Regulatory Roundup: New states adopt NAIC Annuity Suitability Model

State by state variations of laws, compliance protocols, industry transparency, and general regulatory cultures 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 sample platter of regulation. 

Colorado issues guidance following Boulder County fires for HOAs, homeowner’s insurance

With more than 1,000 homes lost in the Marshall fires, many homeowners are still trying to sort out questions about who pays and which coverage is responsible for what.

The Colorado Division of Insurance has issued a guide with answers to standard FAQs for those who have traditional homeowner’s insurance, renter’s insurance, insurance for condominiums, homeowner’s association policies, or other forms of insurance that may include gaps or overlapping coverage. Check it out to get a high-level view of who pays, how to file, and what to expect in the process.

Connecticut announces growth of captive insurance group market

The office of Connecticut Insurance Commissioner Andrew N. Mais announced the department had approved 13 new captives in the state in 2021. 

A captive is where a group of similar companies with similar risks and needs come together to effectively self-insure against losses.

Per the news release, captives are on the rise for mutually insuring areas traditional commercial insurance doesn’t much cover. Connecticut began licensing captives in 2012, and has seen exponential growth in the past few years, closing 2021 with 35 captive insurers – a growth rate of 59 percent for that year.

“This was another exceptional growth year for Connecticut-domiciled captives as businesses leveraged them to strengthen their insurance coverage, fill gaps and reduce risk,” said Commissioner Mais. “Our flexible and responsive regulatory services and the knowledgeable service providers and regulators in the insurance capital of the world will continue to draw companies to call Connecticut home.”

Of the 35 captive insurers, one-third are owned by Fortune 500 companies.

California issues annual reminder of background questions

California issued a reminder in early February that any changes to insurance producers’ personal information should be made within 30 days of the change. 

California Insurance Commissioner Ricardo Lara’s reminder included changes to a producer’s knowledge of:

• Felony and misdemeanor convictions, including convictions for driving under the influence (DUI), reckless driving, driving on a suspended/revoked license. 
• A filing of felony criminal charges in state or federal court. 
• Administrative actions regarding any professional or occupational license, including but not limited to actions against an insurance and/or real estate license.
• A licensee’s discharge, or attempt to discharge, in a personal or organizational bankruptcy proceeding, an obligation regarding any insurance premiums or fiduciary funds owed to any company, including a premium finance company or managing general agent.
• Any admission, or judicial finding or determination, of fraud, misappropriation or conversion of funds, misrepresentation, or breach of fiduciary duty. 

Anyone needing to update information can do it through filling in forms on California’s website, or through NIPR, or through something super dope like AgentSync. This is also extremely  relevant as rumor has it the state is adding new non-uniform questions to its producer license application in the near future.

Louisianans mark close of filing period for Hurricane Ida damages

Commissioner Jim Donelon of Louisiana issued a reminder that Feb. 25 is the close of the period for submitting a proof of loss for anyone seeking reimbursement for Hurricane Ida damages. Louisiana property law gives insureds 180 days from the covered loss event, and Feb. 25 was the 180th day since Hurricane Ida’s destruction.

“Submitting detailed proof of loss is a key component of the claims process following a disaster,” said Commissioner Donelon. “I encourage policyholders to make sure they provide their insurer with the documentation needed to process their claim in a timely manner and accelerate their road to recovery.”

For insurance carriers, this is also a key date to beginning the final tally for the total market cost of Ida.

Alaska updates surplus lines white list

Alaska’s Bulletin B 22-03 elaborated on the eligible surplus lines providers allowed to do business in the state. The state circulated an updated white list of providers who, while they are nonadmitted insurers, conform to the Non-admitted and Reinsurance Reform Act of 2010 (NRRA).

Remember, nonadmitted insurers are insurance carriers or products that aren’t officially recognized or regulated by a given state. But that doesn’t mean they get to just operate entirely off the rails.

In the bulletin, Alaska said it uses two statuses to identify eligible “foreign” (read: outside of Alaska) surplus lines insurers:

• White Listed: Foreign companies that meet the NRRA and domestic state requirements 
• Listing Approved: Alien companies not on the NAIC Quarterly Listing of Alien Insurers but approved by the division (carriers must apply for approval per Alaska state law)

Maryland tightens restrictions on pharmacy fees, proposes adopting NAIC annuity best interest and suitability model

Maryland legislative changes updated the health insurance general administrative code to be in keeping with legislation passed in the 2020-2021 session. Many of the changes have to do with standardizing language and eliminating out-of-date references to laws that have since been amended, but some of the health care revisions have to do with limiting certification fees for pharmacies, or other unexpected fees.

Maryland also has a comment period (closing Feb. 28) for a proposed amendment to the annuity text of its state insurance regulation that would bring it in line with the spring 2020 draft of the NAIC’s Suitability in Annuity Transactions model regulation.

We covered Mississippi’s transition of annuity suitability in a previous Roundup and more in-depth within the context of the Department of Labor’s best interest standard overhaul, and we expect this trend to continue as more states make the transition to an explicit best interest standard for their annuity-selling producers.

While these points of interest aren’t comprehensive, our knowledge of producer license and compliance maintenance is. See how AgentSync can help make you look smarter today.