Life and Health News
November 2016
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.
ACCELERATED BENEFITS
Connecticut updated its regulations to allow life insurance products to be sold with a rider that accelerates the death benefit for purposes of offering a long term care product. The updates allow benefits to be payable in either a lump sum or periodic payments. 38a-458
AGENT / PRODUCER CONTINUING EDUCATION
New Jersey amended its law pertaining to resident individual insurance producer continuing education requirements. NJAC 11:17-3.6
AGENT / PRODUCER LICENSING AND APPOINTMENT
Louisiana issued a notice regarding producer and adjuster license application criteria. Notice dated October 13, 2016
Michigan issued a memorandum to provide Licensed Business Entity Producers (agencies) with information regarding important changes in licensing processes for the maintenance of agency affiliations, demographic changes and adding/cancelling DBAs. Memorandum of September 19, 2016
Nebraska issued a notice regarding reduction of fees for Insurance Producer and Insurance Consultant licenses. Notice of September 23, 2016
New Jersey readopted its law pertaining to producer licensing. NJAC 11:17-2+
New York enacted legislation regarding the expedited licensing of a spouse of an active duty member of the armed forces of the United States, national guard or reserves who has a substantially equivalent out-of-state license. AB 4394
South Carolina issued a bulletin announcing that fingerprints and criminal background checks will be licensing requirements for resident producers effective January 1, 2017. Bulletin 16-10
ANNUITY - DOL FIDUCIARY RULE
The Department of Labor issued a Frequently Asked Questions document providing additional guidance for its "Fiduciary Rule."
DID THE DOL FAQs LEAVE YOU WITH MORE QUESTIONS?
Unfortunately, for many, the recent DOL FAQs actually created more questions than answers. If the DOL FAQ left you wanting more, or you’re curious how the FAQ answers impact your business, we can help.
Click here to learn more.
AUTISM SPECTRUM DISORDERS
California enacted legislation to remove the "sunset" date from existing law addressing Behavioral Health treatment for patients with autism spectrum and pervasive developmental disorders. Assembly Bill 796
Michigan enacted legislation to create an autism coverage reimbursement program to encourage insurance and health coverage providers to provide autism coverage. The Department will reimburse a health carrier or third party administrator for certain paid claims in accordance with the specified formula if certain conditions are met. Senate Bill 1007
CANCELLATION / NON-RENEWAL / PREMIUM OR COVERAGE CHANGES
Louisiana issued an order concerning the emergency suspension of the cancellation, termination, nonrenewal and/or reinstatement provisions due to heavy rain and flooding. The suspension of these provisions will remain effective through February 9, 2017, unless amended, terminated, or rescinded. Executive Order JBE 16-71
CAPTIVES
Delaware issued a bulletin addressing change of ownership for captive insurance companies. Captive Insurance Bulletin 6
Delaware issued a bulletin addressing use of mutual funds for minimum capital and surplus. Captive Insurance Bulletin No. 5
Delaware issued a bulletin reducing capital requirements for special purpose captive insurance companies and illustrating the arrangement in which a special purpose captive insurer may reduce capital. Captive Insurance Bulletin No. 4
CONFIDENTIALITY / PRIVACY
California enacted legislation requiring any person or entity conducting business in the state and using computerized data including personal information, to disclose a breach of the security of the data to any California resident whose encrypted information was, or is reasonably believed to have been, acquired by an unauthorized person along with the encryption key or security credential. Assembly Bill 2828
Idaho promulgated a rule to relieve insurers and producers from having to send their customers an annual privacy notice when they comply with other requirements concerning disclosure of personally identifiable financial information and where the licensee's practices and policies have not changed since the last notice sent to their customer. IDAPA 18.01.48
Tennessee issued a bulletin to all licensed insurance companies to clarify the Department's position regarding recent amendments to the federal Gramm-Leach Bliley act and required annual privacy notices. Bulletin 16-05
DATA CALLS / REGULATORY REPORTING
Florida adopted changes to a regulation to establish uniform requirements for reporting of annual and quarterly statement information for all authorized insurers. It adopts and incorporates by reference several NAIC manuals addressing accounting and reporting practices and procedures. 69O-137.001
Maryland issued a bulletin to advise insurers that offer individual disability insurance of new reporting instructions and amended reporting forms. Bulletin 16-30
DISASTER / CATASTROPHIC EVENT
North Carolina issued a bulletin to remind insurers offering health benefit plans of compliance requirements for operations under a state of emergency. The bulletin addresses the need to obtain extra prescriptions during a state of emergency or disaster. Bulletin 16-B-4, Bulletin 16-B-5
South Carolina issued an emergency regulation providing a moratorium on cancellation due to non-payment of premiums and certain non-renewals and extension of insurance-related provisions affecting insureds impacted by Hurricane Matthew. The state also issued an emergency order in support of emergency regulation 69-78. 69-78, Emergency Order 2016-EO-001
DRUG / PRESCRIPTION COVERAGE
Illinois issued a bulletin advising all insurers writing accident and health policies that provide coverage for prescription topical eye medication of the circumstances under which coverage for refilling the prescription must not be denied. Company Bulletin 2016-7
Rhode Island enacted legislation requiring insurers to provide 30 days' notice to authorized prescribers and affected members before removing a prescription drug from its formulary or making any change in the preferred or tiered cost-sharing status of a covered prescription drug. An exception is made for removal of covered prescription drugs deemed unsafe by the FDA or removed from the market by their manufacturer. Senate Bill 2294
GROUP LIFE
California enacted legislation to clarify that, for dependent children over the age of majority, the group policyholder may elect coverage at age variations up to the limiting age. Further, it addresses waiver of premium for insureds becoming totally disabled prior to age 60, and at or after age 60, noting specific requirements. Assembly Bill 565
GUARANTY ASSOCIATION
California issued a bulletin to announce an update to the Summary Document of the California Life and Health Guarantee Association. Bulletin 2016-5
HEALTH CARE EXCHANGE / MARKETPLACE
New Mexico issued a bulletin to all health carriers offering qualified health plans on the New Mexico Health Insurance Marketplace to clarify certain reporting requirements. This bulletin replaces Bulletin 2016-014, issued May 26, 2016. Bulletin 2016-022
HEALTH INSURANCE / HEALTH RATES
California enacted its "Right to Try Act," which permits a manufacturer of an investigational drug, biological product, or device to make the product available to eligible patients with an immediately life-threatening disease or condition. It also permits (but does not require) health benefit plans to cover such products and prohibits action against the license of a physician based on his/her recommending such a product. Assembly Bill 1668
California enacted legislation requiring health insurers to notify contractholders of individual or small group health policies in writing if the Department of Managed Health Care (DMHC) or the Department of Insurance (DOI) determines that a small group rate is unreasonable or not justified. It specifies further restrictions for premium changes and notification deadlines prior to annual enrollment periods and addresses grandfathered plans. Senate Bill 908
California enacted legislation requiring health policies issued, amended, renewed or delivered after January 1, 2017, to cover up to a 12-month supply of FDA-approved, self-administered hormonal contraceptives when dispensed at one time for an enrollee/insured by a provider licensed to dispense drugs or supplies. The policy is not required to cover such items provided by an out-of-network provider except as governed by the insurer's policies. Senate Bill 999
California enacted legislation to require health care service plans issued, amended or renewed after July 1, 2017, to provide that, if an enrollee receives covered services from a contracting health facility but provided by a non-contracting provider, the enrollee would be required to pay the non-contracting provider only the in-network amount. It also provides for an independent dispute resolution process. Assembly Bill 72
Massachusetts amended requirements pertaining to Coordination of Benefits to provide comprehensive updates to conform with the NAIC Model Coordination of Benefits Regulation. 211 CMR 38.00+
Missouri added language to its health code stating that no provision in a contract in existence on or after August 28, 2016, between a health carrier and a health care provider shall be enforceable if such contractual provision prohibits, conditions, or in any way restricts any party to such contract from disclosing to an enrollee, or such person's parent or legal guardian, the contractual payment amount for a health care service if such payment amount is less than the health care provider's usual charge for the health care service, and if such contractual provision prevents the determination of the potential out- of-pocket cost for the health care service by the enrollee, parent, or legal guardian. Senate Bill 608
Puerto Rico issued a ruling to all insurers that write health insurance in the private market to provide basic coverage for certain supplies for an insured with diabetes. Ruling CN-2016-204-AS
HOLDING COMPANIES
New Jersey amended Insurance Holding Company System requirements adding provisions that will apply to agreements for cost sharing services and management services. NJAC 11:1-35.10
IIPRC / INTERSTATE COMPACT
IIPRC updated its Uniform Standards for: 1) Individual Joint Last to Die Survivorship Term Life Insurance; 2) Individual Single Premium Whole Life Insurance; 3) Individual Joint Last to Die Survivorship Whole Life Insurance; 4) Individual Single Premium Joint Last to Die Survivorship Whole Life Insurance; 5) Individual Current Assumption Whole Life Insurance Policy Standards and Conforming Amendments to Individual Adjustable Life; 6) Individual Endowment Insurance; 7) Individual Single Premium Endowment Insurance; 8) Individual Joint Last to Die Survivorship Endowment Insurance; and 9) Individual Single Premium Joint Last to Die Survivorship Endowment Insurance. Changes are to be effective December 5, 2016. L-04-I-2 Summary +
INSURER INVESTMENTS / SECURITIES
Iowa adopted a regulation regarding fees for securities registration filings. Regulation 191-50.70
LIFE SETTLEMENTS / STOLI
Oklahoma issued a special notice to licensed viatical settlement providers and viatical brokers. Effective December 1, 2016, viatical settlement providers and viatical settlement brokers are required to file all annual license renewals as they become due and provide information pertaining to the annual statement filing. Special Notice - Viatical Settlement Providers
LONG-TERM CARE INSURANCE
California enacted legislation defining "alternate plan of care" (APC) for long-term care services required by an insured but not defined as covered under the policy. It allows proposal of an APC and prohibits the maximum contract benefit from being changed due to an insured utilizing an APC. Coverage for APC services must be in addition to, not in lieu of, coverage for services defined in the policy and the policyholder is to be notified if an APC agreement cannot be reached. Senate Bill 1091
California enacted legislation to require an insurer to notify the policyholder of the availability of new benefits or benefit eligibility or the new policy within 12 months of the date that a new policy series is made available for sale in the state. It also requires insurers to file the notification with the Department at the same time as the new policy or rider and defines "new" benefits as being material in nature. Assembly Bill 2366
California enacted legislation to require long-term care insurance policies that include long-term care services also include nursing and residential care facility coverage only, home care and community-based care coverage only, or comprehensive coverage. It also requires that the policy or rider, as conditions for certification in the California Partnership for Long-Term Care Program, include specified protections against loss of benefits due to inflation and specific disclosures relative to the benefits it provides. Senate Bill 1384
ADVERTISING ASSISTANCE FOR THE WHOLE COMPANY
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MANAGED CARE PLANS / HMOS
California enacted legislation requiring a health insurance policy that provides benefits through contracts with providers for alternative rates that is issued, renewed, or amended on or after July 1, 2017, to provide information to enrollees regarding standards for timely access to health care services and other specified health care access information, including information related to receipt of interpreter services in a timely manner, no less than annually. Senate Bill 1135
California enacted legislation to prohibit health insurers from requiring an enrollee/insured to receive a referral in order to receive reproductive or sexual health care services regardless of whether the patient is a minor. Assembly Bill 1954
California's Department of Managed Health Care (DMHC) published a letter to provide guidance related to premium rate filings. DMHC Directors Letter No. 8-K (revised)
New Hampshire amended requirements applicable to HMOs pertaining to certificate of authority, periodic and special reporting, annual reports and continuity of benefits. Ins 2201+
MEDICARE SUPPLEMENT INSURANCE
Montana advised that, in order to speed up the filing review process, it will be instituting a Medicare Supplement checklist that includes additional filing requirements and templates. The Excel checklist can be found under filing rules in SERFF titled “Montana’s Medicare Supplement Checklist.xlsx." Email dated October 20, 2016
MISCELLANEOUS
Iowa amended its law to provide for certain exemptions from sales and use tax upon the sale of computers used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise. Regulation 701-230.18
Nebraska adopted revised medical insurance and death benefit requirements for licensed contestants in a professional boxing bout, or amateur or professional MMA bout. Such coverage must be provided by the promoter in the insurance policy. Regulation 38 NAC 4-003
New Mexico issued a bulletin to clarify revised requirements for all companies licensed by the New Mexico Office of Superintendent of Insurance. The revisions are applicable to licensing, deposit and fee changes. It also addresses new certificates of authority. Bulletin 2016-024
MISCELLANEOUS HEALTH / ACCIDENT
Oklahoma issued an order requiring electronic filing of annual renewals for all discount medical plan organizations beginning November 1, 2016. Order dated 9-16-16
NOTICE TO INSUREDS
California enacted legislation to permit a notice of lapse, nonrenewal, cancellation or termination, as specified, to be transmitted electronically if it is also transmitted by mail, as prescribed by statute. Assembly Bill 2591
PREMIUM TAX
California enacted legislation to provide that, for health insurers subject to the 0% gross premiums tax rate, prepayments are not required between July 1, 2016 and on or before June 30, 2019. Other details are specified as well. Assembly Bill 1625
New Jersey amended its law concerning the calculation of net premiums on certain policies of life insurance for the purposes of certain assessments on insurers. AB 1794, 17:1C-20m C
PRE-NEED CONTRACTS
Colorado published a bulletin to specify preauthorized forms that preneed funeral contract sellers may adopt. If a company chooses not to use the preauthorized forms, they must follow the certification process prescribed and use the form prescribed by Bulletin B-4.80, Bulletin B-2.2
Iowa amended the procedure for renewal of preneed sellers' licenses, added provisions regarding master trusts, and added a requirement that a preneed seller maintain a list of all sales agents who sold purchase agreements on behalf of the preneed seller during each calendar year. The records are to include the license number of each sales agent and the dates of the sales agent's employment. Regulation 191-100.15, 191-100.19, 191-100.33
REINSURANCE
Massachusetts amended its law regarding credit for reinsurance and sets forth standards that the reinsurance arrangements must comply with for insurance companies to claim credit on their financial statements for business they reinsure. 211 CMR 130.06
STANDARD VALUATION LAW
Idaho issued a bulletin announcing the operative date of its uniform valuation manual as January 1, 2017. Bulletin 16-06
Illinois issued a bulletin advising that the operative date of the Valuation Manual, enabling Principle-Based Reserving, is January 1, 2017. Company Bulletin 2016-6
Montana provided notice of adoption by reference of the NAIC valuation manual, as adopted by the NAIC on August 29, 2016. Regulation 6.6.4501
DID THE DOL FAQS LEAVE YOU WITH MORE QUESTIONS?
The Department of Labor recently released its first FAQ installment to help answer questions related to complying with the “Fiduciary Rule.” In the 24-page document, 34 questions were posed and answered. Unfortunately, for many, the FAQ actually created more questions than answers.
If the DOL FAQ left you wanting more, or you’re curious how the FAQ answers impact your business, give First Consulting a call! We remain committed to helping you build out your strategy for DOL compliance.
We can offer:
- Consulting Services (let us help walk you through how the DOL Rule affects your business)
- Product Drafting Services (helping develop new product or rider or re-tool current product)
- Filing Services (entire team dedicated to quick and efficient filing for approval if you ultimately decide you need to re-tool or create new products)
Make First Consulting your first call for Fiduciary Rule compliance questions! Contact me for more information about how we can help.
Kevin W. Mechtley
816.886.3272
Kevin.Mechtley@FirstConsulting.com
John Palmer
816.391.2744
John.Palmer@FirstConsulting.com
INCLUDE FIRST CONSULTING ADVERTISING SERVICES IN YOUR 2017 BUDGET
Ways we help your Compliance, Legal, Creative, Marketing, Product Development and Risk teams:
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Don’t wait for 2017! If you could use these today, contact me and we’ll get you set up!
C. J. Rathbun
816-391-2740
CJ.Rathbun@FirstConsulting.com