The Roundup of Roundups: Top 9 Regulatory Trends from 2023

Welcome to 2024! Your 2023 likely ended with bragging on the previous year (hopefully!), optimistic lists of future goals, and some well-deserved carb loading and time out of the office. But now it’s time to get yourself back in action, to eat that elephant one bite at a time. 

A year is a long time. And trying to get psyched for what lies ahead isn’t always easy. To help you get hyped for 2024, we’re spitting mad predictions for what lays ahead in the regulatory realm based on what we’ve seen from the year we just closed.

From the team members at AgentSync who read through state regulations, we’ve collected our overarching observations. So, saddle up, dust off your scouting abilities, and we’ll blaze ourselves a trail through regulatory trends.

1. Annuity regulations are still. So. Hot.

The 2023 regulatory atmosphere was ripe for states to adopt annuity regulations, and the balance of states that have adopted the NAIC’s Annuity Suitability and Best Interest Standard model finally tilted, with the majority of states adopting the model into law.

This is by no means the end of the story, however. Even if all the states adopted this model, annuity regulations for how producers sell and position products to consumers would remain hot because of the U.S. Department of Labor (DOL). The DOL spent the last several years rolling out the final implementation of its fiduciary rule only to release a more expanded proposal Oct. 31, 2023. The new proposed rule expands the DOL’s reach under the Employee Retirement Income Security Act of 1974 (ERISA) to essentially require all annuity sales and all uses of retirement-specific funds to be covered under a fiduciary standard.

If you’ve got questions about the DOL’s initial fiduciary rule or what a fiduciary standard even is, you’ll want to brush up because we’re pretty confident that you’re going to hear a lot about both in the new year.

2. Adjuster licensing is still trending

Adjuster licensing remains hellacious. The 16 states that recognize each others’ reciprocity for staff or company adjuster licensing have formed a decently consistent little coalition on how to handle adjuster licensing of various kinds. If we were optimistic, we’d say that represents a good starting point for other states to establish their own practices to join this pocket of agreement. Although it might be more realistic to say adjuster licensing will continue to be difficult and disparate. Regardless, AgentSync can make adjuster licensing and compliance less stressful for your team. 

3. Passionate conversations about how to “solve” P&C are going to continue

Whether it’s Florida having special sessions to end exorbitant attorney fees or California’s impassioned executive order to overhaul P&C pricing, state DOIs will undoubtedly opine on how to shore up the nation’s P&C troubles over the coming year just as they’ve done in the past.

We have our own take on how various factors affect the market and what the future might hold. But states that have been hard hit by wildfires, flooding, hurricanes, earthquakes, and other disasters will continue to address home-hardening, risk pricing, inadequate reinsurance by insurers and inadequate insurance by consumers, and multitudinous other factors.

4. PBM regulations sure to get a second look

Several states found themselves tousling with businesses that belong to that nebulous model of pharmacy benefits managers (PBMs). State DOIs have had different levels of success regulating these entities. Against Oklahoma, one PBM successfully argued in court that it was subject to ERISA and therefore beyond the scope of Oklahoma’s DOI responsibilities. This didn’t stop Florida from developing the backbone of new legislation about the PBM model.

Oklahoma Commissioner Glen Mulready testified before Congress about the need for oversight on these matters, and we’d put reasonable money on 2024 seeing significant state and federal action on how PBMs function within the health insurance pipeline.

5. Prelicensing repeals

Louisiana, Alabama, and Washington all repealed their prelicensing requirements, and frankly we’re here for it. It’s not to say learning the material for a producer licensing exam isn’t important – it is! But there’s already an exam designed to test a producer’s retention. 

Getting off the soap box, we’re going to close our eyes, cross our fingers, and hope that 2024 will also feature a snowball of states that repeal prelicensing as a requirement for producer licensing.

6. States will continue adopting CE for securities brokers

Several states already have new continuing education (CE) requirements for securities brokers going into 2024, and we have every reason to expect that trend to continue. If you’re asking why we care about this in insurance, we have a few reasons:

• Many insurance producers are dually licensed and possess a securities registration in addition to their insurance license.
• Insurance producers who sell variable lines products are necessarily securities brokers by definition.
• Insurance carriers therefore have to maintain some degree of info about variable lines brokers’ insurance and securities data.
• Carriers and agencies that have to track and maintain CE and license data for these brokers are tired of looking in two places for everything just to manage a single broker’s compliance.

Taken together, we suspect that a future trend in CE won’t only be widespread adoption of ever-increasing requirements. We see industry and government stakeholders paying more attention to a holistic picture of what requirements should look like for a single person, and how to consolidate information and data for comprehensive knowledge and compliance. 

7. States vs. courts vs. federal government tug-of-war

The Affordable Care Act (ACA) may be the largest federal intervention in state regulation of all time, and states have come to rely on it to set up their own rules for state-governed health care plans. Many states enshrine ACA coverage standards in state law so state-regulated plans match ACA rules. However, thanks to the ACA and ERISA, employer-sponsored health care plans tend to be federally governed. This adds up to a conglomeration of confusion in cases like Braidwood vs. Becerra, where insurance carriers have thrown the states and federal government out of alignment over prophylactic HIV medication and other specific coverages.

Braidwood vs. Becerra will likely be coming to the U.S. Supreme Court, but it’s hardly the only issue subject to this national argument between states, a federal administration, and the court system over who has what power to regulate which parts of insurance.

8. A post-COVID era

COVID brought about new ways of doing things, from remote options for workers to telehealth visits and broader acceptance of innovations in emergency-use medications and treatments.

While state and federal governments spent 2023 finally dismantling the fabric of emergency regulations, rule extensions, and temporary measures that formed their response to the pandemic, in many ways, there’s no going back. 

Sure, health insurers no longer have to cover experimental treatments to the same degree they did during the pandemic, but the public won’t soon forget about breakthrough treatments. And maybe a state mandates in-person testing for licensing, but it knows now what kind of appetite exists for remote testing. 

Some of these temporary changes have become permanent, and some are gone for good, but we expect 2024 will see state departments and federal agencies examining data from these last tumultuous years to inform future policy.

9. Data use and tech safety

Consider this an obligatory reference to the fact that state governments are getting more tetchy about data use, that the NAIC is working on updated model laws concerning consumer data protection and pricing products, and the stakes for tech safety are getting higher every day.

Tech safety isn’t always going to be an afterthought. That’s all we’re saying.
Bragging time: We’re big fans of digital security and take a zero-trust approach to our protocols. For that matter, some of these trends are top-of-mind for us because we’re addressing them with our products and our market approach. If you’re ready to step into the future with modern insurance infrastructure, see how we can help.