Alert Edition May 2021

Welcome to the May 2021 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,
C. Ignacio Matos, Esq., FORC Alert Co-Editor
Ryan Smart, Esq., FORC Alert Co-Editor
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Category(s): Alabama - 05/24/2021

Notice of Regulation Hearing

Notice is hereby given that a hearing will be held at 10:00 a.m. Central Time, on Thursday, June 10, 2021, in the offices of the Alabama Department of Insurance, 201 Monroe Street, Fifth Floor Conference Room, RSA Tower, Montgomery, Alabama, as follows:

  • Adoption of amendments to Section 5 of Insurance Regulation No. 94 [Rule 482-1-094-.05] which sets forth general provisions applicable to the use of surplus notes by insurers. The amendments would permit the use of a surplus note to initially capitalize a captive insurer but would require the affirmative approval in writing by the commissioner, thus making an exception to the rule applicable to other insurers that an application is deemed approved unless otherwise notified within 15 business days. The proposed effective date of the amendment is July 1, 2021.
  • Adoption of revisions to Insurance Regulation No. 134 [Chapter 482-1-134] which sets minimum reserve requirements for health insurance in accordance with the Standard Valuation Law as set out in Chapter 36A of Title 27 of the Alabama Insurance Code, beginning with Section 27-36A-1, Code of Alabama 1975. The revisions are intended to make the regulation substantially similar to the most recent revisions of the Health Insurance Reserves Model Regulation developed by the NAIC. The proposed effective date of the revisions is June 20, 2021.
  • For a full list of action items, please click here .

    Stephen W. Still, Esq. - BALCH & BINGHAM LLP, (205) 488-5512 , sstill@balch.com

    Category(s): Florida - 05/24/2021

    DWC Presents its 2020 Results and Accomplishments Report

    In early March, the Florida Department of Financial Services Division of Workers’ Compensation (DWC) published a report detailing its 2020 results and accomplishments. The report includes medical, indemnity, and financial results and outlines various regulatory activities. It also includes a points of interest section for its readers, highlighting aspects such as stakeholder training and education, an insurer regulatory report, and COVID-19 summaries. Click here  to view DWC’s 2020 Results & Accomplishments Report.

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

    Category(s): Florida - 05/24/2021

    DWC Releases Updated Report on Effects of COVID-19 on Florida’s Workers’ Comp System

    In April, the Florida Department of Financial Services Division of Workers’ Compensation (DWC) released an updated data summary report outlining the effects of COVID-19 on Florida’s workers’ compensation system. The DWC intends to continually update this report as new data is reported and analyzed. The report, as of March 31, 2021, can be found here .

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

    Category(s): Florida - 05/24/2021

    Governor Extends Emergency Declarations

    On April 27, 2021, Governor Ron DeSantis issued Executive Order 21-94  to extend the state of emergency declared for the entire state due to COVID-19. The Order extends the state of emergency declared in Executive Order 20-52 , as extended by Executive Orders 20-144, 20-166, 20-192, 20-213, 20-276, 20-316, and 21-45, for another 60 days, until June 26, 2021. Additionally, the Governor issued Executive Order 21-64  on March 10, 2021 extending the state of emergency previously declared for Hurricane Sally for the following Florida counties: Escambia, Santa Rosa, Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson, Jefferson, Liberty, Okaloosa, Walton, and Washington Counties. The emergency declared in Executive Order 20-224 , as amended by Executive Orders 20-248 , 20-279 , and 21-10 , has been extended for 60 days until May 9, 2021.

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

    Category(s): Florida - 05/24/2021

    OIR Establishes 2021 Rates for Citizens

    On March 15, 2021, the Florida Office of Insurance Regulation (OIR) conducted a virtual rate hearing  to receive testimony and hear public comments regarding Citizens Property Insurance Corporation’s (Citizens’) proposed rate changes for its business in the Coastal Account (CA), Commercial Lines Account (CLA), and the Personal Lines Account (PLA). Following the hearing, the OIR accepted written comments until March 26. On April 20, 2021, the OIR issued Orders  establishing the 2021 personal property insurance rates for Citizens. The effective date for both new and renewal policies is August 1, 2021. Additional information is available on the Citizens public rate hearing webpage .

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

    Category(s): Florida - 05/24/2021

    OIR Informs the House Commerce Committee about the State of Florida’s Property Insurance Market

    The Florida Office of Insurance Regulation provided an update on the state of the property insurance market to the House Commerce Committee in late February. This report can be found here . Following this update, the OIR gathered supplemental information from the National Association of Insurance Commissioners (NAIC) Market Conduct Annual Statement (MCAS) Data Call to further demonstrate the state’s litigation trends in the insurance market. The OIR’s supplemental report  indicates Florida is home to three-quarters of the nation’s property insurance lawsuits. The OIR’s presentations can be viewed here .

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

    Category(s): Georgia - 05/24/2021

    Georgia Bulletin 21-EX-5 – Certificates of Insurance

    In Georgia, Certificates of Insurance must comply with O.C.G.A. §33-24-19.1. A Certificate of Insurance only provides a synopsis of coverage under an insurance policy at the time of issuance, and does not include the insurance policy, insurance binder or insurance information card. According to the statutory definition, a Certificate of Insurance is prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage.
    A Certificate of Insurance (1) must be issued on an ACORD form, ISO form or other forms explicitly approved by the Commissioner of Insurance; (2) form cannot be altered; and (3) form must contain the following specific disclaimer language required by the Commissioner: “This certificate of insurance is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage, terms exclusions and conditions afforded by the policies referenced herein.” It is a violation of the law to provide or request a Certificate of Insurance on an unapproved or altered form, or to include information that purports to alter or expand coverage. Fines can be up to $5,000 for each violation of the law.
    The law governing certificates and relevant regulations applies to certificate holders, certificate requestors, policyholders, insurers, and insurance producers, wherever they may be located, as long as the certificate issued is for insurance coverage of property, operations or risks located in Georgia.

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

    Category(s): Georgia - 05/24/2021

    Georgia Insurance Commissioner Announces Bid for Election in 2022

    In early April 2021, John King, Georgia Insurance Commissioner, announced his candidacy for election as the next Georgia Insurance and Safety Fire Commissioner in 2022. Governor Brian Kemp appointed Commissioner King in 2019 following the suspension of the then Commissioner elected in 2018. In addition, on April 28, 2021, Georgia State Representative, Matthew Wilson, announced to his Democratic candidacy for this election.

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

    Category(s): Georgia - 05/27/2021

    Key New Insurance Laws From Georgia’s 2021 Legislative Session – Georgia Governor, Brian Kemp, Has Until May 10, 2021 to Approve or Veto New Legislation

    HB 205, will regulate travel insurance based on the NAIC’s Travel Insurance Model Act and has been sent to Governor. 
    HB 254, will create a new regulatory framework for public insurance adjusters and has been sent to Governor.
    HB 241, will amend O.C.G.A. § 33-7-7 to revise the definition of property insurance to exclude automobile tire and wheel road hazard protection products, auto key FOB replacement products and auto wear and tear lease waivers which are offered by third party obligors and insured by a contractual liability insurance policy and has been sent to Governor.
    HB 234, will allow self-funded healthcare plans to elect to participate in Georgia’s Surprise Billing Consumer Protection Act and has been sent to Governor.  
    HB 454, will require a health insurer to reimburse the cost of a healthcare provider listed in the insurer’s provider online directory for services rendered after the healthcare provider ceases to be in-network for a period ending on the earlier of 180 days after termination of the healthcare provider’s network contract or the last day of the covered person’s insurance coverage.  
    HB 509, will, if the Patient Protection and Affordable Care Act were to be repealed, require health insurers to make available at least one reasonably priced comprehensive major health insurance policy available to Georgia residents in an insurer’s approved service areas.  
    SB 43, will enact the "Noncovered Eye Care Services Act" , which prohibits health insurers from requiring an ophthalmologist or optometrist to accept customer payments set by a health insurer, or to provide discounts, for non-covered eye care services and has been sent to Governor.

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

    Category(s): Georgia - 05/24/2021

    Recent Georgia Covid-19 Case – Restaurant Group Management v. Zurich American Insurance Company (Northern District of Georgia, March 20, 2021)

    A popular Atlanta restaurant group recently lost its bid for insurance coverage for Covid-19 related losses. Zurich American Insurance Company successfully obtained a motion to dismiss this lawsuit in which the Court ruled that the plaintiffs did not sufficiently allege any “direct physical loss of or damage to” the restaurants’ premises as required for coverage under their commercial property insurance policy.

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

    Category(s): Indiana - 05/27/2021

    Legislative Update

    The Indiana General Assembly finished up the 2021 legislative session a week earlier than expected on Thursday, April 22. The insurance industry entered this session with a focus on addressing COVID-19 liability. Action took place quickly as the House and Senate sent Senate Enrolled Act 1  to Governor Eric Holcomb before the end of February. The legislation provides civil immunity to businesses related to COVID-19 if certain conditions are met.
    House Enrolled Act 1405  also passed and contained various provisions impacting insurers across all product lines.  The relevant insurance provisions include the following:
    
  • Establishes Indiana as a Deficit Reduction Act state for the purpose of the Indiana Long Term Care Partnership Program. Requires existing Partnership Program policies to be given grandfather status from the federal government before implementing the change.
  • Requires medical records to be provided by a medical provider within 30-days of receipt of the request. Allows for extension of time and fines.
  • Allows an insurance producer to carry over up to 12 CE credits per renewal cycle.
  • Specifies notices for cancellation and non-renewal for auto and home policies are to be “mailed”. Current statute states such notices are to be “mailed or delivered”, which has created confusion and led to litigation.
  • Specifies pre-notice of cancellation or non-renewal for auto and home policies only needs to be sent to “independent” agents.
  • Provides a policyholder acquiring a policy electronically affirmatively consents to receive notices electronically. Requires paper documents to be provided if requested by the policyholder.
  • Provides safe harbor protection against rebating for risk mitigation considerations provided to insureds. Increases rebating threshold for agents to $250 and $500 for raffles.
  • Provides that a merchant or other seller that acts as an agent for purposes of the sale of an auto service contract is not a person contractually obligated under the service contract by virtue of acting as the seller.
  • Greg E. Mitchell, Esq. - FROST BROWN TODD, LLC, (859) 244-7548 , gmitchell@fbtlaw.com
    Jon M. Zarich, Esq. - Frost Brown Todd, LLC, (317) 237-3831 , jzarich@fbtlaw.com

    Category(s): Kentucky - 05/24/2021

    Legislative Update

    Kentucky has joined a number of states in adopting an amended version of the National Association of Insurance Commissioners (NAIC) Travel Insurance Model Act as law. Kentucky House Bill 250  was signed into law by Gov. Andy Beshear on March 18, 2021 and becomes effective 90 days after the adjournment of the state legislature. The NAIC Travel Insurance Model Act contains regulatory requirements related to numerous aspects of the travel protection industry, including, among others:
    •	Form and rate filing,
    •	Sales and marketing,
    •	Use of opt-out marketing plans,
    •	Licensing and administrator requirements, and
    •	The sale of Travel Protection Plans that incorporate insurance and non-insurance products and services such as cancellation waivers or assistance services.

    Greg E. Mitchell, Esq. - FROST BROWN TODD, LLC, (859) 244-7548 , gmitchell@fbtlaw.com

    Category(s): Montana - 05/24/2021

    Montana’s Unisex Law Repealed

    HB 379  which repeals Montana’s law prohibiting rating in all lines of insurance on the basis of sex has been signed by the Governor. HB 379 permits insurers to rate on the basis of sex and marital status along with all previous permitted factors. The bill was supported by Montana’s Commissioner of Insurance and will most highly impact auto and life insurance although it applies to non-ACA health insurance as well. The change takes effect January 1, 2022. We are expecting the law to be litigated.

    Bruce M. Spencer, Esq. - Law Offices of Bruce M. Spencer PLLC, (406) 459-2122 , bruce@brucespencerlaw.com

    Category(s): Nebraska - 05/24/2021

    Nebraska Director of Insurance

    Eric Dunning has been appointed Director of the Nebraska Department of Insurance. He was the Director of Government Relations for Nebraska Blue Cross/ Blue Shield. He succeeds Bruce Ramge who has retired. Click here  to read the press release.

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

    Category(s): New Jersey - 05/24/2021

    New Jersey Governor’s Signature Will Require Insurers to Disclose Covid Coverage

    The New Jersey legislature recently overwhelmingly passed AB4805 , which if the governor signs would require New Jersey insurers to provide summaries of coverage for loss of use and occupancy of a commercial property. The bill sits on Governor Phil Murphy’s desk for signature.

    Daniel A. Cotter, Esq. - Howard & Howard Attorneys PLLC, (312) 456-3674 , dcotter@howardandhoward.com

    Category(s): New York - 05/24/2021

    New Regulations Effective April 1, 2021 Governing Registration and Examination Requirements of Natural Persons Representing New York Registered Investment Advisers

    The New York State Department of Law recently adopted new regulations, effective February 1, 2021, governing registration and examination requirements of natural persons representing New York registered investment advisers, including investment adviser representatives, principals, supervisors, solicitors, and certain investment adviser representatives of federally covered investment advisers (such regulations, the “New Regulations”).
    Under the New Regulations, all (i) covered “investment adviser representatives,” “principals” and “supervisors” of a New York registered investment adviser, (ii) covered “solicitors” and (iii) “investment adviser representatives” of a federally covered investment adviser, must apply for registration in New York. 
    The New Regulations define “investment adviser representative” generally as a natural person who represents: (a) an investment adviser or solicitor in performing any of the acts that define an investment adviser under New York General Business Law (GBL) § 359-eee(1)(a), or (b) a federally covered investment adviser from a place of business in the State of New York and who satisfies the requirements of Rule 203A-3 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”); “principal” as every person or entity directly or indirectly controlling an investment adviser or solicitor; “supervisor” as a natural person who as part of their duties as an investment adviser representative directly supervises one or more natural persons associated with an investment adviser; and “solicitor” as a person who as part of a regular business, engages in the business of providing investment advice to the limited extent that such person receives compensation for introducing a prospective investor or investors to a New York registered investment adviser or a federally covered investment adviser, unless such person would be excluded from the definition of investment adviser under an enumerated exception.

    Frederick J. Pomerantz, Esq. - INSURANCE LEGAL & REGULATORY CONSULTING, PLLC, (516) 297-3101 , PomerantzF35@gmail.com

    Category(s): New York - 05/27/2021

    Update on DFS Investigation of SolarWinds Attack

    On April 27, 2021, the New York State Department of Financial Services (“the Department” or “DFS”)  released a further report on the its investigation of the New York’s financial services industry’s response to the supply chain attack on SolarWinds (“the SolarWinds Attack ”). 
    As all may recall, on Sunday, December 13th, it was publicly reported the Information Technology (IT) products and services company SolarWinds was hacked, and that its Orion IT monitoring and management product was corrupted with sophisticated malware. During the SolarWinds Attack, hackers corrupted routine software updates that were downloaded onto thousands of organizations’ information systems.  
    This malware was then spread through software updates to their customers around the globe, including financial services institutions.  We are aware that several regulated entities were infected with this malware.
    According to DFS ’further report, this intrusion is active and ongoing, and the adversary responsible for the compromise is sophisticated, well-resourced, and persistent.  The Cybersecurity & Infrastructure Security Agency (CISA) has also advised, “the SolarWinds Orion supply chain compromise is not the only initial infection vector this APT actor leveraged,” and this adversary has compromised organizations that were not using SolarWinds Orion.  (“CISA APT Alert ”).  In short, the CISA advised: be prepared for more bad news to come.
    The April 27, 2021 update furthers DFS’s commitment to improving cybersecurity and sharing information to protect consumers and the industry.  DFS has also issued multiple alerts regarding ongoing cyber threats, including the SolarWinds Attack , weaknesses in Microsoft Exchange Server , and an ongoing cyber fraud campaign  identified by the Department.

    Frederick J. Pomerantz, Esq. - INSURANCE LEGAL & REGULATORY CONSULTING, PLLC, (516) 297-3101 , PomerantzF35@gmail.com

    Category(s): Tennessee - 05/24/2021

    TDCI Receives Accreditation by the NAIC

    Following a comprehensive review process, the Tennessee Department of Commerce and Insurance received accreditation by the National Association of Insurance Commissioners (NAIC) on April 8 during the NAIC’s 2021 Spring National Meeting. Commenting on the achievement, Tennessee Commissioner of Commerce and Insurance Carter Lawrence stated that “Tennessee insurance companies can conduct business knowing their insurance industry is well-regulated in conformance with national and state standards and best practices while maintaining a level playing field.”

    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): Washington - 05/28/2021

    Washington Bans Credit in Insurance Rates

    On April 16, 2021, Washington Insurance Commissioner Kreidler recently issued an order  prohibiting insurers in the state from using credit scores in auto, homeowners, and renter’s insurance. Insurance company groups sought to delay Washington’s insurance commissioner Kreidler’s order preventing the use of credit scores in auto, homeowners, and renter’s insurance premium calculations. Kreidler submitted an opposition brief, citing reasoning for the order. The Court denied the motion - insurer groups “were unlikely to succeed with their arguments, and that Kreidler demonstrated good cause for the emergency rule and did not exceed his authority as the regulator of insurance practices in the state.”

    Daniel A. Cotter, Esq. - Howard & Howard Attorneys PLLC, (312) 456-3674 , dcotter@howardandhoward.com

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