Category(s): Connecticut - 10/01/2010

Pursuant to the federal Patient Protection and Affordable Care Act (the “PPACA”), health policies currently in effect must be revised to satisfy certain specific benefit and coverage requirements by September 23, 2010.  The Connecticut Insurance Department (the “CID”) issued Bulletin HC-80 on July 22, 2010 in order to outline the requirements for filing PPACA policy revisions with the CID.  Information provided by Bulletin HC-80 includes the requirements for expediting PPACA filings and the requirement that rate filings be made at the same time as PPACA form filings even if there is no adjustment to the rates.

Michael T. Griffin, Esq. - ACCEL LAW GROUP P.C., (860) 761-8550 , mgriffin@accelcompliance.com

Category(s): Florida - 10/01/2010

Effective August 12, 2010, Rule 69B-231.110, entitled “Penalties for Violation of Other Specific Provisions of the Florida Insurance Code” prescribes penalties for insurance-related licensees who have been found to violate certain provisions of the Florida law pertaining to insurance.  To view the complete Rule text, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 10/01/2010

Recently, a Florida appellate court held that an insured who does not receive a statutorily-mandated premium discount for wind loss mitigation must first pursue administrative remedies with the Florida Office of Insurance Regulation ("OIR") before seeking court action against the insurer.  Serchay v. State Farm Ins. Co., 25 So. 3d 652, 652 (Fla. 4th DCA 2010).  In this case, the insured had filed an action in circuit court and sought class action certification against State Farm, alleging that the insurance company did not notify him of the right to receive the discount, nor did it provide him with the discount.  State Farm moved to dismiss the action based upon the insured's failure to exhaust his administrative remedies before filing the lawsuit.  The trial court granted the insurer's motion and the insured appealed.  Subsequently, the appellate court affirmed the trial court's determination and held that the insured should have exhausted the statutory administrative procedure before filing a judicial action against State Farm.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 10/01/2010

The Florida Office of Insurance Regulation ("OIR") announced on September 28, 2010 that it has signed a Memorandum of Understanding ("MOU") with its Mexican counterpart, the Insurance and Surety National Commissioner of the United Mexican States, that will serve to coordinate regulatory actions affecting insurers and consumers in Florida and Mexico, as well as allow the agencies to exchange information in a confidential manner.  To access the MOU, click here.  The OIR has signed similar agreements with counterparts in Bermuda, Germany and the United Kingdom.

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

Category(s): Florida - 10/01/2010

Effective September 21, 2010, Rule 69O-137.002, entitled "Annual Audited Financial Reports"(also known as the "Model Audit Rule") was revised to improve the Florida Office of Insurance Regulation's surveillance of insurers' financial condition, as well as conform the existing Rule to the National Association of Insurance Commissioners' ("NAIC") Model Audit Rule amendments.  The interstate uniformity resulting from the adoption is expected to reduce the cost of doing business in Florida.  Also, substantial conformity of these amendments to the Model Audit Rule is also required for NAIC accreditation.  As adopted, Rule 69O-137.002 provides for the exemption of certain insurers under certain circumstances.  To access the complete Rule text, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Georgia - 10/01/2010

The Georgia Assembly passed Georgia Senate Bill 310 (the “Bill”) in its 2010 session.  The Bill was signed into law by Governor Perdue on June 2, 2010 and became effective on July 1, 2010.  Under the Bill’s provisions, codified at O.C.G.A. § 33-64-1 et seq., pharmacy benefit managers (“PBM”) are subject to regulation by and must obtain licensure from the Insurance Commissioner’s Office; however, exceptions are provided for unlicensed PBMs operating in partnership with a medical facility or health insurer.  The new Georgia law also provides for regulation and licensure of multiple employer self-insured health plans by the Insurance Commissioner.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Enan E Stillman, Esq.

Category(s): Georgia - 10/01/2010

In Directive 10-EX-2 (“Directive”), Georgia Insurance Commissioner John Oxendine directed insurers to undertake an immediate review of all hospital agreements to ensure that such agreements do not contain a “most-favored-nation” clause.  A “most-favored-nation” clause prohibits, or grants a contracting insurer an option to prohibit, a hospital from contracting with another party to provide health care services at a lower rate than the payment or reimbursement rate specified in the contract with the contracting insurer.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Enan E Stillman, Esq.

Category(s): Louisiana - 10/01/2010

The Louisiana Department of Insurance (“LDOI”) has issued two missives on related topics relative to producer compensation, rebates/inducements and value-added services: Advisory Letter 2010-01 (the “Advisory Letter”) and Bulletin 2010-05 (the “Bulletin”).

Advisory Letter No. 2010-01 

The Advisory Letter states that its purpose is to advise all insurers, brokers and producers that “serious issues exist regarding producer compensation agreements and the manner in which producer compensation is being addressed among insurers, producers and insureds in Louisiana.”  The Advisory Letter goes on to list out a number of specific statutes, including LSA-R.S. 22:855 requiring the quoted premium to include all charges, and LSA-R.S. 22:1964(8) providing that paying or offering any valuable consideration or inducement whatsoever, not specified in a contract for life, health or annuity business, is an unfair or deceptive trade practice.

The Advisory Letter states that, with respect to each separate product line of insurance for which an insurer is required to file rates, the insurer must use “one rating scheme that establishes either a commission based on a percentage of the premium or a commission based on a flat fee.”  This scheme must be made available to all producers authorized to write that business for the insurer.

Further, the Advisory Letter specifically prohibits an insurer, producer or broker from quoting a premium “net of commission” because such a quote does not include all charges as required by LSA-R.S. 22:855, and therefore, such a quote does not accurately reflect the total cost of the insurance.

Bulletin No. 2010-05 

The Bulletin is directed to all brokers and producers selling accident and health insurance in Louisiana regarding rebating and inducements in the accident and health market.  Its stated purpose is to “provide guidance and clarification as to the services often referred to as ‘value added’ services that may be provided to insureds or potential insureds” without violating the rebating and inducement prohibitions set forth in the Louisiana Insurance Code.

Indicating that providing prohibited value-added services may be considered an unfair trade practice, the Bulletin lists examples of services that may be provided in a fair and nondiscriminatory manner, as well as certain services that may run afoul of the applicable rebating and inducement provisions.  Examples of prohibited services include, among others:

    ? COBRA administration beyond billing and collecting insurance premiums for former employees that are forwarded to the contract holder or insurer;

    ? payroll processing and/or services such as providing employers with check creation and distribution services for their employees; and

    ? certain types of risk management or loss control services, such as services not routinely available to all clients or that are typically provided on a fee for service basis.

The Bulletin directs all brokers and producers to conduct themselves accordingly, and to bring their practices into immediate compliance with the Code.

Van R. Mayhall, III - Investar Bank, (225) 227-2309 , van.mayhall@investarbank.com

Category(s): Nebraska - 10/01/2010

Nebraska Director Ann Frohman has submitted her resignation effective October 29.  She has not announced her future plans.  Her sucessor will be appointed by the Governor, who is running for re-election this November and is a strong favorite to win.

Lawrence F. Harr, Esq. - LAMSON, DUGAN & MURRAY, LLP, (402) 397-7300 , lharr@ldmlaw.com

Category(s): New Jersey - 10/01/2010

On September 24, 2010, New Jersey Commissioner of Banking and Insurance Thomas B. Considine issued Order No. A10-119  (Order) regarding retained asset accounts (RAAs). The Order was issued in anticipation of rules to be proposed in the future regarding the disclosures required related to RAAs and the standards for the review and approval of such disclosures.

The Order requires that commencing 120 days from September 24, 2010, all insurers authorized or admitted to transact life insurance in New Jersey offering RAAs shall provide written notice to the owner of a group policy or the beneficiary of a death benefit in bold, easy-to-understand language, the following information: (1) there is no FDIC protection for funds in the RAA, and in the unlikely event of an insurer insolvency, the protections afforded by the New Jersey Life and Health Insurance Guaranty Association are up to a maximum of $500,000; (2) the non-variable interest rate that the funds will earn until withdrawn; (3) a statement indicating that the entire balance may be withdrawn at once without fees or penalties; (4) a statement indicating whether fees on the RAA are chargeable, and if so, in what amounts; (5) a statement indicating the frequency and method of providing statements on the RAA; and (6) the insurer's contact information for questions concerning the RAA.

The Order further directs insurers to submit forms and other written materials to the Department for review within 150 days of the date thereof.

Susan Stryker, Esq. - BRESSLER, AMERY & ROSS, P.C., (973) 966-9681 , sstryker@bressler.com