Regulatory Roundup: Guam Joins SBS, Michigan Warns About HCSMs, Connecticut Touts Captives

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. 

Guam Department of Revenue and Taxation transitions to SBS

Effective March 20, 2024, Guam’s insurance department is going live on the National Association of Insurance Commissioners (NAIC) application for states, the State Based Systems (SBS). 

Guam announced several changes for licensees in the state. Among them: businesses and individuals alike will now use their national producer number (NPN) instead of their Guam license as their primary identification number. Moving forward, all new and renewing license applications, appointments, terminations, class or line of authority additions, and address changes must go through NIPR. Carriers will also receive a new Guam company number, but their NAIC CoCodes will remain the same. 

Of course, if you have AgentSync, this means “NEW TERRITORY UNLOCKED.” Once NIPR launches Guam, all resellers such as ourselves will also have access to Guam’s treasure trove of license and appointment data to make nationwide insurance compliance that much easier.

Michigan warns HCSMs aren’t insurance

Michigan Department of Insurance and Financial Services (DIFS) officials have expressed concern that consumers don’t understand that health care sharing ministries (HCSMs) are not health care insurance.

In a news release, the department said this confusion has spurred its team to create a new consumer publication to address these questions.

We’ve covered HCSMs on this blog before; essentially the organizations are networks of consumers who agree to try to pay for each others’ health care costs based on a shared identifier (often on religious grounds). They’re scant on consumer protections or actual coverage guarantees.

“Before sending any money to a health care sharing ministry, or forgoing comprehensive health insurance, you should carefully research the benefits provided by the entity in question and make sure that you understand if this type of voluntary financial arrangement is right for you and your family,” said DIFS Director Anita Fox in a news release. 

Connecticut getting serious about captives

The Constitution State is putting points on the board for its captive program. 

According to a news release from the state, the captive insurance sector grew by 37 percent over the course of 2023. Connecticut added 10 new captive insurers, which is its own sort of “rah rah” moment, but much of the growth comes from a 108 percent “surge” in 13 new cells. Cells are sub-organizations of captives that take on specific responsibilities and insulate their particular risk or liability from the risks and liabilities of the other cells in that organization.

Thanks to the addition of both new captives and cells within the existing captive market, the state’s new release said, “The influx of new businesses choosing Connecticut for their captive programs has notably increased this year.”

“With recent pro-captive legislation, increased staffing, internal support, and collaborations across the state, Connecticut continues to attract global captive insurers and service providers, further establishing itself as a premier domicile and solidifying our title as the insurance capital of the world,” said Commissioner Andrew Mais.

Other state regulatory changes

Arizona has released its continuing education provider packet online via their Prometric service provider. Producers looking for rule clarifications or CE providers looking to submit courses for state approval can check it out for a more complete list of state CE requirements.

Colorado Division of Insurance officials announced the commissioner’s adoption of a bulletin that “requests insurers to toll, or temporarily suspend, any time limits related to all applicable coverages and endorsements.” The bulletin is in direct response to concerns that those who are still recovering from the Marshall and Middle Fork fires are still struggling to rebuild, and threatens property and casualty insurers with market conduct examinations if they don’t show a good-faith effort to accommodate tolling for policy time limits.

Kansas is, effective Feb. 16, 2024, ending the requirement for reinsurance intermediaries to report a designated responsible licensed producer (DRLP) to the state in their license applications.

Massachusetts is adding a requirement that resident business entities have an NPN for their transactions. For resident business entities with an existing NPN, their NPN will be included in transactions; those with no NPN will be assigned one.

Michigan issued a bulletin updating the inflation-adjusted covered claim amount covered under the Michigan Property and Casualty Guaranty Association. For 2024, individual insured’s net worth limits are set at $37,790,000 and covered claims are capped at $7,560,000. 

New York has implemented a requirement that health insurance carriers and Medicaid cover biomarker testing in patients. 

North Carolina updated line of authority issue dates within NIPR to reflect correct issue dates on Jan. 25, 2024. The state also purged nonresident producer licenses that didn’t have an underlying home state (resident) insurance producer license. Anyone who had let their resident license lapse (or was perhaps in the course of moving resident states) found their North Carolina nonresident license in inactive status. Jan. 27, 2024, the state updated nonresident producer license expiration dates, as well. Presumably, thousands of downstream alerts accompanied these changes. ????

Oklahoma released the Oklahoma Insurance Department’s 2023 annual report. Some stats include that the state recruited 11 new captives to the state, helped beneficiaries locate $49 million in missing life insurance benefits, took 13,157 calls, checked 1,414 consumer complaints, and oversaw a market with $34.7 billion in premiums. 

Pennsylvania has announced the state’s eligible surplus lines insurer list update. For a refresh on the basics of surplus lines insurance, check out our 101 coverage. 

South Carolina is decreasing the state’s retaliatory fees for nonresident individual adjusters. Initial licenses for nonresident adjusters in South Carolina are now $109, and renewals are $169. We applaud the reduction of retaliatory fees, but we’re still asking, “why do they exist at all?” 

Tennessee announced Commissioner Carter Lawrence signed an order decreasing costs for the voluntary workers comp market by 9.4 percent effective March 1, 2024. This is the 11th year in a row the loss cost has decreased for the state.

Vermont announced in its most recent newsletter that adjusters for property and casualty, auto damage appraisers, workers compensation adjusters, crop adjusters, surplus lines brokers, reinsurance intermediaries, and life settlement brokers can submit their license renewal applications via NIPR anytime before March 31, 2024. Vermont also joined the throng of states adopting a version of the NAIC’s Suitability in Annuity Transactions regulation, which the legislature approved Jan. 4, 2024. The state also proudly announced a more accessible layout for the Departement of Financial Regulation website. Love to see it.

Washington now requires resident and nonresident applicants to include the beginning date of their agency affiliations. Do you need to brush up on the basics of affiliations? We’ve got you covered. The state also published its list of current rulemaking activities, including nearly 40 potential upcoming topics. Impressive for both its transparency and its regulatory appetite.

Wisconsin has a new Deputy Commissioner – Rebecca Easland joined the department after a stint as Senior Policy Advisor at the International Association of Insurance Supervisors (IAIS). Before IAIS, she served at the Wisconsin Office of the Insurance Commissioner for more than 15 years. The state is also proud to announce Commissioner Nathan Houdek is the new chair of the Financial Condition (E) Committee and a member of the Life Insurance and Annuities (A) Committee with the NAIC. The state announced effective mid-February, the license classes of risk purchasing group and rate service organization will now display as business entities in the NIPR producer database (PDB).
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.