Legislative Changes Summary – Captive Insurance Act Amendments 

Lines 50 thru 52 – adds definition for ‘affiliated company’. 

Lines53 thru 57 – adds definition for ‘alien captive insurance company’. 

Lines 86 thru 87 – adds ‘captive reinsurance company’ and ‘special purpose captive insurance company’ to definition of ‘captive insurance company’. 

Lines 88 thru 90 – adds definition for ‘captive reinsurance company’. 

Lines 98 thru 99 – adds definition for ‘commissioner’. 

Lines 100 thru 107 – adds definition for ‘consolidated debt to capital ratio’. 

Lines 108 thru 110 – adds definition for ‘consolidated GAAP net worth’. 

Line 116 – adds definition for ‘department’. 

Line 117 – adds definition for ‘GAAP’. 

Lines 145 thru 148 – deletes definition for ‘out of state captive insurance company’.  Definition for ‘alien captive insurance company’ replaced this definition. 

Lines 165 thru 167 – added definition for ‘qualifying reinsurer parent company’. 

Lines 180 thru 181 – added definition for ‘treasury rates’. 

Line 198 – adds prohibition to use of capital and surplus of a sponsored captive insurance company. 

Lines 239 thru 240 – provides statutory authority for the commissioner to issue orders to carry out the provisions of the captive insurer chapter. 

Line 257 – clarifies what risks a pure captive insurer may insure. 

Lines 266 thru 269 – clarifies what risks a special purpose captive insurance company may insure. 

Line 290 – replaces ‘director’ with ‘commissioner’. 

Lines 397 thru 399 – adds paid in capital requirements for a special purpose captive insurance company. 

Lines 401 thru 402 – adds ‘cash equivalent’ to forms of paid in capital. 

Lines 468 thru 471 – adds free surplus requirement for a special purpose captive insurance company. 

Lines 555, 558, 562, 565, 670, 672, 791, 793, 796, 799 – replaces ‘out of state’ with ‘alien’. 

Lines 671 thru 673 – clarifies when an alien insurer may be a party to a merger. 

Lines 697 thru 699 – adds insurance holding company to the list of authorized sponsors of a sponsored captive insurance company. 

Lines 700 thru 701 – clarifies the business written by a sponsored captive insurance company. 

Lines 703 thru 717 – clarifies the type of insurance company that a sponsored captive insurance company may use to front its business. 

Line 738 – provides statutory authority for commissioner to approve risks insured by a sponsored captive insurance company. 

Lines 742 thru 754 – adds section reference the discounting of loss and loss adjustment expense reserves. 

Lines 762 thru 763 and 767 – add captive reinsurance company to the companies required to submit reports. 

Lines 775 thru 778 – clarifies the type of report required from an association captive insurance company and an industrial insured group. 

Lines 823 thru 825 – clarifies what chapters of Title 31A apply to captive insurance companies. 

Lines 831 thru 850 – adds section reference the incorporation of a captive reinsurance company. 

Lines 854 thru 902 – adds section reference captive reinsurance companies. 

Lines 908 thru 920 – adds section reference minimum capitalization or reserves for a captive reinsurance company. 

Lines 926 thru 927 – adds section reference the management of assets of a captive reinsurance company.

Legislative Changes Summary – Interstate Insurance Product Regulation Compact 

Lines 1 thru 787 – adopts the NAIC Interstate Compact.  Provides for the regulation of product filings and advertising through an interstate product regulation commission.  Goal is uniform filing requirements for national insurers that file the same product in multiple states.

Legislative Changes Summary –Insurance Fraud Law Amendments 

Lines 53 thru 55 – adds definition for ‘runner, capper, or steerer’. 

Lines97 thru 98 – adds section making use of a ‘runner, capper, or steerer’ insurance fraud. 

Lines 131 thru 145 – adds section establishing civil penalties for insurance fraud. 

Lines 145 thru 159 – adds section establishing mandatory reporting of fraudulent title acts and establishing penalties for failure to report. 

Lines 181 thru 186 – adds three items to list of items constituting insurance fraud.  (1) knowingly employ, use, or act as a runner, capper, steerer for the purpose of committing insurance fraud; ((2) knowingly assists, abets, solicits, or conspires with another to commit insurance fraud; (3) knowingly supplies false or fraudulent material information in any document or statement required by the department. 

The above changes are needed to deal with current fraudulent acts in our state.  The changes are supported by the insurance industry special investigative units (fraud units).

Legislative Changes Summary – Health Insurance Law Amendments 

Line 71 – changes reporting date to Health and Human Services Interim Committee from July 1 to October 1 each year.  Change allows for the inclusion in the report of uninsured population data that does not become available until September of each year. 

Line 92 – changes title to delete ‘and approval’ from form filing section.  UID does not ‘approve’ filings.  Having ‘approval’ in title confuses industry. 

Lines 271 thru 272 – adds specific rulemaking authority to interpret, describe, and clarify out-of-area court ordered dependent coverage. 

Lines 317 thru 319 – adds independent review if adverse benefit determination involves payment of a claim or denial of coverage.  This subsection was left out when the subsection was rewritten in 2003. 

Line 350 – deletes group or blanket accident and health conversion policies.  Conversion policies are individual policies issued when a certificate holder leaves a group policy. 

Lines 351 thru 352 – clarifies that the ‘group’ referred to is a discretionary group authorized under section 31A-22-509. 

Lines 406 thru 410 – adds requirement for group, blanket, and student health benefit policies to provide a certificate of creditable coverage when a covered person leaves the group, blanket, or student health plan. 

Lines 419 thru 420 – changes reference to Operation Desert Shield or Operation Desert Storm to any mobilization into the United States armed forces. 

Lines 426 thru 428 – changes reference to Operation Desert Shield or Operation Desert Storm to any mobilization into the United States armed forces. 

Line 435 – changes title to clarify subjects of Chapter 30. 

Lines 542 thru 543 – changes actuarial certification date from March 15 to April 1 of each year.  Change makes it easier for industry to comply.

Legislative Changes Summary – Insurance Law Amendments 

Line80 – corrects spelling error. 

Lines 152 thru 153 – adds ‘information collected from an applicant for an annuity’ to definition of application.   

Lines 370 thru 373 – adds definition of ‘escrow agent’ to definition of escrow. 

Lines 454 thru 483 – restates definition of ‘health benefit plan’. 

Line 816 – clarifies that ‘participation’ is based on group health care insurance coverage. 

Lines 1139 thru 1141 – restates sentence to clarify that National Association of Insurance Commissioners refers to rates and examination manual. 

Lines 1215 thru 1223 – adds subsection clarifying that records from other insurance regulators and the National Association of Insurance Commissioners (NAIC) will be protected to the extent they are protected under the laws of the other insurance regulators or terms and conditions of the NAIC. 

Lines 1237 thru 1238 – deleted prohibition of extending fee payment deadline. 

Line 1263 – adds verb ‘is’ to correct grammatical error. 

Lines 1605 thru 1617 – adds specific authority to commissioner to retain technical experts to assist in reviewing information filed in connection with a merger or other acquisition of control of an insurer and adds authority for the commissioner to bill applicants for expenses pertaining to these technical experts.  

Lines 1624 thru 1643 – adds new section prohibiting the public display of or use of social security numbers by insurers.  This provision prohibits the use of social security numbers as policy numbers or as identifying numbers on cards or other documents used to access products or services provided or covered by the insurer. 

Lines 1661 thru 1665 – clarifies meaning of ‘financial institution located in this state’. 

Lines 1693 thru 1697 – adds definition of ‘domicile’ to Chapter 29, Comprehensive Health Insurance Pool Act. 

Lines 1752 thru 1755 – clarifies definition of ‘resident’ or ‘residency’ as those terms apply to Chapter 29, Comprehensive Health Insurance Pool Act. 

Line 1766 – changes number of board members from 11 to 12. 

Line 1778 – adds a licensed producer with an accident and health line of authority to board 

Line 1825 – deletes limitation to ‘at the time of application’. 

Line 1840 – deletes limitation to ‘at the time the pool coverage is applied for’. 

Line 1844 – adds clarification for ‘HIPAA eligible’ individuals. 

Lines 1855 thru 1861 – changes effective date of coverage for individuals covered under another HIP pool plan to termination date if premium is paid back to that date and deletes administrator’s authority to assign a different effective date. 

Lines 1870 thru 1871 – establishes effective date of coverage for individuals with previous coverage in another HIP pool. 

Lines 1914 thru 1918 – restates preexisting pregnancy exclusion and clarifies that exclusion does not apply to HIPAA eligible individuals. 

Line 1919 – adds subsection (8)(a) to provisions of subsection (9). 

Lines 1929 thru 1930 – deletes language rendered unnecessary by changes in lines 1914-1918 and line 1921. 

Lines 1939 thru 1941 – deletes section dealing with employer contributions.  HIP pool policies are individual policies not group policies and therefore section dealing with employer contributions is not necessary.

Legislative Changes Summary – Life Insurance Law Amendments 

Line 33 – changes title to delete ‘and approval’ from form filing section.  UID does not ‘approve’ filings.  Having ‘approval’ in title confuses industry. 

Lines 108 thru 112 – adds specific rule making authority for standards for buyer’ guide, disclosure, illustration, policy summary, and recommendation used in connection with sale of life insurance policies and contracts. 

Lines 121 thru 122 – clarifies that an insured group must have been formed for a purpose other than the purchase of insurance. 

Legislative Changes Summary – Insurance Liquidation Law Amendments 

Line 74 – increases value of property that liquidator can deal with without express written permission of the court from $25,000 to $100,000. 

Lines 149 thru 154 – adds subsection to (1) deem a claim approved by the court as a paid claim; (2) allow the liquidator to submit the claim to the reinsurer; and (3) providing interest accrual for on unpaid billed amounts. 

Line 164 – adds dollar amount ceiling of $100,000 to voluntary commutation that liquidator can enter into without review by the court.

Legislative Changes Summary – Non-forfeiture 

Line 6 – corrected previous error.  There is no such thing as a reinsurance group annuity. 

Lines 27 thru 30 – added clarifying language. 

Line 33 – added clarifying language. 

Lines 35 thru 36 – changed required provision to an optional provision. 

Lines 64 thru 65 – allows annuity issuers to continue to use the current minimum values based on a fixed rate of 3% until June 1, 2006. 

Lines 113 thru 160 – requires annuity issuers to use new minimum values based on the rate indexed to treasuries for policies issued after June 1, 2006; allows annuity issuers to use new minimum values at any time during the period June 1, 2004 through June 1, 2006. 

Lines 243 thru 247 – adds specific rulemaking authority to implement provisions of this non-forfeiture law and interpret, describe, clarify the application of this non-forfeiture law to unusual or new forms of annuities.

Legislative Changes Summary – Property and Casualty Insurance Law Amendments 

Lines 60 thru 61 – clarifies that rate filings must be filed under procedures established by the commissioner. 

Lines 117 thru 118 – clarifies that premium increase prohibition for inquiries or not at fault claims applies to personal property casualty insurance for a vehicle or private residence or dwelling. 

Line 131 - changes title to delete ‘and approval’ from form filing section.  UID does not ‘approve’ filings.  Having ‘approval’ in title confuses industry. 

Lines 372 thru 376 – clarifies when underinsured motorist coverage can be applied. 

Line 507 – clarifies that the $3,000 limit is ‘the total minimum required coverage’. 

Lines 588 thru 590 – adds the name, address, city, state, and zip code of the loss payee of each insured vehicle to the record submitted to the Uninsured Motorist Identification Database Program. 

Lines 665 thru 667 – adds requirement for the signature of the buyers/borrowers, sellers, and escrow officers to any changes to the HUD-1 Settlement Statement initiated after the final closing documents are executed.

Legislative Changes Summary – Producer Licensing Insurance Law Amendments 

Lines 132 thru 133 – added definition of ‘resident’ for individual and agency licensing purposes. 

Lines 141 – 148 – clarifies definition of ‘solicit’.

Line 172 – clarifies that application applies to initial and renewal individual licenses 

Line 196 – clarifies that application applies to initial and renewal agency licenses

Line 228 – adds requirement to submit an application for a license to general licensing requirements 

Line 316 – clarifies that revocation applies to a license or to a line of authority 

Line 420 – deletes incorrect code reference 

Lines 451 thru 452 – deletes requirement for insurers to biennially renew producer appointments.  Appointments are in force until terminated by the insurer. 

Line 484 – clarifies that property and casualty lines of authority are pre-requisite for surplus lines line of authority 

Line 506 – deletes requirement for agencies to biennially renew producer designations.  Designations are in force until terminated by the agency. 

Lines 546 thru 549 – deletes unnecessary section reference requirement for issuing a single license for a single fee and an obsolete fee section.  An adjuster receives one license with one or more lines of authority for a single fee. 

Line 571 – adds ‘current calendar year’ to retention requirement for producer records.  This change adopts the NAIC Model Records Act records retention standard of ‘current calendar year plus three years’. 
 

Legislative Changes Summary – Viatical Settlement Act Amendments 

Lines 33 thru 40 – adds criteria for initial license for viatical settlement providers.  Additional criteria relate to competency, trustworthiness, intention to act in good faith, business reputation, and experience, training, and education of viatical providers. 

Lines 69 thru 70 – adds criteria for renewal license for viatical settlement providers.  Additional criteria relate to competency, trustworthiness, intention to act in good faith, business reputation, and experience, training, and education of viatical providers. 

Lines 98 thru 100 – adds additional rulemaking authority for prohibited practices and payment requirements.

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