National Conference of Insurance Legislators (NCOIL) to Consider Various Proposals at November Annual Meeting
Oct 26, 2012
Below is an NCOIL outline of topics and issues scheduled to be considered at the meeting.
Colodny Fass& Webb representatives will attend the meeting and provide a report on the proceedings.
Should you have any questions or comments, please contact Colodny Fass& Webb.
DATE: OCTOBER 23, 2012
TO: NCOIL LEGISLATORS, IEC MEMBERS, ANNUAL MEETING ATTENDEES, OTHER INTERESTED PARTIES
FROM: SUSAN NOLAN, NCOIL EXECUTIVE DIRECTOR
RE: DOCUMENTS FOR CONSIDERATION AT THE 2012 NCOIL ANNUAL MEETING IN POINT CLEAR, ALABAMA
Legislators will consider proposals on the following key issues during the November 15 through 18 NCOIL Annual Meeting in Point Clear, Alabama.
- certificates of insurance
- insurance binders
- third-party consumer legal funding
- limited lines travel insurance regulation
- committee voting privileges
- mental health parity
Materials that have been submitted in accordance with the October 17 NCOIL 30-day deadline rule may be voted on or discussed at the Annual Meeting. Documents that have not been submitted in accordance with the rule will require a two-thirds vote of a committee prior to consideration, followed by a separate two-thirds vote to adopt. The Executive Committee may consider documents at the Annual Meeting that were approved by another committee at the meeting. Documents must have a legislative sponsor and may only be moved for adoption by a Committee member.
PROPERTY-CASUALTY INSURANCE COMMITTEE
CERTIFICATES OF INSURANCE
On November 16, and again during a special November 18 working session, the Committee will consider proposed amendments to a draft Certificates of Insurance Model Act (substitute), sponsored for discussion by Committee Chair Rep. Steve Riggs (KY). The proposed model seeks to clarify limits on the certificates that third parties use to verify insurance, as well as to stem fraud/misuse. The draft model also would ban changes to certificate forms and assert that certificates are not insurance policies and do not provide different or extra coverage than the policy does.
A proposed amendment sponsored by Rep. George Keiser (ND) would exempt certificate forms, such as those for environmental liability, when federal law specifies their content and wording. The amendment reflects certain p-c industry consensus. Other amendments, sponsored by Rep. Barry Hyde (AR), would (1) give forms filed by the Mortgage Bankers Association (MBA) the same treatment as those filed by organizations like ACORD and ISO and (2) exempt commercial lending transaction’s from the model’s scope.
During a special November 18 working session that also will address certificate of insurance issues, the Committee will consider proposed amendments, sponsored by Rep. Barry Hyde (AR), to an NCOIL Model Act Regarding Use of Insurance Binders as Evidence of Coverage. Adopted on July 15, the model-an outgrowth of Committee certificates of insurance debate-would keep insurance binders in force until a policy is issued or cancelled by an insurer. The draft amendments would (1) require the deliverance of a policy or binder no more than 30 days after certain specified events; (2) require-if a policy is not delivered by that time-that an insurer deliver a binder within five days of a lender/insured request; and (3) establish that a binder is official proof of coverage in a civil action or proceeding.
THIRD-PARTY CONSUMER LEGAL FUNDING
On November 16, the Committee will consider a proposed Consumer Legal Funding Model Act, sponsored by Rep. Charlie Curtiss (TN), as well as a substitute Civil Justice Funding Model Act sponsored by Sen. Neil Breslin (NY). Both models would allow the use of legal funding-subject to various contract disclosures, including of a consumer’s right of rescission; a ban on paying referral fees; guidelines for distributing proceeds; attorney requirements, including acknowledgement of the financing agreement; and penalties and enforcement.
The Consumer Legal Funding Model-first considered at the July Summer Meeting-also would, among other things, prevent funding providers from assessing fees more than three (3) years after the consumer receives his/her money from the company. The Civil Justice substitute model would not include such a three-year cutoff. Also unlike the Consumer Legal Funding Model, the substitute version would allow funding companies to require arbitration to settle disputes, would allow multiple funding companies to contemporaneously provide funding to a consumer, and would forgo applying state Unfair Trade Practice laws or civil penalties to funding-company violators of the Act.
On November 16, the Committee will consider proposed amendments to a draft Limited Lines Travel Insurance Model Act, sponsored by Rep. Robert Damron (KY). The model, as introduced, would establish various disclosure, record-keeping, training, and other requirements that a travel insurance producer must meet-in order for a travel insurance retailer to sell travel insurance on the producer’s behalf. Under the model, the producer ultimately would be responsible for the retailer’s actions.
Representatives of the Independent Insurance Agents & Brokers (IIABA) and the U.S. Travel Insurance Association (UStiA) are working to draft consensus amendments to the model, which Rep. Damron has agreed in concept to sponsor for discussion purposes-as per Committee request on an October 15 conference call. The amendments, which will have been submitted after the 30-day deadline, will require a two-thirds Committee vote for consideration, followed by a separate two-thirds vote for adoption.
ARTICLES OF ORGANIZATION & BYLAWS REVISION COMMITTEE
COMMITTEE VOTING PRIVILEGES
On November 16, the Committee will consider two options regarding when contributing-state insurance-committee chairs can vote on standing NCOIL committees. The proposals are offered in light of a chair’s existing ability to cast Executive Committee votes at his/her first meeting. The first proposed option would allow a chair to vote on a standing committee at his/her first meeting as well. The second option would establish eligibility at the first meeting, if the chair joined the committee before then.
Also, the Committee on November 16 will consider a separate amendment regarding contributing-state legislators who are not state chairs. The amendment would require non-chairs to join a standing NCOIL committee at least 60 before any NCOIL meeting in order to vote on the committee at that time.
REVIEW OF NCOIL MODEL LAW FOR SUNSET/RE-ADOPTION
As per NCOIL bylaws, which require NCOIL committees to review their model laws every five years, legislators will consider the following document at the Annual Meeting.
HEALTH, LONG-TERM CARE, & HEALTH RETIREMENT ISSUES COMMITTEE
MENTAL HEALTH PARITY
An NCOIL Mental Health Parity Model Act offers legislators a template from which they could draft legislation specific to the concerns of their respective states related to coverage for mental illness. The NCOIL Health Committee has deferred its review of the model since the 2012 Spring Meeting in order to consider possible impacts of the Affordable Care Act (ACA). Legislators adopted the model in November 2001 and readopted it in February 2004 and July 2006.
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