Insurance Law

HCS HB 407 – Certificate of insurance for property and casualty insurance coverage Prohibits a person from preparing, issuing, or requesting the issuance of a certificate of insurance form regarding property and casualty insurance unless it has been filed with the Director of the Department of Insurance, Financial Institutions and Professional Registration and from altering or modifying a filed certificate of insurance form.  A certificate of insurance is not a policy of insurance and cannot confer to a holder new or additional policy rights beyond what the referenced insurance policy expressly provides and cannot contain references or opinions on the effect of any other contract.  Only a certificate holder has the legal right to notification of the cancellation, non-renewal, or change of policy of insurance with proper notice. A certificate of insurance cannot create or alter the terms and conditions of the notice, including the required timing of the notice.

An insurance producer can charge a reasonable fee for issuing a certificate of insurance to a policyholder or certificate holder.  Any person violating these provisions will be subject to an administrative order and the imposition of any authorized penalty or remedy from the department director.  No person, wherever located, can demand or request the issuance of or knowingly prepare or issue a certificate of insurance that contains any false or misleading information; and no person can prepare, issue, or request an opinion letter or other document that is inconsistent with these provisions, but an insurer or insurance producer may prepare or issue an addendum to a certificate of insurance that lists the forms and endorsements by an insurance policy.

These provisions apply to all certificate holders, policyholders, insurers, insurance producers, and certificate of insurance forms issued as a statement of coverage on property operations or risks located in this state regardless of where the holder or producer is located.

Any lender requesting use of an evidence of commercial property insurance exempted under the provisions of the bill which has not been approved for use by the insurer issuing the insurance policy and the insurance producer has advised the lender in writing that the insurance provider has not been authorized to use the requested evidence of commercial insurance will have no cause of action against an insurance producer arising from the use of the form except for acts of intentional misrepresentation or fraud. (Signed 6/30/11)

SB 101 – Residential contractors (See Commercial Law)

HCS SS SCS SB 132 – Certain specialty lines insurance contracts Changes the laws regarding specialty lines insurance contracts. Includes provisions relating to insurance claims handling operations; Insurance coverage for portable electronic devices; Insurance company retaliatory taxes and regulation of surplus lines insurance.

MOTOR VEHICLE EXTENDED SERVICE CONTRACTS

(1) Specifies that it is unlawful for a motor vehicle extended service contract provider to fail to deliver a fully executed contract to the consumer within a commercially feasible time period, but no more than 45 days, from the date the consumer’s initial payment is processed.  It will also be unlawful for any provider, administrator, producer, or any other person selling a contract to fail to deliver, upon request, an unsigned copy of the contract to the consumer prior to the time the consumer’s initial payment is processed.  A seller may comply with this provision by directing the consumer to a website containing an unsigned copy of the contract.  Anyone who violates these provisions will be guilty of a level two violation under provisions regarding insurance regulation;

(2) Revises the provisions regarding who can sell motor vehicle extended service contracts;

(3) Specifies that it is unlawful for a provider, administrator, motor vehicle extended service contract producer, or any other motor vehicle extended service contract seller or solicitor to use “warranty” in its materials and to represent in any manner a false, deceptive, or misleading statement with respect to:
(a) An affiliation with a motor vehicle manufacturer or dealer;
(b) Possession of information regarding a motor vehicle owner’s current motor vehicle manufacturer’s original equipment warranty;
(c) The expiration date of a motor vehicle owner’s current motor vehicle manufacturer’s original equipment warranty;
(d) A requirement that a motor vehicle owner register for a new contract with the provider in order to maintain coverage under the current contract or the manufacturer’s original equipment warranty; or
(e) Any term or provision of a contract;

(4) Specifies that it is unlawful for any person, in connection with the offer, sale, solicitation, or negotiation of a motor vehicle extended service contract to:
(a) Employ any deception, device, scheme, or artifice to defraud;
(b) Make or use any misrepresentation, concealment, or suppression of any material fact;
(c) Engage in any pattern or practice of making any false statement of material fact; or
(d) Engage in any act, practice, or course of business which operates as a fraud or deceit upon any person;

(5) Allows the department director to suspend, revoke, or refuse to issue or renew a registration or license to sell motor vehicle extended service contracts for specified causes.  If a license is not renewed or is denied, an appeals process to the Administrative Hearing Commission is specified.  The license of an extended service contract producer may be suspended, revoked, or not renewed or an application can be refused if the department director finds a specified violation;

(6) Requires a licensed contract producer to notify the department director within 30 days of any address change, any license revocation or civil action taken against the producer in another jurisdiction or by another state governmental agency.   A producer must report to the department director any felony proceeding initiated by any state or federal government for an law violation within 30 days of the initial pretrial hearing date or arraignment; and

(7) Requires a provider to maintain a registry of business entity motor vehicle extended service contract producers who are authorized to sell, offer, negotiate, or solicit the sale of these contracts in this state and to make the list available for inspection upon the request of the department director.  If a producer’s appointment is terminated, the provider must update the registry with the effective termination date within 30 days.  A provider must notify the department director in writing if he or she has possession of information relating to any cause for discipline.

The provisions of the bill regarding motor vehicle extended service contracts become effective January 1, 2012.

The bill contains an emergency clause for the provisions regarding the regulation of surplus lines insurance. (Signed 7/7/11)