Regulatory Archives - Page 4 of 6 - The Insurance & Reinsurance Report

August 4, 2015 Life, Health, Disability & ERISA / Regulatory

GAO Statement Highlights Deficiencies in Federal Exchange Enrollment Process

On July 16, 2015, the Government Accountability Office issued a written statement entitled “Patient Protection and Affordable Care Act: Observations of 18 Undercover Tests of Enrollment Controls for Health-Care Coverage and Consumer Subsidies Provided under the Act.” This statement contained the findings of “undercover testing of the [Exchange] application, enrollment, and eligibility verification controls using 18 fictitious identities” that GAO submitted or attempted to submit through the Exchange in several states in a variety of ways.

Testing began in January 2014 before the …

July 7, 2015 Legislative Update / Regulatory

NY Unfair Claims Settlement Practices Bill Dies With Close of Legislative Session

The 2015 Legislative Session in New York came to a close in the wee hours of June 26. Among the bills introduced this session was S-4049/A-0257 amending the New York Insurance Law with respect to unfair claims settlement practices. Specifically, the bill, if enacted, would have established “a civil private cause of action by a policyholder who has suffered unfair claim settlement practices by an insurer.” Current law allows policy holders with these grievances against their insurers to file a complaint with the …

June 25, 2015 Life, Health, Disability & ERISA / Regulatory

SCOTUS: Affordable Care Act Subsidies Apply to Federal Exchanges

On June 25, 2015, in a 6-3 opinion written by Chief Justice John Roberts, the United States Supreme Court held that the subsidies available in the Affordable Care Act apply to participants in both state and federal healthcare exchanges. A key component of the Affordable Care Act (i.e., the part that helps make this insurance affordable) is tax subsidies for those who qualify under the income requirements stated in the Act. Language in this provision, according to the petitioners and the dissent, appeared to limit …

June 25, 2015 Regulatory / Reinsurance

D.C. Circuit Appeals Court to IRS: Hands Off Wholly Foreign Retrocession Agreements

In Validus Reinsurance Ltd. v. United States of America, the D.C. Circuit Court of Appeals decided whether 26 U.S.C. § 4371, which taxes premiums on certain reinsurance policies issued by foreign reinsurers, applies where the reinsurance contract is between two wholly foreign entities.

Validus Reinsurance is a Bermuda-domiciled company located in Bermuda that provides reinsurance for companies either incorporated in the United States or doing business in the U.S. It also purchases retrocession contracts from wholly foreign entities to cover its own risks. Validus …

June 9, 2015 Life, Health, Disability & ERISA / Regulatory

Tracking the Uncertainty of the 2016 ACA Health Insurance Rates

Health insurers have begun submitting their proposals for approval of next year’s health insurance rates. For hundreds of Affordable Care Act (ACA) plans, the proposed rates are up by more than 10 percent with insurers seeking increases of upwards of 49 percent for some products. Insurers have cited to increases in drug costs and the receipt of more accurate data on their insureds in support of the proposed rates. Between now and October 2015, when the final rates are published, federal and state regulators will …

June 2, 2015 Regulatory

FSOC Replies to MetLife Lawsuit Challenging Nonbank SIFI Status

In early 2015, MetLife filed a lawsuit challenging its designation as a nonbank systemically important financial institution (nonbank SIFI). On May 11, 2015, the Financial Stability Oversight Council (FSOC) filed a redacted motion to dismiss (or in the alternative a motion for summary judgment) in response to MetLife’s lawsuit.

One of MetLife’s key arguments in its complaint is that FSOC’s designation was arbitrary and capricious. FSOC argues in its motion to dismiss, dated May 11, 2015, that its decision to designate MetLife as a nonbank …

May 27, 2015 Life, Health, Disability & ERISA / Regulatory

Senate Panel to Probe Eligibility Verification Process for ACA Subsidies

The Senate’s Permanent Subcommittee on Investigations (PSI) has launched an inquiry into government subsidies under the Affordable Care Act available primarily in the form of advance premium tax credits. According to PSI’s letter to Secretary Burwell, the premium subsidies for last year were approximately $15 billion and are expected to reach $849 billion over the next ten years. Prompting the inquiry are concerns of improper over-payments with the goal of preventing government waste.

According to the letter, “to ensure proper oversight, the U.S. Senate Permanent …

May 11, 2015 Regulatory

Inquiry Signals Further Federal Regulation of Annuity Product Sales Likely

Late last week, Senator Elizabeth Warren, Ranking Member of the U.S. Senate Subcommittee on Economic Policy, sent a letter to 15 of the top writers of annuity products, including AIG Companies, Allianz Life Insurance Company of North America, AXA, Lincoln Financial Group, New York Life Insurance Company, and MetLife, seeking information about the manner in which these companies compensate their insurance agents for the sale of these products. Warren emphasized that sales made to those close to retirement were of paramount interest and expressed …

May 4, 2015 Regulatory / Reinsurance

New York Department of Financial Services Superintendent Continues Criticism of “Shadow Insurance” Transactions in Letter to U.S. Senate Committee

New York Department of Financial Services (DFS) Superintendent Benjamin Lawsky continued his attack against the use of so-called “shadow insurance” in an April 27, 2015 letter to the Honorable Sherrod Brown, Ranking Member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. In the letter, Lawsky called on regulators to initiate measures to address this “textbook example of regulatory arbitrage in order to protect the efficacy of our state-based system of regulation” and hopes to stimulate a national debate on these issues.

Lawsky …

April 27, 2015 Regulatory

NAIC Adopts Cybersecurity Regulatory Guidance

On Thursday, April 16, 2015, the Cybersecurity Task Force of the National Association of Insurance Commissioners (NAIC) adopted the “Principles for Effective Cybersecurity Insurance Regulatory Guidance.” Monica J. Lindeen, the NAIC President and Montana Commissioner of Securities and Insurance noted that these 12 principles “will serve as the foundation for protection of sensitive consumer information held by insurers as well as insurance producers and guide regulators who oversee the insurance industry.”

The press release announcing the adoption notes:

The document identifies types of …