Transcript www.aicp.net

AICP Gulf States – January 2012
1 (866) 845-3658; Participant code: 929109
Today’s Agenda
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2011 Legislative and regulatory activity with key
trends and issues
2011 Enforcement Actions and Trends
What to expect in 2012
Best Practices to help anticipate and manage
Current Regulatory Environment
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Legislative and regulatory
1. Intense
2. Traditional focus
3. New issues continue to evolve
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Market Regulation
1. Assessment resources
2. Enforcement activity
Looking back…
2011 Activity
• Over 11,000 bills impacting the insurance industry were
introduced in 2011
• Nearly 22,000 citations were impacted by legislative or
regulatory action
Legislative & Regulatory Activity “Content”
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Underwriting
Claims
Product Filings
Certificates of Insurance
Annuities Suitability
Retained Asset Accounts
Unclaimed Property
Disclosures
Health Care Reform
Mandated Benefits
Trade Practices
Property & Casualty
Property & Casualty
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Cancellation/Nonrenewal
Certificates of Insurance
Credit scoring
Claims
Property & Casualty - Underwriting
• Florida: lawful ownership, possession or storage of a
firearm or ammunition
• Maryland and North Dakota: individual’s status as a
victim of a violent crime
• New York the covered motor vehicle is used for
volunteer firefighting
• Oregon: personal vehicle sharing
Property & Casualty
• Total Loss changes: Maryland and Rhode Island
• Certificates of Insurance: Arizona, Georgia, Maryland,
Massachusetts, Michigan, North Carolina, Utah
• Commercial risks: New York, Virginia
What to File – “Confidential”
Utah
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Under the Government Records Access and Management Act (GRAMA)
supporting information in a rate filing is considered open for public
inspection unless it is classified as private, controlled, or protected
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Filer will need to request which specific document the filer believes
qualifies under GRAMA when the filing is submitted
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The document must include a written statement of reasons supporting the
request that the information should be classified as protected
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If the filer does not request the information in the document to be
classified as protected, the document will be classified as public
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DOI will not automatically classify any document in a filing as protected
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DOI will not re-open a filing to permit a company to request protected
classification of previously filed documents
R590-225-11 Effective December 8, 2011
All Lines – Privacy Notices
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The new Federal Model Privacy Form was developed for use by
federally regulated financial institutions to increase consumers’
understanding and ability to make informed decisions regarding the
sharing of personal information as required by the privacy
provisions of GLBA.
Insurance companies that do business in this state may use the new
Federal Model Privacy Form or continue to use other types of
privacy notices that differ from the Federal Model Privacy Form to
meet the notice content requirements of the Nebraska Privacy of
Insurance Consumer Information Act
Nebraska Bulletin CB-127
Life & Annuities
Annuities Suitability Activity - 2011
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Alaska: 3 AAC 26.770-.789
California: AB 689
Colorado: Regulation 4-1-11; B4.12
Connecticut: 38a-432a
Hawaii: SB 1278; Bulletin 20112LIC
Illinois: 50 Ill. Adm. Code 3120.20;
Bulletin 2011-13
Iowa: Bulletin 11-04
Maryland: COMAR 31-09-12;
Bulletins 11-10 & 11-28
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New Jersey: NJAC 11:4-59
Texas: HB 2277
New York: Reg 187
North Dakota: 26.1-34.2
Ohio: 3901-6-13
Oregon: 836-080-0170 to 836-0800190
Rhode Island: R27-12; Bulletin
2011-2
West Virginia: 114-11B
Retained Asset Accounts Activity - 2011
Legislative
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California - SB 713/ SB 599
Indiana – SB 360
Kentucky – HB 309
Maryland – SB 217
New York – AB 683/SB 504 (P)
Rhode Island - H5244Aaa/S0045A
Pennsylvania – HB 718 (P)
Texas – HB 2152 (P)
Virginia – HB 1458/SB 1388
Regulatory
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Colorado – B-4.12
Connecticut – Bulletin IC-27
Illinois - Bulletin 2011-3/2011-03 R
Iowa – Bulletin 11-01
Maine – Bulletin 376
Maryland – 31.09.14.05
Nebraska – CB-125
New Jersey – Order A 11-101; NJAC
11:4-61.1
Ohio – Bulletin 2011-01
West Virginia - Informational
Bulletin 178A
Health
Discretionary Clauses
Existing legislative or regulatory provisions/restrictions:
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Alaska, California, Connecticut, District of Columbia,
Hawaii, Idaho, Illinois, Kentucky, Maryland, Michigan,
New Jersey, New York, South Dakota, Utah, Washington,
Wyoming
Mandated Benefits
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Autism Spectrum Disorder
Telehealth
Cochlear implants
Oral chemotherapy
Hearing aids
Clinical trials
Health Care Reform
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Rate Filing Authority
Internal Appeals
External Appeals
Health Care Reform – Rate Authority
Pennsylvania SB 1336
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Establishes health insurance rate authority
Provides for federal compliance for required filings
Health Care Claims
Virginia
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Notification of an adverse benefit to include a statement describing the
availability, upon request, of the diagnosis code and its corresponding
meaning, and the treatment code and its corresponding meaning. The
health carrier may not consider a request for diagnosis or treatment
information, in itself, to be a request for internal appeal
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All notices to be provided in a culturally and linguistically appropriate
manner; and upon request, any notice in any applicable non-English
language
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Provision of oral language services, such as a telephone customer hotline,
that include answering questions and providing assistance with filing
claims, benefit requests, internal appeals, and external review in any
applicable non-English language
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Inclusion in the English versions of all notices, a statement prominently
displayed in any applicable non-English language clearly indicating how to
access the language services provided by the health carrier.
14 VAC 5-216-70 (Effective January 1, 2012)
Regulatory Environment
• Continuum of legislative & regulatory activity
• Other initiatives keep growing in number
• Regulator and media focus on consumer protection
2011 Enforcement Activity
Market Conduct
Market Regulation
• MCAS
• Complaints
• Other states’ actions
• State “history”
Market Conduct Focus: Through the Years
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Claims
Underwriting
Producers
Advertising
P&C Market Conduct: Underwriting
• Failed to provide a compliant Summary of Rights for all
homeowner, manufactured home, private passenger
auto and motorcycle non-renewals and cancellations.
Arizona (September 2011)
P&C Market Conduct: Underwriting
• In regard to the company's use of zip codes for
territorial rating in Connecticut, a company is not
allowed to split a town or city into more than one rating
territory. The examiners found that the company's filed
and approved rating plan contained instances of a town
or city containing more than one rating territory.
Connecticut (October 2011)
P&C Market Conduct: Underwriting
• 42 errors were due to failure to properly document the
use of the filed Schedule Rating Plan…files either failed
to document the credit/debits applied or did not have
documentation supporting the application of the plan
• Failure to follow its filed rating plan
Georgia (October 2011)
P&C Market Conduct: Underwriting
• 194 errors were due to failure to limit schedule rating
factors to no more than 15% when Schedule Rating
reports were not sent to the Commissioner’s Office.
• 986 errors were due to failure to limit schedule rating
factors to no more than 15% when Schedule Rating
reports were not sent to the Commissioner's Office…
there were 336 errors involving credits and 650 errors
involving debits.
Georgia (October 2011)
P&C Market Conduct: Underwriting
• Sent 905 non-payment cancellation notices to Maine
policyholders that did not contain the notice of right to
request a hearing.
Maine (November 2011)
P&C Market Conduct: Underwriting
• Issued premium increase notices…failed to contain the
Administration's new address at 200 St. Paul Place Suite
2700 Baltimore MD 21202.
• The address became effective January 1, 2010, and
“companies” were so notified in March 2009.
Maryland (September 2011)
P&C Market Conduct: Underwriting
• Failing to provide notice to insureds at their policy
inception and/or renewal that claims history is
considered for purposes of canceling or refusing to
renew coverage
• Renewal offers failed to advise insureds of the amounts
of expiring premiums
Maryland (September 2011)
P&C Market Conduct: Underwriting
• 10,913 Violations Title 75, Pa. C. S. §1791.1(c)
• Failed to provide a notice at renewal regarding
discounts available for drivers who meet the
requirements relating to restraint systems, anti-theft
devices and driver improvement course.
Pennsylvania (October 2011)
P&C Market Conduct: Underwriting
• 8,266 Violations Title 75, Pa. CS. §1822
• The Company did not provide the fraud warning at
renewal for the 8,266 files noted.
Pennsylvania (October 2011)
P&C Market Conduct: Underwriting
• Issued 152 notices, non-renewing policies because the
agent was terminated, which did not contain an offer to
continue/renew the policy
• Issued 473 cancellation/non-renewal notices which did
not contain the correct address for the Wisconsin
Automobile Insurance Plan (WAIP)
Wisconsin (October 2011)
Market Conduct: Documentation
• Failed to maintain its books, records, documents, and
other business records and to provide relevant
materials, files, and documentation in such a way to
allow the examiners to sufficiently ascertain the claims
handling and payment practices of the Company
Missouri (October 2011)
Life Market Conduct: Underwriting
• “Company” violated the following provision of the
Florida Insurance Code: Section 626.9541(1)(dd), Florida
Statutes - Refusal of life insurance; refusal to continue
the life insurance of; or limiting the amount, extent, or
kind of life insurance coverage available to an individual
based solely on the individual’s past or future lawful
foreign travel plans.
Florida (October 2011)
Life Market Conduct: Claims
• {Company} provided the examiner a sample term life
proof of claim form in which the fraud warning notice
did not comply with the language required by California
law.
• {Company} reported that the claim payments made 30
days after the date of death did not specify the rate of
interest paid on these claims.
California (August 2011)
Health Market Conduct: Underwriting/Advertising
• Used misleading statements within its advertising
• Failed to document the providing of an Outline of
Coverage
• Failed to document the providing of a Guide to Health
Insurance for people with Medicare
• Failed to notify terminated insureds’ of their right to a
conversion policy
Kentucky (August 2011)
Health Market Conduct: Claims
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Failed to send written notice of an adverse decision to certain members
Failed to provide the correct address, for the Maryland Insurance Commissioner on its adverse
decision notices.
Failed to provide its internal grievance process as a component of the adverse decision notice
sent to Maryland members and providers.
Failed to include required information on adverse decision notices sent to Maryland members and
to providers.
Failed to send a copy of a grievance decision notice after rendering a grievance decision.
Failed to provide the correct address for the office of the Commissioner on grievance decision
notices sent to Maryland members and to providers.
Failed to send out a grievance decision notice to some members after rendering a grievance
decision in emergency cases.
Failed to include the required information on a grievance decision notice sent to members and
health care providers acting on behalf of a member as a result of an emergency case.
Failed to make a determination on whether to authorize or certify additional health care services
within one working day after receipt of the information necessary to make the determination.
Failed to authorize or certify an inpatient admission within two hours after receipt of the
information necessary to make the determination
Maryland (October 2011)
2012 – Activity to Date
Regulatory Environment - 2012
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Strong start
Legislative sessions: pre-filed and introduced
Regulatory activity
Enforcement activity
Health – Mandated Benefits
New Jersey AB 1120 – Enacted 1/17/12
• Requires insurers to cover treatment for sickle cell
anemia
• If the insurance policy provides benefits for expenses
incurred in the purchase of outpatient prescription
drugs, then the contract shall provide coverage for
prescription drug expenses incurred by a covered
person for the treatment of sickle cell anemia
Health – Mandated Benefits
New Jersey SB 1834 – Enacted 1/17/12
• Coverage for expenses for prescribed, orally administered
anticancer medications used to kill or slow the growth of cancerous
cells shall not be subject to any prior authorization, dollar limit,
copayment, deductible or coinsurance provision that does not
apply to intravenously administered or injected anticancer
medications.
• Insurers shall not achieve compliance with the provisions of this
section by imposing an increase in patient cost sharing, including
any copayment, deductible or coinsurance, for anticancer
medications, whether intravenously administered or injected or
orally administered, that are covered under the contract as of the
effective date of this act
2012 - Introduced Bills
Property & Casualty – Credit Scoring
Kentucky SB 31
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Insurers shall not use the credit history or the lack of
credit history, including a credit score or insurance
score, of an insured or an applicant as the basis in
whole or in part to decline, refuse to renew, cancel,
rate, or determine the premium rate for any insurance
policy, contract, or plan of insurance
Property & Casualty – Credit Scoring
Virginia HB 355/HB 432
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Motor vehicle insurers shall not set rates or make
pricing decisions based on a person's credit history, lack
of credit history, or credit score
Property & Casualty – Credit Scoring
West Virginia: HB 2049
Insurers shall not:
• Refuse to underwrite, cancel, refuse to renew a risk or increase a
renewal premium based, in whole or in part, on the credit history
of an applicant or insured;
• Rate a risk based, in whole or in part, on the credit history of an
applicant or insured person in any manner, including, but not
limited to, the provision or removal of a discount, assigning an
applicant or insured person to a rating tier, or placing an applicant
or insured person with an affiliated company; or
• Require a particular payment plan based, in whole or in part, on
the credit history of the applicant or the insured
Property & Casualty - Underwriting
Tennessee SB 2372
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All contracts of insurance issued for delivery after July
1, 2012, shall provide for 10% premium reduction for
any renewed insurance policy if a claim has not been
filed against such policy that resulted in payment by
the insurance company for the previous year
Property & Casualty - Claims
Kentucky HB 207
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An insurer shall inform a claimant upon notification of a motor
vehicle damage claim that he or she has the right to choose the
repair facility of his or her choice to repair a damaged vehicle.
After the effective date of this Act, all appraisals shall include the
following notice, printed in not less than 10 point, boldfaced type:
"NOTICE: UNDER KENTUCKY LAW, THE CONSUMER AND/OR LESSEE
HAS THE RIGHT TO CHOOSE THE REPAIR FACILITY TO MAKE REPAIRS
TO HIS OR HER MOTOR VEHICLE."
Property & Casualty
Virginia HB 523/SB 369
• New or renewal contracts/policies of fire insurance
which policy or contract exclude coverage for damage
due to earthquake shall provide written notice that
explicitly states that:
1. Earthquake coverage is excluded and
2. Information regarding earthquake insurance is available
from the insurer or the insurance agent and that such
coverage may be available for an additional premium
Property & Casualty – Certificates of Insurance
Virginia HB 867/SB 47
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No person shall issue or deliver any certificate of insurance that attempts to confer
any rights upon a third party beyond what the referenced policy of insurance
expressly provides.
No certificate of insurance may represent an insurer's obligation to give notice of
cancellation or nonrenewal to a third party unless the giving of such notice is
required by the policy.
No person shall issue or deliver a certificate of insurance unless it contains a
substantially similar statement to the following: "This certificate of insurance is
issued as a matter of information only. It confers no rights upon the third party
requesting the certificate beyond what the referenced policy of insurance expressly
provides. This certificate of insurance does not extend, amend, or alter the
coverage, terms, exclusions, or conditions afforded by the policy referenced in this
certificate of insurance."
No person shall knowingly prepare or issue a certificate of insurance that contains
any false or misleading information or that purports to affirmatively or negatively
alter, amend, or extend the coverage provided by the policy of insurance to which
the certificate makes reference.
Life – Unclaimed Property
Kentucky HB 135
• Requires insurers to compare in-force life insurance
policies against the Death Master File to determine
potential matches of their insureds; requires escheat of
policy proceeds after the expiration of the fee statutory
time period only if no claim for the policy's proceeds
has been made and if good faith efforts to contact the
retained asset holder and any beneficiary are
unsuccessful.
Life – Unclaimed Property
Maryland SB 77
• Requires an insurer that issues or delivers a policy of
life insurance or an annuity contract to perform a crosscheck of the insurer's in- force life insurance policies,
annuity contracts, and retained asset accounts against a
specified death master file to identify any death
benefit payments that may be due as a result of the
death of an insured, annuitant, or account holder
Life – Unclaimed Property
TN HB 2283 includes requirements for insurers to:
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Perform a comparison of its insureds' in-force life insurance policies and retained
asset accounts against a death master file, on at least a quarterly basis, using
criteria reasonably designed to identify potential matches of its insureds. For those
potential matches identified as a result of a death master file match, the insurer
shall:
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Within ninety (90) days of a death master file match:
Complete a good faith effort, which shall be documented by the insurer, to confirm
the death of the insured or retained asset account holder against other available
records and information; and
Determine whether benefits are due in accordance with the applicable policy or
contract; and if benefits are due in accordance with the applicable policy or
contract:
Use good faith efforts, which shall be documented by the insurer, to locate the
beneficiary or beneficiaries; and
Provide the appropriate claims forms or instructions to the beneficiary or
beneficiaries to make a claim including the need to provide an official death
certificate, if applicable under the policy or contract.
Health – Discretionary Clauses
Georgia HB 736
• Disability income protection coverage - shall not
contain a provision purporting to reserve discretion to
the insurer to interpret the terms of the contract, or to
provide standards of interpretation or review that are
inconsistent with the laws of this state.
Health – Dental Coverage
Kentucky HB 98
• Provides that a dental plan shall not require a
participating dentist to provide noncovered services at
a fee set by or subject to the dental plan
• Provides that a TPA for a dental plan shall not make
available any providers in its dentist network that sets
dental fees for any noncovered services
Health – Mandated Benefits
Nebraska LB 882
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Coverage for cancer treatment shall provide coverage for a prescribed,
orally administered anticancer medication that is used to kill or slow the
growth of cancerous cells on a basis no less favorable than intravenously
administered or injected cancer medications that are covered as medical
benefits by the policy, certificate, contract, or plan
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This does not prohibit the policy, certificate, contract, or plan from
requiring prior authorization for a prescribed, orally administered
anticancer medication.
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Cost to the covered individual shall not exceed the coinsurance or
copayment that would be applied to any other cancer treatment
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Prohibited from reclassifying any anticancer medication or increase a
coinsurance, copayment, deductible, or other out-of-pocket expense
imposed on any anticancer medication to achieve compliance with this
section
Health – Mandated Benefits
Virginia SB 450
• Requires health insurers, health care subscription plans,
and health maintenance organizations whose policies
provide coverage for cancer chemotherapy treatment
to provide coverage for a prescribed, orally
administered anticancer medication on a basis no less
favorable than that on which it provides coverage for
intravenously administered or injected anticancer
medications.
Health – Mandated Benefits
Virginia HB 705
• If a health carrier is prohibited from imposing any costsharing requirements with respect to preventive care or
screening, the health carrier shall not impose costsharing requirements such as:
• A copayment, coinsurance, or deductible with respect
to any diagnostic service or test, or related procedure,
that is administered or conducted as a result of, or in
conjunction with, the preventive care or screening
Health - Claims
Virginia SB 135
• Establishes the Virginia All-Payer Claims Database
system, in order to facilitate data-driven, evidencebased improvements in access, quality, and cost of
health care through understanding of health care
expenditure patterns and operation and performance of
the health care system
All Lines – Electronic & Telephonic Applications
Montana Advisory Memorandum of January 9, 2012
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Prior to May 9, 2012, insurers must file with the CSI all electronic and telephonic
application forms, including any currently in use.
Insurers may submit a list of all questions that may be asked throughout a logic
tree, screenshots of the questions as they appear on the application, or any other
format which details the questions that may be asked.
Companies may make an informational filing if they are using electronic or
telephonic forms that mimic forms already approved by the CSI. An informational
filing must indicate that the electronic or telephonic form equates to a form
already on file, and must include the number of the previously approved form on
the bottom of each page.
Companies that have already provided an informational filing are not required to do
so again.
Electronic/telephonic applications in use prior to t1/9/12 and submitted for review
and approval prior to May 9, 2012, may continue to be used unless/until the CSI
informs an insurer otherwise.
Forms not submitted for review and approval prior to 5/9/12 may not be used.
2012 – Market Conduct
Market Conduct - Complaint Log
• “TPA” keeps records of inquiries and complaints;
however, the complaints are comingled in a database
with other plans and the TPA had difficulty segregating
them. As a result, the examination concluded that,
effectively, no separate complaint log had been kept.
Idaho (January 2012)
Market Conduct - Homeowners
• Did not include written complaints in its compliant logs
• Not in compliance with statutory requirements regarding
the licensing of producers
• Failed to follow its rating manual
• Not in compliance with statutory requirements regarding
the declination of homeowners policies
• Use of unlicensed claims adjusters
Connecticut (January 2012)
Trends & Challenges – 2012
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Legislative and regulatory
1. Consumer protection
2. Disclosures
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Market conduct
1. Claims compliance
2. Underwriting compliance
Key Steps in Managing “All these changes”
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Identify
Analyze for business impact
Implement
Minimizing de-implementation
What’s Best – Going Forward
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Making sure you have all you need
Managing all of it through to implementation
Updating/aligning policies & procedures
Making sure compliance is maintained
Thank You
Questions?
For more information, please visit
www.InsuranceComplianceCorner.com
Kathy Donovan
Senior Compliance Counsel, Insurance Solutions
Wolters Kluwer Financial Services
[email protected]
781.907.6689