Regulatory Roundup: N.A.I.C. Scholarship Recipient, Washington Transforms Prior Authorization, Georgia and Embedded Car Insurance

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. 

N.A.I.C. scholarship plants the seeds of industry’s future

The National Association of Insurance Commissioners’ (NAIC) 2022 nonprofit initiative, the New Avenues to Insurance Careers (N.A.I.C.) Foundation, is putting its money where its mouth is in trying to inspire the next generation of insurance professionals.

The Foundation awarded its first scholarship, $2,500, for the spring semester to a student at Troy University in Troy, Alabama.

“This inaugural scholarship marks a milestone step toward the NAIC’s goal under our State Connected strategic plan to introduce to a new generation of students and historically underserved communities career prospects in the field of insurance and insurance regulation,” said NAIC President and Connecticut Insurance Commissioner Andrew N. Mais in an NAIC news release. “We hope the N.A.I.C. Foundation scholarship and associated internship opportunities with state Departments of Insurance will inspire students to explore pathways to careers as insurance regulators, government leaders, and insurance professionals.”

A news release from the Alabama Department of Insurance notes the scholarship also will make the student eligible to participate in the state’s DOI internship program.

Washington implementing program to force modernization of health insurance prior authorization processes

The Washington Legislature tasked the Office of the Insurance Commissioner (OIC) with coordinating industry stakeholders to implement a law adopted in 2023 that requires carriers to modernize their processes for prior authorization.

If you’ve managed your own healthcare in America, you may be familiar with private health care plans’ prior authorization requirements. Essentially, it means consumers must get permission from their carrier before they schedule any nonemergent care. After all, you wouldn’t want to schedule surgery with your podiatrist if your health insurance carrier stipulates that you have to first try to cure your foot ailments with eight weeks of physical therapy.

One of the complaints often leveled against prior authorization requirements is that the process for getting a prior authorization can be a manual one, and it can take weeks to get a response from a carrier. That’s hardly ideal when your physician is advising you to seek treatment from offices that may already be booked out months in advance.

The OIC is in the thick of it, and current changes will shorten timelines carriers have to review and make decisions about authorizations, lay out state standards for what the clinical review process should look like, and include mandatory APIs for carriers to streamline their data and internal processes.

The state closed the comment period from industry stakeholders at the end of February 2024, and we eagerly anticipate what the OIC’s recommendations for full implementation will look like once they take all commentary  into account.

Georgia action against unauthorized embedded policy at car dealership emphasizes compliance

We’ve talked about the business upsides and the regulatory risks of embedded insurance before on this blog, and so it caught our notice when the Georgia Office of the Insurance Commissioner and Safety Fire raised the same points in a recent action.

The Georgia OCI cited a car dealership that offered embedded products in February. Officials issued a cease and desist letter against the dealership, and have subpoenaed the business. The OCI said the dealership’s deductible-based benefits constitute a clear case of insurance but hadn’t been registered as an insurance product with the state.

“We plan to issue comprehensive guidelines to all car dealerships, delineating what constitutes insurance and outlining the regulatory requirements for offering such products. This initiative aims to prevent similar situations in the future,” the OCI said in a news release.

Other state regulatory changes

Alaska Division of Insurance officials held a teleconference session Feb. 27, 2024, to explain potential changes to the state’s Essential Health Benefits benchmark plan. The state intends to add and expand coverage.

California closed the comment period in February 2024 for their new rule regarding independent advisor representatives and their required continuing education. The state requires independent advisor representatives to have six hours of ethics and professional responsibilities and six credit hours on products and practices each renewal cycle. 

Colorado Insurance Commissioner Michael Conway adopted a regulation requiring health insurance carriers in the state to cover RSV shots for consumers without cost sharing, effective March 30, 2024. The state has also released the Colorado Option Standardized Health Benefit Plan rules for 2025.

Florida issued a notice that the state won’t accept OnVUE online proctored exams as a testing option for insurance candidates after March 31, 2024.

Maryland Insurance Administration officials are warning consumers of a commercial insurance scam targeting small businesses that offer painting, construction, and cleaning services.

Michigan released the Department of Insurance and Financial Services (DIFS) by-the-numbers report, noting the department staff answered nearly 140,000 phone calls, more than 7,500 consumer complaints, and recovered more than $19.5 million for consumers in 2023. The state also announced DIFS Director Anita Fox will serve in several roles at the NAIC, including as the chair of the Health Insurance and Managed Care Committee. Bravo!

New Hampshire has added requirements that all resident producers licensed in property, casualty, or personal lines of authority must complete a state-approved flood insurance course or face fines up to $2,500. Producers must comply by June 5, 2024.

Rhode Island issued a reminder to P&C insurers and agencies that if they or their adjusters violate the state’s expected “professional courtesy,” the Insurance Division will hold them in violation of the state’s laws. These include a 10-day period to notify a claimant of a new adjuster assignment, communications that allow the claimant to respond, giving the claimant access to a supervisor at their request, and acknowledgement of a claimant’s legal representative.

Vermont joined a multi-state securities settlement against TradeStation Crypto, which operated unregistered investing programs nationally. The settlement is $1.5 million, split between 51 jurisdictions. Yet, at AgentSync, we’re here to remind you the fine isn’t the real punishment.

Washington lauded the Office of the Insurance Commissioner’s Statewide Health Insurance Benefits Advisors (SHIBA) program, which celebrates its 45th anniversary of providing free counseling for consumers enrolling for Medicare services in the state.

Wisconsin is cracking down on out-of-state brokers after the state’s health care open enrollment period ended with many consumers complaining that health brokers had advised them into plans that weren’t suitable for their needs or compliant with state regulations.

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.