Property & Casualty News
We are celebrating over 25 years of providing selected items of current interest to our clients and friends. The items contained in this newsletter are derived from bulletins, regulations and legislative activity affecting the insurance industry. Please feel free to share this newsletter with others that may be interested. Contact our office for further details about any of the items contained in the newsletter.
Rhode Island enacted legislation making extensive revisions to Chapter 27-10 regarding claim adjusters, specifying qualifications and procedures for licensing, responsibilities of and restrictions on each type of adjuster. SB 2788
South Carolina published a bulletin extending the deadline for temporary, non-resident adjusters to assist with claims arising from storms occurring May 23, 2014. The deadline has been extended to August 1, 2014. Bulletin 2014-06
AGENT / PRODUCER CONTINUING EDUCATION
Massachusetts has amended its statutes regarding continuing education requirements for insurance producers. It changes initial education requirements previously due within 36 months, to "prior to the initial renewal date of such license," and requires completion of the equivalent of at least 45 hours of instruction between renewals, including 3 hours of ethics education. HB 880
Colorado enacted legislation regarding the removal of certain identifying information from motor vehicle registration cards. SB 131
Colorado enacted the "Transportation Network Company Act," defining various terms such as "personal vehicle" and "prearranged ride" which apply to transportation networks. Also addresses financial responsibility of the transportation network companies and specifies additional types of insurance for the time a driver is logged into the company's digital network but not engaged in a prearranged ride, such as contingent liability coverage. SB 125
Connecticut amended its insurance law to require insurers to provide uninsured motorist coverage to a named insured or household member of a named insured if any are hit as a pedestrian during the theft of an insured vehicle. HB 5061
Connecticut amended its laws concerning use of ignition interlock devices (IIDs) after a Driving Under the Influence (DUI) arrest, changing drivers' license suspension time under specified conditions. SB 465
District of Columbia amended its statutes to require action by an underinsured motorist insurer when liability insurance is exhausted. B 365
Florida amended its statutes regarding certificates of destruction, requiring an owner or insurance company to obtain a certificate of destruction for a motor vehicle or mobile home under specified circumstances, defining additional terms and prohibiting use of "fake airbags." SB 754
Florida enacted legislation amending minimum motor vehicle liability policy requirements and lengthening the period in which the insurer may cancel the policy among other changes. SB 490
Florida has amended its statutes to authorize the Office of Insurance Regulation to approve a premium discount for specified insurance coverages if the insured vehicle is equipped with certain technology. Suspension of driver licenses and motor vehicle registrations, DUI and other motor vehicle related issues were addressed also. HB 7005
Maine has amended its Rule Chapter 391 regarding motor vehicle insurance identification cards, allowing for electronic identification formatted for display on personal electronic devices. Rule Chapter 391
Vermont has amended its statutes regarding motor vehicles and mandatory motor vehicle insurance requirements including allowing electronic proof of insurance on a portable electronic device. SB 314
South Carolina amended several of its statutes related to captive insurance companies: allowing the DOI to declare a captive inactive under certain conditions, allowing protected cells to be incorporated or not, revising or adding definitions and revising reporting requirements as well as other changes. SB 909
Delaware released Captive Bulletin 3 to supersede Bulletin 2 effective September 1, 2014. It said that the Department will begin levying an application fee of $200 and an application processing fee of $3000 upon the captive insurance company for each SBU (series business unit) application received on or after the effective date of the bulletin. The Commissioner reserves the right to impose additional fees for any additional costs reasonably incurred when reviewing the application. Captive Insurance Bulletin 3
Pennsylvania has enacted legislation prohibiting drivers of commercial vehicles or motor carrier vehicles from texting or using handheld mobile telephones while driving unless necessary to communicate with law enforcement or other emergency service. SB 1312
COMMERCIAL LINES INSURANCE
Florida amended its statutes regarding workers' compensation and building permits to allow employers to show proof of compensation either physically or electronically. HB 7147
Florida enacted legislation requiring the operator of a vessel engaged in commercial parasailing to comply with certain requirement, one being to obtain and maintain an insurance policy with specified minimum coverage and proof of insurance. SB 320
DATA CALLS/REGULATORY REPORTING
Texas has called for Workers' Compensation and Employers' Liability rate filings for the 2014 public rate hearing. Submissions are due by August 1. Bulletin B-0015-14
Texas has issued a data call for 2014 second quarter experience and 2014 workers' compensation deductible plans due no later than August 15, 2014. Bulletin B-0016-14
New Mexico issued a bulletin announcing that annual filing fees for rates and forms, ordinarily due by July 1, have had their deadlines extended for thirty days from the date of the invoices becoming available online, due to technical problems with the Department's computer systems. It encourages companies to keep checking the Superintendent's website for updates. Bulletin 2014-009
Maryland issued a bulletin regarding filings that include models for rating or underwriting. Bulletin 14-16
Louisiana amended its law to exempt small companies from the requirement to have an anti-fraud plan. The changes specify plan requirements for larger companies, state the authority of the Department to act on certain matters and other details. SB 281
HEALTH INSURANCE - COMPREHENSIVE
Connecticut issued a bulletin to inform carriers of small group health insurance they need to include the appropriate version of the revised major medical and health care center plans with their form and rate filings for 1/1/2015. Bulletin HC-97
Colorado enacted legislation regarding rules about professional conduct and continuing education as well as disciplinary actions that affect dentists and dental hygienists. It also requires professional liability insurance to address the amount of financial responsibility they are required to meet. HB 1227
Michigan enacted legislation to specify the liability of possessors of land for injuries to trespassers. HB 5335
Connecticut issued a bulletin advising telephonic applications must be taken by a licensed producer. The completed application must be delivered for review and signature prior to the delivery of the contract. The bulletin also indicated that insurers issuing individual life insurance policies on or after 1/1/2015 must notify applicants in writing of the right to designate a third party to receive notice of cancellation due to non-payment of premium. Bulletin S-15
Alabama issued a bulletin to all insurers authorized to write Property and Casualty insurance, addressing amendments to AL code providing premium tax incentives to carriers writing new policies including wind and hail coverage in certain counties contiguous to the Gulf of Mexico and Mobile Bay. Bulletin 2014-02 06-11-14
Indiana published a bulletin regarding Mine Subsidence coverage, which must be offered to all prospective policyholders and insureds in eligible counties. Bulletin 209
South Carolina has amended its statutes to allow for the use of electronic documents of title. SB 343
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Connecticut enacted the NAIC's requirements for domestic insurers to establish and maintain a risk management framework and to file Own Risk and Solvency Assessment reports. The requirement may be satisfied if the insurance group of which the insurer is a member maintains a framework that applies to the insurer's operations. SB 194
PERSONAL LINES INSURANCE
Alaska enacted legislation to allow an insurer to cancel coverage if property becomes entirely abandoned and the abandonment increases the hazard insured against. SB 58
Florida enacted legislation stating that refusing to issue or renew or canceling a personal lines policy based on lawful use, possession or ownership of a gun is a discriminatory insurance practice; but this does not prevent insurers from charging supplement premiums for a separate rider requested by the applicant or sharing information with its agent for purposes of such a rider. SB 424
Louisiana amended its statutes to specify that an insurer may not cancel or non-renew a homeowner's policy for two or more claims unless those claims occur in a continuous three-year period within the five years preceding the current policy renewal date. HB 1060
Tennessee released a bulletin regarding sinkhole coverage under homeowner property insurance. The DOI requires that sinkhole coverage must be made available upon request of the consumer. Bulletin dated June 12, 2014
New Mexico published a bulletin to clarify the calculation of premium tax payments. Effective July 1. 2014, payments will be rounded to the nearest hundredths. Samples were provided. Bulletin 2014-010
Delaware enacted legislation adding chapter 50C, Safe Destruction of Records Containing Personal Identifying Information, to Title 6. It requires that a commercial entity which seeks to permanently dispose of records containing consumers' personal identifying information within its custody or control take reasonable steps to destroy or arrange for the destruction of each record by shredding, erasing or otherwise destroying or modifying the information in the records to make it unreadable or indecipherable. Does not apply to certain banks and financial institutions or health insurers/health care facilities subject to HIPAA standards. HB 295
Florida enacted its Information Protection Act of 2014. Requires notice be given to affected customers and the Department of Legal Affairs when a breach of security of personal information occurs. Requires customer records, physical and electronic, to be disposed of in a manner that protects personal information from disclosure. SB 1524
Florida enacted legislation addressing flood insurance, authorizing certain insurers to offer personal lines residential flood coverage, requiring certain limitations to be noted in the policy, and providing the insurer with rate options, among other changes. SB 542
Maryland issued a bulletin regarding the application of a percentage deductible in the case of a hurricane or other storm. Bulletin 14-19
South Carolina has enacted legislation providing that an out-of-state business or employee that performs disaster or emergency-related work in SC is exempt from certain licensing and taxing requirements during the disaster period. SB 1033
Alabama posted a message on SERFF that, effective September 1, 2014, the "Supporting Exhibits Required by ALDOI" is being amended and a new SERFF requirement "Premium Comparisons" is being added. The requirements/instructions are being added now in order for companies to familiarize themselves with the examples. "THE ALDOI IS REQUESTING COMPANIES TO VOLUNTARILY UPLOAD APPROVED PREMIUMS TO OUR WEB PAGE. THE WEBSITE IS CURRENTLY ACCEPTING PREMIUM COMPARISON UPLOADS AND WILL BE TURNED ON FOR PUBLIC ACCESS ON AUGUST 1, 2014." The website address provided is: https://aldoi.gov/ComparePremiums/ SERFF message dated 06 24 2014
Missouri stated that filers may have recently begun to receive messages in their mailboxes on closed filings indicating that the State Tracking Number (State Tr Num) has changed. DIFP began using this field in the third quarter of 2013 internally to track filing page counts to provide perspective on workloads, staffing needs, etc. They plan to capture this information back to 2011 and apologize for any inconvenience it may cause. State message from Missouri
SERVICE CONTRACTS / WARRANTY INSURANCE
Indiana issued a bulletin clarifying Indiana law regarding Automobile Service Contracts generally not being considered insurance. Bulletin 210
Louisiana amended its insurance law to require that, a home service contract may not be issued, sold or offered for sale, unless the provider: 1) files a financial statement annually with the DOI showing it is solvent; and 2) provide an annual report to the DOI documenting the number of contracts sold on residential property, the gross consideration received, the number and dollar amounts of claims paid and the number of claims denied for failure to receive prior approval for a repair or replacement. SB 135
Arkansas published a bulletin clarifying eligibility of Underwriters at Lloyd's, London to write surplus lines business in the state. Bulletin 11-2014
Delaware released a bulletin regarding changes made to the current Statement of Diligent Effort (Form SL-1923… formerly SL-1904) and its inclusion of a notary signature requirement in order to be considered an official affidavit. Surplus Lines Bulletin 13
New Mexico issued a bulletin regarding Surplus Lines premium tax filing and use of OPTins. Bulletin 2014-08
Oklahoma amended its statutes to include a list of conditions under which insurance may be procured from surplus lines insurers if the insurance required to protect the interests of the insured for the amount of coverage, terms and solvency requirements of the insured cannot be procured in the market available to the insurance producer. SB 1873
Tennessee published a bulletin providing guidance for filing of single and multistate surplus lines policies where Tennessee is the home state of the insured. Bulletin dated June 26, 2014
Wisconsin has published a bulletin stating, effective July 1, 2014, the OCI has joined the Nonadmitted Insurance Multi-State Agreement, Inc. During the trial period of the membership, surplus lines agents, direct placement policyholders and risk retention groups are to continue following existing Wisconsin statutes and code for single-state and multi-state policies. Bulletin dated 05/15/2014
THIRD PARTY ADMINISTRATORS
Delaware published a Memorandum to Third Party Administrators (TPA)and Reinsurance Intermediaries (RI) notifying them that, on or before August 29, 2014, all TPA and RI original licenses must be returned to the Department. An Affidavit of Lost License may be submitted, if applicable. Effective September 30, 2014, all TPAs and RIs will be issued new license numbers, to enable access to the SBS and NIPR database to generate licenses and certificates. Memo dated July 1, 2014
Florida amended its statutes related to title insurance, revising criteria for liabilities charged against assets in determinations of financial condition, specifying reserves that certain title insurers must set aside after a certain date and other requirements. HB 321
Wisconsin published a bulletin addressing "blanket exceptions" in title insurance, which gave rise to a complaint. The OCI provided examples of such exceptions, stated that they are misleading and that forms containing such exceptions will be disapproved. Further, companies certifying that policy forms including such exceptions are compliant with WI law or issuing such policies may be subject to OCI enforcement action. Bulletin dated June 24, 2014
New York amended its Vehicle and Traffic law Section 463, Franchised Motor Vehicle Act, to allow dealers to sell extended service contracts they choose instead of exclusively those offered by a franchisor. Prohibits certain acts by franchisors as unfair business practices and requires other practices to increase fairness. AB 7844
Colorado amended its statutes to double the number of physicians and corporate medical providers that must be on the list of available treatment providers that the employer or insurer is required to provide to an injured worker. HB 1383
Colorado enacted and amended statutes concerning the procedures for resolution of Workers' Compensation claims. SB 191
First Consulting can help with your filings for form or rate changes. We can also assist in drafting forms.
Congress may move with reauthorizing the Terrorism Risk Insurance Act (TRIA) in the next few months and when President Obama signs the legislation, additional filings may be necessary. We are able to help companies with any overload situations.
2014 is shaping up to be a good year for the P&C industry and many companies are still looking to make changes in their products this year. We can help!
Please click here for additional information on our filing service.
Contact me or any First Consulting associate for more information if you have questions about filing or any other First Consulting service.
NAIC Corporate Governance Models on the Horizon for Adoption
Are you ready to respond to this new law and regulation? An annual corporate governance filing will be required, and the NAIC has made an affirmative decision not to exempt any type of company or fraternal organization from any of these corporate governance requirements. Here are some highlights of the changes:
- Financial literacy is a requirement for each Board member, and the Board as a whole needs to possess what the NAIC calls “core competencies” of accounting or finance, business judgment, industry knowledge, management, leadership, vision and strategy.
- Regulators will be looking for Corporate Governance Guidelines that document established key governance principles.
- Regulators want to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the Board.
Please contact me to discuss any of these challenges and learn how we can assist you with these new corporate governance requirements. Get more information about First Consulting and our services here.
Carol Stern, FLMI, AIRC, ACS
SAVE A DATE!
Do you have a date set for your Advertising Law Webinar? We are now scheduling into August. Hurry if you want your choice of dates!
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Click here for complete details and registration information from our website.
Please feel free to contact me if you have questions – or if you’re ready to reserve your date!
Debby Paris, FLMI, ACP