures. It adopts the 2009 edition of the NAIC’s accounting manual, which includes accounting guidelines referred to as statements of statutory accounting principles. The accounting manual will be used to prepare quarterly statements and the annual statement for 2009, which will be filed in 2010. The amendment went into effect May 15.
 
    Tennessee TAC 0780-1-37-.1 to -.12 amends rules concerning the annual statement filing requirements. The new rules go into effect June 29 but have not yet been posted to the Web site of the state administrative code.
 
 
Automobile Insurance
    New York has a new online, fill-in form companies can use to provide monthly reports for the collection of the state’s motor vehicle law enforcement fee.
 
    New York Legal Opinion 09-04-03 stresses that insurer must provide a personal auto nonrenewal notice to the named insured and, within seven days, to the insured’s authorized agent or broker as well.
 
 
Claims
    Various sections of Washington WAC 284-30 will be repealed or amended to provide a better understanding and clearer expectations of what should occur during the claims settlement process. The changes are effective Aug. 21.
 
 
Credit Scores
    Nevada Bulletin 09-004 reminds insurers of the existing laws that govern personal lines insurers when using consumer credit information for underwriting or rating. Rules NRS 686A.600 to .730 place limits and requirements on how consumer credit information may be used for insurance purposes, including the underwriting and development of initial and subsequent rates. Insurers are being reminded they must provide clear and concise rating manuals and programs to appropriate staff that provide rating information to consumers. The Insurance Division also “strongly suggests” insurers train staff to explain how insurance premiums are calculated.
 
 
Data Calls
    You don’t have much time to complete a disaster response data call from Texas. Bulletin B-0027-09 seeks information about insurers’ business continuity plans and their policies and procedures for paying a large number of claims following a disaster. Submissions are due 10 days after receipt of the May 26 bulletin.
 
 
Health Insurance
    Several Maryland laws require insurers, nonprofit health service plans and HMOs to provide certain benefits:
    • HB 41 and SB 173 require inpatient hospitalization coverage for a minimum length of time, and coverage for home visits, following a mastectomy that is performed for the treatment of breast cancer. They also prohibit refusing reimbursement for certain services.
    • HB 405 mandates coverage for breast cancer screening and repeals requirements for coverage of screening mammograms.
 
    Nebraska LB 551 requires a health benefit plan to provide the option to continue coverage for a child through the end of the month in which the child marries, ceases to be a state resident unless enrolled in post-secondary school, receives other health coverage or reaches a certain age. The plan may require a written election and additional premiums.
 
    Several recent New York legal opinions impact health insurance.
    • One legal opinion addresses a number of issues connected with balance billing by health care providers. It appears as Legal Opinion 09-04-04 on the department’s opinions Web page, but Opinion 09-10-07 appears on the document itself.
    • Legal Opinion 09-04-05 says a licensed insurance agent or broker may, but is not required to, provide COBRA services at no additional charge if offered in connection with the provision of accident and health insurance, and when it is provided in a fair and nondiscriminatory manner to like insureds or potential insureds. But agents and brokers must charge a fee if they review, evaluate or recommend third-party wellness programs because this service doesn’t directly relate to the sale or servicing of the insurance policy or contract, or provide general information about insurance or risk reduction.
    • Legal Opinion 09-04-07 says only employees who are eligible on the application date for coverage, or in subsequent years on the date of determination of renewal rates, are to be counted for purposes of deciding whether a group health insurance policy is subject to community rating.
 
    West Virginia is proposing several new health insurance regulations:
    •  Rule 114-28, Coordination of Health Benefit;
    •  Rule 114-87, Preventive Care Pilot Program; and
    •  Rule 114-88, West Virginia Affordable Health Care Plan.
 
 
Insurance Fraud
    The Texas Senate passed an amended version of HB 148, which would restrict attorneys and health providers from phoning or personally contacting auto-accident victims within 31 days of the crash. This would limit the ability of swindlers to cajole crash victims into seeking bogus injury treatment. The Senate and House agreed on the 31-day timeline, but the Senate would allow the victims to sue violators. The House is discussing the Senate amendment.
 
    The California Senate passed a bill allowing insurers to speak with the insurance department and prosecutors about specific insurance fraud cases without fear of being sued for defamation by suspects. SB 156 is a scaled-back version of a bill that would have extended immunity to discussing broader fraud trends. The Senate version now faces the Assembly.
 
 
Life Insurance
    Oregon Bulletin INS 2009-3 has new and revised information about the filing procedures and self-certification for life and annuity advertisements. An earlier bulletin, INS-2009-1, has similar guidance for health insurance advertising.
 
    West Virginia is proposing several new life insurance regulations:
    • Rule 114-11D, Variable Life Insurance;
    • Rule 114-11E, Annuity Disclosures; and
    • Rule 114-80, Viatical Settlements.
 
 
Long-Term Care Insurance
    Maryland Bulletin 09-13 gives the current status of the Maryland Partnership for Long-Term Care Program. Some disclosure requirements have been modified due to the enactment of HB 590, which became effective June 1. Specifically, the outline of coverage will no longer be required to contain a statement indicating whether or not the long-term care insurance policy is a partnership policy. Also, the disclosure statement required on the schedule page may follow the text found in HB 590, rather than the text found in COMAR 31.14.03.05B. The current regulations will be amended to conform to HB 590 as soon as possible, but the provisions of the amended statute are now being followed.
 
 
Medicare Supplement Insurance
    Two more states are proposing to amend rules to conform with the NAIC Medigap model and the federal Genetic Information Nondiscrimination Act of 2008. Details are in Arizona proposed rule R20-6-1101Rule 114-24, Medicare Supplement Insurance. and West Virginia proposed emergency
 
    Oregon Bulletin 2009-2 states that insurers cannot base compensation for Medicare supplement insurance policies on the age of the purchaser.
 
 
Producers
    A May 21 notice outlines new prelicensing education requirements for insurance producers in Michigan. Starting July 16, producers seeking single-line license will need to complete 14 hours about the principles of that line of insurance and six hours of professional ethics and the requirements of the insurance laws of Michigan. A combined program of study will require 40 hours – 34 hours on the principles of either life and health or property and casualty insurance and six hours on professional ethics and the requirements of the insurance laws of Michigan. The program of study requirements can be waived for people who have obtained various designations. Of particular importance is the bulletin’s note that candidates who have completed their course of study prior to July 16 must pass their respective examination by Jan. 15, 2010. Candidates who have completed their course of study after July 16 have 12 months to pass their respective examination. If those deadlines aren’t met, license candidates must complete and pass a new program of study.
 
    New York Legal Opinion 09-04-01 says a licensed insurance agent must be appointed by a carrier to receive commissions on a property/casualty insurance book of business that the agent purchased.
 
    Tennessee Legal Opinion 09-91 notes that state law used toprovide a 24-month producer license. Under rules adopted by the commissioner of Commerce and Insurance, producer licenses must now be renewed every other year in the month of the licensee’s birth, regardless of the month the license was first issued. As a result, some licenses issued or renewed in 2007 and 2008 will be in effect for less than two years and others will be in effect for more than two years. The department has not prorated the license fee to reflect the difference. The opinion declares that to be consistent with the statute.
 
    Portions of Washington WAC 284-17 will be repealed or amended to implement changes to the way agents, brokers, solicitors and general agents are licensed and to clarify prelicensing and continuing education requirements. The changes also include many provisions of the NAIC’s Producer Licensing Model Act. They all go into effect July 1.
 
    West Virginia is proposing Rule 114-89, which would prohibit the use of misleading senior-specific designations.
 
 
Property/Casualty Insurance
    At least one property/casualty insurance company in Florida is on track to become actuarially sound. Gov. Charlie Crist signed HB 1495, which will permit state-run Citizens Property Insurance to increase rates up to 10 percent per year, beginning in 2010, until it reaches an actuarially sound level. HB 1495 also phases out $12 billion from the Florida Hurricane Catastrophe Fund, at a rate of about $2 billion per year for the next six years It also increases premiums for reinsurance purchased from the fund 5 percent per year until 2013, and 25 percent annually after that.
 
There is still no action on Florida HB 1171 – a bill that insurance commissioner Kevin McCarty opposes – which would allow well-capitalized insurers to set their own rates (ICI, May 4, 2009), but Crist said at a press conference late last week that he was siding with McCarty and might veto it.
 
    Maryland Bulletin 09-14 reminds title insurers and producers about the provisions of SB 86, and tells how the Insurance Administration will implement the legislation. The bill is effective June 1, except for Section 2, which is effective Oct. 1.
 
    Maryland SB 201 clarifies that, in the event of damage, the condominium council of unit owners is responsible for repair or replacement of common elements and condominium units, exclusive of improvements and betterments installed in units by unit owners other than the developer.
 
 
Rates, Forms & Filings
    Michigan Bulletin 2009-11-INS says the state will now require insurers to file, and receive approval for, documents and forms related to personal auto and homeowner insurance. Prior to use, insurers will have to submit, through SERFF, new or revised personal auto insurance documents and forms starting July 1 and home insurance documents and forms starting Sept. 1.
 
    Maryland SB 716 contains several changes, including those that:
    • repeal the requirement that an outline of coverage for long-term care insurance and annuity contracts contain a specific statement about a policy or contract of long- term care insurance;
    • alter a statement that must be included in a certificate issued under group long-term care insurance; and
    • authorize an annuity contract to include a rider or supplemental contract provision that offers a contract holder reimbursement or payment for long-term care in a nursing home or similar facility.
 
 
State Regulation of Insurance
    Connecticut Bulletin S-13 tells that the insurance department has rescinded Bulletin S-12, issued Dec. 24, 2008 and dealing with gifts of minimal value to insurance clients and prospective clients. The earlier bulletin is no longer apparent on the department’s Web site, but you can find it here if you need it.
 
 
Underwriting
    Washington SB 5688 declares that for all purposes under state law, state registered domestic partners shall be treated the same as married spouses.
 
 
Workers’ Compensation
    Florida HB 903 sets reasonable attorney’s fees in workers’ compensation cases. The legislation was in response to a court decision that struck down portions of the 2003 workers’ comp reforms which have led to massive reductions in workers’ comp premiums in Florida, the National Association of Insurance and Financial Advisors – Florida reports. Any attorney’s fee approved by a judge for benefits secured on behalf of a claimant must equal 20 percent of the first $5,000 of the benefits, 15 percent of the next $5,000 of the benefits, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years.
 
    New York Legal Opinion 09-04-02 says a 2008 Workers’ Compensation Board directive dealing with durable medical equipment applies to no-fault claims.
 
    Ohio Bulletin 09-10 says insurers providing workers’ comp “other states” coverage must make filings with the Insurance Department that include:
    • the standard workers’ comp and employer’s liability policy; and
    • a statement identifying the current rating plan of the administrator and/or the rating bureau that will be used to rate the other states’ coverage.  
 
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)

Publish date Jun 01 2009
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Reprinted with permission from Insurance Compliance Insight.
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