Ethics and Compliance - Going Above the Bottom Line

Connecticut Bulletin FS-4SL-08 (Revised) requires all eligible surplus lines insurers to report their financial condition each quarter, starting with the period ending in June. The reports are to include a breakdown of the company’s Connecticut business showing premiums and losses by line (in same format as page 20 of the Annual Statement but with current year-to-date amounts). The quarterly filings deadlines:

All companies are required to include a completed Connecticut Form SL-10 as a part of their annual and quarterly filings. A copy is included with the bulletin.

Connecticut SB 212 says an insurance company cannot charge more than $100 to an insured who cancels an automobile policy prior to the expiration of the policy.

A proposal ostensibly aimed at ramping up consumer protections and expanding New Jersey’s “bad faith” law isn’t needed, according to the National Association of Mutual Insurance Companies. S 132 would negatively impact the insurance claims process and lead to costly litigation and “higher costs that would ultimately be borne by those who purchase automobile insurance,” NAMIC said in its testimony to the New Jersey Senate Commerce Committee last week.

Utah Bulletin 2009-4 clarifies claim settlement practices pertaining to all applicable fees and taxes for vehicle registration and transfer of evidence of ownership.

Nevada Bulletin 09-005 issues a data call for credit life, credit accident & health and credit involuntary unemployment insurance written in the state. The bulletin has links to instructions and Excel spreadsheets to be used for reporting. Data is due by June 30.

• HB 1204 expands the required coverage for preventive health care services to include alcohol misuse screening and intervention by an outpatient primary care provider, cervical cancer screening, cholesterol screening, childhood immunizations, influenza vaccinations, and pneumococcal vaccinations, as well as tobacco use screening and intervention by an outpatient primary care provider.

• HB 1349 allows an employee who has been terminated from employment the right to continue health care coverage with a specified premium subsidy when the employee is an assistance-eligible individual.

Iowa has adopted a new rule, 191—70.10(514F), that requires the retrospective payment of clean claims for covered physician services during the credentialing period. It becomes effective July 1.

Nevada SB 426 requires certain health care plans and policies of insurance, other than Medicaid, to provide continued coverage for certain prescription drugs related to transplanted organs. Another law, AB 162, requires a health benefit plan to provide an option of coverage for screening for and diagnosis of autism, and for treatment for persons under the age of 18 or, if enrolled in high school, until the person reaches the age of 22. It also contains information about deductibles and co-payments.

Oregon Bulletin INS 2009-4 says the state is withdrawing Bulletin INS 2009-1 dealing the health insurance advertisements and will no longer require a check off list for advertising or self-certification. It will, however, continue to rely on an annual certification. Rather than issuing a new health advertising bulletin, the Insurance Department will include any revisions in filing requirements on its Web site under General Filing Tips and revise the transmittal and standards to reflect the changes.

• SB 189 will allow uninsured, single adult children up to age 30 to be covered by their parents’ health insurance plan. Parents must pay the premiums and the coverage hinges on the employers’ willingness to offer the benefit to parents. This bill will go into effect in six months and coverage will be available on a rolling basis after that as contracts are renewed.

• HB 1089 allows employees who lose their jobs at small businesses (fewer than 20 employees) to continue receiving their health insurance at their expense for up to nine months. It applies to any employee of a small business who is terminated after July 10 and before Jan. 1, 2010.

Tennessee SB 1397 requires a health insurer to clearly identify any material change to its previously released provider manual, to establish and maintain a Web site for its health care provider network with and to have that site include a preadjudicated tool to be used for claims.

Washington has amended WAC 284-52-070 to eliminate the permitted exclusion for mental or emotional disorders. State law now prohibits those exclusions. A link to the rule wasn’t available at ICI’s deadline.

California has introduced new regulations, 2274.70 to .79, governing policy rescissions by health insurers. Among the provisions: Insurers must set clear and rigorous underwriting standards before issuing a policy, prove they’ve met all underwriting standards before considering rescission, must be sure that an individual knew the answer to a health history question and failed to provide it, and provide fair due process for consumers being investigated for possible rescission. The regs take effect at the end of 2009, after public comment and final refinement.

Insurers and agents would have to release to law enforcement information about any illegal activity they may discover while investigating insurance schemes, under a bill, AB 802, passed by the California Assembly. The proposed requirement would be triggered only when law enforcement requests it. Under current California law, insurers only have to provide information about suspected insurance frauds. The measure now goes to the Senate. Insurers in the state oppose the bill, the Coalition Against Insurance Fraud reports.

Fraud warnings would be required on all claim and application forms under a bill passed by the Rhode Island House. Warnings now are required only on workers’ comp documents. Most states already require warnings on all claims and applications, supporters of HB 5773 contend. The provision is part of a larger insurance bill.

Massachusetts Bulletin 2009-07 says the insurance commissioner will consider approving a discretionary group annuity contract or life insurance policy when it is in the best interests of the public and satisfies two criteria:

• discretionary group members have group conversion rights if the member leaves or is no longer eligible for the discretionary group, or if the discretionary group terminates; and

South Carolina Bulletin 2009-07 has information about the state’s new Regulation 69-57.3, Preneed Life Insurance Minimum Standards for Determining Reserve Liabilities and Nonforfeiture Values. The bulletin includes a copy of the regulation.

Two states have updated rules to implements modifications in the NAIC Medicare Supplement Insurance Minimum Standards Model Act and federal laws. Details are in Kansas KAR 40-4-35 and Wisconsin rule Ins 3.39.

South Dakota has repealed rule 20:06:13:33, which required an agent to provide, prior to issuance for delivery of the Medicare supplement policy or certificate, a notice regarding replacement of coverage.

• 806 KAR 9:070 amends rules which restrict the number of times an applicant can take the exam for an agent’s, life settlement broker’s, consultant’s, or adjuster’s license. Applicants take or retake an examination three times within 120 days. It also sets 70 percent as the minimum passing score for a written licensing examination.

Louisiana policyholders may be getting a break on deductibles, and insurers will remain protected with a bill that is making its way to the desk of Gov. Bobby Jindal. HB 333 says policyholders will not have to pay more than one hurricane deductible for a named storm in a calendar year. However, in an instance in which one named storm causes less damage than the maximum hurricane deductible, the insurer can apply the remainder of the hurricane deductible when damage occurs from a second named storm.

Another Louisiana laws, SB 130, would adjust how the state-run Louisiana Citizens Property Corp. calculates rates. Currently in each parish, Citizens first comes up with an actuarially sound rate and then averages the rates of the 10 largest writers and add 10 percent, before taking the higher of the two. Under the bill, Citizens would add 10 percent to the highest rate charged by companies with at least 2 percent market share in each parish. Also added into the mix are companies that may not have that market share yet but have added at least 25 homeowners policies during the year. Citizens would also add 10 percent to its actuarially sound calculation and take the higher of the two.

Surplus lines carriers in Florida no longer have to worry that a court may declare policy provisions, exclusions and conditions to be invalid simply because the policy forms weren’t filed with the Office of Insurance Regulation. That’s the word from Sue Stead, a partner with Nelson Levine deLuca & Horst. HB 853 relieves the uncertainly and angst created by a recent line of cases, Stead says in an article released by the law firm. “As most believed had been the case for years, surplus lines policies are now expressly exempted from the form filing and other requirements that have traditionally applied only to admitted carriers. The Florida Legislature also added new disclosure requirements for surplus lines policies,” according to Stead.