Property and Casualty News
January 2025
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 LICENSING AND APPOINTMENT
Oklahoma announced it will offer Insurance Producer and Adjuster licensing exams and Kaplan Financial study manuals in Spanish. The materials will be available in electronic and printed formats, with bundles for Life and Health or Property and Casualty exams available for purchase on the OID's website. Candidates can contact PSI Exams or the OID Licensing and Education Division for questions regarding scheduling or materials. Special Notice dated 12/23/24
Wyoming's Insurance Department requires insurance companies to renew their agent appointments for 2025 by paying the Annual Appointment Renewal Invoice by March 31, 2025. The Department will send invoices and appointment lists on February 1, 2025, and the last day to terminate appointments without incurring the renewal fee is January 31, 2025. Memorandum 12-2024
ARTIFICIAL INTELLIGENCE
Massachusetts' Division of Insurance issued guidance on insurers' use of Artificial Intelligence (AI) systems. It outlines expectations for insurers to develop written programs for the responsible use of AI, including risk management, governance, and internal controls to prevent unfair or discriminatory outcomes. The DOI may request specific information from insurers during examinations to ensure compliance. Bulletin 2024-10
North Carolina issued a reminder informing insurers that decisions supported by advanced technologies like Artificial Intelligence (AI) must comply with all insurance laws, including those addressing unfair practices and discrimination. The bulletin outlines regulatory expectations, emphasizes the importance of due diligence when using third-party AI systems, and specifies the types of information the Insurance Department may request for regulatory oversight. Bulletin 24-B-19
AUTOMOBILE INSURANCE
Colorado's Department of Insurance clarifies insurers' responsibilities regarding the payment of registration fees following the total loss motor vehicles. The bulletin applies to all insurers that provide motor vehicle policies in Colorado and addresses both first-party and third-party claims of total loss vehicles. Insurers must cover title fees, sales tax, and registration fees ranging from $2 to $20. Recent court rulings mandate payment of these fees in almost all total loss cases, with limited exceptions. Bulletin B-5.51
Maryland's Insurance Department clarifies that private passenger motor vehicle liability insurance carriers must provide a 45-day written notice to policyholders when increasing premiums based on telematics program data such as smartphone apps or GPS trackers. Insurers must justify the rate increase and ensure confidential data collected remains private. Bulletin 24-26
Massachusetts increased the minimum motor vehicle liability coverage amounts to enhance financial protection. The required coverage for bodily injury to one person rises from $20,000 to $25,000, for bodily injury per accident from $40,000 to $50,000, and for property damage from $5,000 to $30,000. These changes apply to policies issued or renewed on or after July 1, 2025. HB 5111
Pennsylvania's Insurance Department announced that it increased the accident surcharge dollar threshold for private passenger automobile insurance to $2,250. This adjustment prevents insurers from penalizing policyholders with rate surcharges or increased premiums as long as the aggregate claim cost does not exceed the new cap. Insurers must file the change discussed in the Notice for prior approval by April 1, 2025, for an effective date no later than July 1, 2025. Notice 2025-01
COMPANY LICENSING
Nevada's Division of Insurance announced the 2025 Annual Company Renewal process, requiring insurers to retrieve their Annual Renewal Invoice online through the Online Service Portal beginning January 3, 2025. Payment is due by March 1, 2025. Notice dated 12/16/24
CYBERSECURITY
Alaska informed licensees, admitted insurers, and other interested parties about SB 134, regarding insurance data security. The passed bill sets data security standards, including risk assessments, written information security programs, and response plans for cybersecurity incidents. Insurers are required to submit annual compliance certifications starting in 2026. Bulletin B 24-11
New York revised its General Business Law requiring businesses to notify affected individuals of a data breach within 30 days. The law also adds the Department of Financial Services to the list of entities that must be notified when a breach affects any New York resident. SB 2659
FLOOD INSURANCE
New York enacted a law limiting the amount of flood insurance mortgagees can require from mortgagors for residential properties. The coverage cannot exceed the outstanding principal mortgage balance and must exclude the property’s contents. Mortgagees must also notify mortgagors that the insurance protects only the lender's interest and may not cover repairs or losses from flooding. AB 5073
HOLDING COMPANIES
Maryland adopted amendments to clarify reporting requirements for insurance holding company systems effective January 6, 2025. The regulations specify when an annual group capital calculation is required, exemption criteria, and conditions for submitting a limited group capital filing. These changes aim to ensure adequate supervision of insurance systems and protect policyholder obligations. COMAR 31.04.18.02
FILING REQUIREMENTS/PROCEDURES
New Jersey's Department of Banking and Insurance issued an order regulating underwriting guidelines for private passenger automobile and homeowners insurance to prevent unfair practices. Insurers are required to submit their underwriting guidelines and file any changes to their rates or rating systems for insurance issued between certain specified dates. Order A24-09
PREMIUM TAX
Louisiana mandates that all companies required to file premium tax returns must do so online through the Industry Access Portal, including submissions of the Annual Premium Tax Statement (Form 1061) and Annual Municipal Premium & Tax Report (Form 1076). Companies seeking investment or military tax credits must also submit additional forms along with their tax returns. Notice dated 12/12/24
PROPERTY INSURANCE
Michigan updated the list of municipalities participating in the Fire Insurance Withholding Program, effective February 1, 2025. The program allows for the escrow of a portion of fire insurance settlements to address damages from fire, explosion, and other specified perils, with participation based on municipal population size. New municipalities will be notified at least 30 days prior to participation, and municipalities can update their information by submitting changes in writing. Notice dated 12/30/24
New York updated its Insurance Law to regulate parametric insurance, a new form of coverage for weather-related events based on the severity and proximity of such events as measured by government agencies. The law introduces parametric insurance as a recognized category, amends provisions for excess line brokers to procure policies from non-authorized insurers and adds disclosure requirements to ensure transparency. These changes include clarifications that parametric insurance is not a substitute for comprehensive coverage and integrate it into the broader regulatory framework for commercial and personal property/casualty insurance policies. AB 10344
REPORTS - ANNUAL / QUARTERLY STATEMENT
Connecticut's Insurance Department informed accredited reinsurers that annual financial statements and related filings must be submitted electronically to the NAIC or via email, for the 2024 reporting year. Reinsurers must file their financial reports by March 1, 2025, including actuarial opinions and management discussions. Bulletin FS-4AR-24
Connecticut issued a bulletin detailing the 2025 electronic financial statement filing requirements for all insurance companies, domestic surplus lines insurers and fraternal benefit societies authorized to operate in the state. These entities must submit their annual and quarterly financial reports electronically to the National Association of Insurance Commissioners (NAIC), with quarterly statements due on May 15, August 15, and November 15, 2025. Additionally, domestic insurers must report the physical locations of their invested assets and comply with specific requirements for reinsurance credit. Bulletin FS-4-24
Connecticut issued a bulletin outlining the 2025 financial filing requirements for captive insurers. Captive insurers must submit verified annual financial statements, including loss reserve opinions from qualified actuaries, and certified reports from independent accountants. These filings are due within 75 days after the end of the fiscal year and must be submitted electronically to the DOI. Bulletin FS-4C-24
Connecticut's Insurance Department issued a reminder to foreign eligible surplus lines insurers about their 2025 electronic financial statement filing requirements. Insurers must submit their annual financial report by March 1, covering the preceding December 31, and adhere to quarterly filing obligations. Additionally, policies must include a notice that the guaranty association does not protect these policies. Bulletin FS-4SL-24
North Dakota's Insurance Department has changed its process for publishing the abstract of the annual statement for each insurance company. Insurance companies must now submit their annual statement abstracts directly to the North Dakota Newspaper Association (NDNA) for publication, using a Self-Service Portal. Proof of publication must be submitted to the Commissioner within four months of filing the annual statement. Bulletin 2024-1
REPORTS - DATA CALLS & OTHER REPORTS
Florida amended Rule 69O-137.009 and Form OIR-D0-1185 to require insurers to report data for personal and commercial residential property by ZIP code instead of county, on a monthly basis rather than quarterly. The first report for January 2025 data is due by February 28, 2025. Rule 69O-137.009
SURPLUS LINES
Alabama now requires surplus line brokers to file quarterly reports on surplus-lines transactions in the state. The reports must be submitted by May 30, August 30, November 30, and January 30, based on the respective quarters. Rule 482-1-036-.04
Colorado announced the launch of the Surplus Lines Information Portal (SLIP) for reporting and paying surplus lines premium taxes. The SLIP platform will handle policies and endorsements with effective dates on or after January 1, 2025, while earlier policies will continue using the existing tax system. A 3% premium tax and a 0.175% transaction fee will apply, with payments processed via ACH Debit. Premium taxes and fees must be reported within 30 days of the transaction's effective date. Notice dated 12/3/24
Montana published a list of eligible surplus lines companies that surplus lines insurance producers in the state may place insurance with. The NAIC has renamed the list to "Quarterly Listing of Alien Insurers, and a link to access the list is provided in the notice. Eligible Surplus Lines List dated December 13, 2024
Pennsylvania's Insurance Department announced that the Surplus Lines law required adjustment to the Exempt Commercial Purchaser Minimum Qualifying Amounts effective January 1, 2025. These adjustments, based on the Consumer Price Index from June 2019 to June 2024, comply with insurance Section 1610 which mandates a review every five years. Stakeholders can direct inquiries about these adjustments to the Office of Corporate and Financial Regulation. Notice 2024-19
West Virginia announced an update to the Surplus Lines Export List, which streamlines the process of exporting specific insurance coverages to the surplus lines market. This update, covering sectors like Agriculture, Aviation, and Medical Malpractice, allows certain coverages to bypass the diligent search requirement among admitted insurers. The notice also highlights regulations on surplus lines brokers, the 4.55% surplus lines tax rate, and guidance for obtaining a non-resident surplus lines broker’s license. Notice dated 12/17/24
WORKERS' COMPENSATION
Arizona Industrial Commission announced the current average monthly wage statutory maximum. The wage maximum is $5,906.55 for injuries occurring from January 1, 2025, to December 31, 2025. Compensation and death benefits are typically based on the employee’s average monthly wage at the time of injury, with the maximum amount set by statute and periodically amended by the Legislature. Notice of Monthly Benefit dated 1/1/25
California's Division of Workers' Compensation advises employers and health care professionals to be vigilant for work-related bird flu cases, particularly among dairy farmworkers and commercial poultry workers, following outbreaks in poultry flocks. Workers who contract bird flu while employed are eligible for workers' compensation benefits, and employers must provide claim forms and guide employees to knowledgeable health care providers. DWC Release 2024-114
California's Division of Workers' Compensation updated the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) section of the Official Medical Fee Schedule, effective January 1, 2025. This aligns with the Medicare January 2025 annual DMEPOS Fee Schedule update. DWC Release 2024-110
California's Division of Workers' Compensation reminds claims administrators about the mandatory submission of the Annual Report of Inventory (ARI) for claims reported during calendar year 2024, due by April 1, 2025. The ARI must detail the number of claims reported at each adjusting location for the previous year, even if no claims were reported, and be submitted to the DWC Audit Unit. Claims administrators must report any changes to the ARI within 45 days of the change. DWC Release 2025-01
California's Division of Workers' Compensation updated the Official Medical Fee Schedule for pharmaceuticals, effective July 1, 2025, impacting the maximum reasonable fee for pharmaceuticals dispensed to injured workers. The changes align the fee schedule with the Medi-Cal pharmacy payment system. DWC Release 2024-108
Delaware's Compensation Rating Bureau Inc. (DCRB) along with 9 other Bureaus released an updated study titled "Countrywide Mega Claims: Accident Years 2001-2021." The study examines claims exceeding $2 million, $3 million, $5 million, and $10 million, highlighting their growing frequency and substantial impact on loss dollars, which now surpass $1 billion annually. The study reveals that mega claims account for less than 1% of total claims but represent over 2% of total loss dollars. DCRB Circular 1046
Indiana requires entities to submit the first installment of their 2024 Second Injury Fund assessment by January 31, 2025, using the state's electronic payment system. Circular 2024-10
New Jersey's Division of Workers' Compensation adjusted the maximum workers' compensation benefit weekly rate for temporary disability, permanent total disability, permanent partial disability, and dependency. The change applies to injuries occurring in the calendar year 2025. NJAC 12:235-1.6
Oklahoma's Insurance Department announced a 9.2 percent decrease in workers' compensation insurance loss costs for 2025, effective for new and renewing policies starting January 1, 2025. Notice dated 12/10/24