Not to be overlooked during these active legislative sessions, state regulatory activity is definitely continuing at a steady pace. When it comes to adopted regulations, insurers should consider immediate checks to validate their organization is currently in compliance. However, there is also other activity that might merit some analysis for possible adoption.
Here’s a quick look at what’s been happening as of late.
While actually adopted in late 2010, new and revised regulations that are effective June 27, 2011, will affect the sale of homeowners’ insurance in California. The result? Resident fire and casualty broker-agents and personal lines broker-agents must satisfactorily complete one three-hour homeowners’ insurance valuation training course. The new regulations also address documentation of replacement cost estimates to applicants and insureds, including who created the estimate and the sources or methods used to create the replacement cost estimate (the latter two issues provided for in Title 10 Sections 2695.182 and 2695.183).
New York has adopted several emergency measures to update Regulations 68-A and 68-B, bringing both of these rules into compliance with Chapter 303 (2010), which became effective on Jan. 26, 2011. That legislation revised Insurance Law § 5103, effectively prohibiting insurers from excluding from coverage any person who is injured as a result of operating a motor vehicle while in an intoxicated condition or while the person’s ability to operate the vehicle is impaired by the use of a drug and who receives necessary emergency health services rendered in a general hospital. These emergency health services include ambulance services and related medical screening. However, an insurer is permitted to have recourse against the person covered under the policy for specific benefits if the person is determined to have violated New York’s Vehicle and Traffic Law § 1192.
NEXT: Oregon and Washington
Effective March 1, 2011, the Oregon Insurance Division (ODOI) adopted OAR 836-080-0800 through 836-080-0810, titled “Provision of Commercial Loss Runs.” It is generally applicable to commercial property; commercial liability; umbrella or excess policies; and commercial automobile insurance—but doesn’t include title and surety insurance. The ODOI has made it clear that it is focused on setting clear timeframes for the production and delivery of loss runs. It now requires property and casualty insurers, or their appointed producers of record, to make loss runs available to current and prior commercial policyholders within 15 calendar days of a request by the policyholder. The request must be made to the insurer or the appointed producer of record, and the period for required loss runs data is set at five years. However, if the commercial policyholder has been insured with that insurer for less than five years, the insurer must provide loss runs for the entire period the policyholder has been insured with that insurer. A privacy issue is addressed in reference to workers’ compensation insurance loss runs where the regulation specifically provides that this data not include confidential worker medical and vocational claim records.
Washington focused efforts on insurance regulation this year with revisions to its previously adopted WAC 284-30-670 rule “Insurers must transact business in their legal name,” effective Feb. 24, 2011. “Legal name” of the insurer is defined in this regulation as the name displayed on the Washington state certificate of authority issued by the commissioner. The Office of the Insurance Commissioner (OIC) enforces the requirement that an insurer conducts its business in its own legal name during the market conduct process. As recently as August 2010, a report issued by the OIC determined that an insurer had used correspondence, claims checks, declaration pages, and notices that failed to identify the actual company or that identified the wrong company.
Targeted to provide additional clarity in the subrogation process, on Apr. 14, 2011, the OIC proposed a revision to WAC 284-30-393 that addresses the requirement that insurers include the insured’s deductible, if any, in its subrogation demands. The proposed change would require that any recoveries must be allocated first to the insured for any deductible(s) incurred in the loss, less applicable comparable fault.
While these regulatory snapshots are limited to just four states’ property and casualty activity, it’s important to remember that other opportunities may emerge with final bill enactments across all states. And while many new and revised statutes do not necessarily require rule promulgation for full implementation, insurance departments frequently look to the issuance of bulletins or other clarifying memoranda to delineate the critical compliance requirements.