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Washington Insurance courses have been updated with annual outline changes effective March 1, 2018. Continue reading for Life and Health and Property and Casualty Addendums.

Addendum for use with Washington Life & Health online ExamFX courses and study guide version 21134en/21133en, per exam content outline updated effective 3/1/2018.

The following are content additions to supplement your existing text unless otherwise indicated:

LIFE & HEALTH

Insurance Regulations

1. Producer Licensing
2. Appointments/Termination of Appointments – additions to existing text

If a licensee is not eligible for an electronic appointment, the insurer will be notified at the time the electronic notice is not accepted for transmission through the third-party online licensing provider or the Commissioner's web site.

An insurer may terminate an appointment of an insurance producer through the commissioner’s website or a third-party online licensing provider. The effective date of revocation of an appointment is the date of receipt by the Commissioner.

If a producer solicits insurance for an insurer, but is later determined to be ineligible for appointment, the contract will remain in effect, but the producer will not receive compensation for the transaction. The producer and insurer may also be subject to disciplinary action.

Business Entity Affiliates – new topic under Appointements

Individual licensees who represent a business entity must be affiliated with the licensed business entity. A business entity must have at least one affiliated individual licensee in order to transact insurance business. Business entities must provide the Commissioner a list of all individual licensees authorized to represent the business entity.

If a business entity terminates the affiliation of an insurance producer for cause, the Commissioner must receive notice of that termination by electronic submission within 30 days of the termination date.

1. Marketing Practices
2. Unfair Practices – additions to existing text

Insurers must disclose all pertinent benefits, coverages, or other provisions of an insurance policy under which a claim is presented. Insurers may not conceal from the first-party claimant any benefits, coverages, or other provisions of an insurance policy if they are pertinent to a claim.

Insurers cannot deny a claim for failure to exhibit the property unless the insurers can prove that they demanded to see the property and that the claimant, without foundation, refused to exhibit the property.

Unless there are time limits specified in a policy, insurers may not require written notice of a loss within a specified time period and may not seek to relieve the company of its obligations if claimants do not meet such time limits.

Insurers cannot ask first-party claimants to sign releases that extend beyond the matter that gave rise to the claim payment.

Insurers cannot issue a partial settlement of a claim under coverage that contains language releasing the insurer or the insured from its total liability.

Insurers cannot pay benefits without clearly advising the payee that it may require reimbursement.

Excess Charges – new topic on outline

The Commissioner may allow producers to enter into reasonable arrangements with insureds and prospective insureds to charge a reduced fee in certain situations. These are situations in which the services charged for are beyond the scope of services customarily provided. In these situations, an overall charge must be reasonable taking into account receipt of commissions and fees and their relation, proportionally, to the value of the total work performed.

1. Producer Responsibilities

Policy Delivery – addition to the existing text

Any notice or document that is evidence of insurance coverage may be delivered, stored, and presented by electronic means as long as it meets the requirements of the Washington Electronic Authentication Act. An electronic signature is the equivalent of a digital signature.

HEALTH REGULATIONS ONLY

1. Health Care Services and Health Maintenance Organizations

Commissioner Authority Over HMOs – new topic on outline

The Commissioner may disapprove an individual or group HMO agreement form on any of the following grounds:

• If it contains inconsistent, ambiguous, or misleading clauses, or exceptions or conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the agreement;
• If it has any title, heading, or other indication that is misleading;
• If purchase of health care services is being solicited by deceptive advertising;
• If it contains unreasonable restrictions on the treatment of patients;
• If it violates Insurance Code or fails to conform to minimum provisions and standards required by the Commissioner; or
• If any agreement for health care services fails to comply with state law.

The Commissioner may disapprove any agreement if the benefits provided are unreasonable in relation to the amount charged for the agreement. Rates, or any modification of rates, may not be used until 60 days after they are filed with the Commissioner. If not disapproved within 60 days of being filed, the filing will be considered approved.

Addendum for use with Washington Property & Casualty online ExamFX courses and study guide version 21151en/21153en, per exam content outline updated effective 3/1/2018.

The following are content additions to supplement your existing text unless otherwise indicated:

PROPERTY & CASUALTY

Property and Casualty Insurance Basics

1. Common Policy Provisions

Arbitration – new topic on outline

Arbitration is a method of casualty claim settlement used when the insured and insurer cannot agree on how to settle a claim. The settlement is submitted to an arbitrator, or multiple arbitrators, whose decision may or may not be binding on both parties dependent on state law.

Insurance Regulations

1. Producer Licensing and Regulation
2. Appointments/Termination of Appointments – additions to existing text

If a licensee is not eligible for an electronic appointment, the insurer will be notified at the time the electronic notice is not accepted for transmission through the third-party online licensing provider or the Commissioner's web site.

An insurer may terminate an appointment of an insurance producer through the commissioner’s website or a third-party online licensing provider. The effective date of revocation of an appointment is the date of receipt by the Commissioner.

If a producer solicits insurance for an insurer, but is later determined to be ineligible for appointment, the contract will remain in effect, but the producer will not receive compensation for the transaction. The producer and insurer may also be subject to disciplinary action.

Business Entity Affiliates – new topic under Appointments

Individual licensees who represent a business entity must be affiliated with the licensed business entity. A business entity must have at least one affiliated individual licensee in order to transact insurance business. Business entities must provide the Commissioner a list of all individual licensees authorized to represent the business entity.

If a business entity terminates the affiliation of an insurance producer for cause, the Commissioner must receive notice of that termination by electronic submission within 30 days of the termination date.

1. Marketing Practices
2. Unfair Practices – additions to existing text

Insurers must disclose all pertinent benefits, coverages, or other provisions of an insurance policy under which a claim is presented. Insurers may not conceal from the first-party claimant any benefits, coverages, or other provisions of an insurance policy if they are pertinent to a claim.

Insurers cannot deny a claim for failure to exhibit the property unless the insurers can prove that they demanded to see the property and that the claimant, without foundation, refused to exhibit the property.

Unless there are time limits specified in a policy, insurers may not require written notice of a loss within a specified time period and may not seek to relieve the company of its obligations if claimants do not meet such time limits.

Insurers cannot ask first-party claimants to sign releases that extend beyond the matter that gave rise to the claim payment.

Insurers cannot issue a partial settlement of a claim under coverage that contains language releasing the insurer or the insured from its total liability.

Insurers cannot pay benefits without clearly advising the payee that it may require reimbursement.

Excess Charges – new topic on outline

The Commissioner may allow producers to enter into reasonable arrangements with insureds and prospective insureds to charge a reduced fee in certain situations. These are situations in which the services charged for are beyond the scope of services customarily provided. In these situations, an overall charge must be reasonable taking into account receipt of commissions and fees and their relation, proportionally, to the value of the total work performed.

1. Producer Responsibilities

Policy Delivery – addition to the existing text

Any notice or document that is evidence of insurance coverage may be delivered, stored, and presented by electronic means as long as it meets the requirements of the Washington Electronic Authentication Act. An electronic signature is the equivalent of a digital signature.

1. Fair Access to Insurance Requirements Plan – additions to existing text

Within 3 business days after receipt of the inspection report, the facility will notify the insured and the agent that

• The risk is acceptable;
• The risk will be acceptable if noted improvements are made and confirmed by reinspection; or
• The risk is not acceptable.

If the risk is accepted, the policy or binder must be delivered within 2 business days of the receipt of premium. Coverage will not begin until the application is accepted and the premium paid.

The facility must notify the applicant and the commissioner if a risk is declined because it fails to meet reasonable underwriting standards, including

• Physical condition of the property;
• Its present use or housekeeping, such as vacancy, overcrowding, storage of rubbish or flammable materials; or
• Other specific characteristics that violate public policy and result in unreasonable exposures to loss.

If the risk is conditionally declined because the property does not meet reasonable underwriting standards, but could meet such standards with improvement, the facility must promptly advise the applicant and the commissioner what improvements noted in the action report should be made to the property. Upon completion of the improvements, the facility will have the property reinspected.

Insurance Score – new topic on outline

Insurers who use insurance scores to calculate renewal premiums must

• Update each policyholder's insurance score at least every 3 years; and
• Calculate premiums using the insurer's most recently determined insurance score for the policy.

If an insurance score is used to assign a policy to a particular rating class, then it is considered using an insurance score to calculate renewal premiums if the insurer

• Leaves that policy in the same rating class upon renewal; or
• Assigns the policy to a rating class that depends on the previous score-based rating class.

When an insurer updates an insurance score, it must update all information necessary to determine the insurance score, rather than partially update the score. This includes updating credit information on policyholders who were previously classified as "no hit" (absence of credit history) or "no score" (inability to determine a credit history).

As used in these rules, "insurance score" means a rating that is based at least partially on credit history.

CASUALTY

1. State Regulations for Casualty Only (Insurance Regulations – Casualty)
2. Automobile Insurance

Method of Satisfying Financial Responsibility – additions to existing text

The deposit of proof of financial responsibility is required of people who have been convicted of or forfeited bail for certain offenses under motor vehicle laws, or who have failed to pay judgments upon causes of action arising out of ownership, maintenance or use of vehicles of a type subject to registration under state law, or who are required to deposit security under state law due to having driven or owned a vehicle involved in an accident.

Other Types of Casualty Insurance

1. Workers Compensation

Types of Laws – new topic on the outline

Monopolistic vs. Competitive

In some states, employers are required to purchase workers compensation insurance from a state-operated entity. These are called monopolistic state funds. Private insurance companies cannot write workers compensation insurance in competition with these state funds.

In other states, workers compensation is purchased by employers from those insurers authorized to write casualty insurance. The coverage and benefits are mandated by state regulations. This is known as a competitive market.

Compulsory vs. Elective

The workers compensation laws vary from state to state. Most states have compulsory laws, which require all employers, except those specifically excluded due to staff size or employment type, to provide workers compensation coverage for those meeting the definition of employee.

The remaining few states have elective laws, which means the employer does not have to be subject to the state's workers compensation laws, but if an employer chooses not to be subject to the state's laws, it loses its common law defenses against liability suits.