Regulatory Roundup: Michigan Health Insurance Marketplace, New Hampshire Reminds Industry of Duty to Report, Celebrities’ Insurance Shenanigans

State by state variations of laws, compliance protocols, industry transparency, and general regulatory cultures 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 sample platter of regulation. 

Michigan health insurance marketplace announces rate change proposals

So, if you’re a devotee of the Regulatory Roundup (we know there must be sycophantic followers out there somewhere, RIGHT?), you probably have noticed that Michigan is hardly the only market announcing rate changes and expanded health insurer participation in its Health Insurance Marketplace. 

Yet a July 5 news release from the state gives a pretty comprehensive state-of-the-market look at a piece of the industry that impacts families and individuals in multitudes of ways both financially and medically.

While Michigan hasn’t approved rate requests yet, it said, “The average requested rate changes filed for individual plans range from a decrease of 2.8 percent to an increase of 12.9 percent. Overall, the average proposed rates show an increase of 6.2 percent.”

The Department of Insurance and Financial Services (DIFS) news release attributes the increase to the coronavirus pandemic and ensuing inflation. Demand for health services has massively increased in the current moment because so many people were forced to postpone services and procedures during lockdowns and COVID-19 surges over the past few years. So, in part, the market is catching up. But also overall inflation due to supply chain pressure and corporate profit margins is taking a toll.

“Health care continues to be at the forefront of public policy discussions, both in Michigan and nationwide, and it is critical that Michiganders have access to the affordable, high quality health insurance they need for themselves and their families,” said DIFS Director Anita Fox. 

Additionally, the Michigan DIFS noted that 80 percent of Michiganders who get insurance through the exchange receive advanced premium tax credits (APTCs). APTCs are credits that reduce insureds’ premium payments. They were initially expanded as a temporary provision of the federal American Rescue Plan, which Congress enacted to limit financial repercussions of COVID-19. According to the news release, Michigan Gov. Gretchen Whitmer has joined 13 other governors to ask Congress to make the APTC expansion permanent.

New Hampshire reminder: Everyone should report fraud, daggumit!

The state of New Hampshire, similar to other states, has laws governing fraud reports. Rule 417:28 requires everyone subject to the state’s insurance regulations (aka, insurers, agencies, MGAs, producers, etc.) to report any suspected fraud or criminal activity in 60 days or fewer.

The regulation includes a provision that, even if a report comes to nothing, those who made the report aren’t subject to reprisal. 

Yet, the New Hampshire Insurance Department (NHID) delivered a bulletin from Commissioner Christopher Nicolopoulos to the industry at large declaring that they have encountered multiple cases of suspected fraud that went unreported.

“This violation of the law is not acceptable and hinders NHID’s mission to protect New Hampshire consumers,” the news release said.

The NHID bulletin served as a reminder: If you see something, say something. Otherwise, you might also face fines for not reporting potential illicit activity.

The state also issued changes to resident and nonresident firm requirements. Updates include clarifying language to make it explicitly understood that designated responsible licensed producers (DRLPs) – the agents who assume compliance responsibility for the producer force of a business entity – must cumulatively hold licenses for everything the business is licensed to do (with an exception for travel insurance). So, if an agency provides life, auto, and homeowner’s insurance coverage, the DRLP(s) better have licenses that cover all those lines of  business. 

And, for insurers and agencies that are looking to keep their teams on the straight and narrow, check out AgentSync’s solutions, hint hint. 

Celebrity is as celebrity does: Heard and Kilcher insurance dustups

Because we’re giant nerds, we always get a little excited when insurance makes it into the mainstream American consciousness for reasons that go beyond cute Aussie geckos or doomsday climate coverage. However, for the two celebs who have made headlines for insurance shenanigans in the past few weeks, the intersection of fame and insurance is somewhat unfortunate.

California Insurance Commissioner Ricardo Lara announced July 11, 2022, that his office was bringing charges against actress Q’orianka Kilcher for worker’s compensation fraud. The news release alleges Kilcher had her physician testify that a neck injury was painful enough to prevent her from working, enrolling in the state worker’s comp program. Kilcher then allegedly drew worker’s comp checks even as she worked on the set of “Yellowstone,” a Western drama series that streams on some online service (really at this point there are a million and we can’t keep track). 

Kilcher sustained her injury during filming for “Dora and the Lost City of Gold,” in which she played an Inca princess. The film has an 85 percent rating on Rotten Tomatoes (and an audience enjoyment score of 88 percent), which isn’t relevant to insurance fraud, but it just goes to show that just because one is a good actor doesn’t mean one is a good actor, you know? 

According to the California Department of Insurance, Kilcher collected more than $90,000 in compensation benefits, but voluntarily self-surrendered on notice that the department had discovered the fraud.

Also in the lineup of celebrity insurance is Amber Heard. You may have read that Amber Heard’s case against Johnny Depp was financed by her insurance company, which at the time was true. However, since the trial didn’t turn out in her favor, the insurance company has declared it doesn’t have a “duty to defend.” 

Heard’s insurer, New York Marine and General Insurance Co., filed in California courts to collect the money it paid out for her legal defense during the course of her battle against Depp. No doubt other insurers will be watching the case with great interest.

For more on the intersection of tabloids and insurance policy, check out our roundup of bizarre celebrity insurance.

What’s going on in other states?

Maryland’s Department of Insurance adopted NAIC Model Regulation Term and Universal Life Insurance Reserve Financing Model Regulation, which the Maryland Legislature allowed as an addendum to Credit for Reinsurance rules. Additional legislative action includes changes to telehealth services and insurer responsibilities. Network adequacy rules now stipulate that insurers must take responsibility for ensuring insureds have reasonably close network services available, and must report on activity that is happening out of network. The state will also allow surplus lines brokers to charge policy fees effective Oct. 1, 2022. According to the Maryland Insurance Administration’s bulletin, the new law will allow surplus lines brokers to charge a policy fee on policies issued by a surplus lines insurer to exempt commercial policyholders. The legislature’s new rule holds that the fee must be “reasonable”: “In all instances, the policy fee charged must be reasonably related to the cost of underwriting, issuing, processing, and servicing the policy by the surplus lines broker for the surplus lines insurer.”

Washington Kreidler extended an order from 2021 that requires insurers to cover services specifically related to counseling people to get vaccinated against COVID-19. This is the 12th extension of the emergency order… 

Connecticut has posted the rate filings by health insurers for benefit plans in the state. 

Alabama is digging into the ticky-tacky back office of accounting practices as it adopts definitions and reporting requirements for domestic insurers’ use of clearing corporations and custody agreements. The too-long-didn’t-read version (tl;dr) is that companies using foreign clearing corporations or custodians had still better be able to back up the guarantees they make to consumers.

California released a bulletin targeting ethical use of artificial intelligence (AI), cautioning insurers and industry stakeholders that, even when using digital means to combat and track potential fraud, if an AI service can be shown to have discriminatory results, the users will be on the hook for ethical violations. 

Rhode Island has made some changes to adjuster licensing. The legislation allows nonresident adjusters who’ve taken certifications exams given by claims associations to be fully licensed, so long as it is “a proctored exam of sufficient length and rigor to adequately determine the competence of the applicant.”

North Carolina has released a comprehensive FAQ for questions about the state’s regulations of surplus lines brokers. License renewal periods, fees, and process questions abound at https://www.ncdoi.gov/media/99/open.

South Carolina announced its insurance carrier appointment renewal dates, with terminations for inactive producers due by Aug. 26, 2022. Carriers have from Sept. 1 through Dec. 1, 2022, to pay renewal invoices from the state. Appointments will next renew in September 2024. For a list of appointment renewal and termination deadlines, check out the blog.

NAIC has updated the Quarterly Alien Listing – a list of insurers that have submitted filings to do business as alien insurers and that are in compliance with the NAIC’s standards for the same – which has a trickle-down effect for states like Kansas and Kentucky, which rely on the NAIC’s list.
While these points of interest aren’t comprehensive, our knowledge of producer license and compliance maintenance is. See how AgentSync can help make you look smarter today.