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PIA Western Alliance knows you want to be the best in the field, and the best way to stay on top is to stay informed. PIA Weekly Industry News Brief is an informative e-news brief that delivers the most relevant industry content.

 

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Inslee proposes 9% Capital Gains Tax — PIA will rally in Olympia to protest - affects Independent Agencies

Posted By staff reporter, Tuesday, January 15, 2019

See our preview video of this article: 

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https://www.piawest.com/blogpost/1199781/316255/Inslee-proposes-9-Capital-Gains-Tax--Washington-Businesses-Worry

Why should a Washington State capital gains tax bother PIA Western Alliance members in general? It’s just one state’s push to fill dwindling coffers. Other states have legislatures that are considering equally onerous measures.

As they pop up we will follow those as well.

In this case, any time a governor or a state Legislature begins the process of taxing the sale of a business at a level this high — and in this case the life’s work of a PIA member — it is a concern to all of us.

Washington Governor Jay Inslee has submitted a budget with two items that will heavily impact small businesses and with a Democratic Party super majority in both houses of the Washington Legislature, it will be a long, hard fight to defeat them.

The first piece is a 9% capital gains tax on the sale of a business. It has some exemptions but it applies to individual filers on a sale of over $25,000 or those filing jointly with a sale of over $50,000.

The second piece affecting businesses is a 66% jump in the B&O tax for the service sector. PIA Washington has been successful in defeating proposals to include its membership in the B&O tax. So this increase does not yet apply to licensed insurance professionals but will affect doctors, lawyers, architects and design professionals.

Members of PIA Washington/Alaska and the PIA Western Alliance will testify at a hearing on the 9% capital gains tax proposal on Wednesday, January 16th in Senate Hearing Room 4 in the Cherberg Senate Office Building.

The association is encouraging PIA members in Washington to attend that hearing.

PIA Washington lobbyist Mel Sorensen told Weekly Industry News that last year the governor wanted a 7% capital gains tax but couldn’t get it through. This year he wants 9% and has an excellent chance of getting the Legislature to approve the tax.

This is why this meeting is so important to PIA member agents and agencies.

“The capital gains tax would adversely impact many business owners — including PIA members who own their own businesses — because prospective capital gains from the sale of a business would be subject to the new 9% tax,” Sorensen said.

Sorensen said many member agents have spent their entire business careers building their business and this tax is very, very unfair and — in a way — punitive. The increased value of their agency is their life’s work and a life’s work ought not be attacked in this way.

And it is an attack.

“For many, they have spent their entire professional careers building their businesses.  The value in their business is frequently what they plan to rely on for their retirements.  It’s simply damaging to expose them to a new 9% capital gains tax. For these reasons, we oppose the Governor's proposal to enact a new 9% tax on Capital Gains in Washington State,” he added.

Here’s another problem with the proposal. It is based on an income tax system. Washington State’s constitution does not allow one.

“Federal law defines the measure of tax on NET capital gain income. Although the Governor's capital gains tax plan may call it an ‘excise tax and ‘for the privilege of selling or exchanging long-term capital assets, or receiving Washington capital gains,’ the departments of revenue for every state with a capital gains tax classify it as an income tax,” Sorensen noted.

And again, if possible — and if you are a PIA member in Washington State — please attend the meeting. It is Wednesday, January 16th in Senate Hearing Room 4 in the Cherberg Senate Office Building. 

Tags:  Inslee proposes 9% Capital Gains Tax; Inslee propo 

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PIA Oregon Forms Young Insurance Professionals Group

Posted By staff reporter, Tuesday, January 15, 2019

 OYIP First Event

 

The PIA Western Alliance is starting Oregon’s first young insurance professionals organization. It’s called Young Insurance Professionals association (YIP) and board member Shawn Carter of Capital Premium Finance said the purpose of the organization is to offer young agents the opportunity to develop professionally, network with peers, participate in industry activities and make positive contributions to the community.

“We want to help those coming into the industry for the first time to understand the different processes and the different ways they can grow and progress as an agent,” Carter said. “It’s an opportunity to network with other young agents.”

Carter noted while this is specifically created for people 35 and under, it also applies to those 35 and above that are new to the insurance industry. All attending the YIP events will benefit. Part of that benefit comes from involvement of older, more experienced PIA member agents and company members in YIP.

“The focus is to help the perpetuation of the industry. A lot of baby boomers are retiring now and we see a lot of agencies being handed down to a son or a daughter, or other family members,” Carter said. “This helps these young agents and the next generation of the industry with networking opportunities.”

 

The first meeting of the OYIPs

5:00pm to 8:00pm

RAM Breweries and Restaurant

515 SE 12th Street

Salem, Oregon 97301

 

PIA Oregon and the YIP leadership are looking for other leaders to fill important positions within the association. Needs range from committee members to YIP leadership.

Carter said the point of YIP is to present something new to attending agents during each event. This is practical, up-to-date information that can be immediately applied to the next work day and at client meetings.

 

Click here for more information on YIP and to join.

Tags:  Oregon Young Insurance Professionals  OYIP Event 

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​Bankruptcy — PG&E & California’s Wildfires

Posted By staff reporter, Tuesday, January 15, 2019

 

 

Pacific Gas & Electric says it is going to file Chapter 11 bankruptcy. Experts say the company will owe at least $30 billion for the deaths of dozens of people and damages it caused to thousands of homes in California wildfires in 2017 and 2018.

That price tag is a minimum. It will likely be much higher. 

The purpose of the Chapter 11 filing is to hold off creditors while still providing electric power and natural gas to its 16 million customers in Central California and Northern California.

The lawsuits will continue but with the filing, a bankruptcy judge will consider all of the claims in one proceeding. It also puts the claims on hold for awhile to buy PG&E some time to get its finances in order.

PG&E equipment is being investigated as the cause of the Camp Fire that destroyed Paradise, killed 86 people and destroyed 15,000 homes. The firm is also being blamed for downed power lines in Santa Rosa last year that killed 22 people and burned down thousands of more dwellings.

PG&E board chairman Richard Kelly said the reorganization is “the only viable option to address the company's responsibilities to its stakeholders. The Chapter 11 process allows us to work with these many constituents in one court-supervised forum to comprehensively address our potential liabilities and to implement appropriate changes.”

The company tried very hard to avoid bankruptcy by getting the California Legislature to to change the law that makes it totally responsible for fires even though it made every effort to make sure its equipment was properly maintained.

A Chapter 11 bankruptcy will allow PG&E to sell assets to raise cash more easily. Company interim CEO John Simon said, “We believe a court-supervised process under Chapter 11 will best enable PG&E to resolve its potential liabilities in an orderly, fair and expeditious fashion. We expect this process also will enable PG&E to access the capital and resources we need to continue providing our customers with safe service and investing in our systems and infrastructure."

Source link: The Press Democrat, NPR

Tags:  PGE bankruptcy 

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Trump & California Duel Over Wildfire Assistance

Posted By staff reporter, Tuesday, January 15, 2019

 

California Governor Gavin Newsom says the state will be on the financial hook for at least $923 million in damages for the wildfire that destroyed Paradise and other California communities last year.

That’s 25% of the overall damages. The federal government will cover the rest. Well, maybe the federal government will cover it. More on that in a bit.

Newsom is also asking the Legislature to approve $400 million to reduce the fuel available for fire in fire-prone areas and to improve the state’s ability to fight fire when it breaks out. He’s also seeking $60 million this year and next to improve emergency communications.

The governor asked President Trump to double the federal dollars the state needs to deal with wildfires and forest management. The president’s response was to threaten to withhold all federal dollars. He has been highly critical of California’s past management of forests.

Trump has — at least for the time being — ordered the Federal Emergency Management Agency (FEMA) to stop giving the state money until “they get their act together.”

In his tweet on the matter, Trump said, “Billions of dollars are sent to the State of California for Forrest fires that, with proper Forrest Management, would never happen. Unless they get their act together, which is unlikely, I have ordered FEMA to send no more money.”

He later corrected the misspelling of forest.

The new House of Representatives Minority Leader is California Republican Rep. Kevin McCarthy. He has defended the president’s comments on the state’s forest management but said he’s going to propose more funds for forest management in the spending bills being introduced to reopen the federal government.

What set the president off was a letter sent by Newsom and Washington Governor Jay Inslee and Oregon Governor Kate Brown asking for double the federal funding. The governors pointed out that over half of California’s 33 million acres of forest is federal land and the dollars available for forest management has been going down since 2016.

“Our significant state-level efforts will not be as effective without a similar commitment to increased wildland management by you, our federal partners,” the letter said.

Newsom also said by itself California has promised to double its spending by $1 billion over the next five-years. “Disasters and recovery are no time for politics. I’m already taking action to modernize and manage our forests and emergency responses,” Newsom tweeted. “The people of CA — folks in Paradise — should not be victims to partisan bickering.”

California Sen. Dianne Feinstein backed Newsom and the West Coast governors.

“It’s absolutely shocking for President Trump to suggest he would deny disaster assistance to communities destroyed by wildfire,” she said. “Attacking victims is yet another low for this president.”

Source links: The Tribune, Insurance Journal, PropertyCasualty360.com

Tags:  president trump  Trump  wildfires 

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Insurance Rates — 2018’s Fourth Quarter

Posted By s, Tuesday, January 15, 2019


Both MarketScout and the IVANS Index have released statistics for the last quarter of 2018. Both groups say nearly all commercial insurance lines saw rate increases.

The data firm IVANS — who gathers data from 32,000 agencies and 380 insurers — said the only real area of concern is workers’ compensation. The average rate dropped and is still in the negative but commercial auto, general liability, commercial property and umbrella all saw rates rise.

 

Here are the highlights of the IVANS report:

Commercial Auto: Rates rose 4.66% in the fourth quarter. October’s 4.81% jump was the highest and December’s 4.51% the lowest.

Business Owners Policy: The average change for the quarter was 4.23%. That’s up from the 4.13% of the third quarter.

General liability: The average jump in the fourth quarter is 2.54%.

Commercial property: The average increase was 3.74% compared to 3.34% in the third quarter. December’s 3.95% was the highest jump.

Umbrella: Rates are up 2.42% compared to the third quarter’s 1.93%. The 2.76% rise in November is the highest increase.

As for worker’s compensation, it was in the negative all year. The average change in the quarter is minus 3.04%. That’s down from the terrible drop of 2.76% in the third quarter. Another negative is workers’ compensation rates were worse in all of 2018 than what we experienced in 2017.

May of 2017 was the last increase in workers’ compensation rates.

IVANS vice president Brian Wood said, “The end of 2018 experienced the greatest change in premium renewal rates from the year prior for nearly all major commercial lines products.”

MarketScout’s CEO Richard Kerr said all commercial lines had a rate rise averaging 2% in the fourth quarter. He said by industry class, transportation saw the biggest increase at 6% and contractors rose 2.5%.

“Ample capacity remains in the commercial insurance market. Rates for all coverage classifications other than workers compensation are increasing at a controlled, slow pace,” Kerr said. “Only transportation and commercial auto exposures are suffering large rate increases.”

As for overall accounts in the fourth quarter:

  Small accounts (up to $25,000 in premium) saw a 2.5% jump

  Medium accounts ($25,001 to $250,000) showed rates rising 1.5%

  Large accounts ($250,001 to $1 million) saw rates rise 2.5%

  Jumbo accounts ($1 million or more) found rates up 2%

 

Source links: Insurance Journal, Business Insurance

Tags:  insurance content  insurance rates  IVANS report  liability 

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Cyber Scams — Americans Lose $18 Billion in 2018

Posted By staff reporter, Tuesday, January 15, 2019

 

Scam artists used a variety of sophisticated schemes to separate Americans from their money in 2018. Those schemes resulted in the loss of a whopping $18 billion to consumers and individuals in the U.S. last year.

That information comes courtesy of Website Builder Expert (WBE). It is a website building and launching platform. WBE came to its conclusions from data produced by the FBI’s Internet Crime Report and from the Insurance Information Institute (I.I.I.).

WBE — as well as most of us — finds the the $18 billion lost shocking. It’s even more shocking when you consider the billions spent each year to combat cybercrime and make websites and other Internet sources safe.

Apparently — and obviously — those measures are not working all that well.

WBE used the statistics from the two reports that show individual complaints to determine which states are most vulnerable and which are the safest. Two PIA Western Alliance states — California and Washington — are on the list of the most vulnerable.

Vermont is the safest. California the least.

 

Here are the stats for the two PIA Western Alliance states in the top-15:

 

1. California

  2018 complaints — 55,774

  Average growth per year in reported crimes — +515

  Average cost per incident — $5,900

 

15. Washington

  2018 complaints — 9,011

  Average growth per year in reported cybercrime — +351

  Average cost per reported incident — $3,572

 

Ironically, WBE says California — unfortunately — will likely have more cyber complaints in 2019 than the bottom 27 states

 

Here’s the list of the 15 most vulnerable states:

1. California

2. Florida

3. Texas

4. Michigan

5. New York

6. Illinois

7. Pennsylvania

8. Georgia

9. Ohio

10. New Jersey

11. North Carolina

12. Virginia

13. Missouri

14. Maryland

15. Washington

The cybersecurity firm McAfee released a report late last year that says cybercriminals are putting out 480 new threats per minute. That frightening statistic comes from

McAfee Labs Threats Report: December 2018.

McAfee’s lead scientist Christiaan Beek said malware attacks were up 73% in the third quarter of 2018.

“Cybercriminals are eager to weaponize vulnerabilities both new and old, and the number of services now available on underground markets has dramatically increased their effectiveness,” he said. “As long as ransoms are paid and relatively easy attacks, such as phishing campaigns, are successful, bad actors will continue to use these techniques.”

 

Source links: PropertyCasualty360.com, Venture Beat

Tags:  cyber scams  cyber security 

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Volcanoes in the U.S. — A Mountain of Danger

Posted By staff reporter, Tuesday, January 15, 2019

 

We all know about Hawaii’s Kilauea volcano and the problems it has been causing in that state. It’s not stable but it’s also not the classic mountain. In fact, we tend to think of the mountains as being permanent and safe.

They are anything but safe and as those living around Washington State’s Mt. St. Helens on May 18, 1980 will tell you, they can be downright dangerous.

All that said, the U.S. Geological Survey says there are 18 volcanoes in the United States that are a very high threat. Mt. St. Helens is number-two on the list followed by Washington’s Mt. Rainier.

Janine Krippner is a volcano expert from West Virginia’s Concord University. She said, “This report may come as a surprise to many, but not to volcanologists. The USA is one of the most active countries in the world when it comes to volcanic activity.”

How dangerous a volcano is is based on several factors:

  How explosive can it be?

  How recently has it erupted?

  How often does it erupt?

  Is there current seismic activity around the volcano?

  How many people are nearby?

  How difficult is an evacuation?

  Will an eruption disrupt air traffic?

For those of us in the PIA Western Alliance, the report says 11 of the 18 most dangerous volcanoes in the country are in Oregon, Washington and California. Mt. Rainier is probably the most dangerous since about 300,000 people are in the volcano’s hazard zone.

Here are the most dangerous volcanoes in the nation:

1. Kilauea — Hawaii

2. Mt. St. Helens — Washington

3. Mt. Rainier — Washington

4. Redoubt Volcano — Alaska

5. Mt. Shasta — California

6. Mt. Hood — Oregon

7. Three Sisters — Oregon

8. Akutan Island — Alaska

9. Makushin Volcano — Alaska

10. Mt. Spurr — Alaska

11. Lassan Volcano Center California

12. Augustine Volcano — Alaska

13. Newberry Volcano — Oregon

14. Mt. Baker — Washington

15. Glacier Peak — Washington

16. Mauna Loa — Hawaii

17. Crater Lake — Oregon

18. Long Valley Caldera California

Most of the others 19 - 41 are in Alaska

 

Source links: US News & World Report, US Geological Survey

Tags:  insurance content  natural disaster  Volcanos 

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Special Report: Wildfire, Insurers & Homeowners

Posted By staff reporter, Tuesday, January 15, 2019

 

 

Munich Re said in 2018 insurers spent one out of four of its claims dollars on forest fires. The reinsurer’s chief climatologist Ernst Rauch blames climate change.

“Higher and higher temperatures are leading to ever greater droughts, and high humidity in the winter means that shrubbery grows quickly, creating an easily flammable material in dry summers,” he said.

His conclusion is that areas of high risk ought not be populated, and that homes need to be built farther from forests and built with better safety standards. That led to discussion of the Paradise, California fire. It was the most expensive natural disaster in 2018 with losses of $16.5 billion.

Of that figure, $12.5 billion are insured losses.

Worldwide, Munich Re noted that last year natural disasters caused $160 billion in economic damage. That’s down from $350 billion in 2017. Insurers and reinsurers paid $80 billion in natural disaster claims last year compared to the $140 billion the year before.

While that’s good news, Munich Re board member Torsten Jeworrek disaster losses in 2018 doubled the 30-year average of $41 billion.

“These include the unusual coincidence of severe cyclones in the U.S. and Japan, and devastating forest fires in California,” he said.

That led to a comment that insurers paid out $18 billion for two huge fires in the United States last year which is one in every four — or 25% — of insurance claims dollars. However, when those claims are filed, many homeowners are going to find they do not have enough insurance to pay for the cost of rebuilding their home.

A survey from the research firm Marshall & Swift/Boeckh found that 60% of homeowners in the U.S. are underinsured by 17%. Or to put it another way, that’s $34,000 under the average cost of rebuilding a home.

That figure is $200,000.

Surveys in California show more than half of the past fire victims are underinsured. Last year, former California Insurance Commissioner Dave Jones noted, “The cost of rebuilding is going to be far beyond what people are insured for.”

The Insurance Information Institute (I.I.I.) says most homeowners have no idea they are underinsured. That’s because few people experience a total loss of their property. In any given year — says the I.I.I. — just 6% experience any kind of insurance claim.

The chance that a home will be totally destroyed is much smaller than the 6%.

The rising cost of construction is the main factor in that conclusion. Insurers will typically adjust for inflation but construction figures rise much more quickly. The average annual increase between 2013 and 2016 hit 5.8% — or four-times more than inflation in the U.S.

Translation — the longer a homeowner owns the home, the more likely the original insurance policy will not pay out enough to rebuild. Plus, those same people are likely to make upgrades to the property that they fail to tell their independent insurance agent and their insurer.

The I.I.I. also notes those covered by a traditional homeowners policy ought to investigate acquiring other types of insurance that will cover wind and flood damage.

Consumer advocates say that insurers should to be responsible for making sure a property is properly insured. Insurers believe — says I.I.I. spokeswoman Janet Ruiz —  that’s really up to the homeowner.

“The reason why it ends up coming back to the homeowner is because you know your individual homes,” she said. And while courts tend to agree with her conclusion, many legislatures are not.

In California insurers are now required to provide homeowners with cost-replacement estimates each year. Homeowners — however — are still required to ask for increased coverage once they receive that information. 

Other state legislatures are expected to start looking at similar laws.

Source links: Carrier Management, PBS News Hour

Tags:  Insurers & Homeowners  Munich Re  Wildfire 

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Around the PIA Western Alliance States

Posted By staff reporter, Tuesday, January 15, 2019

 

Arizona

Work Comp

 The Arizona Supreme Court said the state’s automatic assignment provision does not apply when employees are receiving workers’ compensation benefits from another state.

That state’s laws apply to the individual and not Arizona’s.

The case comes from 2014 and involved a South Carolina resident who is a semi-truck driver. The company she was driving for contracted with an Arizona company to provide training. A claim filed for an accident was the issue.

Source link: PropertyCasualty360.com

 

California

Insurance Commissioner’s Take on Wildfire

 Ricardo Lara took office as California Insurance Commissioner at a ceremony in Sacramento on Monday, January 7, pledging to help Californians recover from wildfires while defeating the threat of climate change.

Commissioner Lara is the eighth Insurance Commissioner of California since voters created the position in 1988.

Commissioner Lara is the first openly LGBTQ+ person to be elected to statewide office in California. U.S. Judge Vaughn R. Walker administered the oath of office. Judge Walker wrote the decision in Perry v. Schwarzenegger in 2010, overturning Proposition 8 and allowing marriage equality in California.

"California's Department of Insurance is the largest state consumer protection agency in America," said Commissioner Lara. "We are the Department of Fair Deals, the Department of Fresh Starts, the Department of Rebuilding Your Home, the Department of Protecting your Investment, and the Department of the Sun Will Come Out Tomorrow. In short, we are the Department of Hope, and we have never been more important."

He pledged to protect the victims of wildfires and other disasters, defend all Californians from the threat of climate change and insurance scams, and promote innovation and technology.

"Our seniors, people living in poverty, and immigrant communities are targets of con artists and scams. Our entrepreneurs face economic uncertainty. Millions of us live one emergency room visit away from financial ruin. We cannot deny that with climate change, California faces a threat like never before," said Commissioner Lara."

Commissioner Lara announced the creation of a Deputy Commissioner of Climate and Sustainability, a first for the department, to work with environmental and industry leaders on innovative solutions to the risk of climate change.

"To the insurance industry - I ask you to join me in this fight against extreme disasters linked to climate change. We need bold action to ensure our communities adapt and are resilient to this new reality," said Commissioner Lara. "There is no other industry that has the necessary expertise to ensure that California is prepared to mitigate and reduce risk to our communities and environment. Our planet can't wait. I am ready, and I hope you are too."

Commissioner Lara took the oath of office on a facsimile of California's first Constitution from 1849 in its original Spanish translation. For California's first 30 years as a state, all laws were translated into Spanish, starting with the Constitution. As the son of two immigrant parents from Mexico, Commissioner Lara grew up in a bilingual house and has been a champion for multilingual learning.

Commissioner Lara was first elected to the California State Legislature in 2010 and represented the 33rd Senate District from 2012 to 2018.

As Senator, he won healthcare for more than 250,000 California children and introduced universal healthcare legislation.

Commissioner Lara said he would work with the new administration of Governor Gavin Newsom to expand access to health care.

"To Governor Newsom - I am excited to be your partner in expanding affordable healthcare for every Californian," said Commissioner Lara. "There is nothing we cannot achieve with our new common agenda. We stand ready for your California4All vision."

Source link: California Department of Insurance

 

Commissioner Pledges Help

 California Insurance Commissioner Ricardo Lara attended Governor Gavin Newsom's first budget release, pledging to support his health care and fire mitigation initiatives.

"When California passed the Health4All budget plan almost four years ago to cover undocumented children, we did the right thing for our state," said Commissioner Lara. "Extending Medi-Cal coverage to all those eligible up to age 26 is the right action today. Governor Newsom's budget will tackle the cost crisis of prescription drugs, strengthen Covered California and make health care more affordable for all."

Commissioner Lara announced that the California Department of Insurance is prepared to expedite any changes needed to implement expanded subsidies and prescription drug cost savings for Covered California plans that it regulates. The Department issued its first Prescription Drug Cost Transparency Report on January 2, showing that prescription drugs are 13.4 percent of premium costs in the state.

Governor Newsom's health care proposal builds on efforts to expand health coverage through Health4All that Commissioner Lara led as a legislator.

"The long-term success of our state depends on healthy young people and a strong workforce. Our policies should be driven by the needs of Californians, not the rhetoric from Washington," added Commissioner Lara. "California has the right to determine our own future, and we will do that. As I said to Governor Newsom the day I was sworn in -- I am excited to be your partner in expanding affordable health care for every Californian."

Wildfire mitigation proposals will save lives and reduce losses.

Commissioner Lara also praised the plan to boost wildfire-mitigation measures using $200 million from the state's signature climate cap and trade initiative. More than 85 Californians died and communities experienced $9 billion in insured losses due to last year's firestorms. Insurers are expected to report updated loss numbers to the Department of Insurance this month.

"By investing in wildfire mitigation and early warning, Governor Newsom's budget will save lives," said Commissioner Lara. "We will need sustained funding to succeed in our fight against wildfire."

The federal shutdown has affected prescribed burn projects that reduce fuels in high-risk federally owned areas.

"With the federal shutdown limiting prescribed burns in the state, the winter weather window is closing to reduce wildfire risk for next year," said Commissioner Lara. "California's mitigation measures are critical to limiting future risk to homes and property. We cannot afford to miss these opportunities."

Commissioner Lara authored SB 30 (Chapter 614, Statutes of 2018) as a member of the California Senate, the nation's first climate insurance law that seeks to safeguard natural infrastructure such as forests and wetlands that can act as a barrier to disasters linked to global warming.

Budget boosts funding for Department of Insurance fraud investigations and long term care mandate.

Commissioner Lara also thanked Governor Newsom for providing $2,805,000 to fund workers' compensation fraud investigations and prosecution workload increases for local district attorneys. This increase is consistent with the increased assessment approved by the state's Fraud Assessment Commission last September.

The budget also includes $756,000 to comply with the mandates of AB 2395 (Chapter 651, Statutes of 2018, Calderon) requiring insurers with long term care contracts to file annual financial disclosure reports to the California Department of Insurance, among other requirements.

The California Department of Insurance anticipates collecting approximately $2.5 billion in premium tax revenue -- of which all insurance companies are subject to a tax on gross premiums -- that is to be remitted to the state's General Fund.

Source link: California Department of Insurance

 

Oregon

Department of Insurance: Draft 2020 filing deadlines

 Based on the Center for Medicaid and Medicare Services’ (CMS) deadline for final plan data submission for 2019 plans, the Division of Financial Regulation (DFR) has prepared the following draft timeline for submission of 2020 form, rate, and binder filings. The filing deadlines apply to health benefit plans and exchange certified pediatric dental offered on-exchange and off-exchange. Dental products that will not be exchange certified are not required to follow this timeline.

DFR is providing these preliminary deadlines for planning purposes but issuers are advised that we are still awaiting final federal due dates for 2020 plans. We will respond and adjust to changes in federal due dates as necessary.

2020-filing-timelines.pdf — https://content.govdelivery.com/attachments/ORDCBS/2019/01/09/file_attachments/1134966/2020-filing-timelines.pdf

Visit our Health Filing Requirements page for more information:

https://dfr.oregon.gov/rates-forms/health/Pages/health.aspx

Bulletin: DFR 2019-01: Use of Corporate and Assumed Business Names by Insurers

Summary: The purpose of this bulletin is to clarify the requirements and procedures relating to the use of corporate and assumed business names by insurers. For purposes of this bulletin, "insurers" includes health care service contractors. Questions about these issues have arisen from insurers in connection with:

Recommendations contained in market conduct examinations, and

Changes in ownership of insurers.

Insurance Division Bulletin 96-5 has been withdrawn and replaced with this bulletin.

Oregon Division of Financial Regulation Bulletin DFR 2019-01 — https://dfr.oregon.gov/laws-rules/Documents/Bulletins/bulletin2019-01.pdf

To read this and other bulletins and get more information, please visit the Division of Financial Regulation's Bulletins page at: https://dfr.oregon.gov/laws-rules/Pages/bulletins.aspx

Request for participants for legislative interest group meetings

The Division of Financial Regulation will host interest groups during the legislative session to share information regarding pending bills and welcome discussion and questions about legislation that is pending. These are informal discussions and you may join us here at the labor and industries building or by teleconference.

Groups for this session will be divided into three general areas:

Property, Casualty, Workers' Compensation And Life Insurance

Health Insurance

Finance

If you are interested in participating Please email us at: INS.Rules@Oregon.gov

When you respond, please indicate the area(s) of interest that you wish to participate in.

We will be setting up the initial forums soon and you will receive information about the scheduled meetings and or information to call in. With each meeting we will try to provide a current run of bills that are actively being tracked by the division. We welcome your thoughts, your questions and your participation.

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

ID 01-2019: Update to adoption of the Valuation Manual for principle-based reserving

Rules affected: OAR 836-031-0605

Rule Summary:

Refile to use rule text of the Notice of Proposed Rulemaking. There are no substantive changes.

Filed: January 4, 2019

Effective: January 4, 2019

Documents:

Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id01-2019_rule-order.pdf

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

https://dfr.oregon.gov/laws-rules/Pages/adopted-rules.aspx

 

Washington

Kreidler to State’s GOP House members must honor promise on pre-existing medical protection

Washington Insurance Commissioner Mike Kreidler today called on the state’s three Republican congressional representatives (PDF, 165 KB) to protect people who need treatment for pre-existing medical conditions.

In a letter to Reps. Cathy McMorris-Rogers (Spokane), Jaime Herrera-Beutler (Camas) and Dan Newhouse (Sunnyside), Kreidler urged them to support a congressional challenge to a recent court ruling against the Affordable Care Act.

The U.S. House of Representatives has scheduled a vote Jan. 9 to protect Americans from losing benefits of the Affordable Care Act. 

A recent federal court ruling, if upheld, would strip Americans of many protections in the existing law. That includes the guarantee of health coverage even if a person has a pre-existing medical condition.

“I’m calling on these representatives to defend the Affordable Care Act and keep their promises to protect their constituents,” Kreidler said. “This should not be another typical party-line vote. It’s time to put people over party alignment. Their votes will be a telling comment on where they really stand.”

Source link: Washington Department of Insurance

 

Deputy Commissioner

Insurance Commissioner Mike Kreidler announced that Candice Myrum will serve as the agency’s Deputy Commissioner for Policy and Legislative Affairs.

She previously served as the Policy and Rules Manager for the Policy and Legislative Affairs division. She joined the Office in 2014 as the Litigation Manager in the Legal Affairs Division. The OIC is recruiting for a Rules Manager to replace Candice.

Candice's background includes work at the Washington State Department of Labor and Industry in both the State Fund and Self-Insured Programs and work in the private sector in insurance services and legal services. 

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A 9% Business Capital Gains Tax — Washington Small Businesses Worry

Posted By staff reporter, Monday, January 14, 2019




Why should a Washington State capital gains tax bother PIA Western Alliance members in general? It’s just one state’s push to fill dwindling coffers. Other states have legislatures that are considering equally onerous measures.

As they pop up we will follow those as well.

In this case, any time a governor or a state Legislature begins the process of taxing the sale of a business at a level this high — and in this case the life’s work of a PIA member — it is a concern to all of us.

Washington Governor Jay Inslee has submitted a budget with two items that will heavily impact small businesses and with a Democratic Party super majority in both houses of the WashingtonLegislature, it will be a long, hard fight to defeat them.

 

The Impact

The first piece is a 9% capital gains tax on the sale of a business. It has some exemptions but it applies to individual filers on a sale of over $25,000 or those filing jointly with a sale of over $50,000.

 

The second piece affecting businesses is a 66% jump in the B&O tax for the service sector. PIA Washington has been successful in defeating proposals to include its membership in the B&O tax. So this increase does not yet apply to licensed insurance professionals but will affect doctors, lawyers, architects and design professionals.

 

What is the PIA doing about it?

Members of PIA Washington/Alaska and the PIA Western Alliance will testify at a hearing on the 9% capital gains tax proposal on Wednesday, January 16th in Senate Hearing Room 4 in the Cherberg Senate Office Building.

The association is encouraging PIA members in Washington to attend that hearing.

PIA Washington lobbyist Mel Sorensen told Weekly Industry News that last year the governor wanted a 7% capital gains tax but couldn’t get it through. This year he wants 9% and has an excellent chance of getting the Legislature to approve the tax.

This is why this meeting is so important to PIA member agents and agencies.

“The capital gains tax would adversely impact many business owners — including PIA members who own their own businesses — because prospective capital gains from the sale of a business would be subject to the new 9% tax,” Sorensen said.

Sorensen said many member agents have spent their entire business careers building their business and this tax is very, very unfair and — in a way — punitive. The increased value of their agency is their life’s work and a life’s work ought not be attacked in this way.

And it is an attack.

“For many, they have spent their entire professional careers building their businesses.  The value in their business is frequently what they plan to rely on for their retirements.  It’s simply damaging to expose them to a new 9% capital gains tax. For these reasons, we oppose the Governor's proposal to enact a new 9% tax on Capital Gains in Washington State,” he added.

 

Here’s another problem with the proposal.

It is based on an income tax system. Washington State’s constitution does not allow one.

“Federal law defines the measure of tax on NET capital gain income. Although the Governor's capital gains tax plan may call it an ‘excise tax and ‘for the privilege of selling or exchanging long-term capital assets, or receiving Washington capital gains,’ the departments of revenue for every state with a capital gains tax classify it as an income tax,” Sorensen noted.

 


If you are a PIA member in Washington State — please attend the meeting. It is Wednesday, January 16th in Senate Hearing Room 4 in the Cherberg Senate Office Building. 

Tags:  A 9% Business Capital Gains Tax — Washington Small 

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