In the News
Several states issue regulations on auto, homeowners and health insurance and annuities.
- June 2020
Annuities: The Iowa Insurance Division has filed an adopted regulation requiring annuity agents to act in their customers' best interest.
The annuity standards follow efforts by the National Association of Insurance Commissioners to develop a model Suitability in Annuity Transactions Model Regulation that is harmonized with rule making by the U.S. Securities and Exchange Commission, it said in a statement.
“Iowans expect their financial professional to act in the consumer's best interest when recommending an annuity. Iowa not only expects it, but we will require it,” said Insurance Commissioner Doug Ommen. “I hope to also work with other U.S. insurance regulators to require the same of any Iowa insurer writing annuity business in those states.”
The best interest standard requires the annuity agent to make only recommendations that match the customer's needs, objectives and situation without placing the producer's or the insurer's financial interest ahead of the consumer's interest, a summary of the rule said.
The rule spells out in detail the producer's obligation to provide care in making recommendations; provide full, adequate disclosure of the producer's relationship to the products and a clear description of them; a requirement to identify, avoid and reasonably manage or disclose material conflicts of interest; and a requirement to fully document the transaction.
It further outlines a producer's responsibility in cases where a customer shows interest in an annuity product not recommended by the producer. Other sections detail responsibilities for record keeping and training.
The adopted rule summary said it is designed to preserve consumer choice so that more middle-class Iowans will retain access to retirement education and security that they choose.
Ommen, who also is Iowa's securities regulator, said the division received several comments requesting it delay the proposed best interest standard in the state securities regulations because of the COVID-19 pandemic. “We have decided that is the appropriate course,” he said.
Health Insurance: Oregon's Department of Consumer and Business Services has updated emergency health insurance regulations, including ordering a 60-day extension of the grace period for past-due premiums.
The order is in effect through June 3 and can be extended in 30-day increments during the course of the COVID-19 outbreak, the department said in a news release.
In addition to extending the grace period, the order requires health insurers to pay claims for any covered services during the first 30 days of the grace period, and extend all deadlines for reporting claims and other communications. The order also requires insurers to provide members with communication options that meet social distancing standards.
The order affects all covered health care and related services, such as pharmaceuticals, a DCBS spokesman said.
Homeowners Insurance: The California Assembly's Committee on Insurance advanced a bill to expedite rate filings in parts of the state that are prone to wildfires.
The committee approved the bill in a 14-0 vote May 7, sending it to the Appropriations Committee.
The insurance industry says the Insurance Market Action Plan that would be allowed under the bill will give consumers options they will not have, because insurers otherwise will leave fire-prone markets.
“The whole goal here is to get insurers not writing enough policies … a reason to engage,” said Committee Chairman Tom Daly at the hearing.
But Consumer Watchdog said the process of expediting the rate filing violates Proposition 103, the 1988 ballot initiative that requires insurance companies seeking to change rates to submit a rate application to the insurance commissioner, and receive the commissioner's approval before use.
Auto Insurance: Three bills that would have eliminated certain rating factors in setting automobile insurance rates have failed to advance in a Louisiana senate committee.
The legislation, proposed by state Sen. Jay Luneau and backed by Gov. John Bel Edwards, would have prohibited insurers from considering a driver's gender after the age of 25, credit score and status as a widow or widower.
Edwards in March told lawmakers that he supported Luneau's package of bills.
“I think we can all agree that our auto insurance rates should be based on our driving records,” Edwards said. “Not on if you're female, or poor, or widowed, or putting your life on the line for our country.”
Edwards called the bill package “the common sense thing to do, but more importantly, it's the right thing to do.”