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 xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

INSURANCE COMMITTEE MOVES LEGISLATION

On May 23, the House Insurance Committee reported on six bills and passed over on one.  To be addressed another day is House Bill 32 (DeLuca-D-Allegheny) which approaches the UPMC-Highmark dispute by requiring 90 days notification to the Insurance Department by a “hospital plan corporation” of a contract termination between it and a hospital (network) having 5% or more of the beds in an area; giving the Department the authority to hold a hearing and launch an investigation as to whether the expiration is “in the public interest, and if not, to extend the contract for a year.

Bills reported out by the committee are:

-          Three dental bills which: mandate health insurance coverage for general anesthesia for certain eligible patients such as mentally impaired or youthful (HB 532 by Rep. Stan Saylor-R-York); require dentists to have professional liability insurance (SB 388 by Sen. Pat Vance-R-Cumberland); amends the Health Security Act to stipulate that an insurer’s contract with a dentist may not require that the dentist provide services at a fee set by the insurer unless compensated for the service (HB 1537 by Rep. Tom Murt-R-Montgomery)

-          House Bill 508 (DeLuca) mandates health insurer coverage for patient costs connected with clinical cancer trials – the Patient Protection Affordable Care Act (PPACA) already has a Federal mandate for clinical trials but not for other associated patient costs.

-          House Bill 2391 (Micozzie-R-Delaware) amends the Holding Companies Act to reflect the NAIC Model Law on group wide supervision of internationally active multi-jurisdictional insurance groups.

-          House Bill 2135 (Quinn-R-Bucks) creates a limited line of authority for unlicensed retail clerks to sell property insurance for portable electronic products.  The company would have to provide training although a PAHU proposal to have the Insurance Department set standards for the training was blocked by the Department which said that no other limited line mandates training and that any consumer complaints based on inappropriate marketing conduct would be dealt with by the regulators’ consumer services and enforcement bureaus.  HB 2135 is supported by the Insurance Federation and IA&B (after it was amended to exclude larger electronic products), and is not opposed by the Insurance Department or PAMIC.

PPACA ATTACK DRAWS FIRE

Senate Bill 10 (Scarnati-R-Jefferson) was reported out of the House State Government Committee May 22 on a party-line vote with Democrats voting no.  SB 10 would amend the PA Constitution to say that citizens of the Commonwealth would not be required to purchase health insurance in direct contradiction to the individual mandate contained within the Patient Protection Affordable Care Act (PPACA).  Democrats attacked the bill by pointing to a Heritage Foundation study and former Governor Romney’s support of the individual mandate.  Motions to fine non purchasers and to re-refer the bill to the Insurance Committee all failed on party-line votes.

CORBETT SIGNS MICOZZIE BILL On May 22, Governor Corbett signed House Bill 2134 (Micozzie-R-Delaware) into law as Act 51 of 2012.  It strengthens health insurer solvency oversight by establishing a regulatory trigger re Risk Based Capital (RBC) assessment.

NUMEROUS LEGISLATIVE DEVELOPMENTS

• The House-passed Towing and Towing Storage Facility Standards Act (House Bill 1908 by Rep. Micozzie-R-Delaware) was referred to the Senate Consumer Protection & Professional Licensure Committee
• Professional Employer Organization (PEO) legislation passed a test May 22 with its’ reporting by the Senate Labor & Industry Committee.  House Bill 1055 (Mustio-R-Allegheny) establishes a regulatory framework by L&I over PEOs.  Another PEO bill, Senate Bill 1069 (Browne-R-Lehigh) was discussed at the meeting but not moved.  There remains concern by some brokers that PEOs may result in less consumer service to businesses than a traditional company-broker relationship would provide.
• Senate Bill 1464 (D. White-R-Indiana) amends the Insurance Company Law providing for additional disclosures by insurers when seeking to do business in PA and specifies that information provided to the Department by insurers is not subject to right-to-know requests.  SB 1464 was reported as amended by the Senate Appropriations Committee May 22.

HEALTH INFORMATION BILL MOVES

The PA Health Information Technology Act (Senate Bill 8 – Folmer-R-Lebanon) was reported out of the Senate Appropriations Committee.  It establishes an independent authority which will operate a data base of medical test and other information.  This resource could be utilized by doctors instead of having duplicative testing which drives up the cost of health care.  Health care providers might be able to access these records without specific prior consent by the patient since access might be necessary to the care of the patient.  Doctors would have civil immunity if they rely on someone else’s test instead of conducting their own.  The Corbett Administration version of this concept is called eHealth Collaborative.

POLITICS…Jane Orie (R-Allegheny) resigned her Senate seat May 21 as a result of her conviction on using state resources for campaign purposes.  One of those rumored to be seeking to replace her is former US representative Melissa Hart who, before being elected to Congress, served in the State Senate.

REGULATORY UPDATE

• The Commonwealth Court rebuffed the Insurance Department’s attempt to liquidate long-term care insurance Penn Treaty American Insurance Company, finding that a plan of rehabilitation had not been devised and that the Insurance Department had “acted to frustrate rehabilitation”.  The Court gave ninety days for a plan to be devised.  It also said that Penn Treaty had $1 billion in assets and was meeting its LTC obligations as they come due.
• Patient Safety Authority (MCARE) will meet June 5 in Harrisburg.  Details: 717/346-0469

NFIP  YES?  NO?  MAYBE?

As the program termination date of May 31 draws ever closer, the National Flood Insurance Program (NFIP) received a boost when the US Senate passed a sixty-day extension.  In order to go in effect, the House must concur.  Media accounts differ as to behind the scenes drama, some of which could still scuttle reauthorization.  IFA Media reported that a stumbling block (now resolved) was Senator David Vitter’s (LA) linking NFIP reauthorization to a Food & Drug Administration reauthorization bill.  Property Casualty 360 tied Senate passage to the inclusion of a substantive NFIP amendment by Senator Tom Coburn (OK) to phase out subsidies for second homes and vacation properties.  The House has to accept Coburn’s amendment in order for the 60-day NFIP lifeline to go into effect.

MARKET NOTE…For those insurance producers advising clients on disaster preparedness, note that May 27-June 2 is Hurricane Preparedness Week.  The National Weather Service has several resources which are accessible at www.nhc.noaa.gov/prepare/

Tags: 16th Issue May 30, 2012, GPAHU, LEG REG REVIEW 2012, Legislative Review, NAHU, PAHU, Phillips Associates, Vince Phillips

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 xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

INSURANCE LICENSING BILL READIED TO MOVE

On May 23, the House Insurance Committee meets to consider House Bill 2135 (Quinn-R-Bucks) to permit retail clerks to sell insurance on portable electronics upon purchase.  NOTE: This is opposed by PAHU as it appears to weaken the integrity of Act 147, the Producer Licensing Law.  IA&B reportedly is working to amend the definition of ‘portable electronics’ to soften the bill and at least at this point, the Insurance Department appears to be neutral.  A link to the bill follows:

http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2011&sessInd=0&billBody=H&billTyp=B&billNbr=2135&pn=2980

FULL MENU OF INSURANCE BILLS ALSO IN HOUSE COMMITTEE

May 23, the House Insurance Committee will also consider six other bills. They include:

-          House Bill 32 (DeLuca-D-Allegheny) approaches the UPMC-Highmark dispute from another angle, requiring 90 days notification to the Insurance Department by a “hospital plan corporation” of a contract termination between it and a hospital (network) having 5% or more of the beds in an area; giving the Department the authority to hold a hearing and launch an investigation as to whether the expiration is “in the public interest, and if not, to extend the contract for a year.  Last week’s Leg Reg Review reported on the settlement reached between UPMC and Highmark that was brokered by the Insurance Department.

-          House Bill 508 (DeLuca) mandates health insurer coverage for patient costs connected with clinical cancer trials – the Patient Protection Affordable Care Act (PPACA) already has a Federal mandate for clinical trials but not for other associated patient costs.

-          Three dental bills which: mandates health insurance coverage for general anesthesia for certain eligible persons such as mentally impaired or youthful (HB 532 by Rep. Stan Saylor-R-York); requires dentists to have professional liability insurance (SB 388 by Sen. Pat Vance-R-Cumberland); amends the Health Security Act to stipulate that an insurer’s contract with a dentist may not require that the dentist provide services at a fee set by the insurer unless compensated for the service (HB 1537 by Rep. Tom Murt-R-Montgomery)

-          Another bill sponsored by Insurance committee Chair Micozzie (R-Delaware) amends the Holding Companies Act to reflect the NAIC Model Law on group wide supervision of internationally active multi-jurisdictional insurance groups.  No bill number or text is available at this time.

CORBETT SIGNS BILL TO DEFY U.S.

On May 8, Governor Corbett signed Senate Bill 354 (Folmer-R-Lebanon) into law as Act 38 of 2012.  Known as the REAL ID Nonparticipation Act, it prohibits the Governor, PennDOT, or any other agency from participating in the Federal REAL ID Act of 2005, a measure standardizing drivers’ licenses in the U.S.  Act 38 gives Pennsylvania the go-ahead to file action in court to challenge the Federal’s law’s constitutionality or legality.

Another new transportation law is Senate Bill 539 (Rafferty-R-Montgomery) or Act 39 of 2012 which applies to penalties relating to DUI where a minor commits a misdemeanor of the first degree.

REGULATORY UPDATE

• The Insurance Department released the full list of Insurance Coverages eligible for Export (also known simply as the Export List.  These types of coverages have been found to be difficult enough to find that admitted market three declinations is not required and the Surplus & excess lines market may be accessed.  Examples are monocline liquor liability, tattoo parlors, amusement rides and their devices.
• The Federal Reserve is looking to oversee over twenty insurers that own or operate savings & loans according to Insurance Journal.  The oversight reflects expanded regulatory authority of the newly created Financial Stability Oversight Council, an entity created by the Dodd–Frank Act to provide stronger oversight of large financial institutions.  (Per Gramm-Leach-Bliley Act, insurers are counted as financial institutions.)  Some with a presence in PA are: AIG, Donegal Mutual, MassMutual, State Farm, USAA, Prudential, Northwestern Mutual, W.R.Berkley which is part owner of InsurBanc along with the Independent Insurance Agents & Brokers of America (the Big I).
• In the May 19 PA Bulletin, the PA Insurance Department presented its new organization chart.  The chart will also appear on their web site.  http://www.pabulletin.com/secure/data/vol42/42-20/906.html

FEMA ISSUES CLOSE-OUT REMINDER. 

On May 18, the National Flood Insurance Program (NFIP) issued notice W-12034 reminding insurance producers that because of congressional inaction, the NFIP’s authorization will expire at midnight on May 31, 2012.  This means that claims will continue to be paid but no new business will be conducted.  An earlier memo issued April 25 (Notice W-12032) spelled out details re insurance proposals and applications on the May 31 cusp.  Although the House had previously passed a comprehensive reform bill including a five-year reauthorization extension, the Senate has not taken action.  LA Senator Dave Vitter has introduced three bills to extend authorization by one month, two months and until year’s end.  All three are in the Senate Committee on Banking, Housing and Urban Affairs.  A hearing was held May 9 on S. 2344 which would take NFIP through December 31.

HOUSE WELCOMES NEW MEMBERS

There were six special elections to fill unexpired terms of legislators who resigned after winning elections for other offices last November.   None of the new Representatives serve on the House Insurance Committee.

-          Rep. Ryan Mackenzie (R-Lehigh).                 Replaces Rep. Doug Reichley  (R-Lehigh)

-          Rep. Madeleine Dean (D-Montgomery          Replaces Rep. Josh Shapiro (D-Montgomery)

-          Rep. Ed Neilson (D-Phila.)                             Replaces Rep. Dennis O’Brien (R-Phila.)

-          Rep. Martin Schmotzer (D-Allegheny)           Replaces Rep. Chelsea Wagner (D-Allegheny)

-          Rep. Harold James (D-Phila.)                         Replaces Rep. Kenyatta Johnson (D-Phila.)

-          Rep. Gary Williams (D-Phila.)                        Replaces Rep. Jewell Williams (D-Phila.)

FYI, Rep. Nielson served as the Number Two official at L&I in the Rendell Administration.  Rep. Schmotzer is a small business owner.  Harold James is a former Member of the General Assembly and former member of the House Insurance Committee.  Their terms end November 30 of this year unless re-elected this November.

POLITICAL NOTE… PA’s primary election means an interesting fall contest between two veteran House Members who are both running for Auditor General.  They are Democrat Eugene DePasquale from York County and Republican John Maher from Allegheny/Washington Counties.  Maher is the current Majority Chair of the House Agriculture & Rural Affairs Committee.  For specific primary results please access the PA Department of State web site, www.dos.state.pa.us

MARKET NOTE… On May 18 the IA&B issued the results of its Carrier Satisfaction Index, a survey of independent agencies evaluating the insurers with whom they do business.  The top three were Goodville Mutual (first), MMG (second) and Donegal (third).

Tags: 15th Issue May 21, 2012, GPAHU, LEG REG REVIEW 2012, Legislative Review, NAHU, PAHU, Phillips Associates, Vince Phillips

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 xenobun@aol.com.  Please email jtrout2792@aol.com supplying both your name and e-mail address if you wish to be removed from this list.

HIGHMARK-UPMC DEAL REACHED

On May 2, Governor Corbett announced a breakthrough deal between feuding Highmark and UPMC that will allow policyholders’ access to UPMC through 2014.  These policyholders include those enrolled in group and individual plans as well as seniors enrolled in Medicare Advantage.  Negotiations begin regarding access to certain UPMC services beginning in 2015 such as oncology and psychiatric care.  Current agreements stay in place for UPMC Children’s Hospital.  Other negotiations will take place regarding access to patients enrolled in CHIP, the Blues’ Special Care, and the PA Fair Care high risk pool administered by Highmark.  In making the announcement, the Governor singled out several key legislators who were instrumentally involved.  Included were Senators Don White (R-Indiana), chair Senate Banking & Insurance Committee and Jay Costa (D-Allegheny), the Senate Democratic Leader.  Recognized Representatives included GOP Majority Leader Mike Turzai, Democratic Leader Frank Dermody, and Republican Rep. Randy Vulakovich, all of whom are from Allegheny County.

One outcome seen by commercial insurers will be continued market dominance by Highmark if their rates remain lower than rates of the private sector commercial insurance carriers.

TOWING BILL PASSES HOUSE

A reform bill affecting the towing industry (House Bill 1908) sponsored by House Insurance Committee chair Nick Micozzie (R-Delaware) passed the House 172-11 and was sent to the Senate.  The legislation strengthens consumer protections such as access to the car while in storage and more publicized information about the towing operation itself.  All of the no votes were Republican.  Text of the legislation follows:  http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2011&sessInd=0&billBody=H&billTyp=B&billNbr=1908&pn=3446

TAXATION BILL MUSTERS HOUSE SUPPORT

Bipartisan House Bill 2150 (Reed-R-Indiana and Eugene DePasquale –D-York) passed the House May 2 on a 129-58 vote.  It proposes elimination of the so-called Delaware Loophole that permits larger corporations to make DE their headquarters and thus be exempted from paying some PA taxes.  At the same time it would lower corporate net income tax rates by one-third.  The vote was bipartisan with 23 Democrats joining the GOP majority.  Two northwest PA Republicans (Roae and Brooks) voted no.  It now goes to the Senate.

BUDGET OUTLOOK IMPROVES

Budget numbers for April will intensify efforts to restore some of the cuts proposed by Governor Corbett for FY 2012-13 beginning July 1.  PA collected $3.4 billion in April which was three percent more than expected.  That has the net effect of reducing the shortfall in revenues versus projected revenues to $288.4 million.  Earlier this fiscal year, the projection was an almost $700 million shortfall.  Sales tax was $35.7 million above estimate as was corporate income tax ($68.7 million above).  Other categories exceeding expectations were Motor Vehicle Fund (gasoline taxes) and realty transfer tax.  On the downside was personal income tax at $26.4 million below estimate and so-called sin taxes (casino table games, cigarettes, beer) which was $4.6 million below expectations.

POLITICS

• According to AP, embattled Senator Jane Orie (R-Allegheny) will resign her Senate seat before May 21.  A special election may not be called for sixty days leading to some speculation that the general election may also serve to fill this vacancy.
• Senate President Pro Tempore Joe Scarnati (R-Jefferson) criticized the Reapportionment Commission on its second proposed redistricting plan.  It would have moved Senator Orie’s district to Monroe County reflecting population growth in the northeast instead of moving Senator Brewster’s Allegheny County seat per the original plan.

REGULATORY UPDATE

The Insurance Department added the following coverages to the Export list:  Misc. E&O or Professional Liability except for architects, engineers, medical malpractice, lawyers, travel agents, real estate brokers, insurance producers; pollution liability and/or environmental impairment coverage; paint and coating manufacturers; change ‘tattoo parlors liability” to “tattoo parlors”; change “Day Care centers Liability including sexual abuse coverage “ to “ Day Care Centers, including sexual abuse coverage.”  The Export List means that these coverages are determined by the Department to be available only from the E&S market and that the usual three declinations from standard carriers rule does not apply.

WHAT HAPPENS IF NFIP IS NOT REAUTHORIZED?

Last week’s Leg Reg Review referenced a memo from NFIP describing how the phase out of activities would occur if the National Flood Insurance Program is not reauthorized by Congress before May 31, 2012.  NFIP followed that with a May 1 release reminding the public and insurance agents that the 30-day countdown to the start of the hurricane season has begun and that flood insurance should be purchased now before the NFIP cannot accept new business and because of required coverage for thirty days before a claim could be paid.

By request from the last issue of Leg Reg Review, following is a link to the NFIP Memo re phase out.            W-12032 April 25, 2012 MEMORANDUM FOR: W…

www.nfipiservice.com/Stakeholder/pdf/bulletin/w-12032.pdf

In a related development, Louisiana Senator David Vicker introduced S. 1958 April 24 which would authorize NFIP to function until December 31, 2012.  Presumably, this would give the Senate more time to consider HR 1309, the comprehensive flood insurance reform legislation that passed the House July 8, 2011.  Earlier, Vicker had introduced S. 1864 which would have extended reauthorization until September 30, 2012.  Details: www.thomas.gov

SENATE OKs DENTAL BILL

On May 2 the Senate approved Senate Bill 1144 (Ward-R-Westmoreland) and sent it to the House.  The bill limits dental insurer fee schedules.

UPCOMING…

The 2012 Workers Compensation Conference will be held June 11-12 in Hershey.  There are over 20 sessions on everything from medical care standards to vocational rehab to avoiding claim and litigation errors.  Details and registration online at www.dli.state.pa.us and then click on “Workers Compensation”.

Tags: 14th Issue May 7, 2012, GPAHU, LEG REG REVIEW 2012, Legislative Review, NAHU, PAHU, Phillips Associates, Vince Phillips