Alert Edition July 2018

Welcome to the July 2018 edition of the FORC Alert. If you have any colleagues that may be interested in this publication, please forward it on. There is a link on the Alerts main page where they can subscribe to receive FORC Alerts automatically.

Regards,
Ryan Smart, Esq., FORC Alert Editor

Blurb

Category(s): Connecticut - 07/23/2018

Connecticut Governor Malloy enacted Senate Bill No. 198

June 12, 2018, Connecticut Governor Malloy enacted Senate Bill No. 198 which establishes a task force, made up of twelve members, to study and develop strategies to develop, expand and improve the insurance industry workforce in the state of Connecticut.  The study shall include, but not be limited to: (1) an evaluation and analysis of the status of the insurance industry workforce in Connecticut, (2) the employment needs of the insurance industry in Connecticut, and (3) methods of developing, expanding and improving the insurance industry workforce in Connecticut.  The findings of the committee are due to the General Assembly no later than January 1, 2019, at which point the task force will terminate.

Alan J. Levin, Esq. - LOCKE LORD LLP, (212) 912-2777 , alan.levin@lockelord.com

Category(s): Federal - 07/23/2018

US President Announced End to ACA Risk Adjustment Payments

President Donald J. Trump announced in early July that the administration would stop the Affordable Care Act’s risk adjustment payments to health insurers.  When ACA became law, it created “the three Rs” programs- reinsurance, risk corridors, and risk adjustment.  The third was designed to compensate insurers with higher-risk patients.

Daniel A. Cotter, Esq. - Dickinson Wright PLLC, (312) 423-8170 , DCotter@dickinson-wright.com

Category(s): Florida - 07/23/2018

Cabinet Approves Hurricane Catastrophe Reimbursement Premium Formula

The 2018-2019 Florida Hurricane Catastrophe Reimbursement Premium Formula was approved at a Cabinet meeting held on June 13.  On May 23, the State Board of Administration (SBA) provided notice of the estimated borrowing capacity, estimated claims-paying capacity, and projected balance of the Florida Hurricane Catastrophe Fund (the “Fund”) as of December 31, 2018.  The estimates relate to the 2018-2019 Reimbursement Contract Year.  For May 2018, based on an estimated borrowing capacity of $8.2 billion, $14.1 billion projected year-end cash balance, and projected $1.0 billion of reinsurance, the Fund’s total estimated claims-paying capacity over the next 12 months is $23.3 billion, which exceeds the $17 billion limit on the Fund’s single-season obligations as specified by subparagraph 215.555(4)(c)1., Florida Statutes, for the contract year.  Greater detail may be obtained in the May 17, 2018 Claims-Paying Capacity Estimates Report, which can be found on the Fund’s website available here, under “Bonding Program.”

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 07/23/2018

CFO Jimmy Patronis to Appoint Cryptocurrency Chief

On June 26, Chief Financial Officer (CFO) Jimmy Patronis directed his office to create a "Cryptocurrency Chief" to oversee how current securities and insurance laws apply to the management and monitoring of emerging Initial Coin Offerings (ICOs) and digital asset activity within the state.  The need for cryptocurrency derives from the persistent scams targeting older residents of the state.  Even though the cryptocurrency industry is in its early stages, it is beginning to mature as it makes its way towards being adopted at both the federal and state level, and one county in Florida has already adopted crypto currency as an acceptable form of payment for state charges.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG, P.A., (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 07/23/2018

Division of Workers’ Compensation Issues Bulletins on Assessment Rates

The Division of Workers’ Compensation (DWC) released the following two Bulletins on June 4, 2018: 

Bulletin DFS-01-2018 advises that the Chief Financial Officer (CFO) has issued an Order (Case No. 226970-WC) setting the assessment rate for the Special Disability Trust Fund (SDTF) for the calendar year 2019.  The SDTF rate has been reduced from the 2018 rate of 0.91% to the 2019 assessment rate of 0.42%. 

Bulletin DFS-02-2018 advises that the CFO has issued an Order (Case No. 226968-WC) setting the Workers’ Compensation Assessment Trust Fund (WCATF) assessment rate for the calendar year 2019.  This rate has been reduced from the 2018 rate of 0.97% to the 2019 assessment rate of 0.90%.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG, P.A., (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 07/23/2018

Governor Announces Federal Assistance for Hurricane Damage

On June 28, Governor Rick Scott announced the state has approved a distribution of $616 Million to local communities for long-term recovery efforts from last year’s hurricane season.  The announcement came following a meeting with U.S. Department of Housing and Urban Development (HUD) Secretary Dr. Ben Carson.  Funding from the HUD Community Development Block Grant – Disaster Recovery (CDBG-DR) program will be used to replace and repair damaged homes, build new affordable housing, and provide grants to impacted businesses.  The funds will be administered by the Florida Department of Economic Opportunity (DEO).  As a requirement of the plan, more than 80 percent of the funding will be used to address needs in the hardest-hit counties and ZIP codes.  These areas, determined by HUD, include Brevard, Broward, Collier, Duval, Lee, Miami-Dade, Monroe, Orange, Polk and Volusia counties, as well as ZIP codes 32136, 32091, 32068, and 34266.  For more information about the CDBG-DR program or to view the approved state action plan, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 07/23/2018

OIR Approves Citizens Updated Policy Language and New Coverage Limits for Nonweather Water-Related Losses

The Florida Office of Insurance Regulation (OIR) has approved changes to Citizens’ policy language that affect coverage limits for nonweather water-related losses and duties after loss.  The changes apply to the Citizens Homeowners 3 (CIT HO-3) and Dwelling Property 3 (CIT DP-3) for new business and renewal policies effective on or after August 1, 2018.  CIT HO-3 and CIT DP-3 policyholders who do not participate in Citizens’ Managed Repair Program will have limited coverage for nonweather water-related losses.  The Managed Repair Program offers services to qualified customers whose homes have been damaged.  Such services include Emergency Water Removal Services and a Managed Repair Contractor Network.  For more information click here.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG, P.A., (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): Florida - 07/23/2018

Supreme Court Rules Against AHCA on Medicaid Beneficiary Tort Recovery

On July 5, the Supreme Court of Florida ruled against the Agency for Health Care Administration (AHCA) in Maria Isabel Giraldo vs. AHCA.  The Court ruled that under federal the AHCA cannot collect anticipated future medical expenses from third-party settlements in cases like car accidents under the Medicaid program.  Florida law allows the state to collect on settlements for medical expenses it would pay on behalf of personal injury victims through the state-federal health program, Medicaid, which provides insurance for low-income Floridians. Under that law, ACHA pursued collection of $322,222 against a personal injury plaintiff’s $1 million settlement for past and future medical expenses. The Florida Supreme Court held that AHCA was only allowed to recoup past medical expenses — $13,881.79 — through the settlement. The decision clarifies this Court’s interpretation of the federal Medicaid Act, which would prompt Florida law related to third party subrogation rights for a patient's medical expenses.  For more information on the ruling, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Georgia - 07/23/2018

Georgia Case Summaries Pt. 1

In Re Estate of Gladstone, Case No. S17G1472 (Georgia Supreme Court, May 5, 2018).
On May 5, 2018, the Georgia Supreme Court ruled that the Georgia Court of Appeals erred in holding that a conservator's surety bond covers punitive damages even though such damages are not expressly provided for under OCGA §29-5-40 or under the provisions of the bond itself.  In the underlying action, the probate court determined that Emanuel Gladstone breached his fiduciary duty as conservator for his incapacitated wife. The probate court entered a judgment against Gladstone and his surety bond carrier, Ohio Casualty Ins. Co., for $167,000 "on the settlement of accounts and as damages" and $150,000 in punitive damages. The Court of Appeals affirmed the probate court's judgment. Ohio Casualty petitioned for certiorari review. 

On appeal, Ohio Casualty argued that, while it was liable for Gladstone's act of misappropriating $167,000 of the ward's funds, it was liable only for actual damages because the amount of the bond was based upon the value of the ward's estate, and there was no authority for the award of punitive damages against a surety.  The Georgia Supreme Court reversed  Georgia Court of Appeals’ decision, holding there was no basis for Ohio Casualty, the surety, being liable for punitive damages, reasoning that conservatorship statutes do not explicitly provide for punitive damages against a surety.

Southern Trust Insurance Company v. Cravey, Case No. A18A0301 (Ga. Ct. App., May 5, 2018).
On May 5, 2018, the Georgia Court of Appeals ruled that a party who occupied a residence on a rent-to-own basis established a valid and enforceable homeowners insurance policy on behalf of both himself and the property owner.  Ronald Cravey owned the residence, and homeowners insurance coverage was provide to Cravey under a policy issued to Cravey by plaintiff Auto-Owners Ins. Co. Cravey entered into a rent-to-own agreement with Kim Clark and Jay Floyd.  Clark obtained an additional homeowners insurance policy from plaintiff Southern Trust Ins. Co. and such policy listed Cravey as an additional insured and described Cravey's interest as the owner who was selling the property to Clark. Cravey never asked for this additional coverage and did not know that Clark had obtained the Southern Trust homeowners insurance policy or that he was an additional insured under it.

Cravey’s house and its contents were destroyed in a fire and Auto-Owners, Cravey’s homeowners insurance company, paid for the loss after Cravey made a claim.  Auto-Owners submitted a subrogation claim on Cravey's behalf against Southern Trust and Southern Trust denied the claim. Auto-Owners filed suit against Southern Trust, and both insurers filed cross motions for summary judgment against the other.

The trial court found that Cravey was a third party additional insured under the Southern Trust policy and it was valid and enforceable as it related to him. Southern Trust appealed. The Court of Appeals affirmed the summary judgment in favor of Auto-Owners. Southern Trust argued that Clark did not have actual or apparent authority to procure the policy on Cravey's behalf, Cravey never ratified the policy; and therefore, could not have been a third party beneficiary of the Southern Trust policy.  The Georgia Court of Appeals ruled that that definition of “insured” in the Southern Trust insurance policy expressly included Cravey and that Auto Owners was entitled to subrogation against Southern Trust even though Cravey did not know of the Southern Trust insurance policy and had never authorized or ratified the Southern Trust insurance policy.

Reis v. Ooida Risk Retention Group, Inc.,  Case No. S18A0505 (Ga. Supreme Ct., May 7, 2018).
On May 7, 2018, the Georgia Supreme Court upheld the grant of summary judgment to Ooida Risk Retention Group (“Oida”) a risk retention group (“RRG) created under the federal Liability Risk Retention Act (“LRRA”) in a direct action lawsuit filed by Candace Reis and Melvin Williams (“Plaintiffs”) pursuant to O.C.G.A. §40-1-112 (the motor carrier and insurance carrier direct action statute) against Ooida. Ooida was not domiciled in Georgia, but was registered in Georgia as a foreign RRG.

Plaintiffs were injured in a collision with a truck insured by Ooida.  Plaintiffs filed the underlying lawsuit directly against Oodia pursuant O.C.G.A §40-1-112 which authorizes direct actions against motor carrier insurers.  Ooida moved for summary judgment on the grounds that the LRRA preempted O.C.G.A. §40-1-112.  The trial court agreed and granted summary judgment to Ooida.

The Georgia Supreme Court affirmed the grant of summary judgment to Ooida, ruling that provisions in the LRRA preempted Georgia’s motor carrier and direct insurance carrier action statutes.  Specifically, the Georgia Supreme concluded that 15 USC §3902(a)(1) provides, in relevant part, that “a risk retention group is exempt from any state law… to the extent that such law.. would make unlawful, or regulate directly or indirectly, the operation of any risk retention group.”  The Georgia Supreme Court found that Georgia’s direct action statute would regulate, directly or indirectly the operation of the risk retention group as prohibited by 15 USC §3902(a)(1) and was thus preempted by the LRRA.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Georgia - 07/24/2018

Georgia Case Summaries Pt. 2

InComm Holdings v. Great American Insurance Company, Case No 1:15-CV-02671 (11th Circuit, May 10, 2018).
On May 10, 2018, the U.S. Court of Appeals for the Eleventh Circuit affirmed the decision of the U.S. District Court for the Northern District of Georgia in InComm Holdings Inc. v. Great American Insurance Company. The Eleventh Circuit agreed with District Court that Great American’s computer fraud insurance policy issued to Incomm did not provide coverage for fraud committed by holders of prepaid debit cards who exploited a coding error in the insured’s computer system and fraudulently increased the balances on the cards which caused InComm to incur a loss of $11.4 million.  

The exploitation of the coding error by the prepaid debit cardholders occurred over the telephone.  The Great American computer fraud insurance policy provided coverage for “loss of, and loss from damage to, money, securities and other property resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the premises or banking premises: (a) to a person (other than a messenger) outside those premises; or (b) to a place outside those premises.”  The Eleventh Circuit Court of Appeals ruled that, although the telephone fraud included interaction with InComm’s computer system, the fraud did not result directly from the use of a computer and was therefore not covered under the Great American computer fraud insurance policy.

Hughes v. First Acceptance Insurance Company of Georgia, (Georgia Court of Appeals Case No. A17A0735, November 2, 2017).
On June 4, 2018, the Georgia Supreme Court granted the writ of certiorari in this case to address questions about an insurance company’s duty to settle when presented with policy limit demands on claims that are potentially worth more and which could expose the company to bad faith litigation if the amount of a verdict exceeds the limit of the insurance coverage.  In particular, the Georgia Supreme Court, in the order granting the writ of certiorari, expressed concern over the following two issues:

    

  1. Did the Court of Appeals err in reversing the grant of summary judgment to the insurer on the insured’s failure-to-settle claim, on the basis that questions of fact existed for the jury to determine as to whether the injured party offered to settle her claims within the policy limits, and established a 30-day deadline to accept the offer?
    2. 

  2. Does an insurer’s duty to settle arise when it knows or reasonably should know settlement within the insured’s policy limits is possible with an injured party or only when the injured party presents a valid offer to settle within the insured’s policy limits?
    3.  

The case presents the opportunity for the Georgia Supreme Court to establish standards for and guidance on insurer’s duty to accept attorney driven time limit demands and subsequent bad faith litigation and will be of interest of all property and casualty liability insurers doing business in Georgia.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Kentucky - 07/23/2018

KDOI Regulation Forthcoming

The Kentucky Department of Insurance (“KDOI”) is expected to promulgate a regulation in the near future that will establish a competitive process to determine the medical necessity criteria that Managed Care Organizations (MCOs) must use when reviewing claims for Medicaid benefits in Kentucky.  Pursuant to HB 69, which passed the General Assembly earlier this year, the procedures must result in the Commissioner issuing an appealable order designating a single set of medical necessity criteria for each Managed Care “service area,” which HB 69 defines as “(1) physical health services; (2) behavioral health services; and (3) any other categories of service required under federal law for Medicaid managed care.”  Once designated, every MCO in Kentucky will be required to use the designated criteria when reviewing claims for Medicaid benefits within each service area.  This process will result in more uniform standards for the adjudication of Medicaid benefits in Kentucky. 
 
The KDOI has also fined pharmacy benefit manager Caremark PCS Health, an affiliate of drugstore chain giant CVS, $1.5 million and placed it on probation for alleged claim reimbursement and reporting violations.

Greg E. Mitchell, Esq. - Global Regulatory Risk & Compliance PLLC, (859) 229-7851 , greg.mitchell@globalreg-law.com

Category(s): Louisiana - 07/23/2018

Application of Separate Named Storm or Hurricane Deductible Clarified

On June 20, 2018, Louisiana Department of Insurance (“Department”) issued Advisory Letter Number 2018-01 specifically addressing the application of separate named storm deductibles with respect to named subtropical storm.

Under La. R.S. 22:1337, insurers issuing homeowners insurance or insurance on one or two family owner occupied premises that use a separate deductible to be applied in place of other deductible to loss or damage resulting from a named storm or hurricane must apply that separate deductible on an annual basis to all named storms or hurricane losses occurring during a calendar year. Under La. R.S. 22:1337(A)(2), a named storm is defined as a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service. The question apparently has arisen with respect to subtropical systems that receive a name from the National Hurricane Center of the National Weather Service but are not deemed tropical storms or hurricanes. Are losses and damages resulting from such a named storm, subject to the separate deductible rules? The answer may depend upon the exact language in the policy. If the language tracks La. R.S. 22:1337(A)(2) as set forth above, then the operative trigger is whether the storm system is assigned a name by the National Hurricane Center of the National Weather Service, regardless of whether it is classified as a subtropical storm, a tropical storm or a hurricane.

On the other hand, if the language in the separate deductible applies to a storm system declared by the National Hurricane Center or National Weather Service to be a tropical storm or a hurricane, then the deductible only applies if the storm system is classified as a tropical storm or a hurricane, even though it has been granted a name. In such case, if the storm system is classified as a subtropical storm, although named, the separate deductible would not be triggered. Consequently, recourse must be to the precise policy language along with the provisions of La. R.S. 22:1337.

Van R. Mayhall, Jr., Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-8009 , van.mayhall.jr@bswllp.com
Sunny Mayhall - The LDS Group and The Versant Group, (225) 768-6160 , Sunny.Mayhall@theLDSgroup.com
Van R. Mayhall, III - Investar Bank, (225) 227-2309 , van.mayhall@investarbank.com

Category(s): Maryland - 07/23/2018

Maryland's House Bill 1078/Senate Bill 792

Governor Hogan signed House Bill 1078/Senate Bill 792 (Commercial Insurance – Insurance Producers – Commissions) into law which codifies a long-standing practice within the insurance industry that had been the subject of examination by the Maryland Insurance Administration over the past year or so.  The bill allows an insurer to pay commissions on a variable basis on policies issued to a qualified exempt commercial policyholder resulting in a lower premium for the policyholder provided the insurance producer receiving the commission has agreed to the specified level of commission.  A commission expense reduction plan (CERP), a term defined by the Maryland Insurance Administration, is commonly known among insurance producers as “commission contribution” or “netting” a premium.  The law will go into effect on October 1, 2018.

Brett S. Lininger, Esq. - THE CAPITAL LAW FIRM, P.A., (443) 321-9988 , brett@kresshammen.com

Category(s): Mississippi - 07/24/2018

Mississippi Supreme Court Defers No More

The Mississippi Supreme Court has abandoned its prior practice of deferring to administrative agency interpretations of state statute, effectively rejecting the doctrine of Chevron deference.  In its June 2018 decision, the Mississippi Supreme Court in King v. Mississippi Military Department clarified the standard of review for administrative agency appeals.  The King court, relying on the state constitution’s strict separation of powers, held that the judicial branch, not the executive branch, had exclusive purview to interpret statutes.  Thus, the Court abandoned its prior, and often inconsistent, practice of deferring to an administrative agency’s statutory interpretation. See King v. Miss. Military Dept., Case No. 2017-CC-00784-SCT, 2018 Miss. LEXIS 251, 2018 WL 2731250 (Miss. June 7, 2018).

Robert B. House, Esq. - JONES WALKER LLP, (601) 949-4830 , rhouse@joneswalker.com

Category(s): New Mexico - 07/24/2018

Suit Filed over Bills for Emergency Air Ambulance Services

On April 24, 2018, PHI Air Medical, L.L.C. (“PHI”), filed suit in the Federal District of New Mexico against the New Mexico Office of Superintendent of Insurance (“OSI”) after disputes arose over bills for emergency air ambulance services.  The OSI had previously prohibited PHI from balance-billing patients based on provisions in the New Mexico Patient Protection Act (“PPA”) that limit payable fees for out-of-network emergency care provided to persons covered by managed health care and preferred provider plans.  In the lawsuit, PHI contends that it is an air carrier under the Airline Deregulation Act (“ADA”) and the ADA preempts the PPA and PHI is entitled to recover its full billed services.  The OSI has filed a motion for judgment on the pleadings arguing that pursuant to the McCarran-Ferguson Act, the PPA is not preemption by the ADA.  The OSI has argued that the PPA regulates the business of insurance while the ADA does not.

J. Brent Moore, Esq. - Moore Law, PC, (505) 870-7496 , jbm@moorelawpc.com

Category(s): New York - 07/23/2018

Court Ends Short-Lived Regulation 208, Aimed at Curbing Title Insurance Marketing Expenses

In December 2017, the New York Department of Financial Services (“DFS”) promulgated Regulation 208 to rein in marketing activities of title insurance corporations, title agents, and closers. The goal of Regulation 208 was to curb “certain practices that impact consumers and result in higher premiums and closing costs,” by limiting the “millions of dollars” insurers spent each year on meals, entertainment, gifts, vacations, sporting events, dinners, and other perks to attorneys, issuing agents, and other partners. DFS believed these costs were being passed along to homeowners, resulting in higher premiums and a culture that encouraged homeowners to pay gratuities and pick-up fees to title closers. The Regulation imposed harsh fines on violators, ranging from $5000 per violation to ten times the amount of compensation paid to an agent at closing.

The title insurance industry took swift action when Regulation 208 went into effect on December 18, 2017, and sued in New York Supreme Court to invalidate the regulation. The petitioners argued Regulation 208 was an overreach of New York Insurance Law, and that the anti-rebating statute on which it is based only prohibits quid pro quo compensation in exchange for title insurance business, not simple entertainment and marketing incentives to issuing agents, attorneys, and other partners. 

The court agreed, holding that the Insurance Law does not prohibit title insurers and agents from paying ordinary marketing and entertainment expenses. Interpreting the language of Regulation 208, the court held that the statute’s prohibition on certain payments by industry players “as an inducement for or as compensation for any title insurance business,” covered only “rebates, fees, premiums, charges, and commission,” paid as kickbacks, not “ordinary marketing expenses.” The court found it “absurd,” that the legislature would have intended to prevent title insurance companies from marketing themselves, as “common sense” dictates that marketing is used to generate business. It struck all of the prohibitions in Regulation 208 down, finding it on the whole “unreasonable and irrational.” 

While the decision is a major win for title insurers, the court hinted the fight over Regulation 208 might not be over. It directed the legislature to pass new legislation if it hopes to regulate marketing and entertainment expenses in the title insurance industry. For its part, DFS filed an appeal just one day after the opinion came down, suggesting that its attempts to regulate title insurance marketing efforts are far from over.

The provision and receipt of the information in this publication (a) should not be considered legal advice, (b) does not create a lawyer-client relationship, and (c) should not be acted on without seeking professional counsel who have been informed of the specific facts. Under the rules of certain jurisdictions, this communication may constitute “Attorney Advertising.”

Frederic M. Garsson, Esq. - SAUL EWING ARNSTEIN & LEHR LLP, (212) 980-7200 , fred.garsson@saul.com
Francis X. Riley, III - SAUL EWING ARNSTEIN & LEHR LLP, (609) 452-3150 , francis.riley@saul.com
Colleen Fox - SAUL EWING ARNSTEIN & LEHR LLP, (609) 452-3145 , colleen.fox@saul.com

Category(s): New York - 07/23/2018

The National Rifle Association of America (“NRA”) has filed a lawsuit against the Department of Financial Services (“DFS”), Governor Andrew Cuomo, and DFS Superintendent Maria T. Vullo

The National Rifle Association of America (“NRA”) has filed a lawsuit against the Department of Financial Services (“DFS”), Governor Andrew Cuomo, and DFS Superintendent Maria T. Vullo alleging violations of the NRA’s First Amendment rights. The lawsuit was filed in May, several days after the DFS fined several insurance companies for participating in an NRA-backed liability insurance program for gun owners and insurance broker, Lockton Affinity, $7 million in connection with sales of a National Rifle Association-branded “Carry Guard” insurance program which provided liability insurance to gun owners and resident family members for legal costs connected with criminal defense for using a legally owned firearm.

Maxine Blake, Esq. - Maxine Blake, Esq., (917) 836-1308 , mblake@mblakelawfirm.com

Category(s): Texas - 07/23/2018

Texas Department of Insurance Adopts New Rules

The Texas Department of Insurance has adopted new rules relating to credit for reinsurance.

The rule implements the provisions of SB 1070 adopted in 2017 to accommodate certified assuming reinsurers from qualified jurisdictions including reduced collateral requirements.  Additionally, the rule amends existing provisions relating to trust accounts, letters of credit and electronic filings.  SB 1070 repealed Chapter 492 of the Insurance Code but included the material provisions of the repealed chapter in amendments to Chapter 493.  The required reporting forms are adopted by reference.

The new provisions apply to reinsurance agreements entered into or renewed on or after July 1, 2018.

Burnie Burner, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C., (512) 480-5100 , bburner@mwlaw.com

Category(s): Texas - 07/23/2018

Texas Department of Insurance Proposes New Rules

The Texas Department of Insurance has proposed new rules relating to surplus lines agents, insurers and the stamping office.

The proposed rule repeals the prior Chapter 15 of the Texas Administrative Code and adopts a new Chapter 15.  The new chapter includes provisions implementing bills relating to surplus lines insurance from the 2013 and 2017 sessions of the Legislature. It incorporates changes to comply with the NRRA and to implement new provisions relating to exempt commercial purchasers and domestic surplus lines insurers. The requirements for non-resident surplus lines agents and the collection of surplus lines taxes and fees are also clarified.

Public comments on the proposed new chapter were due no later than July 23, 2018.

Burnie Burner, Esq. - MITCHELL, WILLIAMS, SELIG, GATES & WOODYARD, P.L.L.C., (512) 480-5100 , bburner@mwlaw.com

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