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The majority of states adjourned the 2018 legislative sessions earlier this year, but seven state legislatures and the District of Columbia Council are still holding sessions prior to the 2019 general assemblies convening. Several states have begun the process of prefiling legislation for the 2019 legislative session.
Over the past quarter, state lawmakers have been active in considering and prefiling bills on climate risk, reforms to health insurance markets and costs, and public pension plan investments. State agencies have also continued to propose and adopt new regulations, which include rules on health insurance costs, unclaimed life insurance policies, and National Association for Insurance Commissioners (NAIC) model regulations.
For a more comprehensive review of state legislation and regulations of interest to actuaries, log in to our online portal, StateScan.
CASUALTY
Auto Insurance
Two auto insurance bills were introduced in the Michigan Senate in November: S.B. 1212 would eliminate a requirement for limousine companies to maintain personal protection insurance and property protection insurance, and S.B. 1217 would eliminate the requirement for drivers to maintain no-fault automobile insurance. The California Department of Insurance proposed amendments (REG−2018−00020) to the state’s automobile insurance rating rule in October that would prohibit the use of an individual’s gender as a factor when setting rates. A public hearing was held Dec. 3.
Flood Insurance and Climate Risk
A bill was introduced in the Pennsylvania House in October that would establish the Pennsylvania Landslide Insurance and Assistance Program within the Pennsylvania Emergency Management Agency. The program would be administered by the Landslide Insurance and Assistance Board using the Landslide Insurance Fund and the Landslide Assistance Fund, with each fund receiving an initial appropriation of $2.5 million. Virginia Gov. Ralph Northam issued an executive order in November outlining several actions for the state to take in order to mitigate the impacts of flooding and extreme events, including the creation of a “Coastal Resilience Master Plan” that will detail specific actions to adapt and protect the state’s coastal regions.
Medical Professional Liability
A bill prefiled in the Missouri Senate would repeal a requirement that assessable malpractice association rates shall not be excessive, inadequate, or unfairly discriminatory. In addition, the bill would require the director of insurance to hold a hearing before determining that rates for medical malpractice insurance policies are excessive, inadequate, or unfairly discriminatory, and require that such determinations must be based on competent and substantial evidence on the whole record rather than competent and compelling evidence.
Other Casualty Issues
H.B. 749, introduced in the Ohio House in October, would authorize domestic insurers to be designated as domestic surplus lines insurers. The Colorado Division of Insurance proposed a rule in November that would prohibit insurers from using an individual’s gender identity or sexual orientation as a factor when setting rates and premiums for sickness and accident and/or health insurance.
HEALTH
Individual Market
SB 1027, prefiled in the Virginia Senate, would require the insurance commissioner to file a state innovation waiver requesting approval for health insurers to offer catastrophic plans on the individual market, and would provide that catastrophic plans are deemed to provide essential health benefits. The Delaware Department of Insurance adopted, on an emergency basis, a rule setting minimum standards for short-term, limited duration insurance (STLDI).
Long-Term Care
Voters in Maine rejected a ballot initiative in November to establish a universal home care program that would be available to all adult residents, regardless of income, who need assistance with at least one “activity of daily living.” The proposed program, which included authorizing stipends for family caregivers and funding for home health care workers, would have been funded by a 3.8 percent tax on non-wage income and earnings that are not subject to the Social Security payroll tax. The Connecticut Department of Insurance proposed amended regulations to update the state’s long-term care partnership regulations by reducing the minimum annual inflation protection requirement for approved policies from 3.5 percent to 3.0 percent.
Medicaid
A bill prefiled in the California House would extend eligibility for Medi-Cal program benefits to immigrants who meet the other criteria of eligibility under the state’s Medi-Cal program. A bill was prefiled in the Texas House that would expand Medicaid eligibility to working-age adults with incomes up to 133 percent of the federal poverty level, as allowed under the Affordable Care Act. Measures on expanded eligibility criteria in state Medicaid programs were on the November ballot in several states during the 2018 elections: Voters in Idaho, Nebraska, and Utah approved ballot initiatives to expand Medicaid eligibility. A similar ballot initiative was rejected in Montana that would have extended the state’s Medicaid expansion, funded in part by increased tobacco product taxes. Montana’s Medicaid expansion is set to expire in 2019. The Idaho Department of Health and Welfare has proposed an amendment to a rule clarifying that the state’s Medicaid program does not cover investigational drugs or drugs acquired through the federal 340B drug pricing program and dispensed by 340B contract pharmacies.
Prescription Drugs
A bill was prefiled in the Florida House that would establish a Prescription Drug Donation Repository Program, allowing for the donation of prescription drugs to low-income patients.
Other Health Issues
California voters rejected a ballot initiative in November aimed at controlling costs for dialysis treatments by setting a cap on dialysis clinic profits at 115 percent of the costs of patient care and using revenues above the cap to provide rebates to commercial insurers. The Colorado Department of Health Care Policy and Financing adopted amendments to a rule in October that add alternate payment model files and prescription drug rebate files to the reporting requirements for the state’s All-Payer Claims Database.
LIFE
Principle-Based Reserving (PBR)
New York Gov. Andrew Cuomo signed a bill into law in December that allows the state to implement a PBR standard for life insurers. The New York Department of Financial Services has released an emergency regulation to begin the implementation of the new standard, to take effect on Jan. 1, 2020. The Oregon Department of Insurance Regulation proposed a rule in October that would designate the version of the Valuation Manual insurers must use in establishing principle-based reserves beginning January 1, 2019, and confirm that the operative date of the Valuation Manual is January 1, 2017.
Other Life Issues
A bill prefiled in the Nevada Senate would deem benefits established by a long-term care rider to a life insurance policy or annuity contract to be the same type of benefits as provided in a basic policy or contract for the purposes of provisions relating to the Nevada Life and Health Insurance Guaranty Association. H.B. 207, prefiled in the Texas House, would require life insurers to notify policyholders when their policy is subject to an increase in insurance charges that are based on the current schedule of mortality rates. The Illinois Department of Insurance proposed a rule (50 Ill. Adm. Code 920) to implement the Lost Policy Finder for life insurance policies. Under the proposed rule, insurers authorized to offer life insurance policies in Illinois would be required to register for the service and make “good faith” efforts to locate policyholders who have not claimed their benefits.
PENSION
Public Pension Plans
SB3638, introduced in the Illinois Senate in November, would exclude contracts with emerging investment managers from a competitive process requirement for awarding investment contracts. Michigan Gov. Rick Snyder issued an executive order in October establishing the State of Michigan Investment Board to oversee investments in the state’s public pension fund. Prior to the creation of the new board, the state treasurer served as sole fiduciary of the fund, with assistance from an advisory committee. A bill introduced in the New Jersey Assembly in October would require the forfeiture of all earned pension or retirement benefits for public employees convicted of crimes. The Oregon Public Employees Retirement System adopted a rule in October allowing public employer lump-sum payments into side accounts to be considered for matching funds from the Employer Incentive Fund and would allow the employer to elect an alternate amortization schedule.
CROSS-PRACTICE
Credit for Reinsurance
The Michigan Department of Insurance and Financial Services proposed amended rules (pp. 136-157) that would bring Michigan into compliance with the National Association of Insurance Commissioners (NAIC) Credit for Reinsurance Model Law and Model Regulation.
Own Risk and Solvency Assessment (ORSA)
The District of Columbia Council is considering a bill that would establish requirements for insurers for maintaining a risk management framework and completing an ORSA.
Other Cross-Practice Issues
The Idaho Department of Insurance adopted a rule (p. 55) in November, pending legislative approval, to adopt provisions of the NAIC Annual Financial Reporting Model Regulation #205 requiring an independent internal audit function for insurance companies with over $500 million in annual premiums written. A bill currently under consideration by the District of Columbia Council would adopt revisions to the NAIC Insurance Holding Company Systems Model Law, Credit for Reinsurance Model Law, and Annual Audited Financial Reports Model Law. In addition, D.C. Mayor Muriel Bowser signed a bill in November making the District a member of the NAIC’s Interstate Insurance Product Regulation Commission (IIPRC).
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