Property & Casualty News
June 2017
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
Connecticut issued a notice regarding license maintenance for claims adjusters and motor vehicle physical damage appraisers. All renewals must be completed via the National Insurance Producer Registry (NIPR) between April 1, 2017 and June 30, 2017. After June 30, all non-renewed licenses will expire. Notice dated June 1, 2017
AGENT / PRODUCER COMPENSATION
Arizona revised its statutes to state that insurance producers shall not charge or receive a fee or service charge in addition to the premium in connection with the transaction of insurance unless both of the following apply: 1) the fee and the specific services for which it's charged are disclosed and agreed to in writing by the insured and 2) the amount of fee is reasonably related to the cost of the service rendered and doesn't duplicate or increase any fee or service charge included in the insurer's rate filing. House Bill 2279
Maryland enacted legislation allowing insurance producers to charge and collect certain expenses from insureds for payment of policy premiums and other fees or taxes by credit card, subject to specified conditions. House Bill 800
AGENT / PRODUCER LICENSING AND APPOINTMENT
Arkansas issued a bulletin regarding producer appointment terminations and renewals. Producer and agency appointments are no longer shared and must be separate. Bulletin 4-2017
AUTOMOBILE INSURANCE
Connecticut has revised provisions regarding ignition interlock devices (IIDs). Changes include definition of "approved applicant", specification and calibration requirements, records maintenance, and penalties for noncompliance. 14-227a-11a
Montana rescinded an Advisory Memorandum of January 5, 2016, which related to auto repair estimating systems and market price. Advisory Memorandum of May 10, 2017
Rhode Island issued a bulletin regarding the auto body labor rate survey and who must participate in the survey. Bulletin 2017-1
South Carolina amended and enacted several regulations relating to motor vehicles. HB 3516
South Carolina amended its regulation regarding motor club certificates of authority. R 28-80
Tennessee amended its regulation relating to insurance requirements applicable to off-highway vehicles. HB 77
CAPTIVES
Georgia enacted legislation addressing captive insurance companies. Senate Bill 173
CONFIDENTIALITY / PRIVACY
Illinois amended regulations regarding annual privacy notices, exempting licensees from having to provide them if the licensee: 1) provides nonpublic personal information to nonaffiliated third parties only in accordance with Sections 4002.130, 4002.140 and 4002.150; and 2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with Section 4002.40. However, if at any time a licensee fails to comply with any of the criteria described, the licensee will be required to provide the annual notice and all licensees are required to provide the initial privacy notices required by Section 4002.40. 50 IAC 4002.50
Maine amended its insurance law to conform it to federal law on the subject of annual privacy notices. In the case of policy renewal, reinstatement or a change in insurance benefits, a notice must be provided if a change has been made to the regulated insurance entity's information practices. For renewals, the notice must be provided by the renewal date and for reinstatements or benefit changes it must be provided upon the carrier's receipt of the request. 24-A MRSA s 2206, sub-s 1
Montana amended its Insurance Code effective October 1, 2017, to replace the requirement for annual notice of a licensee's privacy policies and practices with a requirement for notification within 60 days after any material change, other than typographical, in the licensee's privacy policies or practices. However, delivery of notice continues to be required upon delivery of any new product or service or upon reinstatement, if any notices already provided are no longer current. 33-19-202
Nebraska enacted legislation to relieve licensees from the annual privacy notice requirement if the licensee: 1) provides nonpublic personal information to nonaffiliated third parties only in accordance with sections 44-913 to 44-915; and 2) has not changed its policies and practices with regard to disclosing such information from the policies and practices that were disclosed in the most recent disclosure to consumers. Legislative Bill 241
Wisconsin amended its regulation regarding the required annual privacy notice to consumers. An exemption from providing annual notice is provided under specified circumstances. Ins 25.13
DISASTER / CATASTROPHIC EVENT
Arkansas issued bulletins addressing a major disaster declaration for several counties affected by severe storms, tornadoes and floods and announcing a 60-day moratorium on cancellation/nonrenewal of policies for nonpayment of premiums. However, interested policyholders must request the delay. Bulletin 5-2017; Bulletin 5A-2017; Bulletin 5B-2017
Kentucky issued a notice to companies sending unlicensed adjusters to assist with claims from the wind and thunderstorm event May 27-28, 2017. The unlicensed adjusters must be registered with the Department of Insurance. Catastrophe Serial No. 1734
New Mexico updated its bulletin regarding catastrophe declaration to include the May 8th hailstorm. Bulletin 2017-006 - 5-23-17 update
North Carolina issued bulletins directed to insurance companies and adjusting firms regarding procedures for catastrophic adjusters and catastrophic motor vehicle damage appraisers. Bulletins 17-B-02 and 17-B-03
Wisconsin issued an Executive Order relating to a declaration of a state of emergency in response to severe weather and flooding. Executive Order 244
ELECTRONIC TRANSACTIONS
Missouri adopted regulations relating to electronic seals and signatures by notaries. Conditions for use of electronic seals and signatures are provided. 15 CSR 30-110.010 +
South Carolina amended its law to allow an insurer to deliver, store or present evidence of insurance coverage electronically, effective January 1, 2018. HB 3488
Washington amended its regulation relating to delivery of insurance notices and documents electronically. HB 1845; 48.185.005
FRAUD / ANTI-FRAUD
Louisiana has issued an advisory letter regarding anti-fraud plan filing requirements for insurers. All anti-fraud plans filed prior to January 1, 2011 must be re-filed. Plans must be filed via the Department's online Industry Access Portal. Supplemental reports must be filed annually prior to April 1. Advisory Letter No. 10-02 (Amended)
Utah revised its Mandatory Fraud Reporting rule to indicate a new email address for submitting a report directly to the commissioner: fraud@utah.gov. R590-248-4
THE BATTLE BETWEEN WORK AND VACATION
It’s hard to believe that Memorial Day weekend has already passed!
This holiday typically ushers in the start to the summer vacation season,
and that can often become a difficult time for managers to balance workloads and letting their staff take vacations.
Click here to find out how First Consulting can help!
GUARANTY ASSOCIATION
Michigan corrected errors in calculation of the Michigan P&C Guaranty Association's annual CPI adjustment. Bulletin 2017-03-INS is superseded. Bulletin No. 2017-07-INS
LIABILITY INSURANCE
Georgia adopted provisions requiring maintenance of a commercial insurance policy with liability coverage for wrecker services that have a permit to provide nonconsensual towing. The regulation includes minimum coverage limits, a requirement to provide a Certificate of Insurance to the Georgia Department annually, and cancellation notice requirements. 570-36-.09
South Carolina enacted a new law regarding liability insurance coverage required for on-premises consumption of alcoholic beverages. SB 116; 61-2-145
MISCELLANEOUS
Texas removed a requirement that insurers notify the Insurance Department regarding penalty, forfeiture or sanction imposed for violation of the insurance law of another state. The change is effective September 1, 2017. SB 1012; Ins s 81.003
NOTICE TO INSUREDS
Arizona issued a bulletin that revises requirements for written notification to commercial policyholders in the case of changes to premiums or deductible, as well as reduction in limits or coverage. The written notice must be 30 days prior, which is a change from the previous requirement of 60 days. Bulletin 2017-01
OMNIBUS LEGISLATION
Indiana enacted legislation to update its Insurance Code. Among other things, it notes acceptable forms of proof of mailing, updates producer continuing education requirements, adds a chapter addressing denial of property and casualty claims made by innocent coinsureds and revises notice of nonrenewal requirements. House Bill 1318
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Maryland enacted legislation to require certain carriers to maintain a risk management framework, requiring carriers or insurance groups to conduct an Own Risk and Solvency Assessment (ORSA) and requiring certain carriers to submit ORSA reports to the Insurance Commissioner. Senate Bill 8; 32-101 through 32-110
South Carolina enacted legislation providing instructions for filing an Own Risk and Solvency Assessment (ORSA) Summary report, effective January 1, 2018. SB 254
West Virginia enacted legislation to provide requirements for maintaining a risk management framework as well as submitting an own risk and solvency assessment. House Bill 2619; 33-40B-1 through 33-40B-11
FIRST CONSULTING HAS CGAD COVERED
Twenty states have now either introduced or enacted requirements for you to file an annual
Corporate Governance Annual Disclosure.
Click here to find out how First Consulting can help your CGAD program!
PROFESSIONAL LIABILITY INSURANCE
Kentucky has permanently adopted with revisions an emergency regulation regarding licensing and license maintenance for Pharmacy Benefit Managers. Amendments include E&O financial responsibility requirements and "good cause" circumstances for failure to submit requested information. 806 KAR 9:360
PROPERTY INSURANCE
Oklahoma enacted legislation relating to standardizing construction quality for property insurance discounts for weather-resilient new construction. It requires construction compliance with certain building codes, requires maintenance of records, requires insurers to submit specified rating plans, and defines terms among other things. HB 1720; 36 S 4820
South Carolina amended its regulation regarding hurricane and flood mitigation. SB 315; 38-75-485
SURPLUS LINES
Mississippi issued a bulletin concerning amendments to surplus lines laws, including removal of the diligent search requirement and implementation of an informational notice for personal lines surplus lines policies. Bulletin 2017-3, HB 447
THIRD PARTY ADMINISTRATORS
Kansas issued a bulletin noting that, as of June 1, 2017, the Department will not renew nonresident administrator licenses for nonresident administrators holding resident licenses in states other than Alaska, Delaware, Florida, Idaho, Indiana, Missouri, New Hampshire or West Virginia, as those states' laws are similar to those of Kansas. Also, effective January 1, 2018, all administrators holding Kansas licenses will be required to renew by December 31, 2018 for a two-year period. Bulletin 2017-2
TRADE PRACTICES
Delaware issued a bulletin to remind any/all persons and companies engaged in any aspect of the business of insurance, that it is unlawful to “[make] any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of the insurance business, which is untrue, deceptive or misleading.” It is the Department’s position that any explanation to any consumer that suggests the Department is responsible or otherwise the cause for any premium rate increase constitutes a violation of 18 Del. C § 2304(2) and will be prosecuted accordingly. Universally Applicable Bulletin No. 1
WORKERS' COMPENSATION
Florida amended provisions relating to expert medical advisors (EMAs). Changes include qualification for registration, application process, and responsibilities. FAC Rule 69L-30.002
South Carolina amended its Workers' Compensation law requiring employers' representatives to make payments by check or electronic payment systems. HB 3441
Tennessee amended its Workers' Compensation law regarding utilization review and access to medical care. SB 297; 50-6-124; 50-6-204
3 WAYS WE CAN HELP WITH CGAD
Twenty states have now either introduced or enacted requirements for you to file an annual Corporate Governance Annual Disclosure (CGAD).
Current Board challenges? Haven’t started? Bogged down? We’re here for you!
1. Board training – Tailored, on site or by webinar; and through training slide decks (with presenter notes)
2. CGAD Tool Kit and Supplement Kit – Tools for your risk assessment, necessary documentation and a template report
3. Governance consulting geared to your need – At any touch point in your process, from design or implementation of controls to a second set of eyes on your draft report
Call and let’s chat.
C. J. Rathbun, FLMI, CCEP, HIA, AIRC
816.391.2740
CJ.Rathbun@FirstConsulting.com
THE BATTLE BETWEEN WORK AND VACATION
It’s hard to believe that Memorial Day weekend has already passed! This holiday typically ushers in the start to the summer vacation season, and that can often become a difficult time for managers to balance workloads and letting their staff take vacations.
First Consulting can help!
Our experienced team of insurance experts can step in at any stage of your project and bring it to a speedy finish:
• Drafting
• Filing
• Research
• Compliance Monitoring/Oversight of active or closed blocks
• Compliance Training
• Admissions, Name Change, etc.
Let First Consulting help keep your projects on target. Contact me today to find out more and get a no obligation quote!
Sean Cox
816.391.2737
Sean.Cox@FirstConsulting.com
WE LIKE TO SHARE – CONNECT WITH FIRST CONSULTING
For over 48 years First Consulting has been an active thought leader in the Insurance Compliance Industry, and we like to share what we’ve learned. We love to pass along news and interesting tidbits that we come across, and learn from the information that you have to share.
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Follow us on LinkedIn and Twitter (FCAcosourcing) and join our followers in staying up to date on the latest in the Insurance Compliance Industry. In fact we have recently been attending a number of InsurTech conferences and we are relaying a number of advances that will be impacting the insurance industry in the coming years.
We look forward to connecting with you!
Sean Cox
816.391.2737
Sean.Cox@FirstConsulting.com