News Briefs

December 4, 2005

New Online License Service Available for Wash. Agents and Brokers

Insurance agents, brokers and other insurance professionals licensed to transact business in Washington can now print copies of their licenses from their personal computers using a new online service offered by the Office of the Insurance Commissioner.

The service is accessed from the Insurance Commissioner’s Web site www.insurance.wa.gov. Select the “For Agent/Brokers” button, and then the “Print duplicate license” link that appears in the drop-down menu.

The new feature is available to the 87,000 agents, brokers, adjusters, general agents and solicitors licensed by the state Insurance Commissioner. In addition to the ability to print duplicate licenses, the service also allows users to update address information, phone numbers and e-mail addresses.

Other capabilities include the ability look up an individual’s licensing status, appointments and affiliations. Use the Agent/broker lookup button to access this feature.

Lawmakers Ask Colo. to Crack Down on Auto Insurance Companies

Democratic lawmakers have asked the Colorado Division of Insurance to crack down on auto insurance companies and fine them $250 a day if they fail to submit timely information to a database that tracks uninsured drivers.

Robert Holden, a policy analyst for the Department of Regulatory Agencies, told lawmakers insurance companies are not filing timely reports, which affects the accuracy of the database.

Holden notified lawmakers that there has not been a single instance in which the Division of Insurance has fined an insurance company for failing to update records on time, although state law requires a fine of $250 a day.

“The Division of Insurance isn’t really helping consumers in the state of Colorado by refusing to enforce the laws,” said Rep. Dorothy Butcher, D-Pueblo.

Rep. Morgan Carroll, D-Aurora, said in the six years the program has been in place, “the Department of Motor Vehicles has never reported the insurance violations to the Division of Insurance and in six years the insurance commissioner has never asked for it.”

Bill Imig, a lobbyist for auto insurers, said many of the problems that plagued the auto insurance database six years ago have been fixed.

He said some small insurance companies may not be complying with the law that requires them to fix problems and notify customers within 45 days and those companies should be fined. He said bigger companies like Allstate file weekly updates on all clients and there was no need to respond to individual complaints.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Calif. Commissioner Announces Team in Bid for Lieutenant Governor

California Insurance Commis-sioner and Demo-cratic candidate for Lieutenant Governor John Garamendi has announced his 2006 campaign team, which includes participants in the campaign to defeat Gov. Arnold Schwarzenegger’s ballot initiatives.

In November, all of Schwarzenegger’s key proposals were defeated. “On November 8th, the people of California sent a message to Sacra-mento that they expect results and solutions, not special interest business-as-usual,” Garamendi said.

Larry Grisolano of The Strategy Group, will join Gara-mendi’s team as senior strategy consultant. David Dixon and Rich Davis of Dixon/Davis Media Group will head Garamendi’s media team. Steve Smith and Jason Kruger of Dewey Square Group will spearhead the campaign’s coalition-building communications and will direct outreach to organized labor. Heidi von Szeliski and David Mermin of Lake, Snell, Perry, Mermin Decision Research will conduct the campaign’s public opinion polling. And Gerry Kavanaugh and Josh Fryday of DCS Politics will handle Internet communications. Zain Khan of Constituents Direct will provide e-mail communication services.

Julie Sandino will serve as Northern California finance director, with Rebecca Suter assuming finance director duties for Southern California. And Christine Lally will oversee and coordinate all campaign activities from the Garamendi campaign’s new headquarters in Old Sacramento.

UA Research: Risk of Flooding in Arizona Not As Severe as Estimated

Up to 29,000 Arizonans paid for insurance under the National Flood Insur-ance Program in fiscal year 2004, but new research shows that many of these people may not need the costly coverage.

A study headed by a University of Arizona associate professor suggests the risk of flooding in Arizona is not as severe as projected by the estimates provided by the Federal Emergency Management Agency.

The National Flood Insurance Program requires all residents buy flood insurance in land declared a high flood zone area. But according to the UA research, only 5 percent of the damage predicted by the FEMA agency is likely.

“Current flood-plain maps have a financial impact on Arizona for sure, because people and communities are paying for flood insurance they won’t realistically use.” said Jon Pelletier, a UA associate professor of geosciences.

Pelletier said Arizonans who don’t need the federal flood insurance are subsidizing other parts of the country and are in essence paying for reconstruction costs in areas that are really flood-prone, like the Mississippi flood plain.

For large-scale developments there are already engineering and updated risk-assessment methods in place that are pretty accurate. But for owners of older homes and for new homes that are not part of a larger development, updated flood information is extremely important, said Philip Pearthree, a geologist for the Arizona Geological Survey.

Updating outdated flood-plain information can take FEMA years.

Real estate officials said flood-plain mapping should be revised to reflect up-to-date, more accurate scientific data, which could potentially save homeowners hundreds of dollars a year.

Pelletier and his research team, which included Pearthree, studied the foothills of the Harquahala Piedmont west of Phoenix and the Tortolita Piedmont northwest of Tucson using three methods of analysis: remote sensing, geological mapping and a numerical computer model.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Employers, Employees Could Be Hurt by Disability Income Insurance Changes

Proposed changes in the regulation of disability income insurance in California could significantly increase the cost of coverage and discourage some injured employees from returning to work, according to a study released by America’s Health Insurance Plans.

The study, which was prepared by actuarial consulting firm Milliman Inc., said, “The purchasers of group and individual disability income (DI) insurance, both employers and individuals, will be the ones most affected by the Department’s proposed policy language changes.”

Specifically, the Milliman analysis said the proposed changes would:

• Significantly increase the cost of DI insurance by as much as 46 percent for group products and 33 percent for individual products;

• Limit the range of DI insurance products available to California consumers;

• Reduce the total amount of DI protection per life that Californians may access; and

• Discourage some DI claimants from returning to work.

“Disability insurance is a crucial part of the financial security of millions of working Californians. We commissioned this study to give decision-makers better information on the potential impacts of the regulatory changes proposed by the Department of Insurance,” said Karen Ignagni, president and CEO of AHIP, a national trade association representing nearly 1,300 members providing health benefits, including disability income insurance.

The Milliman report is available online: http://www.ahip.org/content/default.aspx?docid=13557.

Colo. Comp Premium to Decrease

Beginning Jan. 1, 2006, the standard premium for workers’ compensation in Colorado will de-crease an average of 1 percent, as a result of an order signed by Colorado Insurance Commissioner David Rivera.

Although individual employer workers’ comp premiums are affected by many other rating factors, many Colorado employers will see a decrease in their premiums as a result of this action. This decrease follows last year’s average decrease of 5.4 percent.

On Aug. 1, 2005, the National Council on Compensation Insurance (NCCI) submitted its annual workers’ comp loss cost and rating values filing with a proposed average premium increase of 5.1 percent. As is customary, the Division of Insurance contracted with an independent actuary to review the filing to determine the reasonableness of the proposed change.

The Commissioner’s final decision was based on a Sept. 13, 2005, public hearing at the NCCI and the Division’s consulting actuary explained and defended their differing conclusions, and the public was given an opportunity to provide testimony.

No Workers’ Comp Premium Increases Scheduled in Washington

Washington’s Department of Labor and Industries (L&I) has announced there will be no general increase in workers’ compensation premiums for 2006.

In late August, the agency proposed a 3.8 percent increase. But L&I Director Gary Weeks said strong investment earnings and a strong economy, the agency’s success at controlling its medical costs and a continued decline in the frequency of workplace-injury claims combined to make that increase unnecessary.

“We know that business owners around the state need to have workers’ compensation rates that are predictable and as stable as possible,” Weeks said. “I’m pleased that we were able to lower our earlier proposal to zero.”

While there will be no general rate increase, the premium rate will rise in the Accident Fund, which employers pay into. That fund provides money for pensions and wage-replacement benefits for workers who are injured so seriously they cannot work. The increase in that fund will be offset by decreases in the Medical Aid and Supplemental Pension funds, which both workers and employers contribute to.

Rates change annually within industries and among employers. Some employers will see their rates go up while others will have rates that go down. Washington is the only state where workers contribute a substantial portion of the premiums, according to L&I. Next year, their share will be 24.1 percent.

L&I manages the Washington State Fund, which provides coverage for about 161,000 employers and 2.3 million workers. Another 830,000 workers are employed by companies that self-insure.

Safeco Sees After-Tax Losses from Wilma at $29 Million

Seattle-based Safeco has announced estimated after-tax catastrophe losses from Hurricane Wilma of $29 million, or $0.23 per diluted share. Pretax catastrophe losses from the storm are estimated at $45 million.

Those figures represent estimated losses both from claims received through Nov. 9, 2005, and from future expected claims from policyholders with hurricane damage, as well as estimated assessments to Safeco.

Safeco does not anticipate reimbursement from the Florida Hurricane Catastro-phe Fund or the company’s property catastrophe reinsurance for losses related to Hurricane Wilma.

“As the 2005 hurricane season comes to a close, hundreds of Safeco claims professionals are on the ground, helping customers, agents and brokers recover from Hurricane Wilma-a storm more costly by industry estimates than any one of Florida’s four 2004 hurricanes,” said Mike McGavick, Safeco chairman and CEO.

As it has following each of this year’s major hurricanes, Safeco deployed generators and service personnel to help Florida agents whose business operations were disrupted by Hurricane Wilma, so they could service customers.

Safeco has 0.7 percent share of the Florida homeowners market and 2.4 percent share of the commercial multiperil market. The company’s loss estimate is less than proportionate to the company’s market share, due to strict underwriting guidelines in areas susceptible to coastal storms.

Safeco estimated losses for Hurricane Wilma using its knowledge of severity and reporting patterns from past storms as well as claims data and assumptions specific to this catastrophe.

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