Property & Casualty News January 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

Massachusetts amended its Code to prohibit the use of credit information in underwriting and rating private passenger motor vehicle insurance. 175:4E, 175:113B, 175E:4

Puerto Rico issued a Ruling regarding modification of the eligibility rule for the Automobile Single Interest Insurance Experience Rating Plan. Ruling AP-133-2011


CERTIFICATES OF INSURANCE

New Hampshire issued a reminder concerning Certificate of Insurance requirements. The reminder also includes answers to many common questions the department has received. Chapter 137 – HB 419-FN


CROP HAIL INSURANCE

North Dakota issued a bulletin regarding the marketing of Crop Hail Insurance. Bulletin 2011-4


FILING REQUIREMENTS - PACKAGE COVERAGES

Arkansas issued a Directive to advise insurers that SERFF filings containing multiple TOI’s, commonly referred to as “package” filings, will no longer be accepted. The directive explains that the acceptance of “package” filings has resulted in the approval of some lines that are not in compliance with certain requirements. "Package" policies may be marketed, but different types of insurance must be filed individually so they can be reviewed separately. The directive advises that all previously filed and approved forms containing defense within the limits of liability that do not meet applicable exemption order requirements shall not be renewed subsequent to the current term of coverage and that complying forms must be submitted and approved to continue to market those lines of insurance. The directive concludes by stating that effective immediately, SERFF filings submitted under the incorrect TOI will be rejected. Coverages affected are Employment Practices Liability, Directors and Officers, Professional Liability Errors and Omissions, Fiduciary/Trust, and Internet/Technology/Media Risk attaching to (including but not limited to) Commercial Multi-Peril, Commercial General Liability, Businessowners, Garageowners, and Commercial Farmowners. Directive No. 3-2011


FILING REQUIREMENTS - PRIVATE PASSENGER AUTO

Colorado amended regulations providing requirements for readability and SERFF form filing procedure for certain types of coverage, including private passenger automobile. Filings are to have the SERFF Forms Schedule Tab completed with the form name, form number, edition date, form type, action, action specific data, and readability score. Readability scores are not required for commercial automobile insurance coverage. Regulation 1-1-6


FINANCIAL REGULATION

Connecticut issued a bulletin to all insurance Companies noting the necessary forms and instructions for completing annual financial statements. Bulletin FS-4-11


New York issued a circular letter to all insurers clarifying characteristics of an appropriate formal enterprise risk management (ERM) function and detailing the criteria that the Department will evaluate. Circular Letter 14 (2011)


HOMEOWNERS INSURANCE

Connecticut issued an Insurance Department Release and Notice regarding revised coastal underwriting guidelines. The Notice specifies that insurers are not required to resubmit homeowners underwriting guidelines if they are in compliance with the current requirements. Changes to bring underwriting guidelines into compliance are to be filed on or before 3-1-2012. Filing Review Guidelines Related to Underwriting Coastal Homeowners Insurance Policies 12-9-2011


MEDICAL MALPRACTICE

New Hampshire issued an Order stating that a competitive market for medical malpractice insurance covering physicians, surgeons and hospitals does not exist in New Hampshire, and that rate filing procedures and standards specific to a noncompetitive market continue to apply. Order Ins 11-014-AP


MISCELLANEOUS

Delaware issued an amended bulletin to provide guidance regarding the implementation of the Civil Union and Equality Act of 2011 (the original bulletin, Bulletin No. 46, was noted in the December, 2011 edition of this newsletter). The amended bulletin was issued to clarify the Department's expectation concerning how new and existing policy holders are to be notified and allows time for insurer programming changes to be made. A sample notification document is included with the bulletin. Regulatory Activity Domestic/Foreign Insurers Bulletin 46 (Amended)

Washington adopted new regulations concerning biographical affidavit requirements for officers and directors of foreign, alien, and domestic insurers. WAC 284-07-600


PORTABLE ELECTRONICS INSURANCE

Ohio has established requirements and procedures for issuing portable electronics insurance. House Bill 250

Oregon adopted rules requiring vendors who sell or lease portable electronics devices to obtain a limited insurance producer license before issuing, selling or offering portable electronics insurance coverage to customers. The rules establish the vendor application and renewal requirements, including fees, and training requirements for a vendor's employees, agents or authorized representatives. OAR 836-071-0550, 836-071-0560, 836-071-0565 and 836-071-0570


PRODUCERS

Florida issued an Industry Alert pertaining to changes regarding appointments beginning 1-18-2012. The Alert contains information concerning appointment renewals when a licensee has an invalid address, late fees and appointment renewal timeline and notification changes. Industry Alert to All Appointing Entities

North Carolina issued a memorandum restating requirements for all resident and non-resident licensees to provide an email address to the Department. The memorandum notes that this requirement was effective January 1, 2010, and that while many licensees have updated their e-mail addresses, there are still several thousand licensees without an e-mail address. Memorandum 12-8-2011

Utah amended certain regulations concerning individual and agency licensing requirements. Included in the changes are requirements that a licensed individual must have an appointment from an insurer or a designation from an agency and, if the individual is a resident producer, legal liability errors and omissions insurance coverage in an amount not less than $250,000 per claim and $500,000 annual aggregate limit. R590-244-1 +


REPORTING REQUIREMENTS

Texas issued a bulletin regarding the 2011 Policy Count Exhibit insurer reporting requirements. Property and Casualty lines of coverage to be reported include Personal Motor Vehicle, Commercial Motor Vehicle, Dwelling, Workers' Compensation, Other Property, Casualty, Surety and/or Title. Insurers are to file the completed report no later than February 1, 2012. Commissioner's Bulletin #B-0001-12


REPORTING REQUIREMENTS - AUTOMOBILE INSURANCE

New Jersey issued a bulletin stating that the filing of Urban Enterprise Zone (UEZ) quarterly in-force exposure reports is no longer required, as the data within the reports to be submitted semi-annually on January 31 and July 31 of each year is sufficient. Bulletin 2011-28


SERVICE CONTRACTS

Missouri issued a bulletin regarding motor vehicle extended service contract producer licensing. Insurance Bulletin 11-07


SURPLUS LINES INSURANCE

Oregon adopted and amended rules relating to aligning Oregon Surplus Lines Laws with the Federal Nonadmitted and Reinsurance Reform Act of 2010. OAR 836-071-0500 and OAR 836-071-0501


Stretching your Resources – Monitoring TPA’s

Working with TPA’s brings on regulatory requirements that may stretch your compliance resources beyond full.

One of our On-Line Research Services – Third Party Administrator Licensing Service – answers questions you may have about TPA Licensing.

This On-Line Research Service enables Insurers, as well as TPA’s, to find answers about:

  • What is a TPA?
  • What organizations need to be licensed?
  • Where does a TPA need to be licensed?
  • What forms are needed for licensing?
  • What other requirements must be met?

Click here for more details, including the opportunity to take a Virtual Tour of our On-Line Services, pertaining to TPA Licensing Services. Or, you can contact Scott Sheffer (816-391-2742).


Is Your Company Developing or Updating an Excepted Benefits Product?

Let First Consulting use Our Experience to Help

As a result of the Patient Protection and Affordable Care Act (PPACA), many insurers are developing or updating supplemental health products, which are excepted from PPACA requirements. These excepted benefit products include Accident, Critical Illness, Hospital Indemnity, Dental, Vision and similar products.

First Consulting has assisted large and small insurers as they prepared for and responded to PPACA by helping to develop new products, research compliance questions and handle state filings. With regard to Critical Illness insurance in particular, First Consulting has unique expertise, having assisted with many nationwide group and individual critical illness insurance filings. These have included standalone Critical Illness policies with a variety of designs and features, as well as Critical Illness insurance riders.

To find out more about the services First Consulting provides, click here.

Contact Stacy Koron (816-391-2735) or Jerry Wickersham (816-391-2743), to discuss your compliance questions or for a no obligation quote.


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