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Wells Fargo’s Insurance Scandal

Posted By Administration, Tuesday, August 8, 2017

Wells Fargo is in deep trouble. This time instead of a credit card scandal, it’s insurance. Workers at the bank forced an estimated 2.1 million customers who purchased an automobile to pay for unnecessary insurance. Some of them could not afford the extra cost and it sent them into a financial space where the auto had to be repossessed.

The company fired 70 executives over the mistake.

All this comes a year after Wells Fargo settled a decade old suit over issuing credit cards customers didn’t want. The firm settled with regulator for $185 million.

A suit has been filed over this scandal which put 250,000 of the 2.1 million customers into delinquency and caused 25,000 vehicles to be repossessed. One of the plaintiffs claims the reason the insurance was put into place was to get a kickback from National General Holdings for placing the business.

The insurer has not been sued.

One of the lawyers involved is Roland Tellis. He said, “The revelation of this latest breach of customer trust appears to fit right into the Wells Fargo playbook of dirty deeds, and sadly comes as no surprise.”

Senate Banking Committee Democrat Sen. Sherrod Brown of Ohio and House Financial Services Democrat Rep. Maxine Waters of California want Wells Fargo’s Chairman Stephen Sanger and CEO Tim Sloan to testify as to what happened.

Both have sent letters to the Wells Fargo execs. Brown’s said, “Members should have the opportunity to question Mr. Sloan about the bank’s progress in addressing the damage it did to its customers.”

Wells Fargo’s consumer lending head Franklin Codel said, “We take full responsibility for our failure to appropriately manage the CPI program. The bank has publicly promised that it will do better. Our actions over the past year show we are acting on this commitment.”


Source links: Insurance Business America — link 1, link 2, Insurance Journal — link 1, link 2, Carrier Management, PropertyCasualty360.com

Tags:  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Wells Fargo’s Insurance Scandal 

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MetLife’s Too-Big-to-Fail Saga Continues — Maybe

Posted By Administration, Tuesday, August 8, 2017

No one is exactly sure what the Trump administration is going to do with the Obama administration’s decision to appeal U.S. District Court Judge Rosemary Collyer’s ruling that MetLife is not too-big-to-fail and therefore is not a threat to the nation’s entire financial system.

At this point the U.S. appeals court that is looking at the case said it will wait to make a decision on the original appeal until further notice and wants both sides — MetLife and the U.S. Department of Justice — to file their intentions by November 17th or when U.S. Treasury Secretary Steven Mnuchin issues a report on how the government should respond to non-banks that might be too-big-to-fail.

MetLife’s Christopher Stern said, “This decision provides the current administration time to determine whether any of FSOC’s positions in this case should be reconsidered and whether it is appropriate for the government to continue pressing this appeal.”

In the meantime, the public will soon be able to view the case records that Judge Collyer used to make her decision that MetLife should not have the systemically important financial institution (SIFI) designation.

A group called Better Markets asked an appeals court chief judge Merrick Garland to issue an order releasing the decision documents. Garland — as you might remember — was President Obama’s nominee for the vacant Supreme Court position. Senate Majority Leader Mitch McConnell refused to hold a hearing on his appointment.

In his ruling Garland said, “The right of public access is a fundamental element of the rule of law, important to maintaining the integrity and legitimacy of an independent judicial branch.”

Better Markets spokesman Stephen Hall agrees. “The decision is a huge victory for the American people and their right to know how our courts and agencies are protecting the public interest,” he said.


Source links: Insurance Journal — link 1, link 2

Tags:  Insurance Content  Insurance Industry  Insurance News  MetLife’s Too-Big-to-Fail Saga Continues — Maybe  Weekly Industry News 

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Commercial Lines — Looking Better

Posted By Administration, Tuesday, August 8, 2017

IVANS — a division of Allied Systems — tracks insurance rates. It found July figures for most commercial lines — while down from June — stayed in positive territory. Only workers’ compensation took a dip and fell close to 1.4% below July of last year.

  Commercial Auto: Rose 3.28%. That’s up from 2.41% in June.

  BOP: Jumped 3.65%. That’s down from June’s 4.11%.

  General Liability: Went up 1.85%. That’s also down from June’s 2.22% increase.

  Commercial Property: Rose 2.45% but that’s down from 3.52% in June.

  Umbrella: Up 1.40% and that’s up from 0.97% at the end of June.

  Workers’ Compensation: Down1.41%. And that’s down 0.86% from June.

Matt Foran of IVANS said, “The latest IVANS Index figures show that premium renewal rate change across the industry remained consistent, with Commercial Auto and Umbrella premium renewal rate change experiencing the greatest positive increase while Workers Compensation continues to trend more negatively.”


Source links: Insurance Journal, PropertyCasualty360.com

Tags:  Commercial Lines — Looking Better  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Insurance Marketing — Be Careful There are Rules

Posted By Administration, Tuesday, August 8, 2017

An insurance telemarketer called Best Insurance Contracts — also doing business as Wilmington Insurance Quotes — sells health insurance. It is now threatened with an $82 million fine for allegedly 82,106 illegal automated calls.

The Federal Communications Commission (FCC) says the company’s owner Philip Roesel violated the Truth in Caller ID Act and used a robo-type machine to make the calls. The FCC alleges that he falsified the caller ID information to hide the origin of the calls.

The Truth in Caller ID Act prohibits the spoofing of caller ID information “with the intent to defraud, cause harm, or wrongfully obtain anything of value.”

All this came to light when the firm’s automated calls began interfering with medical paging network Spok. It’s an emergency paging firm that immediately complained to the FCC who tracked the calls to Roesel.

The investigation was able to prove Roesel made 82,106 insurance-related calls using phony caller ID. At a fine of $1,000 per call that’s something close to $82 million. That’s all the FCC could prove. Estimates from investigators say the calls number more like 21.5 million.

It’s a bit much said FCC Chairman Ajit Pai. “The record shows that he instructed his employees which consumers to pick on: ‘The dumber and more broke, the better.’ He was even quoted as repeatedly bragging and ‘joking’ to co-workers that his actions were minor legal violations, akin to driving above the speed limit.”

A minor legal violation sitting at something like $82 million.


Source link: Insurance Business America

Tags:  Insurance Content  Insurance Industry  Insurance Marketing — Be Careful There are Rules  Insurance News  Weekly Industry News 

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Weekly Update — ObamaCare’s CSRs Explained

Posted By Administration, Tuesday, August 8, 2017

No surprise. A poll by Quinnipiac University last week says 80% of us don’t approve of how Republicans are handling the repeal and replacement of the Affordable Care Act. Of that 80%:

  60% are Republicans

  Only 32% of Republicans approve

  Just 15% overall approve

PIA National worries about the impact of the failure to repeal and replace ObamaCare on independent insurance agents who sell health insurance:

  Fortunately, most PIA members participate in the private market

  16.2% — however — engage in the ACA marketplace

  68.1% of those agencies reported a loss of 10% or more in the last three years

  Of the 68.1% all reported an increase in the services required to participate

PIA’s worries for member health insurance agents in the future are many:

  Will Congress actually do something to stabilize markets?

  Will advocates of repeal stop stabilization efforts?

  Will President Trump withdraw the cost-sharing subsidies?

By the way, the next payment is due mid-August and the president hasn’t really said which way he’s leaning. And there are many who aren’t sure how much the president actually understands about the Affordable Care Act, insurance and the cost-sharing reductions.

In a tweet on July 29th Trump said, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

The Washington Post did some fact-checking of the president’s tweet and explained to its readers that the “bailout” of insurance companies is actually the cost-sharing reduction or CSR. It helps lower the cost of insurance for people who can’t afford insurance.

The Kaiser Family Foundation’s Larry Levitt explains: “The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. … To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.”

Levitt says Trump doesn’t understand that.

“The government makes insurers offer lower-cost policies for which it then reimburses the insurers. This isn’t a bailout in the sense that insurers overstepped their bounds and need government support to survive. It’s a reimbursement that has been part of the ACA from the outset,” he concluded.

In other words, the idea was to help low income people afford the cost of health insurance. Or as The Washington Post says, the president does not understand. Insurance companies are not being bailed out. What they’re receiving with the CSR is money they’ve already paid to help people purchase health insurance plans.

The newspaper also says where President Obama and the Democrat-led Congress failed is in not putting language in the Affordable Care Act that the CSRs will happen automatically. Instead the language says it must be authorized by Congress. The Obama administration insisted that’s not what the language means but a judge said the language is clear. Congress will approve.

And as we know, insurers are going to raise rates or bag ObamaCare altogether if the CSR is not paid. This is the percent of enrollees benefitting from insurer payments in the PIA Western Alliance states:

  Alaska — 45% or less

  Arizona — 45.1% to 55%

  California — 45.1% to 55%

  Idaho — 60.1% to 70%

  Montana — 45.1% to 55%

  Nevada — 60.1% to 70%

  New Mexico — 45.1% to 55%

  Oregon — 45% or less

  Washington — 45% or less


These are the possible premium increases in the PIA Western Alliance states if the CSR payments go away:

  Alaska — 9% to 13%

  Arizona — 9% to 13%

  California — No data yet

  Idaho — No data yet

  Montana — 14% to 15%

  Nevada — 16% to 21%

  New Mexico — 16% to 21%

  Oregon — 9% to 13%

  Washington — No data yet


At this point, just about everyone is pushing the president to keep making the payments until some sort of solution to the ObamaCare crisis is found. First up is the National Governor’s Association. Governor Terry McAuliffe — a Democrat from Virginia — and Governor Charlie Baker — a Republican from Massachusetts — represented the nation’s governors and sent a letter to the president saying not making the payments is a mistake.

“A first critical step in stabilizing the individual health insurance marketplaces is to fully fund CSRs for the remainder of calendar year 2017 through 2018. This is a necessary step to stabilize the individual marketplaces in the short term as Congress and the Administration address long-term reform efforts,” their statement said.

Sen. Lamar Alexander of Tennessee is the chairman of the Senate Health, Education, Labor and Pensions Committee. When Congress comes back from the August recess he’s going to put together a bipartisan proposal to keep insurance markets stable. He and other moderate Republicans do not want the markets to collapse.

“We need to put out the fire in these collapsing markets wherever these markets are,” Alexander said.

Washington Democrat Sen. Patty Murray of Washington is the ranking Democrat on the committee and she’s thrilled to hear Alexander’s proposal because putting out those fires means continuing the CSR.

Efforts are underway in the House as well to salvage the CSRs.

And while Murray and other Democrats are happy with Alexander’s outreach, Sen. John Cornyn of Texas — the number-two Republican in the Senate — said it’s time for Democrats to reach out to Republicans with some plans of their own. “Democrats need to be more constructive rather than just continuing to bury their head in the sand about the fundamental problems with the Affordable Care Act,” he said.

And Cornyn’s conclusion is that the American people want everyone in Congress to participate in a solution and not just Republicans. “There's a lot the American people expect of us, but we've seen with fragile majorities in the Senate that we are forced to work together to try to solve these problems. And I think, frankly, bipartisan solutions tend to be more durable," Cornyn said.

Senate Majority Leader Mitch McConnell agrees. “If the Democrats are willing to support some real reforms rather than just an insurance company bailout, I would be willing to take a look at it,” he said.

In the meantime, former Democrat presidential hopeful and Vermont Sen. Bernie Sanders is preparing the way to introduce a bill calling for a single-payer system. His 2018 Senate campaign committee is paying six-figures for ads that are now being aired around the country.

The ads are directing people to his website to sign a petition to require the government to give Medicare to all.


Source links: The Washington Post — link 1, link 2, link 3, The Hill — link 1, link 2, link 3, link 4, Insurance Business America, MSN

Tags:  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Weekly Update — ObamaCare’s CSRs Explained 

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Overwhelming? Intimidating? 10 Signs & They’re not All Bad

Posted By Administration, Tuesday, August 8, 2017

Some of us — especially those of us in insurance — can be a bit of a personality challenge for those who don’t have our energy level. That personality challenge often gets us judged as being harsher than we are and some even think we’re not very nice people.

But — hey — we are nice people and here are 10 reasons why.

Before we get there, however, a further definition is needed. This is more for those who might be considered intimidating or overwhelming than those that aren’t. Weekly Industry News Editor Gary Wolcott is writing this and he’s one of them so he’s going to write this in the plural first person.

The plural first person? Only an editor would write it that way. Most of these 10 items — not all but most and just sometimes all — fit the intimidating or overwhelming person:

1. Our word is good. We value honesty and we always do what we say we’re going to do. Better yet, we follow through. It’s a critical skill that many lack.

2. We are straightforward with that word. You can depend on us to speak our minds. We rarely care who we upset because lying is not an option and pulling punches isn’t something that even crosses out mind.

3. Speaking of minds… We are open-minded. New ideas come naturally to us. We also are always willing — and even eager — to try new things. We have found success through the opportunities offered via the trying of new things and the doors opened because of them.

What we don’t understand is people that don’t try new things and that aren’t open-minded.

4. Solutions are our thing. We focus on problems to find solutions. No excuses needed. We just get things done as they need to be done.

5. Solutions require a strong-will so strong-willed is a given. Focus, focus, focus and we always go the extra length to make something positive happen.

6. This isn’t a complaint. We don’t like complaining or people who complain. This is something that drives the intimidating or overwhelming person crazy. In fact, we’d rather work alone than with someone who spends the day complaining. Who has time for it?

7. We tolerate willful ignorance even less than complaining. Yes, you can have an opinion. That opinion can also contradict our opinion. What we won’t tolerate is the judgmental person. That kind of ignorance causes a loss of patience which often ends up with words being spoken.

8. An editorial opinion. Believing this is optional. We are wise. Learning is our thing. So is finding new ways of thinking. We think things through and think them through thoroughly, yet we often instantly find solutions.

9. Small talk doesn’t work and sometimes neither does long talk. It’s annoying. Being alone is more fun than small talk. Conversations with meaning is all we have time to do. In fact, if a deep meaningful conversation can’t be had then no conversation will likely happen at all.

10. More editorializing. We are kind. It’s just not easily noticed and because we don’t do small talk our innate kindness is often not noticed.

Those of you who aren’t intimidating or overwhelming can now wake up (insert big smile here). As noted earlier, this is written from the perspective of that intimidating or overwhelming person. It is more than likely therapeutic for them. For everyone else? It’s — well, shall we say — informative.


Source link: Educate Inspire Change

Tags:  Insurance Content  Insurance Industry  Insurance News  Overwhelming? Intimidating? 10 Signs & They’re not  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, August 8, 2017

Alaska — A Rate Decrease Proposed: Primera Blue Cross is Alaska’s only health insurer and it has now asked the department of insurance if it can cut rates by an average of 22%. The company says payments dropped last year as did the use of medical services by its customers.

It may be the only state in the union where a cut takes place.

Source link: Insurance Business America


Arizona — Wrong Way Driving Grant: Arizona apparently has a wrong way driving problem and the Arizona State Transportation Board is going to help with a fix and give a $3.7 million grant to set up thermal camera technology for an early warning system.

This will be the first of its kind in the country.


California — Work Comp Drug Formula: A new prescription drug formula is being considered for California’s workers’ compensation system. If adopted, one in three drugs will no longer require authorization before being dispensed.

Alex Swedlow heads the California Workers’ Compensation Institute. It did the study. He said this is “an important first step to improve the quality of medical treatments and reduce the frictional costs of oversight.”

The whole point is to improve the quality of care.

Source link: Insurance Journal


California — More Purchasing Quake Insurance: The California Earthquake Authority says it ended the second quarter of this year with policy sales up 5.4% from a year ago in the same quarter. The CEA now has 950,000 policies in force and those purchasing insurance is trending upward.

Glenn Pomeroy is the CEO of the CEA said the reason for the increase isn’t a shaking state. In fact, it’s been rather quiet on the earthquake front lately in California. “We’re attributing to it to a sum total, realizing what’s happening collectively out there. You do have the scientific community speaking with a clearer and stronger voice than they have in the past,” he said.

As of the end of 2016 close to 11% of California residents have earthquake insurance.

Source link: Insurance Journal


Idaho — 2018 Health Insurance Rates: The Idaho Department of Insurance has posted proposed health insurance premium rates and the requested increases for plan year 2018 on its website, http://www.doi.idaho.gov/company/ratereview/. Health insurance carriers have submitted their rating information including justifications as well as rating areas. The Department will continue to review the insurance carriers’ submissions. The Department’s only authority is to determine the rates “unreasonable” if the requests do not meet the justification. In past years, the Department has successfully negotiated lower rate increases with carriers to avoid labeling them “unreasonable.” Final rates will be publicly available by mid-September or early October. 

                                                Bronze Silver Gold Overall

Statewide average               21%      50%    18%     38%

Blue Cross of Idaho             6%        40%    12%     28%

BridgeSpan Health Co.       N/A       N/A     N/A      N/A

Mountain Health CO-OP    6%        29%    6%       25%

PacificSource Health          8%        81%    15%     44%

Regence BlueShield ID      51%      51%    N/A      51%

SelectHealth                         27%      69%   25%     48%

“I am deeply disappointed and frustrated to share these rates,” said Department Director Dean Cameron. “I understand how difficult it will be for Idahoans to afford reasonable coverage, especially those without a subsidy.” The Department encourages consumers to carefully review all of their options with a licensed insurance agent whether purchasing coverage on or off the exchange (Your Health Idaho) once the final rates are published.


Silver level plan rate increases

The proposed increases for Silver level plans on the exchange are significantly higher this year, even more than the increases for Bronze or Gold level plans, due to the potential refusal by the federal government to fund the Cost Share Reduction (CSR) mechanism. The CSR requires insurance carriers selling plans through Your Health Idaho to lower deductibles and out-of-pocket maximums on Silver plans for enrollees who earn below 250% of the federal poverty level. “I call on Congress to either repeal the CSR requirement or fund the program,” said Director Dean Cameron. “That action alone would reduce the proposed increase by at least 20% on the Silver plans.” The premium requests for the Silver level plans reflect the cost of the CSR benefits since the carrier is still obligated to provide the benefits regardless of whether or not the program is funded at the federal level.

The proposed increases to Silver plan premiums would also result in an increase in advanced premium tax credits (APTC) for those eligible and purchasing coverage through Your Health Idaho. Individuals who are not currently receiving APTC are reminded to check for eligibility again this year. “Ironically, Congress may spend more of our federal tax dollars through higher APTC’s than if they funded the CSR mechanism,” said Director Cameron. The Department recommends that all individuals work with a licensed insurance agent to choose the best plan based on their needs.

Carrier participation in Idaho

Idahoans have benefited by having a large number of carriers participating in Your Health Idaho and in the market. While some states grapple to find a single carrier, Idaho has had five carriers participating on the exchange and five carriers participating statewide. For 2018, carrier participation has reduced with the withdrawal of Bridgespan and a reduction of counties served by SelectHealth in Eastern Idaho. (See attached map.)

Department of Insurance seeks comments and assistance from the public

“The proposed rate increases demonstrate the need for changes to the federal law. Idaho’s congressional delegation has been responsive and responsible, but we must help them deliver the message to their colleagues,” said Cameron. “If congress is unable to repeal or replace, I ask that they do the following three things at a minimum to stabilize the market and reduce rates:

  Fund or repeal the CSR mechanism (estimated savings of 20%)

  Fund High Risk Reinsurance Pools, similar to proposals in both bodies of Congress (estimated savings of 10% to 20%)

  Allow true consumer choice of plans, similar to the Cruz amendment, either on or off exchange (estimated savings of 20% to 50% compared to ACA plans)

“The Department and I will continue to work on ideas to reduce costs. We invite the public to comment, ask questions, or share ideas.”

Comments, questions, or ideas can be submitted electronically or mailed to the following:

2018 Rate Comments

Idaho Department of Insurance

PO Box 83720

Boise ID 83720-0043


For questions about this or other insurance-related topics, contact the Idaho Department of Insurance by visiting www.doi.idaho.gov or by calling 334-4250 in the Boise area or 800-721-3272 toll-free statewide. 


Montana — Hub International Purchase: Hub International has purchased the employee benefits and consulting services firm Steve Mariani Insurance. It’s centered in Havre. Mariani will remain with the company.

No terms were announced.


New Mexico — Malpractice Challenge: Four doctors including the American Medical Association president-elect Dr. Barbara McAneny have filed a suit against New Mexico Insurance Superintendent John Franchini. They say he is allowing hospital chains to get money from the state’s malpractice fund when it is underfunded.

The funds were taken by 16 hospitals and a dozen outpatient care outfits from 2009 to recently.

Source link: Insurance Journal


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

ID 07-2017: Amendment to 2018 standard bronze and silver health benefit plans

Adopt: OAR 836-053-0011

Amend: OAR 836-053-0013

This rule establishes the requirement that the standard bronze health benefit plan be HSA eligible, in order to promote consumer choice. The rule brings the standard bronze and standard silver plans into compliance with federal law by amending the exhibits for the plans for plan years beginning on or after January 1, 2018, to meet federal minimum actuarial value (AV) requirements. The rule further clarifies that the insurer or health care service contractor shall clearly indicate on any applicable plan and benefits template or other plan or product specific filing document that the plan is HSA eligible.

Adopted: July 26, 2017

Effective: July 26, 2017

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



Washington — Job Cuts for Molina: Molina Healthcare is cutting 1,500 jobs as it restructures. The hope is to save $300 million to $400 million a year. It is also leaving the money-losing ObamaCare exchanges in Utah and Wisconsin and is going to bump up rates everywhere else.

A major player in the Affordable Care Act and in Medicaid health plans, the firm fired its CEO Mario Molina and CFO John Molina in May. Part of the financial crisis is laid at their feet when they promised investors lots of new business when ObamaCare was put into place.

It didn’t happen.


Source link: Insurance Business America

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

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Special Report: Taxes — Next Up for Republicans

Posted By Administration, Tuesday, August 1, 2017

Healthcare reform and the repeal and replacement of the Affordable Care Act is pretty much dead for now. There may soon be an attempt at a bipartisan solution but as for now, it’s dead.

Now it is on to the second of the Republican Party’s top two priorities for this Congress and that they want done before the mid-term elections. It’s tax reform. If you’re wondering why that didn’t happen simultaneously or first, the leadership of the Republican Party and the president took on ObamaCare first because it has taxes in it that Republicans want gone and part of tax reform includes doing away with them.

Thus, ObamaCare was the first priority.

The PIA wants tax reform for independent insurance agents and for small business. The association supports the creation of a clear and simple tax code and one that reduces tax rates for small businesses.

On its webpage in Government Affairs, PIA National wrote, “Small businesses have been the backbone to this country’s economy for over 250 years; they stimulate the economy by creating jobs in our local communities and have a history of pulling this country out of recessions. Despite these significant contributions, they are hampered by overly burdensome laws and regulations.”

And that burden isn’t just at the federal level. State and local taxes are equally burdensome.


PIA Advocates for Independent Agents by:

  Supporting legislation in Congress to decrease the corporate income tax rate for small businesses.

  Working with Congress, the Small Business Administration (SBA) and the Internal Revenue Services (IRS) to create a simpler tax structure and eliminate unnecessary complexities to create a system that is clear and competitive.

  Monitoring the activities of the IRS and the SBA to ensure that the voices of small business owners are being heard before any changes are made to current tax code


A group called the Big Six has put together the basics of tax reform and both houses of Congress will now go about writing a plan. The Big Six are:

  House Speaker Paul Ryan

  Senate Majority Leader Mitch McConnell

  House Ways and Means Committee Chairman and Texas Republican Rep. Kevin Brady

  Senate Finance Committee Chairman and Republican Sen. Orrin Hatch of Utah

  Treasury Secretary Steven Mnuchin

  White House National Economic Council Director Gary Cohn


Ryan claims this agreement of principles is supported by the House, the Senate and the president. Basically, they are to:

  Make taxes simpler, fairer, and lower for hard-working American families

  Reduce tax rates as much as possible

  Lower tax rates for small businesses so they can compete with larger ones

  Incentivize taxes for corporations in a way that profits are brought back into the country


The Big Six announced the agreement on principles at a news conference late last week. They’re pleased with the results and said for the first time in years the people of the U.S. have elected a Congress and a president that can get tax reform done.

“We are all united in the belief that the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families, small business, and American job creators competing at home and around the globe. Our shared commitment to fixing America’s broken tax code represents a once-in-a-generation opportunity,” the group said in a statement.

Families — the principles state — are at the heart of the reforms and so is small business.

“We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones. The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas.”

The Big Six believe they have come up with a good balance, “And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base.”

The group expects the reforms to come out of committee quickly, “Our expectation is for this legislation to move through the committees this fall, under regular order, followed by consideration on the House and Senate floors. As the committees work toward this end, our hope is that our friends on the other side of the aisle will participate in this effort.”

Will the Republicans actually reach across the aisle? And will across the aisle actually reach back? That’s not likely. Speaking for the Democrats, Oregon Sen. Ron Wyden scoffed at the proposal and called it another set of vague ideas that benefit the rich. “Republicans are dripping tax ideas out like a leaky faucet with no specifics to back them up,” Wyden said.

It doesn’t appear anyone is in the mood to do anything bipartisan. Neil Bradley is the chief policy officer of the U.S. Chamber of Commerce. He said members of the House and Senate tax-writing committees will meet this month at the Reagan Ranch in California to begin drafting specifics and he is going to give a speech at the event.

Brady was asked if any Democrats would be there. Without hesitation he said, “No.”

The Chamber and other business bodies large and small want the reforms and are totally frustrated with the speed at which Congress is not getting the job done. “The engagement and enthusiasm for pro-growth tax reform from Trump administration officials and congressional lawmakers is what will propel this over the finish line,” Bradley said.

On the insurance side of the equation, Evan Greenberg — who heads Chubb — wants to see tax reform sooner rather than later. He is also calling for open trade and significant investment in the infrastructure. At Chubb’s second quarter earnings phone call, Greenberg challenged President Trump and Congress to get the job done.

“My views remain as they were. For our country, and for our economy to reach its full potential — which it is not right now — we need tax reform. We need infrastructure,” he said.

Greenberg called the state of our infrastructure shameful and says it puts the U.S. at a competitive disadvantage. That disadvantage, Greenberg said, is in a sort of a tax on us as other nations like China are making significant investments in theirs.

“An awful lot of this requires legislation. We need an administration that is focused, that is working with Congress, and we need a Congress that comes together to address these issues for our country,” he said.

That urgency is shared by Heidi Ganahl who is the CEO of the world’s largest dog-care franchise, Camp Bow Wow. “Politically, tax relief is the issue that can unite the factions of the Republican Party and even attract some Democrats, so it stands a better chance of passing than divisive issues like healthcare reform. This is vital for Republicans who need a win now."

Bradley’s boss at the U.S. Chamber of Commerce and its CEO Tom Donohue just sent an open letter to Congress and all those aspiring to win a seat in the near future. He said failure is not an option. His organization has teamed with the Business Roundtable, the National Association of Manufacturers (NAM) and the National Federation of Independent Business (NFIB).

They, too, have sent a letter.

Former House Speaker Newt Gingrich is working with a coalition of small business groups — Job Creators Network (JCN), FreedomWorks and the American Legislative Exchange Council (ALEC) — wanting tax relief and the U.S. Chamber of Commerce is also leading a push.

They want something done by Thanksgiving that looks like tax cuts for business, middle-income Americans and repatriation for large businesses so billions in profits offshore can be brought back into the country and put to work.

“I’m optimistic we might be able to get a pretty good consensus on tax cuts and get it passed and signed by Thanksgiving. If we don’t do something like that, we are in real trouble, and we have a real chance of having Nancy Pelosi as the next of Speaker of the House,” Gingrich said.


Small business — says a survey done by JCN — views tax reform as a very high priority and an even higher priority than ObamaCare repeal.

  48.6% said tax cuts will help more than healthcare reform

  8.6% want regulatory relief

  70% of the 500 small business owners polled said they’d reinvest savings and give wage hikes to employees, hire new employees and expand

  Of those reinvesting, 23.8% will make capital investments

  20.8% will raise wages for current employees

  13.8% will make new hires

  8.8% will open new outlets

  31.4% said they’d pay off debts


And what is the biggest obstacle for tax reform?

  26% say Democrats in Congress are the biggest obstacle

  15.2% blame Republicans

  11% blame President Trump

  20.2% say a biased media is also an obstacle


JCN President and CEO Alfredo Ortiz said, “This poll confirms what economists have long known. If you want to create an economic revival on Main Street, then give tax dollars back to small businesses and they will make it happen by reinvesting in jobs, wages and infrastructure.”

Former Best Buy CEO Brad Anderson says the JCN survey is right on target. “It was great to see from JCN's poll that nearly one-quarter of small-business owners would use their tax savings to raise wages for their employees. This demonstrates that a tax cut wouldn’t just help businesses and the economy, but it would also address stagnating wages that are preventing Americans from keeping up with increasing healthcare, housing and other costs.”

By the way, the goal of the former Speaker — and his small business comrades — is to create a sense of urgency. This may just do that.


Source links: Forbes, PIA National, The White House, Carrier Management, The New York Times, The Hill — link 1, link 2, link 3, link 4

Tags:  Insurance Content  Insurance Industry  Insurance News  Special Report: Taxes — Next Up for Republicans  Weekly Industry News 

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Pushing the Limit — NFIP Renewal

Posted By Administration, Tuesday, August 1, 2017

The Senate and the House are both looking at bills to renew the National Flood Insurance Program (NFIP). PIA National likes the Senate bill but refuses to support what may come out of the House.

In a statement on NFIP reform, PIA National said, “The National Association of Professional Insurance Agents appreciates the work done by Senate Banking, Housing and Urban Affairs Committee Chairman Michael Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) on their bill, the National Flood Insurance Program Reauthorization Act of 2017 (S. 1571), which is currently before the committee. This initial legislation is an auspicious start in light of the fact that it provides a long-term reauthorization of the National Flood Insurance Program and has left untouched the Write Your Own (WYO) reimbursement rate for insurers, maintaining agent commissions.”

As for the House bill? PIA National is in strong opposition to the bill “passed out of the Financial Services Committee because it arbitrarily cuts the WYO rate, which is used by carriers to pay administrative expenses as well as agent commissions, among other things. Most WYOs have acknowledged that, for them to remain in the program, they will be forced to pass any cut to the WYO rate on to agents in the form of cuts to agent commissions.”

PIA National Vice President of Government Relations Jon Gentile said PIA will remain opposed to any legislation that cuts the WYO rate without robust protections for agents.

“We applaud this first step by Chairman Crapo and Ranking Member Brown to reauthorize this critical program used to protect against floods. PIA will now continue to work with members of the committee to supplement the bill by supporting efforts to expand the private flood insurance market, enhance mitigation programs and improve the claims process for policyholders, and include provisions meant to recognize the essential role independent insurance agents play in delivering this critical and often misunderstood program to consumers,” Gentile said.

One thing that is certain, the NFIP reauthorization needs to happen before September 30th of this year. The looming deadline has the National Association of Insurance Commissioners (NAIC), the PIA and other insurance, realtor and economic groups concerned.

The NAIC does — however — like the House Flood Insurance Market Parity and Modernization Act because it gives those buying private flood insurance the same treatment by federally-backed mortgage lenders as those purchasing insurance from the NFIP.

NAIC President and Wisconsin Insurance Commissioner Ted Nickel said, “It is important to maintain a stable program to provide certainty for policyholders while also encouraging greater growth in the private flood insurance market as a complement to the NFIP. State insurance regulators support this legislation because it provides consumers with more options for coverage which could lead to more affordable prices.”

Other groups want reforms, too. For one, the number of properties in flood dangerous areas has jumped by 67% in the last 20-years. Or so says Evan Hecht who is the president of The Flood Insurance Agency — and agency that specifically sells flood insurance. Worse, Hecht said, “The number of properties that have had a third loss has increased 56%.”


He made that statement at a recent CAT Risk 2017 Masterclass held by Insurance Business America.

The Federal Emergency Management Agency (FEMA) administers the NFIP and it defines repetitive losses as:

  A property that has two or more claims of $1,000 or more over 10 years is repetitive

  A property with four claims of more than $5,000 each is called severe repetitive

  Two claims equaling the total of a building’s current value is also severe repetitive


Emergency Management Magazine says currently we have 11,000 severe repetitive-loss properties in the U.S. That number is growing. The NFIP says they account for 30% of the claims of its five million active policies.

FEMA task force member Joe Rossi — who chairs the Marshfield and Massachusetts Coastal Coalition — said, “These properties give the program a bad name, when the program was designed so no-one could be labeled non-renewable. The rates for these structures are significantly higher; they don’t get off scot-free. There are penalties.”

Another group wanting a say in how renewals are handled is the Natural Resources Defense Council (NRDC). It wants residents and homeowners to move to safer areas or not build in those areas at all.

NRDC head Rob Moore said for every $100 the NFIP and FEMA spend to repair and rebuild flood damaged homes, they spend $1.75 to move people to less flood prone areas. “Many of those homeowners would probably prefer to relocate somewhere where flooding is no longer a part of their life, and that would also save… the expense of having to rebuild these properties,” Moore said.

He’s suggesting a buyout be part of a flood policy if the owners don’t want to rebuild and Moore contends that will save the NFIP money in the long run.


Source links: PIA National, Business Insurance, Insurance Business America — link 1, link 2

Tags:  Insurance Content  Insurance Industry  Insurance News  Pushing the Limit — NFIP Renewal  Weekly Industry News 

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ObamaCare — Insurance Support Now the Worry

Posted By Administration, Tuesday, August 1, 2017

President Trump is unhappy with Senate Republicans over their failure to pass even the “skinny” version of the repeal and replacement of ObamaCare. And when they refused to give it another shot, Trump tweeted that the party’s leadership are “total quitters.”

He’s also pushing Senate Majority Leader Mitch McConnell to get rid of the 60-vote rule that kept the bill from passing and said they all “look like fools and are just wasting time.”

Without the 60 vote rule the “skinny” plan would have passed — easily.

Trump is being ignored. Sen. Jeff Flake of Arizona blasted the president and said that rule is important. “I don't want to lurch back and forth every couple of years from one extreme to the other. Those rules are there for a reason. They're good. ... They invite us to work across the aisle,” Flake said.

The Senate’s number-two Republican Texas Sen. John Cornyn said don’t leap to conclusions. Something could yet pass. Just not now.

Here’s the worry now according to Tennessee Republican Sen. Lamar Alexander who chairs the Senate Health Committee. It’s worry about the state of the nation’s insurance markets.

“Tennessee's state insurance commissioner [Julie Mix McPeak] says our individual insurance market is very near collapse. Unless Congress acts, many of the 350,000 Tennesseans who buy health insurance in that market — songwriters, farmers, the self-employed — face the real prospect of having zero options to buy insurance in 2018 and 2019,” Alexander said.

It’s also deep on the mind of health insurers who wonder what the Trump administration is going to do. Health and Human Services Secretary Tom Price said on Sunday that “no decision's been made.”

Yet insurers are remembering President Trump’s tweet on Saturday saying he’s thinking of ending the subsidies to insurers which help them help the poor afford insurance. “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” the president said and he promised that ObamaCare will implode “and soon,” the president said.

That said, Price told NBC’s Meet the Press that the administration will follow the law of the land. Or will he? White House spokeswoman Kellyanne Conway told Fox News Sunday that the president is going to decide this week what he’s going to do and if he’s going to make the subsidy payments.

White House Budget Director Mick Mulvaney told CNN’s State of the Union, “I talked to the president at length about that exact issue yesterday. What he’s saying is, look, if Obamacare is hurting people, and it is, then why shouldn’t it hurt insurance companies and, more importantly perhaps for this discussion, members of Congress?”

Trump wants members of Congress and their staffs to lose the subsidies that keep them from having to purchase insurance on the ObamaCare exchanges.

This was written on Tuesday morning early so by now the president may have made that decision. If so, Weekly Industry News will have analysis of it next week. But we also know the president has a habit of bouncing this way and that on these issues.

Key Republicans — like Senate Finance Committee Chairman Orrin Hatch of Utah and House Ways and Means Committee Chairman and Texas Republican Rep. Kevin Brady — want the president to guarantee those payments. “For those trapped in Obamacare, we must continue to look for immediate solutions to deliver relief, stop premiums from soaring even higher, and help people get the health care that’s right for them,” Brady said.

Plus, it might not be — politically — a good move. The Kaiser Family Foundation did a poll on how the people feel about Trump cutting those funds and about Republicans working to hasten the demise of ObamaCare. It found 61% of us say they’ll be responsible for future problems.

Andrew Slavitt who is the acting administrator of the Centers for Medicare and Medicaid Services (CMS) is worried about the president’s comments and so are insurers and insurer groups. Slavitt said cutting off the subsidy payments “will be felt by the middle class who will pay more to subsidize low income.”

America's Health Insurance Plans (AHIP) predicts a 20% jump if those payments are cut off. And it’s getting support from McConnell who said, “Bailing out insurance companies, with no thought of any kind of reform, is not something I want to be a part of.”

And at that, Senate Minority Leader Sen. Chuck Schumer put it all in perspective. “If the President refuses to make the cost sharing reduction payments, every expert agrees that premiums will go up and health care will be more expensive for millions of Americans, the president ought to stop playing politics with people's lives and health care,” he said.

The Senate’s number three Republican Sen. John Thune of South Dakota says that’s just not going to happen. “I guess I'm hopeful that the administration, the president will keep making them and if he doesn't then I guess we'll have to figure out from a congressional standpoint what we do,” he said.

Cornyn agrees and said if Trump fails to act Congress will and the president will have no political choice but to sign the legislation.

In the end, the vote surprised no one and the outcome came about because of failure to reach across the aisle. Sen. John McCain who a couple of days before cast a vote that allowed debate wanted bipartisan support and bipartisan cooperation to solve the healthcare crisis in this U.S. but didn’t get it.

McCain along with Alaska Republican Sen. Lisa Murkowski and Maine Republican Sen. Susan Snow voted no and it is McCain who is being blamed for the failure to advance the bill. In his comments on why he voted the way he did, McCain said, “We must now return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of the aisle, heed the recommendations of nation’s governors, and produce a bill that finally delivers affordable health care for the American people.”

McCain and other Republicans — and the Democrats — blasted the way McConnell went about putting the various versions of the Senate bill together. Much of it was done behind closed doors with the majority Republicans learning of what was going on at lunch meetings and in other after-the-fact ways.

With the failure to advance the bill to a conference committee with the House, McConnell said he’s done and it’s time to move on, “What we tried to accomplish for the American people was the right thing for the country I think the American people are going to regret that we couldn't find another way forward. Now I think it’s appropriate to ask, what are their [Democrat] ideas? It’ll be interesting to see what they suggest as the way forward.”

Schumer said he’s willing to work with Republicans and believes there is a “thirst” among them to work with Democrats. After the vote, he told McConnell and the Senate, “We are not celebrating. We’re relieved. Let’s turn the page and work together to improve our health care system.”

A few days later he laid out some things Democrats want to start the process. “At the very beginning, we should stabilize the system. Make permanent the cost sharing, which keeps premiums low. That is what we should do initially. Then, we should sit down and trade ideas,” Schumer said.

Schumer says he’s already reached out to House Speaker Paul Ryan about bipartisan collaboration. But he’s also encountered some resistance from McConnell who says the Republicans still aren’t willing to pour money into a losing proposition. Schumer agreed and said, “There has to be a give and take. My colleagues and my caucus know that.”

House Minority Leader Nancy Pelosi has also indicated wanting to work with Republicans on solutions. “Democrats extend the hand of friendship, and look forward to our working together in the regular order for the good of the American people,” she said.

Pelosi has also insisted that President Trump get involved and cooperate in the working together process or stay out of it altogether.

Rep. Joseph Crowley of New York is the chair of the House Democratic Caucus. He said, “We have stood ready with ideas and thoughts about how we can mend or improve the Affordable Care Act. It is really incumbent upon them to come join us and bring us to the table.”

Stay tuned. This controversy and the push to reform, replace or repeal ObamaCare isn’t close to over.


Source links: The Hill — link 1, link 2, link 3, link 4, link 5, link 6, The Washington Examiner, Insurance Journal, OregonLive.com, The Washington Post

Tags:  Insurance Content  Insurance Industry  Insurance News  ObamaCare — Insurance Support Now the Worry  Weekly Industry News 

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