Life and Health News January 2011

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.


ACTUARIAL OPINIONS AND MEMORANDUMS
Wyoming adopted a rule that provides an example of interim results of significant concern to be included in the Regulatory Asset Adequacy Issues Summary by an appointed actuary.     Rule 53


ADVERTISING
New Jersey deleted its rule that advertisements or revisions of advertisements of limited death benefit polices must be submitted for review.     Rule 11:4-21.3


DISCRETIONARY CLAUSES
Texas adopted a rule prohibiting the use of discretionary clauses in insurance policy forms.     Rule 28 TAC 3.1201+

The District of Columbia issued a notice notifying insurers that forms are being monitored for the use of improper discretionary clauses.  Also reminds insurers that discretionary clauses cannot override policy definitions and policy terms.     Notice Dated November 24, 2010


FILING REQUIREMENTS
Alaska repealed its provision on the retaliatory filing fee requirement for insurers.     Regulation 3 AAC 31.210

Louisiana announced that the LDI will no longer accept any electronic rate, rule and/or policy form filing submissions via CRAFT and electronic filings will only be accepted when submitted through SERFF.  The LDI will continue to accept paper rate, rule and/or policy form filings.     Bulletin No. 2010-04

Nevada adopted a regulation requiring rate, rule and form filings be submitted via SERFF and payment of the filing fees be made via EFT.     Regulation Chapter 686B.100+


FINANCIAL REGULATION
Alaska adopted a regulation including the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of reserves required under AS 21.18 during one or more interim periods in the disclosure of interim results that are of significant concern to the appointed actuary.     Regulation 3 AAC 21.835

Alaska adopted a regulation that establishes standards and requirements for insurers engaging in derivative transactions.     Regulation 3 AAC 21.213+

Connecticut issued bulletins regarding Financial Reporting Requirements.     Bulletin FS-4AR-10, Bulletin FS-4-10

New Jersey amended its provisions on preferred mortality tables for use in determining minimum reserve liabilities and valuation of life insurance policies.     Rule 11:4-27A.3(a)+

New York adopted a rule adding new sections to apply principle-based credit risk management standards to all licensed ceding insurers and provide alternative credit for cessions to unauthorized assuming insurers.     Reg. 17, 20 and 20-A (11 NYCRR 125)

New York adopted an emergency regulation amending provisions on mortality adjustment factors in the deficiency reserve calculation.     Emergency Reg. 147 (11 NYCRR 98)

New York adopted an emergency regulation which adopts the 2009 NAIC Accounting Practices and Procedures Manual.  This regulation will expire on March 9, 2011.      Emergency Regulation 172 (11 NYCRR 83)

New York adopted an emergency regulation which repeals and repromulgates requirements for preparing and submitting annual audited financial reports.  This regulation will expire on March 16, 2011.     Emergency Regulation 118 (11 NYCRR 89)

Puerto Rico issued a letter informing insurers about reporting requirements for financial statements.     Ruling Letter 2010-118-AF

The District of Columbia enacted legislation amending sections of the Annual Audited Financial Reports Act of 1993, which among other things, includes provision changes for annual and financial reports, audit committees and independent certified public accountants.     Bill 18-773


HAZARDOUS FINANCIAL CONDITION
Connecticut amended regulations that provide standards which the Insurance Commissioner uses to determine if an insurer is in a hazardous financial condition.     Regulation 38a-8-103+


INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION
New Jersey adopted legislation joining the Interstate Insurance Product Regulation Commission.  New Jersey has opted out of the long-term care standards for now, but will revisit that decision in one year.     Bill No 483


LONG-TERM CARE
Colorado adopted a regulation adding a provision prohibiting gender based differences in premium rates for long-term care insurance policies.     Regulation 4-4-1

Nevada adopted a regulation, which sets out requirements for state long-term care insurance partnership plans and long-term care insurance rate increases.     Regulation Chapter 687B


MISCELLANEOUS
Florida notified insurers that the Certified Capital Company Investment Credit for premium tax is repealed in its entirety.     Tax Information Publication #10B8-05

Georgia issued a directive informing domestic insurers that all annual insurance company renewal fees must be paid electronically.     Directive 10-EX-3

Illinois issued a bulletin advising life and health insurers of increased limits for Life/Accident and Health Guaranty fund products and changes to the disclaimer notice.     Bulletin 2010-7

Illinois issued a bulletin that outlines requirements for policy form filings and financial and health insurance reporting.     Bulletin 2010-09


Kentucky adopted regulations regarding life insurance and annuity disclosures.     Regulation 806 KAR 12:170, Regulation 806 KAR 12:150

Nevada adopted new provisions regulating the use of senior-specific certifications.     Regulation Chapter 686A

Nevada withdrew bulletins 94-4 regarding self-certification of certain life and health policy filings and bulletin 10-004 regarding producer compensation for health benefit plans, effective immediately.     Bulletin 2010-009

Puerto Rico issued a letter that defines and establishes licensing and designation requirements for reinsurance intermediary producers and managers.     Ruling Letter 2010-117-SP

The District of Columbia issued a bulletin providing guidance for insurers regarding the implementation of the Religious Freedom and Civil Marriage Equality Amendment Act of 2009.     Bulletin 10-IB-02-12/17

Washington adopted new rules regarding business continuity plan requirements.     284-16-700  and 284-16-710

Washington made technical changes to numerous insurance provisions by replacing the terms agent, broker, and solicitor, among others, with insurance producer.     Chapter 284-02+


MISCELLANEOUS - HEALTH
Colorado amended its regulation on rate requirements for health insurance.     Regulation 4-2-11

Colorado issued a bulletin providing an interpretation on whether HB 10-1021, involving normal maternity benefits for individual sickness and accident policies and contraceptive benefits in individual and group sickness and accident policies, applies to only newly issued policies or to newly issued and renewing policies.     Bulletin B-4.36

Illinois issued a bulletin that provides guidance to carriers on how to comply with the requirements of Section 359b relating to the use of standard health applications.     Bulletin 2010-10

New Jersey issued a bulletin addressing the amendments to the Health Care Quality Act regarding assignment of benefits under managed care plans. The Act applies to any health benefits plan in which the carrier has reserved the right to change the premium and which is in effect on or after the effective date.     Bulletin 2010-36


MISCELLANEOUS - LIFE
New York amended legislation regarding accelerated death benefit requirements on life policies for policyholders that are in nursing homes for three months or longer.     Senate Bill 7196

South Dakota adopted a new rule prohibiting the use of senior specific designations to imply special knowledge when advising senior citizens about investing, purchasing or selling securities.     Rule Chapter 20:08:03

Vermont issued a bulletin reminding insurers of the obligation to pay interest on life insurance policy death claims and provides specific circumstances in which statutory obligation is applicable.     Bulletin 159


MORTALITY TABLES
Alaska adopted a rule allowing substitution of 2001 CSO Preferred Class Structure Mortality Table for 2001 CSO Smoker or Nonsmoker Mortality Table for certain life insurance policies. Also established provisions on valuation of life insurance policies, included reserve requirements and various valuation standards.     Regulation 3 AAC 28.620+, Regulation 3 AAC 21.900+

New York adopted an emergency 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.     Emergency Reg. 179 (11 NYCRR 100)

Wyoming adopted a rule allowing the substitution of 2001 CSO Preferred Class Structure Mortality Table for 2001 CSO Smoker or Nonsmoker Mortality Table for certain life insurance policies with prior approval from the Commissioner of Insurance     Rule 59


PATIENT PROTECTION AND AFFORDABLE CARE ACT
Maryland adopted a bulletin responding to common questions on the issue of grandfathered and non-grandfathered health plans under the Patient Protection and Affordable Care Act.     Bulletin 2010-39

Maryland revises Bulletin 10-21 to reflect amended federal regulations regarding grandfathered health plans that were published in the federal register on November 17, 2010.     Bulletin 10-21 Amended


PRODUCERS
Kentucky adopted regulations, which among other things, repeals certain agent licensing provisions, amends the requirements regarding agent identification cards and amends prelicensing courses of study requirements.     Regulation 806 KAR 9:060, Regulation 806 KAR 9:121, Regulation 806 KAR 9:001

Ohio adopted a rule that revises requirements for agent licensing and continuing education.     Rule 3901-5-01

Oklahoma adopted an emergency rule amending continuing education requirements as well as establishing a one year reinstatement period for continuing education providers whose approval has expired.     Emergency Rule 365:25-3-1


RETAINED ASSET ACCOUNTS
New Hampshire issued an order amending requirements for Retained Asset Account Disclosures.  The requirements are amended for consistency with the NAIC bulletin on this topic.     Order No. A11-101


TRADE PRACTICES
Utah issued a bulletin regarding rebates or inducements in connection with the sale, continuation or termination of insurance.  The bulletin provides a list of services which  may constitute an inducement or rebate in violation of state law.     Bulletin 2010-7


UNIVERSAL LIFE
Maryland adopted a new regulation establishing standards for universal life policies.  The regulation does not apply to  variable universal life  policies.     Regulation 31.09.15.01+


Longevity Insurance

We noted with interest the recent announcement that a major reinsurer has issued a new financial contract to transfer longevity risk to capital market investors. This seems to be another indication of the growing concern by both businesses and individuals about increasing life expectancies.

If your Company is considering capitalizing on this concern and entering the Longevity Insurance Market, First Consulting can help. We have experience in drafting and filing longevity annuity contracts.

Contact John Palmer at 816-391-2744 or john.palmer@firstconsulting.com for more information.

 


Corporate Change Filings (UCAA)


Are there changes in your Company’s future?
Is your company considering an action that will result in a name change, redomestication, acquisition, merger, or adding a new jurisdiction or lines of business? These actions require the filing of a corporate amendment with the jurisdictions affected.

First Consulting can help with UCAA filings.
First Consulting & Administration, Inc. has the knowledge and experience to reduce the amount of time and effort expended. The Uniform Certificate of Authority Application (UCAA) developed by the NAIC has streamlined the corporate amendment filing process, yet a considerable amount of time must be invested to become educated with the UCAA process. Training staff to handle a UCAA filing may be a one-time event and the experience gained may not be used again for several years, if at all.

We are experienced in the UCAA filing process and are familiar with the various state-specific requirements that exist in addition to the UCAA requirements. Our UCAA Filing Services include advising what materials are needed for each state’s filing, assembly of the filings, and follow up, as necessary, to secure approval of the filings. Co-sourcing with First Consulting to handle these services can free your staff for other functions and projects.

Call or email me today to get more details about our services.

Scott Sheffer
800-927-2730, ext. 2742                  scott.sheffer@firstconsulting.com


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