Regulatory Roundup: Hurricane Beryl, Colorado Option Savings, SILA Executive Director

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, instead, as 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. 

States work to recover from Hurricane Beryl

After Hurricane Beryl dumped buckets of rain and once again stressed Texas’s isolationist infrastructure, it marched back out to sea, but not without spinoff effects that rippled across other states.

• Texas and Hurricane Beryl: Texas issued an emergency declaration and a bulletin that designates Beryl as a weather-related catastrophe for insurer claims in 67 counties for the dates of July 7 to July 9, 2024. This gives carriers the ability to bring in emergency adjusters to address the claims volume in those counties.
• Louisiana tornado: A news release in the aftermath of Beryl-spawned tornadoes in the state’s northwestern region encourages consumers to beware of fraudsters as they begin the claims-filing process.
• Michigan and Hurricane Beryl: The Department of Insurance and Financial services issued guidance to consumers on the claims-filing process after remnants of Hurricane Beryl spun off heavy rain and flooding through the state.
• Vermont July storm damage: Vermont authorized the use of catastrophe adjusters and appraisers to help process claims from the July 10 and 11, 2024, storms that broke from Hurricane Beryl. 

Whether you’re deploying adjusters in an emergency declaration situation or processing routine claims in the aftermath of heavy storms, adjuster licensing can be overwhelming. It doesn’t have to be this way. Understand where your adjusters are licensed and where they qualify for a nonresident reciprocal license seamlessly in-system with continually up-to-date data from NIPR. See how AgentSync can help.

Colorado Option using reinsurance to keep healthcare costs low

Colorado Gov. Jared Polis and the Department of Regulatory Agencies’ Division of Insurance issued a news release to highlight the cost savings from the state’s Colorado Option plan, which uses reinsurance to underpin the financial stability of the state’s consumer plan.

The state’s officials are estimating the 2025 plan year will bring more than $450 million in premium savings for Colorado consumers compared to the typical plan cost. 

“Reinsurance savings help make healthcare more affordable for all Coloradans, keeping more of their hard-earned money in their pockets to save or spend. Colorado is leading the nation in saving people money on healthcare and the $477 million Coloradans will save on premiums in 2025 proves that what we are doing in Colorado works,” said Gov. Polis in the news release.  

Colorado Option plans saw a 4 percent average premium increase in the last year, compared to typical plans that increased 6 percent. For perspective, a little over a third of people who selected a health plan from the state’s insurance exchange selected a Colorado Option plan.

Congratulations to SILA’s new Executive Director

The Securities and Insurance Licensing Association (SILA) announced Sherri Coleman, an industry veteran who has joined the organization from a career at Nationwide, took over the post of Executive Director on July 15, 2024. 

Diana Capes, the former Exec, will stay on through the end of the year to help Sherri get her feet wet before she takes a well-deserved retirement.

According to a news release from SILA, Sherri brings 30 years of industry experience to the role, and first joined SILA in 1998. Her past SILA service includes stints as SILA Board President and SILA Foundation Board President, which should equip her well for the road ahead. Congratulations again, Sherri, and we look forward to working together!

Other state regulatory changes

Alabama has issued changes to the regulations governing:

• Limited lines credit producers
• How to value life insurance policies
• Renewal fees for title agents and agencies
• Actuarial requirements and asset adequacy
• Preferred mortality tables and minimum reserving requirements
• Annuity mortality tables and reserving requirements
• Requirements for the Strengthening Alabama Homes grant program
• Regulations outlining the requirements for HMO sales
• Reserve requirements and loss ratios for long-term care coverage

The state has also issued a data call for insurers that covered the events of Hurricane Sally; data is due by Aug. 23, 2024.

Colorado has adopted a regulation effective Aug. 30, 2024, that requires P&C insurers to point out new replacement cost value estimates for consumers who renew their homeowners’ policies, including an explanation for how the insurer arrived at the estimate.

Connecticut has passed a law that allows insurance captives more flexibility, such as converting between captive cell structures.

Delaware issued a bulletin to clarify that Department-required approvals for life insurance carrier transactions that exceed 3 percent of the insurer’s admitted assets will be calculated off the insurer’s total assets in their general account, not as stated in the insurer’s annual statement.

Georgia issued a notice to surplus lines insurers that all filings, tax-exempt and otherwise, should be submitted via SLIP. The state also issued a directive updating the fraud assessment it levies on all foreign and domestic insurers (Directive 24 Ex 3).

Maryland Acting Commissioner Joy Hatchette appointed Robert Guynn as the associate commissioner for insurance fraud and producer enforcement. Guynn is joining the Maryland Insurance Administration after 20 years with the FBI. Stay on his good side, everybody.

Michigan has issued a bulletin that prohibits carriers from including “labor depreciation” in contract definitions of actual cash values unless it’s something that the carrier has explicitly spelled out with the consumer in exchange for a lower premium. This somewhat amusingly echoes a discussion from a recent Alaska bulletin warning carriers against the practice.

Montana released its list of acceptable surplus lines carriers for those looking to place risk coverage outside the admitted market. If you’re interested in a refresher on nonadmitted coverage, check it out.

Nebraska now allows DRLP changes via NIPR.

North Carolina adopted legislation that changes tax incentives for captives that relocate to the state, changes for health benefit plan sponsors, and also makes clear that, while electronic delivery of communications will generally satisfy state requirements, carriers cannot require the receiving party to use electronic communications, and cannot require electronic delivery as a condition of binding coverage.

Pennsylvania passed a bill amending the state’s insurance regulation to include the ability of a surplus lines licensee to charge a service fee to place coverage in addition to the commission they may receive from the carrier. Another bill amended the state’s cybersecurity law to include stricter notification requirements, defining medical information as personal information, and a requirement that affected businesses extend free credit monitoring to consumers affected by data breaches.

Rhode Island updated state regulations to reflect that nonresident adjusters are exempt from CE requirements if their resident state has reciprocal CE requirements, and clarified that failing to complete CE is a reason the DOI may suspend, revoke, or refuse a license.

South Dakota heard public comments at the close of July on a proposed rule change that would allow the state to allow broker-dealers, investment advisers, and investment adviser representatives to re-enter the state market without repeating the exam process.

Tennessee is joining the states that allow producers to process primary name changes via NIPR. 

Washington Insurance Commissioner Mike Kreidler announced the return of Jim Odiorne to the department to serve as the new chief deputy commissioner. The Office of the Insurance Commissioner is also in the midst of rulemaking for health care benefit managers (HCBMs) to shape regulations around a law passed in the last legislative session. The Surplus Line Association of Washington also voted to raise the state’s stamping fee from .1 percent to .3 percent, effective Jan. 1, 2025.

FINRA has adopted a new fee schedule sheet that also indicates which states accept residential supervisory locations (RSLs). FINRA has also posted many new pieces of guidance on their FAQ page for Form BR, like how to file RSLs using the updated Form BR.

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.