Regulatory Compliance Consulting Firm

Westmont Wire

New York Attempts to Modernize Its Approach to Excess Lines Brokers

In Issue 19-1 of ELANY Elaborates, ELANY details their collaborative effort with the New York legislature to modernize New York’s approach to excess lines brokers. In an effort to streamline the diligent effort search process, the New York Senate Insurance Committee recently introduced Senate Bill 769. The Bill attempts to amend NYCLS Ins. § 2118 in order to exempt certain commercial lines policies placed by wholesale brokers from the diligent effort requirement and expedite the process for retail and wholesale brokers filing affidavits regarding declinations.

 

SB 769 would only exempt commercial lines insurance transactions through unaffiliated retail and wholesale brokers from diligent effort requirements. As only the diligent effort is waived, brokers would still be required to file all coverage documents and affidavits with ELANY. Additionally, to expedite the affidavit process, SB 769 would remove the declination date, the reason for the declination, and the name and affiliation of the declining company representative. By eliminating certain elements of the affidavit, filing time speeds up and mistakes are reduced, thus avoiding any delays and extra fees for “suspended” filings.

 

ELANY and the New York legislature expects this bill to improve the service to insureds without sacrificing the state’s ability to monitor the market. Additionally, retail and wholesale brokers would both experience an improved, time-efficient declinations process, boosting their speed to market.

 

For any questions regarding New York’s SB 769, or for assistance in any excess line compliance matters, please contact Westmont Associates, Inc.

Kentucky DOI Clarifies Position on Arbitration Provisions

On January 25, 2019, the Kentucky Department of Insurance issued Bulletin 2019-1, explaining its position on arbitration or other out-of-court dispute resolution provisions contained in insurance policies.

In accordance with KRS § 417.050 and prior court decisions, any insurance policy, except surety contracts, mandating the arbitration of disputes shall be considered void and misleading per se. Additionally, any policy offering, but not explicitly requiring, voluntary arbitration will be subject to disapproval if the policy is deemed to use misleading or ambiguous language or headings. Kentucky’s Uniform Arbitration Act does not recognize non-binding arbitration and policies containing such provisions will be subject to disapproval as well.

Furthermore, the Bulletin points out that even if the Department approves policies containing such provisions, this does not insulate these provisions and they are still subject to judicial review.

For any questions regarding the Kentucky Department of Insurance’s arbitration requirements or any other compliance needs, please contact Westmont Associates, Inc.

Maryland Seeks to Impose Fiduciary Standards on Agents, Brokers, and Dealers

The Maryland Senate and House of Representatives have introduced companion bills-Senate Bill 786 and House Bill 1127-aimed at boosting consumer protection by imposing fiduciary standards on agents, brokers, and dealers (hereinafter “insurance producers”). Known as the Financial Consumer Protection Act of 2019, this initiative would designate the insurance producer as a fiduciary and require insurance producers to act in their clients’ best interest regarding any fee-based financial advice, without regard to their own interests.

According to reports, the bills face concerns from insurance professionals and the ACLI who fear that imposing fiduciary standards on insurance producers may limit consumer access, particularly for low and moderate income consumers, to financial and retirement security products. Maryland believes the bills are necessary to fill a void in consumer protection after Federal efforts to impose similar obligations failed.

For any questions regarding the proposed Financial Consumer Protection Act of 2019 or any updates on its progress through the Maryland legislature, please contact Westmont Associates, Inc.


CONTACT

1763 Marlton Pike East, #200
Cherry Hill, NJ 08003
Phone: 856-216-0220
Email: nancy@westmontlaw.com