Property & Casualty News April 2012

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 Inquiry@firstconsulting.com


AUTOMOBILE INSURANCE

Idaho amended its Code to provide for an increase in deductibles for comprehensive coverage and collision or physical damage coverage as a condition to renewal of an automobile insurance policy. 41-2511

Maine amended its Code pertaining to personal auto rates for emergency responders. Previously, an insurer could not increase the premium for a personal insurance policy providing motor vehicle liability or collision insurance to a law enforcement officer under certain circumstances. The exemption now applies to emergency responders as well as law enforcement officers. Maine Insurance Code 24-A s 2174-B

Rhode Island amended its regulations pertaining to the payment of automobile damage claims. The amendments include clarification of insurer obligations regarding work done by unlicensed auto body shops, and provision of specific consumer warning language to be used if an insured accepts the value of automobile damage rather than have the automobile repaired. Procedures are also provided regarding the Work Completion Certification Form. Insurance Regulation 78

Utah approved changes to its Code amending provisions relating to uninsured and underinsured motorist coverage. HB 167

Utah enacted new law and amended existing laws to modify the Insurance Code and Motor Vehicles Code relating to motor vehicle insurance reporting. Senate Bill 244

Virginia approved amendments to laws concerning auto salvage by adding a definition and an exemption for repairable vehicles. HB 870


CERTIFICATES OF INSURANCE

Tennessee issued a bulletin to clarify to insurers and insurance producers that certificates of insurance must be consistent with and conform to the terms of the underlying policy. The bulletin specifies that the improper modification or fabrication of a certificate of insurance will be treated as an unfair trade practice. Bulletin dated 3-21-2012

Virginia enacted new legislation regarding certificates of insurance and providing that certificates of insurance must contain language substantially similar to a statement included in a newly enacted section of its Code. Senate Bill 47


CLAIMS

Kansas issued a bulletin to notify property and casualty insurers that the Kansas Alternative Mediation Program (K.A.M.P.) has been renewed. The bulletin explains that the program now includes the opportunity to allow telephone mediation if both parties are agreeable and provides examples of disputes suitable for the K.A.M.P. Bulletin 2012-2


DISASTER AND EMERGENCY OPERATIONS

Kentucky issued an advisory opinion providing guidance to insurers on allowances for policyholders and insurance producers affected by recent severe weather events. An Executive Order was also issued setting forth insurer requirements. Advisory Opinion 2012-02 and Executive Order 2012-196

New York issued a circular letter regarding disaster planning, preparedness and response. The letter sets forth requirements for reports and plans (Pre-disaster Data, Business Continuity Plan and Disaster Response Plan Questionnaires, and Disaster Response Plans) to be submitted to the state. Certain reports are due by May 1, 2012 and others are due by June 1, 2012. Circular Letter 2012-1, April 9, 2012

Ohio issued a bulletin to all insurance companies allowing insureds to defer premium payments coming due, and to extend any and all provisions imposing time constraints within which insureds must take certain action. This request derives from the State of Emergency declared in Clermont County from storms occurring on March 2, 2012. Bulletin 2012-01


FRAUD REPORTING

Maryland issued a bulletin to describe requirements for the Annual Fraud Data Report. Bulletin 12-04


FRAUD WARNINGS

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

Maryland amended the fraud statement that is required to be in all applications for insurance and all claim forms, except reinsurance applications and claim forms, changing "knowingly AND willfully" to "knowingly OR willfully". House Bill 301


HOMEOWNERS INSURANCE

Nebraska enacted new laws to create the Insured Homeowners Protection Act. Legislative Bill 943

Nevada issued a bulletin to explain the implementation of new legislation concerning the mandatory offer of replacement-cost coverage for manufactured or mobile homes manufactured within the preceding 15 years. The offer must be made on all new business and on the first renewal of existing policies on or after 1-1-2013. Rates, rules and forms to be used in providing this coverage must be filed for approval by the Commissioner. Bulletin 12-002


MEDICAL MALPRACTICE INSURANCE

Maryland issued a bulletin to advise insurers writing medical professional liability insurance that a report is to be filed with the department related to premiums for certain coverages. Bulletin 12-05


MISCELLANEOUS

Indiana enacted legislation concerning volunteers who may perform emergency services under the direction of a nonprofit corporation. Indiana Code is amended to provide that a community fast responder nonprofit corporation shall purchase insurance to cover the liability of all of the corporation's community fast responders for bodily injury or property damage caused by the corporation's community fast responders acting within the scope of their duties. HB 1040

South Carolina issued a bulletin to clarify Bulletin 2011-02 regarding the application of paid-in-full discounts to third party financing arrangements and insurer installment plans. Bulletin 1-2012


PERSONAL AUTOMOBILE INSURANCE

Arizona amended its Code pertaining to cancellation or nonrenewal to provide that an insurer shall either mail the notice and refund of unearned premium together at least ten days before the effective date or mail the notice before the refund of unearned premium if both the notice and the refund of unearned premium are mailed separately to the insured at least ten days before the effective date. SENATE BILL 1134


PERSONAL LINES INSURANCE

Indiana enacted new legislation regarding group personal excess and umbrella insurance that specifies requirements for insurer issuance of group personal excess and umbrella liability insurance to group members. 27-1-41-1+


POLICY ISSUANCE

Virginia amended its Code to include a requirement that each policy of property and casualty insurance contain a list of all policy forms and endorsements applicable to that policy, and display the respective form numbers. If those form numbers are not unique identifiers of such forms, the applicable edition dates should also be shown. HB 127


PORTABLE ELECTRONICS INSURANCE

Colorado enacted new legislation regarding portable electronics insurance. HOUSE BILL 12-1071

Utah enacted legislation to create the Portable Electronics Insurance Act. HB 61


PRODUCERS

Arkansas issued a bulletin regarding 2012 company producer appointment renewal and termination procedures. Bulletin 2-2012

Illinois issued a bulletin regarding the implementation of a mandatory electronic application process for producer/business entity licenses effective August 1, 2012. COMPANY BULLETIN 20 12-02

North Dakota enacted legislation to exempt an insurance producer licensed exclusively for the sale of title insurance, travel or baggage insurance, surety, bail bonds, legal expense insurance, or credit insurance from continuing education requirements. 45-02-04-09.3

Virginia amended its Code concerning insurance agent continuing education requirements. Changes were made to several portions of the Code including the required number of continuing education credit hours in insurance ethics, submission of proof of compliance and continuing insurance education fees. HB 209


PROPERTY INSURANCE

Virginia amended its Code to add a requirement that insurers writing a fire policy or fire policy in combination with other insurance coverages provide coverage for the cost charged by a volunteer fire department that is not fully funded by real estate taxes or other property taxes for service charges where the fire department is called in to save or protect property insured under the policy from a peril insured against. The provision includes requirements regarding limits of coverage and billing. H.B. No. 1202

Virginia enacted legislation pertaining to fire insurance policies that do not include earthquake damage coverage. Insurers offering new or renewal policies, including fire coverage but excluding earthquake coverage, must provide specified written notices. HB 523


REINSURANCE

New Jersey issued a bulletin regarding changes to credit for reinsurance requirements. Bulletin 12-04


SUBROGATION

Maine amended its Code regarding subrogation of medical payments coverage to delete a provision that permitted a policy to contain a provision allowing subrogation or priority over the insured when an insured's awarded or settled damages exceed $20,000. Title 24-A s 2910-A


SURPLUS LINES INSURANCE

Wyoming enacted legislation pertaining to surplus lines insurance. A new provision is enacted regarding insurance independently procured from a nonadmitted insurer. Other sections of Code concerning the provision of surplus lines insurance were amended. HOUSE BILL NO. 0015


WORKERS' COMPENSATION

Arizona approved amendments to laws to permit marketing representatives of the state compensation fund to be licensed to sell insurance other than workers' compensation, and to allow an employee to elect to have compensation payment made by electronic fund transfer, if offered by the employer. SB 1016



Product Maintenance

We are in the middle of the legislative sessions in many states at this time. It seems like new legislation never stops arriving in your in-basket. Regardless of your product line, new legislation often times results in the need to revise your products.

First Consulting offers a customized solution to help you keep your products current in your territory.

We can assist with the review of the new legislation, as it arrives or after the fact, to see if it affects your products. And, if it does, we can assist with the creation of revised forms to address the new requirements. We can also assist with any form filings that result from legislative changes.

Our Co-Sourcing philosophy allows us to assist you in the manner best suited for your unique needs. As such, your staff can maintain a role in the process at whatever is most appropriate for your company and specific project. Click here for more information on Co-Sourcing.

Contact me today to see how First Consulting can serve as a resource in the review of new legislation, and the resulting product changes and filings.

Jerry L. Wickersham, JD, AIRC
Senior Consultant

First Consulting & Administration, Inc.
1020 Central, Suite 201, Kansas City, Missouri 64105
800-927-2730, ext. 2743
816-391-2743

Email: jerry.wickersham@firstconsulting.com


Product Drafting Experts

Product development is heating up again and insurers are working hard to bring new products to market. New products or markets mean new compliance issues, and for that, experienced compliance assistance is necessary. First Consulting can provide that expertise. Since 1969, First Consulting has helped large and small insurers with initial product creation, compliance review of a new product and creation of state specific variations. We have assisted with design and drafting of a variety of life, health, property and casualty products. Our staff, consists of attorneys and insurance professionals with a wide range of industry designations.

Visit First Consulting’s website and learn more.

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


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