Around the PIA Western Alliance States

California — Insurance Companies & Diversity: New data from the California Department of Insurance suggests that, while more is still yet to be done, there is ample room to continue to push California’s $409 billion insurance industry into partnering more with the state’s diverse small businesses. These new findings are key to helping consumers, investors, and policy leaders hold insurance companies accountable on their public commitments to advance diversity, equity, and inclusion.

The latest results from the California Insurance Diversity Survey (CAIDS) — administered by the Department’s nationally recognized Insurance Diversity Initiative — reveal that, in 2021, insurance companies spent approximately $3.1 billion with California diverse businesses, or suppliers. While this is more than double the amount reported in 2020 that showed insurance company spending on diverse suppliers was $1.5 billion, Commissioner Lara noted this is a small percentage of insurance companies’ total reported spending.

“The latest data shows progress is being made, but it also sheds light on opportunities for insurance companies to deliver even more on their public commitments to advancing diversity, equity, and inclusion,” said Commissioner Lara on CAIDS’ importance. “The evolving pandemic coupled with an economic forecast shrouded in uncertainty continues to underscore a critical need for the insurance industry to continue investing in diverse businesses and having corporate leadership that reflects the people who live and work in the most diverse state in the nation. These elements are the cornerstones to accelerating our state’s economic recovery.”

Survey results also revealed that diversity within the boardrooms of insurance companies improved slightly. Among the 376 (2020) and 386 (2021) insurance companies that reported to the Department, women still account for less than a quarter of insurance company boards. In 2020 and 2021, women’s representation in insurance boardrooms showed some improvement, with 22.8% and 23.8%, respectively. And yet, 17% of insurance company boards across both years still reported zero gender diversity.

At this rate, preliminary Department analysis estimates that it will take upward of 50 years to reach gender parity within the boardrooms of insurance companies. Ethnic diversity among insurance boards showed some modest gains among respondents as compared to prior years, 33% in 2020 and 31.3% in 2021.

Representation among board directors who identified as LGBTQ+ experienced only a fractional percentage gain from 0.6% (2020) to 0.7% (2021); this data continues to underscore the need for more inclusive practices that expand diverse board leadership.

“Diversity in corporate governance is one path that many insurance companies can take toward creating equity, and I recognize the companies that have demonstrated their commitment by aligning their intensions with their actions,” added Commissioner Lara. “As the data shows, there is opportunity for insurance companies to do even more — California consumers demand it.”

Under Commissioner Lara’s leadership, the Department’s nationally recognized Insurance Diversity Initiative in collaboration with its Insurance Diversity Task Force strives to advance equity and inclusion within the boardrooms of California’s insurance companies, and increase contracting opportunities for businesses owned by women, veterans, disabled veterans, LGBTQ+, and historically underrepresented people.

As part of the Department’s annual Insurance Diversity Summit, Commissioner Lara convened insurance company board directors, executives, policymakers, diverse business owners, non-profit leaders, and other government agencies.

In keeping with the Summit’s theme of “Magnifying Your Impact,” the Summit’s welcome plenary included remarks from California Attorney General Rob Bonta and Elmy Bermejo, Regional Administrator of the U.S. Small Business Administration. Commissioner Lara followed up with a keynote conversation alongside Susan Johnson, The Hartford’s Chief Diversity, Equity, and Inclusion Officer, focusing on sharing best practices that drive diversity, equity, and inclusion for the insurance industry.

Registered attendees are invited to partake in a series of business matchmaking roundtables and insightful webinars led by experts on the topics of race and diversity in the insurance industry, diversity in the boardroom, understanding the “nuts and bolts” of contracting with insurance companies, the latest information on the state’s funding opportunities available for diverse business enterprises, and how businesses can stay ahead of the curve by gaining insights on navigating emerging topics such as cybersecurity and algorithmic bias in the insurance industry.

Oregon — The Oregon Division of Financial Regulation recently announced the following proposed rulemaking:

Filing Caption: Mental Health Parity rules, 2021 Or. Laws ch. 629

Amend Rule: 836-053-0012, 836-053-0320, 836-053-1403, 836-053-1404, 836-053-1405, 836-053-1407, 836-053-1408

Rule Summary: 2021 House Bill 3046 (the law), enrolled at 2021 Oregon Laws Chapter 629, establishes new requirements for individual and group health benefit plans providing behavioral health benefits, including updating several provisions related to requirements for behavioral health benefits and treatment which require rulemaking to amend existing rules. The proposed rules amendments will provide clarity and align the law’s amendments to ORS 743.168 and ORS 743B.505.

Filed: October 27, 2022

Hearing: November 15, 2022, 10 a.m.

This is a hybrid meeting conducted in-person and virtually via Microsoft Teams. See Notice of Proposed Rulemaking for Teams meeting instructions.

Last day/time to offer comment: November 22, 2022, 5 p.m.

For more information on this recently adopted rule, please visit the division’s website:

https://dfr.oregon.gov/laws-rules/Documents/Proposed/20221115-mental-health-parity.pdf

Oregon — The Oregon Division of Financial Regulation recently announced the following proposed rulemaking:

Filing Caption: Establishing Uniform Standards for Term and Universal Life Insurance Reserve Financing

Agreements

Amend Rule: 836-012-0200, 836-012-0210, 836-012-0220, 836-012-0230, 836-012-0240, 836-012-0250, 836-012-0260, 836-012-0270, 836-012-0280

Rule Summary: This rulemaking enables Oregon to adopt the significant elements of National Association of Insurance Commissioners (NAIC) Model Regulation # 787, containing uniform, national standards to govern reserve financing agreements pertaining to certain life insurance policies. Completion of this rulemaking will also allow Oregon to maintain NAIC accreditation, which will ensure both stability and competitiveness of Oregon’s insurance market.

Filed: October 27, 2022

Hearing: November 15, 2022, 11 a.m.

This is a hybrid meeting conducted in-person and virtually via Microsoft Teams. See Notice of Proposed Rulemaking for Teams meeting instructions.

Last day/time to offer comment: November 22, 2022, 5 p.m.

For more information on this recently adopted rule, please visit the division’s website:

https://dfr.oregon.gov/laws-rules/Documents/Proposed/20221115-uniform-standards.pdf

Oregon — The Oregon Division of Financial Regulation recently announced the following proposed rulemaking:

Filing Caption: Medicare Supplement Insurance proposed rule amendments

Amend Rule: 836-052-0138, 836-052-0142, 836-052-0143, 836-052-0156

Rule Summary: These rules provide amendments to existing Medicare Supplement Insurance administrative rules regarding Open Enrollment, Guaranteed Issue, including the Annual “Birthday Rule”, and Permitted Compensation Arrangements for insurance producers all of which will provide clarity and enhance consumer protections.

Filed: October 26, 2022

Hearing: November 15, 2022, 1:30 p.m.

This is a hybrid meeting conducted in-person and virtually via Microsoft Teams. See Notice of Proposed Rulemaking for Teams meeting instructions.

Last day/time to offer comment: November 22, 2022, 5 p.m.

For more information on this recently adopted rule, please visit the division’s website:

https://dfr.oregon.gov/laws-rules/Documents/Proposed/20221115-medicare-supplement.pdf

Washington — Small pharmacies reporting requirements: reimbursement appeals (R 2022-07): We adopted the Small Pharmacies Reporting Requirements: Reimbursement Appeals. rule (R2022-07) on November 10, 2022 The rule takes effect on December 11, 2022. The rule adopts conforming regulations that reflect changes in filing tier II appeals by small pharmacies against pharmacy benefit manger reimbursement settlement.

For more information, including the adopted rule (CR-103) and the concise explanatory statement, please visit the rule’s webpage. [hyperlink rule’s web page

Washington — Cost-sharing for prescription drugs rulemaking (R 2022-05): We adopted the Cost-sharing for prescription drugs rule (R 2022-05) on November 10, 2022. The rule takes effect on December 11, 2022. The rule Implements SSB 5610 (Chapter 228, Laws of 2022)—Prescription Drug Cost Sharing—Enrollee Contribution Calculation. The rulemaking will provide consistency and transparency to enrollees using third party payment assistance. The definitions of cost sharing and out-of-pocket maximum are clarified to include coupons and carriers are required to provide enrollees disclosure of their benefits and appeal rights when third party payments are used.

For more information, including the adopted rule (CR-103) and the concise explanatory statement, please visit the rule’s webpage.