Alert Edition January 2022

Welcome to the January 2022 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 - 01/24/2022

AI Regulation

December was a big month when it comes to the regulation of artificial intelligence. In the District of Columbia, the Attorney General introduced legislation aimed at algorithms that produce biased or discriminatory results. Meanwhile, the Federal Trade Commission announced that it is considering rules to ensure that algorithmic decision-making does not result in unlawful discrimination. What’s more, the National Telecommunications and Information Administration announced plans to publish a report on the ways in which commercial data flows of personal information can lead to disparate impact and outcomes for marginalized or disadvantaged communities. (The public notice specifically called out information being used by the insurance industry.) Looking ahead, the Colorado Insurance Division will soon kick off the stakeholder sessions required by SB 169, which restricts insurers' use of external consumer data, algorithms and predictive models.

Scott M. Kosnoff, Esq. - FAEGRE DRINKER, (317) 237-1201 , scott.kosnoff@faegredrinker.com

Category(s): National - 01/24/2022

Lindley-Myers Selected President-Elect of the NAIC

Members of the National Association of Insurance Commissioners (NAIC) elected officers for 2022 this week during the closing activities of its Fall 2021 National Meeting.
Missouri Department of Commerce and Insurance Director Chlora Lindley-Myers was selected as President-Elect for the 2022 term.

Ann Monaco Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522 , awarren@inglishmonaco.com

Category(s): Georgia - 01/24/2022

Clarifying Language on Payments Made by Insurers to and on Behalf of Insureds: Bulletin 21-EX-14

With questions arising since the enactment of House Bill 254, the Department’s position that the provisions of House Bill 254 only apply to payments involving public adjusters. The Department recognizes that insurers may, for the convenience of their insureds, issue payments and/or reimbursements on behalf of their insureds to others who have provided services to the insured.

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

Category(s): Georgia - 01/24/2022

CMS Revokes Georgia’s Medicaid Expansion Pathways to Coverage Section 1115 Waiver

On December 23, 2021, the Centers for Medicare and Medicaid Services (“CMS”) sent a 37 page letter to the Georgia Department of Community Health informing it that CMS was revoking Georgia’s Section 1115 Waiver for Medicaid eligibility expansion. Georgia Governor Brian Kemp criticized the holiday delivery timing of the letter and vowed to challenge CMS’s decision. In October 2020, CMS granted Georgia’s Medicare expansion waiver request for the state’s Pathways plan, which would have expanded coverage eligibility for uninsured, single adults with annual incomes up to 100% of the federally established poverty level (roughly $12,000 annual income). Under this waiver, individuals who are otherwise eligible based on their annual income amounts would have been required to satisfy certain “qualifying activities”, such as working at least 80 hours per month or receiving minimum monthly vocational training. In revoking the previously approved waiver, CMS determined that the minimum work-related requirement for maintaining Medicaid eligibility was not likely to promote the objectives of the Medicaid laws, relying in large part on the continuing adverse impact of the COVID-19 and its variants pandemic on the workplace environment and particularly on minority populations.

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

Category(s): Georgia - 01/30/2022

Georgia HB 454

HB 454 re (OCGA 33-20C-2) goes into effect on January 1, 2022. It will require insurers to reimburse a provider at in-network rates for the earlier of 180 days or through the last day of a insured’s coverage if the provider is listed as a participating provider in the insurer’s provider directory at the time a prospected insured selects the health benefit plan and that provider becomes out of network during and subsequent to open enrollment in the succeeding plan year.

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

Category(s): Georgia - 01/24/2022

Georgia Supreme Court Reverses Vacated Arbitration Award to Auto Dealer Captive Reinsurer

In Adventure Motorsports Reinsurance Ltd. v Interstate National Dealer Services, Nos. S21G0008, S21G0015, 2021 WL 5893247, --- S.E.2d ---- (Dec. 14, 2021), Interstate National Dealer Services (“INDS”) underwrote and administered motorsport vehicle service contracts that a dealer, Southern Mountain Adventures, LLC (“Dealer”), offered to its retail customers.  A dispute arose over the amount that INDS remitted to the Dealer’s affiliated reinsurer, Adventure Motorsports Reinsurance Ltd. (“Reinsurer”). 
The arbitrator found in favor of the Dealer and Reinsurer. In doing so, the arbitrator observed that under the reinsurance agreement, Reinsurer would pay no ceding fee to INDS as the administrator of the service contracts reinsured by Reinsurer.  The arbitrator also found that INDS’ periodic operating statements failed to specify the charges and fees it retained before ceding the claims reserves to the Reinsurer.  Premised on a “quantum meruit” calculation based on testimony of INDS’ former president about industry averages, the arbitrator made an award to the Dealer and Reinsurer. The trial court confirmed the arbitration award, but the Court of Appeals reversed the award, ruling that the arbitrator’s “explicit rejection” of the rate card information “as the contracted-for pricing ignores the express contractual language.” Later, the Supreme Court, observing that trial courts are “severely limited in vacating an arbitration award so as not to frustrate the legislative purpose of avoiding litigation by resort to arbitration.” reversed the Court of Appeals’ decision.  The Supreme Court agreed with the Dealer and Reinsurer that “controlling precedent requires a showing of concrete evidence that the arbitrator intentionally and knowingly chose to ignore the law applicable to the parties’ dispute.”

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

Category(s): Georgia - 01/24/2022

John King Sworn in as New Georgia Insurance Commissioner

On December 3, 2021, the Honorable John King was sworn in as Georgia’s insurance commissioner, a role he’d held on an interim basis while Jim Beck, his predecessor, faced federal fraud charges. Commissioner King is a former Doraville police chief and longtime Georgia National Guard general; he will participating in his first election in November of 2022. Jim Beck was convicted in October and will be serving 7 plus years at Maxwell Air Force Base Prison in Montgomery, for stealing $2 million.

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

Category(s): Georgia - 01/24/2022

Legislation Requiring an Insurer to Reimburse a Provider at In-Network Rates: Bulletin 21-EX-16

This Bulletin informs all health insurers conducting business in the state of Georgia that House Bill 454, which requires an insurer to reimburse a provider at in-network rates for 180 days (or through the last day of a covered person’s coverage, whichever comes sooner) if the provider is listed as a participating provider in the insurer’s provider directory at the time a prospected covered person selects their health benefit plan and that provider becomes out of network,  goes into effect on January 1, 2022. OCI will track consumer complaints regarding potential violations of this law and contact relevant insurers for clarification or correction.

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

Category(s): Georgia - 01/30/2022

Reconciliation of Non-Admitted Premium: Directive 22-EX-1

On January 21, 2022, Commissioner John F. King has issued Directive 22-EX-1 to request certain data regarding non-admitted insurance written in Georgia.  This request is to assist the Department with reconciling of premium written by non-admitted insurance companies with the premiums reported by Georgia non-admitted filers (including Surplus Lines Brokers, Risk Purchasing Groups, and independently procured policies).
Non-admitted filers must file and remit taxes and fees on all Georgia “Home State” non-admitted insurance business through the Surplus Lines Information Portal (“SLIP”).
Under Directive 22-EX-1, insurers must now also use SLIP to submit policy data (requirements listed below).  The deadline for policy submission is 90 days from the end of the quarter for foreign insurers and annually by June 30 for alien insurers. To set up an SLIP account, insurers must contact the DOI Premium Tax Division at (404) 656-7553 or via email at premiumtax@oci.ga.gov
Required policy data for each policy:
1.	Policy number.
2.	Insured.
3.	Premium (100% of the premium for GA “Home State” policies).
4.	Policy effective and expiration dates.
5.	Transaction effective date.
6.	Name of the entity that is responsible for the tax filing (i.e., the surplus lines broker, or individual who procured the policy).
Insurers can manually submit data through SLIP or us an XML batch process (recommended for insurers reporting numerous policies).

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

Category(s): Hawaii - 01/30/2022

Memorandum 2021-13H

In a memorandum dated October 6, 2021, the Insurance Commissioner urged all insurers, mutual benefit societies, and health maintenance organizations doing business in Hawai‘i to post on their websites, clear and complete explanations of coverage for gender identity services applicable to their health plans as soon as possible and at the latest, prior to the effective date of plans for plan year 2022. The Commissioner also reminds all insurers, mutual benefit societies, and health maintenance organizations doing business in Hawaii that HRS §§ 431:10A-118.3, 432:1-607.3, and 432D-26.3 explicitly prohibit discrimination in health plans, with respect to participation and coverage, based on actual or perceived gender identity. Click here  to read Memorandum 2021-13H.

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

Category(s): Maine - 01/24/2022

Maine Bureau of Insurance: Proposed Amendment to 02-031

Notice was given of a public hearing on January 5, 2022 at 3:00 p.m. from the Department of Professional and Financial Regulation (DPFR), to receive comments concerning the proposed amendment to 02 031 C.M.R. Chapter 365, Standards for Independent Dispute Resolution of Emergency Medical Service Bills (IDR). The hearing will take place by an audio-visual link and telephone and instructions for registering for and attending the hearing remotely, by either method, are on the Bureau of Insurance website. The purpose of the proposed rulemaking is to conform the current rule to changes enacted by PL 2021, c. 222 (LD 46, An Act To Further Protect Consumers from Surprise Medical Bills), repealing the $750 threshold for requesting dispute resolution of a bill, and prohibiting a provider from requesting resolution of a health care service for 90 days after an IDR entity has determined a fee for the same service; and to eliminate the IDR ambulance exclusion. Click here  to read the Updated Regulatory Agenda 2021-2022 from the Maine Bureau of Insurance.

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

Category(s): Michigan - 01/24/2022

Michigan Catastrophic Claims Association Adopts Governor Whitmer’s Plan to Issue $3 Billion in Refunds to Michigan Drivers

At the direction of Governor Gretchen Whitmer, the Michigan Department of Insurance and Financial Services (DIFS) has issued a bulletin to Michigan's insurers and launched a consumer FAQ page to inform insurers and consumers of the timeline and other requirements for Michigan's upcoming $400 per vehicle auto insurance refunds. Last week, Governor Whitmer announced  that all drivers would receive the $400 refunds as a result of the surplus in the Michigan Catastrophic Claims Association (MCCA) fund.

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

Category(s): Montana - 01/24/2022

Montana P&C Policy Table of Contents and Notice of Important Provisions

The Montana Commissioner of Securities and Insurance recently issued  a memorandum  requiring pursuant to Montana statute, a Table of Contents and Notice of Important Provisions in every P&C policy form. The memo references Montana Petroleum Tank Release Compensation Board v Crumley’s, Inc., 341 MT 33, 174 P.3d 948 (2008) in which the Montana Supreme Court invalidated an exclusionary endorsement because the policy did not contain a table of contents or notice of important provisions. Trade Associations and Insurance Advisory Organizations are meeting with CSI to discuss implementation, but unless a statutory change is made the requirement is mandatory for all P&C Policy filings.

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

Category(s): New York - 01/24/2022

Insurance Circular Letter No. 10 (12/17/2021)

This circular letter provides guidance to all health insurers, HMOs, certified student health plans, cooperative health benefit plans prepaid health services plans and all health care providers important guidance regarding the independent dispute resolution (IDR) process in the Federal No Surprises Act and New York’s IDR process set out in Financial Services Law Article 6 as well as related disclosure requirements. Click here  to read Insurance Circular Letter No. 10.

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

Category(s): New York - 01/24/2022

New York’s Acting Superintendent Becomes the First U.S. Financial Regulator to Issue Holistic set of Expectations on Managing Climate-Related Financial Risks

Acting Superintendent of Financial Services, Adrienne A. Harris, on November 15, 2021, announced that the New York State Department of Financial Services (DFS) has issued final guidance  to New York-regulated domestic insurers detailing DFS’s expectations related to their management of the financial risks from climate change. After issuing a proposed version  of the guidance in March, 2021, DFS received comments from a broad range of stakeholders, including insurers, trade groups, consumer advocates, climate experts, rating agencies and other financial regulators.  The final guidance reflects DFS’s careful consideration of all comments received.   
“Climate change is an urgent issue that poses wide-ranging and material risks to the financial system. Insurers, which are uniquely impacted as climate change affects both sides of their balance sheets, also play a critical role in managing climate risks,” said Acting Superintendent Harris. “The guidance is intended to support insurers’ efforts to manage the financial risks from climate change, bolstering the safety and soundness of the industry and the protection of consumers. We are grateful to all commenters for their engagement and contributions to the final guidance.”   
The guidance was informed by DFS’s ongoing dialogue with the insurance industry and international regulators and is based on the New York Insurance Law, National Association of Insurance Commissioners manuals, and the work of international regulators and networks. Building on an earlier circular letter on Climate Change and Financial Risks , the guidance sets out DFS’s expectations that all New York insurers start integrating the consideration of the financial risks from climate change into their governance frameworks, business strategies, risk management processes and scenario analysis, and developing their approach to climate-related financial disclosure.

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

Category(s): Oregon - 01/24/2022

Oregon House Bill 2393

Oregon has joined the vast majority of states requiring transportation companies, or TNCs, to provide personal injury protection for drivers and passengers. HB2393, goes into effect January 1, 2022, in Oregon.

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

Category(s): Texas - 01/24/2022

Communication by Email for ALL Texas licensees and COA Holders

TDI adopted regulation 28 TAC, 1.301 and 1.302 January 1, 2022, which requires agents, adjusters, TPA’s and companies, etc. regulated by TDI to designate an email address for official communications with TDI. Also, reports, documents and forms previously submitted to TDI by USPS, will now be provided via email.  Under §1.1302(c), all regulated persons must provide to TDI an email address designated for receipt of official communications and have processes to deal with same. The regulation will standardize the vehicle for official communications from TDI to regulated entities. A licensee may designate separate e-mails for agencies, adjusters, TPAs, and insurers/HMOs or it may designate the same e-mail address for all regulated entities in the group and sort it out on the entity side.

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

Category(s): Texas - 01/24/2022

Credit for Reinsurance Regulation

TDI adopted regulation 28 TAC 7.615, effective January 1, 2022, very similar to the NAIC Model, regarding a new way to achieve credit for reinsurance with a non-US reinsurer. This regulation supports the newly codified TIC 493.108.  Now, a cedant will receive credit for reinsurance when dealing with a non-US reinsurer domiciled in a reciprocal jurisdiction (as defined by statute) if the reinsurer satisfies requirements pursuant to the new law and regulation. In order to be eligible for the zero collateral reinsurance agreements, the non-US reinsurer must: (1) satisfy certain capital and surplus requirements, solvency, prompt payment, and absence of participation in solvent scheme of arrangement; and (2) agree to conditions, including submission to Texas jurisdiction, appointing the Texas Commissioner as its agent for service of process, and providing certain documentation to the TDI.

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

Category(s): Virginia - 01/24/2022

Virginia Issues New Rules Related to Dwelling Property and Homeowners Insurance

The Virginia State Corporation Commission, Bureau of Insurance issued new rules governing the content of dwelling property insurance policies (Chapter 341) and new rules governing the content of homeowners insurance policies (Chapter 342) found at Title 14 of the Virginia Administrative Code. The new rules repeal the rules of Chapter 340 (Rules Governing Standards for the Content of Fire Insurance in Combination with Other Coverages) and become effective January 1, 2022 and require compliance for policies delivered or issued for delivery in Virginia with effective dates on and after July 1, 2023. Insurers and rate service organizations are required to submit filings for compliance with these chapters no later than December 31, 2022.

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

Category(s): Washington - 01/24/2022

Washington Insurance Commissioner’s Legislative Priorities 2022 & Prefiled Bills

When the Washington Legislature convenes in 2022, the Insurance Commissioner has four proposed “priorities” that he is requesting the Legislature address as to (1) updating the state Balance Billing law to better align with the federal No Surprises Act; (2) adopting the NAIC model law as to Insurance Data Security (cybersecurity) for consumer protection; (3) modifying the life & disability guaranty fund to include long term care insurer insolvency; and (4) re-introducing ban on use of credit scores in certain personal lines underwriting. Review of pre-filed bills prior to the session beginning, include bills for the Legislature to look at the employee mandatory long term care insurance law, and a bill was prefiled to require the Declaration Page in a “residential” policy to state all the “sublimits” of coverage.

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

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