National Conference of Insurance Legislators 2012 Summer Meeting Materials and Information
Jun 21, 2012
The National Conference of Insurance Legislators (“NCOIL”) 2012 Summer meeting is scheduled for July 12-15 in Burlington, Vermont. For complete meeting information, click here.
(Click on the hyperlinks in boldface below to access model act drafts and other specified documents).
During the event, NCOIL legislators will take up a slate of key insurance-related issues, among which include the NCOIL Property-Casualty Committee’s proposed resolution entitled “Supporting State Control over Natural Catastrophe Policy” and sponsored by Alabama State Representative Greg Wren. The resolution highlights NCOIL building code-related and other natural catastrophe efforts. It also supports states’ rights to establish catastrophe mechanisms and opposes federal backstops that could intrude on state regulation and private markets.
As part of NCOIL’s required five-year review of model laws for sunset or re-adoption, the NCOIL Property-Casualty Insurance Committee will consider the Model State Uniform Building Code, which would establish structural building requirements based on the latest technical information, but with stricter standards in areas of high-hazard for wind, flood and earthquake. Originally adopted in 2007, the Uniform Building Code Model also would create a framework for building code regulation, among other provisions.
The Property-Casualty Insurance Committee also will consider a proposed substitute version of a Certificates of Insurance Model Act, sponsored for discussion by Committee Chair and Kentucky State Representative Steve Riggs. This proposal is in lieu of an original draft set aside by the Committee on a May 11 conference call in anticipation of an interested-party compromise. The original draft was sponsored for discussion by North Dakota State Representative George Keiser.
The substitute model, like the original version, seeks to clarify limits on the certificates that third parties use to verify insurance, as well as to stem their misuse. It bans changes to certificate forms and asserts that certificates are neither insurance policies, nor do they provide different or extra coverage than the policy itself. The substitute version does not include a specific “information only” disclosure requirement, which was one of several provisions removed from the original version at the NCOIL Spring Meeting. The substitute model reflects the input of various industry organizations, including the Property Casualty Insurers Association of America.
On a related track at the Summer meeting, the Property-Casualty Committee is expected to consider an insurance binder law model, which is sponsored for discussion by Indiana State Representative Matt Lehman and seeks to address lender concerns that certificates need to be more than “information-only.” Lenders had asked to be exempted from the original Certificates Model Act.
Based on New York law, the binder model would keep binders effective until a policy is issued. Interested parties have been given until June 21 to submit specific markup amendments to the model-as well as any comments on linking the binder and certificates bills.
Hoping to satisfy lender concerns that binders do not adequately describe a policy, Representative Lehman also has suggested the creation of an “enhanced” binder form that would not expire and would blend the ACORD 75 binder with the more detailed ACORD 28 certificate.
The Property-Casualty Committee is planning a late-June call to review comment submissions and determine a path for Summer Meeting debate.
Also on the Property-Casualty agenda is the consideration of the proposed Consumer Legal Funding Model Act sponsored by Tennessee State Representative Charlie Curtiss and based on Tennessee legislation. While not a direct opposition to third-party litigation financing, the model would mandate various contract disclosures, including of a consumer’s right of rescission. It also would prohibit funding providers from paying referral fees to attorneys, medical providers and others; establish a process for distribution of proceeds; require payment to the funding provider based on predetermined times and amounts; and prevent funding providers from assessing fees more than three years after the consumer receives his or her money from the funding company. The model sets forth attorney requirements and allows for penalties and enforcement.
Finally, the Property-Casualty Committee will consider a proposed Limited Lines Travel Insurance Model Act, which is sponsored for discussion by State Representative Robert Damron of Kentucky. The model sets forth licensing and other requirements for limited lines travel insurance producers, on whose behalf travel companies and retailers offer and disseminate travel insurance to consumers. Under the model, marketing materials would be required to clearly identify a travel insurance producer. Further, a producer would be required to keep a register of travel companies and retailers that offer travel insurance on the producer’s behalf. Producers would also be required to comply with state insurance and fingerprinting laws, while travel companies and retailers would be subjected to instruction and training on travel insurance.
Workers’ Compensation Committee
As a possible first step toward an NCOIL model act, the NCOIL Workers’ Compensation Committee will review two approaches to address rising workers’ compensation costs related to physician dispensing of repackaged drugs. A Florida approach provides that the price of a repackaged drug cannot be greater than the price of that same drug in its original packaging. A Montana approach prohibits physician dispensing except in emergency situations or when no community pharmacy is available.
Other Agenda Items
NCOIL’s International Insurance Issues Committee will resume consideration of a proposed Resolution entitled “Urging Support for State Authority in U.S. Trade Negotiations,” which is sponsored for discussion by Vermont State Representative Kathie Keenan. The resolution urges the Office of the United States Trade Representative to expand state officials’ role in trade activity in order to avoid preempting state oversight. The Resolution also urges greater transparency in trade negotiations.
NCOIL’s Life Insurance and Financial Planning Committee will resume consideration of amendments to a Model Unclaimed Life Insurance Benefits Act. Adopted at the 2011 NCOIL Annual Meeting, the model requires insurers to quarterly compare a U.S. Social Security Death Master File with holders of in-force life insurance policies and retained asset accounts, among other provisions. The model calls for timely insurer efforts to confirm an insured or account holder’s death, locate any beneficiaries and provide them with claims forms and instructions. In the event that benefits go unclaimed, the model provides clear procedures for life insurers to notify state treasury departments and escheat the funds pursuant to unclaimed property laws.
Amendments in the markup of the Unclaimed Life Insurance Benefits Model include amendments jointly proposed by the American Council of Life Insurers and the National Association of Unclaimed Property Administrators in a letter dated April 16, 2012. The most recent proposed amendments relate to use of the Death Master File.
NCOIL’s State-Federal Relations Committee will consider a proposed Resolution entitled “Urging Producer Licensing Modernization,” which is sponsored for discussion by New Mexico Senator Carroll Leavell. The resolution, which builds on long-standing NCOIL support for producer licensing reform, endorses regulatory uniformity, encourages states to continue their ongoing state modernization efforts to forestall federal regulatory intrusion and urges state legislators and regulators to work together to eliminate unnecessary non-resident licensing barriers.
The Workers’ Compensation Committee also will consider an updated version of a 2008 NCOIL Resolution relating to Medicare Secondary Payer Reforms. Sponsored by Arkansas State Representative Barry Hyde, the original resolution endorsed H.R. 2549 to establish clear criteria for when a Medicare Set-Aside (“MSA”) should be reviewed. The legislation also endeavored to create certainty as to the rules for calculating an MSA, establish safe harbor provisions for settlements under a certain amount and provide optional direct payment to the U.S. Center for Medicaid Services, among other provisions. The updated resolution supports a similar bill, H.R. 5284, which was introduced by State of Washington Representative David Reichert.
NCOIL’s Health, Long-Term Care and Health Retirement Issues Committee will review the NCOIL Mental Health Parity Model Act for sunset or re-adoption. The Model Act offers legislators a template from which they may draft legislation specific to their respective states’ concerns related to coverage for mental illness. Legislators adopted the model in November 2001, and readopted it in February 2004 and July 2006.
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