Bill Text - HB227 (2013)

Relative to property and casualty insurance.


Revision: Jan. 15, 2013, midnight

HB 227 – AS INTRODUCED

2013 SESSION

13-0339

01/10

HOUSE BILL 227

AN ACT relative to property and casualty insurance.

SPONSORS: Rep. Butler, Carr 7; Rep. John Hunt, Ches 11; Rep. Flanders, Belk 3

COMMITTEE: Commerce and Consumer Affairs

ANALYSIS

This bill makes certain changes in the laws relative to property and casualty insurance.

This bill was requested by 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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

13-0339

01/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Thirteen

AN ACT relative to property and casualty insurance.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Insurance: Record Retention. Amend RSA 400-B:5, I(a) to read as follows:

(a) For property and casualty: the file or files containing the notice of claim, claim forms, proof of loss, or other form of claim submission, settlement demands, accident reports, policy reports, adjusters’ logs, claim investigation documentation, inspection reports, supporting bills, estimates and valuation worksheets, medical records, correspondence to and from insureds and claimants or their representatives, notes, contracts, declaration pages, certificates evidencing coverage under a group contract, endorsements or riders, work papers, any written communication, any documented or recorded telephone communication related to the handling of a claim, including the investigation, payment, or denial of the claim, copies of checks [or], drafts, [or] check numbers and amounts, numeric identifying information for debit cards, bank cards, or other similar cards, including date of issue and amounts, releases, all applicable notices, correspondence used for determining and concluding claim payments or denials, subrogation and salvage documentation, any other documentation created and maintained in a paper or electronic format, necessary to support claim handling activity, and any claim manuals or other information necessary for reviewing the claim.

2 New Subparagraph; Insurance Companies and Agents; Rebating. Amend RSA 402:41, I by inserting after subparagraph (f) the following new subparagraph:

(g) The rebate of all or part of a producer’s commission on the sale of commercial insurance as defined in RSA 412 provided the insurer expressly provides for such rebate in rate filings approved by the commissioner and the reduction of the commission is not disclosed to the insured either directly or indirectly.

3 Insurance Companies and Agents; Premium Refunds. Amend RSA 402:81, I(c) to read as follows:

(c) For auditable policies:

(1) Audits shall be [conducted] completed promptly, no more than 120 days after the expiration or cancellation of the policy, provided that there is no bona fide dispute; and

(2) If there is no bona fide dispute, the refund of gross unearned premium shall become due on the date of the completed audit or 120 days after the expiration or cancellation of the policy, whichever occurs first.

(3) Any insurer that violates this subparagraph shall be subject to an administrative fine of $1,000 per day for each day that the violation continues.

[(3)] (4) In cases where the amount of refund is in bona fide dispute, the refund shall not become due until the dispute is resolved and the audit is completed. The insurer shall notify the insured in writing that there is a bona fide dispute and this notice shall toll the 120-day time period until the dispute is resolved. Upon resolution of the dispute, the insurer shall proceed to complete the audit within the time remaining in the 120-day time period.

[(4)] (5) A bona fide dispute includes the insured’s failure to cooperate with the audit, provided the insurer has notified the insured of:

(A) The acts or omissions that constitute the insured’s failure to cooperate; and

(B) The consequences of the insured’s failure to cooperate, including delay in the completion of the audit and payment of any refund due.

4 Public Adjusters; Approval of Forms. Amend RSA 402-D:14, II to read as follows:

II. Contracts not containing all of the information required by RSA 402-D:13, I shall be automatically deemed disapproved[, and shall not be enforceable by the parties]. Any disapproved contract that is used by a public adjuster in violation of this paragraph shall be voidable by the consumer who signed the contract.

5 Third Party Administrators; Premium Collection and Payment of Claims. Amend RSA 402-H:7, IV to read as follows:

IV. All claims paid by the administrator from funds collected on behalf of or for an insurer shall be paid only on drafts or checks of and as authorized by the insurer, provided however that property and casualty claims may also be paid other than by draft or check, pursuant to rules adopted in accordance with RSA 281-A and RSA 417.

6 Fire Insurance Contract. RSA 407:15 is repealed and reenacted to read as follows:

407:15 Notice to Insured. The insurer shall provide written notice to the insured of any denial of coverage. The notice shall inform the insured than any action based upon the denial shall be barred by law if not commenced within 12 months from the date of the written denial.

7 Third Party Administrators; Standard Form. Amend the unnumbered paragraph entitled “Concealment, fraud” of RSA 407:22 to read as follows:

Concealment, fraud.

Coverage under this policy shall be [void] denied with respect to a loss for [the] any insured who, whether before or after [a] the loss, has intentionally concealed or misrepresented any material fact or circumstance; engaged in fraudulent conduct; or made false statements relating to this insurance. Coverage for a loss shall not be denied to an innocent insured or other third party based upon an insured’s intentional concealment, misrepresentation, fraudulent conduct or false statement.

8 Third Party Administrators; Standard Form. Amend the unnumbered paragraph entitled “Suit” of RSA 407:22 to read as follows:

[Suit] Action.

No [suit or] action on this policy for the recovery of any claim shall be sustainable in any court [of law or equity unless the requirements of this policy shall have been complied with, and] unless commenced within 12 months [next after inception of the loss] from the company’s written denial of the insured’s claim.

9 Regulation of Forms and Rates; Forms. Amend RSA 412:5, II to read as follows:

II. No liability policy issued or delivered in this state that insures against personal risk shall contain any exclusion which would preclude coverage for intra-family or inter-spousal claims.

10 Regulation of Forms and Rates; Motor Vehicle Coverage. Amend RSA 412:8, II to read as follows:

II. No liability policy issued or delivered in this state that insures against personal risk shall contain any exclusion which would preclude coverage for intra-family or inter-spousal claims.

11 Regulation of Forms and Rates; Workers’ Compensation. Amend RSA 412:35, III to read as follows:

III. Audits shall be completed promptly, no more than 120 days after the expiration or cancellation of the policy, provided that there is no bona fide dispute. Any insurer that violates this paragraph shall be subject to an administrative fine of $1,000 per day for each day that the violation continues.

12 Refusal to Issue, Cancellation and Refusal to Renew Automobile Insurance. Amend RSA 417-A:3 to read as follows:

417-A:3 Cancellation; Refusal to Write; Refusal to Renew; Insufficient Grounds. No insurer shall cancel, refuse to write or refuse to renew a policy of automobile insurance on any person [with at least 2 years’ driving experience] solely because of the age, residence, race, color, creed, national origin, ancestry, marital status or lawful occupation, including the military service, of anyone who is or seeks to become insured or solely because another insurer has refused to write a policy, or has cancelled or has refused to renew an existing policy in which that person was the named insured.

13 Refusal to Issue, Cancellation and Refusal to Renew Automobile Insurance. RSA 417-A:5-a is repealed and reenacted to read as follows:

417-A:5-a Termination Upon Renewal Date. If an insurer issues a written offer to renew that complies with state law and includes a declarations page and premium invoice for the subsequent policy term, but the insured does not tender payment by the due date on the invoice, the policy shall terminate as of the expiration date of the policy and the insurer is not required to issue a notice of non-renewal or cancellation. If such termination occurs, no premium shall be charged by the insurer for coverage beyond the policy’s expiration date.

14 New Section; Cancellation, Refusal to Write, Refusal to Renew Certain Property and Liability Insurance; Termination Upon Renewal Date. Amend RSA 417-B by inserting after section 4 the following new section:

417-B:4-a Termination Upon Renewal Date. If an insurer issues a written offer to renew that complies with state law and includes a declarations page and premium invoice for the subsequent policy term, but the insured does not tender payment by the due date on the invoice, the policy shall terminate as of the expiration date of the policy and the insurer is not required to issue a notice of non-renewal or cancellation. If such termination occurs, no premium shall be charged by the insurer for coverage beyond the policy’s expiration date.

15 Effective Date. This act shall take effect 60 days after its passage.

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