Annual Statements & Financial Matters
    Minnesota has provided annual statement filing instructions for property/casualty insurers and reinsurers; alien surplus lines; fraternal societies; health insurers; life, accident & health insurance; risk retention groups; and title insurers.
 
    Missouri has adopted an amendment to 20 CSR 200-1.105, Property and Casualty Actuarial Opinions.
 
    Washington amended rules in WAC 284-16-300, -310 and -320 change the existing regulatory standards for companies deemed to be in hazardous financial condition and bring those standards in line with a recently amended NAIC model.
 
    Washington WAC 284-16-600 establishes the process for the administrative supervision of an insurer or carrier, the requirements for the plan of correction an insurer or carrier must prepare and follow, and the procedures for the administrative supervisor.
 
   
Anti-Money Laundering
    The Financial Crimes Enforcement Network will soon launch the second phase of its BSA e-filing SAR acknowledgements and validation process. Phase I was implemented in September 2009 and acknowledges the receipt of a submitted suspicious activity report. Starting Dec. 12, Phase II will give filers with information about the quality of their submissions for electronically filed SARs of all types, including the Suspicious Activity Report by the Securities and Futures Industries (SAR-SF) used by insurance companies. Filers have to enroll to receive the feedback. More information is at the BSA e-filing home page.
 
   
Automobile Insurance
    Insurers are supporting Wisconsin legislation to overturn automobile insurance changes tucked into a budget bill that passed earlier this year. The budget legislation doubled per-person bodily injury limits, increased the minimum limit on medical payments and raised the coverage requirement for uninsured motorist and underinsured motorist coverage. It also made automobile insurance mandatory for the first time, beginning June 1, 2010. AB 525 would return coverage terms to former levels but still require vehicles to have insurance. Robert Passmore, a senior director with the Property Casualty Insurers Association of America, said legislative changes “have driven Wisconsin out of the mainstream in terms of mandatory minimum coverage limits and will have serious repercussions on consumer costs and the stability of the state's insurance marketplace.”
 
    New Jersey Bulletin 09-37 advises the state has revised the New Jersey Automobile Insurance Consumer Bill of Rights to reflect a new address where appeals of cancellation of coverage are to be filed. Appeals should now be filed electronically at http://www.state.nj.us/dobi/consumer.htm or sent to:
    Consumer Inquiry and Case Preparation Unit
    P.O. Box 471
    Trenton, NJ 08625-0471
 
   
Health Insurance
    Colorado has issued Proposed Amended Regulation 4-2-6 to standardize the definition of the term “complications of pregnancy” in insurance policies. A rulemaking hearing has been scheduled for Jan. 5, 2010. If approved, the changes would go into effect March 1, 2010.
 
    Connecticut Bulletin HC-70-09-2 discusses a new law that increases the limits for medically necessary early intervention services for both group and individual health insurance. The annual limit increases, which are already in effect, go from $3,200 to $6,400, and the aggregate limit for the three year period increases from $9,600 to $19,200. The bulletin covers procedures for filing and approving amended policy forms.
 
    Georgia is reminding, in a press release, that insurers must continue to pay for mammograms as prescribed by state law. Federal breast exam guidelines were recently revised to suggest that women should only get mammograms once every two years starting at age 50, rather than annually at age 40. Georgia law, however, states that women age 35 to 39 are entitled to a baseline mammogram, women in their 40s can get a mammogram once every two years or when ordered by their physician, and women 50 and older are to be provided a mammogram every year. That’s the coverage the Insurance Department says it expects health insurers to provide.
 
    A New Hampshire Dec. 1 Bulletin tells how the number of employees should be counted for determining whether a group should be considered a small or large employer for health insurance purposes.
 
    The Ohio Insurance Department has created a toolkit to provide information about a federal mental health parity law that went into effect in October. A new state law, SB 116, requires parity between benefits for mental health and substance use disorders and benefits for medical and surgical treatments under certain health plans. The main provisions of the Ohio Mental Health Parity law can be also found in sections 1751.01, 3923.28, 3923.281 and 3923.282 of the Ohio Revised Code.
 
    Proposed new rules in Washington WAC 284-155 establish the application process to obtain a discount health plan organization license and set reporting and recordkeeping requirements.
 
 
Insurance Fraud
The New York Insurance Department wants to tighten Regulation 68, the state’s no-fault auto regulation, to reduce fraud. One change requires more information on claims forms to help make sure treatments are medically necessary. Insurers also could more easily suspend paying suspicious claims by medical clinics while regulators investigate a clinic’s licensing. Send comments to the department using an online form or by email message before Jan. 8, 2010.
 
   
Life Insurance
    Colorado is proposing changes to several life insurance regulations to deal primarily with issues related to mortality tables. Included are:
    • Rule 4-1-5, Permitting Same Minimum Nonforfeiture Standard for Men and Women Insured Under 1980 CSO and 1980 CET Mortality Tables;
    • Rule 4-1-6, Permitting Smoker/Nonsmoker Mortality Tables for use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits;
    • Rule 4-1-7, Recognizing a New Annuity Mortality Table for use in Determining Liabilities for Annuities;
    • Rule 4-1-9, Valuation of Life Insurance Policies (Including the Introduction and Use of New Select Mortality Factors);
    • Rule 4-1-10, Recognition of the 2001 CSO Mortality Table for Use in Determining Minimum Reserve Liabilities and Nonforfeiture Benefits; and
    • Rule 4-1-13, Permitting the Recognition of Preferred Mortality Tables for use in Determining Minimum Reserve Liabilities.
    A rulemaking hearing has been scheduled for Jan. 5, 2010.
 
    An updated Florida notice discusses the suitability determination that must be made when selling an annuity to an individual 65 or older. The Office of Insurance Regulation has approved an alternative version of the disclosure and comparison form that has been officially adopted. It differs from the adopted form only in that the footnote “(List limitations, requirements, exclusions of the benefit)” has been placed in the line item box “Waiver of Surrender Charge Benefit or Similar Benefit?” to clarify that it is intended to apply only to that item. Use either version of the form, the state says.
 
    Louisiana Regulation 58 sets requirements for viatical settlements, including the licensing of life and annuity producers and the filing of the annual reports.
 
    Mississippi Proposed Amended Regulation 99-2, Life Insurance and Annuities Replacement Regulation, seeks to exempt transactions in which corporate affiliates exercise term conversion privileges.
 
    Oregon is proposing new rules for life settlements that clarify the process for applying for a broker, provider and investment agent license, and that set the fee for each application and for the renewal of the licenses.
 
   
Medicare Supplement Insurance
    Connecticut has issued a 97-page update to its Medicare supplement regulations that tells of new or modified benefits that must be provided.
 
    A Washington proposed rule change would repeal two section of WAC 284-66 and amend other sections to conform state rules with the NAIC Model Law for Medicare supplement policies.
 
   
Producers
    Louisiana has issued four bulletins of interest to insurance producers:
    • Bulletin 09-09, Submittal of Consent-To-Rate Filings, A-Rated Filings and Individual Risk Rated Filings;
    • Bulletin 09-10, Appointments and Terminations of Insurance Producers Electronic Submission Required;
    • Bulletin 09-11, Change of Address Electronic Submission Required; and
    • Bulletin 09-12, Non-Resident Licensing and Renewal Requests Electronic Submission Required.
 
    A notice on the New Hampshire Insurance Department Web site advises that the electronic system it uses for producer licensing is experiencing a temporary problem. Only a certain group of resident producers and adjusters – those with a zero as the first digit of their license number – can go online to reinstate expired or cancelled licenses or to amend active licenses. All others must wait until Dec. 18 when repairs are scheduled to repair that function.
 
    A New York proposed rule would require insurance producers to make certain consumer disclosures about their role in a insurance transaction, but an agent’s group is threatening legal action to keep it from taking effect. The Independent Insurance Agents & Brokers of New York says the insurance superintendent “doesn’t have legal authority to compel compensation disclosure” and that, “In its current form, the regulation is unacceptable.”
    The proposed regulation would require an insurance producer to disclose whom the producer represents in the transaction, that the producer will receive compensation from the insurer based upon the sale of the policy, that the compensation paid by insurers may vary, and that the purchaser may obtain from the producer, upon request, information about the compensation the producer expects to receive from the sale of the policy. The regulation also requires that upon the customer’s request, the producer disclose the amount of compensation for the policy selected and any alternative quotes presented. The required disclosures would minimize the potential conflicts that arise from producer compensation because it allows insurance customers to request information about the compensation for the insurance policy and alternative policies quoted.
    But an IIABNY letter to the Insurance Department denounced a mandate that a producer disclose to the insurance buyer whether he is acting as a legal representative of the buyer or of the insurance company. That requires “producers to evaluate complex legal concepts and then make legal conclusions that even the judiciary has struggled with,” the group said. It also faulted the rule for assuming that all agents and brokers have incentives to place clients with unsuitable companies,
 
   
Property/Casualty Insurance
    Maryland Bulletin 09-28 tells insurers how the Insurance Administration will proceed if, during a state of emergency, the commissioner suspends their authority to cancel or nonrenew property/casualty policies. The guidance says the commissioner will determine, for each situation, whether consumers should be given additional time to meet their financial obligations, including paying for insurance then in force. The bulletin also includes a Q&A discussion covering specific situations and topics.
 
   
Sales & Marketing
    Rhode Island Bulletin 2009-9 addresses the use of gifts in insurance marketing. Generally, gifts may be offered in exchange for quotes only if:
    • the gift is not contingent on the purchase or renewal of a policy;
    • the value of the gift is minimal enough that it would not serve as an inducement to choose one policy over another similar policy; and
    • the gift is offered to the general public.
 
   
State Regulation of Insurance
    The Missouri Insurance Department has announced three changes to its division and section managers:
    • Fred Heese is now director of the Division of Insurance Company Regulation. Heese has served as acting director since May 2007 and has been with the department since 1984. He also assumes leadership responsibility for the department’s Kansas City regional office.
    • Jim Mealer is the chief examiner of the Market Conduct Section. A 19-year veteran of the department, Mealer has served as audit manager, overseeing all market conduct examinations for life and health insurance companies. He also assumes leadership responsibility for the department’s St. Louis regional office.
    • Brenda Otto is a manager in the licensing section. She has served in licensing since 1984.
 
    A New York press release advises that certain individuals seeking licenses must submit electronic fingerprints with their license applications beginning Dec. 15. The new requirement affects residents who are seeking new licenses as:
    • insurance company officers and directors;
    • public and independent insurance adjusters;
    • professional bail bondsmen; and
    • viatical settlement brokers.
    Applicants from outside the state can continue to use paper fingerprint cards.
 
    Among the latest New York legal opinions:
    • Legal Opinion 09-11-02 says there is nothing in state insurance law or in regulations that would prohibit an insurer from cancelling a marine insurance policy for nonpayment when the insured has filed for Chapter 11 bankruptcy protection.
    • Legal Opinion 09-11-05 spells out some limits on no-fault attorney fees.
 
    Rhode Island Bulletin 2009-8 brings insurers up to date on recent legislation impacting the business of insurance.
 
   
(RR&B is produced with the assistance of The CLEAR Report and the Coalition Against Insurance Fraud.)

Publish date Dec 07 2009
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Reprinted with permission from Insurance Compliance Insight.
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