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Around the PIA Western Alliance States

Posted By Administration, Tuesday, February 27, 2018

Arizona — Governor Names Interim Insurance Department Director: Keith Schraad is going to run Arizona’s Department of Insurance. At least he’ll run it temporarily. Arizona Governor Doug Ducey made the announcement last week.

He replaces the now previous interim director Leslie Hess who was a life insurance lawyer before accepting the interim position.

Schraad has been employed by credit card processing firm First Data Corp. since 2016 and before that founded and operated Online Insurance Corporation. During that job he developed a health insurance product rate comparison tool.

Source link: PropertyCasualty360.com


California — Cannabis Surety Bond Approved: This from California Insurance Commissioner Dave Jones.

Insurance Commissioner Dave Jones announced he has approved the first surety bond program for the cannabis industry in the State of California. Continental Heritage Insurance Company is the first insurer in the state to be approved to offer surety bonds for the cannabis industry.

"Cannabis businesses should have insurance coverage available to them just like any other California business," said Insurance Commissioner Dave Jones. "As Insurance Commissioner, my mission is insurance protection for all Californians, which includes insurance for California's legalized cannabis businesses. I encourage more insurance companies to file cannabis business insurance products with the department to meet the needs of this emerging market."

Cannabis Surety Bonds are needed for various entities seeking licensure under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The State of California requires a surety bond in the amount of $5,000 for most licensing categories.

Surety bonds are required by licensing agencies to guarantee the behavior of licensees. A license bond guarantees that the entity will comply with the laws and regulations for that entity. These bonds ensure compliance with licensure and permit requirements, and guarantee payments related to the cost incurred for the destruction of cannabis goods and materials in the event of a violation of the applicable regulations.

The new program from Continental Heritage is the first-of-its-kind for California's new and evolving cannabis industry.

Commissioner Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. This first filing and approval of commercial insurance for the cannabis industry was announced in November of last year as a successful result of Commissioner Jones' initiative. Jones has convened meetings between commercial insurance company executives and cannabis business owners to educate the insurance industry about the sophistication, professionalism and risk management of the cannabis industry. Jones has also organized tours for insurance executives at cannabis businesses.

In October of last year, Jones held a first-in-the-nation public hearing to identify insurance gaps faced by the cannabis industry. Cannabis businesses and insurance industry representatives testified about the limited availability of insurance for cannabis businesses. The hearing revealed that while there is insurance available from surplus lines insurers, insurance coverage is limited in scope and, until the approval announced last November, commercial carriers were not yet writing insurance. Jones also announced that department staff would be allocated to cannabis insurance filings


California — Mercury & Proposition 103: This from California Insurance Commissioner Dave Jones.

The United States Supreme Court declined to hear Mercury Insurance Company's appeal to overturn a February 2017 California Court of Appeal ruling that held Insurance Commissioner Dave Jones' 2013 order requiring the insurer to reduce its homeowner insurance rates by 5.4 percent did not infringe on the insurer's constitutional rights. 

"After Mercury's repeated assaults on Proposition 103, we have prevailed once again in protecting consumers from excessive and unjustified insurance rates," said Insurance Commissioner Dave Jones. "While we can declare victory in this case, insurers continue to try to undermine the consumer protections provided under Proposition 103. I pledge to continue to defend those important protections that have saved California consumers over $100 billion over the past 30 years."

This case is the latest in a number of assaults by Mercury and other insurers to weaken the voter-imposed limits on insurance rates in Proposition 103. In arguments the court of appeal referred to as "hocus pocus" and "smoke and mirrors", Mercury claimed it should be allowed to disregard the 30-year-old rate formula which provides insurers a fair rate-of-return. Instead of following the tried and true rate regulations, Mercury argued the insurer should be allowed to argue over how to calculate the fair rate of return in every case. 

The court of appeal agreed with the commissioner, that Mercury was bound by the formula. The court also agreed with the commissioner that Mercury could seek a variance from the formula if Mercury established the rate would cause deep financial hardship, but Mercury did even not try to prove that the rate caused it any kind of hardship. In fact, under the commissioner's regulatory formula, Mercury has realized profits in the millions of dollars every year and in addition, over the last five years, Mercury has issued dividends totaling nearly $1 billion.

Mercury also argued unsuccessfully to the court of appeal it had a constitutional right under the first amendment to charge ratepayers for brand advertising that only benefits shareholders, not ratepayers.

After Mercury's petition challenging the February 2017 decision was denied by the California Supreme Court in May 2017, Mercury petitioned to the U.S. Supreme Court arguing that  Commissioner Jones' ruling violated the company's Fifth and 14th Amendment rights.

Mercury argued that the company had a right to determine its own profit with each rate filing proceeding versus using the commissioner's rate formula, which was approved by the California Supreme Court in 1994.

The commissioner's original order that Mercury lower its homeowner rates by 5.4 percent in 2013, saved policyholders $11,745,102.


California — Trump & Health Markets: This from California Insurance Commissioner Dave Jones.

Today, the Trump Administration took another action to erode the protections of the Affordable Care Act and put the individual health insurance market in jeopardy by proposing a change to federal rules regarding limited duration health plans. The proposed rule would extend the maximum length of time someone can be covered by one of these plans which often exclude coverage for preventive health care and many essential health benefits, while also lacking consumer protections for those with pre-existing conditions, and lack annual or lifetime dollar limits and guaranteed renewability of ACA compliant coverage.

This Trump Administration proposal is another attack on the integrity of the nation's health insurance markets, as it would permit skimpy health plans, without the benefits required under the ACA. This Trump proposal would leave a family exposed to high medical costs and medical bankruptcy just when they need health coverage the most. Further, this proposal would act to transform the existing ACA market into a high-risk pool by siphoning off consumers with lower health risks into skimpy plans. The Trump Administration admits that their plan will degrade the risk pool for ACA plans, raise premiums in state exchanges, and increase costs to the federal government. I oppose the Trump Administration proposal to offer consumers health plans that cannot be relied upon to cover essential health services when people need them most and will result in higher premiums for people who maintain their ACA coverage."


Idaho — Hand-Held Phone Ban: Idaho’s SB 1283 will ban the hand-held use of cell phones while driving and — at the same time — repeal the ban on texting while driving.

If it passes, Idaho will join 15 states to ban the use of any mobile device while driving and the 47 who’ve banned texting for all drivers. Idaho police want the change because it’s too hard to catch people texting.

The ban vote by the Senate panel was 8 to 1 but it still has a long way to go. It has to survive amending in the Senate and a House committee and a vote by the full House. Then there’s the governor’s signature.

Source link: The Spokesman Review


Washington — Wheat Farmers & Trumps Crop Insurance Cuts: Wheat farmers in Washington State are worried about cuts President Trump is planning on crop insurance spending and other farm programs. The cuts are looking like $47 billion over a 10-year period.

Washington Association of Wheat Growers Executive Director Michelle Hennings noted the crop insurance cuts are $22 billion and that makes it unaffordable for Washington farmers because it lowers the maximum income threshold and still benefit from government-sponsored conservation programs.

Source link: Insurance Journal


Washington — Kreidler Says Trump Changes Bad: This came to Weekly Industry News from Washington Insurance Commissioner Mike Kriedler.

Allowing short-term medical plans to infiltrate our health insurance markets is not the panacea the Trump administration promises. It’s just one more devastating step in dismantling the consumer protections we’ve come to rely on.

Short-term medical plans may sound good to those who do not understand how health insurance works. The promise of lower premiums and fewer mandatory benefits may be appealing, but here’s what’s left in the small print: they also offer little protection if you get sick and need comprehensive care. In addition, they also force the good risk out of the market, causing premiums to go up and leaving many people unable to afford health insurance.

These short-term medical plans are not required to provide comprehensive coverage, out-of-pocket limits are high, and vital essential health benefits such as prescription drugs and mental health services can be excluded. Most importantly, if you get sick, you may not be able to renew your coverage – there are no protections for people with a pre-existing condition. There’s also no coverage for maternity care. These plans could seriously harm unsuspecting consumers.

I seriously question the president’s misguided belief that the only way to provide less expensive health insurance is to do so at the expense of those unlucky enough to get sick or who have a health condition. If he is serious about lowering health care costs for everyone, he should support the bipartisan efforts to stabilize the health insurance markets.

He should also turn his immediate attention to the leading cost-driver in this country: the skyrocketing costs of prescription drugs. That’s a promise he has failed to keep.

I will be using my authority as insurance commissioner to begin the rule-making process to prohibit these skinny plans from destabilizing Washington’s health insurance market. Just like the rest of the health insurance market, these plans would be required to be approved by my office.”

Source link: Washington Department of Insurance


Washington — Idaho Plans Not Good: This came to Weekly Industry News from Washington Insurance Commissioner Mike Kriedler.

Washington state Insurance Commissioner Mike Kreidler urged the federal government to carefully review proposed state-based health plans in Idaho to ensure consumers continue to receive vital protections.

“The proposed state-based plans could start a domino effect throughout the country that could severely weaken consumer protections,” Kreidler said. “These plans could further increase instability in states beyond Idaho.”

Kreidler urged the federal Department of Health and Human Services to apply the requirements of the Affordable Care Act to its review of the Idaho plans.

Kreidler said he identified a number of initial concerns with the proposed Idaho state-based plans:

  Allowing insurers to consider pre-existing health conditions

  Requiring consumers to complete medical questionnaires that could result in much costlier premiums for less coverage

  Allowing older people to be charged up to five times more than younger enrollees

  Would not include maternity care in all plans

  Not permitting federal subsidies to reduce premium costs

  Limiting annual claim benefits

  Whether consumers will receive effective notice the plans do not comply with all benefits required under current federal law


“If you have diabetes or were sick with cancer and didn’t have health insurance prior to applying for this coverage, insurers would be free to deny coverage of your diabetes or cancer or charge exorbitant premiums that price you out of coverage,” Kreidler said. “I understand the desire to create more options for consumers, but we should never start down a road toward less protection. Cheaper does not necessarily translate to better.”

If the plans take hold, Kreidler said other states would likely follow suit. This would further threaten individual health insurance markets throughout the country, markets already weakened by Trump administration actions over the last year. 

To bolster these markets, Kreidler recommends Congress and the Trump administration approve legislation designed to help consumers. Recent proposals by Sen. Patty Murray, D-Wash., and Sen. Lamar Alexander, R-Tenn., would restore cost-sharing reduction payments that helped insurers keep premiums and deductibles lower for consumers.

Kreidler also urged:

  Renewal of a federally funded reinsurance program that helps insurers keep premiums lower and encourages them to offer coverage in the individual market

  States to expand Medicaid to provide health coverage to more of their citizens

  States to reject the use of short-term medical plans as proposed by the Trump administration

  Restoration of federal funding for outreach efforts during annual enrollment periods


Source Link: Washington Department of Insurance

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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