Regulatory Roundup: Flu Season, Washington Re-Rules on LTC Riders, Michigan Producer Does a Fraud

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. 

DOIs tackle cold and flu season, COVID-19, RSV

The season for sniffles, snuffles, and deeply unsettling rattles throbbing in one’s lungs is upon us. And naturally, there’s insurance involved.

Several DOI’s took the beginning of indoor-borne illness season to remind consumers that their insurance coverage should handle preventative care vaccines against the flu, COVID-19, and respiratory syncytial virus (RSV) thanks to the mandates of the Affordable Care Act. 

Michigan’s reminders aimed at consumers emphasize that everyone who qualifies to get vaccinated should do so, noting that anyone covered by Medicare, Medicaid, or CHIP benefits should qualify at no cost.

“With the colder weather comes increased risk from viruses like COVID-19, influenza, and RSV, and vaccines to help prevent these diseases are available with no out-of-pocket cost for eligible Michiganders,” said Michigan Department Insurance and Financial Services Director Anita Fox. 

Insurance carriers must also cover most vaccines delivered through in-network providers with no cost-sharing. Covered vaccines include the mRNA COVID-19 vaccine, as of Sept. 12, 2023. 

The Wyoming Department of Insurance issued a bulletin to remind insurers of their obligations, including the requirement that carriers pay for vaccine coverage within 15 days. Wyoming officials urged carriers “to act as quickly as possible and take the necessary measures to streamline any claim system, billing, coding, or overall coverage issues prior to the 15 days, but no later than Oct. 9, 2023.” 

Washington regulators open door to life insurance with LTC riders

State law in Washington allows carriers to offer life insurance policies that have long-term-care insurance riders, which pay an accelerated death benefit to the insured during their lifetime if they meet certain conditions. Yet, state regulations specifically prohibit carriers from offering these policies, and actually require carriers to disclose that they are prohibited from offering them.

The Washington Office of the Insurance Commissioner is beginning the rulemaking process to change its regulatory rule to harmonize it with the laws passed by the legislature. The OIC accepted comments through Oct. 20, 2023. For more on this rule, check out the Washington OIC rulemaking page. 

Michigan suspends producer’s license for … shenanigans

Insurance is a business built on trust, and most of us take that seriously. Compliance is a best-effort sort of initiative. But sometimes you get people who’re determined to meet new heights (or lows?) of notoriety for brazen misbehavior.

The Michigan Department of Insurance and Financial Services encountered such when DIFS officials ordered the suspension of a producer’s license. While the producer can ask to be reinstated by requesting a hearing, the facts of the case as stated by the DIFS are… well, we already used the word “brazen.”

According to DIFS Director Anita Fox’s order, this (licensed!) producer approached prospects and said she was a State of Michigan DIFS Fraud Investigator. She told them she was investigating their existing life insurer for fraud, then said, because of the investigation, many people were canceling their policies. She told people they could receive money from the state and then walked them through paperwork to cancel and replace their policies with ones she sold.

State investigators caught wind when multiple people complained to the state. DIFS obtained a list of the 23 most recent sales by the producer from her carrier, and then made contact with 15 of the 23. Nine of the customers said the producer identified herself as a state employee, and others said she misrepresented the facts of their previous insurance.

In many of her applications, the producer (deceptively) indicated that she wasn’t replacing current coverage. And, when the state confronted her, the producer denied any wrongdoing. 

“Without prompt action summarily suspending [the producer’s] license, additional customers will be misled by [the producer’s] scheme to encourage insureds to cancel their current insurance policy and buy a new insurance policy,” said the order. “…The alleged conduct of [the producer] indicates that [the producer] does not possess the requisite character and fitness to be engaged in the business of insurance…”

Other state regulatory changes

Alabama Department of Insurance officials announced the department has launched the Office of Risk and Resilience under the direction of Brian Powell. Powell was previously director of the Strengthen Alabama Homes program, which dispensed grants for home hardening in the state. The state has also released the rate increases for approved health plans on the state health care exchange.

Alaska Division of Insurance officials hosted a hearing Oct. 18, 2023, where attendees could share their perspectives on whether the state’s admitted market adequately covers their needs and seek changes to the state’s approved surplus lines list.

Colorado is taking public commentary on proposed changes that’ll align its Colorado Option Standardized Health Benefit process for rate changes with new laws passed by the legislature.

Delaware announced the Medicare Assistance Bureau would help people with Open Enrollment with live appointments at the various state insurance offices through November.

Florida Health Insurance Advisory Board members met Sept. 28, 2023, and approved the audit of 2021 financial records and a solvency review of the Florida Reinsurance Program, as well as approving the previous year’s meeting minutes.

Idaho published rate approvals for the coming year for health insurers, announcing that rates are in a gradual decline.

Maryland has issued a draft to change the state’s disability health care regulations to include provisions for consumers seeking to overturn their insurer’s adverse benefit determination. New provisions include stipulations that insurers can’t fire claims adjusters based on whether they think the adjuster will side with a consumer in a dispute.

Montana passed updates to the state’s workers’ compensation procedures, including rules that make it easier for all parties to use digital hearings as opposed to in-person-only meetings.

New Mexico alerted the industry that the Office of Superintendent of Insurance is delayed in processing business and answering questions as officials deal with a cyberattack, which New Mexico news outlets are reporting as a ransomware incident. 

Oklahoma Insurance Department officials will host the first Oklahoma Insurance Day in Oklahoma City on Dec. 14, 2023. The event aims to bring industry professionals and regulators together for a day of networking and education. The state is also moving to a new platform to process surplus lines premium taxes, with the Surplus Lines Information Portal (SLIP) effective in January 2024.

Oregon issued a bulletin clarifying what information the state needs from applicants for insurance producer licenses in the hopes of reducing the number of incomplete applications the department receives.

South Dakota Division of Insurance members heard from consumers and insurance businesses about the state’s newest proposed rule. The rule applies to situations where consumers ask for a third-party review of their health insurance carrier’s judgement on coverage. Currently, consumers pay a $25 filing fee to get this independent review of carrier determinations, but the new rule would remove the fee. 

Washington Commissioner Mike Kreidler issued more than a quarter of a million dollars in fines in the industry in August. The state also revised its rules regarding commercial property insurers, removing the commissioner’s authority to set prices and values for the cost of risk-mitigation services. The new rule aligns the state’s insurance regulation with legislation recently passed by the state and is effective Nov. 4, 2023. Another rule is up for a public hearing Nov. 7 to get an idea of how the Office of the Insurance Commissioner can reduce the administrative burden of registration for health care benefit managers. At AgentSync, we stan a good administrative streamlining.
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.