Life and Health News April 2011

First Consulting is pleased to provide this brief review of selected items that may be of current interest to clients and friends.  Please feel free to copy it for distribution to your staff.  Contact us for more details about any item.  We welcome your comments and suggestions on this letter.  To contact us call 800-927-2730 or email us at 

New Hampshire adopted new provisions to its actuarial opinion and memorandum rule concerning assets supporting the interest maintenance reserve and the asset valuation reserve.     Rule 2401.01+

Oregon amended requirements for statements of actuarial opinion and memorandum, including those on statements of actuarial opinion based on an asset adequacy analysis.     Rule 836-031-0600+

Hawaii enacted legislation recognizing  civil unions in the state of Hawaii. It extends the same rights, benefits, protections and responsibilities of spouses in a marriage to partners in a civil union.     Senate Bill 232

New York issued a circular letter that requires all accident and health insurers to submit a disaster response plan,   disaster response plan questionnaire and  business continuity plan questionnaire by June 1, 2011. The Letter provides guidelines, procedures and requirements for insurers before, during and after disasters occur.  It replaces and repeals Circular Letter No. 2 (2010).     Circular Letter 2011-2

New York issued a circular letter to life insurers and fraternal benefit societies regarding disaster planning, preparedness and response.  The Letter provides guidelines, procedures and requirements for insurers before, during and after disasters occur. This circular letter replaces and repeals Circular Letter No. 3 (2010).     Circular Letter 2011-3

Illinois adopted regulations that establish criteria and provide guidance to health carriers for the use of the standard health applications. They also establish criteria for use of the standard health applications electronically, as well as for their translation into other languages.     Adm. Code 2030.10,  Adm. Code 2030.30, Adm. Code 2030.40,  Adm. Code 2030 App. A,  2030 App. C

Kansas amended its regulations by adopting by reference the Department's "policy and procedure requiring annual audited financial reports" dated November 22, 2010.     Regulation K.A.R. 40-1-37

New York adopted a regulation  amending the valuation of life insurance reserves regulation requirements.     Regulation 147 (11 NYCRR 98)

New York adopted a regulation which repeals and repromulgates requirements for preparing and submitting annual audited financial reports.     Regulation 118 (11 NYCRR 89)

New York adopted the 2009 NAIC Accounting Practices and Procedures Manual in its entirety, with certain exceptions.     Regulation 172 (11 NYCRR 83)

Oregon amended the “Accredited Investor” rule definition to conform to recent changes in federal law.     Rule 441-035-0010(5)

Puerto Rico issued a ruling letter to International Insurers regarding Protected Cell Company requirements.  It also requires every Protected Cell Company to submit Form CIS-003-001, for every cell established or operated and for every amendment to said cell thereinafter.     Ruling CIS-123-2011

The District of Columbia amended, on an emergency basis, the Annual Audited Financial Reports Act to require annual financial reporting requirements and enhance the surveillance of the financial condition of insurance companies.     Bill 19-126

Virginia enacted legislation relating to derivative transactions and qualified financial contracts made by insurance companies.     House Bill 1504

Maryland amended its antifraud plan filing requirements.     Regulation, COMAR

New Jersey issued a bulletin to remind all insurers who write health insurance that all such insurers are to prepare and file with the Department of Banking and Insurance an annual report of the prior calendar year's results from their plan for the prevention and detection of fraudulent insurance applications and claims.     Bulletin 2011-2

Maryland amended small employer group health insurance disclosure statement requirements.     COMAR, COMAR

Massachusetts issued a bulletin informing commercial health insurers, and health maintenance organizations that for any insured health products offered, issued or renewed in the small group market on and after July 1, 2011, any and all rates, including proposed rates or proposed changes to rating factors must be submitted for review.     Bulletin No. B-2011-5

Montana enacted legislation making numerous changes to the Life and Health Guaranty Association Act.     Senate Bill 78

Virginia enacted legislation providing that  life, accident and sickness guaranty association's disclosure documents be posted on the association's website.     Senate Bill 916

Tennessee established a sunrise provision for the Interstate Insurance Product Regulation Compact.     Senate Bill 179

North Carolina adopted a regulation regarding Long-Term Care Partnership standards. North Carolina also issued memorandums explaining Long-Term Care Partnership (LTCP) Program requirements and producer training requirements.     Regulation 11 NCAC 12.1030, Memorandum 2-24-2011 (#1), Memorandum 2-24-2011 (#2)

Oregon amended its  rules to limit premium increases for Medicare Supplement insurance policies to once in 12-month period and to correct errors in exhibits to the Medicare Supplement rules.     OAR 836-052-0114, 836-052-0145, 836-052-0151 and 836-052-0160

Maryland adopted a new regulation that defines misleading use of a senior retiree credential or designation by advisors and insurance producers in connection with life and health insurance or annuities.     Regulation 31.03.15

Montana amended the Insurers Supervision, Rehabilitation, and Liquidation Act to clarify that all proceedings and judicial reviews under certain sections will remain confidential.     Senate Bill 31

Nebraska issued a notice that provides guidance on the collection of insurance consultant's fees by insurers.     Notice 03-11-11

New York established minimum standards for internal appeal benefits found in long term care insurance, nursing home and home care insurance, nursing home insurance only, and home care insurance only policies and certificates.     Regulation 62 (11 NYCRR 52)

North Dakota enacted legislation providing that an actuarial report, workpapers, or actuarial opinion summary provided in support of the actuarial certification commonly known as the statement of actuarial opinion, and any other material provided by the insurance company to the commissioner in connection with the actuarial report, workpapers, or actuarial opinion summary, are confidential and privileged.     House Bill 1121

South Dakota enacted legislation regarding changes to  insurance coverage in the event of a divorce or separate maintenance action.  Changes  to insurance coverage are prohibited without the written consent of the other party or an order of the court unless the change under the applicable insurance coverage increases the benefits, adds additional property, persons, or perils to be covered, or is required by the insurer.     Senate Bill 114

South Dakota revised certain provisions regarding representations and warranties in insurance and annuity applications.     Senate Bill 44

Tennessee amended its provisions on the disposition of unclaimed property, including insurance policy proceeds.     Rule 1700-02-01-.01+

Arkansas enacted legislation regulating child-only health insurance policies and providing requirements.     House Bill 1428

Arkansas enacted legislation requiring coverage for autism spectrum disorders.  Also provides definitions and requirements for autism spectrum disorders.     House Bill 1315

Colorado issued a bulletin regarding requirements for coverage of maternity expenses for issued and renewing individual sickness and accident insurance policies and health care coverage contracts.  It replaces B-4.36 effective March 15, 2011.     Bulletin B-4.37

Florida issued a memorandum reminding Health insurers and health maintenance organizations (HMOs) of requirements regarding guaranteed availability of individual health insurance coverage for eligible individuals.     Memorandum 2011-001

Idaho amended the Health Carrier External Review Act, by revising among other things,  definitions,  provisions for the notice of the right to an external review and the exhaustion of internal grievance process, and provides additional disclosure requirements.     House Bill 131

Nebraska issued a notice notifying insurers that, as a result of recent legislation, accident and sickness policies must include a "Conformity with State and Federal Law" provision.  Language for this provision is specified.     Notice 3-18-11

New Jersey issued a bulletin reminding health carriers of their obligations with respect to authorizations and providing further guidance as to some actions the Department considers to be prohibited by current law and regulation.     BULLETIN NO. 11-03

New Mexico issued a bulletin listing information health care insurers need to provide each subscriber, as well as requesting specific language to be included on health care insurance cards.  This Bulletin repeals and replaces Insurance Division Bulletin No. 2009-006.     Bulletin 2011-004

Oregon amended its Standard Health Statement requirements.     OAR 836-053-0510

Oregon now requires all policies that provide coverage for hospital, medical or surgical expenses to include coverage for prosthetic and orthotic devices.     OAR 836-052-1000

Texas amended its regulation effective date regarding mental health parity requirements.     Regulation 21.2401+

Wyoming enacted legislation prohibiting fee schedules in health and dental insurance policies for noncovered services.     House Bill 73

New Jersey established limitations on the use of certain certifications, professional designations, or forms of advertising by insurance producers, representatives of fraternal benefit societies and insurers expressing that the person or entity has special education, training or experience in advising or servicing senior citizens in connection with the solicitation and negotiation of the sale of life insurance.     Rule 11:4-60.1+

Oregon established disclosure and free look period requirements for small face amount life insurance policies.     Rule 836-051-0030+

Virginia amended legislation providing that life insurance also includes additional benefits for specified disease coverage or limited benefit health coverage if these coverages comply with certain minimum standards.     Senate Bill 1390

Wyoming amended its nonforfeiture net level premium percentage adjustment.     Senate Bill 69

New York adopted a regulation which allows the 2001 CSO Preferred Class Structure Mortality Table to be substituted for the 2001 CSO Smoker or Nonsmoker Table with prior approval from the superintendent, under certain circumstances.     Regulation 179 (11 NYCRR 100)

Arkansas has enacted the state insurance department's general omnibus bill.  Changes are made to many provisions.     House Bill 1806

Nebraska enacted legislation, which among other things, enacts netting of financial interest.  It includes amendments to other sections relating to rehabilitation and liquidation, interest payments on life insurance proceeds, life insurance reserves, and sickness and accident policy provisions.     Legislative Bill 72

Wyoming enacted legislation, which among other things, amends the definition of private health benefit plan and provides exceptions to the definition of disability insurance.     Senate Bill 37

Kentucky issued an advisory opinion to clarify the Department's position on the provision of special enrollment periods for child-only policies upon the occurrence of certain qualifying events.     Advisory Opinion 2011-1

New Mexico issued a bulletin requiring all grievance registers maintained by health care insurers to be provided to the Superintendent of Insurance by May 1st of every year.     Bulletin 2011-003

South Dakota issued a bulletin providing health carriers instructions for prior written notice requirements of the open enrollment rights for persons under the age of 19.  The written notice must also provide how an eligible person may apply for coverage during the open enrollment.     Bulletin 2011-1

South Dakota revised certain health insurance standards for patient protection, which among other things, specifies that no health insurer may terminate coverage of any individual younger than 26.  It provides that persons under the age of nineteen are not subject to a preexisting condition limitations or exclusions.     Senate Bill 43

Montana enacted legislation that provides that the initial limit for a policy or certificate of funeral insurance is up to $15, 000.     Senate Bill 186

Nebraska issued a notice to all pre-need insurers requesting information which will serve as an addendum to the 2010 Annual Report.  The information is due by July 1, 2011.     Notice 2-22-2011

Arkansas issued a bulletin notifying insurers of the requirements and procedures for producer appointments,  renewals, terminations and payment of fees. This Bulletin  rescinds prior Bulletin 2-2010.     Bulletin 2-2011

Kentucky legislation now allows license and certificate extension for military personnel on active duty and for six months after discharge. Requires that a temporary or regular license be issued to a spouse within 30 days of application and would set forth that a spouse must meet certain statutory requirements in order to receive the temporary license or certificate.     House Bill 301

North Carolina issued a memorandum explaining how applicants can obtain resident insurance producer/agent or public adjuster licenses using the new internal business process called fast track.     Memorandum 2-24-2011 (#3)

Utah enacted legislation providing errors and omissions coverage requirements.     House Bill 43
Wyoming amended various sections of the producer licensing law regarding fee schedule, definitions, continuing education, and reinsurance intermediaries. It requires  resident insurance producer license applicants to provide fingerprints and other information necessary for a criminal history record background check. Applicants  must pay for the background check.     House Bill 9, House Bill 4

Colorado issued a bulletin establishing disclosure standards regarding the payment of life insurance benefits to a beneficiary by means of a “Retained Asset Account” instead of a lump sum payment or other settlement options under the policy.     Bulletin No. B-4.12
Illinois issued a bulletin establishing the use, requirements and disclosure standards on the payment of life insurance to a beneficiary by means of a retained asset account.     Bulletin 2011-03
Kentucky enacted legislation regarding the use and requirements of retained asset accounts.     House Bill 309
Nebraska issued a bulletin establishing disclosure standards regarding the payment of life insurance benefits to a beneficiary by means of a retained asset account.     Bulletin CB-125
Virginia enacted legislation regarding the use of retained asset accounts.     Senate Bill 1388, House Bill 1458

Arkansas has enacted the state insurance department's general omnibus bill, which includes changes to employee benefit stop-loss provisions.     House Bill 1806

South Carolina adopted a new regulation setting forth standards to be followed by insurers, agencies and producers in the sale and negotiation of annuity products.     Regulation 69-29

New Jersey issued a Bulletin to clarify standards for advertising and provide guidance for insurers regarding advertising content and/or omissions that the Department considers to be prohibited.    The state encourages insurers to disseminate the Bulletin to all producers with whom they have agency contracts.     Bulletin 2011-1

Is your Company thinking of entering the
Excepted Benefits Insurance market?
If so, First Consulting can help.

Insurance pertaining to Excepted Benefits (including Accident Only, Critical Illness, Dental/Vision and others) is a growing line of insurance and many companies are looking to enter or expand their presence in this market.  First Consulting has experience drafting and filing group and individual excepted benefit type insurance products and can put that experience to work for you.  First Consulting can also provide customized research regarding compliance issues associated with excepted benefit type insurance to help your company stay compliant with state requirements. 

First Consulting & Administration’s Co-Sourcing approach lets you leverage First Consulting’s experience while maintaining control of the project at the level you want.  Our staff can help train your staff about a product line they may not have had an opportunity to work with before. 

Contact Jerry Wickersham, or any First Consulting associate, for more information about how First Consulting & Administration, Inc. can help your company.

Jerry L. Wickersham
First Consulting & Administration, Inc.
1-800-927-2730, ext. 2743

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