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News from the American Academy of Actuaries

Fall 2017

Most state legislatures have adjourned for the year—currently, 10 legislatures and the District of Columbia Council remain in session, while some others have already begun to prefile bills for their upcoming sessions next year. Legislation that has been passed or introduced in state legislatures over this quarter includes bills relating to auto insurance, extreme events, Medicaid/long-term care, and public pension plans. State regulatory agencies have also been active in proposing and adopting new regulations relating to, among other issues, life and property/casualty Statements of Actuarial Opinion, credit for reinsurance, and own risk and solvency assessments (ORSA).

For a more comprehensive review of state legislation and regulations that may be of interest to Academy members, log in to access StateScan.


Auto Insurance
Louisiana Gov. John Bel Edwards signed Senate Bill 184 into law in June, which allows the exclusion of an offset or credit against uninsured motorist coverage when the insurer is insolvent. Senate Bill 150, prefiled in the Florida state legislature in August, would repeal the Florida Motor Vehicle No-Fault Law, revise requirements for a motor vehicle liability policy that serves as proof of financial responsibility for certain operators or owners, and require specified motor vehicle liability insurance policies to include medical payments coverage. Delaware Gov. John Carney signed a bill into law in August that sets permissible uses of credit information in rating personal insurance and prohibits insurers from using factors such as age and marital status, among others, to determine an insurance rate.

Extreme Events
Florida Gov. Rick Scott signed a bill into law in June that untethers the state’s building codes from international standards, with the effect of allowing local authorities to adopt weaker building codes than those that were imposed after Hurricane Andrew’s massive damage from wind. In July, North Carolina Gov. Roy Cooper signed into law Senate Bill 338, which provides subsidies for flood insurance as part of $100 million in disaster funding. A bill was also prefiled in the Florida house in August that would revise reimbursements to insurers from the Florida hurricane catastrophe fund and authorize temporary rapid cash build-up factors if the fund balance drops below a certain amount, as well as authorize the fund’s board to direct the Florida Office of Insurance Regulation to levy an emergency assessment on specified premiums to address certain deficits in the fund.

Medical Professional Liability
The New York state legislature in June passed Senate Bill S6800, which extends the statute of limitations for medical malpractice suits concerning cancer from 2.5 years after an injury was caused to 2.5 years from the discovery of such an injury.

Workers’ Compensation
A bill was prefiled in the Florida state senate that would prevent the inclusion of attorneys’ fees paid under the state’s workers’ compensation laws in insurers’ rates or rate changes.

Other Casualty
Colorado Gov. John Hickenlooper signed a bill into law in June that authorizes nonadmitted insurers to provide disability insurance as a type of surplus lines insurance. The New York Department of Financial Services adopted a rule in August providing guidelines for Statements of Actuarial Opinion by property and casualty insurers.


Employer-Sponsored Health Care
Massachusetts Gov. Charlie Baker signed a bill into law in August that increases the employer medical assistance contribution tax from $55 per employee to $77.

Marketplace Changes
A bill was prefiled in the Washington state legislature in June that would incentivize insurers to re-enter the individual health insurance marketplace by reducing state health insurance mandates in counties with one or zero health plans offered.

Medicaid/Long-Term Care
The Maine legislature is considering H.P. 457, which would increase reimbursement rates for home- and community-based services, as well as another bill that would provide a cost-of-living adjustment to MaineCare-funded private institutions and adult family care homes. A resolution was filed in the Tennessee General Assembly in September that would authorize the governor to extend Medicaid eligibility to working-age individuals within 138 percent of the federal poverty level, in accordance with the Affordable Care Act.

Other Health
The Texas Department of Insurance adopted a rule in June that provides guidelines for the creation, management, and oversight of health maintenance organizations. The Delaware state senate passed a resolution in June that would create a health care spending task force.


Synthetic Guaranteed Investment Contracts (GICs)
The Connecticut insurance commissioner proposed an amendment to a rule in July to adopt changes made to the NAIC’s Synthetic Guaranteed Investment Contracts and Separate Accounts Funding Guaranteed Minimum Benefits Under Group Contracts Model Regulations. The Iowa Insurance Division adopted a revised Synthetic GIC regulation in July outlining requirements for a plan of operations for a class of contracts; revising the calculation of the minimum value of guaranteed contract benefits under a contract issued to a pooled fund; and requiring that an actuarial memorandum clearly describe how the valuation actuary has reflected withdrawal risks, if applicable.

Other Life
The New Jersey state legislature passed Assembly Bill 2511 in July that requires life insurers to use the federal death master file to identify potential matches of insureds or account holders to confirm deaths and locate beneficiaries. The Ohio Department of Insurance proposed new rules for life insurance policy illustrations in August. A rule was adopted by the Colorado Division of Insurance in September that provides guidelines for Statements of Actuarial Opinion by life insurers.


Fiduciary Requirements
Nevada Gov. Brian Sandoval signed a bill into law in June that expands the fiduciary responsibilities of certain financial professionals. Pending regulations to enforce the law will determine whether and how retirement plans in the state are affected.

Public Pension Plans
Missouri Gov. Eric Greitens signed a bill into law in July that, among other things, lowers the vesting period for state employees and makes other changes to cost-of-living adjustments and survivor’s benefits. In September, New York Gov. Andrew Cuomo signed into law A8093, which limits the amount that certain members of state and local retirement systems can borrow against retirement contributions.


Credit for Reinsurance
The Mississippi Department of Insurance adopted a rule in July relating to credit for reinsurance. A rule proposed by the South Dakota Division of Insurance in August would update the credit for reinsurance rules for domestic insurance companies.

The South Dakota Division of Insurance proposed a rule in August to adopt the NAIC’s ORSA guidance manual.


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2017 Annual Meeting and Public Policy Forum