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Regulatory News

ARIZONA
Gov. Jan Brewer signs law turning state workers comp fund into a private mutual by January 2013.
www.id.state.az.us

CALIFORNIA
Workers comp total direct premium fell nearly 10% in 2009 to a nine-year low of $6.9 billion. It was also the fifth year in a row that aggregate premium fell (a $750 million drop). Factors in the decreases: a decline in claim frequency, high rates of unemployment, and multiple rate reductions. Still, the loss ratio was up about nine and a half points from 2008, to 68.52% in 2009. >> Puts insurers on notice that equities held in Iranian companies will be disqualified from use as part of the insurers’ legally required reserves for paying claims. About 77% of the 1,300 or so carriers doing business in the state have agreed to withdraw from Iranian stocks. The total investment in Iran by insurers operating in California is about $6 billion. Some big names, such as State Farm, Geico and Prudential, won’t play along. >> Assembly passes bill requiring all increases in health premiums, co-payments or deductibles to be approved by Department of Insurance or Department of Managed Health Care before implementation.
www.insurance.ca.gov

FLORIDA
Commissioner Kevin McCarty orders 16 workers comp insurers and groups to return more than $9.4 million in excess profits to policyholders. The profits were earned from 2005 to 2007. >> Gov. Charlie Crist vetoes omnibus property insurance bill, SB 2044, that, in part, allowed for better regulation over insurer solvency. Crist said the law would have made it easier for insurers to raise residential premiums. Ironically, the veto permits insurers to implement new rates before getting state approval under the use-and-file system. The bill would have required approval before implementation of rate hikes. >> He also vetoed HB 5603, which tried to strengthen the state’s risk management program and reduce workers comp costs to the state. >> Crist did sign SB 2176, a deregulation bill that exempts many commercial and professional lines that produce an annual premium of $25,000 or more from rate reviews prior to use. The law also gives the Office of Insurance Regulation the authority to add other commercial lines that it thinks shouldn’t be subject to filing and review requirements.
www.floir.com

GEORGIA
State ethics commission summons insurance commissioner John Oxendine for hearing on insurer donations that exceeded the legal limit tenfold. Oxendine is running in the Republican gubernatorial primary and returned the illegal money last year. The ethics commission concluded in October 2009 that there wasn’t enough evidence to find probable cause that he knowingly violated the law. >> Gov. Sonny Perdue signs law allowing employers whose workers comp carrier folds to buy into state insolvency pool to cover injured workers’ claims. Companies with under $25 million net worth can pay $10,000 per claim to get them covered by pool. Those over $25 million can pay $50,000 per claim. Private insurers balk, saying it skews the actuarial basis of the pool and unfairly burdens employers who paid higher premiums to sounder insurers.
www.inscomm.state.ga.us

HAWAII
Insurance Commissioner J. P. Schmidt, resigns, moves into private legal practice. He was the longest-serving commissioner at seven and a half years. >> Legislature passes HB 1985, which doubles all insurance licensing fees through June 30, 2014. Half of the fees head straight to the state’s general budget fund. >> Also passes HB 2600 requiring insurers to put systems in place to pay premium taxes monthly rather than quarterly, the traditional method in the state.
www.hawaii.gov/insurance

KANSAS
More Harvey County residents placed in flood plains under new federal flood mapping, but dams built in the Sand Creek Watershed in Newton could allow property owners to be removed from flood-prone areas.
www.ksinsurance.org

KENTUCKY
Approves workers comp rate increases for coal mining operation expenses related to easing of claims requirements under the federal Black Lung Benefits Act passed within the healthcare reform legislation. Surface mine rates could rise 3.8%, and underground operations could increase 6.2%.
www.doi.state.ky.us/kentucky

LOUISIANA
Legislators approve $68 million, five-year contract with F. A. Richard and Assoc. to handle much of the claims processing and management previously done by the state’s Office of Risk Management. It is projected to save the state $20 million over five years and improve claims processing. Government workers who held the duties were offered jobs in the private company.
www.ldi.state.la.us

MARYLAND
Gov. Martin O’Malley wants legislature to permit state tax credits to insurers that prematurely pay off a portion of their state taxes that are due through 2015. The state would pump that money into its venture capital fund over the next five years to support investment in Maryland’s biotech and life sciences startups, as well as other newly forming companies. The legislature won’t reconvene until Jan. 2011.
www.mdinsurance.state.md.us/

MASSACHUSETTS
AG Martha Coakley proposes new regulations for the auto insurance market, including banning the use of credit scores and requiring that agents quote an insured with every carrier they represent.
http://www.mass.gov

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