Big Data in Connecticut, KFF Tallies Healthcare Exchange Carriers, Wyoming Adopts NAIC Best Interest Rule

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. 

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. 

Connecticut consolidates actuarial and data science divisions to address emerging tech

Big data, artificial intelligence (AI), and machine learning are still buzzwords in many state and private insurance offices around the country as a legacy industry grapples with how to best put its arms around emerging digital trends.

Many insurance carriers and agencies have been slow to adopt AI and big data changes, and insurance regulatory bodies tend to lag behind industry adaptations. This is often the nature of regulation, that it tends to be reactive to industry trends and the general zeitgeist.

Yet, Connecticut Insurance Commissioner Andrew Mais has placed his department at the forefront of the industry data revolution. 

“As the insurance industry increasingly relies on rapid technological innovation within a complex data-driven environment, the regulators at the Connecticut Insurance Department (CID) will meet these challenges by restructuring and integrating all actuarial and data science functions within a single unit to better protect consumers,” said Andrew N. Mais, Commissioner, Connecticut Insurance Department (CID), in a news release. 

Mais’s words came with the CID’s announcement that it has massively restructured its data science and actuarial teams to place data knowledge functions under the same umbrella, under the direction of Assistant Deputy Commissioner and Chief Actuary Wanchin Chou. The CID news release said it expects the new division to: 

• Collaborate with the National Association of Insurance Commissioners and other national organizations to stay on the leading edge of reviewing company disaster and catastrophe models
• Put firm parameters on the ethical use of AI and ML capabilities
• Set the bar for what reserving and capital requirements can or should look like as more predictive economic data emerges

“I am truly excited about this new organization. Our experienced actuaries and data scientists will bring advanced analytics expertise in economic capital modeling (ECM), predictive modeling in artificial intelligence, machine learning, and catastrophe modeling to enhance the needed actuarial services in our current regulatory environment,” said Chou.

Wyoming adopts NAIC annuity model

The Equality State has joined the throngs of states adopting the NAIC’s best interest model regulation for annuities.

As we’ve covered before on this blog, the model is, to some degree, the insurance industry’s answer to a Department of Labor rule on fiduciary standards regarding annuity sales. In effect, it sets a standard for annuity sales agents, ensuring they take basic precautions to ensure their advice to clients is in their clients’ best interests, while stopping short of a full fiduciary standard.

For insurance carriers that back annuity sales, the standard sets a few duties, as well, holding carriers responsible for:

• Verifying to some extent that the particular annuity is, in fact, suitable for a given client.
• Maintaining a supervisory system that accounts for training producers and housing documents to validate their recommendations.
• Taking corrective action when a producer is believed to be operating outside of the legal and ethical parameters of a best interest framework.

The NAIC model also clarifies that insurers aren’t responsible for ensuring producers meet their standards for products and contracts that are placed through other insurers. Along with the updated model, Wyoming will require new continuing education and training credits for those who intend to sell annuities.

Kaiser Family Foundation reveals data on states’ health insurance marketplace accessibility

The Kaiser Family Foundation has updated its analysis of the number of insurance carriers that service each state’s health insurance marketplace. 

The data set covers 2014 to 2022, and provides interesting entry points into various state markets. Take, for instance, Arizona, which has had anywhere from 11 to only two insurance carriers supporting its market. Or Montana, which stoically has maintained three insurers for eight out of the reported nine years.

For 2022, Texas boasts the most robust marketplace, with 15 health insurance carriers providing plans in the marketplace, which is run via Healthcare.gov. Wisconsin ranks second in terms of its diversity of insurers, with 13 insurance carriers to service its residents and also relies on the federal Healthcare.gov site for enrollment in the exchange.

While county-by-county access varies, Wisconsin Insurance Commissioner Nathan Houdek said in a news release that residents in 70 of the state’s 72 counties will have three or more insurers to choose from.

Nine states had ten or more insurers for their health care exchanges, but state exchanges are far more likely to have only a few health insurance carriers servicing enrollees, with nine states tied at two insurers per state, and Delaware making due with a single insurer in its marketplace.

Appointments and terminations cycle begins again

If you handle compliance at a national insurance carrier and you were starting to feel bored or overly confident in your producer appointments, here’s your annual reminder that appointment cycles are starting over.

The following states have reported their appointments are up for a refresh, so keep in mind to take advantage of that termination period and terminate any appointments you won’t want to renew in the new year.

Hopefully, if you’re an AgentSync customer, this has been a process that you’ve kept up on throughout the year, but best practices say that, as these renewal dates pop up, it’s still a good idea to give your full ecosystem of appointment compliance a good long look.

• Illinois
  Terminations due Oct. 27, 2022
  Invoice payment open Nov. 2, 2022, to Jan. 2, 2023

• Louisiana
  Terminations due Nov. 23, 2022
  Invoice payment open Dec. 1, 2022, to Jan. 3, 2023
• Iowa
  Terminations due Dec. 27, 2022
  Invoice payment open Jan. 5 – March 15, 2023
• Wisconsin
  Terminations due Dec. 31, 2022
  Invoice payment open Jan. 5 – March 15, 2023
• Alabama
  Terminations due Dec. 31, 2022
  Invoice payment open Jan. 5 – March 1, 2023

For more on appointment renewals and terminations procedures, take a look at the AgentSync Compliance Library, where you can search state by state to understand deadlines and regulations.

Other state regulatory changes in brief

Kentucky issued a bulletin to remind surplus lines insurers and surplus brokers to pay the taxes required by local governments via the Local Government Premium Tax Annual Reconciliation Report on the Kentucky Insurance Department’s eServices portal. In part, the reminder served to alert insurance stakeholders that a third party report preparer can’t submit the report on the company’s behalf, nor can the company submit an annual reconciliation report through paper means.

Washington Insurance Commissioner Mike Kreidler’s office proposed expediting the process to remove language from other rules that would prohibit carriers and agencies from using consumers’ credit histories to determine personal insurance rates, premiums, or eligibility. The Office of the Insurance Commissioner (OIC) says removing the language about credit history prohibition will make the rules align with a Thurston County Superior Court judicial ruling that stated the OIC had overstepped its bounds of authority with the credit rule.

Delaware Insurance Commissioner Trinidad Navarro announced the state’s workers’ compensation insurance rates decreased, effective Dec. 1, 2022. This is the sixth year in a row that the program has seen decreased costs, which Commissioner Navarro attributes to business’s adherence to programs like Delaware’s Workplace Safety Initiative.

Florida Chief Financial Officer (CFO) and State Fire Marshal Jimmy Patronis issued a bulletin directed at consumers who have electric vehicles (EVs), warning that saltwater’s effects on EV batteries can cause fires, something that is a source of concern as the state recovers from Hurricane Ian and Hurricane Nicole. Florida in a separate release, similar to Delaware, also noted the state plans a lowered rate for worker’s compensation rates in 2023.

Colorado Division of Securities released new licensing fees for securities licensees, with Colorado FINRA Sales Representative, Mortgage Sales Representative, State-Registered Investment Adviser, and SEC Investment Adviser Representative licensees paying $16 per license for their annual renewal; and Colorado/FINRA Broker-Dealer, Mortgage Broker-Dealer, SEC Investment Adviser, and State-Registered Investment Adviser entities paying $59 per entity renewal. And sure, it’s not insurance, but a lot of insurance folks are also securities folks.

Maryland hosted a regulator from Thailand through November as part of the NAIC International Fellows Program. Nuengrutai “Nueng” Hengburriboonpong, Director of Investment Supervision in Thailand’s Office of Insurance Commission, joined the Maryland Department of Insurance for five weeks to observe how the office regulates the $46 billion industry in the state.

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.