Category(s): Alabama - 05/01/2016
With the approach of hurricane season, Alabama recently passed a bill (SB 353) that authorizes insurance premium finance companies to provide financing for charges relating to wind mitigation construction. Homeowners or policyholders wishing to minimize property loss due to hurricane or other catastrophic windstorm events could receive a construction loan for wind mitigation upgrades to the insured home. Additionally, the annual licensing fee for an insurance premium finance company is $200. However, if it is an insurance agency that finances their own business of less than $150,000 annually in premiums, the fee is reduced to $50.
Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530
Category(s): Connecticut - 05/01/2016
A proposed bill that would require homeowners’ policies to cover mitigation undertaken to prevent a covered property from collapsing or caving in was introduced in Connecticut’s General Assembly in the legislative session that ended earlier this month. HB 5522 was proposed in the wake of the filing of more than 150 complaints with the Dept. of Consumer Protection by homeowners who have alleged that their foundations are failing due to chemical issues with the foundation’s concrete. Some lawmakers expressed concern that HB 5522 would only help homeowners on a go-forward basis, and would offer no relief to homeowners already dealing with damaged foundations. HB 5522 ultimately did not come to a vote in either the Senate or House, but given that the issues underlying HB 5522 are not going away, it is reasonable to expect that a similar bill will be presented again in the near future.
Alan J. Levin, Esq. - LOCKE LORD LLP, (212) 912-2777 , alan.levin@lockelord.com
Category(s): Florida - 05/01/2016
Due to continuing increases in water damage claims, particularly in South Florida, Citizens Property Insurance Corporation is implementing several changes to its policies, most of which will begin on July 1. The policy forms for the state-backed insurer will permit policyholders to take emergency repair measures, not to exceed $3,000 or 1 percent of Coverage A limit, to protect insured properties from further damage in case of a loss. Permanent repairs to the property will not be covered until one of the following occurs: 72 hours have passed since the loss is reported; the loss is inspected by Citizens; or verbal or written approval is provided by Citizens. It is expected these new policy changes will help to decrease escalating loss costs caused by the practice of insureds assigning their claims to contractors who commence repairs before the insurer has had a chance to inspect the property.
The Assignment of Benefits legislative package failed to pass the Florida Legislature again in 2016, making it four years in a row. There was a less controversial package to address the fraud aspect of the issue only by prohibiting activities by licensed professionals that may result in fraudulent or inflated property insurance claims, which also failed to garner final approval. Both issues are expected to be addressed again in the 2017 Florida Legislative Session.
Richard J. Santurri, Esq. - MANG & SANTURRI, P.A., (850) 222-7710 , rsanturri@manglaw.com
The Florida Hurricane Catastrophe Fund’s (FHCF) Advisory Council has reported that the FHCF has a record $400 Million in surplus heading into the 2016 Hurricane Season. The Council said with this surplus, the FHCF has excess capacity and liquidity resources to meet its potential obligations for the 2016-2017 hurricane season, which is statutorily capped at $17 Billion. Moreover, the FHCF is estimating its total claims-paying capacity at $24.9 Billion, which includes the $17.4 Billion in funding sources on hand and borrowing capacity of $7.5 Billion, if needed. The FHCF obtains its funds through the following means – accumulated reimbursement premiums, pre-event bond proceeds, recoveries from reinsurance, proceeds of post-event revenue bonds, emergency assessments, and investment earnings on accumulated reimbursement premiums.
Fred E. Karlinsky, Esq. - GREENBERG TRAURIG, P.A., (954) 768-8278 , karlinskyf@gtlaw.com
The Florida Office of Insurance Regulation has adopted changes to several rules related to the holding company registration of insurers that go into effect on May 31, 2016. These changes create an annual deadline of April 1 for insurers, authorized to do business in Florida and which are members of an insurance holding company system, to register with the Office. The rule changes further adopt the use of recently revised forms that insurance holding companies are required to submit: Form B – Insurance Company Holding System Registration Statement; Form C- Summary of changes to Registration Statement; and Form F – Enterprise Risk Report. In addition, the rule changes provide that “foreign insurers subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those [in Florida regarding transactions with affiliates]” are exempt from filing an annual Form F.
A lawsuit by four life insurance companies is the first challenge to a new 2016 unclaimed benefits law that requires life insurers with beneficiaries in Florida to search the Social Security Administration’s Death Master File (DMF) to determine whether benefits are owed. The law is controversial because it retroactively covers all life or endowment insurance policies, annuity contracts and retained asset accounts that were in effect on or after January 1, 1992. The lawsuit was filed by United Insurance Company of America, Reliable Life Insurance Company, Mutual Savings Life Insurance Company and Reserve National Insurance Company. Gov. Rick Scott approved the law (Chapter No. 2016-219) on April 12, 2016 and it became effective immediately.
Florida’s recently appointed Insurance Commissioner David Altmaier is appealing a recent circuit court ruling that upheld claims of trade secret asserted by an insurer when it filed its policy information with the Office of Insurance Regulation (OIR) in the Quarterly Supplemental Report (QUASR). On May 2, 2016, Circuit Court Judge James C. Hankinson ruled that State Farm’s QUASR filing meets the definition of a trade secret under Florida law and is exempt from public disclosure as a protected trade secret. In determining that the QUASR report included information that met the statutory trade secret definition, Judge Hankinson rejected OIR’s affirmative defense of laches, which is the claim of an unreasonable delay in bringing suit by State Farm that prejudices OIR’s ability to provide a proper defense. Additionally, the court disputed OIR’s general arguments that keeping QUASR data confidential will constitute an undue burden that is not in the state’s best interest.
Category(s): Georgia - 05/01/2016
Allstate Property & Casualty Insurance Company (“Allstate”) recently announced an average rate increase of 25 percent in the state of Georgia. Under the Georgia Insurance Code, private passenger auto insurance companies may implement new insurance rates on a file and use basis for auto insurance policies that provide coverage in excess of the state mandatory (25/50/25) minimum amounts. In a statement, Georgia Commissioner of Insurance Ralph Hudgens declared, “I am deeply concerned about this filing and the impact it could have on consumers,” but added that “Georgia law prohibits me from stopping or delaying this increase unless an actuarial examination proves the rate to be legally excessive.” The rate increase, which will cause some policyholders to see their premiums increase by more than 58%, is set to become effective May 22. Under Georgia statute, Allstate does not need regulatory approval of the rate hike, unless an actuarial examination proves the increase to be legally “excessive.” Commissioner Hudgens has engaged an actuarial firm to examine Allstate’s rate increase request, but that examination will not likely be completed before the effective date of Allstate’s rate increase.
Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.comAaron Igdalsky, Esq.
On January 28, 2016, the Georgia Department of Insurance adopted a new regulation (Ga. Comp. R. & Regs. 120-2-2-.25) regarding the assertion of trade secret status to information filed with the Department. In 2012, Georgia’s Open Records Act was amended to require companies to file an affidavit when submitting information that they consider to be a trade secret. The Department believes that knowledge of this requirement was not widespread and that a regulation was necessary to provide guidance to companies on how to comply with the statutory requirement. Under the regulation, the affidavit must be submitted at the same time as the filing and include the following information: (1) an affirmative declaration that specific information in the filing constitutes a trade secret under Georgia law; (2) an identification of the specific information by page number, document, exhibit or other identifying characteristic; (3) an affirmative declaration that the filer does not wish the information to be made public; (4) an affirmative declaration that the trade secret information is not commonly known or available to the public; (5) an affirmative declaration that the filer derives economic value from the information not being publicly known; and (6) an affirmative declaration that the information is subject to reasonable efforts to maintain its secrecy.
Tony Roehl, Esq. - BAKER HOSTETLER LLP, (404) 256-8419 , troehl@bakerlaw.com
Category(s): Illinois - 05/01/2016
On April 27, 2016, the Illinois Department of Insurance launched a campaign (including a toolkit) to expand awareness of how to navigate health insurance coverage for behavioral health and substance use disorders claims. The DOI Acting Director Anne Melissa Dowling stated, “Our goal is to ensure that consumers gain a better understanding of their rights under state and federal insurance laws.”
Daniel A. Cotter, Esq. - Dickinson Wright PLLC, (312) 423-8170 , DCotter@dickinson-wright.com
On February 1, 2016, Illinois Representative Robert Martwick introduced House Bill 4633 (Unclaimed Life Insurance Benefits Act), which passed the House 75-34 and is now in the Illinois Senate, where a weaker bill is being lobbied. The legislation, if passed, would require life insurers to use the federal Death Master File to determine if an inactive policyholder died and benefits are payable under the life insurance policy.
Category(s): Oklahoma - 05/01/2016
Comissioner John Doak sent out a Data Call to insurers writing earthquake insurance. The informtion he receives will result in a Hearing on Earthquake Insurance on May 24th. Oklahoma experienced 915 earthquakes in 2015.
Angela Ables, Esq. - KERR, IRVINE, RHODES & ABLES, P.C., (405) 272-9221 , aables@kiralaw.com
Commissioner John Doak reminded insurers to cover roof repairs that meet state or local building codes. Complaints spurred the bulletin from the Department which reminded insurers that they have to follow state or local codes when making repairs. (See OID Bulletin No. PC 2016-02)
Category(s): Tennessee - 05/01/2016
Amendments to the Revised Tennessee Captive Insurance Act effective as of April 28, 2016 streamline the process for redomestication of foreign and alien captives to Tennessee. The new law (Public Chapter No. 1018) also (1) provides certain premium tax incentives for captives that redomesticate prior to December 31, 2018, and (2) enhances legal protections for protected cell captives.
T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.comRobins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259
Governor Bill Haslam on April 7 signed legislation based on the NAIC model that updates various provisions on accreditation and reinsurance of insurance companies and governance standards for risk retention groups. The new law (Public Chapter No. 735) also contains a provision proposed by the Tennessee Department of Commerce and Insurance that requires insurers and HMOs to report ordinary dividends and distributions within 5 days following declaration and at least 10 days prior to payment.
Category(s): Washington - 05/01/2016
Washington’s 2016 short session produced merely a handful of new insurance laws, many of which relate to health care. Highlights of some of the other bills include: (1) adoption of the NAIC model act for life reserve requirements (standard valuation law/principle based reserving); and, (2) an easing of filing/registration requirements for service contract/product protection guarantee providers. Two other new laws may be of interest: (1) insurance commissioner licensing & regulatory oversight (new) of pharmacy benefit managers; and (2) the right of personal insurance providers to offer (and advertise) money back guarantees and other “customer satisfaction” “contractual benefits”. Space prevents us from listing all of the activity. Contact Steven Beeghly or Brian Kreger if you want copies of these bills, effective date, or other information.
Steven Beeghly, Esq. - BEEGHLY RICOY LAW GROUP, Serving the Pacific Northwest, (206) 618-6110 , sb@BeeghlyRicoy.com
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