Property & Casualty News August 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.


AUTOMOBILE INSURANCE

Alabama issued a bulletin regarding motor vehicle accident prevention courses and premium reductions applicable to drivers 55 years of age or older who have successfully completed certain accident prevention courses.     Bulletin No. 2012-07

Massachusetts issued a notice to insurers and provided a list of private passenger motor vehicles that the Commissioner of Insurance has designated as "high-theft vehicles."     PC Filing Guidance Notice 2012-A

Missouri amended legislation pertaining to plans for apportionment of substandard insurance risks. By October 1 of each year any company that elects to accept and service applicants and policies for the next calendar year for any such plan shall notify the plan. Any company that does not notify a plan shall be excused from accepting and servicing applicants and policies for the next calendar year for such plan and shall pay a fee based on the company's market share on the kinds of insurance offered by the plan.     303.200


CANCELLATION PROCEDURE

New Mexico issued a bulletin to advise insurers that certain commercial policyholders are required to provide certain state agencies with proof of insurance that includes a statement from the insurer that it will notify the state agency 30 days before cancelling the insurance.  Types of insurance subject to this requirement include but are not limited to product liability issued to manufacturers of ignition interlock devices, garagemen's public liability insurance issued to service centers where ignition interlock devices are installed, and vehicle insurance issued to driver education schools.  The bulletin specifies that when a commercial policyholder is required to provide proof of insurance that includes a statement from the insurer that it will notify a state agency 30 days before cancelling the insurance, the insurer shall provide such a statement.     Bulletin No. 2012-009


CERTIFICATE OF AUTHORITY

Hawaii amended several sections of its Code relating to issuance of a certificate of authority for mutual benefit societies and fraternal benefit societies.     Senate Bill 2766

North Dakota implemented changes concerning the renewal of a Certificate of Authority by repealing the requirement that an application by a corporation, association, or benefit society be accompanied by a certified copy of the articles of incorporation or association, requiring the payment of the certificate of authority renewal fee by April 30 of each year and establishing the timing for the payment of that fee.     Rule 45-02-03-04+


CIVIL UNIONS

Hawaii enacted legislation to provide clarification to civil union laws.     House Bill 2569


CLAIMS

Maryland issued a bulletin reminding insurers of laws and regulations pertaining to claims investigations.  The bulletin describes recent complaint investigations and discusses prohibited unfair claim settlement practices.     Bulletin 12-14


CREDIT SCORING

Michigan enacted legislation pertaining to the use of credit information and providing definitions, exceptions to the application of credit information for specified life events, reevaluation process, disclosure, notice and other requirements.  The new legislation also provides that an insurer shall indemnify, defend, and hold harmless producers from and against all liability, fees, and costs arising out of or relating to the actions, errors, or omissions of a producer resulting from the use of credit information or insurance scores for the insurer, when the producer follows the procedures and instructions established by the insurer and complies with all applicable laws and regulations.     500.2151 +


DISASTER AND EMERGENCY OPERATIONS

Ohio issued a bulletin asking companies to allow their insureds to defer premium payments coming due, interest free, for up to 60 days from the original premium due date, and to extend any and all provisions imposing time constraints within which insureds must take certain action for at least 60 days, not to extend past September 30, 2012.  This request derives from the Federal Emergency Declaration for the state  from storms occurring on June 29, 2012.     Bulletin 2012-02


FILING REQUIREMENTS

Oregon added filing guidelines to their website regarding Statements of Variability, cover letters, replacement form filings, and filings made for more than one company.     Filing Guidelines 7-13-2012


FRAUD

Missouri enacted legislation relating to fraudulent insurance acts to clarify immunity provided to insurers, employees or agents of any insurer, or any other person acting without malice, for furnishing information related to insurance fraud investigations.     375.993


HOMEOWNERS INSURANCE

Alabama issued a bulletin regarding data reporting requirements applicable to insurers authorized to transact homeowners insurance.  The bulletin explains that insurers must report certain data pertaining to personal lines property business written from 2007 through 2012 and on an annual basis in subsequent years, and certain catastrophe wind/hail information.  2007 through 2012 data must be reported not later than 10-1-2013, and catastrophic data calls will be required after 9-1-2012 if requested.   The bulletin includes technical instructions for reporting data.     Bulletin No. 2012-06


MEDICAL PROFESSIONAL LIABILITY

Hawaii revised provisions pertaining to medical claim conciliation to make the process less adversarial and to emphasize inquiry.  Also included is a provision prohibiting medical malpractice insurers from increasing premiums based on medical claim conciliation panel filings since these filings should be properly recognized as inquiries rather than true claims.     House Bill 1967


MISCELLANEOUS

Delaware amended its reinsurance Code to permit a captive insurance company, other than a risk retention group, to take a credit or reduction from liability for the reinsurance of risks, or portions of risks ceded to reinsurers, in accordance with Subchapter III of Chapter 9 of Title 18, or as otherwise approved by the Commissioner.     Senate Bill 203

Delaware has rewritten rules pertaining to inspection of public records.  The form and process required to file a Freedom of Information Act request is described, the fee section is updated, and provisions require the Department to respond in a specified manner to a FOIA request as soon as possible, but no longer than 15 business days after receipt.     700 Policies and Procedures Regarding FOIA Requests

Missouri enacted legislation requiring household goods carriers to procure workers' compensation insurance for all employees. No certificate or permit to transport household goods in intrastate commerce shall be issued or renewed unless the applicant demonstrates that such insurance is in effect.     390.054

New Mexico issued a bulletin regarding garagekeepers liability coverage required by towing services.  The bulletin notes that towing services must maintain $50,000 of both on-the-hook and garagekeepers' liability insurance.     Bulletin 2012-010

North Carolina amended a rule to update the phone numbers and mailing address for the Insurance Department for those with inquiries or seeking information.      Rule 11 NCAC 04.0116

North Carolina enacted legislation to provide for the creation of mutual insurance holding companies.     SB 647

Pennsylvania amended requirements pertaining to the incorporation of insurance companies and holding company systems.  Among the changes is the addition of a provision regarding the filing of an annual enterprise risk report specifying  that beginning in 2014 the report must be filed by March 31 for the previous calendar year.     Senate Bill 1464

Pennsylvania issued a notice updating per diem charges for market conduct and financial examinations of insurance companies.     Notice 2012-05 and Notice 2012-06

Rhode Island issued a bulletin summarizing legislative amendments enacted during the 2012 session of the General Assembly.  Included are descriptions of new legislation concerning issues with residential homeowners policies due to weather related events, licensing of portable electronic insurance vendors, loss information that must be provided to an insured or authorized agent, notice requirements necessary for an insurer to cancel or modify an insurance producer contract, among others.     Insurance Bulletin Number 2012-2


POLICYHOLDER NOTICES
New York issued a Circular Letter directed to insurers who write motor vehicle insurance regarding revisions made to the DWI Information Statement as a result of recent statutory changes.  Insurers are to begin using the updated statement no later than 9-1-12 for new business, and 10-1-12 for renewals.  Insurers may revise the format of the statement, but must submit any variation in the text of the prescribed statement to the Department of Financial Services for review.     Circular Letter 2012-7

North Carolina amended language to be included in the notice that insurers must provide when selling certain residential or commercial property insurance.  The perils of windstorm or hail must now be included in the notice, if applicable.     58-44-60


PORTABLE ELECTRONICS INSURANCE
Delaware created the Portable Electronic Device Insurance Producer Limited License Act.  Included are requirements regarding the distribution of such insurance, written disclosure requirements, and provisions requiring that a program must have established eligibility and underwriting standards     House Bill No. 335

Hawaii enacted legislation concerning Portable Electronics Insurance and providing for licensure and authority of vendors, requirements for sale, termination or modification of such insurance, and claim resolution.     SB 2655

Missouri implemented requirements pertaining to licensing and authorization of portable electronics insurance  producers and related entities. Included are initial and renewal licensing fees.     20 CSR 700-1.160

New Hampshire created new legislation to regulate the sale of portable electronics insurance.  Included are marketing, vendor training and licensing requirements.     SB 350

Pennsylvania established the Portable Electronics Insurance Act providing sales, solicitation, disclosure, licensing and termination requirements.     HB 2135

South Carolina enacted the Portable Electronics Insurance Act.  Requirements are included regarding licensing, and the sale, modification or termination of such insurance.     HB 4787


PREMIUM TAX
Kentucky adopted changes to clarify accounting and reporting requirements for collecting local government premium tax.     Rule 806 KAR 2:095


PRODUCERS
Florida revised notification requirements, modified definitions, and clarified renewal fee and filing deadline requirements pertaining to renewal licensing.     Rule 69B-211.004

Georgia adopted an emergency regulation regarding license renewals and continuing education requirements.  Included in the changes is a transition from annual to biennial license renewals for insurance agents, insurance agencies, subagents, counselors, insurance adjusters, and certain non-resident licensees.     Emergency Regulation 120-2-3-0.25-.05+

Kentucky issued a notice advising that agents, consultants, adjusters, apprentice adjusters, surplus lines brokers, life settlement brokers, and life settlement providers will no longer be required to file proof of financial responsibility with the Department of Insurance. All licensees must continue to maintain minimum levels of financial responsibility to protect the consumer.     Announcement of 2012 Legislative Change

North Carolina repealed provisions on earning a portion of continuing education credits after attending a certain percentage of a continuing education course.     Repeal Of Rule 11 NCAC 06A .0806

North Carolina repealed the prohibition against an agent using a facsimile countersignature as a legal signature.     Repeal Of Rule 11 NCAC 01 .0603


RATEMAKING
North Carolina added ratemaking standards allowing property insurance rates to reflect the cost of reinsurance to protect against catastrophic exposures.  Amounts to be paid to reinsurers, ceding commissions paid or to be paid to insurers by reinsurers, expected reinsurance recoveries, North Carolina exposure to catastrophic events relative to other states' exposure, and any other relevant information may be considered when determining the provision to reflect the cost of reinsurance.     58-36-10


SERVICE CONTRACTS
Missouri amended requirements pertaining to licensure of motor vehicle extended service contract producers. Included is a requirement that a license be issued to the producer by the DOI before the producer sells, offers or solicits motor vehicle extended service contracts.     20 CSR 200-18.030


UNCLAIMED PROPERTY
Michigan amended the Unclaimed Property Act by modifying the look-back period to 5 years.     House Bill 5577


WORKERS' COMPENSATION
Massachusetts issued a notice providing  guidance to insurers about the use of rate deviations and schedule rating plans during September and October 2012.  The notice provides instructions for insurers wishing to retain currently approved deviations or scheduled rating plans beyond August 31, 2012 and those wishing to offer new or altered deviations or scheduled rating plans on and after September 1, 2012.     WC Filing Guidance Notice 2012-F

  



First Consulting’s personalized approach to research

While there are many ways to access data regarding laws and regulations, determining their applicability to your company and the products it offers is not so simple. 

First Consulting recognizes these difficulties and provides insurance research tailored to your specific needs.  Our clients specify the scope of the research, states to be researched, lines of business and audience to whom the research applies.  We work with our clients to determine the format in which research is presented, to ensure that the people that need to use it will be able to do so easily.  We can even help maintain the research after it is done. 

To discuss your research needs and find out how First Consulting can help, please contact Stacy Koron.  Or, click here for more information about our custom research services.

 Stacy Koron
816.391.2735
stacy.koron@firstconsulting.com



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As budget time approaches, including First Consulting can allow you to accomplish much more in 2013.

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We can assist you during any stage of the form, rules or rate filing process. We have experience with all lines of insurance.

First Consulting can provide assistance in obtaining regulatory approval of upcoming Corporate structure changes, assumption of business filings and other matters regarding the UCAA.

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