Life and Health News
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.
Michigan amended its law to clarify that accelerated benefits do not include benefits payable under a long-term care insurance policy. HB 5149
ADVERTISING/SALES & MARKETING
Kansas issued a bulletin warning life insurers that they are responsible for monitoring and ensuring the compliance of marketing activities of independent marketing organizations (IMOs) and field marketing organizations (FMOs). Bulletin 2014-1
Rhode Island amended its regulation regarding commutation plans. The changes include among other things clarifying language regarding what must be included in an application to the Department for review of the commutation plan. R27-68-003 Dated 4-9-2014
Ohio amended its rules to conform to NAIC model standards. The rule conforms to the NAIC's updated Annuity Disclosure Buyer's Guide. The amended rule includes standards for annuity illustrations and exempts from the rule's scope certain nonregistered variable annuities. Rule 3901-6-14 dated 4-4-2014
CREDIT FOR REINSURANCE
Colorado enacted new legislation to adopt the NAIC's Credit for Reinsurance Model Act and section 711 of the NAIC's Insurer Receivership Model Act. HB 1315
Vermont revised its statute concerning credit for reinsurance. In order for credit to be allowed for ceded reinsurance, the assuming insurer must file their trusts, and trust instruments, with every Department of every state in which the ceding insurer beneficiaries of the trust are domiciled. HB 260
Massachusetts issued a bulletin to remind carriers that discrimination based on gender identity or gender dysphoria is prohibited. Denial of coverage for medically necessary treatment based on an individual's gender identity or gender dysphoria is sex discrimination and is prohibited. Bulletin 2014-03
Colorado enacted legislation to allow for electronic delivery of insurance documents with the consent of the insured. HB 1344
Louisiana amended its law concerning public disclosure of policy forms and premium rates filed with the Department. Policy forms and premium rates filed with the Department will now be exempt from public disclosure until open enrollment. Insurers need to mark such filings as confidential or proprietary in order to take advantage of the exemption. SB 244
Idaho issued a bulletin announcing the March 2014 version of the NAIC's Accounting Practices and Procedures manual has been adopted by the Department. Bulletin 14-03
Pennsylvania issued a notice providing general guidance for disclosing prescribed differences from NAIC statutory accounting principles. Notice 2014-05
Louisiana amended its law to exempt small companies from the requirement to have an anti-fraud plan. The changes also clarify plan requirements, the authority of the Department to take certain actions, filing requirements and the confidentiality of the plan and summary report. SB 281
New Hampshire enacted a new law to allow members of a credit union to be defined as a group for purpose of issuing group accidental death and dismemberment. SB 290
District of Columbia established Health Benefit Exchange Authority Fund. It requires the authority to annually assess each health carrier doing business in the District with direct gross receipts of $50,000 or higher in the preceding calendar year an amount based on a percentage of its direct gross receipts for the preceding calendar year. B 776
Maryland has revised its laws to provide that a health benefit plan offered outside the Maryland Health Benefit Exchange to individuals or small employers is not required to include certain pediatric dental benefits under specified circumstances. HB 693
HEALTH INSURANCE - COMPREHENSIVE
Colorado enacted the Right to Try Act. The Act allows terminally ill patients access to investigational products. HB 1281
Connecticut issued a bulletin to inform carriers of small group health insurance they need to include the appropriate version of the revised major medical and health care center plans with their form and rate filings for 1/1/2015. Bulletin HC-97
Louisiana enacted a new regulation mandating that health insurance policies in the state include an option to be exercised by the policyholder covering benefits for treatment of lymphedema. SB 57
Louisiana enacted a new regulation prohibiting health care coverage plans from denying coverage for medically necessary treatment prescribed by a physician. HB 1254
Maine amended its statute, in order to accommodate the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification. 90-590 s 243-1 dated 2-6-2014
LIFE INSURANCE/ LIFE CONTRACTS
Michigan amended its group life insurance laws. HB 5146
LONG-TERM CARE INSURANCE
South Carolina enacted new law under the Long Term Care Insurance Act to outline specific notice requirements that insurers must meet before termination of a long-term care insurance policy to protect against unintentional lapse. The new law also gives insureds the right to have a designee to receive any notice of lapse or termination. HB 4916
MARRIAGE EQUALITY/CIVIL UNIONS / DOMESTIC PARTNERS
Washington issued a notice advising that health insurers who provide dependent coverage for opposite-sex spouses are required to also provide dependent coverage for same-sex spouses. Notice 06-05-2014
MENTAL HEALTH PARITY
New York issued a Circular Letter that provides guidance about the impact of the federal Mental Health Parity and Addiction Equity Act on New York's health insurance market in light of the ACA and the final MHPAEA rule. The Circular Letter supersedes Circular Letter 20 (2009) and Supplement 1 to Circular Letter 20 (2009). Circular Letter 5 (2014)
Connecticut issued a bulletin advising telephonic applications must be taken by a licensed producer. The completed application must be delivered for review and signature prior to the delivery of the contract. The bulletin also indicated that insurers issuing individual life insurance policies on or after 1/1/2015 must notify applicants in writing of the right to designate a third party to receive notice of cancellation due to non-payment of premium. Bulletin S-15
South Carolina revised its regulations to recognize the 2012 Individual Annuity Reserve Table for use in determining the minimum standard of valuation for annuity and pure endowment contracts issued on or after January 1, 2015. R 69-37 Dated 1-24-2014
NOTICE TO INSUREDS
California issued a notice to inform admitted insurers, insurance producers and others of the state's notification requirements related to the improper disclosure of personal information or to security breaches. The notice requests insurers copy the Department on any data breach reports made to the Attorney General. Notice dated May 16, 2014
Louisiana amended its regulations to require an insurer to notify a policyholder of the option to convert a policy from term life insurance to permanent life insurance at least 31 days prior to the expiration of the conversion option. The Bill also addressed notice to an individual covered under a group term life insurance policy who ceases to be eligible under the policy due to termination of employment or membership in the class eligible for coverage under the policy must have the option to convert the policy to an individual term life policy. HB 286
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Connecticut enacted the NAIC's requirements for domestic insurers to establish and maintain a risk management framework and to file own risk and solvency assessment reports. The requirement may be satisfied if the insurance group of which the insurer is a member maintains a framework that applies to the insurer's operations. SB 194
PATIENT PROTECTION AND AFFORDABLE CARE ACT
California amended its statute concerning open enrollment for individual health plans offered outside the Exchange. Annual enrollment for policy year beginning 1/1/2015 is from 11/15/2014 to 2/15/2015. Annual enrollment periods for policy years beginning 1/1/2016 and after is from October 15 to December 7. SB-20
California enacted an emergency law effective 5/21/2014 and expires 11/18/2014. The emergency rulemaking adopts the 2015 Standard Benefit Plan Designs. Emergency T. 10 s 6460 Dated 5-21-2014
Colorado established a rule effective January 1, 2015 to require that carriers cannot sell a health benefit plan in the individual or small group market, whether inside or outside the Exchange, that does not contain pediatric dental EHB coverage without obtaining reasonable assurance that such coverage has been purchased. 3 CCR 702 Reg. 4-2-50 dated 4-15-2014
Colorado issued a bulletin that advises of the notices that must be delivered to consumers with non-compliant non-grandfathered health plans that the carrier has elected to continue into 2015. Bulletin B-4.75 dated 5-19-2014
Colorado issued a bulletin that provides instructions on how to file via SERFF the continuation of non-ACA compliant non-grandfathered health benefit plans that insurers intend to continue through 12/31/2015. Bulletin B-4.73 dated 5-19-2014
Illinois issued a bulletin advising if an insurer plans to sell plans off of the Illinois Health Marketplace for the 2015 plan year they should transmit their rate and form filings through SERFF by 9/15/2014. In order for such plans to be sold on or after November 15, 2014, for coverage beginning on 1/1/2015 they must be filed according to the bulletin. Bulletin 2014-7
Illinois issued a bulletin reminding health insurers that the Affordable Care Act prohibits health care plans from discriminating on the basis of age, expected length of life, present or predicted disability, degree of medical dependency, quality of life or other health conditions. Company Bulletin 2014-08
Maine issued a bulletin to explain the requirements that apply to student health insurance under the federal Affordable Care Act (ACA). Student health insurance is individual health insurance under the ACA, however, it is exempt from certain requirements otherwise applicable to non-grandfathered individual health insurance. Bulletin 394
Mississippi issued a bulletin that provides an overview of the requirements to offer qualified health plans and stand-alone qualified dental plans on Mississippi state based Small Business Health Options Program Marketplace, One Mississippi. In order to offer plans with an effective date of January 1, 2015, carriers should submit an application of intent to the Department and submit QHP templates via SERFF by July 1, 2014. Bulletin 2014-6
New Hampshire issued a bulletin letting carriers know that guaranteed issue standards require any plan being offered as a qualified health plan on the marketplace must be made available at the same premium rates and on the same provider terms to any individual who wishes to purchase the plan outside the marketplace. Bulletin of May 22, 2014
New Jersey issued a bulletin announcing the Department will allow insurance carriers to extend policies as outlined in the March 5, 2014 memorandum from the Center for Consumer Information and Insurance Oversight. The extended transition applies to small group and individual policies that were addressed in the November 14, 2013 guidance. Bulletin 14-07
New Mexico issued a press release advising that non-ACA compliant plans will not be eligible for renewal beyond 12/31/2014. Press Release
Tennessee enacted a new law requiring insurers to disclose the percentage of premium and/or tax attributable to the Federal ACA when requested by an insurance producer or any other individual or entity that is authorized to sell, solicit or negotiate insurance on behalf of the insurer. SB 2155
Utah corrected the open enrollment period for 2015 and for following years to match the required Federal Department of Health and Human Services. Open enrollment for 2015 will be 11/15/2014 to 2/15/2015. Open enrollment for subsequent years will be the open enrollment period established by the US Department of Health and Human Services. Rule 590-269-4 Dated 3-19-2014
Maryland amended its law concerning pre-need contracts. Definitions for guaranteed contract, guaranteed in part contract, and nonguaranteed contract were added. In addition the requirements and criteria for each of those types of contracts were specified. SB 415
Louisiana published a list of qualified jurisdictions from which reinsurers may apply for certification for the purpose of reducing required reinsurance collateral. The Advisory Letter also addressed credit for reinsurance. Advisory Letter No. 14-02
South Carolina amended its statute as it relates to risk based capital reporting requirements and action level events. SB 908
Wisconsin revised the capital level below which a company action level event will be triggered. Ins 51.01- Dated 8-14-2013
SMALL EMPLOYER GROUPS
Oregon announced updated product standards for modification and discontinuances on health benefit plans for use with all individual and small group health benefit plans. Announcement
Illinois issued a bulletin to remind insurers of the suitability standards for Life Insurance and Annuity Products set out in sections 50 IAC 3117 and 3210. The bulletin also reminds producers to make reasonable efforts to obtain information about the customer's financial status, tax status and investment objectives, and other information needed to make a sales recommendation. Company Bulletin 2014-09
Iowa enacted new insurance law on unclaimed life insurance benefits. The new law requires insurers to perform a comparison of life insurance policies, annuities or retained asset accounts against the death master file on at least a semiannual basis in order to identify potential death master file matches. SF 2342
Tennessee enacted the Unclaimed Life Insurance Benefits Act. The act requires life insurers, on a semi-annual basis, to search for and confirm the deaths of policyholders by conducting a comparison of in-force policies, annuities, and account owners against a Death Master File (DMF). Requires life insurers to make a good-faith effort to locate beneficiaries for claims payment. SB 2516
SAVE A DATE!
Do you have a date set for your Advertising Law Webinar? We are now scheduling into August. Hurry if you want your choice of dates!
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Debby Paris, FLMI, ACP
Need help getting a life or annuity product approved?
First Consulting & Administration, Inc. and the Interstate Insurance Product Regulation Commission (IIPRC) may be your answer.
The Interstate Insurance Product Regulation Commission (IIPRC) has developed product standards for most individual life insurance contracts and annuities, including variable and non-variable. There are also standards for individual disability income and long-term care insurance. There are even standards for employer based group term life insurance. Standards exist for most benefits, including guaranteed withdrawal benefits, bonus benefits and accelerated benefits.
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NAIC Corporate Governance Models on the Horizon for Adoption
Are you ready to respond to this new law and regulation? An annual corporate governance filing will be required, and the NAIC has made an affirmative decision not to exempt any type of company or fraternal organization from any of these corporate governance requirements. Here are some highlights of the changes:
- Financial literacy is a requirement for each Board member, and the Board as a whole needs to possess 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.
Please contact me to discuss any of these challenges and learn how we can assist you with these new corporate governance requirements. Get more information about First Consulting and our services here.
Carol Stern, FLMI, AIRC, ACS