Property & Casualty News
April 2017
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.
ADJUSTERS
Maryland adopted a new regulation regarding Public Adjusters who are not a business entity to complete a certain number of continuing education hours in order to renew their license, effective April 1, 2017. 31.03.18.01+
Mississippi amended its law to provide exemption from examination requirements for certain adjuster license applicants. House Bill 957
AGENT / PRODUCER CONTINUING EDUCATION
Florida revised rules addressing requirements and standards for continuing education courses, providers of such courses and records for licensees authorized to transact business or adjust claims in insurance. FAC 69B-228.010 +
AGENT / PRODUCER LICENSING AND APPOINTMENT
North Dakota amended its law pertaining to insurance fraudulent acts for producers. The application or renewal for a license will be denied if the commissioner finds the applicant or licensee has been convicted of a felony involving dishonesty or breach of trust. House Bill 1112, 26.1-02.1-01
Rhode Island issued an industry alert reminding all affected parties that mailed notices of license renewals for producers, adjusters and appraisers were discontinued March 1, 2017, in favor of email notices. Licensees are obligated to keep their contact information current. Industry Alert 2017-1
The Virgin Islands enacted legislation entitled "Virgin Islands Producer and Adjuster Licensing Act” to be in compliance with NAIC accreditation standards. Bill No. 31-0445
CAPTIVES
Arkansas enacted legislation addressing captive insurance companies, adding definitions and revising several sections. House Bill 1476, 23-63-1601+
CLAIMS / CLAIMS ISSUES
New Mexico amended its insurance Code to provide for electronic claims payment if requested by a claimant. HB 127; 59A-16-21
COMMERCIAL LINES INSURANCE
New York issued a circular letter for insurers authorized to write surety insurance regarding motor vehicle dealer surety bonds. Circular Letter No. 2 (2017)
CONFIDENTIALITY / PRIVACY
Virginia enacted legislation stating that an insurance agent or institution that provides nonpublic personal information to nonaffiliated third parties only in accordance with section 38.2-613, and has not changed its policies and practices regarding such disclosure from the policies and practices disclosed in its most recent notice, is not required to provide an annual notice. House Bill 2422
CORPORATE GOVERNANCE
Montana created the Corporate Governance Annual Disclosure Act, which among other things, provides for an insurer or insurance group's corporate governance structure, policies, and practices. Senate Bill 120
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CREDIT FOR REINSURANCE
Idaho enacted legislation to revise provisions regarding credit for reinsurance. House Bill 101
North Dakota amended its regulation regarding credit for reinsurance, effective April 1, 2017. CHAPTER 45-03-07.1
South Dakota enacted legislation updating its laws regarding credit for reinsurance. House Bill 1045
DISASTER / CATASTROPHIC EVENT
Iowa issued a bulletin to all insurers and producers. Effective immediately, Bulletin 16-01 that provided guidance for policyholders affected by flooding and previously declared disasters has been rescinded. Bulletin 17-02
FEE SCHEDULES
North Dakota amended and reenacted sections of its code relating to fees chargeable by the insurance commissioner. SB 2103; 26.1-01-04; 26.1-01-07; 26.1-15.1-35
FINANCIAL REGULATION
North Dakota amended its regulation and adopted a new regulation regarding internal audit function requirements. CHAPTER 45-03-20; 45-03-20-15
FRAUD / ANTI-FRAUD
Delaware amended Bulletin 15 by updating the link through which the Model Uniform Suspected Insurance Fraud Reporting Form and completion instructions may be accessed. Insurers opting to use the NAIC Online Fraud Reporting System are encouraged to continue doing so; this update is for those not using the OFRS.
DOMESTIC/FOREIGN INSURERS BULLETIN NO. 15 (revised)
North Dakota amended its regulation regarding insurance fraud effective April 1, 2017 clarifying the meaning of reasonable belief. 45-15-01-01
HOLDING COMPANIES
Arkansas enacted legislation to modernize the Insurance Holding Company Regulatory Act. Senate Bill 344, 23-63-506+
MISCELLANEOUS
Delaware issued a bulletin to notify insurers that bulletins will appear on the Department's Laws, Regulations and Bulletins page instead of the home page. Bulletin No. 11
New York adopted regulations establishing cybersecurity requirements for financial services companies. Companies are required to assess their specific risk profile, design a program that addresses the risks and file an annual certification confirming compliance with these regulations. 23 NYCRR 500.0+
North Dakota amended and reenacted a section of its code relating to authority of county mutual insurance companies. HB 1147; 26.1-13-15
The Virgin Islands enacted legislation to update the Territory's insurance laws and adopt core standards and Model Laws and Regulations of the National Association of Insurance Commissioners (NAIC) for purposes of obtaining NAIC accreditation, placing the Territory on par with other United States jurisdictions. Bill No. 31-0442
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NATIONAL STANDARDS
Arkansas issued a bulletin announcing adoption of amendments, revisions, and modifications to the NAIC Accounting Practices and Procedures Manual. The Manual is to be used for annual statements as of December 31, 2017 and to be filed with the Department on or before March 1, 2018. Bulletin 1-2017
OMNIBUS LEGISLATION
Arkansas enacted legislation concerning policyholder's bill of rights, annual statements filed with the commissioner, and mandatory insurance fraud reporting, among other subjects. Senate Bill 247
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
Idaho enacted legislation to adopt ORSA requirements, adding new Chapter 63 to its insurance code. House Bill 100
Mississippi enacted legislation, which among other things requires insurers to conduct an Own Risk and Solvency Assessment (ORSA) and file an ORSA summary report. Senate Bill 2298
South Dakota enacted legislation to provide requirements for insurers' Own Risk and Solvency Assessment. House Bill 1060, 58-5A
PERSONAL LINES INSURANCE
Idaho issued a notice regarding the Department of Insurance position regarding the exclusion of terrorism in personal lines products. SERFF Message
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PROFESSIONAL LIABILITY INSURANCE
Delaware revised a bulletin regarding medical negligence insurance claims reporting. The revisions clarify that the form that insurers are to use to fulfill their reporting requirements may be downloaded from the Department's Bulletins webpage. Bulletin No. 18
REINSURANCE
Wyoming enacted legislation to update its laws addressing reinsurer requirements. House Bill 7, 26-5-112+
RISK-BASED CAPITAL
The Virgin Islands enacted legislation entitled "The Virgin Islands Risk-Based Capital for Insurers Act,” to place the Territory on par with other United States jurisdictions and satisfy one of the NAIC requirements for bringing the Territory into compliance with the NAIC accreditation standards. Bill No. 31-0443
THIRD PARTY ADMINISTRATORS
Florida published a Memorandum to all insurers using third party administrators noting certain provisions of the Insurance Code. Among the notations: 1) all responsibility for competent administration of its programs remains with the insurer; 2) any premiums paid to the administrator are deemed to have been received by the insurer; and 3) payments from the insurer to the administrator are not deemed to have been paid to the insured/claimant. Also, a semi-annual review of the TPA operations is required. Informational Memorandum OIR-17-01M
The Virgin Islands enacted legislation entitled "The Virgin Islands Third Party Administrator Act," updating its insurance laws to reflect the licensing requirements contained in the model laws of the NAIC. Bill No. 31-0446
Wyoming enacted legislation requiring registration of third party administrators. House Bill 14; 26-53-101+
TPA LICENSING CHOICES
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TRADE PRACTICES
Louisiana revised and re-issued an advisory letter to clarify prior guidance relative to "value added" services or things of value furnished by persons engaged in the business of insurance, as well as to common and ordinary marketing practices. Advisory Letter No. 2015-01 (Revised)
North Dakota amended and reenacted sections of its code relating to limitations on insurance rebates, effective August 1, 2017. Producers are limited to $100 gift, prize, logo merchandise, meal, entertainment activity or other promotional item per person per year in connection with marketing, promoting or advertising their business. SB 2140; 26.1-04-03; 26.1-04-06; 26.1-25-16
TRANSPORTATION NETWORK
New Mexico enacted legislation amending the Transportation Network Company Services Act definition of "transportation network company" to exclude entities receiving federal subsidies to provide service under the federal Older Americans Act of 1965. HB 77
WORKERS' COMPENSATION
North Dakota amended and reenacted sections of its code relating to subrogation liens, administrative orders, and the decision review office for the Workforce Safety and Insurance Organization. SB 2093; 65-01-09; 65-01-16; 65-02-27
North Dakota amended its code relating to Workers' Compensation attorney's fees and costs. SB 2048; 65-02-08; 65-10-03
North Dakota amended its regulations regarding claims and compensation for Workers' Compensation. Changes affect doctor's report certifying disability, social security offsets, examination of employee, false statements and rehabilitation services pilot programs. HB 1086; 65-05-08.1; 65-05-09.1; 65-05-28; 65-05-33; 65-05.1-06.3
Texas issued a notice concerning information for Workers' Compensation non-subscribers. The notice provides links to forms required for employers who are non-subscribers and the grace period for them to report their status without penalty. The reports are due by April 30, 2017. DWC005
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C. J. Rathbun, FLMI, CCEP, HIA, AIRC
816.391.2740
CJ.Rathbun@FirstConsulting.com
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816.391.2744
John.Palmer@FirstConsulting.com