Annual Statements & Financial Reporting
    Mississippi Regulation 2009-2 sets standards the Insurance Department will use to determine when an insurance company has a hazardous financial condition. 
 
    New York has adopted Regulation 192, Minimum Standards For Determining Reserve Liabilities And Nonforfeiture Values For Preneed Life Insurance.
 
    Washington is amending WAC 284-07-100, governing the surveillance of the financial condition of insurance companies. The new rule goes into effect Nov. 5.
 
   
Automobile Insurance
    California has issued final pay-as-you-drive regulations, which will enable insurers to base rates on verified, actual miles driven as opposed to estimated miles driven, and the rules are now in effect. The rules allow insurers to offer discounts to drivers who opt to purchase such a policy. Any auto insurance program, including a pay-as-you-drive program, must be approved before being placed on the market for consumers to purchase.
 
    Gov. Arnold Schwarzenegger vetoed AB 725, which would have extended California’s low-cost auto insurance program for low-income families. The governor said extending the program, now set to expire in 2011, was premature at this point. “The effectiveness of this program is questionable given the number of policies in effect and low participation rate amongst the uninsured," he said in a statement.
 
    Delaware is proposing changes to Regulation 901 that would establish procedures for arbitrating certain automobile or homeowner policy claims and pay for legal services to prevailing consumers in arbitration cases. No hearing is scheduled, but comments are due by Dec. 7.
 
    Oregon is proposing to amend a current rule, Rule 836-080-0240, that establishes standards for adjusting and settling automobile total loss claims. The proposed rule specifies a written statement that insurers must provide to consumers whose vehicles are totaled and also incorporates other provisions of HB 2190. The public comment period ends Dec. 11.
 
    South Carolina Bulletin 2009-20 issues a data call to insurers that had more than $1 million in direct written premiums during 2008. Insurers must return a completed Excel spreadsheet by Nov. 30.
 
   
Health Insurance
    Schwarzenegger also vetoed a bill that would have required proof that a policyholder intended to deceive before an insurer could retroactively cancel a policy. The bill would have required insurers to complete medical underwriting and demonstrate that a person “intentionally misrepresented” a known health condition when applying for coverage.
 
    Delaware is proposing amendment to Regulation 1305 that would create procedures and time lines for rate filings by health insurers, managed care organizations and others. No public hearing is planned, but comments must be submitted by Dec. 7.
 
   
Health Insurance
    Colorado is conducting a data call to obtain state-specific health insurance information. Use the online survey complete to capture the information. It is expected that the information in Sections 1 and 2 will be gathered annually until financial statement data is uniform and complete. The state anticipates making the information publicly available. Submissions are due Oct. 30.
 
    Connecticut Bulletin HC-75 reiterates the requirements for group trust and association health insurance coverage sold to individuals where the group policy is issued or delivered in another state.
 
    Oregon is proposing to update Rule 836-052-1000, which details which  prosthetic and orthotic devices and supplies must be covered by group and individual health insurance policies. The public comment period ends Dec. 15.
 
    Utah is proposing to adopt a new regulation, R590-76-1, to provide reasonable standards for terms and provisions contained in HMO group and individual contracts and evidences of coverage. The comment period ends Nov. 16.
 
   
Insurance Fraud
    The Coalition Against Insurance Fraud is updating its model bill that gives insurers and others immunity from lawsuits when they report fraud and share anti-fraud intelligence. Anyone interested in providing comments or assisting in the process should contact Howard Goldblatt at 202-393-7332 or howard@insurancefraud.org.
 
    The New York State Insurance Department is forming a special unit to fight title insurance crimes. "Title insurance agents, in addition to providing title insurance, hold large sums of money including mortgage recording fees, real estate taxes and other fees related to commercial and residential real estate transactions. The lure of these funds, combined with the downturn in the economy, appears to be fueling an increase in title insurance-related crimes," said insurance superintendent James Wrynn.
 
   
Life Insurance & Annuities
    California SB 98 is now law. It regulates regulating life settlements and bans stranger-originated life insurance policies. The law prohibits a policyholder from entering into a life settlement during the first two years a policy is in force. But it also forbids insurers from restricting the lawful transfer of a policy and from keeping producers from telling their clients about the benefits of life settlements. Agents that handle such transactions must reveal every offer that has been made for a policy and divulge any business relationship or compensation agreement they have with any person making an offer on a policy.
 
    Texas Bulletin B-0045-09 starts the process for a data call for information about credit life and credit accident & health policies in force during 2006, 2007 and 2008. Carriers must acknowledge receipt of the data call by Oct. 26 and provide the requested data using an online form by Dec. 1.  
   
    Utah is proposing two new rules: R590-79, dealing with disclosures, and R590-177, dealing with illustrations. Comments are due Nov. 16 for both proposed rules.
 
   
Producers
    Washington producers who sell title insurance are required to report the name and address of anyone with a financial interest in the title insurance agent. The annual report must also include the percentage of title orders originating from each of those persons who own a financial interest in the title insurance agent. A new section in WAC 284-29 establishes the information that must be included in the report, the procedures for filing the report, how to report the sources of title orders received and other associated recordkeeping requirements. The changes go into effect Nov. 5.
 
   
Property/Casualty Insurance
    A bill pending in the Massachusetts legislature, HB 960, would exclude terrorism coverage from the commonwealth’s standard commercial fire policy. Federal law requires insurance companies to make terrorism coverage available, but leaves it to policyholder to accept it or not. John Murphy, a regional vice president for the American Insurance Association said the idea is a good one because it would give commercial policyholders in Massachusetts the option of purchasing commercial property insurance with or without terrorism coverage. “Current law is inconsistent with federal law and impairs the ability of policyholders to manage their terrorism exposures or pursue innovative risk management solutions,” said. “Sophisticated insurance buyers prefer products tailored to their business needs rather than standardized products.”
 
    Rhode Island is proposing changes to Regulation 38, Commercial Insurance Cancellation, Non-Renewal and Premium or Coverage Changes. A Nov. 10 hearing is planned.
 
    Texas Bulletin B-0046-09 provides notice to agents, carriers and all persons engaged in the write-your-own flood insurance program that the Insurance Department will exercise its full regulatory authority as it relates to the writing, marketing, soliciting and delivery of the standard flood insurance policy through the write-your-own program. 
 
   
State Regulation of Insurance
    Texas Bulletin B-0043-09 discusses how the state will implement requirements of HB 3221. The law requires notice to consumers before automatic premium payments can be increased. The bulletin suggests insurers review their procedures to make sure they comply with the law’s requirements.
 
  
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)

 
Copyright 2009 ProBusiness Publishing LLC

Publish date Oct 19 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.