Life and Health News

December 2017

Welcome to our latest newsletter!  As a thought leader in the Insurance Industry for over 48 years we are always excited to share the latest sampling of insurance compliance related bulletins, regulations and legislative activity. Please feel free to share this newsletter with others that may be interested.  Contact Us  with any questions on the items in this newsletter or with any other compliance related matter we can assist you with. Enjoy!


Ohio amended its law to provide that the maximum interest rate used for the calculation of the accelerated death benefit shall be no greater than the greater of: (i) The current yield on ninety day treasury bills; or (ii) The current maximum statutory adjustable policy loan interest rate; or (iii) The policy loan interest rate stated in the contract.     Rule 3901-6-06


Louisiana amended its law regarding the advertising of accident and sickness and Medicare supplement insurance by removing the requirement that insurers file a certificate of compliance regarding advertisements.     LAC 37:XI.1301, LAC 37:XI.101


Connecticut posted a notice on the Insurance Department website announcing that veterans applying for insurance licenses in the state are eligible to be reimbursed for examination fees.     Website Notice dated November 9, 2017

Louisiana issued a notice advising of changes in license renewal procedures.  Beginning in 2018, producers will file a single license renewal, which will renew all eligible lines on the license. Licensees will no longer renew in an even or odd year based on the lines of authority on the license. The renewal year will be determined by the license number.     Notice dated October 17, 2017

Oklahoma issued a special notice reminding carriers to keep their producer licensing/appointment contact email information updated, noting that electronic filing of UCAA Form 14 is required, and giving deadlines for appointment renewals and termination notices.  Renewal fees are due by 4 P.M. central time 12/29/17.     Special Notice 10-09-17 Appointment Renewal


Virginia promulgated regulations to set forth rules and procedures for filing, and the required contents of, the Corporate Governance Annual Disclosure.     14 VAC 5-265-10


Puerto Rico issued a ruling advising health insurers that during the current state of emergency they must not apply penalties or restrictions to policyholders when they request or obtain healthcare services from a provider, whether such services are an emergency or not. The ruling also requires an extension of claim filing deadlines, addresses out of network providers, extends waiting time for prescription refills and requires a premium payment grace period.     Ruling CN-2017-221-D

Puerto Rico issued a ruling pertaining to the grace period for payment of premiums and temporary postponement of cancellation of policies for lack of payment during the current state of emergency.     Ruling CN-2017-227-D


California enacted legislation to authorize pharmacists to dispense a Schedule II controlled substance as a partial fill if requested by the patient or prescriber. Effective January 1, 2019, insurers and health care service plans will be required to prorate an enrollee's or insured's cost sharing for a partial fill and will be prohibited from considering a prorated cost-sharing payment made to a pharmacist on such a partial fill as an overpayment.     Assembly Bill 1048

California enacted legislation to prohibit prescription drug manufacturers from offering any discount, repayment, product voucher or other reduction in an individual's out-of-pocket expenses associated with his health insurance, when a lower cost generic drug is available or the active ingredients of the drug are contained in an FDA-regulated product available without prescription at a lower cost and not otherwise contraindicated. Exceptions are provided.     Assembly Bill 265


New Mexico issued a bulletin providing requirements to bring all Life Insurance and Health Insurance forms delivered or issued for delivery in New Mexico into compliance no later than April 1, 2018.  This Bulletin extends the compliance deadline from January 1 to April 1, 2018. Examples of forms that are not compliant are available on the Life and Health Rate and Form Filing Bureau tab of the OSI website.     Bulletin 2017-013


The Financial Crimes Enforcement Network (FinCEN) issued an advisory to warn financial institutions of the potential for fraudulent transactions in the wake of recent disasters, including hurricanes and wildfires. FinCEN requests that "disaster-related fraud" be noted in the narrative of a Suspicious Activity Report (SAR) when filed.      FIN-2017-A007

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Montana updated the Montana Guaranty Association Notice by revising the Life and Health Insurance Guaranty Association address and department name.     Regulation 6.6.4603


Minnesota issued a bulletin regarding the employee counting method in the small group health insurance market.  Beginning January 1, 2018, health plan companies will no longer be offering small group health insurance policies on MNsure, the Minnesota marketplace exchange.     Bulletin 2017-2


Maryland issued a bulletin to health insurers and HMOs reminding them to establish procedures allowing members to obtain referrals to certain types of providers and that the referral procedures must be filed with the Commissioner. The requirements are effective 1/1/17.     Bulletin 17-12

New Jersey adopted new regulations to identify an evidence-based and peer-reviewed clinical tool to review the medical necessity of inpatient and outpatient treatment of substance use disorders in the context of determining insurance benefit coverage.     NJAC 10:163-1.1+

New York amended its law to prohibit health insurers from requiring a prior authorization determination for services provided in a neonatal intensive care unit of a general hospital. However, insurers may deny a claim for services if the services are determined not medically necessary.     Senate Bill 6053

New York issued a circular letter providing guidance pertaining to benefits in individual, group, and blanket accident policies and disability income insurance policies.     Circular Letter 2017-18

Puerto Rico issued a ruling to health insurers providing notification that the guaranteed enrollment period for 2017 will run from November 16, 2017 to December 31, 2017, including the first and last day, for enrollment in basic individual health insurance that will enter into effect as of January 1, 2018. For renewals, the guaranteed enrollment period will be extended to January 30, 2018, so insureds may renew their basic individual health insurance.     Ruling CN-2017-228-D, Circular Letter CC-2017-1909-AS


The Interstate Compact adopted new Uniform Standards applying to annuity contracts that provide for single premium, modified single premium, fixed or flexible premium payments over the life of a contract or for a limited payment period and that provide for all funds to be held in the general account.     A-02-I

The Interstate Compact adopted new Uniform Standards applying to individual life contingent immediate variable annuity contracts, both with or without period certain, that provide for a single premium payment, and that provide for funds to be held in separate accounts only or in separate and general accounts. The standards apply to fixed or variable annuities for the life of the contract.     A-06-I

The Interstate Compact adopted new Uniform Standards for annuity contracts providing for single premium, modified single premium, fixed or flexible premium payments over the life of a contract or for a limited payment period, and that provide for funds to be held in separate accounts only or in separate and general accounts.     A-03-I

The Interstate Compact adopted updated Uniform Standards for individual life contingent, both with or without a period certain, or non-life contingent immediate non-variable annuity contracts that provide for single premium, modified single premium, or flexible premium payments over the life of the contract, and that provide for all funds to be held in the general account.     A-05-I

The Interstate Compact updated the Filing Information Notice for Individual Long-Term Care filings.     Filing Information Notice 2017-2


New York issued a circular letter to all life insurance companies and licensed fraternal benefit societies to notify them that the Department is designating the National Association of Insurance Commissioners’ Life Insurance and Annuity Policy Locator service as a Lost Policy Finder pursuant to Insurance Law Section 3240. Insurers must treat requests submitted via the NAIC and received by insurers from the Department as subject to the requirements of Section 3240.     Circular Letter No. 19 (2017)


Colorado issued a bulletin to clarify that certain products meeting conditions as limited benefit health coverage, hospital indemnity, short-term limited duration health insurance or other fixed indemnity policies are not to be marketed or represented as substitutes for health benefit plans. The bulletin provides further guidance on "excepted benefit" plans, including various definitions.     Bulletin B-4.72 dated 10-31-2017


California published a notice of its hourly rate schedule for conduct of examinations of insurance companies. Rates are specified according to function, with such categories as financial analysis reviews, field examinations, fraud division special investigation and insurance practice examinations, among others.     Notice dated November 3, 2017


Idaho amended its rule regarding Medicare Supplement insurance. Insurance companies offering such coverage will be required to sell those plans to eligible individuals of all ages enrolled in Medicare Part B effective January 1, 2018.     IDOI News Digest, Vol 124, Issue 2


California enacted legislation entitled the Gender Recognition Act regarding obtaining a new birth certificate with gender noted as female, male or non-binary if the person seeking such a change is born in the state and over the age of 18.  Special procedures apply to persons younger than 18.     Senate Bill 179

California enacted legislation to require written translations of non-standardized documents which contain insured-specific information into the top 15 languages spoken by limited-English-proficient individuals as determined by the State Department of Health Care Services. The bill requires health insurers to notify insureds upon initial enrollment and annual renewal of the availability of language assistance services.     Senate Bill 223


Rhode Island issued a bulletin from the Office of the Health Insurance Commissioner, providing state-specific requirements for carrier notices of renewal and discontinuance in the individual and small group markets. Carriers may receive a waiver from one or more of the requirements upon demonstrating to the Commissioner's satisfaction that the waiver is in the public interest.     Bulletin OHIC-2017-1


New York amended its law regarding the rating of individual and small group health insurance policies.     Ins. Law s 3231 (AB 12350), Ins. Law s 4317


North Carolina issued a bulletin to all licensed domestic insurance Companies to communicate certain reporting requirements of the annual financial reporting law.  This bulletin replaces Bulletin Number 16-B-05.     Bulletin 17-B-05


Massachusetts amended several sections of the law regarding small group health insurance.     211 CMR 66.02+


Maine issued a bulletin to provide guidance regarding tax credits for employer-offered disability insurance. The premium for a qualified disability income protection plan can be paid by the employee, the employer, or a combination of both. The credit is available for the first three years that the employer offers one or more qualified plans, and is based on the number of employees.     Bulletin 425


Massachusetts amended its law regarding the initial registration and annual renewal of registration requirements for Third Party Administrators.     211 CMR 148.03


Maine issued a bulletin that replaces Bulletin 384 and provides additional guidance for producers and insurers regarding what activities may be conducted, or value-added services provided, under Maine's amended rebating statutes.     Bulletin 426


Illinois amended its law to require insurers to perform a comparison of specified in-force policies, annuity contracts, and retained asset accounts on or before December 31, 2018 by using the full death master file. Within 6 months after acquisition of policies, annuity contracts, or retained asset accounts from another insurer, the acquiring insurer must compare all newly acquired policies that were not searched by the previous insurer against the complete death master file.     House Bill 302

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C. J. Rathbun, FLMI, CCEP, HIA, AIRC