|
|
|||||||
|
|
|
|||||||
|
NALC What's New... Read the latest NALC publications: In the News Upcoming Meetings Register Now!
|
Legislative & Regulatory ReportDecember 31, 2008 CLICK HERE for the PDF version of this report Inside this IssueState Resources on the NALC Members WebsiteAs the new year begins and state legislatures will be in full swing, NALC members may want to make use of several resources available on the NALC members website. The updated State Legislative Session calendar includes convening and adjournment dates for all state assemblies. The 2008 Election Results table will give you a summary of the political composition of all state legislatures. The state resources also include an interactive map that provides links to all state legislative, insurance department and general websites. Each state page also includes contact information for insurance commissioners. The information is updated monthly. The NALC members website also features interactive versions of the NALC Newsletter and Legislative and Regulatory Report, Federal resources, extensive information about the Preneed Mortality Table Adoption process, and a detailed member directory. This information is available only to NALC member companies, and requires a user name and pass word for access. If you do not know your login information, contact Dawn Bergsma by e-mail at nalc@comcast.net. Preneed Mortality Table Adoption UpdateWe have reached 26 states. Once again, thank you to all of the interested parties who helped gain this substantial achievement! Additional information is available at the NALC members website at http://members.nalc.net/preneed.htm. Look for the updated "Who, What, When" report and the activity updates. Industry members and/or state insurance departments can network about any adoption activities by contacting the ad hoc industry coordinator, Gerry Kraus, Homesteaders Life Company (515-440-7705) gkraus@homesteaderslife.com.
Alabama Installation of Vaults or Outer Burial Containers Before Need (Bulletin)In a bulletin dated December 5, 2008, the Alabama Department of Insurance explained the circumstances under which the Alabama Preneed Funeral and Cemetery Act allows the installation of a vault or outer burial container to be installed before need. The bulletin provides detailed guidance for this practice and requirements for applicable preneed contracts. In addition, the bulletin includes a disclosure form to be used for preneed installations. This bulletin supersedes a bulletin issued on July 30, 2008 on the same subject. All bulletins are available at http://www.aldoi.gov/Legal/Bulletins.aspx. AlaskaProposed RegulationsThe Alaska Division of Insurance has released the following new regulations. Regulations Dealing with Continuing Education for Licensees, Surplus Lines Premium Reports, Producer Duties Regarding Replacement Policies, Mortality Tables, and Insurer Fees: This regulation makes several amendments to existing rules related to Life Insurance Policy and Annuity Contract Replacements, Licensing Requirements, Mortality Tables and Fees. Regulation Dealing with Military Sales Practices Regarding Life Insurance and Annuity Products: This regulation adds a new section relation to military sales practices. CaliforniaPreneed Life Insurance Minimum Standards for Determining Reserve Liabilities and Nonforfeiture Values (Bulletin)This bulletin approves the 1980 Commissioners Standard Ordinary ("CSO") Life Valuation Mortality Table for use in determining the minimum standard of valuation of reserves, and the minimum standard for nonforfeiture values, for preneed insurance products. For the purposes of this bulletin, a "preneed insurance policy" is any life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. The status of the policy or contract as preneed insurance is determined at the time of issue in accordance with the policy form filing. Preneed insurance policies issued on or after January 1, 2009 and before January 1, 2012 may use the Ultimate 1980 CSO in the calculation of minimum reserves and minimum nonforfeiture values. If an insurer elects to use a mortality table approved by the Commissioner other than the Ultimate 1980 CSO as a minimum standard for any preneed insurance policy issued on or after January 1, 2009 and before January 1, 2012, the insurer shall provide, as a part of the regulatory asset adequacy issues summary, an annual written notification to the Commissioner. KansasNotice of Public Hearing: Preneed Life Insurance Minimum Mortality StandardsA public hearing will be conducted at 1:30 p.m., February 24, 2009, in the third floor conference room, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, to consider the adoption of this proposed rule and regulation. All interested parties may submit written comments prior to the hearing to John Wine, Kansas Insurance Department, 420 S.W. 9th, Topeka, Kansas, 66612-1678, via facsimile at 785-291-3673, or via email at jwine@ksinsurance.org. All interested parties will be given a reasonable opportunity to present their views orally on the adoption of the proposed regulation during the hearing. This regulation is being proposed to establish the 1980 Commissioners Standard Ordinary Life Valuation Mortality Table as the valuation mortality table used in determining the minimum reserves for pre-need life insurance contracts. Pre-need life insurance is defined as any life insurance policy or certificate that is issued in combination with, in support of, with an assignment to, or as a guarantee for a prearrangement agreement for goods and services to be provided at the time of and immediately following the death of the insured. MaineNotices of Adoption of New RulesThe Maine Bureau of Insurance has published notices of adoption for two new regulations. Both regulations are effective January 1, 2009. Rule Chapter 340: Preneed Life Insurance Minimum Mortality StandardsThe Bureau of Insurance has published notice of adoption of Rule Chapter 340. This rule establishes the 1980 Commissioners Standard Ordinary (CSO) Life Insurance Valuation Mortality Table as the required minimum statutory reserve valuation and nonforfeiture value standard for preneed life insurance policies. Chapter 340 has been amended effective January 1, 2009. Rule 340 was originally adopted in 1978 to specify acceptable mortality tables for use in determining minimum reserves and nonforfeiture benefits for life insurance. The purpose of the current amendment is to establish for preneed insurance products minimum mortality standards for reserves and nonforfeiture values, and to require the use of the 1980 Commissioners Standard Ordinary (CSO) Life Valuation Mortality Table for use in determining the minimum standard of valuation of reserves and the minimum standard nonforfeiture values for preneed insurance products. The amendment also makes minor technical corrections to existing portions of the Rule. Rule Chapter 585: Life Insurance Third-Party Notice of CancellationThe Superintendent of Insurance proposed Rule 585 which requires third-party notice prior to cancellation of an individual life insurance policy for nonpayment of premium. The purpose of this Rule is twofold. First, the Rule’s third-party notice provisions allow a policyholder to establish in advance a line of communication that will increase the likelihood that adequate notice is given if an insurer intends to terminate coverage for nonpayment of premiums. Second, the Rule establishes conditions and procedures to reduce the danger that persons suffering from organic brain disease will lose life insurance coverage because of their disease. This Rule applies to all individual life insurance policies and riders delivered, issued for delivery, continued, or renewed in the State of Maine. An individual life insurance policy that has been in force for at least one year may not be terminated for nonpayment of premium, unless at least 21 days prior to the expiration of the policy’s grace period, the insurer has mailed a notice of cancellation to the policyholder and any third party designated by the policyholder by name and address in writing. The notice shall state the reason(s) for cancellation and the date that coverage is to terminate. If the policy is subject to cancellation for nonpayment of premium, the notice shall include the amount of unpaid premium and the date by which premium must be paid to avoid policy cancellation. At its option, an insurer may provide other notification regarding termination of coverage or other rights to the policyholder and any designated third party. The notice shall include an explanation of the reason for termination and the time and method by which termination may be avoided. If the reason for termination is beyond the policyholder’s control, the notice shall so state. This optional notification is in addition to, not a substitute for, other requirements of law or contract. MassachusettsBulletin 2008-20: Licensing Requirements for Variable Life/Variable Annuities Lines of AuthorityThe Division of Insurance has received inquiries regarding its licensing requirements for producers and companies who wish to market and sell variable products, including variable life and variable annuity products. Some of these inquiries pertain to whether the licensing requirements are different if a producer or a company intends to market and sell only group variable products rather than individual variable products. The purpose of this Bulletin is to inform all interested persons that the Division’s licensing requirements are uniform with regard to all producers and companies who wish to market and sell any kind of variable life or annuity product, regardless of whether it is an individual or a group product. Some producers and companies who market and sell group variable life or annuity products in the Commonwealth maintain that the requirements pertaining to the sale of such individual products should not apply to them. They assert that these requirements should not apply to them because, unlike individual variable products, group variable products are exempt from registration as securities with the Securities and Exchange Commission ("SEC"). Due to this exemption, the individuals who market and sell these group products are not required under the securities laws to be registered with the SEC, or affiliated with broker-dealers. Finally, these individuals are not required to take Financial Industry Regulatory Authority ("FINRA"), formerly known as National Association of Securities Dealers ("NASD"), examinations because they are exempt from registration with the SEC. Notwithstanding that these individuals are not required by the federal securities laws to be registered with the SEC and that such group products are exempt from registration as securities with the SEC, the Division requires that they possess the necessary qualifications and knowledge to market such products in the Commonwealth. For that reason, in addition to fulfilling all other licensing requirements, all producers who wish to market and sell variable life and variable annuity products in the Commonwealth, including group variable products, must be licensed to do so. The licensing prerequisites for these lines of authority are: (1) the producer must have successfully passed a life insurance examination; (2) the producer must have successfully passed the FINRA (formerly NASD) Series 6 or Series 7 examinations; (3) the producer must be actively licensed and in good standing with FINRA; (4) the producer must possess a valid FINRA Central Registration Depository ("CRD") number; and (5) the producer must be affiliated with a registered broker/dealer who also is in good standing with FINRA. Producers are required to identify their CRD numbers on their licensing applications. The identification of this number serves as the producer’s attestation that he/she has met all of the five requirements detailed above. The producer has an ongoing obligation to ensure that all five of these requirements remain current and valid. If the Division determines that any of such requirements are no longer valid or active, or that the producer’s attestation in the first instance was inaccurate, it will take immediate remedial action against such producer and, if applicable, against his/her company. MichiganBulletin 2008-17: Preneed Life Insurance Minimum StandardsIn May 2008, the DeLoitte-UConn Actuarial Center completed a Preneed Insurance Mortality Study for the Society of Actuaries that found use of the 2001 CSO mortality table produced inadequate reserves and nonforfeiture values for preneed insurance products. This study found that preneed insurance is often sold to people 75 to 90 years old, in low face amounts with limited or no underwriting, since insurers often require a single premium, paid in advance. In response to this report, the NAIC developed a model regulation, 778 17-3, requiring use of the Ultimate 1980 CSO mortality table as the minimum mortality standard for determining reserve liabilities and nonforfeiture values for both male and female insureds for all preneed insurance contracts. The NAIC model also provides transition rules for those insurers currently using the 2001 CSO mortality table with specific directives for information and certification in the annual actuarial opinion memorandum until January 1,2012. By that date, the NAIC model requires all insurers selling preneed policies, annuities, or other preneed contracts to use at a minimum the Ultimate 1980 CSO to assure adequate reserves and nonforfeiture values for these products. In Michigan, MCL 500.2080 governs both the sale of life insurance policies and assignment of their proceeds to fund prepaid funeral and cemetery sales of goods and services contracts subject to the Prepaid Funeral and Cemetery Sales Act. Both the Insurance Code and the Prepaid Act contain numerous disclosure requirements and consumer protections to assure that adequate funds are available immediately following the death of the insured to pay for the funeral and cemetery goods and services purchased. Chapter 8 of the Michigan Insurance Code specifically requires life insurance companies to maintain reserves adequate to satisfy all contractual provisions of the products they sell and authorizes the Commissioner's to take action by order or rule to implement those requirements. Similarly, the Michigan Administrative Code, R 500.991 - R 500.997 grants the Commissioner authority to specify methods of actuarial analysis and actuarial assumptions, when, in the Commissioner's judgment, these specifications are necessary for an acceptable opinion to be rendered on the adequacy of reserves and related items, including nonforfeiture values under MCL 500.4060. The Commissioner has elected to address the inadequacy of reserves and nonforfeiture values for preneed products under the 2001 CSO mortality table by Order rather than rule. Under the statutory and administrative rule authority cited in Order 08-062-M, all life insurers selling preneed products in Michigan for a single premium, paid in advance, must maintain reserves and nonforfeiture values for such products as they would for annuity or endowment contracts under Appendices A-820 andA-830 of the NAIC Accounting practices and procedures manual, exclusive of use of the 2001 CSO mortality table. Commencing January 1, 2009, the annual actuarial opinion memorandum shall specify the methods used for these products in support of the company's asset adequacy testing. Order 08-062-M also authorizes all preneed insurers offering preneed products for periodic premiums and currently using the Ultimate 1980 CSO mortality table to continue its use after January 1,2009. The annual actuarial memorandum of these life insurers must specify use of the Ultimate 1980 CSO for male and female insureds in support of the company's asset adequacy testing. Order 08-062-M also incorporates the transition rules developed by the NAIC for continued use of the 2001 CSO mortality table for preneed products until December 31, 2011 if the actuarial opinion memorandum submitted in support of the company asset adequacy testing includes the notification and information required in the order. Finally, Order 08-062-M requires all preneed insurers selling products for periodic premiums to use as of January 1, 2012 the Ultimate 1980 CSO mortality table for male and female insureds in the calculation of minimum nonforfeiture values and minimum reserves. Any questions regarding this bulletin or the attached Order should be directed to: Office of Financial and Insurance Regulation Supervisory Affairs and Insurance Monitoring Division, 611 West Ottawa Street, P.O. Box 30220, Lansing, Michigan 48909-7720. MissouriBulletin 08-14: Statistical Reports Required of Insurers Using the 2001 CSO Preferred Class Structure TableThe purpose of this Bulletin is to notify insurers of the director's decision to waive the mortality experience reporting requirements for year 2008 for all insurers using the 2001 CSO Preferred Class Structure Table. Subsection (3)(C) of 20 CSR 400-1.170, Rule to Recognize the Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities, requires every authorized insurer using the 2001 CSO Preferred Class Structure Table to annually file with the director, the NAIC, or with a statistical agent acceptable to the director, statistical reports showing mortality and such other information as the director may deem necessary or expedient for the administration of this rule. Subsection (3)(C) also gives the director the discretion to exempt any company from said reporting requirement. For reporting year 2008, the director exempts all companies using the 2001 CSO Preferred Class Structure Table from filing the statistical reports required under 20 CSR 400-1.170. This rule has been amended by emergency rulemaking to allow application of the 2001 CSO Preferred Class Structure Table to certain insurance plans issued on or after January 1, 2007. A notice of a future public hearing on making the emergency amendment permanent will be published by the Secretary of State in a future issue of the Missouri Register. MontanaMeet Montana's Auditor Elect
The people of Montana have elected a new state auditor, who also serves as the insurance commissioner. Monica Lindeen is a successful business woman who served four terms in the Montana State Legislature. Monica served in a variety of leadership roles and is respected for her bipartisan efforts on economic development policy. As the Commissioner of Insurance and Securities, State Auditor Monica Lindeen's top priorities will be expanding the Insure Montana program, promoting wellness and preventive programs, and continuing to build Montana's health information technology network. NebraskaAdoption of Title 210 NAC Chapter 84 of the Insurance Department Rules and RegulationsChapter 84 of the Insurance Department Rules and Regulations was filed with the Secretary of State for adoption on December 15, 2008, with an implementation date of December 31, 2008. Chapter 84 entitled, "Model Regulation Permitting the Recognition of Preferred Mortality Tables for Use in Determining Minimum Reserve Liabilities" was adopted to recognize, permit and prescribe the use of mortality tables that reflect the differences in mortality between preferred and standard lives in determining minimum reserve liabilities of all ordinary policies of life insurance in accordance with Neb. Rev. Stat. §44-404 (a) (i) (c) and Title 210 Nebraska Administrative Code Chapter 71, Sections 005.01 and 005.02. The regulation permits the 2001 CSO Mortality Table to be split into preferred and residual classes. Additionally, it specifies the conditions for the use of the preferred rate structure tables in substitution for the 2001 CSO Mortality Tables. UtahProposed RuleR590-252. Use of Senior-Specific Certifications and Professional DesignationsThe purpose of this rule is to set forth standards to protect consumers from misleading marketing practices with respect to the use of senior-specific certifications and professional designations in the solicitation, sale or purchase of, or advice made in connection with, an annuity, accident and health, or life insurance product. This is a new rule. The comment period will end 2-17-09. No hearing is scheduled. This rule shall apply to any solicitation, sale or purchase of, or advice made in connection with, an annuity, accident and health, or life insurance product by an insurance producer or consultant. The commissioner finds that the acts prohibited by this rule are unfair, misleading and deceptive. An insurance producer or consultant may not use a senior-specific certification or professional designation that indicates or implies, in such a way as to mislead a purchaser or prospective purchaser, that the insurance producer or consultant has special certification or training in advising or servicing seniors in connection with the solicitation, sale or purchase of any annuity, accident and health, or life insurance product or in the provision of advice as to the value of or the advisability of purchasing or selling an annuity, accident and health, or life insurance product, either directly or indirectly through publications or writings, or by issuing or promulgating analyses or reports related to an annuity, accident and health, or life insurance product. Your written comments are encouraged. Please direct your comments to J. Whitby by email: jwhitby@utah.gov; FAX 801-538-3829; or mail: State Office Building, Room 3110, Salt Lake City, UT 84114. VirginiaNotice of Adoption: Rules Governing Preneed Life Insurance (INS-2008-00194)The Virginia Bureau of Insurance had issued a notice of adoption entitled "Rules Governing Preneed Life Insurance Minimum Standards for Determining Reserve Liabilities and Nonforfeiture Values." The Bureau recommends that the Rules be adopted as proposed effective January 1, 2009.
|
||||||
|
Copyright © 2003-2009, National Alliance
of Life Companies
|
|||||||
