While legislative initiatives so far this year are quite varied, there does appear to be one common thread: Consumer protection. It continues to be a major focus in some introduced bills, with additional notices proposed for either clarity in the underwriting or claims process.

Homeowners' insurance policyholders are the focus of Maryland's Senate Bill 136, which seeks to require homeowners' insurers to provide to an applicant or insured, at the time of application or renewal, a written notice that states whether the insurer's standard homeowner's insurance policy provides coverage for loss that:

Is caused by or results from a discharge of water from a plumbing system or plumbing source, including a discharge from a water main break, whether the plumbing system or plumbing source is located on or off the insured premises; and
Is not caused by the negligence of the insured.

Mississippi's House Bill 1199 would require insurers to provide a clear, written disclosure of the actual costs of each item of coverage contained in a renewal policy, with the disclosure expressing the costs as the actual rate or cost per $1,000 of coverage of each item of coverage, and as the actual total cost of each item of coverage. Additionally, and continuing an effort we saw last year in a few states, Mississippi's House Bill 1240 proposes that liability insurers disclose the limits of any policy to a third-party claimant.

Medical malpractice insurance also appears on some state agendas this year. Connecticut's House Bill 5760 proposes an amendment to limit recovery of non-economic damages resulting from personal injury or wrongful death when it is alleged that the injury or death resulted from the professional negligence of a health-care provider or health-care institution. Applicable to the medical diagnosis, care, or treatment of the claimant, the proposed limits include not more than $250,000 for each health-care provider per event; $250,000 for each health-care facility per event; and $750,000 overall for each event.

On a related note, Virginia currently has House Bill 1459, which is attempting to increase the cap on certain medical malpractice actions and to allow for annual increases in the set amount of $50,000 per year starting on July 1, 2013 and continuing each year until July 1, 2031. That state's current monetary recovery is limited to $1.5 million. This bill, if enacted, would increase that amount to $2.05 million for any verdict returned against a health-care provider in an action for malpractice where the act or acts of malpractice occurred on or after July 1, 2012 for any injury to, or death of, a patient.

Speaking of medical malpractice, Vermont is employing a very different approach this session with its introduction of House Bill 92. This bill proposes to establish a no-fault compensation program for medical injury claims brought against primary care physicians in that state. This no-fault system is planned to replace the current litigation-based system, providing claimant compensation without regard to fault. Funding for this no-fault system would be from annual assessments paid by physicians practicing primary care in Vermont. These participating physicians would not have to purchase medical malpractice insurance for providing primary care.

With the wide-ranging legislative activity, 2011 is shaping up to be far from boring for the insurance industry. From homeowners' policies and water damage to no-fault medical malpractice, this year bears careful watching for new developments.

Special Reports /

Legislative Initiatives Varied, But Consumer Protection Is Common Theme

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