New legislation, including companion bills affecting health insurance mandates, goes into effect in Virginia July 1.

The new law (HB 2024/SB 1411) allows health insurers to offer group health policies that do not include state mandates to employers with fewer than 51 employees to provide coverage for employees who have been uninsured for at least six months.

Bob Bradshaw Jr.

“Everybody has been complaining for years about the mandates, and here’s the opportunity” to go without them, said Bob Bradshaw Jr., president and CEO of the Independent Insurance Agents of Virginia.

Bradshaw added that some eligible companies are saying that they will not be taking advantage of these changes right away.

“It remains to be seen whether employers who are currently providing health insurance will ‘trade down’ to the mandate light products when they become available,” said Gerald A. Milsky, a lobbyist for the Virginia chapter of the National Association of Insurance and Financial Advisors.

Another bill taking effect July 1 (HB 2430) permits insurers to send electronic notices, excluding notices of cancellation or termination of a policy, to policyholders who give their consent.  An insurance agent must receive copies of electronic notices within 72 hours of the notice being sent to a policyholder.

‘In the notification loop’

“Keeping the agent in the notification loop will provide the agent with the opportunity to follow up with his or her customer to make certain that the customer understands the notice and any options that may be available,” Milsky said.

The controversy of when and how various types of insurance policies go into effect is resolved with SB 1480.  According to the new law, the date of delivery of a policy is the date of the signed receipt of delivery, whether delivered by physical or electronic means.

This bill will “clear long-standing issues between and among insurers, producers, and policyholders,” Milsky said.

HB 1982 defines large commercial risks and allows commercial automobile insurance policies that are written to large commercial risks to be exempt from requirements that policy forms be filed with and approved by the State Corporate Commission.

“This is a good and bad thing,” Bradshaw said.  “Commercial insurance may craft their own policy instead of using the regulation policy, but the more unlikely the policy,” the more work the insurance carrier needs to do.

This story originally appeared in the July 2009 print edition of Insurance & Financial Advisor.