Zoning-In - Summer 2024

Northeast Zone

Connecticut

Bulletin PC-63-24, dated July 3, 2024, addresses the “Exemption of certain commercial lines property and casualty policies from form, rate, and rule filing requirements.” Additionally, this Bulletin “rescinds Bulletin PC-71 regarding the exemption from form, rate, and rule filing procedures for claims made insurance policies. The Department indicates that it had reviewed a sampling of claims made in insurance policy form filings and found various compliance issues. As a result, the Department has determined that all claims made in policy filings will require a complete filing review and are removed from the exempted commercial lines of insurance set forth in Appendix A. Claims made form filings will be subject to full examination by the Department from the date of issuance of this Bulletin.”

Regarding the exemption of certain commercial lines policy filings from review, Bulletin PC-63-24 replaces Bulletin PC-63-01 and extends the Department’s program to exempt certain commercial lines policy filings from the current filing review procedures under section 38a-676-1 through 38a-676-3. Accordingly, the commercial lines of insurance set forth on Appendix A continue to remain exempt from form filing review procedures under the regulations.

New Hampshire

Effective Jan. 1, 2025, SB 173 enacts many of the same requirements and prohibitions that are included in the federal No Surprises Act (NSA) regarding payments to, and billing by, out-of-network providers of emergency medical services and out-of-network providers of any health care service rendered at an in-network facility. “As under the NSA, this bill requires health carriers to cover out-of-network emergency services and services provided at an in-network facility by out-of-network providers in the same manner as if the services were provided by an in-network provider or facility. It requires the health carrier to pay the out-of-network provider or facility a rate that is determined either through open negotiation between the parties or through a fair value independent review process made available by the insurance commissioner using the same fair value standards as are established in the NSA and the same independent dispute resolution (IDR) entities as are certified under the federal IDR process.” SB 173 also provides for the same prohibitions as are included in the NSA regarding balance billing by out-of-network providers for covered services provided at an in-network facility and for covered emergency services.

New York

The Life Bureau Filing Guidance of July 16, 2024 addresses the submitting of wellness programs to the Life Bureau for use with life insurance. Both Chapter 768 of the Laws of 2023 and Chapter 3 of the Laws of 2024 revised Insurance Law § 3239 provide that insurers licensed to write life insurance may establish a wellness program in conjunction with the issuance of life insurance policies. This recently issued Life Bureau Filing Guidance includes topics on voluntary and non-discriminatory participation in the wellness program, wellness programs definition, preparation of policy forms and submission of policy forms to the Life Bureau.

Southeast Zone

Kentucky

Bulletin 2024-05, dated July 17, 2024, announced that the Administrator of the Mine Subsidence Insurance Program has established new premium rates for mine subsidence insurance which are effective Jan. 1, 2025, in accordance with HB 371. The Department of Insurance includes those new rates in this Bulletin and states that these new rates are to be charged for the appropriate amount of coverage. HB 371 increases the maximum total insured value eligible to be reinsured by the mine subsidence fund per structure from $300,000 to $500,000. Additionally, the additional living expense limit referenced in KRS 304.44-030(2) is increasing to $50,000.

The Bulletin further reminds insurers that all insurers doing business in Kentucky will need to re-execute reinsurance agreements with the Department due to the change in the total insured value eligible for reinsurance. The new reinsurance agreement, which the Department attached to this Bulletin, is to be executed by all insurers providing mine subsidence coverage by January 1, 2025. Regarding existing policies and renewals, policies in effect on January 1, 2025 “may remain at their current rate and coverage limit until renewal of the policy. The new reinsured value limits and corresponding premium rates reflected in this bulletin shall be implemented at the renewal of existing policies.”

Louisiana

HB 375 enacts disclosure requirements for homeowners’ and private passenger motor vehicle policies. Effective May 1, 2025, the following requirements apply: “Every insurer that writes homeowners’ or private passenger motor vehicle insurance policies in this state shall, in writing that is not less than twelve-point font, disclose all discounts the insurer offers that may reduce the homeowners’ or motor vehicle insurance premium of a policyholder or prospective policyholder. Insurers shall ensure the disclosure is delivered by electronic means as defined in R.S. 22:2461 or submit the disclosure within the written materials of a new policy delivered to the policyholder and at each subsequent renewal.” 

Additionally, HB 375 specifies that, “discounts” means premium credits advertised by an insurer to policyholders who meet certain criteria defined by the insurer and that these disclosure requirements do not apply to excess and surplus lines.

Midwest Zone

Illinois

HB 5559 creates a new section 215 ILCS 5/154.10 concerning the determination of vehicle total losses. Applicable to policies issued or renewed on or after July 1, 2025, the following requirement is established: “Upon the determination of a total loss of an insured vehicle, the insurance company shall provide the insured with a brief description of how that determination was made, including any available repair estimate, estimated vehicle salvage value, assessed market value, and other costs and calculations used."

Michigan

Bulletin No. 2024-18-INS, dated July 3, 2024, addresses the depreciation of nontangible items in some property insurance policies, which include depreciation of labor and other nontangible items in the definition of “Actual Cash Value” (ACV). This Bulletin provides the general understanding of ACV and sets forth new policy form requirements as follows:

“To facilitate greater transparency and mitigate the risk of insureds being confused, misled, or deceived as to their coverages, for policies issued or renewed effective January 1, 2025 or after, insurers that wish to depreciate labor or other nontangible items must do so by a standalone endorsement specifically identifying the nontangible items subject to depreciation. Such endorsements must be optional coverage available for a reduced premium. The Director will not approve policies that include language that depreciates nontangible items in the policy definition of “Actual Cash Value,” “Depreciation,” etc. The Director may disapprove forms or policies that contain potentially confusing, misleading, or deceptive language. Insurers shall not depreciate labor or any other nontangible items unless the insured has elected to endorse their policy with the relevant endorsement that identifies the specific nontangible cost in subject to depreciation in the definition of ACV.”

Western Zone

California

SB 1320 enacts new mandates concerning processes to reimburse providers for mental health and substance use disorder treatment services. Effective January 1, 2025, “For services provided to an insured under a disability insurance policy issued, amended, or renewed on or after July 1, 2025, a disability insurer subject to Section 10144.5, and its delegates, shall establish a process to reimburse providers for mental health and substance use disorder treatment services that are integrated with primary care services. A process required under this section may be based upon federal rules or guidance issued for the Medicare program.”

Hawaii

SB 2342 amends certain provisions applicable to motor vehicle insurance policies effective January 1, 2026. Included in those revisions are the following:

Increases the motor vehicle insurance liability coverage minimums under 431:10C-301 subsections (b)(1) and (2) as follows (with current minimum limits noted parenthetically):

• Liability coverage of not less than $40,000 (currently $20,000) per person, with an aggregate limit of $80,000 (currently $40,000) per accident, for all damages arising out of accidental harm sustained as a result of any one accident and arising out of the ownership, maintenance, use, loading, or unloading of a motor vehicle;

• Liability coverage of not less than $20,000 (currently $10,000) for all damages arising out of damage to or destruction of property including motor vehicles and including the loss of use thereof, but not including property owned by, being transported by, or in the charge of the insured, as a result of any one accident arising out of the ownership, maintenance, use, loading, or unloading, of the insured vehicle;

Lowers the required coverage under 431:10C-802 for shared cars that are made available through a peer-to-peer car-sharing program during the car-sharing period as follows:

• Primary insurance coverage for each shared car available and used through a peer-to-peer car-sharing program in amounts no less than the amounts set forth in section 431:10C-301(b) for death, bodily injury, and property damage per accident, and costs of defense outside the limits;

Nevada

The Memo of June 28, 2024 addresses the Division of Industrial Relations (DIR) update concerning “Changes in DIR audit unit practices regarding subsequent fines” and describes the practices used by the DIR Audit Unit including the implementation of the issuance of the subsequent fine structure under NRS 616D.120(2)(b) using a graduated fine schedule. The DIR provides that “effective immediately, when a new Administrative Fine is being imposed, DIR will review prior Administrative Fines which have exceeded the appeal timeframe (30 days from date of issuance) or have completed the appeal process, to determine the appropriate amount for the new Administrative Fine.” The Memo further addresses its “Initial and Subsequent Violation Schedule” as well as consequences of noncompliance with requests for records.

New Mexico

Bulletin 2024-013, dated July 30, 2024, provides information on the submission of health insurance policies for compliance review under House Bill 53, titled Delivery of Necessary Diabetic Resources, which became effective on January 1, 2024. The Office of Superintendent of Insurance (OSI) states that it will enforce the provisions of this legislation and will provide the specific review criteria to be used when conducting a compliance review on its website at: https://www.osi.state.nm.us/. This Bulletin states that OSI will review claims processing, provider reimbursement procedures, network adequacy, provider reimbursement rate adequacy, utilization management, level of care determinations and medication coverage to ensure access to resources for diabetics.

Additionally, each health care plan must notify insureds of their rights as established by HB 53. Regarding disclosure of these rights, the Superintendent will not approve any impacted health care plan unless the required language is included in the health care plan. That required language, as specified in this Bulletin, covers the following topics and rights of the insured: Coverage for Individuals with Diabetes; Basic Health Care Services; Prescription Medications, DME, Insulin, and Supplies; Prior Authorization; Cost sharing; Network Access; and Reimbursement.

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Kathy Donovan is Senior Compliance Counsel, Insurance with Wolters Kluwer Financial Services. Kathy has more than two decades of experience in insurance compliance. Her expert commentary on legal and regulatory issues affecting the insurance industry is widely published and she is a regular presenter at various industry events.