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Paul Zimmerman

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Insurance Regulatory Update

The information below is current as of the date of the report. Additional information about any of these proposals may be obtained from the CDI web site at

Recently Approved Department of Insurance Regulations – There have been no significant CDI regulations affecting property and casualty insurance approved by the California Office of Administrative Law (OAL) in the past 90 days.

Department of Insurance Regulations Currently Under Review by OAL – There are two proposed Department of Insurance regulations currently under review by OAL.

  • Review of Complaints of Unlawful Cancellation, Rescission, or Nonrenewal of Health Insurance Policies: CDI File #2012-00022 – On October 15 CDI submitted regulations to implement AB 2470 of 2010. The regulations are intended to provide a procedural mechanism for the Department of Insurance to review the lawfulness of health insurance terminations following a consumer's request for review, the establishment of a proper complaint, and the insurer's request for a hearing. OAL review must be  completed by November 27.
  • Hazardous Financial Condition Regulations: CDI File #2013-00005 – On October 14 submitted proposed regulations to OAL that are intended to provide guidance and clarity to insurers by listing some of the conditions that the commissioner may consider in determining whether an insurer is operating in a hazardous financial condition. The proposal also lists some of the steps the commissioner may take and some of the corrective actions the commissioner may order an insurer to take in order to correct, eliminate or remedy the condition(s). This proposal was originally developed by the NAIC as model regulation #385. OAL review must be completed by November 26.
  • Health Insurance Emergency Regulations in Effect. CDI currently has two sets of emergency regulations in effect. Neither set has been formally proposed for permanent adoption but CDI does intend to adopt both sets on a permanent basis. Unless these regulations are adopted by CDI and submitted to OAL for review within 360 days after their initial effective date, they will be repealed by operation of Gov. Code § 11346.1, part of the Administrative Procedure Act (APA).
  • Essential Health Benefits under the Patient Protection and Affordable Care Act (PPACA); CDI File #ER-2012-0001 – These CDI emergency regulations implement  SB 951 of 2012, legislation which established standards in California state law defining essential health benefits under the federal PPACA. These emergency regulations CA State Bar Insurance Subcommittee Regulatory Report November 11, 2013 became effective on June 13, 2013.
  • Mental Health Parity: CDI File #ER-2013-0001 – These CDI emergency regulations establish standards for treatment of children with Autism. The regulations initially became effective on March 11, 2013.

Currently Proposed CDI Regulations – There are no significant regulations affecting P&C insurers with open rulemaking files at CDI. There is one open health insurance proposal.

  • Prescription Drug Prior Authorization Requests: CDI File #REG-2012-00015 – This proposal creates a standardized process for health insurers to use in dealing with prior authorization requests from health care providers to approve the use of prescription drugs. The regulations must be submitted to OAL by January 24, 2014 or the rulemaking will expire pursuant to the APA (Gov. Code 11346.4(b)).

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.