News Briefs

MASSACHUSETTS

Romney Would Require Insurance: Gov. Mitt Romney would require every person in the state to have health insurance under his plan for universal health coverage, which he has dubbed the Safety Net Care proposal. The Safety Net plan is geared toward the roughly 150,000 state residents who make too much money to qualify for Medicaid and too little to buy private insurance.

“This is a group of people who are eminently insurable,” Romney said.

The plan would require people to sign up for insurance if they can afford it. Anyone who didn’t sign up could have state income tax returns withheld and their wages garnished to pay for care. “It means everyone is covered by health insurance, or they pay their own way. One or the other,” he said.

Romney said the Safety Net plan would cost $922 million annually; the same as the existing free care pool, which now pays for care for people without any insurance. The plan also relies on enrolling 106,000 people in Medicaid who are eligible but aren’t currently enrolled. That would cost about $400 million, split between the state and the federal government.

MassMutual Critical of Ousted CEO: The recently ousted chief executive of Mass Mutual Financial Group in Springfield abused his authority by retaliating against employees who questioned him and by using policyholders’ assets for personal ends, according to his termination letter. The termination letter accuses O’Connell of “a systematic and pervasive pattern of willful abuse of authority.”

The letter, included in a court filing the company made seeking to quash a subpoena from Massachusetts Secretary of State William Galvin, details allegations that have surfaced since Robert O’Connell was fired on June 2 by the company’s board.

O’Connell has denied any wrongdoing and vowed to challenge the board’s conclusions.

The letter says O’Connell retaliated against employees “for attempting to act in the company’s best interests” and it alleges he blocked communication between employees and the board. O’Connell is also accused of letting family and friends travel on the company’s aircraft.

The Springfield-headquartered diversified financial services company has argued that Secretary of State Galvin, who oversees the securities industry, has no authority to investigate the company. Meanwhile, the state’s attorney general and insurance commissioner also are looking into the matter.

Big Dig Surety Settlement Achieved: St. Paul Travelers Companies and The Kemper Insurance Companies have reached a settlement in connection with certain surety bonds that St. Paul Travelers and Kemper issued as co-sureties. The bonds were issued on behalf of a large construction contractor engaged in various projects, including the Boston-based central artery project known as the Big Dig. Under the settlement, Kemper made a payment to St. Paul Travelers in exchange for which Kemper was released from any further financial obligations to St. Paul Travelers relating to these bonds. The insurers did not disclose the amount of the payment.

This settlement, together with St. Paul Travelers’ previously recorded co-surety reserves, approximates the company’s estimate of Kemper’s share of the losses related to the bonded projects. St. Paul Travelers said it continues to believe its reserves related to the bonded projects are appropriate.

CONNECTICUT

AG Blumenthal Questions ‘Kickbacks:’ An obstetrician and gynecologist management company has been subpoenaed as part of an investigation into whether it received insurance kickbacks that artificially inflated malpractice insurance rates for Connecticut doctors, state and company officials said. Women’s Health Connecticut of Avon provides management services to more than 140 doctors and other health care providers around the state. It has been one of the most vocal supporters of a cap on awards in medical malpractice cases.

Connecticut Attorney General Richard Blumenthal confirmed the subpoena was part of an investigation into whether the company profited from an illegal insurance brokerage deal that drove up premiums for unwitting doctors. “The price of their insurance was raised as a result of this scheme,” Blumenthal said. “We’re talking about literally hundreds of doctors who see thousands of patients for ob-gyn services.”

It is illegal for brokers to pay clients or share commissions to secure their business-a practice called rebating.

The Women’s Health Connecticut investigation adds a new wrinkle to the typical rebating probe. The company’s former insurance broker, Hilb Rogal & Hobbs, acknowledged last month that its officials may have accepted extra fees, which are illegal, from insurance providers in exchange for steering business. HRH announced the resignation of its president, fired another employee and turned over documents to federal and state prosecutors and insurance regulators.

Blumenthal is investigating whether those illegal fees were shared with Women’s Health Connecticut managers without the knowledge of the doctors, who paid more for insurance because the hidden fees were wrapped into their premiums.

RHODE ISLAND

Lead Paint Law Goes Into Effect: The state’s Lead Hazard Mitigation Law went into effect July 1. The law requires all rental property owners to take a three-hour lead hazard awareness class and meet and maintain the lead hazard mitigation standard, which means the property has been inspected for lead hazards in and around the property.

But most rental property owners do not have to have their property inspected until their tenants change or someone complains. The law applies about 80 percent of the state’s housing stock-homes built before 1978, when it was likely lead-based paint was used in a house.

Rental property owners must conduct a visual inspection, fix any hazards, give tenants information about lead hazards, respond to tenant concerns, perform regular maintenance according to lead compliance mitigation standards and have the property inspected to obtain a certificate of conformance when there is a tenant change. Then, a certified lead inspector must examine the property.

The state reported that more than 12,000 people have taken the lead hazard awareness class, up from 7,000 last year.

After July 1, a property owner’s insurance coverage may be affected based on their compliance or noncompliance with the law. After the law goes into effect, property owners will cease to be covered by the “innocent owner” provision of the law-which means landlords can be held responsible for any cases of lead poisoning on their property after July 1.

NEW HAMPSHIRE

Pre-trial Med-Mal Screening Approved: New Hampshire lawmakers have approved pretrial screening panels in medical malpractice lawsuits in hopes of controlling rising insurance costs for doctors. The screening panel adopted by the House and by the Senate is modeled on one used in Maine. Doctors have lobbied hard for the measure. A panel comprising a judge, a lawyer and a doctor would review cases before they went to trial. The panel would consider evidence and testimony from witnesses. If the panel unanimously felt the case was weak and the parties continued to trial, the panel’s finding would be presented to the jury.

Some objected, saying this will force lawyers to try a case twice-once before a screening panel and once before a jury. Others argued the Maine model is unconstitutional in New Hampshire because the state constitution calls the right to a jury trial “sacred.”

Gov. John Lynch has said he will sign the bill.

Workers’ Comp Refunds Expected: The New Hampshire Insurance Department reported that a number of businesses should be getting workers’ compensation insurance refunds beginning next month. The workers compensation rating organization, the National Council on Compensation Insurance, is recalculating the rates because of errors in reporting income for many occupations, including loggers, drivers in many industries, wallboard installers and hotel restaurant workers.

Insurance Commissioner Roger Sevigny said he would order the rate adjustments and refunds as soon as the National Council on Compensation Insurance recalculates its rates. The state says the refunds will be paid for various occupations for 2003, 2004 and 2005, and could range from $10 to more than $5,000.

The state said refunds of $5,000 or more will go to about five employers; refunds of between $1,000 and $5,000 will go to about 45; and refunds of between $500 and $1,000 will go to another estimated 60 employers.

Similar recalculations resulted in refunds to employers in Maine and Vermont.

MAINE

Fixed Codes Lead to Comp Savings: Maine Superintendent of Insurance Alessandro A. Iuppa announced that hundreds of Maine employers may see reductions in their 2003, 2004 or 2005 workers’ compensation insurance premiums as a result of adjustments to the data used by rating organization, the National Council on Compensation Insurance.

The change in the data used for the 2003 through 2005 rate filings resulted from the discovery that payroll information used in calculating rates had been excluded for specific class codes, according to Iuppa. He said a review showed reduced rates for 29 employer classification codes. Iuppa has requested that all insurers to recalculate 2003, 2004 and 2005 premiums and make appropriate refunds or premium adjustments.

NEW YORK

Empire Blues Conversion Upheld: New York’s highest court has dismissed an attempt to block the plan to convert Empire Blue Cross and Blue Shield into a for-profit company. The planned conversion is projected to provide the state with as much as $4 billion in revenues, funds that Gov. George Pataki and lawmakers say the state needs to pay for health programs and raises for hospital and nursing home workers.

In Consumers’ Union of the U.S., et. al. vs. The State of New York and Empire HealthChoice, Inc., (d/b/a Empire Blue Cross Blue Shield), the court concluded that the plaintiffs’ allegations were legally insufficient to support any cause of action. The court granted the defendants’ motion to dismiss the amended complaint alleging that the conversion legislation violated the state constitution on the ground that it is a local law granting an exclusive privilege, immunity and/or franchise.

The suit was brought in 2002, by Consumers Union, the publisher of Consumer Reports, as well as three individual Empire policyholders. The court rejected their contentions that the deal was unconstitutional because it benefited only a single insurer and that it was a breach of Empire’s directors’ fiduciary responsibilities.

Marsh Won’t Sell Business Units: Marsh & McLennan Companies will not sell any of its various businesses, the company announced after completing a strategic review of its options. Michael G. Cherkasky, president and chief executive officer of Marsh & McLennan Companies Inc., announced the decision not to sell or spin off any of its current units that include insurance broker Marsh, reinsurance intermediary Guy Carpenter, risk services firm Kroll, investment advisor Putnam Investments, Mercer Human Resource Consulting and Mercer Specialty Consulting. Instead, Cherkasky said that the focus of MMC is to operate these businesses to provide superior service and advice to clients and to deliver value to its shareholders.

PENNSYLVANIA

Workplace Injuries at 4 Year Low: Gov. Edward Rendell reported that workplace injuries in the state in 2004 were down to 93,566, the lowest since 2000 when there were 82,676 workplace injuries. The number was down more than 5,500 from 2003. Work related deaths dropped by 10 in 2004 to 130.

More than 6,100 businesses are taking advantage of the state’s certified Workplace Safety Committee program. The program offers a 5 percent discount on workers’ compensation premiums to any company that creates and maintains a certified committee. Such committees currently cover more than 840,000 employees and the state’s employers have saved an estimated $200 million in premiums as a result, officials said.

Law Shields Bosses Who Disclose: Gov. Ed Rendell has signed legislation that protects employers from being sued over work histories they disclose about current or former employees. The measure stemmed from the case of a Pennsylvania nurse who murdered 24 patients. The information must be requested either by the employee, or the prospective new employer. Employees who dispute the disclosed information can sue for damages if they prove that the employer did not act in good faith.

State Sen. Pat Vance, R-Cumberland, originally wrote the bill to apply to hospitals, nursing homes and other medical facilities, but interest from various business groups prompted her to broaden it to all employers. “I’m surprised how many employers were concerned they were going to be sued,” Vance said. “It allows people to give a truthful explanation of their employee’s history.”

VIRGINIA

Auto Residual Market Rates Up 3.8%: An average 3.8 percent increase in rates for private passenger auto policies insured through the Virginia Automobile Insurance Plan is now in effect. The industry had requested an average 5.5 percent rate increase. The Virginia Bureau of Insurance approved the rates for new policies as of June 1 and renewals as of July 1. By coverage, the increases approved break down as 2.3 percent for collision; 3.2 percent for comprehensive; 29.2 percent for medical expense; 7.8 percent for property damage liability. In addition, decreases of 0.8 percent on bodily injury liability and 0.9 percent on uninsured motorists (at limits of $25,000/50,000/20,000) were also approved as part of the decision.

The residual market plan had requested an overall hike of 5.5 percent. Specific coverage rate level revisions requested included 1.9 percent for bodily injury liability; 9.6 percent for property damage liability; 30.4 percent for medical expense; 1.4 percent for uninsured motorists; 3.4 percent for comprehensive and 2.5 percent for collision.

Topics Legislation Workers' Compensation Property Connecticut Maine New Hampshire Medical Professional Liability