Life and Health News May 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.


ACTUARIAL OPINION AND MEMORANDUM
Maryland amended its annual actuarial opinion and memorandum regulation to add requirements for the Regulatory Asset Adequacy Issues Summary and make it consistent with the NAIC model.     Regulation 31.05.01.06


CAPTIVE INSURANCE
Oregon enacted legislation regarding general requirements for captive insurers.     Senate Bill 1547

West Virginia amended its law regarding captive insurance, limiting risk retention groups' risks on single subjects of insurance and requiring captive insurance companies to notify the insurance commissioner of any material changes to certain information.     House Bill 4256


CREDIT INSURANCE
Alaska issued a bulletin regarding the consumer credit insurance reporting form.     Bulletin 2012-3


DENTAL
Mississippi removed the repealer on Section 83-51-31, which provides prohibitions against certain provisions in contracts between health care entities and dentists. Previously, this law was scheduled to be repealed on July 1, 2012.     Senate Bill 2324


DISASTER OR CATASTROPHIC EVENT
New York issued circular letters setting forth the standards expected of authorized life insurers and health insurers in planning and preparing for, and responding to disasters in New York state.     Circular Letter 3 (2012), Circular Letter 3 (2012)


FILING REQUIREMENTS
Maine amended its regulation on requirements for all health insurance rate filings and data reporting.     Rule R. 02-031 Ch. 940


FINANCIAL REGULATION
Arizona amended its financial provisions, which includes among other things, confidentiality of working papers and documents regarding the analysis of financial condition or market conduct of an insurer. Also amends provisions relating to payment of extraordinary dividends and provisions relating to eligible investments of an insurer, including certain foreign investments.     House Bill 2153

Colorado amended its regulation concerning actuarial qualification to add penalties for failure to comply with actuarial qualification requirements.   
 
Illinois issued a bulletin revising its bulletin regarding financial reporting, health insurance reporting, and policy form filings that was issued on December 16, 2011. It contained misinformation concerning semi-annual statement due dates in Item #14 related to accident and health expense reports for 2012.     Bulletin 2011-15 (Revised)

Kansas amended its law to allow an insurance company to designate a trust company, as well as a bank to hold the Company's securities. This is effective July 1, 2012.     Senate Bill 264


FINANCIAL STATEMENTS
Kentucky enacted legislation amending the definition of admitted assets to include those on the most recent statutory financial statement of the insurer filed with the Department of Insurance.     House Bill 3333


FRAUD
Arizona amends its Code regarding the warning statement required on claims forms to add a definition for the term "claims form."     20-466.03

California issued a bulletin that informs all insurers that the Fraud General Annual Assessment will be adjusted from $2,100 to $4,200 effective July 1, 2012.    Bulletin 2012-3

Maryland amended its fraud statement that is required to be in all applications for insurance and all claim forms, except reinsurance applications and claim forms. New filings will be required prior to January 1, 2013. Maryland also issued a bulletin to describe requirements for the Annual Fraud Data Report.     House Bill 301, Bulletin 12-04


GROUP HEALTH
Arkansas issued a bulletin regarding the definition of small employer group for medical loss ratio purposes.     Bulletin 3-2012

Arkansas issued a bulletin reminding carriers that write small group A&H business to file by September 1 of each year its schedule of rates or the methodology for determining rates.  This includes carriers that issue coverage to small employer groups through group policies issued to associations.     Bulletin 7A-2011


INTERNAL AND EXTERNAL REVIEW
Maryland amended its grievance procedure requirements.     COMAR 31.10.18.02-.15


LIFE SETTLEMENT
New York adopted emergency regulations regarding license fees and financial accountability requirements for life settlement providers and brokers.     11 NYCRR 381, 11 NYCRR 381.2, 11 NYCRR 381.3
 
Puerto Rico amended its standards for regulating the viatical settlements, life settlements and other transactions related to life insurance benefits.     Rule LXXXV


MANAGED CARE PLANS
Arkansas issued a directive to all health care insurers which issue managed care plans to address the termination of participation of a hospital in a health care insurer's network during the time an individual or group is covered under a managed care plan. This Directive applies to all health benefit plans issued or renewed after July 2, 2012.     Directive 1-2012


MANDATED COVERAGE
Maryland enacted legislation prohibiting insurers and health maintenance organizations that provide coverage for cancer chemotherapy under specified health insurance policies or contracts from imposing limits or cost sharing on coverage for orally administered cancer chemotherapy that are less favorable to an insured or enrollee than the limits or cost sharing on coverage for cancer chemotherapy that is administered intravenously or by injection.     Senate Bill 179, House Bill 243

Michigan issued a bulletin providing the new minimum substance abuse benefit level effective April 1, 2012 through March 31, 2013 is $4,094.     Bulletin 2012-06-INS

Nebraska enacted legislation requiring certain cancer treatment coverage.     Legislative Bill 882

Virginia enacted legislation relating to the requirements for orally administered cancer chemotherapy drugs.     Senate Bill 450, House Bill 1273

West Virginia enacted legislation regarding required coverage for treatment of autism spectrum disorders.     House Bill 4260


MEDICARE
Delaware issued an amended bulletin to all insurers issuing Medigap Policies to remind them of the requirement  to submit annual premium rates electronically. Companies are responsible for monitoring the Department's website to access the questionnaire and matrix in a timely fashion.     Domestic Foreign Insurers Bulletin 36 (Amended)


MIB NOTICE
Nebraska issued a notice informing insurers that the Medical Information Bureau requires members to amend authorization forms.  Nebraska determined that forms revised solely to comply with the language in the MIB, Inc. requirement are not required to be submitted for review and approval.     Notice 03/29/12


MISCELLANEOUS
Colorado issued a bulletin for all carriers writing AD&D benefits in connection with a group life insurance policy, with a health policy, or as a stand-alone health insurance policy.  It provides the Division’s position as it relates to AD&D policies and mandated health benefits in order to eliminate any confusion.     Bulletin B-4.45

Colorado repealed its regulation on complaint record maintenance.     Repeal Of Regulation 3 CO ADC INS 6-2-1

Rhode Island updated its rule regarding insurance holding company systems.     Regulation 17

Vermont amended various laws pertaining to banking, insurance, securities, and health care administration.  It also changed the name "Department of Banking, Insurance, Securities, and Health Care Administration" to "Department of Financial Regulation" (DFR).     House Bill 512

Virginia enacted legislation providing that the benefits under a policy of life insurance or accident and sickness insurance may include additional benefits.     Senate Bill 646

Virginia issued an administrative letter advising agents and insurance institutions that changes have been made in the Federal Model Privacy Forms.     Administrative Letter 2012-04


MISCELLANEOUS - HEALTH
Colorado amended its premium deficiency reserve standards for individual and group health benefit plans.     Regulation 3 CO ADC INS 3-1-15

Minnesota revised the definitions of "health plan company" and "health plan companies” to specify that they do not apply to an entity that offers, sells, issues, or renews only products expressly excluded from the definition of a health plan.     Senate Bill 1793

New Jersey revised its rules concerning internal appeals and external reviews of claims under health benefits plans to comply with federal and state law.  Also, among other things, provides requirements for complaints for which an HMO must maintain a complaint and appeal system.     N.J.A.C. 11:24-2.1;  N.J.A.C. 11:24A-1.2; 11:24A-3.2+

Oregon decided to allow companys with a certificate of authority for both health and property and casualty, to file a blanket accident and sickness policy that includes the option to purchase property and casualty riders and spells out the filing requirements.     Email Dated 4-19-12 and DOI Website

Texas issued a bulletin to all insurers with preferred provider health benefit plans and HMOs regarding the data call for reports for provider claims processing and additional clarification on reporting requirements due May 15, 2012.     Bulletin No. B-0009-12

Utah amended provisions in the health code and insurance code related to the state's strategic plan for health system reform.     House Bill 144

Utah enacted a new law to clarify when certain health care services are not subject to regulation as a health insurance plan.     House Bill 240

Utah revised the threshold of third-party payers reporting to the All Payer Claims Database from 200 to 2,500 persons.  Utah also established requirements for insurers that pay for health care to submit enrollment, medical claims, and pharmacy data elements to the Utah Department of Health, excluding insurers that covers fewer than 2500 individual Utah residents.     R428-15-1+; R590-262+

Virginia issued an administrative letter to assist carriers in the preparation of the annual report of cost and utilization data relating to mandated benefits and providers and remind all affected carriers of the reporting requirements applicable to mandated benefits and providers for the 2011 reporting year.     Administrative Letter No. 2012-2

Washington enacted legislation that pertains to individual health benefit plan coverage when a person's prior carrier has terminated individual coverage.     Senate Bill 6412


MISCELLANEOUS - LIFE
Kentucky enacted legislation that requires insurers to compare in-force life insurance policies against the Death Master File to determine potential matches of their insureds and provides the requirements for this.     House Bill 135

Virginia enacted legislation regarding a trustee's power to appoint assets into second trust.     Senate Bill 110


OMNIBUS LEGISLATION
Kentucky enacted legislation, which among other things, includes changes relating to certificates of authority, licensure requirements, surplus lines and captive insurers, insurance holding company systems, and penalties.     House Bill 295

Kentucky enacted legislation, which among other things, provides eligibility standards for an employee's child over the age of eighteen and updates the states group life law to more near match the NAIC model.     House Bill 497

Nebraska enacted and amended various insurance laws, including among other things, provisions relating to the Nebraska Holding Company System statutes, Health Maintenance Organization Act, Nebraska Protection in Annuity Transactions Act, structured settlement annuities, and benefits that guaranty associations may become obligated to cover for disability insurance and long-term care insurance.     Legislative Bill 887

Utah enacted legislation providing for or amending insurance related provisions including, but not limited to, annual reporting to policyholders, continuing education requirements, immunity and definitions related to insurance marketing and licensing.     House Bill 29

Washington amended legislation which, among others, pertains to grievance procedures, coverage requirements, producer licensing, and company solvency.     House Bill 2523


PREMIUM TAX
Kentucky issued a bulletin regarding premium tax information.     Bulletin 2012-01


PRE-NEED
Michigan issued a bulletin notifying insurers that the maximum amount of a death benefit from a life insurance policy or annuity contract that may be assigned to pay for cemetery or funeral services or goods is $9,775, effective from June 1, 2012 to May 31, 2013.     Bulletin 2012-04-INS

Virginia amended the definition of a limited burial insurance authority to replace the certificates of membership $10,000 limit with a requirement for use solely to fund preneed funeral contracts.     House Bill 871


PRESCRIPTIONS
Maine enacted legislation that provides that a health plan covering prescription drugs may not require cost sharing, deductibles or coinsurance obligations for prescription drugs that exceed the dollar amount for nonpreferred brand drugs or for brand drugs if there is no nonpreferred brand drug category.  It also adjusts of out-of-pocket limits.     House Bill 1243


PRODUCERS
Georgia enacted legislation that transitions annual license renewals to biennial license renewals for insurance agents.     House Bill 477

Virginia amended legislation requiring annual review of the pass rate of licensing examination for life insurance and annuities agents in accordance with the NAIC State Licensing Handbook by the end of the second quarter of the following year. Virginia amended its agent continuing education requirements.     House Bill 313, House Bill 209


REINSURANCE
Colorado repealed its regulation concerning annual application for approval as an authorized nonadmitted reinsurer and repromulgated its regulation to clarify the filing and other requirements regarding insurers gaining approval to reinsure risks.     Repeal Of Regulation 3 CO ADC INS 2-1-5; Regulation 3 CO ADC INS 3-3-1


REPLACEMENT MEMORANDUM
Arkansas clarified that the use of the replacement memorandum in connection with existing life insurance or annuities is not required if there is no replacement.     Bulletin 4-2012


RETAINED ASSET ACCOUNTS
New York issued a circular letter that replaces and supersedes the Insurance Circular Letter No. 4 (2012) that was dated February 24, 2012. That version is withdrawn. The circular letter sets forth procedures an insurer should follow to establish a retained asset account (“RAA”) upon the death of an insured.     Circular Letter 4 (Amended)


RISK-BASED CAPITAL
Kansas updated its risk-based capital requirements for qualified insurers.     Senate Bill 266


SECURITIES
Tennessee revised provisions governing deposit of securities in clearing corporation and also authorized domestic insurers to utilize modern systems for holding and transferring securities without physical delivery of securities certificates.     Senate Bill 2202


SUITABILITY
Utah amended its suitability in annuity transactions rule.     Rule R590-230-1+


THIRD PARTY ADMINISTRATOR
Oklahoma issued a bulletin regarding the TPA Annual Reports due on June 1, 2012.     Bulletin 3-21-2012


Compliance at your Fingertips with First Consulting’s
Web-Based Services

At First Consulting, we understand the need to access good information quickly, and we are always working to help our clients meet this need.  One way we’ve done so is with our web-based research services, including:

  • Anti-Fraud Compliance, detailing state requirements regarding use of fraud warnings, content and filing of anti-fraud plans and fraud reporting duties.  This service also defines what constitutes a fraudulent insurance act in all states.
  • HIV Informed Consent Service, describing HIV consent requirements, allowable AIDS application questions and HIV testing and screening protocol.
  • Third Party Administrator Licensing Service, which outlines whether an entity needs to be licensed as a TPA and the requirements for obtaining such license.
     

We also offer complimentary on-line research on a variety of topics of interest to insurers in all lines of business.

Visit First Consulting’s website and learn more.

Contact Sean Cox or Stacy Koron to discuss how First Consulting can help solve your product drafting or filing challenges.


 Is it Worth It?

Is it really worth all the hassle to put an Enterprise Risk Management Program in place? Are regulators really going to care about whether your program is not only robust enough, but effective? 

The verdict is in! 

The 2012 E-Reg Conference just ended this week in Kansas City, sponsored by the National Association of Insurance Commissioners (NAIC) and National Insurance Producers Registry (NIPR). 

Regulators there confirmed that when one person in an organization crosses ethical and regulatory boundaries, they will go after the individual and the Company. HOWEVER, if they find that the company had robust and effective controls in place, ones that the violator had to circumvent in order to cross those boundaries, they will NOT pursue the Company. 

So, is it worth it? Call us to find out how we can help you ease the hassle and still move the “compliance ball” toward the goal. 

C.J. Rathbun, FLMP, CCEP, HIA, AIRC
Senior Consultant
Direct Dial: 816-391-2740
Email: cj.rathbun@firstconsulting.com


 Have You Registered for our
Advertising Compliance Seminar?


A Practical Approach to Advertising Compliance
for the Insurance Industry
(includes sessions on Internet Advertising and Social Media Issues)

August 13 – 14, 2012
Kansas City, Missouri

Click here for complete details and registration information from our website

Any questions can be answered by
Jerry L. Wickersham, JD, AIRC
Vice President and Senior Consultant
Direct Dial: 816-391-2743
Email:  jerry.wickersham@firstconsulting.com



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