Property & Casualty News
July 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
Alabama amended its Code relating to independent insurance adjusters, waiving certain prerequisites for licensure if the applicant holds a certification from a person or entity approved by the Commissioner that provides specified education and examination requirements similar to those of the state. House Bill 357
Delaware issued a bulletin for emergency CAT adjusters, advising them of updates to the procedures by which they are required to notify the Department of performing catastrophic insurance adjustment work in the state. Agents Bulletin No. 18 (Revised)
Florida enacted legislation redefining the term "public adjuster," revising prohibited acts by public adjusters, redefining the terms "all-lines adjuster," "nonresident all-lines adjuster," and "primary adjuster" and revising requirements and accountabilities applicable to the various adjusters. House Bill 911
ADVERTISING / SALES & MARKETING
Indiana amended the definition of telephone solicitor and now requires a telephone solicitor to disclose where they are employed or contracted. House Bill 1444
AGENT / PRODUCER COMPENSATION
Louisiana published a bulletin addressing the state's allowance of agency fees, under specified conditions, as an additional charge over and above the premium quoted to the insured, any premium tax on surplus lines policies and any expense reimbursement due to the producer. Bulletin 2017-05
AGENT / PRODUCER LICENSING AND APPOINTMENT
Arkansas issued a bulletin addressing 2017 company appointment renewals for producers. Bulletin 4-2017
Delaware published a revised bulletin to withdraw Agents Bulletin No. 5 and set forth in one bulletin updated instructions for obtaining state and federal criminal history reports. Producers & Adjusters Bulletin No. 22 (Revised)
Louisiana enacted legislation requiring producers to maintain professional liability insurance or errors and omissions coverage. Senate Bill 117
Maryland revised its laws regarding producer licensing to allow an applicant who fails a licensing examination to retake it 4 (instead of the previous 14) days later. House Bill 1277; Section 10-108 and 10-109
Michigan issued a memorandum to notify licensed business entity producers (agencies) that branch registration transactions can now be performed through the Insurance Licensing Online System (ILOS). Memorandum of June 28. 2017
New Mexico posted on its website that it is implementing SBS (State Based Systems). This required the temporary shutdown of professional licensing operations, including applications submitted via NIPR. NIPR began accepting licensing applications for the state on Monday, July 17, 2017. Website announcement
Texas extended the period of time within which an applicant must complete required training after specified materials have been submitted from 14 days to 30 days. HB 1197; Ins s 4001.160
AUTOMOBILE INSURANCE
Alabama enacted legislation allowing a driver who is involved in an accident to immediately move the vehicle from the roadway to a location adjacent to the accident site, when no apparent injury or the death of a person occurred, the driver is not impaired, the vehicle is drivable and can be safely moved from the roadway. The driver is required to return and remain at or as close to the scene of the accident as is safely possible. House Bill 214
Delaware issued a bulletin regarding a new law that raises bodily injury and property damage limits for new or renewed automobile insurance policies issued after December 13, 2017. Auto Bulletin No. 25; HB 114; 21 S 2902 (B)(2)
Maryland amended its Insurance Code to prohibit an insurer, with respect to private passenger motor vehicle coverage, from increasing the premium for an insured based solely on the insured's change in marital status, when the insured is a surviving spouse. House Bill 916
Maryland enacted legislation to amend and renumber its Insurance Code to address Enhanced Underinsured Motorist Coverage. Senate Bill 403
New York amended its law relating to collision or comprehensive coverage for motor vehicles providing that the disclosure statement required with a copy of a repair estimate is not required for claims solely involving window glass. SB 1859; Ins. Law s 2610
Oregon amended its regulation pertaining to policy renewal for Motor Vehicle Liability Insurance, specifying the conditions and requirements under which a replacement policy (from a different company but under the same control as the insurer) is offered in lieu of a renewal. SB 331; 742.566; 742.568
South Carolina issued a bulletin regarding mopeds. Automobile insurance policies issued or renewed on or after November 19, 2018 must provide uninsured and underinsured motor vehicle coverage that includes compensation for losses resulting from accidents involving mopeds. Moped operators are not required to maintain automobile liability insurance coverage. Bulletin 2017-03; 38-77-30
CANCELLATION / NON-RENEWAL / PREMIUM OR COVERAGE CHANGES
Alabama published a bulletin providing guidelines for cancellation or non-renewal of policies and premium increase notifications for personal and commercial lines. Bulletin No. 2017-04
CAPTIVES
Montana enacted legislation amending its laws pertaining to captive insurance companies, allowing for inactive captive insurance companies to apply for dormant status and providing requirements. Senate Bill 245; 33-2-705, 33-28-105, and 33-28-108
Vermont amended its regulation regarding annual financial reporting requirements and reinsurance for captive insurers. C-81-2 s 2 +
CLAIMS / CLAIMS ISSUES
Virginia adopted amendments to its rules governing unfair claim settlement practices to conform them to the NAIC models addressing the topic. 14VAC5-400-10+
CONFIDENTIALITY / PRIVACY
Oregon amended its regulation by eliminating the requirement that insurers provide an annual notice to the consumer regarding policies and practices for disclosing personal information if the insurer provides such information to nonaffiliated third parties in accordance with law and if the insurer has not changed privacy policies and practices. SB 986; 746.620
Washington published an advisory to all licensees with consumers in the state to inform them of the two-day notification requirement for security breaches. If a security breach occurs, all licensees are to notify the Insurance Commissioner in writing of the number of consumers potentially affected and the actions being taken by the licensee. Technical Assistance Advisory 2017-01
CORPORATE GOVERNANCE
Connecticut enacted legislation to allow domestic insurers to divide into two or more companies and providing details of the process. House Bill 7025
Kansas added a new section to its Insurance Code to require all insurers domiciled in the state to submit, no later than June 1 of each year, a Corporate Governance Annual Disclosure (CGAD). Uncodified Senate Bill 16 s 2
Maine amended several sections of its Insurance Code to maintain conformance with national standards. Included are: MRSA §423-A, regarding interim financial reporting requirements; MRSA §423-G, regarding Corporate Governance Annual Disclosure; MRSA §4208, regarding Annual and interim reports; and MRSA §222, sub-§7-C regarding Groupwide supervision, among others. SP 539
Nevada enacted legislation adopting certain provisions of the NAIC Corporate Governance Annual Disclosure Model Act. Assembly Bill 35; Uncodified AB 35 s 6
Ohio promulgated a rule to establish the procedures for filing, and the required content of, the corporate governance annual disclosure. Rule 3901-3-19
CREDIT FOR REINSURANCE
Kansas amended provisions applicable to credit for reinsurance. 40-221a
DEPARTMENT OF INSURANCE
Louisiana enacted legislation to require each risk-bearing entity to transmit contact information to the Commissioner annually and within 30 days of any change in the information. House Bill 289
Texas amended its Insurance Code to remove the requirement that an insurer notify the Commissioner of imposition of a penalty, forfeiture, or sanction on the insurer for a violation of the insurance laws of another state. Senate Bill 1012; 81.003(b)
DISASTER / CATASTROPHIC EVENT
Louisiana extended the emergency rule that was a result of the 2016 historic flood. The emergency rule related to suspension of the right to nonrenew residential and commercial insurance coverage. The new expiration date is August 14, 2017. Emergency LAC 37:XI.5101
ELECTRONIC TRANSACTIONS
South Carolina enacted legislation allowing for electronic delivery of certain insurance documents under specified conditions. House Bill 3488; 38-55-710+
ELECTRONIC INSURANCE SOLUTIONS FOR ELECTRONIC QUESTIONS
Do you feel like a fish out of water when it comes to understanding
electronic applications, delivery, and advertising? First Consulting can help you get back
in the water and swim ahead of the competition. Contact Us to learn more.
FEE SCHEDULES
Delaware published a bulletin advising that on July 1, 2017, the state legislature enacted laws to take effect immediately to increase fees and charges collected by the Department of Insurance. Checks postmarked before the July 1 effective date will be accepted at the old rates, but any postmarked July 1 and later must be at the new rates. Questions may be emailed to DOI-Legal@state.de.us. Universally Applicable Bulletin No. 2
FILINGS: PROPERTY / CASUALTY
Connecticut issued a bulletin updating Bulletin PC-78 concerning insurance rates for voluntary market personal risk policies or "Flex-Rate Filings". The bulletin provides guidance for filers. Bulletin PC-85
New Mexico issued a bulletin regarding annual rate and form filing fees for all property and casualty insurance companies. Bulletin 2017-007
Oregon enacted legislation exempting certain classes of commercial lines insurance from the requirement to file rates and policy forms. SB 985
FINANCIAL REGULATION
Idaho issued a bulletin to announce its adoption of the March 2017 version of the NAIC's Accounting Practices and Procedures Manual. Bulletin 17-02
FLOOD INSURANCE / NFIP
Florida enacted legislation relating to flood insurance, authorizing certain insurers to issue insurance policies, contracts or endorsements providing certain excess coverage for the flood peril on a flexible basis; revising applicability of certain notification and filing requirements; and revising a notice requirement for agents before they place flood insurance coverage with an admitted or surplus lines carrier for properties receiving insurance under the NFIP. House Bill 813
FRAUD / ANTI-FRAUD
Florida amended its laws related to insurance fraud requiring that, by December 31, 2017, all insurers admitted in the state establish and maintain a designated anti-fraud unit to investigate and report possible fraud and that the insurers adopt an anti-fraud plan and file it with the state as prescribed. House Bill 1007
Florida amended its laws to protect the confidentiality of insurers' anti-fraud education and training, the descriptions of their anti-fraud investigative units and their rationales for the resources and staffing provided to their anti-fraud investigative units when this data is reported to the Department under applicable requirements. House Bill 1009
Louisiana issued an advisory letter concerning anti-fraud plan filing requirements. Amended Advisory Letter No. 2010-02
GUARANTY ASSOCIATION
Michigan issued a bulletin regarding the Michigan Property and Casualty Guaranty Association's annual adjustment of an insured's maximum unearned premium refund. Bulletin 2017-11-INS
HOLDING COMPANIES
Kansas enacted legislation adding a new section to its Insurance Code addressing internationally active insurance groups. Uncodified Senate Bill 16 s 1
Mississippi amended rules addressing insurance holding company regulation. Rule 19-1-20.13, .23, .29
Texas amended its statutes governing holding companies, adding a new section addressing internationally active insurance groups. House Bill 3220; 823.002+
CERTIFICATE OF AUTHORITY SERVICES
If your company is in the process of a corporate change (e.g., control, merger, name)
or considering expansion into additional jurisdictions or product lines, let First Consulting assist.
Click here to learn more.
LIABILITY INSURANCE
Tennessee amended provisions concerning financial responsibility and liability coverage requirements for hazardous waste management. 0400-12-01-.01; 0400-12-01-.02; 0400-12-01-.05; 0400-12-01-.06
Texas approved legislation relating to the purchase of certain insurance coverage by public schools for the benefit of businesses and students participating in career and technology programs and providing for immunity from liability of certain public school students participating in career and technology programs. HB 639; Ed s 29.191; Ed s 29.192
Texas enacted legislation relating to the liability of first responders who provide roadside assistance, effective September 1, 2017. HB 590
MARRIAGE EQUALITY / CIVIL UNIONS / DOMESTIC PARTNERS
Nevada enacted legislation to recognize domestic partnerships validly formed in other jurisdictions, removing the requirement to register such a partnership. Assembly Bill 227; NRS 122A.030
MISCELLANEOUS
Florida enacted legislation to, among other things, amend surplus requirements for new and current insurers providing renter's insurance, tenant's coverage, and/or cooperative unit owner insurance. House Bill 359
Maine enacted legislation to address the usage and consumer protections of Guaranteed Asset Protection Waivers. Sec. 1. 10 MRSA c. 229
Oregon approved legislation relating to the tax reporting requirements of insurers. It also clarifies how taxable income is determined for an affiliate group. SB 153; 317.267; 317.710; 317.715
Oregon issued a bulletin regarding clarification of coverage for marijuana items and activities. The bulletin notes that policies should explicitly state whether marijuana items and activities are covered or excluded, and if marijuana activities are considered illegal activities under the policy. BULLETIN DFR 2017-04
ORSA: OWN RISK AND SOLVENCY ASSESSMENT
South Carolina enacted the "Own Risk and Solvency Assessment Act" to require insurers to conduct an Own Risk and Solvency Assessment (ORSA) on no less than an annual basis. Senate Bill 254; 38-13-810+
Utah amended its Insurance Code to add a chapter known as the "Risk Management and Own Risk and Solvency Assessment Act." 31A-16a-101+
ARE YOU FULLY AWARE OF YOUR RISKS?
More and more Boards of Directors are seeking an external review/audit/exam of their business operations.
Our experienced staff can help you with your own assessment. Click here to learn more.
PROFESSIONAL LIABILITY INSURANCE
West Virginia amended its regulation concerning required reports from insurers providing professional liability insurance to a physician or podiatric physician. 11-1A-13
West Virginia revised and reenacted provisions relating to medical professional liability. SB 338
PROPERTY INSURANCE
Louisiana amended its law to provide certain policyholders the option to exclude personal property coverage after a declared disaster and receive a reduction in premium. Insurers issuing homeowner's insurance including personal property coverage are to provide specified options to policyholders in the affected area. House Bill 393
Louisiana enacted legislation barring insurance companies from combining a higher classified public fire protection area with a lower classified public fire protection area for the purpose of determining the fire insurance rate for the combined public fire protection areas. House Bill 392
Oklahoma enacted legislation related to property insurance, and to discounts, rate reductions, and other related adjustments for certain properties constructed, or retrofitted, to resist loss due to tornado or catastrophic windstorm events. The requirements apply to policies issued or renewed on or after April 1, 2018. HB 1720
Oklahoma issued a bulletin providing guidance concerning changes to insurance law 36 s 4809. Bulletin No. PC 2017-02
Texas enacted legislation concerning certain consumer actions related to claims for property damage, effective September 1, 2017. HB 1774; Ins s 542A.001+
REPORTS - DATA CALLS & OTHER REPORTS
Louisiana published a bulletin for domestic property and casualty insurers writing terrorism risk insurance to notify them that Louisiana will participate in an examination being coordinated by New York. Insurers are directed to respond to the request for data call information by the NYDFS by September 30, 2017. This is expected to become an annual event, though the entity coordinating it may vary. Bulletin 2017-06
RISK RETENTION GROUPS
Vermont promulgated revisions to its regulations governing risk retention group holding company systems. Regulation C-12-2 s 4+
SERFF FILINGS
Arizona's Department of Insurance released an updated model Certificate of Translation and a new checklist for filing translated forms or advertisements. The checklist was developed to assist filers in ensuring that the SERFF translation filing and any filer-created Certificate of Translation includes all required elements. SERFF Message 05-26-17
SURPLUS LINES
Michigan published a bulletin addressing the annual CPI adjustment of the surplus lines licensee fee for costs. Bulletin 2017-08-INS
Wisconsin amended its Code relating to surplus lines insurance policies issued by domestic insurers. SB 77; 611.02; 611.20; 618.40; 618.41; 646.01
TITLE INSURANCE / AGENTS
Florida enacted legislation to, among other things, rename the previous "ownership and encumbrance report" to "property information report" and allow for such a report to be issued by licensed title insurers, title agents or title agencies. Such a report does not constitute title insurance and must include the specified disclosure of that fact. House Bill 359
TRADE PRACTICES
Maine amended its laws governing the provision of rebates, including provision of services for free or for less than fair market value. SP 382; 24-A MRSA s 2163-A
TRANSPORTATION NETWORK
Connecticut enacted legislation to regulate transportation network companies separately from taxicabs and specifies the different coverage requirements. House Bill 7126
TRAVEL INSURANCE
Louisiana enacted property and casualty insurance laws concerning travel insurance to be issued or delivered in the state. House Bill 542; R.S. 22:1351+
WORKERS' COMPENSATION
Alabama amended its Workers' Compensation law relating to exemptions for individual limited liability company members. House Bill 242
Colorado enacted legislation effective July 1, 2018 that clarifies when a worker may be compensated under workers' compensation for a claim of mental impairment for a psychologically traumatic event. House Bill 1229
Florida promulgated a rule to adopt by reference the Florida Workers' Compensation Health Care Provider Reimbursement Manual, 2016 Edition (effective July 1, 2017); the CPT 2016 Current Procedural Terminology Professional; the CDT-2016, Dental Procedure Codes; and, in part, the "2016 HCPCS Level II Professional Edition." The rule specifies conditions under which the various codes are used. FAC 69L-7.020
Ohio amended its rule concerning wage loss compensation for Workers' Compensation by revising the definition of non-working wage loss to require a "good faith" job search. 4125-1-01
Oregon enacted legislation amending Workers' Compensation benefits for beneficiaries. HB 2338
Oregon issued a notice stating that starting August 1, 2017, all insurer-prepared Forms 801 and 1502 received will be reviewed for required information. Any insurer-prepared form that is missing required information or is illegible will be rejected by the division and returned. Notice of June 27, 2017
CERTIFICATE OF AUTHORITY SERVICES
Are big plans on the horizon?
If your company is in the process of a corporate change (e.g., control, merger, name) or considering expansion into additional jurisdictions or product lines, let First Consulting assist with the Uniform Certificate of Authority Application process.
Our experienced staff can assist you with this process. Don’t waste time training your staff on this process when it may not be needed again for years, if at all.
Click here for information on how First Consulting can assist you with UCAA filings.
Jason Robbins
816.886.3275
Jason.Robbins@FirstConsulting.com
LET US HELP YOU VERIFY YOUR COMPLIANCE RESULTS
Are you fully aware of your risks?
More and more Boards of Directors are seeking an external review/audit/exam of their business operations to assess their policy files, claims, policies & procedures as meeting their own internal guidelines and insurance regulatory requirements. Corporate Governance, ERM/risk management and regulators require knowledge of your own risks.
Our experienced staff can help you with your own assessment. We can mentor your review team and if desired we can include industry best practices.
Please click here to learn more or give me a call.
As a Certified Risk Manager and an Accredited Insurance Examiner I’d like to help you verify your compliance results.
Joe Bieniek, CPCU, AIE, CRM, CCP, CIC, ARC, AMCM, AIS, AU, AINS
816.512.2832
Joe.Bieniek@FirstConsulting.com