LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol. It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities. It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU) or Manufacturers Association of South Central PA (MASCPA). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/728-1164 or e-mail to firstname.lastname@example.org. Please email email@example.com supplying both your name and e-mail address if you wish to be removed from this list.
POLITICS AND REAPPORTIONMENT
The 2012 election season is or will soon be in disarray for state legislative candidates thanks to a PA Supreme Court January 25 ruling that invalidated Reapportionment Commission-drawn boundary lines for House and Senate districts. It is uncertain as to what district lines will be used this election cycle since nominating petitions are already circulating based on the NEW district lines. New congressional district lines are unaffected by the ruling. In addition, special elections for unexpired terms for open House seats are at risk since constitutionally they would have had to have been in the new district boundaries, not the old. Side note: in one of those districts former Rep. Chelsea Wagner (D-Allegheny) decided to resign her post in the General Assembly after all despite early indications to the contrary because the new district would have been a Lehigh Valley vote, not a Pittsburgh vote where her district had been before reapportionment.
Other state political news:
- House Majority Leader Mike Turzai (R-Allegheny) will not run for Congress. In that district, there is a hot contest between two Democratic incumbents, Mark Critz and Jason Altmire.
- Senator John Pippy (R-Allegheny) has decided not to stand for re-election.
- The House Insurance Committee hearing on SB 338 (Vance-R-Cumberland) that was originally scheduled for January 26 was cancelled and is rescheduled for February 9.
- February 16 remains the date for a House Insurance Committee hearing on HB 717 (Matzie-D-Allegheny) that would establish a Consumer Advocate for Health Insurance based in the Department of Community & Economic Development.
NAHU CAPITOL CONFERENCE REPORT
The National Association of Health Underwriters (NAHU)’s annual Washington, DC Capitol Conference ended with major developments on insurance agents’ quest to have agent compensation removed from calculations of the Patient Protection Affordable Care Act (PPACA) Medical Loss Ratio (MLR). First, congressional visits landed 11 more sponsors to HR 1206 as of 1/27/12 including two more from Pennsylvania, Republicans Glenn Thompson and Patrick Meehan. This brings the PA sponsorship up to 12, a majority of the 19-person House delegation. HR 1206 has 160 House sponsors. Another development is the promise to introduce a similar bill in the Senate by Democratic Senator Mary Landrieu (LA).
HHS Director of the Center for Consumer Information and Insurance Oversight Steve Larsen stated that HHS would not consider exempting agent compensation from MLR.
Another presenter of note was Speaker of the House John Boehner (R-OH). Coming the morning after the President’s State of the Union speech, Boehner said that President Obama had changed into the “Great Divider” which as a campaign theme does not help the country. He also pointed to Senate inaction as an obstacle to constructive legislation since the House had passed 30 economic development bills, only three of which had been taken up by the Democratic-controlled U.S. Senate.
HOUSE COMMITTEE MOVES RBC BILL
On January 24, the House Insurance Committee moved House Bill 2134 (Micozzie-R-Delaware) to strengthen the Insurance Department’s tools in analyzing insurance company solvency. It provides a “trend test” to better gauge insurer solvency in the life and health market. This legislation gives the Insurance Department an additional monitoring tool and helps the state maintain its NAIC accreditation as being equipped to evaluate company solvency.
- On January 28, the PA Bulletin published a list of eligible Surplus Lines Insurers. This replaces in its entirety the list published on January 4, 2011. Details: www.pabulletn.com
- Philadelphia-United Fire Insurance Company, a domestic stock property insurance company, has submitted an application for approval to surrender its Insurance Department Certificate of Authority.
- Per PA Compensation Rating Bureau Circular 1594 issued January 10, the U.S Department of Labor wants to transit away from hard copy submissions of form LS 570 from insurers reporting coverage under the Longshoreman and Harbor Workers Compensation Act. This is not finalized. Details: www.pcrb.com
INSURANCE DEPARTMENT TO HOLD BRIEFINGS ON EXCHANGE IN PA
Next week the PA Insurance Department is holding briefings on the Corbett Administration’s approach to establishing Health Insurance Exchanges in Pennsylvania. Briefings will be held separately for legislative staffs and stakeholder groups such as PAHU and the PA Chamber. Expected in the presentations will be an overview and background as well as discussing enabling legislation that might be proposed by the Administration. This announcement comes on the heels of the Insurance Department’s seeking of $33 million implementation money from HHS, a move that evoked some controversy from conservatives who regarded it as a de facto endorsement of the Patient Protection Affordable Care Act (PPACA). The counter to this was the argument that PA has until 1/1/13 to pass Exchange legislation or HHS will impose its version on the Commonwealth.
2011 ENFORCEMENT ACTIONS LISTED
On January 25, the PA Insurance Department reported that in 2011, it closed 334 enforcement actions and market conduct exams, issued 141 orders and adjudications, collected $900,000-plus in fines and recovered more than $3.2 million in restitution for consumers. Some specific outcomes:
- 37 individual producer licenses were revoked or surrendered
- 57 licensees were placed on probation
- 16 waivers were granted from section 1033 of the Federal Violent Crimes Act which prohibits anyone with a criminal past from working in the insurance industry
Examples of what caused the department to take action were using unapproved insurance contracts, misappropriating insurance premium dollars, forging or altering signatures on applications, failing to disclose prior felony and misdemeanor convictions, selling unlicensed health plans, and lying on license applications or renewal forms. Details: www.insurance.pa.gov .
ITEMS TO WATCH IN HARRISBURG…On January 20, Rep. Marguerite Quinn (R-Bucks) introduced House Bill 2135 which would permit electronics vendors to have a limited lines license to sell, solicit or negotiate coverage for portable electronic devices. It follows House Bill 20 sponsored by Rep. Katherine Watson (R-Bucks) which would allow staff at self service storage units to sell, solicit and negotiate property policies for the storage unit contents. Both representatives are members of the House insurance Committee.
SPARKS NOTE: The SPARKS Club is holding two seminars on disaster March 27 in Monroeville and March 28 in Grantville. The class is pending Insurance Department approval for six credits and will focus on disaster strategies undertaken by agencies and their clients. It will also examine endorsement language issues (E&O?) for earthquake, storms, flood, hail, etc. Details: www.sparksclub.com