Alert Edition May 2023

Welcome to the May 2023 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,
C. Ignacio Matos, Esq., FORC Alert Co-Editor
Ryan Smart, Esq., FORC Alert Co-Editor
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Category(s): National - 05/24/2023

New Federal Mandates Won’t Impact Premium Finance Transactions

The Consumer Financial Protection Bureau recently issued a final rule as part of the Dodd-Frank Act, and thanks to the lobbying efforts of the Independent Insurance Agents & Brokers of America (Big “I”) and others, premium financing transactions have been exempted from the scope of the rule. The rule was a long-delayed response to a section of the nearly 13-year-old Dodd-Frank Act that deals with credit lending and requires financial institutions to annually collect extensive data from any small business ($5 million or less in gross yearly revenue) seeking a loan.

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

Category(s): Alabama - 05/31/2023

ALDOI BULLETIN NO. 2023-02

The Alabama Department of Insurance has issued/updated BULLETIN NO. 2023-02 – Medical Bill Factoring and Altering Medical Bills. Click here  to read BULLETIN NO. 2023-02.

Stephen W. Still, Esq. - BALCH & BINGHAM LLP, (205) 488-5512 , sstill@balch.com

Category(s): Alabama - 05/31/2023

ALDOI: Notice of Regulation Hearing

A hearing will be held at 10:00 a.m. Central Time, on Thursday, July 6, 2023, in the offices of the Alabama Department of Insurance, 201 Monroe Street, Fifth Floor Conference Room, RSA Tower, Montgomery, Alabama.
This hearing will cover the following:
•	Adoption of amendments to Insurance Regulation No. 147 [Chapter 482-1-147]
•	Adoption of amendments to Insurance Regulation No. 148 [Chapter 482-1-148]
•	Adoption of amendments to Insurance Regulation No. 151 [Chapter 482-1-151]
For more information, please click here. 

Stephen W. Still, Esq. - BALCH & BINGHAM LLP, (205) 488-5512 , sstill@balch.com

Category(s): Alabama - 05/24/2023

Governor Ivey Signs Executive Order 736 to Establish the Alabama Resilience Council

Governor Kay Ivey on Friday signed Executive Order 736,  establishing the Alabama Resilience Council. This action is a key part of the Ivey Administration’s ongoing effort to make Alabama the most resilient state in the nation by protecting the lives, property, and economic well-being of Alabamians against possible hazards, both natural and manmade.
The Alabama Resilience Council will work with local, state, federal and private partners to help communities build stronger, live safer and recover quicker. The work of the Council will be aimed at better preparing Alabama’s communities to withstand events that result in harmful societal impacts.
Alabama Insurance Commissioner Mark Fowler is co-chair of this newly established council. 
Click here  to read the full press release from The Office of Alabama Governor Kay Ivey. For more information on the Alabama Resilience Council, please click here. 

Stephen W. Still, Esq. - BALCH & BINGHAM LLP, (205) 488-5512 , sstill@balch.com

Category(s): Colorado - 05/24/2023

Colorado Division of Insurance Crafts Legislation to Tackle Life-Insurance Algorithms

The Colorado Division of Insurance is proposing new regulations to protect consumers from potential disparate treatment which may occur due to the use of life-insurance algorithms. State regulators are pushing back against U.S. life insurers who rely on algorithms and predictive models to speed up life insurance applications. Regulators note that the proposed measures are to safeguard consumers from unfair discrimination that could arise from automated underwriting.

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

Category(s): Florida - 05/24/2023

Citizens Property Insurance Taps Retiring Justice Ricky Polston as New General Counsel

Retiring Florida Supreme Court Justice Ricky Polston will take on a new role as General Counsel and Chief Legal Officer for Citizens Property Insurance Corporation. Citizens' Board of Governors unanimously approved the appointment of Justice Polston on Wednesday, just days after the media reported that he was in line to land with the state-created insurer after he officially resigns on March 31.

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

Category(s): Florida - 05/24/2023

Financial Services Commission Confirms Michael Yaworsky as Insurance Commissioner

On March 13, the Financial Services Commission appointed Michael Yaworsky as the Insurance Commissioner for the Florida Office of Insurance Regulation. Michael Yaworsky has served as Interim Insurance Commissioner since being nominated by Governor DeSantis in February 2023. Yaworsky is taking over an agency dealing with the aftereffects of two major hurricanes that hit the state last year and with an all-but-crippled property insurance market that has undergone some recent reforms aimed at stabilization.

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

Category(s): Florida - 05/24/2023

Florida Insurers Facing a New 1% Assessment on Premiums for Insolvent Insurer Claims

Florida property insurers are preparing for another assessment on premiums to help the Florida Insurance Guaranty Association fund outstanding claims from an insolvent insurer. The 1% emergency assessment on all premium for new and renewing policies, approved in April by the state insurance commissioner, will be the fourth surcharge needed for FIGA in the last two years. The revenue must be forwarded to FIGA on a quarterly basis, the FLOIR said in its April 10 order.

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

Category(s): Florida - 05/24/2023

Governor Ron DeSantis Signs Major Tort Reform Legislation Into Law

On March 24, Governor Ron DeSantis on Friday signed historic lawsuit abuse reform legislation into law, just three weeks into the 2023 Florida Legislative Session. DeSantis wasted no time putting pen to paper, signing the major tort reform package in a private ceremony less than 24 hours after the Florida Legislature cleared the bill. The legislation package (HB 837/SB 236) is aimed at curbing frivolous lawsuits against insurance companies and businesses.

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

Category(s): Georgia - 05/24/2023

BULLETIN 23-EX-6: Notice of 1332 Innovation Waiver Parameters

On May 11, 2023, Commissioner John F. King issued Bulletin 23-EX-6 to inform all insurers that the Georgia Office of the Commissioner of Insurance has set the parameters for the 1332 Waiver Reinsurance Program Plan Year 2024:

• Attachment Point: $35,000 
• Cap: $500,000 (unchanged from PY 2023) 
• Co-insurance Rates (unchanged from PY 2023):

Tier 1: 15% (includes rating regions 2, 3, 5, 8, 14)
Tier 2: 45% (includes rating regions 1, 7, 9, 12, 16)
Tier 3: 80% (includes rating regions 4, 6, 10, 11, 13, 15)

Georgia’s Reinsurance Program will apply to all ACA-compliant, non-grandfathered individual market plans and will be a claims-based model with an attachment point, cap, and a tiered coinsurance rate. Georgia insurers should refer to The Centers for Medicare & Medicaid Services website for additional information regarding the Georgia Reinsurance Program.

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

Category(s): Georgia - 05/24/2023

BULLETIN 23-EX-7: Notification of Coverage for Prostate-Specific Antigen Testing

On May 15, 2023, Commissioner John F. King issued Bulletin 23-EX-7 to encourage Georgia insurers to provide notification to each male insured when they attain the age of 40 and annually thereafter of the existence of coverage for annual prostate-specific antigen tests for covered males who are 45 years old. Insurers should also advise every male insured 40 years of age or older of coverage for annual prostate-specific antigen tests, if ordered by a physician.

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

Category(s): Georgia - 05/24/2023

BULLETIN 23-EX-8: Fraudulent Audit Notices

On May 19, 2023, Commissioner John F. King issued Bulletin 23-EX-8 to inform all Pharmacies that the Department has recently been made aware of fraudulent audit notices being sent to some Georgia pharmacies. The fraudulent audit notices appear to be from “Express Scripts” and “CVS Caremark”. If a pharmacy believes it has received a fraudulent audit letter, it should immediately contact the Criminal Investigations Division at CID@oci.ga.gov.

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

Category(s): Georgia - 05/24/2023

DIRECTIVE 23-EX-2: Annual Autism Spectrum Disorder Data Call Filing Requirement

On March 20, 2023, Commissioner John F. King issued Directive 23-EX-2 to inform all insurers that the Georgia Office of the Commissioner of Insurance is required to report information regarding mandated Autism Spectrum Disorder services to the General Assembly annually. All reports are to be submitted to the Office of the Commissioner of Insurance by June 15th.

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

Category(s): Georgia - 05/24/2023

GEORGIA HOUSE BILL 221: Legislation Granting Insurance Commissioner Additional Authority Over Auto Rates

On May 3, 2023, Governor Kemp signed legislation to reform certain private auto insurance rate filings in Georgia (HB 221).  Insurers writing personal private passenger motor vehicle insurance providing coverage above the mandatory minimum limits must now submit to the Commissioner rates, rating plans, rating systems and underwriting rules for such insurance.  These filings must have an effective date at least 60 days after the filing date unless an earlier effective date is authorized by the Commissioner.  However, these filings do not require the Commissioner’s “prior approval” before going into effect.  House Bill 221 did not alter the Commissioner’s current “prior approval” authority for insurers writing private passenger motor vehicle insurance providing mandatory minimum limits coverage only.  HB 221 will go into effect on July 1, 2023.

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

Category(s): Georgia - 05/24/2023

Key New Insurance Laws Adopted during Georgia’s 2023 Legislative Session Ended March 29, 2023 – Georgia Governor, Brian Kemp, has until May 8, 2023 to Approve or Veto

HB 85 will require health insurance policies to cover biomarker testing for a characteristic that is an indicator of normal biological processes, pathogenic processes, or pharmacologic responses to a specific therapeutic intervention, such as gene mutations, protein expression, known gene-drug interactions for medications and characteristics of genes.
HB 221 will revise, effective on July 1, 2023, the private passenger auto insurance file and use rate system under O.C.G.A. § 33-9-21 to provide that such rate filings cannot be implemented until 60 days after filing to allow the Georgia Insurance Department time to review such a rate filing.
HB 222 will amend O.C.G.A. § 33-7-6 to exclude commercial service contracts from the definition of property insurance.
HB 294 will amend O.C.G.A. § 33-6-4, the Insurance Unfair Trade Practices Act, which was amended in 2022 to allow insurers and insurance producers to provide insurance customers with specified value-added services which will not constitute an unlawful insurance inducement based on the NAIC’s similar amendments to its model unfair trade practices act, to add (a) that a “customer” means a policyholder, potential policyholder, certificate holder, potential certificate holder, insured, potential insured or applicant and (b) new, permissible, value-added products or services for (i) enhancing the health of a customer, (ii) enhancing the financial wellness of a customer through items such as education or financial planning services and (iii) assisting the administration of employee or retiree benefit insurance coverage.  
HB 529 will lower from $1 million to $300,000 the minimum limits of uninsured motorist coverage that transportation networking companies must carry.  
SB 65 will authorize the Georgia Insurance Commissioner to create an advisory board or committee for providing recommendations on the creation, implementation or operation of a state-based health insurance exchange.   
SB 158 will add to Chapter 32 of the Georgia Insurance Code (Property Insurance) a requirement that, not later than March 1, 2024, insurers provide a premium discount or insurance rate reduction for new or retrofitted single-family residential real property, commercial real property and modular homes to resist loss due to tornado, hurricane or other catastrophic windstorm events.

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

Category(s): Louisiana - 05/24/2023

Louisiana Insurance Commissioner Jim Donelon Will Not Seek Re-election

Longtime Louisiana Insurance Commissioner Jim Donelon announced on March 14 that he will not be seeking re-election this fall. Donelon announced his decision during a press conference about the Insure Louisiana Incentive Program. The 78-year-old Republican noted that his age, and insurance industry demands on tap this upcoming legislative session were the two factors in his decision.

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

Category(s): Maryland - 05/24/2023

Maryland Legislation Update

The Maryland legislature adjourned Sine Die on April 10th at midnight. Although it was the first year of a new legislative term and for Maryland’s new Governor, Wes Moore, the legislature did not hesitate to continue building on significant policies.  One such example was a clean up bill to last year’s Family and Medical Leave Insurance Program (House Bill 988 / Senate Bill 828).  Last year’s effort was done very hastily, necessitating this technical follow up legislation.  One of the biggest changes was to change the ratio of the total rate of contribution between the employer and employee from a 25/75 split to a 50/50 split, respectively.  More bills to summarize in the next alert after the Governor completes his final bill signing.

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

Category(s): NAIC - 05/24/2023

NAIC Releases 2022 Annual Report

During the 2023 Spring National Meeting in Louisville, Kentucky, The National Association of Insurance Commissioners released its 2022 Annual Report. The report, titled “Conquering the New Normal Together,” shares how the NAIC successfully overcame pandemic-era challenges to further its state-based agenda. In 2022, the NAIC enhanced connectivity among its staff and Members, leaned forward on emerging issues, accelerated investments in technology, and rallied its internal team. The report details accomplishments in these areas.

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

Category(s): NAIC - 05/24/2023

Nebraska, Virginia, and West Virginia Receive NAIC Accreditation

The NAIC Financial Regulation Standards and Accreditation (F) Committee voted to accredit the Nebraska, Virginia, and West Virginia departments of insurance (DOIs) at the NAIC 2023 Spring National Meeting. The NAIC Accreditation Program demonstrates that state DOIs meet standards of solvency regulation and provide effective regulation of multi-state insurers. NAIC accreditation allows non-domestic states to rely on the accredited domestic regulator to fulfill a baseline level of effective financial regulatory oversight.

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

Category(s): New York - 05/24/2023

DFS Superintendent Adrienne A. Harris Announces Adoption of Virtual Currency Assessment Regulation

On April 17, 2023, New York Superintendent of Financial Services Adrienne A. Harris announced today that the New York State Department of Financial Services (DFS) has adopted a final regulation establishing how companies holding a DFS-issued BitLicense will be assessed for costs of their supervision and examination.
A copy of the adopted regulation can be found here  on the DFS website. 
The adopted regulation effectuates a provision in the New York State FY23 Budget giving DFS new authority to collect supervisory costs from licensed virtual currency businesses, similar to other licensees regulated by DFS. This regulation will allow the Department to continue adding top talent to its virtual currency team to continue efficient and effective regulatory oversight.
DFS’s virtual currency regulatory framework is modeled after full-scope banking supervision, requiring companies to meet rigorous standards for capitalization, cybersecurity protection, and anti-money laundering protocols, among other requirements.  
Prior to adoption, DFS conducted in-depth research and met extensively with key stakeholders to inform the regulation which applies to entities holding a BitLicense. The Department received constructive feedback which informed the regulation.  At the time that DFS’s first-in-the-nation virtual currency regulation was adopted in 2015, the Financial Services Law (FSL) did not include a provision for the assessment of operating costs, unlike provisions provided in Banking and Insurance Law for licensed entities. Entities licensed as a limited purpose trust company or a banking organization will continue to be assessed under existing laws and regulations. 
This regulation only applies to Licensees, and the assessment only covers the costs and expenses associated with the Department’s oversight of each person’s virtual currency business activities. Accordingly, to the extent that a person is licensed to engage in virtual currency business activities under the FSL, and concurrently as a money transmitter pursuant to Article XIII-B of the Banking Law, such person will be billed separately for each license. To the extent that a person holds multiple licenses to engage in virtual currency business activities pursuant to 23 NYCRR Part 200, such person will be billed separately for each license.

Frederick J. Pomerantz, Esq. - INSURANCE LEGAL & REGULATORY CONSULTING, PLLC, (516) 297-3101 , PomerantzF35@gmail.com

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