Life and Health News October 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.


ANNUITIES

Nevada issued a bulletin providing information regarding statutory revisions which amend the minimum nonforfeiture requirements for individual deferred annuities issued on or after January 1, 2012.     Bulletin 2011-007


CIVIL UNION
Illinois issued a bulletin to provide additional guidance about the form and content requirements of Bulletin 2011-06, which described compliance with the Religious Freedom Protection and Civil Union Act.     Bulletin 2011-12


CREDIT LIFE AND HEALTH INSURERS
New Mexico issued a bulletin regarding the adjustment of presumptively acceptable credit life insurance and credit accident and health insurance premiums.     Bulletin 2011-010


DISASTER OR CATASTROPHIC EVENT
New Jersey issued a bulletin pertaining to the disruption and dislocation resulting from Hurricane Irene. The bulletin asks insurers to relax documentation and other requirements including premium payments, prior authorization requirements and limitations on prescriptions.     Bulletin 11-17


North Carolina issued a bulletin to all insurance companies providing specifics pertaining to extensions, deferrals, and other requirements regarding premium and debt deferrals as a result of Hurricane Irene.     Bulletin 2011-B-9

 
Rhode Island issued a bulletin to all health insurers advising how to handle individual and group health insurance claims for disaster victims and evacuees throughout the duration of a catastrophe and state of emergency.     Health Insurance Bulletin 2011-1


EXTERNAL REVIEW
Arizona issued a bulletin notifing health issuers of the impact of the Department of Health & Human Services’ (HHS) Technical release 2011-02 on the external review process.     Regulatory Bulletin 2011-07


Colorado amended standards for the external review process for health coverage plans to facilitate the implementation of certain provisions of the Affordable Care Act (ACA).     Regulation 4-2-21


Hawaii amended its external review procedure process for health carriers to comply with the requirements of the Patient Protection and Affordable Care Act.     Senate Bill 1274


Illinois issued a bulletin pertaining to the changes made to the Health Carrier External Review Act, which apply to adverse determinations or final adverse determinations.     Bulletin 2011-10


Iowa amended its External Review Administration Code to provide conformity with the Patient Protection and Affordable Care Act and provide uniform processes for covered persons to request an external review.     Regulation 191-76.1, 191-76.2, 191-76.3, 191-76.4, 191-76.6


New Hampshire issued a bulletin to clarify external review requirements for health insurance carriers in light of the federal Patient Protection and Affordable Care Act of 2009  and related federal regulations and determinations.     Bulletin 11-019-AB


FILING REQUIREMENTS
Michigan cancelled phase II of the data call which had previously been planned to collect forms in use from January 1, 2000 through December 31, 2004 for life, health and annuity forms.     Memorandum dated August 26, 2011

 
South Carolina issued Bulletin Number 2011-09 advising that, effective 12-1-2011, paper filings will no longer be accepted.  This applies to all lines of insurance.  All fees are to be paid by electronic funds transfer.     Bulletin Number 2011-09


FINANCIAL REGULATION
North Carolina issued a bulletin to clarify certain reporting requirements of the Annual Financial Reporting Law.  It is effective immediately for financial statements as of December 31, 2011 and has been issued to replace Bulletin Number 10-B-06.     Bulletin 2011-B-11


FRATERNAL BENEFIT SOCIETIES
Pennsylvania rescinded its chapter on fraternal beneficial societies to eliminate obsolete and unnecessary regulations related to fraternal beneficial societies that no longer exist as an entity licensed to transact insurance.     Rescission Of Chapter 43


FREE LOOK PROVISION
Nevada issued a bulletin providing guidance to life insurance policies or annuities regarding compliance with the revised free-look period provisions effective October 1, 2011.     Bulletin 2011-008


GUARANTY ASSOCIATION
Alaska issued an order explaining that an insurer may not deliver a policy or contract unless the Notice of Protection Provided by the Alaska Life and Health Insurance Guaranty Association is delivered to the policy or contract owner at the time of delivery of the policy or contract.  This order supersedes and rescinds Bulletin B 11-06 issued on July 21, 2011.     Order R11-03


Nevada issued a bulletin requiring all life and health insurers use the updated summary document describing coverage, limitations, and exclusions under the guaranty association effective October 1, 2011.     Bulletin 2011-009


Texas issued a notice informing insurers that the Commissioner of Insurance revised the life and health guaranty association summary document notice.  Insurers have 60 days from August 30, 2011 to start providing the revised summary document to policy or contract holders when issuing new policies or contracts.     Notice 8/30/11


HEALTH MAINTENANCE ORGANIZATIONS
Virginia amended its requirements for health maintenance organizations, which among other things, added exceptions to the copayment, deductible requirements for certain preventative services, amended its reasons for termination and added additional definitions.     14 VAC 5-211-90, 14 VAC 5-211-100, 14 VAC 5-211-20, 14 VAC 5-211-230


INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION
The Interstate Compact Commission will accept interstate compact product filings for Nevada beginning October 18, 2011. The notice also provides helpful tips for how to add a state to your interstate compact filing.     IIPRC E-mail Dated 9-23-11


LIFE SETTLEMENTS
Texas issued a bulletin reminding all life settlement  insurance companies of the new statutory requirements on the business of life settlements.     Commissioner's Bulletin B-0036-11


LONG-TERM CARE
Maine issued a bulletin explaining the exchange process, due to the new requirement for insurance companies to reissue qualifying long-term care partnership policies.     Bulletin 381


New York amended the long term care integration and finance act of 1997, in relation to extending the expiration of operating demonstrations operating a managed long term care plan.     A. 8098


MEDICARE SUPPLEMENT
North Carolina issued a bulletin informing issuers of medicare supplement insurance about the requirement for an open enrollment period for those persons under the age of 65 that become eligible for Medicare Part A and Part B by reason of disability.     Memorandum 9-9-2011


MISCELLANEOUS
Arkansas issued a directive replacing directive No. 2-2011 in its entirety.  This directive prohibits giving gifts or anything of value as an inducement to inquire about, to purchase or renew insurance.  This does not apply to token gifts of $25 or less in value or other items for advertisement purposes.     Directive No. 2A-2011


California enacted legislation which prohibits an insurance broker or agent from participating in, being associated with, or employing any party that participates in or is associated with, the origination of a reverse mortgage, except as provided.  This legislation also prohibits, with exceptions, individuals transacting insurance from receiving compensation, commission, or direct incentive for providing reverse mortgage borrowers with a noncasualty insurance product that is connected to or a result of the reverse mortgage.     Assembly Bill 793


Illinois enacted legislation amending the Personal Information Protection Act, which modifies the notice requirements for security breaches and adds a section on the disposal of materials containing personal information.     House Bill 3025


MISCELLANEOUS - HEALTH
California enacted legislation providing that contracts between certain insurers and a hospital or health facility may not contain a provision that restricts the ability of the insurer to furnish information to insureds concerning the cost range of procedures at the hospital or health facility or the quality of services performed.  It requires a plan or insurer to provide a hospital or facility the opportunity to review the methodology and data used before information is provided to subscribers or to policyholders or insureds.     Senate Bill 751


Colorado adopted a new regulation establishing a standard affidavit form to be used upon application for an individual health benefit plan when a small employer intends on reimbursing an employee for any portion of the premium. It does not apply to applications for limited benefit health insurance plans or to applications for short-term health benefit plans.  It replaces emergency regulation E-11-04 in its entirety.     Regulation 4-2-37, 4-2-37, App. A, 4-2-37, App. B


Connecticut issued a bulletin regarding several new laws that impact individual and group health insurance policies.     Health Care Bulletin HC-70 (#4)

 
Delaware enacted legisation regarding reimbursement for orthotic and prosthetic services for health contracts.     House Bill 76


Maryland adopted new regulations regarding the assignment of benefits to nonpreferred providers applicable to preferred provider insurance policies.     COMAR 31.10.41.01, 31.10.4, 31.10.41.05, 31.10.41.06, 31.10.41.07, 31.10.41.03


South Carolina issued a bulletin addressing a provision that requires that annual adjustments of the maximum benefit for coverage for behavioral therapy be made to reflect any change from the previous year in the Consumer Price Index.     Bulletin 10-2011


Tennessee adopted an emergency rule on form and rate filings for health insurance not subject to the authority of The Patient Protection And Affordable Care Act of 2010.     Emergency Rule 0780-01-92+


Tennessee repealed  Rule 0780-01-20+, regarding filing and approval rule for group accident and sickness policies and forms.     Emergency Repeal of Rule 0780-01-20+


Wisconsin amended its Colorectal Cancer Screening coverage requirements.     Regulation Ins 3.35


MISCELLANEOUS - LIFE
Illinois enacted legislation regarding the misrepresentation of senior-specific certification.  The legislation also amends the proof of death provision and amends the interest rate and timing requirement for payment of death claims.     Senate Bill 1607


Nevada enacted legislation eliminating premium and benefit limits on the amounts of certain property, including life insurance contracts and annuities, that are exempt from execution.     Senate Bill 348


PATIENT PROTECTION AND AFFORDABLE CARE ACT
Colorado amended its regulation regarding mandatory open enrollment periods for carriers that issue child-only plans on or after September 1, 2011.  This replaces emergency regulation E-11-03 in its entirety.     REGULATION 4-2-33


Delaware amended its insurance code for supplement coverage for children of insureds by revising the age requirements.     House Bill 160


Idaho issued a bulletin providing health insurers with information required to meet new requirements by clarifying rate filing procedures. This bulletin outlines the data elements and required documentation for each submission of new rate filings, rate revisions or justifications of an existing rate.     Bulletin 2011-7


Michigan issued a memorandum clarifying the new filing requirements for health insurance rates under the Affordable Care Act.     Memorandum 8-31-11


Virginia established a uniform process for the internal appeals process, sets forth requirements for the external review process and provides conformity with the Patient Protection and Affordable Care Act.     14 VAC 5-216-10


PREMIUM TAX
Illinois enacted legislation which amends the tax law with regard to reimbursed insurance premiums.     House Bill 2955


PRE-NEED
Texas amended its rules concerning pre-paid funeral benefits and contracts.     Rule 7 TAC 25.22, Rule 7 TAC 25.3


PRODUCERS
Maine issued a bulletin regarding the repeal of the Independent Producer license authority for insurance producers, repealed effective September 28, 2011. The Bulletin explains how this affects licensed producers, and clarifies when an appointment by the insurer is required.     Bulletin 380


Utah repealed and reenacted the rule on insurance producer continuing education requirements including provisions on required hours.     Rule R590-142-1+


SETTLEMENT OPTIONS
New Jersey established disclosure and filing requirements for retained asset accounts, and disclosure requirements for all settlement options related to life insurance policies.     Rule 11:4-61.1+


SUITABILITY
Connecticut amended its requirements for suitability in the sale of annuities including the purchase, exchange, and replacement of annuities.     Regulation 38a-432a-1+


Vermont adopted a new rule that outlines provisions on senior-specific designations and certifications.     Regulation SI-2011-03


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
816-391-2743
jerry.wickersham@firstconsulting.com

 

CJ Rathbun
 816-391-2740
cj.rathbun@firstconsulting.com

 


New Standards for Compliance: ERM

Your market conduct activity is under increased state scrutiny with the November 2010 updates to the Federal Sentencing Guidelines manual.

Regulators are now required to determine whether or not (a) the insurer’s overall compliance program is robust and (b) the insurer’s compliance program leads to effective results.

First Consulting can support your Enterprise Risk Management (ERM) efforts.

  1. If you are just setting up an ERM program, we can help you identify gaps, assist with root cause analysis, and offer recommendations to strengthen those areas identified.
  2. If your program is in place and you would like a neutral third party to help preview what regulators may find in your company, we can also help you with that.
     

ERM used to be the realm of financial examinations, but it’s becoming a key component in market conduct examinations, as well. Ensure that you are prepared to satisfy regulatory inquiries.

Let us help! 

CJ Rathbun
816-391-2740
cj.rathbun@firstconsulting.com


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