P&C Legislative Round-Up: January 2020

State updates 

Starting Jan. 1, a law in Idaho goes into effect that will require vehicle owners to provide proof of insurance for two consecutive months. Owners without insurance coverage for two consecutive months will receive a warning and be given 30 days to provide proof of insurance or obtain an exemption before their registration is suspended.

A new law in Alabama will give motorists a break if they are found driving without insurance coverage. For the first violation, a driver who is unable to provide proof of coverage within 30 days faced a suspension of their registration, a $200 reinstatement fee and proof of insurance requirement. Under the previous law, a second violation within four years carried a $400 reinstatement fee, requirements for proof of coverage and a mandatory four-month suspension of registration. The mandatory four-month suspension has been removed under the new law.

A three-year window for child sexual assault lawsuits opens Jan. 1, 2020, in California, allowing adults to bring claims regardless of their current age and opening the door for victims previously barred from doing so under prior statutes of limitations. After the window closes, the new age for the statute of limitations will be 40, up from 26.

On Jan. 1, a two-year window opens in North Carolina to allow child sex abuse victims to file lawsuits regardless of the statute of limitations.

Washington's Commissioner of Public Lands Hilary Franz proposed a plan to raise $63 million each year to prevent and fight wildfires. The bill will be introduced to the state's House of Representatives by Rep. Joe Fitzgibbon( D-West Seattle). Franz estimates the bill will cost the average household slightly over $1 a month.

Insurance Commissioner Ricardo Lara issued the first-ever one-year moratorium on insurance companies non-renewing policyholders in wildfire disaster areas of California, which will end Dec. 5, 2020. "This wildfire insurance crisis has been years in the making, but it is an emergency we must deal with now if we are going to keep the California dream of homeownership from becoming the California nightmare, as an increasing number of homeowners struggle to find coverage," said Commissioner Lara in a statement.

A revised plan was issued to the California FAIR Plan Association (FAIR Plan) by Commissioner Lara following the FAIR Plan's petition for a writ of mandate seeking to have a court annul, vacate, or withdraw the original order issued on Nov. 14, 2019. The Commissioner's new order requires the FAIR Plan to offer a comprehensive HO-3 policy, in addition to its current dwelling fire-only coverage, by June 1, 2020. It also asks the FAIR Plan to expand its coverage limits from $1.5 million to $3 million, and offer consumers a monthly payment plan and the ability to pay by credit card or electronic funds transfer without fees.

HB 301 passed in Florida, which states liability insurers can assert a claim of contribution for defense costs when multiple insurers are defending the same insured. This allows insurers to recover defense costs when another insurer has a right to defend and fails to do so. The law effectively overrules Argonaut Insurance v. Maryland Casualty, which held that an insurer could not assert a claim for contribution against another insurer that had a duty to defend their mutual insured and failed to contribute to the defense.

Florida state's Senate Banking and Insurance Committee failed to pass SB 312, which addresses Assignment of Benefits (AOB) abuses involving auto glass.

"Auto glass fraud continues to be a problem in Florida, and we are disappointed the committee didn't take a closer look at the issue in order to protect Floridians," said Alan Haskins, vice president of government affairs for the National Insurance Crime Bureau, in a release. "Insurers, depending on the number of their auto policies, will process thousands of auto glass claims each year. While most claims are legitimate, the large volume of fraudulent claims, coupled with the legal costs related to these claims, drives up the insurance costs for all consumers.

AB 6007 in New Jersey passed the state's Assembly Financial Institutions and Insurance Committee and is now waiting for review from the Assembly Speaker. The bill requires groups to file a confidential corporate governance annual disclosure to New Jersey's Commissioner of Banking and Insurance and ensures insurer and insurance groups in the state maintain accreditation standards set by the National Association of Insurance Commissioners (NAIC).

The Missouri Department of Commerce and Insurance proposed a 1.6% decrease in workers' compensation insurance loss costs for policies effective Jan. 1, 2020.

The Texas Department of Insurance, Division of Workers' Compensation, determined a 5.03% rate for any interest or discount provided by the Texas Labor Code from Jan. 1, 2020, to March 31, 2020.

On Jan. 1, 2020, a range of new laws will go into effect in Illinois, including:

• The Illinois Cannabis Regulation and Tax Act: Legalizes the use of recreational marijuana for users age 21 and older.
• SB 0001: This law raises the state's minimum wage from $8.25 to $9.25 on Jan. 1, followed by a second increase to $10 on July 1, 2020.
• SB 0075: This bill, also known as the Hotel and Casino Employee Safety Act, requires such businesses to adopt anti-sexual harassment policies and make panic buttons available to certain employees.
• SB 1624: The attorney general must be notified, as expediently as possible, when a data breach requires the notification of 500 or more Illinois residents.

The U.S. Virgin Islands Office of Insurance received accreditation under the National Association of Insurance Commissioners' (NAIC) Financial Regulation Standards and Accreditation Program. This is the first accreditation for the territory.

Starting Jan. 1, 2020, Nevada state law AB 132 will prohibit employers from refusing to hire a job applicant based on results from a marijuana screening test. However, the law does not apply to firefighters and public safety positions.

Oregon's Employer Accommodation for Pregnancy Act goes into effect on Jan. 1. The legislation expands the Oregon Fair Employment Practices Act to require employers with six or more employees to provide reasonable accommodations for known limitations related to pregnancy, childbirth, and related conditions.

On Dec. 10, 2019, Florida Insurance Commissioner David Altmaier was voted president-elect of the National Association of Insurance Commissioners (NAIC). His tenure will start on Jan. 1, 2020.

Michigan's House of Representatives voted to advance HB 5174, which would eliminate the cap on surplus lines broker fees for commercial policies and raise the cap on personal lines policies to $100 or 10% of the premium, whichever is greater.

A reminder of a few previously announced laws that go into effect Jan. 1, 2020

• The California Privacy Rights and Enforcement Act of 2020 (CCPA) goes into effect and will require businesses to comply with a range of new requirements that govern their collection, use and sharing of personal information.
• California's Assembly Bill 5 reclassifies gig economy workers, like Uber and Lyft drivers, as employees instead of independent contractors. Employers must apply a new three-prong test outlined by the California Supreme Court to determine if they can continue treating workers as independent contractors.
• New Hampshire's SB 194 that requires insurers licensed in the state to place data security programs and report cybersecurity events.
• Nurse practitioners in New York will be authorized to treat injured workers.
• Changes to the windstorm and hail insurance by the Texas Windstorm Insurance Association states the type of loss settlement — replacement cost value (RCV) versus actual cash value (ACV) —  will be decided at the time the policy is issued as opposed to when a claim is submitted.
• Changes to the white-collar overtime exemption in the federal Fair Labor Standards Act will go into effect, impacting approximately 1.2 million workers eligible for overtime pay.

Related: 

• P&C Legislative Round-Up: December 2019
• P&C Legislative Round-Up: November 2019
• P&C Legislative Round-Up: October 2019