Property and Casualty News
October 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
Massachusetts issued a bulletin announcing new continuing education requirements for insurance producers. The date by which producers in MA must complete their continuing education (CE) will be their license renewal date. Three hours of ethics training is now a requirement and producers must complete 60 hours of CE before their initial license renewal dates. Bulletin 14-06
AGENT / PRODUCER LICENSING AND APPOINTMENT; FEES
South Carolina issued a Memorandum dated July 25, 2014 regarding their biennial appointment renewal process that occurs in September, with reinstatement instructions applicable October 1 to December 1, 2014. Memorandum dated July 25, 2014
AUTOMOBILE INSURANCE
New Jersey published a bulletin with its annual survey of private passenger automobile insurers. The completed survey is due by November 1, 2014. Bulletin 14-11
Rhode Island issued a bulletin regarding Auto Body Rate Survey Reports and 2014 Prevailing Labor Rates. Bulletin 2014-6
DEPARTMENT OF INSURANCE
Connecticut announced launch of new online access to carrier filings, using the Department's website. Also available are enforcement actions, financial examination of companies and complaint data. September 19, 2014 Notice
Maryland issued a bulletin to annouce that effective November 1, 2014, the Maryland Insurance Administration will make public certain rate and form filiing information available through SERFF. BULLETIN 14-21
Pennsylvania published a notice of deregulation of certain claims-made Commercial Property and Casualty forms effective October 1, 2014. A list of the forms is supplied in the notice. Notice 2014-10
Rhode Island issued a bulletin announcing two electronic options for viewing rate and policy filings. One is remotely through SERFF and the other is through use of a computer terminal at the Division. Bulletin 2014-7
South Dakota announced that the Division of Insurance office has relocated to 124 S. Euclid Ave. in Pierre. News release dated September 2, 2014
DISASTER / CATASTROPHIC EVENT
New Jersey issued a bulletin to all insurers, producers and public adjusters providing guidance regarding pre-and post-disaster regulatory activity, including, but not limited to, issuance of bulletins and/or orders, likely to be undertaken by the Commissioner. Bulletin 14-08
LIABILITY INSURANCE
California amended its statutes, specifically the Passenger Charter-party Carriers' Act, to require specified liability insurance coverage for transportation network companies and their participating drivers. The requirements become operative July 1, 2015, while the law is effective January 1, 2015. AB 2293
New Jersey published a bulletin notifying carriers of annual due dates of various property/casualty reports. Failure to timely file the required reports may result in enforcement action. Bulletin 14-10
NOTICE TO INSUREDS
California has amended its Insurance Code effective January 1, 2016, regarding private passenger automobile insurance providing coverage for 6 months or longer, specified residential property insurance and policies of individual disability insurance that are issued, take effect or are renewed on or after January 1, 2016. Insurers are required to maintain a verifiable process or adopt a procedure that allows an applicant or policyholder to designate one additional person to receive notice of lapse, termination, expiration, nonrenewal or cancellation of a policy for nonpayment of premiums. Notice must be provided at least 10 days prior to the termination, but the additional specified individual to receive such notice does not have any other rights under the policy. AB 1804
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Connecticut issued a bulletin which notifies all domestic insurers, fraternal benefit societies and title insurers that the Commissioner is requesting all entities subject to the Public Act No.14-107 and not exempt from filing pursuant to subsection (g) of the Act, to file an annual ORSA Summary Report. The bulletin also provides filing guidance for the ORSA Summary Report. Bulletin No. FS 29
Delaware amended its statutes to add its "Risk Management and Own Risk and Solvency Assessment (ORSA) Act," effective January 1, 2015, which requires maintaining a risk management framework, completing an ORSA and filing an ORSA Summary Report with the Insurance Commissioner, upon request. SB 203
Illinois enacted legislation to provide the requirements for maintaining a risk management framework and completing an own risk and solvency assessment and provide guidance and instructions for filing an ORSA summary report with the Director. HB 4725
PROPERTY INSURANCE
Arkansas issued a bulletin to replace Bulletin 13A-2013 in its entirety. The purpose is to clarify the AID position regarding depreciation of labor in property claims. Labor of any kind related to the repair, rebuild or replacement of covered property cannot be depreciated. Bulletin 13B-2013
California amended its Insurance Code related to earthquake insurance effective January 1, 2015. Changes were made to disclosure language an insurer is required to use in offering earthquake coverage, making the content of the disclosures dependent upon whether or not the insurer is a member of the California Earthquake Authority (CEA) and requiring specified disclosures to insureds regarding coverage of losses, the CEA's liability limitations, and premiums concurrent with the issuance or renewal by the CEA of a residential earthquake policy. The participating insurer is required at least annually to provide each insured with marketing documents produced at the CEA's expense. Certain disclosures become effective January 1, 2016 and later dates. AB 2064
California amended its Insurance Code to regulate pet insurance policies marketed, issued, amended, renewed or delivered, whether or not in California, to a California resident. Changes define certain terms and specify certain disclosures a pet insurer is required to provide to consumers. AB 2056
SURPLUS LINES
Alaska issued a bulletin to announce it has adopted regulations modifying the surplus lines requirements to conform to Alaska statute changes brought about to conform to the federal Nonadmitted and Reinsurance Reform Act of 2010. The regulations include modifications to the diligent search requirements, additional requirements for the notice of nonrenewal and premium increase, and fees for the new portable electronic limited producer licenses. Bulletin B 14-05
Delaware issued a bulletin to answer several questions arising out of recent legislation (HB 213) which raised the tax payable on surplus lines policies. The bulletin is in a question-and-answer format. Surplus Lines Bulletin No. 15
Delaware issued a bulletin to set forth the Department's position regarding deposits, fees and guaranty fund assessments applicable to foreign surplus lines companies that redomesticate to Delaware. Surplus Lines Bulletin No. 16
TITLE INSURANCE
Illinois amended its statutes to allow, as an alternative to the affidavit of the applicant title insurance agent, an accurate disclosure of any felony or misdemeanor involving a crime of theft or dishonesty. It states that no person who has had a conviction or pled guilty to such a felony or misdemeanor may be registered by a title insurance company without a written notification to the Secretary of Financial and Professional Regulation disclosing the conviction or plea and no such person may serve as owner, officer, director, principal or manager of any registered title insurance agent without the written permission of the Secretary. SB 2947
NAIC Corporate Governance Models on the Horizon for Adoption
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:
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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.
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Regulators will be looking for Corporate Governance Guidelines that document established key governance principles.
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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
Don’t Outsource. Co-Source
To learn more about Co-Sourcing click here.
Your Company faces daily unique regulatory and compliance challenges. Don’t face them alone with only in-house staff or give-up control to cookie-cutter outsourcing.
First Consulting & Administration, Inc. is the creative answer to state insurance regulatory and compliance requirements.
Co-Sourcing with First Consulting allows compliance professionals to:
- Maximize their efforts by delegating specific sub-parts of the total function while maintaining control of all projects.
- Improve quality by functioning as the “reviewer” and not the “doer”.
- Learn as the work progresses. Knowledge does not remain solely with an outside consultant, as it may when work is outsourced.
- Resolve the in-house staffing level dilemma. With First Consulting available to assist with peak workloads, organizations do not need to choose between staffing for such situations and missing opportunities because of regulatory or compliance backlogs.
To learn more about our services click here.
Contact me for a no obligation proposal and cost estimate.
John Palmer
816.391.2744
John.Palmer@FirstConsulting.com
What can we do for your Advertising Compliance Team today?
As the leading Advertising Compliance Consulting Firm in the insurance industry, First Consulting has compliance review staff that is ready to help your Team today or when you need us.
We offer
- Tailored webinar training
- Annual August advertising compliance seminar/workshop
- Hands-on review of advertising
- Complementary advertising regulatory email updates (beginning in January 2015)
- Tailored research and surveys to answer information needs about advertising law, interpretation and application
Check out our services here: Advertising Compliance Services. Where can you get on the mailing list for advertising regulatory updates? Sign up here.
C. J. Rathbun
816.391.2740
CJ.Rathbun@FirstConsulting.com
Analyzing is for Analysts…..Filing is for First Consulting!
Your compliance resources are limited. It’s critical that you maximize the talents and skills of your staff. First Consulting can help you to reach your staff’s full potential.
How much of your Analysts time is spent handling the routine functionality of form and rate filings? Wouldn’t their skills be better used elsewhere?
Keep your Analysts analyzing and let First Consulting handle your state product filings.
Since 1969 First Consulting has been devoted to helping you meet your target implementation dates and getting your products filed on a timely basis. Co-Sourcing with First Consulting means you will always remain in control of your form and rate filing project. You will determine how and when your project will be handled.
For more information about our filing services, or a no obligation estimate of our fees, please contact me or any First Consulting associate, or visit our Filing Services page.
Sean Cox, HIA, MHP
816.391.2737
Sean.Cox@FirstConsulting.com