State by state variations of laws, compliance protocols, industry transparency, and general regulatory cultures can lend one the impression that maintaining with industry changes is just a little bit like herding cats. So, what higher approach to wrangle a few of the more localized insurance news than in a Regulatory Roundup?
On an ongoing basis, in no particular order or rank, we’re wrestling the varied regulatory changes, compliance actions, and commissioner decisions into our roundup. As a disclaimer: There’s lots occurring at any given time in these here United States, so this isn’t a comprehensive picture of state-level motion by any means. Consider it as, as a substitute, a sample platter of regulation.
Crypto still headlining financial scam alerts with ‘pig butchering’
Florida Chief Financial Officer Jimmy Patronis issued an alert to Florida consumers concerning the dangers of investing in unvetted cryptocurrencies. The latest scam, the alert said, is “pig butchering,” wherein scammers encourage investors to pump up the stock with contributions and “fatten them up.” Just as investors begin to feel confident that their money pays handsomely, the scammer will drain the account and disappear.
In accordance with Patronis’s office, these scams are most ceaselessly perpetuated on social media or via dating sites, where latest prospective lovers will encourage their dates to pay in crypto or put money into crypto to offer them a shared interest.
“Reports say cryptocurrency scams have bilked hundreds of thousands out of unsuspecting crypto investors; a lot of which were scammed through online dating apps over the course of several months,” said Patronis. “You might as well kiss your money goodbye… All the time remember, if a possibility sounds too good to be true, it’s.”
Louisiana Department of Insurance helped policyholders collect $129 million
Within the aftermath of Hurricane Ida, policyholders faced chaos for filing claims. Many insurance firms, keen to weed out possible scams, denied legitimate claims. The Louisiana DOI reported the department worked with hundreds of policyholders who complained about carriers improperly denying claims to resolve disputes, ultimately leading to $129 million in additional payouts for fiscal 12 months 2021-2022 – that’s $129 million beyond the quantity carriers paid in typical claims.
Within the Louisiana DOI news release, Commissioner Jim Donelon said the department received 8,819 complaints, with nearly 5,000 related to Hurricane Ida alone.
“Our Office of Consumer Services staff are hardworking and compassionate of their efforts to assist policyholders get the answers they need and the cash they deserve,” Donelon said. “Although we’re approaching the height of the 2022 hurricane season, our office has not forgotten about those still struggling after Hurricane Ida and the 2020 hurricanes that impacted our state. Should you’re having issues along with your insurance claim process, contact us for help.”
The state’s news release said the DOI takes a median of 45 days to resolve claims complaints, giving ample time for each insurers and policyholders to make their cases and are available to as amicable a resolution as possible.
Insurance consumers can file a proper grievance by submitting a paper form or visiting www.ldi.la.gov/fileacomplaint.
Connecticut Commissioner Mais calls for prolonged ARPA credits
Throughout the last several Regulatory Roundups, we’ve reported on states announcing medical health insurance carrier rate requests. While a few of them are presented without commentary, others have included explanations from the DOI about how general market conditions reminiscent of inflation affect insurance rates.
Connecticut Insurance Commissioner Andrew Mais in his state’s news release specifically tackled federal health subsidies. With the American Rescue Plan Act (ARPA), Congress prolonged tax credits for medical health insurance and removed upper income limits on who could qualify for them.
Credits were originally set to run out on Jan. 1, 2023. Nevertheless, states needed to set medical health insurance rates well before that, because the open enrollment season for state and federal healthcare exchanges is upon us.
Many states selected, then, to proceed with rate setting as if the tax credits will expire. Mais’s department is taking a distinct approach.
“CID didn’t ask the health carriers to assume the ARPA extension would expire on Jan. 1, 2023. On the contrary, we had already asked each carrier to elucidate how they used the belief of the federal subsidy of their data projection of premium for 2023 in order that we now have the knowledge and adaptability to quickly address any changes,” said Mais.
As a substitute, Mais called on Congress to increase the ARPA credits. His assumption could have resulted in a scramble to reset rates before the open enrollment period on Nov. 1. 2022, but ended up being a fortuitous gamble as Congress prolonged the ARPA expansion credits in its Inflation Reduction Act of 2022.
Other state updates
Delaware has adopted NAIC Actuarial Guideline XLVIII, effective Sept. 1, 2022. If it seems pedantic, the long and short is that the rules establish a standardized way of calculating credit for all times insurers which have ceded policies and purchased reinsurance. The calculations should make it more uniform for all times insurers that transact across multiple states.
Rhode Island passed a bill in June that went into effect in July to manage self-storage insurance. Per the bill summary, it exempts self-storage firms and their representatives from needing producer licenses to sell limited insurance policies to storage users, so long as the self-storage insurance carrier provides proper oversight.
Maryland now has a latest law proposed to enter effect in early 2023 mandating title producers take 13 title-specific hours of CE, and producers who hold each life and health and property and casualty licenses must take a minimum of six hours specific to property/casualty, and 6 hours specific to life/health.
Ohio issued a bulletin to remind life insurance producers and businesses that there are limitations on their non-cash gifts, items, donations, or other inducements for policy sale or retention. On this case, effective in July 2022, the full per-policy expenditure can’t exceed $250 per 12 months.
Colorado has adopted latest laws aligning its annuity regulations with the NAIC’s model. This aligns the state with a slew of others which have adopted the model regulation for a best interest rule of annuity sales. Should you’re curious about a breakdown of roles and responsibilities, try our evaluation of the model as enacted in Mississippi. The state can be looking for volunteers to achieve out to Coloradans who could also be DACA recipients or undocumented to enroll them within the state’s medical health insurance initiatives.
Connecticut added a Third Party Administrator Registration line of authority for each individuals and firms. To operate as a TPA, you will need to have a license or registration; for more, try the state’s Third Party Administrator page.
Louisiana issued an advisory letter clarifying the requirements for title licenses, from creating an “affiliated business” definition to clarifying who’s a “full-time worker,” and giving direction on what constitutes a principal workplace.
FINRA issued a reminder to all firms that they’ve an obligation to look out for forgery and document falsification, even and particularly when those documents are being signed and approved via digital signature. FINRA requires firms to determine supervisory procedures for stopping these situations in the primary place. Nevertheless, the agency reported it has seen an uptick in concerns from consumers and firms alike that registered representatives aren’t waiting for consumers to open accounts or approve transactions.