Read the Academy’s latest overview of state legislative and regulatory activities.

News from the American Academy of Actuaries

Spring 2020

There are currently 32 state legislatures and the District of Columbia Council slated to be in legislative session; 15 of those states have temporarily adjourned due to the risks associated with the COVID-19 crisis, while the other 18 states are actively convened in session, with six states convening temporarily to consider COVID-19 legislation. Sixteen state legislatures have adjourned sine die or as regularly scheduled. Lawmakers have largely shifted focus on introducing and considering legislation responding to the social and economic effects of the COVID-19 pandemic.

Prior to the pandemic, lawmakers addressed legislation related to auto insurance rates, reforms to health insurance markets and costs, and public pension plan funding, among other issues. State agencies have continued to propose and adopt new regulations, including rules on life insurance, auto insurance, and guidance to insurers responding to the unprecedented impact of coronavirus on various industries.

For a more comprehensive review of state legislation and regulations of interest to actuaries, log in to our online portal, StateScan.


Auto Insurance
The California Department of Insurance issued proposed regulations in December that would make changes to insurance companies’ group discount offerings based on occupation, education, and other factors that have negatively impacted low-income drivers. The New Jersey Motor Vehicle Commission issued a proposed rule in December that would revise the penalties for operating a motor vehicle under the influence and expands the use of ignition interlock devices to deter drunk driving and enhance public safety. Kentucky Gov. Andy Beshear signed a bill into law on March 27 requiring auto insurance companies to provide appropriate discounts on comprehensive coverage for certain insured motor vehicles with an antitheft device or mechanism. West Virginia Gov. Jim Justice signed a bill into law on March 25 regulating peer-to-peer car sharing by requiring cars to be covered by insurance; requiring notification of implications of a lien on the shared vehicle; providing for certain exclusions from motor vehicle insurance policies; requiring peer-to-peer car-sharing programs to maintain certain records; requiring the peer-to-peer car-sharing program maintain an insurable interest in the shared vehicle to cover a lapse of coverage; and exempting the peer-to-peer car-sharing program and the shared vehicle owner from vicarious liabilities.

Several states have issued auto insurance coverage regulations in response to restaurant closures due to the coronavirus pandemic. The Colorado Division of Insurance (DOI) issued an emergency regulation on certain types of auto insurance including: allowing policies to cover new delivery drivers for restaurants that already have commercial automobile policies for drivers; and allowing employees to use their own personal auto insurance for restaurants that do not have a commercial insurance policy, removing the restriction for the restaurant employee’s personal insurance that would usually prevent commercial food delivery activities. Alabama issued a recommendation for individuals delivering food, medicine, and other essentials. North Dakota and Rhode Island issued bulletins requiring insurers to pay auto insurance claims under personal insurance policies of food delivery personnel while the insured is using the personal vehicle for the purposes of work; the Washington state insurance commissioner strongly urged insurers in the state to extend personal insurance policies for food workers as well. California issued guidance preventing insurers from denying coverage to food service delivery workers.

Property Insurance
Virginia Gov. Ralph Northam on March 2 signed a bill into law, the Virginia Residential Property Disclosure Act, requiring buyer-beware disclosures for radon gas by the owner of the residential property. Additionally, Northam also signed a bill into law requiring the disclosure of knowledge of properties located on stormwater management facilities, and provide the long-term maintenance and inspection requirements of those facilities to the purchaser of the property. A bill was introduced in the Georgia House on March 2 that would provide for new insurance policy disclosure requirements for condominium associations and unit owners in the event of potential or actual claims filed against such policies.

Flood Insurance and Climate Risk
Wisconsin Gov. Tony Evers signed a signed a bill into law March 4 that allows nonconforming buildings located on floodplains that make the necessary modifications to conform with federal standards to make additional modifications without prohibition from the state Department of Natural Resources. The Hawaii Senate passed legislation March 3 that would require the Hawaii Climate Change Mitigation and Adaptation Commission to consider and make specific recommendations on rising sea level policies, and would allocate appropriate funding to address them. The bill is now being considered in the Hawaii House. Legislation has been introduced in several states that would facilitate private flood insurance providers issuing insurance policies as alternatives to existing flood insurance offered by the National Flood Insurance Program. These states include Louisiana and Illinois; the South Carolina State Senate passed initial legislation on March 4.

Travel Insurance
A bill was introduced in the New York Senate on March 23 that would require airlines and travel insurance companies to provide refunds for travel canceled as a result of the coronavirus pandemic. Virginia Gov. Ralph Northam signed a bill into law on March 10 requiring individuals and business entities to be properly licensed and to act as a limited lines travel insurance agent. Similar legislation passed the Florida House of Representatives on March 11 and is now being considered in the Florida Senate. A bill was introduced in the Maine House of Representatives that would impose stricter definitions and regulations of travel insurance including providing that travel insurance must be classified and filed under an inland marine line of insurance, establishes requirements for travel protection plans, establishes requirements for travel insurers, and assesses a premium tax on travel insurance premiums and establishes reporting requirements. Similar legislation was introduced in the Oklahoma Legislature and Kentucky Legislature.

Workers’ Compensation
The Florida House of Representatives passed a bill on March 11 that would authorize the payment of certain workers’ compensation benefits to be transmitted to the employee’s account with a licensed money transmitter, among additional insurance requirements. West Virginia Gov. Jim Justice signed a bill into law on March 25 requiring the transfer of funds from the Volunteer Fire Department Workers’ Compensation Premium Subsidy Fund to the Fire Service Equipment and Training Fund, and extending the sunset date until June 30, 2022. The New York Department of Financial Services issued emergency regulations in response to COVID-19 imposing a moratorium on cancellations and non-renewals of workers’ compensation policies for nonpayment, in addition to other non-renewal policies. The Florida Office of Insurance Regulation issued an informational memorandum on April 6 mandating that first responders, health care workers, and other personnel that contract COVID-19 due to work-related exposure are eligible for workers’ compensation benefits.

Business Interruption
In response to the economic impacts of the COVID-19 pandemic, several states have introduced legislation to require payment of business interruption claims to small businesses from property/casualty insurers despite policies that do not provide compensation for that type of loss. These states include Louisiana, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania. The California Department of Insurance also issued guidance on April 14 to ensure that all insurance companies forward, acknowledge, and fairly investigate all business interruption insurance claims submitted by large and small businesses.

Other Casualty Issues
The California Department of Insurance issued a bulletin on April 13 requiring all lines of property/casualty insurance in which risk has diminished due to the COVID-19 pandemic to issue refunds to all impacted policyholders for March and April. Types of insurance included in the regulation include auto insurance, workers’ compensation, commercial insurance, medical malpractice, and any other lines of coverage where the measures of risk have become substantially overstated as a result of the pandemic. The Illinois Department of Insurance issued a bulletin on April 3 requesting a moratorium on cancellations and nonrenewal resulting from nonpayment for automobile and home insurance companies through April 30 in response to the COVID-19 pandemic.


Individual Market
Maine Gov. Janet Mills signed a bill into law on March 18 titled the Made for Maine Health Coverage Act, including provisions: implementing a state-based marketplace in November 2020, requiring all health plans for individuals and small businesses in Maine cover the first primary care visit and behavioral health visit for free; limiting the amount the public would pay for certain high-cost services to no more than twice what Medicare pays; providing insurance companies better leverage to negotiate with providers; and merging the small group and individual markets in Maine to increase the size and stability of the risk pool. West Virginia Gov. Jim Justice signed a bill into law titled the Health Benefit Plan Network Access and Adequacy Act providing that all health benefit plans ensure certain criteria and accessibility to health care providers. Utah Gov. Gary Herbert signed a bill into law that amends provisions related to certain health benefit plans and enacts the Limited Long-Term Care Insurance Act, which establishes disclosure and performance standards for limited long-term care insurance policies. Indiana Gov. Eric Holcomb signed a bill into law on March 30 urging the legislative council to establish a task committee to study medical payment coverage to determine whether medical payment coverage should be supplemental to benefits and whether a health plan should be prohibited from requiring the use of exhaustion of medical payment coverage as a condition of payment of benefits under the health plan for health care services rendered to the covered individual. The New York State Department of Financial Services on April 7 amended a standing insurance regulation requiring health insurers, HMOs, and student health plans to extend the time for payment of premiums until June 1, 2020, for policyholders that prove they were negatively impacted by COVID-19, and mandating that policies may not be terminated for nonpayment. Similarly, the Washington State Insurance Commissioner issued an emergency order requiring health insurers to offer a 60-day grace period for payment of premiums on plans offered through the Health Benefit Exchange, as well as dental plans, in light of COVID-19.

Long-Term Care
Wyoming Gov. Marc Gordon signed a bill into law on March 24 providing that long-term care insurance premium rate increases shall be based on accepted actuarial principles and practices, and that all long-term care insurance premium rate increases shall be subject to the approval of the commissioner. Washington Gov. Jay Inslee signed a bill into law on March 19 modifying the long-term services and supports trust program by clarifying the ability for individuals with existing long-term care insurance to opt out of the premium assessment.

Medicare and Medicaid
Washington Gov. Jay Inslee signed a bill into law on March 27 amending the state insurance code to include health coverage that is supplemental to the coverage provided under employer- or union-sponsored prescription drug coverage that supplements Medicare Part D provided through an employer group waiver plan. Vermont Gov. Phil Scott signed a bill into law on March 30 providing for a number of appropriations and rule provisions in response to the coronavirus pandemic including relaxed provider enrollment requirements for Medicaid and relaxed provider credentialing requirements for health insurance plans. Maryland Gov. Larry Hogan signed a bill into law on April 3 requiring the state to request a waiver from the Centers for Medicare and Medicaid Services to implement a pilot program to provide certain telehealth services to recipients under the state’s Medicaid program.

Prescription Drugs
Virginia Gov. Ralph Northam signed a bill into law on March 10 that requires the state insurance commissioner to license regulate pharmacy benefits managers (PBMs). West Virginia Gov. Jim Justice signed a bill into law on March 7 implementing new requirements for health insurance coverage for people with diabetes including: providing cost-sharing in prescription insulin drugs and establishing cost-sharing for designated equipment and supplies related to the treatment and management of diabetes. Illinois Gov. J.B. Pritzker signed a bill into law in December providing that PBMs may not prohibit a pharmacy or pharmacist from providing a customer with a more affordable alternative if a more affordable alternative is available. A bill has been introduced in the Massachusetts Senate that would ensure prescription drug cost transparency and affordability by limiting unreasonable costs increases on common prescription drugs.

Public Health Insurance Option
Washington Gov. Jay Inslee signed a bill into law on March 25 requiring the Public Employees Insurance Agency and other health insurance providers to provide mental health parity between behavioral health, mental health, substance use disorders, and medical and surgical procedures.

Other Health Issues
Utah Gov. Gary Herbert signed a bill into law on March 30 that imposes more strict reporting requirements for health care facilities and health care providers that engage in balance billing for certain health care services and requires an insurer to provide certain information for reimbursement for emergency services. Kentucky Gov. Andy Beshear signed a bill into law including several health care provisions in response to the coronavirus pandemic including: lifting restrictions on telehealth services, allowing health professionals to contact patients remotely rather than in person; establishing a database of billed health care service charges resulting from COVID-19 patients; provides an independent dispute resolution program to review reimbursements provided for unanticipated out-of-network care; requires an insurer to reimburse for unanticipated out-of-network care; and allows unregulated health plans to opt in to requirements. Indiana Gov. Eric Holcomb signed a bill into law on March 18 requiring hospitals and some health care facilities to post certain information on their websites regarding the negotiated charges for the health care services they provide to maintain transparency. The California Department of Insurance released a notice on March 30 stating that insurers should allow for all health network providers utilizing telehealth services to lessen the strain of the health supply chain and reduce the amount of in-person health care during the COVID-19 pandemic. Florida released a similar informational memorandum on April 6. Rhode Island and New Hampshire also issued guidance surrounding telemedicine coverage to clarify emergency orders issued by their governors.


Principle-Based Reserving (PBR)
Michigan Gov. Gretchen Whitmer signed a bill into law on Jan. 27 removing a provision that had exempted certain insurers from the requirement to establish reserves using a principle-based valuation that meets certain conditions for policies or contracts as specified in the manual of valuation instructions (Valuation Manual) adopted by the National Association of Insurance Commissioners (NAIC).

Other Life Issues
The Florida Senate passed a bill on March 12 that would prohibit life insurance providers and long-term care insurers from canceling, limiting, or denying coverage to an individual based on genetic information, as well as prohibits insurers from establishing differential premium rates. Maine Gov. Janet Mills signed a bill into law on March 17 that would prohibit insurers from refusing to issue or renew coverage of an individual under a life, disability income, or long-term care insurance policy to a person whom has been prescribed preexposure prophylaxis medication to prevent HIV infection. A bill was introduced in the Vermont Senate that would prohibit life insurers from denying coverage to an individual based on genetic information, as well as in the context of additional social and medical services. South Carolina Gov. Henry McMaster signed a bill into law on March 26 making changes to the South Carolina Life and Accident and Health Insurance Guaranty Association, including mandating that the life insurance death benefits the Association may become obligated to cover may not exceed $300,000. South Dakota Gov. Kristi Noem signed a bill into law on Feb. 13 establishing an association of member insurers to pay benefits and continue coverages, and protect against failure to perform contractual obligation under life, health, and annuity policies due to impairment or insolvency of the member insurer that issued the contracts. The New York Department of Financial Services issued emergency guidance in response to the coronavirus pandemic requiring a 90-day grace period for individual and group life insurance and annuity contracts when the policyholder or contract holder demonstrates hardship as a direct result of the pandemic.


Public Pension Plans
Colorado Gov. Jared Polis signed a bill into law on April 1 making several changes to public pension plans administered by the Fire and Police Pension Association (FPPA) including: a 0.5-percentage-point increase in the employer contribution rate every year from 2021 through 2028; appropriates an additional lump-sum payment to the FPPA to fund the unfunded liabilities of the death and disability benefits for pension recipients. Washington Gov. Jay Inslee signed a bill into law increasing the annual fee for each member of municipal fire departments from $30 to $50 toward the contribution to the volunteer firefighters’ and reserve officers’ relief and pension system. Inslee also signed a bill into law on March 25 creating municipality firefighters’ pension boards to determine salary contributions to law enforcement pension plans. Indiana Gov. Eric Holcomb signed a bill into law on March 18 providing that members of the public employee’s retirement fund (PERF), the Indiana State Teachers’ Retirement Fund (TRF), or the legislators’ defined contribution plan who meet certain age and service requirements may withdraw from the member’s annuity savings account without consequence to the member’s pension benefit under the fund and without separating from a covered position. Holcomb also signed a bill into law on March 30 increasing the death benefit of members of certain policy and firefighter pension funds, among others, from $150,000 to $225,000. Wyoming Gov. Mark Gordon signed a bill into law on March 13 increasing contributions to the volunteer firefighter, EMT and search and rescue pension account up to 100% of the gross premium tax levied upon fire insurance premiums.


Virginia Gov. Ralph Northam signed a bill into law on March 10 eliminating the reinsurance collateral requirements for assuming insurers that are domiciled in a reciprocal jurisdiction, and requiring insurers to maintain minimum capital and surplus and maintain a minimal solvency or capital ratio. Kentucky Gov. Andy Beshear signed a similar bill into law on March 27 that also requires the commissioner to publish a list of reciprocal jurisdictions and assuming insurers.

Regulatory Reporting Requirements
West Virginia Gov. Jim Justice signed a bill into law on March 25 enacting the insurance fraud prevention act and establishing stricter reporting standards for suspected insurance law violations. Michigan Gov. Gretchen Whitmer signed a bill into law on Jan. 28 amending sections of the state insurance code to require that insurers with over $500 million in annual premiums establish an internal audit function that provides independent, objective, and reasonable assurance to the audit committee and management regarding the insurer’s governance, risk management, and internal controls. In light of COVID-19, the Kentucky Department of Insurance issued guidance on April 7 providing insurers an additional 30 days to complete most filings, and 60 days for specific filings. Additionally, the guidance waves the hard copy and original signatures requirements for 60 days after the state wide stay-at-home orders are lifted. The Massachusetts Division of Insurance released guidance on April 3 providing flexibility for compliance with certain filing requirements in light of COVID-19, noting that they will accept quarterly financial statements that are not notarized and that are electronically submitted, providing that insurers specify when they will fulfill the original requirements. California and Nebraska issued similar guidance as well.

Other Cross-Practice Issues
West Virginia Gov. Jim Justice signed a bill into law on March 25 imposing new requirements on state certified insurance adjusters by providing licensure requirements for company, independent, and public adjusters and authorizing the insurance commissioner to conduct criminal history checks for prospective adjusters. Virginia Gov. Ralph Northam signed a bill into law on March 10 requiring insurers to develop, implement, and maintain a comprehensive written information security program based on an assessment of its risk that contains administrative, technical, and physical safeguards for the protection of nonpublic information. Minnesota Gov. Tim Walz signed a bill into law on March 28 providing for increased appropriations and extended certain deadlines in response to the coronavirus pandemic, including increased state funding for unemployment insurance for workers laid off as a direct result of the pandemic. Kentucky Gov. Andy Beshear signed into law similar legislation, providing that employees experiencing a reduction in work hours as a result of the coronavirus pandemic are eligible for unemployment benefits to compensate the employee for the temporary loss of income, as well as waiving the seven-day waiting period required prior to collecting unemployment benefits.

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