Life and Health News May 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

Illinois increased the annual benefit required by the Autism Mandate for 2011 from $37,260 to $38,527.  The yearly adjustment to the Autism Mandate benefit takes effect on January 1 of each year and applies to insurance policies and HMO contracts that are issued, renewed, or modified on or after January 1 of each year.     Bulletin 2011-4

Vermont issued a bulletin reminding health insurance plans of the coverage mandated for autism spectrum disorders.     HCA Bulletin No. 133

Arkansas enacted legislation prohibiting a dental insurance plan from requiring a dentist to accept a fee set by the plan for services not covered by the plan, removing limitations placed on fees charged for noncovered services and declaring an emergency.     House Bill 1425

Maryland enacted legislation prohibiting a carrier from including in a dental provider contract a provision that requires a dental provider to provide certain services at a fee set by the carrier, defining certain terms and generally relating to dental provider contracts and health insurance carriers.     Senate Bill 705

New Mexico enacted legislation prohibiting a dental insurance plan from requiring a dentist to accept a fee set by the plan for services not covered by the plan.     Senate Bill 260

North Dakota enacted legislation prohibiting a preferred dental provider arrangement from directly or indirectly setting or otherwise regulating the fees charged by the preferred provider, other than for covered services.     House Bill 1183

Maryland has adopted an amendment defining the word "carrier" as it applies to disability insurance.     House Bill 1085

Washington enacted legislation applicable to group disability insurance.     House Bill 1709

North Carolina issued a bulletin that pertains to all insurance companies licensed to transact business in the State of North Carolina.  It is intended to remind insurance companies of compliance requirements under a state of disaster.     Bulletin 2011-B-3

The Texas Commissioner issued a bulletin regarding the Texas State Disaster Coalition Catastrophe Plan.  The plan calls for an annual survey of all insurers doing business in Texas.  The survey includes questions about two types of plans: a catastrophe plan for paying large numbers of claims following a disaster, and a business continuity plan should the company experience a significant business interruption.   The bulletin asks insurers to complete the survey on the TDI website.     Commissioner's Bulletin B-0017-11

California issued a bulletin providing guidance to insurers on the implementation of reinsurance provisions of the Federal Nonadmitted and Reinsurance Reform Act.     Bulletin 2011-2

New Mexico issued a bulletin advising all health insurers of the medical loss ratio (MLR) requirements and of the Superintendent's immediate adoption of federal ‘Preliminary Justification‘ filing requirements. This Bulletin does not affect any short-term travel, accident-only or limited or specified disease policies.     Bulletin 2011-006

Arizona amended the annual audited financial reports requirements.     House Bill 2110

Utah issued a bulletin that provides guidance on the default of a premium finance agreement.     Bulletin 2011-1

West Virginia provided that certain financial information provided by insurance companies to the insurance commissioner is confidential and provided that such confidential information is not subject to subpoena or discoverable in a private civil action.     House Bill 2745

Massachusetts issued a bulletin instructing commercial heath insurers and health maintenance organizations regarding the application of the limit on increases to group base premium rates for renewing individuals and small groups.     Bulletin B-2011-6

New Mexico enacted legislation providing for the creation and registration of health insurance purchasing cooperatives among employers.     Senate Bill 89

Montana enacted legislation recognizing discretionary groups for life insurance and setting out requirements for such groups.     House Bill 487

Idaho enacted legislation which provides provisions and requirements applicable to the Life and Health Insurance Guaranty Association Act.     Senate Bill 1090

Kansas amended the life and health guaranty association act.     Senate Bill 179

Massachusetts adopted a new regulation setting forth standards the Insurance Commissioner may use to identify insurers in a hazardous financial condition.     Regulation 211 CMR 150

West Virginia amended its insurance holding company systems requirements and provisions, which includes among other things, filing requirements, definitions, confidentiality, reporting of dividends to shareholders, information to insurers, consolidated filing, exemptions, power of the commissioner, use of consultants, and orders and penalties.     Senate Bill 253

Arizona enacted legislation applicable to life settlement provisions and requirements, which among other things includes requirements for advertising, licensure and contracts, provider and broker disclosures to owners and fraud procedures.     Senate Bill 1461

North Carolina established long term care partnership continuing education requirements, definitions and responsibilities.     Rule 11 NCAC 06A .0801+

Arkansas amended its Insurance Holding Company Regulatory Act.     House Bill 1815

Arkansas amended its legislation applicable to regulation of insurance consultant fees.     Senate Bill  768

Arkansas amended its legislation for life and annuity insurers to require certain insurers to make an annual filing of a market conduct annual statement.     House Bill 1813

Arkansas amended the requirements for rescission of life and health policies concerning statements as representations in insurance applications.     House Bill 2137

Arkansas has approved legislation to establish the Arkansas Arbitration Act by amending the previous Act in its entirety.     House Bill 1438

Iowa eliminated the transfer tax imposed on insurers organized in other states who elect to become domestic insurers in Iowa.     Senate Bill 260

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

North Carolina enacted legislation to limit new agency regulatory requirements that result in substantial additional costs.     Senate Bill 22

Arkansas enacted legislation that requires health insurance plans to provide coverage for gastric pacemakers     House Bill 1915

Arkansas issued emergency rules concerning open enrollment and enrollment following a qualifying event for child-only individual policies. Applies to all insurers required to offer child-only individual policies during an open enrollment period as defined and provided for under the Child-Only Law.     Emergency Rule 102

Colorado amended its regulation regarding reimbursement by health insurance carriers for acupuncture services.     House Bill 11–1186

Colorado enacted legislation that allows a small employer that does not have a group health benefit plan to reimburse an employee, whether through wage adjustments or health reimbursement arrangements, for any portion of the premium for a health coverage plan.     Senate Bill 019

Colorado issued a bulletin intended for all carriers marketing or selling individual health benefit plans to self-employed business groups of one.  It provides a sample of the health benefit plan description form for the standard health benefit plans.     Bulletin B-4.22

Hawaii removed the term long-term care from the terms "accident insurance", "accident and health or sickness insurance", "health insurance", or "sickness insurance".  These terms now include an accident-only, specified disease, hospital indemnity, disability, dental, vision, medicare supplement, or other limited benefit health insurance contract regardless of the manner in which benefits are paid.     Senate Bill 27

Kentucky enacted legislation relating to individual and group health benefit plan wellness programs.     Senate Bill 114

Kentucky enacted legislation relating to occupational and physical therapy coinsurance requirements.  It also requires an insurer to clearly state the availability of occupational and physical therapy coverage under its plan and all related limitations, conditions, and exclusions.     Senate Bill 112

Maine issued a bulletin reminding health insurance carriers of their obligation to comply with the "any-willing-pharmacy" requirements.     Bulletin 377

New Mexico amended its legislation applicable to coverage for orally administered anticancer medications that limits patient costs.     Senate Bill 385

North Dakota enacted new legislation providing that individual health insurance coverage is not required, except under certain situations.     House Bill 1165

South Dakota enacted legislation limiting copayment or coinsurance amounts for chiropractic services.     House Bill 1146

Colorado enacted legislation concerning enactment of the insurable interest amendments to the uniform trust code.     Senate Bill 175

Kansas amended its legislation relating to insurable interests of trustees.     House Bill 2028

Maryland expanded it definition of “life insurance” to include (1) additional benefit for a second opinion for specified health conditions; (2) additional lump sum specified disease benefits; and (3) riders or supplemental policy provisions that operates to safeguard the contract from lapse in the event of involuntary unemployment.     House Bill 496, Senate Bill 255

New York issued a circular letter regarding the sale of unapproved annuity contracts and life insurance policies.  It, among other things, reminds all life insurers and producers that conducting insurance business is prohibited without authorized licenses.     Circular Letter 2011-6

North Carolina adopted a rule applicable to universal life insurance policies and certificates issued after December 31, 2006, and before January 1, 2014, that contain a secondary guarantee.     Rule 11 NCAC 11F .0406

North Dakota enacted legislation regarding insurable interest of a trustee.     House Bill 1135

Indiana enacted legislation, which among other things, incorporates amendments relating to netting agreements of qualified financial contracts.  Also includes amendments to laws on DOI retention of examiners, annual audited financial reporting, risk based capital, credit for reinsurance, requirements for certain domestic insurers, producer licensing and education requirements, and provisions for limited purpose subsidiary life insurance companies.  It also includes new requirements for producers selling variable products.     House Bill 1486

Iowa enacted legislation, which among other things, establishes provisions for summary and disclosure requirements for notice to policyholders.  It also establishes provisions for hedging transactions, insurer mergers, and the authority of the insurance commissioner related to enforcement powers.     Senate Bill 406

Hawaii enacted legislation requiring accident and health or sickness and health maintenance organization insurers to comply with applicable federal law. The commissioner will enforce the consumer protections and market reforms relating to insurance as set forth in the federal Patient Protection and Affordable Care Act.     Senate Bill 1273

North Dakota enacted an emergency legislation relating to compliance with federal law by health insurers, to provide for application and to declare an emergency.     House Bill 1125

Kentucky issued a bulleting regarding the 2011-2012 local government premium tax schedule.  The bulletin explains policyholder disclosure requirements and contains information regarding changes to the annual reconciliation filing requirements, legislative changes that impact local government premium tax laws and changes to various tax rates.     Bulletin 2011-1

Idaho amended legislation by replacing references to agents, solicitors, or brokers with producers, and allows life and disability insurers and producers to provide a maximum of $200 annually to prospective policyholders and policyholders for prizes, goods, wares, merchandise, articles or property.     House Bill 283

New Jersey issued a bulletin to clarify producer appointment procedures.     Bulletin 2011-6

New Mexico enacted legislation, which among other things, amends fees collected by the superintendent for an insurer's certificate of authority, annual statement, agents' licenses and appointments, viatical settlements license, rates and forms.     Senate Bill 198

North Carolina has allowed agents who qualified for the AGE exemption on or before December 31, 2011 to continue to apply and obtain the exemption, due to numerous complaints about the lack of notification of the AGE exemption being eliminated .     Memorandum 4-11-2011

North Dakota enacted legislation allowing insurance producers to give a gift to a person, with certain exceptions, in connection with marketing, promoting, or advertising insurance contracts, as long as the gift is $50 or less per person per year.     House Bill 1175

Oklahoma announced a new continuing education course available for licensees that are over the age of 65 and have been in the insurance industry for 20 or more years.     Producer Notice 4-8-11

Rhode Island issued a bulletin regarding long-term care and annuity producer training requirements prior to the sale, solicitation or negotiation of such policies.     Bulletin 2011-02

Tennessee enacted legislation, which among other things, clarifies the Commissioner's investigatory authority and provides system of due process for producer investigations.     House Bill 1845

Utah has revised its Code regarding errors and omission coverage of certain insurance producers.     House Bill 43

Indiana enacted legislation establishing the use, requirements and disclosure standards on the payment of life insurance to a beneficiary by means of a retained asset account.     Senate Bill 360

Maryland enacted legislation regarding the use of retained asset accounts.     Senate Bill 217

New Hampshire issued a bulletin clarifying the disclosure requirements detailed in the use of retained asset accounts bulletin (10-046-AB) that was previously issued. The disclosures must be submitted with an informational designation via SERFF to the New Hampshire Insurance Department by July 1, 2011.     Bulletin INS-11-004-AB

West Virginia issued an information letter to clarify the duties of insurers relative to the payment of life insurance benefits to beneficiaries by means of retained asset accounts and outlines disclosure standards.     Informational Letter No. 178

Kansas made adjustments to the risk-based capital formula to conform with NAIC requirements.     Senate Bill 15

Maryland enacted legislation applicable to risk-based capital requirements specifying criteria for determining when a company action level event occurs for health insurers.     Senate Bill 59

Utah modified the Utah Uniform Securities Act to revise licensing rules relating to who may transact business as an investment adviser or investment adviser representative. Also makes revisions pertaining to filing of documents over a course of a holiday or weekend.     Senate Bill 98

North Dakota enacted legislation, which among other things, amends annuity suitability provisions related to producer training, duties of insurers and insurance producers, adds requirements for determining suitability of annuity transactions and defines replacement and suitability information.     House Bill 1160

Advertising Compliance Services

During our Advertising Compliance seminars, we find that some companies need outside assistance with advertising review and, depending on your market, advertising filings.

Our expert staff can perform a comprehensive one-time review of all of your existing marketing pieces, or those designed for a specific product.  We can also provide an ongoing review that allows you to route new pieces for review prior to printing for release.  We can provide both general compliance advice and address particular state concerns.

One advantage in using our services is that we can provide our review and comments on an unbiased basis.  We know that marketing/sales wants to put the best foot forward on their sales material, but we also know that the foot sometimes goes too far in the eyes of the insurance regulators.  Let us help develop a solution that meets your objective, but within the boundaries of the advertising rules.

If your products require that advertising be filed for approval, we can also provide assistance with this requirement, utilizing the SERFF filing system.

Click here to go to our webpage on Advertising Compliance or give CJ or me a call today to discuss how we can provide assistance to meet today’s advertising compliance requirements.

Jerry L. Wickersham

CJ Rathbun

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