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Forms Tornado Recovery Action Council, which will hold forums in communities affected by the April 2011 tornadoes and will issue recommendations in January on disaster preparedness, warning, response and recovery. Johnny Johns, president and CEO of Protective Life Corp., and Pam Siddall, publisher of The Birmingham News, lead the council. Ron Gray, a retired aerospace executive, will be executive director. Other members represent a wide array of interests in the state, including academia, business, government, nonprofits and utilities.

Bulletin No. 5-2011 outlines state’s surplus lines tax policies. If Arkansas is the home state of the insured, the state’s requirements will apply to collection of its premium tax. If 100% of the insured’s operational risk is located in another state, the state that receives the greatest portion of the insured’s taxable premium is its “home state.” If more than one insured in a group are named on a single non-admitted placement, Arkansas will be the home state if it is the home state of the group member with the highest percentage of premium under that policy.

Workers comp bureau has requested pure premium rate decrease of 1.8% under new loss cost calculation method instituted by Insurance Commissioner David Jones. The new method benchmarks to average rates filed by insurers with consideration to underlying systemic costs. Previously, rates relied more on a comparison of current advisory pure premium rates. The new rate, $2.33 per $100 of payroll, would take effect Jan. 1 if adopted. >> Community investment policies of top insurers now posted on Department of Insurance website. The state is trying to get carriers to invest in development projects that benefit low- and moderate-income communities.

New law allows agents and brokers to offer surplus lines coverage without first filling out a due diligence form. Previously, a rejection from three state-authorized carriers that were currently writing business had to be secured before an application could be sent to the surplus market. The new law applies to commercial lines policies that aren’t regulated by the Office of Insurance Regulation. General liability, non-residential property, non-residential multi-peril, excess property, and burglary and theft are on that list as of Oct. 1. Commercial excess, surety and fidelity, boiler and machinery, E&O, D&O, intellectual property, advertising and Internet liability, and property risks under certain rating plans became unregulated in July. The law requires policyholders to sign a statement acknowledging that coverage may be available on the regulated market at lower costs and that surplus lines carriers aren’t covered by the Florida Insurance Guaranty Association. The document removes E&O liability on those grounds for agents and brokers. Policies must still be placed through a Florida-licensed surplus lines agent, with commission shared with the retailer.

Insurance Commissioner Sharon Clark approves average 7.5% decrease in workers comp loss cost rates as of Oct. 1. Applies fairly evenly across five major industry classifications. Coal, however, to see increases: 1.8% for underground and 1.1% for surface operations.

State workers’ health plan under consideration for privatization by Gov. Bobby Jindal. Assessment by Chaffe & Assoc. puts value at $133 million to $217 million. No final decision has been made about privatizing the program, which would affect about 62,000 employees, retirees and dependents. Morgan Keegan advising on matter. There is a $500 million trust fund that holds premiums paid by covered employees.

Opens new toll-free hotline consumers can call with insurance-related complaints or questions. Commissioner Joseph Murphy expects it to be particularly helpful after large-loss events like the early 2011 tornadoes and the recent damage from Irene.

New law assesses insurers and third-party claims administrators (in the case of self-funded plans) a 1% tax on paid healthcare claims. Certain plans are exempt, including Medicare Advantage plans, Medicare prescription drug plans, and plans covering federal employees. Tax also wouldn’t be assessed on services provided in Michigan to non-Michigan residents.

Department of Commerce reorganizes, creates new Division of Insurance. Covers insurer financial solvency and actuarial groups, product filing, life, health, workers comp, and self-insurance. Insurance-related enforcement matters remain under Enforcement Division. Assistant Commissioner for Insurance Jaki Gardner will serve as head of new Insurance Division until mid-October, when she is scheduled to leave for a COO position at a nonprofit.

The state’s second-largest health insurer, New West Health Services, has agreed to transfer one fourth of its business to Blue Cross Blue Shield of Montana, which dominates the market there. New West is looking to transfer more of its business in the near future. The hospitals that sponsor New West say they want out of the health insurance business and need to focus on upcoming changes under healthcare reform. The deal needs state and federal approvals.

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