With summer fast approaching, thoughts may turn to vacations, carefree strolls along the beach, cookouts, and generally taking life a bit easier. And for some, this may just be the ticket.

Even for regulatory compliance professionals, squeezing in some quality downtime may occur, as many state legislatures providing new and revised compliance requirements will have already concluded their business for the year and moved on to other issues.

However, there's never a "real" vacation when it comes to compliance. Many states have either very recent effective dates or impending ones looming large on the horizon that warrant close attention.

A number of states have concluded their general sessions, including Arizona, Arkansas, Georgia, Idaho, Indiana, Kentucky, Mississippi, Montana, Nebraska, New Mexico, North Dakota, South Dakota, Utah, Virginia, West Virginia, and Wyoming. So while basking in the possibilities of a lighter legislative load is tempting, it's important to be mindful of some key effective dates that have resulted from these sessions.

Arizona

Arizona's recently enacted SB 1567 revises the cancellation and nonrenewal notice requirements in §20-1674 and 20-1676 for commercial insurance policies, respectively, by reducing the advance days' notice from 60 to 45 days for sending written notice to the insured. It further amends 20-1676 by addressing policy extensions in providing that if the written notice of nonrenewal is mailed less than 45 days before expiration of the policy, the coverage must remain in effect until 45 days after the written notice is mailed, rather than 60 days.

SB 1567 also amends §20-1677 by reducing the advance days' notice requirement for an insurer's mailing or delivery of a written notice of premium increase, change in deductible, reduction in limits, or substantial reduction in coverage from 60 days to at least 30 days before the expiration date of the policy. These new timeframes become effective on July 20, 2011.

Georgia

Georgia took steps this year in further regulation of certificates of insurance with its HB 66. Creating a new section within the Georgia Insurance Code, §33-24-19, no person is permitted to prepare, issue, or request the issuance of a certificate of insurance unless the form has been filed with and approved by the Commissioner of Insurance. Additional provisions of the bill include that:

No person may alter or modify an approved certificate of insurance form;
Each certificate of insurance must contain the following or similar statement: "This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend, or alter the coverage, terms, exclusions, and conditions afforded by the policies referenced herein.";
Standard certificate of insurance forms promulgated by the Association for Cooperative Operations Research and Development (ACORD) or the Insurance Services Office (ISO) are deemed approved by the Commissioner of Insurance and are not required to be filed if the forms otherwise comply with the requirements of this Code section;
No certificate of insurance shall contain references to contracts, including construction or service contracts, other than the referenced insurance contract;
A certificate holder shall have a legal right to notice of cancellation, nonrenewal, any material change, or any similar notice concerning a policy of insurance only if the person is named within the policy or any endorsement and the policy or endorsement requires notice to be provided; and
The terms and conditions of the notice, including the required timing of the notice, are governed by the policy of insurance and cannot be altered by a certificate of insurance

North Dakota

Like Georgia, North Dakota also legislatively addressed certificates of insurance through its SB 2062, effective Aug. 1, 2011. Similar to the Georgia provisions, the certificate of insurance form must be filed with the commissioner by or on behalf of the insurer and be approved by the commissioner. There is acknowledgment of standard certificate of insurance forms, which may include a form promulgated and filed by a national insurance advisory organization.

On a related note, North Dakota also enacted insurance rebate legislation this year.

Effective Aug. 1, 2011, HB 1175 amends §26.1-04-03 with a provision that allows an insurance producer to give a gift, prize, promotional article, logo merchandise, meal, or entertainment activity directly or indirectly to a person in connection with marketing, promoting, or advertising the business. However, the cost cannot exceed an aggregate retail value of $50 per person per year.

Idaho

In Idaho, HB 283 amends §41-1314 and provides that, effective July 1, 2011, insurers or producers are allowed to offer prizes, goods, wares, merchandise, articles, or property to a current or prospective policyholder as long as the aggregate value is $200 or less in a calendar year. This value substantially exceeds the current maximum aggregate value of $50.

Montana

Montana's HB 265 added a new restriction for automobile insurers effective Apr. 28, 2011. An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in Montana covering a motor vehicle may not "unilaterally disregard a repair operation or cost identified by an estimating system that the insurer and an automobile body repair business or location have agreed to utilize in determining the cost of repair." And its HB 29, effective May 5, 2011, adds "consideration of military overseas" to that state's existing list of extraordinary events to be considered by an insurer when using credit reports for underwriting or rating.

Virginia

Virginia's HB 1586 and SB 1015, amending §38.2-1903.1 allows professional liability insurance policies to be eligible, effective July 1, 2011, for the exemptions that currently exist for most types of policies written for large commercial risks. Currently, professional liability insurance and workers' compensation insurance are the only commercial lines of business excluded from the forms and rates exemption provisions. The annual reporting requirement to the Bureau of Insurance on the number of exempted policyholders and the criteria establishing the large commercial risk exemption is also eliminated.

This is just a sampling of the evolving requirements facing insurance compliance professionals, proving that the regulatory environment never really takes a summer vacation.

Special Reports /

No Summer Vacation When It Comes To Compliance

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