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). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to email@example.com. Please email firstname.lastname@example.org supplying both your name and e-mail address if you wish to be removed from or added to this list.
LEGISLATURE OPTS NOT TO RECONVENE
The PA House opted not to reconvene in August to address Philadelphia school funding (a cigarette tax) and possibly reauthorization of the PA Health Care Cost Containment Council (PHC4). This defers legislative action until September 15. Governor Corbett said that he would advance funding to the PhiladelphiaSchool District in anticipation of legislative action so as to allow schools to begin on time. Still on the table is Governor Corbett’s statement that he was considering forcing the General Assembly back into Harrisburg to force action on pension reform legislation.
In September, the General Assembly may also take up Public Utility Commission (PUC) -supported legislation (Senate Bill 1457 sponsored by Senator Wayne Fontana-D-Allegheny) to establish a regulatory framework where the PUC could regulate ride-sharing (also known as transportation networking companies) alternatives to traditional taxi service. Some in the insurance industry expressed concern to the House Insurance Committee June 23 over Uber and Lyft’s practice of relying on a driver’s personal auto passenger coverage first if there is an accident and then falling back on the ride-sharing companies’ carriers when the claim was denied.
CONSEDINE APPOINTED TO FEDERAL ADVISORY BOARD
PA Insurance Commissioner Michael Consedine was appointed to the Federal Advisory Committee on Insurance, an advisory group designed to provide input to the Federal Insurance Office (FIO) created by the Dodd-Frank financial regulation law. An FIO responsibility is to review the state regulatory system and identify areas where there might need to be federal legislation. Its’ initial report pointed to two specific insurance issues — annuity suitability (PA already passed this legislation) and whether or not use of insurance (credit) scores pose a barrier to underserved insurance populations. Link to the FIO report follows:
AGENCIES’ REGULATORY AGENDAS RELEASED
The Corbett Administration issued its annual list of regulations being considered by the various state agencies. The Insurance Department posted only three (Details – Peter Salvatore 717/787-4429):
– Annual Financial Reporting for large insurers (31 PA Code, Chapter 147) Fall 2014
– Deleting a provision re qualifications for qualified reinsurers (31 PA Code 161.1-161.9 Fall 2014
– Medical Catastrophe Loss Fund (31 PA Code 242.1-242.18)
SPARKS CLINICS ANNOUNCED
SPARKS Clinics begin September 8 at eight locations in PA, MD and DE and feature six credit hours of continuing education. Clinics include sessions on personal lines exclusions, cyber liability, and “Green” insurance issues. PA Locations are Grantville, Altoona, Warrendale, Wilkes-Barre, Bethlehem, and Coatesville. Other venues are Dover, DE and Hagerstown, MD. An organization made up of marketing representatives of Mutual Insurance Companies, SPARKS (besides offering CE) is a platform to remind insurance agencies of the value that comes with placing insurance business with Mutual Insurance Companies. Details: www.sparksclub.com, 717/728-1217.
JOINT AGING HEARING IN PITTSBURGH
On August 28, a joint meeting of the Senate Aging & Youth Committee and the House Aging & Older Adult Services will be held at the University of Pittsburgh on aging related issues. Although presentations from Department of Aging and the Department of Public Welfare are expected to focus on care quality issues and the work of Governor Corbett’s Long-Term Care Commission, a number of non-governmental groups will be heard. The PA Association of Health Underwriters (PAHU) will discuss the need for legislative tax incentives to promote the long-term care insurance market as a Medicaid alternative.
TWO MORE PROPERTY/CASUALTY BILLS SIGNED INTO LAW
This summer, Governor Tom Corbett signed two more P/C bills into law. Previously reported was Act 112 – Senate Bill 1422 (Tomlinson-R-Bucks) limiting asbestos liability payments to the value of a firm acquired by another entity if the acquired firm is found to have such a liability. (This protects the firm making the purchase from devastating financial impact from asbestos claims that they did not know existed.)
– ACT 63 of 2014: House Bill 2081 (Adolph-R-Delaware) eliminates coverage under Pennsylvania’s Workers’ Compensation Act for those who are covered by the Federal Longshore and Harbor Workers’ Compensation Act.
– ACT 109 of 2014: Senate Bill 1187 (Argall-R-Schuylkill) provides for several specialty auto license plates. Of interest to insurers is the section on seasonal registration waiving an “insurer of a vehicle belonging to any owner or lessee who obtains a seasonal registration and who applies for and receives a reduced automobile insurance premium on account… (from being required) to provide any contractual coverage, whether in the form of the provision of a defense or the payment of first-party or third-party benefits, or otherwise, to the owner or lessee in connection with any event occurring during that part of the year in which the vehicle is not registered. “
MED MAL SUITS DECLINE
The Administrative Office of PA Courts (AOPC) issued a report showing statistically that the number of medical malpractice lawsuits has dropped significantly since 200-2002. According to the AOPC, the state’s total dropped by 43.4% with the 2013 number of cases at 1,546 compared to 2,733 in 2000-2002. The number does show a slight up tick however from 2012’s 1,510 but is lower than 2011 (1,675). The report credited two factors, requiring that a medical malpractice lawsuit be tried in the county where the alleged malpractice occurred and second, requiring a certificate of merit for cases in order to weed out frivolous lawsuits. Following are several counties by comparison as well as a link to the statistics.
County 2000-2002 2007 2013 Percent Change
Philadelphia 1,204 586 382 -68.3%
Allegheny 396 262 295 -25.5%
Lackawanna 65 34 27 -58.5%
AUTO MARKET NOTE: According to a study released August 5, 2014, by the Insurance Research Council, the number of U.S. uninsured drivers has declined to 12.6 percent in 2012 from 14.9% in 2003. Casting a shadow on this good news is the finding that total claim payments for uninsured motorists is up 75% over the past ten years. Information on the Uninsured Motorists, 2014 Edition is available from David Corum, CPCU 484/831-9046, corum@TheInstitutes.org
AUTO DATA CALL: The 2013 Data Call Letter for data from insurers authorized to sell auto insurance in the Commonwealth, instructions and data formats are available on the Insurance Department’s web site at www.insurance.pa.gov. Schedule of reports was posted August 9 in the PA Bulletin.