8 General Notices/Errata

GENERAL NOTICES/ERRATA

Vol. 31 Iss. 16 - April 06, 2015

GENERAL NOTICES/ERRATA

STATE CORPORATION COMMISSION

Bureau of Insurance

March 10, 2015

Administrative Letter 2015-03

To: All Property and Casualty Insurers and Rate Service Organizations Licensed in Virginia

Re: Filing Procedures for Compliance with the Provisions of the Terrorism Risk Insurance Program Reauthorization Act of 2015; Withdrawal of Administrative Letters 2002-15, 2004-06, 2006-03, and 2008-01

The purpose of Administrative Letter 2015-03 is to advise insurers of certain provisions of the Terrorism Risk Insurance Program Reauthorization Act of 2015 amending and extending the Terrorism Risk Insurance Act of 2002 (the Act) by reauthorization (the Act), which may require insurers to submit a filing of policy language and applicable rates as a result of the Act. For further details related to the Act, please consult the Act itself.

Further, Administrative Letter 2015-03 brings forward relevant provisions of previously issued administrative letters to address filing-related requirements pertaining to coverage for terrorism risk in property and casualty insurance contracts. The previously issued administrative letters listed above are hereby withdrawn.

Background

Uncertainty in the markets for commercial lines property and casualty insurance coverage arose following the substantial loss of lives and property experienced on September 11, 2001. Soon after these tragic events, many reinsurers announced that they would no longer provide coverage for acts of terrorism in future reinsurance contracts. This led to a concerted effort on behalf of all interested parties to seek a federal backstop to facilitate the ability of the insurance industry to continue to provide coverage for these unpredictable and potentially catastrophic events. As a result, Congress enacted and the president signed into law in November 2002, the Terrorism Risk Insurance Act of 2002 (the Act). This Federal law provided a federal backstop for defined acts of terrorism and imposed certain obligations on insurers. The Act was extended for a two-year period covering Program Years 2006 and 2007, and for an additional seven years through December 31, 2014, with the enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2007. The Act has now been extended again with the enactment of the Terrorism Risk Insurance Program Reauthorization Act of 2015.

All insurers, as defined in the Act, are required by the Act to participate in the Terrorism Insurance Program and to make available coverage for insured losses, as defined in the Act, resulting from an act of terrorism, as defined in the Act, in all of their property and casualty insurance policies, as defined in the Act. The Act further requires insurers to make available, in all property and casualty insurance policies, coverage for insured losses that does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism.

Definition of Insured Loss(es)

The Act defines "insured loss" as any loss resulting from an act of terrorism (including an act of war in the case of workers' compensation) that is covered by primary or excess property and casualty insurance issued by an insurer if such loss—(A) occurs within the United States; or (B) occurs to an air carrier (as defined in section 40102 of title 49, United States Code), to a United States flag vessel (or a vessel based principally in the United States, on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), regardless of where the loss occurs, or at the premises of any United States mission.

Definition of Act of Terrorism

Section 102(1) defines an act of terrorism for purposes of the Act. Please note that the unmodified reference to "the Secretary" refers to the Secretary of the Treasury. The revised Section 102(1)(A) states, "The term 'act of terrorism' means any act that is certified by the Secretary, in consultation with the Secretary of Homeland Security, and the Attorney General of the United States—(i) to be an act of terrorism; (ii) to be a violent act or an act that is dangerous to—(I) human life; (II) property; or (III) infrastructure; (iii) to have resulted in damage within the United States, or outside the United States in the case of—(I) an air carrier or vessel described in paragraph (5)(B); or (II) the premises of a United States mission; and (iv) to have been committed by an individual or individuals, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion." Section 102(1)(B) states, "No act shall be certified by the Secretary as an act of terrorism if—(i) the act is committed as part of the course of a war declared by the Congress, except that this clause shall not apply with respect to any coverage for workers' compensation; or (ii) property and casualty insurance losses resulting from the act, in the aggregate, do not exceed $5,000,000." Section 102(1)(C) and (E) specify that the determinations are final and not subject to judicial review and that the Secretary of the Treasury cannot delegate the determination to anyone.

The policy form must include a definition of act(s) of terrorism. Section 102(1) defines an act of terrorism for purposes of the Act.  In order to satisfy this filing requirement, insurers may reference the definition of "acts of terrorism" in the Act or restate the definition in the policy form. If the term "acts(s) of terrorism" is defined in the policy form, it is not necessary for the insurer to repeat the definition in endorsements used with the policy form.

Definition of Property and Casualty Insurance

For details regarding the lines of insurance to which the Act applies, please consult the Act and the Interim Guidance provided by the Department of the Treasury.

Certified and Non-Certified Acts of Terrorism

As a result of the definitions of "act of terrorism" and "insured loss" contained in the Act, there are essentially two distinct types of losses that a policyholder might face that result from terrorism. One type of loss is the insured loss that is defined within and covered by the provisions of the Act. For convenience, the term "certified loss" will be used to refer to losses resulting from certified acts of terrorism. The second type of loss is one that does not fit within the definition of insured loss as described in the Act. For convenience, the term "non-certified loss" will be used to refer to those losses resulting from acts of terrorism that are not certified.

Non-Certified Acts of Terrorism

If insurers elect to exclude non-certified acts of terrorism, the coverage form must define a non-certified act, which includes an act of terrorism that fails to be certified solely because it falls below the $5,000,000 in Section 102(1) (B).

The Bureau will continue to approve certain limitations to coverage for non-certified acts of terrorism. For policies providing property insurance coverage, the following limitation applies with regard to exclusions of non-certified losses:

• Industry-wide insured losses must exceed $25,000,000 for related incidents that occur within a 72 hour period;

• Exclusions applicable to non-certified acts of terrorism are not subject to this limitation if:

1. The act involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination;

2. The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or

3. Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such material.

Note: The exemption in § 38.2-2102 B of the Code of Virginia does not apply to non-certified acts; therefore, the provisions of § 38.2-2105 of the Code of Virginia apply to ensuing fire losses for non-certified acts of terrorism.

For policies providing liability insurance coverage, the following limitations apply with regard to exclusions of non-certified losses:

• Industry-wide insured losses must exceed $25,000,000 for related incidents that occur within a 72-hour period; or

• Fifty or more persons must sustain death or serious injury for related incidents that occur within a 72-hour period. For the purposes of such provisions, serious injury means:

1. Physical injury that involves a substantial risk of death;

2. Protracted and obvious physical disfigurement; or

3. Protracted loss of or impairment of the function of a bodily member or organ.

• Exclusions applicable to non-certified acts of terrorism are not subject to the above limitations if:

1. The act involves the use, release, or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination;

2. The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or

3. Pathogenic or poisonous biological or chemical materials are released, and it appears one purpose of terrorism was to release such materials.

Submission of Rates, Loss Cost Multipliers, and Policy Forms or Endorsements

Expedited Review Process – Forms, Endorsements

Since the provisions of the Terrorism Risk Insurance Program Reauthorization Act of 2015 are already in effect, the Bureau is expediting the reviews of form filings submitted in response to the Act. Filers should use the SERFF system for submitting such filings. Filers should use the term "TRIA2015" in the product name field in SERFF to indicate a filing related to terrorism made in connection with the Terrorism Risk Insurance Program Reauthorization Act of 2015. An Expedited Filing Transmittal document is not required.

The 2015 Act is effective until December 31, 2020, unless extended by Congress. The expedited filing procedures described in this administrative letter shall take immediate effect and shall expire on April 13, 2015.

Coverage Forms, Endorsements

Except to the extent an insurer has authorized a rate service organization (RSO) to file forms on its behalf, insurers must file any policy forms or endorsements that they intend to use to cover or exclude certified losses on or before the date the forms or endorsements are effective. However, it is important to note that for lines or sub-classifications of insurance exempted from form filing requirements by Virginia statutes or administrative orders, the forms or endorsements related to terrorism coverage for those lines or sub-classifications of insurance are also exempt from filing requirements. The requirements of the Act, however, are not affected by such exemptions and continue to apply.

Conditional Terrorism Exclusions

As a result of uncertainty associated with reauthorizations of the Act, insurers filed conditional terrorism exclusions that would be activated in the event the Act was not renewed or renewed on a basis that substantially affected the risk of the loss assumed by the insurer during the period that the policy was in effect. In response to those concerns, the Bureau approved conditional terrorism exclusions. These endorsements were required to provide the same limitations to coverage for non-certified acts of terrorism, which are described below, for any terrorism loss that occurred after the termination of the Act. Conditional terrorism exclusions applicable to claims made coverage required that claims made policies provide extended reporting provisions for the certified terrorism coverage that would be excluded if the Act was not re-enacted as provided by the Virginia claims made regulation. The conditional endorsements were required to clearly state that the terrorism exclusion would apply only if Congress failed to enact an extension of the Act or enacted changes to the Act that substantially affected the risk of loss that an insurer had assumed. Approved conditional endorsements may remain on file to ensure that they are available for any subsequent uncertainty related to the expiration of the Act. However, insurers and rate service organizations should review these endorsements to determine their continued appropriateness.

Exclusions Not Allowed in Virginia Coverage Forms

• Virginia laws and regulations prohibit the use of terrorism exclusions in personal and commercial automobile insurance and insurance covering owner-occupied dwellings.

• Workers' compensation coverage forms are subject to regulation by the Virginia Workers' Compensation Commission (WCC). Terrorism exclusions have not been approved by the WCC. Any questions pertaining to workers' compensation insurance coverage forms should be directed to the WCC.

• For property insurance policies that are subject to the provisions of Virginia's standard fire policy, as set forth in § 38.2-2105 of the Code of Virginia, coverage for ensuing fire losses is required. If, however, the insured does not purchase fire coverage for certified acts of terrorism, the provisions of § 38.2-2102 B of the Code of Virginia apply, and the insurer would be allowed to exclude the ensuing fire loss from certified acts of terrorism.

Rates, Loss Cost Multipliers – Other than Workers' Compensation

Rate and loss cost multiplier filings will be accepted on a file-and-use basis, in accordance with § 38.2-1906 of the Code of Virginia. If an insurer relies on an RSO for advisory loss costs and to file supplementary rate information on its behalf, no filing is required unless an insurer plans to use a different loss cost multiplier than is currently on file for coverage for certified losses. It is important to note that for lines or sub-classifications of insurance exempted from rate filing requirements by Virginia statutes or administrative orders, the rates related to terrorism coverage for those lines or sub-classifications of insurance are also exempt from filing requirements. The requirements of the Act are not affected by such exemptions and continue to apply.

Rates, Loss Cost Multipliers – Workers' Compensation

If an insurer relies on an RSO to file workers' compensation loss costs and related rating systems on its behalf, no filing is required unless the insurer plans to use a different loss cost multiplier than is currently on file.  Refer to Administrative Letter 2010-05 for additional details regarding filing loss cost multipliers. Insurers electing to file independent workers' compensation rates for terrorism exposures that do not rely upon the approved loss costs filed on their behalf by the National Council on Compensation Insurance are subject to the 60-day prior filing requirements of § 38.2-1912 of the Code of Virginia and must include full actuarial support for their proposed rates.

Disclosure Notices – Filing Not Required

Insurers should not submit the federally required disclosure notices to the Bureau for review or approval. The federally required disclosure notices do not contain terms or conditions of coverage and are, therefore, not subject to form filing requirements.

Please feel free to contact the Property and Casualty Division of the Bureau of Insurance with your questions about Administrative Letter 2015-03.

Betty Branum, Principal Insurance Market Examiner, [e-mail], [phone]

Melinda Willis, Principal Insurance Market Examiner, [e-mail], [phone]

Rebecca Nichols, Assistant Deputy Commissioner, [e-mail], [phone]

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

Bureau of Insurance

March 12, 2015

Administrative Letter 2015-04

To: All Insurers Licensed to Write Accident and Sickness Insurance in Virginia, and All Health Services Plans and Health Maintenance Organizations Licensed in Virginia

Re: 14VAC5-190-10 et seq.: Rules Governing the Reporting of Cost and Utilization Data Relating to Mandated Benefits and Mandated Providers - 2014 Reporting Period

The purpose of this Administrative Letter is to assist carriers in the preparation of the Annual Report of Cost and Utilization Data relating to Mandated Benefits and Providers required pursuant to 14VAC5-190-10 et seq. and § 38.2-3419.1 of the Code of Virginia, and to remind all affected carriers of the reporting requirements applicable to mandated benefits and providers for the 2014 reporting year.

The Virginia total annual written premiums for all accident and sickness policies or contracts referenced in the regulation is the amount reported to the Commission on the company's Annual Statement for the year ending December 31, 2014. This is the amount used to determine if a report is required. If the total annual written premium reported to Virginia for all accident and sickness lines is less than $500,000 or the company is licensed to issue only credit accident and sickness insurance, the company is EXEMPT from filing any information and a report is not required.

A company may be required to file a COMPLETE report or an ABBREVIATED report if the total annual written premium reported to Virginia for all accident and sickness lines is at least $500,000 (excluding credit only accident and sickness). Carriers should refer to 14VAC5-190-40 for an explanation of the circumstances under which a COMPLETE or an ABBREVIATED report must be filed.

Each affected carrier must submit a completed Form MB-1 to furnish the required information. It is not acceptable to submit more than one Form MB-1 for a single carrier or to consolidate information from different carriers on one form.

The completed Form MB-1 (cover sheet and sections) is due on or before May 1, 2015 and may be submitted electronically. The due date may not be extended for any reason, including the inability to file the reports electronically. The instructions, representative CPT and ICD-9-CM codes, and forms for the 2014 reporting period are available on the Bureau of Insurance's website at http://www.scc.virginia.gov/boi/co/health/mandben.aspx.

The instructions explain the type of information necessary to complete Form MB-1. All sources of information, including 14VAC5-190-10 et seq., §§ 38.2-3408 through 38.2-3418.17, as applicable, § 38.2-4221, and CPT and ICD-9-CM codes, should be consulted in the preparation of this report. Please note that the CPT and ICD-9-CM codes are not intended to exhaust all medical codes that may be used in collecting data for Form MB-1, but are representative of some of the more common codes associated with the mandated benefits.

Effective July 1, 2014, provisions relating to the conversion of health insurance coverage under a group policy to an individual policy upon termination of eligibility, and the mandated offer of coverage for the treatment of morbid obesity in the individual and small group markets were repealed. Beginning with the 2014 reporting period, data pertaining to these mandates will no longer be collected.

Carriers are reminded that failure to submit a substantially complete and accurate report pursuant to the provisions of 14VAC5-190-10 et seq., by May 1, 2015, may be considered a violation subject to a penalty as set forth in § 38.2-218 of the Code of Virginia. Lack of notice, lack of information, lack of means of producing the required data, or other such reasons will not be accepted for not submitting a complete and accurate report in a timely manner.

Correspondence regarding reporting requirements should be directed to Mary Ann Mason, Principal Insurance Market Examiner, Forms Section, Bureau of Insurance, Life and Health Division, P.O. Box 1157, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

System related questions or problems should be directed to Andrew Iverson, Insurance Analyst, Bureau of Insurance, Automated Systems, P.O. Box 1157, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

Bureau of Insurance

March 17, 2015

Administrative Letter 2015-05

To: All Companies Licensed to Write Fire and Fire in Combination with Other Coverages Including Policies Providing Homeowners Coverage, Coverage on Owner-Occupied Dwellings, and Coverage for Tenants; and Interested Parties

Re: Mandatory Notices; Withdrawal of Administrative Letters 1980-02, 1993-09, and 1999-04

Over the years, many statutes have been added to Title 38.2 of the Code of Virginia requiring certain insurers to provide notices to applicants and insureds to make them aware of the additional coverages available for their protection or to make them aware of certain rights they may have under their policies. This administrative letter compiles information provided in previous administrative letters about notices required by a number of these statutes and provides guidance as to when and how such notices should be provided. Consequently, the following administrative letters are hereby withdrawn: 1980-02, 1993-09, and 1999-04.

The notices identified in this letter are not subject to approval by the Bureau of Insurance (Bureau), and should not be filed with the Bureau. Unless otherwise specified in the statute, insurers have flexibility as to the manner in which the notice is provided. For example, a stuffer may be used at the time a policy is mailed to an insured, or the notice may be prominently displayed on the application. However, the notice must not be ambiguous or obscure and must be given no later than at the time the new or renewal policy is delivered.¹

Except as noted below, the policies to which the notice requirements identified in this letter apply include all fire policies and fire policies in combination with other coverages, including but not limited to mobile home policies, dwelling fire policies, homeowners policies, renters policies, commercial fire policies, commercial package policies providing fire coverage, and master policies providing mortgage force-placed fire coverage that are issued in Virginia. The notice requirements addressed in this letter do not apply to surplus lines policies or mutual assessment fire policies, except that the notice required by § 38.2-305 of the Code of Virginia must be provided when issuing mutual assessment fire policies.

Important Information to Policyholders Notice

Subsection B of § 38.2-305 of the Code of Virginia requires that a specific notice be provided with each new or renewal insurance policy, contract, certificate, or evidence of coverage issued to a policyholder, covered person, or enrollee. This notice must read substantially the same as the notice in the Code. Examiners frequently find that this notice is not given when policies are renewed or when a renewal certificate is issued. The insurer should ensure that this notice is being given when required. This notice applies to all classes of insurance except those exempted in § 38.2-300 of the Code of Virginia, and except as specifically noted in subsection E of § 38.2-305 of the Code of Virginia.

Replacement Cost Coverage

Section 38.2-2118 of the Code of Virginia requires every insurer writing insurance policies on owner-occupied dwellings and appurtenant structures that have replacement cost provisions to provide to all applicants a notice (1) outlining the minimum coverage requirement necessary to make the replacement cost provision fully effective, and (2) the effect on a claim payment of not meeting the minimum coverage requirement.

Coverage for Water that Backs Up Through Sewers and Drains

Section 38.2-2120 of the Code of Virginia provides that any insurer who issues or delivers a homeowners insurance policy (including a tenant's personal property policy) as defined in § 38.2-130 of the Code of Virginia in the Commonwealth shall offer, as an option, coverage insuring against loss caused or resulting from water which backs up through sewers or drains. The notice must be given at the time a homeowner's policy is renewed as well as at the time a policy is initially delivered.

Building Ordinance or Law Coverage

Section 38.2-2124 of the Code of Virginia requires any insurer that issues a policy of fire insurance, or fire insurance in combination with other coverage, to provide a written offer of coverage for the repair or replacement of property in accordance with applicable ordinances or laws that regulate construction, repair, or demolition. This offer must be made with all new and renewal policies.

Flood Notice

Section 38.2-2125 of the Code of Virginia requires any insurer that issues a policy of fire insurance or fire insurance in combination with other coverage that excludes coverage for damage due to flood, surface water, waves, tidal water, or any other overflow of a body of water to provide written notice that explicitly states (1) that flood damage is excluded; (2) that information about flood insurance is available from the insurer, the insurance agent, or the National Flood Insurance Program; and (3) that contents coverage is available on the flood policy for an additional premium. This notice applies to new and renewal policies.

Insurance Credit Score Disclosure Notice

Any insurer issuing or delivering a homeowners or tenant policy that uses credit information contained in a consumer report for underwriting, tier placement, or rating an applicant or insured shall disclose, on the insurance application, at the time the application is taken, or at renewal if no previous notice has been given, the information required by § 38.2-2126 A 1 of the Code of Virginia.

Insurance Credit Score Adverse Action Notice

Subsection A 2 of § 38.2-2126 of the Code of Virginia requires insurers that take adverse actions, based in whole or in part, upon credit information to provide notice to applicants or insureds (on owner-occupied and tenant residential property policies) that the adverse action was based in whole or in part on credit. The notice must also either provide a statement of the primary factors or characteristics that were used as the basis for the adverse action, or notify the applicant or insured that he may request such information. For the purposes of § 38.2-2126 of the Code of Virginia, an adverse action is defined as a denial, nonrenewal or cancellation of, an increase in any charge for or refusal to apply a discount, or placement in less favorable tier, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with underwriting, tier placement, or rating.  Adverse action includes, but is not limited to, circumstances where the applicant or insured (i) did not receive the insurer's most favorable rate, (ii) was not placed in the insurer's best tier, and (iii) when there are multiple insurers available within a group of insurers, the applicant or insured did not receive coverage with the group's most favorably priced insurer. In the case of renewals, the circumstances listed in (i), (ii), and (iii) are not adverse actions if, due to the insured's credit information, the insured is not receiving a less favorable rate, or placed in a less favorable tier or company than during the policy period immediately preceding the renewal policy.

Notice of Change in Deductible

Section 38.2-2127 of the Code of Virginia requires an insurer to provide a written notice whenever it unilaterally changes the deductible on a policy written to insure an owner-occupied dwelling (homeowners and dwelling fire policies). The notice must (1) state that the deductible has changed and (2) explain how the new deductible will be applied. The law prohibits the insurer from changing the deductible except at renewal. Insurers should be aware that the law is not limited to changes in the deductible because of the territory or location of the property. For example, if the insurer unilaterally changes the deductible because of the insured's loss history, the notice must be given.

NOTE: Deductibles may only be unilaterally changed at renewal. Therefore, insurers are prohibited from changing a deductible unilaterally during the policy term, including the 90-day underwriting period once coverage is bound. Where the need arises to make a change in a deductible during the underwriting period, insurers must cancel the policy and offer to write with a different deductible. However, insurers may make changes, such as increasing deductibles or increasing limits, during the underwriting period if the insured agrees to such changes, or if the application, signed by the insured, advises the insured that the deductible may be changed.

Earthquake Notice

Section 38.2-2129 of the Code of Virginia requires insurers issuing new or renewal policies of fire insurance, or fire insurance in combination with other insurance coverages, which exclude coverage for damage caused by earthquake, to provide a written notice that explicitly states, "earthquake coverage is excluded unless purchased by endorsement." This notice must state that information regarding such coverage is available from the insurer or the agent if earthquake coverage is otherwise available from the insurer. Insurers may use notices that unambiguously set forth the information required by the law even if the language of the notice is not in the precise language that is quoted in the law.

Questions about this administrative letter should be directed to Joy Morton, MCM, Supervisor, P&C Market Conduct, telephone (804) 371-9540, or email [e-mail].

______________________________________

¹ Additional information may be found in the Common Problems Found During Examinations Identified by the Property and Casualty Market Conduct and Consumer Services Sections that is located at http://scc.virginia.gov/boi/laws.aspx.

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

Bureau of Insurance

March 17, 2015

Administrative Letter 2015-06

To: All Insurers Licensed to Write Motor Vehicle Policies and Interested Parties

Re: Mandatory Notices; Withdrawal of Administrative Letters 1977-13; 1991-09; and 1994-07

Over the years, many statutes have been added to Title 38.2 of the Code of Virginia requiring certain insurers to provide notices to applicants and insureds to make them aware of the additional coverages available for their protection or to make them aware of certain rights they may have under their policies. This administrative letter compiles information provided in previous administrative letters about notices required by a number of these statutes when issuing motor vehicle insurance policies and provides guidance as to when and how such notices should be provided. Consequently, the following administrative letters are hereby withdrawn: 1977-13; 1991-09; and 1994-07.

The notices identified in this letter are not subject to approval by the Bureau of Insurance (Bureau) and should not be filed with the Bureau. Unless otherwise specified in the statute, insurers have flexibility as to the manner in which the notice is provided. For example, when the statute requires a notice to be given on a new policy, a stuffer may be used at the time a policy is mailed to an insured, or the notice may be prominently displayed on the application. However, the notice must not be ambiguous or obscure and must be given not later than when the new policy is delivered.¹

Important Information to Policyholders Notice

Subsection B of § 38.2-305 of the Code of Virginia requires that a specific notice be provided with each new or renewal insurance policy, contract, certificate, or evidence of coverage issued to a policyholder, covered person, or enrollee. This notice must read substantially the same as the notice in the Code. Examiners frequently find that this notice is not given when policies are renewed or when a renewal certificate is issued. Insurers should ensure that this notice is given when required. This notice applies to all classes of insurance except those exempted in § 38.2-305 of the Code of Virginia, and except as specifically noted in subsection E of § 38.2-305 of the Code of Virginia.

Offer of Medical Expense and Income Loss Coverages

Section 38.2-2202 of the Code of Virginia requires insurers (issuing policies in Virginia covering the ownership, maintenance, or use of a motor vehicle) to offer at least $2000 in coverage for medical expense benefits and at least $100 per week in income loss benefits. However, this does not preclude the offering of both higher and lower limits. In addition, if policies are renewed at medical expense limits lower than those offered during the preceding policy term, an adverse underwriting decision notice must be provided to the insured. No such notice is required if the insured requests lower limits in writing.

Subsection A of § 38.2-2202 of the Code of Virginia requires that insurers issuing original premium notices for insurance covering liability arising from the ownership, maintenance, or use of any motor vehicle include the IMPORTANT NOTICE provided in the statute with the premium notices. The notice can be on the front of the premium notice or can be enclosed with the premium notice. This notice does not have to be provided on renewal policies. The notice must be in boldface type and read exactly as stated in the statute. The Bureau often finds that this notice is not given when new policies are issued or that the notice is not worded as required by the statute. Insurers must offer a limit of $2,000 in the notice and may offer higher and lower limits.

Notice that UM/UIM Limits May Be Reduced

Subsection B of § 38.2-2202 of the Code of Virginia requires insurers issuing original premium notices or new policies covering the ownership, maintenance, or use of a motor vehicles to provide notice that insureds may reduce their uninsured/underinsured motorist limits to limits less than the liability limits on the policy, within 20 days of the mailing of a new policy or original premium notice. The notice can be on the front of the premium notice or can be enclosed with the premium notice. It must be in boldface type and read exactly as stated in the statute. Once the 20 days has lapsed, no insurer is required to provide this notice on any subsequent premium notice, renewal policy, extension certificate, or other written evidence of coverage continuation.

Warning Concerning Cancellation of Motor Vehicle Liability Policy

Section 38.2-2210 of the Code of Virginia requires that a specific notice be printed on or attached to the first page of an automobile application form in boldface type. The Bureau frequently finds that this notice is not provided or is provided somewhere other than the first page of the application. Insurers should review their applications to ensure compliance with all of the requirements of this section of the Code. This requirement only applies to applications for liability insurance on motor vehicles as defined in § 38.2-2212 of the Code of Virginia.

Insurance Credit Score Disclosure Notice

Any insurer issuing or delivering a policy of motor vehicle insurance, as defined in § 38.2-2212, that uses credit information contained in a consumer report for underwriting, tier placement, or rating an applicant or insured shall disclose, on the insurance application, at the time the application is taken, or at renewal if no previous notice has been given, the information required by Subdivision A 1 of § 38.2-2234 of the Code of Virginia.

Insurance Credit Score Adverse Action Notice

Subdivision A 2 of § 38.2-2234 of the Code of Virginia requires insurers that take adverse actions, based in whole or in part, upon credit information to provide notice to applicants or insureds (on policies of motor vehicle insurance, as defined in § 38.2-2212 of the Code of Virginia) that the adverse action was based in whole or in part on credit. The notice must also either provide a statement of the primary factors or characteristics that were used as the basis for the adverse action or notify the applicant or insured that he may request such information. For the purposes of § 38.2-2234 of the Code of Virginia, an adverse action is defined as a denial, nonrenewal or cancellation of, an increase in any charge for or refusal to apply a discount, or placement in a less favorable tier, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with underwriting, tier placement, or rating. Adverse action includes, but is not limited to, circumstances where the applicant or insured (i) did not receive the insurer's most favorable rate, (ii) was not placed in the insurer's best tier, and (iii) when there are multiple insurers available within a group of insurers, the applicant or insured did not receive coverage with the group's most favorably priced insurer. In the case of renewals, the circumstances listed in (i), (ii), and (iii) are not adverse actions if, due to the insured's credit information, the insured is not receiving a less favorable rate, or placed in a less favorable tier or company than during the policy period immediately preceding the renewal policy.

Offer of Rental Reimbursement Coverage

Section 38.2-2230 of the Code of Virginia requires that every insurer issuing a new or renewal policy of motor vehicle insurance, as defined in § 38.2-2212 of the Code of Virginia, which provides comprehensive or collision coverage, must offer, in writing, to the named insured the option of purchasing rental reimbursement coverage. This notice must be given by insurers writing motor vehicle policies insuring as the named insured one individual or a husband and wife who are residents of the same household and the vehicle is a private passenger type vehicle. Commercial policies endorsed to provide coverage for individuals must also provide this notice if the vehicle is a private passenger type vehicle.

Questions about this administrative letter should be directed to Joy Morton, MCM, Supervisor, P&C Market Conduct, telephone (804) 371-9540, or email [e-mail].

__________________________________

¹ Additional information may be found in the Common Problems Found During Examinations Identified by the Property and Casualty Market Conduct and Consumer Services Sections that is located at http://scc.virginia.gov/boi/laws.aspx.

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

DEPARTMENT OF ENVIRONMENTAL QUALITY

State Implementation Plan Revision - Definition of Volatile Organic Compound

Notice of action: The Department of Environmental Quality (DEQ) is announcing an opportunity for public comment on a proposed revision to the Commonwealth of Virginia State Implementation Plan (SIP). The SIP is a plan developed by the Commonwealth in order to fulfill its responsibilities under the federal Clean Air Act to attain and maintain the ambient air quality standards promulgated by the U.S. Environmental Protection Agency (EPA) under the Act. The Commonwealth intends to submit regulation amendments to the EPA as a revision to the SIP in accordance with the requirements of § 110(a) of the federal Clean Air Act.

Regulations affected: The regulation of the board affected by this action is 9VAC5-10, General Definitions (Revision H13).

Purpose of notice: DEQ is seeking comment on the issue of whether the regulation amendments should be submitted as a revision to the SIP.

Public comment period: April 6, 2015, through May 6, 2015.

Public hearing: A public hearing may be conducted if a request is made in writing to the contact listed below. In order to be considered, the request must include the full name, address, and telephone number of the person requesting the hearing and be received by DEQ by the last day of the comment period. Notice of the date, time, and location of any requested public hearing will be announced in a separate notice, and another 30-day comment period will be conducted.

Public comment stage: Because the regulation amendments have been adopted by the board in accordance with the Administrative Process Act and have subsequently become effective, DEQ is accepting comment only on the issue cited above under "purpose of notice" and not on the content of the regulation amendments.

Description of proposal: The proposed revision will consist of amendments to an existing regulation concerning the definition of volatile organic compound (VOC). EPA has revised the definition of volatile organic compound (VOC) to add trans 1-chloro-3,3,3-trifluoroprop-1-ene (also known as SolsticeTM 1233zd(E)) and 2,3,3,3-tetrafluoropropene (also known as HFO-1234yf) to the list of compounds excluded from the definition of VOC on the basis that these compounds make a negligible contribution to tropospheric ozone formation. The state definition must now be revised accordingly.

Federal information: This notice is being given to satisfy the public participation requirements of federal regulations (40 CFR 51.102) and not any provision of state law. It is planned to submit all provisions of the proposal as a revision to the Commonwealth of Virginia SIP.

How to comment: DEQ accepts written comments by email, FAX, and postal mail. In order to be considered, comments must include the full name, address, and telephone number of the person commenting and be received by DEQ by the last day of the comment period. All comments, exhibits and documents received are part of the public record.

To review regulation documents: The proposal and any supporting documents are available on the DEQ Air Public Notices for Plans website at http://www.deq.state.va.us/Programs/Air/PublicNotices/airplansandprograms.aspx. The documents may also be obtained by contacting the DEQ representative named below. The public may review the documents between 8:30 a.m. and 4:30 pm of each business day until the close of the public comment period at the following DEQ locations:

1) Main Street Office, 8th Floor, 629 East Main Street, Richmond, VA, telephone [phone],

2) Southwest Regional Office, 355 Deadmore Street, Abingdon, VA, telephone [phone],

3) Blue Ridge Regional Office, Roanoke Location, 3019 Peters Creek Road, Roanoke, VA, telephone [phone],

4) Blue Ridge Regional Office, Lynchburg Location, 7705 Timberlake Road, Lynchburg, VA, telephone [phone],

5) Valley Regional Office, 4411 Early Road, Harrisonburg, VA, telephone [phone],

6) Piedmont Regional Office, 4949-A Cox Road, Glen Allen, VA, telephone [phone],

7) Northern Regional Office, 13901 Crown Court, Woodbridge, VA, telephone [phone], and

8) Tidewater Regional Office, 5636 Southern Boulevard, Virginia Beach, VA, telephone [phone].

Contact Information: Karen G. Sabasteanski, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Total Maximum Daily Load for Upper Roanoke River

The Department of Environmental Quality (DEQ) seeks written and oral comments from interested persons on the development of an implementation plan (IP) for bacteria and sediment total maximum daily loads (TMDLs) on the main stem Upper Roanoke River and tributaries. The following is the name of the "impaired" stream, the length of the impaired segment and the reason for the impairment: Ore Branch, all, bacteria; Roanoke River, 29.56 miles, bacteria; Back Creek, 9.88 miles, bacteria; Mason Creek, 7.56 miles, bacteria; Mudlick Creek, 7.28 miles, bacteria; Murray Run, 3.22 miles, bacteria; Peters Creek, 7.14 miles, bacteria; Tinker Creek, 19.34 miles, bacteria; Carvin Creek, 5.36 miles, bacteria; Glade Creek, 12.59 miles, bacteria; Laymantown Creek, 2.07 miles, bacteria; Lick Run, 9.37 miles, bacteria; Roanoke River, 20.04 miles, sediment. These portions of the Roanoke River watershed are located in Bedford, Botetourt, Floyd, Franklin, Craig, Montgomery, and Roanoke Counties, Roanoke City, and Salem.

In addition, the DEQ seeks written and oral comments from interested persons on the development of a TMDL implementation plan for the North Fork and South Fork Roanoke Rivers and tributaries. These streams were listed as impaired on the Virginia's § 303(d) TMDL Priority List and Report due to violations of the state's water quality standard for bacteria. The following is the name of the "impaired" stream, the length of the impaired segment, and the reason for the impairment: North Fork Roanoke River, 16.09 miles, bacteria; Wilson Creek and unnamed tributary to Wilson Creek, 6.99 miles, bacteria; Bradshaw Creek, 10.36, bacteria; South Fork Roanoke River, 17.31 miles, bacteria; and Goose Creek, 2.30 miles, bacteria. These stream segments are located in Montgomery County, Roanoke County, or Floyd County.

The TMDL studies for these stream impairments were completed in February 2006, February 2006, and March 2004, and can be found, respectively, in the Bacteria TMDLs for Wilson Creek, Ore Branch and Roanoke River Watersheds, Virginia report (available at http://www.deq.virginia.gov/portals/0/DEQ/Water/TMDL/apptmdls/roankrvr/uroanec.pdf), the Benthic TMDL Development for the Roanoke River, Virginia report (available at http://www.deq.virginia.gov/portals/0/DEQ/Water/TMDL/apptmdls/roankrvr/uroanbc.pdf), and the Fecal Coliform Total Maximum Daily Load Development for Glade Creek, Tinker Creek, Carvin Creek, Laymantown Creek and Lick Run report (available at http://www.deq.virginia.gov/portals/0/DEQ/Water/TMDL/apptmdls/roankrvr/tinkerfc.pdf).

Section 62.1-44.19:7 C of the Code of Virginia requires the development of an IP for approved TMDLs. The IP should provide measurable goals and the date of expected achievement of water quality objectives. The IP should also include the corrective actions needed and their associated costs, benefits, and environmental impacts.

A public meeting will be held to discuss the draft implementation plan for the bacteria and sediment TMDLs on the main stem Upper Roanoke River, and tributaries that has been under development since June 2013. The public meeting will also kick off the development of an implementation plan focused on the North Fork Roanoke River, South Fork Roanoke River, and tributaries. At this meeting, the process by which an implementation plan was developed to restore water quality in the Upper Roanoke River watershed will be discussed, and citizens will learn how they can be part of the water quality improvement process. In addition, interested persons will have the opportunity to be involved in working groups to develop an implementation plan for the North Fork and South Fork Roanoke Rivers and tributaries.

The public meeting will be held at 6:30 p.m. on April 30, 2015, at the Meadowbrook Center, 267 Alleghany Spring Road, Shawsville, VA 24162.

DEQ accepts written comments by email, fax, or postal mail. The 30-day public comment period on the information presented at the meeting will end on June 1, 2015. Questions, information requests, and written comments and inquiries should include the name, address, and telephone number of the person submitting the comments and be sent to Mary Dail, Virginia Department of Environmental Quality, 3019 Peters Creek Road, Roanoke, VA 24019, telephone [phone], FAX [phone], or email [e-mail].

STATE BOARD OF HEALTH

Notice of Periodic Review and Small Business Impact Review

Pursuant to Executive Order 17 (2014) and §§ 2.2-4007.1 and 2.2-4017 of the Code of Virginia, the Department of Health is conducting a periodic review and small business impact review of 12VAC5-381, Regulations for the Licensure of Home Care Organization. The review of this regulation will be guided by the principles in Executive Order 17 (2014), available at http://dpb.virginia.gov/regs/EO17.pdf.

The purpose of this review is to determine whether this regulation should be repealed, amended, or retained in its current form. Public comment is sought on the review of any issue relating to this regulation, including whether the regulation (i) is necessary for the protection of public health, safety, and welfare or for the economical performance of important governmental functions; (ii) minimizes the economic impact on small businesses in a manner consistent with the stated objectives of applicable law; and (iii) is clearly written and easily understandable.

The comment period begins April 6, 2015, and ends April 28, 2015.

Comments may be submitted online to the Virginia Regulatory Town Hall at http://www.townhall.virginia.gov/L/Forums.cfm. Comments may also be sent to Susan Horn, Policy Analyst, 9960 Mayland Drive, Richmond, VA 23233, telephone [phone], FAX [phone], or email [e-mail].

Comments must include the commenter's name and address (physical or email) information in order to receive a response to the comment from the agency. Following the close of the public comment period, a report of both reviews will be posted on the Town Hall and a report of the small business impact review will be published in the Virginia Register of Regulations.

VIRGINIA LOTTERY

Director's Orders

The following Director's Orders of the Virginia Lottery were filed with the Virginia Registrar of Regulations on March 17, 2015. The orders may be viewed at the Virginia Lottery, 900 East Main Street, Richmond, Virginia, or at the office of the Registrar of Regulations, 201 North 9th Street, 2nd Floor, Richmond, Virginia.

Director's Order Number Six (15)

Virginia Lottery's "$100,000 Home Changer Mega Power Promotion" Final Rules For Operation (effective April 7, 2015)

Director's Order Number Seven (15)

Virginia Lottery's "$100,000 Home Changer Scratcher Promotion" Final Rules For Operation (effective April 7, 2015)

Director's Order Number Ten (15)

"Cash4life Retailer Incentive Promotion" Virginia Lottery Retailer Incentive Program Requirements (This Director's Order becomes effective on May 3, 2015, and shall remain in full force and effect until ninety (90) days after the conclusion of the incentive program, unless otherwise extended by the Director)

Director's Order Number Twelve (15)

Handy Mart Retailer Incentive Program Promotions – Virginia Lottery Program Requirements

Program 1: "$100,000 Home Changer Free Item with Purchase"

Program 2: "Free Ticket Fridays"

Program 3: "June Out-of-Stock Contest"

(This Director's Order becomes effective on April 7, 2015, and shall remain in full force and effect until ninety (90) days after the conclusion of the final incentive program promotion, unless otherwise extended by the Director)

Director's Order Number Thirteen (15)

MACS Circle K Retailer Incentive Program Promotions – Virginia Lottery Program Requirements

Program 1: "Stretch Your Scratch Goal"

Program 2: "Free Ticket Fridays" Retailer Incentive Promotion

(This Director's Order becomes effective on April, 1, 2015, and shall remain in full force and effect until ninety (90) days after the conclusion of the final incentive program promotion, unless otherwise extended by the Director)

Director's Order Number Fifteen (15)

Sunoco Retailer Incentive Program Promotions – Virginia Lottery Program Requirements

Program 1: "Stretch Your Scratch Goal"

Program 2: "Free Ticket Fridays"

Program 3: "Fuel 5000 Sign Up Scratch Giveaway"

(This Director's Order becomes effective on April 1, 2015, and shall remain in full force and effect until ninety (90) days after the conclusion of the final incentive program, unless otherwise extended by the Director)

Director's Order Number Sixteen (15)

FasMart Retailer Incentive Program Promotions – Virginia Lottery Program Requirements

Program 1: "Fas Mart Free Ticket Fridays"

Program 2: "Fas Mart/Virginia Lottery Summer Jam Promotion"

(This Director's Order becomes effective on May 1, 2015, and shall remain in full force and effect until ninety (90) days after the conclusion of the final incentive program, unless otherwise extended by the Director)

Director's Order Number Seventeen (15)

Virginia Lottery's "#Pickyourdecade Promotion" Final Rules for Operation (effective February 10, 2015)

Director's Order Number Nineteen (15)

Virginia's Instant Game Lottery 1493 "7-Eleven®" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty (15)

Virginia's Instant Game Lottery 1537 "Beginner's Luck" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty-One (15)

Virginia's Instant Game Lottery 1548 "Hit $155,000!" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty-Two (15)

Virginia's Instant Game Lottery 1546 "Hit $25,000!" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty-Three (15)

Virginia's Instant Game Lottery 1547 "Hit $55,000!" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty-Four (15)

Virginia's Instant Game Lottery 1533 "Electric 8's" Final Rules For Game Operation (effective February 27, 2015)

Director's Order Number Twenty-Six (15)

Virginia's Computer-Generated Game Lottery "Cash 5" Final Rules For Game Operation (This Director's Order becomes effective on February 19, 2015, fully replaces any and all prior Virginia Lottery "Cash 5" game rules, and shall remain in full force and effect unless amended or rescinded by further Director's Order)

Director's Order Number Twenty-Seven (15)

Virginia's Computer-Generated Game Lottery "Fastplay Bingo Blast" Final Rules For Game Operation (effective March 15, 2015)

Director's Order Number Twenty-Eight (15)

Virginia's Computer-Generated Game Lottery "Fastplay $15,000 Jackpot" Final Rules For Game Operation (effective March 15, 2015)

Director's Order Number Twenty-Nine (15)

Virginia's Computer-Generated Game Lottery "Fastplay Getaway" Final Rules For Game Operation (effective March 15, 2015)

Director's Order Number Thirty (15)

Virginia's Computer-Generated Game Lottery "Fastplay Blackjack Cash" Final Rules For Game Operation (effective March 15, 2015)

Director's Order Number Thirty-Two (15)

Virginia's Computer-Generated Game Lottery Powerball® Final Rules For Game Operation (This Director's Order becomes effective February 19, 2015, fully replaces any and all prior Virginia Lottery "Powerball" game rules,  and shall remain in full force and effect unless amended or rescinded by further Director's Order)

Director's Order Number Thirty-Three (15)

Virginia Lottery's Hit It Big Time! Promotion Final Rules For Operation (effective March 10, 2015)

VIRGINIA WASTE MANAGEMENT BOARD

Notice of Periodic Review and Small Business Impact Review

Pursuant to Executive Order 17 (2014) and §§ 2.2-4007.1 and 2.2-4017 of the Code of Virginia, the Department of Environmental Quality on behalf of the Virginia Waste Management Board is conducting a periodic review and small business impact review of 9VAC20-130, Solid Waste Planning and Recycling Regulations. The review of this regulation will be guided by the principles in Executive Order 17 (2014). http://dpb.virginia.gov/regs/EO17.pdf.

The purpose of this review is to determine whether this regulation should be repealed, amended, or retained in its current form. Public comment is sought on the review of any issue relating to this regulation, including whether the regulation (i) is necessary for the protection of public health, safety, and welfare or for the economical performance of important governmental functions; (ii) minimizes the economic impact on small businesses in a manner consistent with the stated objectives of applicable law; and (iii) is clearly written and easily understandable.

The comment period begins April 6, 2015, and ends April 27, 2015.

Comments may be submitted online to the Virginia Regulatory Town Hall at http://www.townhall.virginia.gov/L/Forums.cfm. Comments may also be sent to Melissa Porterfield, Office of Regulatory Affairs, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX (804) 698-4019, or email [e-mail].

Comments must include the commenter's name and address (physical or email) information in order to receive a response to the comment from the agency. Following the close of the public comment period, a report of both reviews will be posted on the Town Hall and a report of the small business impact review will be published in the Virginia Register of Regulations.

STATE WATER CONTROL BOARD

Proposed Consent Special Order for Celanese Acetate, LLC

An enforcement action has been proposed for Celanese Acetate, LLC for violations in Giles County, Virginia. The special order by consent addresses and resolves violations of environmental law and regulations. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Jerry Ford, Jr. will accept comments by email at [e-mail], or postal mail at Department of Environmental Quality, Blue Ridge Regional Office, 3019 Peters Creek Road, Roanoke, VA 24019, from April 6, 2015, through May 6, 2015.

Proposed Enforcement Action for W.W. Realty Associates, LLC

An enforcement action has been proposed for W.W. Realty Associates, LLC for alleged violations of the State Water Control Law in Chesapeake, Virginia. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Mr. Robin Schuhmann will accept comments by email at [e-mail], FAX at [phone], or postal mail at Department of Environmental Quality, Tidewater Regional Office, 5636 Southern Boulevard, Virginia Beach, VA 23462, from April 6, 2015, through May 6, 2015.

VIRGINIA CODE COMMISSION

Notice to State Agencies

Contact Information: Mailing Address: Virginia Code Commission, General Assembly Building, 201 North 9th Street, 2nd Floor, Richmond, VA 23219; Telephone: Voice [phone]; FAX (804) 692-0625; Email: [e-mail].

Meeting Notices: Section 2.2-3707 C of the Code of Virginia requires state agencies to post meeting notices on their websites and on the Commonwealth Calendar at http://www.virginia.gov/connect/commonwealth-calendar.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed: A table listing regulation sections that have been amended, added, or repealed in the Virginia Register of Regulations since the regulations were originally published or last supplemented in the print version of the Virginia Administrative Code is available at http://register.dls.virginia.gov/documents/cumultab.pdf.

Filing Material for Publication in the Virginia Register of Regulations: Agencies use the Regulation Information System (RIS) to file regulations and related items for publication in the Virginia Register of Regulations. The Registrar's office works closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.