Regulatory Roundup: Washington LTC riders, Michigan uninsured driving, North Carolina 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 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. 

Washington life insurance rider rules

Washington has adopted a rule to allow life insurance carriers to expand the use of accelerated death benefits for long-term care provisions.

Previously, state regulations forbade life insurance policies from holding themselves out as also providing long-term care riders. In other states, it’s common practice for carriers to allow consumers to buy permanent life insurance policies that include long-term care riders. Essentially, these riders allow the contractholder to receive the policy’s death benefit early, as a living benefit, if the contractholder has a doctor’s signoff affirming that they struggle to perform two or more activities of daily living (ADLs), such as toileting, dressing, feeding, and grooming themselves.

As traditional long-term care has become increasingly expensive and difficult to obtain, and, since many people may not ever live in a long-term care facility, consumers have turned to policies that offer these types of “both/and” benefits. People like the assurance that they have some money available for a long-term care stay, while also having the option of passing legacy money onto their family if they never need it.

However, Washington expressly forbid these policies until 2023, when the state legislature signed a law that provides for these accelerated benefits, as long as the producer and carrier adequately disclose how these policies work (accelerated death benefits), what they are (life insurance), and what they aren’t (long-term care insurance). 

Once that law became reality, the state was in the awkward position of having a law that allowed accelerated death benefit policies and a set of state regulations that expressly forbade them. The Washington Office of the Insurance Commissioner has updated its rules to allow consumers to use accelerated death benefits to fund the cost of long-term care as long as the title, marketing, and sales of the policy are clear that these policies and their riders aren’t long-term care insurance.

Michigan insurance department sees hard work pay off

Michigan is tooting its own horn after the Insurance Research Council released data on uninsured driving.

Overall, 14 percent of drivers nationally drove without basic insurance in 2022, which is up slightly from 2020. However, in the same time period, Michigan saw its uninsured driver rate drop by more than 6 percent.

According to a news release from the state, the study credited a 2019 bipartisan law for the decrease in uninsured driving. The 2019 law reduced the amount of coverage a person had to buy, eliminated certain criteria from the rating process (like race, marital status, and credit score), and gave uninsured drivers an amnesty period in which to buy insurance without having premiums increase as a consequence of their uninsured period.

“Under the old auto insurance law, too many Michiganders had to face the financial and legal risks of driving without insurance, and the new law has made it possible for more Michiganders to protect themselves and their families with auto insurance,” said Michigan Department of Insurance and Financial Services Director Anita Fox. “In addition to increasing consumer protections and reducing the number of uninsured drivers, the new law has increased competition by encouraging new companies and affiliates to enter the Michigan market. 

North Carolina announces carrier appointment renewal period

North Carolina joined the throng of states whose renewal periods roll through 2024. 

Carriers appointing producers in North Carolina, should terminate any producers they don’t want to pay to renew in the 2024-2025 appointment years by Jan. 22, 2024. Anyone still appointed to a carrier by the close of Jan. 22 will be on the company’s invoice. The state said invoices are open Feb. 3 through March 31, 2024. 

North Carolina isn’t the only state renewing appointments. To see a more comprehensive list of appointment renewals, check out our blog.

Other state regulatory changes

California’s Surplus Lines Association (SLA) updated its Diligent Search Report, streamlining it for a more simplified single-page view. Effective Jan. 1, 2024, the fillable form aims to modernize the SLA’s processes. You know how we feel about that! ????????????

Colorado Division of Insurance officials have proposed requirements for carriers and dental organizations to report dental loss ratios.

Florida Insurance Commissioner Michael Yaworsky and Chief Financial Officer Jimmy Patronis announced the Office of Insurance Regulation approved a Delaware company’s acquisition of Trusted Resource Underwriters Exchange. Statements from the commissioner’s office indicate officials hope the acquisition will allow the Florida-based reciprocal insurer to continue to expand in the state’s property and casualty market.

Georgia Insurance and Safety Fire Commissioner John King issued a bulletin reminding auto insurers and the public that insurance on “multipurpose off-highway vehicles” is still vehicle coverage and requires owners to register those vehicles with the state. 

Maryland issued a bulletin notifying title insurers that, thanks to legislation passed in 2022, remote reviews count as much as on-site reviews, and only reviews that reveal issues need to send their findings to the Maryland Insurance Administration. 

Michigan Department of Insurance and Financial Services officials issued a bulletin to remind health insurers they’re required to cover genetic therapy, immunotherapy, CAR-T, and a variety of other treatments for cancer.

Mississippi is working on its website, and added its Appointment Cancellation Notification form to instructions on contacting the commissioner in the property and casualty section of the site.

New Hampshire announced updated filing instructions for surplus lines filings in OPTins, which it updated to its website. Some of the highlights: The filing should be made under the login of the entity responsible for paying the tax, annual statements were due Jan. 31, 2024, and filings are due by the 10th of the month following the business transaction.

Washington Insurance Commissioner Mike Kreidler issued a cease-and-desist order against a Salt Lake City, Utah-based health insurance company selling plans in the state both without a certificate of authority and out of compliance with state laws for minimum coverage.

Wisconsin released its list of administrative actions, and an informal tally shows missed taxes and people not communicating with the state about action taken against them in other states are among the top reasons for license revocation. Pay your taxes, report your actions. C’mon people.
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.