Life and Health News June 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


West Virginia amended its rule on actuarial opinion and memorandum based on the 2009 changes to the NAIC model regulation.     Rule 114-41

North Dakota amended its laws regarding advertising and promotional direct mail, which among other things, includes sales and use tax provisions.     House Bill 1391

Texas enacted legislation relating to a rescission period for annuity contracts.     House Bill 1032

Utah issued a bulletin clarifying the provisions related to allowable surrender charge schedules in various product designs of non-registered, general account contracts including traditional fixed annuities, index annuities, deposit type annuities, and market value adjusted annuities.     Bulletin 2011-2

Colorado adopted an emergency regulation pertaining to required information which carriers must obtain on all full-length applications for individual health benefit plans when a small employer intends on reimbursing an employee for any portion of the premium.     Emergency Regulation E-11-04

Kentucky amended its regulation establishing definitions and guidelines for a health benefit plan in providing a benefit for an individual with an autism spectrum disorder.     806 Ky. Admin. Regs. 17:460

Massachusetts prohibited health insurance carriers from limiting coverage for the diagnosis and treatment of Autism Spectrum Disorders to a fixed number of visits or days or require that visits be completed within a fixed number of days.     Bulletin 2011-08

Virginia enacted legislation requiring insurers that issue group accident and sickness insurance policies providing hospital, medical and surgical, or major medical coverage on an expense-incurred basis; corporations providing group accident and sickness subscription contracts; and health maintenance organizations providing a health care plan for health care services to provide coverage for autism spectrum disorder.     Senate Bill 1062, House Bill 2467

New Jersey issued a bulletin providing notification of the application process, guidelines, and other requirements for insurers seeking to form or redomesticate a captive insurance company in New Jersey.     Bulletin 11-08

Delaware enacted the Civil Union and Equality Act of 2011.  It among other things, provides definitions, requirements, eligibility, status of children of civil unions, as well as clarifies the rights, benefits, protections, and treatment of parties in a civil union.     Senate Bill 30

Mississippi issued a bulletin reminding insurers offering dental insurance of the various laws in effect relating to dental services.     Bulletin 2011-6

Alabama issued a bulletin that a state of emergency has been declared and directs all insurers to extend a grace period to affected insureds.     Bulletin 2011-01

Arkansas issued a sixty day moratorium on the cancellation/non-renewal of policies for the non-payment of premiums for Arkansans residing in storm impacted areas, due to the storms of April 14, 2011 through April 27, 2011. This moratorium shall apply to all insurance policies issued in this state, with some exceptions.     Bulletin 4-2011 Amendment

Georgia issued directives that direct insurers to use leniency when dealing with affected individuals whose premium payments may appear late due to mail service disruption and property loss, due to the severe weather outbreaks in April 2011.     Directive 11-EX-5, Directive 11-EX-5A

North Carolina issued a bulletin reminding all insurers of compliance requirements under a state of disaster and declaring a disaster.  It provides affected insurers with the option of deferring premium or debt payments.     Bulletin 11-B-03

Delaware enacted legislation providing for enforcement and recognition of contractual rights of insurer's counterparties under qualified financial contracts, netting agreements and related security arrangements to terminate, liquidate, accelerate, and close out contracts.     Senate Bill 46

Idaho issued a bulletin providing guidance regarding the version of the NAIC's Accounting Practices and Procedures manual to be used by insurers when preparing the 2011 quarterly and annual financial statements.     Bulletin No. 11-02

Maine enacted provisions regarding netting of qualified financial contracts by insurers.     House Bill 938 (LD 1279)

New Hampshire issued a bulletin updating the information requested by the Department for the annual statement supplemental reporting requirement.  Bulletin 2011-006-AB

Washington enacted legislation, which among other things, provides for eligible investments for insurers and financial reporting requirements that may be authorized by the commissioner.     House Bill 1257

Hawaii amended its laws regarding fraternal benefit societies.     Senate Bill 1484

Kansas enacted legislation regarding fraudulent insurance acts.     House Bill 2076

Texas provided immunity for organizations primarily dedicated to the detection, investigation, and prosecution of fraud.     Senate Bill 918

Maryland issued a bulletin providing clarification to HMOs regarding the appropriate payment amounts required by HMOs for covered services provided by nonparticipating providers.     Bulletin 2011-9

New Hampshire enacted legislation permitting an insurer to operate a health maintenance organization as a line of business.     House Bill 95

Illinois issued a letter indicating that the Interstate Insurance Product Regulation Commission is accepting product filings on behalf of the State of Illinois for individual life, individual annuity and individual long-term care product lines other than variable life and annuity product filings and annuity product filings with market value adjustment (“MVA”) features.  Illinois also does not accept modified rate schedules for individual long-term care insurance.     Letter dated May 6, 2011

North Carolina provided guidance for insurers on requirements of the Long-Term Care Partnership Program, including policy requirements.     Bulletin 11-B-06

Oregon enacted legislation applicable to long-term care insurance, which among other things, amended prompt payment requirements to reflect the NAIC Model act, defines a benefit trigger, adopted internal and external review procedures of whether the conditions of a benefit trigger have been met and requires that policies have a description of the process for appealing and resolving disputes.     Senate Bill 88

Georgia enacted legislation providing that the Commissioner will determine if an insurer meets the definition of a reinsurer, to provide for the definition of a reinsurer and to provide for designation on the certificate of authority.     Senate Bill 252

Kentucky issued an informational bulletin informing life and health insurers of insurance legislation adopted by the 2011 general assembly.  It includes, among other things, occupational and physical therapy coverage requirements, lists rewards or incentives that may be used to encourage participation in health benefit plan wellness programs, and provides standards for the use of retained asset accounts.     Bulletin 2011-3

Maryland adopted a regulation and may retain an actuarial consultant to examine a rate filing when the Commissioner considers it advisable. It also requires insurance companies to pay for the actuarial reviews completed by the Maryland insurance administration.     Regulation

New Mexico issued a bulletin reminding insurers of the requirement to promptly furnish requested documentation in order to expedite the certificates of authority application process and outlines time limits that will be enforced.     Bulletin 2011-009

New Mexico issued a bulletin to all health care providers that provide health benefit plans subject to the managed health care grievance procedures. It clarifies managed health care insurance cards requirements.  This Bulletin repeals and replaces Insurance Division Bulletin No. 2011- 004.     Bulletin 2011-08

New York issued a memorandum clarifying electronic fingerprint requirements for any person wishing to be an officer/director of an insurance company, and for Life Settlement Providers, Life Settlement Intermediaries and Life Settlement Brokers.     Memorandum 5-3-2011

North Dakota enacted legislation, which among other things, relates to coverage limits, powers and duties, and assessments of the North Dakota Life and Health Insurance Guaranty Association.     Senate Bill 2111

Puerto Rico issued a ruling letter informing international insurers and reinsurers of annual certificate of authority renewal requirements.     Ruling Letter 2011-125-CIS

Tennessee enacted legislation providing for statutory remedies and sanctions applicable to allegations of breach of contracts and unfair or deceptive acts by insurers, individuals, or entities regulated by the Division of Insurance.     House Bill 1189

Colorado amended its regulation regarding small employer health plan requirements.     Regulation 4-6-8

Georgia enacted legislation authorizing insurers to offer individual accident and sickness insurance policies in Georgia that have been approved in other states, as well as providing definitions and minimum standards for policies.     House Bill 47

Idaho amended the Idaho Health Carrier External Review Act by deleting language related to the certain final adverse benefit determinations and providing an opt-in election to single employer self-funded employee benefit plans.     House Bill 299

Indiana enacted legislation requiring a policy of accident and sickness insurance that provides coverage for physical medicine and rehabilitative services to provide coverage for physical medicine and rehabilitative services that are rendered by a licensed athletic trainer within the scope of the trainer's scope of practice.     House Bill 1467

North Dakota enacted legislation for health insurance prohibiting consideration of an individual's status as a subject of domestic abuse when establishing health insurance premiums or fees.     Senate Bill 2237

Tennessee amended its legislation allowing insurers issuing group or individual benefit plans to offer a voluntary wellness or health improvement program that uses incentives or rewards.     Senate Bill 1119

Virginia enacted legislation allowing insurers to receive test results directly from laboratories, with prior authorization from the patient.     Senate Bill 1116, House Bill 2216

Washington amended its laws relating to the health insurance partnerships.   Senate Bill 1560

Georgia enacted legislation relating to domestic stock and mutual insurers, which among other things, provides for the establishment of limited purpose subsidiary life insurance companies, as well as provide definitions, requirements, investment of funds, and reinsurance.     House Bill 341

West Virginia amended its valuation of life insurance policy rule.     Rule 114-68

West Virginia amended its regulation pertaining to the recognition of preferred mortality tables for use in determining minimum reserve liabilities.  It is based on the NAIC model.     Rule 114-69A

Indiana enacted legislation, which among other things provides, commission requirements pertaining to insurance producers selling long-term care insurance policies, limited purpose life subsidiary requirements and agent licensing requirements.     House Bill 1015

Oklahoma enacted legislation, which among other things, provides requirements for all group and individual initial rates and rate adjustments for every health benefit plan to be filed with the Insurance Commissioner.  It provides provisions for the application for admittance to transact insurance and provisions for the Uniform Health Carrier External Review Act.  It also defines health benefit plans.     Senate Bill 778

Colorado issued an emergency regulation applicable to carriers issuing child-only plans on or after May 3, 2011 regarding mandatory open enrollment periods.  Bulletin B-4.38 provides additional guidance on child-only policies.     Emergency Regulation E-11-03, Bulletin B-4.38

Connecticut issued a bulletin informing health insurance issuers that the insurance department will seek legislative amendments to the external appeals requirements.     Bulletin HC-82

Delaware enacted legislation enabling certain students graduating from college to remain on their parent's health plan pursuant to provisions of the Patient Protection and Affordable Care Act.     Senate Bill 35

Iowa provided uniform standards for the establishment and maintenance of external review procedures to assure that covered persons have the opportunity for an independent review of an adverse determination or final adverse determination made by a health carrier as required by the federal Patient Protection and Affordable Care Act.     House Bill 597

Kentucky issued a bulletin to all insurers issuing or renewing health benefit plans that explains the external review preemptions guidelines insurers should be adhering to, due the Patient Protection and Affordable Care Act.     Bulletin 2011-4

Montana enacted legislation prohibiting state and federal government from mandating the purchase of health insurance with certain exceptions.     Senate Bill 418

Oklahoma enacted legislation prohibiting elective abortion coverage in certain health plans.     Senate Bill  547

Washington enacted legislation clarifying the requirements of individual health insurance or health benefits plans for persons under the age of 19, including open enrollment, pre-existing conditions and the creation of a health benefit exchange.     S.S.B. No. 5371, Rule 2011-09, S.S.B. No. 5445

Virginia amended the retaliatory tax credit for the insurance premiums tax.  Also, transfers the administration of the premium tax from the State Corporation Commission to the Department of Taxation.     House Bill 2335, Senate Bill 1359, Senate Bill 1124

Arizona enacted legislation requiring individuals licensed in the state to provide documentation of citizenship or alien status indicating lawful presence in the United States. The requirement does not apply if the individual is a resident of another state and holds an equivalent license in that state.     House Bill 2102

Georgia provided for the transition from an annual renewal to a biennial renewal of licenses of agents and adjusted licensing fees.     Senate Bill 251

Idaho issued a bulletin reminding producers of their fiduciary responsibilities including reporting and accounting for premiums and handling of funds.     Bulletin No. 11-01

Kentucky amended provisions on producers' continuing education to add agency management to the required subject matter.     Regulation 806 KAR 9:220

Nebraska issued a notice regarding appointments and the cancellation of producers appointment forms.  This was provided in conjunction with the state's billing statement.     Notice dated May 2011

Ohio issued a memorandum applicable to license renewal requirements, penalties for non-renewal and provides information of the new electronic licensing system.     Memorandum Dated May 6, 2011

Ohio outlined the new training requirements for agents who engage in the sale, solicitation or negotiation of annuity products.     Bulletin 2011-07

Oklahoma amended the producer licensing act, which among other things, modifies reexamination requirements, insurance producer license application requirements and certain license reinstatement requirements. It removes certain provisional license fees and modifies educational requirements.     Senate Bill 965

Pennsylvania issued a notice that cautions producers who sell insurance or annuities to seniors not to use any professional designations that could be misleading to seniors and to otherwise comply with their obligations under Pennsylvania law.     Notice 2011-03

Utah issued a bulletin providing guidance regarding requirements for a producer to be authorized to sell products on the health insurance exchange. Producers currently authorized to sell products on the exchange should complete the additional training and secure direct appointments with all carriers no later than August 28, 2011.     Bulletin 2011-3

Colorado reissued the retained asset accounts bulletin, which updates information on applicable guaranty association and beneficiary contact information for coverage limitation information.     Bulletin No. B-4.12 (Reissued)

The Securities and Exchange Commission amended its procedures for holding funds in any filing fee account in which there has not been a deposit, withdrawal or other adjustment. The amendment extends the holding period from 180 days to three years, after which the Commission will initiate the return of funds to the account holder without any action by the account holder.     76 FR 28888-02, 2011 WL 1883954 (F.R.)

Maryland amended its suitability in annuity transactions rule to follow the NAIC model regulation with minor deviations.     Regulation

West Virginia amended its rule establishing requirements for producers and insurers in determining suitability of annuity products.     Rule 114-11B

Idaho approved changes to its Code pertaining to rebates and Illegal inducements.     House Bill 283

North Dakota enacted legislation relating to limitations on insurance rebates.     House Bill No. 1175

Utah modified its Code to address what constitutes unfair inducements related to insurance.     House Bill 333

New York enacted legislation, which among other things, amends its laws relating to unclaimed property, payment of abandoned property and premium tax credits.     Senate Bill 2811

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On-Line Research Services

Have you reviewed the On-Line Research Service section of our Website?  Go to

Our On-Line Research Services include the following:

The HIV Informed Consent Service
Third Party Administrator Licensing Service
Fraud Compliance Service


Complimentary research items are also available for select topics.

When you visit the Research portion of our website, you can take a virtual tour of the Fraud Compliance Service, Third Party Administrator Licensing Service, and our HIV Informed Consent Service. 

 Sean Cox
1-800-927-2730, ext 2737


 Advertising Compliance Seminar

Our Annual Advertising Compliance Seminar is scheduled for August 8–9 in Kansas City, Missouri. 

The link below will allow you to access a complete description of the content of our Seminar or to a link that will allow you to register online.  Learn the reasons why you should attend the seminar, the topics to be covered, and who should attend.  Our past seminars have been very well received.  Whether it is a better understanding of the laws or best practices that you can use, you will walk away with knowledge that you can put to use immediately.

The Early Bird Deadline for a reduced registration fee is Friday, June 10, 2011.  But, if you send an email to Judy below and mention you read this month’s newsletter, we will extend the deadline date for you until June 20, 2011.

If you have any questions, you can direct them to:

Registration Questions:  Judy Sykes         
Seminar Content Questions:  Jerry Wickersham


 First Consulting & Administration, Inc.
1020 Central, Suite 201

Kansas City, Missouri 64105

Judy at ext. 2753, or
Jerry at ext. 2743, or


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