Property & Casualty News June 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

Arizona enacted legislation pertaining to liability coverage for rental vehicles.  Included are requirements concerning rental vehicle disclosures and response to third-party claims.     Senate Bill 1153

Florida amended certain requirements pertaining to personal injury protection coverage.  Among the changes is a revision in the benefit cap amounts.     627.736

Iowa issued a bulletin to provide guidance to insurers regarding reasonable repair estimates.  The bulletin discusses methods of calculating repair estimates and frequency of review of reasonable estimated rates.     Bulletin 12-04

Louisiana amended requirements pertaining to filing proof of financial responsibility and notice of cancellation or termination to provide that such filings be made electronically.     Senate Bill No. 559

Maryland amended provisions applicable to uninsured motorist coverage to provide that written consent by an uninsured motorist insurer to accept a certain settlement offer may not be construed to limit certain rights of the insurer and does not constitute an admission by the insurer as to any issue raised in the action.     Senate Bill 604

Maryland amended provisions concerning personal injury protection coverage adding mopeds and motor scooters to the list of vehicles for which insurers may exclude economic loss benefits or offer restricted benefits.     Ins. s 19-505

Maryland amended requirements concerning notifications insurers must provide to the Motor Vehicle Administration about new policies issued and additions, deletions or modifications to fleet policies.     House Bill 1180

Maryland enacted legislation providing a procedure for the rescission of personal auto policies and binders.     House Bill 1059

Mississippi added a requirement, effective 7-1-2013, that the insurance card insurers furnish to commercial auto coverage customers should be clearly marked with the identifier, “Commercial Auto Insurance” or “Fleet” or similar language, to reflect that the vehicle is insured under a commercial auto policy.     Senate Bill 2631

Nevada issued a notice reminding producers that numerous cases of a one-day lapse in coverage occur because of an incorrect policy inception or cancellation date. Because auto liability insurance policies terminate at 12:01 am on the expiration date listed on the evidence of insurance cards, policyholders have only one minute of coverage on the expiration date.     Producer News Flash - auto liability insurance policies - one day lapse

West Virginia established the On-line Insurance Verification Program, also referred to as the Electronic Insurance Verification Program, and amended certain guidelines for insurers writing motor vehicle liability insurance. Provisions require that certificate of insurance forms include the insurer’s NAIC number and amend requirements pertaining to the cancellation notice that insurers must provide to the DMV.     91-13-1 through 91-13-10

AUTOMOBILE INSURANCE - FILING REQUIREMENTS

Florida issued a memorandum to assist insurers with the filing necessary to implement recent changes in the notice requirement in Section 627.736(5)(A) 5.  There is a new statutory requirement that insurers provide a notice of the schedule of medical charges or "fee schedule" to insureds if the insurer is limiting reimbursement.  The memorandum includes sample endorsement language to provide the schedule of charges.     Memorandum 2012-02M


AUTOMOBILE INSURANCE - POLICYHOLDER NOTICES

Maryland amended requirements concerning an insurer's obligation to send written premium increase notices to exempt certain increases made during the 45-day underwriting period.     Ins. s 27-614

 


CANCELLATION

Louisiana revised requirements regarding reinstatement notices to provide that such notices must be sent to lienholders for policies that provide coverage on any property.     House Bill 492


CANCELLATION - PREMIUM REFUNDS
Louisiana revised requirements pertaining to premium refunds insurers owe to policyholders.  The change provides that when the insured continues to maintain a policy of insurance with the insurer, or an affiliated insurer, and the amount of the refund due plus interest is $25 or less, the insurer may credit the amount of the payment against future premiums.  The insurer must give written notice to the insured of the credit and the amount at policy renewal.     R.S. 22:1268


CERTIFICATES OF INSURANCE
New Hampshire clarified requirements for certificates of insurance to permit use of "substantially similar language" for the required statement.  Changes pertaining to excess/umbrella limits and fees for preparation of certificates of insurance were also made.     RSA 412:6-b


CIVIL UNION
Delaware issued a second amendment to the bulletin providing guidance for the implementation of the Civil Union and Equality Act of 2011.  The bulletin addresses the phrase "and then annually thereafter", striking that language, and stating that the general policyholder notification does not need to be distributed annually.     Domestic Foreign Insurers Bulletin 46 (Amended) (#2)


FILING REQUIREMENTS
Illinois issued a bulletin explaining that product submission filing fees will no longer be billed on a quarterly basis. Filing fees must be submitted by EFT for all SERFF filings received on or after June 1, 2012.     Bulletin CB2012-03


FRAUD
Alabama enacted legislation pertaining to insurance fraud which, among other things, requires a fraud warning on certain forms, defines fraud, provides requirements concerning confidentiality, mandatory reporting requirements and fraud units.     House Bill 323

Delaware issued a bulletin informing insurers that the Insurance Fraud Prevention Bureau's fee assessment amount has been increased from $550 to $750.     Bulletin 49

Louisiana enacted legislation to clarify terms regarding insurance fraud.  The word "claim" is changed to "insurance act", and the word "believes" now reads "suspects" when describing that companies, brokers, and adjusters may report suspected acts of insurance fraud.     House Bill 569

Oklahoma amended its regulation relating to notification of suspected fraud.     Senate Bill 1060

Oklahoma enacted legislation pertaining to insurance fraud, which among other things, modifies penalties, expands the investigatory scope of the insurance department's anti-fraud unit and provides for immunity for persons reporting insurance fraud.     Senate Bill 1439


HOLDING COMPANIES
Louisiana revised and restructured provisions pertaining to insurance holding company systems.   Included are definitions, provisions regarding acquisition and filing requirements for those acquiring domestic insurers.     House Bill 1191


HOMEOWNERS INSURANCE
Alabama created the Homeowners Bill of Rights Act.  The Act requires insurance carriers to provide to policyholders an outline of policy coverage and a standard checklist of policy contents, and provides specific policyholder rights regarding pricing, advertising, financial assurances, readable policies, cancellation, claims, filing complaints and other topics.     House Bill 166

Alabama created the Property Insurance Clarity Act including requirements for insurers to provide specified homeowners insurance policy, claims and premium information to the department.  Reports are to be submitted annually, beginning on or before 10-1-13.     Senate Bill 210

Alabama enacted legislation permitting homeowners to cancel a residential roofing contract if the insured homeowner receives written notice from the insurer that all or part of the claim is not a covered loss under the policy.     House Bill 405

Alabama enacted legislation to encourage private homeowner insurance carriers to write homeowners policies with wind coverage in areas covered by the Alabama Insurance Underwriting Association by providing certain insurance premium tax credits.     Senate Bill 230

Maryland added requirements that insurers issuing homeowner's insurance policies provide applicants and insureds with a notice stating certain claim-related grounds under which the insurer may cancel or refuse to renew the policy.     House Bill 1068

Michigan issued bulletins to report the 2012 adjustments to the minimum dollar claim thresholds that control insurers’ ability to refuse to insure, refuse to continue to insure, or limit the coverage available.  The first bulletin shows the changes effective 1-1-2012, the second bulletin uses a 7-1-2012 effective date.     Bulletins 2012-08-INS (dated 5-22-2012) and 2012-08-INS (updated 5-31-2012)


LARGE COMMERCIAL RISKS

Tennessee enacted legislation to provide a filing exemption for certain commercial risks.  Included are a definition of "exempt commercial risk policyholder" and a requirement that the application or policy issued to exempt commercial risk policyholders contain a disclaimer explaining that the forms and rates were not filed for approval in Tennessee.     Senate Bill 2596


MARKET CONDUCT ANNUAL STATEMENT
Arkansas issued a bulletin reminding insurers that Arkansas will participate in the market conduct annual statement for the 2012 data year.  The bulletin is applicable to all property and casualty insurers reporting $7,000,000 or more in gross premiums in homeowners or private passenger automobile.     Bulletin 5-2012


MEDICAL MALPRACTICE INSURANCE
Maryland amended provisions concerning a medical professional liability insurer's request for reimbursement from the Rate Stabilization Account.     Ins. s 19-805


MISCELLANEOUS
Delaware enacted legislation addressing the delivery of notices and documents by electronic means under specified circumstances.  Consent procedures and requirements are also provided.     House Bill 223

Maryland enacted legislation requiring an insurer, upon discovery of certain material risk factors, to recalculate the premium for a policy or binder of personal insurance or commercial property or liability insurance under certain circumstances; specifying a procedure for providing written notice to the insured; and requiring an insurer to provide notice that premium may be recalculated when specified binders or policies are issued.     Senate Bill 531

Oklahoma enacted legislation regarding insurance compliance self-evaluative audits and creating privilege related to such audits.     Senate Bill 1474

Oregon posted a notice on the Insurance Division website advising that the Division and most other state agencies will close because of budget limitations on 10 specified Fridays that fall throughout the current two-year budget period.     Notice titled Statewide budget cuts cause DCBS to close on scheduled days.

Tennessee enacted new legislation concerning the effect of an applicant's signature and payment of premium.  A provision is added stating that the signature of an applicant on an application, amendment, or other document stating the type, amount, or terms and conditions of coverage, creates a rebuttable presumption that the statements provided by the person bind all insureds.  A provision is also added stating that the payment of premium for an insurance contract by an insured creates a rebuttable presumption that the coverage provided has been accepted by all insureds.     Senate Bill 2271

Virginia issued an Administrative Letter summarizing certain statutes enacted or amended and re-enacted during the 2012 Session of the General Assembly.  Subjects include notices pertaining to earthquake exclusions, requirement to list all policy forms and endorsements on the declarations page, and the use of certificates of insurance.     Administrative Letter 2012-5

Wisconsin issued a bulletin containing a summary of the provisions of newly enacted legislation.  The bulletin is found on the department's website and contains links to the described legislation.  Subjects addressed include surplus lines, certificates of insurance, UM/UIM and portable electronics insurance.     Bulletin dated May 23, 2012


NONRENEWAL NOTICES

Florida amended nonrenewal provisions to provide specified exemptions from the requirement that an insurer provide notification of nonrenewal to an insured.  Exceptions are cases where the insurer has manifested its willingness to renew and the offer is not rescinded prior to expiration of the policy, and where a notice of cancellation for nonpayment of premium is provided.     626.9201


POLICY SURCHARGES
Minnesota reduced the amount of the fire safety surcharge insurers are required to collect for homeowner's, commercial fire, and commercial nonliability policies from 0.65% to 0.5%.  The requirement applies to licensed insurers that write homeowner's insurance.     297I.06


PORTABLE ELECTRONICS INSURANCE
Georgia amended its Code pertaining to portable electronics insurance.  Included are revised provisions regarding the issuance and regulation of limited licenses to sell portable electronics insurance and corrections to language concerning claimants' rights.     House Bill 1067



Louisiana enacted legislation to provide for the sale and termination of portable electronics insurance and the licensing of vendors.  Disclosure requirements are also provided.     Senate Bill 167


PRODUCERS
Alabama enacted legislation to expedite issuance of professional licenses and certificates for spouses of active duty military personnel and to acknowledge those licenses obtained in other jurisdictions.     House Bill 638

Hawaii amended its producer training requirements.     Senate Bill 2768


PROPERTY INSURANCE
Rhode Island enacted legislation concerning weather related losses and handling of insurance claims for hurricane damage.     House Bill 7484


REPORTING REQUIREMENTS
Maryland issued a bulletin to remind insurers of slavery era insurance reporting requirements.  All authorized insurers were required to submit a report on or before 10-1-2011.  The bulletin notes that, as of 4-20-2012, 883 of 1,431 authorized insurers had submitted the required report, and adds that a list of insurers that have submitted the required report can be found in Appendix 5 of the Slavery Era Insurance Policy Report available on the Insurance Administration’s website.     Bulletin 2012-8


RISK-BASED CAPITAL
Louisiana clarified definitions and company-action level events relative to risk-based capital for domestic insurers.     Senate Bill 230


SURPLUS LINES
Mississippi issued two Bulletins concerning Surplus Lines.    Bulletin 2012-2 provides assistance regarding implementation of revised requirements concerning the nonadmitted policy fee, and Bulletin 2012-3 provides guidance concerning the reporting, payment, collection and allocation of taxes and fees for multi-state policies.     Bulletin 2012-2; Bulletin 2012-3

Pennsylvania issued a notice providing a list of insurance coverages or risks eligible for export.     Notice of May 12, 2012

Wisconsin issued a bulletin summarizing changes made by recently enacted legislation to bring the state into compliance with the Federal Nonadmitted and Reinsurance Reform Act.     Bulletin dated May 29, 2012


Product Filing Approval

Our experienced team can process any size form or rate filing, from nationwide to a single insurance department.Whether your company’s need is a rush filing, or the development of a new product, First Consulting is the answer for truly professional assistance from drafting to approval.

Contact me today to see how we can serve as a resource for your product development and filing needs.

Sean Cox
816.391.2737
sean.cox@firstconsulting.com
http://www.firstconsulting.com/


First Consulting can help with UCAA filings

If your Company is planning action such as a name change, re-domestication, acquisition, merger, or adding of a new jurisdiction or line of business, these actions will require a change in your certificate of authority.

Our experienced staff can help with the Uniform Certificate of Authority Application (UCAA) developed by the NAIC and we are familiar with the various state-specific requirements that exist. First Consulting can handle these services and free your staff for other functions and projects.

Call or email me today to get more details about our services.

Scott Sheffer
816.391.2742
scott.sheffer@firstconsulting.com

 


Back To Property & Casualty Newsletters