NCOIL Adopts Insurance Business Transfer Model Act

For Immediate Release
March 31, 2020
Contact: Cara Zimmermann
(732) 201-4133

NCOIL ADOPTS INSURANCE BUSINESS TRANSFER MODEL ACT
Provides for Improved Operational and Capital Efficiency for Insurance Companies while Ensuring Policyholders are Notified and Protected

Manasquan, NJ – At the recently concluded 2020 NCOIL Spring Meeting in Charlotte, NC, the organization adopted the NCOIL Insurance Business Transfer (IBT) Model Act sponsored by NY Assemblyman Andrew Garbarino and OK Representative Lewis Moore. The measure passed on a voice vote by the NCOIL Joint State-Federal Relations & International Insurance Issues Committee and was affirmed by the Executive Committee.

The OK IBT Law, signed into law in 2018, was introduced to NCOIL to serve as a basis for an NCOIL IBT Model at the 2018 NCOIL Annual Meeting in Oklahoma City, OK. NY Asm. Andrew Garbarino and OK Rep. Lewis Moore then introduced a discussion draft of an NCOIL IBT Model Law at the 2019 NCOIL Spring Meeting in Nashville, TN, based on the OK IBT law.

NY Asm. Andrew Garbarino stated, “I greatly appreciate the Committee’s work on the NCOIL IBT Model and there were a lot of great points made by the panels throughout drafting discussions. The OK IBT Law was a solid foundation to use when considering IBT model legislation. The most frequently used restructuring options in this country are sale and reinsurance or limited portfolio transfers (LPTs) but those options are limited in their scope and effect. There is a need for consistency among states and it seems to be generally agreeable that IBTs can be valuable as long as they are done properly with the right level of consumer protections.”

OK Rep. Lewis Moore said, “I want to echo what Asm. Garbarino stated and thank the Committee and all interested parties for their work and input throughout the drafting process. During the Model legislation drafting discussions, I stressed the importance of the protection of policyholders and worked with NCOIL to ensure that issue remained in the Model. As is always the case with NCOIL models, states are free to change any provisions they deem appropriate. State interest in IBTs has continued to grow significantly since initially discussing IBTs at the 2018 NCOIL Annual Meeting, making it that much more important to send this Model to the states and adequately address the issue.”

During the drafting discussions, NCOIL legislators and staff heard from a wide array of interested parties including: PricewaterhouseCoopers, LLC (PWC); the Oklahoma Dept. of Insurance; the Reinsurance Assoc. of America (RAA); the Rhode Island Dept. of Business Regulation; Enstar; New York Life; the American Council of Life Insurers (ACLI); Brighthouse Financial; International Solutions Services, LLC; Faegre Baker Daniels, LLP; the National Organization of Life & Health Insurance Guaranty Associations (NOLGHA); the National Conference of Insurance Guaranty Funds (NCIGF); and the American Property & Casualty Insurance Association (APCIA).

The purpose of the Model is “to provide options to address the significant limitations in the current methods available to insurers to transfer or assume blocks of insurance business in an efficient and cost-effective manner that provides needed legal finality for such transfers in order to provide for improved operational and capital efficiency for insurance companies, stimulates the economy by attracting segments of the insurance industry to the state, make this state an attractive home jurisdiction for insurance companies, encourages economic growth and increased investment in the financial services sector and increases the availability of quality insurance industry jobs in this state.”

Highlights of the Model include requirements that the IBT applicant notify interested parties such as: the chief insurance regulator in each jurisdiction in which the applicant holds or has ever held a certificate of authority, and in which policies that are part of the subject business were
issued or policyholders currently reside; the National Conference of Insurance Guaranty Funds, the National Organization of Life and Health Insurance Guaranty Associations and all state insurance guaranty associations for the states in which the applicant holds or has ever held a certificate of authority, and in which policies that are part of the subject business were issued or policyholders currently reside; reinsurers of the applicant pursuant to the notice provisions of the reinsurance agreements applicable to the policies that are part of the subject business, or where an agreement has no provision for notice, by internationally recognized delivery service; all policyholders holding policies that are part of the subject business, at their last-known address as indicated by the records of the applicant or to the address to which premium notices or other policy documents are sent; and by publication in a newspaper of general circulation in the state in which the applicant has its principal place of business and in such other publications that the Commissioner requires.

The Model also requires that the Insurance Business Transfer Plan must be filed by the applicant with the Insurance Commissioner for his or her review and approval. The Plan must include information such as: a summary of the Insurance Business Transfer Plan; an identification and
description of the subject business; the most recent audited financial statements and statutory annual and quarterly reports of the transferring insurer and assuming insurer filed with their domiciliary regulator the most recent actuarial report and opinion that quantify the liabilities associated with the subject business; pro-forma financial statements showing the projected statutory balance sheet; results of operations and cash flows of the assuming insurer for the three (3) years following the proposed transfer and novation; the officers’ certificates of the transferring insurer and the assuming insurer attesting that each has obtained all required internal approvals and authorizations regarding the Insurance Business Transfer Plan and completed all necessary and appropriate actions relating thereto; the proposal for Plan implementation and administration, including the form of notice to be provided under the Insurance Business Transfer Plan to any policyholder whose policy is part of the subject business; a full description as to how such notice shall be provided; a description of any reinsurance arrangements that would pass to the assuming insurer under the Insurance Business Transfer Plan; a description of any guarantees or additional reinsurance that will cover the subject business following the transfer and novation; a statement describing the assuming insurer’s proposed investment policies and any contemplated third-party claims management and administration arrangements; a description of how the transferring and assuming insurers will be licensed for guaranty association coverage purpose; and evidence of approval or nonobjection of the transfer from the chief insurance regulator of the state of the transferring insurer’s domicile.

Importantly, the Insurance Business Transfer plan must also contain a report from an independent expert, selected by the Commissioner from a list of at least two nominees submitted jointly by the transferring insurer and the assuming insurer, to assist the Commissioner and the court in connection with their review of the proposed transaction. Should the Commissioner, in his or her sole discretion, reject the nominees, he or she may appoint the independent expert. The Model sets forth specific requirements for what the independent expert report must contain such as the independent expert’s opinion of the likely effects of the Insurance Business Transfer Plan on policyholders and claimants, distinguishing between transferring policyholders and claimants, policyholders and claimants of the transferring insurer whose policies will not be transferred, and policyholders and claimants of the assuming insurer.

The Model then requires the Commissioner to authorize the submission of the Plan to the court unless he or she finds that the Insurance Business Transfer would have a material adverse impact on the interests of policyholders or claimants that are part of the subject business. Within thirty (30) days after notice from the Commissioner that the applicant may proceed with the court filing, the Model then directs the applicant to apply to the court for approval of the Insurance Business Transfer Plan.

Following a court hearing, which the Model requires all parties to be notified of and provides them the opportunity to present evidence or comments if he, she, or itself considers to be adversely affected by the transfer, the Model requires the court to enter a judgment and implementation order if the court finds that the implementation of the Insurance Business Transfer Plan would not materially adversely affect the interests of policyholders or
claimants that are part of the subject business.

The judgment and implementation order shall: order implementation of the Insurance Business Transfer Plan; order a statutory novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including the
extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer, and providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies, and that the assuming insurer shall have all such rights, obligations, and liabilities as if it were the original insurer of such policies; release the transferring insurer from any and all obligations or liabilities under policies that are part of the subject business; authorize and order the transfer of property or liabilities, including, but not limited to, the ceded reinsurance of transferred policies and contracts on the subject business, notwithstanding any non-assignment provisions in any such reinsurance contracts. The subject business shall vest in and become liabilities of the assuming insurer; order that the applicant provide notice of the transfer and novation in accordance with the notice provisions in Section 5 of the Model; and make such other provisions with respect to incidental, consequential and supplementary matters as are necessary to assure the Insurance Business Transfer Plan is fully and effectively carried out.

The Model also requires the Commissioner to promulgate regulations that are consistent with the Model, rather than authorizing the Commissioner to do so, and states that no Insurance Business Transfer Plan shall be approved in a State unless and until such regulations are promulgated.

NCOIL CEO, Commissioner Tom Considine, stated, “IBTs can be a driver for economic expansion which makes it vital for the states to understand the tools and guidelines that this Model has to offer. These are complex transactions, and making sure the appropriate regulations are promulgated before an IBT is approved is critical in ensuring both businesses and consumers are properly protected. Thank you to the Committee, and a special thanks to Asm. Garbarino and Rep. Moore for sponsoring this and getting the Model to a good place to be ready to send to the states.”

A full copy of the model is below

National Council of Insurance Legislators (NCOIL)

Insurance Business Transfer Model Act

*Sponsored by Asm. Andrew Garbarino (NY) and Rep. Lewis Moore (OK)

*Adopted by the Joint State-Federal Relations and International Insurance Issues Committee on March 6, 2020 and by the Executive Committee on March 8, 2020.

Table of Contents

Section 1. Title
Section 2. Purpose
Section 3. Definitions
Section 4. Court Authority
Section 5. Notice Requirements
Section 6. Application Procedure
A. Submitting Application of Insurance Business Transfer Plan to Insurance Commissioner
B. Application to the Court for Approval of the Insurance Business Transfer Plan
C. Approval of the Insurance Business Transfer Plan
D. Implementation of Insurance Business Transfer Plan
Section 7. Ongoing Oversight by Insurance Commissioner
Section 8. Fees and Costs
Section 9. Effective Date

Section 1. Title

This act shall be known and may be cited as the “Insurance Business Transfer Act”.

Section 2. Purpose

This act is adopted to provide options to address the significant limitations in the current methods available to insurers to transfer or assume blocks of insurance business in an efficient and cost-effective manner that provides needed legal finality for such transfers in order to provide for improved operational and capital efficiency for insurance companies, stimulates the economy by attracting segments of the insurance industry to the state, make this state an attractive home jurisdiction for insurance companies, encourages economic growth and increased investment in the financial services sector and increases the availability of quality insurance industry jobs in this state. These purposes are accomplished by providing a basis and procedures for the transfer and statutory novation of policies from a transferring insurer to an assuming insurer by way of an Insurance Business Transfer without the affirmative consent of policyholders or reinsureds. The novation is effected by court order. This act establishes the requirements for notice and disclosure and standards and procedures for the approval of the transfer and novation by the State Insurance Commissioner and a District Court pursuant to an Insurance Business Transfer Plan. This act does not limit or restrict other means of effecting a transfer or novation.

Section 3. Definitions

A. “Affiliate” means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

B. “Applicant” means a transferring insurer or reinsurer applying under Section 6 of this act.

C. “Assuming insurer” means an insurer domiciled in this State that assumes or seeks to assume policies from a transferring insurer pursuant to this act. An assuming insurer may be a company established pursuant to the State Captive Insurance Company Act.

D. “Court” means the [District Court].

Drafting Note: Each state shall identify the specific court that shall have jurisdiction and venue

E. “Department” means the State Insurance Department.

Drafting Note: In certain states “State Insurance Department” may be replaced with the regulatory body that has jurisdiction over insurance

F. “Commissioner” means the State Insurance Commissioner.

G. “Implementation order” means an order issued by the Court under Section 6 of this act.

H. “Insurance Business Transfer” means a transfer and novation in accordance with this act. Insurance Business Transfers will transfer insurance obligations or risks, or both, of existing or in-force contracts of insurance or reinsurance from a transferring insurer to an assuming insurer. Once approved pursuant to this act, the Insurance Business Transfer will effect a novation of the transferred contracts of insurance or reinsurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer’s insurance obligations or risks, or both, under the contracts are extinguished.

I. “Insurance Business Transfer Plan” or “Plan” means the plan submitted to the Department to accomplish the transfer and novation pursuant to an Insurance Business Transfer, including any associated transfer of assets and rights from or on behalf of the transferring insurer to the assuming insurer.

J. “Independent expert” means an impartial person who has no financial interest in either the assuming insurer or transferring insurer, has not been employed by or acted as an officer, director, consultant or other independent contractor for either the assuming insurer or transferring insurer within the past twelve (12) months, is not appointed by the Commissioner to assist in any capacity in any insurer rehabilitation or delinquency proceeding and is receiving no compensation in connection with the transaction governed by this act other than a fee based on a fixed or hourly basis that is not contingent on the approval or consummation of an Insurance Business Transfer and provides proof of insurance coverage that is satisfactory to the
Commissioner.

K. “Insurer” means an insurance or surety company, including a reinsurance company, and shall be deemed to include a corporation, company, partnership, association, society, order, individual or aggregation of individuals engaging in or proposing or attempting to engage in any kind of
insurance or surety business, including the exchanging of reciprocal or inter-insurance contracts between individuals, partnerships and corporations.

L. “Policy” means a policy, annuity contract or certificate of insurance or a contract of reinsurance pursuant to which the insurer agrees to assume an obligation or risk, or both, of the policyholder or to make payments on behalf of, or to, the policyholder or its beneficiaries, and shall include property, casualty, life, health and any other line of insurance the Commissioner finds via regulation is suitable for an insurance business transfer.

Drafting Note: States may wish to remove certain lines of insurance from the scope of an insurance business transfer.

M. “Policyholder” means an insured or a reinsured under a policy that is part of the subject business.

N. “Subject business” means the policy or policies that are the subject of the Insurance Business Transfer Plan.

O. “Transfer and novation” means the transfer of insurance obligations or risks, or both, of existing or in-force policies from a transferring insurer to an assuming insurer, and is intended to effect a novation of the transferred policies with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer on the transferred policies and the transferring insurer’s insurance obligations or risks, or both, under the transferred policies are extinguished.

P. “Transferring insurer” means an insurer or reinsurer that transfers and novates or seeks to transfer and novate obligations or risks, or both, under one or more policies to an assuming insurer pursuant to an Insurance Business Transfer Plan.

Section 4. Court Authority

Notwithstanding any other provision of law, the court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this act. No provision of this act shall be construed to preclude the court from, on its own motion, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of power.

Section 5. Notice Requirements

A. Whenever notice is required to be given by the applicant under the Insurance Business Transfer Act and except as otherwise permitted or directed by the court or the Insurance Commissioner, the applicant shall, within fifteen (15) days of the event triggering the requirement, cause transmittal of the notice:

1. To the chief insurance regulator in each jurisdiction in which the applicant:

a. holds or has ever held a certificate of authority, and

b. in which policies that are part of the subject business were issued or policyholders currently reside;

2. To the National Conference of Insurance Guaranty Funds, the National Organization of Life and Health Insurance Guaranty Associations and all state insurance guaranty associations for the states in which the applicant:

a. holds or has ever held a certificate of authority, and

b. in which policies that are part of the subject business were issued or policyholders currently reside;

3. To reinsurers of the applicant pursuant to the notice provisions of the reinsurance agreements applicable to the policies that are part of the subject business, or where an agreement has no provision for notice, by internationally recognized delivery service;

4. To all policyholders holding policies that are part of the subject business, at their lastknown address as indicated by the records of the applicant or to the address to which premium notices or other policy documents are sent. A notice of transfer shall also be sent to the transferring insurer’s agents or brokers of record on the subject business; and

5. By publication in a newspaper of general circulation in the state in which the applicant has its principal place of business and in such other publications that the Commissioner requires

B. If notice is given in accordance with this section, any orders under this act shall be conclusive with respect to all intended recipients of the notice, whether or not they receive actual notice.

C. Where this act requires that the applicant provide notice but the Commissioner has been named receiver of the applicant, the Commissioner shall provide the required notice.

D. Notice under this section may take the form of first-class mail, facsimile and/or electronic notice.

Section 6. Application Procedure

A. Application Procedure.

1. An Insurance Business Transfer Plan must be filed by the applicant with the Insurance Commissioner for his or her review and approval. The Plan must contain the information set forth below or an explanation as to why the information is not included. The Plan may be supplemented by other information deemed necessary by the Commissioner:

a. the name, address and telephone number of the transferring insurer and the assuming insurer and their respective direct and indirect controlling persons, if any,

b. summary of the Insurance Business Transfer Plan,

c. identification and description of the subject business,

d. most recent audited financial statements and statutory annual and quarterly reports of the transferring insurer and assuming insurer filed with their domiciliary regulator,

e. the most recent actuarial report and opinion that quantify the liabilities associated with the subject business,

f. pro-forma financial statements showing the projected statutory balance sheet, results of operations and cash flows of the assuming insurer for the three (3) years following the proposed transfer and novation,

g. officers’ certificates of the transferring insurer and the assuming insurer attesting that each has obtained all required internal approvals and authorizations regarding the Insurance Business Transfer Plan and completed all necessary and appropriate actions relating thereto,

h. proposal for Plan implementation and administration, including the form of notice to be provided under the Insurance Business Transfer Plan to any policyholder whose policy is part of the subject business,

i. full description as to how such notice shall be provided,

j. description of any reinsurance arrangements that would pass to the assuming insurer under the Insurance Business Transfer Plan,

k. description of any guarantees or additional reinsurance that will cover the subject business following the transfer and novation,

l. a statement describing the assuming insurer’s proposed investment policies and any contemplated third-party claims management and administration arrangements,

m. description of how the transferring and assuming insurers will be licensed for guaranty association coverage purposes,

Drafting Note: The regulatory authorization language of Section 6D. is meant to allow for the promulgation of regulations that address issues including, but not limited to:

(1) Guaranty association coverage;

(2) The financial implications of the transaction including solvency, capital adequacy, cash flow, reserves, asset quality and risk-based capital;

(3) An analysis of the assuming insurer’s corporate governance structure to ensure that there is proper board management oversight and expertise to
manage the subject business;

(4) The competency, experience and integrity of the persons who would control the operation of an involved insurer; and

(5) Ensuring the transaction is not being made for improper purposes, including fraud.

n. evidence of approval or nonobjection of the transfer from the chief insurance regulator of the state of the transferring insurer’s domicile, and

o. a report from an independent expert, selected by the Commissioner from a list of at least two nominees submitted jointly by the transferring insurer and the assuming insurer, to assist the Commissioner and the court in connection with their review of the proposed transaction. Should the Commissioner, in his or her sole discretion, reject the nominees, he or she may appoint the independent expert. The report shall provide the following:

(1) a statement of the independent expert’s professional qualifications and descriptions of the experience that qualifies him or her as an expert
suitable for the engagement,

(2) whether the independent expert has, or has had, direct or indirect interest in the transferring or assuming insurer or any of their respective
affiliates,

(3) the scope of the report,

(4) a summary of the terms of the Insurance Business Transfer Plan to the extent relevant to the report,

(5) a listing and summaries of documents, reports and other material information the independent expert has considered in preparing the report and whether any information requested was not provided,

(6) the extent to which the independent expert has relied on information provided by and the judgment of others,

(7) the people on whom the independent expert has relied and why, in his or her opinion, such reliance is reasonable,

(8) the independent expert’s opinion of the likely effects of the Insurance Business Transfer Plan on policyholders and claimants, distinguishing between:

(a) transferring policyholders and claimants,

(b) policyholders and claimants of the transferring insurer whose policies will not be transferred, and

(9) for each opinion that the independent expert expresses in the report the facts and circumstances supporting the opinion, and

(10) consideration as to whether the security position of policyholders that are affected by the Insurance Business Transfer are materially adversely
affected by the transfer.

2. The independent expert’s report as required by subparagraph o of paragraph 1 of this subsection shall include, but not be limited to, a review of the following:

a. analysis of the transferring insurer’s actuarial review of reserves for the subject business to determine the reserve adequacy,

b. analysis of the financial condition of the transferring and assuming insurers and the effect the transfer will have on the financial condition of each company,

c. review of the plans or proposals the assuming insurer has with respect to the administration of the policies subject to the proposed transfer,

d. whether the proposed transfer has a material, adverse impact on the policyholders and claimants of the transferring and the assuming insurers,

e. analysis of the assuming insurer’s corporate governance structure to ensure that there is proper board and management oversight and expertise to manage the subject business, and

f. any other information that the Commissioner requests in order to review the Insurance Business Transfer.

3. The Commissioner shall have sixty (60) business days from the date of receipt of a complete Insurance Business Transfer Plan to review the Plan to determine if the applicant is authorized to submit it to the court. The Commissioner may extend the sixtyday review period for an additional thirty (30) business days.

4. The Commissioner shall authorize the submission of the Plan to the court unless he or she finds that the Insurance Business Transfer would have a material adverse impact on the interests of policyholders or claimants that are part of the subject business.

5. If the Commissioner determines that the Insurance Business Transfer would have a material adverse impact on the interests of policyholders or claimants that are part of the subject business, he or she shall notify the applicant and specify any modifications, supplements or amendments and any additional information or documentation with respect to the Plan that must be provided to the Commissioner before he or she will allow the applicant to proceed with the court filing.

6. The applicant shall have thirty (30) days from the date the Commissioner notifies him or her, pursuant to paragraph 5 of this subsection, to file an amended Insurance Business Transfer Plan providing the modifications, supplements or amendments and additional information or documentation as requested by the Commissioner. If necessary the applicant may request in writing an extension of time of thirty (30) days. If the applicant does not make an amended filing within the time period provided for in this paragraph, including any extension of time granted by the Commissioner, the Insurance Business Transfer Plan filing will terminate and a subsequent filing by the applicant will be considered a new filing which shall require compliance with all provisions of this act as if the prior filing had never been made.

7. The Commissioner’s review period in paragraph 3 of this subsection shall recommence when the modification, supplement, amendment or additional information requested in paragraph 5 of this subsection is received.

8. If the Commissioner determines that the Plan may proceed with the court filing, the Commissioner shall confirm that fact in writing to the applicant.

B. Application to the court for approval of the Insurance Business Transfer Plan.

1. Within thirty (30) days after notice from the Commissioner that the applicant may proceed with the court filing, the applicant shall apply to the court for approval of the Insurance Business Transfer Plan. Upon written request by the applicant, the Commissioner may extend the period for filing an application with the court for an additional thirty (30) days.

2. The applicant shall inform the court of the reasons why he or she petitions the court to find no material adverse impact to policyholders or claimants affected by the proposed transfer.

3. The application shall be in the form of a verified petition for implementation of the Insurance Business Transfer Plan in the court. The petition shall include the Insurance Business Transfer Plan and shall identify any documents and witnesses which the applicant intends to present at a hearing regarding the petition.

4. The Commissioner shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings pursuant to the Rules for District Courts of the State. The Commissioner’s position in the proceeding shall not be limited by his or her initial review of the Plan.

5. Following the filing of the petition, the applicant shall file a motion for a scheduling order setting a hearing on the petition.

6. Within fifteen (15) days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided in accordance with the notice provisions of Section 5 of this act. Following the date of distribution of the notice, there shall be a sixty-day comment period.

7. The notice to policyholders shall state or provide:

a. the date and time of the approval hearing,

b. the name, address and telephone number of the assuming insurer and transferring insurer,

c. that a policyholder may comment on or object to the transfer and novation,

d. the procedures and deadline for submitting comments or objections on the Plan,

e. a summary of any effect that the transfer and novation will have on the policyholder’s rights,

f. a statement that the assuming insurer is authorized, as provided in this section, to assume the subject business and that court approval of the Plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer,

g. that policyholders shall not have the opportunity to opt out of or otherwise reject the transfer and novation,

h. contact information for the Insurance Department where the policyholder may obtain further information, and

i. information on how an electronic copy of the Insurance Business Transfer Plan may be accessed. In the event policyholders are unable to readily access electronic copies, the applicant shall provide hard copies by first-class mail.

8. Any person, including by their legal representative, who considers himself, herself or itself to be adversely affected can present evidence or comments to the court at the approval hearing. However, such comment or evidence shall not confer standing on any person. Any person participating in the approval hearing must follow the process established by the court and shall bear his or her own costs and attorney fees.

C. Approval of the Insurance Business Transfer Plan.

1. After the comment period pursuant to paragraph 6 of subsection B of this section has ended the Insurance Business Transfer Plan shall be presented by the applicant for approval by the court.

2. At any time before the court issues an order approving the Insurance Business Transfer Plan, the applicant may withdraw the Insurance Business Transfer Plan without prejudice.

3. If the court finds that the implementation of the Insurance Business Transfer Plan would not materially adversely affect the interests of policyholders or claimants that are part of the subject business, the court shall enter a judgment and implementation order. The judgment and implementation order shall:

a. order implementation of the Insurance Business Transfer Plan,

b. order a statutory novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including the extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer, and providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies, and that the assuming insurer shall have all such rights, obligations, and liabilities as if it were the original insurer of such policies,

c. release the transferring insurer from any and all obligations or liabilities under policies that are part of the subject business,

d. authorize and order the transfer of property or liabilities, including, but not limited to, the ceded reinsurance of transferred policies and contracts on the subject business, notwithstanding any non-assignment provisions in any such reinsurance contracts. The subject business shall vest in and become liabilities of the assuming insurer,

e. order that the applicant provide notice of the transfer and novation in accordance with the notice provisions in Section 5 of this act, and

f. make such other provisions with respect to incidental, consequential and supplementary matters as are necessary to assure the Insurance Business Transfer Plan is fully and effectively carried out.

4. If the court finds that the Insurance Business Transfer Plan should not be approved, the court by its order may:

a. deny the petition, or

b. provide the applicant leave to file an amended Insurance Business Transfer Plan and petition.

5. Nothing in this section in any way effects the right of appeal of any party.

D. Implementation of Insurance Business Transfer Plan.

The Commissioner shall promulgate rules that are consistent with the provisions of the Insurance Business Transfer Act. No insurance business transfer plan shall be approved in a State unless and until such regulations are promulgated.

E. The portion of the application for an Insurance Business Transfer that would otherwise be confidential, including any documents, materials, communications or other information submitted to the Commissioner in contemplation of such application, shall not lose such confidentiality.

Section 7. Ongoing oversight by Insurance Commissioner

Insurers subject to this act consent to the jurisdiction of the Insurance Commissioner with regard to ongoing oversight of operations, management and solvency relating to the transferred business, including the authority of the Commissioner to conduct financial analysis and examinations.

Section 8. Fees and Costs

A. At the time of filing its application with the Insurance Commissioner for review and approval of an Insurance Business Transfer Plan, the applicant shall pay a nonrefundable fee to the Insurance Department.

B. The Commissioner may retain independent attorneys, appraisers, actuaries, certified public accountants, authorized consultants, or other professionals and specialists to assist Department personnel in connection with the review required by the Insurance Business Transfer Act, the cost of which shall be borne by the applicant.

C. The transferring insurer and the assuming insurer shall jointly be obligated to pay any compensation, costs and expenses of the independent expert and any consultants retained by the independent expert and approved by the Department incurred in fulfilling the obligations of the independent expert under this act. Nothing in this act shall be construed to create any duty for the independent expert to any party other than the Department or the Court.

D. Failure to pay any of the requisite fees or costs within thirty (30) days of demand shall be grounds for the Commissioner to request that the court dismiss the petition for approval of the Insurance Business Transfer Plan prior to the filing of an implementation order by the court or, if
after the filing of an implementation order, the Commissioner may suspend or revoke the assuming insurer’s certificate of authority to transact insurance business in this state.

Section 9. Effective Date

This act shall become effective _______.

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NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in insurance and financial services, works to preserve the State jurisdiction over insurance as established by the McCarran-Ferguson Act seventy-five years ago, and to serve as an educational forum for public policymakers and interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy when it comes to insurance and educate State legislators on current and longstanding insurance issues

NCOIL President and CEO Statement on Enactment of Coronavirus Relief Bill – The CARES Act

For Immediate Release
March 27, 2020
Contact: Cara Zimmermann
(732) 201-4133

NCOIL PRESIDENT AND CEO STATEMENT ON ENACTMENT OF CORONAVIRUS RELIEF BILL – THE CARES ACT

Manasquan, NJ – Indiana Representative Matt Lehman, NCOIL President, and Commissioner Tom Considine, NCOIL CEO, issued the following statement regarding the enactment of the historic coronavirus relief bill – The Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

“I applaud President Trump for signing the CARES Act into law in order to provide the country the social and financial relief it needs during this time of crisis. Congress also deserves a tremendous amount of credit for working together and acting quickly to get this done. There is still much work to do, but the CARES Act is a great step towards revitalizing the country” said Lehman.

“NCOIL appreciates the bipartisan approach towards developing the CARES Act. As Congress continues its work on further coronavirus-related legislation, NCOIL believes the issue of business interruption insurance coverage as it relates to the coronavirus needs to be addressed. While we support efforts to protect businesses and professionals facing the grave economic consequences of the current crisis, we cannot support, in any manner, efforts to retroactively force coverage into the contractual agreements that are business interruption insurance policies,” said Considine.

“We believe there is a way to accommodate all of our collective concerns for the businesses and professionals facing a near full stop on their income, as well as associations who are forced to cancel their revenue generating events with a national solution that has already proved effective. Accordingly, we have reached to Congress to suggest a federal claims fund in the model of the 9/11 Victims Compensation Fund for these claims that fall outside the four corners of their insurance contracts. We look forward to working with Congress on this very important issue,” Considine concluded.

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NCOIL Concludes Successful 2020 Spring Meeting in Charlotte

For Immediate Release
March 12, 2020
Contact: Cara Zimmermann
(732) 201-4133

NCOIL CONCLUDES SUCCESSFUL 2020 SPRING MEETING IN CHARLOTTE
Four New Model Laws Adopted, Keynote Speaker Addressed Coronavirus, Continued Timely Policy Discussion

Manasquan, NJ – Despite the omnipresent spectre of the coronavirus, the National Council of Insurance Legislators (NCOIL) concluded a successful 2020 Spring Meeting at the Charlotte Marriott City Center in Charlotte, North Carolina. There were 273 total registered attendees consisting of 46 legislators from 18 states, 15 first-time legislators, five Insurance Commissioners (or equivalent), and 11 insurance departments represented. Indiana Representative Matt Lehman presided over his first meeting as NCOIL President.

“Despite travel bans and precautionary procedures implemented in response to the Coronavirus pandemic, I am pleased with the large turn-out of attendees and the participation from first-time legislators in Charlotte,” said NCOIL President, IN Rep. Matt Lehman. “We had anticipated that at some point the consistent climb of attendance might begin to slow, but the data proves otherwise for the NCOIL Spring Meeting. 2020 is already demonstrating to be a busy year of policy discussion, and it’s because of everyone who shows up to engage in the critical discussions that make it possible for NCOIL to move quickly on urgent issues we face as a country.”

Participants at the Welcome Breakfast were greeted by NC Insurance Commissioner Mike Causey, followed by a presentation from Paul Tetrault, Executive Director of the Insurance Library.

Nick Davidson, Acting Director of Public Health of the South Carolina Department of Health and Environmental Control (DHEC), delivered an informative and timely Keynote Luncheon Address on COVID-19 (Coronavirus disease) awareness and prevention, followed by the most extensive Q&A session in NCOIL memory.

The agenda was highlighted by the adoption of four NCOIL Model Laws – the NCOIL Insurance Business Transfer (IBT) Model Act by the Joint State-Federal Relations & International Insurance Issues Committee, sponsored by NY Asm. Andrew Garbarino and OK Rep. Lewis Moore; the NCOIL E-Commerce Model Act sponsored by LA Rep. Edmond Jordan, the NCOIL E-Titling Model Act sponsored by WV Del. Steve Westfall, and the NCOIL Rebate Reform Model Act sponsored by NCOIL President, IN Rep. Matt Lehman, all by the Financial Services & Multi-Lines Issues Committee. Additionally, amendments to the NCOIL Market Conduct Surveillance Model Act, sponsored by IN Sen. Travis Holdman, NCOIL Immediate Past
President, were adopted by the Joint State-Federal Relations & International Insurance Issues Committee. These models and amendments were then adopted by the Executive Committee.

Dr. James M. Carson, Daniel P. Amos Distinguished Professor of Insurance of the Terry College of Business at the University of Georgia, delivered a presentation at The Institutes Griffith Foundation Legislator Luncheon titled “Considering the Economic Impact of the Insurance Industry on the States: An Overview for Public Policymakers.”

There were two enlightening general sessions: “LIBOR’s End: What Does it Mean?”; and “What States Preparing for Opioid Lawsuit Funds Can Learn from Tobacco Settlements.”

“Thank you to the wonderful host committee and NC legislators, Sens. Vickie Sawyer and Valerie Foushee, for being great hosts to us in Charlotte. I am happy to report that our ‘Handshakes Free Meeting’ was a success,” NCOIL CEO, Commissioner Tom Considine said. “There were 20 last minute cancellations due to COVID-19, but that represents just 7% of the total, and a great deal of business still moved forward.”

“The new NCOIL financial structure is working as intended, encouraging greater participation among legislators from contributing states through the stipend program. We look forward to welcoming new faces to NCOIL along with returning legislators as we take on another year of developing sound public policy,” Considine continued.

The Property & Casualty Insurance Committee continued discussion on the NCOIL E-Scooter Insurance Model Act, sponsored by ND Sen. Jerry Klein, NCOIL Chairman At-Large, in addition to having an initial discussion on the National Association of Insurance Commissioners (NAIC) Casualty Actuarial & Statistical Task Force’s (CASTF) initiatives. The Committee also heard an interesting presentation from Debra Ballen, General Counsel & Chief Risk Officer for the Insurance Institute for Business & Home Safety (IBHS).

The Special Committee on Natural Disaster Recovery continued discussion on the NCOIL Private Flood Insurance Model Act, sponsored by FL Rep. David Santiago. Lynne Grinsell from Zurich North America and Gina Schwitzgebel-Hardy of the North Carolina Joint Underwriting Association (NCJUA) and North Carolina Insurance Underwriting Association (NCIUA) each gave a presentation on Natural Disaster Mitigation Efforts.

The Life Insurance & Financial Planning Committee met to discuss Reforming the Life Insurance Application Process with Porter Nolan, Head of Legal at Ethos. Dr. Robert Gleeson, medical consultant to the American Council of Life Insurers (ACLI) spoke to the Committee about the fundamentals of life insurance underwriting. Representatives from the ACLI also introduced the Committee to the Paid Family Leave Income Replacement Benefits Model Act for development and consideration throughout 2020. Oklahoma Insurance Commissioner Glen Mulready gave an update on the work of the NAIC Accelerated Underwriting Working Group.

In addition to the adoption of the NCOIL IBT Model Act and amendments to the NCOIL Market Conduct Surveillance Model Act, the Joint State-Federal Relations & International Insurance Issues Committee was given a briefing on the NCOIL Comment Letter on the Department of Housing and Urban Development’s Disparate Impact Rule by NCOIL CEO Commissioner Tom Considine and former Illinois Insurance Director Nat Shapo.

The Health Insurance & Long-Term Care Issues Committee had another packed agenda, during which they continued discussions on the NCOIL Short-Term Limited Duration Insurance (STLDI) Model Act and the NCOIL Health Care Sharing Ministry (HCSM) Registration Model Act, both sponsored by IN Rep. Martin Carbaugh. Additionally, the Committee held discussions on the NCOIL Patient Dental Care Bill of Rights Model Act, sponsored by ND Rep. George Keiser and AR Rep. Deborah Ferguson, and the NCOIL Vision Care Services Model Act, sponsored by OH Sen. Bob Hackett. Jean Holliday from the NC Department of Health and Human Services delivered a presentation titled “Making the Switch from Fee-for-Service to Managed Care: An Update on North Carolina’s Medicaid Transformation.”

The Workers’ Compensation Insurance Committee heard a presentation from Teri Leon of Pie Insurance focused on innovation in the workers’ compensation insurance marketplace.

In addition to the adoption of three NCOIL Model Laws, the Financial Services & Multi-Lines Issues Committee discussed the introduction of the NCOIL Model Act Concerning Statutory Thresholds for Settlements Involving Minors, sponsored by TX Rep. Tom Oliverson, M.D. and KY Rep. Joe Fischer, NCOIL Secretary. The Committee also heard a presentation from Nicole Gunderson, Managing Director at Global Insurance Accelerator, titled “Supporting and Promoting Innovation in the Insurance Industry.”

Committee minutes will be posted within the next week at www.ncoil.org.

Discussions on model laws will continue during the 2020 Summer Meeting in Jersey City, NJ, and possible interim committee calls beforehand. The NCOIL Summer Meeting will take place from July 22-25.

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NCOIL Adopts Peer-to-Peer Car Sharing Program Model Act

For Immediate Release
February 3, 2020
Contact: Cara Zimmermann
(732) 201-4133

NCOIL ADOPTS PEER-TO-PEER CAR SHARING PROGRAM MODEL ACT
Protects Against Loss and Bridges the Trust-Gap

Manasquan, NJ – During the 2019 NCOIL Annual Meeting in Austin, TX, the organization adopted the NCOIL Peer-to-Peer Car Sharing Program Model Act sponsored by Kentucky Representative Bart Rowland, 2020 Chair of the NCOIL Workers’ Compensation Insurance Committee. The Model passed without objection by the Property & Casualty Insurance Committee and the NCOIL Executive Committee.

The Property & Casualty Insurance Committee had been discussing the growing sharing economy in general for several years. In 2015, NCOIL passed groundbreaking TNC legislation for ridesharing companies such as Uber & Lyft, which has passed either in whole or in part in nearly every state. This peer-to-peer car sharing model legislation was first discussed thoroughly at the 2019 Summer Meeting in Newport Beach, CA. Sensing that both the peer-to-peer car sharing and insurance industries were in agreement with several issues, the Committee, and NCOIL as a whole, acted in an expeditious manner to ensure that a Model was ready for states to consider adopting in 2020 legislative sessions.

KY Rep. Bart Rowland stated, “With the rise of collaborative consumption and sharing, it is important that the insurance industry keep up and create trust between the consumers and companies. If you pay someone to have access to transportation, there is a base level of safety that people expect. The car sharing industry must work in conjunction with legislators and regulators to properly accommodate the sharing economy. I am proud to sponsor this Model and commend NCOIL for taking the lead on this issue. Good public policy requires putting parameters in place for these rapidly emerging platforms and technologies.”

A document previously negotiated between peer-to-peer car sharing companies and the American Property Casualty Insurance Association (APCIA) had served as the basis for peer-topeer car sharing legislation enacted in some states. Rep. Rowland decided to use that document as the basis for the first draft of the Model.

“Since several states are looking to adopt legislation on this issue in 2020, it was crucial that NCOIL move quickly. It is also important to remember that this is a Model. Every state is going to have its own process for tailoring it to accommodate the particular needs of that state. The Model provides states the vehicle for that debate,” stated Commissioner Tom Considine, NCOIL CEO. “I applaud the peer-to-peer companies and the insurance industry for coming together with legislators and creating a great framework on how insurance for the car sharing economy is handled. NCOIL thanks Rep. Rowland for his leadership in developing very positive public policy on this issue,” continued Commissioner Considine.

During drafting discussions, NCOIL legislators and staff worked closely with interested parties such as: Turo, APCIA, Enterprise Holdings, Allstate, the National Association of Mutual Insurance Companies (NAMIC), State Farm, and Getaround.

During drafting discussions, KY Rep. Rowland took the lead in bringing forth an amendment to the Model in the form of a “Scope” section in order to clarify what NCOIL’s intent as an organization is when it comes to legislation such as peer-to-peer car sharing. The “Scope” section states, “This Act is intended to govern the intersection of peer-to-peer car services and the state-regulated business of insurance. Nothing in this Act shall be construed to extend beyond insurance or have any implications for other provisions of the code of this state, including but not limited to, those related to motor vehicle regulation, airport regulation, or taxation.” This amendment proved vital in getting both the peer-to-peer car sharing and insurance industries to support the Model. “The I in NCOIL does stand for insurance, after all. We understand that legislators and regulators may need to deal with other policy issues impacted by this peer-to-peer auto business,” concluded Commissioner Considine.

Highlights of the Model include the requirement that a peer-to-peer car sharing program ensure that, during each car sharing period, the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that provides insurance coverage in amounts no less than the minimum amounts set forth in state minimum coverage statutes; the requirement that a peer-to-peer car sharing program assume liability of a shared vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses during the car sharing period in an amount stated in the peer-topeer car sharing program agreement which amount may not be less than those set forth in a State’s financial responsibility law; the requirement of the peer-to-peer car sharing program to notify the shared vehicle owner if the shared vehicle has a lien against it; exclusions in motor vehicle liability insurance policies may exclude any and all coverage and the duty to defend or indemnify for any claim afforded under a shared vehicle owner’s motor vehicle insurance policy; recordkeeping requirements for peer-to-peer car sharing programs pertaining to the use of a vehicle; consumer protection disclosure requirements for peer-to-peer car sharing programs such as the daily rate, fees, and if applicable, any insurance or protection package costs that are charged to the shared vehicle owner or the shared vehicle driver; driver’s license verification and data retention requirements; requiring sole responsibility of the peer-to-peer car sharing program for any equipment, such as a GPS system or other special equipment put in or on the vehicle to monitor or facilitate the car sharing transaction; and reporting requirements related to automobile safety recalls for both shared vehicle owners and peer-to-peer car sharing programs.

A full copy of the Model is below.

National Council of Insurance Legislators (NCOIL)

Peer-to-Peer Car Sharing Program Model Act

*Sponsored by Rep. Bart Rowland (KY)
*Adopted by the Property & Casualty Insurance Committee and Executive Committee on December 13th, 2019.

Table of Contents

Chapter 1. Short Title
Chapter 2. Scope
Chapter 3. Definitions
Chapter 4. Insurance
Chapter 5. Consumer Protection Disclosures
Chapter 6. Effective Date

AN ACT concerning transportation.

Be it enacted by the Legislature of the State of X:

[(New Act) / or / (The statutes of the jurisdiction are hereby amended as follows)]:

Chapter 1. Short Title

This Act may be cited as the Peer-to-Peer Car Sharing Program Act.

Chapter 2. Scope

This Act is intended to govern the intersection of peer-to-peer car services and the state-regulated business of insurance. Nothing in this Act shall be construed to extend beyond insurance or have any implications for other provisions of the code of this state, including but not limited to, those related to motor vehicle regulation, airport regulation, or taxation.

Chapter 3. Definitions

Drafting Note: These definitions need to be read, interpreted and implemented within the limitations placed upon this Act by its scope set forth in Chapter 2.

Application of definitions

Sec. 1. Except as otherwise provided, the definitions in this chapter apply throughout this article.

“Peer-to-Peer Car Sharing”

Sec. 2. “Peer-to-Peer Car Sharing” means the authorized use of a vehicle by an individual other than the vehicle’s owner through a peer-to-peer car sharing program. “Peer-to-Peer Car Sharing” does not mean rental car or rental activity as defined in _______.

“Peer-to-Peer Car Sharing Program”

Sec. 3. “Peer-to-Peer Car Sharing Program” means a business platform that connects vehicle owners with drivers to enable the sharing of vehicles for financial consideration. “Peer-to-Peer Car Sharing Program” does not mean rental car company as defined in _______.

“Car Sharing Program Agreement”

Sec. 4. “Car Sharing Program Agreement” means the terms and conditions applicable to a shared vehicle owner and a shared vehicle driver that govern the use of a shared vehicle through a peer-to-peer car sharing program. “Car Sharing Program Agreement” does not mean rental car agreement, or similar, as defined in
_______.

“Shared Vehicle”

Sec. 5. “Shared vehicle” means a vehicle that is available for sharing through a peer-to-peer car sharing program. “Shared vehicle” does not mean rental car or rental vehicle as defined in [insert citation to the State’s statutory definition of “rental car” or the equivalent term in that State’s laws].

“Shared Vehicle Driver”

Sec. 6. “Shared Vehicle Driver” means an individual who has been authorized to drive the shared vehicle by the shared vehicle owner under a car sharing program agreement.

“Shared Vehicle Owner”

Sec. 7. “Shared Vehicle Owner” means the registered owner, or a person or entity designated by the registered owner, of a vehicle made available for sharing to shared vehicle drivers through a peer-to-peer car sharing program.

“Car Sharing Delivery Period”

Sec. 8. “Car Sharing Delivery Period” means the period of time during which a shared vehicle is being delivered to the location of the car sharing start time, if applicable, as documented by the governing car sharing program agreement.

“Car Sharing Period”

Sec. 9. “Car Sharing Period” means the period of time that commences with the car sharing delivery period or, if there is no car sharing delivery period, that commences with the car sharing start time and in either case ends at the car sharing termination time.

“Car Sharing Start Time”

Sec. 10. “Car Sharing Start Time” means the time when the shared vehicle becomes subject to the control of the shared vehicle driver at or after the time the reservation of a shared vehicle is scheduled to begin as documented in the records of a peer–to–peer car sharing program.

“Car Sharing Termination Time”

Sec. 11. “Car Sharing Termination Time” means the earliest of the following events:

(1) The expiration of the agreed upon period of time established for the use of a shared vehicle according to the terms of the car sharing program agreement if the shared vehicle is delivered to the location agreed upon in the car sharing program agreement;

(2) When the shared vehicle is returned to a location as alternatively agreed upon by the shared vehicle owner and shared vehicle driver as communicated through a peer-to-peer car sharing program; or

(3) When the shared vehicle owner or the shared vehicle owner’s authorized designee, takes possession and control of the shared vehicle.

Chapter 4. Insurance

Insurance Coverage During Car Sharing Period

Sec. 1. (a) A peer-to-peer car sharing program shall assume liability, except as provided in subsection (b) of this chapter, of a shared vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses during the car sharing period in an amount stated in the peer-to-peer car sharing program agreement which amount may not be less than those set forth in (State’s financial responsibility law).

(b) Notwithstanding the definition of “car sharing termination time” as set forth in Chapter 3 or 4 of this Act, the assumption of liability under subsection (a) of this subsection does not apply to any shared vehicle owner when:

(1) A shared vehicle owner makes an intentional or fraudulent material misrepresentation or omission to the peer-to-peer car sharing program before the car sharing period in which the loss occurred, or

(2) Acting in concert with a shared vehicle driver who fails to return the shared vehicle pursuant to the terms of car sharing program agreement.

(c) Notwithstanding the definition of “car sharing termination time” as set forth in Chapter 3 or Chapter 4 of this Act, the assumption of liability under subsection (a) of this section would apply to bodily injury, property damage, uninsured and underinsured motorist or personal injury protection losses by damaged third parties required by [insert citation to the applicable state financial responsibility law]

(d) A peer-to-peer car sharing program shall ensure that, during each car sharing period, the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that provides insurance coverage in amounts no less than the minimum amounts set forth in [insert citation to applicable statute establishing state minimum coverage], and:

(1) Recognizes that the shared vehicle insured under the policy is made available and used through a peer-to-peer car sharing program; or

(2) Does not exclude use of a shared vehicle by a shared vehicle driver.

(e) The insurance described under subsection (d) may be satisfied by motor vehicle liability insurance maintained by:

(1) A shared vehicle owner;
(2) A shared vehicle driver;
(3) A peer-to-peer car sharing program; or
(4) Both a shared vehicle owner, a shared vehicle driver, and a peer-to-peer car sharing program.

(f) The insurance described in subsection (e) that is satisfying the insurance requirement of subsection (d) shall be primary during each car sharing period.

(g) The peer-to-peer car sharing program shall assume primary liability for a claim when it is in whole or in part providing the insurance required under subsections (d) and (e) and:

(1) a dispute exists as to who was in control of the shared motor vehicle at the time of the loss; and

(2) the peer-to-peer car sharing program does not have available, did not retain, or fails to provide the information required by Section 5 of this Chapter 4.

The shared motor vehicle’s insurer shall indemnify the car sharing program to the extent of its obligation under, if any, the applicable insurance policy, if it is determined that the shared motor vehicle’s owner was in control of the shared motor vehicle at the time of the loss.

(h) If insurance maintained by a shared vehicle owner or shared vehicle driver in accordance with subsection (e) has lapsed or does not provide the required coverage, insurance maintained by a peer-to-peer car sharing program shall provide the coverage required by subsection (d) beginning with the first dollar of a claim and have the duty to defend such claim except under circumstances as set forth in Chapter 4 Section (1)(b).

(i) Coverage under an automobile insurance policy maintained by the peer-to-peer car sharing program shall not be dependent on another automobile insurer first denying a claim nor shall another automobile insurance policy be required to first deny a claim.

(j) Nothing in this Chapter:

(1) Limits the liability of the peer-to-peer car sharing program for any act or omission of the peer-to-peer car sharing program itself that results in injury to any person as a result of the use of a shared vehicle through a peer-to-peer car sharing program; or

(2) Limits the ability of the peer-to-peer car sharing program to, by contract, seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer car sharing program resulting from a breach of the terms and conditions of the car sharing program agreement.

Notification of Implications of Lien

Sec. 2. At the time when a vehicle owner registers as a shared vehicle owner on a peer-to-peer car sharing program and prior to the time when the shared vehicle owner makes a shared vehicle available for car sharing on the peer-to-peer car sharing program, the peer-to-peer car sharing program shall notify the shared vehicle owner that, if the shared vehicle has a lien against it, the use of the shared vehicle through a peer-to-peer car sharing program, including use without physical damage coverage, may violate the terms of the contract with the lienholder.

Exclusions in Motor Vehicle Liability Insurance Policies

Sec. 3. (a) An authorized insurer that writes motor vehicle liability insurance in the State may exclude any and all coverage and the duty to defend or indemnify for any claim afforded under a shared vehicle owner’s motor vehicle liability insurance policy, including but not limited to:

(1) liability coverage for bodily injury and property damage;

(2) personal injury protection coverage as defined in [CITE STATUTE];

(3) uninsured and underinsured motorist coverage;

(4) medical payments coverage;

(5) comprehensive physical damage coverage; and

(6) collision physical damage coverage

(b) Nothing in this Article invalidates or limits an exclusion contained in a motor vehicle liability insurance policy, including any insurance policy in use or approved for use that excludes coverage for motor vehicles made available for rent, sharing, or hire or for any business use.

Recordkeeping; Use of Vehicle in Car Sharing

Sec. 4. A peer-to-peer car sharing program shall collect and verify records pertaining to the use of a vehicle, including, but not limited to, times used, fees paid by the shared vehicle driver, and revenues received by the shared vehicle owner and provide that information upon request to the shared vehicle owner, the shared vehicle owner’s insurer, or the shared vehicle driver’s insurer to facilitate a claim coverage investigation. The peer-to-peer car sharing program shall retain the records for a time period not less than the applicable personal injury statute of limitations.

Exemption; Vicarious Liability

Sec. 5. A peer-to-peer car sharing program and a shared vehicle owner shall be exempt from vicarious liability in accordance with 49 U.S.C. § 30106 and under any state or local law that imposes liability solely based on vehicle ownership. Contribution against Indemnification

Sec. 6. A motor vehicle insurer that defends or indemnifies a claim against a shared vehicle that is excluded under the terms of its policy shall have the right to seek contribution against the motor vehicle insurer of the peer-to-peer car sharing program if the claim is: (1) made against the shared vehicle owner or the shared vehicle driver for loss or injury that occurs during the car sharing period; and (2) excluded under the terms of its policy.

Insurable Interest

Sec. 7. (a) Notwithstanding any other law, statute, rule or regulation to the contrary, a peer-to-peer car sharing program shall have an insurable interest in a shared vehicle during the car sharing period.

(b) Nothing in this section creates liability on a Peer-to-Peer Car Sharing Program to maintain the coverage mandated by this Chapter 4, Sec. 1.

(c) A peer–to–peer car sharing program may own and maintain as the named insured one or more policies of motor vehicle liability insurance that provides coverage for:

(1) liabilities assumed by the peer–to–peer car sharing program under a peer–to–peer car sharing program agreement; or
(2) any liability of the shared vehicle owner; or
(3) damage or loss to the shared motor vehicle; or any liability of the shared vehicle driver.

Chapter 5. Consumer Protections Disclosures

Sec. 1. Each car sharing program agreement made in the State shall disclose to the shared vehicle owner and the shared vehicle driver:

(a) Any right of the peer-to-peer car sharing program to seek indemnification from the shared vehicle owner or the shared vehicle driver for economic loss sustained by the peer-to-peer car sharing program resulting from a breach of the terms and conditions of the car sharing program agreement;

(b) That a motor vehicle liability insurance policy issued to the shared vehicle owner for the shared vehicle or to the shared vehicle driver does not provide a defense or indemnification for any claim asserted by the peer-to-peer car sharing program;

(c) That the peer-to-peer car sharing program’s insurance coverage on the shared vehicle owner and the shared vehicle driver is in effect only during each car sharing period and that, for any use of the shared vehicle by the shared vehicle driver after the car sharing termination time, the shared vehicle driver and the shared vehicle owner may not have insurance coverage;

(d) The daily rate, fees, and if applicable, any insurance or protection package costs that are charged to the shared vehicle owner or the shared vehicle driver.

(e) That the shared vehicle owner’s motor vehicle liability insurance may not provide coverage for a shared vehicle.

(f) An emergency telephone number to personnel capable of fielding roadside assistance and other customer service inquiries.

(g) If there are conditions under which a shared vehicle driver must maintain a personal automobile insurance policy with certain applicable coverage limits on a primary basis in order to book a shared motor vehicle.

Driver’s License Verification and Data Retention

Sec. 2. (a) A peer-to-peer car sharing program may not enter into a peer-to-peer car sharing program agreement with a driver unless the driver who will operate the shared vehicle:

(1) Holds a driver’s license issued under _________ that authorizes the driver to operate vehicles of the class of the shared vehicle; or

(2) Is a nonresident who:

(i) Has a driver’s license issued by the state or country of the driver’s residence that authorizes the driver in that state or country to drive vehicles of the class of the shared vehicle; and

(ii) Is at least the same age as that required of a resident to drive; or

(3) Otherwise is specifically authorized by ________ to drive vehicles of the class of the shared vehicle.

(b) A peer-to-peer car sharing program shall keep a record of:

(1) The name and address of the shared vehicle driver;

(2) The number of the driver’s license of the shared vehicle driver and each other person, if any, who will operate the shared vehicle; and

(3) The place of issuance of the driver’s license.

Responsibility for Equipment

Sec. 3. A peer-to-peer car sharing program shall have sole responsibility for any equipment, such as a GPS system or other special equipment that is put in or on the vehicle to monitor or facilitate the car sharing transaction, and shall agree to indemnify and hold harmless the vehicle owner for any damage to or theft of such equipment during the sharing period not caused by the vehicle owner. The peerto-peer car sharing program has the right to seek indemnity from the shared vehicle driver for any loss or damage to such equipment that occurs during the sharing period.

Automobile Safety Recalls

Sec. 4. (a) At the time when a vehicle owner registers as a shared vehicle owner on a peer-to-peer car sharing program and prior to the time when the shared vehicle owner makes a shared vehicle available for car sharing on the peer-to-peer car sharing program, the peer-to-peer car sharing program shall:

(1) Verify that the shared vehicle does not have any safety recalls on the vehicle for which the repairs have not been made; and

(2) Notify the shared vehicle owner of the requirements under subsection (b) of this section.

(b) (1) If the shared vehicle owner has received an actual notice of a safety recall on the vehicle, a shared vehicle owner may not make a vehicle available as a shared vehicle on a peer-to-peer car sharing program until the safety recall repair has been made.

(2) If a shared vehicle owner receives an actual notice of a safety recall on a shared vehicle while the shared vehicle is made available on the peer-to-peer car sharing program, the shared vehicle owner shall remove the shared vehicle as available on the peer-to-peer car sharing program, as soon as practicably possible after receiving the notice of the safety recall and until the safety recall repair has been made.

(3) If a shared vehicle owner receives an actual notice of a safety recall while the shared vehicle is being used in the possession of a shared vehicle driver, as soon as practicably possible after receiving the notice of the safety recall, the shared vehicle owner shall notify the peer-to-peer car sharing program about the safety recall so that the shared vehicle owner may address the safety recall repair.

Chapter 6. Effective Date.

Sec. 1. This Act shall take effect on the day that occurs [the effective date should be at least nine (9) months after the Act becomes law—insert date here] after the date on which the Act becomes law.

Drafting Note – The effective date should be a minimum of 9 months from the date the Governor signs the legislation.

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NCOIL Adopts Workers’ Compensation Drug Formulary Model Act

For Immediate Release
January 21, 2020
Contact: Cara Zimmermann
(732) 201-4133

NCOIL ADOPTS WORKERS’ COMPENSATION DRUG FORMULARY MODEL ACT
Facilitates Safe and Appropriate Use of Prescription Drugs in State Workers’ Comp Systems

Manasquan, NJ – During the 2019 NCOIL Annual Meeting in Austin, TX, the organization adopted the NCOIL Workers’ Compensation Drug Formulary Model Act sponsored by Indiana Representative Matt Lehman, 2020 NCOIL President. The Model passed without objection on a voice vote by both the Workers Compensation and the NCOIL Executive Committees.

The Workers’ Compensation Committee had been working on this Model since its introduction at the NCOIL Spring Meeting in Nashville, TN in March 2019. The initial discussion draft of the Model was based on Indiana SB 369 which Rep. Lehman sponsored and was signed into law in March 2018. Essentially, the IN law requires the adoption of the Official Disability Guidelines (ODG) Workers’ Compensation Drug Formulary Appendix A published by MCG Health, and prohibits workers’ compensation reimbursement for drugs specified in said formulary as “N” drugs, except during a medical emergency.

However, in order to provide states with flexibility, the Model does not require the selection of a specific formulary but rather provides states the option of either selecting a nationally recognized, evidence-based drug formulary, or developing such a formulary, by rule.

“I am proud to sponsor this Model for NCOIL, and I commend the Committee for acting promptly on this issue. In efforts to combat the opioid crisis and lower drug costs, it is our duty as State legislators to ensure that the treatment provided to injured workers is related to and most appropriate for their work-related injury,” stated Rep. Matt Lehman, NCOIL President. “My goal when developing NCOIL Models is always to develop a framework for states to consider, knowing that states may need to make certain changes to reflect the market and other realities. I am pleased we were successful in ultimately ending up in a good place with this Model,” he concluded.

During the drafting discussions, NCOIL legislators and staff heard from a wide array of interested parties such as: the Tennessee Bureau of Workers’ Compensation; Mitchell, ODG by MCG Health; ReedGroup; MAXIMUS; the California Workers’ Compensation Institute (CWCI); Baker & Welsh LLC; the American Medical Association Advocacy Center (AMA); the California Labor Federation; the American Association of Payors, Administrators, and Networks (AAPAN); the Maryland State Medical Society (MedChi); the Physicians Research Institute (PRI); the American Property Casualty Insurance Association (APCIA); and Medtronic.

The purpose of the Model is “to require the establishment of a drug formulary for use in a states’ workers’ compensation system in order to facilitate the safe and appropriate use of prescription drugs in the treatment of work-related injury and occupational disease.”

Highlights of the Model include the requirement for the appropriate state agency/department to select a nationally recognized, evidence-based drug formulary or to develop such a formulary by rule; setting forth factors the appropriate state agency/department must consider while selecting or developing a drug formulary for adoption; solicitation of public comments and holding a public hearing regarding the selection of a formulary;; requiring the appropriate state agency/department to review updates by the publisher of a selected formulary; ensuring the formulary is available through the department/state agency’s publicly accessible Internet website; requirements for operation of a formulary, including the process by which an employee can obtain a drug that is listed but no approved on the formulary; and third party conflict of interest requirements. The Model also requires the state department/agency to promulgate rules necessary for the implementation of the formulary.

Commissioner Tom Considine, NCOIL CEO, stated, “I am confident that the NCOIL Workers’ Compensation Drug Formulary Model Act will serve its purpose and provide states options so that they can determine what is best for their state. NCOIL Models are developed to better equip the states to act in the best interest of the public. In this instance of the Workers’ Compensation Drug Formulary Act, NCOIL provides the framework for states to make their workers’ compensation system safer and more efficient, while having the opportunity to expand provisions as they deem appropriate.”

A full copy of the model is below

National Council of Insurance Legislators (NCOIL)

Model Workers’ Compensation Drug Formulary Act

*Sponsored by Rep. Matt Lehman (IN)
*Adopted by the Workers’ Compensation Insurance Committee on December 12th, 2019 and
the Executive Committee on December 13th, 2019.

Table of Contents

Section 1. Short Title
Section 2. Purpose
Section 3. Selection of Drug Formulary
Section 4. Operation of Formulary
Section 5. Third Party Conflict of Interest
Section 6. Rules
Section 7. Effective Date

Section 1. Short Title

This Act shall be known as the “Model Workers’ Compensation Drug Formulary Act”

Section 2. Purpose

The purpose of this Act shall be to require the establishment of a drug formulary for use in a state’s workers’ compensation system in order to facilitate the safe and appropriate use of prescription drugs in the treatment of work-related injury and occupational disease.

Section 3. Selection or Development of Drug Formulary

(A) It is the intent of the Legislature that the [insert appropriate state agency/department] select a nationally recognized, evidence-based drug formulary, for use in the workers’ compensation system, or to develop such a formulary, by rule. Such formulary shall apply to prescription drugs that are prescribed and dispensed for outpatient use in connection with workers’ compensation claims with a date of injury on or after [insert date]. The drug formulary shall not apply to care provided in an emergency department or inpatient setting.

(B) In developing by rule or selecting a nationally recognized, evidence-based drug formulary for adoption, the [department] shall consider the following factors:

(1) Whether the formulary focuses on medical treatment specific to workers’ compensation.

(2) Whether the basis for the formulary is readily apparent and publicly available.

(3) Whether the formulary includes measures to aid in management of opioid medications.

(4) The cost of implementation and post-implementation associated costs of the formulary.

(5) Evidence-based guidelines for the treatment of workplace injury and disease.

(C) Within [thirty (30)] days of the effective date of this Act, the [department] shall solicit public comments regarding the selection of a nationally recognized, evidence-based prescription drug formulary under this section. The public comment period shall be [ninety (90) days]. During the public comment period, the [department] shall conduct at least one public hearing on the selection of a drug formulary. The [department] shall publish notice of the public comment period and public hearings on its website. The public hearing shall include, but not be limited to, employers, insurers, private sector employee representatives, public sector employee representatives, treating physicians actively practicing medicine, pharmacists, pharmacy benefit managers, attorneys who represent applicants, and injured workers.

(D) Commencing [insert date], and concluding with the implementation of the formulary, the [administrative director] shall publish at least two interim reports on the internet web site of the [division of workers’ compensation] describing the status of the selection of the formulary.

(E) The [department] shall [annually] review updates issued by the formulary publisher to the selected formulary.

(F) The [department] shall ensure that the current nationally recognized, evidence-based prescription drug formulary is available through its publicly accessible Internet website for reference by physicians and the general public.

Section 4. Operation of Formulary

(A) Beginning [insert date] reimbursement is not permitted for a claim for payment of a drug that:

(1) is prescribed for use by an employee who files a notice of injury under this Act; and

(2) is listed but not approved in the formulary, or omitted from the formulary, unless the employee begins use of such drug after [insert date], and the use continues after [insert date].

(3) if the employee begins use of the such drug before [insert date], and the use continues after [insert date], reimbursement is permitted for such drug until [insert date].

(B) If a prescribing physician submits to an employer a request to permit use of a drug that is listed but not approved in the formulary, or omitted from the formulary, including the prescribing physician’s reason for requesting use of such drug and the employer approves the request, the prescribing physician may prescribe such drug for use by the injured employee.

(C) If the employer does not approve the prescribing physician’s request under subsection (B) to permit use of a drug that is listed but not approved in the formulary, or omitted from the formulary, the employer shall:

(1) send the request to a third party that is certified by the [Utilization Review Accreditation Commission (URAC) or another Accreditation Organization] to make a determination concerning the request. The use by the employer of an independent review organization selected by the [department] shall also satisfy this subsection; and

(2) notify the prescribing physician and the injured employee of the third party’s determination not more than [three (3)] business days after receiving the request.

(D) If an employer fails to provide the notice required by subsection (C)(2), the prescribing physician’s request under subsection (B) is considered approved, and reimbursement of the drug that is listed but not approved in the formulary, or omitted from the formulary, and prescribed for use by the injured employee is authorized.

(E) If the third party’s determination under subsection (C) is to deny the prescribing physician’s request to permit the use of the drug that is listed but not approved on the formulary, or omitted from the formulary:

(1) the employer shall notify the prescribing physician and the injured employee; and

(2) the injured employee may apply to [workers’ compensation board] for a final determination concerning the third party’s determination under subsection (C)

(F) Notwithstanding subsections (A) through (E), during a medical emergency, an employee shall receive a drug prescribed for the employee even if the drug is a drug that is listed but not approved on the formulary, or omitted from the formulary.

Section 5. Third Party Conflict of Interest

(A) The URAC certified third party identified in Section 4(C)(1) shall be independent of any workers’ compensation insurer or workers’ compensation claims administrator doing business in this state.

(B) No URAC certified third party identified in Section 4(C)(1) shall have any material professional, material familial, or material financial affiliation with any of the following:

(1) The employer, insurer or claims administrator.

(2) Any officer, director, employee of the employer, or insurer or claims administrator.

(3) A physician, the physician’s medical group, the physician’s independent practice association, or other provider involved in the medical treatment in dispute.

(4) The facility or institution at which either the proposed health care service, or the alternative service, if any, recommended by the employer, would be provided.

(5) The development or manufacture of the drug proposed by the employee whose treatment is under review, or the alternative therapy, if any, recommended by the employer.

(6) The injured employee or the employee’s immediate family, or the employee’s attorney.

Section 6. Rules

The [state department] shall promulgate rules necessary for the implementation of the formulary.

Section 7. Effective Date

This Act shall take effect [xxx days] following enactment.

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NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by
legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in
insurance and financial services, works to preserve the State jurisdiction over insurance as established by the
McCarran-Ferguson Act seventy-five years ago, and to serve as an educational forum for public policymakers and
interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy
when it comes to insurance and educate State legislators on current and longstanding insurance issues.

NCOIL Adopts Drug Pricing Transparency Model Act

For Immediate Release
January 13, 2020
Contact: Paul Penna
(732) 201-4133

NCOIL ADOPTS DRUG PRICING TRANSPARENCY MODEL ACT
Promotes Accountability and Establishes Reporting Requirements to Ensure Honesty with Patients

Manasquan. NJ – At the recently concluded 2019 NCOIL Annual Meeting in Austin, TX, the organization adopted the NCOIL Drug Pricing Transparency Model Act sponsored by Texas Representative Tom Oliverson, M.D., 2019 Health Committee Vice-Chair, and co-sponsored by Louisiana Sen. Dan “Blade” Morrish, former NCOIL President. The measure passed without objection on a voice vote and was affirmed by the NCOIL Executive Committee.

TX Rep. Oliverson said, “I want to thank everyone involved for their input. The NCOIL Drug Pricing Transparency Model Act has come a long way since the topic was first discussed in March of 2018. I am proud to have sponsored this measure, along with similar legislation that has been enacted in my home state of Texas, and I am pleased with the hard work the Committee has done to meet the objectives of ensuring that policymakers are doing everything they can to help states understand why prescription drug prices are increasing.”

LA Sen. Blade Morrish said, “I want to express my appreciation to Rep. Oliverson for his work on this and echo what Rep. Oliverson stated. The Model language allows for everyone to learn from one another and more quickly put into place legislation and practices that will effectively serve to support incentives and hold all participants in the delivery of healthcare to the same standards of accountability,” he concluded.

The topic of drug pricing transparency was introduced at the 2018 Spring Meeting in Atlanta, where then NCOIL Vice President, Vermont Representative Bill Botzow, and then NCOIL Secretary, California Assemblyman Ken Cooley, had presented laws from their respective states for distribution to the Committee. Their legislation focused on reporting and notification requirements for prescription drug manufacturers.

With the departure of VT Rep. Botzow from the legislature, the starting point for a framework on an NCOIL Drug Pricing Transparency Model Law was delayed until the 2018 Annual Meeting in Oklahoma City, where the Model was introduced for initial discussion. TX Rep. Oliverson chose to use provisions from the drug pricing transparency laws already enacted in Louisiana and Connecticut to start the discussion.

NCOIL worked closely on the Model with interested parties such as the Pharmaceutical Research and Manufacturers of America (PhRMA), the Pharmaceutical Care Management Association (PCMA), America’s Health Insurance Plans (AHIP), and several consumer advocates over the course of the past year. The purpose of the Model is to promote prescription drug pricing transparency and cost control.

Highlights of the Model include the requirement for drug manufacturers to report price increases over a certain threshold (sixty percent or greater over the preceding five calendar years or fifteen percent or greater in the preceding twelve months for drugs over $70 per month) as well as a statement of rationale regarding the factor or factors that caused the increase; the requirement for pharmacy benefit managers to report the aggregated dollar amount of rebates, price protection payments, fees and any other payments collected from pharmaceutical manufacturers that were retained as revenue by the PBM; and the requirement for health insurers to report the percent increase in annual net spending for prescription drugs across all plans and the percent increase in premiums that were attributable to prescription drugs across all plans. The Model requires this and other information to be reported to the State Insurance Commissioner who is then required to publish the data in an appropriate location on the Insurance Department’s internet website.

“This is exactly why the work of this Committee is so important. The NCOIL Drug Pricing Transparency Model is so timely. The most important thing for patients is that they really need to know how much the drug costs when they go to the pharmacy, and NCOIL believes that policymakers have a right to know about cost changes and factors that caused increases in wholesale acquisition costs,” said Commissioner Tom Considine, NCOIL CEO.

A full copy of the model is below.

NATIONAL COUNCIL OF INSURANCE LEGISLATORS (NCOIL)
AN ACT CONCERNING PRESCRIPTION DRUG COSTS

*Sponsored by Rep. Tom. Oliverson, M.D. (TX)
*Co-Sponsored by Sen. Dan “Blade” Morrish (LA)
*Adopted by the Health Insurance & Long Term Care Issues Committee on December 11th, 2019 and by the Executive Committee on December 13th, 2019.

Table of Contents

Section 1. Title
Section 2. Purpose
Section 3. Definitions
Section 4. Disclosure of Prescription Drug Pricing Information
Section 5. Disclosure of Pharmacy Benefit Management Information
Section 6. Disclosure of Health [Carrier/Insurer] Spending Information
Section 7. Severability
Section 8. Effective Date

Section 1. Title

This Act shall be known as the [State] Health Care Cost Transparency Act.

Section 2. Purpose

The purpose of this Act is to promote prescription drug price transparency and cost control.

Section 3. Definitions

“Board of Pharmacy” or “board” means the [State] Board of Pharmacy.

“Commissioner” means the Insurance Commissioner.

“Department” means the Insurance Department.

“Director” means the Medicaid Director.

“Drug” means (A) articles recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States or official National Formulary, or any supplement to any of them; (B) articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in humans or other animals; (C) articles, other than food, intended to affect the structure or any function of the body of humans or any other animal; and (D) articles intended for use as a component of any articles specified in this subdivision; but shall not include devices or their components, parts or accessories;

“Health care plan” means any individual, blanket, or group plan, policy, or contract for healthcare services issued or delivered by a healthcare insurer in this state.

“Health carrier” or “Health insurer” means an insurance company, a health maintenance organization, or a hospital and medical service corporation.

“Net spending” means the cost of prescription drugs minus any discounts that lowers the price of the drugs, including, but not limited to, rebates, fees, retained price protections, retail pharmacy network spread, and dispensing fees.

“Pharmacist services” means products, goods, and services, or any combination of products, goods, and services, provided as a part of the practice of pharmacy.

“Pharmacy benefits manager” means any person that administers the prescription drug, prescription device, pharmacist services or prescription drug and device and pharmacist services portion of a health care plan offered in the state on behalf of a [HEALTH CARRIER/INSURER].

“Rebate” means any discount or concession which affects the price of a prescription drug to a pharmacy benefits manager or health [CARRIER/INSURER] for a prescription drug manufactured by the pharmaceutical manufacturer.

“Specialty drug” means a prescription drug outpatient specialty drug covered under Medicare Part D program established pursuant to Public Law 108-73, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, as amended from time to time, that exceeds the specialty tier cost threshold established by the Centers for Medicare and Medicaid Services.

“Utilization management” means a set of formal techniques designed to monitor the use of, or evaluate the medical necessity, appropriateness, efficacy, or efficiency of, health care services, procedures, or settings.

“Wholesale acquisition cost” means, with respect to a pharmaceutical drug or biological product, the manufacturer’s list price for the pharmaceutical drug or biological product to wholesalers or direct purchasers in the United States for the most recent month for which the information is available, as reported in wholesale price guides or other publications of pharmaceutical drug or biological product pricing data, not including any rebates, prompt pay or other discounts, or other reductions in price.

Section 4. Disclosure of prescription drug pricing information.

(a)(1) Not later than January 1, 2020, and annually thereafter, each drug manufacturer shall submit a report to the [INSURANCE COMMISSIONER] no later than the fifteenth day of January, April, July, and October with the current wholesale acquisition cost information for the United States Food and Drug Administration approved drugs sold in or into the state by that manufacturer.

(2) The commissioner shall develop a website to contain prescription drug price information submitted pursuant to subsection (a)(1) of this section. The website shall be made available on the [INSURANCE DEPAREMENT’S] website with a dedicated link that is prominently displayed on the home page, or by a separate easily identifiable internet address.

(b)(1) Not more than thirty days after an increase in wholesale acquisition cost of sixty percent or greater over the preceding five calendar years or fifteen percent or greater in the preceding twelve months for a drug with a wholesale acquisition cost of seventy dollars or more for a thirty-day supply, a pharmaceutical drug manufacturer shall submit a report to the [COMMISSIONER OF INSURANCE]. The report shall contain the following information:

(A) Name of the product;

(B) Whether the drug is a brand name or a generic;

(D) Aggregate, company-level research and development costs for the prior calendar year;

(E) The name of each of the manufacturer’s prescription drugs that was approved by the federal Food and Drug Administration in the previous five calendar years;

(F) The name of each of the manufacturer’s prescription drugs that lost patent exclusivity in the United States in the previous five calendar years; and

(G) A statement of rationale regarding the factor or factors that caused the increase in the wholesale acquisition cost.

(2) The quality and types of information and data that a pharmaceutical manufacturer submits to the commissioner pursuant to this subsection shall be consistent with the quality and types of information and data that the manufacturer includes in their annual consolidated report on Securities and Exchange Commission Form 10-K or any other public disclosure.

(c) A manufacturer shall notify the commissioner in writing if it is introducing a new prescription drug to market at a wholesale acquisition cost that exceeds the threshold set for a specialty drug under the Medicare Part D program. The manufacturer shall provide the written notice within three calendar days following the release of the drug in the commercial market. A manufacturer may make the notification pending approval by the U.S. Food and Drug Administration (FDA) if commercial availability is expected within three calendar days following the approval.

(d) The commissioner may adopt regulations to implement the provisions of this section.

Drafting Note: States may wish to raise or lower the percentages and dollar amount set forth in Section 4(b)(1) depending upon each state’s economic environment as it relates to prescription drug prices.

Section 5. Disclosure of pharmacy benefit management information.

(a)(1) Not later than February 1, 2020, and annually thereafter, each pharmacy benefits manager shall file a report with the commissioner. The report shall contain the following information for the immediately preceding calendar year:

(A) The aggregated rebates, fees, price protection payments, and any other payments collected from pharmaceutical manufacturers;

(B) The aggregated dollar amount of rebates, price protection payments, fees and any other payments collected from pharmaceutical manufacturers that were passed to health [CARRIERS/INSURERS];

(C) The aggregated dollar amount of rebates, price protection payments, fees and any other payments collected from pharmaceutical manufacturers that were passed to enrollees at the point of sale; and

(D) The aggregated dollar amount of rebates, price protection payments, fees and any other payments collected from pharmaceutical manufacturers that were retained as revenue by the pharmacy benefit manager.

(2) Reports submitted by pharmacy benefit managers shall not disclose the identity of a specific health benefit plan or enrollee, the prices charged for specific drugs or classes of drugs, or the amount of any rebates or fees provided for specific drugs or classes of drugs.

(3) Within sixty days of receipt, the commissioner shall publish the report on the [INSURANCE DEPARTMENT’S] prescription drug price information website developed pursuant to subsection (a)(2) of section (4) of this Act. For any pharmacy benefit manager with fewer than five (5) clients, the commissioner shall aggregate all the collected data and publish the aggregated data from all reports for that year required by this section in an appropriate location on the department’s internet website. The data from all of the reports must be published in a manner that does not disclose or tend to disclose proprietary or confidential information of any pharmacy benefit manager.

(b) The commissioner may adopt regulations to implement the provisions of this section.

Section 6. Disclosure of health [CARRIER/INSURER] spending information.

(a)(1) Not later than February 1, 2020, and annually thereafter, each health [CARRIER/INSURER] shall submit a report to the commissioner. The report shall contain the following information for the immediately preceding calendar year:

(A) The names of the twenty-five most frequently prescribed prescription drugs across all plans;

(B) Percent increase in annual net spending for prescription drugs across all plans;

(D) Percentage of specialty prescription drugs with utilization management requirements across all plans;

(E) Premium reductions that were attributable to specialty drug utilization management.

(2) Within sixty days of receipt, the commissioner shall publish the report on the [INSURANCE DEPARTMENT’S] prescription drug price information website developed pursuant to subsection (a)(2) of section (4) of this Act. The commissioner shall aggregate all the collected data and publish the aggregated data from all reports for that year required by this section in an appropriate location on the department’s internet website. The data from all of the reports must be published in a manner that does not disclose or tend to disclose proprietary or confidential information of any health [CARRIER/INSURER].

(b) Reports submitted by [CARRIERS/INSURERS] shall not disclose the identity of a specific health benefit plan or the prices charged for specific drugs or classes of drugs.

Section 7. Severability

If any provisions of this Act or the application of this Act to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this Act which can be given effect without the invalid provision or application, and to this end, the provisions of this Act are declared severable.

Section 8. Effective Date

This Act is effective immediately.

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NCOIL President Announces 2020 Committee Leadership

For Immediate Release
January 7, 2020
Contact: Paul Penna
(732) 201-4133

NCOIL PRESIDENT ANNOUNCES 2020 COMMITTEE LEADERSHIP
Strong Group of Leaders from Diverse States to Head Committees

Manasquan, NJ – NCOIL President Matt Lehman, state Representative from Indiana, announced the lineup of Committee Chairs and Vice Chairs for 2020.

“I am excited to work with this distinguished group of legislative leaders from across both the country and the political spectrum as NCOIL continues to examine and enact sound public policy that protects the state-based system of insurance regulation,” said Lehman. “Each legislator has demonstrated knowledge and expertise on a variety of insurance and financial services issues, and I am confident they will be an asset throughout the year and do an admirable job leading these committees,” he concluded.

The NCOIL Chairs and Vice-Chairs are:

Articles of Incorporation/Bylaws:
Chair: Sen. David Livingston, AZ
Vice-Chair: Asw. Ellen Spiegel, NV

Audit Committee:
Chair: Asm. Ken Cooley, CA
Vice-Chair: Sen. Jim Seward, NY

Budget Committee:
Chair: Asm. Kevin Cahill, NY
Vice-Chair: Sen. Neil Breslin, NY

Business Planning Committee:
Chair: Rep. Matt Lehman, IN
Vice-Chair: Asm. Ken Cooley, CA

Financial Services & Multi Lines Issues Committee

Chair: Rep. Edmond Jordan (LA)

Vice Chair: Rep. Jim Dunnigan (UT)

Health Insurance & Long Term Care Issues Committee

Chair: Asw. Pam Hunter (NY)

Vice Chair: Asw. Deborah Ferguson (AR)

Joint State-Federal Relations & International Insurance Issues Committee

Chair: Sen. Bob Hackett (OH)

Vice Chair: Sen. Roger Picard (RI)

Life Insurance & Financial Planning

Chair: Asw. Maggie Carlton (NV)

Vice Chair: Asm. Andrew Garbarino (NY)

NCOIL – NAIC Dialogue

Chair: Asm. Ken Cooley (CA)

Vice Chair: Rep. Martin Carbaugh (IN)

Property & Casualty Insurance Committee

Chair: Rep. Richard Smith (GA)

Vice Chair: Rep. Tom Oliverson, M.D. (TX)

Workers’ Compensation Insurance Committee

Chair: Rep. Bart Rowland (KY)

Vice Chair: Sen. Paul Utke (MN)

Chairman At-Large: Sen. Jerry Klein, ND

The purpose for the addition of the Chairperson At-Large position to the NCOIL Committee Leadership is to oversee general committee activities and serve a committee’s strategic needs as determined by the President at any given time. The Chairperson At-Large may have various responsibilities and tasks during their elected term to the NCOIL Committee Leadership.

NCOIL CEO, Commissioner Tom Considine said, “2020 promises to be an exciting year for all aspects of insurance legislation and NCOIL will work to ensure we are advancing model legislation for the states that benefits consumers while promoting economic growth and solvency protection. This group of chairs and vice-chairs is just one representation of the leadership and experience of the total NCOIL membership. The total membership is committed to strengthening our nation’s state-based insurance system.”

The 2020 Spring Meeting will be held in Charlotte, NC from March 6th – 8th at the Charlotte Marriott City Center. Registration is open – Register Now at https://ncoil.org/register-now/

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NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in insurance and financial services, works to preserve the State jurisdiction over insurance as established by the McCarran-Ferguson Act seventy five years ago, and to serve as an educational forum for public policymakers and interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy

NCOIL Concludes Successful 2019 Annual Meeting in Austin

For Immediate Release
December 19, 2019
Contact: Paul Penna
(732) 201-4133

NCOIL CONCLUDES SUCCESSFUL 2019 ANNUAL MEETING IN AUSTIN
Celebrates NCOIL’s 50th Year, Passes 3 New Model Laws, Lehman Assumes Presidency

Manasquan, NJ – The National Council of Insurance Legislators (NCOIL) concluded a successful 2019 Annual Meeting in Austin, Texas from December 10th – 13th at the JW Marriott Austin. There were 353 participants consisting of 57 legislators and participants from 33 states, 16 first-time legislators, 4 insurance commissioners, and 9 insurance departments represented.

“In my final meeting as a legislator, I am proud of all the work we accomplished as an organization, and I am grateful for the support and assistance of NCOIL legislators and staff over this past year,” said LA Senator Dan “Blade” Morrish, who concluded his term as NCOIL’s President at the Annual Meeting’s conclusion. “Further, I am pleased that NCOIL attracted a large number of attendees and first-time legislators to celebrate NCOIL’s 50th year. I look forward to watching from afar the success of future NCOIL Presidents with great pride.” Participants at the Welcome Breakfast heard from TX Insurance Commissioner Kent Sullivan who discussed objectives for the department and the policy challenges Texas and the nation face in the insurance industry.

Tom Workman, Independent Member of the Financial Stability Oversight Council, delivered a compelling Keynote Luncheon Address as an insurance expert with more than four decades of experience in the insurance sector.

The packed agenda was highlighted by the passages of three NCOIL Model Laws – the NCOIL Drug Pricing Transparency Model Act by the Health Insurance & Long-Term Care Issues Committee, sponsored by TX Representative Tom Oliverson, M.D. and co-sponsored by LA Senator Dan “Blade Morrish; the NCOIL Workers’ Compensation Drug Formulary Model Act by the Workers’ Compensation Insurance Committee, sponsored by IN Representative Matt Lehman; and NCOIL Peer-to-Peer Car Sharing Program Model Act by the Property & Casualty Insurance Committee, sponsored by KY Representative Bart Rowland. These models were then passed by the Executive Committee.

“Thank you to the wonderful host committee and TX Rep. Tom Oliverson for being a great host to us in Austin. As NCOIL concludes its 50th year, I am proud that the organization has stayed on the cutting edge with the passage of timely Model Laws and Resolutions and has engaged in meaningful dialogue with federal and regulatory counterparts,” said Commissioner Tom Considine, NCOIL CEO. “There is much work to be done in the new year, but the Spring meeting agenda NCOIL is considering shows 2020 will be consistent with NCOIL’s upward trend.”

The Nominating Committee selected KY Representative Joe Fischer to serve as Secretary, the first step in the NCOIL Officer ranks. The other officers were elected to the next chair in the sequence: NY Asm. Kevin Cahill moved up to Treasurer, CA Asm. Ken Cooley moved up to Vice President and IN Rep. Matt Lehman moved up and will serve as President. Outgoing President LA Sen. Blade Morrish will serve as Immediate Past President, until his term in the LA Senate ends in January 2020, along with AR Sen. Jason Rapert. Sen. Rapert and IN Sen. Travis Holdman will serve as Immediate Past Presidents in 2020.

IN Representative Matt Lehman, NCOIL President, said, “I look forward to continuing to increase state legislator participation at NCOIL. Our organization has been a leader in educating policymakers to make informed insurance policy decisions that protect consumers and ensure a vibrant insurance marketplace in every state. I know how valuable NCOIL has been to me in Indiana and to legislators across the country. Sen. Morrish has done an outstanding job as President and I look forward to his counsel as Past President.”

KY Representative Joe Fischer, NCOIL Secretary, said, “I am honored to be elected, by my peers from across the nation, to serve as NCOIL’s next Secretary. NCOIL is an important organization that I have partnered with for many years as a state legislator. I am eager to continue making a positive impact on insurance and financial services public policy as an NCOIL Officer.”

Remarks from Managing Director of the MicroInsurance Centre at Milliman, Michael McCord, were delivered at The Institutes Griffith Foundation Legislator Luncheon titled “A Primer on Microinsurance for Public Policymakers”. The luncheon was followed by concurrent sessions: “Microinsurance Explosion: Lessons from Abroad and their Impact on the U.S. Market” and a Special Drug Pricing Session for public policymakers and staff titled “Start Up CEO: The Role of Price in the Biopharmaceutical Business Model”.

The NCOIL Innovation Series continued with a discussion on “The Gig Gap: Does Insurance Come With That?” There were two interesting and timely general sessions: “Insuring the Previously Unimaginable: A Discussion on the Active Shooter Insurance Coverage Landscape” and “The U.S. Healthcare System in Flux. Judicial Repeal of the ACA? Medicare For Whom?”

The Property & Casualty Insurance Committee re-adopted the NCOIL Model Act Regarding the Use of Insurance Claims History Information in Homeowners and Personal Lines Residential Property Insurance. The Executive Committee passed a resolution honoring Former NCOIL President William Larkin (NY) and a resolution in Support of the Reauthorization of the Terrorism Risk Insurance Act (TRIA).

The Special Committee on Natural Disaster Recovery continued discussion on the NCOIL Private Flood Insurance Model Act and heard from Michael Hecht, President & CEO of Greater New Orleans, Inc., regarding lessons in natural disaster recovery.

The Health Insurance & Long Term Care Issues Committee continued discussions on the NCOIL Short-Term Limited Duration Insurance (STLDI) Model Act and the NCOIL Health Care Sharing Ministry (HCSM) Model Act. The Health Insurance & Long Term Care Issues Committee also heard briefings on upcoming Health Committee topics regarding the introduction of the Patient Dental Care Bill of Rights Model Act, prior authorization reforms, an update on the biosimilar landscape, and the introduction of a Vision Care Services Model Law Concept.

The Financial Services & Multi-Lines Issues Committee continued discussion on the development of NCOIL Insurance Modernization Model Legislation, including discussion on the NCOIL Rebate Reform Model Act, and NCOIL Electronic Salvage Title Model Act.

The Joint State-Federal Relations & International Insurance Issues Committee continued discussion on the NCOIL Insurance Business Transfer (IBT) Model Law, proposed amendments to the NCOIL Market Conduct Surveillance Model Law, and the reauthorization of TRIA

The Workers’ Compensation Insurance Committee discussed Post Traumatic Stress Syndrome (PTSD) coverage and other expanding benefit changes in the workers’ compensation insurance marketplace. The Life Insurance & Financial Planning Committee examined the use of genetic testing information in life insurance underwriting as well as overall life insurance underwriting trends and developments. The Property & Casualty Insurance Committee discussed the NCOIL Electric Scooter Insurance Model Act and insurance rating variables. Discussions of these model law proposals will continue during interim committee calls and at the 2020 Spring Meeting in Charlotte, NC.

Committee meeting minutes will be posted within the next week at www.ncoil.org.

The 2020 NCOIL Spring Meeting will take place in Charlotte, NC from March 6th – 8th.

Registration is now open at https://ncoil.org/register-now

– 30 –

NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in insurance and financial services, works to preserve the State jurisdiction over insurance as established by the McCarran-Ferguson Act seventy four years ago, and to serve as an educational forum for public policymakers and interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy when it comes to insurance and educate State legislators on current and longstanding insurance issues.

NCOIL Urges Passage of Long-Term NFIP Reauthorization Legislation

For Immediate Release
December 3, 2019
Contact: Paul Penna
(732)201-4133

NCOIL URGES PASSAGE OF LONG-TERM NFIP REAUTHORIZATION LEGISLATION
Short-Term Reauthorizations Disruptive to the Market and Cause Ambiguity for Policyholders

Manasquan, NJ – NCOIL’s President Dan “Blade” Morrish (Sen. LA) blasted Congress’ “tepid” action on flood insurance, stating that Congress need to do more. On Thursday, November 21st, Congress granted an extension to the National Flood Insurance Program (NFIP) as part of a continuing resolution; The extension is for just 30 days. The resolution, now headed to the President’s desk for signature, marks the fourteenth short-term extension to the NFIP since June 2017. NCOIL urges Congress to develop and pass long-term NFIP reauthorization legislation.

“While we do recognize that the program has avoided a lapse, we are beyond disappointed that Congress cannot make a long-term commitment to this program before it expires in a mere three weeks. It is impossible for states to plan accordingly and protect consumers. Never-ending shortterm extensions is no way to maintain a stable market for flood insurance,” said LA Sen. Blade Morrish, NCOIL President.

The extension until December 20th gives Congress more time to decide which of the multiple bipartisan bills it wants to pass that would reform and authorize a long-term extension of the program. “It is time for Congress to step up, to stop the tepid approach of the short-term extension, and protect our nation’s at-risk homeowners,” concluded Morrish.

“While NCOIL urges the President to sign this extension, we also urge Congress to pass legislation that would stabilize the NFIP, create availability of affordable flood coverage, and support growth of the private flood insurance market. Short-term extensions just leave policyholders on the brink again and again. NCOIL will continue to raise this issue until it is passed by both houses of Congress and signed by the President,” said Commissioner Tom Considine, NCOIL CEO.

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NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in insurance and financial services, works to preserve the State jurisdiction over insurance as established by the McCarran-Ferguson Act seventy four years ago, and to serve as an educational forum for public policymakers and interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy when it comes to insurance and educate State legislators on current and longstanding insurance issues.

NCOIL Praises Swift House and Senate Banking Committee Passage of TRIA Reauthorization Bill

For Immediate Release
December 3, 2019
Contact: Paul Penna
(732)201-4133

NCOIL PRAISES SWIFT HOUSE AND SENATE BANKING COMMITTEE PASSAGE OF TRIA REAUTHORIZATION BILL
Encourages Same Bi-Partisan Support from Full Senate

Manasquan, NJ – A bill to reauthorize the Terrorism Risk Insurance Act (TRIA) until 2027, H.R. 4634, overwhelmingly passed on Tuesday, November 19th by the US House of Representatives. Just one day later, the bill was advanced out of the US Senate Committee on Banking, Housing, and Urban Affairs. TRIA is currently set to expire in December 2020. NCOIL is supportive of this bi-partisan bill for a long-term reauthorization of TRIA.

“This decision by the House and Senate Banking Committee to reauthorize TRIA for seven more years sends a message of vital importance that TRIA has on financial security and economic stability of the private insurance market,” said NCOIL President, LA Senator Dan “Blade” Morrish. “NCOIL commends NC Sen. Thom Tillis for sponsoring this legislation in the Senate, and we urge that the full Senate come together and commit to moving this legislation forward to the President’s desk by the end of the year.”

Kentucky Representative Bart Rowland, Vice-Chair of the NCOIL Financial Services & MultiLines Issues Committee, said, “The risk-sharing mechanism of TRIA enables the federal government and the insurance industry to share losses and provide an immediate stabilizing effect following a terrorist attack. NCOIL has been calling for a timely reauthorization of TRIA and we are very pleased with the bi-partisan support from House and Senate Banking Committee.”

“American businesses rely on the availability of terrorism risk coverage, and TRIA is instrumental in making this coverage available at an affordable price,” said NCOIL CEO, Commissioner Tom Considine. “The overwhelming message from NCOIL legislators, whose main area of public policy concern is insurance legislation and regulation, is that TRIA meets its purpose and needs to be reauthorized again,” he concluded.

Full information about H.R. 4634 and S.2877 can be viewed here:

https://www.congress.gov/bill/116th-congress/senate-bill/2877?s=1&r=1

https://www.congress.gov/bill/116th-congress/house-bill/4634/all-actions

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NCOIL is a national legislative organization with the nation’s 50 states as members, represented principally by legislators serving on their states’ insurance and financial institutions committees. NCOIL writes Model Laws in insurance and financial services, works to preserve the State jurisdiction over insurance as established by the McCarran-Ferguson Act seventy four years ago, and to serve as an educational forum for public policymakers and interested parties. Founded in 1969, NCOIL works to assert the prerogative of legislators in making State policy when it comes to insurance and educate State legislators on current and longstanding insurance issues.