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.
Maine adopts NAIC model for pet insurance
As pet insurance becomes a source of headaches for insurance compliance officers across the U.S., Maine has joined the line of states to adopt the National Association of Insurance Commissioners model regulation for pet insurance. The demand for pet insurance is on the rise as people seek the same protection for their furry family members that they have for their peopled relations.
Yet, pet insurance isn’t the same as people insurance, and trying to regulate this line of insurance in a way that values state-to-state reciprocity has proved tricky. Maine’s new pet insurance regulation mostly concerns consumer protections, review periods, and policy renewal or cancellation procedures.
The NAIC model provides an important relief for reciprocal pet insurance understanding across the country, even as debates about licensing this line rage on among insurance regulators. Is it its own line of authority? Is it a specialty line? A sub-certification of personal lines? A limited line subcategory of P&C? No doubt it’ll keep making headlines as states vie over how to handle this license.
Idaho retires affiliations workaround after SBS changeover
Idaho’s move to the State Based Systems (SBS) online application for more National Insurance Producer Registry processes has ended a previous way of doing business in the state.
Idaho law has always required individual producers and business entities to hold appointments with the insurance carriers they sell for. However, the state lacked the infrastructure to track these appointments. Instead, the state had a workaround similar to that of Kansas. Agencies would record and report their affiliated producers. Carriers would appoint the agencies. And downstream producers would be covered by the agency umbrella appointment.
With the change to SBS for carrier appointments, the state now expects carriers to use the system to appoint individual producers and business entities alike, in keeping with state law. Producers who operate under umbrella agency appointments will be grandfathered in as the state fully transitions.
Hawaii moving to State Based Systems application
Hawaii is joining Idaho and Massachusetts and many, many other states in moving procedures to State Based Systems online processing. This means a new era of collaboration for those who have reciprocal resident or nonresident licenses.
Now, using the SBS infrastructure, agencies, carriers, and producers can submit license applications, renewals, inquiries, complaints, and enforcement actions via one system, and know the uniform process will carry over to other states. Hawaii is now the 31st state to join SBS.
States moving to SBS can impact your compliance software, and you may need to work with your point of contact to update the codes. But if you’re an AgentSync customer, you can rest easy because we do that stuff for you!
Other state changes
Several states have updated their procedures for appointment data, effective Oct. 14, 2022. This push toward standardization means the following states will now display original appointment dates for insurance producers in the Producer Data Base (PDB) instead of the current appointment effective date:
Utah issued a bulletin reminding carriers, agencies, individual producers, and adjusters of the state’s requirements for what relationships (such as DRLPs, affiliations, and appointments) they must maintain and report to the state department of insurance.
Washington Commissioner Mike Kreidler has extended mandatory health insurance coverage for coronavirus testing and coronavirus vaccine counseling through Oct. 31, 2022. The state also finalized its proposal for new regulations of telehealth appointments for consumers, as well as announcing rate change filings for health insurance premium increases (on average, 8.18 percent).
Delaware Commissioner Trinidad Navarro released information about newly approved health and dental insurance rates in the state, with statements that touted the relief brought by health care insurance exchange subsidy extensions in the Inflation Reduction Act. On average, Delaware health plan premiums will increase 5.5 percent.
Wisconsin’s annuity best interest law based on the NAIC model legislation – holding carriers and producers who sell annuities to a “best interest” standard – is in effect as of Oct. 1, 2022.
Michigan is cautioning employers and insurance companies not to act on the outcome of a Texas Supreme Court ruling that could have repercussions for the Affordable Care Act. At issue: a Texas court ruled a business had exemptions on the grounds of religious belief that it needn’t pay for its employees’ prophylactic HIV medication. Legal experts anticipate the decision will be appealed to the U.S. Supreme Court. Michigan Department of Insurance and Financial Services Director Anita Fox said,“It is important to note the Braidwood decision does not take immediate effect, so preventive services, including the HIV medication at issue in this case, must still be covered in Michigan and around the country.”
Colorado is hearing comments that would make a Marshall fires emergency rule permanent. After the Marshall fires, one rule allowed homeowners to rebuild their homes based on out-of-date building codes if the new codes required more costly repairs. The proposed rule will make this the standard as opposed to requiring structural repairs to meet newer codes. The hearing is virtual on Oct. 18, 2022.
Maryland issued a reminder to title producers and title insurers that, while beginning Oct. 1, 2022 state law allows them to compensate real estate brokers, agents, or businesses, they can’t pay out a set commission or a portion of insurance commission to those real estate entities.
Oklahoma notified insurance professionals that anyone operating under a customer service representative (CSR) insurance license or an insurance consultant license will now operate under an insurance producer license. All current CSRs and insurance consultants will be converted to insurance producer licenses by the State Based Systems, and moving forward these license holders will need to follow all CE and other requirements of insurance producers.
Illinois’s surplus lines association announced a new stamping fee, effective Jan. 1, 2023, for new business, which will reduce the association’s stamping fee from 0.075 percent to 0.04 percent.
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.