Property and Casualty News
November 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 CONTINUING EDUCATION
Maine issued a bulletin providing best practices for online continuing education providers, which may apply to insurance companies. Bulletin 395
Maryland updated the requirements for insurance producer continuing education. The change is effective 02/01/2015. COMAR 31.03.02
AGENT / PRODUCER LICENSING AND APPOINTMENT FEES
New Mexico issued a bulletin regarding licensing and registration requirements for insurance consultants. Requirements, forms and fee schedules are posted on the licensing bureau's website. Bulletin No. 2014-015
AUTOMOBILE INSURANCE
Colorado increased minimum levels of motor vehicle liability insurance coverage required. 4 CCR 723-6 Rule 6007
Delaware issued a bulletin to give notice to all auto insurers in Delaware that the Department is changing the process for when annual auto insurance rate information should be submitted. Carriers will be responsible for checking the Department's website annually to ensure the process is completed timely. A website address is provided along with a note that the rate template data should be updated by January 31, 2015. Auto Bulletin No. 22
Hawaii clarified payment of general excise tax for personal injury protection benefits, which applies to auto insurers. Memorandum 2014-2L
CANCELLATION / NON-RENEWAL / PREMIUM OR COVERAGE CHANGES
Wisconsin requires insurers to provide renewal notice 60 days before the renewal date when a policy will be renewed with higher premium rates or less favorable terms. Section 631.36
COMMERCIAL LINES INSURANCE
Maryland implemented changes to the requirements for notices of premium increase for commercial lines and workers' compensation policies. COMAR 31.15.13
COMPLAINTS
Nebraska posted a notice dated October 3, 2014 that the Consumer Affairs Division has begun to transmit complaint information electronically. All insurers are requested to send an email with their NAIC number and the name of their compliance contact along with his/her email address, fax number and direct dial telephone number to DOI.ConsumerAffairs@nebraska.gov. Notice dated October 3, 2014
CREDIT FOR REINSURANCE
Ohio revised the requirements related to credits for reinsurance to follow the NAIC's Credit for Reinsurance Model Regulation (Model 786). Rule 3901-3-16
CROP HAIL INSURANCE
North Dakota issued a bulletin to all insurers writing Crop Hail insurance, stating that rates and forms are due to be filed no later than January 15, 2015. Bulletin 2014-2
DEPARTMENT OF INSURANCE
Arizona issued a bulletin regarding HB 2560 (which established "Insurance Compliance Self-Evaluative Privilege"), notifying insurers of the requirements of A.R.S. 20-3302(A)(5) that insurers must notify the director prior to the initiation of an Insurance Compliance Audit (Audit) and at the conclusion of the Audit. The bulletin provides the address for such notice and contact information for questions. Bulletin 2014-08
DISASTER / CATASTROPHIC EVENT
South Carolina issued a bulletin regarding electronic appointment procedures for temporary adjusters, to be applied when a disaster occurs. Bulletin Number 2014-13
DISCLOSURE REQUIREMENTS
Massachusetts adopted "prominent display" requirements for disclosures of premium quotes for private passenger motor vehicle and personal property insurance. Bulletin 2014-08
FILINGS: PROPERTY/CASUALTY
Massachusetts issued a bulletin regarding Portable Electronic Insurance (PEI) policy forms and certificates (TOI 9.0007-Communication Equipment (Cellular Telephones)). Bulletin 14-09
Oklahoma issued a bulletin regarding online access to Rate and Forms filings. BULLETIN NO.: No. PC 2014-02
FINANCIAL REGULATION
Colorado adopted rules and procedural requirements to carry out the provisions of Section 10-3-243, C.R.S., regarding domestic insurers that enter into derivative transactions. 3-2-8
Delaware adopted regulations concerning the use of derivative instruments by insurers. 404 s 1.0
LIABILITY INSURANCE
Washington adopted provisions regarding enhanced services facilities licensing. Liability insurance requirements are included. 388-107-0010 +
MISCELLANEOUS PROPERTY / CASUALTY
Massachusetts issued a bulletin to insurance companies, insurance company groups, and licensed insurance producers that sell private passenger motor vehicle or personal property insurance policies in Massachusetts regarding policy term disclosure requirements for insurance premium quotes issued on or after March 15, 2015. To ensure consumers get full information to compare coverage and rates, quotes are to prominently display the policy term associated with the premium prior to the applicant's decision to purchase a new policy. Bulletin 14-08
PERSONAL LINES INSURANCE
Maryland established requirements for notice of renewal and expiring premiums for policies of personal insurance and insurance issued under the Maryland Property Insurance Availability Act. COMAR 31.08.16
PREMIUM ISSUES
Arizona published a bulletin reaffirming and updating the Department's previously stated position regarding the policyholder premium credit for subscription fire protection. Giving a policyholder fire protection service credit when the policyholder does not subscribe to such service constitutes misrepresentation and rebating. It also puts the insurer in violation of rate filing law if the insurer has not filed the discount the producer offers or the insurer has filed the discount but the producer has offered it improperly. Bulletin 2014-07
PROPERTY INSURANCE
Arkansas issued a bulletin notifying insurers that an assessment by the Arkansas Rural Risk Underwriting Association is needed for 2014. The assessment is $200.00, and the bulletin provides address information for submitting it as well as contact information if there are questions. The assessment is due by December 31, 2014. Bulletin 15-2014
Kansas issued a bulletin stating that the Department has been advised by the Kansas Fire Marshall's Office that insurance companies are not reporting fire losses to their agency as required by law and regulation. Losses exceeding $500.00 are required to be reported as is the fact that there have been no losses meeting the monetary threshold, when applicable. The address for reporting was provided along with contact information for questions. Bulletin 2014-3
Maryland enacted a new regulation establishing standards for homeowners loss caused by water that backs up through drains or sewers. COMAR 31.08.14
RATEMAKING
Maryland has determined that price optimization is unfairly discriminatory when rating insurance policies, and therefore will not be allowed. Bulletin 14-23
REGULATORY REPORTING REQUIREMENTS
Louisiana established annual data reporting requirements for property & casualty insurers issuing homeowners' insurance. The data must be reported beginning on or before 05/01/2015. Act No. 427 of 2014 Legislature Regular Session
SERVICE CONTRACTS / SERVICE WARRANTY INSURANCE
Tennessee issued Interpretive Opinion No. 05-14 regarding when a contract (specifically a warranty contract) for future services constitutes insurance. Interpretive Opinion No. 05-14
TITLE INSURANCE
New York amended the definition of "Agent" and "Broker". 11 NYCRR 29
TITLE INSURANCE/AGENTS
Arkansas issued a bulletin to reiterate that premium tax is required to be paid on the exact premium charged to all customers. The bulletin reminds agents and insurers that the next annual premium tax report is due on or before March 1, 2015. Bulletin 14-2014
Maryland made substantive changes to the annual on-site review of a title insurance producer by a title insurance company. The changes include minimum requirements of the review and written reporting and document retention requirements. COMAR 31.04.22
Utah issued a bulletin regarding retention of title and escrow related records. This applies to individual title insurance producers, title insurers, escrow agents, and agency title insurance producers. Bulletin 2014-6
TRAVEL INSURANCE
New Hampshire adopted rules establishing standards to write travel policies covering unforeseen loss of property while an individual is travelling away from their home or place of business. Ins 4700
CAREER OPPORTUNITY!
First Consulting has on outstanding career opportunity for the person who wants to join a team of compliance professionals in a leadership role.
To find out more about this opportunity, click here.
A PERSONALIZED APPROACH TO RESEARCH
Identifying applicable laws and regulations to complex insurance regulatory and compliance issues can be difficult. Determining their applicability to your specific company, its products, and needs is often even more complex.
First Consulting recognizes these difficulties and uses a wealth of knowledge and experience that its associates possess to provide insurance research tailored to your company’s unique needs. You specify the scope of the research, the states to be included, the lines of business and all other parameters. We will work with you to determine the format in which results will be presented ensuring that the people that need to use the information can do so as easily as possible. We can even help update and maintain the research, if that is desired.
Click here for more information about our custom research services.
To discuss your research needs and find out how First Consulting can help, please contact me or any First Consulting associate.
Jerry L. Wickersham, J.D., AIRC
816.391.2743
Jerry.Wickersham@FirstConsulting.com
NAIC CORPORATE GOVERNANCE MODELS ADOPTED
Did you know that there are no exemptions for small companies or fraternal insurers under the new NAIC Corporate Governance Models?
The NAIC has made an affirmative decision not to exempt small companies or fraternal insurers from any of these new corporate governance requirements. Here are some highlights of the changes:
- The Board as a whole needs to possess all of what the NAIC calls “core competencies” of accounting or finance, business judgment, industry knowledge, management, leadership, vision and strategy.
- Regulators will be looking for Corporate Governance Guidelines that document established key governance principles.
- Regulators want to understand the frequency at which information on each critical risk area is reported to and reviewed by senior management and the Board.
First Consulting’s new Corporate Governance Tool Kit provides you with a budget-friendly solution for compliance readiness with these new requirements.
Click here for the full description of our Corporate Governance Tool Kit.
Please contact me to discuss any of these services and learn how we can assist you with these new corporate governance requirements.
Carol Stern, FLMI, AIRC, ACS
816.391.2746
Carol.Stern@FirstConsulting.com