In some respects, it is hard to believe we have already completed one full quarter of 2011. But when you consider the legislative proposals that have been enacted so far, and additional pending proposals, it’s evident that the insurance industry is well on its way to a very active year.
Regarding enacted legislation, three states in particular stand out. The first is Arkansas, where commercial liability insurance has been in focus. The state’s HB 1439 sought to address some concerns over whether damages caused by faulty workmanship are included in the coverage provided to an insured under a commercial liability insurance policy. Effective 90 days after this session’s adjournment, commercial general liability insurance policies in Arkansas must contain a definition of "occurrence" that includes:
- Accidents, including continuous or repeated exposure to substantially the same general harmful conditions; and
- Property damage or bodily injury resulting from faulty workmanship.
Also during first quarter, Utah’s SB 79 enacted the Property and Casualty Certificate of Insurance Act. It includes provisions regarding the filing of certificate of insurance forms with the Department of Insurance. It also acknowledges that a standard certificate of insurance form filed for use by a nationally recognized insurance rating organization that is licensed by the department is, in fact, considered filed. Other compliance requirements set forth include the scope of certificates of insurance, addendums, and notices of cancellation.
Finally, Virginia’s HB 1412, and the identical HB 1416, both establish a new reporting threshold for certain damaged vehicles. When a vehicle has been damaged by water to such an extent that the insurance company insuring it has paid a claim of $3,500 or more because of this water damage, the insurer must report the claim payment to the Virginia Department of Motor Vehicles.
While the enacted legislation is the top concern for insurers, it’s important to remember the pending proposals that could have an impact on the industry this year, too.
For example, the activity in Connecticut is getting attention as it follows the consumer protection focus seen in so many legislative introductions. Connecticut has two pending bills addressing repair and remediation after a covered loss. HB 5110 proposes that insurers be required to send a notice to an insured indicating that he or she may choose the person who will perform the repair or remediation for a loss covered under a personal or commercial risk policy.
Yet another bill, HB 6233, proposes a requirement that policies providing coverage for repair or remediation following a covered loss must bear on the declaration page, in not less than 12-point boldface type in capital letters, the following:
“NOTICE: YOU HAVE THE RIGHT TO CHOOSE THE PERSON OR COMPANY WHO WILL PERFORM THE REPAIR OR REMEDIATION WORK ON YOUR PROPERTY FOLLOWING A COVERED LOSS.”
Many states’ legislatures remain in session with continued approvals expected over the next several months. With all the introduced and enacted activity seen thus far, 2011 will certainly be an interesting year.
