Aaron J. Aisen

All articles by Aaron J. Aisen

 

Congress Rolls Back FCC Privacy Regulations

On March 28, 2017, Congress passed legislation (S.J. Res. 34) that rolled back privacy regulations recently adopted by the Federal Communications Commission. The resolution passed the Senate by a vote of 50-48 and the House by a voted of 215 to 205. This is one of several sets of regulations Congress is rolling back under the authority of the Congressional Review Act of 1996. Under this statute, Congress can nullify administrative regulations by simply passing a joint resolution of disapproval.
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The NAIC Appeals to the Secretary of the Treasury Over the Covered Agreement

While the U.S. and EU governments are deliberating on whether to accept the negotiated Covered Agreement (Agreement), state insurance regulators in the U.S. are continuing to express concerns about the Agreement. In February 2017, the National Association of Insurance Commissioners (NAIC) testified before Congress against the Agreement. On March 15, 2017, the NAIC continued these efforts by submitting a letter to the U.S. Treasury Secretary Steven Mnuchin detailing the NAIC’s concerns. One of the NAIC’s central concerns centers on the
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ELANY Publishes Practical Tips on Applying New York’s New Cybersecurity Regulation to “Unique Situations”

There has been a lot of commentary on New York’s new regulation entitled Cybersecurity Requirements for Financial Services Companies (23 NYCRR 500) (the Regulation) which went into effect on March 1, 2017. On March 16, 2017, The Excess Line Association of New York (ELANY) released Bulletin 2017-12 which contains some practical guidance for insurance producers that will face some “unique situations” not addressed in the other commentary. Specifically, the bulletin refers to insurance producers that “may not meet the technical
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New York Issues Final Cybersecurity Regulation

On February 13, 2017, the New York Department of Financial Services (NYDFS) adopted the final version of its first-of-its-kind cybersecurity regulation, “Cybersecurity Requirements For Financial Services Companies” (23 NYCRR 500). This regulation took effect on March 1, 2017. The final regulation reflects several of the comments offered during the final comment period that concluded on January 27, 2017. For a prior list of significant changes from the initial version to the second version, please see our blog post located here.
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President Trump Takes Aim at Affordable Care Act; New York Governor Responds

Within hours of taking the Presidential oath of office, President Donald J. Trump issued his first executive order and it was directed at the Patient Protection and Affordable Care Act (ACA). The executive order formalized the Trump Administration’s policy to “seek the prompt repeal of the [“ACA”].” President Trump then directed executive department heads to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement” of the [ACA] that would impose a fiscal or regulatory burden
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Death of Carrie Fisher Likely Triggers Largest Contractual Performance Indemnity Policy

On December 27, 2016, Carrie Fisher, who was perhaps best known as Princess/General Leia Organa in the Star Wars Universe, passed away after a heart attack. As Star Wars fans and the world mourn Ms. Fisher’s passing, questions are swirling about how the Star Wars franchise will handle her death and the future of Princess Leia. Ms. Fisher finished shooting Episode VIII prior to her passing and was expected to have a part in Episode IX. What is clear now
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Insurance Companies Narrowing Role in ACA Exchanges

In recent months, several major health insurance companies, including Aetna, Humana, and UnitedHealth Group, have announced their intention to reduce their footprints in the ACA healthcare exchanges. Aetna recently announced that it sustained a $200 million loss in the second-quarter of 2016 and over $430 million since January 2014 with respect to individual products. As a result, it “will reduce its individual public exchange participation from 778 to 242 counties for the 2017 plan year, maintaining an on-exchange presence in
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Principle Based Reserving Coming January 1, 2017

In recent years, life insurance companies have expressed concern that the current approach to product reserves does not take into account the increasingly complex, non-static, nature of current life insurance products. In response to these concerns, the National Association of Insurance Commissioners (NAIC) conducted “an extensive analysis of amended Standard Valuation Laws passed by 45 states, representing nearly 80 percent of the U.S. life insurance market.” The end result happened on June 10, 2016, when the National Association of Insurance
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SCOTUS Orders Parties to Brief on Possible Compromise in ACA Case

On March 23, 2016, the U.S. Supreme Court heard oral arguments in Zubik, et al. v. Burwell, the case in which religious not-for-profits are challenging the process in which they can claim a religious exemption to the contraception requirement in the Affordable Care Act (ACA). On Tuesday, March 29, 2016, the court issued an unusual order hinting the court might be looking for some kind of compromise to deal with this highly controversial case. The court’s order requests supplemental briefing
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Recent Court Decisions Show Fight Over ACA is Alive and Well

The battle over the Affordable Care Act (ACA) is heating up again with two recent high-profile decisions. In the first case, the U.S. House of Representatives as an institution sued the executive branch over actions taken by the executive during the implementation of the ACA. This case is unique because it addresses the broader question of whether the legislative branch has the authority to sue the executive branch over how the executive implements statutes. In U.S. House of Representatives v.
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Money Trouble: Some Health Insurance CO-OPs in Financial Trouble

Much of the focus on health insurers under the Affordable Care Act (ACA) has centered on larger health insurance companies. In an effort to expand the number of health plans available to the public, the ACA also created the Consumer Operated and Oriented Plan (CO-OP) Program. The program is administered by the Centers for Medicare and Medicaid Services (CMS) at the Department of Health and Human Services (HHS). The ACA further directed HHS to make loans to these CO-OPs to
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NAIC Tackles Cybersecurity Including Proposed Consumer Cybersecurity Bill of Rights

In the wake of recent cyber breaches against major health insurance companies, the NAIC is undertaking three initiatives designed to “protect consumer information and educate the public about cyber risks.” First, on July 28, 2015, the NAIC’s Cybersecurity Task Force issued a proposed Consumer Cybersecurity Bill of Rights. This Bill of Rights contains 12 specific rights for consumers including: Know what type of personally identifiable information is being collected by the insurer and how long that information is being kept
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Federal Cyber Legislation – Hurry Up and Wait

In recent months, two more companies in the healthcare industry have been hacked. UCLA Health announced on July 17, 2015 that it was the victim of a “criminal cyber attack” and “as many as 4.5 million individual potentially may have bene involved in the attack.”  This comes on the heels of another attack in May 2015 against Medical Informatics Engineering whose subsidiary is NoMoreClipboard, an online medical information sharing service used by patient and physicians alike.  Both of these episodes
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SCOTUS: Affordable Care Act Subsidies Apply to Federal Exchanges

On June 25, 2015, in a 6-3 opinion written by Chief Justice John Roberts, the United States Supreme Court held that the subsidies available in the Affordable Care Act apply to participants in both state and federal healthcare exchanges. A key component of the Affordable Care Act (i.e., the part that helps make this insurance affordable) is tax subsidies for those who qualify under the income requirements stated in the Act. Language in this provision, according to the petitioners and
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Hackers Continue to Target Health Insurers

Another health insurer has fallen victim to hackers. Premera Blue Cross suffered a breach that may have affected upwards of 11 million consumers. The National Association of Insurance Commissioners (“NAIC”) announced that Washington Insurance Commissioner Mike Kreidler was coordinating the response. NAIC President Monica J. Lindeen stated in the announcement, “Events like this underscore the need for consumers to take immediate and ongoing action to protect personal information like passwords to bank accounts, credit card companies, health insurance accounts and
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California Issues Emergency Regulation on Access to Healthcare Providers

During his second inauguration, California Insurance Commissioner Dave Jones, announced a new emergency regulation relating to access to healthcare providers.  According to an accompanying press release, The emergency regulation . . .  addresses the problems identified with access to doctors, hospitals, and other medical providers in 2014, as many health insurers reduced their medical provider networks and/or shifted to offering Exclusive Provider Organization (EPO) health insurance products with no out-of-network benefits. Consumers complained of having trouble getting appointments with doctors,
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MetLife Files First Challenge to SIFI Designation

MetLife is challenging its designation as a nonbank systemically important financial institution (SIFI). Dodd-Frank created the Financial Stability Oversight Council (FSOC) which comprises the heads of federal financial regulators and a voting insurance specialist and is chaired by the Treasury Secretary.  So far, three insurance companies, Prudential, AIG and MetLife, have received the nonbank SIFI designation.  However, MetLife is the first to take advantage of the judicial review provision in Dodd-Frank. Dodd-Frank provides that within 30 days of a final
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GAO and MITRE Sponsor Discussion on Information Sharing During a Crisis

During a crisis, good information is critical to ensure a proper and prompt response. One big challenge is how to ensure good information sharing both between different levels of government and even between agencies at the same level of government.  On January 26, 2015, the Government Accountability Office (GAO) and The MITRE Corporation (a not-for-profit organization that operates several federally funded research and development centers) will sponsor a discussion on how governmental entities share data in the event of a
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Update: “Where are You TRIA?” – Maybe Next Year

Last week we commented upon the debate surrounding the Terrorism Risk Insurance Act (TRIA). However, unlike the end of How the Grinch Stole Christmas where Cindy Lou Who ultimately found Christmas, TRIA did not make the cut of hastily passed legislation/nominations as the Senate gaveled to a close for this Congress. While the House of Representatives passed TRIA by over 400 votes, outgoing Senator Tom Coburn, (R-OK) put a hold on the legislation while he sought a provision that would
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“Test Drive” Ambiguous

In Exotic Motorcars and Jewelry, Inc. v. Essex Insurance Co., a Florida appeals court found the trial court interpreted material policy terms too narrowly in denying coverage of the vehicle collision at issue. In this coverage dispute, the insured Exotic Motorcars and Jewelry, Inc. (Exotic) sued its insurer Essex Insurance Co. (Essex) to recover its loss from a vehicle collision.  The collision occurred while the insured, an exotic car dealer, drove a newly acquired vehicle to another location for inspection. 
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Insurance and ISIS, Inc.

In recent weeks, the U.S. and British governments have unveiled new measures for fighting the Islamic State of Iraq and Syria (ISIS).  These measures are designed to counter the terrorist group’s financial structure. On the U.S. side, in an effort to starve ISIS of oil revenue, the U.S. Government in cooperation with others, have threatened sanctions against individuals and entities that purchase this black market oil or otherwise support ISIS.  Insurance companies need to be vigilant in this environment about
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SCOTUS Grants Cert on ACA Tax Subsidy Case

On Friday, November 7, 2014, the U.S. Supreme Court agreed to hear King v. Burwell, one of the cases about who is eligible for the tax subsidies in the Affordable Care Act (ACA).  These subsidies are a critical part of the legislation as they are designed to help make health insurance affordable.  As we discussed in a prior post, at least two U.S. Circuit Courts of Appeal have issued different interpretations on this language. In King v. Burwell, the 4th
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Higher Deductible Plans Are the New Black and Speaking of Enrollment . . .

With 2014 wrapping up, attention is quickly turning to the benefits enrollment period for 2015 including enrollment for health insurance.  A new survey out by Towers Watson, the National Business Group on Health, and PriceWaterhouseCoopers provides a glimpse into how employers are thinking about these benefits.  One conclusion is that, for health insurance, higher deductible plans are the new black. Since the passage of the Affordable Care Act (ACA), one of the big questions is what, if any, impact its
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Insured Settles for Less from Insurers, and Excess Coverage Still Must Indemnify: “Ultimate Net Loss Liability” Could Apply to Settlement Amounts with Lower Level Insurers

On Friday, August 29, 2014, the Eleventh Court of Appeals in Texas reversed the trial court’s summary judgment order finding that an excess insurance policy was triggered though the underlying policies had not exhausted their full coverage limit. Plantation Pipe Line Co. operates pipelines transporting petroleum throughout the southern and eastern United States.   In 1990, a leak was found in North Carolina, and Plantation was required to remediate the site. Plantation spent almost $12 million to clean and restore the
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First List of Non-Bank Systemically Important Financial Institutions Due Out Soon

U.S. Treasury Under Secretary for Domestic Finance Mary J. Miller recently announced that the first final list of non-bank Systemically Important Financial Institutions (SIFI) is going to be released soon. See Property Casualty for more details.  This list will include insurance companies.  Miller said she hoped the Financial Stability Oversight Council (FSOC) headed by new Treasury Secretary, Jacob Lew, would vote on the list in the next several months. The FSOC and SIFI designation were critical components of the Dodd-Frank reform
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D.C. Circuit Court of Appeals Holds Recess Appointments to the National Labor Relations Board Unconstitutional – Could Affect the Consumer Financial Protection Bureau

Canning v. NLRB Regulations created by the new Consumer Financial Protection Bureau (CFPB) under its current director could be challenged on the basis of a recent ruling from the U.S. Court of Appeals for the D.C. Circuit. On Friday, January 25, 2013, a three-judge panel held in Canning v. National Labor Relations Board that three recess appointments made to the National Labor Relations Board (NLRB) while the U.S. Senate was in pro forma session are unconstitutional because the Senate was
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Nearing Deadline to Fiscal Cliff, Congress Passes Law ‘Improving Program Efficiency’ For Medicaid/Medicare Reimbursements

On Friday, December 21, 2012, in the midst of the upcoming holidays and the discussions on how to avoid the Fiscal Cliff, Congress passed H.R. 1845 (2012) entitled The Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012.  Of particular interest is Title II – Strengthening Medicare Secondary Payments.   Title II amends Section 1862(b)(2)(B) of the Social Security Act (codified at 42 U.S.C. 1395y(b)(2)(B)) which permits the Secretary of Health and Human Services (the Secretary) to make
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