Hot Topic Archive
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The Department of Treasury, Department of Labor & Department of Health and Human Services has published a final regulation in regards to Excepted Benefits; Lifetime and Annual Limits; and Short-Term, Limited-Duration Insurance (26 CFR Parts 1, 301, 46, 54, 57, 29 CFR Part 2590, 45 CFR Parts 146, 147, 148, 158).
IIPRC Annuity Amendments Become Effective
Be advised that on Monday, October 17th, the amendments made to the Additional Standards for Guaranteed Living Benefits for Individual Deferred Variable Annuities and Additional Standards for Guaranteed Living Benefits for Individual Deferred Non-Variable Annuities became effective. The amendments specifically authorize additional benefit triggers and increased withdrawal benefits based on certain benefit triggers.
Texas Bulletin B-0021-16 - Data Call
The Texas Department of Insurance has issued Bulletin B-0021-16 requiring a data call to insurers licensed to write Accident and Health insurance in the state, basic service HMOs and all other related entities, including certain Third Party Administrators. The Department of Insurance has requested collecting and reporting data relating to mandated health benefits and mandated offers of coverage. The reporting period is October 1, 2015 to September 30, 2016, and submissions are due by December 1, 2016.
West Virginia Advertising Filings
West Virginia immediately requires filing of advertising for any product that has a medical component. They are concerned that consumers not be misled regarding supplementary health coverage. Click here for a full discussion on this issue.
New Mexico Bulletin 2016-019 L&H Products
The New Mexico Office of Superintendent of Insurance has issued Bulletin 2016-019 announcing the requirement that all Life Insurance and Health Insurance forms delivered or issued for delivery in New Mexico be brought into compliance with the Insurance Code and implementing regulations no later than January 1, 2017. Matrix policies or certificates that have been previously approved must be replaced by non-matrix filings in order to comply with the bulletin. Violations are subject to regulatory enforcement and may result in penalties and fines. The Bulletin can be found here.
IIPRC Celebrates 10 years with 45 th Compacting State
Connecticut became the 45th Compacting state to join the Interstate Insurance Product Regulation Commission (IIPRC) when Connecticut Governor Dan Malloy signed HB5051 on June 8. The law goes into effect on July 1 of next year.
This month, the IIPRC is celebrating 10 years since its inaugural meeting where 27 compacting states gathered to lay the groundwork. Today’s 45 compacting states represent more than 75% of the premium volume written nationwide. For more information about the IIPRC click here.
IIPRC Now Accepts Group Disability Income Filings
Effective June 9, 2016 , 2015 – The Interstate Insurance Product Regulation Commission (IIPRC) has begun accepting filing under the Group Disability Income Uniform Standards (GDI Uniform Standards). For more information about the IIPRC click here.
DOL Fiduciary Rule
April 6, 2016 - the Department of Labor released its Conflict of Interest Rule – better known as the “Fiduciary Rule” – on the Federal Register website. This rule impacts Carriers, IMOs and Producers that issue insurance products purchased by consumers with qualified money. The impactful provisions are provided below, with linked PDFs:
1. Definition of Term Fiduciary; Conflict of Interest Rule – Retirement Investment Advice
2. Best Interest Contract Exemption
3. Amendment and Partial Revocation of Prohibited Transaction Exemption 84-24
First Consulting has been tracking the rule since its beginning, and will be diving into the significant changes in the final rule release over the next few days. Should you have any questions about the rule and its impact on your business, please Contact Us for a free, no-obligation discussion about how First Consulting can help.
Oregon Discretionary Groups
December 3, 2015 – Oregon will approve for issuance of life insurance a group that meets the requirements of ORS 743.360. Approval of a discretionary group for purposes of life insurance cannot be automatically construed to approve the group for purposes of issuance of a health insurance product. An insurer must obtain separate approval of the group as a discretionary group for health insurance.
New Mexico Bulletin 2015-2016, Advertising
September 22, 2015 – The American Council of Life Insurers (ACLI) joined with two other industry organizations to send a letter to the New Mexico Office of Superintendent of Insurance, and received a response last week. The two documents are shared courtesy of the ACLI. Several items of note come from this information:
- A confirmation that Disability Income advertisements are required to be filed – specifying that this requirement includes both individual and group policies.
- The reversal of previous direction by the same staff member(s) that national advertising is to be filed. In this response letter, the instruction is specifically stated that national, “generic” advertising should not be filed for approval with New Mexico.
- NM staff is in the process of revising their advertising checklist, which is offered only as a guidance tool. Advertisements must be in compliance with NMAC 13.10.4.
- If an advertisement is an invitation to contract, according to NMAC 188.8.131.52 and 12, it must be filed. Proposals and highlight sheets/benefit summaries may fall into this category.
- A big concern for New Mexico’s staff is not only non-compliant advertising but non-compliant health insurance products.
Wisconsin Bulletin – Annuity Buyer’s Guide
September 8, 2015 – Wisconsin has issued a bulletin implementing the use of NAIC Buyers’ Guides for annuities, rather than state versions, beginning March 1, 2016. “For sales of fixed and fixed index annuities, the Buyer's Guide for Deferred Annuities (2013) or the Buyer's Guide for Deferred Annuities Fixed (2013) shall be used. For sales of variable annuities, the Buyer's Guide for Deferred Annuities (2013) or the Buyer's Guide for Deferred Annuities Variable (2013) shall be used.” Read more details here in the Bulletin on the Wisconsin Office of the Insurance Commissioner website.
Maine Bulletin 407
September 8, 2015 – Maine issued Bulletin 407 to clarify some requirements as updated in 2014 for Medicare Supplement benefits and required reporting, but leads off with a reminder to carriers, marketing entities and associations about Guaranteed Issue (GI) requirements of Rule 275. Carriers are instructed to review their policies, procedures and training to ensure that agents or others dealing with the public are not misleading consumers. If consumers are eligible for GI policies, they should not be told they are ineligible or will require medical underwriting. Apparently, the Bureau is receiving “significant numbers” of complaints on this topic.
California AB 553, Corporate Governance
August 17, 2015 – California adopted the NAIC Corporate Governance Annual Disclosure (CGAD) and Insurance Holding Company System Regulatory Act.
Iowa Bulletin 14-02
On September 15, 2014, Iowa issued Bulletin 14-02 as guidance on advertising compliance for index annuities.
The three areas of concern are promotions of Lifetime Withdrawal Benefits with potentially misleading language such as “earn” or “return” when the product feature is not related to interest; Uncapped Rates of Return without balancing this feature by disclosing limitations and restrictions; and Back-Casting, or projecting the gains an index annuity would have shown during high stock market growth periods when that annuity did not exist at the time. Bulletin 14-02 (full copy here) cautions against promoting index annuities in “aggressive” and “potentially deceptive” ways.
The effective date was August 1, 2014. It applies to all term policies offering a conversion option issued after this date. To facilitate the required form revision(s), the Louisiana Department of Insurance will allow the revisions to be filed. Riders or endorsement forms affecting previously approved life insurance or annuity products, provided that the policy form filings and dates approved are identified for each previously approved product with which the rider or endorsement form will henceforth be used. No filing fees will be required for these filings. The rider or endorsement forms shall be included with any subsequently filed basic insurance policy forms as needed to constitute a complete filing. All filings are due by March 1, 2015.
New Guidance on Fixed Indemnity Insurance under the ACA
New final rules were published in the Federal Register outlining the new final rules that apply in the Individual Market to Fixed Indemnity Plans. The prior guidance issued the CCIIO, under the CMS, will still be applicable to Fixed Indemnity issued on a Group basis.
Please refer to the FAQs here.
Montana IIPRC Filing Date
Montana will be eligible to be included on filings on Tuesday, October 15, 2013. For more information about the IIPRC click here.
New Hampshire DOMA Disclosure
The New Hampshire Insurance Department is advising that the language as required in Bulletin INS No. 10-004-AB is no longer necessary and can be omitted from filings. The Department has issued Bulletin INS No. 13-021-AB which details appropriate action following the U.S. Supreme Court’s decision which struck down section 3 of the federal Defense of Marriage Act as unconstitutional.
Illinois Allows MVA in the Interstate Compact
Interstate Compact annuity product filings that include a Market Value Adjustment (MVA) provided through a separate account will now be accepted by Illinois.
Interstate Compact Registration Fee Update
Also the Insurance Compact’s Registration Fee is prorated thru the end of 2013. Companies may register with the IIPRC for half the cost. Contact us for assistance.
IIPRC Member State Filing Fee Update
The IIPRC Member State Filing Fee Chart was recently updated. Please note that the chart has been updated to reflect an increase in fees for Delaware as well as a clarification in New Mexico’s fees. Delaware is non-compacting state, but the IIPRC uses Delaware’s domestic fees for Compact retaliatory states.
Arkansas and Montana IIPRC Filing Dates
Arkansas will become an effective member of the Compact on August 15th and eligible to be included on filings on August 29, 2013. Montana will be eligible to be included on filings on Tuesday, October 15, 2013. For more information about the IIPRC click here.
Advertising Certifications and Life Insurance Illustrations
The Nevada Insurance has issued the following e-mail to all life insurers:
“This is a friendly reminder to send in your Advertisement Certifications and Life Insurance Illustrations if you haven’t already done so. Please remember to submit everything through SERFF using the correct TOI and Sub-TOI. If you have any questions, please contact Nanci Hoffman at email@example.com or Jack Childress at firstname.lastname@example.org.”
If you need any assistance with these filings, please contact First Consulting.
California Requires Changes to Life Insurance Policies
California has new laws effective January 1, 2013 requiring:
1. all life insurance policies provide a 60-day premium grace period. Notice must be provided at least 30 Days before any lapse.
2. the right in individual life policies to designate another person or persons to receive notice of lapse or termination.
3. a notice at least 30 Days before any lapse to the policy owner, any persons designated, and any assignee.
Any form not in compliance must be revised. Changes to group and variable products must be filed with the Department of Insurance. To contact First Consulting for filing assistance click here.
Interstate Compact Group Term Standards
The Interstate Compact (IIPRC) will accept comments on the proposed Group Term Life Insurance Uniform Standards for Accidental Death Benefits, Accidental Death and Dismemberment Benefits and Waiver of Premium While the Employee is Totally Disabled until May 11, 2013. The IIPRC will also accept Hearing Requests regarding its proposed Group Term Life Uniform Standards for Accelerated Death Benefits until Ma7 2, 2013 and will accept comments until June 11, 2013. For more information about the IIPRC click here.
Interstate Compact Additional Standards for Incidental Guaranteed Minimum Death Benefits
The IIPRC Products Standards Committee and Actuarial Working Group has schedule a joint conference call for Tuesday , April 30, 2013 at 1:30 pm ET. The call is to receive the second round of public comments on the Additional Standards for Incidental Guaranteed Minimum Death Benefits for Individual Deferred Non-Variable Annuities. For more information about the IIPRC click here.
Change in Reserve & Nonforfeiture Interest Rate
The maximum interest rate for reserves held on many life insurance policies issued on and after 1/1/2013 will be 3.5%. The maximum nonforfeiture interest rate will be 4.5% optionally in 2013 and mandated in 2014. For more information click here.
To contact First Consulting for filing assistance click here.
Enterprise Risk Management Guidance
You and your compliance staff may benefit from considering enterprise risk management best practices outlined in this New York Insurance Circular Letter No. 14 (2011). First Consulting can help your company stay ahead of regulatory requirements with the help of our Operational Compliance Services.
First Consulting is pleased to add Compliance 360 as a new Partner. Compliance 360 provides software applications. More details are at FCA Partners.
Compliance and Ethic Institute
In mid-September, C.J. Rathbun attended the Compliance and Ethics Institute sponsored by the Society of Corporate Compliance and Ethics (SCCE). This cross-industry group of compliance professionals on the level of managers, directors and officers impressed C.J. with their purpose, content and openness.
For more information about the IIPRC click here. To receive a copy of our most current update about the Interstate Compact, request it in the notes section of our Contact form (click here) or contact John Palmer at John.Palmer@Firstconsulting.com.
Long-Term Care Annuities
The Pension Protection Act of 2006 creates new opportunities for annuity/long-term care insurance combination products. For more about the benefits and challenges of these products, please click here to see our article.