Banking Commerce and InsuranceSession Review 2018

Session Review: Banking, Commerce and Insurance

<a href='' target='_blank' title='Link to the website of the Banking, Commerce and Insurance Committee'>Banking, Commerce and Insurance Committee</a> chairperson <a href='' target='_blank' title='Link to the website of Sen. Brett Lindstrom'>Sen. Brett Lindstrom</a>
Banking, Commerce and Insurance Committee chairperson Sen. Brett Lindstrom

The provision of health insurance to individuals in temporary custody and rules governing property appraisers, public adjustors and payday and short-term lenders were among the topics considered by the Banking, Commerce and Insurance Committee this session.

Lawmakers approved a bill intended to prevent termination of private health insurance solely due to incarceration.

Introduced by Omaha Sen. John McCollister, LB480 prohibits an insurer from canceling the coverage of an individual who is in temporary custody solely based on the status of being incarcerated.

Temporary custody is defined as being in the custody of a jail pending disposition of charges. An insurer could cancel coverage or deny coverage for services or supplies provided to an insured who is incarcerated after sentencing.

The bill also would prohibit an insurer from refusing to credential a health care provider on the basis that the employee or contractor provides medical services in a jail. Insurers could deny coverage for treatment of injuries resulting from a violation of law by the insured or for diagnostic tests or health evaluations required for all individuals in temporary custody.

The bill passed 45-0 and becomes effective Jan. 1, 2019.

Lawmakers updated Nebraska’s Real Property Appraiser Act this session.

LB741, introduced by Omaha Sen. Brett Lindstrom, brings the act into compliance with Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the Uniform Standards of Professional Appraisal Practice and the Policy Statements of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

The bill lessens the burden to obtain or maintain a credential by removing the required demonstration of general knowledge of Nebraska appraiser law, as well as a continuing education requirement.

It also simplifies the standards for evaluation of a reciprocal applicant’s jurisdiction of practice.

Finally, it makes minor changes to the administration of Nebraska’s Real Property Appraiser Act and eliminates provisions relating to the separate credential of real property associate.

The bill passed on a 45-0 vote.

State law related to insurance producers was amended this year to address public adjusters.

LB743, also introduced by Lindstrom, creates regulations for public adjusters—individuals who provide compensated assistance to an insured in the filing and settlement of a property claim against an insurer—through adoption of the National Association of Insurance Commissioners model law.

Among other provisions, the bill:
• establishes criteria for resident and nonresident public adjusters;
• provides for administration of exams and licensure requirements;
• creates a continuing education requirement for public adjusters;
• eliminates a pre-licensing requirement for insurance producers;
• requires public adjusters to secure a minimum $20,000 surety bond;
• provides criteria for a business entity to become a public adjuster in Nebraska;
• removes a paper certificate requirement for insurance producer continuing education activities and limits approval of those activities to four years; and
• prohibits an individual from acting as a public adjuster without being licensed in accordance with the act, misrepresenting that they work for an insurer or entering an agreement to repair property that the adjuster was engaged to adjust.

The bill was amended to include provisions of LB220, introduced by Omaha Sen. Burke Harr, which provide protections for consumers who assign their property insurance rights or benefits to a contractor following a loss.

LB743 passed on a 48-0 vote.

Providers of short-term, delayed deposit loans—often called payday loans—are required to provide more information to borrowers under a bill passed this session.

To secure a payday loan a borrower typically submits a personal check for the loan amount, which is then held and cashed by the lender at the end of the loan period—typically 34 days.

LB194, introduced by Omaha Sen. Tony Vargas, requires that a lender provide written notice to a borrower including the name of the borrower, transaction date and amount, payment due date and total payment due and the total fees imposed on the transaction, both as a dollar amount and an annual percentage rate.

The notice must state that such loans should be used only to meet short-term cash needs, that the total cost of a transaction cannot exceed $500 and that the borrower has the right to rescind a transaction before the end of the next business day and to rescind authorization for an electronic payment.

A borrower who is unable to pay back a loan when due can request an extended payment plan once in any 12-month period. The bill also requires lenders to accept prepayment of a loan from a borrower without any penalty.

Lenders are required to provide information annually to the state Director of Banking and Finance, who will submit a final report to the Legislature.

The bill passed on a 49-0 vote.

A bill that would have increased the interest rate that licensees may charge under the Nebraska Installment Loan Act failed to advance from general file.

Currently, a licensee may charge a borrower a maximum annual interest rate of 24 percent on the first $1,000 of an unpaid principal balance, and 21 percent on the remaining unpaid balance.

LB384, introduced by Lindstrom, would have raised the cap to a single rate of 29 percent annually. A motion was offered to indefinitely postpone LB384, which was adopted on a 19-17 vote. A simple majority of those voting was required to end debate on the bill for the session.

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