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.
COMMISSIONER TESTIFIES ON LEAN FY 2012-13 BUDGET
Insurance Commissioner Mike Consedine testified before the Senate Appropriations Committee February 14 on the Administration’s Budget proposal for the fiscal year beginning in July. But the real focus of the hearing was on Highmark versus UPMC and on the Health Insurance Exchanges mandated by the Patient Protection Affordable Care Act (PPACA). When Senator Robert Mensch (R-Montgomery) asked why we shouldn’t wait until after the courts have ruled on PPACA’s constitutionality, Consedine likened the situation to Hurricane Irene last year. Even if Pennsylvania did not know the path of the storm, it still had to plan and prepare. Likewise, (he said) Pennsylvania does not know if the January 1, 2013 mandate to the states to establish an Exchange or have it imposed by HHS will come to be but we have to prepare for it nonetheless. Senator Larry Farnese (D-Phila.) took exception to comparing PPACA to an impending catastrophe. The Commissioner also said that the Administration Exchange legislation would have a sunset if PPACA were invalidated and that planning is underway per the Department’s efforts to obtain a $30-plus million grant from HHS to develop the backroom systems necessary to operate Exchanges.
Another issue that received attention was a proposal (SB 1339) raised by Minority Appropriations Committee Chair Vincent Hughes (D-Phila.) to double auto limits. Senator Hughes cited the higher cost of accidents and the human harm it causes versus the limits that were set by Act 6 in 1990. The Commissioner said that the Department opposes changes in limits because they will ad to the cost of insurance that may be hard for some to bear in these economic times and that the result will be more uninsured motorists (and hence, more claims that have to be paid by carriers without hope of recouping their losses through premiums).
The House Insurance Committee February 15 hearing on House Bill 717 (Matzie-D-Beaver) establishing an Office of Consumer Advocate for Health Insurance (OCA) went beyond particulars of the specific legislation to center generally on how the Commonwealth can best help educate and advocate for health insurance consumers. Most supporters and opponents agreed to the need to adequately support the Department’s efforts in Consumer Services where 15,000 complaints are dealt with yearly despite having a shrunken budget and staff. The PA Health Law Project and others supporting OCA however felt that agency fragmentation between Insurance, DPW and Health leaves consumers confused. OCA would give them one place to go to in order to advance their concerns, even to represent them before the Insurance Department itself. Opponents such as the Insurance Federation of PA and Capital Blue Cross said that an OCA would hasten confusion and would run out of money quickly if assumptions of funding were based on PPACA. The Pennsylvania Association of Health Underwriters (PAHU) stressed that the Insurance Department has been hit hard in successive Administrations and that general operating budget was cut from 23 million to 18 million in five years and that the job complement had drastically decreased with another 20 jobs lost for the new fiscal year. In addition, there are no more regional Insurance Department offices and the Department does not even fund a switchboard or operator. PAHU urged legislators to take money from the $43 million in fees revenue generated by the Department each year and dedicate some of it to fund the Department’s operations instead of establishing an OCA.
- Rep. John Hornaman (D-Erie) has decided not to seek re-election.
- Despite reapportionment woes, the primary filings are in. If you want to see whose running, please use the link below. Of particular interest is that licensed insurance producer and current House member Mark Mustio is seeking the southwest PA seat held by retiring John Pippy (R-Allegheny). Another item of interest is that Insurance Committee member Nick Kotik (D-Allegheny) is standing for re-election now that it appears that the 2001 district lines will be in effect this election year pending court action to the contrary. With the new district lines, he would have been pitted against fellow Democrat Joe Preston and there was some question as to his decision. If you know of an agent running for the General Assembly, please contact firstname.lastname@example.org.
INSURANCE COMMITTEE HEARS DENTAL MED MAL TESTIMONY
On February 9 the House Insurance Committee held a hearing on Senate Bill 388 (Vance-R-Cumberland) that would require dentists to carry medical malpractice insurance. Although the PA Dental Association and others are in favor of the requirement, there was some concern raised about what levels of coverage should be mandated.
- Pennsylvania updated its regulatory agenda, something that it is required to do periodically. For the first time in years, the Insurance Department does not list any pending regulations. Other agencies do:
- Department of Aging is promulgating regulations by June 2012 regarding the long-Term Care Ombudsman in order to reach compliance with national standards. (Bob McNamara 717/772-3688)
- Labor & Industry has 14 proposed rules dealing with various labor standards issues but none with Workers’ Compensation.
- Maryland Insurance Administration (MIA) issued a caution to Maryland insurance producers to the effect that someone had a web site up that offered to help producers renew their licenses. According to MIA, using the .exe file would cause computer damage. The MIA web site is www.mdinsurance.state.md.us. Details: Vivian Laxton 410/468-2007
- In case you missed it, PA Bulletin Vol. 42, No. 2 ran a list of the Qualified Unlicensed Reinsurers. www.pabulletin.com .
- The Insurance Department is seeking comments from the industry as to what types of coverage should be put on the export list. That list includes coverages where the Department has determined that a diligent search is NOT required and that the Surplus & Excess Lines market may be accessed without checking with standard carriers first. Deadline for written comments is March 4. Details: Cressinda Bybee email@example.com.
- The MCARE office in Rosemont is now closed. Communications go to: MCARE Bureau of Claims Administration, 30 North Third St., 8th floor, Harrisburg, PA 17101. 717/783-3770.
- BrickStreet Mutual Insurance Company filed an application to acquire control of PennCommonwealth Casualty Insurance Company, a stock casualty company based in PA.
- The Insurance Department’s bid to liquidate First Sealord Surety Insurance Co. was accepted by Commonwealth Court. NOTE: Surety products are NOT covered by the PA Insurance Guaranty Association (PIGA).
FLOOD MARKET NOTE: National Flood Insurance Program (NFIP) still has two Webinars remaining for February. They will be held Feb. 28 and 29, Basic Agent Parts I and II.
I- DATES: March 22 Philly I Day; April 12 Reading I-Day; April 26 Pittsburgh I Day and May 2 Central PA I Day