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Update: California’s Data Privacy Law

Posted By Staff reporter, Tuesday, May 21, 2019

 

An effort has been made to improve California’s new data privacy law. It failed. Other bills are being pushed to make changes to make it easier for tech companies to use data they mine.

The bill is complex. This story is not. The California Consumer Privacy Act gives consumers the right to know what data is being gathered and the right to restrict how it is sold — if it is sold — and to force firms to delete the data. 

Congress is considering a similar bill and consumer advocates are rallying around the California law to make that happen. It is — like this new privacy improvement bill did — getting strong pushback from technology companies like Facebook, Amazon and Google.

The bill introduced by California Sen. Hannah-Beth Jackson — a Democrat — would have allowed consumers to sue companies for violations of the law. It failed to get out of the Senate Appropriation Committee.

Tech companies are delighted.

The bill had the support of California Attorney General Xavier Becerra and other privacy advocates. He liked that it would give the state more latitude to enforce the law’s provisions. And like Jackson — he’s disappointed.

The senator says the tech firms have too much power and use that power to the detriment of consumers. “The truth of the matter is the tech world is such a behemoth at this point in time, they have so much money, they have really been driving this whole discussion,” she said.

The point — she said — is to make sure companies delete data when asked and her bill would make them more accountable. As the law stands now, it is up to the state to do the enforcement. The bill would have put the consumer in that loop.

 Lori can help you with membership at the PIA Western Alliance

 

“There are so many aspects to this where violations could occur but the attorney general could be the only entity that could bring a suit,” Jackson added. That’s why the bill did away with the 30-days notice to a tech firm to fix a violation before the attorney general could act.

Business groups jointed Facebook, Google, Amazon and others in opposing the bill. Sarah Boot of CalChamber (the California Chamber of Commerce) said it gives trial attorneys too many money-making opportunities via lawsuits and attorneys fees.

“Compliance with the CCPA should be the goal of any regulatory enforcement and having individual trial lawyers responsible for enforcement as is the case in SB 561 will not serve that goal,” she said.

In the meantime, these same business groups want to change some of the law and give it some exceptions. They are supporting legislation that would allow companies to sell the data from people who’ve opted out. That is illegal now.

Source link: Associated Press

Tags:  insurance content  insurance news  Update: California’s Data Privacy Law 

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Around the PIA Western Alliance

Posted By Staff reporter, Tuesday, May 21, 2019

Montana

Governor Signs Medicaid Expansion & Vetoes Drug Price Bill: Montana Governor Steve Bullock signed a bill to expand the state’s Medicaid program. He also signed a one that has a work requirement and increased premiums for those remaining on the state’s Medicaid program for over a year.

All together he signed nine bills that involve health. One of the bills requires the state to start a reinsurance program. The goal of that program is to cut premium costs for those using the Affordable Care Act’s marketplace and reimburse insurers for high-cost claims.

A bill to reduce prescription drug prices by regulating the contracts companies can sign with pharmaceutical benefit managers hired to negotiate prices for pharmacies and manufacturers was vetoed.

Bullock said the bill would cause administrative costs to rise.

Source link: Independent Record

 

 

Oregon

Filings: Oregon consumers can get a first look at requested rates for 2020 individual and small group health insurance plans.

In the individual market, seven companies submitted rate change requests ranging from an average 3.2 percent decrease to an average 13.5 percent increase, for an average of 3.3 percent. In the small group market, nine companies submitted rate change requests ranging from an average 0.3 percent decrease to an average 13.1 percent increase, for an average of 8.7 percent. See the attached chart for the full list of rate change requests.

“It’s early in the process, but we are encouraged to see carriers providing more options to Oregonians by expanding into both rural and coastal communities, and the market stabilizing in spite of uncertainty at the federal level,” said Insurance Commissioner Andrew Stolfi. “Now it is time to start our open and thorough review process that allows Oregonians to provide input on the filings that affect them.”

Moderate rate increase requests, recent health insurance company financial statements, and expansion into additional counties by multiple carriers reveal that the Oregon health insurance market is stabilizing in spite of continued uncertainty at the federal level. The Oregon Reinsurance Program continues to help stabilize the market as well. It consistently lowers rates by 6 percent each year.

Health insurance companies submitted rate requests to the Department of Consumer and Business Services, Division of Financial Regulation on May 13. Over the next two months, the division will analyze the requested rates to ensure they adequately cover Oregonians’ health care costs. The division must review and approve rates before they are charged to policyholders.

The requested rates are for plans that comply with the Affordable Care Act for small businesses and individuals who buy their own coverage rather than getting it through an employer.

Later this month, Oregonians will be able to compare their health plans and submit comments at  www.oregonhealthrates.org

Public hearing dates will also be posted to the site.

Oregonians are encouraged to comment on rate change requests during the public comment period, which opens later this month and runs through early July. The public can submit comments online and during the public rate hearings.

Preliminary decisions are expected to be announced late June, and final decisions will be made in late July.

 

 

Washington

Kriedler Disaster Plan: Insurance Commissioner Mike Kreidler’s proposal to prepare for and mitigate the effects of climate disasters was signed into law yesterday by Gov. Jay Inslee. Senate Bill 5106 passed the House on April 12 with a 95-0 vote and the state Senate on April 22 with a 48-0 vote. The law takes effect on July 28.

The bill creates a work group represented by 27 organizations including legislators, state agencies, insurance companies, Tribal leaders, municipal groups and other key parties. The group will review and make recommendations on how to best coordinate and improve disaster resilience work in Washington state.

“I thank Sen. Mona Das, (D-Kent), and Rep. Kristine Reeves, (D-Federal Way), for sponsoring this important legislation,” Kreidler said. “This is a crucial first step in being prepared to mitigate disasters that we face in Washington state, including earthquakes, wildfires and flooding.”

““Washington state is prone to natural disasters including earthquakes, floods, landslides, and wildfires,” Das said. We’ve seen an increase in these events because of climate change. We need to act now to ensure we’re fully prepared.”

The work group will hold its first meeting in September. The group’s final report on its recommendations on whether Washington should have an ongoing resilience program is due in December 2020.

Source link: Washington Department of Insurance

 

 

Kreidler & Long Term Care: Insurance Commissioner Mike Kreidler says signing House Bill 1087 into law is a good step toward helping Washington residents deal with the costs of long-term care. Gov. Jay Inslee signed the bill into law yesterday.

The legislation, better known as the Long Term Care Services and Support Trust Act (www.leg.wa.gov), would provide up to $36,500 in assistance toward long-term care costs. Washington residents will begin paying premiums through their workplace in January 2022.

Benefits will be available to qualified residents beginning January 2025.

Kreidler noted the new benefits can be combined with other options, such as long-term care insurance policies, to help pay for needed assistance.

“This program can help people avoid impoverishing themselves to get care in their older age,” Kreidler said. “Most people don’t even think of buying a long-term care policy until they are much older and the cost is prohibitive.

“This new program will have many more people paying in from a younger age. This will help keep costs down and provide many with greater options for long-term care in the latter part of their lives. This program offers some needed peace of mind.”

Source link: Washington Department of Insurance

 


Tags:  Around the PIA Western Alliance States  insurance content  insurance news 2019 

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Around the PIA Western Alliance States

Posted By Staff reporter, Tuesday, May 14, 2019

Around the Western Alliance States Weekly Insurance Industry News

California

Appeals Court Decision on Mercury: In 2015 the California Department of Insurance leveled a $27.5 million fine against Mercury Insurance for illegal fees. The fees — the department said — should have been premiums and disclosed as such.

 

The fees violated rules established by Proposition 103.

 

The appeals court said since the fees are premiums they ought to have been approved by the commissioner. But even when warned by the commissioner to stop the practice, Mercury’s agents — allowed to do so by the company — kept charging $50 to $150 in fees on top of the premium rates approved by the commissioner.

 

It did so by illegally by giving its agents the moniker broker. As a result unapproved fees were leveled in over 180,000 transactions from 1999 to 2004. Those transactions brought $27.5 million to Mercury’s coffers. Thus the size of the fine.

 

By the way, the $27.5 million is the largest fine ever imposed on an insurer by the California Department of Insurance.

 

“The decision is unequivocal: insurers cannot avoid the Department’s scrutiny by charging ‘fees’ on top of the rates already approved by the Commissioner,” Insurance Commissioner Ricardo Lara said. “Our efforts to maintain fair rates depend on insurers playing fair by disclosing the full cost of their insurance, which Mercury did not do.”

 

Source link: Insurance Journal

 

 

Oregon

From the Department of Insurance: Future Income Payments LLC fined $5.9 million for targeting pensions of veterans and retirees

 

Multnomah County Circuit Court Judge Katherine von Ter Stegge fined Future Income Payments LLC $5.9 million for executing a scheme on approximately 240 Oregon veterans and retirees. The Oregon Department of Consumer and Business Services’ Division of Financial Regulation and the Department of Justice sued Future Income, owned by Scott Kohn, for the scheme which provided illegal loans to low-income Oregonians with interest up to 200 percent.

 

The scheme required borrowers to authorize Future Income to make electronic withdrawals from their pension or retirement accounts to repay the loans. This provided Future Income the ability to remove money from victims’ accounts despite violating multiple Oregon and federal laws.

 

In addition to the judgment, the court declared all the loans void, saving victims more than $5 million in principal, interest, and fees. Since the judgement, a number of other states and the Consumer Financial Protection Bureau have taken similar action against Kohn and Future Income. The U.S. Attorney’s Office for the District of South Carolina indicted Kohn and Future Income last month for conspiracy to engage in mail and wire fraud.

 

“The collaboration with Attorney General Ellen Rosenblum and the Department of Justice was key in this case,” said Andrew Stolfi, division administrator. “Preying on the hard-earned pensions of our veterans and retirees is disgraceful, and all our teams work hard to protect Oregonians from being victims of illegal schemes like this.”

 

Oregonians are encouraged to know before you owe by making sure loan companies like Future Income are legally registered with the state before signing any agreement. For more resources to protect your finances visit dfr.oregon.gov/financial or contact our advocates at 888-877-4894 (toll free).

 

To learn more about protecting yourself from financial fraud visit, https://dfr.oregon.gov/financial/protect/Pages/senior-safe.aspx

 

 

Oregon Health Insurance Marketplace, a Statewide Partner Agent Program

The Department of Consumer and Business Services has released a request for grant proposals (RFGP) for the Marketplace’s Statewide Partner Agent Program. This program provides promotion, funding, and support for qualified, resident agents with the goal of helping educate and enroll Oregonians in health insurance through the Marketplace.

 

Proposals are due Friday, May 31, 2019 by 11:59 p.m. Pacific Time. The RFGP and supporting documents can be found on ORPIN and on our website under Agents resource center. Please contact Frances Wilkins, Procurement Specialist, at (503) 947-7008 or frances.j.wilkins@oregon.gov if you have any questions about this opportunity.

 

Oregon Health Insurance Marketplace

1-855-268-3767

agents.marketplace@oregon.gov

 

You are Invited to Our First Innovation Forum: THE FUTURE OF FINANCE, INSURANCE, COLLABORATION

 

June 7, 2019

8:30 a.m. - noon

Salem Convention Center

 

Learn how local financial and insurance companies are preparing for the future.

 

You’ll hear from:

 

  Oregon Division of Financial Regulation Administrator Andrew Stolfi

  Oregon State Treasurer Tobias Read

  Technology Association of Oregon

  maps credit union

  Umpqua Bank

  The Standard

  and more

 

This FREE event is for professionals from the financial

service, insurance, and technology industries.

 

Visit our website dfr.oregon.gov/innovation to register for this free event today, space is limited.

 

Learn more: https://www.eventbrite.com/e/oregon-division-of-financial-regulations-innovation-conference-tickets-60581985349

 

Updated Product Standards

 The Division has updated the following product standards:

 

440-4953 – We’re updating the Medical Binder Filings product standards for 2020 to comply with the maximum out of pocket (MOOP) listed in the 2020 Notice of Benefit and Payment Parameters. If the existing product standards have already been completed we are not requiring submission of these new standards. Just be aware of the updated MOOP of $8150 and published filing dates for the 2020 plan year.

440-4980 – Minor changes to coincide with 2020 plan year.

Tags:  around the pia western alliance states  industry content  Insurance Content 

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PG&E Gets Permission to Meet Safety Goals

Posted By Staff writer, Tuesday, April 30, 2019

Pacific Gas & Electric is bankrupt. At the same time, it must still continue to provide power to its customers and is being legally required to manage the lands its power lines cross. The firm and its equipment — as you know — is being blamed for many of the wildfires that have decimated California over the last couple of years.

 

Those fires and the company’s culpability have driven it to declare bankruptcy.

 

To get all of the trees cleared and branches trimmed around power lines will require a lot of labor. PG&E said to accomplish that it will need — at the most — $350 million. A hunk of that is for employee overtime. However, company officials think the task can be accomplished for $235 million.

 

U.S Bankruptcy Judge Dennis Montali in San Francisco has approved the plan. Montali grilled John Lowe who is responsible for the company’s compensation program. The judge agreed he’s the expert and will go along. “It was helpful for me to hear from him,” Montali said. “Bottom line is I will defer to judgment of management.”

 

PG&E has to remove 375,000 trees this year. 

Tags:  insurance content  Insurance News  Pacific Gas & Electric  pia western alliance 

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Distracted Driving — It’s Not Just Smartphones

Posted By Staff writer, Tuesday, April 23, 2019

Most of the talk these days about distracted driving involves the use of smartphones, texting, handheld talking and checking email and websites.

 

However, new research from Root Insurance and Wakefield Research says other distractions exist and are not only prevalent, but they’re just as dangerous.

Here’s a partial list:

  Hairstyling

  Shaving

  Doing makeup

  Playing with pets

  Changing clothes

  Eating

  Controlling children

Root Insurance director of data science for telematics Joe Plattenburg said over half of the people they talked to say distracted driving is one of their top driving worries. “The number of distractions are increasing,” Plattenburg said, “And so is the need for companies and drivers to find new ways to encourage focused driving.”

Not only that, but distracted driving is also an insurance problem. And all this comes into play and is important to Root Insurance because it uses smartphone technology to help its customers get better rates based on how they drive.

However, a lot of Root’s clients aren’t going to get much help because many admit to excessive cellphone use while driving.

  A high percentage admitted to spending an average of 13-minutes a day interacting with their mobile device while driving

  38% say they check mobile devices while behind the wheel

  An equal number say they don’t even put their phones down when they see law enforcement on a street or highway

Plattenburg said 99% of drivers Root Insurance and Wakefield polled said the cellphone is among their top-three distractions.

  52% said they get distracted by group texts and chain emails

  33% said social media is a cause of distraction while driving

  18% say attention from the road has strayed because of streaming video like a movie trailer or a TV show

Ironically, the Root/Wakefield survey found many of us to be hypocrites. A high percentage were totally intolerant of distracted driving though they are — themselves — distracted drivers.

  90% said they give an Uber or Lyft driver a bad rating for texting while driving

  Yet, 40% say they have texted while driving

  90% — however — say they are much better drivers than Uber or Lyft drivers

Other distracted driving stats from the survey:

  30% say they have steered a vehicle with their knee or chin while driving

  18% say they have engaged in groom — hairstyling, makeup, shaving, etc. — while driving

  13% say they’ve played with a pet while driving

  12% say they’ve changed clothes will driving

And what’s the point of the Root Insurance-Wakefield survey? Root Insurance CEO Alex Timm said, “Root’s mission is to help drivers make better decisions on the road, and the industry standard fear tactics are clearly not working.”

Source link: Carrier Management

Tags:  Distracted Driving  insurance content  Insurance News  PIA Insurance 

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Around the PIA Western Alliance States

Posted By Staff writer, Tuesday, April 23, 2019

Around the PIA Western Alliance PIA Insurance

 

Arizona

Texting & Driving Ban

 Arizona Governor Doug Ducey says he will sign the bill making Arizona the 48th state to ban texting and driving. The law takes effect in 2021. It fines a first time offender somewhere between $75 and $149. Further violations could go up to $250 per incident.

Source link: Arizona Capital Times

 

Idaho

Job Opening

 The Idaho Department of Insurance has an open Consumer Affairs Officer position in Boise.  Below is the link to the job announcement and application:

This position is open for all qualified individuals to apply through April 28, 2019.  If interested, please apply through the application process via the Division of Human Resources website. There is an online exam associated with this position to ensure minimum qualifications are met. Feel free to pass this information along to any other individuals you think may be interested in this opportunity.

If you’re interested click here to apply.

 

Medicare Workshops

 A pair of free Medicare Workshops for individuals turning 65 and those approaching Medicare eligibility will be held in Lewiston the last full week of April. 

The first session is scheduled for Wednesday, April 24 from 6 p.m. to 7:30 p.m. at the St. Joseph Regional Medical Center, 415 6th St., Conference Room D. The second workshop will take place Thursday, April 25, from 10 a.m. to noon at the Community Action Partnership, 124 New 6th St.  Caregivers and all those interested in learning how Medicare works are encouraged to attend.

Another will be held in Preston on Tuesday, April 23 from 5:15 p.m. to 7:15 p.m. at Southeastern Idaho Public Health, 42 W. 1st South, Preston.

Medicare workshops are designed to introduce the various parts of Medicare and to share some of the costs and benefits associated with the program.  Sessions cover enrollment time frames for Medigap, Medicare Advantage, prescription drug plans, and how the different parts of Medicare work together.

Staff members with the state’s Senior Health Insurance Benefits Advisors (SHIBA) program, a unit of the Idaho Department of Insurance, conduct the workshops.  To register for either session, please contact the SHIBA Helpline at 1-800-247-4422.

 

 

Montana

Firefighter Work Comp Law

 Montana Governor Steve Bullock has signed a bill into law that makes it easier for firefighters to get workers’ compensation insurance to cover cancer and other occupation-related diseases.

The bill ends a 20-year battle between legislators and firefighters over the issue.

Under the new law, an insurer can only deny a claim if it can prove the firefighter was not exposed to enough smoke or particles to cause an illness. Until the governor signed the bill into law, Montana was one of only a few states without a presumptive law.

The presumptive illnesses in the law include myocardial infarction, colorectal cancer, mesothelioma, non-Hodgkin's lymphoma and cancers of the esophagus, brain, lung and breast.

 

In signing the bill into law, Bullock said, “Today every firefighter should know Montana has your back and it's about damn time.”

The law goes into effect July 1st of this year.

Source links: Fire Engineering, The News & Observer

 

 

Oregon

State Innovation Hub

 If you have an innovative product, service, or idea for the financial service or insurance industry, don't miss this free event hosted by the Oregon Division of Financial Regulation.

Oregon's Innovation Hub is here to help financial services, insurance, and tech companies deliver innovative products and services to Oregon consumers.

Registration and more information available soon at dfr.oregon.gov/Innovation.

 

 

Washington

Kreidler Fines

 Insurance Commissioner Mike Kreidler issued fines in March totaling $158,000 against insurance companies, agents and brokers who violated state insurance regulations.

Insurance companies

  United States Fire Insurance Co., Wilmington, Del.; fined $25,000, order 16-0192

  United States Fire Insurance Co. sells pet insurance under the brand name ASPCA Pet Health Insurance. In July 2016, Kreidler fined the company $50,000 for several law violations, including charging customers the wrong rate, selling policies through unlicensed producers, issuing incorrect policy forms to customers and not disclosing the underwriter’s name to customers. At the time, Kreidler suspended $25,000 of the fine as long as the company followed a compliance plan to correct the violations.

Kreidler determined that the company has violated the compliance plan and is levying the remaining $25,000 fine. As recently as November 2018, the company continues to let unlicensed producers sell its pet insurance product and is selling pet insurance through an unappointed marketing website, www.policygenius.com.

Kreidler fined the following insurance companies for violating state insurance laws and rules:

  Lincoln National Life Insurance Co., Fort Wayne, Ind.; fined $100,000, order 19-0100

  IDS Property Casualty Insurance Co., De Pere, Wisc.; fined $7,500, order 19-0094

  USI Insurance Services National, Inc.; Seattle; ordered to pay premium taxes, order 17-0466

  Banner Life Insurance Co., Frederick, Md.; ordered to cease and desist, order 19-0048

Agents and brokers

  Paul Curtis Rhoton, Burien, Wash.; license revoked, order 19-0095

  Jack J. Barry, Vancouver, Wash.; license revoked, order 19-0092

  JetClosing, Inc., Seattle; fined $250, order 19-0018

  Noelia Clemons, Pickerington, OH; fined $250, order 19-0064

  Steven N. Farah, West Linn, Ore.; license revoked, order 19-0091

  Christopher Todd Price, Overland Park, Kan.; revocation rescinded, fined $500, order 19-0140

  Highland Health Direct and Daniel Strikowski, Deerfield Beach, Fla., and Ian McCauslin, Boca Raton, Fla..; fined $1,000, order 19-0097

  Stephanie F. Miller, Reading, Penn.; fined $250, order 19-0042

  Tabak Insurance Agency PLLC, Sugar Land, Texas; fined $250, order 19-0065

  Socius Insurance Services, Inc., San Francisco; fined $250, order 19-0068

  Hanna Perez, Phoenix; license revoked, order 19-0069

Other organizations

  International Hole in One Association dba Hole in One International, Reno, Nev.; ordered to cease and desist, fined $15,000 and ordered to pay premium tax, order 19-0113

  First Automotive Service Corp., Albuquerque, N.M.; fined $3,250, order 19-0067

  Apex Longevity, Avon, Ohio; fined $3,000, order 19-0070

  National Rural Letter Carriers Association, Alexandria, Va.; ordered to cease and desist, order 19-0098

  Landcar Agency, Inc., Sandy, Utah; ordered to cease and desist, order 19-0050

  BKL Holdings Inc. dba Insurance License Coach, Baton Rouge, La.; fined $1,500, order 19-013

Source link: Washington Department of Insurance

 

 

Tags:  Around the PIA Western Alliance States  insurance content  insurance news 2019 

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Oregon Governor Raids SAIF — PIA Oregon Reacts

Posted By Staff writer, Tuesday, April 16, 2019

The Professional Insurance Agents of Oregon — PIA Oregon — is just one of many groups in Oregon disturbed over Governor Kate Brown’s decision to grab funds from the quasi-private State Accident Insurance Fund (SAIF) to beef up the PERS retirement system.

Brown’s decision takes $486 million from SAIF’s $1.9 billion surplus.

Negative reaction around the state was immediate. PIA Oregon Lobbyist Lana Butterfield said the governor’s decision is not a good one and she checked off a few reasons why:

  SAIF’s reserves are essential to protecting the safety of Oregon workers and ensuring low rates for employers throughout state. 

  Small businesses, school districts, local governments and non-profits depend on SAIF’s affordable rates and safety programs to ensure a safe and healthy workplace.

  Raiding SAIF’s reserves will negatively impact worker safety and accident prevention.

  Any excess premiums (that created the reserves) should go back to the employers who have paid them.

And the bottom line? SAIF’s funds ought not be used as a piggy bank by Salem politicians trying to cover unsustainable costs in PERS.

 

"Many PIA members serve small businesses. SAIF has stepped up to serve this community of small businesses that often have difficulty securing coverage,” she said. “It provides a very reasonable price for a high level of worker benefits and safety. If SAIF reserves are swept, it is likely employer rates will increase substantially over time.  This is not good for Oregon, small businesses or PIA members.”

 

In her news release on the decisions to shore up PERS, the governor said, “Oregon’s public employee retirement system, or PERS, is first and foremost an essential benefit for our public employees. In exchange for dedicating their lives to public service, Oregon has made a promise to provide them a secure retirement after decades of teaching our kids, fixing our roads, keeping our neighborhoods safe, fighting fires, or helping our children in foster care.”

 

Brown said it’s important to keep the promises the state made to those workers. Anything less is “kicking the can down the road.”

 

The editorial board of Portland, Oregon’s newspaper, The Oregonian published an editorial that urged the governor to reconsider her decision. It said:

 

“While the Legislature in 1982 passed a law expressly authorizing such a transfer, it would be controversial and risks destabilizing an entity that has competently, reliably and efficiently administered workers compensation for public and private employers for years. In trying to address the PERS crisis, Oregon should not do anything to trigger another,” the editorial board wrote.

 

In a story in Weekly Industry News last week, we referenced what happened with the 1982 decision of the Oregon Legislature. It authorized taking $80 million of SAIF’s reserves. A lawsuit followed and the Oregon Supreme Court said the state acted illegally and ordered the money returned.

 

With interest, $225 million was returned to SAIF and its policyholders. The attorneys fees and the cost of the litigation totaled a staggering $20 million.

 

If a decision is made by the Legislature to grant the governor’s decision to take that money, Weekly Industry News assumes lawsuits will be filed.

 

PIA Oregon is part of a coalition of business groups and associations opposing the governor’s decision. The group published a response a couple of weeks ago when the governor began talking seriously about taking the SAIF funds.

 

“SAIF’s revenue’s come via premiums from the 47,000 small businesses, school districts, nonprofits and local governments who depend on the company to cover their workers,” the group wrote. “The system is working well for workers and employers and this could significantly disrupt the balance that exists within the system. Make no mistake that this will impact rates paid by employers as SAIF fights to rebuild it’s reserves.”

 

The group called the governor’s decision, a dangerous game.

 

“They are literally stealing from one pot to cover liabilities in another and hoping that you can pay it back before something bad happens. That’s a dangerous game,” the coalition stated.

 

“Additionally, that would require significant changes to SAIF’s operating structure and should be done after careful study rather than as a hasty bailout strategy for PERS. SAIF is unlike other insurers in that it operates solely within the state of Oregon and is required to focus 100% on workers comp (mono-state and mono-lines).”

 

Republicans immediately criticized the SAIF raid decision. House Republicans said, “While recent Secretary of State audits reveal many agencies are prone to waste, SAIF has built enviable reserves, annually returning dividends to clients and covering thousands of claims. Ironically, cash reserves built on years of workplace safety and sound fiscal practice are viewed as easy pickings to shovel into the ever-deepening PERS pit.”

 

Mike Salsgiver is the Executive Director of the Associated General Contractors. He agrees and said SAIF’s reserves should be off limits. “You can be certain that raiding hundreds of millions of dollars from SAIF's reserves will negatively impact worker safety and accident prevention. That means higher rates for employers, reduced benefits for workers, or fewer investments in accident prevention. Any way you cut it, Oregon small businesses and workers lose,” he said.

 

Oregon Business & Industry represents Oregon’s largest employers. Spokeswoman Samantha Tipler said her group agrees that the SAIF raid is a bad idea. “We will strongly oppose this effort to raid SAIF to bail out PERS. The PERS solution should stand on its own.”

 

The governor’s PERS rescue plan has a couple of other components:

  After giving each family $100, the state will keep — one time — the income tax kicker. Brown hopes it will raise $400 million to 500 million.

  Repatriation funds already dedicated under 2018 Senate Bill 1566 (and Senate Bill 1529) for a total of $83.3 million.

  Windfall revenue from variable sources, including direct, above-trend revenues from capital gains and estate taxes to the account.

 

Keeping the kicker — funds returned to Oregonians if tax collections exceed income projections by 2% — will require a two-thirds vote by the Legislature to happen. It has no chance since the idea has to get support from both parties.

 

In last week’s Weekly Industry News, we covered a letter to The Oregonian from former PIA Oregon/Idaho president Rich Kingsley. He hit the nail on the head with his description of the governor’s decision.

 

“It was a stupid stunt then,” Kingsley wrote. “And to think of doing it again is still stupid, and reckless.”

 

Source links: Governor Kate Brown, Weekly Industry News — link 1, link 2, link 3OregonLive.com, Willamette Week

Tags:  insurance content  insurance news 2019  PERS  PIA Western Alliance 

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Washington Legislature Wants to Tax Insurance

Posted By Staff writer, Tuesday, April 16, 2019

The Professional Insurance Agents of Washington/Alaska (PIA) is just one of many groups, associations, agencies and insurance companies opposing a new proposal to add to Washington’s insurance premium tax.

 

The premium tax — as it stands now — is 2%. It generates $1.4 billion in income for the state. The new proposal — SB 5996 — was introduced in both the Senate and the House. It adds an additional .52% to the current tax. The hope is to bring in $125 million in revenue to use to fund the newly established Wildfire Prevention and Suppression Account.

 

As most of you know, the current tax is on home, auto and business insurance. This tax applies to all P&C lines including home, auto, commercial property, BOP, medical malpractice, inland marine, construction and contractor liability, municipal and school district excess liability, umbrella policies — and no joke — even the insurance paid to insure mobile phones.

 

PIA Washington Lobbyist Mel Sorenson testified before the House Financial Committee. Along with others — including PIA Western Alliance Executive Vice President Clark Sitzes — Sorensen said the tax is unfair and unjustifiable.

 

“Fighting and preventing wildfires is a priority for society as a whole,” he told Weekly Industry News. “The costs should be supported broadly, not just by insurers and the insurance-buying public. SB 5996 will drive the cost of insurance coverage for Washington consumers $125 million higher over the next two years. It’s not fair to homeowners, drivers, and others who need insurance to push the cost of their coverage higher in this way.”

 

Sitzes pointed out the danger of the tax to consumers. Higher insurance prices could end up with a lot of people forgoing the buying much-needed insurance.

 

In addition to Sorensen and Sitzes, members from the American Property Casualty Insurers Association (APCIA), the National Association of Mutual Insurance Companies (NAMIC) and the Northwest Insurance Council (NWIC) testified.

 

Mark Sektnan of the APCIA said, “Taxes on insurance companies and our customers are contributing to support the state budget — including efforts to train wildland firefighters, prevent loss and improve forest health — and insurance consumers are doing their part to protect the investment they make in their homes, vehicles and businesses when they buy insurance. Improving forest health and protecting wildlands and communities is a societal good, and should be a priority shared by all taxpayers, not just insurance consumers.”

 

NWIC’s Kenton Brine said the increase — if passed — will put Washington-domiciled insurers at a competitive disadvantage to insurers housed in other states. In a document he prepared for testimony, Brine said it’s not that insurers oppose doing something about the destructive nature of wildfires. They just don’t want to bear the entire burden.

 

“We recognize that a variety factors including population growth, changing demographics, current and past forest practices and climate change are rapidly and dramatically changing the wildland fire threat in Washington,” he wrote.

 

Brine went on to say insurers are partners with communities all over the state in working onways to stop the carnage. However, he said this “unfairly shifts the societal cost of fire suppression exclusively to insurance premiums.”

 

He also asked committee members a number of critical — and very good — questions.

 

“Does the state tax health insurance policies to pay for cancer research and chemotherapy treatments?” he asked. “Is there a tax exclusively on jewelry stores to pay for more police officers? Of course not.

 

Washington residents, businesses and visitors across the state pay taxes to our state’s general fund to pay for societal costs, like fire and police protection. SB 5996 shifts those costs from all taxpayers exclusively to insurance companies and policyholders with a 25% tax increase only on auto, home, commercial and other P&C insurance premiums, to be paid into a dedicated account managed by the state Department of Natural Resources.”

 

Plus, Brine wrote, “There are no controls or limits included in SB 5996 on the use of the $125 million tax increase after it is put into the Wildfire Suppression and Prevention Account. At any time, the Legislature could ‘sweep’ these funds back into the general fund for other unrelated purposes, leaving property owners paying more and getting the status quo.”

 

Source links: Insurance Journal, Northwest Insurance Council, Tri-City Herald

Tags:  Insurance Content  PIA National  Washington insurance premium tax 

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M&A Activity — Growing ​

Posted By Staff writer, Tuesday, April 16, 2019

 

OPTIS Partners tracks mergers and acquisitions. The company said the first quarter of 2019 saw M&A activity continuing to be hot. By “hot,” the company means 151 agencies changing hands. That’s one more than was seen in the first quarter last year.

These are agencies that sell P&C insurance, employee benefits, or both.

The largest number of the transactions were picked up by Patriot Growth Insurance Services. There were 18 of them and 17 closed. Other top buyers:

  Acrisure — 16

  Hub — 12

  Gallagher — 10

  Broadstreet Partners — 10

OPTIS Partners also noted there were only 57 unique buyers in the first quarter transactions. That’s the lowest number in any quarter since 2014.

Source link: Insurance Business America

Tags:  insurance content  insurance news 2019  M&A Activity — Growing  pia western alliance 

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Commercial Rates — Looking Good!

Posted By Staff writer, Tuesday, April 16, 2019

The first quarter of 2019 is looking good for insurance rates. New data from MarketScout says both commercial lines and personal lines saw increases of 2% when compared to the first quarter of 2018.

MarketScout’s CEO Richard Kerr said, “Transportation risks were up by 4%. Auto continues to be assessed with the most aggressive rate increase by line of coverage at plus 7%. Also, energy exposures are now starting to see more rate increases. Otherwise, the commercial market is stable.”

Here are the statistics by line:

  Commercial property: +2.5%

  Business interruption: +2%

  BOP: +2%

  Inland marine: +2%

  General liability: +2%

  Umbrella/excess: +2%

  Commercial auto: +7%

  Workers’ compensation: -1%

  Professional liability: +2%

  D&O liability: +1%

  EPLI: +1%

  Fiduciary: +1%

  Crime: +1%

  Surety: Flat

By account size:

  Small — up to $25,000: +2.5%

  Medium — $25,001-$250,000: +2%

  Large — $250,001-$1 million: +1%

  Jumbo — over $1 million: +1%

By industry:

  Manufacturing: +2.5%

  Contracting: +2%

  Service: +2%

  Habitational: +3%

  Public entity: +2%

  Transportation: +4%

  Energy: +2.5%

Kerr said personal lines rates are in the positive as well. The composite rate only rose 2% but Kerr said the number isn’t exactly what it seems. The totals are a bit deceptive.

“The personal lines market is so large that the composite rate can sometimes be misunderstood. There is an incredible volume of business in benign areas, which helps stabilize rate increases in catastrophe-exposed areas such as Florida and California,” Kerr pointed out. “Some of the insurers of larger homes in Florida are increasing rates significantly or choosing to restrict their writings. In California, it’s a mess for wildfire- and mudslide-exposed properties. California homeowners are experiencing rate increases of 20% for homes in brush areas, and for the brush-exposed homes without adequate protection, rate increases are up over 40%.”

Here are the personal lines stats:

  Homeowners under $1 million value: +2%

  Homeowners over $1 million value: +2%

  Auto: +2.5%

  Personal articles: +1%

Source link: Insurance Business America

Tags:  2019 insurance rates  Around the PIA Western Alliance States  commercial lines  insurance content  insurance news 2019  personal lines 

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