Fall 2020 NAIC Meeting: Preview Of Hot Topics - Insurance Laws and Products

The National Association of Insurance Commissioners (the "NAIC") will be holding its fall meeting from December 3 through December 9, 2020 (the "Fall 2020 NAIC Meeting"). As a result of the ongoing COVID-19 pandemic, the Fall 2020 NAIC Meeting will be held virtually. Unlike previous years, the agenda for the Fall 2020 NAIC Meeting is highly abbreviated, reflecting the fact that many groups within the NAIC have been conducting interim virtual meetings throughout the year.

Here is a preview of some of the hot topics our Mayer Brown team will be following. Please contact any of the attorneys listed below if you would like to discuss these topics before or after the NAIC Meeting.

I. Long-Term Care Insurance (EX) Task Force

FRIDAY, 12/4/2020 – 11:00 A.M. - 12:30 P.M. EST

At the NAIC meeting this past summer (the "Summer 2020 NAIC Meeting"), the Long-Term Care Insurance (EX) Task Force (the "LTCI Task Force") consolidated the six work streams originally organized to address long-term care insurance ("LTCI") issues into three subgroups: (i) the LTCI Multistate Rate Review (EX) Subgroup; (ii) the LTCI Reduced Benefit Options (EX) Subgroup; and (iii) the LTCI Financial Solvency (EX) Subgroup. Concurrently, the LTCI Task Force adopted 2020 charges for each of the subgroups. Of the three subgroups, two will be reporting on key initiatives at the Fall 2020 NAIC Meeting.

First, the LTCI Multistate Rate Review (EX) Subgroup has been conducting a pilot project to perform multistate rate reviews, for which it expects to finalize the work product by year-end 2020. The goal of the project is to develop a consistent state-based approach for reviewing LTCI rate increase filings that will result in an actuarially justified rate increase process that will be timely and will eliminate cross-state rate subsidization. The original intention of the subgroup was to engage industry and interested parties in the discussions around the pilot project prior to year-end 2020. The subgroup's report will likely be primarily focused on the results of its pilot program and may include the exposure of work product for comment, though such work product may initially only be released confidentially to insurance regulatory authorities

Second, the LTCI Reduced Benefit Options (EX) Subgroup has been reviewing comments received on a principles document that was previously prepared by the LTCI Task Force to provide guidance to insurance regulatory authorities when evaluating reduced benefit option ("RBO") offerings by insurers. The document under review provides guidance around the following principles: (i) fairness and equity for policyholders that elect an RBO; (ii) fairness and equity for policyholders that choose to accept rate increases and continue LTCI coverage at their current benefit level; (iii) clarity of communication with policyholders eligible for an RBO; (iv) consideration of encouragement or requirement for a company to offer certain RBOs; and (v) exploration of innovation, particularly where an outcome of improved health and lower claim costs are possible.

The subgroup's report will likely include a discussion of comments received on the RBO principles document, and may include a revised version of that document for exposure. In addition, at the Summer 2020 NAIC Meeting, the subgroup said it would begin to prepare a related principles document with respect to consumer notices, which it may provide a draft of or otherwise discuss at the Fall 2020 NAIC Meeting.

Links to the agenda and materials for this meeting are attached here and here.

II. Innovation and Technology (EX) Task Force

FRIDAY, 12/4/2020 – 2:00 P.M. - 3:30 P.M. EST

Like many other NAIC task forces and committees, at the Fall 2020 NAIC Meeting, the Innovation and Technology (EX) Task Force (the "I&T Task Force") will hear reports and updates from the various working groups that operate under its aegis. However, the I&T Task Force will also discuss comments received on two key initiatives that are being managed at the Task Force level

First, the I&T Task Force has recently been considering certain amendments to Section 4(H) of the NAIC Model Unfair Trade Practices Act (Model #880) dealing with rebates (the "Proposed Anti-Rebating Amendments"). Among other things, the Proposed Anti-Rebating Amendments address the permissibility of offering to potential consumers: (a) value-added products or services; (b) non-cash promotional or advertising items and meals; and (c) charitable donations to be made on their behalf. The I&T Task Force held an interim meeting on November 4, 2020, a primary purpose of which was to discuss comments received on the proposed amendments. Following the November 4 meeting, the I&T Task Force circulated a revised draft of the Proposed Anti-Rebating Amendments for additional comments. While the I&T Task Force had previously expressed a hope to have the Proposed Anti-Rebating Amendments in a form ready for adoption by the Fall 2020 NAIC Meeting, it is unclear if this will be the case. The comments discussed at the November 4, 2020, meeting and received since that meeting reflect significant concern by several trade associations with the language of the Proposed Anti-Rebating Amendments as currently worded, which may indicate that further revision of these amendments will be necessary.

Second, the I&T Task Force generally requested comments relating to regulatory relief or accommodation measures pertaining to innovation and technology that have been granted by insurance regulatory authorities in response to the COVID-19 pandemic. While a wide range of comments were received by the I&T Task Force, many commenters requested that the task force promote the following measures: (i) the uniform acceptance of electronic signatures wherever a wet signature is required; (ii) the electronic delivery and posting of notices, policy documents and related documents; (iii) the elimination of in-person notarization requirements and the uniform acceptance of remote notarizations; (iv) the removal of telehealth restrictions, limitations and mandates to allow plans, providers and patients to make the ultimate decision regarding appropriate care; and (v) the acceptance of electronic versions of regulatory filings (with one commenter noting that "[m]any a tree has suffered unnecessarily at the hands of state insurance regulatory filings"). In its discussion of these comments at the Fall 2020 NAIC Meeting, the I&T Task Force may decide that such comments should form the basis for a recommendation to insurance regulatory authorities to adopt the measures listed above or otherwise harmonize their efforts in this space.

Links to the agenda and materials for this meeting are attached here, here and here.

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