CHAPTER 255
HB 1279 – FINAL VERSION
05Mar2008… 0526h
05/01/08 1468s
05/01/08 1482s
2008 SESSION
01/09
HOUSE BILL 1279
AN ACT relative to the scope of certain insurance laws.
SPONSORS: Rep. Reardon, Merr 11; Rep. DeStefano, Merr 13; Rep. Spratt, Hills 3
This bill clarifies the scope of certain insurance laws.
This bill is a request of the insurance department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05Mar2008… 0526h
05/01/08 1468s
05/01/08 1482s
08-2395
01/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT relative to the scope of certain insurance laws.
Be it Enacted by the Senate and House of Representatives in General Court convened:
255:1 Insurance Companies; Exceptions. Amend the introductory paragraph of RSA 402:41, I(d) to read as follows:
(d) Value added service, activity, or product offered or provided without a fee, or at a reduced fee, that is related to the coverage provided by [an] the insurance contract, if the provision of such value added service, activity, or product does not violate any other applicable statute or rule, and is:
255:2 Foreign Insurance Companies. Amend RSA 405:24 to read as follows:
405:24 Applicability; Issue.
I. Foreign unlicensed companies that satisfy the provisions of RSA 405:26 and are approved by the commissioner as unadmitted surplus lines companies are not subject to any statutory or regulatory provision unless the statute or regulation specifically references unadmitted surplus lines companies; provided however, unadmitted surplus lines companies shall be subject to RSA 417:1 through RSA 417:22.
II. The commissioner, pursuant to RSA 402-J, may issue a producer license to a resident of the state permitting the producer named therein to procure insurance policies and contracts of insurance or suretyship to be effective in this state in foreign insurance companies not authorized to transact business in this state, but which are duly authorized to do business in some state having an insurance commissioner. Such insurance or suretyship placed with an unadmitted surplus lines company shall be for such amount as the producer cannot place with an admitted company, and shall not be placed until the producer has first satisfied the insurance commissioner that the producer cannot procure such an insurance in an admitted company. Before delivering to the insured a policy or binder of insurance written under the provisions of this section, every producer shall have stamped in a form approved by the commissioner on the face of the binder or policy the following: “The company issuing this policy has not been licensed by the state of New Hampshire and the rates charged have not been approved by the commissioner of insurance. If the company issuing this policy becomes insolvent, the New Hampshire insurance guaranty fund shall not be liable for any claims made against the policy.”
255:3 Prohibited Acts and Terms. Amend RSA 415-C:7 to read as follows:
415-C:7 Prohibited Acts and Terms.
I. No obligor, its designee, or any other representative of an obligor, including a seller or administrator, shall [make, publish, display, print, distribute, issue, circulate, advertise, or place before the public, or cause directly or indirectly, any of the foregoing, in any manner whatsoever any statement or representation that] in connection with the sale, or offer to sell, or any advertisement or in connection with any benefits, advantages, conditions, terms, or services available under a consumer guaranty contract:
(a) [Is false or misleading in connection with the sale, offer to sell, advertisement, benefits, advantages, conditions, terms, or services available under a consumer guaranty contract.] Make, publish, print, distribute, issue, circulate, advertise, or place before the public, any statement or representation that is false or misleading;
(b) [Permits or causes the omission of a] Mislead by permitting or causing the omission of a material statement [in connection with the sale, offer to sell, advertisement, benefits, advantages, conditions or terms of a contract] that under the circumstances should have been made in order to make the statements that were made not misleading.
(c) [Represents or makes the purchase of] Require the purchase of a consumer guaranty contract or represent that the purchase is mandatory.
(d) [Has the effect of creating or maintaining] Create or maintain a fraud.
(e) [Uses] Use in its name the words insurance, casualty, guaranty, surety, mutual, or any other words descriptive of the insurance, casualty, guaranty or surety business; or a name deceptively similar to the name or description of any insurance or surety corporation, or any other obligor. This section shall not apply to a company that was using any of the prohibited language in its name prior to the effective date of this chapter. However, a company using the prohibited language in its name shall conspicuously disclose in its consumer guaranty contracts a statement substantially as follows: "This agreement is not an insurance contract.''
(f) Fail to act promptly upon communications with respect to claims arising under a consumer guaranty contract.
(g) Fail to effectuate fair and equitable settlements or compromises of claims in which liability has become reasonably clear.
(h) Unfairly discriminate based solely on age, place or area of residence, race, color, creed, national origin, ancestry, marital or civil union status, lawful occupation including military service, gender, religion, or blindness or other disability.
II. An obligor shall not make, permit, or cause any practice that:
(a) Fails to perform the services promised under the contract in a timely, competent, or workmanlike manner; or
(b) Has the effect of creating or maintaining a fraud.
III. No consumer guaranty contract issued, sold, or covering property located in this state shall provide that:
(a) The consumer is not a party to the contract;
(b) The obligor has no liability to the consumer;
(c) The consumer does not have the right to bring an action to enforce the terms of the contract or otherwise challenge the denial of a claim which the consumer believes is wrongful, subject to the provisions or any alternative dispute resolution procedure specified in the consumer guaranty contract; or
(d) Any civil action or alternative dispute resolution procedure brought in connection with the consumer guaranty contract shall be brought in the courts of a jurisdiction other than New Hampshire.
IV. Nothing in this chapter shall be construed to impair or in any way affect any rule or law applicable to or governing consumer guaranty contracts.
[V. No violation of this chapter shall of itself be deemed to create any cause of action in favor of any person other than the commissioner; but nothing in this chapter shall impair the right of any person to seek redress at law or in equity for any conduct for which action may be brought.]
255:4 Foreign Insurance Companies; Redomestication. Amend RSA 405:62 to read as follows:
405:62 Approval as a Domestic Insurer. Any insurer which is organized under the laws of any other state and is admitted to do business in this state for the purpose of writing insurance may become a domestic insurer upon the approval of the commissioner by amending its articles of incorporation or equivalent corporate charter to designate its change of domicile to this state, and by complying with all [of the] applicable requirements of [law] Title XXXVII relative to the organization and licensing of a domestic insurer of the same type [and by designating its principal place of business at a place in this state]. Such domestic insurer shall be entitled to like certificates and licenses to transact business in this state, and shall be subject to the authority and jurisdiction of this state.
255:5 New Section; Foreign Insurance Companies; Filings. Amend RSA 405 by inserting after section 64 the following new section:
405:65 Filing with Secretary of State. An insurer transferring its domicile to this state shall file the following documents with the secretary of state, together with applicable filing fees:
I. Restated articles of incorporation or equivalent, as amended pursuant to RSA 405:62;
II. Executed order of the commissioner approving the redomestication; and
III. The statement set forth in RSA 421-B:11, II.
255:6 New Section; Action Against an Obligor, Designee, or Representative of an Obligor. Amend RSA 415-C by inserting after section 10 the following new section:
415-C:10-a Action Against an Obligor, Designee or Representative of an Obligor.
I. When an obligor, its designee, or any other representative of an obligor, including a seller or administrator, in any action or proceeding brought by the insurance commissioner has been found to be in violation of this chapter or has been ordered to cease and desist, and said finding or order has become final, any consumer claiming to be adversely affected by the act or practice giving rise to such finding or order, and to whom restitution has not been provided under RSA 415-C:10, IV or to whom the obligor, its designee or representative has not made voluntary restitution acceptable to the consumer within 30 days of the finding or order, may bring suit against said obligor to recover such damages or loss that have been suffered by him or her because of such action or practice.
II. For the sole purposes of providing the consumer with the procedural rights set forth under RSA 541 and RSA 541-A, failure of the commissioner to take action under RSA 415-C:10 within 120 days from the date of the receipt of a complaint from an alleged injured person shall constitute a finding that the alleged act or practice is not in violation of this chapter. This finding may be appealed in accordance with RSA 541. If upon appeal the decision of the commissioner is not upheld, the consumer may proceed under RSA 415-C:10-a, I. This provision shall not bar the commissioner from bringing an enforcement action for violation of this chapter more than 120 days after receipt of a complaint.
255:7 Effective Date. This act shall take effect 60 days after its passage.
Approved: June 26, 2008
Effective Date: August 25, 2008