Life and Health News August 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.
ACCIDENT AND SICKNESS INSURANCE
Rhode Island approved the exclusion of disability income insurance and benefits for long-term care from the definition of "health plan" and "health benefit plan". Senate Bill 2887
Virginia amended its general advertising disclosure requirements for life and annuity insurance policies that do not fund pre-need funeral contracts. Regulation 14 VAC 5-41-40
Idaho issued a bulletin to notify insurers that effective July 1, 2012, they must pay a minimum of 5.250% interest on deferred payment of cash surrender values. Insurers not satisfying a cash surrender request within 30 days of receipt will be considered to have deferred payment and are obliged to pay interest from the date on which the cash surrender request is received. Bulletin 12-04
CERTIFICATE OF AUTHORITY
Hawaii amended several sections of its Code relating to issuance of a certificate of authority for mutual benefit societies and fraternal benefit societies. Senate Bill 2766
North Dakota implemented changes concerning the renewal of a Certificate Of Authority by repealing the requirement that an application by a corporation, association, or benefit society be accompanied by a certified copy of the articles of incorporation or association, requiring the payment of the certificate of authority renewal fee by April 30 of each year and establishing the timing for the payment of that fee. Rule 45-02-03-04+
Hawaii enacted legislation to provide clarification to its civil union laws. House Bill 2569
New Jersey has extended the maximum elimination period for disability income insurance policies from 365 days to two years. N.J.A.C. 11:4-16.6
DISASTER AND EMERGENCY OPERATIONS
Ohio issued a bulletin asking companies to allow their insureds to defer premium payments coming due, interest free, for up to 60 days from the original premium due date, and to extend any and all provisions imposing time constraints within which insureds must take certain action for at least 60 days, not to extend past September 30, 2012. This request derives from the Federal Emergency Declaration for the state from storms occurring on June 29, 2012. Bulletin 2012-02
Oregon added filing guidelines to their website regarding Statements of Variability, cover letters, replacement form filings, and changes to health benefit form filings. Filing Guidelines 7-13-2012
Oregon added IIPRC filing guidelines to their website. Topics addressed include adding Oregon to a previously approved IIPRC filing, submitting a filing to Oregon that uses IIPRC-approved forms, submitting a filing to the IIPRC that includes Oregon, advertisements submitted to Oregon that reference IIPRC approved forms, and applications/enrollment forms filed with Oregon or the IIPRC. IIPRC Guidelines 7-17-2012
North Carolina approved legislation to preserve the Department of Insurance regulatory surcharge rate of 6 percent for the 2012–2013 fiscal year, and to provide a temporary 20 year carry forward for the Growing Business Credit which can be taken against the premium tax. House Bill 1015
North Dakota adopted by reference the March 2011 version of the NAIC accounting practices and procedures manual for life and health insurance. Rule 45-03-15-01+
North Dakota amended requirements pertaining to custodial agreements and the use of clearing corporations to exempt insurers who write direct and assumed premiums of less than 3 million dollars in any calendar year from certain requirements. Procedures for requesting such an exemption are provided. Rule 45-03-23-02
South Dakota adopted by reference the 2012 editions of the NAIC Accounting Practices and Procedures Manual and the Annual Statement Instructions manuals for various topics, including Life, Accident, and Health. Rule 20:06:25:01
Tennessee adopted an emergency rule establishing standards for national banks, state banks, federal home loan banks, trust companies, and broker/dealers to qualify as custodians for insurance company securities. Emergency Rule 0780-01-46-.01+
Alabama issued a bulletin regarding the enactment of the Insurance Fraud Investigation Unit and Crime Prevention Act which becomes effective 8-1-12. The bulletin asks insurers to "familiarize themselves with this law and to inform their staff and agents of its implications," and provides a link to the Act. Bulletin No. 2012-03
Missouri expanded the immunity afforded to insurers and others for filing reports and furnishing other information related to an insurance fraud investigation so that the insurer will not be subject to civil liability of any kind, including libel and slander. House Bill 1495
North Carolina repealed a rule prohibiting a reduction in group disability income paid due to changes in social security benefits, such as cost of living adjustments or changes to social security laws. Repeal Of Rule 11 NCAC 12 .0545
Alabama issued a bulletin reminding health insurers of provisions added by the Patient Protection and Affordable Care Act concerning summary of benefits requirements and new Federal rules implementing the requirements. Prior to use, health insurers are to file their summary of benefits and coverage and their uniform glossary forms on an informational basis. Bulletin 2012-05
Colorado issued a bulletin explaining requirements applicable to health insurance rate and form filings containing provisions for deductible credits. Bulletin No. B-4.46
Connecticut issued a bulletin summarizing three recently enacted bills affecting mandated individual and group health insurance benefits. The bills discussed in the bulletin concern insurance coverage for the Birth-to-Three Program, coverage for breast magnetic resonance imaging, and deductibles for screening colonoscopies and screening sigmoidoscopies. The bulletin includes a reminder that all policy forms are subject to prior approval, and that for new benefits on policies that require rates be filed, a rate filing should be made at the same time as the form filing even if there is no adjustment to the rates. Bulletin HC-70-l2
Maine issued a bulletin regarding implementation of wellness programs in the Individual and Group Health Insurance markets. The bulletin explains the standards applicable to wellness programs under state and federal law. Bulletin 382
Massachusetts issued a bulletin regarding open enrollment and continuation of coverage in existing health insurance plans with policy-year deductibles. Bulletin 12-05
Montana issued an advisory memorandum explaining how issuers may, in part, fulfill the consumer disclosure requirements of Montana law by using the Federal Summary of Benefits Coverage (SBC) template. The bulletin also advises that the Federal SBC must be filed with the Montana department prior to use. Advisory Memorandum Dated July 6, 2012
Texas issued a bulletin directed to insurers with preferred provider health benefit plans regarding a data call and reports required to determine compliance with "prompt pay" requirements. Reports are to be submitted by August 15, 2012. Bulletin B-0019-12
Missouri amended certain sections of Chapter 376 to change requirements for life insurance policies that are issued outside of the United States. House Bill 1112
North Carolina revised certain requirements concerning audits of life insurance companies for the purpose of identifying unclaimed death benefits. House Bill 462
Pennsylvania issued a notice announcing that the Department has been working on a project to revise and streamline Life product filing checklists resulting in a nearly 60% reduction in the size and scope of the checklists. The revised checklists are available on the Department's website. Notice 42 Pa.B. 4552
Rhode Island enacted legislation that, among other things, provides for development of a central database of electronic contact information for each life insurer having policies in force in this state and provides that any member of the immediate family of a decedent searching for life insurance policies covering the decedent may file a request with the department for a search, provided the decedent was a resident or former resident of this state. Senate Bill 2749
LIFE SETTLEMENT CONTRACTS
Wisconsin created a new regulation to interpret and implement statutes concerning life settlement contracts. Included are licensing, filing, and policyholder, owner and purchaser notice requirements. Ins 2.18
Colorado has withdrawn 3 bulletins due to the amendment of Regulation 4-4-4 effective July 1, 2012. Subjects of the withdrawn bulletins are: Guidance on Implementation of the Colorado Long-Term Care Partnership Program, Notice Requirement Regarding Long-Term Care Partnership Status, and Expedited Review Process for Long Term Care Partnership Program. Bulletins B-4.27, B-4.28, B-4.30
New Hampshire amended a long-term care insurance rule. Provisions regarding reduction of coverage, marketing, benefit triggers and claims payments have been revised. Chapter Ins 3600, Part Ins 3601
New York amended the minimum standards for its Long-Term Care Partnership Program. Regulation 144 (11 NYCRR 39)
West Virginia issued a letter to provide guidance regarding the implementation of the West Virginia Long-Term Care Insurance Partnership Program. Informational Letter 182
MEDICAL LOSS RATIO
Massachusetts issued a bulletin to health insurers and HMO's clarifying the requirements associated with Medical Loss Ratio (‘MLR‘) calculations. Bulletin B-2012-2
MEDICARE SUPPLEMENT INSURANCE
South Dakota amended requirements concerning application forms and replacement coverage. Amendments include the following: Insurers may record or make contractual arrangements for persons other than agents to record the applicant’s responses. Prior to issuance of coverage, the insurer, agent, or contractor involved in the application process must ask all remaining application questions and such persons must accurately record the applicant’s responses to each of the applicable questions in the application. The insurer is responsible for any failure to ask and accurately record the applicant’s responses to each applicable question. An insurer may deny an incomplete application or require that further questions be asked of the applicant once the response to a question clearly indicates the applicant is ineligible for coverage. A person must hold an insurance agent license if that person sells, solicits, or negotiates insurance. 20:06:13:32, 20:06:21:28.01
Delaware has rewritten rules pertaining to inspection of public records. The form and process required to file a Freedom of Information Act request is described, the fee section is updated and provisions require the Department to respond in a specified manner to a FOIA request as soon as possible, but no longer than 15 business days after receipt. 700 Policies and Procedures Regarding FOIA Requests
Hawaii adopted the NCOIL Life Settlements Model Act and requires the delivery of a buyer's guide or a similar consumer advisory package to owners during the process of soliciting a life settlement contract. The bill also contains a section allowing the commissioner to collect fees relating to numerous insurance licenses and examination fees. Senate Bill 3062
Hawaii updated the Life and Disability Insurance Guaranty Association Act to conform various provisions with those of the NAIC Model on Life and Health Guaranty Association, including coverage limits, coverage exclusions of Medicare Part C and D plans, and treatment of unallocated annuities. The bill also clarifies the rights of subrogation, clarifies the rights and duties of the association, and defines and amends terms. Senate Bill 2767
North Carolina amended a rule to update the phone numbers and mailing address for the Insurance Department for those with inquiries or seeking information. Rule 11 NCAC 04.0116
Oklahoma revised provisions regarding requests for information from the Commissioner's office. The street address for submitting written requests is revised, and references pertaining to requests made by personal appearance and by telephone are deleted. 365: 1-1-4
Pennsylvania issued a notice updating per diem charges for market conduct and financial examinations of insurance companies. Notice 2012-05 and Notice 2012-06
North Dakota updated requirements for the notice that insurers must give to policy owners regarding the limits of the Life and Health Guaranty Association. Benefit limits for long-term care and disability insurance are increased from $100,000 to $300,000; and for annuities, government retirement benefit plans and structured settlement annuities, from $100,000 to $250,000. Limits for life insurance are unchanged. Rule 45-11-01
Kentucky adopted changes to its regulations to clarify accounting and reporting requirements for collecting local government premium tax. Rule 806 KAR 2:095
Alabama issued a bulletin addressing the offering and sale of “return of mortal remains plans” in conjunction with the sale of pre-need contracts for funeral or cemetery merchandise and services. Bulletin 2012-04
New York extended until June 1, 2017, provisions that prohibit funeral directors, undertakers, and embalmers from accepting consideration from an insurer to sell, offer, or promote pre-need funeral insurance and prohibit insurers from paying such consideration. Senate Bill 7490
Texas amended a rule regarding conversion from trust-funded to insurance-funded benefits. The amendment is designed to increase flexibility in setting guaranteed interest rates used in conversion annuities. Rule 7 TAC 25.25
Hawaii created the Health Care Privacy Harmonization Act with the purpose of ensuring that covered entities subject to HIPAA’s Privacy Rules shall be deemed in compliance with state privacy laws and regulations including, among other things, section 325-101 relative to the use and disclosure of records related to HIV, AIDS, and AIDS-related complex. House Bill 1957
Colorado established continuing education requirements for licensed insurance producers. Included are details on credit hours required on a biennial basis, the use of carryover credits, the number of course hours required to be in ethics education, and continuing education record retention requirements. Emergency Regulation 3 CO ADC INS 12-E-01
Colorado established pre-licensing education requirements for resident insurance producers concerning course content, the number of course hours required (including ethics training requirements), the validity period for a course completion certificate, and exemptions from requirements. Emergency Regulation 3 CO ADC INS 12-E-09
Colorado established producer licensing requirements, including processes for initial applications and the continuation of licenses, the amendment and reinstatement of licenses. Also included are provisions on producer registration and the disclosure of all agency officers, partners, and directors. Reporting requirements for the termination of a producer for cause and the required reporting of administrative actions or criminal prosecution of a producer are also provided. Emergency Regulation 3 CO ADC INS 12-E-02
Florida revised notification requirements, modified definitions, and clarified renewal fee and filing deadline requirements pertaining to producers. Rule 69B-211.004
Georgia adopted an emergency regulation regarding license renewals and continuing education requirements. Included in the changes is a transition from annual to biennial license renewals for insurance agents, insurance agencies, subagents, counselors, insurance adjusters, and certain non-resident licensees. Emergency Regulation 120-2-3-0.25-.05+
Hawaii issued a Memorandum describing new continuing education requirements for producers. Memorandum 2012-3LIC
Kentucky issued a notice advising that agents, consultants, adjusters, apprentice adjusters, surplus lines brokers, life settlement brokers, and life settlement providers will no longer be required to file proof of financial responsibility with the Department of Insurance. All licensees must continue to maintain minimum levels of financial responsibility to protect the consumer. Announcement of 2012 Legislative Change - July 12, 2012
Nebraska issued a bulletin in response to queries received by the Department of Insurance regarding annuity training requirements for producers who hold a life insurance line of authority. The bulletin clarifies that insurance producers who hold a life insurance line of authority and want to solicit the sale of annuity products are required to complete, within 6 months after July 19, 2012, a one-time, four-credit training course approved by the Department of Insurance. Bulletin CB-128
North Carolina repealed provisions on earning a portion of continuing education credits after attending a certain percentage of a continuing education course. Repeal Of Rule 11 NCAC 06A .0806
North Carolina repealed the prohibition against an agent using a facsimile countersignature as a legal signature. Repeal Of Rule 11 NCAC 01 .0603
North Dakota implemented a new rule exempting continuing education requirements for insurance producers licensed exclusively for the sale of certain limited lines of insurance, including travel and credit insurance. Rule 45-02-04-09.3
Wisconsin approved additions to the list of course topics that qualify for continuing education course approval. The additional topics are related to life settlements. Ins 28.06(6)
RISK RETENTION GROUPS
Delaware amended its reinsurance Code by providing that with the exception of a risk retention group, any captive insurance company may take credit or a reduction from liability for the reinsurance of risks or portions of risks ceded to reinsurers in accordance with Subchapter III of Chapter 9 of Title 18, or as otherwise approved by the Commissioner. The bill also provides that a risk retention group may take credit or a reduction from liability for the reinsurance of risks or portions of risks ceded to reinsurers only in accordance with Subchapter III of Chapter 9 of this Title. Senate Bill 203
New York adopted an emergency regulation establishing standards and procedures to determine a consumers' suitability before recommending or selling annuities. 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)
Michigan amended provisions setting forth withholding requirements for flow-through entities under the Michigan Corporate Income Tax. Other changes provide for a withholding exemption for a person who disburses annuity payments pursuant to the terms of a qualified charitable gift annuity and provide a definition of qualified charitable gift annuity. Senate Bill 1104
New York adopted an emergency regulation requiring insurers to implement reasonable procedures to identify unclaimed death benefits, locate beneficiaries, and make prompt payments. Emergency Regulation 200 (11 NYCRR 226)
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