GENERAL NOTICES/ERRATA
STATE CORPORATION COMMISSION
Bureau of Insurance
June 8, 2011
Administrative Letter 2011-04
To: All Insurers and Other Interested Parties
Re: Legislation Enacted by the 2011 Virginia General Assembly
We have attached for your reference summaries of certain statutes enacted or amended and re-enacted during the 2011 Session of the Virginia General Assembly. The effective date of these statutes is July 1, 2011, except as otherwise indicated in this letter. Each organization to which this letter is being sent should review the summaries carefully and see that notice of these laws is directed to the proper persons, including appointed representatives, to ensure that appropriate action is taken to effect compliance with these new legal requirements. Copies of individual bills may be obtained at http://legis.state.va.us/. You may enter the bill number (not the chapter number) on the Virginia General Assembly Home Page, and you will be linked to the Legislative Information System. You may also link from the Legislative Information System to any existing section of the Code of Virginia. All statutory references made in the letter are to Title 38.2 (Insurance) of the Code of Virginia unless otherwise noted. All references to the Commission refer to the State Corporation Commission. The federal Patient Protection and Affordable Care Act is referred to as PPACA.
Please note that this document is a summary of legislation. It is neither a legal review and interpretation nor a full description of the legislative amendments affecting insurance-related laws during the 2011 Session. Each organization is responsible for review of the statutes pertinent to its operations.
/s/ Jacqueline K. Cunningham
Commissioner of Insurance
Chapter 107 (House Bill 1985)
This bill amends § 38.2-2206 (Uninsured Motorist Coverage) to provide that a liability insurer may make irrevocable offers of its limits contingent upon a final judgment that is at least equal to the liability insurer's offer or may make such offer of its limits contingent upon the underinsured motorist insurer's waiver of subrogation.
Chapter 186 (Senate Bill 1390)
The bill amends the definition of "life insurance" in § 38.2-102 (General Provisions) to include additional benefits that provide specified disease or limited benefit health coverage, subject to compliance with the minimum standards for individual accident and sickness policies set forth in § 38.2-3519. Such additional benefits may be combined in an individual policy or added as a rider to the policy if the insurer is licensed to transact the business of accident and sickness insurance in Virginia and complies with the rate and form filing requirements contained in the Commission's Rules Governing the Filing of Rates for Individual and Certain Group Accident and Sickness Insurance Policy Forms (14 VAC 5-130-10 et seq.)
Chapter 194 (House Bill 1458) and Chapter 227 (Senate Bill 1388)
The bill adds a new article to the Life Insurance chapter (§§ 38.2-3100 et seq.) to establish requirements for use of retained asset accounts by insurers licensed in Virginia. The insurer shall provide, at the time a claim is made, written information describing the settlement options available under the policy and how to obtain specific details relevant to the options. The insurer shall also provide certain written disclosures to the beneficiary of a policy before the retained asset account option is selected, if optional, or established, if not optional. If the insurer settles benefits through a retained asset account, the insurer shall provide the beneficiary with a supplemental contract that clearly discloses the rights of the beneficiary and the obligations of the insurer under the supplemental contract.
Chapter 198 (House Bill 1504)
The bill amends provisions in the Investments chapter (§§ 38.2-1400 et seq.), amends § 38.2-1501, and adds § 38.2-1522 to the Rehabilitation & Liquidation of Insurers chapter to establish the criteria to be met by domestic insurers in order to engage in hedging and replication transactions involving derivative instruments. The bill includes an enactment clause that allows insurers currently investing in derivative instruments to continue doing so after the effective date of this act provided they submit guidelines to the Commission for review by April 1, 2011.
Chapter 222 (House Bill 2480)
The bill adds a new article to the Insurance Agents chapter (§§ 38.2-1800 et seq.) to allow the sale of Portable Electronics Insurance (PEI) for the repair or replacement of portable electronic devices by vendors of such devices. The bill also amends § 38.2-1800 to include "portable electronics insurance authority" in the lines of insurance that may be sold by limited lines property and casualty (P&C) insurance agents. Vendors of portable electronic devices holding a limited lines P&C license may sell PEI.
Chapter 298 (Senate Bill 1387)
The bill adds § 13.1-400.10 (Automobile Clubs), which provides an exemption to legal entities from the automobile club licensing requirements in the chapter. This exemption applies if the legal entity contracts with an automobile club that is licensed in Virginia to provide emergency road and towing service to the legal entity's customers.
Chapter 306 (Senate Bill 916)
The bill amends § 38.2-1715 (Life, Accident & Sickness Insurance Guaranty Association {Association}) to require posting of its summary document prepared pursuant to subsection B of § 38.2-1715 on the Association's website.
Chapter 329 (House Bill 1538)
The bill amends § 38.2-3420 (Accident and Sickness Insurance) to exempt multiple employer welfare arrangements (MEWAs) that are comprised of banks and their plan-sponsoring organization, and their respective employees, from Title 38.2. A "plan-sponsoring organization" is defined, in part, as an association that sponsors a MEWA comprised only of banks which have been in existence for at least five years and were formed for a purpose other than obtaining insurance.
Chapter 498 (House Bill 2286)
The bill amends various provisions of the Insurance Agents (§§ 38.2-1800 et seq.) chapter and amends and enacts various provisions of the Surplus Lines and Insurance Law chapter (§§ 38.2-4800 et seq.) in accordance with provisions of the federal Nonadmitted and Reinsurance Reform Act of 2010. The bill eliminates the requirement that a surplus lines broker be licensed in Virginia unless the broker is selling, soliciting, or negotiating contracts of insurance for insureds whose home state is Virginia. The bill states that surplus lines premium taxes will be collected for risks for which the home state is Virginia. The bill also establishes uniform eligibility requirements for the approval of nonadmitted or unlicensed insurers.
Chapter 618 (House Bill 1586) and Chapter 636 (Senate Bill 1015)
The bill amends § 38.2-1903.1 by making professional liability insurance policies eligible for the exemptions that currently exist for most types of policies written for large commercial risks. The bill also eliminates the requirement that insurers issuing policies under the exemption for large commercial risks report annually to the Commission on the number of exempted policyholders.
Chapter 623 (House Bill 2437)
The bill amends § 9.1-185.8 (Bail Bondsmen) to require premiums charged by bail bondsmen to be no less than 10 percent and no more than 15 percent of the amount of the bond. Bail bondsmen shall not loan money with interest for the purpose of helping another obtain a bail bond. A bail bond premium is defined as the amount of money paid to a licensed bail bondsman for the execution of a bail bond.
Chapter 682 (Senate Bill 1482)
The bill amends § 38.2-1705 (Life, Accident & Sickness Insurance Guaranty Association {Association}) to establish new procedure by which the Association would dispose of any surplus funds on hand with respect to an insurer insolvency. The bill requires the Association to reimburse member insurers for assessment costs not otherwise amortized and offset and then to pay the remaining surplus to the Commission for deposit in the Commonwealth's general fund.
Chapter 758 (House Bill 1459) and Chapter 759 (Senate Bill 771)
The bill amends § 8.01-581.15 (Medical Malpractice) to increase the cap on the amount an injured person may receive from a judgment in a medical malpractice action for acts occurring after July 1, 2012. The new cap as of July 1, 2012 will be $ 2.05 million, and the cap will increase annually on July 1 by $50,000 through July 1, 2031. (Refer to Administrative Letter 2011-03 for further guidance).
Chapter 788 (House Bill 1928)
The bill substantially revises various provisions of Title 38.2 regarding independent external review of a health carrier's final adverse determination regarding covered benefits. The bill also revises some provisions of Title, 32.1, Article 1.1 and Article 1.2. The bill also enacts a new chapter that requires a health carrier to establish an internal appeals process and adds requirements for external review consistent with the requirements set forth in the federal Patient Protection and Affordable Care Act (PPACA). The provisions of the bill expire on July 1, 2014.
Chapter 823 (House Bill 2434)
The bill expresses the intent of the Virginia General Assembly that the Commonwealth create and operate its own health benefits exchange or exchanges, and, at a minimum, the exchange will meet the relevant requirements of the federal PPACA. The Governor, through the Secretary of Health and Human Resources, and with the Bureau of Insurance, will work with the General Assembly, relevant experts and stakeholders to provide recommendations for consideration by the 2012 General Assembly regarding the structure and governance of the Virginia Exchange. The recommendations are due by October 1, 2011. The bill expires on July 1, 2014.
Chapter 850 (Senate Bill 1124)
The bill amends various provisions of Title 38.2 and adds new provisions in the Surplus Lines Insurance Law (§§ 38.2-4800 et seq.) to transfer the responsibility for the administration of gross premium taxation from the Commission to the Department of Taxation. The provisions become effective for the taxable year on or after January 1, 2013, except for the provisions in subdivisions A 1 through A 4 of § 38.2-4809 and § 38.2-4809.1 of the act, regarding the tax on surplus lines insurance policies, which are effective on July 1, 2011.
Chapter 876 (House Bill 2467) and Chapter 878 (Senate Bill 1062)
The bill adds a provision to the Accident and Sickness Insurance chapter (§§ 38.2-3400 et seq.) and amends § 38.2-4319 (HMOs) to require health insurers, health care subscription plans, and health maintenance organizations to provide coverage for the diagnosis of autism spectrum disorder (ASD) and treatment for ASD in individuals from age two to six. There is an annual maximum benefit of $35,000 or greater for coverage of applied behavior analysis. The mandate to provide coverage shall not apply to individual or small employer group policies, contracts, or plans. The bill will not apply to an insurer, corporation, or health maintenance organization, or to the state employee health benefit plan if the costs associated with coverage for behavioral health treatment exceed one percent of premiums charged over the experience period. The bill is effective January 1, 2012.
Chapter 882 (House Bill 1958)
The bill conforms health insurance provisions of the Accident and Sickness Insurance chapter (§§ 38.2-3400 et seq.) with corresponding provisions of the federal PPACA which became effective on September 23, 2010. The provisions include (i) requirements that policies providing dependent coverage for a child provide such coverage until the child reaches age 26; (ii) limitations on annual and lifetime dollar limits on essential benefits; (iii) a prohibition on the rescission of health insurance policies except in cases of fraud or misrepresentation of a material fact; (iv) requirements that nongrandfathered plans cover preventive services without out-of-pocket cost-sharing for the insured; (v) requirements that nongrandfathered plans permit covered persons to designate any participating primary health care professional who is available to accept the covered person and prohibitions of such plans requiring authorizations or referrals for obstetrical or gynecological care by in-network health care professionals specializing in obstetrics or gynecology; (vi) prohibitions on nongrandfathered plans imposing preexisting condition exclusions for enrollees who are under 19 years of age, except a grandfathered plan providing individual health insurance coverage; and (vii) prohibitions on nongrandfathered plans charging higher cost-sharing for emergency services that are obtained out of a plan's network and from requiring preauthorization for emergency services. The provisions expire July 1, 2014.
NOTE: If a health carrier providing individual health insurance coverage offers child only policies, the carrier must offer (i) coverage continuously throughout the year; or (ii) a limited open enrollment period each calendar year from April 1-May 31 or from October 31-November 30.
DEPARTMENT OF ENVIRONMENTAL QUALITY
Proposed Consent Order for Charlottesville-Albemarle Airport Authority
An enforcement action has been proposed for the Charlottesville-Albemarle Airport Authority for violations in Albemarle County. A proposed consent order describes a settlement to resolve unpermitted discharge of fill material at its runway extension project. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Steven W. Hetrick will accept comments by email at steven.hetrick@deq.virginia.gov, FAX at (540) 574-7878, or postal mail at Department of Environmental Quality, Valley Regional Office, P.O. Box 3000, 4411 Early Road, Harrisonburg, VA 22801, from July 4, 2011, to August 3, 2011.
STATE LOTTERY DEPARTMENT
Director's Orders
The following Director's Orders of the State Lottery Department were filed with the Virginia Registrar of Regulations on June 6, 2011, and June 13, 2011. The orders may be viewed at the State Lottery Department, 900 East Main Street, Richmond, VA, or at the office of the Registrar of Regulations, 910 Capitol Street, 2nd Floor, Richmond, VA.
Director's Order Number Forty-Five (11)
Virginia's Twenty-Seventh Online Game Lottery; "Fast Play 3-Card Bingo" Final Rules for Game Operation (effective on
the first sale date of the Matrix set forth in the "Fast Play 3-Card Bingo" Official Game Rules, as adopted)
Director's Order Number Forty-Seven (11)
Virginia's Instant Game Lottery 1275; "Lady Bucks" Final Rules for Game Operation (effective June 13, 2011)
STATE WATER CONTROL BOARD
Public Notice - Approval of Water Quality Management Planning Actions
Notice of action: The State Water Control Board (board) is considering the approval of eight total maximum daily load (TMDL) implementation plans (IPs) and granting authorization to include the TMDL IPs in the appropriate water quality management plans (WQMPs).
Purpose of notice: The board is seeking comment on the proposed approvals and authorizations. The purpose of these actions is to approve eight TMDL IPs as Virginia's plans for the management actions necessary for attainment of water quality goals in several impaired waterbodies. These actions are taken in accordance with the Public Participation Procedures for Water Quality Management Planning.
Public comment period: July 4, 2011, to August 3, 2011.
Description of proposed action: Department of Environmental Quality (DEQ) staff intends to recommend (i) that the DEQ director approve the TMDL IPs listed below as Virginia's plans for the management actions necessary for attainment of water quality goals in the impaired segments, and (ii) that the DEQ director authorize inclusion of the TMDL IPs in the appropriate WQMPs. No regulatory amendments are required for these TMDL IPs.
At previous meetings, the board voted unanimously to delegate to the DEQ director the authority to approve TMDL IPs, provided that a summary report of the action the director plans to take is presented to the board prior to the director's approval. The TMDL IPs included in this public notice will be approved using this delegation of authority.
The TMDLs listed below were developed in accordance with 1997 Water Quality Monitoring, Information and Restoration Act (WQMIRA, §§ 62.1-44.-19:4 through 62.1-44.-19:8 of the Code of Virginia) and federal recommendations. The TMDL IPs were developed in accordance with DEQ's Public Participation Procedures for Water Quality Management Planning. Extensive public participation was solicited during the development of the plans, and the public comment process provided the affected stakeholders with opportunities for comment on the proposed plans. The final TMDL IPs can be found at http://www.deq.virginia.gov/tmdl/iprpts.html.
Affected Waterbodies and Localities:
In the Potomac/Shenandoah River Basin:
1. "Hays, Moffatts, Walker, and Otts Creeks Water Quality Improvement Plan"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in Hays Creek, Moffatts Creek, Walker Creek, and Otts Creek located in Rockingham and Augusta Counties.
2. "South River and Christians Creek Water Quality Improvement Plan"
· The IP proposes management actions needed to reduce bacteria, sediment, and phosphorus and restore the primary contact (swimming) use and aquatic life use in the South River and Christians Creek located in Augusta County.
In the James River Basin:
3. "James River and Tributaries TMDL Implementation Plan"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in the James River, Ivy Creek, Tomahawk Creek, Burton Creek, Judith Creek, Fishing Creek, Blackwater Creek, and Beaver Creek located in the city of Lynchburg and Campbell, Bedford, and Amherst Counties.
4. "Implementation Plan for the Fecal Coliform TMDL for Mill Creek and Powhatan Creek"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in Mill Creek and Powhatan Creek located in James City County.
5. "Slate River and Rock Island Creek Bacteria Total Maximum Daily Load Implementation Plan"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in the Slate River and Rock Island Creek located in Buckingham County.
In the Rappahannock River Basin:
6. "Craig Run, Browns Run, and Marsh Run Bacteria Total Maximum Daily Load Implementation Plan"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in Craig Run, Browns Run, and Marsh Run located in Fauquier County.
7. "Little Dark Run and Robinson River Bacteria Total Maximum Daily Load Implementation Plan"
· The IP proposes management actions needed to reduce bacteria and restore the primary contact (swimming) use in the Little Dark Run and Robinson River located in Madison and Culpeper Counties.
In the Tennessee/Big Sandy River Basin:
8. "Lewis Creek Sediment Total Maximum Daily Load Implementation Plan"
· The IP proposes management actions needed to reduce sediment and restore the aquatic life use in Lewis Creek located in Russell County.
How to comment: DEQ accepts written comments by email, fax, and postal mail. All written comments must include the full name, address, and telephone number of the person commenting and be received by DEQ by 5 p.m. on the last day of the comment period.
How a decision is made: After comments have been considered, the board will make the final decision.
To review documents: The TMDL implementation plans are available on the DEQ website at http://www.deq.virginia.gov/tmdl/iprpts.html and by contacting the DEQ representative named below. The electronic copies are in PDF format and may be read online or downloaded.
Contact for public comments, document requests, and additional information: David S. Lazarus, Department of Environmental Quality, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4299, FAX (804) 698-4116, or email david.lazarus@deq.virginia.gov.
Public Notice - Approval of Water Quality Management Planning Actions
Notice of action: The State Water Control Board (board) is considering the approval of three total maximum daily load (TMDL) reports and six TMDL modifications, and granting authorization to include the TMDL reports and modifications in the appropriate water quality management plans (WQMPs).
Purpose of notice: The board is seeking comment on the proposed approvals and authorizations. The purpose of these actions is to approve three TMDL reports and six TMDL modifications as Virginia's plans for the pollutant reductions necessary for attainment of water quality goals in several impaired waterbodies. These actions are taken in accordance with the Public Participation Procedures for Water Quality Management Planning.
Public comment period: July 4, 2011, to August 3, 2011.
Description of proposed action: Department of Environmental Quality (DEQ) staff intends to recommend (i) that the DEQ director approve the TMDL reports and TMDL modifications listed below as Virginia's plans for the pollutant reductions necessary for attainment of water quality goals in the impaired segments, and (ii) that the DEQ director authorize inclusion of the TMDL reports and TMDL modifications in the appropriate WQMPs. No regulatory amendments are required for these TMDLs and their associated waste load allocations.
At previous meetings, the board voted unanimously to delegate to the DEQ director the authority to approve TMDLs that do not include waste load allocations requiring regulatory adoption by the board, provided that a summary report of the action the director plans to take is presented to the board prior to the director approving the TMDL reports. The TMDLs included in this public notice will be approved using this delegation of authority.
The TMDLs listed below were developed in accordance with federal regulations (40 CFR § 130.7) and are exempt from the provisions of Article 2 (§ 2.2-4006 et seq. of the Code of Virginia) of the Virginia Administrative Process Act. The TMDLs have been through the TMDL public participation process contained in DEQ's Public Participation Procedures for Water Quality Management Planning. The public comment process provides the affected stakeholders an opportunity for public appeal of the TMDLs. EPA approved all TMDL reports presented under this public notice. The approved reports can be found at https://www.deq.virginia.gov/TMDLDataSearch/ReportSearch.jspx.
Affected Waterbodies and Localities:
In the Potomac River & Shenandoah River Basins:
1. "Bacteria TMDLs for the Hunting Creek, Cameron Run, and Holmes Run Watersheds"
· 3 bacteria TMDLs, located in Arlington, Alexandria, Falls Church, and Fairfax, propose bacteria reductions for portions of the watersheds to address primary contact (swimming) use.
In the James River Basin:
2. Modification for "Total Maximum Daily Load for the Appomattox River Basin"
· 19 bacteria TMDLs, located in Chesterfield, Colonial Heights, Petersburg, and Hopewell, propose bacteria reductions for portions of the watersheds to address primary contact (swimming use) impairments.
In the Rappahannock River Basin:
3. Modification for "Totuskey and Richardson Creeks Total Maximum Daily Load Report for Shellfish Condemnation Areas Listed Due to Bacteria Pollution"
· 2 bacteria TMDLs, located in Richmond County, propose bacteria reductions for portions of the watersheds to address VDH Shellfish Area Condemnations and primary contact (swimming use) impairments.
4. Modification for "Bacteria Total Maximum Daily Load Development for the Hoskins Creek Watershed"
· 1 bacteria TMDL, located in Essex County, proposes bacteria reductions for portions of the watersheds to address the primary contact (swimming) use.
In the Roanoke River Basin:
5. Modification for "Bacteria TMDLs for the Cub Creek, Turnip Creek, Buffalo Creek, Buffalo Creek (UT), and Staunton River Watersheds, Virginia"
· 5 bacteria TMDLs, located in Halifax and Charlotte Counties, propose bacteria reductions for portions of the watersheds to the primary contact (swimming) use.
6. Modification for "Fecal Coliform TMDL (Total Maximum Daily Load) Development for Gills Creek, Virginia"
· 1 bacteria TMDL, located in Franklin County, proposes bacteria reductions for portions of the watersheds to address the primary contact (swimming) use.
In the Chowan River Basin:
7. "E. Coli Total Maximum Daily Load Development for Fontaine Creek in Greensville and Brunswick Counties, VA"
· 1 bacteria TMDL, located in Brunswick and Greensville Counties, proposes bacteria reductions for portions of the watersheds to address the primary contact (swimming) use.
8. "E. Coli Total Maximum Daily Load Development for Unnamed Tributary to Nebletts Mill Run and Hatcher Run in Sussex and Dinwiddie Counties, VA"
· 1 bacteria TMDL, located in Dinwiddie and Sussex Counties, proposes bacteria reductions for portions of the watersheds to address the primary contact (swimming) use.
In the Chesapeake Bay-Small Coastal-Eastern Shore Basin:
9. Modification for "Indian, Tabbs, Dymer, and Antipoison Creeks Total Maximum Daily Load (TMDL) report for Shellfish Condemnation Areas Listed Due to Bacteria Pollution"
· 14 bacteria TMDLs, located in Northumberland and Lancaster counties, propose bacteria reductions for portions of the watershed to address VDH Shellfish Area Condemnations and primary contact (swimming use) impairments.
How to comment: DEQ accepts written comments by email, fax, and postal mail. All written comments must include the full name, address, and telephone number of the person commenting and be received by DEQ by 5 p.m. on the last day of the comment period.
How a decision is made: After comments have been considered, the board will make the final decision.
To review documents: The TMDL reports and TMDL implementation plans are available on the DEQ website at https://www.deq.virginia.gov/TMDLDataSearch/ReportSearch.jspx and by contacting the DEQ representative named below. The electronic copies are in PDF format and may be read online or downloaded.
Contact for public comments, document requests, and additional information: David S. Lazarus, Department of Environmental Quality, P.O. Box 1105, Richmond, VA 23218, telephone (804) 698-4299, FAX (804) 698-4116, or email david.lazarus@deq.virginia.gov.
VIRGINIA CODE COMMISSION
Notice to State Agencies
Contact Information: Mailing Address: Virginia Code Commission, 910 Capitol Street, General Assembly Building, 2nd Floor, Richmond, VA 23219; Telephone: Voice (804) 786-3591; FAX (804) 692-0625; 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 http://www.virginia.gov/cmsportal3/cgi-bin/calendar.cgi.
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/cumultab.htm.
Filing Material for Publication in the Virginia Register of Regulations: Agencies are required to use the Regulation Information System (RIS) when filing regulations for publication in the Virginia Register of Regulations. The Office of the Virginia Register of Regulations implemented a web-based application called RIS for filing regulations and related items for publication in the Virginia Register. The Registrar's office has worked 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.