Alert Edition July 2019

Welcome to the July 2019 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): Alabama - 07/16/2019

Alabama Department of Insurance 2019 Legislative Agenda Status Report

Corporate Governance Annual Disclosure Law & Insurance Holding Company Act Amendments
SB 52 by Sen. Shay Shelnutt (R-Trussville); Status: Signed by Governor on 5/1/19; Act No. 2019-97
Synopsis: This bill seeks to establish best practices and provide enhancements to strengthen corporate governance standards, including the annual collection of detailed information on an insurer’s corporate governance practices. Based on the NAIC Corporate Governance Annual Disclosure Model Act, the bill also incorporates provisions from the current version of the NAIC Insurance Holding Company System Regulatory Model Act into existing Alabama law. In particular, this bill adds the definition of “Internationally Active Insurance Group” and provides that documents, materials, and other information filed with the Commissioner relative to the group-wide supervision of an internationally active insurance group is confidential and privileged.

Insurance Data Security Law
SB54 by Sen. Shay Shelnutt (R-Trussville); Status: Signed by Governor on 5/1/19; Act No. 2019-98
Synopsis: Based on the NAIC Insurance Data Security Model Law, this bill seeks to establish data security standards for the DOI and insurers in order to mitigate the potential damage of a data breach. The law applies to insurers, insurance agents, and other entities licensed by the DOI. The U.S. Treasury Department has urged prompt action by states to adopt this model law by 2022 or the administration will ask Congress to preempt the states.

Bronze Endorsement
HB283 by Rep. Chip Brown (R-Mobile); Status: Signed by Governor on 5/22/19; Act No. 2019-240
Synopsis: This bill requires all insurers writing homeowner policies to offer an endorsement statewide that upgrades a home to IBHS Fortified Bronze building standard whenever the insured incurs roof damage covered by the policy requiring the roof to be replaced. This upgrade applies only when the insured incurs roof damage covered by their policy that will require a roof to be replaced.

Clarity Act Amendments
HB106 by Rep. Chip Brown (R-Mobile); Status: Signed by Governor on 5/15/19; Act No. 2019-177
Synopsis: This bill amends the Property Insurance Clarity Act to require information to be reported according to the perils required under the By-Peril reporting regulation: (1) Fire, (2) All non-hurricane wind/hail, (3) Hurricane, and (4) All other perils. This bill would also authorize the Commissioner of Insurance to create educational and informational programs and presentations regarding how the Department of Insurance can assist consumers.

Roofing Contracts
SB62 by Sen. Rodger Smitherman (R-Birmingham); Status: Signed by Governor on 5/1/19; Act No.
2019-99
Synopsis: Under current law, a homeowner may cancel a roofing contract up to ten (10) business
days from the date the contract is initiated. The 10-day period may expire prior to an inspection
by the property insurer. If the home did not sustain a covered loss, the homeowner will still be
bound by the contract. This bill will allow a homeowner to cancel a roofing contract within five (5)
business days after the property insurer provides written notice that the property did not sustain a
covered loss.

Strengthen Alabama Homes – Grant Applicant Personal Information
HB363 by Rep. Chip Brown (R-Mobile); Status: Signed by Governor on 5/22/19; Act No. 2019-242
Synopsis: This bill would require the SAH program to maintain as confidential all documents and
information submitted to the Department by property owners or insurance companies in support
of grant applications. Applicant’s personal information submitted to the Department in their grant
applications would be required to be kept confidential.

Stephen W. Still, Esq. - MAYNARD COOPER & GALE PC, (205) 254-1097 , sstill@maynardcooper.com

Category(s): Florida - 07/16/2019

DWC Issues Bulletins on WCATF and SDTF Assessment Rates

The Division of Workers’ Compensation (DWC) issued an informal bulletin, DWC-02-2019, on an Order by Chief Financial Officer (CFO), Jimmy Patronis, setting the Workers' Compensation Administration Trust Fund (WCATF) assessment rate to 0.79% for Calendar Year 2020.  The rate has been reduced from the 2019 rate of 0.90%.  DWC also issued informal bulletin DWC-01-2019 on the CFO’s Order setting the assessment rate for the Special Disability Trust Fund (SDTF) for Calendar Year 2020.  The SDTF has been reduced for Calendar Year 2020, from 0.42% (in 2019) to 0.40%.

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

Category(s): Florida - 07/16/2019

FDEM, FEMA to Award $78 Million to Miami-Dade County Hurricane Recovery Efforts

On June 14, The Office of Insurance Regulation (OIR) issued Memorandum OIR-19-02M on changes to the statutes regarding assignment of benefits (AOB). The memorandum was issued to notify insurers of the new law, discuss various provisions contained in it and provide guidance to insurers to assist in implementing the changes.

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

Category(s): Florida - 07/16/2019

Florida Passes HB 617 Governing Flood Insurance Disclosures

On June 7, 2019, Governor Ron DeSantis signed HB 617.  The bill, which becomes effective on July 1, 2019, revises circumstances under which insurers issuing homeowners insurance policies must include a specified statement relating to flood insurance with policy documents at initial issuance and renewals. The bill also fixes an oversight in previous legislation that required property insurance policies to prominently display that they do not provide flood or other coverages, which did not contemplate “endorsement” of coverages onto property insurance policies.  This bill requires the flood insurance portion of the notice only when the policy does not include flood coverage.

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

Category(s): Florida - 07/16/2019

Governor Signs Insurance Omnibus Bill and Other Insurance-Related Bills

On June 18, Governor Ron DeSantis signed HB 301 into law, a large omnibus insurance package that touches on issues across almost all lines of insurance, and will take effect July 1, 2019.  Some provisions of the bill include: removing the $35 cap on reasonable per-policy fees available to surplus lines agents; decreasing the amount of loss adjustment expenses (LAE) that may be recovered from the Florida Hurricane Catastrophe Fund (FHCF) from 5% to 10%; reducing the minimum premium collected for auto insurance policies from two to one month.  All provisions of the bill are available here.

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

Category(s): Florida - 07/16/2019

New Florida AOB Law Becomes Effective July 1

Governor Ron DeSantis signed the Assignment of Benefits (AOB) reform bill, HB 7065, into law on May 23.  The bill is designed to curtail future AOB abuse and lays out substantive new requirements for AOB agreements.  The legislation establishes rights and obligations of both the assignees and assignors, and perhaps most important, eliminates the one-way attorneys’ fee provision for assignees.  The law takes effect July 1, 2019, except for the attorneys’ fee provision which took effect upon becoming a law (pursuant to HB 337 being signed into law).

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

Category(s): Florida - 07/16/2019

OIR Issues Memorandum on AOB Law

On June 14, The Office of Insurance Regulation (OIR) issued Memorandum OIR-19-02M on changes to the statutes regarding assignment of benefits (AOB). The memorandum was issued to notify insurers of the new law, discuss various provisions contained in it and provide guidance to insurers to assist in implementing the changes.

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

Category(s): Georgia - 07/30/2019

Doraville Policy Chief John King

Governor Brian Kemp has chosen the Doraville Police Chief John King, a major general in the Georgia National Guard, a native of Mexico, to be the acting insurance commissioner for Georgia.  King has extensive law enforcement and military experience.  The Georgia Commissioner oversees insurance, small-loan business, and also serves as the state fire marshal.  Through the National Guard, King was deployed to combat in Bosnia-Herzegovina, Iraq and Afghanistan. He has been Doraville’s chief since 2002.

Julie M. Pomerantz, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C, (512) 480-5100 , jpomerantz@mwlaw.com

Category(s): Louisiana - 07/30/2019

Act 226 Of The 2019 Regular Legislative Session State of Louisiana

Act 226 worked changes in producer appointment and renewal fees, both individually and for producer agencies. The timelines for renewals have also changed. Under the Act, fees for initial appointments of individual producers have increased from $20.00 to $30.00. This is effective for new appointments after July 1, 2019. Renewal appointment fees remain $20.00. Renewal of individual producer appointments are now due annually by January 1st.

Agency appointment fees have also increased but from $20.00 to $100.00. Appointment of a producer agency includes all licensed individuals who are affiliated with the producer agency. Unlike individual appointment renewal fees, the producer agency appointment renewal fee has also increased from $20.00 to $100.00. All changes are effective on or after July 1, 2019.

Renewal of producer agency appointments are now due annually by August 1st.
For additional details, see Louisiana Department of Insurance Advisory Letter No. 2019-03.

Van R. Mayhall, Jr., Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-8009 , van.mayhall.jr@bswllp.com
Sunny Mayhall West, Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-8049 , sunny.west@bswllp.com
Van R. Mayhall, III, Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-3169 , van.mayhall.iii@bswllp.com

Category(s): Texas - 07/16/2019

Named Driver Insurance in Texas

HB 259 re the near abolition of Named Driver Insurance in Texas will become effective September 1, 2019 and apply to newly issued and renewed policies effective January 1, 2020.  It prohibits an insurer from issuing or renewing a named driver policy except in the case of an operator’s policy.  The legislation allows for a “named driver exclusion,” allowing the insurer to use a named driver exclusion only if the exclusion specifically names each excluded driver and does not exclude a class of drivers.  Further the named insured must accept same in writing.  An “operator’s policy” is defined as an auto policy that provides coverage for the named insured when operating an auto the insured does not own.

Julie M. Pomerantz, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C, (512) 480-5100 , jpomerantz@mwlaw.com

Category(s): Virginia - 07/16/2019

Virginia Passes Law Regulating Travel Insurance and Virginia Bureau Of Insurance Issues Guidance Outlining Differences Between P&C Travel Insurance And L&H Accident And Sickness Insurance While Traveling

The Virginia General Assembly passed House Bill 2186 and Senate Bill 1565 establishing procedures and requirements for travel protection plans and travel administrators and establishing travel insurance as an inland marine line of insurance sold by property and casualty insurance agents. Among other things, the legislation (i) prohibits any person from acting as a limited lines travel insurance agent unless properly licensed, and (ii) prohibits any person from acting as a travel retailer unless properly registered. The new law applies to travel insurance policies purchased on or after July 1, 2019. On April 16, 2019, the Bureau of Insurance issued Administrative Letter 2019-01, providing guidance that “travel insurance” is included within the marine classification of insurance as property and casualty insurance, requiring rule, rate and form filings with the P&C Division, and policies providing “accident and sickness insurance while traveling” are regulated as accident and sickness insurance and must be filed with the L&H Division and shall not include P&C coverages such as interruption or cancellation of a trip or event; loss of baggage or personal effects; damages to accommodations; or rental vehicles.

Scott J. Sorkin, Esq. - BLAND & SORKIN P.C., (804) 747-6667 x12 , ssorkin@blandsorkin.com

Category(s): Washington - 07/30/2019

New Surprise Billing Law

The new surprise billing law takes effect January 1, 2020 and the Washington Office of Insurance Commissioner (OIC) is currently drafting the regulation related to same.  This law will prevent the consumer from receiving a surprise bill when they receive emergency care from a hospital or get care at an in-network facility but are treated by an out-of-network provider. The out-of-network provider will be paid by the insurer a “commercially reasonable” amount, based on similar services provided in the geographic area.  If they cannot agree on amount, then they can request arbitration, but the consumer will not be involved in the dispute.  Insurers, providers, and facilities must give consumers a new notice detailing their rights and that they cannot be balance billed.

Julie M. Pomerantz, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C, (512) 480-5100 , jpomerantz@mwlaw.com

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