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Around the PIA Western Alliance States

Posted By Administration, Tuesday, May 8, 2018

California — State Fund Net Premiums: The annual report from the California State Compensation Insurance Fund says net written premiums fell in 2017 to $3.1 billion from $1.5 billion in 2016. The soft market, increased competition and dropping rates are said to be the reason for the decline.

Underwriting loss was $658 million compared to $478 million the year before. A decline in written premium of $217 million and other factors figured into the loss.

Vern Steiner heads the fund and says, “State Fund’s financial position remained strong in 2017. A strong financial position allows us to concentrate on what is ultimately the purpose of workers’ compensation coverage — which is caring for people and providing an important safety net for Californians."

Source link: Insurance Journal


California — Insurance and Cannabis: The American Association of Insurance Services has put out a first of a kind cannabis business owner’s policy. It’s a non-profit insurance advisory organization and in its statement, the AAIS said, “The new CannaBOP Program from AAIS is designed for cannabis dispensaries, storage facilities, processors, manufacturers, distributors, and other cannabis-related businesses operating in the state of California.”

Source link: Insurance Business America


California — Protecting Property Owners Leasing to Cannabis Firms: Insurance Commissioner Dave Jones announced he has approved the first insurance coverage for commercial landlords that addresses risks specific to renting to cannabis businesses. California Mutual Insurance Company is the first insurer in the state approved to add Lessor's Risk coverage for property owners who are exposed to specific risks resulting from cannabis related business activities of their commercial tenants.

"As Insurance Commissioner, my goal is to make sure all Californians have insurance protection-including the legalized cannabis businesses in California," said Commissioner Jones. "I want to make sure that when consumers shop in cannabis businesses, when investors and owners invest in cannabis businesses, when vendors sell to cannabis businesses, and when landlords rent to cannabis businesses, there is insurance coverage available to cover everyone from losses. I encourage more insurance companies to follow California Mutual Insurance Company's lead and file insurance programs to fill the gaps in coverage for the cannabis industry."

Lessor's Risk coverage provides liability and property insurance for commercial property owners who lease building space to commercial tenants. Specific commercial activities and businesses addressed by this coverage include cannabis labs, product manufacturing, cultivation, and dispensary operations. 

Commissioner Jones launched an initiative last year to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. As a result of Jones' initiative, the first filing and approval of commercial insurance for the cannabis industry was announced in November of last year and the first surety bond program for the industry was announced in February. Today's announcement is another first - the first insurance for commercial landlords renting to cannabis businesses. The availability of this insurance will reduce barriers to obtaining leased space faced by the cannabis industry.

Last week, Commissioner Jones renewed his call for insurers to offer insurance products for California's legalized cannabis industry in the wake of published reports that President Trump has abandoned Attorney General Jeff Sessions' policy on federal law enforcement of cannabis. Jones sent a formal letter to California insurers encouraging them to fill insurance gaps for California's cannabis businesses. Jones has convened meetings between commercial insurance 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, 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 expedite cannabis insurance filings.


California — Jones Wants to Help Disaster Survivors: Insurance Commissioner Dave Jones announced that two bills he sponsored which are designed to help prevent homeowners from being underinsured when disaster strikes passed the Assembly Insurance Committee today with a unanimous, bipartisan vote. Assembly Bill 1797 (Levine) and Assembly Bill 1875 (Wood) will help homeowners avoid being underinsured-a terrible problem faced by many survivors of the 2017 fires.

"These bills are designed to help fire and mudslide survivors avoid the huge financial burden of being underinsured and unable to afford to rebuild by tens of thousands or hundreds of thousands of dollars," said Commissioner Jones. "They offer California consumers more peace of mind knowing that if disaster strikes their insurance coverage should be sufficient to cover the costs of rebuilding and they will be able to move forward with certainty. I am pleased the Assembly Insurance Committee recognized the need for this legislation and am hopeful the full Legislature will agree and pass these important consumer protection bills."

Underinsurance is one of the most significant problems facing fire and mudslide survivors in the aftermath of the 2017 firestorms. According to a survey conducted by United Policyholders following the 2017 North Bay fires, 66 percent of survivors were underinsured on the dwelling portion of their claim and 47 percent were underinsured on the contents portion of their claim.

AB 1797 is aimed at making sure that homeowners are given an updated replacement cost estimate for their home. Current regulations require a complete and comprehensive estimate of the cost to replace a home when a replacement estimate is provided by the insurer, but state law does not mandate that insurers produce or regularly update a replacement cost calculation.

AB 1797 would require insurers to either provide a policyholder with a full replacement cost estimate every other year or apply an inflation factor to the dwelling limit at each renewal and clearly offer the consumer the option to obtain a full replacement cost estimate.

AB 1875 addresses confusion surrounding extended replacement cost coverage (ERC). Almost all insurance companies offer ERC, which allows property owners to purchase limits above the replacement cost policy limits, which are typically based upon the insurance company's estimated cost of replacement. However, those ERC limits can vary dramatically from the low of a 20 percent option to higher options of 50, 75, or 100 percent. Many consumers are never provided these options by insurers nor are they told how the coverage options, if available, would impact their premiums. AB 1875 would require an insurer who does not provide at least 50 percent ERC to help direct the consumer to an insurer that does. This will give consumers reasonable options against underinsurance.


Idaho — Medicare workshop offered in Lewiston:

BOISE ID – Senior Health Insurance Benefits Advisors (SHIBA), a unit of the Idaho Department of Insurance, is offering a Medicare Workshop on Tuesday, May 15 at the Community Action Partnership, 124 New 6th Street, Lewiston, from 1:00 pm to 3:00 pm.

This workshop is especially designed for:

  People who are turning 65 or otherwise approaching Medicare eligibility


  Anyone who would like to learn more about how Medicare works

Presenters will explain some of the vocabulary associated with Medicare and they will introduce the various parts of Medicare. Attendees will learn about:

  Important timeframes for enrolling in Medicare

  Enrollment periods for Medigap, Medicare Advantage and Medicare Prescription Drug Plans

  How the different parts of Medicare work together – and how they don’t

Anyone interested in attending this workshop is encouraged to contact SHIBA at 1-800-247-4422 to RSVP.


Oregon — OHA reorganization: In a message to staff Monday, OHA Director Patrick Allen shared a proposal for a new organizational structure. The goals of the reorganization are to:

  Consolidate Medicaid: Align Medicaid policy and operations into a single program under the Medicaid director.

  Consolidate behavioral health: Unite mental health, substance use and gambling services across the agency within a single program, under a new behavioral health director.

  Strengthen relationships with OHP members and stakeholders: Expand the ombuds program that helps OHP members solve access to care problems and align innovator agents who work with coordinated care organizations under OHA’s chief of staff.


The changes are intended to “improve our business rigor and strengthen transparency and accountability in our agency,” said Director Allen. You can see the proposed organizational charts here.

Director Allen is seeking stakeholder input on the proposal. He presented an overview of the proposed reorganization to the Oregon Health Policy Board at the board’s May 1 meeting. He’ll bring a final proposal for OHPB’s approval in June. The new OHA structure will take effect on July 1.


Oregon — From the Department of Insurance: The Oregon Division of Financial Regulation recently adopted the following rule:

ID 08-2018: Amendment of Process For Rate Filing for Individual and Small Employer Health Benefit Plans

Rules affected: OAR 836-053-0473, 836-053-0474

Amendment of Process For Rate Filing for Individual and Small Employer Health Benefit Plans

This proposed rule would codify the ability to reopen a previously closed comment period in response to an “intervening event”. Intervening events are primarily defined as actions taken by the Centers for Medicare and Medicaid Services, but could include other instances that materially impact prior rate decisions.

Filed: April 24, 2018

Effective: April 24, 2018


Permanent Administrative Order — http://dfr.oregon.gov/laws-rules/Documents/id08-2018_rule-order.pdf  

For more information, please visit the Division's website:



The Oregon Division of Financial Regulation recently adopted the following rule:

ID 09-2018 (temporary): Amendment to Standard Plans for 2019 to ensure compliance with House Bill 3391

Rules affected: OAR 836-053-0013

Amending to clarify the applicability of cost sharing and coverage updates to the standard plans.

Justification of Temporary Filing:

The coverage requirements of HB 3391 apply to plans issued or renewed in the individual or small employer market on or after January 1, 2019. Insures wishing to participate in these markets must file their 2019 plan offerings with the Department by May 16, 2018. The guidance provided in this temporary rule is necessary for carriers to make informed decisions on 2019 market participation and to complete the required regulatory filings timely. If the Department does not act, Oregonians may not receive the full scope of benefits to which they are entitled under the Insurance Code.

Filed: April 24, 2018

Effective: April 24, 2018 through October 20, 2018


Temporary Administrative Order — http://dfr.oregon.gov/laws-rules/Documents/id09-2018_rule-order.pdf

For more information, please visit the Division's website:



The Oregon Division of Financial Regulation recently announced the following Proposed Rulemaking hearing:

Standards and Process for Shortened Period of Market Prohibition

Rules affected: OAR 836-053-0014

To establish the standards and process for a shortened period of market prohibition for carriers that electively withdraw from a market in the state.

Filed: April 30, 2018

Public hearing: May 24, 2018 9:00 AM

Last day for public comment: May 31, 2018, 5:00 PM

The agency requests public comment on whether other options should be considered for achieving the rule's substantive goals while reducing the negative economic impact of the rule on business.

For more information on this proposed rule, please visit the Division's website:



Washington — Arthur J. Gallagher Buys ClearPoint: Arthur J. Gallagher & Co. has acquired ClearPoint Financial Inc. The terms were not disclosed for the purchase of the Bellevue, Washington firm.

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

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