Regulatory activity continues to make headlines, even as themajority of legislative sessions have long since ended. Frombulletins to regulatory adoptions, various states continue topresent insurers with multiple challenges in tracking all theregulatory activity, analyzing documents, and implementing changesfor one or more lines of business.

Some of the more recent developments from state insurancedepartments are identified below, beginning with Colorado'sB-5.35.

Additional or Enhanced Coverages

This bulletin provides information about the state'sHomeowner's Insurance Reform Act of 2013. Compliance areasaddressed in B-5.35 include the issuance or renewal of areplacement-cost homeowners' insurance policy and a homeowners'right to obtain additional or enhanced coverage. It alsoclarifies the division's position concerning the option topurchase 24 months of additional living expense (ALE)coverage. According to the Colorado Division of Insurance, anapplication for a homeowner's insurance replacement-cost policyshall give the consumer the choice to accept or reject each of thefollowing benefits, unless the benefit is a standard policyprovision:

• Extended replacement-cost coverage equal to at least 20 percentof the dwelling limit.
• Law and ordinance coverage at a minimum of 10 percent ofthe dwelling limit.
• ALE coverage for a total of 24 months.

If, at renewal, the policy does not include the maximum benefitprovided by this statute, the insurer shall offer the opportunityto purchase the above listed coverages. The offer shall clearlyexplain the purpose, terms, and cost of each of these additionalcoverages, as well as any policy limitations. The insuranceproducer or representative of the insurer should maintain, in itsrecords, documentation of any coverage rejection.

Turning our attention now toMaine, Bulletin 387 concerns motor vehicleglass and collision damage repair. With its issuance, Maine seeks“to remind motor vehicle insurers of Maine's laws requiringclaimants to be offered the opportunity to choose their motorvehicle glass and collision appraisal and repair providers, and toexplain how those requirements apply to the practice of havingappraisals done at preferred repair facilities.”

The statute also prohibits any insurer from entering intoan agreement to manage, handle, or arrange for appraisalsor repairs if the compensation is based on the differencebetween the list price of the repair services and the amountpaid to the repair shop. The Maine Bureauof Insurance notes it has received complaints of “insurersreferring claimants to specific repair shops or networks ofrepair shops without clearly disclosing that the claimants mayuse any facility for their repairs.” Specifically, Section2164-C prohibits this practice; it does, however,allow insurers to:

• Contract with repair shops for repairs to claimants' motorvehicles on a discounted basis, if the interests of thoseclaimants who elect to have repairs made elsewhere are notadversely affected and if such agreements do not violate otherapplicable laws, such as antitrust laws.
• Limit the allowable charge for motor vehicle repairs tothe amount for which the claimant can reasonably cause therepair to be performed absent a special arrangement between theinsurer and repair shop or network of repair shops.

In Other Developments

New Mexico's Bulletin 2013-006 about“tie-in sales” specifically “advises property and casualty insurersthat requiring an insurance consumer to purchase a privateautomobile insurance policy from the insurer or its affiliates inorder to purchase a homeowners' multi-peril insurance policy fromthat insurer, or vice versa, is considered an unfair method ofcompetition and is prohibited under 59A-16-3 NMSA 1978. However, itis permissible for an insurer issuing a personal lines umbrellapolicy to require a supporting automobile and/or homeowner policyissued by the insurer or its affiliates.”

Oklahoma's Bulletin PC 2013-08 addresses theincrease in days' notice for the nonrenewal of homeowner'sinsurance policy or any other personal residential insurancecoverage from twenty days to 30 days effective July 14, 2013.Additionally, OK Bulletin 2013-09, in addressing the “sale,solicitation, and negotiation of insurance,” provides detailedexamples of licensed producer activities as well as thoseactivities which it has determined are “non-licensed”activities.

Rhode Island's amended Regulation 110 titled“Property Insurance and Weather-Related Claims, effective October3, 2013, includes new provisions covering hurricane deductibles,cancellation and nonrenewals, premium increases or surcharges,comprehensive nonrenewal plans and cessation of new business in thestate, as well as Division authority to establish a mediationprogram and to adopt emergency measures.

Vermont's Bulletin 3summarizes the notice requirements in that state's Security BreachNotice Act, which was effective May 13, 2013.

State regulators are sure to issue additional guidance the formof bulletins between now and the end of the year. More new andamended regulations are also to be expected. As we head into thelast quarter of 2013, all this regulatory activity will set thestage for what we will see in the way of legislative developmentsin early 2014.