Alabama Big ‘I’ supports five bills, rejects two

Alabama HB627 defining insurance fraud and making it easier for the Insurance Commission to join with neighboring states to crack down on fraud has gained the support of the Alabama Independent Insurance Agents. During AIIA’s Young Agent’s Legislative Conference in Montgomery, Ala. AIIA issued a position paper supporting five bills and saying it did not support two bills.

The fraud bill defines insurance fraud by a person, an insurer, a reinsurer, a broker or their respective agents. It will authorize the DOI to investigate suspected insurance fraud and will require the reporting to certain public officers of suspected insurance fraud.

HB627 will offer civil immunity for certain persons reporting and investigating suspected insurance fraud and would require confidentiality of information and files. This bill would create an Insurance Fraud Unit within the DOI to investigate suspected insurance fraud and provide powers and remedies to enforce this bill. The bill would provide for assessments to insurers to fund the unit, for the establishment of the Insurance Fraud Unit Fund and would make appropriations from the fund for the fiscal years ending Sept. 30, 2005 and Sept. 30, 2006.

It would provide civil penalties up to $1,000 per violation or suspension of license or certificate of authority. It would also provide for civil and criminal penalties in addition to restitution to the aggrieved party and would limit the filing of a cause of action to six years. The bill would authorize the commissioner of insurance to promulgate rules to administer this act and to require licensees of the department to include three hours of continuing education on insurance producer ethics or business practices.

AIIA supports this bill because it believes Alabama needs to join neighboring states in cracking down on fraud. AIIA feels this bill would strengthen the fraud investigative process and provide for greater penalties for those caught committing fraud.

Licensing bill HB227
HB227 would lengthen the licensing period for insurance producers, service representatives and adjusters from the present one year, to two or more years, and increase the 12-hour continuing education requirement to 24 hours. This bill would require three hours of continuing education on insurance producer ethics and would adjust licensing fees as necessary to accommodate biennial licensing.

AIIA supports this legislation because most licenses are available for renewal at terms longer than one year. The bill will allow the DOI to allocate human resources to other departments without placing any burden on the licensing division. With only half the licensees renewing their license in any given year, fewer people will be needed to perform the job.

The bill will allow the DOI to allocate human resources to other departments without placing any burden on the licensing division. With only half the licensees renewing their license in any given year, fewer people will be needed to perform the job.

HB 174, SB228, licensing bills
The National Association of Insurance Commissioners has proposed an Interstate Compact, adopted by 20 states to streamline the approval of life, disability, long-term care and annuity products in Compact member states. The Compact will be fully operational after 26 states or states representing 40 percent of the market have adopted the legislation.

HB174 and SB228 benefit consumers and companies with new more competitive products in the market on a timely basis.

AIIA supports this bill because it feels getting products to market quickly benefits the consumer, and the easier it is to file uniform policy and rate information, the more carriers Alabama will attract.

HIPAA bill SB70
SB70 provides HIPAA amendments to authorize the commissioner to disapprove any policy of insurance to be marketed in Alabama by an insurance company or fraternal benefit society, and any evidence of coverage to be used by a health maintenance organization that does not meet any applicable requirements of federal law or federal regulations.

This bill authorizes the commissioner to have 30 days in which to disapprove any contract to be offered to the public by a health care service plan and make it unlawful to issue any contract until approved, with certain exemptions, to provide for notice specifying the reasons for the disapproval if a contract is disapproved and allow a hearing if requested; and to provide that any contract not approved within 30 days of the filing to be deemed approved.

SB70 is non-controversial, with technical amendments to bring Alabama’s insurance laws into compliance with federal HIPAA regulations.

AIIA supports this bill because it believes legislation is necessary to keep the insurance department in compliance with federal regulations.

Liability limits SB302
SB302 increases state minimum liability limits required for liability under insurance coverage of personal fiscal responsibility because of bodily injury or death of one person to $50,000 and for two or more persons to $100,000 and would increase the limit for property loss to $20,000.

AIIA supports this bill because it has been more than 30 years since the current minimum limits of 20/40/10 were increased. The current minimum, according to AIIA, is no longer adequate to cover bodily injury of property damage limits due to the tremendous increases in health care and automotive parts and labor. With the current liability limits set at 20/40/10, many motorists seek only to provide the minimum limit required to satisfy the law. Mississippi used to have the lowest minimum limits in the country, but have now passed a bill requiring 50/100/20.

Double-dipping bill SB57
AIIA said it does not support the Double Dipping Bill (SB57) or the Customer Service Representative Bill.

SB57 would allow an employee who received workers’ compensation benefits because of injuries sustained in a work-related motor vehicle accident to receive uninsured motorist benefits from an insurer or the insurer of the employer, or both.

The bill would repeal and supersede conflicting provisions of law. Existing law has been interpreted to prohibit an employee who received workers’ compensation benefits from an insurer.

AIIA opposes this legislation because at the turn of the last century, businesses gave up three common defenses in return for workers’ compensation benefits.

HB582, SB417
HB582 and SB417 would include persons employed by insurance producers within the definition of service representatives and allow them to market “limited lines” of insurance, specifically life, credit life and auto rental coverage without being examined by the state to do so.

AIIA said it opposes this bill because it would permit a customer service representative to be employed by a carrier and to work for a producer to sell and transact insurance business without passing an Alabama license exam.

Topics Carriers Fraud Agencies Legislation Workers' Compensation Alabama Training Development