| Tick Tock
Following a change in the legislative calendar last week, the General Assembly was in recess until Thursday and Friday of this week when it convened for Days 53 and 54 of this 2024 sixty-day budget session. Our update this week is focused heavily on the budget bills and the conference committee, as the fate of most bills in the General Assembly is tied in some way to its progress. While the legislature was not in session the first part of the week, legislative committees continued to meet to move bills through the process.. By the time Chambers gaveled in on Thursday, many more bills–47 in the Senate and 17 in the House–had made their way through committee to the floor. When they convened for floor action on Thursday and Friday, both Chambers worked efficiently but did not log the number of hours that many expected, as there continues to be a limited number of bills being heard in the second chamber. In large part, this was due to House and Senate leadership and others needing to meet to negotiate differences in the budget. There remain many bills to pass and less and less floor time to get them passed. Bills that require concurrence were expedited, and bills were moved to the committee and back for floor readings to keep them viable to pass before this Thursday. These procedural steps anticipate the four-day week to come: The General Assembly will meet Monday through Thursday. The veto recess begins on March 29, and then the legislature will return for veto override days on April 12 and 15.
With four legislative days before the veto recess, it has all come down to this! With the GOP-controlled legislature wanting to maintain its ability to override any vetoes that may be issued by Democrat Governor Andy Beshear we expect a couple of hundred bills to be considered before Thursday at midnight. The insurance industry bills of interest to Big I members are all poised to hit the Governor's Desk this week. Top Priorities
HB 371 - Mine Subsidence Coverage Limit - Passed 38-0 with friendly Senate amendment and heads to House for floor vote to concur in amendment, which should happen on concurrence days (Wed/Thur). Big I Supports!
SR 235 - Insurance Commissioner Sharon Clark's confirmation resolution. The resolution must be approved by the full Senate before sine die adjournment on April 15, and we expect adoption will not occur before the veto recess. Big I Supports!
SB 188 - PBM Reforms - The bill mandates an increase in pharmacists dispensing fees, restricts mail order, and mandates changes to pharmacy networks. Could have a significant impact on self-insured health groups and ERISA plans. Awaits Senate Floor action with amendments…seems likely to pass this week. Big I Opposes…Contact Your Senator! Key Insurance Bills
HB 554 - Allow public universities to opt out of buying coverage from the state Tornado & Fire fund and allow them to access coverage in the private market. Passed from Senate B&I unanimously…awaits Senate floor action on Consent Calendar
HB 256 - Fortified Roof Incentives - Passed unanimously from Senate B&I last week…poised for Senate Consent floor action as early as Monday. No amendments so it would go straight to the Governor's Desk.
SB 29 - Glass Bill - Passed House 87-1 with friendly amendment…heads back to Senate for concurrence in House amendment, so it is a Senate floor vote away from the Governor's Desk. Likely to occur on concurrence days Wednesday/Thursday.
HB 280 - NCOIL Delivery Network Companies Insurance Model - Passed 38-0 and should be delivered to the Governor on Monday.
HB 498 - DOI Accreditation - The DOI's financial standards legislation needed to maintain their NAIC accreditation. Passed unanimously by Senate B&I last Wednesday and awaits Senate consent floor action that could occur as early as Monday.
SB 158 - Minor Settlements - Two Readings in House Rules. Could see House floor action this week.
HB 401 - Allows out-of-state physicians to review workers' compensation medical records. The bill is on the Senate Consent Calendar with friendly amendment and should receive a floor vote early this week and then will need House concurrence. Don't forget to review the Big I bill list!!!
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| As an insurance agent prepares to step into the spotlight as a guest on a podcast or for an interview in an article, navigating the discussion requires careful consideration of Errors & Omissions (E&O) risks. While the opportunity to share knowledge and insights can be invaluable for both the agent and the audience, it also presents potential pitfalls that could lead to an increase in an agency's required standard of care. From the nuances of policy interpretation to the communication of coverage details, being mindful of E&O risks is essential to ensure accuracy, transparency, and compliance throughout the exchange. Whether it's being a guest on a podcast, interviewed for an article or being part of a video to be posted on social media, keep certain words and phrases in mind that can increase an agent's standard of care beyond what is required.
Avoid Calling Yourself an “Expert", “Advisor" or “Consultant"
Establishing oneself as an “expert", “advisor" or “consultant in a particular area of coverage may seem like a great way to separate oneself from the competition, but overstating expertise or promoting oneself as an advisor can invite reliance by an insurance customer. This can create an easier path to a court finding that a greater duty to advise exists due to a special relationship being formed. Never Say “Best Coverage"
Clients may be looking for the “best coverage" at the “best price", but it can oftentimes be unattainable or difficult to know the policy language of each carrier agent represents, especially in a rapidly-changing environment. Remember, insurance agents procure coverage or may assist with submitting claims on behalf of their client, but they do not make underwriting decisions or investigate and determine if a claim is covered. Agents should avoid suggesting a customer's risk is covered or that coverage always exists for a loss when the underwriting and claims decisions are made by a separate company. It's Okay to Discuss Your Niche without saying“ We specialize in..."
Many agents or agencies have a niche or focus on a specific type of business. This gives the agent the ability to have a more detailed conversation with the client about their insurance needs. However, when talking about a niche business, an agent should avoid saying “we specialize in..." or “our specialists" as it creates an automatic increase in their duty to advise as well as a blanket statement that applies to all employees at the agency. Instead, an agent should talk about their niche along with their experience in that business category. Avoid Offering “Peace of Mind"
While agents want to offer “peace of mind" to clients, this phrase can be understood as creating an expectation that the insured will not experience an uncovered loss or have any coverage gaps as they should not have to worry about their insurance coverage. Instead of offering peace of mind to your clients, offer to help them find coverage that matches their described needs or offer greater financial security (including qualifiers in your wording can help!).
As an agent in your local community and beyond, any opportunity to get your name or brand is something to take advantage of. Who knows what that 30-minute podcast or short phone-call interview may lead to in terms of publicity and leads. By keeping “E&O friendly" language in mind and avoiding words that may give clients a path to establishing a special relationship (and therefore may require a greater standard of care), these marketing opportunities can remain advantageous. Just keep the E&O risks in mind. Looking for additional information about E&O risk management as it relates to an agent's duty to advise and ways to avoid creating a special relationship. Evan Leitch
Swiss Re Approved Auditor Virtual Agency Solutions/Independent Insurance Agents of Wisconsin
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| Today is the LAST DAY to apply for the 2024 Big I Kentucky Education Scholarship. Are you interested in a new designation? Want to take an MBA class with other insurance professionals around the U.S.? The scholarship can be used for the Commercial Lines Coverage Specialist designation, an online program to be access at any time this calendar year. You can also use the scholarship for registration in the spring or fall IA-MBA course. Don't miss out on this opportunity!
APPLY HERE- 2024 Education Scholarship (smartsheet.com)
More info about the CLCS- Created with the learning needs of new insurance producers, agents, managers, CSRs and corporate staff in mind, the CLCS is the most complete professional learning program available for industry professionals seeking to master the subject of commercial lines coverage. Earn 9 CE hours for completing all five parts to this designation.
Benefits of the CLCS Designation:
-Gain fundamental knowledge necessary to begin working in the insurance industry
-Fill the knowledge gap between entry-level and advanced positions in underwriting and claims
-Understand and be able to apply comprehensive concepts in a practical way -Become well versed in the main aspects of the commercial world of insurance -Learn about insurance principles, commercial auto, general liability, commercial property, and workers compensation topics -Readily digestible, easy learning format -Focus only on industry and commercial concepts to move into a competency level that would otherwise take years using a more traditional approach -Competently assume a functional role for the agency or carrier
More info about the IA-MBA program-
Designed for growing agencies, this unique program is your road map to optimizing the essential skills for nurturing a thriving, profitable agency.
Why Join the IA-MBA?
-Transformative Training & Networking: The blend of self-paced eLearning with bi-weekly live sessions with industry experts & peers can easily fit into your full-time role.
-MBA-Based Insight in 10-Weeks: A curriculum designed to streamline the practical lessons taught in an executive MBA, but tailored for independent insurance agencies.
-Upskill Your Entire Agency: Team discounts available, but more importantly, create a shared language of leadership and implement the lessons together.
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| When it adjourned on Friday, March 1, the General Assembly had completed the forty-second legislative day of this sixty-day 2024 Session. In addition to passing the two-thirds mark for the Session, deadlines for new bill filings were this week. Over 1,200 bills have been filed (not including resolutions), which is roughly 50 more than was filed in the last long session. This includes nearly 150 shell bills, which can be used as vehicles to move legislation now that the bill filing deadline has passed.
Don’t forget to review the Big I bill list!!! In order to help us all stay engaged on legislation that could impact YOU, this bill list is updated nightly and can be accessed 24/7 via this link. Moving HB 256 - Fortified Roof Incentives - Remains in the House Appropriations & Revenue Committee but will be considered in House A&R on Tuesday and, if reported favorably, could be out of the House this week. SB 29 - Glass Bill - Two Readings in House Rules. Could see House floor action this week. HB 280 - NCOIL Delivery Network Companies Insurance Model - To be heard in Senate B&I on Tuesday HB 371 - Mine Subsidence Coverage Limit - Gives the DOI the authority to adjust mine subsidence coverage to meet increased construction costs. To be heard in Senate B&I on Tuesday with an agreed committee substitute to address insurer concerns about the implementation timeline. SB 158 - Minor Settlements - Passed House B&I and has two Readings in the House Rules committee HB 401 - Reverses a KY Supreme Court ruling to allow out-of-state physicians to review workers’ compensation medical records. In Senate Economic Development Committee
HB 498 - DOI Accreditation - The DOI’s financial standards legislation needed to maintain their NAIC accreditation passed the House and is in the Senate Committee on Committees awaiting assignment. HB 554 - This measure would allow public universities to opt out of buying coverage from the state Tornado & Fire fund and allow them to access coverage in the private market. Passed House awaiting Senate Committee assignment No Movement Yet HB 620 - Hands-Free - Prohibits the use of cell phones when driving. It has not been assigned to committee. SB 188 - Sen. Wise - An omnibus PBM reform bill that would mandate pharmacists dispensing fees in statute, restrict mail order pharmacy, and mandate changes to pharmacy networks. The LRC’s financial analysis is not available yet, but we continue to hear a lot of chatter that this could have a significant impact on self-insured health groups and ERISA plans. HB 474 - ESG Disclosure - This legislation requires disclosure by investment advisers if the investments being offered follow an ESG policy. Being opposed by SIFMA. Awaiting committee assignment. |
| Key Bills
SB 29 - Glass Bill - Heard and favorably reported by the House B&I committee on Wednesday, with an HCS to address concerns raised by some in the industry over the compromise AOB language. SB 29 is in House Rules with two readings. HB 280 - Delivery Network Companies - Pollock's NCOIL model insurance requirements for delivery network companies. Assigned to Senate B&I. HB 474 - ESG Disclosure - This legislation requires disclosure by investment advisers if the investments being offered follow an ESG policy. Being opposed by SIFMA. Awaiting committee assignment. HB 554 - This measure would allow public universities to opt out of buying coverage from the state Tornado & Fire fund and allow them to access coverage in the private market. Likely to be voted on the House floor this week.
SB 188 - Sen. Wise - An
omnibus PBM reform bill that would mandate pharmacists dispensing fees in
statute, restrict mail order pharmacy, and mandate changes to pharmacy
networks. The LRC’s financial analysis is not available yet, but we continue to
hear a lot of chatter that this could have a significant impact on self-insured health
groups and ERISA plans.
HB 620 - Hands-Free - Rep. Pollock filed legislation last week that would prohibit the use of cell phones when driving. It has not been assigned to committee, and the issue is not supported by Leadership. HB 256 - Fortified Roof Incentives - Remains in the House Appropriations & Revenue Committee. The Chairman has signed off on the bill, but it won't be heard in their meeting on 2-27. HB 401 - Rep. Pollock, to legislatively reverse a KY Supreme Court ruling and allow out-of-state physicians to review workers' compensation medical records. In Senate Committee on Committees. HB 371 - Mine Subsidence - Rep. Wade Williams' bill to give the DOI the authority to adjust mine subsidence coverage to meet increased construction costs, which has been assigned to Senate B&I. We expect an amendment in the Senate from some insurers concerned about the implementation timeline. HB 498 - DOI Accreditation - The DOI's financial standards legislation needed to maintain their NAIC accreditation passed the House and is in the Senate Committee on Committees awaiting assignment.
Contact Tara Purvis tpurvis@bigiky.org.
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| Join insurance pros around the country on February 28th
as we share the cool aspects of your career! Follow along on Facebook, X, Instagram, and LinkedIn! WHAT: #DayInTheLife Social Challenge
WHEN: Wednesday, February 28, 2024
WHERE: Facebook, Instagram, LinkedIn, XJoin us on 2/28 by sharing a photo or video on your social channels with the following hashtags: #DayInTheLife #InsureMyCareer
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| When we report that there are a lot of bills moving of interest to Big I members, think about this…last week, four insurance bills passed off the House or Senate floor. Thanks in large part to YOUR efforts and the relationships you have built with your local legislators, the insurance industry is in a prominent place where the needs of our industry are being heard by leaders in both chambers.
Below, we have provided an update on the bills that moved last week and what we expect in the week ahead.
These bills need review from Big I kentucky members:
HB 474 - ESG Disclosure - This legislation requires disclosure by investment advisers if the investments being offered follow an ESG policy. Being opposed by SIFMA. SB 162 - Accident Reports - Sen. Mills bill allowing Carfax to contract with local law enforcement agencies related to accident reports passed from committee on Wednesday with a Committee Substitute to address concerns raised by the industry related to access to accident reports by PIP/legal runners. HB 470 - Home Solicitation Sales - Exempts products regulated by the DOI from the home solicitation sales regulations. HB 554 - This measure would allow public universities to opt out of buying coverage from the state Tornado & Fire fund and allow them to access coverage in the private market. SB 188 - Sen. Wise - This appears to be an omnibus PBM reform bill that would mandate pharmacists dispensing fees in statute, restrict mail order pharmacy, and mandate changes to pharmacy networks. The LRC's financial analysis is not available yet. HB 190 - Rep. Sharp - This would prohibit or restrict incentives for the use of mail order pharmacy in a group health insurance plan. The LRC's financial analysis says this will increase premiums by as much as $2.55 per member per month.
Connect with Big I Kenyucky President/CEO Tara Purvis at tpurvis@bigiky.org for feedback.
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| Now is a good reminder to review the Big I bill list!!! In order to help us all stay vigilant and on alert for legislation that could impact Big I members, your bill list is updated nightly and can be accessed 24/7 via this link, which you can bookmark and review at any time! As we near the midpoint of the 2024 regular session…its time to take stock. It is likely that after the week ahead, every insurance industry-related bill that we have been tracking so far this session will be out of its first committee. Due in part to the Senate B&I committee holding its first meeting of the session on Tuesday at Noon to hear three bills, and House B&I is expected to meet on Wednesday at Noon and hear as many as four bills. Below is a quick update on those bills, as well as a look at new filings. Newly Filed Bills
HB 498 - DOI Accreditation - Rep. Pollock filed the DOI's financial standards legislation needed to maintain their NAIC accreditation. Could be heard in House B&I on Wednesday. Please review. HB 470 - Home Solicitation Sales - Rep. Duvall filed HB 470 which exempts products regulated by the DOI from the home solicitation sales regulations. Please review. HB 474 - ESG Disclosure - Rep. Sharp filed this legislation that requires a disclosure by investment advisers if the investments being offered follow an ESG policy. Please Review. Bills of Note
HB 371 - Mine Subsidence Insurance - Rep. Wade Williams' bill was to give the DOI the authority to adjust mine subsidence coverage to meet increased construction costs. Passed the House on Tuesday and is awaiting Senate committee assignment. HB 256 - Fortified Roof Incentives - Has been recommitted to the House Appropriations & Revenue Committee due to the $5 million appropriation for the grant program. SB 29 - Glass Bill - The bill is scheduled to be heard in the Senate B&I committee on Feb. 13. A committee substitute will be presented that is the result of negotiations with glass companies, the plaintiff's attorneys, and the auto manufacturers. HB 280 - Delivery Network Companies - Rep. Pollock's NCOIL model insurance requirements for delivery network companies passed from House Banking & Insurance on Wednesday with an HCS. Is posted for passage in the House Orders on Monday. SB 148 - Litigation Funding - Sen. Wheeler's bill to authorize and regulate litigation funding was assigned to Senate B&I this week. This was a little surprising as these bills have typically been assigned to the Judiciary Committee. SB 158 - Minor Settlements - Sen. Gridler's bill to clarify the processes for opening accounts in claim settlements involving minors is set for a hearing on Tuesday in Senate B&I. HB 401 - Rep. Pollock, to legislatively reverse a KY Supreme Court ruling and allow out-of-state physicians to review workers' compensation medical records was reported by House Economic Development and is posted for House passage. Pharmacy Bills for Review
It appears that there is going to be a robust discussion of pharmacy-related health insurance issues over the last half of the 2024 session. Because some Big I members sell employee benefits, some of these bills may directly impact your employer-customers. We have engaged to oppose similar bills in the past, so we would ask you to review these bills and let us know how we should engage: SB 188 - Sen. Wise - This appears to be an omnibus PBM reform bill that would mandate pharmacists dispensing fees in statute, restrict mail order pharmacy, and mandate changes to pharmacy networks. The LRC's financial analysis is not available yet. Please review SB 149 - Sen. Meredith - This would force all pharmacy rebates derived in a group health insurance plan to be applied at the point of sale, providing that rebate to the consumer getting the drug. This would prohibit the rebate from being used to reduce group health premiums as is commonly done today. The LRC's financial analysis says this will increase premiums as much as $20.08 per member/per month. Please review HB 190 - Rep. Sharp - This would prohibit or restrict incentives for the use of mail order pharmacy in a group health insurance plan. The LRC's financial analysis says this will increase premiums as much as $2.55 per member per month. Please review
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| UPDATE – URGENT NOTICE on United Home Insurance Company Business Liquidation Date: February 2, 2024 From the Kentucky Department of Insurance This message is sent to notify all formerly appointed agents of United Home Insurance Company (UHIC) that all insurance policies have now been cancelled, effective December 18, 2023, pursuant to the liquidation order entered by the Arkansas Circuit Court on November 16, 2023. NO FURTHER PREMIUM should have been received from policyholders after December 18, 2023. Agents should have contacted all policyholders regarding the upcoming cancellation and provided replacement coverage before 12/18/2023. All policies in-force, renewed, or cancelled between the Liquidation Order issued on September 6, 2023, and the final, effective date of cancellation on December 18, 2023, are valid policies authorized by the Arkansas Receivership of United Home. Accordingly, the Kentucky Insurance Guaranty Association (KIGA) has the authority to pay the existing claims and return unearned premiums for all policies through December 18, 2023. If agents are aware of any policyholders who were initially denied benefit or unearned premium claims, agents are advised to contact the policyholders and KIGA directly to ensure the claims are reprocessed. On September 18, 2023, the Commissioner of the Kentucky Department of Insurance issued an order suspending the Certificate of Authority for UHIC in Kentucky. This action has resulted in the automatic suspension of all agent appointments for UHIC in Kentucky, except for the purpose of renewing and servicing existing in-force policies. The suspension order will be effective for one year from the effective date of the September 18, 2023. At the end of the initial suspension period, the Commissioner of the Kentucky Department of Insurance may issue an additional suspension order or a revocation order, depending on UHIC's status in the liquidation process. If you have questions about the liquidation process, please contact United Home at 800-467-0723 or Deputy Receiver/Liquidator Michael Surguine at 501-371-2776 or michael.surguine@Arkansas.gov. If you have any questions regarding the claims process with the Kentucky Guaranty Fund, please contact the fund by phone at 502-327-0819 or via mail at: Kentucky Insurance Guaranty Association
327 Townepark Circle
Suite 100
Louisville, KY 40243
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| Much of the activity on bills of interest to Big I thus far this session has been in the background. With sponsors and interest groups working through bill language to get things ready prior to bills moving through the legislative process. Some of that work will start to show in the week ahead as we see various bills begin to move through the process. Below we have highlighted what is likely to move next week, new bill introductions, and bills still waiting to get out of the starter's blocks.
Week Ahead
The Senate Banking & Insurance Committee will not meet next week, but we do expect the House committee to meet. Here is what we expect to move in the process next week: HB 256 - KY Safer Homes Act (Fortified Bill) - Will be up for hearing in House B&I on Wednesday. HB 155 - This bill is likely to be considered on the House floor next week and says that a spouse who is convicted of committing a felony against the other spouse is not entitled to claim retirement or whole life insurance as marital property.
HB 179 - The House is likely to consider this bill sponsored by Rep. Heavrin on the House floor this week. The KY Chamber supports this legislation that authorizes life and health insurers to transact disability income and paid family leave insurance. Newly Filed Bills
A few new introductions to review: - Rep. Wade Williams filed HB 371, providing additional authority for the mine subsidence program for the maximum insured value per structure to the DOI. The draft also increases the maximum amount of living expenses. - HB 356, filed by Rep. Amy Neighbors, allows nonprofit fire departments to increase the fees charged when responding to fires or other emergencies at properties that are not subscribers. This topic is also contained in SB 107, which passed from the Senate Transportation Committee with a committee substitute last week that also contained increased penalties for wrecker services. - SB 139 - This is leftover from the 2023 session when the bill passed the House and Senate but was vetoed by the Governor. It deals with an exemption from registration for certain investment advisers. No Movement
These bills have yet to move in the process: HB 280 - NCOIL model insurance requirements for delivery network companies. Conversations continue between the DNCs and the plaintiff's attorneys over independent contractor language. SB 104 - Would require dog owners or property owners to provide notice of insurance coverage to dog bite claimants. SB 29 - Glass Bill - The auto manufacturers and Safelite are debating some amendments. The sponsor cannot be in committee on Feb. 6, so the bill is not likely to be heard until Feb. 13.
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