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.
Delaware changes acceptable data for underwriting on all policies issued after Sept. 14, 2024
The state legislature of Delaware passed a law Sept. 14, 2023, that put new restrictions on personal data and the way insurers could use it. Delaware Insurance Commissioner Trinidad Navarro issued a bulletin to notify insurance carriers of the new strictures.
The new rules mean that even data that might seem neutral but which might have disparate impacts in practice can be a no-go for carriers. The state’s changes include prohibitions on carriers using the following data for underwriting or rating:
- Non-pending arrests, charges, or indictments that do not result in conviction.
- Convictions, arrests, charges, or indictments that do not relate in any way to either fraud or to the type of risk being insured or evaluated for the insurance being sought.
- Suspension or revocation of a driver’s license when the suspension or revocation is for nondriving-related reasons unless otherwise permitted.
According to the law’s bill detail summary on the state legislative page, “Research has shown that certain underwriting factors used by insurers, while facially neutral, may have a disparate impact on protected classes. This bill seeks to address this disparate impact by prohibiting certain underwriting and rating factors, despite being correlative with loss, in homeowner’s and private passenger motor vehicle insurance policies.”
Washington Office of the Insurance Commissioner prelicensing requirements to end Nov. 18, 2023
Would-be producers in the state of Washington have one less hoop to jump through as of Nov. 18, 2023.
A legislative update this year eliminated legislation that previously required producer applicants to complete a certain number of prelicensing hours prior to taking the licensing exam. The Washington Office of the Insurance Commissioner first planned to end prelicensing requirements this summer but administrative issues caused several delays.
This Thanksgiving, new applicants in the state will have one more thing to be grateful for, as Washington joins this insurance trend that makes the industry slightly more accessible.
Vermont investigation finds administrative errors drive noncompliance
The Vermont Department of Financial Regulation (DFR) announced nearly 9,000 consumers should receive refund checks after their two-year investigation found none of the top-three health insurance carriers in the state were fully compliant with Affordable Care Act and state standards for contraceptive coverage.
The investigation began in 2021 after a series of complaints concerning issues like coverage denials and copays that were improperly enforced. By auditing more than a quarter of a million claims going back to 2017, the state found the top three insurers had wrongfully pushed more than $1.5 million in care costs to consumers.
The state said the amount will be returned to consumers with interest, and said there was “no intent” on the part of the insurers to violate the provisions of the law.
“The findings were similar across all insurers’ claims data,” DFR Director of Market Conduct Karla Nuissl said. “The claims inappropriately processed to include cost-share to the member were generally the result of incorrect coding, differing interpretations of the mandate, and system limitations.”
Here’s hoping a more streamlined approach to carrier tech could result in a more compliant market for everyone.
Other state regulatory changes
Alabama scheduled a hearing Dec. 7, 2023, to discuss proposed amendments to their regulations, such as increasing gifting limits to reflect inflation and administrative changes to align state regulations with federal law and National Association of Insurance Commissioners best practices.
Connecticut Department of Insurance rescinded a bulletin that required surplus lines brokers to file signed statements to verify “diligent search requirements” with the state via OptIns. Thanks to legislation passed in the state earlier this year, surplus lines businesses must instead keep documentation to produce at regulators’ requests.
Delaware Insurance Commissioner Trinidad Navarro announced the state’s workers’ compensation insurance rates will decrease for the seventh year in a row. Navarro announced the voluntary market saw an average decrease of 10.03 percent and the residual market saw an average decrease of 13.85 percent. Navarro said it’s a sign of improvement in coverage availability and affordability, as well as worker safety.
Kansas Insurance Commissioner Vicki Schmidt announced another drop in producer fees after the legislature gave the commissioner the power to lower fees below statutory minimums. Effective Jan. 1, 2024, the state is reducing resident producer application fees from $30 to $15 and nonresident producer application fees from $80 to $50.
Maryland announced two moves, with Commissioner Kathleen Birrane appointing Sean McEvoy to the position of Associate Commissioner of Operations, Jamie Sexton to Director of Legislative and Regulatory Policy, and William Fawcett to the role of Associate Commissioner for Property and Casualty for the Maryland Insurance Administration. The state is also accepting commentary on a proposed rule to limit the commissioner’s ability to remove “reciprocal jurisdictions” from the Credit for Reinsurance provisions of the state regulation.
Michigan released a list of the insurance department’s final decisions on license hearings and such from September, and it’s worth mentioning that the majority of agencies whose licenses the department suspended were in trouble for failing to maintain a designated responsible licensed producer (DRLP) with the state. Don’t get caught with your paperwork down. Get AgentSync!
North Dakota has adopted new standards for continuing education for investment adviser representatives. The 12 credit hours are effective Jan. 1, 2024, and content must be approved by the North American Securities Administrators Association (NASAA). According to the standard, every year, an investment adviser representative must complete six credits of education about regulation and ethics (at least three credits in ethics) and then six credits specific to products and their practice.
Oklahoma is celebrating the successful expansion of the state’s captive market, bringing a net 11 new captive insurers into its space, which is a 25 percent gain in the market.
Pennsylvania is removing a set of nonuniform licensing questions the state used to require for reporting and outreach. The state removed questions about race, ethnicity, and sexual orientation from firm and individual licenses for nonresidents and residents alike as of Oct. 31, 2023.
Virginia will no longer allow residents to apply for license reinstatement or renewal through the National Insurance Producer Registry (NIPR) if the state terminated the original license for missing CE hours.
Washington has released a proposed rule to align with legislative requirements for health insurance carriers, from reporting to coverage. The hearing is via Zoom Nov. 21, 2023.
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.