BANKRUPTCY: INSURANCE EXEMPTION Background: Federal bankruptcy law permits individuals, when filing for bankruptcy, to elect either the federal or the state exemptions (amounts of money, insurance proceeds, and items of personal property that are exempt from the claims of creditors). Insurance policy proceeds and cash values are generally larger under the state exemptions. Position: Oppose any proposal that would reduce the amount of insurance proceeds exempt from the claims of creditors. Web Keywords: B LILS #7 Bankruptcy & Creditors BANKS: GLBA: SAFE HARBORS Banks: Insurance Powers Unfair Trade Practices: Generally Position: Support faithful adoption (i.e., no changes) of the NAIC Amendments to the UTPA relating to GLBA Safe Harbors for bank sales of insurance consumer protection laws. The federal Gramm Leach Bliley Act (GLBA) includes 13 “Safe Harbor” provisions insulating state consumer protection laws addressing bank sales of insurance from federal regulatory preemption. The NAIC developed amendments to the model Unfair Trade Practices Acts to incorporate 11 of the federal provisions in a uniform manner for states to adopt (two provisions related to Privacy were not included in deference to their being addressed by the NAIC Privacy Model Regulation). Compliance Notes: If information is available mention if follow or deviates from the model. Web Keywords: bank distribution of insurance, unfair trade practices B ADVANCE BANKS: INSURANCE POWERS Position: Monitor bills that would permit state-chartered financial institutions to sell insurance products, including annuities. Look for bills that would give state banks the same powers as national banks ("parity laws"), which would in effect allow state banks to sell annuities, since national banks are currently authorized to do so. Oppose legislation that would allow banks to underwrite insurance products. Compliance Notes: Include in summary whether provisions follow Agents’ Model with respect to whether a seller of insurance has to be registered as an agent; and whether there is a separate area required for the transaction of insurance business. Advance if it contains restrictions; do not advance if law merely authorizes banks to sell. Web Keywords: bank distribution of insurance B Annuity (Lewis); Market Conduct (Auerbach) CAMPAIGN FINANCE Position: Monitor restrictions on corporate giving. AB DO NOT ADVANCE
DOMESTIC PARTNERSHIPS OR CIVIL UNIONS Health Insurance Life Insurance: Generally Background: On June 25, 2015, the United States Supreme Court ruled the federal Defense of Marriage Act to be unconstitutional in Obergefell v. Hodges. This decision states the fundamental right to marry is guaranteed to same-sex couples by both the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. Domestic partnerships, a legal contract between adults to be joined in a relationship, similar to but not the same legally as marriage remain in practice. For our purposes, they are the same as they may affect payment of life insurance proceeds and health benefit payments. Position: Monitor bills regarding domestic partnerships that require domestic partners to register with the state and permit insurers to require an affidavit of domestic partnership. Monitor bills regarding civil unions. Compliance Notes: Bills are advanced because provisions that extend the same rights and benefits of spouses to partners in a domestic partnership or civil union may impact insurance and annuity benefits. Insurance is not usually specified in the bills, but regulatory action may follow to explain how the new law impacts insurance. Web Keywords: civil unions, same sex marriage B ADVANCE LILS #55 Same-Sex Marriage SR Liaison: Rowden ELECTRONIC COMMERCE: GENERALLY Background: Electronic commerce is a broad term that encompasses electronic activities relating to the marketing, selling, or servicing of goods and services over the Internet or via another electronic medium. Because the area of electronic commerce is emerging new issues arise that may not have been contemplated. This keyword should serve as the “catch-all” for electronic commerce issues that affect the business of insurance generally. Some examples include web site advertising, jurisdiction, content; unsolicited email; etc. Position: Monitor any proposal related to electronic commerce. Compliance Notes: Electronic commerce is a general catch-all and could include tax payment or filings too. B ADVANCE Privacy (Wolf) Premium Tax (Witt) LILS # 62 UETA & E-Commerce Laws Specific to Insurers
GROUP INSURANCE: MODEL ACT Position: Support NAIC Group Model Definition for Life Insurance and Health Insurance (two separate Models). Web Keywords: group life insurance, health insurance (if applicable to care and disability income) B Annuity - if group Annuity (Lewis); Life Contracts - if life only (Auerbach); Long-Term Care – if applicable (McGuffey); Disability Income - if applicable (McGuffey); ISC Group Modernization (RETIRED) SR Liaison: Mangan term
LIFE INSURANCE: COST OF INSURANCE Life Insurance: Verification of Coverage Position: Oppose proposals requiring specific written disclosures to each policy holder of a universal life or similar policy, within [x] days of a proposed cost of insurance increase. Oppose proposals requiring insurers provide the Insurance Commissioner with certain filings not later than [x] days of a proposed cost of insurance increase. Compliance Notes: Web Keywords: disclosure regulation, STOLI B LIFE INSURANCE: GENERALLY Background: A general keyword for life insurance bills for which a more specific keyword can't be found. Position: Monitor any proposal relating to life insurance AB B ADVANCE relevant sections LIFE INSURANCE: MULTIPLE POLICY SEARCHES Position: Support Multiple Policy Search Standards Model Regulation (2003) which sets forth guidelines for insurers to utilize to search for additional policies or insurance coverages on the life of an insured upon notification of the death of the insured. Also provides for a “reasonableness” standard, allowing companies to adopt their own written claim processing standards and methodology for searching multiple policies for the same insured. Web Keywords: claim, claims payment, escheat B ADVANCE LIFE INSURANCE: RESCISSION Market Conduct Position: Oppose provisions to prohibit insurers from rescinding policies on the basis of misrepresentation or false warranty. Web Keywords: life insurance, market conduct, rescission B ISC Return of Premium Legislation (RETIRED) LIFE INSURANCE: SETTLEMENT OPTIONS Retained Asset Accounts Position: Monitor proposals concerning life insurers offering applicants a number of ways to provide income to their beneficiaries rather than payment in a lump sum (i.e., interest income option, income for a fixed period option.) Compliance Notes: Include in summary any provisions which provide disclosures to policyholders. Web Keywords: claims payment, retained asset accounts. B Market Conduct (Auerbach); Life Insurance Contracts (Auerbach); LILS#70 Retained Asset Accounts
OWN RISK AND SOLVENCY ASSESSMENT Corporate Confidentiality Privacy: Information Practices Background: The ORSA Model was developed by the NAIC Group Solvency Issues Working Group as a required assessment the insurer makes about the adequacy of the insurer's risk management, and of current and likely future solvency position - encompassing all reasonably foreseeable and relevant material risks. An insurer that is subject to the ORSA requirement will be expected to have a risk management framework, regularly assess the adequacy of that risk management framework and the insurer’s current prospective solvency position, internally document the process and results, and provide an annual high-level summary report to the lead state regulator. Position: Support uniform adoption of the ORSA Model Web Keywords: confidentiality, holding company, solvency B ADVANCE ISC Holding Company Act / ORSA ISC Corporate Confidentiality SR Liaison: Walters PAID LEAVE Disability Income Insurance Disability Income Insurance: Group Background: The Family and Medical Leave Act (FMLA), enacted in 1993, allows eligible employees to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. More recently, many states have begun introducing legislation creating paid family leave programs that would provide paid benefits to individuals who need to take time off work to care for a seriously ill family member (and some for the employee’s own illness). Other states have proposals requiring employers with a minimum number of employees to offer paid sick leave. Position: Monitor bills that create family leave and paid sick leave benefits. Conditionally Oppose bills that may adversely affect an insurer’s ability to sell short-term disability products. B ADVANCE Disability Income Insurance Compliance Service OGC Liaison: Clayburn PENSIONS Public Employees: Pensions Position: Monitor bills that allow the establishment of public employee pension plans, usually as a defined contribution plan or an annuity-type product. Also monitor bills authorizing changes to public pension plans that may potentially affect our members who underwrite or administer the plans. Compliance Notes: Advance if impact to insurers is clarified, or if potential applicability remains as opposed to bills that specifically identify state agencies for administration of policy applications or of claims processes. Web Keywords: pension, retirement, IRA B PENSIONS: Pensions Position: Monitor: Bills that mandate auto enrollment of 401(k)s. Web Keywords: retirement, pension, state employee pension plan, IRA B
PRODUCERS: GENERALLY Position: Monitor any proposals concerning other producer issues not covered by a keyword. Web Keywords: producer licensing, producer regulation B Agents (Somers); ISC Producer Licensing (RETIRED) PRODUCERS: SALES PRACTICES Background: On December 29, 2004, the NAIC adopted new language that amends the NAIC Producer Licensing Model Act to implement disclosure requirements that ensures that consumers are provided the necessary information to understand the manner in which brokers are compensated for the sale of insurance products. The NAIC deferred action on the following issues until no later than March 2005: consideration of fiduciary duty; consideration of all quotes received by a broker; and disclosure of producer-owned reinsurance arrangements. Insurance bid-rigging revelations by NY Attorney General Spitzer in 2004 inaugurated sweeping re-evaluation of broker regulation issues, spilling into agent-broker definitions, producer compensation disclosure, rebates, and broker fiduciary duty. Position: Support amendments to Producer Licensing Model Act adopted by the NAIC on December 29, 2004. Support legislation (a) if introduced in any jurisdiction; or (b) as an alternative to legislation the industry finds objectionable. Compliance Notes: Include in summary how enacted or amended provisions compare to model act. Web Keywords: agent licensing, producer licensing, producer regulation B Agents (Somers) LILS #68 Agent Commission Assignment PRODUCERS: SENIOR DESIGNATIONS Background: On September 24, 2008, the NAIC adopted the Model Regulation on the Use of Senior-Specific Certifications and Professional Designations in the Sale of Life Insurance and Annuities. As adopted, the model prohibits the use of certain senior-specific certifications and professional designations in advising or servicing seniors in the purchase of life insurance and annuities. Position: Support: The introduction of the model regulation in any jurisdiction. Compliance Notes: Include in summary how enacted or amended provisions compare to model act. Web Keywords: agent licensing, annuity, life insurance, producer licensing, producer regulation; senior-specific certifications B LILS#42 Certifications ISC Annuity Disclosure & Suitability & Certifications
RISK CLASSIFICATION: GENETIC INFORMATION/ TESTING Risk Classification: Generally Position: Monitor state proposals that would prohibit or limit underwriting based on genetic tests or information. Support enactment of state legislation which would limit underwriting for life, disability income, or long-term care insurance provided: --(i) traditional medical underwriting on the basis of traditional medical information and medical tests is not jeopardized; --(ii) continued access to and underwriting on the basis of all medical information (including genetic information and the results of genetic tests) which exists at the time the individual applies for coverage is allowed; and --(iii) even if limitations placed on life insurers’ right to require individuals to undergo genetic tests, the right to require routine medical tests in use today and any other tests, including genetic tests, once they become generally accepted in clinical practice is preserved. Support also a requirement that there be a relationship between medical information that is the basis for an underwriting action and the cost of insurance. Compliance Notes: Include in summary how provisions relate to ACLI positions on genetic testing; also, if provisions were enacted or amended in compliance or in reaction to the federal Genetic Testing Information Act (GINA). Web Keywords: genetic testing, GINA (if applicable) B Risk Classification (McGuffey) LILS# 6 Genetic Testing SR Liaison: Gerni RISK CLASSIFICATION: PRESCRIPTION DRUG HISTORY Risk Classification: Generally Position: Oppose proposals relating to prescription drug histories, that would limit life, disability income or long-term care insurers’ right to obtain, use, or underwrite on the basis of information relating to existing or prospective customers’ prescription drug histories. Monitor proposals relating to prescription drug histories that do not impact insurers' ability to obtain, use, or underwrite on the basis of prescription drug histories. Web Keywords: risk classification B Risk Classification (McGuffey)
TERRORISM: GENERALLY Background: As a result of the tragic events of September 11, 2001, many states introduced legislation addressing acts of terrorism. Position: Monitor terrorism laws if (1) requirements are not overly burdensome to company operations; (2) it provides “good faith” for compliance/noncompliance; (3) it does not impose onerous civil penalties or allows civil actions; and (4) provisions are based on the USA Patriot Act. If otherwise, a position would be determined on a case-by-case basis. Compliance Notes: Bills of interest that do not have policy exclusions include, but are not limited to: legislation regarding money laundering; victims’ compensation funds; use of affidavits in lieu of death certificates; missing policy determination procedures; terrorism loss accounting, financial effects and solvency reviews; modification of benefits or terms regarding disability, long-term care, worker’s compensation, unemployment insurance, and retirement funds; claim practices; and premium payment deadline extensions or modifications. Web Keywords: Terrorism Risk Insurance Act, reinsurance, risk classification. B Life Contracts (Auerbach) Reinsurance (Wolf) Risk Classification (McGuffey) TERRORISM: POLICY EXCLUSIONS Insurance Contracts: Generally Policy Form Filing Background: If their policies cover loss or disability attributable to terrorism, primary insurers may be penalized if they are unable to reinsure their exposure and cannot amend those policies to limit or exclude terrorism losses. Exclusions in general should be defended as traditional risk management techniques. Insurers use exclusions carefully lest they lose market share to others willing to assume the risk. Position: Monitor terrorism exclusions--which are one way for an insurer to manage risk. Terrorism exclusion provisions were introduced in reaction to (1) the events of the 9/11 terrorist attacks; and (2) the decision by reinsurers providing catastrophic coverage to limit or eliminate terrorism risk for the policies being renewed or underwritten. B Life Contracts (Auerbach) Reinsurance (Wolf) Risk Classification (McGuffey) THIRD PARTY ADMINISTRATORS Position: Support NAIC Third Party Administrator Statute which imposes requirements upon anyone who directly or indirectly solicits, effects, underwrites or collects premium for, or who settles claims in connection with, life or health insurance coverage or annuities. Compliance Notes: Third-party administrators are covered within a limited basis in the Reinsurance Service. Web Keywords: third party administrator B Reinsurance (Wolf) limited coverage
WAR: POLICY EXCLUSIONS Insurance Contracts: Generally Policy Form Filing Position: Monitor exclusions, which help an insurer manage risk. War exclusions typically exclude insurance coverage for loss or disability attributable to acts of war. Acts of war can be declared or undeclared as such, but they are usually made by governments against other governments. The exclusion can be further refined by reference to particular geographic areas, or theaters, of war. Support exclusions in general as traditional risk management techniques. Insurers use exclusions carefully lest they lose market share to others willing to assume the risk. Web Keywords: risk classification, underwriting B Life Contracts (Auerbach); Reinsurance (Wolf); Risk Classification (McGuffey); LILS #52 Exclusions for Coverage WITHHOLDING: CHILD SUPPORT Position: Monitor bills that require life or health insurers to withhold insurance benefits to satisfy the child support obligations of the policyholder or beneficiary. Web Keywords: data match B ADVANCE all provisions related to an insurer’s obligation. WORLDWIDE SOURCING Position: Oppose bills that place restrictions on tax and fee benefits to entities that outsource jobs to foreign countries. Web Keywords: worldwide sourcing B *Discretionary Law: can be B or AB. Laws on topics that are not normally advanced will be advanced if they contain a specific compliance requirement for insurers.