California — State Farm Cuts Rate
California Insurance Commissioner Dave Jones has negotiated a deal with State Farm to drop rental policy rates by an average of 40%. Overall, the state’s renters will see a $101.1 million savings.
The agreement goes into effect on February 1st of next year.
“This is good news for the approximately 200,000 State Farm rental dwelling policyholders, most of whom will receive a rate reduction as a result. Thanks to our review and conclusion that the rates as first proposed were excessive, we have obtained from State Farm a record reduction that will enable small businesses and other rental property owners to keep more of their hard-earned money,” Jones said.
There is — however — a caveat. The decrease — and if a renter gets one — depends on a bunch of factors including the property location, risk factors of the insured and what’s being covered.
California — Calderon to Prison
Former California state Sen. Ron Calderon has received a prison sentence for taking bribes. He was found guilty of taking over $155,000 in payments in cash and other financial benefits to support or block legislation depending on the need of the payee.
Two others were involved in the crimes including Calderon’s brother Thomas.
At the sentencing by U.S. District Court Judge Christina Snyder Calderon pleaded to remain under house arrest instead or to at least get a reduced sentence. Prosecutors wanted him to get five-years.
The judge gave him 3 1/2 and with the sentences of Calderon’s brothers and their associates it brings an end to an ugly chapter in California politics. However, California State University, Los Angeles political science professor Jaime Regalado said the conviction of Calderon and his brothers and friends is important but it’s not likely to change anything.
“The public would like to think the convictions and sentences of Tom and Ron would help clean up Sacramento and the body politic, as well as strike fear in the hearts of legislators who are willing to engage in illegal gambits with the public’s money. But the reality is we’ve seen this time and again. … There’s a lot of greed that continues to go around, so this will be a drop in the pan,” he said.
Source link: Insurance Journal
California — Flash Flood Warnings
Bill Croyle of the California Department of Water Resources is warning residents and businesses near areas impacted by wildfire. He said the five years of drought make the areas prone to flooding and mudslides.
The state — as of mid-October — saw 6,726 fires that burned a total of 560,888 acres. Many are in rural areas while others border cities and towns.
Source link: Capital Press
California — Work Comp Edict
This came to Weekly Industry News from the California Department of Insurance.
Commissioner Dave Jones issued a formal finding today that costs to insurers in the workers' compensation system are declining. Jones asked that workers' compensation insurers pass those cost savings on to employers in the form of lower rates. Commissioner Jones today issued a workers' compensation advisory pure premium rate of $2.19 per $100 of employer payroll, which is 13.8 percent lower than the pure premium rates filed by workers' compensation insurer.
The commissioner has the authority to regulate auto, home and property insurance rates and has saved consumers and businesses $2.6 billion in rates by rejecting excessive rates or rate increases for those lines of insurance, but the Legislature has not given the commissioner the authority to regulate workers' compensation rates, and there is no requirement in state law that workers' compensation insurers pass onto employers any of the savings from SB 863 or any other workers' compensation reform laws that reduced costs in the system.
Instead, for workers' compensation rates the Legislature has limited the commissioner to issuing an advisory workers' compensation rate benchmark known as the pure premium rate benchmark. The pure premium rate reflects the insurers' costs in the workers' compensation system.
In his order setting the advisory pure premium rate, the commissioner asked workers' compensation insurers to reduce their prices for employers accordingly, but noted that the Legislature has not provided him the authority to require insurers to pass on the cost savings.
"Insurers' net costs in the workers' compensation system continue to decline as a result of SB 863 and other reform laws enacted by the Legislature and Governor Brown, which is good news," said Insurance Commissioner Dave Jones. "Workers' compensation insurers should pass these cost savings onto employers, but there is no legal requirement that they do so, and workers' compensation insurers continue to file pure premium rates that are higher than the pure premium rate warranted by their costs."
The Workers' Compensation Insurance Rating Bureau's (WCIRB) pure premium advisory rate filing for January 1, 2017, which includes insurers' experience data up to June 30, 2016, demonstrated that insurers continue to file pure premium rates that are higher than the projected cost of providing benefits and adjusting expenses. After reviewing the data filed by the WCIRB as well as testimony and information submitted by the public as a part of the public hearing held on the pure premium rate filing, the California Department of Insurance's review of the California workers' compensation insurance industry's costs concluded that insurers' filed pure premium rates are higher than needed to cover insures claims costs and claims handling expenses. The commissioner adopted this finding in his order.
This most recent pure premium advisory rate issued by the commissioner follows the pure premium benchmark rate he approved in May of this year, which was effective July 1, 2016, of $2.30 per $100 of payroll, which was 10.5 percent lower than the insurers' filed pure premium rates at that time. This most recent determination to lower the advisory pure premium rate benchmark is the fourth time since January 1, 2015, that the commissioner has found that costs are declining but that insurers filed pure premium rates are higher than the pure premium benchmark rate adopted by the commissioner.
The commissioner's newly issued pure premium rate includes projected savings as a result of recent anti-fraud legislation in SB 1160 and AB 1244, which limit the ability of medical and other service providers indicted or convicted of fraud in the workers' compensation system to pursue liens against insurers for alleged failure to reimburse medical expenditures incurred by the indicated or convicted medical or other services providers.
New Mexico — Work Comp Rates
New Mexico’s Office of the Superintendent said workers’ compensation rates will drop an average of 9% in 2017. It’s the second straight year of cuts.
Source link: Insurance Journal
Washington — Fines:
Weekly Industry News got this story from the Washington Department of Insurance.
Insurance Commissioner Mike Kreidler issued fines in September totaling $13,000 against insurance companies, agents and brokers who violated state insurance regulations.
For more information, search the order number on the Commissioner’s website.
Group Health Cooperative, Seattle; fined $5,000, order 16-0164
Group Health submitted changes to its rates more than two weeks late twice in March 2016. The company had already been warned, based on previous late filings, that the insurance commissioner would take enforcement action on future late filings.
Mount Vernon Abstract & Title Co., Burlington; fined $500, order 16-0193
The title company sent a bouquet of flowers to a real estate agency, which is against state insurance regulations. Title companies are not allowed to give gifts as a way to solicit business.
Hal E. Quinby, Snohomish; fined $6,000, order 16-0198
Hal Quinby is a licensed resident insurance producer. In 2006, he sold an annuity that was not approved for sale in Washington state. The consumer Quinby sold it to paid $100,000 for an annuity that guaranteed to pay $165,818 over 30 years via monthly payments of $406. In 2015, the consumer received a notice that the company, Trust Counselors Network Inc., would no longer be making payments because of a lack of money. The consumer received a total of $48,824 from the annuity. The company is currently in receivership after action by the U.S. Securities and Exchange Commission.
Artisan Risk and Insurance Services, Inc., Pasadena, Calif.; fined $500, order 16-0171
Artisan Risk is a nonresident surplus lines broker and is licensed to sell insurance in Washington state. The company’s license lapsed from November 2014 until February 2016. During the time it was unlicensed, it sold seven policies to four Washington customers with premiums of $189,620. The company discovered it was unlicensed when it was attempting to pay its premium taxes for 2015. The company contacted the Insurance Commissioner and started the process of renewing its license.
Audit Pros by Refundo, Elizabeth, NJ; ordered to cease and desist, order 16-0220
Refundo offered and tax audit insurance policies worth $2,500 to Washington consumers without being a licensed insurance producer or having an appointment with an insurer. The Insurance Commissioner contacted Refundo and asked it to remove Washington state from its website listing of states where it can legally sell insurance. The company agreed to update its website but had not yet done so at the time of the order.
Tire Factory, Portland, Ore.; ordered to cease and desist, order 16-0229
The Tire Factory sold warranties for its tires to Washington consumers without being registered as a service contract provider, as required by state law. From January 2014 to June 2016, the company sold 4,000 warranties to Washington consumers totaling $52,909. The company stopped selling the warranties at the end of June 2016.
Automotive Business Solutions, Inc., Westminster, Colo.; ordered to cease and desist, order 16-0230
Automotive Business Solutions, Inc., (ABS) administers road hazard and tire warranties that were sold at an online retailer, treaddepot.com, and through independent repair businesses that sell tires. The company was doing business in Washington without being registered as a service contract provider, as required by state law. The retailers that sell the warranties from ABS make a small percentage on each one and ABS administers claim payments. In 2014 and 2015, ABS was paid $606 for 17 road hazard plans that were sold through the online retailer and $8,909 for 330 hazard plans that were sold through independent repair facilities in Washington state. ABS agreed to stop selling plans to Washington consumers without being a registered service contract provider.
Old Republic Surety Co., Brookfield, Wisc.; fined $1,000, order 16-0231
Old Republic allowed 120 insurance producers’ appointments to lapse for 24 days in April and May 2015. During that time, 44 producers whose appointments had lapsed completed 136 transactions totaling more than $32,900 in written premiums. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer.
Prudential Insurance Co. of America, Newark, NJ; ordered to cease and desist, order 16-0245
In March 2016, a consumer submitted a complaint to the Insurance Commissioner about a clause in a long-term disability policy that violated state insurance regulations. The clause, called a discretionary clause, gave the insurer the sole discretion to interpret the policy terms or decide the eligibility for benefits. State insurance regulations do not allow long-term disability policies to contain discretionary clauses. In this complaint, Prudential used the discretionary clause to declare the policyholder no longer eligible for benefits. The Insurance Commissioner ordered Prudential to cease and desist from including discretionary clauses from its long-term disability policies.
Washington — Washington Department of Insurance priorities for the 2017 Legislature
Click here for a link outlining Washington Insurance Commissioner Mike Kreidler’s priorities for the 2017 Washington Legislature.