Annual Statements & Financial Reporting
    Delaware Regulation 305 amends rules for actuarial appointments, actuarial opinions and memoranda of insurance companies. 
 
    New Jersey is proposing, in NJAC 11:19-1.1 to -1.4, to amend its annual statement filing requirements to reflect the procedures that are currently being used. Domestic insurers would be required to continue to file printed copies of their annual and quarterly statements with the state. Rules for foreign and alien admitted insurers, and for eligible surplus lines insurers, outlined in Bulletin 08-06, would remain in force.
 
    Ohio has adopted a new rule, OAR 836-012-0331(T), to replace OAR 836-012-0330, which appears to have been repealed in error. The repeal of that rule removed the prohibition of an insurer reporting reserve credits or assets established with respect to existing reinsurance agreements entered into prior to the effective date of the NAIC’s Life and Health Reinsurance Agreements Model Regulation. The replacement rule simply states that any reserve credits or assets established with respect to reinsurance agreements entered into prior to Nov. 9, 1995 that would not be entitled to recognition must be reduced to zero for purposes of the insurer’s annual statement filing. The new rule will remain in effect until Dec. 24.
 
    A new Utah rule, R590-254, contains requirements for annual financial reporting.
 
    Virginia Administrative Letter 2009-07 says that no person responsible for rendering an annual audited financial report can act in that capacity for more than five consecutive years. The old standard was seven years.
 
 
Anti-Money Laundering
    FinCEN issued a July 10 advisory to inform banks and other financial institutions about the risks associated with deficiencies in anti-money laundering and counter-terrorist financing in Iran, Uzbekistan, Turkmenistan, Pakistan, and São Tomé and Príncipe.
 
 
Automobile Insurance
    Two states are taking action on defensive driving courses:
    • Delaware has posted proposed amendments to Regulation 607 that would update requirements for course content, course and instructor certifications, online course attendance verification and other matters. No public hearing will be held, but email comments to Mitch Crane will be accepted through Sept. 4.
    • Virginia SB 1013 permits approved crash prevention courses to be delivered using the Internet, and provides for a reduction in rates once completed.
 
    New Jersey is proposing two rules changes that would impact personal auto carriers:
    • Proposed amendments to NJAC 11:3-8.4 to 8.6 would clarify rules for the acceptance, renewal, nonrenewal and cancellation of automobile insurance policies.
    • Proposed amendments to NJAC 11:3-4.2, 4.4, 4.7, 4.8, 5.10 and 5.11 address personal injury protection benefits, medical protocols, diagnostic tests and dispute resolutions.  
 
    Oregon HB 2369 requires automobile insurers to wait 60 days after an accident before settling with an injured individual. It also requires insurers to give injured individuals a plain and concise statement of the effect of entering into a settlement agreement. The law also provides that settlement agreements may not restrict the ability of insurers to recover personal injury protection benefits by subrogation, and makes crash exchange reports exempt from disclosure under public records law.
 
    Rhode Island HB 5193A prohibits an insurance company from failing to renew a private passenger automobile policy when a chargeable loss is less than $1,500. The old standard was $1,000.
 
    Utah has repealed rule R590-211, Uninsured Motorist Insurer Notification.
 
 
Claims
    Maryland Bulletin 09-18 reminds insurers of the need to act in good faith on first-party claims. It discusses a recent decision, Buckley v. The Brethren Mutual Insurance Company in which the state found the carrier failed to pay full value for the plaintiff’s claim. The key element was that the carrier didn’t follow a Court of Appeals decision in Mauer v. Pennsylvania Mutual Casualty Insurance Company. Once the Mauer decision was issued, all insurers were required to follow it, regardless of any previous actions they might have taken. They must also follow COMAR 31.08.11 because “the failure to comply with the requirements of this regulation may, in and of itself, support a finding of an absence of good faith by the insurer.” The department suggests you share this information, “at a minimum,” with all staff involved in handing claims.,  
 
Consumer Privacy
    New York Legal Opinion 09-06-09 reaffirms that an employee of an insurer that is adjusting a claimant’s first-party, no-fault claim is prohibited from sharing non-public personal health information about that claimant with an employee of an affiliate insurer that is adjusting the claimant’s third-party bodily injury claim.
 
 
Health Insurance
    Delaware Senate Substitute 1 to Senate Bill 35 will permit the state to regulate health insurance rates. “The top five companies hold approximately 88 percent of the health insurance market,” said Commissioner Stewart.  “The bill ... assures a level playing field and a competitive market,” said insurance commissioner Karen Weldin Stewart. “With so few companies holding such a large percentage of the market, it is critical for the Insurance Department to monitor rates.”
 
    Massachusetts Bulletin 2009-09 highlights recent changes to Massachusetts law that mandate coverage for early intervention services for dependent children.
 
    New York Legal Opinion 09-06-12 discusses Regulation 164 and the types of entities to which it applies. 
 
    Washington WAC 284-53-003 and -010 has new chemical dependency benefit requirements.
 
    Wisconsin has filed a statement of the scope of proposed rule Ins. 3.36, which addresses treatment for autism spectrum disorder.  
 
 
Insurance Fraud
    Nebraska LB 208 adds premium scams to the definition of insurance fraud. The measure takes effect August 30.
 
    New York Legal Opinion 09-06-10 states that insurers can request that a corporate assignee submit to an examination under oath about no-fault personal injury protection benefits. But the insurer cannot require that a specific person be examined.
 
     The Rhode Island legislature will take up several insurance fraud bills when it returns from recess at the end of July. SB 722 would expand the definition of insurance fraud to include cons by insurers. HB 5773A/SB 667A also would require anti-fraud warnings on claims and application forms. A legislative report targeting illicit employee misclassification and exploring tightening definitions and rules for workers comp also is in limbo, reports the Coalition Against Insurance Fraud.
 
 
Life Insurance & Annuities
    The Maryland Insurance Administration is seeking comments about proposed regulation 31-16-09. The regulation is in response to SB 751 and requires insurers to provide certain information and data about slavery era insurance. Submit your comments by email to Alexis Gibson by Aug. 7.
 
    A New York notice tells of the state’s plans to hold a series of hearings in August and September to gather information about the issue of suitability in the sale of life insurance policies and annuity contracts. The Insurance Department wants to determine whether additional oversight and regulation are needed to protect consumers when they are considering the purchase of life insurance or annuities, and to determine the scope of any new oversight and regulation.
 
    New York Legal Opinion 09-06-11 examines a specific example of a contingent annuity contract and determines that it isn’t permitted under the New York insurance law because it constitutes an impermissible form of financial guaranty insurance.  
 
    West Virginia has filed two life insurance rules:
    • Emergency rule 114 CSR 80 deals with viatical settlements. It is based on the NAIC’s Viatical Settlement Model Regulation.
    • Proposed rule 114 CSR 36 has West Virginia Life & Health Insurance Guaranty Association Act notice requirements. The comment period ends July 27.
 
 
Medicare Supplement Insurance
    Delaware had adopted amendments to Regulation 1501, relating to minimum standards for Medicare supplement insurance. It goes into effect Aug. 11.  
 
    Oregon has adopted three new rules and amended others that govern Medicare supplement insurance so the state’s rules conform to changes in federal law and an NAIC model regulation. The changes also provide dually eligible Medicaid/Medicare recipients a guarantee issue time period of 63 days to purchase a Medicare supplement plan, when they have received notice that their Medicaid coverage is terminating.
 
 
Producers
    Hawai’i has modified a number of forms for producers and insurance agencies. These forms were modified July 9:
    • Form NTA, Notice of Name Change, Adding/Removing Trade Name and  Adding Assumed Name(s);
    • Form APPTMGA, Notice of Appointment (Insurer to MGA Only);
    • Form ARDR, Adding/Removing a Designated Representative from the Business Entity's License;
    • Form ARC, Adding/Removing Class(es) of Insurance from a Hawaii Insurance License; and
    • Form T, Notice of Termination of Appointment.
 
    New York has issued a revised draft of a proposed regulation dealing with producer compensation transparency. The change adds a new part to the proposed rule that would set minimum disclosure requirements about the role of the producer and any potential conflicts of interest.
 
 
Property/Casualty Insurance
    Florida has repealed rule FAC 69J-2.002, which provided alternative procedures resolving disputed insurance claims arising from hurricane and tropical storm damage.
 
    New York Insurance Law 3420 requires insurers to provide timely notice that will deny coverage in a claim. New York Legal Opinion 09-06-08 says that the law’s term of “issued or delivered in this state” includes policies issued in New York but delivered outside of the state. And, while the law sets minimum requirements for liability policies, insurers may provide more liberal provisions in their policies to benefit their insureds, and thus may include a prejudice rule in other kinds of policies, too.
 
    New York AB 9036/SB 6026 would extend the freeze on medical malpractice premium rates for physicians and surgeons and prevent a surcharge on premiums until June 30, 2010. It has passed both houses and is on its way to the governor for consideration. “We are not only concerned about the impact this rate freeze will have on the medical malpractice insurance market, but we are deeply troubled by the terrible precedent this type of legislation sets with regard to rate setting,” said Gary Henning, Northeast Region assistant vice president for the American Insurance Association.
 
    An Ohio notice is reminding property/casualty insurers about changes in Medicare Secondary Payer Reporting Requirements. Particularly, there are changes in the testing period for the claim input file, the live productions start date. “These requirements present new challenges for property and casualty insurers. Insurers will be subject to significant federal fines – $1,000 per day per reportable Medicare claim – if such claims are not reported correctly or in a timely manner,” the Insurance Department reminds carriers. “The new reporting rules do not eliminate any existing statutory provisions or regulations.” Details are on the Centers for Medicare and Medicaid Services Web site.
 
 
Rates, Forms & Filings
    Georgia Directive 09-L&H-1 says the state will soon require that life and health insurers use SERFF for all product and rate filings. The new requirement is effective for any life or health product (including property/casualty filing health products) submitted on or after Oct. 1. Earlier this year, the state mandated the use of electronic fund transfer payments.
 
 
State Regulation of Insurance
    Oregon is proposing changes to a number of regulations:
    • Regulation 4-1-4, dealing with the replacement of life insurance policies and annuities;
    • Regulation 4-7-2, Health Maintenance Organization Benefit Contracts and Services;
    • Regulation 4-6-8, Small Employer Health Plans;
    • Regulation 4-2-28, Payment Of Early Intervention Services For Children Eligible For Benefits;
    • Regulation 4-2-13, Minimum Mammography Benefits;
    A rule-making hearing is scheduled for Aug. 6.
 
    Virginia Administrative Letters 2009-05 and 2009-06 review recent legislation of interest to insurers.
 
 
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)
 
Copyright 2009 ProBusiness Publishing LLC
July 13, 2009

Publish date Jul 13 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.