Life and Health News
February 2023
Welcome to our latest newsletter! As a thought leader in the Insurance Industry for over 50 years we are always excited to share the latest sampling of insurance compliance related bulletins, regulations, and legislative activity. Please feel free to share this newsletter with others that may be interested. Contact Us with any questions on the items in this newsletter or with any other compliance related matter we can assist you with. Enjoy!
AGENT / PRODUCER CONTINUING EDUCATION
The California Department of Insurance approved revisions to its ethics curriculum to include one hour of study on insurance fraud. The notice includes frequently asked questions about the change. Licensing Notice Dated January 12, 2023
AGENT / PRODUCER LICENSING AND APPOINTMENT
Delaware's Department of Insurance issued notice to all non-resident producers and adjusters that all non-resident licenses must be renewed by February 28, 2023. The notice provides details about renewal fees, continuing education requirements, and procedures for renewing or surrendering a license. Non Resident License Renewal Notice 2023
ANNUITIES / ANNUITY CONTRACTS
New York amended the insurance law dealing with dividend-paying deferred income annuities and disclosure requirements. SB 7744
CAPTIVES
Hawaii's Insurance Department has issued a memorandum describing the requirements for captive insurance companies to file 2022 annual reports. Memorandum 2023-1C
CLAIMS / CLAIMS ISSUES
Nebraska's Insurance Department released an updated interest rate that is to be added to death claims if a life insurance carrier does not pay a claim within 30 days of receiving proof of loss. Effective October 20, 2022, the judgment interest rate is 5.981%. Effective January 19, 2023, the judgment rate is 6.812%. Notice 2022-1 dated January 4, 2023
CYBERSECURITY
Kentucky's Insurance Department issued an advisory opinion to carriers, agents, and other entities licensed to conduct insurance in the state regarding cybersecurity. Until a regulation is passed, the opinion clarifies requirements for reporting and handling cybersecurity risks under HB 474 passed in early 2022 with staggered effective dates starting January 3, 2023. Instructions are given on how to report a cybersecurity event to the Department. Advisory Opinion dated January 3, 2023
DEFERRAL OF CASH SURRENDER BENEFITS
Idaho's Department of Insurance issued a bulletin announcing the interest rate payable on deferred payment of cash surrender benefits under a life insurance policy or individual deferred annuity. Back to July 1, 2022, insurers must pay a minimum interest rate of 7.375%. Bulletin 23-02
DISASTER PREPAREDNESS
Maryland's Insurance Administration issued a bulletin requiring all insurers doing business in the state to report to the department certain information about the insurer's disaster response plan. The information to be reported includes contact information that may be used by the consumer. Responses are due by close of business April 14, 2023. Bulletin 23-1
DRUG / PRESCRIPTION COVERAGE
Colorado's Prescription Drug Affordability Board has adopted new regulations addressing the affordability of prescription drugs. The regulation establishes a methodology for establishing an upper limit on the amount to be paid for prescription drugs. 3 CCR 702-9
EXCEPTED BENEFITS
Virginia updated its rule governing accident and sickness excepted benefit policies, short-term limited duration insurance, and individual and small group market health benefit plans. Rule 14 VAC 5-120-10
FINANCIAL REGULATION
Kentucky's Department of Insurance issued an advisory opinion explaining the requirement for insurers, exceeding the $500,000,000 premium threshold, to file an annual report on internal controls. The opinion clarifies the grace period for insurers who previously fell below the threshold. Advisory Opinion 2023-02
Michigan adopted legislation requiring that each multiple employer welfare arrangement (MEWA) doing business in that state file certain annual and quarterly financial reporting, including audited financial statements. SB 1085
FRATERNAL BENEFIT SOCIETIES
Ohio amended its fraternal benefit law to modernize solvency requirements and oversight. HB 575
HEALTH INSURANCE - COMPREHENSIVE
Massachusetts' Department of Insurance adopts amendments to its Small Group Health Insurance provisions. Amendments address renewability, rate filing, disclosure, and reporting requirements. 211 CMR 66.02
HEALTH MAINTENANCE ORGANIZATIONS
Illinois adopted amendments that expand coverage for certain infertility treatments and clarify certain policy exclusions. 50 ILL Adm. Code 2015
HOLDING COMPANIES
Illinois amended its regulation allowing insurance holding company groups to request an exemption or to otherwise qualify for a limited filing in certain conditions. 50 Ill. Adm. Code 652.55
MEDICARE SUPPLEMENT INSURANCE
Nevada amended its Medicare Supplement regulation to prohibit an insured from re-enrolling in the same policy he/she is currently enrolled in thereby lowering the premium rate. Other updates were also made. Regulation NAC 681B
Oregon amended its Medicare Supplement regulation to allow guaranteed issue for individuals who lose Tricare or disabled individuals who move to Oregon from a state that does not allow coverage for persons under age 65. Additional updates were made. Regulation OAR 836-052-0138
MISCELLANEOUS
California's Insurance Department issued a revised notice regarding the requirement for producers to include their California license number on emails. The notice answers additional questions about the requirement. Revised Notice dated December 22, 2022
Louisiana's Department of Insurance reminds all risk bearing entities in the state to provide certain contact information by March 1 of each year. Updates to that information are required within 30 days after a change. Notice dated January 20, 2023
New Mexico streamlined its prior authorization process for health insurance carriers. Carriers must begin evaluating prior authorizations issued during the preceding calendar year and make an annual report and necessary changes. Regulation NMAC 13.10.31.12
PHARMACY BENEFIT MANAGERS
New Mexico announced to Pharmacy Benefit Managers that the checklists and forms with requirements for applying for or renewing a license, payment of fees, and submitting the required annual report can be found on the Department's website. Bulletin 2023-001
New York delays certain requirements for Pharmacy Benefit Managers for a year to be effective January 1, 2024, instead of January 1, 2023. These requirements pertain to maximum allowable costs, appeals, and other items. First Amendment to 11 NYCRR 451, Insurance Regulation 221
Tennessee adopts a new Pharmacy Benefit Manager rule relating to appeals, reimbursement methodology, audits, and professional dispensing fees. Rule 0780-01-95
REINSURANCE
Colorado's Department of Insurance adopts a new regulation governing reserve financing for term and universal life insurance products. 3CCR 702-4
Massachusetts' Department of Insurance adopts a new regulation governing reserve financing for term and universal life insurance products. 211 CMR 59.01
Nevada adopted a regulation that establishes uniform standards governing reserve financing arrangements for certain types of life insurance policies. The Actuarial Method is used to determine the required level of primary security for an affected reinsurance treaty. Regulation NAC 681A s 2
Oregon promulgated a regulation that establishes uniform standards for term and universal life insurance reserve financing agreements. This pertains to life insurance policies containing guaranteed non-level gross premiums, guaranteed non-level benefits, and universal life insurance policies with secondary guarantees. Regulation OAR 836-012-0200
RESERVE VALUATION
Colorado's Division of Insurance adopted and promulgated a regulation setting the minimum standards for reserves held by insurers providing individual and group health, sickness, and accident insurance. 3 CCR 702-3
STOP LOSS
Nevada updated regulations dealing with stop-loss insurance and requirements relating to group health plans. An insurer that issues a stop-loss policy must annually provide certain information to the insurance commissioner. Regulation NAC 689B.350
SUITABILITY
Tennessee adopts Suitability in Annuity Transaction amendments in accordance with the NAIC model law. Rule 0780-01-86
THIRD PARTY ADMINISTRATORS
Nebraska's Insurance Department reminds third party administrators of the requirement to file an annual report for the preceding calendar year by March 1. The information and documents that must be filed are outlined in detail. The Notice states that annual reports not properly completed or submitted by March 1 will result in the forfeiture by the third-party administrator of $50.00 each day thereafter such failure continues. Notice dated December 30, 2022