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.
Hawaii Commissioner Ito authorizes nonresident independent adjusters to help after deadly fire
Hawaii is grappling with the aftermath of the deadly Maui and Hawaii county wildfires, and the department of insurance (DOI) is no exception.
Insurance Commissioner Gordon Ito issued several declarations in August to assist with recovery, including a declaration that gives nonresident independent adjusters 120 days to operate in the state as long as:
- The nonresident adjuster provides a copy of the adjuster’s current license in another state that has licensing requirements substantially similar to Hawaii’s adjuster law; and
- Within three working days of a nonresident adjuster starting work, an insurance company, independent adjusting company, or producer who’s using a nonresident adjuster gives the following data to the insurance commissioner on official letterhead:
a. The name of the nonresident adjuster;
b. The nonresident adjuster’s Hawaii mailing and business addresses and phone numbers; and
c. The nonresident adjuster’s permanent home and business addresses and phone
For a form to report any nonresident adjusters, you can use https://cca.hawaii.gov/ins/files/2023/08/Form-for-EIA.pdf
Commissioner Ito has also sent an industry request to remind insurers that, as the wildfires have displaced so many, insurance carriers should be lenient about missed or delayed payments for coverage. The commissioner asked insurance carriers to work with insureds beyond what normal coverage circumstances would provide, including:
- Giving latitude with deadlines
- Establishing payment plans for missed premiums
- Waiving late fees and penalties
- Extending timeframes for property inspections or medical exams
- Stretching grace periods for nonpayment
- Continue working with insureds to extend coverage for 60 days after the emergency or “as long as is reasonably practical.”
“We are asking insurers to refrain from canceling or non-renewing policies, to grant a grace period for premium payments, and to work with their insureds,” said Ito. “Communication between insurers and insureds is key to the recovery process. Therefore, we are asking the insurance companies to work with their insureds to make sure their coverage continues during this difficult time for a period of 60 days or longer.”
Oklahoma PBM regulations set back by court of appeals
The Tenth Circuit Court of Appeals ruled against the state of Oklahoma in Pharmaceutical Care Management Association v. Glen Mulready on Aug. 15, 2023.
The issue of the case was Oklahoma’s Patient’s Right to Pharmacy Choice Act, passed by the Oklahoma legislature in 2019. The law gave the Oklahoma Commissioner of Insurance, Glen Mulready, the ability to regulate issues with pharmacy benefits managers (PBMs) that lock patients into working with a single pharmacy or drug with whom the PBM has a relationship.
Yet, the Tenth Circuit Court of Appeals ruled the regulation of the relationships between PBMs, health insurance, and pharmacy companies is largely under provisions of the Employee Retirement Income Security Act (ERISA) and Medicare Part D federal laws.
“The decision from the Tenth Circuit bolstering the power of PBMs in the prescription drug market is disappointing and will be appealed,” Mulready said in a news release. “Enforcement of the Act will continue to the maximum ability of state law. I have been working closely with Attorney General Gentner Drummond since the close of Oklahoma’s Legislative session to ensure a smooth transition of PBM oversight to the Office of the Attorney General.”
No doubt this case will continue as the Oklahoma attorney general takes the lead on PBM regulation and the Oklahoma DOI appeals the appeal. Oklahoma, after all, isn’t the only state looking to regulate PBMs.
Florida P&C market remains turbulent
The Florida Office of Insurance Regulation has approved new P&C insurers to the state market, hoping to replace the mass exodus of 2022 that’s continued with prominent withdrawals this year such as the Farmers Insurance withdrawal in July.
The state is clawing its way through a historically fraught period of disastrous weather events and P&C market losses and withdrawals, which the legislature countered with an overhaul of existing P&C market laws.
In the first half of the year (plus August), the state had approved four new P&C insurers. To add perspective, in the first half of 2022, the state added 14, and in the first half of 2021, the state added 21. The last time the state added four or fewer P&C insurers in the first half of the year was 2015.
The addition of new insurers could act as a barometer to gauge whether the reforms will shore up the market struggle, and could act as a beacon to other states plagued by climate-change-related disasters. Or it could serve as a cautionary tale, giving other states guidance on the potential pitfalls of mismanaging a tough market.
Other state regulatory changes
California held its annual export lines hearing Sept. 13, 2023, giving members of the public a chance to comment on the list of coverage that they can secure handily outside of the California market. Among the coverage that consumers asked Commissioner Ricardo Lara to add: personal animal liability, bail enforcement, cannabidiol and cannabis operations coverage, cyber liability, parametric earthquake coverage, herbicide and pesticide applicators, and residential flood insurance. Changes to the list could be interesting in light of the mass exit of prominent insurers from the state.
Colorado Division of Insurance took comments through August on the draft proposal for a new regulation to require insurance carriers to participate in the NAIC’s Climate Risk Disclosure Survey. (If you want a refresh on who else requires a Climate Risk Disclosure for insurance carriers, check out our notes from this year’s survey request.) The state is also taking commentary on how to implement their recent law to regulate pharmacy benefits managers (PBMs).
Connecticut Insurance Department officials sent a reminder to consumers that, thanks to a life insurance policy locator tool developed by the National Association of Insurance Commissioners, the state helped consumers find more than $25 million in lost insurance benefits in 2022. The state encouraged consumers to explore whether they’re missing benefits from deceased relatives.
Idaho has selected Pearson VUE as the state’s administrator for its insurance licenses. Life, health, bail bonds, property, casualty, personal lines, surety, and all those adjuster exams are maintained by Pearson VUE in Idaho, as of Sept. 1, 2023.
Florida changed the state’s MyProfile log-in to require more frequent password changes, two-factor authentication, and more stringent password requirements. The state also stressed the importance of keeping one’s contact information up-to-date via NIPR Contact Change Requests in order to maintain access to one’s Florida MyProfile account. If you’ve gotten locked out or don’t have access to the email associated with your MyProfile, email firstname.lastname@example.org with a copy of your driver’s license and any relevant details that’ll help the staff identify your account.
Louisiana Department of Insurance officials is holding a public hearing Oct. 5 and 6 to determine if the plan proposed by Louisiana Health Service & Indemnity Company, also known as Blue Cross and Blue Shield of Louisiana (BCBSLA), to convert from a mutual insurance company to a stock insurance company is in the best interests of policyholders and members.
Minnesota is awaiting $200,000 from a settlement with Robinhood Financial after the investing platform’s outages in March 2020 affected more than 200,000 Minnesota customers.
Michigan Director of Insurance and Financial Services Anita Fox told drivers to get their act together following a report of increasing driving-related fatalities in the state. In case the plea to protect human life wasn’t enough incentive, Fox reminded drivers that unsafe driving habits also impact their pocketbooks: “We urge Michiganders to slow down, drive safely, and follow all traffic laws to help reduce the risk of accidents and serious injury,” Fox said in a news release. “Driving safely can also help reduce the risk of serious financial hardship, as vehicle repair and replacement costs remain higher than normal.”
Montana’s Insurance Summit, Sept. 12-13, 2023, offered a day and a half of discussion, networking, and legislative updates in Butte, Montana, as well as offering attendees seven hours of continuing education credits and one continuing legal education credit.
New Hampshire has updated its processes to now reject applicants for resident insurance licenses when the person already has a nonresident insurance license with the state if applying through NIPR or a service like AgentSync. The applicant should instead contact the state DOI directly to change resident status. If you’d like commiseration or a general discussion of how to change your resident state license, check out our coverage here.
Ohio has proposed updates to state regulations that would further embrace distance learning (*cough cough* online *cough cough*) options for acceptable continuing education (CE) credits and for acceptable prelicensing requirements.
Oklahoma Commissioner Mulready issued a bulletin Aug. 15, 2023, to communicate changes to the state’s third-party administrator (TPA) laws. Among the changes: The state no longer requires TPAs to get third-party background checks for administrators, but still requires an NAIC Biographical Affidavit. Renewals must be filed and paid electronically – TPAs that file renewals late but within 90 days of expiration may be reinstated with a $200 fine in addition to regular renewal fees. TPAs must submit any changes to core data (dbas, legal business names, addresses, service agents and contact information, etc.) within 30 days of the change or face a fee. The changes will be effective Nov. 1, 2023. The state also adopted the NAIC’s best interest annuity rule, effective Sept. 1, 2023 (for a reminder of what that means, catch up on what this model law does).
Oregon Division of Financial Regulation (DFR) officials published a news release applauding the recently-passed House Bill 2274. The new law gives the division extended authority to govern and regulate securities in the state, requiring anyone selling a security to have a license and to register the security with the DFR prior to advertising it for sale. The DFR also now has enhanced power to extend civil penalties and demand restitution from wrongdoers.
Vermont has secured bragging rights as officially the largest captive market in the world. Two captive-oriented publications, Captive Review and Captive Intelligence, named Vermont No. 1, with 639 recognized captives in 2022, compared to 633 in Bermuda and 559 in Cayman Islands. To read more about captive insurance companies, check out our coverage.
Washington Insurance Commissioner Mike Kreidler issued a consumer alert reminding people in the state to take steps to proactively protect their property in wildfire season as well as encouraging them to get insurance coverage that provides appropriate protection. The commissioner also issued an emergency order directing insurers to provide additional protection for insureds in the aftermath of the Gray and Oregon Road fires.
Wisconsin Office of the Commissioner of Insurance recently finalized a report examining short-term limited duration plans (STLDP), which are bridge plans people can enroll in during periods where they are in between more comprehensive health insurance coverage. The report found STLDP plans tend to be inexpensive but offer limited benefits for many common health needs (e.g.: average $157 premium, no coverage for maternity care whatsoever). If you want to learn more about these plans, check out the report.
FINRA renewal season is upon us, with firms submitting their terminations and renewals for their registrants. There’s a whole timeline for how to approach U5s and BRs and BDWs and ADV-Ws, so if this applies to you, get started today.
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.