National Conference of Insurance Legislators (NCOIL) 2012 Summer Meeting Report

 

The National Conference of Insurance Legislators (“NCOIL”) has issued a report of action taken at its Summer Meeting in Burlington, Vermont, held from July 12-15, 2012.  More than 250 state legislators, insurance regulators, federal officials, media, and consumer and industry representatives attended.

The report, which is reprinted below, contains a brief synopsis of various Committee actions followed by detailed summaries. Click on the hyperlinks in bold type to access the referenced document.

 

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Legislators at the Summer Meeting:

Health, Long-Term Care & Health Retirement Issues Committee

• deferred bylaws-required review of NCOIL Mental Health Parity Model Act

International Insurance Issues Committee

• adopted a resolution on U.S. trade activity/state preemption
• determined to solicit and submit to the USTR the names of legislators interested in USTR advisory committee membership

Life Insurance & Financial Planning Committee

• amended and adopted an NCOIL model on unclaimed life insurance benefits

Property-Casualty Insurance Committee

• adopted a model on use of insurance binders as evidence of coverage
• readopted an NCOIL Model State Uniform Building Code
• requested proposed interested-party amendments to a draft certificates of insurance model act, for review via conference call prior to the Annual Meeting
• requested comments on a draft travel insurance model, for review via conference call prior to the Annual Meeting
• deferred until the Annual Meeting a draft model on third-party litigation financing
• deferred until the Annual Meeting a draft resolution on natural catastrophe insurance reform

State-Federal Relations Committee

• adopted a resolution on producer licensing modernization

Workers’ Compensation Insurance Committee

• adopted an updated NCOIL resolution regarding Medicare secondary payer reforms
• extended review of physician-dispensed repackaged drug issues at the Annual Meeting

In addition, legislators participated in:

• a roundtable on the Federal Insurance Office
• a symposium on healthcare reform implementation hurdles

 

INTERNATIONAL INSURANCE ISSUES COMMITTEE

U.S. TRADE ACTIVITY & STATE PREEMPTION

On July 13, the Committee unanimously adopted a Resolution Urging Support for State Authority in U.S. Trade Negotiations that aims to strengthen the role of state legislators in U.S. trade talks. The resolution highlights lawmakers’ now-limited opportunities to comment, asserts the importance of state legislator input, and calls for appropriate transparency in trade negotiations. The Executive Committee unanimously adopted the resolution on July 15.

In addition-in order to facilitate broader legislative participation-the International Committee determined to solicit the names of NCOIL legislators who would be interested in joining a key USTR advisory group, the Intergovernmental Policy Advisory Committee (IGPAC), and to submit those names to the USTR.

 

LIFE INSURANCE AND FINANCIAL PLANNING COMMITTEE

UNCLAIMED BENEFITS

On July 13, the Committee adopted an updated Model Unclaimed Life Insurance Benefits Act at the conclusion of a special working session.  The model, first adopted in November 2011, was amended to require insurers to compare their in-force life insurance policies against the U.S. Social Security Death Master File (DMF) on a semi-annual basis; to remove an exemption for government and church plans; to bar insurers’ service providers, as well as insurers themselves, from charging policyholders service fees associated with DMF searches; and to set up protocol for insurer conduct post-identification of potential matches.  Also, a drafting note now offers the possibility of a delayed effective date of up to one year to allow insurers to comply with the model.  The Executive Committee unanimously adopted the amended model on July 15.

In general, the NCOIL model calls for timely insurer efforts to confirm an insured or account holder’s death, locate any beneficiaries, and provide them with claims forms and instructions.  In the event that benefits go unclaimed, the model provides clear procedures for life insurers to notify state treasury departments and to escheat the funds, per unclaimed property laws. 

 

PROPERTY-CASUALTY INSURANCE COMMITTEE

INSURANCE BINDERS

On July 15, after two special working sessions and review of numerous amendments, the Committee adopted a Model Act Regarding Use of Insurance Binders as Evidence of Coverage.  The model-an outgrowth of Committee debate over certificates of insurance-would keep insurance binders in force until a policy is issued or cancelled by an insurer.  Prior to adoption, the Committee omitted language that would have required lenders to accept binders as evidence of coverage. The Executive Committee unanimously adopted the model on July 15.

The binder model responds to lender concerns over possible language in a draft certificates of insurance model act that would deem all certificates to be “for information only”-including those used by lenders to verify a borrower’s coverage before they receive an insurance policy.  Legislators on a July 27 Committee call had agreed to pursue development of the binder model before resuming debate on certificates of insurance model legislation.  

 

CERTIFICATES OF INSURANCE

On July 15 following its adoption of a Model Act Regarding Use of Insurance Binders as Evidence of Coverage, the Committee voted to request interested-party amendments to a draft Certificates of Insurance Model Act and to consider proposed revisions via conference call prior to the Annual Meeting.  The draft model, which is a substitute version of an initial model set aside by the Committee on a May 11 call, would ban changes to certificate forms and would assert that certificates are not insurance policies and do not provide different or extra coverage than the policy does. 

 

TRAVEL INSURANCE

On July 13, in order to facilitate discussion at the Annual Meeting, the Committee voted to request comments on a draft Limited Lines Travel Insurance Model Act and to consider any submissions via conference call prior to the meeting.  The draft model would set forth licensing and other requirements for limited lines travel insurance producers.  It would 1) require a producer to keep a register of travel companies/retailers who offer travel insurance on the producer’s behalf; 2) require a producer to comply with state insurance and fingerprinting laws; 3) require marketing materials to clearly identify a travel insurance producer; and 4) subject travel companies/retailers to instruction and training on travel insurance.

 

THIRD-PARTY LITIGATION FINANCING

On July 13, the Committee deferred until the Annual Meeting a draft Consumer Legal Funding Model Act, due to time constraints.  The proposed model-while not opposing third-party litigation financing or capping third-party fees-would mandate various contract disclosures, including that of a consumer’s right of rescission.  The model also would 1) require attorneys to sign off on a funding transaction; 2) prohibit funding providers from paying referral fees to attorneys, medical providers, and others; 3) establish a process for distributing proceeds; 4) require a borrower to pay a funding provider at predetermined times/amounts; and 5) ban funding providers from assessing fees more than three years after a consumer receives his/her money from the funding company.  The draft model is based on proposed Tennessee legislation.

 

NATURAL CATASTROPHE INSURANCE

On July 13, the Committee deferred until the Annual Meeting a draft Resolution Supporting State Control over Natural Catastrophe Policy, due to time constraints.  The resolution highlights NCOIL building code and other natural catastrophe efforts and supports states’ ability to establish catastrophe financing mechanisms-while recognizing that some insured catastrophe losses may be too large for states to handle without federal aid.

 

STATE-FEDERAL RELATIONS COMMITTEE

PRODUCER LICENSING

On July 12, the Committee adopted a Resolution Urging Producer Licensing Modernization.  The resolution, which builds on long-standing NCOIL support for producer licensing reform, endorses regulatory uniformity, encourages states to continue their ongoing state modernization efforts to help forestall federal regulatory intrusion, and urges state legislators and regulators to work together to eliminate unnecessary non-resident licensing barriers.  The Executive Committee unanimously adopted the resolution on July 15.

 

WORKERS’ COMPENSATION INSURANCE COMMITTEE

PHYSICIAN DISPENSING OF REPACKAGED DRUGS

On July 12, the Committee discussed possible approaches to addressing rising workers’ compensation costs related to physician dispensing of repackaged drugs and determined to consider the issue further at the Annual Meeting.  The Committee reviewed a Montana approach, which prohibits physician dispensing (with limited exceptions), and a Florida approach, which provides that the price of a repackaged drug cannot be greater than the price of that same drug in its original packaging.

 

MEDICARE SECONDARY PAYER REFORMS

On July 12, the Committee adopted an updated version of a 2008 NCOIL Resolution Regarding Medicare Secondary Payer Reforms.  The original resolution endorsed H.R. 2549, a bill to establish clear criteria for when a Medicare Set-Aside (MSA) should be reviewed, create certainty as to the rules for calculating an MSA, establish safe harbor provisions for settlements under a certain amount, and provide optional direct payment to CMS, among other things. The updated resolution supports a similar bill, H.R. 5284, introduced by Rep. David Reichert (WA).  The Executive Committee unanimously adopted the updated resolution on July 15.

 

MODELS FOR SUNSET/RE-ADOPTION, AS PER BYLAWS

The Property-Casualty Insurance Committee renewed support for a 2007 NCOIL Model State Uniform Building Code.  The Health, Long-Term Care & Health Retirement Issues Committee deferred its review of an NCOIL Mental Health Parity Model Act, first adopted in 2001, until the Annual Meeting pending federal guidance concerning mental health coverage in essential health benefits packages, which must be offered beginning in 2014.

 

OTHER MEETINGS

ROUNDTABLE ON FEDERAL INSURANCE OFFICE

On July 12, representatives of the American Academy of Actuaries, the American Bankers Insurance Association, the American Council of Life Insurers, the Center for Economic Justice, the Independent Insurance Agents and Brokers of America, and the NAIC offered perspectives on current FIO activity and discussed how a much-anticipated FIO report to Congress might impact the future of state regulation.  Among other things, speakers addressed concerns that the FIO could recommend establishing a federal insurance regulator.  The roundtable furthered NCOIL efforts regarding the FIO and other elements of the 2010 Dodd-Frank Act. 

 

SYMPOSIUM ON HEALTHCARE REFORM: WHAT HURDLES LIE AHEAD?

On July 13, legislators participated in a symposium entitled Healthcare Reform: What Hurdles Lie Ahead?  David Mineta, Deputy Director of Demand Reduction for the Office of National Drug Control Policy, opened the symposium with a briefing on federal efforts to reduce substance abuse and on related provisions in the Affordable Care Act.  Legislators and panelists representing the U.S. Department of Health & Human Services (HHS), the Ohio State Senate, America’s Health Insurance Plans, Families USA, and the Vermont Agency of Administration discussed how the recent U.S. Supreme Court decision upholding the federal Affordable Care Act will impact state implementation efforts-specifically regarding health insurance exchanges, Medicaid expansion, and consumer protections.

 

In addition, legislators considered the following issues:

 

• state of the bond insurance marketplace
• contingent annuity regulation
• discontinued health insurance plans
• Dodd-Frank Act rulemaking
• FEMA flood insurance activity
• international accounting standards
• lender-placed insurance regulatory activity
• long-term care insurance costs
• workers’ comp for migrant farm workers
• opioid abuse and workers’ comp costs
• state laws mandating oral chemotherapy coverage
• principles-based reserving initiatives
• SLIMPACT implementation
• an NAIC Solvency Modernization Initiative (SMI)

 

 

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