Alerts for March 2018

Alert Edition March 2018

Welcome to the March 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

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Category(s): Connecticut - 03/26/2018

Proposed Amendments to Regulations Applicable to Surplus Lines Insurers

On February 27, 2018 the Honorable Katharine L. Wade, Insurance Commissioner for the State of Connecticut, proposed certain amendments to regulations applicable to surplus lines insurers. The amendments seek to establish that domestic insurance companies designated by the Insurance Commissioner as “domestic surplus lines insurers” are subject to the same obligations, conditions, standards and requirements applicable to other unauthorized insurers conducting similar surplus lines insurance business in the state of Connecticut. The proposed regulation may be accessed here.

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

Category(s): Florida - 03/26/2018

Advertising Gifts HB 483

Advertising Gifts – HB 483 by Rep. Clay Yarborough (R-Jacksonville) -- Current law prohibits specific inducements to purchase insurance coverage, with an exception for insurers and their agents to make gifts of merchandise up to $25 per gift to any person, for the purpose of advertising. Although the value of the gift is limited, the frequency of giving or the aggregate value of gifts given over any period of time is not addressed. Also, these gifts are limited to advertising merchandise with a company name on it (i.e. pens, coffee mugs, etc.).  HB 483 raises the value cap from $25 to $100 per year and removes restrictions as to the type of merchandise that can be given. It also allows insurers and agents to make a charitable contribution in the name of a potential insured of up to $100 per year, effective July 1, 2018.  The bill can be found here.

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

Category(s): Florida - 03/26/2018

AOB Legislation Does Not Pass – Again

Assignment of Benefits – HB 7015 by Rep. Jay Trumbull (R-Panama City); SB 62 by Sen. Dorothy Hukill (R-Port Orange); SB 1168 by Sen. Greg Steube (R-Sarasota) -- For the sixth legislative session in a row, a bill addressing the issue of contractors convincing homeowners to assign their policy claims benefits, thus allowing contractors to submit inflated invoices to insurers, was not approved.  The bills advanced by the House and Senate differed greatly and despite efforts by the Insurance Commissioner, the business community, and the insurance industry, the Senate was unwilling to amend their proposal with language that would have curbed this deceptive practice.  Florida property insurers, particularly in the southeast portion of the state, have seen significant adverse claim development over the last several years, resulting in regular rate increases.  The bill can be found here.

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

Category(s): Florida - 03/26/2018

Department of Financial Services

Department of Financial Services –  HB 1073 by Rep. Bill Hager (R-Boca Raton) -- The legislative package by the Chief Financial Officer Jimmy Patronis was approved in the final days of session and contained the following provisions, among others:  changing Managing General Agent license requirements; reducing the number of policies that can be written each year by an unappointed agent from 24 to 4; and eliminating an affidavit requirement for nonresident public and all-lines insurance adjusters.  The bill can be found here.

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

Category(s): Florida - 03/26/2018

Insurance Omnibus

Insurance Omnibus – HB 465 by Rep. David Santiago (R-Deltona) -- A large package of insurance-related matters was approved in the final days of session with the following provisions, among others:  incorporates a recent amendment of the Gramm-Leach-Bliley Act for purposes of privacy standards; provides for changes to insurer policy execution requirements; allows private passenger motor vehicle insurers to generally exclude coverage of transportation network services provided by a named insured, rather than limiting exclusion to specific motor vehicles; expands the confidentiality of documents submitted under the Own-Risk and Solvency Assessment; revises unearned premium reserve requirements; and changes delivery requirements for motor vehicle service agreements companies and health maintenance organizations.  The bill can be found here.

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

Category(s): Florida - 03/26/2018

Residential Flood Insurance

Flood Insurance Notification – SB 1282 by Senator Annette Taddeo (D-Miami) -- Legislation was approved this session to expand the required notice in homeowner’s property insurance policies to note that hurricane coverage does not include flood insurance.  The notice is required to be included in the policy documents upon the issuance and each renewal and will apply to policies issued or renewed on or after July 1, 2019.  If the bill becomes law, it will take effect July 1, 2018.  The bill can be found here.

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

Category(s): Georgia - 03/26/2018

Department Issues Bulletin Regarding Surcharges & Multivehicle Not-At-Fault Accidents

On February 21, 2018, The Georgia Department of Insurance issued Directive 18-EX-2, which states that some auto insurers are under the mistaken impression that not-at-fault multivehicle accidents can be used to rate upon initial underwriting.  It appears that some consumers who have been involved in not-at-fault multivehicle accidents are being charged more than consumers, similarly situated, who have not been involved in not-at-fault multivehicle accidents.  

O.C.G.A. § 33-9-40 prohibits insurers from charging higher rates due to a not-at-fault multivehicle accident, whether that rate is a new rate or a renewal rate.  The Insurance Commissioner is currently using his market conduct exam power to determine the prevalence of this practice in Georgia.

Tony Roehl, Esq. - BAKER HOSTETLER LLP, (404) 256-8419 , troehl@bakerlaw.com

Category(s): Georgia - 03/26/2018

Haulers Insurance Company v. Davenport

Haulers Insurance Company v. Davenport Case No. A17A1808 (Ga. Ct. App. 2018)

On February 2, 2018, in an interlocutory appeal, the Georgia Court of Appeals affirmed the denial of Haulers Insurance Company's motion for summary judgment in Mell Davenport's suit to recover for injuries he suffered when his car collided with another car while he was attempting to park. Construing the evidence in the light most favorable to the non-movant, the trial court’s record showed that Davenport had offered a ride to a neighbor which he did on occasion. Davenport did not have a transportation fee meter in his car and did not drive the neighbor every time she had asked him for a ride. When he did drive her, the neighbor would pay Davenport approximately $7.  On the day of the accident, the neighbor did not ask Davenport for a ride; instead, Davenport offered to drive her. Although the neighbor expected to pay Davenport, there was no evidence in the record that she ever paid him for the ride on the day in question. Nor was there any evidence in the record that Davenport offered paid rides to the general public. As Davenport pulled into a parking space at the post office, the driver in the adjacent parking space opened his car door into Davenport's path. At the sound of impact with the other car, Davenport jerked his head around to see what had happened and injured his neck doing so.

Davenport sued the other driver and served his own uninsured motorist carrier, Haulers, under O.C.G.A. § 33-7-11 (d).  Davenport's policy with Hauler's excluded coverage for damage and injuries resulting when the insured's car "is being used as a public or livery conveyance."  Haulers answered in its own name and moved for summary judgment on the ground that the policy’s exclusion applied. The trial court denied the motion and granted a certificate of immediate review.

The Court of Appeals found that the evidence showed that Davenport was not operating his vehicle as a public or livery conveyance, and therefore, Haulers was not entitled to summary judgment. The underlying insurance policy did not define the terms "public or livery conveyance," and thus, the Court of Appeals considered the usual and common meaning of those terms.  The Court of Appeals noted that  the Supreme Court of Georgia previously stated in dicta that the phrase "public livery conveyance" is interpreted as a taxicab, while other states’ courts have defined a public or livery conveyance as a vehicle held out to the general public for hire and which is used indiscriminately in that manner.

The Court of Appeals concluded that the ordinary meaning of the policy’s language was unambiguous and that absent evidence that the Davenport had used the vehicle indiscriminately to transport members of the general public for hire or regularly rented out his vehicle for hire, Davenport had not operated his vehicle either as a livery or a public conveyance at the time of the accident as required to trigger the policy’s exclusion.  Accordingly, the Court of Appeals affirmed the trial court’s denial of Hauler's motion for summary judgment.

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

Category(s): Georgia - 03/26/2018

Hughes v. First Acceptance Insurance of Georgia, Inc.

Hughes v. First Acceptance Insurance of Georgia, ,Inc., Case No. A17A735 Ga. Ct. App. 2017) (Published on February 18, 2018)

On November 2, 2017 the Georgia Court of Appeals reaffirmed that there is no hard-set rule conducive to summary judgment for an insurer’s bad faith failure to settle cases; but rather, the court ruled that a jury should determine whether the insurer’s actions had been “reasonably prudent.” Robert Jackson allegedly caused a five-vehicle collision that resulted in his death and serious injuries to others, including Julie An and her minor child, Jina Hong. An and Hong, through their counsel, communicated with Jackson’s insurance company, First Acceptance Insurance Company, stating that they were “interested” in settling their claims within Jackson’s First Acceptance insurance policy’s $25,000 limit of liability. Counsel for An and Hong also requested that First Acceptance send him Jackson’s insurance policy information within 30 days. An later claimed that this communication represented an offer of settlement made to First Acceptance, when, 41 days later, An’s and Hong’s counsel sent First Acceptance a letter withdrawing their “offer” and stating their intent to file suit due to First Acceptance’s failure to respond to the request for Jackson’s insurance policy information. An and Hong then sued and were ultimately awarded $5,334,220 in damages. First Acceptance paid $25,000 towards the award, leaving Jackson’s estate exposed to over five million dollars in damages.

Robert Hughes, as administrator of Jackson’s estate, then commenced an action against First Acceptance, alleging negligent and bad faith failure to settle An’s and Hong’s lawsuit. Granting summary judgment to First Acceptance, the trial court accepted First Acceptance’s argument that because there were numerous other injured parties seeking compensation, First Acceptance could not in good faith settle a claim that would exhaust its insured’s policy’s limit of liability. The Court of Appeals, however, rejected this reasoning, noting that an insurer may be liable for an excess judgment against its insured if the insurer, negligently or in bad faith, failed to settle within the policy’s limits. The court therefore held that whether First Acceptance acted negligently under these circumstances turned on whether it had acted reasonably in responding to the settlement offer from An’s counsel, which is a matter for the jury.

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

Category(s): Georgia - 03/26/2018

Lee v. Mercury Ins. Co. of Georgia

Lee v. Mercury Ins. Co. of Georgia, 808 S.E.2d 116 (Ga. Ct. App. 2017) (Published on February 18, 2018)

On November 3, 2107 the Georgia Court of Appeals held that a homeowners insurance policy’s definition of “residence premises” was ambiguous, requiring a construction of the policy in favor of coverage.

Ronald Lee made a claim under his homeowners insurance policy for damage to an insured premises as a result of a fire loss. Lee lived with his wife elsewhere, but owned and paid the mortgage payments for the residence for which claim was filed for the fire loss. Mercury denied the claim, and the insured sued Mercury for breach of contract. Mercury moved for summary judgment alleging that Lee failed to reside at the insured residence as required by the policy. Lee cross-moved for summary judgment, asserting he was entitled to judgment in his favor on the issue of coverage under the terms of the policy. The trial court granted Mercury’s motion for summary judgment, and Lee appealed.

On appeal, Lee argued that the policy’s provisions expressly covered the type of loss at the residence and the residence qualified for coverage under the policy’s terms. The appellate court noted that the policy’s definition of “residence premises” was ambiguous, thereby requiring construction of the policy in favor of coverage and precluding summary judgment in favor of Mercury. The term “residence premises” was defined as “one, two, three or four family dwelling, condominium or rental unit, other than structures and grounds, used principally as a private residence; where you reside and which is shown in the Declarations.” The appellate court held that the placement of the semicolon in the definition of “residence premises,” the policy’s lack of definition of the term “reside,” and the lack of an express condition requiring the insured to reside only at the insured premises created an ambiguity which precluded summary judgment in favor of Mercury.

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

Category(s): Georgia - 03/26/2018

Stanley v. Government Employees Insurance Company

Stanley v. Government Employees Insurance Company Case No. A17A1813 (Ga. Ct. App. 2018)

On January 25, 2018, the Georgia Court of Appeals affirmed the grant of Government Employees Insurance Company's (“GEICO”) motion for summary judgment in Jason Stanley's action seeking uninsured motorist coverage from GEICO, Stanley's fiancé's parents' automobile insurance carrier. Stanley sued Alissa Young alleging that, while driving a vehicle owned by his employer, he suffered injuries in a head-on collision with a vehicle driven by Young. He also sought uninsured motorist coverage from GEICO.

GEICO had issued the underlying automobile insurance policy to Allen and Rosa McMillan, the parents of Stanley's fiancé, Robmeka Scott. The automobile insurance policy's declaration page listed the McMillans as the "Named Insureds" and Stanley as an "Additional Driver." At that time, the McMillans, Stanley and Scott resided in the same home. In its motion for summary judgment, GEICO argued that Stanley was not an insured under the McMillans' automobile insurance policy and, thus, was not entitled to uninsured motorist coverage. The trial court granted GEICO's motion, and Stanley appealed.

Contrary to Stanley's contention on appeal, the Court of Appeals found that the automobile insurance policy was not ambiguous and Stanley was not covered under it. The declarations page of the automobile insurance policy listed only the McMillans as the "Named Insureds" and explicitly listed Stanley as an "Additional Driver." The Court of Appeals further concluded that Georgia is clear that an “Additional Driver” is not a “Named Insured” and affirmed the grant of summary judgment to GEICO.

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

Category(s): Georgia - 03/26/2018

State Farm Mutual Insurance Company v. Fabrizio

State Farm Mutual Insurance Company v. Fabrizio, Case No. A17A1447 (Ga. Ct. App. 2018)

On January 16, 2018, the Georgia Court of Appeals reversed the grant of summary judgment to Toni E. Fabrizio in her suit to recover damages resulting from injuries she sustained in an automobile collision. Fabrizio sued State Farm Automobile Insurance Company in an attempt to collect uninsured/underinsured motorist benefits under five automobile insurance policies issued to her father, Tony Foster. Fabrizio subsequently moved for summary judgment as to coverage, arguing that she was covered by the State Farm policies as a resident relative of Foster at the time of the accident, and the trial court granted her motion. State Farm appealed.

The trial court’s record showed that the accident occurred on December 19, 2013. In her March 17, 2015 interrogatory responses, Fabrizio identified only her three children as members of her household at the time of the accident. At her initial deposition, taken July 10, 2015, she testified that she and Foster maintained separate residences at the time of the accident, stating that she lived at 3297 Carl Sutton Road with her three children, and Foster lived in a house across the street at 3290 Carl Sutton Road. On September. 13, 2015, Fabrizio executed an affidavit stating that Foster moved into the 3297 Carl Sutton Road house with her in October 2013, where they both lived at the time of the accident. Fabrizio characterized her prior deposition testimony regarding members of her household as "a mistake that [she] realized after [her] deposition . . . after speaking to [Foster]." Foster also executed an affidavit, averring that he moved in with Fabrizio at the house at 3297 Carl Sutton Road in October 2013, where they both lived at the time of the accident. On November 4, 2015, State Farm took Fabrizio's deposition a second time, and she testified that she lived at 3297 Carl Sutton Road with her father and three children at the time of the accident.

The Georgia Court of Appeals concluded on appeal that the trial court erred in granting summary judgment to Fabrizio because genuine issues of material fact existed regarding whether she and Foster maintained the same residence at the time of the accident. The court reasoned that, even if the trial court determined that a reasonable explanation existed for Fabrizio's contradictory testimony, that did not permit her to effectively "erase" her own prior contradictory testimony and prevail on her own motion for summary judgment. Accordingly, Fabrizio's initial testimony regarding whether she resided with Foster at the time of the accident remained in the record, along with her subsequent testimony, which together presented a factual question as to whether she was a resident relative of Foster's household at the time of the accident so as to qualify for coverage under the State Farm policies at issue, and the trial court, therefore, erred in granting summary judgment to Fabrizio.

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

Category(s): Georgia - 03/26/2018

State Of Georgia et al. v. International Indemnity Company et al.

State Of Georgia et al. v. International Indemnity Company et al., Case No. A171A1195 (Ga. Ct. App. 2017)

On October 10, 2017, in an interlocutory appeal, the Georgia Court of Appeals partially reversed a trial court’s order finding, among other things, that State of Georgia waived sovereign immunity under certain provisions of the Insurers Rehabilitation and Liquidation Act, O.C.G.A. § 33-37-1 et seq..(the “Act”). The trial court’s record showed that State of Georgia, through the Commissioner of Insurance, Ralph T. Hudgens, served as liquidator of International Indemnity Company (“IIC”), an insurance company in liquidation pursuant to the Act. Sun States Inc., IIC's sole shareholder, sought relief from the trial court requiring the liquidator to be liable for money that Sun States alleged was wrongfully removed from the IIC estate and paid for the fees of third parties that had rendered services to the liquidator and requiring the liquidator to pay Sun States’ attorney’s fees. The State of Georgia moved to dismiss Sun States’ claims on the basis of sovereign immunity, which the trial court denied, and the Court of Appeals affirmed in part and reversed in part.

However, on certiorari review, the Supreme Court of Georgia found that direct appeals from the denial of a motion to dismiss based on governmental immunity were not permitted and that the Court of Appeals should have dismissed the direct appeals for failure of the appellants to follow the interlocutory appeal procedures.

On remand to the trial court, the State of Georgia moved the trial court to vacate its original order denying the motion to dismiss, and then to reinstate the same order and issue a certificate of immediate review. The trial court granted the motion and vacated its earlier order, reinstated it and granted a certificate of immediate review. The Court of Appeals granted applications for interlocutory review.

The Court of Appeals held that the trial court erred in finding a waiver of sovereign immunity under the Act as to claims for payment of administrative expenses and attorney’s fees. The trial court found an implied waiver of State's sovereign immunity under the Act that could require State to pay administrative expenses and attorney’s fees. But contrary to the trial court's ruling, there is nothing in the applicable Georgia Code sections upon which the trial court relied that specifically created a right of action against the government that would otherwise be barred by sovereign immunity, and that expressly stated that an aggrieved party is entitled to collect money damages from the government in connection with a successful claim under the statute. Thus, Court of Appeals concluded that the trial court erred in finding an implied waiver of sovereign immunity. Because the plain language of the Act does not provide for a specific waiver of governmental immunity nor the extent of such a waiver, and no waiver can be implied, the Court concluded "that the General Assembly did not intend to waive sovereign immunity." Accordingly, the Court of Appeals reversed the trial court's order to the extent it found that the government waived sovereign immunity pursuant to the specified provisions of the Act and that the state/liquidator could be held liable for claims seeking payment of administrative expenses and attorney’s fees under the Act.

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

Category(s): Mississippi - 03/26/2018

2018 Regular Session of the Mississippi Legislature

With a nod to opening day of what remains our national pastime, here is the current box score for selected insurance legislation debated during the 2018 Regular Session of the Mississippi Legislature.

Runs

Affiliate Transfer. SB 2311 provides for affiliate transfer of policies at renewal or policy expiration. This bill has been signed by the Governor and is effective July 1, 2018.

Insurance Fraud Reporting. SB 2527 prohibits civil liability against a person or entity for reporting insurance fraud. This bill is due from the Governor on March 26 and would become effective July 1, 2018.

Guaranteed Asset Protection. SB 2929 provides a framework within which GAP products are defined and may be offered. This bill is due from the Governor on March 26 and would become effective July 1, 2018.

Fortified Homes Premium Discounts. SB 2465 requires property insurers to provide premium discounts for homes built to certain fortified standards. This bill has been signed by the Governor and is effective July 1, 2018.

Texting While Driving. HB 900 removes the repealer on the prohibition against texting while driving. This bill has been signed by the Governor and is effective July 1, 2018.

Hits

Still in scoring position is SB 2467. This bill concerns the Mississippi Windstorm Underwriting Association, the residual market mechanism for wind and hail coverage along the Mississippi Gulf Coast, and together with its House counterpart has received a fair amount of media attention. Among other things, this bill would reauthorize and redirect surplus lines policy fees that currently provide funding for MWUA to certain rural fire truck acquisition funds. SB 2467 is in conference as of the submission of this alert. Stay tuned to learn if this bill scores or is left stranded.

Outs

Cargo Theft. Bills that would establish cargo theft as a specific crime and impose tougher penalties than the general theft statute died.

Depreciation. Bills that would provide express statutory language on depreciation of costs died.

Drones. Bills that would pre-empt local entities from regulating the use of drones died.

Commercial Lines Modernization. An industry supported initiative to deregulate forms of commercial lines was not introduced.

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

Category(s): NAIC - 03/26/2018

Hearing Held on Covered Agreement Signed by US and EU

The National Association of Insurance Commissioners' Reinsurance (E) Task Force held a public hearing on February 20, 2018 to hear comments on the reinsurance collateral provisions of Article 3 of the Bilateral Agreement between the U.S. and the European Union (EU) on Prudential Measures regarding Insurance and Reinsurance.  The Agreement was formally signed by the U.S. and EU on September 22, 2017 and addresses three areas of insurance and reinsurance prudential measures:  group supervision, reinsurance supervision, and exchange of information between supervisory authorities.  A summary of the meeting can be found here.

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

Category(s): NAIC, South Carolina - 03/26/2018

Proposed Changes to South Carolina Credit for Reinsurance Statutes

The South Carolina General Assembly is considering legislation (H4656/S786) that would amend the State’s current Credit for Reinsurance statutes to bring them into conformity with the latest Credit for Reinsurance Model Law (785) adopted by the National Association of Insurance Commissioners.  The proposed changes will allow the Director of Insurance to adopt additional requirements relating to the valuation of assets or reserve credits, the amount and forms of security supporting reinsurance arrangements, and the circumstances pursuant to which credit will be reduced or eliminated.  

The South Carolina General Assembly also is considering legislation (H4675) proposed by the South Carolina Captive Insurance Association to revise and update the State’s captive insurance company statutes.  The legislation removes references to “Captive Reinsurance Companies” and effectively repeals the Coastal Captive Insurance Company Act passed in 2007.  The changes would amend capitalization and incorporation requirements, reporting requirements, and the ability of a captive to discount its loss and loss adjustment.  They also would establish standards for aggregate taxes for protected cells and capital requirements for an inactive captive insurance company, and alter participant requirements for a Sponsored Captive Insurance Company.  

The South Carolina Department of Insurance licensed 15 new captive insurance companies in 2017, bringing its total number of active licenses to 169.

Michael A. Molony, Esq. - CLEMENT RIVERS, LLP, (843) 724-6631 , mmolony@ycrlaw.com

Category(s): NAIC, Tennessee - 03/26/2018

TDCI Announces Public Rulemaking Hearing on Annual Financial Reporting Amendments

The Tennessee Department of Commerce and Insurance (TDCI) has issued a Notice of Proposed Rulemaking to amend Regulation 65 (Chapter 0780-01-65) on Annual Financial Reporting for insurers and insurance holding companies. The proposed revisions, which are intended to bring current Regulation 65 into full compliance with the NAIC Model Regulation, will be the subject of a public rulemaking hearing on April 17.

T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.com
Robins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259

Category(s): NAIC, Wisconsin - 03/26/2018

NAIC Work on Annuity Suitability

The deputy chief legal counsel at the Wisconsin Office of the Commissioner of Insurance (OCI) recently reported that OCI is a new member of this working group, which exposed a chair draft of the revised model law for comment last year (staff prepared a nice chart summarizing the comments). The main changes proposed for the model are using a "best interest" of the consumer standard, which is a higher one than the current model (and the Wisconsin standard), but lower than the fiduciary rule proposed by the U.S. Department of Labor; and changes to compensation disclosure requirements. There is general support for best interest standard aside from agent groups. The working group has an upcoming conference call and will meet at the Spring NAIC meeting in Milwaukee.  Interested parties should let him know of any comments.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com

Category(s): NAIC, Wisconsin - 03/26/2018

NAIC Work on Life Insurance Disclosures

The deputy chief legal counsel at the Wisconsin Office of the Commissioner of Insurance recently reported that this working group is looking at a new approach to illustrations, which would boil down all the information needed by consumers to a one or two page summary. A vision for this summary - which is an example, not a template - is included on the NAIC web site. One aim is to make life insurance more accessible to young people. As is the case with many NAIC committee activities, the working group hopes to complete its work by the end of the year.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com

Category(s): NAIC, Wisconsin - 03/26/2018

NAIC Work on Variable Annuity Reserves

The Wisconsin Deputy Commissioner of Insurance recently reported that last month Oliver Wyman issued its report on whether capital standards for variable annuities are working. The variable annuities working group and an NAIC financial subgroup are jointly working through the report.

William J. Toman, Esq. - QUARLES & BRADY LLP, (608) 283-2434 , william.toman@quarles.com

Alert Edition March 2018

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