Category(s): Connecticut - 02/01/2013

Connecticut law requires the annual filing, on or before March 1, of various information concerning health benefit plan utilization review programs and grievance procedures.  The Connecticut Insurance Department recently issued Bulletin HC-89-13, which provides guidance regarding what must be filed and the format to be used in reporting requested information.

Michael T. Griffin, Esq. - ACCEL LAW GROUP P.C., (860) 761-8550 , mgriffin@accelcompliance.com

Category(s): Florida - 02/01/2013

During its December 11, 2012 meeting, the Florida Cabinet approved Emergency Rule 69OER12-01, entitled "Emergency Adoption of Revised Notification of Personal Injury Protection ("PIP") Benefits Form," which allowed the Florida Office of Insurance Regulation ("OIR") to adopt Form OIR-ER1-1149, "Notification of Personal Injury Protection Benefits" on January 1, 2013--the same day on which a number of changes to Florida's PIP law took effect.  Along with the aforementioned Emergency Rule, the Cabinet considered other PIP-related items and approved publication of proposed amendments to Rule 69O-170.0155, "Forms," and Rule 69O-176.013, "Notification of Insured's Rights and Standard Disclosure Form," consistent with changes to PIP benefits effectuated by the 2012 enactment of HB 119.

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

Category(s): Florida - 02/01/2013

In an e-mail issued December 12, 2012, the Florida Office of Insurance Regulation ("OIR") clarified certain language contained in a previously amended Order providing an expedited review and self-certification process for all property and casualty personal lines forms except workers' compensation. Under the expedited process, insurers can submit any property and casualty policy form, policy endorsement, application or other form which would otherwise be subject to the requirements of s. 627.410, F.S., in an informational filing to the OIR 30 days prior to use with a notarized certification. The Order provides that the certification must confirm that the filed forms are "in compliance with all applicable Florida Laws." In the December 12 e-mail, Sandra Starnes, OIR Director of Property and Casualty Product Review, states that by "Florida Laws," the OIR means all applicable Florida Statutes and Rules.  To view the amended Order, click here.

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

Category(s): Florida - 02/01/2013

The Florida Office of Insurance Regulation issued its 2012 Workers' Compensation Annual Report to the Florida Legislature on January 2, 2013. The report highlights information about Florida's workers' compensation insurance market statewide. To access the report, click here

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

Category(s): Georgia - 02/01/2013

On December 31, 2012, the United States District Court, Northern District of Georgia, Atlanta Division (“District Court”) denied the Commissioner’s motion to dismiss America’s Health Insurance Plans’ (“AHIP”) complaint challenging Georgia’s amended prompt pay law as preempted by ERISA and granting AHIP’s motion for a preliminary injunction against the enforcement of the amended prompt pay law.  The prompt pay law came into existence in Georgia in 1999 with the passage of Ga. L. 1999, Act No. 263, § 2, 1999, codified at O.C.G.A § 33-24-59.5.  In substance, the prompt pay law requires all health benefit plans to pay claims within 15 working days or face an 18% per annum interest charge on the outstanding claim balance.  Importantly, the 1999 prompt pay law specifically excluded health benefit plans that were subject to the exclusive jurisdiction of ERISA.  In 2011, this exclusion for ERISA welfare plans was removed from the prompt pay statute through the Georgia General Assembly’s enactment of the Insurance Delivery Enhancement Act of 2011, No. 196, 2011 Ga. Laws 595, codified in relevant part as amended O.C.G.A. § 33-24-59.5 and newly created O.C.G.A. § 33-24-59.14 (note that these laws are virtually the same insofar as both apply same prompt pay requirements to ERISA plans).  The Commissioner argued that the prompt pay law only regulated third party administrators, which are not ERISA fiduciaries, and that alternatively the prompt pay law regulated insurance and was therefore not preempted by ERISA by virtue of its insurance savings clause.  The Court rejected the Commissioner’s argument, concluding that the plain terms of the amended prompt pay statute clearly “related to” an employee benefit plan and that, while the prompt pay law did regulate insurance in accordance with the requirements of the ERISA savings clause, the ERISA deemer clause also applied and preempted the new prompt pay law insofar as it deemed a self-funded employer benefit plan to be insurance.  Consequently, the District Court dismissed the Commissioner’s motion to dismiss AHIP’s preemption challenge to the amended prompt pay law and granted AHIP’s motion for preliminary injunction prohibiting the enforcement of the amended prompt pay law against self-funded employer benefit plans and administrators thereof.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Trey Sivley, Esq. - LOCKE LORD LLP, (404) 870-4657 , tsivley@lockelord.com

Category(s): Georgia - 02/01/2013

Effective as of January 23, 2013, the Georgia Department of Insurance adopted the NAIC’s Hazardous Financial Condition Model Act.  The Model Act defines the standards and the Commissioner’s ability for determining when companies are deemed to be in a hazardous financial condition.  The regulation is available in Regulation Chapter 120-2-54.

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

Category(s): Georgia - 02/01/2013

On December 11, 2012, the Georgia Court of Appeals affirmed the grant of partial summary judgment to AGCO Corp. and denial of summary judgment to Lloyd’s Syndicate No. 5820 d/b/a Cassidy Davis (“Cassidy Davis”) on the issue of whether there was insurance coverage for obligations of AGCO arising from its liability to customers pursuant an extended warranty plan, and denying summary judgment to AGCO for its claims of bad faith against Cassidy Davis and its claims of estoppel against certain contractual defenses. AGCO Corp. manufactured and sold an agricultural spray applicator, the RoGator.   AGCO purchased extended protection plans (EPP) from Warranty Specialists d/b/a Glynn General Corporation and offered them to customers who purchased RoGators.  The EPP provided coverage required due to a mechanical breakdown or failure that is the result of a true defect in material or workmanship.  Glynn General Purchasing Group (GGPG) obtained a master policy of liability insurance for AGCO from Cassidy Davis to provide coverage to AGCO for its liability to AGCO’s customers pursuant to the EPPs.  The RoGator at issue was powered by four wheel motors and the failure of one wheel motor stopped the machine.  Initially, the ACGO dealer repaired the machine, submitted a claim for reimbursement for the repair cost to Warranty Specialists, who paid premiums to Cassidy Davis, and Cassidy Davis paid Warranty Specialists for claims deemed valid.  After paying approximately 25 wheel motor claims, Warranty Specialists stopped paying the claims because Cassidy Davis had invoked the Epidemic Failure Clause (EFC).  AGCO then paid the claims and filed this action.  The Court affirmed that the master policy provided coverage for the wheel motor claims; it was unambiguous and contained no exclusion for mechanical breakdowns or failures resulting from design or engineering defects and only a causal connection is required to show a loss arose out of a specified act set forth in a contract.  Whether Cassidy Davis acted in bad faith denying the warranty claims is question for the trier of fact, the Court determined, as it could not find that the insurer’s defense to coverage was reasonable as a matter of law under the circumstances presented in the case in order to grant summary judgment.  The Court denied Cassidy’s argument that there was no bad faith because payment was not yet due as AGCO did not have a judgment rendered against it, finding no judgment had to be rendered against AGCO before it could demand payment from Cassidy or before Cassidy was obligated to reimburse AGCO.  The Court held that Cassidy, Warranty Specialists, and GGPG were not estopped from asserting other grounds to deny coverage because they initially denied the claims based on the EFC.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
Trey Sivley, Esq. - LOCKE LORD LLP, (404) 870-4657 , tsivley@lockelord.com

Category(s): New Mexico - 02/01/2013

The Insurance Division of the New Mexico Public Regulation Commission will pursue a number of model law updates in the 2013 legislative session.  The Insurance Division is pursuing the model law updates in order to satisfy the requirements necessary to maintain its NAIC accreditation.  Senator Carroll Leavell (R), NCOIL’s Past President, has indicated that he will sponsor the legislation for the Insurance Division.  The legislation will contain updates to current New Mexico law and will be based on the following model laws:  NAIC Risk Based Capital;  NAIC Credit for Reinsurance;  NAIC Standard Valuation Law (Principle-Based Reserves Implementation); NAIC Standard Nonforfeiture Law (Principle-Based Reserves Implementation);  NAIC Insurance Holding Company Act;  and NAIC Hazardous Financial Condition.  In addition, the Insurance Division will pursue two NCOIL model laws in the 2013 session.  This second bill is expected to be more controversial.  It will contain updates to current New Mexico law and will be based on the following model laws:  NCOIL Certificates of Evidence of Insurance and NCOIL Unclaimed Life Insurance Benefits.

Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873

Category(s): New York - 02/01/2013

On January 29, 2013, New York Governor Cuomo announced that as a result of an investigation by the New York Department of Financial Services (the "New York Department") that began in July of 2011, New York licensed insurers have now paid more than $665 million in unclaimed life insurance benefits to individuals who were unaware that they were owed such funds.  As a result of the investigation, in June of 2012 the New York Department adopted, on a temporary basis, New York Insurance Regulation 200 (entitled "Unclaimed Life Insurance Benefits and Policy Identification"). In December of 2012 the New York legislature made New York’s unclaimed benefits rules permanent by enacting New York Insurance Law Section 3213-a (entitled "Unclaimed Benefits"). Section 3213-a becomes effective on June 15, 2013. In addition to requiring New York licensed insurers to quarterly search the Social Security Administration’s master death file to identify deceased insureds and to locate beneficiaries, the new law and regulation also establishes a "Lost Policy Finder" application on the New York Department’s website that can be used to assist beneficiaries in locating lost policies (and obtaining the associated unclaimed death benefits).

Frederic M. Garsson, Esq. - SAUL EWING ARNSTEIN & LEHR LLP, (212) 980-7200 , fred.garsson@saul.com

Category(s): Tennessee - 02/01/2013

The Haslam Administration has included two additional insurance-related bills in its legislative package that are now under consideration by the 107th General Assembly.  The measures would clarify (1) calculation of the gross premium tax due on premiums charged for surplus lines insurance (SB0150/HB0144), and (2) procedures for external review of health insurance claims (SB0147/HB0140).

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