Around the PIA Western Alliance States

California — The Fair Plan: According to a new report released by the California Department of Insurance, the number of homeowners non-renewed by insurance companies fell by 10 percent statewide in 2020 compared to the previous year. Mandatory moratoriums by Insurance Commissioner Ricardo Lara made up more than 80% of the statewide reduction in non-renewals. The report also shows that the number of policies written by the FAIR Plan increased for the second year to a new high, underscoring the need for continued actions that Commissioner Lara has taken to strengthen its coverage for consumers. The data represented approximately 98.8% of the homeowners’ insurance market in the state.

“More communities are rolling up their sleeves to protect their homes from wildfire. And more insurance companies are heeding my call to give incentives for home safety,” said Commissioner Lara. “While we still have a way to go until we have an insurance market that works for all Californians, I remain focused on increasing home safety measures to protect homes and promote market competition while strengthening the FAIR Plan, California’s insurance safety net, so it better addresses consumers’ and businesses’ coverage needs.”

The number of non-renewals by insurance companies fell from 235,597 in 2019 to 212,727 in 2020 – a decrease of 22,870 policies – while the number of new and renewed homeowners’ policies issued by the voluntary market statewide increased from 8.62 million to 8.7 million, or an increase of 82,635 policies. California is the largest insurance market in the nation, and non-renewals by insurance companies affect less than 3 percent of California policyholders, although data shows that areas with greatest risk of wildfires experienced higher rates of non-renewals.

The FAIR Plan, an association made up of insurance companies that serves as California’s “insurer of last resort,” provides insurance coverage to less than 3 percent of the state’s homeowners. However, the number of consumers forced to obtain a policy from the FAIR Plan because they could not find an insurance company willing to write them coverage increased by 49,049 policies in 2020, to 241,466 new and renewed policies. While the Department of Insurance data covers only 2020, the Sacramento Bee reported in October that the FAIR Plan expects continued growth of policies in 2021.

The data also suggests that Commissioner Lara’s actions have contributed to declines in non-renewals, especially in wildfire risk areas. Commissioner Lara implemented a series of temporary one-year moratoriums on non-renewals under a state law that he wrote when he was a member of the California State Senate, protecting more than 1 million policyholders in 2019 and 2.4 million in 2020 who lived in the perimeter or adjacent to a Governor-declared wildfire disaster. Areas in the state under moratoriums saw non-renewals fall by nearly 20 percent, compared to a less than 3 percent decrease in areas not under moratorium.

“Temporary non-renewal moratoriums are essential to California property owners and communities as stakeholders work to reduce wildfire risk and restore available and affordable insurance options,” said Amy Bach, Executive Director of United Policyholders. “The science behind incentivizing home safety is indisputable and supported by consumer groups and first responders. Commissioner Lara has undertaken reforms of the FAIR Plan that are long overdue and will help homeowners in the future even after we solve this non-renewal issue.”

Since taking office in 2019 after the deadliest fires in the state’s history, Commissioner Lara has held in-person and virtual meetings on wildfire issues in 36 counties attended by more than 10,000 local residents. Out of these meetings, he has grown his comprehensive strategy to support a competitive insurance market for all communities while strengthening consumer protections.

Among the consumer protection actions that Commissioner Lara has taken since assuming office in 2019 include:

At his urging, several major insurance companies including Allstate, CSAA, and Farmers, among others, have told the Department of Insurance that they will increase the number of new homeowners policies written in the state and cease or limit non-renewals.

Recent insurance company rate filings approved by the Department of Insurance have significantly expanded insurer-recognized mitigation efforts made by consumers and grown premium discount offerings, up to 20 percent for wildfire-hardened homes, to include 2 in 5 consumers – with five additional companies offering incentives since 2019. The full list of companies offering premium discounts is available on the Department of Insurance’s website.

Ordered the FAIR Plan to raise homeowners coverage limits to keep pace with increasing home values in California and to offer a comprehensive homeowners’ insurance coverage option in addition to its current limited coverage today. While the FAIR Plan has resisted the Commissioner’s Order, a judge ruled in July that the Commissioner has the existing authority to order the FAIR Plan to provide these enhanced coverage options that benefit consumers.

Initiated a partnership with Governor Newsom’s Administration, bringing together the state’s major emergency response and preparedness agencies to create resilient wildfire safety measures for homes and communities. That group is close to completing its work.

Introduced new regulations to incentivize safety mitigation standards and provide more transparency to consumers on their wildfire risk scores. When formally adopted, these regulations will require insurance companies to recognize homeowners’ safety actions when they evaluate the wildfire risk to homes and communities as well as allow consumers to know their risk scores upfront and be able to appeal them.

Sponsored a law that increases payouts and evacuation benefits for wildfire survivors. Senate Bill 872 authored by Senator Bill Dodd of Napa created new protections despite opposition to the measure from the insurance industry.

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

ID 9-2021: External review update, removing state HIPAA waiver requirement established by 2021 Or. Laws ch. 205.

Rule affected: 836-053-1340

Rule Summary: Removes the state HIPAA waiver requirement for external review requests to prevent unnecessary

procedural cancellations of external review requests of health insurers by their enrollees. Insurers are still required to

follow federal HIPAA law requirements for release of confidential information to independent review organizations. 

Filed: December 14, 2021 

Effective: January 1, 2022

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

ID 11-2021: Relating to credit for reinsurance for insurance ceded to assuming insurers in reciprocal

jurisdictions.

Rule affected:836-012-0000

Rule Summary: Amends for the purpose of adopting Form RJ-1, Certificate of Reinsurer Domiciled in Reciprocal

Jurisdiction, as referenced in Section 9 of the NAIC Credit for Reinsurance Model Regulation #786. 

Rule affected: 836-012-0046

Rule Summary: Amends in a manner consistent with June 2019 revisions to Section 8 of the NAIC Credit for

Reinsurance Model Regulation #786.

Rule affected: 836-012-0048

Rule Summary: Adopts the provisions of Section 9 (i.e., the Covered Agreement provisions) of the National

Association of Insurance Commissioners (NAIC) Credit for Reinsurance Model Regulation #786, relating to the

allowance of credit for reinsurance for insurance ceded by domestic insurers to assuming insurers in reciprocal

jurisdictions.

Filed: December 15, 2021 

Effective: January 1, 2022

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

ID 8-2021: Updating annual/quarterly statement blanks and instructions, and valuation manual, to be used by

insurers.

Rule affected: 836-011-0000

Rule Summary: Amends rule to state that the director’s decision to prescribe applicable statement blanks and

instructions shall be posted on the department’s Division of Financial Regulation website.

Rule affected: 836-031-0605

Rule Summary: Amends rule to state that the director’s decision to specify an effective date for amendments to the

Valuation Manual shall be posted on the department’s Division of Financial Regulation website. 

Filed: December 13, 2021 

Effective: January 1, 2022

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

ID 10-2021: External review update, removing state HIPAA waiver requirement established by 2021 Or. Laws ch. 205.

Rule affected:  836-053-1070

Rule Summary: Amended to include prior authorization requests to reporting of grievances process. 

Rule affected:  836-053-1080

Rule Summary: Amended to include prior authorization requests to tracking grievances process.

Rule affected:  836-053-1200

Rule Summary: Amended the definition of prior authorization to include a form of utilization review that requires a

provider or an enrollee to request a determination by an insurer.

Rule affected:  836-053-1203

Rule Summary: Amended the definition of prior authorization to include a form of utilization review that requires a

provider or an enrollee to request a determination by an insurer.

Filed: December 14, 2021 

Effective: January 1, 2022

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

ID 12-2021: Amendment to Oregon Reinsurance Program Payment Parameters for 2022.

Rule affected:  836-150-0040

Rule Summary: Amended to increase the attachment point for 2022 to $92,000 but extend all other payment

parameters from 2021 to cover claims made during the 2022 benefit year. 

Filed: December 16, 2021 

Effective: January 1, 2022

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

ID 13-2021: Adoption of Temporary Rules for Pharmaceutical Sales Representative Licensing.

Rules affected: 836-200-0600, 836-200-0605, 836-200-0610, 836-200-0615, 836-200-0625, 836-200-0630, 836-200-0635

Need for the Rules: Oregon Laws 2021, chapter 593, directed the department to create a licensing program for individuals and entities who do business as a pharmaceutical representative for 15 or more days a year, takes effect on January 1, 2022. The statute requires the department to define certain aspects of the licensing program by rule, including the professional education requirements for licensure applicants and applicants for licensure renewal. These temporary rules define the required program parameters.  

Filed: December 20, 2021 

Effective: December 20, 2021 through June 17, 2022

Washington — Kreidler extends emergency order on coronavirus testing and surprise billing to Jan. 28: Insurance Commissioner Mike Kreidler has extended two emergency orders. His order requiring health insurers to waive copays and deductibles for any consumer requiring testing for the coronavirus (COVID-19) and his order protecting consumers from receiving surprise bills for lab fees related to medically necessary diagnostic testing for COVID-19 are both extended until Jan. 28.

Kreidler’s order waiving cost-sharing applies to all state-regulated health insurance plans and short-term, limited-duration medical plans. The order on surprise billing applies to both in-state and out-of-state laboratories when a provider orders diagnostic testing for COVID-19.

Also, insurers must continue:

    Allowing a one-time early refill for prescription drugs.

    Suspending any prior authorization requirement for treatment or testing of COVID-19.

    In addition, if an insurer does not have enough medical providers in its network to provide testing or treatment for COVID-19, it must allow enrollees to be treated by another provider within a reasonable distance at no additional cost.

“Consumers are rightly concerned about prevention, testing and possible treatment,” Kreidler said. “My emergency order provides guidance to health insurers and should help reassure the public that we will take all necessary steps to protect them.”

Kreidler is using powers granted to him following the statewide emergency that Gov. Jay Inslee declared to protect Washington residents against the spread of the coronavirus.

When the governor issues an emergency proclamation, the commissioner can issue an emergency order related to health care coverage to ensure access to care. The order can be extended by the commissioner for 30 days at a time as long as the governor’s emergency proclamation remains in effect.

Washington — Rule to protect gender-affirming medical treatment takes effect Jan. 1

Changes in the law prevent insurers from denying lifesaving medical care: A rule to solidify access to gender-affirming health care in Washington state takes effect Jan. 1, 2022. Insurance Commissioner Mike Kreidler adopted the rule on Nov. 30, 2021, which sets into state law the Gender Affirming Treatment Act (SB 5313), passed by the Washington state Legislature in 2021.

The rule clarifies several aspects of the existing law to ensure medically necessary gender-affirming treatments are covered by health insurers. The wording in the rule previously allowed insurers to deny coverage in a way that subverted the intent of the law.

For example, insurers may not deny gender-affirming hormone treatments because they are prescribed at different levels than they are for cisgender patients whose gender identity corresponds with their sex assigned at birth.

“While the clarifications in the rule seem technical, the implications for transgender and gender-diverse people is significant,” said Kreidler. “Advocates told us over and over again that gender-affirming treatment saves lives. As the insurance regulator, I take seriously my duty to make sure laws and rules around insurance coverage are as inclusive as we intend them to be and insurers aren’t able to issue blanket denials based on inadvertent loopholes in the law.”

Kreidler has a long history of protecting the rights of transgender and gender-diverse people to access health care, in line with state laws to protect them. He’s fined insurers millions of dollars for denying treatment and has issued technical assistance advisories to make it clear to insurers what they must cover.

If you’ve been unfairly denied coverage for medical services, you can file a complaint and we’ll look into it for you, or you can file an appeal with your health insurance company.

Read more about gender-affirming medical rights in Washington state.