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Around the PIA Western Alliance States

Posted By Administration, Tuesday, August 14, 2018

California — Underwriting Transparency:  This is from the office of the insurance commissioner.

The general counsel for the California Department of Insurance issued a legal opinion, that under insurance reform law Proposition 103, insurers' underwriting rules submitted with a rate application must be made available for public inspection.


Underwriting rules are the criteria insurance companies use to determine whom to insure, what they will insure, and whether to renew an existing policy.


"Consumers and insurers alike benefit from transparency," said Insurance Commissioner Dave Jones. "Consumers are able to better understand how insurance companies decide who to insure and who to renew."


Voters passed Proposition 103 in 1988 to lower insurance rates and encourage the public to participate in the rate-setting process. Insurance companies seeking a rate increase or decrease must submit public rate applications to the commissioner including their underwriting rules.


In the past, certain insurers have contended their underwriting rules are confidential or proprietary information and not subject to public disclosure.


In response to a request by a member of the public, the general counsel analyzed the issue and determined Proposition 103 does not allow this practice.


California — Jones Appointed to National Cannabis Committee: The National Association of Insurance Commissioners (NAIC) yesterday voted to establish a Cannabis Insurance Working Group to address the issue of insurance availability for the legalized cannabis industry. Recognizing California Insurance Commissioner Dave Jones' leadership on the issue, the NAIC appointed Jones chair of the NAIC Cannabis Insurance Working Group.


At the NAIC's Summer National Meeting, Commissioner Jones proposed that the NAIC establish this working group to enable state insurance regulators to better understand where there are insurance coverage gaps for the legalized cannabis industry and to share and develop best practices for state insurance regulators to follow to address coverage gaps and cannabis insurance regulatory issues.


Jones previously successfully chaired the NAIC Sharing Economy Working Group which developed a template for insurance coverage for ride sharing and home sharing. Like these prior working groups, the Cannabis Insurance Working Group will enable regulators to better understand the legalized cannabis industry and its insurance needs and the role insurance regulators can play in helping to address insurance needs.


"Cannabis businesses face insurance availability and insurance coverage gaps - which means that those who shop, those who work in, those who sell goods or services to, or those who own, invest in or operate cannabis businesses may not have access to insurance to help them recover if there are accidents, injuries, property damage, or any of the things insurance typically covers," said California Insurance Commissioner Dave Jones.


"As state insurance regulators, one of our responsibilities is to understand new legal businesses and their insurance needs, and then work to encourage the availability of insurance to meet these new risks and coverage needs. I look forward to working with my fellow state insurance regulators to better understand the insurance needs of the legalized cannabis industry and the role we can play in helping to address those insurance needs and other insurance regulatory issues."


The newly created NAIC Cannabis Insurance Working Group will consider the insurance regulatory issues surrounding the legalized cannabis business from seed to sale, including availability and scope of coverage, workers' compensation issues, and consumer information and protection. The working group will also develop a white paper outlining the issues and make recommendations for the development of regulatory guidance as appropriate.


Insurance Commissioner Dave Jones launched in California an initiative last year to encourage admitted commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry.


As a result of Jones' initiative, in California the first filing and approval of an admitted commercial insurer offering insurance for the cannabis industry was announced in November 2017, the first surety bond program for the industry was announced in February 2018, the first coverage for commercial landlords for the industry was announced in May 2018, the first standardized cannabis policy forms and program filed by the American Association of Insurance Services (AAIS) was approved in June 2018, and just last week three more insurance carriers were approved by Commissioner Dave Jones to offer surety bond coverage for the cannabis industry in California.


Jones has convened meetings between commercial insurance company executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.


In October of last year, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses. The hearing revealed that while there is insurance available from surplus lines insurers, insurance gaps in coverage remain, and, until the approval announced last November, no admitted insurance carriers were offering insurance products to cannabis businesses. Jones also announced that he has directed Department staff to devote the resources necessary to timely review the cannabis product and rate filings.


In May, Commissioner Jones hosted a webinar titled "Weeding through the Unique Insurance Needs of the Cannabis Industry" with the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research (CIPR). In April, Jones renewed his call for insurers to offer insurance products for California's legalized cannabis industry in the wake of published reports that President Trump has overruled Attorney General Jeff Sessions' policy on federal law enforcement against state legalized cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California's cannabis businesses.


California — Jailed for Threats: A man in Placer County has been arrested and jailed for threatening three Liberty Mutual employees. He was unhappy with the size of a settlement. Lloyd Jones had a restraining order issued against him but he continued to threaten.


It was so bad Liberty Mutual hired a security guard to protect them. One threat forced the building to be evacuated.  When he was arrested, police said his home had more than a dozen assault rifles and 6,000 rounds of ammunition. His vehicle — parked close to the Liberty Mutual office at the time of his arrest — was found loaded with guns.


A statement from the sheriff’s office said, “They [the Liberty Mutual employees] really feel like that he was dead set on committing this crime if he didn’t get what he wanted. So I feel like we have saved some people’s lives with this arrest.”


Source link: Insurance Business America


Nevada — Marijuana Sales: The first year of marijuana sales in Nevada totally topped expectations. Sales and the taxes generated from those sales are 25% higher than projected.


Sales are expected to exceed $500 million when June’s numbers are finally tallied. That means tax revenues will hit $70 million and $25 million of that will go to schools.

Andrew Jolley of the Nevada Dispensary Association said, “I think it has been a huge success, and I don’t see how anyone could argue with that.”


Source link: Insurance Journal


Oregon — Short-Term Health Sales: The Oregon Division of Financial Regulation reviewed the federal rule about short-term, limited-duration insurance. Insurance companies and professionals who market, sell, or offer short-term health plans to Oregonians should note that the federal regulation does not limit a state’s ability to establish laws regarding these plans.


It is a violation of Oregon law to market, sell, or offer short-term health insurance policies that exceed three months, including renewals, and a new policy cannot be issued to a customer within 60 days of expiration.


Anyone aware of the unlawful marketing, sale or offering of short-term health insurance policies in Oregon is encouraged to contact the division at 888-877-4894 (toll-free).



On Aug. 3, 2018, the United States departments of Health and Human Services, Labor, and Treasury published a final regulation on short-term, limited-duration insurance, 38 FR 38212. The regulation defines short-term health insurance plans as lasting less than 12 months, and has a total duration of 36 months or less, including renewals and extensions. For purposes of federal law, short-term health insurance is not subject to Affordable Care Act market reform regulations, such as guaranteed availability and coverage for pre-existing conditions.


The federal regulation does not prevent states from enforcing stricter requirements for short-term health plans, including shorter duration limits.


Application of short-term, limited-duration insurance regulation in Oregon

Insurers, health care service contractors, producers, and all other entities transacting health insurance in Oregon are reminded that ORS 743B.005(16) defines the term health benefit plan.


ORS 743B.005(16)(b)(H) provides a limited exception from the definition of health benefit plan for “short-term health insurance policies that are in effect for periods of three months or less, including the term of a renewal of the policy.” ORS 743B.005(16)(c) further provides that “renewal of a short-term health insurance policy includes the issuance of a new short-term health insurance policy by an insurer to a policyholder within 60 days after the expiration of a policy previously issued by the insurer to the policyholder.”


Accordingly, Oregon law limits short-term health insurance policies to a maximum of three months, including renewals, and new policies cannot be issued within 60 days of expiration. A health insurance policy that is in effect for a longer period violates the exception for short-term health insurance under ORS 743B.005(16)(b)(H), and would need to comply with the Oregon requirements for a health benefit plan.


A person who participates in the marketing, sale, or offering of a health insurance policy that does not comply with these requirements may violate the insurance code and be subject to civil penalties.


Entities transacting health insurance in Oregon are also reminded that health insurance policy forms, and the rates associated with them, must be approved by the Division of Financial Regulation before issuance of the policy, see ORS 742.003 (forms) and ORS 743.018 (rates). The division’s current product standards for short-term, limited-duration insurance and health benefit plans are available on its website at https://dfr.oregon.gov/rates-forms/health/Pages/health.aspx.


The division encourages regulated entities, insurance producers, and consumers to report possible violations of the insurance code. If you are aware of the unlawful marketing, sale, or offering of short-term health insurance policies in Oregon, please contact a consumer advocate at 888-877-4894 (toll-free).

Tags:  Around the PIA Western Alliance States  Cannabis Insurance  Insurance Industry  Weekly Industry News 

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