Property & Casualty News October 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

New Jersey issued a bulletin regarding the annual premium survey of private passenger automobile insurers and to advise all insurers of the survey information they should use to complete their annual responses.   The bulletin also notes that the completed survey should be submitted on or before November 1, 2011.     Bulletin No. 11-18


CREDIT INSURANCE
Texas adopted amendments to Regulations pertaining to insurance offered in connection with motor vehicle retail installment sales contracts.     7 TAC s 84.301; 7 TAC s 84.302; 7 TAC s 84.308


DISASTER AND EMERGENCY OPERATIONS
North Carolina issued a bulletin to all insurance companies regarding requirements applicable as a result of Hurricane Irene.     Bulletin 2011-B-9


FINANCIAL REGULATION
North Carolina issued a bulletin regarding certain reporting requirements of the Annual Financial Reporting Law.  It is effective immediately for financial statements as of December 31, 2011 and replaces Bulletin Number 10-B-06.     Bulletin 2011-B-11


GENERAL LIABILITY INSURANCE
Massachusetts issued a Policy Filing Guidance Notice informing insurers that write or intend to write commercial general liability policies of changes to the Division's policy regarding the acceptance of filings for general liability policies that provide coverage on a claims-made basis.     PC Filing Guidance Notice 2011-A

New Jersey amended its law to clarify the liability insurance requirements for certain auto body repair facilities.     AB 1467


HOMEOWNERS INSURANCE
Nevada issued a bulletin regarding personal lines property insurance policy covering a manufactured or mobile home.   For such homes manufactured within the preceding 15 years, insurers are required to offer to the insured the option to purchase replacement value coverage under specified circumstances, and the offer must be made on an approved form.     Bulletin 11-012


MISCELLANEOUS
Arkansas issued a directive replacing directive No. 2-2011.   Directive No. 2-2011 was discussed in the September 2011 edition of this newsletter.  The Directives concern gifts provided as an inducement to make an inquiry about or to purchase or renew insurance.  The replacement directive revises the Section of Arkansas Code referred to within the directive.     Directive No. 2A-2011

Illinois issued a bulletin to provide guidance to insurers regarding compliance with the Religious Freedom Protection and Civil Union Act.  The bulletin is issued in response to questions received by the Department and provides guidance about the form and content of the notification insurers are required to provide to insureds and potential insureds.     Company Bulletin 2011-12

Rhode Island issued a bulletin summarizing legislative amendments enacted during the 2011 session of the General Assembly.   The amendments pertain to several topics including, among others, Surplus Lines,  Repeal of Certain Report Requirements, Commercial Special Risks, Insurance Producer Licensing, Compliance with Standard Policies, Medical Malpractice Reporting, and Notice of Premium or Coverage Changes.     Bulletin Number 2011-7


PREMIUM TAX
Kentucky issued a bulletin regarding local government premium taxes (LGPT's).   This bulletin amends the 2011-2012 Local Government Premium Tax Schedule and Tax Code Descriptions published in conjunction with Bulletin 2011-01.  The bulletin also clarifies the responsibilities of insurers with regard to the payment of certain LGPT’s.     Bulletin 2011-7


PRODUCERS
Indiana issued a notice regarding an increase in licensing and renewal fees for certain non-resident producers.     Indiana Notice of 9-9-2011

Kentucky issued an Advisory Opinion directed to all licensees providing guidance regarding the need to have current contact information on file with the DOI.     Advisory Opinion 2011-06

New York issued an Office of the General Counsel opinion regarding insurers providing lunch to producers and situations where such meals would be considered producer compensation.     OGC Op. No. 11-08-01

Utah adopted changes to its regulations concerning continuing education requirements.     R590-142


SERVICE CONTRACTS
Nevada issued a bulletin to explain new financial responsibility requirements to obtain a certificate of registration as a service contract provider.     Bulletin 11-010


SURPLUS LINES
Delaware issued a bulletin to provide new surplus lines reporting forms.  The bulletin is directed to all insurers eligible to write nonadmitted insurance, surplus lines brokers and insureds.     Surplus Lines Bulletin No. 10

Maryland issued a bulletin in response to questions the Department received concerning application of the percentage deductible requirements of § 19-209 of the Insurance Article to surplus lines carriers writing homeowners insurance.  The bulletin states that if the homeowners insurance policy was issued or delivered in the state for property located in the state, then the requirements apply.     Bulletin 11-27

Maryland issued a bulletin regarding implementation of the Federal Nonadmitted Reinsurance Reform Act.     Bulletin 11-26

Ohio issued a bulletin to outline regulatory changes that affect the placement of nonadmitted insurance.     Bulletin 2011-08

Oklahoma issued a bulletin regarding implementation of the Federal Nonadmitted and Reinsurance Reform Act and related Oklahoma legislation.     Bulletin 9-30-2011


WORKERS COMPENSATION
New Hampshire issued a bulletin telling insurance carriers that they may build the Workers Compensation Administration Fund Assessment obligations into their loss cost multipliers.  The bulletin also advises that the state is directing NCCI to amend its pending loss cost filing to exclude this assessment, and to provide to NCCI affiliates with notice of this regulatory directive as well as the amended loss costs.     Bulletin Docket No. Ins. No. 11-018-AB


New Standards for Compliance: ERM

Your market conduct activity is under increased state scrutiny with the November 2010 updates to the Federal Sentencing Guidelines manual.

Regulators are now required to determine whether or not (a) the insurer’s overall compliance program is robust and (b) the insurer’s compliance program leads to effective results.

First Consulting can support your Enterprise Risk Management (ERM) efforts.

  1. If you are just setting up an ERM program, we can help you identify gaps, assist with root cause analysis, and offer recommendations to strengthen those areas identified.
  2. If your program is in place and you would like a neutral third party to help preview what regulators may find in your company, we can also help you with that.

ERM used to be the realm of financial examinations, but it’s becoming a key component in market conduct examinations, as well. Ensure that you are prepared to satisfy regulatory inquiries.

Let us help! 

CJ Rathbun
816-391-2740
cj.rathbun@firstconsulting.com


Advertising Compliance Services

During our Advertising Compliance seminars, we find that some companies need outside assistance with advertising review and, depending on your market, advertising filings.

Our expert staff can perform a comprehensive one-time review of all of your existing marketing pieces, or those designed for a specific product.  We can also provide an ongoing review that allows you to route new pieces for review prior to printing for release.  We can provide both general compliance advice and address particular state concerns.

One advantage in using our services is that we can provide our review and comments on an unbiased basis.  We know that marketing/sales wants to put the best foot forward on their sales material, but we also know that the foot sometimes goes too far in the eyes of the insurance regulators.  Let us help develop a solution that meets your objective, but within the boundaries of the advertising rules.

If your products require that advertising be filed for approval, we can also provide assistance with this requirement, utilizing the SERFF filing system.

Click here to go to our webpage on Advertising Compliance or give CJ or me a call today to discuss how we can provide assistance to meet today’s advertising compliance requirements.
 

 Jerry L. Wickersham
816-391-2743
jerry.wickersham@firstconsulting.com

 

CJ Rathbun
 816-391-2740
cj.rathbun@firstconsulting.com