Property & Casualty News July 2011

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
Colorado enacted legislation to require that personal auto forms must have a minimum Flesch score of 50.  Certain requirements are included pertaining to font and format of such policies.     10-4-633.5

Oklahoma enacted legislation pertaining to the Compulsory Insurance Law and limiting recovery for damages or claims against an insurer in certain circumstances.     Senate Bill No. 272

Oregon enacted legislation relating to arbitration of motor vehicle liability disputes.     House Bill No. 2468

Wisconsin issued a bulletin containing a summary of the provisions of 2011 Wisconsin Act 14 (AB 4) which applies to motor vehicle insurance policies that are newly issued or renewed on or after November 1, 2011.     Bulletin dated July 15, 2011


CANCELLATION
Louisiana approved amendments to its Code concerning the calculation of an unearned premium in the event of cancellation by an insured.     Senate Bill 84


CERTIFICATES OF INSURANCE
New Hampshire enacted legislation pertaining to the content and form of certificates of insurance.   The new law provides that certificates of insurance must contain a specific statement.     House Bill 419


DISASTER AND EMERGENCY OPERATIONS
Iowa issued two bulletins providing guidance regarding cancellation, nonrenewal, premium deferral and other issues related to the floods and natural disasters of May and June 2011.  A list of associated questions and answers is also included on the department's website.     Bulletin 11-02, Bulletin 11-03

North Dakota issued a bulletin to provide guidance for insurers providing commercial property and homeowners' insurance in areas impacted by recent flooding.     Bulletin 2011-2

South Dakota issued a bulletin regarding the temporary suspension of cancellations and nonrenewals for insureds displaced by recent flooding.     Bulletin 2011-5

South Dakota issued a bulletin to insurers providing guidance on the temporary suspension of cancellations and nonrenewals for displaced insureds due to recent flooding.     Bulletin 11-05


FINANCIAL REPORTING
New York issued a Circular Letter to advise all domestic P&C insurers required to file a Statement of Actuarial Opinion with the NAIC property/casualty statement that they also should file an AOS with the Insurance Department.  Instructions regarding this filing are found in the NAIC's 2011 ‘Annual Statement Instructions for Property Casualty Companies.‘  The Circular Letter also includes information regarding insurer requests for exemption from disclosure of trade secrets.     Circular Letter 2005-22 (Supplement #4)


HOMEOWNERS' INSURANCE
Hawaii issued a memorandum advising all insurers providing homeowners' insurance in the state that new rate filings must be submitted by 10-6-2011.     Memorandum 2011-1R


MEDICAL PROFESSIONAL LIABILITY
Nevada issued a bulletin concerning reporting requirements for insurers writing medical professional liability insurance.     Bulletin 11-004


MISCELLANEOUS
Colorado has amended regulations pertaining to mass merchandising of property and liability insurance.     3 CCR 702 Reg. 5-1-1

South Carolina issued a bulletin concerning discrimination in the pricing of policies financed by premium service companies.     Bulletin 2-2011

The New York Office of General Counsel issued an opinion presenting the NYSID position pertaining to dishonored checks and debit card premium payments.     OGC Op. No. 11-05-02

Washington issued a bulletin advising all authorized foreign and alien insurers of a new requirement to provide an email address for Service of Process.   The NAIC UCAA Consent to Service of Process form (Form 12), including an email address, should be submitted to the OIC.  Instructions for submitting the required form by email or paper are included in the memorandum.     Memorandum 6-17-2011

West Virginia issued an informational letter to respond to questions regarding placement of homeowners coverage in the surplus lines market before attempting to place the coverage with the West Virginia FAIR Plan.     Informational Letter 180


OMNIBUS
Florida enacted legislation making changes to several laws.   Revisions include changes pertaining  to Workers Compensation,  the timeframes that limit how frequently an insurer may use the same accountant or partner to prepare an annual audited financial report, licensing provisions, and changing the designated person or persons who must be notified by an insurer in situations involving nonrenewal, renewal premium, cancellation, or termination of certain insurance coverage from the "insured" to the "first-named insured".    Additional changes are also included.     House Bill 1087

Minnesota revised laws pertaining to continuing education and prelicensing requirements and to surplus lines insurance.     SF 1045

North Carolina enacted legislation concerning several topics.  Included in the Bill is a requirement that certificate of insurance forms be submitted to and approved by the Commissioner (G.S. 58-3-150).     House Bill 298


PORTABLE ELECTRONICS INSURANCE
Maine enacted legislation to establish portable electronic device insurance as a limited line of insurance.     SP 455, LD 1464

Minnesota enacted legislation regulating claims processing for insurance on portable electronics products.     H.F. No. 1405

Nevada enacted legislation providing for the licensure and regulation of persons who sell or offer portable electronics insurance.     Senate Bill 292

Oregon enacted legislation to prohibit issuance or sale of portable electronics insurance coverage without licensure by the Department of Consumer and Business Services, and to require vendors of portable electronics to make disclosures about such insurance coverage to prospective customers.     House Bill 3411

Tennessee enacted legislation regarding the sale of insurance for portable electronics.     House Bill 1267

West Virginia enacted legislation relating to portable electronics insurance and providing an exemption from insurance licensing requirements for vendors of portable electronics when offering such insurance.     Senate Bill 472


PREMIUM TAX
Kentucky adopted a new regulation setting forth the standards for a reasonable collection fee to be retained by an insurance company as compensation for collecting local government premium tax from an insured.     Regulation 806 KAR 2:150


PRODUCERS
Louisiana enacted new legislation pertaining to producer compensation.  The new law permits an insurance producer to negotiate for the placement of commercial property and casualty insurance coverages by any combination of commissions, fees, or fees in lieu of commissions if the commercial insurance policyholder meets certain specified criteria.     House Bill 137

Massachusetts issued a bulletin notifying resident insurance producers of the Division’s review of their compliance with the Commonwealth’s continuing education (“CE”) requirements, and the implementation of a compliance program for those producers who are deficient in CE credits.     Bulletin 2011-12


PROPERTY INSURANCE
Maryland enacted a new insurance law related to homeowners’ insurance.  Included in the law is a provision prohibiting insurers from taking certain actions relating to homeowner’s insurance based solely on information about an individual’s status as a victim of a violent crime.  The bill also amends two existing insurance laws.  Maryland issued Bulletin 11-13 to announce the changes contained in this House Bill and an identical Senate Bill (No. 317).    The bulletin notes that the carriers must comply with the law effective October 1, 2011, and carriers have until October 1, 2012 to revise forms to conform with the changes in the law.     House Bill 647


RATE FILING REQUIREMENTS
Florida amended its law concerning rate standards to exempt certain classes of commercial insurance and all commercial motor vehicle insurance from being subject to otherwise applicable rate filing requirements.  Insurers are required to notify the state of any changes to rates for such insurance and to maintain certain data.     House Bill 99


RENEWAL NOTICE
Oklahoma amended its Code to provide that an insurer shall give to the named insured at the mailing address shown on a private passenger auto or homeowner's policy, a written renewal notice that shall include new premium, new deductible, new limits or coverage at least thirty days prior to the expiration date of the policy.     36 s 3639.1

Texas enacted legislation concerning notice of coverage changes at renewal.     House Bill 2655


SERVICE CONTRACTS
Maine enacted legislation to create the Service Contracts Act.  It provides that service contracts are not insurance and are not subject to the insurance laws.     HP1109, LC 1507


SURPLUS LINES
Maine issued a bulletin to outline changes that will affect the placement of nonadmitted insurance.     Bulletin 378

Nevada issued a bulletin concerning compliance with the Nonadmitted and Reinsurance Reform Act of 2010.     Bulletin 11-002


TITLE INSURANCE
Alabama enacted new legislation to permit title insurers to issue closing or settlement protection, to require closing or settlement protection forms to be approved by the Commissioner,  to specify the fees that may be charged by title insurers for issuing closing or settlement protection, and to require notice to real estate purchasers of the availability of closing or settlement protection.     House Bill 267 

 


Customized Research Solutions

First Consulting’s monthly newsletter is probably one of the many resources you use to keep up to date on current legislative and regulatory changes.  However, organizing and compiling this information in a user friendly manner can be a challenge.  When a specific compliance issue arises, the information you need might not always be readily available. 

First Consulting’s Custom Research Services can help by:

  • Gathering laws and regulations related to a particular area of concern and presenting them in an easy to read format.
  • Advising you of regulatory changes applicable to a specific line of business.  We can even suggest form revisions and advise you of new filing requirements that apply.
  • Conducting surveys of regulator positions on your specific compliance questions.  Surveys can be done without revealing your Company’s identity.
     

Research will be customized to the issue you define and the states with which you are concerned.  We will work with you to determine the format and presentation of information, in order to ensure that it meets your needs. 

Contact me for more information.

Stacy Koron
1-800-927-2730, ext 2735
stacy.koron@firstconsulting.com


 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 the questions 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?

For more details, including the opportunity to take a Virtual Tour of our On-Line Services, visit the First Consulting Website or, you can contact me. 

Scott Sheffer
Email:  scott.sheffer@firstconsulting.com   Phone:  816-391-2743