Insurance Regulation 2013: What the Future Holds...

A couple of industry observers, Arthur D. Postal and Elizabeth D. Festa, speculate on the future of state and federal insurance regulation in 2013.

Assuming the Mayans just got tired of calendaring out the centuries and the world doesn't end on December 21, 2012, Arthur D. Postal of Lifehealthpro.com has consulted the augurs and put together his federal regulatory forecast for the life and health insurance industry in Washington Regulation: 6 Things to Look for in 2013.

Postal's article is worth the read, but a few highlights:

• Although speculation previously suggested that the report on insurance modernization by the Federal Insurance Office (FIO) would finally arrive, a year after its original deadline, in January of 2013. Postal says that now appears unlikely "with signs emerging that the administration will delay the release of the report until after a new Treasury secretary is confirmed sometime early next year."

One reason for the apparent delay is that the administration doesn’t want Republicans in Congress to use the report to embarrass the administration through the confirmation process if it contains proposals calling for greater federal regulation, a politically sensitive issue.

• Although consolidated regulation of insurance companies that operate savings and loans is mandated under the Dodd-Frank Act, "members of Congress have made clear through recent hearings that they won't support strong oversight of these institutions." As the designated regulator, however, the Federal Reserve Board may have its own ideas.
• American International Group (AIG) could be designated a "systemically important" non-bank financial institutional by the Federal Stability Oversight Council before the end of the year, and other insurers could face similar designation next year.
• Taxes are going up, including estate taxes. But Postal suggests that "with the certainty likely to be generated by knowledge that the government is coming to terms with the need for increased revenue and lesser expenditures, the stock market is likely to rise...".[1]

Also tempting the Mayan fates is Elizabeth D. Festa, who crystal-balls 2013 with respect to state regulation in State Regulation: 4 Things to Expect in 2013 at Lifehealthpro.com.

Again, Festa's article is definitely worth the read, but consider a few of her points:

• Like Postal, Festa also predicts the emergence of the long overdue FIO report on insurance modernization.

While there is plenty to speculate about, only when it is finally issued by the Federal Insurance Office will we have an idea of the FIO’s intent toward a more modern regulatory regime, including whether it intends to act purely as a fact-finding body, or if it will lay the groundwork for more substantive action.

• New NAIC President, Louisiana Insurance Commissioner James J. "Jim" Donelon will have his hands full after the retirement of current NAIC CEO Terri Vaughn at a time when the NAIC has "an ambitious agenda and no small number of critics."
• To the extent the various states have elected to participate, state regulators will be busy setting up and working with the health care exchanges under the Patient Protection and Affordable Care Act. Regulators may also be occupied with trying to push the principles-based reserving provisions of the recently adopted NAIC Valuation Manual through their state legislatures. [2]

1. Washington Regulation: 6 Things to Look for in 2013, Arthur D. Postal, Lifehealthpro.com, December 19, 2012.
2. State Regulation: 4 Things to Expect in 2013, Elizabeth D. Festa, December 19, 2012.

Louisiana Insurance Regulatory Law

More information on Louisiana insurance regulatory law, Louisiana insurance industry news and other Louisiana insurance information is available from Louisiana Insurance Regulatory Law.

Louisiana Becomes the First Insurance Department to Share Info with FinCEN; California Follows Suit

The Louisiana Department of Insurance and the federal Financial Crimes Enforcement Network have agreed to share information in an effort to combat fraud and other financial crimes; California recently entered into a similar agreement with FinCEN.

Louisiana has become the first state to agree to share information with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department, according to a recent press release by the Louisiana Department of Insurance (LDOI).

Louisiana Commissioner of Insurance, Jim Donelon, and the FinCEN Director, James H. Freis, Jr., signed a Memorandum of Understanding in late April that will allow the LDOI and FinCEN to "share important information enabling both parties to better protect the industry and consumers from criminal activity and fraud."[1]

The new [Memorandum of Understanding] will allow both parties to improve and enhance the level of [anti-money laundering] cooperation and seeks to efficiently maximize their combined resources in discharging their statutory obligations to defend against money laundering, fraud and other financial crime. The collective goal is to enhance communication and coordination between FinCEN and the Louisiana Department of Insurance to help Louisiana insurance companies better identify, deter and interdict financial crime and efficiently convey that information to FinCEN.[2]

Director Freis pointed out that Commissioner Donelon's "influential role as president-elect of the National Association of Insurance Commissioners will help set the standard for other state to follow" Donelon's lead in partnering with FinCEN to share information. Commissioner Donelon, for his part, indicated that the partnership with FinCEN was "a significant tool" that should enhance the LDOI's efforts to better protect Louisiana consumers from fraud and other criminal activity.[3]

California has recently followed Louisiana's lead. FinCEN announced in early May that Director Freis signed a Memorandum of Understanding with Dave Jones, the Insurance Commissioner for the State of California, that will allow the Director, as the "Federal Anti-Money Laundering (AML) regulator" to share information with the California state insurance regulator.[4]

Details on what types of information will be shared under the FinCEN agreements remains unclear.

Details on what types of information will be shared under the FinCEN agreements remains unclear, including whether individuals and companies regulated by the California or Louisiana state insurance regulators will have any notice or opportunity to object before information is shared with FinCEN.

Because FinCEN's regulatory activities are specifically targeted at financial crimes, the nonpublic and personally identifiable financial information of both entities regulated by the California or Louisiana state insurance regulators, and consumers that transact business with those entities, may be implicated by these information sharing agreements with FinCEN.

1. Commissioner Donelon, U.S. Treasury's FinCEN Join Forces to Enhance Anti-Fraud Efforts, Louisiana Department of Insurance Press Release, April 30, 2012.
2. Commissioner Donelon..., id.
3. Commissioner Donelon..., id.
4. FinCEN and California Department of Insurance Sign MOU to Combat Money Laundering and Fraud, FinCEN Press Release, May 5, 2012.

Louisiana: Summary of Insurance-Related Bills Pre-Filed for the 2012 Regular Session of the Louisiana State Legislature

—» UPDATED: A summary of some of the bills relating to insurance, insurance law and the insurance industry pre-filed for the 2012 Regular Session of the Louisiana State Legislature is available at Louisiana Insurance Regulatory Law.

The summary will be updated as more bills are pre-filed before the February 29, 2012 pre-filing deadline.

The 2012 Regular Session of the Louisiana State Legislature convenes on March 12, 2012.

 

Louisiana Department of Insurance Issues Notice of Intent Regarding Regulation 100: Coverage of Prescription Drugs through a Drug Formulary

Proposed Regulation 100 drafted by the Louisiana Department of Insurance requires three different and distinct types of notice by health insurance plan issuers to enrollees with respect to coverage of prescription drugs through a drug formulary, and requires approval by the Department of certain modifications to prescription drug coverage.

The Louisiana Department of Insurance has released a Notice of Intent in the January edition of the Louisiana Register proposing Regulation 100 pertaining to the recently enacted Coverage of Prescription Drugs through a Drug Formulary Subpart of the Louisiana Insurance Code. Proposed Regulation 100 includes provisions intended to clarify and implement the Drug Formulary Subpart, which establishes certain restrictions and requirements for health insurance companies issuing health benefit plans that cover prescription drugs and that use one or more drug formularies to indicate the prescription drugs covered under such plans.

For more information, read the full article on Louisiana Insurance Regulatory Law.