Louisiana Offers Extension for Homeowners with Canceled Coverage, Illinois Asks for Honesty, Colorado Looks for Marshall Fire Claims Relief

This post is part of a series sponsored by AgentSync.

State by state variations of laws, compliance protocols, industry transparency, and general regulatory cultures can lend one the impression that keeping up with industry changes is a little bit like herding cats. So, what better way to wrangle some of the more localized insurance news than in a Regulatory Roundup?

On an ongoing basis, in no particular order or rank, we’re wrestling the various regulatory changes, compliance actions, and commissioner decisions into our roundup. As a disclaimer: There’s a lot going on at any given time in these here United States, so this isn’t a comprehensive picture of state-level action by any means. Think of it as, instead, a sample platter of regulation.

Louisiana cancellation and putting coverage with Citizens

Louisiana Insurance Commissioner Jim Donelon has announced an additional 60 days for homeowners to replace coverage from liquidated Florida P&C insurance companies.

A Florida court ordered the liquidation of Weston Property & Casualty Insurance Company on Aug. 8, 2022, which will cancel the insurer’s 10,300 Louisiana policies by Sept. 7. The news release from Donelon’s office said during the additional 60-day period, the state-backed insurer Louisiana Citizens will provide coverage as insurance agents help homeowners find appropriate coverage.

United Property & Casualty Insurance, another Florida insurer, was recently given a downgraded financial stability rating by ratings agency Demotech. The lower rating puts the insurer outside of many mortgage-paid policies’ requirements, meaning Louisiana homeowners will need to obtain different coverage in order to maintain their mortgage according to their banks’ policies. The new 60-day Citizens-backed coverage will apply to them, as well.

“I urge Louisiana policyholders who have residential insurance policies with Weston to contact an agent and begin shopping for a new policy in the private market or, if necessary, with Citizens,” said Donelon. “UPC policyholders should open any correspondence from their mortgage company in case it contains a notice of force-placed coverage, in which case they should contact their agent immediately or call the LDI at 800-259-5300.”

Louisiana updates CE rules

Louisiana has issued a notice of intent, signaling that the commissioner wishes to change rules regarding the continuing education requirements of the state. Among other things, the change would remove the state’s exemption for first-time licensees from submitting CE within their first license renewal period. The DOI bulletin cites the state’s recent abdication of pre-licensing requirements as the justification.

Colorado DOI waives building codes for Marshall Fire recovery

The Colorado Division of Insurance has issued an emergency regulation giving policyholders the ability to opt out of portions of their local building codes.

The Marshall Fire on Dec. 30, 2021, burned through more than 1,000 buildings, both commercial and residential. As insurance policyholders have filed claims to rebuild or repair homes and businesses, new building codes enacted since the original structures were finished have increased the cost of rebuilding.

Often, policies limit coverage to the cost to rebuild to the structure’s original standard. This regulation would provide policyholders whose coverage is limited to choose whether to rebuild to the old standard, or build to a newer standard (which may include more out-of-pocket costs).

The regulation puts the decision in a policyholder’s hands, and forbids insurance companies from interfering with their decision.

“Individuals impacted by this fire will need access to every available claim dollar they are entitled to under their policy,” said the DOI order. “In order to rebuild their lives and communities, policyholders are entitled to amounts available through their law and ordinance coverage to cover upgrades made in rebuilding their homes to be compliant with authorized building codes. The Division finds that this regulation will help to protect and provide necessary resources to affected policyholders.”

Illinois DOI issues caution on responses to application background questions

Illinois Department of Insurance (DOI) Director Dana Popish Severinghaus issued a caution to would-be producers applying for a license in the state about the importance of answering background questions correctly.

The notice alleges DOI employees are seeing “a significant number of license applications containing incorrect responses to background questions.”

Specifically at issue are two questions regarding criminal background, from misdemeanors to felonies, military offenses, or administrative proceedings such as FINRA sanctions.

“Please be aware that the Illinois Department of Insurance will evaluate and consider the individual circumstances regarding any response. Responding incorrectly to any question may be of greater concern than the circumstances requiring a ‘YES’ response,” said the notice.

As the DOI notes, Illinois has access to the NAIC’s list of regulatory actions. Reading between the lines, the state is trying to tell applicants that they’re far better off reporting past misdeeds accurately and having a discussion with the Illinois DOI than lying. Past misconduct can be explained, learned from, and forgiven; lying about your past instead means you are currently still a liar-McLiarPants.

Auditing your agents’ background questions can be time consuming. Learn how AgentSync can help through robust reporting and background question response tracking.

Other state updates

Kansas in March voted to license pharmacy benefits managers, and, beginning in October 2022, the state will have a Pharmacy Benefit Manager License Class to match in the National Insurance Producer Registry.

California approved revisions to the syllabus and topics required for the eight-hour long course the state mandates for producers selling long-term care insurance.

Maryland issued a bulletin allowing surplus lines brokers to charge policy fees and outlined specifics regarding how much, when, and how to report these fees for tax purposes.

Georgia, meanwhile, issued Directive 22-EX-4 specifically clarifying that charging surplus lines insurance policyholders any fees beyond those specified in the policy is prohibited.

North Carolina has issued a data call to property and casualty carriers writing personal auto and residential home insurance and updated state appointment fees from $10 to $11.

Washington extended its order on coronavirus vaccine counseling coverage and requirements that insurers waive copays and deductibles for coronavirus tests for another month, through most of September.

New York approved of the Excess Lines Association of New York (ELANY) request to reduce its stamping fee to .15 percent.

Colorado Insurance Commissioner Michael Conway was honored by One Colorado with a 2022 Prism Award, recognizing him for his work on behalf of the LGBTQ community in becoming the first state to explicitly include gender-affirming care as a required benefit in commercial health insurance.

Georgia isn’t currently allowing the “Agent – Georgia Access” application electronically, possibly waiting until the state’s clash with the federal government over the Georgia Access model is settled.

New Mexico warned licensees to be wary of scammers purporting to be from government agencies that are trolling for sensitive information.

Hawaii has announced new training requirements for producers who sell annuities. For producers licensed before the close of 2022, the new training must be completed by July 1, 2023.

Massachusetts passed a law at the end of July to require abortion coverage in health insurance plans without copays for health insurance policies outside of specific church-controlled organizations with exemptions and plans that require copays to maintain a specific tax status.

While these points of interest aren’t comprehensive, our knowledge of producer license and compliance maintenance is. See how AgentSync can help make you look smarter today.