Alert Edition September 2016

Welcome to the September 2016 edition of the FORC Alert. If you have any colleagues that may be interested in this publication, please forward it on. There is a link on the Alerts main page where they can subscribe to receive FORC Alerts automatically.

Regards,
Ryan Smart, Esq., FORC Alert Editor

Blurb

Category(s): Connecticut - 09/01/2016

Governor Dannel P. Malloy signed PA 16-82, An Act Concerning Health Insurance Coverage for Tomosynthesis for Breast Cancer Screenings

In June, Governor Dannel P. Malloy signed PA 16-82, An Act Concerning Health Insurance Coverage for Tomosynthesis for Breast Cancer Screenings (“the Act”), into law. The Act requires coverage of a baseline mammogram (including by a breast tomosynthesis at the option of the insured) for any female insured age 35-39, and an annual mammogram (including by a breast tomosynthesis at the option of the insured) for any female insured age 40 age or older. The Act is effective beginning January 1 for most comprehensive health insurance policies delivered, issued for delivery, renewed, amended or continued in Connecticut.

Alan J. Levin, Esq. - LOCKE LORD LLP, (860) 541-7747 , alan.levin@lockelord.com
Aaron Igdalsky, Esq. - LOCKE LORD LLP, (860) 541-7766 , aaron.igdalsky@lockelord.com

Category(s): Federal - 09/01/2016

Looking for Balance in Principle-Based Reserving

In recent years, life insurers have expressed concern that the current formulaic (or rule-based) methodology for calculating product reserves does not take into account the increasingly complex, nonstatic nature of current life insurance products. In response to these concerns, the National Association of Insurance Commissioners conducted an extensive analysis of amended Standard Valuation Laws passed by 45 states, representing nearly 80 percent of the U.S. life insurance market. The end result? On June 10, 2016, the NAIC announced it adopted the recommendation of the Principle-Based Reserving Implementation Task Force to switch to PBR starting Jan. 1, 2017. There are still a number of outstanding issues that will need to be addressed as this new methodology moves forward. In the end, PBR may strike the balance that industry and regulators are striving for in this climate.

Frederick J. Pomerantz, Esq. - Insurance Legal & Regulatory Consulting, PLLC, (516) 297-3101 , PomerantzF35@gmail.com
Aaron J Aisen, Esq. - GOLDBERG SEGALLA, LLP, (716) 566-5483 , aaisen@goldbergsegalla.com

Category(s): Florida - 09/01/2016

2017 Rates Established for Citizens Property Insurance Corporation

The Florida Office of Insurance Regulation (“Office”) has issued their Rate Filing Order setting the 2017 rates for Citizens Property Insurance Corporation (“Citizens”). The rates were established for Citizens’ Multi-Peril and Coastal Homeowners, Dwelling Fire, Mobile Homeowners and Mobile Homeowners Dwelling Fire lines of business. The Office held a public hearing last month regarding the requested statewide rate increases for Citizens, in which Citizens reviewed water loss trends in Broward, Palm Beach, and Miami-Dade counties and cited the surge in water losses as a rationale for rate increases. The new rates for Personal Lines Accounts and Coastal Accounts will take effect on February 1, 2017.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 768-8286 , fideir@gtlaw.com

Category(s): Florida - 09/01/2016

Florida Hurricane Catastrophe Fund Issued Bulletin on Hurricane Hermine Reporting Requirements

The Florida Hurricane Catastrophe Fund (“FHCF”) recently issued a Bulletin on Hurricane Hermine Reporting Requirements. The Bulletin advised that the State Board Administration (“SBA”) is not requiring companies participating in the FHCF to submit their interim loss report at this time unless they are notified directly. Additionally, the FHCF advised that they will issue reimbursements based on loss information reported by participants on the Proof of Loss Report, but the FHCF is also not requiring participants to file a Proof of Loss Report at this time. For reporting in December 2016, companies must complete a mandatory Proof of Loss Report for Hurricane Hermine through the FHCF’s Online Claims System, irrespective of the amount of FHCF covered losses experienced.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 09/01/2016

Florida Office of Insurance Regulation Released Informational Memorandum for Principle-Based Reserving

The Office of Insurance Regulation (“Office”) released an Informational Memorandum notifying all life and health insurers authorized to transact business in Florida about the implementation of principle-based reserving (PBR). The memorandum recommends that insurers review the Valuation Manual for reference and in order to best adhere to the requirements. The operative date of the Valuation Manual in Florida is January 1, 2017, but a deferral of up to three years is permitted for all life and health insurers to provide a smoother transition to PBR.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 768-8286 , fideir@gtlaw.com

Category(s): Florida - 09/01/2016

Florida’s Fourth District Court of Appeal Held $10,000 Maximum Benefit for PIP Applicable Only in Emergency Declarations

The Fourth District Court of Appeal in Florida recently held that the $2,500 limit for non-emergency medical conditions for no-fault personal injury protection (PIP) benefits applies when a medical provider does not make an affirmative decision that there is an emergency medical condition. The decision, resulting from an appeal in Medical Center of the Palm Beaches v. USAA Casualty Insurance Company, was issued on August 31, 2016. The Court said that benefits above $2,500 and up to the maximum of $10,000 are reserved only for situations where a medical provider determines an emergency medical condition exists. This decision, however, will not be final until time expires for a filed motion for rehearing.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 09/01/2016

Florida’s Office of Insurance Regulation Releases Personal Injury Protection (PIP) Study

The Florida Office of Insurance Regulation (“Office”) released the much-anticipated Actuarial Study, which estimated the effect of cost savings realized by insurance companies writing Personal Injury Protection (“PIP”) auto insurance. The actuarial study was requested to determine how the sixteen provisions of the law passed by the Florida Legislature in 2012 would impact PIP coverage. The study, conducted by Pinnacle Actuarial Resources, Inc., sought to analyze the impact of PIP in Florida, the impact of repealing the requirement of purchasing PIP, and the repeal of requirement to purchase insurance. The report found that the 2012 law achieved an estimated aggregate savings in PIP claim costs of 17.5%; an estimated statewide average savings in PIP premiums of 15.1%; as well as a 10.2% reduction in PIP arising claim frequency and a 10.9% reduction in claim severity, for a combined reduction in total Florida PIP loss costs of 20% - in comparison to an overall increase of 4.1% in PIP claims nationwide.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG LLP, (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Georgia - 09/01/2016

Georgia Implements Standard Valuation Law

In Bulletin 16-EX-1, published on August 4, Georgia Insurance Commissioner Ralph T. Hudgens announced that the Georgia Standard Valuation Law will become operative January 1, 2017. The Georgia Standard Valuation Law, found at O.C.G.A. §33-10-13, establishes a principle-based valuation methodology that is applicable, subject to specified exceptions, to life, health, and annuity business written after the "operative date" of the uniform valuation manual adopted by the MNAIC. Forty-five (45) states, including Georgia, have advised the NAIC that they have enacted laws substantially similar to the model standard valuation law, triggering the "operative date" as it is defined in the standard valuation law.

Tony Roehl, Esq. - MORRIS, MANNING & MARTIN, LLP, (404) 495-8477 , troehl@mmmlaw.com

Category(s): Tennessee - 09/01/2016

TDCI Issues Bulletin Prohibiting Auto-enrollment of Travel Insurance

According to guidance issued by the Tennessee Department of Commerce and Insurance, the automatic enrollment in, and charge to a consumer for, travel insurance unless the consumer affirmatively opts out of such coverage constitutes an unfair trade practice and is prohibited in Tennessee. New Bulletin 16-02 notes that such auto-enrollment of travel insurance in the context of a consumer purchase of flights or other travel services is a nationwide issue, and the Bulletin warns that violators will be subject to "appropriate penalties under Tennessee insurance laws."

T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.com
Robins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259 , rledyard@bassberry.com

Category(s): Tennessee - 09/01/2016

TDCI Issues Guidance on Surplus Lines Premium Tax Payments

The Tennessee Department of Commerce and Insurance has issued a new Bulletin 16-04 which provides guidance on premium tax payments for surplus lines policies issued on and after October 1, 2016. Effective October 1, all new and renewable single state and multistate surplus lines policies in which Tennessee is the “home state” under the Nonadmitted and Reinsurance Reform Act will be filed as single-state policies, with 100% of the premium being reported to and taxed by Tennessee through the Surplus Lines Information Portal (“SLIP”), along with the SLIP transaction fee (which fee may be passed through to the insured).

T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.com
Robins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259 , rledyard@bassberry.com

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