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Regulatory Update.

California Wildfires: California's Senate Insurance Committee passed legislation that would require insurers to combine various coverage limits within their homeowner policies to pay any covered losses and to cover 80% of the limit of a policyholder's personal property coverage without requiring a written inventory.

Senate Bill 894 and 897 were issued by Democrat lawmakers as part of a legislative package designed to address policyholders' difficulties after the wildfires that ravaged California last year. Insurance Commissioner Dave Jones said the fires destroyed 36,000 structures and resulted in nearly $13 billion in damages.

Sen. Bill Dodd offered SB 894, which he said would allow policyholders to combine homeowners policy coverage limits to pay covered losses after major disasters. Also, he said the bill would guarantee up to three years of coverage for living expenses and provide homeowners with policy renewal for up to two years following a disaster.

Cannabis Coverage: The California Mutual Insurance Co. has been approved as the California's first insurer to provide lessor's risk coverage for property owners leasing to cannabis-related companies.

Insurance Commissioner Dave Jones said the availability of the insurance should reduce barriers faced by the cannabis industry to obtaining leased space. Jones wants legalized cannabis businesses in the state to have insurance protection and urged other insurers to follow California Mutual's lead. "I want to make sure that when consumers shop in cannabis businesses, when investors and owners invest in cannabis businesses, when vendors sell to cannabis businesses, and when landlords rent to cannabis businesses, there is insurance coverage available to cover everyone from losses," Jones said in a statement.

The California Department of Insurance said lessor's risk coverage provides liability and property insurance for commercial property owners who lease building space to commercial tenants. Activities and businesses addressed by lessor's risk coverage include cannabis labs, product manufacturing, cultivation, and dispensary operations, the CDI said.

Workers' Compensation:

The Illinois House of Representatives has passed legislation that would create a state-sponsored workers' compensation insurance company.

House Bill 4595 would create Illinois Employers Mutual Insurance Co., using a $10 million loan from the Illinois Workers' Compensation Commission's operations fund as start-up capital to be repaid within five years. Money to the operations fund is generated by a surcharge on companies operating in the state.

The National Association of Mutual Insurance Companies was among the trade groups who are opposed to the legislation. "The bill is a retread that doesn't bring anything new to the table to solve the problems Illinois' employers are facing in workers' compensation," said Mark Johnston, NAMIC vice president, Midwest Region. He said the bill is thinly capitalized and unnecessary in a state with a workers' comp market as competitive as Illinois.

Workers' Compensation:

Florida's Office of Insurance Regulation has approved a 1.8% workers' compensation insurance rate cut that applies to new and renewed policies beginning June 1.

The OIR approved the National Council on Compensation Insurance filing, which was based on the impact of the Federal Tax Cuts and Jobs Act passed by Congress and signed by President Donald Trump in December 2017.

The OIR attributed the rate change to a reduction in the profit and contingency factor from 1.85% to 0.5%. The revised P&C factor reflects portions of the congressional tax bill, including top corporate tax decreases and changes to reserve discount factors, the OIR said in its announcement.

NCCI has demonstrated through its rate filing that this decrease is an actuarially sound response to the savings workers' compensation insurers have realized as a result of recent federal legislation," Insurance Commissioner David Altmaier said in a statement.

South Korea:The South Korean Financial Services Commission has lowered entry requirements for the financial services industry to promote innovation and competition, according to a statement from the regulator.

"It is the first-ever reform plan on entry barriers in 20 years since the current regulatory framework on market entry was established after the Asian financial crisis," said the FSC in a statement.
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Title Annotation:Department
Publication:Best's Review
Geographic Code:1U9CA
Date:Jun 1, 2018
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