2016 Legislative Changes

Department of Business Regulation Insurance Division 1511 Pontiac Avenue, Bldg. 69-2 Cranston, Rhode Island 02920 Insurance Bulletin Number 2016-5 2016 Legislative Changes The following legislative amendments were enacted during the 2016 session of the Rhode Island General Assembly. This information is being provided in accordance with R.I. Gen. Laws § 27-71-14(a). This bulletin is being provided for informational purposes only and may not be an all-inclusive list of enactments that impact the insurance industry. Licensees should refer to the statute itself to determine the impact. Any person wishing to be included in these annual notifications pursuant to R.I. Gen. Laws § 27-71-14(b) who is not currently on the interested parties list should send an email request to DBR.InsNotice@dbr.ri.gov. Corporate Governance/Flood Surplus Lines H7842A 2016 P.L. ch. 107 Effective January 1, 2017 S2785Aaa 2016 P.L. ch. 98 Effective January 1, 2017 This legislation was introduced at the request of the Department. The legislation (1) adopts the National Association of Insurance Commissioners model act on Corporate Governance Annual Disclosure and (2) adds private flood to the list of lines of insurance that are exempt from the diligent effort affidavit prior to placement in the surplus lines market. Section 1 takes effect January 1, 2017. Section 2 upon passage. RI Jobs/Premium Tax H8058A 2016 P.L. ch. 538 Effective September 7, 2016 This legislation amends R.I. Gen. Laws § 44-17-1 regarding premium tax. The amendments provide the formation of a committee to determine the current employment by “qualifying insurers” and provide for a decrease in the premium tax assessed as Rhode Island jobs are added. Insurance Consumer Protection H7125 2016 P.L. ch. 392 Effective January 1, 2017 S2011 2016 P.L. ch. 376 Effective January 1, 2017 This legislation makes four changes to the insurance code as follows: (1) requires that insurers notify the applicant at the time of application of an individual life insurance policy of the right to designate a third party to receive notice of cancellation based on nonpayment of premium by the addition of R.I. Gen. Laws § 27-4-30; (2) provides standards for notice of conversion privileges under a group life policy by amendment to R.I. Gen. Laws § 27-4.8-6; (3) prohibits certain actions in the issuance of automobile policies because of the active duty status of the insured by the addition of R.I. Gen. Laws § 27-9-7.4 and (4) requires notification requirements on policies with fully earned premiums by amendment of R.I. Gen. Laws § 27-29-13.2. The third in this list was effective on July 1, 2016. All other provisions are effective on January 1, 2017. Transportation Network Companies H8044A 2016 P.L. ch. 367 Effective November 4, 2016 S2864Aaa 2016 P.L. ch. 346 Effective November 4, 2016 This legislation enacts provisions regarding the licensing of Transportation Network Companies (“TNC”) by the Division of Public Utilities and Carriers. R.I. Gen. Laws § 39-14.2-14 concerns proof of financial responsibility and requires that either the company or driver maintain an automobile liability policy that applies during the activities undertaken by the TNC vehicle while operating as a TNC. The provisions requires 50/100/25 limits while the driver is logged into the digital network and available to receive requests but is not providing prearranged rides and a combined single limit of $1.5 million while the TNC is providing a prearranged ride. Effective November 4, 2016 (120 days after passage). Adjusters at Scene of Fire H7279A 2016 P.L. ch. 393 Effective July 9, 2016 S2213 2016 P.L. ch. 379 Effective July 9, 2016 Prohibits all insurance adjusters, contractors and restoration companies from engaging in any solicitation or inspection or having any physical presence at a premises under fire investigation until twenty fours (24) hours after control has been released back to the owner or occupant. An exception exists if the adjuster, contractor or restoration company is accompanied by and acting with permission of the premises legal owner. Violation of this section subjects the actor to a fine of one thousand dollars and revocation of the adjusters’ license. The Department will be amending Insurance Regulation 43 to address this change. Lead Hazard Mitigation H7128 2016 P.L. ch. 311 Effective July 2, 2016 S2638 2016 P.L. ch. 302 Effective July 2, 2016 This legislation extends the coverage of the lead liability law to dwelling units constructed after 1950 on federally owned or leased lands. The Department will be amending Insurance Regulation 110 to address this change. 2 Task Force to Study Feasibility and Fiscal Ramifications of Climate Change H8267 2016 Resolution 302 Effective July 2, 2016 This resolution forms a new task force under the Climate Change Coordinating Council to study the fiscal ramifications of climate change. Members of the subgroup include an insurance industry representative and a designee from DBR. Farm Vehicles H7783 2016 P.L. ch. 399 Effective July 9, 2016 S2983 2016 P.L. ch. 387 Effective July 9, 2016 This legislation allows a farm owners operations policy to satisfy the mandatory liability requirements for the Department of Motor Vehicles for vehicles covered by such policies. Condominium Owners S2259A 2016 P.L. ch. 434 Effective July 12, 2016 H7437A 2016 P.L. ch. 433 Effective July 12, 2016 This legislation entitles a condominium unit owner to request from the condo association (1) a copy of an insurance company appraisal with regard to damage to the owners unit and (2) a copy of any letter denying coverage or deeming the value of the claim as below the policy deductible upon request to the condominium association. Workers Compensation Omnibus H8203A 2016 P.L. ch. 470 Effective July 13, 2016 This legislation makes changes to the workers compensation laws including increasing the daily pay for members of the medical advisory board, clarifies the mileage allowance rate for injured workers and allowing recovery of DLT legal fees for fraud investigations. Guaranteed Asset Protection (GAP) Waivers S2424A 2016 P.L. ch. 530 Effective January 1, 2017 This legislation provides a regulatory framework that allows motor vehicle dealers to sell GAP waivers. Electronic Tracking Devices S2596A 2016 P.L. ch. 39 Effective May 31, 2016 H7002A 2016 P.L. ch. 41 Effective May 31, 2016 The legislation provides a framework for electronic tracking of motor vehicle devises. The proposal specifically allows use of such data for insurance rating purposes subject to vehicle owners consent. 3 Telemedicine H7160B 2016 P.L. ch. 188 Effective June 28, 2016 S2577 2016 P.L. ch. 177 Effective June 28, 2016 This legislation mandates that all health benefit plans provide coverage for the cost of medically appropriate services. Plans may impose a deductible, copayment, or coinsurance requirement and the services may be subject to the terms and conditions of the telemedicine agreement between the insurer and participating health care provider or provider group. Telemedicine services do not include audio-only telephone conversations, email messages or facsimile transmission between the provider and patient. This legislation is effective upon passage, however, plans have until January 1, 2018 to comply. Direct Pay Hearing H7510Aaa 2016 P.L. ch. 156 Effective January 1, 2017 S2209Aaa 2016 P.L. ch. 145 Effective January 1, 2017 This legislation expands the direct pay hearing process to those rate filings that cover 10,000 lives. A formal APA hearing process would be triggered if there is a 10% or more overall average rate increase requested. This legislation will sunset on January 1, 2021. Prescription Drug Benefits (MAC Pricing) H7438A 2016 P.L. ch. 168 Effective September 30, 2016 S2467A 2016 P.L. ch. 166 Effective September 30, 2016 This legislation requires a PBM to include in their contracts a requirement to update pricing information on the MAC list at least every ten (10) calendar days and to maintain a procedure to eliminate products from the list of drugs subject to pricing or modifications with the MAC rates when the drugs do not meet the standards and requirements established in this section of law. Off-Label Uses for Prescription Drugs H7512A 2016 P.L. ch. 105 Effective January 1, 2017 S2499B 2016 P.L. ch. 95 Effective January 1, 2017 This legislation provide coverages for off label FDA approved medications to be used for disabling or life threatening chronic diseases. Mental/Substance Use Illness – Discharge Bill H7616A 2016 P.L. ch. 189 Effective June 28, 2016 S2356Aaa 2016 P.L. ch. 172 Effective June 28, 2016 This legislation amends R.I. Gen. Laws §§ 23-17.26-3 and 27-38.2-1. Patients that are admitted to the hospital or free-standing emergency rooms suffering from mental health and/or substance abuse issues will not be released from the hospital until a discharge 4 plan is established. Comprehensive discharge plans must be filed with the Department of Health by January 1, 2017 Coverage for Naloxone Hydrochloride/Opioid Antagonists H7710A 2016 P.L. ch. 192 Effective January 1, 2017 S2460Aaa 2016 P.L. ch. 175 Effective January 1, 2017 This legislation would require coverage for at least one generic opioid antagonists and device. Prior authorizations may be required for non-generic forms of opioid antagonists and devices. The legislation provides that coverage shall include generic opioid antagonists prescribed or dispensed via standing order or collaborative practice agreement intended for use on patients other than the insured. Medical Billing Innovation Act H7786A 2016 P.L. ch. 480 Effective July 16, 2016 S2828Aaa 2016 P.L. ch. 479 Effective July 16, 2016 This legislation amends R.I. Gen. Laws § 42-14.5-3 to require OHIC to submit recommendations to the General Assembly for establishing guidelines and regulations for systems that give patients electronic access to their claims information. Medical Synchronization H8022A 2016 P.L. ch. 196 Effective January 1, 2017 S2822A 2016 P.L. ch. 179 Effective January 1, 2017 This legislation allows patients, suffering from chronic conditions, to synchronize their medications. 30 Day Formulary Notice S2294A 2016 P.L. ch. 541 Effective January 1, 2017 This legislation requires carriers to notify patients and providers of formulary changes at least 30 days’ prior to the effective date of the formulary change. Prescriptions H8224A 2016 P.L. ch. 199 Effective June 28, 2016 S2823A 2016 P.L. ch. 180 Effective June 28, 2016 This legislation amends R.I. Gen. Laws § 21-28 and requires pharmacies to transmit certain information to the prescription monitoring database at the Department of Health within 24-hours. Physicians are required to check database for each script. 5 Copies of Rhode Island Insurance Regulations, Insurance Bulletins and applicable Rhode Island General Laws are accessible through these links or by visiting the Department’s website at www.dbr.ri.gov. Copies of the Senate and House bills are accessible through these links or by visiting the Rhode Island General Assembly website at www.rilin.state.ri.us. In light of the above amendments, insurers are required to review current policy forms, rules and rates to determine if new and/or revised filings are required and to timely submit such filings in SERFF for the Department’s review and approval. Elizabeth Kelleher Dwyer Superintendent of Insurance October 6, 2016 6