The bill also addresses both the delivery method and content of the notice. The insurer must send the notice to the physical address, email or other electronic address furnished by the claimant or judgment creditor, unless the claimant or judgment creditor has notified the insurance company in writing that he or she waives notice of payment. Absent an address or waiver furnished by the claimant or judgment creditor, the notice must be sent to the last known physical address, email or other electronic address, of the claimant or judgment creditor. The insurer is required to send this notice only after a settlement has been agreed to by the attorney or other representative of the claimant or judgment creditor. The exact language required for the notice reads as follows:

“Pursuant to §38.2-236 of the Code of Virginia, you are hereby notified that a payment was sent on (insert date on which payment was sent) by (insert name of insurer) to your attorney or other representative (insert name, address, and telephone number of attorney or other representative known to insurer), in satisfaction of your claim or judgment against (insert name of insurer, or insured, whichever is appropriate). If you have any questions, please contact your attorney or other representative.”

Hurricane Deductibles

An upcoming issue in Maine concerns a focus on hurricane deductible programs. The recently enacted property insurance initiative, LD 452, requires the Maine Bureau of Insurance to adopt uniform policy standards concerning hurricane deductible programs. Specifically, the bill requires that the superintendent of insurance “adopt rules establishing procedures and standards for an insurer that uses a hurricane deductible program or programs regarding the applicability of hurricane deductibles. Procedures and standards must include without limitation uniform policy standards and the form of notice that the insurer must provide to the named insured under a policy subject to this subchapter issued by the insurer.” Homeowners insurers will certainly be watching for expected proposals from the Bureau.

Colorado also has some upcoming new requirements for homeowner's insurers effective January 1, 2014. These pending compliance challenges affect both underwriting and claims practices:

• Before issuing or renewing a replacement-cost homeowners' insurance policy whose dwelling limit is equal to or greater than the estimated replacement cost of the residence, the insurer must provide the applicant with an opportunity to obtain extended replacement-cost coverage and law and ordinance coverage.
• All homeowners' insurance replacement cost policies for a dwelling must include additional living expense (ALE) coverage.
• The text of all endorsements, summary disclosure forms, and homeowners' insurance policies must not exceed the tenth-grade reading level, as measured by the Flesch-Kincaid grade-level formula, or must not score less than 50, as measured by the Flesch reading ease formula. Insurers must revise all homeowners' insurance policies issued or renewed in Colorado on or after January 1, 2015, to comply with these requirements.
• Insurers must provide written notification to policyholders describing changes in insurance policy language that are applicable to the renewal period.
• An electronic or paper copy of the policyholder's insurance policy must be available to the policyholder, including the declaration page and any endorsements, within 3 business days after a request from the policyholder. The policyholder must be able to select the method of delivery.
• Insurers must make available to a policyholder a certified copy of the policyholder's insurance policy within thirty days after a request from the policyholder.
• In the event of a total loss of the contents of an owner-occupied primary residence that was furnished at the time of loss, the insurer shall offer the policyholder a minimum of 30 percent, or a larger percent by mutual agreement of the policyholder and insurer, of the value of the contents coverage reflected in the declaration page of the homeowners' policy without requiring submittal of a written inventory of the contents. In order to receive up to the full value of the contents coverage, the policyholder may accept the offer under this paragraph (a) and submit a written inventory as required by the insurer.
• If the policyholder receives the depreciated value of contents insured under a policy, then the insurer must make available to the insured the methodology used for determining the depreciated value of the insured contents.
• An insurer shall allow the policyholder at least 365 days after a total loss claim to submit an inventory of lost or damaged property.

Turning to Maryland, effective June 1, 2013, an insurer that issues a policy of homeowners' insurance in the state that contains an anti-concurrent causation (ACC) clause is required to provide its policyholder each year with a notice that:

• Is clear and specific.
• Describes the ACC clause.
• Informs the insured to read the policy for complete information on the exclusions.
• States that the insured should communicate with the insurance producer or the insurer for additional information regarding the scope of the exclusions.

We are fast approaching the true halfway mark in the year, but actual changes and pending ones definitely have impacts on P&C operations. With varying effective dates, insurers will need to review, assess, and implement any required procedural changes in their processing systems.