LEG REG REVIEW 2014, 2nd Issue January 27, 2014

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

CHIP GETS FEDERAL REPRIEVE

The Federal Government has agreed to Pennsylvania’s request to delay the forced-placement of 30,000 CHIP families into Medicaid, a provision of the Patient Protection Affordable Care Act (PPACA).  PA is the only state receiving this one-year delay.  The option to stay on CHIP or move into Medicaid will apply to children from families earning 100-133 percent of the Federal Poverty Level.  Children from families earning more than 133% ($31,322 for a family of four) will remain in the Children’s Health Insurance Program.

POLITICS

  • Rep. Ron Miller (R-York) has been named the Republican candidate for the March special election to fill out the remainder of former Senator Michael Waugh’s seat after he resigned to become the new head of the Farm Show Complex in Harrisburg.  Miller would still have to win the GOP nomination in May in order to compete in the fall election for the full four-year term.  In the primary, he is opposed by conservative businessman Scott Wagner who bypassed the special election contest to aim his sights on the nomination for the fall election.  If Miller wins the special election over Democrat Linda Small, there will be a vacancy in his House seat as well as the need for House Republicans to name a new chairman of the House Environmental Resources & Energy Committee.
  • Long-time House member and chairman of the House Education Committee Paul Clymer (R-Bucks) has chosen not to run for re-election.

PAHU COMMENTS ON PROPERTY TAX BILL

The PA Association of Health Underwriters (PAHU) wrote to Senate Finance Committee chairmen Senators Mike Brubaker (R-Lancaster) and John Blake (D-Lackawanna) seeking a delay in consideration of Senate Bill 76 (Argall-R-Schuylkill), legislation that would replace the current property tax system with increased sales taxes, increased Personal Income Taxes, and elimination of some industries previously exempt from the sales tax.  PAHU expressed concern that the bill might require brokers to impose a sales tax on fee services.  Given the PPACA Medical Loss Ratio impact on commissions and a growing reliance on fee services (such as assisting employers with PPACA compliance), brokers would see financial pressure and making these services more expensive also makes obtaining insurance expertise less available to firms and individuals needing it most said the letter.

HEARING TO ADDRESS HOSPITAL PATIENT STATUS

On January 29, the House Aging & Older Adult Services Committee will hold a hearing on House Bill 1907 (Saylor-R-York).  This legislation would require a hospital to provide a written and verbal notice to a patient if he or she is receiving care as an ‘outpatient’ under ‘observation status’ rather than being admitted as an ‘inpatient’ and to explain the ramifications of this admission status upon the patient’s insurance coverage.

NFIP LISTS FLOOD TRAINING

The National Flood Insurance Program (NFIP) listed several February training webinars for insurance agents:  Basic Agent (2 days): Feb. 4-5; Feb 12-13; Feb.25-26; FEMA Mapping Changes on Feb. 5, 11, and 12.  Details: nfiptraininginfo@h2opartnersusa.com, 800-427-4661 These webinars do not supply CE credits.

SURPLUS LINES ITEMS

  • PA Insurance Department is seeking suggestions for the Export List.  These are coverage types for which it has been determined that there is no standard market.  A producer seeking this Export List coverage can bypass the usual three declinations by standard carriers and, using a surplus lines licensee, access the Surplus &Lines & Excess market.  Suggestions are due by February 17 and should go to Cressinda Bybee, Office of Corporate & Financial Regulation, PA Insurance Department, 1345 Strawberry Square, Harrisburg, PA17120, 717-787-8557, cbybee@pa.gov.
  • On January 25, the PA Bulletin (www.pabulletin.com ) published the Eligible Surplus Lines Insurer List.  It replaces the January 19, 2013 list.  Questions: Cressinda Bybee 717-787-2735, cbybee@pa.gov
  • January 31 is the filing date for surplus lines licensees to remit premium tax payments to the Commonwealth using form RCT-123.  In a January 15 Bulletin, the PA Surplus Lines Association  advised all surplus lines licensees to make certain to black out or white out both social security numbers from the COPY of the RCT-123 form that is required to be uploaded and submitted into PSLA’s Electronic Filing System.  Questions: 610-594-1340, dataservice@pasla.org)  The form is accessible at: https://www.revenue.state.pa.us/portal/server.pt/community/search_all_forms/18842

BUDGET OUTLOOK WORSE

A January 23 report from the Independent Fiscal Office (IFO) added more bad budget news for the current fiscal year by projecting a revenue shortfall of $150 million. The IFO said that year-to-date revenues through December were $65 million behind while the Department of Revenue said that we are $2.6 million ahead of expectations.  This adds to the estimated one billion dollar gap from an adverse court decision (MCARE), HHS Medicaid reimbursement, and a possible $300-plus million loss of monies from the Tobacco Settlement).  The General Assembly established IFO to provide legislators with an additional resource to analyze state budgeting.

REGULATORY UPDATE

  • Genworth is the latest life insurance company to reach a settlement through a multi-state effort by regulators to have companies use the Social Security Administration’s Death Master File.  Regulators are concerned that life insurance companies were not working hard enough to identify when someone has died and to locate and pay beneficiaries.  Included are Genworth Life Insurance Company, Genworth Life & Annuity Insurance Company and Genworth Life Insurance Company of New York.
  • On January 18, The PA Insurance Department listed qualified unlicensed reinsurers able to do business in PA.  https://www.pabulletin.com/secure/data/vol44/44-3/156.html   On January 25, the list of qualified jurisdictions for Certified Reinsurers was listed (Questions: Kimberly Rankin 717-783-6409, krankin@pa.gov ):

–          Bermuda: Bermuda Monetary Authority

–          Germany: German Federal Financial Supervisory Authority

–          Switzerland: Swiss Financial Market Supervisory Authority

–          UK: Prudential Regulation Authority of the Bank of England

NFIP ISSUES PRE-FIRM POLICYHOLDER NOTICE

On January 16, the National Flood Insurance Program issued Notice W-14001 which updated June 1, 2014 changes to spell out how a homeowner may still be classified as a Pre-FIRM property with the grandfather discount in premium.  The Biggert-Waters Food Reform Act removes the grandfather exemption from properties where it is a non-primary residence or where there is a lapse and increases premiums in 25% increments.  Those wishing to preserve the pre-FIRM discounted premium must have lived in the property more than 50% of the time since July 6, 2012 and have had continuous Flood Insurance coverage since on or before July 6, 2012, or if there was a lapse, the policy was reinstated prior to October 1, 2012.  Policyholders will need to work with their agent to document eligibility to remain pre-FIRM after receiving an NFIP notice.  https://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-14001.pdf

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