Regulatory Roundup: Rhode Island Appointment Guidance, Sunshine Freedom Bank, Vermont Flood Data

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. 

Rhode Island appointment guidance

As we’ve discussed, Rhode Island is implementing a proactive state appointment process for carriers, and the state issued the first of what will undoubtedly be a slew of bulletins to outline and clarify the procedures for making these appointments. 

Rhode Island will be processing appointments through the National Insurance Producer Registry (NIPR). Some of the points worth knowing:

• Every producer will require an appointment
• Appointment fees will be $15
• Appointments are per licensee, not per line of authority
• Agencies can’t be appointed, just individual producers
• All appointments for 2024 will need to be recorded during the month of January, 2025

For all the clamoring about whether Rhode Island will consider itself a Just-in-Time state, we have yet to hear definitively. But the note that new initial appointments “must be made within fifteen (15) days from the date the first insurance application is submitted” gives us reason to believe the answer is a “probably.”

Vermont 2023 flood claims data call

That Canada of the U.S., Vermont, has released the results of its 2023 flood insurance data call. The report comes with few surprises, but gives some interesting context to the kind of losses – and who covers what – that follow one of these large-loss, unexpected events. 

For instance, some of the towns that reported massive claims only had one or two policies in force, which makes you wonder about all the uninsured losses. Crop policies only paid 17 percent of the claims policyholders filed. Federal flood policies paid out the highest portion, with 81 percent of claims ending with a payment. 

To check out other flood insurance data, visit the Vermont website. Another fun fact from the department: P&C carriers closed the average claim within 24 days. And, as a reminder, if you want to be the pacesetter on your claims close rates, it starts with rethinking your adjuster force.

Florida CFO proposes state bank

In Florida, insurance regulation, banking, and securities all double up under the position of chief financial officer, currently filled by Jimmy Patronis.

Patronis recently proposed establishing the “Sunshine Freedom Bank,” which would be a state-run bank established for the purposes of handling the state’s $152 billion tax revenues and managing other Treasury funds like long-term investments. The CFO’s primary concerns are that the banks managing Florida funds in California and New York are philosophically at odds with the leadership of the Sunshine State.

“Florida is an economic powerhouse, and it’s time to build the financial infrastructure to handle our massive size and success – and keep the associated benefits in-state,” said Patronis in a news release. “Moreover, woke banks and regulators in New York, California and Washington D.C. have been imposing their toxic ideology on hardworking Floridians by controlling their money, when they should be focused on core business functions and maximizing returns on our investments. The Sunshine Freedom Bank will protect Floridians and increase our bottom line.”

Other state regulatory changes

Alabama amended a bulletin to set all long-term care policyholder letter filings and service contracts, vehicle protection products, or motor club filings. For the state to review your form filing in these areas is now $50 per form.

Colorado Division of Insurance officials adopted a bulletin on guidance for how legislators should request actuarial reviews for potential health insurance law proposals. The state also clarified that, thanks to line of authority conflicts, Colorado doesn’t accept nonresident applicants with a title insurance license for reciprocal licensure.

Connecticut is updating the license expiration date for motor vehicle physical damage appraiser and casualty adjuster licenses thanks to new legislation. The renewal deadline used to be June 30 every other year. Starting Oct. 1, 2024, new licensees will renew every other year by the end of their birth month, based on the last birthday before licensure. I.e., your first license period will be less than two years long. The new timeline will apply to current licensees after the June 30, 2025, renewal.

Delaware has fined an insurance carrier more than $300,000 for improper bills to consumers and improper payments to third parties instead of the ambulance service. The market conduct investigation took three years, which reminds us that market conduct penalties aren’t necessarily about the fines.

Illinois is now accepting changes to DRLPs and primary name changes via NIPR. Woot woot!

Maryland issued a consumer advisory that the Department of Insurance has found several insurance carriers that are operating without registering with the state. So, reminder: If you want to do business in Maryland, you have to play by Maryland’s rules.

Missouri has updated the state’s suitability in annuity transactions rule to conform with the NAIC’s model regulation best interest standards. If you need a refresh on what this means, check out our redux on Mississippi’s adoption. The state also issued a bulletin to state that, with a few exceptions, businesses have a minimum of 30 days to respond to communications from the department.

New Hampshire has updated laws to clarify the difference between commercial and personal homeowner policies, mandate insurance carriers to give a reason when nonrenewing or canceling a policy, and exempts people who only assess auto glass damage from having to be licensed as a claims adjuster. 

New Mexico has changed licensing exam vendors from Prometric to PSI effective Aug. 27, 2024. The state will offer a 90-day temporary license while it’s in a “blackout” period to facilitate the change over.

Oklahoma Commissioner Glen Mulready sent a notice to the industry about the Thunderbird Drone Festival Oct. 4 to 5, which Mulready said would align with the industry’s increased use of drone technology for underwriting and claims. Another state bulletin issues guidance for changes to the state’s rules on health care insurance provider directories and motor vehicle repair estimations. And legislative changes include the need for all of the everybody who is subject to Oklahoma Insurance Department regulation to keep their contact info current with the department.

Rhode Island issued a bulletin to explain new continuing education requirements for licensed adjusters (including those who use Rhode Island as a designated home state for license reciprocity). Adjusters whose licenses will renew in 2026 will need to meet the new CE requirements before renewal. Adjusters must have 24 hours of CE completed before renewal, with at least three of those hours in ethics.

Utah released a bulletin directing title agencies and title agents to direct questions about unfair marketing practices or inducements to the state’s Title and Escrow Commission for clarification and discussion.

Wisconsin is joining the states that allow primary name changes and DRLP updates to process via NIPR. We love to see it!

Financial Industry Regulatory Authority (FINRA) guidance for the end-of-2024 renewal cycle is live. Insurance carriers that use dually licensed producer/brokers to move variable products would do well to get ahead of guidance so any necessary terminations, renewals, or continuing education is locked down in advance.

Securities and Insurance Licensing Association (SILA) announced Douglas Vincens earned a SILA Fellow Designation and Lori Bird and Tammi Schuchard earned their SILA Associate Designation. We love to see the wins! Congratulations!
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.