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.
GOVERNOR EXPANDS CHIP BENEFITS
On August 20, Governor Wolf and Insurance Commissioner Miller announced that enrollees in the Children’s Health Insurance Program (CHIP) will have their benefits expanded to meet compliance requirements of the Patient Protection Affordable Care Act (PPACA). This change will take place in December. Background: Early in the Wolf Administration, HHS determined that 3,600 children enrolled in the CHIP Buy-In (meaning that they pay the full premium rather than receiving a taxpayer subsidy) did not have PPACA-compliant coverage and would have to pay fines for 2014 and 2015. The Wolf Administration was able to convince HHS to waive the penalties while CHIP Buy-In benefits were expanded to meet Federal requirements. This new announcement brings all other CHIP enrollees up to PPACA standards even though there is no HHS threat of penalties for non-compliant coverage.
INSURANCE DEPARTMENT SAYS NO TO PRICE OPTIMIZATION
On August 21, the PA Insurance Department issued Notice 2015-6 expressly prohibiting a practice known as price optimization. The Notice stressed that policyholders and applicants with identical risk classification — risks of the same class and essentially the same hazard — must be charged the same premium. The Notice says “Rates that fail to reflect differences in expected losses and expenses with reasonable accuracy are unfairly discriminatory under Commonwealth law and will not be approved by the Department.” Hinting of possible enforcement action, the Notice cites several PA laws: Unfair Insurance Practices Act, Property Casualty Filing Reform Act, Casualty and Surety Rate Regulatory Act, and Fire, Marine and Inland Marine Rate Regulatory Act. Details: Mark Lersch 717-783-2103, mlersch@pa.gov.
POLITICS
- Another candidate for the Republican nomination for Attorney General has announced. Rep. Todd Stephens (R-Montgomery) joins Senator John Rafferty (R-Montgomery) in the GOP contest.
- Former Wolf Chief of Staff Katie McGinty is running for the Democratic nomination for US Senate. If she wins the primary against former congressmen Joe Sestak, she will face off against incumbent Republican Pat Toomey in 2016. She resigned from the Wolf Administration July 22.
- Special election results: There were special House elections held August 4 in Cumberland and Delaware Counties and August 11 in Philadelphia. The net outcome was a gain of one seat for Democrats although Republicans still have a sizable majority.
- Cumberland County (succeeding Republican Glen Grell) Greg Rothman (R )
- Delaware County (succeeding Republican Joe Hackett ) Leanne Krueger-Branekey (D)
- Philadelphia (succeeding Democrat Michelle Brownlee) Donna Bullock (D)
- Philadelphia (succeeding Democrat Ron Waters) Joanne McClinton (D)
- Philadelphia (succeeding Democrat John Sabatina) Ed Neilson (D)
ANNUAL AUTO DATA CALL
The PA Insurance Department issued its annual data call for insurers who wrote private passenger auto insurance in PA in 2014. Submissions to the Department are due by October 15, 2015. Details: James DiSanto 717-783-2118, jadisanto@pa.gov .
DEPARTMENT SAYS IT RECOVERED $70 MILLION FOR BENEFICIARIES
In a continuing part of a multi-state effort, the PA Insurance Department said that it recovered $70,449,334.00 for beneficiaries of life insurance policies in the first half of 2015. This effort addresses the concern that some life carriers are not doing as diligent search as they ought in identifying beneficiaries. Under these negotiated agreements, companies agree to use the Social Security Administration’s Master Death List as a search tool rather than as a device to terminate annuity benefits while not triggering the life insurance policy benefits.
REGULATORY UPDATES
- The PA Insurance Department submitted a regulation deleting a requirement that reinsurers be on the NAIC Quarterly Listing of Alien Insurers to the Independent Regulatory Review Commission (IRRC) for review. IRRC has until mid-September to review and approve/disapprove of this proposed regulation.
- Taxi operations insurer Pinelands Insurance Company Risk Retention Group is no longer doing business in PA because of “uncertainties regarding its finances.” The move was voluntary working with Washington, DC insurance regulators where the company is domiciled.
- Insurance company updates:
- Delaware corporation Diversus, Inc. seeks to acquire PA reciprocal insurance exchange Physicians’ Insurance Program Exchange (medical malpractice).
- Michelene Pagnotti filed an application to acquire control of three PA insurers, Lackawanna American Insurance Company, Lackawanna Casualty Company and Lackawanna National Insurance Company.
- Equator Reinsurance Ltd. is seeking renewal of its designation as a certified reinsurer in the Commonwealth.
- Express Scripts Insurance Company (prescriptions) and Medco Containment Life Insurance Company are asking the Insurance Department to approve their merger.
- Aetna, Inc. filed an application to acquire Humana Medical Plan of PA, Inc. (HMO).
CROP INSURANCE TAKES CENTER STAGE AT PDA
On August 27, the PA Department of Agriculture (PDA) is convening its 15th Annual Crop Insurance Conference at the Farm Show Complex in Harrisburg. This event includes speakers from both USDA’s Risk Management Agency (RMA) as well as PDA and numbers of industry experts. A focus for Crop Insurance agents is the emphasis on Crop Insurance as the farmer’s primary safety net per the 2014 Farm Bill. This shift to risk management from direct farmer subsidies is a hallmark of the Federal law but according to PDA, many agents and farmers are still uncertain of the new Crop Insurance specifics now in place. At AG Progress Days held near State College August 19, the PA Agriculture Department also convened a one-hour CE refresher on Crop Insurance.
Details: Jordan Stasyszyn jstasyszyn@pa.gov . Insurance producers receive six CE credits at the Crop Insurance Conference.
SPARKS ROLLS OUT ITS 2015 CLINIC SCHEDULE
SPARKS Club, an organization of Mutual Insurance Company marketing representatives, begins its annual educational schedule for insurance producers on September 15. Now in its 70th year, the Clinics include six-hour CE seminars in PA, DE, and MD. The first week includes Monroeville Sept. 15, Altoona Sept. 16, Grantville Sept. 17, and Dover, Delaware, Sept. 18. Week number two begins Sept. 29 in Wilkes-Barre and goes on to include Bethlehem Sept. 30, Exton October 1, and Bel Air, Maryland on October 2. Program includes segments on E&O, underwriting, special coverage issues such as drones, as well as Ethics in MD and DE. Details: www.sparksclub.com, 717-728-1217