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Regulatory News

State Supreme Court finds against Industrial Commission, which contested legislature’s action to swipe $4.6 million from a special workers comp fund. The money comes from fees on insurance companies and self-insured employers. >> Commissioner Bradford approves 7% reduction in workers comp rates.

Mid-year workers comp rate requests coming in lower than Workers Compensation Insurance Rating Bureau’s (WCIRB) recommendation of 23.7%. The State Compensation Insurance Fund, a quasi-public San Francisco-based workers comp insurer and one of the state’s biggest comp carriers, files for 15% mid-year increase. Zenith Insurance files for 4%, and two Berkshire Hathaway units request 10.3% hikes. Other players have come in under 5%. >> Department of Insurance releases audit of WCIRB, saying procedures are not in place to assure accurate and credible ratings. Report says WCIRB does not apply enforcement powers to compel or punish insurers that don’t comply with reporting standards. The WCIRB did not contest the findings.

Legislative session ends with defeat of several insurance bills that would mandate state CAT fund, establish state workers comp program, and allow private cause of action for unfair claim settlement practices without the necessity of showing a general business practice on the part of the insurer.

Commissioner McCarty orders 6.4% workers comp rate reduction from the April 1 increases he approved in the same amount. The rollback results from a newly signed law restoring a cap on claimants’ attorney fees. >> Gov. Crist vetoes condo insurance bill because he didn’t want a nine-year deadline extension for installation of fire sprinklers in condo buildings’ common areas. The vetoed law primarily dealt with problems in language errors on insurance issues that expose insurers to broad and vague liabilities. Agents are unhappy because current language leaves many unanswered questions regarding special assessment coverage, additional named insured coverage for the association, and force-placed coverage for associations, among others. >> Department of Financial Services makes online library of financial and insurance information available at MyFloridaCFO.com. >> Governor signs bill allowing 10% rate hike for Citizens Property Insurance customers along a “glide path” capped at 10% until Citizens’ rates are actuarially sound. The law also gradually reduces the exposure of the state’s hurricane fund by phasing out the upper levels by $2 billion a year over six years. The same law prohibits public adjusters from accepting referrals of business from any person with whom the adjuster conducts business and allows agents to discuss the state’s backup guaranty insurance fund that covers claims for insolvent insurers.

Insurance Division approves 12.1% average rate boost for Hawaii Medical Service Association’s preferred provider plan for small businesses, the biggest hike in 20 years.

Department of Insurance resumes status as independent department after five-year stint consolidated with several other state agencies. Its operations will continue to be funded through assessments on the industry rather than from the state’s general revenue fund. With the change, the department has launched a new website.

Successfully certifies handful of governmental and non-profit entities for waivers of FEMA regulations regarding purchase of specified limits of insurance based on previous receipt of FEMA aid. Applicants are evaluated on a case-by-case basis by the Department of Insurance.

Tim Schott appointed deputy superintendent of insurance. He was previously county attorney in Webster County, Iowa.

New law takes effect Oct. 1 to bring the Injured Workers’ Insurance Fund, an insurer of last resort but not publicly funded, under the same standards as other domestic insurers in the state. The state will review its rate-making practices every five years; although, it will not have to join the National Council on Compensation Insurance or adhere to its policies. IWIF will contribute about $100,000 per year to the Insurance Regulation Fund.

Commissioner Chaney delivers $2 million to the state’s general fund. The money—fees paid by the surplus lines industry—was shifted from the Department of Insurance under recent legislation. The Mississippi Surplus Lines Association lost an appeal in 2008 in the 5th U.S. Circuit Court of Appeals on protecting surplus lines fee-based funds from the legislature’s general budgetary demands. >> The state legislature heads home without approving the Insurance Department’s funding for FY 2010. The proposed appropriation for the Insurance Department includes $20 million for reinsurance programs to offset premium increases in the wind pool. The Gulf Coast Business Council had asked for $60 million in additional funding from the state over the next few years to lower insurance premiums. Moving money from an existing disaster recovery trust fund into the wind pool is an option under consideration and is supported by Commissioner Chaney, State Treasurer Reeves and some coastal lawmakers. Gov. Barbour plans to discuss a multi-state wind pool with other governors at the National Governors Association meeting. Commissioner Chaney will be a party to those talks.

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