California
Regulations on Gender Discrimination in Auto Insurance: California Insurance Commissioner Dave Jones has issued new regulations that prohibit the use of gender in private passenger automobile insurance rating in California. The Gender Non-Discrimination in Automobile Insurance Rating Regulation became effective on January 1, 2019.
“My priority as Insurance Commissioner is to protect all California consumers, and these regulations ensure that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control,” said Insurance Commissioner Dave Jones.
This is not the first regulatory action Commissioner Jones has taken to prevent gender-based discrimination in California’s insurance industry. In 2012, the Commissioner promulgated regulations that prohibit and prevent the denial of coverage or denial of claims for medical services based upon an insured or prospective insured’s actual or perceived gender identity. Prior to his election as Insurance Commissioner, then Assemblymember Jones authored legislation (Assembly Bill 119, in 2009) to prohibit gender-based discrimination in the pricing of health insurance. Thanks to that law, California eliminated gender-based pricing in health insurance before that became the national standard under the Affordable Care Act.
The Commissioner’s Gender Non-Discrimination in Automobile Insurance Rating Regulation mandates that all automobile insurance companies operating in California file a revised class plan that eliminates the use of gender as a rating factor.
Source link: California Department of Insurance
New Regs on Average Medical Service Contract Rate: Under the leadership of Insurance Commissioner Dave Jones, the California Department of Insurance adopted new regulations to implement provisions of Assembly Bill 72 (Chapter 492, Statutes of 2016). These regulations relate to the average contracted rate that a non-contracted medical professional will be paid when an insured seeks medical services at an in-network medical facility and is treated by an out-of-network provider. These average contracted rate regulations were approved by the Office of Administrative Law (OAL) and go into effect on January 1, 2019.
AB 72 protects consumers from surprise medical bills when they go to an in-network health facility and receive care from an out-of-network provider without specifically consenting to out-of-network care. The law also establishes a payment amount of 125 percent of the Medicare rate or the average contracted rate in that geographic region for that out-of-network medical service, whichever of the two is greater. These new regulations issued by the department provide the methodology for determining the "average contacted rate" for the medical service that insurers must use to reimburse non-contracting medical professionals. This will reduce disputes between insurers and medical providers about reimbursement rates for non-contracted medical care by providing a clear methodology for rate calculation for commonly billed services at in-network medical facilities.
Under these new regulations, the average contracted rate will be the average of the contracted commercial rates paid by a health insurer for the same or similar health care services in the baseline year (2015) in the geographic region in which the service was provided, with the rate then adjusted for inflation based on the date the medical service was provided.
"These regulations were carefully crafted to provide a fair way of calculating the average contracted rate for medical services in a given geographic region in those circumstances in which a patient inadvertently receives care from an out-of-network provider. Insurers are required to maintain an adequate provider network to ensure timely access to care for their policyholders and when patients are forced to go out-of-network at an in-network facility, the patient should not have to pay more for their care and the providers should be reimbursed fairly," explained Commissioner Jones.
The consumer protection in AB 72 that prevents policyholders from surprise medical bills for non-emergency care went into effect on July 1, 2017, and ensures that when consumers seek medical care at a facility in their insurer's network, but receive care from an out-of-network medical provider, they only have to pay their in-network cost sharing. The law also called for the Insurance Commissioner to set up an Independent Dispute Resolution (IDR) system that providers can use if they do not believe they have been paid fairly under the law. The IDR program was developed by the department for use by medical providers and insurers starting in September 1, 2017.
Source link: California Department of Insurance
Supreme Court Decision Fair Claims
After a decade of legal wrangling over the regulations that implement the Unfair Insurance Practices Act (UIPA), the California Supreme Court let stand the decision of California Court of Appeal, 4th Appellate District, upholding the Insurance Commissioner's Fair Claims Settlement Practices Regulations, which prescribe how insurance companies must process insurance claims. The regulations are the foundation in determining the number of violations committed when assessing fines against insurers that have committed unfair claims practices.
Department of Insurance examinations of PacifiCare's claims-handling uncovered evidence of numerous unfair claims practices-which included wrongful denials for life-saving treatment for people battling serious illness and claim payment denials for providers and hospitals-all because the insurer was focused on maximizing profits through what it called "efficiencies" after the 2015 botched $9 billion acquisition of PacifiCare by UnitedHealthcare. The Department examinations also uncovered evidence the company was well aware of the egregious issues.
Under the Insurance Code, these unfair acts or practices include misrepresenting what medications or treatments an insurance policy covers, failing to promptly pay claims where liability is reasonably clear, and forcing claimants to file lawsuits to get full payment, and other acts. The Insurance Code allows the commissioner to impose fines of up to $5,000 each time an insurer commits an unfair act or practice on a consumer, or up to $10,000 each time if the insurer did so willfully.
"UnitedHealthcare purchased PacifiCare and imposed cost-cutting measures that destroyed PacifiCare's claims-handling processes and its arguments in litigation that insurance companies should be allowed to willfully harm consumers as long as they don't do it too often, reflect a gross disregard of the lives and well-being of the consumers who paid for the promise of coverage," Commissioner Jones said. "Customers have no choice but to rely on the integrity of their health insurance companies. PacifiCare breached that trust. By any measure, 908,000 violations reflect a general business practice of violating consumer protection laws. I am delighted the Supreme Court has rejected further challenges to the insurance commissioner's authority to punish insurance companies for knowingly harming even one consumer."
Based on departmental examination results and following an administrative hearing that took three years, Insurance Commissioner Dave Jones found PacifiCare committed 908,547 separate violations of the UIPA, and he imposed fines aggregating $173,603,750 in penalties. On behalf of PacifiCare, UnitedHealthcare sued the commissioner, arguing that none of its harmful conduct violated the Insurance Code.
PacifiCare argued that insurers are immune from fines for committing these unfair acts, even if the insurer did so intentionally, unless the commissioner is also able to show that the insurer knew it had committed the acts frequently enough to constitute a "general business practice." The court of appeal rejected the argument, stating: "PacifiCare's interpretation of section 790.03(h) is not only internally problematic, it stands in contrast to virtually every other statute the Legislature has enacted in connection with (1) enforcement of the Insurance Code against insurers generally; (2) enforcement of the UIPA in particular; and (3) the imposition of administrative penalties against insurers in other contexts."
The court also rejected PacifiCare's argument that the commissioner must prove an insurer had "actual knowledge" of its illegal conduct and held that it was within the commissioner's authority to hold the insurer responsible if its agents or employees were aware of facts that would cause a reasonable person to know of the violations. The court also found the commissioner's reasoning was sensible in that restricting the definition of "knowingly" to one particular individual's actual knowledge would fail to take into account that many people handle a claim, and an unfair practice can be committed by cumulative acts, not simply the intentional act of one person."
Further, the court of appeal also upheld the commissioner's interpretation that an insurer's "willful" violation of the act may be established by showing a purpose or willingness to commit the act and agreed that penalties for willful violations do not need to require a showing that the insurer intended to violate the law or injure someone. The court held, "As the Commissioner points out, he engaged in an extensive, formal rulemaking process in the course of promulgating these regulations. That careful consideration, combined with the Commissioner's expertise in the area, weighs in favor of according significant deference to the Commissioner's interpretation of the terms, and we do so."
Source link: California Department of Insurance
Wells Fargo Settlement
Wells Fargo has agreed to pay a $10 million penalty as part of a settlement agreement with the California Department of Insurance. This settlement resolves the department’s accusation alleging improper insurance sales practices related to Wells Fargo’s online insurance referral program. The improper practices resulted in consumers being signed up and charged for insurance products without their consent.
“The Department of Insurance’s investigation found that Wells Fargo was signing up and charging customers for insurance without their consent,” said Insurance Commissioner Dave Jones. “Banks and other financial institutions should never be allowed to prey on their customers’ trust without being held accountable.”
Wells Fargo has agreed to not transact any new business during the remaining term of its two insurance licenses, which expire in July and September 2020, respectively. The company also agreed to not apply for a license for at least two years following the expiration of their current licenses. Wells Fargo has provided restitution to all California consumers who were charged premiums, bank fees and other direct monetary losses connected to the unauthorized insurance policies.
$5 million of the penalty is due immediately. If the company ever seeks to return to the California insurance marketplace, it will then pay the remaining $5 million penalty. The Department may also decline to issue a new license.
In November 2017, the department served on Wells Fargo an accusation seeking revocation of Wells Fargo’s insurance license for improper insurance sales practices. The accusation was the result of an investigation opened at the direction of Insurance Commissioner Dave Jones, which found that from 2008 to 2016, Wells Fargo customers were issued approximately 1,500 insurance policies without their knowledge or permission. In some cases, employees told consumers to enter their personal information on a policy application merely to receive a quote, but Wells Fargo employees later submitted the application to the insurer to purchase the policy without the consumer’s permission.
Source link: California Department of Insurance
Idaho
Drunk Driver Interlock Law
Starting this year ignition interlock devices are required for the vehicles of all drivers getting a first-time drunken driving conviction. The device will be connected to the vehicle for one-year.
In the past, the blow-into-a-mouthpiece device was only required for repeat offenders.
Source link: Insurance Journal
Nevada
Marijuana Sales: The Nevada Department of Taxation says marijuana sales in the state are quite brisk. October’s figures were released late last year and sales hit $42 million. That means $8.24 million in tax revenue for the state.
Sales from July through October of 2018 were almost half of the projected sales for the entire year.
Revenues are expected to go even higher since the state issued 61 more dispensary licenses in December bringing the total to 65.
Source link: Insurance Journal
Oregon
Off Duty Pot Use for State Workers
The Oregon Legislature is considering a bill that will make it illegal to fire an employee who fails a marijuana drug test if they used marijuana while off the clock.
The rationale is that it is unfair to penalize an employee for using a substance that is legal to use in the state.
Senate Bill 301 will not allow employees to use marijuana if their collective bargaining agreement says they cannot do that even while not working. So exemptions are in the bill for labor agreements, workers who are under the influence while working or from federal jobs that require employees to have a drug free workplace in order to receive federal dollars.
Source link: Insurance Journal
From the Department of Insurance: The Oregon Division of Financial Regulation recently adopted the following rule: ID 39-2018: Establishes reimbursement rates for out-of-network services provided at in-network health care facilities
Rules affected: OAR 836-150-0010, 836-150-0020, 836-150-0030, 836-150-0040, 836-150-0050, 836-150-0060
Rule Summary: Clarifies the purpose, statutory authority, and applicability for OAR 836-053-1600 to 836-053-1615. Adopt definitions of: anesthesia conversion factor; base units; base rate; CMS; CPT; CPI adjustment; director; geographic rating area; modifier adjustment; out-of-network reimbursement; physical status units; Q modifier adjustment; and time units. Adopt formula for out-of-network reimbursement for non-anesthesia-related claims. Adopt formula for out-of-network reimbursement for anesthesia-related claims.
Filed: December 19, 2018
Effective: January 1, 2019
Documents:
Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id39-2018_rule-order.pdf
Summary of Testimony and Hearing Officer's Report — https://dfr.oregon.gov/laws-rules/Documents/id39-2018_ho-rec.pdf
Appendix A: Non-anesthesia reimbursement base rate — https://dfr.oregon.gov/laws-rules/Documents/OAR/div53-1605_exA.pdf
The Oregon Division of Financial Regulation recently adopted the following rule: ID 38-2018: Implementing the Oregon Reinsurance Program
Rules affected: OAR 836-150-0010, 836-150-0020, 836-150-0030, 836-150-0040, 836-150-0050, 836-150-0060
Rule Summary: Explains the purpose of the Oregon Reinsurance Program. Defines benefit year, department, reinsurance eligible claim, reinsurance eligible issuer and reinsurance payment. Lists the reporting requirements and payment processes to receive reinsurance payments. Establishes the attachment point, reinsurance cap and coinsurance rate for the benefit years 2018 and 2019. Describes how and when reinsurance payments are to be made. Describes the duties of the Oregon Reinsurance Program administrator.
Filed: December 19, 2018
Effective: January 1, 2019
Documents:
Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id38-2018_rule-order.pdf
Summary of Testimony and Hearing Officer's Report — https://dfr.oregon.gov/laws-rules/Documents/id38-2018_ho-rec.pdf
The Oregon Division of Financial Regulation recently adopted the following rule: ID 37-2018: Update to adoption of the Valuation Manual for principle-based reserving
Rules affected: OAR 836-031-0605
Rule Summary: Designates the version of the Valuation Manual insurers must use in establishing principle-based reserves beginning January 1, 2019, and confirms that the operative date of the Valuation Manual is January 1, 2017 under section 16(2) of Oregon Laws 2015 chapter 547.
Filed: December 19, 2018
Effective: January 1, 2019
Documents:
Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id37-2018_rule-order.pdf
Summary of Testimony and Hearing Officer's Report — https://dfr.oregon.gov/laws-rules/Documents/id37-2018_ho-rec.pdf
The Oregon Division of Financial Regulation recently adopted the following rule: ID 36-2018: Adoption of 2018 annual and 2019 quarterly statement blanks and instructions for insurers
Rules affected: OAR 836-011-0000
Rule Summary: Amended annually to prescribe the statement blanks and applicable instructions then in effect.
Filed: December 19, 2018
Effective: January 1, 2019
Documents:
Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id36-2018_rule-order.pdf
Summary of Testimony and Hearing Officer's Report — https://dfr.oregon.gov/laws-rules/Documents/id36-2018_ho-rec.pdf
The Oregon Division of Financial Regulation recently adopted the following rule: ID 35-2018: Update to morbidity standards for valuation of individual and group health insurance policies
Rules affected: OAR 836-031-0270
Rule Summary: The rule sets forth the minimum standards to be used by insurers for the valuation of specified benefits, and the computation of contract reserves and claim reserves, for individual and group health insurance policies.
Filed: December 19, 2018
Effective: December 19, 2018
Documents:
Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id35-2018_rule-order.pdf
Summary of Testimony and Hearing Officer's Report — https://dfr.oregon.gov/laws-rules/Documents/id35-2018_ho-rec.pdf
Establishment of Oregon Prescription Drug Price Transparency Program, reporting requirements, fees, civil penalties
Rules affected: OAR OAR 836-053-0473, 836-200-0500, 836-200-0505, 836-200-0510, 836-200-0515, 836-200-0520, 836-200-0525, 836-200-0530, 836-200-0535, 836-200-0540, 836-200-0545, 836-200-0550, 836-200-0555, 836-200-0560
Need for Rules:
The Prescription Drug Price Transparency Act (2018 Oregon House Bill 4005, enrolled at 2018 Oregon Laws, Chapter 7) directs the Department of Consumer and Business Services (DCBS) to establish a reporting program for prescription drug manufacturers and health insurance carriers to increase the transparency of prescription drug pricing in Oregon. This program will be known as the Oregon Prescription Drug Price Transparency program. The law directs DCBS to engage in rulemaking to define key terms and timelines, and empowers DCBS to establish fees, adopt a schedule of civil penalties for violations and adopt any other rules necessary for carrying out the provisions of Section 2 of the law.
The proposed rule establishes:
• Definitions for key terms including “new prescription drug,” “net annual increase,” “one month supply” and “course of treatment” that clarify the circumstances when a report is required;
• Form, manner and content requirements for reports from drug manufacturers;
• DCBS’s supervisory expectations of participating drug manufacturers, including good faith standards;
• Timelines for DCBS to request additional information relating to drug manufacturer reports, and for manufacturers’ responses;
• DCBS’s process for adjudicating trade secret claims from drug manufacturers;
• Timelines for DCBS to make drug manufacturer reports publicly available, subject to applicable trade secret exemptions;
• DCBS’s process for receiving notices from consumers about prescription drug price increases;
• Establishing an annual $400 fee for drug manufacturers, as well as an additional surcharge fee for manufacturers that file reports with DCBS;
• Adopting a schedule of civil penalties for drug manufacturer violations; and
• Requirements for information on drug pricing to be provided by health insurance carriers in rate filings.
The proposed rules are necessary to ensure that the program is administered in a fair and equal manner for all participating drug manufacturers and health insurance carriers, to minimize the administrative burden and cost of the program for the state and the industry, and to achieve the program’s purpose of providing notice and disclosure of information relating to the cost and pricing of prescription drugs in order to provide accountability for prescription drug pricing.
Filed: December 28, 2018
Public hearing: January 22, 2019, 10:00 a.m.
Last day for public comment: February 1, 2019, 5 p.m.
The agency requests public comment on whether other options should be considered for achieving the rule's substantive goals while reducing the negative economic impact of the rule on business.
For more information on this proposed rule and others, please visit the Division's website:
dfr.oregon.gov/laws-rules/Pages/proposed-rules.aspx
Washington
The Department of Insurance Issues Fines: Insurance Commissioner Mike Kreidler disciplined and issued fines in November 2018 totaling $700,500 against insurance companies, agents, brokers and others who violated state insurance regulations.
Insurance companies
Dental Health Services, Seattle; fined $500,000, order 18-0437
Kreidler fined the dental insurer for:
• Failing to identify and process 23 policyholders’ appeals.
• Failing to identify and process 342 grievances from policyholders.
• Erroneously canceling polices.
• Double-charging 492 policyholders a total of $56,351. The company refunded the money with an additional $5,635 in interest.
• Failing to deliver enrollment materials to 76 policyholders.
In addition to the fine, Kreidler will prohibit the company from selling new policies for at least 12 months. After the probationary period, the company can ask Kreidler to allow it to sell policies if it completes compliance and corrective action plans to the commissioner’s satisfaction. Kreidler is suspending $400,000 of the fine and will impose additional penalties if the company fails to comply with the terms of the order.
Kreidler previously took action against Dental Health Services in 2017 and 2018. Kreidler fined the company $400,000 for mishandling consumer complaints and other issues.
American Pet Insurance Co., New York City; fined $10,000, order 16-0127
Kreidler imposed $10,000 of a suspended fine against the pet insurance company for failing to follow the compliance plan it agreed to in July 2016. The plan includes a self-audit, which revealed that one policyholder was charged the incorrect premium and eight policyholders did not receive the required 30-day notice for a rate change. Kreidler previously suspended $100,000 of the $250,000 to ensure compliance with the terms of the order. This is the first portion of the suspended fine that Kreidler has imposed on the company.
Kreidler disciplined the following companies for violating state insurance regulations:
• Country Mutual Insurance Co., Bloomington, Ill.; fined $50,000, order 18-0409
• Nationwide Agribusiness Insurance Co., Des Moines, Iowa; fined $25,000, order 18-0425
• Amica Mutual Insurance Co., Lincoln, R.I.; fined $20,000, order 18-0424
• Zurich American Insurance Co., New York City; fined $20,000, order 16-0107
• Horace Mann Insurance Co., Springfield, Ill.; fined $10,000, order 18-0408
• Garrison Property & Casualty Insurance Co., San Antonio, Texas; fined $10,000, order 18-0433
• Stillwater Insurance Co., Santa Barbara, Calif.; fined $10,000, order 18-0474
• Allied World Specialty Insurance Co., Wilmington, Del.; fined $3,500, order 18-0458
• Amica Mutual Insurance Co., Lincoln, R.I.; fined $3,000, order 18-0444
Agents and brokers
Kreidler disciplined the following insurance producers for violating state insurance regulations:
• Michelle F. Boyer, Parker, Colo.; fined $2,500, order 18-0390
• Rashun Mann, Mansfield, Texas; fined $500, order 18-0380
• Reed Jeff Insurance Agency and Jeffrey Reed, Silverdale, Wash.; fined $250, order 18-0363
• Steele Group Insurance Agency, Inc., and Kelly S. Steele, Eugene, Ore.; fined $250, order 18-0416
• Gentry Partners Ltd.; Greenwich, Conn.; fined $250, order 18-0440
• Bruce Gilchrist, San Carlos, Calif.; fined $250, order 18-0396
• Larry P. Chinn, Memphis, Tenn.; license revoked, order 18-0398
• Kathy Ann Graham, Fort Pierce, Fla.; license revoked, order 18-0427
• Andrea Godoy, Clovis, Calif.; license revoked, order 18-0428
• Tiana Tam, Everett, Wash.; probationary license issued, order 18-0438
• Kiara Munguia, Las Vegas; license revoked, order 18-0445
• Juan Alberto Porras, Phoenix; license revoked, order 18-0430
• Glenn Chavious, Hull, Mass.; license revoked, order 18-0431
• Bijan Richards, Omaha; license revoked, order 18-0432
• April Holmes, Mesa, Ariz.; license revoked, order 18-0435
Other organizations
• Credit Acceptance Corp., Southfield, Mich.; fined $30,000, order 18-0426
• Kreidler fined the company for selling nearly 10,000 guaranteed asset protection waivers to Washington consumers via car dealerships without being registered.
• Device Doctorz of Clermont LLC, dba Insure Apple, Oviedo, Fla.; ordered to cease and desist, order 18-0462; fined $5,000, order 18-0463
A Washington state consumer complained to Kreidler’s office when Insure Apple denied his claim for the loss of his iPhone. Upon review, the commissioner found the company sold insurance without a license in Washington state. Altogether, it illegally sold 37 policies for $4,436 in premiums.
Source link: Washington Department of Insurance
Workers’ Compensation Price Drop
The Washington Department of Insurance said the price for workers’ compensation is going to fall for most businesses in 2019.
Department L&I Director Joel Sacks said the drop will average about 5% and will be the largest drop in over 10-years. “We’re seeing fewer injuries on the job and we’ve made improvements in helping injured workers heal and return to work. That’s good news for workers and employers, and it’s helping us significantly lower workers’ compensation costs,” Sacks said.
Employers will pay about $58 less per employee. The drop for workers will average about $6 year. Estimated total premium savings for businesses in the state will be about $136 million in 2019.
Of course all of this changes from industry to industry. Some will pay more. Others less.
• Building and construction workers’ premiums will decrease by 9%
• Agricultural workers’ and food processors’ premiums will drop by 2%
• Healthcare workers’ premiums will fall by 4%
• Forest products workers’ premiums will go down 6%
• Government workers’ and school employees’ premiums will see a 3% drop
• Restaurant and hotel workers’ premiums will fall an estimated 6%
Not all areas will see a drop:
• City and county law enforcement officers’ premiums will rise by 8%
• City and county firefighters’ will see a 6% hike
Source link: Chinook Observer
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