Regulatory Roundup: Hurricane Idalia Aftermath, Healthcare Open Enrollment Prep, Alabama Resilience Council

State by state variations of laws, compliance protocols, industry transparency, and general regulatory culture can lend one the impression that keeping up with industry changes is a little bit like herding cats. So, what better way to wrangle some of the more localized insurance news than in a Regulatory Roundup?

On an ongoing basis, in no particular order or rank, we’re wrestling the various regulatory changes, compliance actions, and commissioner decisions into our roundup. As a disclaimer: There’s a lot going on at any given time in these here United States, so this isn’t a comprehensive picture of state-level action by any means. Think of it as, instead, a sampler platter of regulation. 

Also important to note: If we’re recapping interpretations of legal decisions, this is some armchair insurance speculation and not at all legal advice. If you need legal advice, get a lawyer. 

States deal with the fallout of Hurricane Idalia

Hurricane Idalia made landfall Aug. 30 and southern states will undoubtedly grapple with the fallout for months to come.

The Florida Office of Insurance Regulation published a list of protections for policyholders affected by the hurricane, prohibiting P&C insurers from canceling policies for certain counties for the time being, and extending typical claims grace periods.

Florida insurers must also file the 2023 Catastrophe Reporting Form (CRF) for Hurricane Idalia Catastrophe claims data through the Insurance Regulation Filing System (IRFS), with state regulations requiring daily claims filing through Sept. 13.

In Georgia, Commissioner John F. King announced the Office of Commissioner of Insurance and Safety Fire opened a Hurricane Claims Village the first weekend after the hurricane to help people in Valdosta with claims-processing. Commissioner King also announced that the governor’s declaration of an emergency order for the hurricane triggered protections for policyholders similar to those declared by Florida. As part of the news release, King lauded his office’s efforts to secure those protections in previous legislative sessions.

“The Governor’s emergency declaration triggers several important consumer protections that my office helped pass into law,” said Commissioner King. “From allowing Georgians to receive an early refill of important medications to a ban on public adjusters from soliciting new business, these measures are designed to protect Georgians at their most vulnerable during a national disaster.”

States prepping for healthcare enrollment season

The states and the federal government are preparing for healthcare open enrollment season, which opens Nov. 1 and runs to Jan. 15 in most states.

The Colorado Option will return to that state’s healthcare exchange, which the Division of Insurance anticipates will see low healthcare costs for enrollees, thanks in part to the Colorado Reinsurance Program. This program is an addition to the Colorado healthcare exchange that helps subsidize Colorado Option standardized plans that meet the state’s criteria. This year, President Joseph Robinette Biden’s administration announced it would award $245 million in pass-through funding to Colorado’s various health plan options.

“This is unprecedented. Not only is this the largest amount of pass-through funding we have seen, it is an acknowledgment from the federal government of the savings from the Colorado Option, teaming up with the Reinsurance Program for a one-two punch in saving people money on health care,” said Colorado Insurance Commissioner Michael Conway.

Delaware, too, is gearing up for open enrollment, as Commissioner Trinidad Navarro announced the addition of an insurance carrier to the state’s marketplace for the 2024 plan year, and expanded consumer options. For 2024, Delaware will have four carriers offering 57 plans. In 2022, the state had a single carrier offering 12 plans. 

“Improving healthcare accessibility and affordability across our state is one of my top priorities, and I’m proud that our work has led both options and enrollments to an all-time high,” said Commissioner Navarro. “In addition, our Office of Value-Based Health Care Delivery has confirmed carrier’s filings reflect compliance with our affordability standards, including increasing spending on primary care to lower overall cost of care. We look forward to continuing to make progress in this work.”

For Medicare-adjacent insurance carriers, whose enrollment period is Oct. 15 through Dec. 7, Oklahoma’s Commissioner Glen Mulready issued a bulletin reminding them that recent legislative actions effective Sept. 1 have changed enrollment requirements for Medicare Supplement providers. 

Alabama Resilience Council getting started

Alabama is ringing in hurricane season with an innovative milestone: The newly formed Alabama Resilience Council held its inaugural meeting Aug. 30, 2023.

Gov. Kay Ivey created the council in May 2023, aiming to have council members coordinate and prepare for storms before they happen, aiding in resilience and recovery efforts. As a private-public partnership, the council brings leaders from business and government to the same place, and is co-chaired by Alabama Insurance Commissioner Mark Fowler and Emergency Management Agency Director Jeff Smitherman. 

“We can continue to lose lives and property, repeatedly spend taxpayers’ money, and miss out on opportunities to bring jobs to Alabama – or we can do something different. We can continue to be surprised and unprepared for evolving causes of events with negative impacts across our state – be they natural disasters, cyber-attacks, a health scare, or something totally unforeseen today, be it local, regional, or statewide – or we can do something different,” Fowler told those gathered at the meeting, according to a news release.

Statements released by the state government haven’t included what, if any, specific action items arose from the meeting, but no doubt other states will be watching as private businesses and public officials grapple with current P&C market conditions.

Other state regulatory changes

Alabama Department of Insurance officials announced the DOI no longer regulates “preneed activity” – thanks to a new law. Things that qualify as preneed and funeral insurance provisions will now be under the regulation of the Alabama Board of Funeral Services.

Alaska issued its eligible surplus lines insurer list, also known as the “whitelist,” a list of nonadmitted aka foreign surplus lines insurers that are approved to underwrite business in the state for coverage that isn’t available through the domestic market.

Arizona updated its processes so nonresidents applying for an adjuster license won’t have to pay a fingerprint fee, effective Sept. 15, 2023.

Colorado Division of Insurance officials are working through comments from the industry about the state’s proposed requirements for pharmacy benefit managers to register with the DOI. The requirements would include financial statements, a filing fee of $2,500, and certification that the PBM meets compliance requirements for other states they operate in. The state is also looking to address challenges to its homeowner’s insurance market, starting with asking homeowners to weigh in.

Delaware issued a bulletin for surplus lines insurers, clarifying how they should self-report their geographic distribution of premiums, meaning carriers have to report the ZIP codes where they sell the most premium. The state reminded insurers that failure to report this data correctly could result in the state pulling the insurer’s certificate of authority. The state legislature also passed a law increasing capital and surplus requirements for insurance carriers in the state.

Kansas has adopted the NAIC’s Suitability in Annuity Transactions Model Regulation, effective Jan. 1, 2024.

Kentucky Department of Insurance Commissioner Sharon Clark issued an advisory opinion to remind public adjusters that, under normal circumstances, they can’t charge clients a commission based on claims an insurer paid to the client before the client enlisted the public adjuster. This practice is only allowed in certain emergency situations, with limitations outlined in the advisory opinion.

Michigan’s Supreme Court decision on July 31, 2023, in the case of Andary v. USAA Casualty Insurance Co., has ruled that state limitations on no-fault auto policies aren’t retroactive. If you want it broken down a tiny bit more: Michigan amended state law in 2019 to limit what healthcare providers can bill auto insurance companies for treating victims of no-fault car crashes. Someone who purchased a policy before the law was effective on June 11, 2019, sued their auto insurance provider over these changes, and many other claims have been on ice while the courts system sorted it. In the end, the courts ruled that the amendments are constitutional, but they don’t apply to policies insurers issued before the law’s effective date. Insurers who have denied or held off on claims because of the 2019 limitations will need to reprocess and pay claims, according to a state bulletin from the Department of Insurance and Financial Services.

Oklahoma Senate Bill 557 becomes effective Nov. 1, 2023, and is designed to bring mental healthcare to parity with other medical care. The bill requires insurers to have anyone reviewing claims for mental healthcare to have credentials that are relevant to the care being provided. Moving forward, mental healthcare claims that are denied by someone who isn’t a mental healthcare professional could be subject to the Unfair Claims Settlement Practices Act.

Texas passed a glut of insurance-related legislation, which the state DOI rounded up for perusal on this helpful webpage. While some rules apply to the industry broadly – expanded rules for e-communications, fewer limitations on capital stock distribution – the DOI also splits out life and health vs. P&C rules.

Washington is one step closer to eliminating its prelicensing requirements for insurance producers, holding a public hearing on the proposal Oct. 10, 2023. The state has also announced that, due to many reasons (not least of which involve federal legal shenanigans), health insurers involved in a dispute with healthcare providers should use the state’s Balance Billing Protection Act dispute resolution mechanism for arbitration for the time being.

Wisconsin released its August 2023 list of administrative actions, and, while delinquent taxes are still tops for dumb reasons people lose their licenses, there’s also a high proportion of people who lied or neglected to disclose that they had issues in other states. If only insurance carriers and agencies could protect themselves from these kinds of producers with a daily synchronization of state RIRS data… Oh wait. They CAN.

NASAA, the North American Securities Administrators Association, has launched the Exam Validity Extension Program (EVEP). For securities professionals operating in states that have opted into EVEP, if they aren’t registered with a state jurisdiction for up to five years, but commit to the basic compliance requirements, they can re-enter the industry and register with a state without having to retake the relevant Series exam such as the Series 65 or 66.

While these points of interest aren’t comprehensive, our knowledge of insurance producer and variable lines broker license and compliance maintenance is. See how AgentSync can help make you look smarter today; head over to the Compliance Library and wrastle up some state-by-state regulation and more jurisdictional updates.