Life and Health News

July 2017

We are celebrating over 25 years of providing selected items of current interest to our clients and friends. The items contained in this newsletter are derived from bulletins, regulations and legislative activity affecting the insurance industry. Please feel free to share this newsletter with others that may be interested. Contact our office for further details about any of the items contained in the newsletter.


ADVERTISING / SALES & MARKETING

Indiana amended the definition of telephone solicitor and now requires a telephone solicitor to disclose where they are employed or contracted.     House Bill 1444


AFFORDABLE CARE ACT

Arkansas issued a bulletin addressing health insurers and HMOs requesting permission to file alternative or dual rates for review and approval for policies or contracts to be issued through the Arkansas Health Insurance Marketplace for the 2018 plan year.     Bulletin 6-2017

Arkansas published a bulletin extending transitional policies until December 31, 2018.     Bulletin 8-2017

Maine issued a bulletin that further updates uniform deadlines for rate, form, and Qualified Health Plan filings for nongrandfathered individual and small group health plans with effective dates of coverage during 2018. The rate revision deadline has been revised from July 17 to July 14.     Bulletin 423 (Supersedes Bulletins 416 and 421)

Michigan issued a bulletin stating that, if federal cost-sharing reductions (CSRs) are not funded, issuers offering silver plans on the Marketplace will need to fund them. Therefore, the Department is requiring issuers to submit two premium rate filings, one assuming no CSR payments will be made and one assuming they will be similar to existing payments.     Bulletin 2017-09-INS

Mississippi issued a bulletin regarding the federal default uniform age curve, saying that it will continue to utilize the old rule and not adopt the new age curve rule.     Bulletin 2017-5

Missouri issued a bulletin addressing guaranteed renewability in the individual market and their intention not to take enforcement action against insurers who opt to continue offering grandfathered and transitional plans, while discontinuing other individual health benefit plans, so long as the insurer follows the specified procedures.     Bulletin 17-05


AGENT / PRODUCER CONTINUING EDUCATION

Missouri published a bulletin to respond to inquiries the Department has received relative to producer training requirements arising from "Suitability in Annuity Transactions," Regulation 20 CSR 400-5.900.     Bulletin 17-06


AGENT / PRODUCER LICENSING AND APPOINTMENT

Arkansas issued a bulletin addressing 2017 company appointment renewals for producers.     Bulletin 4-2017

Maryland revised its laws regarding producer licensing to allow an applicant who fails a licensing examination to retake it 4 (instead of the previous 14) days later.     House Bill 1277; Section 10-108 and 10-109

New Mexico posted on its website that it will be implementing SBS (State Based Systems). This will require the temporary shutdown of the state's professional licensing operations, including applications submitted via NIPR, starting at 5:00 p.m. MT on Friday, June 30, 2017. Implementation is expected to be completed by 9 a.m. MT on Monday, July 10, 2017 and NIPR will begin accepting licensing applications for the state on Monday, July 17, 2017.     Website announcement


AUTISM SPECTRUM DISORDERS

Alabama amended its law requiring health benefit plans to cover treatment of Autism Spectrum Disorder, including amending the definition of the condition.     House Bill 284

Nevada revised its definition of autism spectrum disorder and revised its law relating to eligibility for services provided or coordinated by the Autism Treatment Assistance Program. It also requires an insurer to reimburse an early intervention agency for certain services for autism spectrum disorder.     AB 304, 427A.875, 695C.1717


CAPTIVES

Montana enacted legislation amending its laws pertaining to captive insurance companies, allowing for inactive captive insurance companies to apply for dormant status and providing requirements.     Senate Bill 245; 33-2-705, 33-28-105, and 33-28-108


CLAIMS / CLAIMS ISSUES

Georgia enacted legislation to prohibit certain practices. Pharmacy benefits managers are prohibited from requiring the use of mail-order pharmacies under specified circumstances, from providing individual insureds information on their cost share for prescription drugs and from discussing efficacy of more affordable alternatives, among other prohibitions.     House Bill 276

Iowa amended claim disclosure requirements for group health benefit coverage to remove reference to "organized delivery system."     509.19

Iowa amended its Insurance Code concerning the requirement to accept or deny "clean" health claims and prompt payment of accepted claims. Failure to timely pay claims incurs interest at the rate of 10 per cent per annum for the delay.     507B.4A

Tennessee enacted legislation prohibiting a health benefit plan providing prescription drugs and coverage for prescription eye drops issued on or after January 1, 2018, from denying coverage in certain circumstances.     House Bill 18

Virginia adopted amendments to its rules governing unfair claim settlement practices to conform to the NAIC models addressing the topic.     14VAC5-400-10+


CONFIDENTIALITY / PRIVACY

Washington published an advisory to all licensees with consumers in the state to inform them of the two-day notification requirement for security breaches. If a security breach occurs, all licensees are to notify the Insurance Commissioner in writing of the number of consumers potentially affected and the actions being taken by the licensee. Additional instructions and contact information is provided.     Technical Assistance Advisory 2017-01


CORPORATE GOVERNANCE

Kansas enacted legislation adding a new section to its Insurance Code to require all insurers domiciled in the state to submit, no later than June 1 of each year, a Corporate Governance Annual Disclosure (CGAD).     Uncodified Senate Bill 16 s 2

Nevada enacted legislation adopting certain provisions of the NAIC Corporate Governance Annual Disclosure Model Act.     Assembly Bill 35; Uncodified AB 35 s 6


DENTAL INSURANCE

Georgia enacted legislation to exempt standalone dental plans from the requirement to provide printed directories.     House Bill 262


DEPARTMENT OF INSURANCE

Louisiana enacted legislation to require each risk-bearing entity to transmit contact information to the Commissioner annually and within 30 days of any change in the information.     House Bill 289

Texas amended its Insurance Code to remove the requirement that an insurer notify the Commissioner of imposition of a penalty, forfeiture, or sanction on the insurer for a violation of the insurance laws of another state.     Senate Bill 1012; 81.003(b)


DISCRIMINATION

Iowa amended its law that prohibits making or permitting any discrimination in the sale of insurance solely on the basis of domestic abuse to include sexual abuse.     507B.4

Nevada revised its laws that prohibit various types of discrimination to include discrimination on the basis of sexual orientation and gender identity or expression.     Senate Bill 188


DRUG / PRESCRIPTION COVERAGE

Nevada amended its law to prohibit certain insurers from moving a prescription drug from a lower cost tier to a higher cost tier under certain policies of health insurance issued to an individual or a small employer, except on specified dates or when an applicable generic drug is added to the formulary under specified circumstances.     AB 381


ELECTRONIC TRANSACTIONS

Nevada enacted legislation authorizing the delivery by electronic means of notices or other documents relating to insurance.     Assembly Bill 455

South Carolina enacted legislation allowing for electronic delivery of certain insurance documents under specified conditions.     House Bill 3488; 38-55-710+


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FEE SCHEDULES

Arizona updated its fee schedule with minimum and maximum fees for filing charter documents, obtaining or renewing certificates of authority, obtaining or renewing certificates of registration, filing annual statements, and for licenses and examinations, among other items, effective January 1, 2018.     20-167


FRAUD / ANTI-FRAUD

Louisiana amended its anti-fraud plan filing requirements to note that such plans are to be filed electronically through the Department's website.  Any insurer required to file and any HMO that may have already filed its plan with the Department prior to January 1, 2011, shall refile with the Department using the electronic format specified.     Amended Advisory Letter No. 2010-02


GROUP HEALTH

New Jersey enacted legislation addressing infertility coverage under health insurance plans covering more than 50 persons and including pregnancy-related benefits.     Senate Bill 1398, 17:48-6x, 17:48-7w, 17:48E-35.22 and 17B:27-46.1x


HEALTH INSURANCE - COMPREHENSIVE

Delaware enacted legislation to require that a health benefit plan which provides coverage for prescription drugs must provide coverage for the treatment of alcohol and drug dependencies that includes immediate access, without prior authorization, to a 5-day emergency supply of prescribed medications for the medically necessary treatment of alcohol and drug dependencies where an emergency condition exists.     Senate Bill 41; 18 s 3343

Georgia amended its Code adding a new section addressing prescription drug programs and providing for synchronizing the insured patient's medications as well as prohibiting payment structures using prorated dispensing fees based on days' supply of medication dispensed.     Senate Bill 200

Iowa enacted its "Right to Try Act," relating to the use of experimental treatments for patients with a terminal illness.     Senate File 404; 144E.1+

Iowa enacted legislation addressing the use of step therapy protocols for prescription drugs by health carriers, health benefit plans and utilization review organizations.     House File 233; 514F.7

Maryland amended its Insurance Article requiring that health care services delivered through telehealth under health insurance include counseling for substance use disorders.     House Bill 983; Section 15-139

Maryland amended the President Jimmy Carter Cancer Treatment Access Act to prohibit imposition of a step therapy or fail-first protocol on an insured for a prescription drug for stage four metastatic cancer under the specifications noted.     House Bill 740; Senate Bill 919; Section 15-142

Maryland enacted emergency legislation prohibiting prior authorization requirements for drug products to treat an opioid use disorder when they contain methadone, buprenorphine or naltrexone.     House Bill 887; Section 15-850

Maryland enacted legislation expanding the mandated benefit for breast cancer screening to include digital tomosynthesis, if determined by the treating physician to be medically appropriate and necessary.  Entities subject to the section are prohibited from imposing a copayment or coinsurance requirement greater than that applied to other breast cancer screening methods for which coverage is required under the section.     House Bill 675; Senate Bill 61; Section 15-814

Maryland enacted legislation prohibiting denial of a covered medically necessary behavioral health service provided by a participating provider to a member who is a student solely on the basis that the service is provided at a public school or school-based health center.     House Bill 786; Section 15-510

Maryland enacted new health insurance law addressing the synchronization of prescriptions, with an effective date of January 1, 2019.     House Bill 1147; Senate Bill 898; Section 15-850

Minnesota enacted legislation amending their Insurance Code to require that health plans providing coverage for prescription eye drops shall not deny coverage for a refill of such a prescription, if the prescriber indicated on the original prescription that additional quantities are needed and the refill requested by the insured does not exceed the number of additional quantities needed. Further details are included.     SF 997; 62A.3095

Mississippi published a bulletin strongly encouraging all issuers of health insurance products in the state to implement the Centers for Disease Control and Prevention (CDC) Guidelines for Prescribing Opioids for Chronic Pain and to promptly submit to the Department any necessary form and rate filing changes associated with this implementation.     Bulletin 2017-4

South Carolina amended its Code regarding the mandated language in optional intoxicants and narcotics exclusions for certain insurance policies. Such an exclusion does not apply to a medical expense policy.     Senate Bill 9

Texas amended its Insurance Code related to step therapy protocols required by a health benefit plan in connection with prescription drug coverage.     Senate Bill 680; 1369.051

Texas amended its Insurance Code relative to telemedicine to state that a health plan may not exclude from coverage a covered health care service or procedure solely because it is not provided through an in-person consultation.     Senate Bill 1107; 1455.001+

Washington amended its Insurance Code to expand patient access to health services via telemedicine by further defining where the patient may receive service adding, "any location determined by the individual receiving the service."     Senate Bill 5436; RCW 48.43.735


HEALTH MAINTENANCE ORGANIZATIONS

Michigan issued a notice regarding tax treatment of Health Maintenance Organizations (HMOs) under the corporate income tax. HMOs are not "authorized insurers" and are not subject to the 1.25% tax on gross direct premiums under the CIT. HMOs remain subject to the CIT's business income tax.     Notice dated May 18, 2017


HOLDING COMPANIES

Kansas enacted legislation adding a new section to its Insurance Code addressing internationally active insurance groups.     Uncodified Senate Bill 16 s 1

Texas amended its statutes governing holding companies, adding a new section addressing internationally active insurance groups.     House Bill 3220; 823.002+

Texas enacted legislation relating to the registration statement and reporting requirements of insurers in an insurance holding company system.     Senate Bill 1073; 823.054


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INDUCEMENTS

Maine amended its laws governing the provision of rebates, including provision of services for free or for less than fair market value.     SP 382; 24-A MRSA s 2163-A

Nevada amended its law authorizing certain types of insurance and insurers to give certain items and gifts not to exceed $100 in aggregate value per policyholder or insured or prospective policyholder or insured in any one calendar year.     AB 244


LIMITED BENEFIT CONTRACTS

Virginia amended its regulation regarding required minimum benefits for specified disease policies.     14 VAC 5-120-70


LONG-TERM CARE INSURANCE

Arizona amended, adopted and renumbered its regulations governing long-term care insurance, with the regulations applying to all LTC policies, including qualified contracts and life insurance policies that accelerate benefits for long-term care.     R20-6-1001+

Maryland enacted legislation creating new Subtitle 7 of the insurance rating law, addressing long-term care insurance premium rate review. It also requires carriers to provide a one-time written notice to the insured that they may access information about proposed rate increases on the Administration's website. Notices are to be supplied with all policies as of January 1, 2018, and no later than the next anniversary for previously issued policies.     House Bill 493; Section 11-701 through 11-704

Washington amended its regulation addressing unintentional lapse on long-term care insurance.  Issuers must be able to show proof that they have produced and sent the required notice in accordance with regulations and, if they receive notification of non-delivery of such notice, that the issuer has used due diligence to attempt to locate the policyholders or named lapse designees.     WAC 284-83-025


MARRIAGE EQUALITY / CIVIL UNIONS / DOMESTIC PARTNERS

Nevada amended its law to authorize the marriage of two persons of any gender under certain circumstances and revised its law regarding consent of insured to replace "husband or wife" with "spouse."     Assembly Bill 229

Nevada enacted legislation to recognize domestic partnerships validly formed in other jurisdictions, removing the requirement to register such a partnership.     Assembly Bill 227; NRS 122A.030


MEDICARE SUPPLEMENT INSURANCE

Vermont issued a bulletin addressing the use of expense discounts for Medicare supplement insurance policies. Insurers offering such discounts are required to submit documentation with the relevant rate filing evidencing a direct correlation between the expense discount and the cost savings related to the offered payment modes.     Insurance Bulletin 194


MENTAL HEALTH PARITY

Montana enacted legislation to amend its law regarding parity in insurance coverage for mental health and physical health and to ensure that Montana law applies the same level of parity as existed in federal law on January 1, 2017.     House Bill 142; 2-18-704


MISCELLANEOUS

Connecticut enacted legislation allowing domestic insurers to divide into two or more companies and providing details of the process.     House Bill 7025

Idaho issued a bulletin to announce its adoption of the March 2017 version of the NAIC's Accounting Practices and Procedures Manual.     Bulletin 17-02

Mississippi updated its rating classifications for certain insurance products and amended its product and rate filing fee schedule.     19-1-38.09

Oklahoma enacted legislation relating to the subsidiaries of insurers, which among other things, authorizes insurers to acquire subsidiaries, provides additional investment authority, exempts certain investments from certain restrictions, determines qualification of investment and requires filing with the Insurance Commissioner for certain agreements.     House Bill 2234


MISCELLANEOUS HEALTH / ACCIDENT

Iowa amended its laws applicable to group and individual accident or health insurance by removing short-term limited duration policies and organized delivery systems from the definition of creditable coverage.     509.3A, 513B.2, 513C.3

Maryland amended its law to allow short-term medical insurance to be purchased from a nonadmitted insurer if the policy term is less than three months. It requires the contract and any application materials to include a disclosure that reads, " This is not qualifying health coverage ("minimum essential coverage") that satisfies the health coverage requirements of the Affordable Care Act. If you don't have minimum essential coverage, you may owe an additional payment with your taxes."     Ins. s 3-306.2

Maryland amended its law, to, among other things, make certain provisions of the Affordable Care Act relating to preventive and wellness services and chronic disease management applicable to certain coverage offered in certain markets. The bill also alters the definition of "health benefit plan" for the individual health market and revises enrollment periods for small employer health insurance.     House Bill 123

Nevada amended its law with respect to certain health insurance policies covering the treatment of illnesses within the scope of the practice of a qualified psychologist. The insured is entitled to reimbursement for treatments provided by a licensed psychologist.      AB 429, 689A.048, 689B.038, 695B.197

New Hampshire published a bulletin to clarify existing consumer protections and to provide guidance, to carriers offering health insurance, about the differences between product discontinuance and full market withdrawal under state law.     Bulletin dated June 2, 2017; Docket No.: INS-17-027-AB

North Carolina amended it law pertaining to an insured having the right to choose services of certain providers to add occupational therapist.     House Bill 208, 58-50-30


MORTALITY TABLES

New York amended its rule regarding the use of the 2017 CSO Table as the minimum mortality standard for reserve and nonforfeiture determinations and set forth timeframes.     11 NYCRR 98.4, 11 NYCRR 100.3, 11 NYCRR 100.7


NOTICE TO INSUREDS

Texas enacted legislation addressing settlement of certain out-of-network health benefit claims involving balance billing. A new section, 1467.0511, adds a notice required to be provided to an enrollee on bills sent by facility-based providers or emergency care providers or explanation of benefits sent by insurers for an out-of-network health claim eligible for mediation.     Senate Bill 507; 1467.001+


ORSA: OWN RISK AND SOLVENCY ASSESSMENT

Utah amended its Insurance Code to add a chapter known as the "Risk Management and Own Risk and Solvency Assessment Act."     31A-16a-101+


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PREMIUM TAX

Hawaii issued a notice to state it has implemented OPTins to facilitate payment of premium taxes and fees.  All license extension/renewal forms and fees will be processed through OPTins; and this will apply to all insurance companies, Risk Purchasing Groups and Foreign Risk Retention Groups. They ask that no forms or payment checks be mailed to the Division.     Notice dated May 22, 2017


REINSURANCE

Kansas enacted legislation amending its Insurance Code section 40-221a, addressing reinsurance.     Senate Bill 16; 40-221a


RISK RETENTION GROUPS

Vermont promulgated revisions to its regulations governing risk retention group holding company systems adding reference to Form F.     Regulation C-12-2 s 4+


RISK-BASED CAPITAL

Alabama amended its Code stating that RBC reports, to the extent the information is not required to be set forth in a publicly available annual statement schedule, and RBC plans will be kept confidential by the commissioner.     27-2B-9


SERFF FILINGS

Arizona's Department of Insurance released an updated model Certificate of Translation and a new checklist for filing translated forms or advertisements. The checklist was developed to assist filers in ensuring that the SERFF translation filing and any filer-created Certificate of Translation includes all required elements.     SERFF Message 05-26-17


STANDARD VALUATION LAW

West Virginia adopted the most recent changes to the Valuation Manual adopted by the National Association of Insurance Commissioners (NAIC).     114-98-1+


SUITABILITY

Montana enacted legislation to adopt the NAIC Suitability in Annuity Transactions model regulation, revise state laws pertaining to annuity regulation, require insurers to adopt annuity supervision processes and address education requirements for insurance producers selling annuities.     House Bill 145; Uncodified HB 145 s 1; 33-20-805


SURPLUS LINES

Colorado enacted legislation to add disability insurance to its definition of surplus lines insurance.     Senate Bill 274; 10-5-101.2.

South Carolina amended its Code to include in its definition of surplus lines Insurance, "disability insurance in excess of any benefit limit available from an admitted insurer."     Senate Bill 463; 38-1-20(56)


UNCLAIMED PROPERTY

Maine amended its disposition of unclaimed funds provisions to include required actions to be taken by a life insurer before disposing of any unclaimed money. Record-keeping procedures are addressed as well.     HP 851

Tennessee amended its Code relating to the "Uniform Unclaimed Property Act."     House Bill 420; 66-29-101+

Texas enacted legislation adding a subchapter to its Insurance Code which addresses Death Master File searches and identification of unclaimed proceeds. It requires an insurer to compare records with the DMF at least semi-annually, specifying data to be searched and duties of the insurer relative to matches found.     Senate Bill 561; 1109.010+


LET US HELP YOU VERIFY YOUR COMPLIANCE RESULTS

Are you fully aware of your risks?

More and more Boards of Directors are seeking an external review/audit/exam of their business operations to assess their policy files, claims, policies & procedures as meeting their own internal guidelines and insurance regulatory requirements. Corporate Governance, ERM/risk management and regulators require knowledge of your own risks.

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Joe Bieniek, CPCU, AIE, CRM, CCP, CIC, ARC, AMCM, AIS, AU, AINS
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Joe.Bieniek@FirstConsulting.com


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