California — Drought Might be Ending
The Sierra Nevada in California has seen record-breaking snowfall this winter. Two blizzards dropped snow that made the snowpack 173% above what is considered average.
California’s Department of Water Resources spokesman Frank Gehrke said, “It gives everything a brighter outlook.” But brighter outlook or not, Governor Jerry Brown won’t decide until sometime in April when the Spring rains come whether to drop the state’s drought emergency designation.
Source link: VOA News
California — Death Master File Settlement
This came to Weekly Industry News from the California Department of Insurance.
Insurance Commissioner Dave Jones announced a multistate $1.5 million settlement agreement with RiverSource Life Insurance Company, a wholly owned subsidiary of Ameriprise. Ameriprise has agreed to use the Social Security Death Master File database to identify life insurance policyholders who have died and then to search for and pay benefits to their beneficiaries.
"The Ameriprise settlement brings the total to 28 major life insurers that are doing the right thing for policyholders," said Insurance Commissioner Dave Jones. "Ameriprise has set a great example through the examination process by fully cooperating and agreeing to change their practices to benefit their policyholders. I strongly urge other life insurers to follow Ameriprise's lead."
Insurance Commissioners for California, North Dakota, Florida, New Hampshire, and Pennsylvania have led the national investigation into life insurers' use of the Social Security Administration's Death Master File database, which came about after it was discovered life insurers used the database to their benefit to identify deceased annuity holders, so they could stop making payments to them, but failed to use the database to identify deceased policyholders so that benefit could be paid to their beneficiaries. The practice violated California's Unfair Insurance Practices Act and similar laws in other states.
To date, state insurance regulators have either reached settlements or concluded the investigation of 28 of the top 40 companies and as a result life insurers have paid $7.3 billion to life insurance beneficiaries nationwide.
Montana — Punitive Awards
The Montana House of Representatives has passed a measure to reduce the amount of punitive damages a court can award. Currently the cap for a company or a business is the greater between $10 million or 3% of the defendant’s net worth. The 60 to 40 vote says punitive damages cannot be more than three-times what a plaintiff will get in actual, or compensatory damages.
Business groups like the bill because they believe it will attract businesses to Montana.
Source link: Insurance Journal
Nevada — State on Insurance Data
The Nevada Department of Insurance has sent out a bulletin to insurers designed to reduce the use of some analytics models. It is Bulletin 17-001 and it — quote — remind[s] insurers that any mathematical model used in underwriting or rating of any personal line of property and/or casualty insurance, or other line of property and/or casualty insurance subject to regulation of rates ... [must] be filed with the Division for approval.
More specifically, the bulletin defines this as “any underwriting rule or model used in underwriting that affects the premium that any insured would pay.”
This is a practice that 19 states have banned and that the National Association of Insurance Commissioners (NAIC) is targeting and has written a white paper about.
falls under this requirement. The clarification pulls under the regulatory umbrella practices that related to so-called "price optimization," a controversial practice that has been banned by 19 other states and targeted by the NAIC.
Nevada takes the ban a bit farther and the bulletin said, “The proliferation of complex predictive models that some insurers have termed 'underwriting models' has led to the necessity to reiterate such requirements. Nevada’s filing and prior-approval requirements continue to apply irrespective of the complexity of the algorithms utilized by insurers or the labels given to those algorithms.”
“Price optimization is a more nuanced and complicated strategy than how some consumer groups have characterized it. Initially a few states issued bulletins with unclear or overly broad definitions of price optimization. However, the Nevada bulletin is similar to the vast majority of other states and simply restates long-standing statutes and precedents that the industry has followed. State insurance laws incorporate well understood standards and those standards should be applied to the practices of insurers as set forth in those laws as Nevada is doing,” the bulletin said.
Source link: Insurance Networking News
Oregon — PIA Response to SB 271
PIA Oregon Lobbyist testified about this bill in the Senate Health Care Committee. The following is her written testimony.
Senate Health Care Committee
RE: SB 271
Dear Madam Chair and Members of the Committee:
The Professional Insurance Agents of Oregon/Idaho strongly supports Senate Bill 271, which codifies that “small employer” means an employer who employs an average of at least one but not more than 50 full-time equivalent employees.
The Division held an advisory committee on this subject and we participated prior to session.
There are points to be considered by limiting the definition to 50, in terms of not including groups 51-100.
• Employers with 51-100 employees have bargaining power with insurance companies that they cannot afford to lose by being included in the definition of small employers in Oregon.
• Groups with 51-100 employees have the ability to design and manage their group insurance costs and benefits to attract and retain good employees and to remain stable and competitive in their marketplace.
• Employers with 51-100 employees are unique in the State of Oregon and represent a unique demographic in specialized industries, including a significant number of non-profit organizations. These businesses foster innovation and high productivity, a characteristic that does not need to be disrupted. If included in the small business definition they would lose this distinct advantage.
• Presumably, these 51-100 employee businesses would end up subsidizing smaller employers, thereby increasing the 51-100 employee business’s costs and reducing their competitiveness or unique attraction to hiring and retaining high quality employees.
• These employers are “large employers” in the context of employers in Oregon.
As an association of professional insurance agents serving all sizes of clients, we encourage you to vote yes on Senate Bill 271.
Washington — Fraud Investigation
Washington Insurance Commissioner Mike Kreidler issued this news release last week. He said the criminal insurance fraud unit investigated 150 cases in 2015 and 2016.
Many people don’t know that the Office of the Insurance Commissioner investigates criminal insurance fraud, much of which is referred to us by insurance companies themselves. The work is done by the OIC’s Criminal Investigations Unit (CIU), staffed by law enforcement and criminal analysts. They refer the results of their investigations to state and local prosecutors, who bring charges against the people who are suspected of committing the fraud.
• Received 3,571 referrals, which are questionable insurance cases that consumers and the insurance industry send to us to review.
• Opened 150 criminal fraud cases.
• Submitted 52 cases to a prosecutor.
• Had 40 criminal cases charged; 37 of those were heard before a judge.
• Had 44 convictions for various crimes.
• Saved $3.6 million in immediate and projected insurance claim payouts. These efforts resulted in $857,353 of restitution ordered paid back to victims and $26,760 in court costs ordered back to the judicial system.
• The vast majority – 73 percent – of the cases we investigate involve personal property or property damage. Bodily injury frauds are 11 percent, fraud by insurance agents and brokers (called producers) is 6 percent, and the rest involve disability, a medical provider, staged auto collisions or other types of cases.
• Other information about CIU:
• CIU was established by the Washington state Legislature in 2006. Since then, we have pursued 434 cases and adjudicated 105 of them. Our workload has steadily increased each year.
• It maintains a list of insurance fraud most wanted suspects, who have been charged with a crime but did not appear in court to face the charges.
• In November 2016, the CIU earned law enforcement accreditation from the Washington Association of Sheriffs and Police Chiefs (WASPC), joining the 20 percent of law enforcement agencies in the state to have it.
• CIU hosted the 19th annual 2016 Fraud Directors Conference, a gathering of more than 70 insurance fraud professionals from 26 states and DC. It was the first time the conference has been held in Washington state.
• The insurance commissioner is required by law to appoint a 10-member volunteer board to advise him on fraud investigations.
Washington — Insurance Department & the Legislature
This came to Weekly Industry News from the Washington Department of Insurance.
Insurance Commissioner Mike Kreidler posts his departments Legislative agenda and gives updates on SB 5619, SHB 1043 and SB 1850.
Click here to read his post
Washington — Health Insurance Proposed Plans Deadline
This came to Weekly Industry News from the Washington Department of Insurance.
Insurance Commissioner Mike Kreidler has set May 5, 2017, as the date that health insurers in Washington must file their proposed plans and rates for 2018.
“I want to reassure the insurance-buying public and insurers that I am committed to stability in our state’s market,” Kreidler said. “Insurers and consumers are understandably concerned about stability because of the uncertainty in Congress over changes to the Affordable Care Act (ACA) and no viable replacement.
“Republican leaders and the President have said they intend to repeal and replace the ACA with something better. This must be done simultaneously. As long as their plan does not decrease the number of people covered, reduce benefits, or pass costs on to the state, I wish them well. The ACA is working well for Washingtonians. At this point, we have no idea if an alternative will or can be enacted.”
The May 5 deadline marks the formal start of Kreidler’s review of individual and small-group health plans and stand-alone dental plans for 2018. Kreidler’s office consulted with insurers and others to help determine the filing date.
“The ACA remains in effect and stability of the market should take priority over the unnecessary rush to put political considerations ahead of basic insurance principles,” said Kreidler. “The sooner insurers file plans, the quicker we can review them and have a viable market available for Washingtonians.”
Once plans and their rates are approved, Washington’s Health Benefit Exchange must certify them for sale on Washington Healthplanfinder (www.wahealthplanfinder.org).
Open enrollment for 2018 health plans begins Nov. 1.
About 750,000 more state residents now have health insurance since the Affordable Care Act took effect in 2010. Washington’s uninsured rate also has dropped from 14 percent to just under 6 percent in the same period.