Annual Statements & Financial Matters
    Indiana 760 IAC 1-78 makes changes to annual financial reporting requirements. It requires an annual audit by independent certified public accountants, communication of internal control related matters noted in an audit and a report by management that details internal controls over financial reporting.
 
    Maryland COMAR 31.05.12.01 to .04 makes the state’s rules for property/casualty actuarial opinions substantially similar to the NAIC’s Property and Casualty Actuarial Opinion Model Law. It has not yet been posted to the state’s regulations Web site.
 
 
Automobile Insurance
    In Massachusetts, lawmakers are considering HB 4303, which would allow cities and towns to install red light cameras at intersections to catch and fine violators. But the American Insurance Association would like to see that red light camera violation information be made available to insurers. “Running a red light is bad behavior whether it is witnessed by a police officer or a camera,” AIA said in a letter last month to the Massachusetts House Ways and Means Committee. “The penalties associated with that bad behavior should not be different merely because on driver was nabbed by the police while another was captured on film.”
 
    New York has issued a draft of revised rules intended to reduce fraud associated with no-fault auto insurance claims. “The cost of each no-fault claim has gone up by more than half in the past five years, and all New Yorkers with auto insurance are paying that tab,” insurance superintendent James Wrynn said last week. This will be the first significant revision to Regulation 68 since 2002. The proposal would:
    • modify prescribed forms to require more information, helping to ensure that claims paid are medically necessary;
    • simplify procedures required for insurers to suspend all payments for claims submitted by the owner or owners of medical clinics suspected of fraud while an investigation of the clinics’ licensing status is underway;
    • require insurers to schedule medical examinations they request so as not to overly burden the insured; and
    • raise the maximum attorney fee to reflect inflation and eliminate the minimum attorney fee to encourage the consolidation of claims in arbitration and litigation.
    Wrynn is also seeking changes to state law to address the requirement for an insurer to pay a claim within 30 days, even if the claim turns out to be fraudulent or abusive.
    Comments about the draft can be e-mailed to NoFaultDraftReg@ins.state.ny.us through Jan. 8, 2010.
 
    Oregonians who total their vehicles have additional consumer protections starting Jan. 1, 2010. HB 2190 requires insurers to:
    • provide vehicle owners any valuation or appraisal reports and a notice containing additional information about total loss;
    • reimburse their insured for reasonable appraisal costs when the final appraisal decision is greater than the insurer’s final offer; and
    • pay the undisputed amount of the value of the vehicle up front under certain circumstances while negotiations continue.
    The Insurance Division has drafted Proposed Rule 836-080-0240 to implement the legislation and will hold a hearing about it this week. Comments will be accepted through Dec. 11.
 
 
Health Insurance
    New York has adopted the 41st Amendment to Regulation 62, dealing with minimum standards for the form, content and sale of health insurance, including standards of full and fair disclosure.
 
 
Insurance Fraud
    A Maryland fraud fighter wants to limit a provision in state workers’ compensation law that could benefit those committing insurance fraud. Carolyn Henneman, fraud division chief for the Maryland Insurance Administration, told a recent gathering the state could not prosecute some fraud referrals because state law gives immunity to any witnesses testifying before the Workers’ Compensation Commission. “It’s terrible.... Until we get this immunity provision clarified and hopefully narrowed, our hands are tied,” Henneman said, as reported by Insurance & Financial Advisor. “It’s not because there isn’t fraud; it is because our hands are tied and we can’t prosecute it.” She said she wants to limit that immunity to only certain, limited, circumstances.
 
    The Coalition Against Insurance Fraud is supporting a new National Conference of State Insurance Legislators model law that would make it a crime to install an airbag obtained fraudulently. The model, recently adopted by NCOIL, would require repair shops to keep detailed records showing where they obtain replacement airbags, and would also call for manslaughter charges to be filed if anyone dies or is injured as a result of a fraudulent installation. State airbag fraud laws are inconsistent, but NCOIL’s well-developed model, with strong penalties, could encourage more states to take tougher stances against airbag schemes, says Howard Goldblatt, the coalition’s director of government affairs.
 
 
Life Insurance
    New York SB 9 amends rules for life settlements and life settlement brokers.
 
    New York has adopted the 1st Amendment to Regulation 151, dealing with the valuation of annuity, single premium life insurance, guaranteed interest contract and other deposit reserves. The change repeals two subsections of the rule and adds a new subsection 99.9(d) that states:
    (d) In the case of variable annuities and other contracts involving certain guaranteed benefits similar to those offered with variable annuities, standards for the valuation of reserves are governed by section 83.3 of this Title.
 
    The Oregon Insurance Division recently filed with the Secretary of State proposed rules 836-014-0200 implementing SB 973 relating to life settlement requirements. The legislation established statutory requirements related to the use and marketing of life settlement agreements and expanded regulation of their agreements beyond the use of life settlement agreements by terminally ill policyholders. These rules include clarification of the process for applying for a broker, provider and investment agent license and setting the fee for each application and for renewal of the licenses.
 
 
Producers
    Ohio OAC 3901-4-03 creates new rules relating to the retention of long term care insurance education records.
 
    Texas HB 963 allows a person to ask the insurance department for a criminal history evaluation letter if the person:
    • is enrolled or plans to enroll in a prelicensing program or is planning to take an examination for an initial license; and
    • has reason to believe that the person is ineligible for the license due to a conviction or deferred adjudication for a felony or misdemeanor offense.
 
 
Property/Casualty Insurance
    Louisiana insurance commissioner Jim Donelon said in a Nov. 23 press release that he won’t allow property/casualty insurers to cancel policies because of tainted drywall manufactured overseas if the policyholder has been with the company for more than three years. Policyholders are protected by a consumer protection law unique to Louisiana, Donelon said at a press conference. Policyholders who have been covered for more than three years have the right to continue their coverage while vacating and remediating their home of defective Chinese drywall, even if the defective drywall constitutes a “material change in the risk.” But the homeowner must report the issue to the insurer. “Notification to an insurance company cannot be used against you and your premiums cannot and will not be raised by your insurer for such a report,” Donelon added. “I am here to make sure that insurance companies do the right thing and abide by our state’s three year protection rule and all other consumer protection laws on our books,” the commissioner said.
 
    A South Dakota Nov. 23 memorandum extends, until Jan. 15, 2010, the deadline to comply with Bulletins 09-05 and 09-06.  Bulletin 09-05 deals with certificates of insurance and Bulletin 09-06 clarifies that guidance as well as Bulletin 06-02. There will be no further extensions for compliance with these bulletins, the guidance notes.
 
 
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)
 
 
Copyright 2009 ProBusiness Publishing LLC

Publish date Nov 30 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.