Property & Casualty News
July 2016
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.
ADJUSTERS
Mississippi issued a bulletin summarizing key provisions of insurance adjuster licensing requirements. Bulletin 2016-7
Mississippi revised its continuing education requirements for renewal of an adjuster license. Senate Bill SB 2193, 83-17-415
ADVERTISING / SALES & MARKETING
Massachusetts has revised the requirements for third parties involved in insurance sales such as banks, credit unions, and lenders/affiliates. Changes include addition of credit unions to the entities to comply, consumer protection, eligibility, and penalties. 209 CMR 49.01
AGENT / PRODUCER CONTINUING EDUCATION
Puerto Rico issued a circular letter regarding insurance licensee continuing education standards for educational institutions and programs. Circular Letter CC-2016-1885-SR
South Carolina increased the number of hours of education required for licensure and continuing education. HB 4931
AGENT / PRODUCER LICENSING AND APPOINTMENT
South Carolina enacted legislation relating to the address requirements of insurance license applicants and providing additional background check requirements to obtain a resident producer license. Legislation also eliminated the affidavit requirement for nonresident insurance brokers. Additionally, a broker stamp is no longer required on surplus lines applications. HB 4817
Vermont amended regulations relating to business entity limited lines producer licenses. The initial licensing and biennial renewal licensing fee for a business entity limited lines producer is $150.00. HB 872
SPECIALIZED COMPLIANCE TRAINING
Does your training need to be refreshed? Three specific training programs geared for P&C include Anti-Fraud, Privacy and OFAC (Office of Foreign Assets Control). Click here to learn more.
AUTOMOBILE INSURANCE
Delaware has adopted a rule regarding transportation network companies (TNCs). The rule sets forth requirements for TNCs, drivers and their vehicles, and procedures for compliance and obtaining permits. DMV 2289
Hawaii now allows electronic proof of insurance for motor vehicles, motorcycles, and motor scooters. HB 1705
Maryland issued a bulletin providing information for Property and Casualty insurers regarding passage of SB 0784/HB 0900 (Motor Vehicle Insurance - Personal Injury Protection - Rejection of Coverage). According to the new legislation, qualified policyholders may fully reject the Personal Injury Protection benefits. The Maryland Insurance Administration is in the process of developing a new form(s) as required by the new statute. Bulletin 16-20
New Hampshire enacted and amended laws relating to the use of aftermarket parts for motor vehicle repairs, effective January 1, 2017. SB 436
Vermont enacted a bill regarding a department of insurance study of credit-based motor vehicle scoring and updated the motorcycle helmet law. HB 571
CANCELLATION / NON-RENEWAL / PREMIUM OR COVERAGE CHANGES
Arizona modified its laws regarding cancellation or non-renewal of motor vehicle insurance. The bill outlines the terms under which an insurer can non-renew an automobile policy. The change is effective August 6, 2016. HB 2445
CORPORATE GOVERNANCE
Connecticut enacted legislation addressing Corporate Governance Annual Disclosures (CGAD). Effective June 17, 2017 and annually thereafter, each domestic insurer, or the group of which such insurer is a member, is to submit a CGAD containing information as specified. Senate Bill 436
35 STATES WILL ADOPT THE CORPORATE GOVERNANCE MODEL IN 2016
Changes needed to your Board of Director’s documentation can take months, so we advise you act now!
First Consulting’s Corporate Governance Tool Kit can help by providing your company the documentation
needed for compliance under CGAD and the supporting Model Regulation.
DATA CALLS / REGULATORY REPORTING
Maryland has requested data from certain medical professional liability insurers. The information will be used to publish a rate comparison guide. The deadline for the information is August 29, 2016. Bulletin 16-14
Pennsylvania issued a data call regarding 2015 private passenger automobile insurance experience. All information must be submitted no later than October 15, 2016. 2015 Private Passenger Auto Data Call Instructions
Texas amended its requirements relating to the Commercial Lines Statistical Plan. 28 TAC §5.9501
Texas issued a bulletin regarding a data call for Texas Residential Property Hail Litigation. The purpose is to collect information for the examination of data on the cost of weather-related property insurance claims and the incidence of litigation of these claims. Insurers are required to respond no later than August 19, 2016. BULLETIN # B-0014-16
DISASTER / CATASTROPHIC EVENT
New Jersey issued a bulletin suspending reports required by Order No. A12-113 and Bulletin No. 14-02. These are reports required as a result of Superstorm Sandy claims. Bulletin 16-05
New Jersey issued an order terminating the Storm Sandy Mediation Program effective 8/1/2016. Order A16-110 dated June 6, 2016
North Carolina issued a bulletin outlining procedures for property/liability insurance companies and adjusting firms to follow if a catastrophic event were to occur in North Carolina. Bulletin 16-B-3
West Virginia issued an emergency order regarding the severe storm and state of emergency on June 23, 2016. The provisions in this emergency order will be effective immediately and will continue until July 23, 2016, unless extended or terminated by the DOI. Emergency Order Notice 16-EO-05
MARKET CONDUCT EXAMINATIONS
Connecticut enacted legislation concerning the Insurance Department's market conduct authority and data call confidentiality. It states that all work papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or anyone in the course of an examination shall be confidential, not subject to subpoena and not made public. If the Commissioner grants access to such documents to the National Association of Insurance Commissioners, the NAIC must agree to hold the documents confidential. Senate Bill 368
Maryland amended regulation regarding examinations reports, specifically reinsurers. "Accepted reinsurers" was replaced with "accredited reinsurers". COMAR 31.04.01
MARRIAGE EQUALITY / CIVIL UNIONS / DOMESTIC PARTNERS
Colorado enacted legislation to address the effect of a recent U.S. Supreme Court ruling on the state's issuance of marriage licenses. Parties to a civil union who marry each other will have the civil union terminated upon solemnization of the marriage. Persons who are party to a civil union and marry, enter a civil union with or cohabit with someone else are guilty of bigamy unless a specified affirmative defense can be presented. If a civil union and marriage are merged, any calculation of the duration of the marriage includes the duration of the civil union. Senate Bill 150
MISCELLANEOUS
Illinois amended its record retention requirements to allow all companies to dispose of or destroy certain records in their custody that do not have sufficient administrative, legal or fiscal value to warrant their further preservation. 50 Ill. Adm. Code 901.20
Ohio enacted a new law and amended requirements regarding authorizing the use of marijuana for medical purposes and to establish the Medical Marijuana Control Program. HB 523; 4731.229; 4123.54; 4731.22
MISCELLANEOUS PROPERTY / CASUALTY
Iowa amended reporting requirements relating to the boiler and pressure vessel program. The amendments expand the required reporting to include certain injuries and illnesses and add contractor requirements. The changes are effective July 27, 2016. 875-90.11
Maryland issued a rescission order for "the 1986 Order" pertaining to the requirement that any policy issued on a claims made basis include, at the option of the insured, an offer to purchase an extended reporting period. Maryland has determined that the requirements of the 1986 Order are no longer necessary. Rescission Order MIA-2016-06-008
Vermont issued an order regarding credit card related insurance benefits. Order dated June 2, 2016
YOUR UNIQUE NEEDS – OUR SERVICE
You may have cutting edge products, unique products, different ideas or different challenges. You can effectively leverage our expertise and resources with our Co-Sourcing approach.
NOTICE TO INSUREDS
Alabama issued a bulletin regarding personal and commercial property insurance policy cancellation or nonrenewal, and notification of premium increase. In addition to the guidelines implemented, the Department is requiring a minimum of 30 days advance notice to insureds. Bulletin 2016-04 dated 06-08-16
PREMIUM TAX
Arizona enacted legislation to change its premium tax rates for all lines except fire, health care service plans and disability insurance. House Bill 2002
Colorado enacted legislation regarding the requirements for an insurance company to be deemed as maintaining a home or regional office in the state for premium tax purposes. Senate Bill 165
PROPERTY INSURANCE
Alabama issued a bulletin reminding property insurers of dates when certain filings are due relating to Personal Property by Peril Rating Requirements. The bulletin also describes disclosure requirements and penalties for noncompliance with filing requirements. Bulletin 2016-05 dated 06-09-16
Georgia issued a reminder advising all insurers writing fire loss coverage that they are required to submit quarterly reports including required data. Reports must be filed electronically through the Georgia Company Portal. Directive 16-EX-3
Oklahoma issued a bulletin directing insurers to provide a written response by July 21, 2016 verifying their compliance with TITLE 36 O. S. § 4809, which requires insurers to ask a question on every application for fire insurance in a rural fire protection district about payment of any dues or subscription payments and to obtain evidence such payments have been made. The Department will begin targeted market conduct examinations to address the issue. BULLETIN NO. PC 2016-05
RATEMAKING
Florida has issued a bulletin listing the profit and contingency factors for use in rate filings. Informational Memorandum OIR-16-04M
REGULATORY REPORTING REQUIREMENTS
Maryland clarified the regulations relating to interrogatories section of the NAIC annual statement, specific to conflicts of interest. The term "company" was replaced with "reporting entity". COMAR 31.04.06.01
RISK RETENTION GROUPS
Connecticut enacted legislation addressing regulation of Risk Retention Groups (RRGs). RRGs are to provide specified information to the Commissioner when filing for a charter and when making material revisions to a plan of operation. Senate Bill 436
Nevada issued a bulletin outlining credit for reinsurance standards for captive Risk Retention Groups filing on a U.S. Generally Accepted Accounting Principles basis. Bulletin 16-003
SERFF FILINGS
Connecticut issued a bulletin concerning Property and Casualty filings. The bulletin confirms that all Property and Casualty rate, rule, and form filings are to be submitted via SERFF. Incomplete filings will be rejected without further review. The bulletin outlines what constitutes a complete filing. Fees for rejected filings will not be refunded. Most form filings are "File and Use" in Connecticut. Bulletin PC-82
SURPLUS LINES
Oklahoma issued an order informing surplus lines brokers of the electronic filing of quarterly premium tax remittance and annual statement in Oklahoma. Order concerning Electronic Quarterly Premium and Annual Statement
Puerto Rico issued a circular letter informing insurers and surplus lines general agents and brokers of the new electronic management procedures to register all transactions of the surplus lines process effective July 1, 2016. CC-2016-1886-AF
Puerto Rico issued a ruling regarding a compulsory bond for surplus lines brokers who pay premium tax for excess lines on an annual basis. Ruling CN-2016-201-AF
Rhode Island amended its law relating to surplus line brokers and added private flood insurance to the lines of business exempt from providing a due diligence affidavit regarding attempts to procure from admitted insurers. HB 7842; 27-3-38
TITLE INSURANCE / AGENTS
New Mexico issued a bulletin directed to title insurance licensees regarding the definition of escrow officers. On 10-1-2016, all escrow officers must be licensed as title insurance agents. Bulletin 2016-015
TRANSPORTATION NETWORK
Missouri created new insurance coverage requirements for transportation network companies and their drivers that use personal vehicles to transport passengers. SB 947; 379.1700; 379.1702; 379.1704; 379.1706; 379.1708
New Hampshire enacted a bill regarding the operation and insurance of transportation network companies. HB 1697
WORKERS' COMPENSATION
Delaware amended the rules relating to the Workers' Compensation Oversight Panel. The revisions remove obsolete provisions regarding the Panel's authority. DIA 1341 s 1.0
New Hampshire amended its Workers' Compensation law to allow an injured worker whose treatment is purposely postponed to petition the commissioner of labor to review a denial or to award compensation. SB 203
New Mexico added provisions concerning post-accident drug and alcohol testing. 11.4.3.12 NMAC
New York increased the amount of reimbursement for funeral expenses or memorial services, based on counties, for any deaths occurring on or after June 8, 2016. 12 NYCRR 311.1 Dated 11-10-2015
Rhode Island published its Workers' Compensation hospital rates for all hospital services provided on or after July 1, 2016. Informational Letter 2016-05
South Carolina amended its law concerning rate filing requirements for insurers writing Workers' Compensation policies. SB 1064
South Carolina issued a bulletin relating to workers' compensation loss cost and loss cost multiplier adoption and filing procedures. Bulletin 2016-02
South Carolina issued an order relating to the workers' compensation assigned risk plan to ensure it can continue to operate as a self-funded mechanism. Order 16-1
Tennessee amended its regulations regarding case management for Workers' Compensation. 0800-2-7 Dated 3-27-2015
Vermont modified a notice regarding the Workers' Compensation Assessment Fund to extend the current assessment rate for insurance companies. Workers Comp Assessment Fund Notice dated 6-8-2016
SPECIALIZED COMPLIANCE TRAINING
Three specific training programs geared for P&C include:
- Anti-Fraud
- Privacy
- OFAC (Office of Foreign Assets Control)
Does your training need to be refreshed?
The available features include:
- Meets state and/or federal training requirements*
- Available on our platform or yours so 24/7 access; Webinar is also available
- Fully customizable
- Recordkeeping of your staff that took and passed the training
- Downloadable Red Flags or Compliance Checklists for every person to use at their desk
* Except for the full 4.5 hours of Anti-Fraud in NJ for the first year
Additional information on our training programs is available here.
Please call for additional information.
Joe Bieniek
816.512.2832
Joe.Bieniek@FirstConsulting.com
LICENSING ASSISTANCE FROM FIRST CONSULTING
First Consulting & Administration, Inc. assists with obtaining and renewing Third Party Administrator (TPA) licensing. We also assist with licensing other specialized market operations such as Warranty Service Providers and Limited Health Service Organizations. Plus, First Consulting assists with expanding insurers' Certificates of Authority.
We are experienced with each licensing process and with the various state-specific requirements. Our services include advising what materials are needed for each filing, assembling the filings, and following up to secure approval of the filings.
Contact me for a no obligation proposal and cost estimate.
John Palmer
816.391.2744
John.Palmer@FirstConsulting.com