Around the PIA Western Alliance States – Week of July 15, 2024

California — Thompson Wildfire Order: Insurance Commissioner Ricardo Lara ordered insurance companies to preserve residential property insurance coverage for approximately 46,000 policyholders affected by the Thompson Fire in Butte County after Governor Gavin Newsom issued an emergency declaration on July 3, 2024. The Commissioner’s Bulletin shields those living within the perimeters or adjoining ZIP Codes of the Thompson Fire from insurance non-renewal or cancellation for one year from the date of the Governor’s emergency declaration regardless of whether they suffered a loss.

“Consumers affected by the Thompson Fire should have peace of mind knowing that they get to keep their insurance coverage as they take the time to assess, rebuild, and begin the long recovery process. My top priority is consumer protection for all Californians, and especially vulnerable consumers and disaster survivors,” said Commissioner Lara. “My moratorium order is just one of the many actions that I am taking to provide relief to homeowners while I continue to work with stakeholders and climate experts to address the root causes of these ever-intensifying natural disasters in order to prevent even greater losses.”

The Commissioner’s ability to issue moratoriums is a result of a California law he authored in 2018 while serving as state senator in order to provide temporary relief from insurance non-renewals and cancellations to residents living within or adjacent to a gubernatorial-declared wildfire disaster.

Since 2019, Commissioner Lara’s actions have protected nearly 4 million homeowners. Today’s order protects an estimated 46,000 policyholders in 18 ZIP Codes for one year, effective July 3, 2024. Consumers who were non-renewed prior to the emergency declaration date and are unable to obtain insurance or are dissatisfied with their current coverage should contact the California Department of Insurance for assistance in understanding their options and tools.

Consumers can go to the Department of Insurance website to see if their ZIP Code is included in the moratorium. Consumers should contact the Department of Insurance at 800-927-4357 or via online chat or email at insurance.ca.gov if they believe their insurance company is in violation of this law, or have additional claims-related questions.

Commissioner Lara’s major wildfire-related actions since taking office in 2019 include:

    Announcing California’s Sustainable Insurance Strategy, the largest insurance reform since voters passed Proposition 103 in 1988. This new strategy is a comprehensive approach to modernizing California’s insurance market by improving insurance choices for consumers, creating a resilient insurance market, and protecting communities from climate threats, while addressing the long-term sustainability of the nation’s largest insurance market.

    Creating “Safer from Wildfires,” a new insurance framework that incorporates wildfire safety measures to help save lives while making homes and businesses more resilient. Safer from Wildfires was created by a first-ever partnership between the Department of Insurance and the emergency and preparedness agencies in the Governor’s Administration, including CAL FIRE, the Governor’s Office of Emergency Services (CalOES), the Governor’s Office of Planning and Research, and the California Public Utilities Commission.

    Finalizing new regulations to incorporate Safer from Wildfires in insurance pricing, driving down costs for consumers who have taken actions to protect their communities while increasing transparency about their home’s or business’s “wildfire risk score.”

    Sponsoring new insurance protections signed into law by the Governor — despite opposition from insurance companies — that will mean larger payouts for some claims, less red tape from insurance companies, and more help for people under evacuation orders.

    Ordering the FAIR Plan, the state’s insurer of last resort, to offer a more comprehensive homeowners policy as an option, which a judge upheld, as well as expanding residential and commercial coverage limits for the first time in 25 years to keep pace with increased costs.

Following Governor Newsom’s state of emergency declarations, the Department of Insurance partners with CAL FIRE and CalOES, pursuant to existing statute, to identify wildfire perimeters for mandatory moratorium areas. The Department of Insurance will continue to collaborate with CAL FIRE and CalOES to identify additional wildfire perimeters for any fires where there is a gubernatorial declaration of a state of emergency.

Source link: California Department of Insurance — https://bit.ly/4d40CNQ

California — Lara Sets New Work Comp Benchmark Rate: Insurance Commissioner Ricardo Lara adopted and issued a new and decreased rate for workers’ compensation insurance that reflects California’s growing economy. The Commissioner’s action lowers the annual benchmark rate from currently $1.41 to $1.38 per $100 of payroll for workers’ compensation insurance — representing a 2.1 percent decrease from last year — which will go into effect on September 1, 2024.

Key factors in the Commissioner’s decision include the continuing decrease in the number of medical services associated with each workers’ compensation claim, and a continuing decline in the percentage of claims with permanent disability benefits. After considering the healthy state of the workers’ compensation market, overall economic conditions, and his staff’s actuarial projections concerning long-term and short-term trends, Commissioner Lara concluded that a reduction in the average pure premium rate is reasonable and appropriate at this time.

The Workers’ Compensation Insurance Rating Bureau of California’s (WCIRB) September 1, 2024 Pure Premium Rate Filing includes COVID-19 experience in the portion of the projection that is developed from accident year 2023. Beginning with accident year 2023, COVID-19 experience will no longer be excluded from consideration when setting rates. In addition, the Commissioner notes the concerns raised by the WCIRB and Bickmore, the WCIRB Governing Committee public members’ actuary, regarding recent large increases in litigation and other claim expenses and looks forward to the WCIRB further investigating potential causes for these cost increases.

Commissioner Lara’s decision results in an average advisory pure premium rate that is below the $1.42 average rate proposed by the WCIRB in its filing with the California Department of Insurance. Commissioner Lara issued today’s advisory rate after a virtual public hearing held on June 6, 2024, and careful review of the testimony and evidence submitted by stakeholders.

The Commissioner’s recommended rate is based on insurance companies’ cost data, trends, and recommendations made to him by the Department’s workers’ compensation experts. The pure premium rate is only advisory, as the Commissioner does not have statutory rate setting authority over workers’ compensation rates. The average advisory pure premium rate level of $1.38 approved by the Commissioner is about 21.1 percent lower than the industry-filed average pure premium rate of $1.75 as of January 1, 2024.

Oregon — Student Loan Ombuds & Borrowers: Student loan borrowers faced significant confusion and frustration this past year in navigating the shifting landscape of loan repayment and forgiveness programs, according to a new report issued by Oregon’s student loan ombuds. Part of the Oregon Division of Financial Regulation, the student loan ombuds is tasked with helping guide borrowers through their options and navigate the confusing road that has become the world of student loans.

As part of the position, the legislature requires an annual report that highlights the work of the student loan ombuds. Lane Thompson, who has been in the position for more than two years, recently posted the second annual report.

Thompson said the past year has been challenging.

“After federal student loan payments were paused during the pandemic, the return to repayment last September was really messy,” she said. “There has been a lot of confusion, because the courts struck down some of the (Biden) administration’s attempts at a loan forgiveness program, complicating federal agencies ability to produce consistent messaging leading up to repayment.”

She said because the rules continue to change, it leads to frustration and confusion for both borrowers and servicers.

“The good news is that student loan cancellation is more available than ever and people are getting resolution through the Public Service Loan Forgiveness program and the one-time account adjustment,” Thompson said. “This is especially true for those who have been making payments for a long time.”

Going into year three, Thompson said she is excited that her work will be able to help more people get clarity on their options and eligibility for student loan repayment programs.

“I think that’s the biggest impact I’m having on a day-to-day basis is that people can get help or answers from me,” she said. “We have more resources available and I am out doing more presentations to different organizations.”

The other area Thompson said where her office is having an impact is in helping student loan borrowers avoid scams.

“We are doing more outreach to help Oregonians protect themselves,” she said. “Fewer people are getting scammed and I think that’s because we have the licensing requirements, examinations taking place, and our advocates helping people navigate through difficult situations.”

Thompson said during this past year, she has sent information to borrowers in a much clearer way whether through more experience, online resources, brochures, and relationship building.

“They see me and know that there is a real person here to help them and that really helps,” she said.

Thompson said more relief could be coming.

“I was on a federal rulemaking committee that worked on specific debt forgiveness rules under the higher education act, and there is some debt relief coming out for people who really need it in the near future,” she said. “There will continue to be changes to the rules and I feel confident that our office will continue to be a good resource as circumstances continue to shift.”

If you have questions about your student loans or issues with your loan providers, contact Thompson at 888-877-4894 (toll-free) or Dfr.bankingproducthelp@dcbs.oregon.gov.

Washington — Kreidler names Jim Odiorne chief deputy insurance commissioner: Insurance Commissioner Mike Kreidler announced that Jim Odiorne will return to the Office of the Insurance Commissioner (OIC) to serve as the new chief deputy commissioner.

Odiorne previously served as Kreidler’s Chief Deputy from 2013 to 2018 before he retired. Prior to that he was Deputy Commissioner for Company Supervision from 1996 to 2013. He starts his new role on July 29.

“Jim is widely regarded by the insurance industry and OIC employees as an expert regulator and brings a breadth of experience and knowledge of the issues we face today” said Kreidler. “I’m grateful to him for agreeing to step into this role and look forward to working with him again.”

Odiorne replaces Chief Deputy Commissioner Michael Wood who is moving back home to take a new position in the Civil Rights Division of the Oregon Bureau of Labor and Industries. His last day with the OIC will be July 31.

Washington — OIC Releases Prepublication Draft for R 2024-02, Relating to Health Care Benefit Managers: We are releasing a prepublication draft of the health care benefit manager rule(R 2024-02) for comments. The prepublication draft addresses health care benefit manager and pharmacy benefit manager regulations including but not limited to implementation of E2SSB 5213 (Chapter 242, Laws of 2024), consistent with OIC’s Preproposal Statement of Inquiry (CR-101).

We have scheduled an interested party meeting to discuss the rule:

When: July 22, 2024 from 3:00-4:00 PM PT

Where: Virtual Meeting on Zoom Register in advance

Comments on the prepublication draft are due by July 26, 2024. Please send them to rules.coordinator@oic.wa.gov.

For more information, including the text of the prepublication draft, please visit the relating to health care benefit managers web page.