Property and Casualty News
April 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.
AGENT / PRODUCER COMPENSATION
Kentucky has issued an advisory opinion to clarify inquiries relating to insurance agent compensation. The clarification points include the definition of a client, prohibition of unlawful incentives for clients, and agent compensation. Advisory Opinion 2016-02
AGENT / PRODUCER CONTINUING EDUCATION
Arkansas has enacted legislation that allows the Department to charge an additional $1 fee per credit hour of electronic pre-licensing instruction. This fee does not apply to classroom education. The legislation expires on March 1, 2018. The fee is intended to allow the Department to monitor success of online educational courses. Rule and Regulation 57
California has made substantial revisions to prelicensing educational objectives. Course providers must comply with the revised curriculum by July 15, 2016. Examinations beginning on August 1, 2016 will reflect the changes to the educational objectives. Licensing Notice dated April 4, 2016
Virginia amended its regulation relating to continuing education program changes for insurance agents. HB 844
AT YOUR SERVICE: ADVERTISING COMPLIANCE HELP
How can we help you – agent, IMO, or carrier – maintain compliance in your advertising and
marketing campaigns, staff training and up-to-date knowledge?
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AUTOMOBILE INSURANCE
Colorado has provided guidance for insurers in relation to no-fault claims subject to independent medical examination (IME) program. Since the available physicians and specialties have ceased to exist and the number of IME claims has significantly decreased, the Department is no longer administering the IME program. Bulletin B-5.37
Delaware has issued a warning to automobile insurers relating to their obligation to provide mandatory minimum coverage. Disclaiming liability of a claim by improperly using the cooperation clause of a policy is deemed an unfair practice. Auto Bulletin 24
Puerto Rico issued a circular letter regarding the application process to participate on the "Selection Form" for compulsory liability insurance for all property and casualty insurers that write motor vehicle insurance in Puerto Rico. CC-2016-1875-CM
West Virginia amended its statute regarding cancellation or nonrenewal of automobile liability policies. SB 330
CAPTIVES
Nebraska amended regulations to prohibit limited liability companies from operating as insurers or as special purpose financial captive insurers. LB 758
South Dakota amends its regulation to revise certain provisions concerning fees for sponsored captive insurance companies. SB 39
CORPORATE GOVERNANCE
Vermont adopted a regulation regarding procedures for filing, and the required contents of, the Corporate Governance Annual disclosure. Regulation 2015-1 dated 3-30-2016
35 STATES WILL ADOPT THE CORPORATE GOVERNANCE MODEL IN 2016
Changes needed to your Board of Director’s documentation can take months, so we advise you act now!
First Consulting’s Corporate Governance Tool Kit can help by providing your company the documentation
needed for compliance under CGAD and the supporting Model Regulation.
DATA CALLS / REGULATORY REPORTING
Maryland has requested that property and casualty insurers actively writing personal lines private passenger automobile insurance provide information relating to Homeowners and Private Passenger Auto premiums. The information should be submitted in Excel format, with a sample of formatting available with the Bulletin. The deadline is June 10, 2016. Bulletin 16-10
DISASTER / CATASTROPHIC EVENT
Texas approved new endorsements for Texas Windstorm Insurance Association dwelling and commercial policies excluding storm doors from coverage unless specifically listed on the declarations page of an individual policy. The Texas Windstorm Insurance Association must begin using the endorsements for new business on or before April 1, 2016, and for renewal business on or before June 1, 2016. The Texas Windstorm Insurance Association must notify the Texas Department of Insurance when they begin using the endorsements. Commissioner Order No. 4301
Texas has declared that the weather events on March 16-March 17, 2016 and March 23-March 24, 2016 are a catastrophe and claims associated with that event are subject to additional time for processing per Section 542.059. Commissioner's Bulletin B-0005-16 and B-0006-16
HOLDING COMPANIES
Oregon amended different sections of regulation 836-027 by noting that Forms A, B, C, D, E & F for holding companies can now be found on the Department's website and information pertaining to statement filings, acquisition of control, pre-acquisition notification, enterprise risk report, and transactions subject to prior notice. 836-027-0005, 836-027-0010, 836-027-0012, 836-027-0100, 836-027-0125, 836-027-0140 and 836-027-0160
INSURER INVESTMENTS / SECURITIES
Wyoming has enacted a law amending a number of provisions of its Uniform Securities Act. HB 31
LIABILITY INSURANCE
Texas amended its regulation concerning reporting requirements for liability insurance under the insurance code regarding quarterly closed claim report forms. 28 TAC s 5.9201 Dated 12-07-2015
West Virginia enacted a law regarding successor corporation asbestos-related liabilities. SB 14
Wisconsin amended provisions of its law relating to liability of ski area operators. SB 463
Wyoming has enacted a law clarifying requirements for operating a foreign limited liability company. HB 108
MISCELLANEOUS
Puerto Rico issued a circular letter reminding all insurers, health services, producers, organizations, authorized representatives, adjusters, general agents, surplus line brokers, attorneys-in-fact, and insurance consultants authorized in Puerto Rico that it is mandatory for them to use the online services portal when filing the Annual Business Report. CC-2015-1860-AF
Virginia amended its civil procedure law requiring that an insurance company disclose the physical address of an insured person in a personal injury and wrongful death action. HB 1257
Wyoming enacted a law creating the Uniform Fiduciary Access to Digital Assets Act. SF 34
OMNIBUS LEGISLATION
New Mexico amended its code regarding several topics including capital and surplus requirements. The initial and renewal licensing, examinations, and continuing education codes were also amended. SB 108
PREMIUM ISSUES
Texas repealed the regulation concerning premium reduction certification under the fire and allied lines insurance. 28 TAC s 5.3401 Dated 12-01-2015
PROFESSIONAL LIABILITY INSURANCE
New Mexico enacted legislation to enforce exclusive forum selection and choice of law provisions for certain health care professional liability contracts relating to claims arising out of acts or omissions occurring on or after the effective date. HB 270
Virginia amended its law relating to statutes of limitation of certain medical malpractice actions. HB 637
REGULATORY REPORTING REQUIREMENTS
South Dakota amended its statute regarding the South Dakota Business Corporation Act annual report filing fees. SB 49
CUSTOM RESEARCH
We can provide you with custom research or surveys based on your specific need which frees your staff for other activities. We can provide one time research or surveys or update the information quarterly or monthly. Click here to learn more.
SERVICE AND ADMINISTRATIVE FEES
Colorado has implemented a surcharge on fines and monetary penalties of 15%. The surcharge will not apply to interest or penalties or interest from late payment of premium taxes. The collected funds will be used for a consumer outreach and education program. Bulletin B-1.26
SERVICE CONTRACTS / WARRANTY INSURANCE
Virginia amended its regulation regarding home warranties and licensing requirements for home service contract providers. HB 304
SURPLUS LINES
Maryland has amended subsection B of its regulation to clarify that surplus lines insurers are not members of the Maryland Life and Health Insurance Guaranty Corporation or Maryland Property and Casualty Insurance Guaranty Corporation. Therefore funds from these associations may not be used to cover claims on an insolvent insurer. COMAR 31.03.06.09
Rhode Island amended its regulation relating to medical malpractice insurance to allow licensed medical and dental professionals and licensed health care providers to obtain professional liability insurance from surplus lines carriers among other specified options. R27-21-004 Dated 12-10-2015 and R27-21-005
South Carolina amended its statute to add a new subsection stating that when placing surplus lines insurance through a licensed insurance broker, a producer licensed for property and casualty insurance isn't required to be appointed by the surplus lines insurer. 38-43-50
South Carolina amended its statute to expand the definition of "eligible surplus lines insurer". 38-1-20
Wyoming amended its insurance law regarding records required to be kept in the office of a surplus lines broker. HB 29
TITLE INSURANCE / AGENTS
California has provided instructions for title companies and other entities to complete the Securities Transaction Request Form A-174 to comply with new financial security requirements, as of July 1, 2016 and to provides information regarding requests for the release of existing escrow deposits. Bulletin 2016-3
New Mexico issued a bulletin with codes to facilitate the consistent reporting by licensed title insurance agents of premiums remitted for pro forma policies. The bulletins describes certain corrections made to title insurance administrative rules. Bulletin 2016-004
Utah adopted a new rule regarding requirements for interest bearing accounts used by title insurance agencies for trust fund deposits. Rule R592-17-1 Dated 12-24-2015
TRANSPORTATION NETWORK
Maryland has enacted new provisions relating to Transportation Network Companies, Operators, and Services. New provisions include processes for obtaining licenses (including a background check requirement), compliance with all insurance requirements, and discrimination against individuals with disabilities. COMAR 20.95.01.03
New Mexico enacted legislation relating to transportation network companies, their drivers and insurance coverage requirements. HB 168
South Dakota enacted a bill regarding insurance for vehicles used to provide rides for transportation network companies. HB 1091
West Virginia amended its statute regarding coverage for Transportation Network Companies. 17-29-10
WORKERS' COMPENSATION
Alaska has amended its rules relating to workers' compensation. Documents filed by fax or email must comply with Department of Labor and Workforce Development Commissioner's requirements. The changes were effective April 9, 2016. 8 AAC 45.020
Colorado has amended and added sections to its rules relating to workers' compensation dispute resolution. New provisions include motions (formerly "place of filing"), penalty procedures, settlements, and merger of claims. The new section was effective April 15, 2016. 7 CCR 1101-3 Rule 9
District of Columbia has issued a directive relating to attorney fees in workers' compensation cases. Beginning July 1, 2016, attorney fee award hourly rates will be determined by the chart enclosed in the directive. DIRECTIVE: Administrative Issuance No. 15-01
New Mexico amended its workers compensation act to provide that compensation benefits be reduced in proportion to the contribution of a worker's intoxication to the worker's injury or death. SB 214
Tennessee has amended its statue regarding governmental entities set to terminate on June 30, 2016. SB 1496
Texas amended its regulations to allow for eligible spouses for first responders to remarry and remain eligible for death benefits, if the first responder provided serves as a volunteer and amended its regulation to increase the maximum amount of reimburement for burial benefits for Workers' Compensation system from $6,000 to $10,000 for a compensable injury that occurs on or after September 1, 2015. 28 TAC s 132.7 Dated 11-24-2015
Texas amended its requirement regarding utilization review for health care provided under Workers' Compensation insurance coverage. 28 TAC §19.2014 and 28 TAC s 19.1714 Dated 12-07-2015
Texas has amended its regulation to make a number of revisions regarding the contents of rulemaking petitions for Workers' Compensation. 28 TAC s 104.1 Dated 12-04-2015
Texas has issued a new bulletin with instructions on making rate filings for revised workers' compensation classification relativities. Bulletin B-0004-16
Texas issued an order revising Workers' Compensation classification relativities for policies with effective dates on or after July 1, 2016. Commissioner Order No. 4337
Utah amended its law regarding the burden of establishing permanent total disability for Workers' Compensation. SB 146
Virginia amended its regulation pertaining to fees schedules for medical and legal services for Workers' Compensation that are to be effective January 1, 2018. HB 378
Virginia amended its regulation regarding claims and presumptions that certain injuries arose out of and in course of employment for Workers' Compensation. HB 44
Wisconsin announced changes in the manner supplemental benefits are reimbursed for Workers' Compensation. Insurance Letter 509
Wisconsin expanded its Workers' Compensation definition of "employers" and provides circumstances under which a franchisor is or is not considered an employer. SB 422
Wisconsin issued a Workers' Compensation Insurance Letter concerning changes in the maximum age for ending the social security reverse offset. Insurance Letter 508
AT YOUR SERVICE: ADVERTISING COMPLIANCE HELP
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Compliance: Advertising compliance review services for agents, IMOs and companies
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First Consulting expertise is available to help meet your advertising compliance need(s). Don’t wait! Call or email today:
C. J. Rathbun, FLMI, CCEP, HIA, AIRC
816.391.2740
CJ.Rathbun@FirstConsulting.com
CUSTOM RESEARCH
We can provide you with custom research or surveys based on your specific need which frees your staff for other activities. We can provide one time research or surveys or update the information quarterly or monthly. We can help you with:
EXPANDING TO NEW STATES
- Research on state laws for licensing or policy needs or operational requirements
PRODUCT DEVELOPMENT
- If you are revising policy forms or rates and you need research on state-specific requirements
- We can help with research on a particular type of coverage like:
- Sharing economy
- Drones for limiting coverage or providing specific enhancements
- Or any other coverage
- Research on competitor filings
MARKET REGULATION COMPLIANCE
- Specific research in states for:
- New lines of business
- New programs
OTHER
- We can help on any line of business for state-specific insurance requirements
Please click here for a brief overview of our custom research or give me a call. I’d like to help.
Joe Bieniek
816.512.2832
Joe.Bieniek@FirstConsulting.com
