Automobile Insurance
    Delaware Proposed Amended Regulation 607 would update the existing rule with new content addressing defensive driving course content, requirements for courses and instructor certification, online course attendance verification, proof of course completion and notifications to the Division of Motor Vehicles.
 
    New York has adopted, on an emergency basis, Regulation 153. It implements a state law that replaces the prior approval system for personal auto rates with a flexible rating system that allows periodic overall average rate changes up to 5 percent on a file-and-use basis. The insurance superintendent must approve overall average rate increases above 5 percent in any 12-month period.
 
    Oregon HB 2190 changes the way insurers will deal with motor vehicle total loss claims. The bill will require insurers to:
    • provide the claimant written a written notice telling how it determines the value of the vehicle; and
    • pay any undisputed amount of the loss before negotiating any undisputed amounts.
    The bill has a Jan. 1, 2010 effective date. In the interim, the Insurance Division is working on a disclosure form insurers would use to provide information about the total loss and vehicle valuation.
 
    Washington state has repealed and amended a number of rules in WAC 284-30 dealing with unfair business practices in the handling of automobile claims. The state notes that the amendments refine or clarify current rules, but don’t change them significantly. Included in the changes that went into effect Aug. 21:
    • a need to adjust and settle vehicle total losses using the methods set forth in WAC 284-30-391, unless the insurer and the claimant can agree on the vehicle’s value;
    • the necessity to include an insured’s deductible in subrogation demands;
    • new steps to take before denying towing and storage fees; and
    • a new requirement for an insurer’s total loss vehicle valuation report to include:
        ◊ all information collected during the initial inspection about the condition, equipment and mileage of the vehicle;
        ◊ the information the insurer used to determine the actual cash value of the loss vehicle; and
        ◊ the comparable motor vehicles the insurer considered to help it determine the vehicle’s actual cash value.
 
    Wisconsin is proposing to amend sections of Rule Ins. 6-77 to exempt commercial umbrella and commercial liability policies covering only hired and non-owned autos from having to offer or include coverage for uninsured or underinsured motorists.
 
 
Insurance Fraud
    There is general consensus in Maine that that insurers may be required to report all suspected frauds to a proposed state insurance fraud bureau, according to a report from the Coalition Against Insurance Fraud. Insurers and trial lawyers appeared to agree that the definition of insurance fraud is broad enough that any suspected scam would be reported. But immunity for insurers reporting fraud was a contentious issue. Insurers want the broadest immunity, including insurer-to-insurer protection, but the coalition says the Insurance Department may opt for a lower immunity that tracks what the state gives for reporting arson. Next steps: Drafting of a report to become the basis for legislative discussion in 2010.
 
    A federal judge will hear arguments in early October on the validity of Texas HB 148, which keeps medical providers from contacting accident victims within 30 days of the crash. The Texas attorney general is seeking crash victims who were solicited by telemarketers as proof the law is needed.
 
 
Producers
    New Jersey is seeking comments through Oct. 16 about two proposed rules that would make producers disclose to the source of their compensation to consumers. The Insurance Department has already issued Proposed Rule NJAC 1:17B-4 to provide standards for providing those notices when selling health plans. Now, in a Notice of Pre-Proposal, the Insurance Department is seeking comments about notices to purchasers of policies other than health plans, such as long-term care, disability and accident-only policies. The department particularly wants to know:
    • how the required disclosure should be made to purchasers where commissions may be paid in a lump sum in one year with little or no commissions paid in subsequent years; and
    • how to address situations where residents leave or enter the state after an existing contract has been effectuated.
 
    New York has drafted a new Proposed Regulation 194 dealing with producer compensation transparency and has sent it to the Governor’s Office of Regulatory Reform for review, an early step in the rulemaking process. The regulation would require insurance producers to tell consumers they have a right to ask about insurer-provided compensation for the sale or service of insurance.
 
    South Carolina Bulletins 2009-16 and 2009-17 outline changes to licensing of insurance producers and brokers, respectively.
 
    A Sept. 1 Informational Letter tells Virginia insurance agents and agencies how to comply with a state requirement to have a comprehensive written information security program. The letter addresses the physical and computer security of policyholder information. “Each agent/agency must carefully evaluate their individual operation and circumstances to develop a comprehensive written information security program tailored to protect policyholder information” that is appropriate to its size and complexity, the letter states.
 
    Wisconsin producers can now print their own license at the insurance department Web site. Those persons without access to a computer will still be able to request a copy from our office.
 
 
Property/Casualty Insurance
    Michigan Bulletin 2009-13-INS tells of a new maximum work loss payment payable under personal protection insurance policies. Starting Oct. 1, the new limit is $4,878.00 per month, down from the current limit of $4,948 per month. The maximum payment also applies to survivor’s loss benefits.
 
    New Jersey Amended Rule NJAC 11: 1-7.3 deals with reporting medial malpractice claims and arbitration judgments to state medical licensing boards. It clarifies that the notification requirement doesn’t apply to payments made under agreements for minimum and maximum payments, irrespective of the verdict (commonly referred to as high/low agreements), when the arbitrator or civil action verdict finds no liability on the part of the practitioner. A notice of the rule adoption says the change went into effect Sept. 8.
 
 
Rates, Forms & Filings
    Ohio Bulletin 2009-11 tells of the state’s intent to require insurers to use SERFF for rate, rule and form filings for all lines of insurance starting Dec. 31. There shouldn’t be much of an impact on insurers – the department notes that more than 97 percent of all filing submissions are already using SERFF.
                                        
    Rhode Island Revised Bulletin 2002-13 provides new rate and form filing fees.
 
 
State Regulation of Insurance
    Louisiana is correcting guidance it issued in August about SB 318/Act 258 that told insurers they have to tell new and existing policyholders about additional coverage limitations and benefit limitations of the Louisiana Life and Health Insurance Guaranty Association. Now, regulators said, “...Insurers are only required to advise all new policyholders of this change and all existing policyholders only at the time of renewal.”
 
 Maryland Bulletin 09-23 provides a summary of 2009 insurance legislation that has been signed into law.
 
    Texas Proposed Rule 26 TAC 21.480-.4807 concerns noninsurance benefits that are provided or disclosed as part of certain insurance policies, contracts or certificates9i of insurance and that are reasonably related to the type of policy, contract or certificate being issued. The proposed new sections are necessary to implement HB 1847 which, in part, requires full description and disclosure of the benefit and an explanation of events or conditions that will trigger the termination of the benefit.
 
 
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)
 
Copyright 2009 ProBusiness Publishing LLC

Publish date Sep 14 2009
Prior Issues

Reprinted with permission from Insurance Compliance Insight.
Copyright © 2009 ProBusiness Publishing LLC
Licensed from ProBusiness Publishing LLC. All rights reserved.