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NAIC Approves Amendments Permitting Value-Added Rebates to Consumers

On December 4th, 2020 the NAIC issued a revised Model Law addressing Unfair Trade Practices, which has adopted some baseline language regarding rebates. This Model Law does not have binding authority. States may now respond to this Model Rule by choosing to adopt, or not.
For both traditional and institutional consumers, the Model Law permits insurers and producers to offer non-cash gifts, items, or services in connection with marketing, purchase, or other sale of insurance contracts. Insurers and producers must not exceed value amounts deemed “reasonable” by the DOI Commissioner in a given policy year term. Additionally, offers must not require continued purchase or renewal of policies as a condition of gift, item, or service receipt.
The Model Law also permits Insurers and Producers to conduct raffles to the extent permitted by State laws, so long as there remains no financial cost to enter in the raffle, and so long as the prizes are not value in excess of “reasonable” amounts as determined by the Commissioner.
Westmont will be tracking this matter and will follow-up with any new developments. For more information on this Model Rule, or any other regulatory compliance matter, please contact Westmont Associates, Inc.
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Westmont Associates, Inc. can assist with procurement of approved SERFF filings for all commercial and personal lines of business.  Please contact us at info@www.westmontlaw.com for further information.

New Mexico Moratorium on Filing of Commercial Insurance Forms

On December 4th, 2020 the New Mexico Office of Insurance issued Bulletin 2020-023 addressing the prior approval exemption of most commercial insurance products authorized by 13.8.3.9 NMAC.

In light of the COVID-19 health emergency, the Office of Insurance superintendent has expressed concern over permitting the pre-authorization of commercial insurance products, which have the potential to harm New Mexicans in COVID-19 related cases. As a result, the superintendent will not accept new commercial insurance filings that include COVID-19 related changes pending the conclusion of the 2021 New Mexico legislative session. Pending commercial insurance form filings that include COVID-19 related changes will be administratively withdrawn pending the rescission of this bulletin. Any previously approved commercial insurance forms may continue to be sold in New Mexico until further order of the superintendent.

This moratorium is effective as of December 4th, 2020 and the superintendent will extend this moratorium as necessary to accommodate any new form review standards adopted during the 2021 legislative session.

If you would like to read this New Mexico Bulletin in its entirety, please find the Bulletin HERE.

For more information on this Bulletin, or any other regulatory compliance matter, please contact Westmont Associates, Inc.

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Montana CSI Recession of Advisory Memorandum

On November 2nd, 2020, the Montana Commissioner of Securities and Insurance released a notice which rescinded an Advisory Memorandum issued on January 23, 2013, titled “Form Provisions Limiting Coverage of Defense Expenses, Including Defense Within Limits Provisions – Montana Code § 33-1-502”.

For Commercial lines, any form that is providing Defense within the limits of liability will need to provide, with the submission of forms, the limits that will be offered with that product. A determination will be made with each filing. If it is determined appropriate and will be allowed under the discretion of the Commissioner in compliance with MCA 33-1-502(2).

The Commissioner still requires forms containing defense within limits provisions to include “conspicuous disclosure” of the meaning and implications of those provisions. Defense within limits provisions that lack adequate disclosure may violate insurance consumers reasonable expectations. See MCA 33-1-502(3). The Notice of Recession can be found HERE.

For more information on this Bulletin, or any other regulatory compliance matter, please contact Westmont Associates, Inc.

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