Property & Casualty News
April 2014
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.
AGENT / PRODUCER COMPENSATION
Colorado adopted changes concerning fees charged by producers. The purpose of the regulation is to implement rules prohibiting producers from charging certain fees for which they are already compensated through commissions and to clarify which fees may be charged. 3 CCR 702 Reg. 1-2-9
AGENT / PRODUCER CONTINUING EDUCATION
Montana amended requirements concerning continuing education programs for insurance producers and consultants. 6.6.4202 +
AGENT / PRODUCER LICENSING AND APPOINTMENT
Arkansas issued a bulletin describing the process to be followed for 2014 company appointment renewals for producers. The bulletin explains that to comply with 2014 procedures for appointments renewals and terminations, a company must annually review its records on its appointed Arkansas producers and business entities (insurance agencies) and decide whether the company will renew each appointment. Bulletin 5-2014
New Jersey issued a bulletin to ensure that all insurers are aware of the producer appointment renewal procedures outlined in N.J.A.C. 11:17-2.9. Bulletin 14-03
AUTOMOBILE INSURANCE
Nevada revised requirements concerning a notice that is to appear on specified auto policies. The previous requirement called for an imprint, stamp, or sticker in 14-point or larger wording. The new requirement refers to a notice, prominently displayed on the declarations page. NAC 690B.310
South Carolina revised requirements relating to motor vehicle evidence of financial responsibility to allow such evidence to be provided by use of a mobile electronic device in a format issued by an automobile insurer. The revision does not require an automobile insurer to issue verification concerning the existence of coverage in an electronic format. 56-10-225
CANCELLATION/NON-RENEWAL/PREMIUM OR COVERAGE CHANGES
Maryland adopted new regulations concerning cancellation or nonrenewal of certain commercial insurance policies. The regulations describe what is to be provided in the statement of reason for cancellation or nonrenewal. COMAR 31.08.17.01 - .03
West Virginia amended its Code relating to the nonrenewal or cancellation of property insurance policies in force for at least four years by prohibiting nonrenewal or cancellation of such policies as a result of certain claims arising from natural causes and from declared states of emergency. HB 4204
CAPTIVES
South Dakota revised certain provisions regarding the regulation of captive insurance companies. R27-41-006
CERTIFICATES OF INSURANCE
Wyoming amended the Unfair Trade Practices Act to provide certificate of insurance standards. The provisions specify filing and language requirements. Surplus lines standards are included. 26-13-125
CLAIMS/CLAIMS ISSUES
Mississippi amended its Code concerning a requirement for an insurer paying an auto insurance claim to add as payees on the check the business repairing the automobile and the lienholder. A sunset provision stating that the requirement would be repealed on 7-1-14 has been deleted. SB 2329
Tennessee amended its Code effective 7-1-14 to require that within 10 business days (previously 30 days) of receipt of a written request from an insured or an insured's designee, a commercial lines insurer shall furnish directly to the person designated in the request a copy of the insured's loss run history for up to the previous 3 years, or complete loss run history with the insurer if the history is less than 3 years. SB 1350
CROP HAIL INSURANCE
The United States passed House Bill 2642 concerning Federal Crop Insurance. The bill provides for the reform and continuation of agricultural and other programs of the Department of Agriculture through fiscal year 2018. House Bill 2642
DEPARTMENT OF INSURANCE
Rhode Island issued a bulletin providing the contact information for the Rhode Island Insurance Division which insurers must use when complying with notification requirements. Bulletin 2014-1
ELECTRONIC TRANSACTIONS
Indiana established requirements concerning the electronic delivery of notices and documents. HB 1058
Iowa enacted new legislation pertaining to electronic delivery of notices and documents. SF 2105
Oregon amended requirements concerning electronic delivery of a notice, offer, disclosure, document, form, correspondence, information or other communication. The changes include a statement providing that, if proof of mailing is sufficient proof of notice, confirmation of electronic delivery of a notice in any form is sufficient proof of notice. HB 4052
South Dakota enacted legislation pertaining to the transmission of electronic documents. HB 1156
Utah modified its Code to address electronic delivery of certain insurance documents. SB 129
Wyoming enacted legislation concerning the transmission of electronic notices or documents. SF 17
FLOOD INSURANCE/NFIP
West Virginia enacted legislation concerning flood insurance. SB 621
FRAUD
Colorado passed a bill creating the crime of insurance fraud and criminalizing various claimant and insurance broker or agent conduct that would result in defrauding an insurance company or customer. If an insurance producer is convicted of the offense, the insurance commission shall revoke the person's license for a period of 5 years. Senate Bill 14-092
LIABILITY INSURANCE
Colorado adopted changes to regulations concerning the construction, operation, repair, maintenance and registration of amusement rides and devices. 7 CCR 1101-12
Mississippi amended provisions concerning products liability. HB 680
MISCELLANEOUS
Indiana amended its Code concerning insurer taxes, risk management, captive insurers/foreign company registration, and service contracts, among other topics. Included in the changes is the addition of a Chapter titled Risk Management and Own Risk and Solvency Assessment. HB 1206
South Dakota issued a bulletin stating that if a statute, rule, or company policy requires any application for insurance to be signed by an insurance agent, the application must be signed by the insurance agent that solicited that policy after completion of the application. The bulletin provides additional information about agent signatures on applications. Bulletin 14-01
Virginia amended its Code concerning compensation for livestock and poultry killed by dogs to increase the compensation maximum from $400 to $750 per animal. HB 54, SB 432
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Indiana added a Chapter to its Code regarding ORSA. Included are requirements that insurers maintain a risk management framework, reporting requirements and an explanation of exemptions from the requirements of the Chapter. HB 1206, Chapter 27-1-23.5
Kansas adopted legislation to require insurance holding companies to submit enterprise risk reports. The legislation adopts the NAIC Model Regulation 450 - Insurance Holding Company System Model Regulation With Reporting Forms and Instructions. 40-1-28
Wyoming enacted legislation requiring insurance companies to maintain a risk management framework as specified, providing for risk assessments, and providing filing requirements. SF 21
PERSONAL LINES INSURANCE
Mississippi amended provisions concerning hurricane deductible programs to require that the commissioner establish uniform policy language requirements and the form of notice to be provided to an insured under a homeowner's insurance policy. HB 756
Tennessee amended its Code concerning sinkhole loss coverage under homeowners insurance. SB 880
PREMIUM TAX
Mississippi revised provisions concerning payment of premium taxes. SB 2024
PROPERTY INSURANCE
Maryland issued a bulletin to notify insurers underwriting personal and commercial property insurance of a change in address for the Joint Insurance Association. The bulletin specifies that this information is necessary for compliance with certain notice requirements. Bulletin 14-11
South Carolina issued a bulletin concerning the use of hurricane catastrophe models in property insurance ratemaking. Bulletin 14-03
SERVICE CONTRACTS / WARRANTY INSURANCE
Virginia amended its Code to expand the list of services that may be provided under extended service contracts, to specify the types of contracts that are not included under the definition of extended service contract, and to specify that extended service contracts are not considered insurance. HB 69
Washington amended requirements relating to the regulation of service contracts and protection product guarantees. SB 5977
STOP LOSS
Connecticut issued a bulletin regarding stop loss insurance coverage, also known as excess reimbursement insurance or excess insurance coverage, providing revised attachment points based on the current model of the NAIC. This bulletin supersedes Bulletins HC-42 and HC-44. Bulletin PC-75 and Bulletin HC-95
TITLE INSURANCE/AGENTS
Indiana amended its code to require the DOI to create a title insurance consumer comparison tool and include the filed rates of all insurers that issue title insurance policies in Indiana on the tool. HB 1224
Utah revised regulations concerning the title insurance producer annual and controlled business reports. Rule R592-11-1 +
TRADE PRACTICES
South Dakota enacted legislation to establish consumer protection standards regarding certain insurance claim practices. HB 1054
UNINSURED MOTORISTS / UNDERINSURED MOTORISTS COVERAGE
Mississippi added a provision to its Code concerning Uninsured Motorist Coverage stating that insurers shall inform the named insured or applicant, on a form approved by the DOI, of the benefits of and reasons for electing to purchase uninsured motorist coverage. If the form rejecting uninsured motorist coverage is signed by or on behalf of the named insured, it is binding upon all persons insured by the automobile liability policy. SB 2733
WORKERS' COMPENSATION
New York issued a bulletin concerning amendments to regulations governing the conduct and reporting of independent medical examinations of injured or ill workers' compensation claimants. Bulletin WC 46-666
Rhode Island published a notice concerning a 2014 cost of living benefit increase pertaining to Worker's Compensation Weekly Compensation for Total Incapacity. Information Letter 2014-04
Texas adopted the NCCI Basic Manual with Texas exceptions, and the national and Texas-specific endorsements and forms in the NCCI Forms Manual, as proposed by Petition No. W-1213-01-I, with one amendment to explicitly allow participation in the dispute resolution appeals panel by telephone or other electronic means, on agreement by all parties. The bulletin specifies that carriers do not have to make a filing. Commissioner’s Order No. 3142 and Bulletin B-0007-14
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. Preparing and making the filings can be a time consuming task.
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.
Click here for information on how we can assist with obtaining additional state licenses or authority and with corporate changes such as name changes.
Or, you can call or email Scott Sheffer or Jerry Wickersham today to get more details about our services.
| Scott Sheffer | Jerry Wickersham |
| 816.391.2742 | 816.391.2743 |
| Scott.Sheffer@FirstConsulting.com | Jerry.Wickersham@FirstConsulting.com |
Agent Advertising Compliance
Companies sometimes struggle in knowing whether their independent agents produce compliant 'generic' advertising. If your company name or products are not being advertised, do you have any responsibility for those general ads? Does it matter if they are more likely or less likely to sell one of your products?
Thoughtful compliance officers ask those questions. How can you find answers? We can help you gain reasonable assurance the advertising is compliant.
From our experience with agent marketing materials, we can address your concerns. To view a description of our advertising services, please visit our website at Advertising Compliance Services.
If you have additional questions, please contact me.
CJ Rathbun
816.391.2740
CJ.Rathbun@FirstConsulting.com