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Around the PIA Western Alliance States

Posted By Staff Reporter, Tuesday, November 6, 2018


California

Proposition 103: From the California Department of Insurance

 Insurance Commissioner Dave Jones announced that Proposition 103, which became law 30 years ago, has saved California drivers $154 billion on their auto insurance and has lowered auto liability premiums in California by 5.7 percent according to an analysis by Consumer Federation of America.

 

Proposition 103, passed by California voters in November 1988, establishes the Insurance Commissioner's authority to reject excessive rate increases sought by insurance companies. The law requires the "prior approval" of California's Department of Insurance (CDI) before insurance companies can implement property and casualty insurance rates. Prior to Proposition 103, automobile, property and casualty insurance rates were set by insurance companies without approval by the Insurance Commissioner.

 

"As insurance commissioner and the leader of the largest consumer protection agency in the state, my top priority is protecting consumers," said Insurance Commissioner Dave Jones. "California voters gave me the responsibility under Proposition 103 to make sure that insurance companies do not charge consumers rates that are excessive. I am proud that actions by my department has continued to protect consumers and save them billions of dollars by lowering insurance rates."

 

Since Commissioner Jones took office in 2011, the CDI has processed over 54,000 property and casualty insurance rate filings under Proposition 103, reduced the overall amount of requested rate increases by $1.5 billion and obtained over $1.9 billion in rate reductions, totaling over $3.4 billion in savings to California consumers and businesses. This total includes approximately $1.26 billion in rate reductions for personal auto coverage and $947 million in rate reductions for personal homeowners' coverage.

 

Last year the department's consumer hotline received over 147,000 calls for assistance. Through the department's complaint handling efforts, staff recovered more than $62.4 million for consumers in 2017. Additionally, the department performed 125 market conduct examinations, resulting in more than $18.9 million in recovered claims or premiums being returned to consumers. Since Commissioner Jones took office in 2011, more than $469 million has been returned to consumers through consumer complaint investigations and market conduct examinations of insurance companies.

 

Pre-Emptive Wildfire Outage

 A couple of weeks ago Pacific Gas & Electric decided to cut power to 60,000 customers. The forecast in the area said winds would hit 25 to 45 miles per hour. That made it a danger to power lines and downed power lines start wildfires.

 

It is the first time the company has cut power over wind worries. PG&E is being blamed for several of the devastating wildfires that hit California a couple of years ago and is on the line for $13 billion or more in damages and deaths.

 

The power cuts caused customers some damages and 146 of them are demanding reimbursements. Food damage losses are the main reason.

 

Source link: Insurance Journal

 

Workers Comp Coverage Pricing

 Workers’ compensation insurance rates are falling in California. The combined ratio — however — is rising. The average per $100 of payroll premium price is $2.35. That is 7% below the 2017 average rate.

 

While it looks good rate wise, the combined loss and expense ratio is predicted to be 88% which is four points higher than the 2016 level.

 

This info comes from Workers’ Compensation Insurance Rating Bureau of California (WCIRB).

 

Source link: Business Insurance

 

Oregon

From the Department of Insurance

 Update to Adoption of the Valuation Manual for Principle-based Reserving

Rules affected: OAR 836-031-0605

Rule Summary:

Designates the version of the Valuation Manual insurers must use in establishing principle-based reserves beginning January 1, 2019, and confirms that the operative date of the Valuation Manual is January 1, 2017 under section 16(2) of Oregon Laws 2015 chapter 547.

Need for Rules:

Insurers in Oregon, like other states, must keep sufficient capital in reserve in order to pay claims, and use actual experience of policyholders when calculating claims reserves by means of principle-based reserving. The Director is authorized to prescribe use of the Valuation Manual, developed by the National Association of Insurance Commissioners (NAIC), to make those calculations, and has done so through rulemaking. To the extent that the NAIC revises the Valuation Manual from time-to-time, adoption of the Valuation Manual is updated accordingly. This rulemaking designates the version of the Valuation Manual insurers must use in establishing principle-based reserves beginning January 1, 2019, and confirms that the operative date of the Valuation Manual is January 1, 2017 under section 16(2) of Oregon Laws 2015 chapter 547.

Filed: October 29, 2018

Public hearing: November 27, 2018 9:00 a.m.

Last day for public comment: December 4, 2018, 5 p.m.

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:

dfr.oregon.gov/laws-rules/Pages/proposed-rules.aspx

 

Update to morbidity standards for valuation of individual and group health insurance policies

Rules affected: OAR 836-031-0270

Rule Summary:

The rule sets forth the minimum standards to be used by insurers for the valuation of specified benefits, and the computation of contract reserves and claim reserves, for individual and group health insurance policies.

Need for Rules:

ORS 733.080 requires insurers to maintain reserves for health insurance policies “which place a sound value on its liabilities under such policies and which are not less than the reserves according to appropriate standards set forth in rules issued by the Director of the Department of Consumer and Business Services.” Adoption of such standards establishes clear guidelines for the industry and regulator alike and increases consumer protection through greater assurance of adequate reserves.

Filed: October 26, 2018

Public hearing: November 27, 2018 10:00 a.m.

Last day for public comment: December 4, 2018, 5 p.m.

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.

 

Implementing the Oregon Reinsurance Program

Rules affected: OAR 836-150-0010, 836-150-0020, 836-150-0030, 836-150-0040, 836-150-0050, 836-150-0060

Need for Rules:

These rules adopt definitions, reporting requirements, and payment processes for the Oregon Reinsurance Program, which was established by the Oregon Legislature in 2017 (Enrolled House Bill 2391). The rules also establish the attachment point, coinsurance rate, and reinsurance cap that will be used to calculate payments under the program for benefit years 2018 and 2019. The rules are necessary to ensure that the program is administered in a fair and equal manner for all participating issuers and to ensure that the program achieves its purposes of stabilizing rates and premiums for individual health benefit plans and providing greater financial certainty to consumers of health insurance in Oregon.

Filed: October 29, 2018

Public hearing: November 27, 2018 11:00 a.m.

Last day for public comment: December 4, 2018, 5 p.m.

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:

dfr.oregon.gov/laws-rules/Pages/proposed-rules.aspx

 

Washington

From the Department of Insurance: Valuation of the Stock of a Subsidiary rule adopted

The rule takes effect on 11/25/18. The rule will amend WAC 284-16-150 through WAC 284-16-190 regarding the valuation of a stock of a subsidiary of a domestic insurance company to be compatible with the current version of the Insurance Holding Company Act.

For more information, including the adopted rule (CR-103) and the concise explanatory statement, please visit the rule's webpage. https://www.insurance.wa.gov/valuation-stock-subsidiary-r-2018-07

 

Eleven insurers approved to sell 74 plans in Washington's 2019 individual market

Washington state Insurance Commissioner Mike Kreidler has approved 11 health insurers to sell 74 plans in Washington's 2019 individual health insurance market. Health insurers requested a 19.44 percent average increase, but Kreidler’s office determined that only 13.57 percent was justified. All 39 counties in the state will have at least one Exchange insurer. 

“I’m grateful increases are down from last year and that we’re seeing some moderation of rate changes, but I know these costs may be hard for many to afford — especially if they don’t qualify for subsidies," said Kreidler. “Unfortunately, the Trump administration is focused on sowing uncertainty in the insurance markets and insurers are reacting. In addition, his administration and Congress have failed to address the underlying costs of health care in this country and until they do, individuals and businesses buying health insurance will be impacted.”

For more info: https://www.insurance.wa.gov/news/eleven-insurers-approved-sell-74-plans-washingtons-2019-individual-market?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

Tags:  Around the PIA Western Alliance States  insurance content  pia western alliance  Weekly Industry News 

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