HB460: relative to property and casualty insurance.

CHAPTER 144

HB 460-FN - FINAL VERSION

2003 SESSION

03-0715

01/09

HOUSE BILL 460-FN

AN ACT relative to property and casualty insurance.

SPONSORS: Rep. D. Flanders, Belk 30; Sen. Flanders, Dist 7

COMMITTEE: Commerce

ANALYSIS

This bill makes a variety of changes in the insurance laws relative to property and casualty insurance. Some of the changes include:

(1) Adding a timely mailing provision.

(2) Requiring electronic funds transfers in certain circumstances.

(3) Adding terrorism to the perils not included section of the Fire Insurance Contract.

(4) Increasing the fine for failure to comply with certain automobile insurance laws.

(5) Clarifying the provision of law regarding nonrenewal of homeowner's insurance.

This bill is a request of the insurance department.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-0715

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

AN ACT relative to property and casualty insurance.

Be it Enacted by the Senate and House of Representatives in General Court convened:

144:1 New Sections; Insurance; Timely Mailing; Electronic Funds Transfer. Amend RSA 400-A by inserting after section 32 the following new sections:

400-A:32-a Timely Mailing.

I. Any report, claim, tax return, statement and other document, relative to tax matters, required or authorized to be filed with or any payment made to the state which is:

(a) Transmitted through the United States mail, shall be deemed filed and received by the state on the date shown by the post office cancellation mark stamped upon the envelope or other appropriate wrapper containing it.

(b) Mailed but not received by the state or where received and the cancellation mark is illegible, erroneous or omitted, shall be deemed filed and received on the date it was mailed if the sender establishes by competent evidence that the report, claim, tax return, statement, remittance, or other document was deposited in the United States mail on or before the date due for filing; and in cases of such non-receipt of a report, tax return, statement, remittance, or other document required by law to be filed, the sender files with the state or political subdivision a duplicate within 30 days after written notification is given to the sender by the state of its non-receipt of such report, tax return, statement, remittance, or other document.

II. If any report, claim, tax return, statement, remittance, or other document is sent by United States registered mail, certified mail or certificate of mailing, a record authenticated by the United States post office of such registration, certification or certificate shall be considered competent evidence that the report, claim, tax return, statement, remittance or other document was mailed, and the date of registration, certification or certificate shall be deemed the postmarked date.

III. If the date for filing any report, claim, tax return, statement, remittance, or other document falls upon a Saturday, Sunday or legal holiday, the filing shall be considered timely if performed on the next business day.

IV. The provisions of this section shall not apply to payment or remittance for tax sales, the advertisement of tax sales, tax sale redemptions or payment of subsequent taxes thereon.

400-A:32-b Electronic Funds Transfer. Insurers shall remit taxes by electronic funds transfer when the insurer, or group of insurers, had a tax liability in the prior tax year of $100,000 or more.

144:2 Insurance; Annual Financial Statement. Amend RSA 400-A:36, II to read as follows:

II. The commissioner may extend the time for filing such statement for cause shown for a period of not more than 60 days. Life insurance companies shall not be required to file that part of their annual statement known as the gain and loss exhibit until the succeeding May 1. An insurer intentionally failing to file its annual statement as required by paragraph I shall forfeit to the department $25 for each day of delinquency. The commissioner may refuse to continue, or may suspend or revoke, the certificate of authority of any insurer intentionally failing to file its annual statement when due. [At time of filing,] The insurer shall pay the fee for filing its annual statement as prescribed by RSA 400-A:29 at the time of filing or with the premium tax return, but no later than March 15th.

144:3 Insurers Rehabilitation and Liquidation; Disposition of Records During and After Termination of Liquidation. Amend RSA 402-C:50 to read as follows:

402-C:50 Disposition of Records During and After Termination of Liquidation. Whenever it appears to the commissioner that the records of any insurer in process of liquidation or completely liquidated are no longer useful, he or she may recommend to the court what records should be retained for future reference and what should be disposed of. The court shall enter an order thereon. [The commissioner shall immediately submit to the state historical society a copy of the court order, and on written application of the historical society within 3 months after receipt from the commissioner of the copy of the court order, the commissioner shall deliver to the society such records which are to be disposed of as the society deems of historical significance and shall destroy the remainder whether or not the records have been photographed or otherwise reproduced.] Until further order of the court, the commissioner shall keep all records the court orders preserved and shall destroy the remainder whether or not the records have been photographed or otherwise reproduced.

144:4 Managing General Agents; Definition of "Managing General Agent". Amend RSA 402-E:1, III(a)(1) to read as follows:

(1) Adjusts or pays claims in excess of [an amount determined by the commissioner] $200,000; or

144:5 New Paragraphs; Producer Licensing. Amend RSA 402-J:14 by inserting after paragraph III the following new paragraphs:

IV. While such producer's appointment remains in force, an insurer shall be bound by the acts of the person named therein within his or her apparent authority as its acknowledged producer.

V. No such company shall issue a policy or other evidence of insurance through an unlicensed producer or other unlicensed person. Any violation of this provision shall, after hearing, subject the insurer to an administrative fine, pursuant to RSA 400-A:15, III, and, upon repeated violations, the commissioner may suspend or revoke the license of the company.

144:6 Sales by Financial Institutions; Definition of "Financial Institution." Amend RSA 406-C:2, IV, to read as follows:

IV. "Financial institution" means a bank, savings bank, savings and loan association, trust company, credit union, or any depository institution as defined by the Federal Deposit Insurance Act, as amended, 12 U.S.C. section 1813 (c)(1), which is authorized to take deposits and make loans from a place of business in the state. For the purpose of this chapter, the term financial institution shall also include any non-depository affiliate or subsidiary of a financial institution but only in the instances when the non-depository affiliate or subsidiary is soliciting the sale or purchase of insurance recommended or sponsored by, on the premises of, or in connection with a product offering of, the depository financial institution. Activities of employees and agents of a financial institution shall be deemed to be the activities of the financial institution. The term does not include an insurance company subject to regulation under title XXXVII.

144:7 The Fire Insurance Contract; Perils Not Included. Amend RSA 407:22, the Perils Not Included paragraph, to read as follows:

This Company shall not be liable for loss by fire or other perils insured against in this policy caused, directly or indirectly, by: (a) enemy attack by armed forces, including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) civil war; (g) usurped power; (h) terrorism; (i) order of any civil authority except acts of destruction at the time of and for the purpose of preventing the spread of fire, provided that such fire did not originate from any of the perils excluded by this policy; [(i)] (j) neglect of the insured to use all reasonable means to save and preserve the property at and after a loss, or when the property is endangered by fire in neighboring premises; [(j)] (k) nor shall this Company be liable for loss by theft.

144:8 Unfair Insurance Trade Practices; Reference Additions. Amend RSA 417:4, XVII(a) and (b), to read as follows:

(a) Failing to maintain a procedural means within the company, headed by a responsible officer, to process and respond adequately to policyholders' and certificate holders' complaints.

(b) Failing to record and assemble all records of policyholders' and certificate holders' complaints in a central location to facilitate periodic review by insurance departments.

144:9 Unfair Insurance Trade Practices; Staff. Amend RSA 417:24 to read as follows:

417:24 Staff. The commissioner shall appoint [3] full-time, classified persons who shall be qualified by training and experience to perform the duties of their positions.

144:10 Automobile Insurance; Statement of Residency. Amend RSA 417-A:3-b, I to read as follows:

I. All applicants for coverage under new policies of automobile insurance shall sign a statement of residency, on a form prescribed by the insurance department, which the insurer shall provide as part of the application or upon delivery of the policy papers to the insured for such insurance.

144:11 Automobile Insurance; Penalty Increased. Amend RSA 417-A:10, I to read as follows:

I. Failure by an insurer to comply with any section of this chapter, or rules, regulations, and order issued pursuant thereto shall subject an insurer to a fine not exceeding [$500] $2,500 in the discretion of the insurance commissioner, or suspension or revocation of such insurers license, or both.

144:12 Certain Property and Liability Insurance; Nonrenewal for filing a Claim. Amend RSA 417-B:3-a, to read as follows:

417-B:3-a Nonrenewal for Filing a Claim. The nonrenewal of a homeowner's insurance policy [shall not be effective] is prohibited if [such] the nonrenewal is based solely on the insured having filed a single valid claim [during] within any one previous or current policy term. For policies that contain no fixed expiration date or that are issued for other than annual periods a term shall be considered each 12 month anniversary from the date of policy issuance.

144:13 Title of Chapter Amended. Amend the title of RSA 417-C to read as follows:

CANCELLATION OR REFUSAL TO RENEW COMMERCIAL

[LIABILITY] INSURANCE

144:14 New Section; Insurance Policies Procured by Government Agency. Amend RSA 507-B by inserting after section 7 the following new section:

507-B:7-a Insurance Policies Procured by Governmental Agency. It shall be lawful for the state or any municipal subdivision thereof, including any county, city, town, school district, school administrative unit or other district, to procure the policies of insurance described in RSA 412. In any action against the state or any municipal subdivision thereof to enforce liability on account of a risk so insured against, the insuring company or state or municipal subdivision thereof shall not be allowed to plead as a defense immunity from liability for damages resulting from the performance of governmental functions, and its liability shall be determined as in the case of a private corporation except when a standard of care differing from that of a private corporation is set forth by statute; provided, however, that liability in any such case shall not exceed the limits of coverage specified in the policy of insurance or as to governmental units defined in RSA 507-B, liability shall not exceed the policy limit or the limit specified in RSA 507-B:4, if applicable, whichever is higher, and the court shall abate any verdict in any such action to the extent that it exceeds such limit.

144:15 Effective Date. This act shall take effect January 1, 2004.

(Approved: June 17, 2003)

(Effective Date: January 1, 2004)