Docstoc

journal

Document Sample
journal Powered By Docstoc
					      journal                                                                        Vol. 26 | No. 1 | March 18, 2011




                                                 Southwest Region News
                                                                 Editor: Kathryn H. Rowan, Esq., Christian & Small, LLP
                                                                                205-250-6606, khrowan@csattorneys.com




Southwest Chapter: Arizona, California, Colorado, Nevada, New Mexico, Utah


    AZ Revises Private Passenger Automobile Property Damage Threshold
    Arizona Department of Insurance Regulatory Bulletin 2011-02 issued on January 31, 2011 notified P&C insurers
    that the department has increased the property damage threshold level to $2,400. Therefore, insurers may not
    use Subsection E as a basis to nonrenew personal automobile policies unless they meet all of the A.R.S.§20-
    1631(E) requirements and the property damage exceeded $2,400 in 2011. This adjusted threshold is in effective
    immediately and remains in effect until the department publishes an adjusted threshold in 2012.
    A.R.S.§20-1631(D) sets forth the limitations on an insurer’s ability to cancel or nonrenew a personal automobile
    policy after it has been in effect for 60 days and A.R.S.§20-1631(E) lists additional conditions and limitations for
    cancellations and nonrenewals, including the provision that: “An insurer shall not fail to renew more than one-
    half of one percent of its policies annually pursuant to this subsection.”
    The bulletin may be found online at
    http://www.id.state.az.us/bulletin/2011-02.pdf
    Kathryn H. Rowan, Esq.


    AZ Clarifies Use of Certificates of Insurance
    The Arizona Department of Insurance has become aware that some P&C insurers and producers receive
    requests to issue preprinted certificate of insurance forms that may include language that amends, extends, or
    alters the coverage of the underlying policy or suggests the existence of certain contractual rights, such as hold-
    harmless agreements. Regulatory Bulletin 2011-01 reminds insurers & producers writing business in Arizona
    that the practice of misrepresenting insurance coverage when insurers or insurance producers issue certificates
    of insurance is prohibited.
    Any certificate of insurance issued by an insurer or producer that obscures or misrepresents the insurance
    coverage or terms of a policy violates Arizona law. When the certificate of insurance or other evidence of
    coverage exceeds a mere synopsis of the policy, the insurer or producer risks modifying the policy’s terms or
    conditions. A.R.S. §20-443(A)(1) prohibits a person from misrepresenting the terms of any policy issued, or to
    be issued or misrepresenting benefits.
    The bulletin may be found online at
    http://www.id.state.az.us/bulletin/2011-01.pdf
    Kathryn H. Rowan, Esq.




                                                            36
  journal                                                                     Vol. 26 | No. 1 | March 18, 2011



AZ Cites Rules for Risk Retention Group Captives
Arizona Department of Insurance Regulatory Bulletin 2010-03, issued on December 2, 2010, notified risk
retention group captives of the NAIC’s new accreditation requirements. RRG captives are subject to the
insurance company holding systems statutes and the producer-controlled insurance statutes.
The department asked that as of January 1, 2011, all currently licensed RRG captives voluntarily comply with all
the new NAIC accreditation requirements until such time as the department pursues legislation to implement
the changes to maintain NAIC accreditation.
The bulletin further advises that all of the NAIC’s new accreditation requirements are already applicable to
Arizona RRG captives by statutes, rule, procedure or policy except for the insurance holding company Systems
statutes (A.R.S. §§20-481 – 20-481.30) and the producer-controlled property and casualty insurance statutes
(A.R. S. §§20-487 – 20-487.04).
The bulletin may be found online at
http://www.id.state.az.us/bulletin/2010-03.pdf.
Kathryn H. Rowan, Esq.


CA Adopts Rate Review Law for Health Insurers
California SB 1163, which went into effect on January 1, 2011, requires health insurers to provide detailed
information regarding proposed premium increases along with a certification from an outside actuary to the
California Department of Insurance for review.
In a press release dated February 3, 2011, Commissioner Dave Jones advised that the legislation is intended
to provider greater transparency. SB 1163 does not give the insurance commissioner the authority to reject
excessive health insurance rate increases.
The press release may be found online at
http://www.insurance.ca.gov/0400-news/0100-press-releases/2011/release023-11.cfm
Kathryn H. Rowan, Esq.


CA Commissioner Names Executive Team
On January 3, 2011, California Insurance Commissioner Dave Jones announced the following appointments:
Nettie Hodge – Chief Deputy Commissioner – overseeing all operations and policy matters at the department
Janice Rocco – Deputy Commissioner, Health Policy
Geoff Margolis, Special Counsel and Deputy Commissioner
Michael Martinez, Deputy Commissioner and Legislative Director
Chris Shutlz, Deputy Commissioner, Community Programs – manage insurance programs that benefit under-
served communities.
Patricia Tenoso Sturdevant, Deputy Commissioner, Policy – focus on policy and special projects for the
Commissioner.
The following members of the CDI Executive Staff have also been retained:
Adam Cole, Deputy Commissioner and General Counsel
Tony Cignarale, Deputy Commissioner, Consumer Services and Market Conduct
Byron Tucker , Deputy Commissioner, Communications & Press Relations
Sherwood “Woody” Girion, Deputy Commissioner, Financial Surveillance
Rick Plein, Deputy Commissioner, Enforcement
Joel Laucher, Deputy Commissioner, Rate Regulation


                                                       37
  journal                                                                       Vol. 26 | No. 1 | March 18, 2011



Robin E. Baker, Deputy Commissioner, Administratino and Licensing Services
Patricia Staggs, Deputy Chief Counsel to Insurance Commissioner
Ioannis Kazanis, Press Secretary, Communications and Press Relations
The announcement may be found online at
http://www.insurance.ca.gov/0400-news/0100-press-releases/2011/release005-11.cfm
Kathryn H. Rowan, Esq.


CA Sets Loss Ratio Standard for Health Insurers
On January 24, 2011, the California Department of Insurance submitted emergency rulemaking action to
amend Sec. 2222.12 of title 10 of the California Code of Regulations as a result of the health market reforms.
As a result of this amendment, insurers in California will have to demonstrate both compliance with the
existing 70 percent lifetime anticipated loss ratio standard set forth in section 2222.12 and compliance with the
80 percent federal standard on a market segment basis.
The Emergency Regulatory Action may be found online at
http://www.insurance.ca.gov/0400-news/0100-press-releases/2011/upload/nr015OALApproval-
FedAffordableCareAct.pdf.
Kathryn H. Rowan, Esq.


CA Issues Standards for Health History Questionnaires
In August 2010, a new regulation aimed at curbing illegal rescissions by health insurers was adopted by the
California Department of Insurance. The purpose of the regulation is:
    (a) to clarify the following statutes to the medical underwriting process and the permissibility of rescission
        by insurers: Insurance Code sections 10113, 10119.3, 10380, 10381.5 and 10384 and related insurance
        policy provisions;
    (b) to set forth standards for determining whether questions used to ascertain the health condition or
        history of an applicant for health insurance coverage are clear and unambiguous pursuant to Insurance
        Code section 10291.5(c)(1);
    (c) to identify bases on which the commissioner may find that provisions in a health insurance policy
        containing a health history questionnaire that the insurer makes part of the contract between the
        insurer and the insured are unintelligible, uncertain, ambiguous, abstruse, or likely to mislead an
        applicant pursuant to Insurance Code section 10291.5(b)(1);
    (d) to set forth standards for determining whether questions on a health history questionnaire,
        supplemental questionnaire, or script used during pre-issuance underwriting are reasonable and
        necessary for medical underwriting purposes as required by Insurance Code section 10291.5(c)(2);
    (e) to set forth requirements for the pre-issuance medical underwriting process pursuant to Insurance Code
        section 10384;
    (f) to set forth attestation requirements for agents assisting insureds in the submission of health insurance
        applications; and
    (g) to set forth requirements for the conduct of post-issuance rescission investigations where a claim has
        been submitted or the insurer has received notice of a claim.
The regulation may be found online at
http://www.insurance.ca.gov/0400-news/0100-press-releases/2010/upload/nr112rescissionregs.pdf.
Kathryn H. Rowan, Esq.




                                                        38
  journal                                                                      Vol. 26 | No. 1 | March 18, 2011



CO Proposes Suitability in Annuity Transactions
The Colorado Division of Insurance will adopt Amended Regulation 4-1-11, Concerning Suitability in Annuity
Transactions on April 1, 2011. The purpose of this regulation is to require insurers to establish a system to
supervise recommendations and to set forth standards and procedures for recommendations to consumers
that result in a transaction involving annuity products so that the insurance needs and financial objectives of
consumers at the time of the transaction are appropriately addressed.
The proposed regulation may be found online at
http://www.dora.state.co.us/insurance/regs/F4-1-11_110210.pdf.
Kathryn H. Rowan, Esq.


CO Amends Regulation Concerning Conversion Coverage
The Colorado Division of Insurance has adopted a regulation applicable to small group and large group health
benefit plans subject to group laws. The purpose of this regulation is to establish rules for implementing the
statutory requirement that group carriers offer a choice of a basic and standard health benefit plan to persons
entitled to conversion coverage.
The regulation may be found online at
http://www.dora.state.co.us/insurance/regs/F4-6-9_120110.pdf.
Kathryn H. Rowan, Esq.


NV Requires Health Claim Information for Policyholders
Effective February 1, 2011, Nevada health carriers must provide information regarding claims paid on behalf
of the policyholder within 30 working days of a request for such information by the policyholder. This is
a requirement under Nevada Revised Statute 687B.355, and the Nevada Division Insurance has received
complaints that some health carriers may not be complying.
Bulletin 11-001, released January 7, 2011, advised that when a policyholder requests information regarding
claims paid on the policyholder’s behalf, the health carrier must provide the information within 30 days.
For groups 2-100 and 100 and above, the bulletin outlines the minimum types of information that must be
disclosed.
The bulletin may be found online at
http://www.doi.state.nv.us/sinfo/bulletin/11-001.pdf.
Kathryn H. Rowan, Esq.


NV Makes SERFF & EFT Mandatory for P&C Companies
Nevada Insurance Regulation R097-10 mandates that effective December 31, 2010, all rate, rule and form
filings for P&C lines of insurance must be submitted to the Division of Insurance using SERFF, and the Electronic
Funds Transfer (EFT) function within SERFF must be used when submitting the filing fee.
Bulletin 10-010, released December 21, 2010 addresses the SERFF and EFT requirements and urges other
entities not subject to the mandate to use the SERFF method of filing and EFT method of payment to expedite
and streamline the filing process.
The bulletin may be found online at
http://www.doi.state.nv.us/sinfo/bulletin/10-010.pdf.
Kathryn H. Rowan, Esq.




                                                        39
  journal                                                                     Vol. 26 | No. 1 | March 18, 2011



NM Defines Certificate of Insurance Requirements
Bulletin No. 2011-001, issued by the New Mexico Division of Insurance on January 14, 2011, reminds P&C
insurers and agents that they are in violation of New Mexico Code 59A-16-4 when they issue a certificate of
insurance that obscures or misrepresents the insurance coverage or terms. Offering a certificate of insurance
or other evidence of coverage that extends beyond offering a mere synopsis of the policy risks modifying the
policy’s terms or coverage. The New Mexico Division of Insurance has directed that all insurers inform their
personnel and agents of the contents of this directive.
The bulletin may be found online at
http://www.nmprc.state.nm.us/insurance/pdf/Bulletin2011-001.pdf
Kathryn H. Rowan, Esq.


NM Makes Catastrophe Declaration
On February 8, 2011, the New Mexico Division of Insurance issued Insurance Bulletin 2011-02 regarding
the recent severe winter weather in the State of New Mexico. State law forbids an insurance company from
cancelling or failing to renew any policy because of claims filed during a natural disaster.
The bulletin may be found online at
http://www.nmprc.state.nm.us/insurance/pdf/Bulletin2011-002.pdf
Kathryn H. Rowan, Esq.


NM Prohibits Inducements for Insurance Quotes
New Mexico Insurance Bulletin 2010-04 reminds all P&C insurers and agents that Section 59A-16-17(A) NMSA
1978 prohibits inducements for insurance quotes. The New Mexico Insurance Division said it has become aware
that various property/casualty insurance companies are advertising the “gifting of free goods and services”
to consumers who obtain an insurance quote. The appearance of such advertisements or such inducements
violate the Insurance Code.
The bulletin further addresses the issue of property/casualty insurance agents charging applicants and
policyholders for the cost of obtaining photographs, Motor Vehicle Division records, and other expenses
incurred in the application or renewal process. This practice is in violation of 59A-16-24(B) NMSA 1978.
The bulletin may be found online at
http://www.nmprc.state.nm.us/insurance/pdf/Bulletin2010-004.pdf
Kathryn H. Rowan, Esq.


UT Issues Rule on Dependant Coverage to Age 26
Utah rule R590-259-4 now requires that health insurers that provide dependant coverage to children must
make that coverage available until the child reaches age 26. Health providers may not restrict or deny coverage
to a child under 26 based on financial dependency on the participant, primary subscriber, residence with the
participant or primary subscriber, student status or employment.
The rule may be found online at
http://www.insurance.utah.gov/docs/rules/259Emergency9-30-10.pdf
Kathryn H. Rowan, Esq.




                                                      40
  journal                                                                       Vol. 26 | No. 1 | March 18, 2011



UT Interprets Rebates & Inducements for Insurers
Utah Insurance Bulletin 2010-7 provides interpretative guidance for insurers, agencies and individual licensees
with regard to the sale, continuation, or termination of an insurance contract. Under Utah Code Ann. Sec.
31A-23a-402(2)(a) & (b), insurer, agency, or individual licensees offering or providing a benefit that is not
specified in the insurance contract to an insured or potential insured is a violation of state law. This would
include a benefit provided at no cost or a cost below fair market value.
Bulletin 2010-7 was issued November 10, 2010, after the department became aware that some insurers,
agencies or individual licensees were offering or providing free or reduced cost benefits or services not specified
in the insurance contract. Effective January 1, 2011, sections 31A-23a-402(a) and (b) will be included as an
element in the department’s market conduct examinations.
The bulletin may be found online at
http://www.insurance.utah.gov/docs/bulletins/2010-7Rebates.pdf
Kathryn H. Rowan, Esq.




                                                        41

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:22
posted:8/1/2011
language:English
pages:6