Regulatory Roundup: Maryland Prelicensing, Colorado Homeowner Disclosures, Massachusetts Appointment Renewals

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. 

Maryland insurance legislation package tweaks prelicensing, fees 

As is true in any state, the legislative session in Maryland has amended many existing insurance laws and introduced new ones, too. 

Much of the 2024 legislative session involves bills that focus on healthcare reforms like children’s health, hearing aid coverage, health insurance grievance processes, reproductive health, and prosthesis coverage. And P&C legislation included changes to pet insurance disclosures, uninsured driving penalties, and mandates for condo insurance.

Some of the state’s changes that affect everyone, however, include things like increasing the penalty on carriers, producers, and public adjusters for conducting unlicensed or improperly licensed insurance business. Carriers could face a maximum penalty of $125,000 per infraction, and public adjusters and producers could face up to $5,000 per infraction. Another broad reform: The state’s ending its prelicensing and other prior qualification requirements, such as the requirement that someone work in insurance for one year before applying for a producer license.

Colorado homeowners disclosures a hot topic of regulation

Colorado’s P&C market has been struggling in the wake of the Marshall Fire that began Dec. 30, 2021. The deadly blaze is the most costly in the state’s history, so not for nothing are consumers, carriers, and regulators still coping with the aftermath.

The newest regulation to come out of it is Colorado’s Division of Insurance now requiring a special disclosure from insurers if they underwrite a policy for the actual cash value of a home and not for the full replacement cost. The new disclosure requirement is in effect for homeowners insurance carriers on Jan. 1, 2025. 

Additionally, the following disclosure has to appear on the insurer’s declarations page:

“You have chosen not to buy coverage available to you that would give you extra protection when you have an insured loss. This coverage includes options to increase your dwelling coverage limits, such as extended replacement cost coverage and law and ordinance coverage. To learn more about your choices, review the information included in your new or renewal policy.”

And carriers have to provide documentation of all the comprehensive coverages they could have provided and the premium report on a separate page. Whew.

Colorado also opened a webpage for state-required pharmacy benefits manager registration. This is the first stage in several sweeping legislative reforms aimed at the PBM market in Colorado.

Massachusetts announces carrier appointment renewal period

Massachusetts has announced that state carrier appointment renewals will be open July 19 to Aug. 31, 2024. The state will open invoices for payment during that period. 

To avoid renewing (and paying for!) any producer or agency appointments, carriers should terminate any undesirable appointments by July 14, 2024, at the latest. The state will invoice anything or anyone on the books after that for a full renewal payment.

For other carrier renewal dates, check out our appointments timeline list here. But if you want more information on Massachusetts’ appointments, specifically, and how to avoid paying double for your producers, we’ve got you covered.

Hurricane Beryl wreaks havoc on Texas, New York 

Adjusters are mobilizing en masse in the wake of the destructive Category 1 Hurricane Beryl that ripped through Texas and spun off post-hurricane cyclones through New York, Vermont, and New Hampshire with follow-on effects felt through the country’s upper Midwest states.

With infrastructure damage to roads, public water, and electricity – the latter of which prompted Texans to use the Whataburger app as a proxy for measuring electrical outages – from Beryl, insurance is poised to absorb many of the losses. All told, predictions say insurers may absorb $2.7 billion in damages from Hurricane Beryl.

Other state regulatory changes

Alabama is wishing everyone who turned 26 this year a happy birthday… and reminding them they need to enroll in their own health care insurance because they can’t be on their parents’ insurance anymore. 

California has awarded a first-of-its-kind grant to the city of Imperial Beach to study innovative flood prevention and coastal protection strategies. The $848,000 grant aims to help solve the state’s insurance woes.

Colorado issued regulation to standardize carrier rate filings for stop loss and limited benefit health plans, amended health benefit regulations to match new legislation for open enrollment and coverage periods, and repealed regulations for how carriers should report out-of-network coverage data (the repeal is because the regulation was overridden by new laws from the state legislature). The state also issued guidance for how carriers can comply with ACA-mandated cost-sharing reductions.

Connecticut has received rate filings from seven insurers looking to provide private health care under the Affordable Care Act in the Open Enrollment period starting Nov. 1, 2024. That’s right, health care season is almost upon us! Check out the filings for rate requests here.

Florida, beginning July 1, 2024, requires all producers selling Citizens’ property coverage (the state’s FAIR plan) to maintain at least three carrier appointments.

Kansas is increasing the state’s fingerprinting fee from $50 to $60. Inflation, I tell ya what.

Maryland announced the state has received rate proposals for Affordable Care Act plans from health insurers in the state, including a new HMO hoping to sell plans in the state in the upcoming enrollment period. The state will now also allow primary name changes and DRLP updates to be submitted via NIPR.

Nebraska can now process individual and business primary name changes via NIPR. 🎈

Oklahoma implemented new home-hardening legislation to incentivize homeowners to take a forward approach to preventing wind and tornado damage. Also, from May 10 to Aug. 8, 2024, nonresidents can enter the state as emergency adjusters to help with damage from spring tornadoes – emergency adjusters require sponsorship from licensed in-state adjusters.

South Carolina is now accepting DRLP changes via NIPR. We love to see it!

Vermont is increasing resident and nonresident producer appointment and renewal fees to $80 effective Jan. 1, 2025. 🙁

Virginia has updated the state’s payment processing vendor, so any companies that pay the state directly will need to get updated payment information. Since many state transactions come with late fees and penalties attached, this is probably one of those higher-on-the-to-do-list items.

Washington Office of the Insurance Commissioner sent a reminder that insurers are facing tighter regulations with disclosing and justifying premium increases to auto and homeowner policyholders. Phase 1 started June 1, 2024, and Phase 2 starts June 1, 2027.

SILA announced new SILA-A members: Sal Auricchio, John Eberhardt, Holly Grove, Aaron Lafontaine, and Samantha Zepeda. Congrats everyone! 

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.