Westmont Wire

On June 10, 2019, Vermont Governor Phil Scott signed into law Senate Bill 131, creating an insurance regulatory sandbox that gives the Department of Financial Regulation the authority to grant limited-duration innovation waivers of statutory and regulatory requirements.  The waivers are designed to enable companies to create innovative or more efficient insurance products and services that can be developed, tested and brought to market more quickly.  In order to obtain an innovation waiver, a company must demonstrate, inter alia, that such waiver is in the public interest and will not substantially or unreasonably increase any risk to consumers.

The new law, effective July 1, 2019, also authorizes domestic surplus lines insurers.  Accordingly, Vermont domestic surplus lines insurers may obtain a certification from the Commissioner as a surplus lines insurer, enabling such insurers to place policies not reasonably available in the admitted market.

For any questions regarding Senate Bill 131, or for innovation waiver and surplus inquiries, please contact Westmont Associates, Inc.

On June 17, 2019, ELANY issued Bulletin No. 2019-19 regarding Impermissible Group Coverage. The bulletin warns that the New York Department of Financial Services (DFS) has begun to issue fines against insurance groups who are placing unaffiliated parties in master or group policies. Unless the group fits into a statutory exception, the DFS will consider these to be impermissible groups and may then be subject to fines. ELANY further warns that there are no statutory exceptions for property programs under New York law.

ELANY specifies that the DFS pursues action against these policies based on complaints received by the insured, brokers and other claimants. The major complaints include: that one or more insured can exhaust the policy coverage limits; the master policy is filed not in New York, which places the policy in violation of both New York compliance requirements, but also New York Tax law; the policy violates New York’s requirements for disclosure notices, cancellation rights, and rules for misrepresentation. ELANY requests that brokers instead file individual policies in New York for New York residents in order to avoid fines or potential lawsuits.

For any questions regarding Bulletin No. 2019-19, or for any compliance questions regarding group policies, please contact Westmont Associates, Inc.