Property and Casualty News
February 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!
ADJUSTERS
California issued a notice reminding licensed public insurance adjusters of the legal requirements for soliciting business following the Southern California wildfires. The notice emphasizes that adjusters must wait seven days after the disaster or evacuation orders are lifted before offering services and must refrain from contacting policyholders between 6 p.m. and 8 a.m. Adjusters who violate these rules may face penalties or loss of licensure. Notice Dated 1/10/25
CANCELLATION / NON-RENEWAL / PREMIUM OR COVERAGE
California issued a bulletin enforcing a mandatory moratorium on the cancellation and non-renewal of residential property insurance policies in areas affected by a state of emergency, particularly due to the Palisades Fire. This moratorium prohibits insurers from canceling or non-renewing policies based on wildfire risk for one year, starting January 7, 2025, in the specified ZIP Codes. Insurers must also offer to rescind any such cancellations or non-renewals issued since the emergency declaration. Bulletin 2025-1
CLAIMS / CLAIMS ISSUES
California issued a reminder to insurers and adjusters handling claims from the Southern California wildfires, emphasizing the need for prompt claim payments to support wildfire survivors. The notice mandates advance payments for living expenses and contents, clarifies that policyholders are entitled to full replacement benefits without land value deductions when relocating, and ensures protections like extended ALE coverage and policy renewals after a declared disaster. Bulletin 2025-2
California issued the 2025 Annual Notice outlining key laws affecting residential property insurance policies in declared states of emergency, especially those related to wildfires. The notice emphasizes insurers' responsibilities to provide timely claim notices, details requirements for loss calculations, coverage extensions, and policyholder rights. It also addresses rules on wildfire risk scores, policy cancellations, and nonrenewals. Notice Dated 1/9/25
California issued this bulletin reminding property and casualty insurers of their obligation to adhere to the "efficient proximate cause" doctrine in wildfire areas. The notice clarifies that if a wildfire is found to be the efficient proximate cause of subsequent events like mudslides, insurers must cover the resulting damage, even if such events are typically excluded under the policy. It advises insurers to thoroughly investigate the cause of loss before denying claims related to these circumstances. Bulletin 2025-3
CORPORATE GOVERNANCE
New Jersey adopted new rules requiring insurers and related entities to submit a Corporate Governance Annual Disclosure (CGAD). The rules mandate the filing of a CGAD by June 1 annually, detailing governance structures, policies, and practices, with penalties for late submissions. NJAC 11:1-48.1
DISASTER / CATASTROPHIC EVENT
California's Insurance Department declared an emergency situation due to the Palisades fire, which caused widespread damage in Los Angeles and Ventura Counties. To address the surge in wildfire-related claims, the DOI allows insurers to employ nonlicensed adjusters under supervision, with registration required within 15 days of starting work. The DOI also mandates training on relevant insurance laws for all adjusters and holds supervisors accountable for nonlicensed adjuster actions. Notice Dated 1/13/25
FINANCIAL REGULATION
Arkansas issued a bulletin announcing its intent to approve the NAIC’s Accounting Practices and Procedures Manual (APPM). The DOI will implement amendments to the APPM in compliance with Ark. Code Ann. § 23-63-613, ensuring that domestic insurers and reporting entities adhere to the latest edition. The adoption of these changes will begin with the 2025 Annual Statement, due by March 1, 2026, and will supersede previous bulletins related to the APPM's use. Bulletin 1-2025
MISCELLANEOUS
Illinois' Department of Insurance announced the relocation of its Chicago office to 115 South LaSalle Street, 13th Floor, Chicago, Illinois 60603. The Department instructed all regulated entities to update public-facing communications, including forms and notices, to reflect the new address and ensure third parties also make necessary updates. The Department will accept filings with the new address via the System for Electronic Rate and Form Filing (SERFF). Bulletin 2025-1
NOTICE TO INSUREDS
Arkansas revised notice period requirements regarding premium increases. Insurers must notify both the insured and the insured's agent of premium increases of 25% or more. The notice period to an agent is extended from 30 days to at least 60 days before renewal. An insured must be notified by the insurer at least 30 days before the renewal (formerly 10 days) of the premium increase. SB 70
PREMIUM TAX
California issued guidance outlining the transition to mandatory electronic filing for 2024 Insurance Premium Tax filings. Surplus Line Broker filings are due by March 3, 2025, Insurer filings by April 1, 2025, and Ocean Marine filings by June 16, 2025. Beginning January 31, 2025, all filings must be submitted through the Premium Tax Processing System (PTPS). The bulletin also details filing requirements, prepayment conditions for high-liability entities, and the use of Electronic Funds Transfer (EFT). Notice Dated 1/29/25
New Hampshire issued 2024 premium tax instructions for property and casualty insurance companies and risk retention groups, highlighting the March 1, 2025, filing deadline for annual statements and March 15, 2025, for premium tax returns. The notice encourages electronic filing and outlines payment procedures, specifying that payments of $20,000 or more must be made via Electronic Funds Transfer (EFT), with penalties for late payments. Notice Dated 2/5/25
RATEMAKING
California adopts and amends regulations allowing insurers to use catastrophe models in rate calculations and to change the rate-making formula. The new rules provide guidelines for employing catastrophe models to project losses, determine catastrophe adjustments, and address wildfire exposure in designated distressed areas. They also introduce a Pre-Application Required Information Determination (PRID) process for insurers. Reg. Title 10 s 2644.4
California amended Title 10 of the Code of Regulations, making significant changes to insurance ratemaking and reinsurance. "Flood" was added as a new category of insurance. Adjustments were made to rate of return calculations to account for reinsurance costs, and the introduction of specific provisions for reinsurance in property catastrophe perils. New sections update variance request guidelines, among others. Reg. Title 10 s 2642.7
SURPLUS LINES
Louisiana issued an Advisory Letter to property and casualty insurers, including surplus lines insurers and producers, clarifying that policy fees are considered premium taxes under La. R.S. 22:855 et seq. The advisory reminds insurers that all fees related to insurance, unless specifically exempted by statute, must be included in the quoted premium and disclosed on the policy. Insurers and producers must itemize and clearly describe any fees in the quote and policy. Advisory Letter 2025-01
New Jersey published updated lists of eligible foreign and domestic surplus line insurers, including a revised list of eligible alien surplus line insurers from the NAIC Quarterly Listing of Alien Insurers. The updates highlight additions, deletions, name changes, and redomiciled insurers with corresponding changes to alien identification numbers. Notice Dated 1/1/25
Pennsylvania published the latest Eligible Surplus Lines Insurer List, replacing the previous list from January 20, 2024. Notice Dated 2/8/25
TRADE PRACTICES
Arkansas amended its Insurance Code to clarify the fees property, casualty, and surplus lines brokers can charge. The amendment permits brokers to charge fees in addition to premiums, provided these fees are separately disclosed and capped at 20% of the total gross premium. However, this cap does not apply when a licensed agent refers a risk to a surplus lines broker. SB 76
WORKERS' COMPENSATION
California's Division of Workers' Compensation (DWC) reminded claims administrators of the mandatory submission of the Annual Report of Inventory (ARI) for claims reported during 2024, due by April 1, 2025. The ARI must detail the number of claims at each adjusting location, even if no claims were reported. Late submissions may result in penalties up to $500 per location. Notice Dated 1/2/25
California's Workers' Compensation Commission announced that the statewide average weekly wage (SAWW) for the period from January 15 to July 14, 2025, is set at $1,452.68. This rate is used to determine the maximum and minimum weekly benefit levels for workers' compensation claims. Notice Dated 1/15/25
Nebraska's Workers' Compensation Court adopted a new fee schedule for medical services and updated the Medicare Diagnostic Related Groups (DRGs) for the inpatient hospital fee schedule. The Court also revised the informal dispute resolution process, offering various methods for resolving workers' compensation disputes. Additionally, the amendments updated life expectancy tables for 2021 and revised regulations under the Nebraska Administrative Rules and Regulations. Rule 26
Oregon Workers' Compensation Division (WCD) updated reimbursement rates for injured workers' travel, food, and lodging costs, setting the private vehicle mileage rate at 70 cents per mile effective January 1, 2025. Lodging and meal rates remain unchanged for the period from October 1, 2024, to September 30, 2025. Insurers must reimburse workers for these costs promptly and provide a reimbursement request form with independent medical examination appointment notices. Bulletin 112
Oregon Workers' Compensation Division issued guidance on determining "gainful occupation" for permanent total disability (PTD) evaluations, outlining examples for eligibility under labor and employment law 656.206. The bulletin updates the federal poverty guidelines for a family of three, noting that insurers and self-insured employers must use the most recent guidelines published on the HHS website. This bulletin replaces Bulletin No. 342. Bulletin 342 (Revised)
Pennsylvania announced that workers’ compensation insurance carriers must submit their Special Schedule “W” data to the Pennsylvania Compensation Rating Bureau (PCRB) by April 15, 2025. Carriers must now report all Special Schedule "W" information, including Coal Mine experience, through the PCRB’s Financial Data Manager (FDM) instead of directly to the DOI. Special Schedule W Letter
Pennsylvania released an update to the Workers’ Compensation Medical Fee Schedule to include a 1.7% increase in the fee schedule, changes to billing practices, and instructions for healthcare providers, including the use of National Provider Identifiers (NPIs) and Medicare guidelines. The update also provides the latest submission procedures and guidelines for out-of-state providers. WC Medical Schedule Update 1/1/25
Pennsylvania updated the Impairment Rating Evaluation (IRE) process under the Workers' Compensation Act. The changes clarify timing for IRE requests, introduce mandatory physician training, and adjust impairment rating criteria, including procedures for shifting disability status after 104 weeks of total disability benefits. Reg. 34 s 123.101+