Alert Edition November 2021

Welcome to the November 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): National - 11/11/2021

Biden Administration Proposes Rules to Promote Transparency in Air Ambulance Costs, Agent and Broker Compensation

On September 16, 2021, the Office of Personnel Management Office, the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department (Agencies) published proposed rules  which would require plans, issuers, and providers of air ambulance services to submit data regarding air ambulance services specified in the reporting requirements of the federal No Surprises Act. The rules also outline the Centers for Medicare & Medicaid Services' (CMS) authority to enforce Title I (the No Surprises Act) and Title II (Transparency) of Division BB of the Consolidated Appropriations Act of 2021, in states that do not have the authority to enforce or fail to substantially enforce one or more of the provisions. It also helps consumers understand the compensation being paid to agents and brokers who assist them in selecting health insurance. An Air Ambulance NPRM Fact Sheet can be found here. 

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

Category(s): National - 11/11/2021

FIO Issues RFI on the Insurance Sector and Climate-Related Financial Risks

In response to President Biden’s May 2021 executive order on climate change, the U.S. Department of the Treasury’s Federal Insurance Office (FIO) published a request for information  (RFI) on the insurance sector and climate related financial risks. FIO has three initial climate-related priorities: (1) assessing climate-related issues or gaps in the supervision and regulation of insurers, including their potential impacts on U.S. financial stability; (2) assessing the potential for major disruptions of private insurance coverage in U.S. markets that are particularly vulnerable to climate change impacts, as well as facilitating mitigation and resilience for disasters; and (3) increasing FIO’s engagement on climate-related issues and leveraging the insurance sector’s ability to help achieve climate-related goals. The responses to the RFI are expected to help inform FIO’s assessment of implications of from climate-related financial risks for the insurance industry.  The RFI accepts comments for 75 days, ending on November 15, 2021.

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

Category(s): National - 11/11/2021

FIO Releases its Annual Report on the Insurance Industry

On September 30, 2021, the U.S. Department of the Treasury’s Federal Insurance Office (FIO) released its 2021 Annual Report on the Insurance Industry.  The Report discusses the U.S. insurance industry’s financial performance and its financial condition for the year ending December 31, 2020. It also addresses domestic and international insurance issues, including the COVID-19 pandemic, climate risk, and cyber risks, and provides updates on FIO’s activities. International developments, such as those at the International Association of Insurance Supervisors (IAIS), are discussed as well.

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

Category(s): Alabama - 11/11/2021

The Alabama Department of Insurance has issued/updated the following Legal Regulations

Regulation Number: 161 
Adoption of Valuation Manual (revised effective January 1, 2022) [adoption of new Section 8 (Rule 482-1-161-.08)]

Regulation Number: 164 
Pharmacy Benefits Managers (revised effective January 1, 2022)

Regulation Number: 138 
Captive Insurers (revised effective January 1, 2022) [addition of new Section 20 (Rule 482-1-138-.20)]

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

Category(s): California - 11/19/2021

Insurance Commissioner Issues Orders to Allstate, Mercury and CSAA Regarding Auto Insurance Refunds

On October 6, 2021, the CDI issued letters to Allstate, Mercury and CSAA communicating its view that their private passenger policyholders should have received additional premium refunds and credits due to decreased driving to comply with various state and local public health “stay-at-home” orders. This letter follows prior CDI orders issued this year and last year calling on insurers to provide premium refunds and credits. As for these three insurers, the CDI demanded they provide information concerning past refunds and credits and plans for future ones. More information can be found here. 

Spencer Y. Kook, Esq. - Hinshaw & Culbertson LLP, (213) 614-7359 , skook@hinshawlaw.com

Category(s): California - 11/11/2021

Prenotice Discussion on Mitigation in Rating Plans and Wildfire Risk Models

On October 11, 2021, the CDI issued an invitation to a prenotice public discussion  on mitigation in rating plans and wildfire risk models (REG-2020-00015). The discussion had been postponed from early 2021 and is now scheduled for 1:00 p.m. on November 10, 2021, over Zoom. The CDI has been working on draft regulations addressing the use of models with respect to wildfire risk and is seeking alternatives to the contemplated draft  that would achieve similar benefits, which the CDI identifies as follows:
•	Incentivizing individual and community mitigation efforts by requiring consideration of property- and community-level mitigation against wildfire risk. 
•	Reducing the risk of loss posed by wildfires. 
•	Improving accuracy in the classification of wildfire risk and the resulting rates and premiums. 
•	Increasing transparency in, and consumer awareness of, insurers’ rating and/or scoring of wildfire risk.
•	Enhancing consumer protection by establishing a consumer appeal process. 
•	Reducing unfair discrimination by enhancing consistency in insurers' wildfire rating practices and/or risk scoring practices.
•	Potentially improving availability and affordability of property-casualty insurance for communities and properties where wildfire mitigation measures have been implemented.
Written and oral comments are invited, and the CDI requests analysis and supporting information on the economic impact of suggested alternatives.

Nicole M. Zayac, Esq. - Willkie Farr & Gallagher LLP, (415) 858-7443 , nzayac@willkie.com

Category(s): California - 11/19/2021

Surplus Lines Export List

On October 12, 2021, the CDI issued a pre-hearing notice  with respect to the export list for surplus line placements. Coverages included on the list are considered generally unavailable in the admitted market may be placed in the surplus line market without a diligent search of the admitted market. The date and time of the hearing, which will be virtual, is not specified and will be provided in the Notice of Hearing to be subsequently issued. The notice seeks recommendations from interested parties regarding the modification, addition, or deletion of any export list coverage.

Nicole M. Zayac, Esq. - Willkie Farr & Gallagher LLP, (415) 858-7443 , nzayac@willkie.com

Category(s): California - 11/11/2021

The California FAIR Plan Association Sues Commissioner to Void Attempt to Expand Residential Coverage

On October 14, 2021, the California FAIR Plan Association (FAIR Plan), the market of last resort for basic property insurance, sued the California Commissioner to void Order no. 2021-2 which seeks to require the FAIR Plan to sell a so-called “Homeowners’ Policy” (which offers some, but not all the coverages offered under a traditional HO-3 homeowners’ policy). Order no. 2021-2 follows entry of a judgment on a petition for writ of mandate action voiding the Commissioner’s prior Order nos. 2019-2 and 2019-3, which sought to require the FAIR Plan to offer a comprehensive homeowners’ HO-3 policy. Further information regarding the Commissioner’s latest Order no. 2021-2 can be found here. 

Spencer Y. Kook, Esq. - Hinshaw & Culbertson LLP, (213) 614-7359 , skook@hinshawlaw.com

Category(s): California - 11/11/2021

Wildfire Moratoriums

On September 20, 2021 and October 1, 2021, respectively, the California Department of Insurance (CDI) issued Bulletin 2021-06  and Bulletin 2021-07  identifying the ZIP codes to which the Cal. Ins. Code § 675.1(b)(1) residential property non-renewal moratorium applies as a result of wildfires.  
For reference, the text of Cal. Ins. Code § 675.1(b)(1) states that: 
“An insurer shall not cancel or refuse to renew a policy of residential property insurance for a property located in any ZIP Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency, as defined in Section 8558 of the Government Code, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. This prohibition applies to all policies of residential property insurance in effect at the time of the declared emergency.”

Nicole M. Zayac, Esq. - Willkie Farr & Gallagher LLP, (415) 858-7443 , nzayac@willkie.com

Category(s): Florida - 11/19/2021

Citizens Updates its Policy Forms

In early September, the OIR approved changes to Citizens Property Insurance Corporation’s (Citizens’) policy forms and endorsements in response to Senate Bill 76.  The changes to Citizens’ forms are specific to provisions regarding claims and apply to new business and renewal policies effective November 1, 2021. Further information, including an overview of the changes made to Citizens’ forms, can be found in Citizens’ Personal Lines Bulletin  and Commercial Lines Bulletin. 

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

Category(s): Florida - 11/11/2021

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

In October, 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 September 30, 2021, can be found here. 

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

Category(s): Florida - 11/11/2021

FHCF Rule Amendments Become Effective

The State Board of Administration of Florida, Florida Hurricane Catastrophe Fund (FHCF) filed final rule amendments on October 21, 2021, to implement section 215.555, F.S. Rule 19-8.010, F.A.C., is being amended to adopt the 2022-2023 Reimbursement Contract, including Addenda. Rule 19-8.013, F.A.C., is being amended to delete a reference to an obsolete statutory provision. The following final amended rules are effective November 10, 2021:
•	19-8.010  Reimbursement Contract
•	19-8.013  Revenue Bonds Issued Pursuant to Section 215.555(6), F.S.

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

Category(s): Florida - 11/11/2021

NCCI Proposes Workers’ Comp Rate Reduction

On August 30, 2021, the Florida Office of Insurance Regulation (OIR) received the 2022 Florida Workers’ Compensation Rate Filing  by the National Council on Compensation Insurance (NCCI). NCCI has proposed an overall average -4.9 percent rate level decrease for the voluntary market. If approved by OIR, the rate changes would become effective January 1, 2022. The OIR held a hearing on NCCI’s proposed rate decrease on October 14, 2021, to receive public comments. No public testimony was provided, but the record remained open until October 28, 2021. Further information, including a recording to the OIR rate hearing, can be found here. 

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

Category(s): Florida - 11/11/2021

OIR Publishes its Regulatory Plan for FY 2021-22

In early October, the OIR released its Regulatory Plan for the 2021-2022 Fiscal Year  in accordance with section 120.74, Florida Statutes (F.S.).  The proposed regulatory revisions were prepared by the OIR following its review of the legislation passed during the 2021 Regular Session. Notably, the OIR plans to create a new subsection (11) in section 624.424, F.S., requiring the Financial Services Commission to create a form for residential property insurers to file information with the OIR on an annual basis. The form will capture information from all residential property claims closed in the prior calendar year, including data related to vendors, attorneys, and public adjusters associated with the claim. The OIR also plans to amend section 624.610, F.S., credit for reinsurance, to add reciprocal reinsurers and to comply with covered agreements entered into by the U.S. and other countries.

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

Category(s): Georgia - 11/19/2021

Directive 21-EX-13: Surprise Billing Arbitration Portal

On November 15, 2021, Commissioner John F. King has issued Directive 21-EX-13 to update the procedures of the arbitration program pursuant to the Surprise Billing Consumer Protection Act OCGA § 33-20E (the “Act”) to be used by providers, facilities and insurers. The Act was effective on July 1, 2021.  

Requests for Arbitration
Starting November 16, 2021, requests for Arbitration under the Act (OCGA § 33-20E-9) must be submitted via the Department of Insurance’s (“DOI”) GovLink portal , which will also be sent to the health insurer. Instructions can be found here. 

Providers and Facilities
When submitting a request, submitters should review whether the claim is eligible for surprise billing arbitration by using the DOI-issued application here.  Providers and facilities should note that the application only allows for claims related to four enrollees to be submitted per Arbitration request, or the application will otherwise be rejected.

Health Insurers
To view a claim submitted against it, insurers must create an account in the GovLink portal.

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

Category(s): Georgia - 11/12/2021

Duty to Properly Respond to Consumer Services Division

On September 27, 2021, Insurance and Safety Fire Commissioner John F. King issued Directive 21-EX-4  due to some insurers, agents and public adjusters not responding expeditiously to requests for information from the Consumer Services Division.
Upon a request for information from the Consumer Services Division, individuals or entities licensed by the Office of Commissioner of Insurance and Safety Fire must provide a prompt and sufficient response, and not a de minimis response merely confirming receipt or requesting an extension. The Consumer Services Division must receive the sufficient response within fifteen business days of the date the Consumer Services Divisions send an inquiry via email, fax or U.S. Mail. Failure to comply may result in further regulatory action by the Office of Commissioner of Insurance and Safety Fire.

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

Category(s): New York - 11/11/2021

DFS Announces Return of a Drawing to the Heirs of a Prominent Art Collector of the Nazi Era

In a DFS Press Release dated October 15, 2021, Acting Superintendent of Financial Services Adrienne A. Harris announced the return of a drawing to the heirs of Dr. Arthur Feldmann. The work is a double-sided chalk drawing by the Italian artist Giacomo Cavedone (1577-1660) entitled A Study of a Priest Holding a Book (recto); A Study of the Standing Figure of a Young Soldier (verso). The drawing was stolen from the Brno home of the renowned art collector Dr. Arthur Feldmann when the Nazis requisitioned the Feldmann villa in March 1939. This is the first time the New York State Department of Financial Services (DFS) Holocaust Claims Processing Office and the Feldmann Heirs collaborated with the Carabinieri for the Protection of Cultural Heritage whose swift and diligent intervention made this success possible.

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

Category(s): New York - 11/11/2021

Lead-Based Paint Exposure Public Hearing

A public hearing to determine if insurance companies should be allowed to continue to exclude from coverage damages caused by lead-based paint exposure was held November 8, 2021.

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

Category(s): Tennessee - 11/11/2021

Remote Testing for Producer Exams Takes Off in Tennessee

Over 2,000 prospective insurance producers have utilized the remote license examination implemented earlier this year by the Tennessee Department of Commerce and Insurance (TDCI), accounting for over 35% of all insurance producer examinations, which confirms that Tennesseans have “a strong interest in the insurance industry as a career and a willingness to adapt to new technology in order to fulfill their licensing requirements,” according to Commissioner of Commerce and Insurance Carter Lawrence. TDCI has partnered with Pearson VUE for online, proctored remote exams that can be taken at home, an office or any secure location in Tennessee – more information on testing and ID requirements is available on Pearson Vue’s Tennessee insurance testing page here. 

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

Category(s): Washington - 11/12/2021

Washington State Imposes $25,000 Fine and Orders Walmart to Cease & Desist Soliciting Pet Insurance

The Washington Insurance Commissioner has ordered Walmart, Inc., to pay a $25,000 fine and to cease & desist from alleged unlicensed soliciting and being paid a referral fee for pet insurance. The Insurance Commissioner found the website “Walmart Pet Insurance powered by Petplan” to be a co-branded website, owned by Walmart, to be an enterprise with the “intent to sell”, and the activity is alleged to not fall within the narrow list of exemptions from needing a producer’s license for “referral compensation”. Order 21-0629  (10/28/2021) Related order to Cease & Desist and fine also issued to Fetch Insurance Services, LLC (d/b/a Petplan) Order 21-0630  (10/28/2021).

Steven Beeghly, Esq. - KREGER BEEGHLY PLLC, (206) 618-6110 , sb@kregerbeeghly.com

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