OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 175 Final Analysis
135th General Assembly
Click here for S.B. 175’s Fiscal Note
Primary Sponsor: Sen. Lang
Effective date: October 24, 2024; provisions related to pet insurance effective January 22, 2025
Effective date:
Abby Gerty, Research Analyst
Kelly Bomba, Attorney
SUMMARY
Regulatory restrictions
▪ Exempts from the law concerning reductions in regulatory restrictions any rule adopted
as a requirement for a state agency to obtain or maintain accreditation or certification
from a multistate organization consisting of at least 45 participating states.
Insurance
Filing requirements
▪ Exempts commercial insurance policy forms and endorsements that are unique in
character and designed for a particular risk from being filed with the Superintendent of
Insurance.
▪ Modifies the process by which an insurer may use a rate greater than the rate on file with
the Superintendent by eliminating the requirement that the Superintendent approve the
higher rate.
▪ Requires that the insurer retain any insurance policy form, endorsement, or rate that is
exempt from filing requirements for three years after the effective date of the policy and
requires that the insurer make this information and supporting documentation available
for inspection upon request of the Superintendent.
Premiums tax
▪ Modifies the taxation of insurance premiums written for bail bonds.
Electronic delivery of documents
▪ Permits a health benefit plan sponsor to agree to receive all communication related to
the plan via electronic means.
August 8, 2024
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Claims on a liquidated insurer’s estate
▪ Adds funding agreements to the list of eligible claims on the assets of a liquidated
insurer’s estate.
Ohio Fair Plan
▪ Removes certain requirements of the Ohio Fair Plan Underwriting Association.
Ohio Assigned Risk Insurance Plan
▪ Prohibits making false and deceptive statements to the Ohio Assigned Risk Insurance Plan.
Ohio Life and Health Insurance Guaranty Association
▪ Requires the Ohio Assigned Risk Insurance Plan to only accept applications for insurance
from licensed insurance agents that are registered under the Plan.
▪ Eliminates the requirement that a health insuring corporation include notice that the
corporation is not a member of the Ohio Life and Health Insurance Guaranty Association
in insurance contracts that are covered by the Association.
Confidentiality
▪ Requires the Superintendent to maintain the confidentiality of information in connection
with the merger or other acquisition of control of a domestic insurer.
Pet insurance
▪ Creates a legal framework within which pet insurance may be sold, issued, and delivered.
Service of certain notices and documents
▪ Eliminates requirements for the service of certain documents and notices and instead
requires that those items be served in accordance with Ohio’s Administrative Procedure
Act.
Professional employer organizations
▪ Specifies that a professional employer organization (PEO) is the employer of shared
employees co-employed by the PEO and a client employer for purposes of determining
whether a PEO who sponsors a group health benefit plan is covered under Ohio’s Small
Employer Health Benefit Law.
▪ Specifies that Ohio’s Small Employer Health Benefit Law does not apply to a fully insured
health benefit plan sponsored by a PEO if the PEO is not a small employer for purposes of
the law.
TABLE OF CONTENTS
Regulatory restrictions.................................................................................................................... 3
Insurance......................................................................................................................................... 4
Filing requirements ..................................................................................................................... 4
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Premiums tax............................................................................................................................... 4
Electronic delivery of insurance documents ............................................................................... 5
Claims on a liquidated insurer’s estate ....................................................................................... 5
Ohio Fair Plan .............................................................................................................................. 5
Ohio Assigned Risk Insurance Plan .............................................................................................. 6
Ohio Life and Health Insurance Guaranty Association ............................................................... 6
Confidentiality of information..................................................................................................... 6
Pet insurance ............................................................................................................................... 7
Defined terms ......................................................................................................................... 7
Policy information and disclosures......................................................................................... 8
Coverage ................................................................................................................................. 9
Licensing ................................................................................................................................. 9
Rules .......................................................................................................................................... 10
Service of certain notices and documents ................................................................................ 10
Professional employer organizations ........................................................................................... 10
DETAILED ANALYSIS
Regulatory restrictions
The act exempts any rule that is adopted as a requirement for a state agency to obtain or
maintain accreditation or certification from a multistate organization consisting of at least 45
participating states from the base inventory of regulatory restrictions that a state agency must
reduce by 30% under continuing law by June 30, 2025. A “regulatory restriction” is any part of an
administrative rule that requires or prohibits an action.1 Beginning July 1, 2025, if a state agency
failed to reduce its base inventory of regulatory restrictions by 30%, the agency is generally
prohibited from adopting a new regulatory restriction unless it simultaneously removes two or
more existing restrictions until the 30% reduction has been met.2
As soon as practicable after the act’s effective date, the Superintendent of Insurance must
amend the Department of Insurance’s base inventory to remove regulatory restrictions adopted
by the Superintendent that are necessary for accreditation by the National Association of
Insurance Commissioners’ (NAIC) Financial Regulation Standards and Accreditation Committee.
The Superintendent must then post the amended list on its website, transmit a copy to the Joint
Committee on Agency Rule Review, and use the amended list for purposes of complying with the
regulatory restriction reduction requirements.3
1 R.C. 121.95 to 121.953, not in the act.
2 R.C. 121.95; R.C. 121.951 and 121.952, not in the act.
3 Section 3.
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Insurance
Filing requirements
Insurers are generally required to file certain documents that they propose to use with
the Superintendent. These include every form of a policy, endorsement, rider, manual, minimum
class rate, rating schedule, rating plan, and rating rule, along with any modifications to those
items. Continuing law exempts documents for inland marine risk insurance from this filing
requirement. Similarly, the act exempts commercial insurance policy forms or endorsements that
are “unique in character and designed for a particular risk,” subject to restrictions prescribed by
the Superintendent.4
Continuing law generally prohibits insurers from making or issuing contracts or policies
that are different from those filed with the Superintendent. However, an insurer may use a rate
that is greater than the rate filed with the Superintendent on a specific risk if the person insured
applies to the Superintendent in writing stating the reasons for the higher rate and the
Superintendent approves the application. The act retains the ability of an insured person to
submit such an application but eliminates the requirement that the Superintendent approve it
before the higher rate may be applied.5
The act requires the insurer to retain any policy that is exempt from filing requirements
and all supporting documents for at least three years after the effective date of the policy. The
insurer must make the policy and all supporting documentation available for inspection by the
Superintendent upon request.6
Premiums tax
The act modifies the taxation of insurance premiums written for bail bonds. Under
continuing law, Ohio taxes the gross premiums collected by foreign and domestic insurance
companies from policies issued in the state. This includes premiums charged to underwrite bail
bonds.
Under prior law, the tax on bail bond premiums was based on the gross premiums paid,
without deduction. The act modifies this calculation by allowing insurance companies to deduct
amounts retained by bail bond agents. However, the deduction cannot cause the company’s
taxable bail bond premiums to be less than 6.5% of the company’s gross bail bond premiums.7
The act applies to premiums reported on annual statements filed in 2021 and thereafter.
If an insurance company has already filed an annual statement for any such year, and the act’s
4 R.C. 3935.04(H) and 3937.03(H).
5 R.C. 3935.04(G) and 3937.03(G).
6 R.C. 3935.04(I) and 3937.03(I).
7 R.C. 5725.18 and 5729.02; R.C. 3905.901, not in the act.
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changes would reduce the company’s tax liability for that year, the company can request a
refund.8
Electronic delivery of insurance documents
The act enables the sponsor of a fully insured health benefit plan, on behalf of all
individuals covered under the plan, to agree to receive all communications related to the plan
via electronic means, including the delivery of any health benefit or prescription drug benefit
identity card. Under continuing law, electronic communications include email, instant messaging,
cell phone communication, and fax machines.9
The act requires that a health benefit plan sponsor, prior to making such an authorization,
confirm that all of the primary covered individuals routinely use electronic communications
during the normal course of business. The act also requires that the issuer of a health plan, prior
to issuing documents electronically, provide the covered individuals with an opportunity to opt
out of delivery by electronic means. The issuer must also document that the requirements for
conducting the business of insurance electronically have been met.10
Claims on a liquidated insurer’s estate
Under continuing law, the assets of a liquidated insurer’s estate are distributed in ten
classes. The second class comprises all claims under policies for losses incurred. The act expands
the second class of eligible claims to include funding agreements.11
Ohio Fair Plan
The Ohio Fair Plan is an underwriting association comprised of all insurers authorized to
write property insurance in the state. Its purpose has been to assist applicants in urban areas to
secure basic property or homeowners insurance where policies cannot be obtained in the normal
market. The act broadens the purpose of the Association to include assisting applicants that are
not in urban areas.12
Under prior law, the Association’s board of governors was required to submit a proposed
plan of operation to the Superintendent of Insurance. If the Superintendent rejected the plan,
the Association had 15 days to submit a revised plan to the Superintendent. If the Association
failed to do so, or if the revised plan was rejected, the Superintendent was required to make a
plan of operation. The act removes this submission and review procedure from the statute since
the plan has already been approved and implemented.13
8 Section 4.
9 R.C. 3901.411(B); R.C. 3901.41, not in the act.
10 R.C. 3901.411(C) and (D).
11 R.C. 3903.42(B).
12 R.C. 3929.41, 3929.42, 3929.43, and 3929.44.
13 R.C. 3929.43(C).
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Prior law mandated a property inspection by representatives of the inspection bureau
following an application to the Ohio Fair Plan. The act makes the inspection optional, permitting
the Association to engage an inspection bureau or other organization to assist in collecting
information necessary to underwrite risk for basic property or homeowners insurance.14
The act also removes the requirement that the Association pay the Superintendent of
Insurance 1¢ for each outstanding insurance policy.15
Ohio Assigned Risk Insurance Plan
The act applies the criminal prohibition against insurance fraud to false and deceptive
statements made to the Ohio Assigned Risk Insurance Plan (OARP).16 OARP provides coverage to
drivers who are unable to obtain automobile insurance through ordinary methods, and
apportions the associated risk among Ohio automobile insurers.
The act also allows OARP to establish procedures to register insurance agents. If an
insurance agent has their registration rejected or revoked, OARP may inform the Superintendent
of Insurance. OARP and its manager are immune from civil liability for decisions to deny or revoke
registration or to inform the Superintendent. Under the act, OARP is prohibited from accepting
an application for insurance unless it is submitted through a registered agent. Registered agents
have an affirmative duty to ensure that the information on the application is true and accurate.17
Ohio Life and Health Insurance Guaranty Association
Under prior law, a health insuring corporation was required to include a notice in
insurance contracts that are covered by the Ohio Life and Health Insurance Guaranty Association
stating that the corporation is not a member of the Association. The act removes this provision,
as S.B. 273 of the 134th General Assembly, effective in September 2022, required health insuring
companies to join the Association.18
Confidentiality of information
Under continuing law, the Superintendent of Insurance is required to maintain
confidentiality of certain documents, materials, and other information. The act adds to the list of
confidential information any information in connection with the merger or other acquisition of
control of a domestic insurer.19
14 R.C. 3929.44.
15 R.C. 3929.481.
16 R.C. 2913.47.
17 R.C. 4509.70(H).
18 R.C. 1751.11; R.C. 3956.04, not in the act; S.B. 273 of the 134th General Assembly.
19 R.C. 3901.36(A); R.C. 3901.321, not in the act.
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Pet insurance
The act establishes a legal framework for property insurance policies that provide
coverage for accidents and illnesses of pets – referred to in the act and this analysis as “pet
insurance.” It applies to pet insurance policies that are: (1) issued to a resident of Ohio, (2) sold,
solicited, or negotiated in Ohio, or (3) delivered or issued for delivery in Ohio. The act spec