STATE CORPORATION COMMISSION

Bureau of Insurance

February 14, 2018

Administrative Letter 2018-01

TO: All Carriers Licensed to Market Credit Life Insurance or Credit Accident and Sickness Insurance in Virginia

RE: Credit Insurance Experience Exhibits
       Virginia Code § 38.2-3730

This Administrative Letter Withdraws and Replaces Administrative Letter 2015-02.

In accordance with § 38.2-3730 B of the Code of Virginia, adjustments to the prima facie rates applicable to credit life and credit accident and sickness insurance for the triennium commencing January 1, 2019 will be established and published later this year.

This letter serves as a reminder to all carriers licensed to write either or both of these coverages that the Credit Insurance Experience Exhibit (CIEE) for the 2017 reporting year, from which information will be obtained to properly calculate these rates, must be submitted in accordance with § 38.2-3730 A of the Code of Virginia, no later than April 1, 2018.

In order to expedite the review process, we are requesting that ALL carriers complete the attached questionnaire. This questionnaire will enable the Bureau of Insurance to distinguish carriers who have Virginia experience to report on the CIEE from those who do not have any Virginia experience to report. Carriers that have experience to report must answer all questions and submit the completed questionnaire to the Life and Health Forms and Rates Section of the Bureau. Because of the time constraints under which the rate calculation must be completed, carriers must submit complete and accurate CIEEs, as well as the questionnaire, on or before April 1, 2018. Please note that carriers with no experience to report are not required to answer questions 1-9 on the questionnaire; however, all carriers must return the questionnaire to the Bureau with its name, NAIC # and contact information completed.

We have attached to this administrative letter examples of some of the problems identified with CIEE filings in previous years. In some instances, although information was correct, an explanation was necessary to properly evaluate the information. Carriers are hereby directed to review the attachment to ensure that similar problems do not recur this year. Please note that the CIEE must be filed on a direct basis; i.e. before taking into account reinsurance ceded.

We strongly encourage all carriers to electronically submit the questionnaires to the Life and Health Forms and Rates Section via the Company Filing Portal. To access the questionnaire and the portal, go to http://www.scc.virginia.gov/boi/co/miscforms.aspx, and scroll down to "Credit Insurance Experience Exhibit". You will note that instructions are provided on the Bureau's website for submitting the documents through the portal.

Please contact the Bureau with any questions or requests for clarification. Questions or requests for clarification regarding the filing of required documents should be directed to Amanda McCauley, telephone (804) 371-0034, or email amanda.mccauley@scc.virginia.gov.

Questions or requests for clarification regarding the use of the portal should be directed to Trish Todd, telephone (804) 371-9195, or email trish.todd@scc.virginia.gov.

/s/ Scott A. White
Commissioner of Insurance

The following are examples of problems identified in filings of the Credit Insurance Experience Exhibits (CIEEs) in previous reporting years.  Companies are directed to review the information below to ensure that similar problems do not recur in their 2017 CIEEs. Any of the following situations legitimately applicable to a 2017 CIEE should include an appropriate explanation in the attached questionnaire.

• Prima facie premium not listed. The prima facie premium is needed to evaluate the rates. Each company should explicitly state the prima facie premium on the appropriate exhibit line, even if it is the same as earned premium.

• Prima facie premiums greater than earned premiums. While this may not be a problem, our experience is that most companies charge the maximum rate allowed. This may be indicative of a miscalculation, especially on MOB business. 

• Earned premiums greater than prima facie premium.  For MOB business, this may be indicative of a miscalculation. Such premiums violate statutes unless the premium rates have been approved. If the premium rates have been approved, we ask that reporting carriers provide the Bureau with the approval date(s) to facilitate our analysis.

• Changes in the reserves reported from the end of one reporting year to the beginning of the subsequent reporting year. This can cause previously charged premium and claims to disappear. It can also cause claims without corresponding premium and vice versa. Restatement of opening reserves merely results in delay and unnecessary expense for the Bureau and, in light of the purpose of these CIEEs, companies should ensure that opening reserves (at the beginning of the year) are equal to closing reserves (at the end of the previous year).

• Claim reserve errors. These cause inaccurate incurred claims and may also indicate inadequate reserves for the product line.

• Premium reserve errors. These cause inaccurate premium reserve calculations.

• Assumption reinsurance transactions. If any business is transferred by assumption reinsurance, identify in the questionnaire the companies involved and the reserve amounts impacted by the transaction.

• Company Name Changes or Mergers. If the reporting company has changed its name and/or has been involved in a merger, full details should be provided in the questionnaire to enable the Bureau to appropriately combine experience for the past three years.

• Calculation of Earned Premium at Prima Facie Rates. Prima facie premium must be calculated using the prima facie rates approved and published by the Bureau effective January 1, 2016. Approval by the Bureau to charge alternate rates or use alternative rate structures does not constitute a change to the published prima facie rates, and these alternative rates or rates structures should not be used in calculating earned premium at prima facie rates.

Questionnaire

Company Name:  ______________________________

NAIC #: ____________

For calendar year 2017, did the company have any earned premiums or incurred claims?

______ Yes  ______ No

If "yes," please complete the entire questionnaire. If "no," please proceed to the last page and complete the contact information only. Responses to questions 1-9 are not required.

1. Are both the earned premiums and earned premiums at prima facie rates stated?  _____Yes  _____No

What adjustments, if any, were made to the earned premiums at prima facie rates?  Please explain in detail how the adjustments were made.  If none were made, please explain why not.

2. Are incurred claims stated without stating earned premiums and earned premiums at prima facie rates? ____Yes  _____No  If "yes," please explain.

3. Are the beginning of year (BOY) reserves equal to the prior years' stated end of year (EOY) reserves? _____Yes  _____No  If "no," please provide a detailed explanation. (This applies to the premium, IBNR and claim reserves.)

4. Are the BOY reserves positive but no data was reported last year?  _____Yes  ____No  If "yes," please explain.

5. Has the reserve methodology changed since the prior year's CIEE was filed in Virginia? ____Yes  _____No  If "yes," please explain.

6. Was any business transferred by assumption reinsurance?  _____Yes  _____No  If "yes," identify the companies involved and explain how any values in the CIEE have been impacted by the transaction.

7. Has the Company changed its name or has the Company been involved in a merger since the prior year's CIEE was filed in Virginia?  _____Yes  _____No  If "yes," please provide complete details in order that the Bureau of Insurance can appropriately combine experience for the past three years.

8. Have all totals been verified as correct?  _____Yes  _____No  If "no," please explain.

9. Does the CIEE contain any negative numbers?  _____Yes  _____No  If "yes," please provide a detailed explanation.

Completed by: _______________________________________________

Title:  _______________________________________________

Date:  _______________________________________________

Phone #:  _______________________________________________

Email Address:  _______________________________________________

(Revised 1/4/18)

DEPARTMENT OF ENVIRONMENTAL QUALITY

Public Meeting and Public Comment for a Watershed Plan for Cunningham Creek and its Tributaries

Meeting details: A community meeting will be held on Tuesday, March 6, 2018, at 5:30 p.m. at the Fluvanna County Public Library, 214 Commons Boulevard, Palmyra, VA 22963. This meeting will be open to the public and all are welcome to attend. In the case of inclement weather, the meeting will be postponed until Monday, March 26, 2018, at 5:30 p.m. For more information, please contact Nesha McRae at email nesha.mcrae@deq.virginia.gov or telephone (540) 574-7850.

Meeting description: A public meeting will be held to present a draft watershed plan for Cunningham Creek and its tributaries. This plan is intended to address excess sediment and bacteria in these streams through the implementation of best management practices designed to reduce runoff of these pollutants to the streams. The meeting will include a presentation by the Virginia Department of Environmental Quality summarizing this plan, along with additional presentations on streambank stabilization practices by the Virginia Department of Game and Inland Fisheries, and citizen monitoring and watershed restoration by the Rivanna Conservation Alliance.

Description of study: Cunningham Creek and its North and Middle Forks are located primarily in Fluvanna County, with the uppermost reaches of the North Fork extending in to Albemarle County. These streams do not host a healthy and diverse population of aquatic life, and are identified as impaired for the "General Benthic (aquatic life)" water quality standard on Virginia's impaired waters list. A benthic stressor analysis conducted as part of this restoration effort indicated that sediment is the primary culprit responsible for this impairment. In addition, the Middle Fork of Cunningham Creek has a high concentration of E. coli bacteria, which prevents it from meeting the "primary contact" water quality standard. This watershed plan reports on the sources of bacteria and sediment in the watersheds and identifies strategies to reduce pollution coming from these sources, with the goal of restoring the aquatic community in these streams and assuring their suitability for primary contact recreation. The plan identifies an implementation timeline, costs and benefits, and education and outreach strategies. Planning efforts were led by a technical advisory committee, and a detailed summary of the committee's planning process is described in the plan.

How to comment and participate: All are welcome to attend the meeting and are encouraged to ask questions and provide feedback. Written comments will be accepted through April 5, 2018, and should include the name, address, and telephone number of the person submitting the comments. For more information or to submit written comments, please contact Nesha McRae, Department of Environmental Quality, Valley Regional Office, P.O. Box 3000, Harrisonburg, VA 22801, telephone (540) 574-7850, FAX (540) 574-7878, or email nesha.mcrae@deq.virginia.gov.

Notice of Public Comment on the Draft 2018 Water Quality Assessment Guidance Manual

The Virginia Department of Environmental Quality (DEQ) will release the draft 2018 Water Quality Assessment Guidance Manual on March 5, 2018.

Virginia's 2018 Water Quality Assessment Guidance Manual contains the assessment procedures and methods to be used for the development of Virginia's 2018 §305(b)/§303(d) Integrated (i.e., combined water quality assessment and impaired waters) Report. The assessment guidance seeks to address all key elements of the U.S. Environmental Protection Agency (EPA) 2006 Assessment Guidance and subsequent updates current to December 2017, in addition to the assessment methodology for Chesapeake Bay Water Quality Standards established by EPA and adopted by Virginia (Ambient Water Quality Criteria for Dissolved Oxygen, Water Clarity, and Chlorophyll a for the Chesapeake Bay and Its Tidal Tributaries).

A copy of the draft 2018 Water Quality Assessment Guidance Manual is available for download from the DEQ Water Quality Assessment webpage at http://www.deq.virginia.gov/Programs/Water/WaterQualityInformationTMDLs/WaterQualityAssessments.aspx. A hard copy can also be requested from Amanda Gray, DEQ Water Quality Assessment Coordinator, using the contact information below.

Modifications have been made to the guidance document since 2016. A complete list of significant guidance modifications are described in Part II of the manual.

Section 62.1-44.19:5 C of the Code of Virginia requires DEQ to develop and publish the procedures used for defining and determining impaired waters and provide for public comment on the procedures. The public is invited to submit written comments through April 19, 2018. Comments should include the name, address, telephone number, and, if applicable, the email address of each person or organization submitting comments. Comments and related correspondence should be addressed to Amanda Gray. Responses to comments received will be made collectively, via a response document. The response document will be posted on the assessment webpage along with the final guidance manual.

Agency Contact: Amanda Gray, Department of Environmental Quality, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4181, FAX (804) 698-4032, or via email at amanda.gray@deq.virginia.gov.

VIRGINIA LOTTERY

Director's Orders

The following Director's Orders of the Virginia Lottery were filed with the Virginia Registrar of Regulations on February 14, 2018. The orders may be viewed at the Virginia Lottery, 600 East Main Street, Richmond, Virginia, or at the office of the Registrar of Regulations, 900 East Main Street, 11th Floor, Richmond, Virginia.

Director's Order Number One (18)

Virginia Lottery's Scratch Game 1848 "Extreme Cash" Final Rules for Game Operation (effective February 2, 2018)

Director's Order Number Two (18)

Virginia Lottery's Scratch Game 1795 "Super Crossword" Final Rules for Game Operation (effective February 2, 2018)

Director's Order Number Three (18)

Virginia Lottery's Scratch Game 1872 "Jewel 7's Playbook" Final Rules for Game Operation (effective February 2, 2018)

Director's Order Number Four (18)

Virginia Lottery's Scratch Game 1874 "SUPER CASH FRENZY" Final Rules for Game Operation (effective February 6, 2018)

Director's Order Number Eleven (18)

Certain Virginia Promotion; Rescission of Murphy USA Playbook Gas Discount Retailer Incentive Promotion (175 2017) (effective February 2, 2018)

Director's Order Number Twelve (18)

Virginia Lottery's Scratch Game 1822 "Power 5s" Final Rules for Game Operation (effective February 6, 2018)

Director's Order Number Thirteen (18)

Virginia Lottery's Scratch Game 1867 "5X the Money" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Fourteen (18)

Virginia Lottery's Scratch Game 1871 "Bonus Word Crossword" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Fifteen (18)

Virginia Lottery's Scratch Game 1858 "2X The Money" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Sixteen (18)

Virginia Lottery's Scratch Game 1873 "Cash Multiplier" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Seventeen (18)

Virginia Lottery's Scratch Game 1820 "Lucky 13" Final Rules for Game Operation (effective February 6, 2018)

Director's Order Number Eighteen (18)

Virginia Lottery's Scratch Game 1826 "$1,000 Cash Dash" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Twenty (18)

Virginia Lottery's "3, 4, 5, Play" Promotion Final Rules for Operation (This Director's Order becomes effective on March 1, 2018, and shall remain in full force and effect through the end Promotion date unless amended or rescinded by further Director's Order)

Director's Order Number Twenty-One (18)

Virginia Lottery's Scratch Game 1881 "Combo Play" Final Rules for Game Operation (effective February 13, 2018)

Director's Order Number Twenty-Three (18)

Certain Virginia Promotion; Typographical Error Correction - Extreme Millions Second Chance Promotion (158 2017) (This Director's Order is effective nunc pro tunc to October 3, 2017, and shall remain in full force and effect unless amended or rescinded by further Director's Order)

STATE WATER CONTROL BOARD

Announces Public Meeting on Watershed Cleanup Plan

The Virginia Department of Environmental Quality (DEQ) will host an informational meeting to discuss the development of a cleanup plan for the Yeocomico River Watershed in Northumberland and Westmoreland Counties. The meeting will be held on March 14, 2018, from 2 p.m. until 4 p.m. at the Kinsale Fire Department, 123 Yeocomico Lane, Kinsale, VA 22488.

This meeting is open to the public and all are welcome. Participants will have the opportunity to contribute to the watershed cleanup plan by offering input and sharing information about the area and its local streams. Specifically, the purpose of this meeting is to review the final bacteria source assessment and implementation scenarios.

Should inclement weather occur, the meeting would be rescheduled to March 22, 2018, at the Kinsale Fire Department.

A total maximum daily load (TMDL) Implementation Plan for the Yeocomico River watershed is being developed by DEQ and the Virginia Institute of Marine Science. Since portions of local streams have high levels of bacteria, they are currently listed on the state's list of impaired waters. TMDLs for fecal coliform were developed in 2008 and now require a TMDL implementation plan. The high bacteria levels have led to the closure of shellfish harvesting in segments of these waterbodies. To restore water quality, pollutant levels must be reduced to meet the current water quality standards in Virginia. The EPA approved TMDL can be located on DEQ's website at http://www.deq.virginia.gov/Programs/Water/WaterQualityInformationTMDLs/TMDL/TMDLDevelopment/ApprovedTMDLReports.aspx.

Streams with impaired water quality include Gardner, Jackson, and Bonum Creeks in Westmoreland County, Mill Creek in Northumberland County, and portions of the Yeocomico River.

The public comment period will extend from March 14, 2018, to April 13, 2018. Written comments will be accepted by email, fax, or postal mail to the contact below.

Additional information is also available on the DEQ website at http://www.deq.virginia.gov/Programs/Water/WaterQuality
InformationTMDLs/TMDL/TMDLImplementation.aspx.

For more information, contact: Kaitlin Ranger, NPS TMDL Coordinator, telephone (804) 527-5018, Department of Environmental Quality, Piedmont Regional Office, email kaitlin.ranger@deq.virginia.gov.

VIRGINIA CODE COMMISSION

Notice to State Agencies

Contact Information: Mailing Address: Virginia Code Commission, Pocahontas Building, 900 East Main Street, 8th Floor, Richmond, VA 23219; Telephone: (804) 698-1810; Email: varegs@dls.virginia.gov.

Meeting Notices: Section 2.2-3707 C of the Code of Virginia requires state agencies to post meeting notices on their websites and on the Commonwealth Calendar at https://commonwealthcalendar.virginia.gov.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed: A table listing regulation sections that have been amended, added, or repealed in the Virginia Register of Regulations since the regulations were originally published or last supplemented in the print version of the Virginia Administrative Code is available at http://register.dls.virginia.gov/documents/cumultab.pdf.

Filing Material for Publication in the Virginia Register of Regulations: Agencies use the Regulation Information System (RIS) to file regulations and related items for publication in the Virginia Register of Regulations. The Registrar's office works closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.