Marty WoodPresidentMPW@insuranceinstitute.org317.464.2455

MEMO

March 31, 2017

Issue 13

Legislative

Kristen ScottDirector of OperationsKHS@insuranceinstitute.org317.464.2458

Abbey LewarkGov't Affairs AssistantAKL@insuranceinstitute.org317.464.2454

An InsuranceInstitute of

Indiana publication

With three weeks left in the 2017 Indiana legislative session, the end result is coming into frame. This session has predominantly been a battle to ensure that frame does not damage the positive climate for the insurance industry and its Hoosier insureds, and it appears the good f ight has beaten back a slew of bad proposals including:

- Prohibit ion on factoring deprecation for state and local owned property

- Turning Indiana into a true value policy state - Mandating f ire fee payments for paid f iref ighters- Stripping the use of credit as a factor for insurance

rates - Strict l iability for dog bites - Broad language mandating payouts to innocent

coinsured for automobile damage - Prohibit ion on out of state arbitration clauses - Mandating easier access to the Worker?s

Compensation High Risk Pool These measures would have damaged the insurance market in Indiana, creating unwarranted red tape, and severely impacted premiums, and virtually all of these proposals were authored by Republicans. When Republicans author bil ls in Republican legislative super majorit ies, with every statewide off ice held by a Republican, the likelihood that a bad bill can pass and be signed into law is high. Institute agenda pieces are stil l alive and moving through the legislature with the end goal of landing on the Governor?s desk, but this session will be most def ined by the defeated bad legislation and lingering damaging language for 2018.

Michael NilandDirector of Gov't Affairs & Political StrategyMSN@insuranceinstitute.org317.464.2452

Michael NilandDirector of Gov't Affairs & Political StrategyMSN@insuranceinstitute.org317.464.2452

THE END FRAME

House Bil l (HB) 1033, Motor Vehicle Insurance Policy Requirements, passed the Senate unanimously 50-0 and was sent to back to the House with no amendments. With no amendments, HB 1033 goes directly from the House to the Governor?s desk. HB 1033 is authored by Rep. Matt Lehman (R-Berne) and sponsored by Sen. Travis Holdman (R-Markle). HB 1033 addresses an issue which was inadvertently created upon the passage of Senate Enrolled Act (SEA) 40 in 2016, increasing the state minimums on property loss or damage from $10,000 to $25,000. The law, as adopted, has an effective date of July 1, 2017, done so with the intention of allowing companies the time to update policies and systems. However, what became clear once the legislation passed was the unintended ambiguity of the effective date; are the increases applicable to policies issued prior to July 1, 2017? HB 1033 attempts to ensure any policies not updated before July 1, 2017 are not annexed by the effective date, but rather only policies issued or renewed after July 1, 2017 are impacted. HB 1033 handles this issue in Indiana Code Title 9, Motor Vehicles. Normally a change such as this could be handled through policy offer and renewal language, but f inancial responsibil ity does not specif ically refer to insurance. Indiana allows for multiple ways to meet f inancial responsibil ity l imits, insurance being just one of those mechanisms. Regardless of how individuals meet the f inancial responsibil ity l imit, Hoosiers must comply with the $25,000 property damage limit beginning July 1, 2018.

House Bil l (HB) 1318, the Indiana Department of Insurance Omnibus Bill, was amended on the Senate f loor on Thursday, March 30 to contain a request for an interim study committee to examine "incorporation by reference", an issue brought forth by the National Conference of Insurance Legislators (NCOIL) in response to current National Association of Insurance Commissioners (NAIC) practices. Sen. Travis Holdman (R-Markel) believes commissioners have overreached their ability to impact laws in a way that should be left to the legislature and would like to thoroughly vet where Indiana currently stands on this issue. HB 1318 is authored by Rep. Martin Carbaugh (R-Fort Wayne) and sponsored by Sen. Travis Holdman. HB 1318 contains three other agenda pieces:

- Would implement a United States Postal Service intell igent mail bar code tracking record, a certif icate of mailing, or another similar f irst class mail method to be used as proof of mailing, for purposes of the insurance law.

- Would remove current transfer and notice requirements that apply to an insurer that transfers an insured under certain kinds of property and casualty insurance policies to an aff il iate of the insurer. Apply the same exemption to commercial property and casualty, automobile insurance, and residential property policies.

- Would amend IC 27-1-23-4(h), changing the statute back to the language prior to 2016. The 2016 amendment also included language allowing a 2-year lookback period for insurers, which would substantially increase the threshold for determining whether a dividend is extraordinary. The 2-year lookback period does not apply to life insurers. Instead of changing ?lesser? to ?greater? and removing the 2-year look back period, the proposed language removes all the extraordinary dividend changes made in 2016 and goes back to the language prior to 2016.

INSTITUTE AGENDAITEMS PRESS ON

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Senate Bil l (SB) 353, Enhanced Penalties to Storm Scammers, will be heard in the House Judiciary Committee on Monday, April 3rd. Sen. Randy Head (R-Logansport) has worked on this piece of legislation with the Insurance Institute and the proposed language is an enhancement to the national model set out by NCOIL. SB 353 is sponsored by Rep. Martin Carbaugh (R-Fort Wayne).

Consumer protections in SB 353: - Would expand the protections for personal property to include the entirety of the property. - Would include commercial property with less than 50 employees employed by the policy

holder. - Would allow for a 72-hour period after the contract is init iated for the property owner to cancel

the proceedings. - Would specify that:

- The contract may not assign any rights of the consumer to any supplier or third parties. - The real property improvement contract must ref lect the

full amount of the contract price less any discounts offered.

- A real property improvement supplier or third party who recklessly, knowingly, or intentionally impersonates a consumer commits a Class A misdemeanor.

SB 353 is l imited to:

- Insured consumers. - Instances where the consumer and contractor has no prior

business relationship or preexisting relationship. - Instances where the consumer has not agreed to repairs before

complete specif ications have been made. This does not apply to instances where insurance is not paying. This provides for payment of temporary repairs even if contract is eventually canceled. The goal of SB 353 is to ensure the smoothest possible repair of the property and ensure the insurance policy is working on behalf of the insured consumer, not the contractor.

House Bil l (HB) 1133, Short Term Rental Regulations, remained on the Senate f loor this week. Institute staff anticipates it will pass out of the Senate next week. HB 1133 is authored by Rep. Matt Lehman (R-Berne) and is sponsored by Sen. Randy Head (R-Logansport) with the goal of preventing wide spread bans of the short-term rental industry in local governments throughout Indiana. The portion of the bil l concerning insurance states: Sec. 1. The booking and rental periods for a property used as a short-term rental are limited as follows:

- The property may only be:A. booked for rental to the public; or B. rented to the public; for a rental period at any one time of less than 30 consecutive days

the total number of days during a calendar year that the property may be rented to the public may not exceed 180 days.

- The insurance may be provided by any of the following: A. Liability insurance maintained by the owner.B. Liability insurance maintained by the facil itator. C. Liability insurance maintained by any combination of clauses (A) and (B).

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