Life and Health News April 2012

The following is a brief review of selected items that may be of current interest to First Consulting & Administration, Inc. 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.  Please call our office.


ADVERTISING

Kansas issued a bulletin reminding insurers that Insurance companies and/or their agents are responsible for the content of advertisements distributed directly and on their behalf and advertisements produced and distributed by third-party marketing firms are still subject to regulatory action for failure to comply.     Bulletin 2012-1


ANNUITIES
Iowa amended its annuity disclosure rule to conform to the NAIC model regulation.     Rule 191-15.61+


AUTISM
New Jersey issued a notice explaining the adjusted maximum dollar amount for benefits that carriers and health maintenance organizations (HMOs) are required to provide for expenses incurred for medically necessary behavioral interventions related to the treatment of autism.     Notice 2-21-2012

Pennsylvania issued a notice informing insurers of the adjustment to the maximum benefit for autism spectrum disorder coverage for 2013.     Notice 2012-03


CAPTIVE RISK RETENTION GROUPS
Kentucky adopted a regulation to provide reinsurance, financial solvency, and consumer protection requirements for captive risk retention groups.     806 KAR 49:050


DISASTER OR CATASTROPHIC EVENT
Indiana issued a bulletin calling on all insurance companies to implement certain extensions and/or grace periods in the administration of insurance policies for any counties declared disaster areas due to recent storms.     Bulletin 191

Kentucky issued an advisory opinion providing guidance to insurers on allowances for policyholders and insurance producers affected by recent severe weather events.  An Executive Order was also issued setting forth insurer requirements.     Advisory Opinion 2012-02 and Executive Order 2012-196

Ohio issued a bulletin to all insurance companies requesting that insureds defer premium payments coming due, and extend any and all provisions imposing time constraints within which insureds must take certain action.   This request derives from the State of Emergency declared in Clermont County from storms occurring on March 2, 2012. It is applicable to insureds or claimants residing in, or property insured in, the area declared a state of emergency.     Bulletin 2012-01


FILING REQUIREMENTS
California adopted a regulation altering most of the filing fees charged by the Department.  This includes product and non-product filings.     Regulation 2202

Puerto Rico informed insurers that all rate filings for health benefits plans and Medicare supplement plans will only be accepted when submitted via SERFF, effective June 1, 2012.  Paper filings will no longer be accepted.     Ruling Letter 2012-140-AV


FINANCIAL REGULATION
Illinois revised its bulletin issued on December 16, 2011 that provided guidance on financial reporting, health insurance reporting and policy form filings, because Item #14 contained some misinformation.  Item #14 now contains more accurate due dates for the semi-annual statements concerning A&H Health Expense Reporting for 2012.     Bulletin No. 2011-15 (Revised)

Tennessee enacted legislation on the rehabilitation and liquidation of insurance companies, which among other things, allows persons to exercise the contractual right to cause the termination, liquidation, acceleration, or close-out of obligations under or in connection with any netting agreement or qualified financial contract with an insurer under specified reasons.     Senate Bill 465 

Texas adopted revised regulations concerning requirements for the filing of annual statements, quarterly statements, other reporting forms, and electronic data filings.     28 TAC §7.68

Washington amended its general calculation requirements for basic reserves and premium deficiency reserves.     Rule 284-74-340


FRAUD
Arizona amended its notice of penalty for false or fraudulent claim requirements to clarify the definition of "claim form."     H.B. 2393

Wyoming enacted legislation that provides immunity from liability for cooperating with and furnishing information regarding suspected insurance code violations as specified.     House Bill 50


GROUP
Colorado issued a bulletin providing additional guidance on proper reporting of ‘transition credits‘ or payments to offset an employer group's expenses in transferring coverage between group benefit carriers. The bulletin outlines the required reporting to the Colorado Division of Insurance.     Bulletin B-4.43


GUARANTY ASSOCIATION
Iowa issued a bulletin requiring the summary document attached to Bulletin to be provided on sales of all life insurance, health insurance and annuities.     Bulletin 12-02

New Mexico has amended its guaranty association law and requirements.     Senate Bill 47

Tennessee extended the Life and Health Insurance Guaranty Association until June 30, 2017.     Senate Bill 2320

Wyoming increased coverage limits on annuity and health insurance, disability income insurance and long-term care insurance benefits liability of the life and health insurance guaranty association.     House Bill 5


HEALTH MAINTENANCE ORGANIZATIONS
New Jersey issued a notice regarding an average 2.3% increase in the medical Consumer Price Index for urban consumers in New Jersey.  HMOs and Organized Delivery Systems are required to make adjustment for their minimum net worth by July 1, 2012.     Notice 3-5-2012 (#2)


HIV
Oregon amended its requirements relating to informed consent for HIV tests.     Senate Bill 1507


INTERNAL AND EXTERNAL REVIEW
Colorado reissued a bulletin specifying the forms to be utilized in conjunction with processes related to independent external reviews of health claim denials.     Bulletin No. B-4.19

Mississippi amended its external review regulation regarding the notice of right to external review and what a health carrier should include in the required notice under subsection A.     Chapter 15


INTERNAL GRIEVANCE PROCESS
Maryland issued a bulletin reminding health carriers of changes to the internal grievance process filing requirements, which were effective July 1, 2011.     Bulletin 12-03


INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION
Tennessee enacted legislation extending its participation in the Interstate Insurance Product Regulation Compact until June 30, 2017.     Senate Bill 2319


LIFE SETTLEMENT
New York adopted a new regulation establishing new provisions concerning life settlement providers and brokers.     Regulation 198 (11 NYCRR 381)


LONG-TERM CARE
Oregon adopted rules regarding prompt pay requirements plus internal and external review procedures for long-term care insurance modeled after the NAIC Regulation. The rules apply to long term care policies issued or renewed after July 1, 2012.     Rule 836-052-0508, Rule 836-052-0768, Rule 836-052-0770


MANAGED CARE PLANS
Colorado amended its regulation regarding requirements for women's access to obstetricians, gynecologists and certified nurse midwives under managed care plans.     Regulation 4-2-16


MEDICAL LOSS RATIO
California required all individual health plans to meet a minimum medical loss ratio of 80 percent pursuant to PPACA and for insurers to demonstrate compliance with both the existing 70% lifetime anticipated loss ratio standard and the 80% federal standard on a market segment basis at the time of the Department’s rate review.     10 CCR § 2222.12


MEDICARE
Oregon amended its rule regarding open enrollment to clarify that the six month open enrollment period for a person who is awarded "retroactive" eligibility, begins after the person is notified of their "retroactive" enrollment in Medicare, not on the date the person’s enrollment has been backdated to.  Oregon adopted a "birthday rule" for Medicare supplement policies to allow an individual the opportunity to change Medicare supplement plans.     OAR 836-052-0138, OAR 836-052-0143




MISCELLANEOUS
South Dakota revised the circumstances under which alterations may be made to certain insurance applications.     House Bill 1034

South Dakota revised the time period for which unclaimed property is presumed abandoned and to revise certain provisions regarding the publication notice of unclaimed property.     House Bill 1270

Washington enacted legislation requiring same-sex couples have equal rights and protection under the law and gender specific terms such as husband and wife used in any statute, rule, or other law must be construed to be gender neutral and applicable to spouses of the same sex.  No longer requires people entering into a domestic partnership to be the same sex.     Senate Bill 6239


MISCELLANEOUS - HEALTH
Alaska enacted legislation providing the requirements that a health care insurer must follow when requesting overpayments from a health care provider.     3 AAC 26.110

Colorado amended the method that health coverage plans must use to credit and certify creditable coverage for purposes of limiting pre-existing condition exclusion periods.     Regulation 4-2-18

Nebraska enacted legislation permitting the procurement of certain disability insurance from a nonadmitted insurer.     Legislative Bill 1064

New Jersey issued a notice advising of adjustments to the maximum dollar amounts for benefits or services that carriers and HMOs are required to provide or allow for the schedule of screens, tests, and services.     Notice 3-5-2012 (#1)

New York revised its law to require any co-pays, coinsurance, or deductibles for the coverage of orally administered anticancer medications be at least as favorable to the insured as the co-pays, coinsurance, and deductibles that apply to intravenous or injected anticancer medications.     A. 8906

Oregon has enacted legislation relating to the treatment for craniofacial anomalies.     House Bill 4128

Oregon has enacted a new law which deletes the requirement for a notice of cancellation of health benefit plan if the cancellation is due to nonpayment of premium, revises the definition of “grievance” and defines “health benefit plan”.     Senate Bill 1504

South Dakota provided that insurers may not impose a copayment or coinsurance amount for services provided by a chiropractor, occupational therapist or a physical therapist that is more than which would be imposed for the services of a physician.     HB 1183


OMNIBUS LEGISLATION
Indiana revised its insurance law, including the law concerning: derivatives transactions, life insurance company filing requirements, insurance producer education, insurance company publications, insurer response to Department of Insurance requests, notice of individual health insurance market withdrawal, confidentiality of certain insurer filings, insurance holding company regulation, and health maintenance organization risk based capital requirements.     House Bill 1226

Wyoming enacted legislation modifying provisions relating to maintaining NAIC accreditation and relating to financial solvency of insurers; authorizing premium rate adjustments by the commissioner; providing for judicial review of commissioner decisions; providing for consideration of protection of creditors in suspension or revocation of certificates of authority; providing guidelines for suspension and revocation of certificates of authority; adjusting risk based capital requirements for life, disability and health insurers.     House Bill 16


PATIENT PROTECTION AND AFFORDABLE CARE ACT
Colorado issued a bulletin to insurers providing health benefits providing guidance on classifying employer groups, counting the number of employees, and calculating the Medical Loss Ratio as defined by The Patient Protection and Affordable Care Act.     Bulletin No. B-4.44

New Mexico issued a bulletin requiring that all grievance registers maintained by health care insurers be provided to the Superintendent of Insurance by May 1st of every year.  Additional data as required by NAIC, pursuant to NMSA 1978 §59A-4-3 will also need to be submitted.     Bulletin 2012-003

South Dakota enacted legislation that no qualified health plan offered through a health insurance exchange established in the state may include elective abortion coverage.     House Bill 1185


PREMIUM TAXES
Nebraska issued a notice taking into account comments made by insurers on its February 3, 2012 notice regarding OPTins.  While the Department strongly prefers insurers make use of OPTins for 2012 filing requirements, insurers will be able to file the tax year 2012 Annual Premium Tax Return via paper using forms located on the Department's website.     Notice 02/27/12

Oregon has exempted accident only, specified disease and hospital indemnity insurance policies that pay benefits on an indemnity basis from payment of the assessment based on gross amount of premiums.     House Bill 4046


PRESCRIPTIONS
New Mexico enacted legislation regarding prescription eye drop refills.     Senate Bill 81

New York amended its law allowing insureds to fill any covered prescription that may be obtained at a network participating mail order or other non-retail pharmacy, at a network participating non-mail order retail pharmacy, provided that the network participating non-mail order retail pharmacy agrees in advance, through a contractual network agreement, to the same reimbursement amount, as well as the same applicable terms and conditions, that the insurer has established for the network participating mail order or other non-retail pharmacy.     A. 8904

New York amended its laws to require policies that cover prescription fertility drugs provide the same coverage when purchased through a network participating mail order or other non-retail pharmacy.     A. 8900

Washington prohibited health benefit plans from being offered, renewed, or issued that provide a prescription drug benefit after August 1, 2012, that limits the prescription drug benefit to generic drugs or otherwise applies a prescription drug benefit structure, including a formulary, that results in a restriction on the treatment of patients.     WAC 284-43-817


PRODUCERS
Arkansas reminds insurers about their obligation to annually file renewal appointments.     Bulletin 2-2012

Hawaii issued a memorandum announcing it has updated its requirements for producer appointments by creating a new category for variables on the Notice of New Appointment Form (Form APPT).  Also effective immediately, a Life Insurance appointment is no longer required for Producers selling Variables.     Memorandum 2012-2 (LC)

Illinois issued a bulletin advising insurers that beginning August 1, 2012 the insurance department will only accept new and renewal producer/business entity licenses electronically.     Bulletin 2012-02

Oregon issued a notice explaining that they will begin using the NAIC's State Based Systems as their internal operating system on May 7, 2012. In order to implement this new system, they will be unable to process ANY license application or renewal transactions from Thursday, April 26, 2012 until Monday, May 7, 2012.     Producer Notice 3-7-12

South Dakota amended its Code pertaining to producer continuing education and licensing requirements applicable to certain transportation ticket agents of common carriers and attorneys licensed to practice law in South Dakota.     SENATE BILL 33

South Dakota clarified certain requirements relating to insurance examinations.     House Bill 1033

Tennessee required the department of insurance to suspend, deny, or revoke the license of a person who has defaulted on a repayment or service obligation on any state or federal educational loan.     Senate Bill 551


REINSURANCE
New Jersey issued a bulletin setting forth the requirements for a New Jersey domestic insurer to receive credit for reinsurance, either as an asset or a deduction from liability.     Bulletin 12-04


RETAINED ASSET ACCOUNTS
Louisiana issued a bulletin that establishes disclosure standards on the payment of life insurance death benefits by means of a retained asset account.     Bulletin 2012-01

New York issued a circular letter setting forth procedures an insurer should follow to establish a retained asset account (“RAA”) upon the death of an insured.     Circular Letter 4 (2012)


RISK-BASED CAPITAL
Colorado adopted a new regulation pertaining to risk-based capital (RBC) for health organizations.     REGULATION 3-1-12

Kentucky amended its regulation regarding risk-based capital requirements for insurers.     Regulation 806 KAR 3:190

Virginia amended its risked-based capital act by, among other things, increasing the trend test from 2.5 to 3.0; and expanding statutory definition of "life and health insurer" to include fraternal benefit societies.     Senate Bill 120


STRANGER-ORIGINATED ANNUITY TRANSACTIONS
California issued a bulletin encouraging Insurance companies to put safeguards in place to prevent or limit their exposure to stranger-originated annuity transactions (STOAs).     Bulletin 2012-2


SUITABILITY
New York adopted a new emergency regulation establishing standards and procedures to determine a consumers' suitability before recommending or selling annuities. This emergency regulation is substantially similar to the NAIC Suitability in Annuity Transactions Model Regulation.  This emergency regulation expires June 11, 2012.     Emergency Regulation 187 (11 NYCRR 224)

New York adopted an emergency regulation that establishes standards and requirements for use of senior-specific certifications and designations in the sale of life insurance and annuities.     Emergency Regulation 199 (11 NYCRR 225)

South Dakota amended its law regarding the suitability requirements for annuities.     Senate Bill 32

Washington adopted new rules to clarify the requirements for confirming that an annuity product is suitable for the customer.     Rules 284-17-265, 284-23-390


VARIABLE LIFE
New York amended its regulation on variable life insurance to include provisions for the regulation of private placement variable life insurance.     Regulation 77 (11 NYCRR 54)


 Product Drafting Experts

Product development is heating up again and insurers are working hard to bring new products to market.  New products or markets mean new compliance issues, and for that, experienced compliance assistance is necessary.  First Consulting can provide that expertise.  Since 1969, First Consulting has helped large and small insurers with initial product creation, compliance review of a new product and creation of state specific variations.  We have assisted with design and drafting of a variety of life, health, property and casualty products. Our staff, consists of attorneys and insurance professionals with a wide range of industry designations.

Visit First Consulting’s website and learn more.

Contact Stacy Koron or John Palmer to discuss how First Consulting can help solve your product drafting or filing challenges.

 


PRODUCT MAINTENANCE

We are in the middle of the legislative sessions in many states at this time.  It seems like new legislation never stops arriving in your in-basket.  Regardless of your product line, new legislation often times results in the need to revise your products. 
 

First Consulting offers a customized solution to help you keep your products current in your territory.
 

We can assist with the review of the new legislation, as it arrives or after the fact, to see if it affects your products.  And, if it does, we can assist with the creation of revised forms to address the new requirements.  We can also assist with any form filings that result from legislative changes.
 

Our Co-Sourcing philosophy allows us to assist you in the manner best suited for your unique needs.  As such, your staff can maintain a role in the process at whatever is most appropriate for your company and specific project.
 

Contact me today to see how First Consulting can serve as a resource in the review of new legislation, and the resulting product changes and filings.

 

Jerry L. Wickersham, JD, AIRC
Senior Consultant
First Consulting & Administration, Inc.
1020 Central, Suite 201, Kansas City, Missouri 64105
800-927-2730, ext. 2743
816-391-2743

Email:  jerry.wickersham@firstconsulting.com

 


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