Property and 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.
ADVERTISING/SALES & MARKETING
New Hampshire clarified an exception to the anti-rebating law removing limitations in connection with the marketing or promotion of insurance. House Bill 171
AGENT / PRODUCER COMPENSATION
Louisiana has revised a 2010 letter regarding producer compensation. This revision is applicable to all insurers. Advisory Letter No. 15-02
Louisiana issued a letter advising all insurers and all producers of the manner in which the Louisiana Department of Insurance (LDI) addresses and shall enforce various provisions of the Louisiana Insurance Code with respect to producer compensation. It supersedes guidance previously issued as Advisory Letter No. 2010-01 on August 9, 2010. Advisory Letter 2015-02
AGENT / PRODUCER LICENSING AND APPOINTMENT; FEES
Alaska modified certain requirements for controlling insurance producers. A controlling insurance producer may not be appointed as a broker by a client unless, in a form acceptable to the director, the controlling insurance producer has disclosed in writing to the client the relationship between the controlling insurance producer and controlled insurer, each client has acknowledged receipt of the disclosure, and a copy of the acknowledged disclosure is maintained by the controlling insurance producer in its records. 21.27.570
Illinois revised the requirements for applications and renewals of producer licenses. The changes apply to individuals and business entities. 50 Ill. Adm. Code 3121
Indiana specified conditions under which a non-resident of Indiana may receive a designated home state license. A designated home state license requires a biennial fee of ninety dollars. Insurance Code: 27-1-15.6-8.2, 27-1-15.6-32
Nevada published a notice regarding 2015 annual appointment renewal invoices. Invoices were to be emailed on July 1, 2015. Payment is due September 1, 2015 and must be paid in full. Failure to pay the appointment invoice by the due date may cause assessment of an administrative fine of $2000 per violation. Notice dated June 13, 2015
New Mexico issued a bulletin to all insurance license applicants providing notice that fees are deemed earned upon submission and are not refundable. Applicants are advised to be certain applications are complete when submitted, because incomplete applications will be rejected and the fee will not be refunded or applied to any resubmission. Notice of additional licensing procedures are also provided. Bulletin 2015-022
Georgia enacted legislation which addresses insurance requirements of transportation network companies (TNCs) and their drivers, providing definitions of terms, minimum liability limits, as well as certain disclosures and notifications. It becomes effective January 1, 2016. HB 190
Maryland has made revisions to the Maryland Automobile Insurance Fund, including address and new deadlines for updating notices. The new address was effective July 6, 2015 but the deadline for compliance was extended until November 5, 2015. Bulletin 15-21
Massachusetts has classified certain 2016 model year vehicles as "high-theft". A complete list of vehicles with this designation from years 2012-2016 is effective August 1, 2015. PC Filing Guidance Notice 2015-A
Massachusetts has further clarified the timing on a notice requirement during a change of auto insurance carriers. Notification is required within 10 days of the first payment for the replacement policy. The notification requirement is effective October 1, 2015. Bulletin 15-04
Michigan published a bulletin regarding automobile policies containing provisions that impermissibly allow the insurer to rescind or terminate policies without notice when a claim is denied because the insured has committed fraud in the making of the claim. The Department encouraged insurers to review their policy forms, make necessary modifications and file them, if they are found to have such provisions. Bulletin 2015-14-INS
Nebraska's Attorney General issued an opinion that the Public Service Commission has the authority to establish minimum uninsured and underinsured motorist coverage requirements for contract carriers. Opinion 2015-9
Nevada amended its statutes to allow for electronic proof of insurance to be displayed on mobile devices. AB 143
Nevada enacted legislation related to Transportation Network Companies. Regulations are provided by the Nevada Transportation Authority and requirements have been established for the driver and vehicle they operate among other details. AB 176
Rhode Island updated its law to require licensing of motor vehicle glass repair and replacement companies, specifying data that must be included in bills for repair, prohibiting certain practices, requiring insurers to inform claimants of their free choice of a licensed repair facility and prohibiting insurers from requiring a claimant to use a particular repair shop. Further, insurers are prohibited from recommending different repair shops once the insured or claimant has advised of a shop having been selected. SB 334
South Carolina enacted its Transportation Network Company Act providing definitions and requirements relative to operation of and participation in transportation networks. HB 3525
Texas amended its statutory definition of "motorcycle." SB 1756
Texas enacted legislation creating its Chapter 1954 entitled "Insurance for Transportation Network Company Drivers." It defines terms and sets insurance requirements regarding TNCs and drivers or TNCs on the drivers' behalf. HB 1733
Texas issued a bulletin, as a result of recent heavy rains and flooding across the state, reminding insurers of their obligations regarding losses to motor vehicles due to flood damage. Titling of flood-damaged vehicles must comply with the Texas Transportation Code. Bulletin B-0014-15
Virginia Bureau of Insurance issued an Administrative Order approving recent amendments of the Virginia Automobile Insurance Plan Manual including rules, classifications, territories, rates and additional charges. The amendment establishes the Automobile Insurance Plan Service Office (AIPSO) as a back-up Commercial Automobile Insurance Plan (CAIP) service provider. Administrative Order No. 11982
Ohio adopted a regulation pertaining to special purpose financial alternative reserve methodologies for captive insurance companies. Rule 3901-11-05
Texas enacted legislation relating to reinsurance, distributions and pooling arrangements by captive insurance companies. SB 667
Kansas issued a bulletin that clarifies and updates various topics relating to motor vehicle damage claims, particularly salvage vehicle titles. Bulletin 2015-1
COMMERCIAL LINES INSURANCE
New Jersey issued an order requiring commercial motor vehicle insurers or rating organizations to file, by specified dates, policy forms, then rates and/or rules to include coverage for stranger pedestrian personal injury protection, leading up to the requirement that all CMV policies include the coverage by March 31, 2017. Order A15-106 dated June 30, 2015
Texas enacted legislation relating to the disclosure of certain information under a Consolidated Insurance Program. SB 1081
Indiana enacted legislation providing the annual corporate governance annual disclosure (CGAD) filing requirements. 27-1-4.1-1 through 27-1-4.1-15
DATA CALLS/REGULATORY REPORTING
Georgia adopted regulations relating to annual reports, particularly internal audits. The changes were effective July 15, 2015. 120-2-60-.01 dated 04-30-15
Maryland issued a bulletin to insurers domiciled in Maryland regarding enterprise risk report reporting requirements. Bulletin 15-15
Iowa amended its conditions for posting insurance policies or endorsements on the internet. Insurance Code: 505B.2
Iowa amended its requirement pertaining to the electronic delivery and posting of insurance notices and documents. Insurance Code: 505B.1
Illinois revised the requirements for the filing of rates and rules. Rate and rule filings must be filed electroncially via SERFF. 50 Ill. Adm. Code 754
Pennsylvania issued a notice updating the per diem charges for financial examinations conducted by the insurance department. Notice 2015-04
FLOOD INSURANCE / NFIP
Oklahoma announced that residents with flood damage would have extra time to file their insurance claim. The Federal Emergency Management Agency has given National Flood Insurance Program (NFIP) policyholders an extra 180 days to file a claim. The new deadline gives a total of 240 days after date of loss to provide proof of loss to the insurer. A toll free number for additional information from the NFIP call center was provided along with the website: floodsmart.gov. News Release dated July 1, 2015
New Jersey issued an order allowing imposition of a surcharge for recoupment of the New Jersey Property-Liability Guaranty Association assessment due September 17, 2015. The order provides information on handling recoupment. Order A15-105
North Carolina enacted legislation requiring owners of mopeds to have a policy of financial responsibility and clarifying changes to the law requiring the registration of mopeds. HB 148
Pennsylvania issued a notice providing an updated schedule of per diem charges for market conduct examinations of insurance companies conducted by the Department. Notice 2015-05
Maryland issued a memorandum by the Insurance Commissioner to all domestic companies pertaining to cybersecurity. Maryland is emphasizing cybersecurity, and the NAIC Cybersecurity Task Force issued a guide entitled "Principles for Effective Cybersecurity: Insurance Regulatory Guidance". The Maryland Commissioner welcomes input on implementation of cybersecurity measures. Memorandum dated June 4, 2015
Missouri has enacted an order that all departments comply with the Supreme Court decision in Obergefell v. Hodges regarding same-sex marriage. It will not expire and is effective immediately. Executive Order 15-04
Indiana issued a bulletin on the subject of ""price optimization,"" Requires from all companies using this rating practice to submit new rate filings within 90 days of the July 20, 2015 publication date of the bulletin. Companies failing to comply with the bulletin and found to be using price optimization may be subject to disciplinary action. Bulletin 219
Oregon enacted legislation related to electronic delivery of policies and endorsements and providing requirements for retention of electronic information as well as specifics about notifying policyholders. SB 578
Vermont published a bulletin cautioning property and casualty insurers about the practice called "price optimization." Bulletin 186
Washington issued a Technical Assistance Advisory referring to the practice of "price optimization" as unfairly discriminatory and in violation of state law. Technical Assistance Advisory 2015-01
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Georgia amended its Code to provide requirements for maintaining a risk management framework and provide guidance and instructions for filing an Own Risk and Solvency Assessment and report with the Commissioner. SB 108
Nevada amended its statutes regarding privacy to expand the definition of "personal information" and require certain security measures to ensure its protection. Items added are electronic mail addresses and passwords, driver's authorization card numbers, medical and health insurance identification numbers and other similar information. AB 179
Mississippi enacted legislation labeled the "Property Insurance Clarity Act," requiring insurers to provide policy and premium information to the Department of Insurance and authorize the Department to provide aggregate information on its website pertaining to the number of homeowners' policies in force, direct incurred losses, direct earned premiums and policy limits representing the total of every insurer doing business in the state. Information is required to be submitted by October 1, 2015. HB 739
Nevada added a new chapter to its Insurance Code addressing guaranteed asset protection waivers. SB 253
New Hampshire enacted legislation to establish procedures for regulation of guaranteed asset protection waivers offered in the state. SB 119
Connecticut issued a bulletin relating to flex-rate filings. The bulletin supercedes Bulletin PC-74 and affects filings after June 30, 2015. Bulletin PC-78
SERVICE CONTRACTS / SERVICE WARRANTY INSURANCE
South Carolina has amended its regulations regarding insurance premium service companies. SB 666, 38-39-70, 38-39-80
Michigan issued a bulletin regarding the fees allowed to be charged by insurers, specifically placement costs on top of the premium charge. The bulletin is effective from June 1, 2015 to May 31, 2016. Bulletin No. 2015-12-INS
Montana has revised the requirements relating to fees charged by surplus lines producers. The revision is in effect for policies with an effective date July 1, 2015 and after. Advisory Memorandum of July 1, 2015
Wisconsin published a bulletin stating that it would not become a member of the Nonadmitted Insurance Multi-State Agreement, Inc. (NIMA); therefore, effective July 1, 2015, surplus lines agents, direct placement policyholders and risk retention groups should no longer report multistate surplus lines policies to the Surplus Lines Clearinghouse, but should continue reporting such policies to the Office of the Commissioner of Insurance (OCI) as before. Bulletin dated June 25, 2015
TITLE INSURANCE / AGENTS
New Mexico published a bulletin highlighting Administrative Code sections requiring that, upon completion of an escrow, written statements specifying all receipts and disbursements of funds made by or on behalf of each affected party must be delivered to each affected party and that each escrow file is to include a complete, current disbursement sheet with detailed information. Penalties apply for failure to comply. Bulletin 2015-023
Texas issued a data call for all title agent experience for the calendar year ended December 31, 2014. The annual reporting is due no later than August 24, 2015. Bulletin B-0015-15
Louisiana issued an advisory letter to all insurers that relates directly to the enforcement of the Unfair Trade Practices Act. It informs all insurers, producers and brokers of the rescission of Bulletin No. 2010-05 and clarifies prior guidance relative to "value added" services or things of value furnished by persons engaged in the business of insurance, as well as to common and ordinary marketing practices. Advisory Letter 2015-01
Nevada enacted legislation to update its statutes regarding limited lines travel insurance and authorizing producers to offer such insurance through certain retailers. It also requires certain disclosures to be made to purchasers of the insurance. SB 373
Oregon enacted legislation regarding travel insurance, defining terms, allowing for retail sale of such coverage under the direction of a limited travel insurance producer and listing information and disclosures to be provided in written form to customers. SB 715
Connecticut established a program to provide for mediation of Workers' Compensation cases. The program was effective July 1, 2015. Memorandum 2015-04
Montana has clarified the requirements relating to workers' compensation claims when workers cross state lines for work. The memorandum's intention is to reduce requirements when a Montana worker is injured in North Dakota, and was effective July 1, 2015. Memorandum of July 1, 2015
Oklahoma Governor Fallin issued an Executive Order clarifying funding for the Workers' Compensation system of Oklahoma and remedying the lack of clear legislative intent regarding refund of payments to the Multiple Injury Trust Fund. Executive Order 2015-28
Rhode Island enacted legislation updating its laws regarding Workers' Compensation insurance including notices to be given to claimants and electronic transfers of payments. SB 874
Tennessee posted a message to SERFF stating: Voluntary carriers filing Waiver of Subrogation charges in the state pursuant to NCCI filing RM-01-TN-2015 must adhere to NCCI filing effective dates of July 1, 2015 and after, applicable to new and renewal policies only, as referenced in per FYI-TN-2015-01. SERFF message 06-24-15
Texas issued a mandatory data call for second quarter 2015 experience on worker's compensation deductible plans. Response is due no later than August 15, 2015. Bulletin B-0013-15
Virginia issued an Administrative Order approving revisions to the Manual of Rules, Classifications and Rates for writing Workers' Compensation insurance, as requested by the National Council on Compensation Insurance (NCCI) on behalf of its members. Administrative Order No. 11981
FRAUD RESEARCH – FIRST CONSULTING CAN HELP!
In addition to our full Anti-Fraud Training, First Consulting also offers detailed state by state research on the following important Anti-Fraud topics:
- Fraud Investigation and Monitoring - SIU criteria, Fraud Plan standards and filing requirements.
- Fraud Reporting – state mandates, confidentiality, and liability.
- Fraud Warning – language and forms where it should be used.
- Fraud Definition – various definitions of fraud types for each state.
Find out how First Consulting can help. Contact me today to find out more about our online research or take a Free Virtual Tour.
DO YOU NEED TO KNOW MORE?
If you need research on insurance laws and regulations, we can help you. This will help your office concentrate on other matters. We have the experience to get the information you need and want. Whether it is expanding into a new niche market or new states, we have the experience on many topics. We’ve helped the industry for many years on various topics and compliance issues.
You may have done research but perhaps you need a survey of regulator positions without revealing your identity. We can help.
Please contact us to learn more about our practical approach to helping you or for a no-obligation quote or click here.