FIRE WORKS DISPLAYS AT RISK:
A Texas Department of Insurance (TDI) Fraud Unit investigation revealed that one insurance agent's actions may have left over 100 public firework displays scheduled for this Fourth of July uninsured, as well as hundreds of trucks filled with petroleum products traveling on the nation's highways. As a result, an emergency cease-and-desist order has been issued to Tesher Corp. in Tyler and its president, insurance agent John William Tesseyman III. The investigation was conducted with the help of the Travis County District Attorney´s office. Tesseyman allegedly sold millions of dollars of worthless general liability insurance policies to individuals and companies that conduct indoor and outdoor public fireworks displays, as well as operate retail firework outlets across the nation. The bogus policies also covered petroleum companies located in dozens of states. TDI Commisioner Jose Montemayor urged petroleum companies and fireworks distributors nationwide to check their policies to make sure they were not purchased through Tesseyman. The agent sold the policies through the Tesher Corp., Southwest Pyro Consortium and Southwest Property and Casualty in Tyler. He does not hold a surplus lines, corporate general property and casualty or corporate surplus lines license. In the past 12 months, Tesseyman has moved his insurance business through four different insurance carriers, all of which have cancelled any working arrangement with Tesseyman and his corporation. The investigation was initiated following a written complaint filed in January by an insurance broker. Tesseyman is reportedly out of the country. When he returns, he faces an arrest warrant issued by State District Judge Julie Kocurek of Austin that lists charges of misapplication of fiduciary property over $200,000, theft over $200,000 and securing execution of a document by deception over $200,000; as well as a third-degree felony charge of unauthorized insurance.
SENATE TERRORISM BILL INTRODUCED:
The Alliance of American Insurers (AAI) says it is encouraged that the Senate is now beginning to focus on the terrorism insurance issue with the introduction of a bill (S 2600) by Senators Chris Dodd (D-CT), Harry Reid (D-NV), Paul Sarbanes (D-MD) and Charles Schumer (D-NY). An Alliance spokesperson said the association believes the bill's introduction will initiate a process leading to a bipartisan bill that will make it to the President's desk for signing. The association plans to participate in that process. The U.S. House of Represen-tatives passed terrorism legislation in the fall of 2001. The Senate has yet to bring similar legislation to a vote.
AGENTS SELLING BOGUS COVER':
Texas State District Judge Pete Lowry issued a temporary restraining order against Robert Harrison of Richmond and Pete Ballard of San Antonio to keep them from selling bogus commercial insurance coverages. The order put a clamp on their assets. The Texas Department of Insurance (TDI) alleges the agents sold worthless commercial real estate insurance policies to some 73 people, collecting millions of dollars in premium. Operating as Harrison Insurance Agency, Harrison and Ballard are alleged to have added commercial properties to an existing policy without the authorization or the knowledge of the insurer. TDI contends the agents continued adding unauthorized properties to a Lloyd's of London policy after their authority to represent the insurer was revoked. Lloyd's obtained a temporary restraining order on May 3 to stop them from further sales or any affiliation with Lloyd's. Many of the allegedly bogus policies cover apartment complexes in the Houston and San Antonio areas. A receiver was appointed to take charge of all the property and assets held by Harrison, Ballard, Harrison Insurance Agency, HB Insurance Management Inc. and HB Insurance Services Inc. Assets seized will be used to provide restitution to individuals who have outstanding claims.
CHIROS LOSE WITH SOAH ACTION:
The Texas State Office of Administrative Hearings (SOAH) overturned a ruling by the Texas Workers' Compensation Commission (TWCC) pertaining payment for chiropractors, finding that chiropractors cannot collect additional payments for joint mobilizations immediately followed by chiropractic manipulation to the same body area. The ruling was made in a case in which Texas Mutual Insurance Co., a workers compensation insurance provider, denied a bill from Curtis Adams, D.C. for joint mobilization because he had billed for manipulations to the same body area on the same date of service. Texas Mutual's decision was based on information from chiropractic experts. After Adams filed for medical dispute resolution, TWCC ruled in his favor. In the SOAH appeal an expert witness, another chiropractor, called by Texas Mutual explained that when a chiropractor manipulates a body part, the manipulation includes a preliminary joint mobilization. Texas Mutual Insurance Co. also provided a 15-minute videotape demonstration of a mobilization and manipulation performed to the same body area. The expert went on to say that chiropractors view the joint mobilization as part of the manipulation for billing purposes. Adams did not attend the hearing. SOAH found that the joint mobilizations in the context provided were not separately reimbursable as provided by law, and that Texas Mutual had correctly reimbursed Adams. SOAH also ruled that a chiropractor cannot manipulate a body area without first mobilizing the body area, and could not bill for both services because it would be double-billing for the same service.
FEDERAL OVERSIGHT FOR INDUSTRY CONSIDERED:
Federal lawmakers met recently to discuss the possibility of allowing insurance companies to have the option to be regulated by the federal government as opposed to the current system of state regulation, according to the Washington Post. The issue continues to divide insurers, some of whom were present at the meeting in support of federal regulation. They told a House Financial Services committee that larger, national companies would likely benefit from a standardized set of regulations. Those opposed to such plan argued that insurance is a local product that is best served by regional oversight. The Post noted that much of the support in favor of federal regulation comes from the life insurance sector. Two bills have been introduced to create a new federal regulatory system, but both are lacking support to move forward. One, introduced by Sen. Charles E. Schumer (D-N.Y.), models the banking industry's' dual state-federal regulatory system, giving insurance companies the option to choose between state and federal regulation. The other, introduced by Rep. John J. LaFalce (D-N.Y.), proposes the creation of an optional federal charter for insurance companies, but keeps agents and brokers under state regulation.
TX MUTUAL WINS ONE MORE:
In another Texas Mutual case, SOAH ruled that chiropractor, David Olson, D.C., misrepresented group physical medicine as individual treatment. The case began when Olson billed Texas Mutual for one-on-one sessions because an injured worker was frequently the only patient in his physical medicine facility at the end of the day. Chiropractors may charge for each 15 minutes of treatment during one-on-one sessions; group physical medicine sessions, however, entail flat fees that are less expensive. According to expert testimony from another chiropractor, one-on-one physical medicine would be appropriate for severely injured patients, such as stroke patients, those with significant gait problems, or those with profound neurological deficits. The chiropractor also testified that Dr. Olson's physical medicine session was no different than what is available at a health club for far less expense or in a home setting if the patient had the right equipment. For Texas workers' compensation cases, health care providers bill for their services using Current Procedural Terminology (CPT) codes from the Texas Workers' Compensation Commission Medical Fee Guideline. The guideline also includes ground rules that govern the use of the CPT codes. SOAH agreed with Texas Mutual that Dr. Olson did not perform one-on-one physical medicine and that CPT code 97110 (one-on-one physical medicine) is not a "default code" just because the claimant is the only patient in the clinic at the end of the day. SOAH also agreed that Texas Mutual had correctly reimbursed Olson.
AAI URGES MODIFICATION ON SAFEGUARDING INFORMATION:
Regulations being proposed in three states aimed at safeguarding consumer information should be modified so as not to encourage private lawsuits against insurers, according to the Alliance of American Insurers. The three states, Arkansas, Oregon and Utah are considering regulations that closely track the recently adopted 2002 National Association of Insurance Commissioners' Standards for Safeguarding Customer Information Model Regulation. They are the first to consider the model regulation. Eventually, all states will have to adopt standards to comply with provisions in the federal Gramm-Leach-Bliley (GLB) Act. The GLB provisions require regulators to establish standards to protect the confidentiality and security of customer records, protect against threats to security or integrity of the information and to protect against unauthorized access to customer records. The proposed state regulations require insurers to implement a comprehensive written information security program that includes administrative, technical, and physical safeguards for the protection of customer information. The program must be appropriate to the size and complexity of the insurer and the nature and scope of its activities. The regulations give examples of methods of developing and implementing an information security program. These include steps to assess risk, manage and control risk, oversee service provider arrangements, and adjust the program. Violations would be considered unfair trade practices. Hearings will be held in the near future on the above-states' regulations and the Alliance plans to submit comments at each.
FIRE WORKS DISPLAYS AT RISK
A Texas Department of Insurance (TDI) Fraud Unit investigation revealed that one insurance agent's actions may have left over 100 public firework displays scheduled for this Fourth of July uninsured, as well as hundreds of trucks filled with petroleum products traveling on the nation's highways. As a result, an emergency cease-and-desist order has been issued to Tesher Corp. in Tyler and its president, insurance agent John William Tesseyman III. The investigation was conducted with the help of the Travis County District Attorney´s office. Tesseyman allegedly sold millions of dollars of worthless general liability insurance policies to individuals and companies that conduct indoor and outdoor public fireworks displays, as well as operate retail firework outlets across the nation. The bogus policies also covered petroleum companies located in dozens of states. TDI Commisioner Jose Montemayor urged petroleum companies and fireworks distributors nationwide to check their policies to make sure they were not purchased through Tesseyman. The agent sold the policies through the Tesher Corp., Southwest Pyro Consortium and Southwest Property and Casualty in Tyler. He does not hold a surplus lines, corporate general property and casualty or corporate surplus lines license. In the past 12 months, Tesseyman has moved his insurance business through four different insurance carriers, all of which have cancelled any working arrangement with Tesseyman and his corporation. The investigation was initiated following a written complaint filed in January by an insurance broker. Tesseyman is reportedly out of the country. When he returns, he faces an arrest warrant issued by State District Judge Julie Kocurek of Austin that lists charges of misapplication of fiduciary property over $200,000, theft over $200,000 and securing execution of a document by deception over $200,000; as well as a third-degree felony charge of unauthorized insurance.
SENATE TERRORISM BILL INTRODUCED
The Alliance of American Insurers (AAI) says it is encouraged that the Senate is now beginning to focus on the terrorism insurance issue with the introduction of a bill (S 2600) by Senators Chris Dodd (D-CT), Harry Reid (D-NV), Paul Sarbanes (D-MD) and Charles Schumer (D-NY). An Alliance spokesperson said the association believes the bill's introduction will initiate a process leading to a bipartisan bill that will make it to the President's desk for signing. The association plans to participate in that process. The U.S. House of Represen-tatives passed terrorism legislation in the fall of 2001. The Senate has yet to bring similar legislation to a vote.
AGENTS SELLING BOGUS COVER'
Texas State District Judge Pete Lowry issued a temporary restraining order against Robert Harrison of Richmond and Pete Ballard of San Antonio to keep them from selling bogus commercial insurance coverages. The order put a clamp on their assets. The Texas Department of Insurance (TDI) alleges the agents sold worthless commercial real estate insurance policies to some 73 people, collecting millions of dollars in premium. Operating as Harrison Insurance Agency, Harrison and Ballard are alleged to have added commercial properties to an existing policy without the authorization or the knowledge of the insurer. TDI contends the agents continued adding unauthorized properties to a Lloyd's of London policy after their authority to represent the insurer was revoked. Lloyd's obtained a temporary restraining order on May 3 to stop them from further sales or any affiliation with Lloyd's. Many of the allegedly bogus policies cover apartment complexes in the Houston and San Antonio areas. A receiver was appointed to take charge of all the property and assets held by Harrison, Ballard, Harrison Insurance Agency, HB Insurance Management Inc. and HB Insurance Services Inc. Assets seized will be used to provide restitution to individuals who have outstanding claims.
CHIROS LOSE WITH SOAH ACTION
The Texas State Office of Administrative Hearings (SOAH) overturned a ruling by the Texas Workers' Compensation Commission (TWCC) pertaining payment for chiropractors, finding that chiropractors cannot collect additional payments for joint mobilizations immediately followed by chiropractic manipulation to the same body area. The ruling was made in a case in which Texas Mutual Insurance Co., a workers compensation insurance provider, denied a bill from Curtis Adams, D.C. for joint mobilization because he had billed for manipulations to the same body area on the same date of service. Texas Mutual's decision was based on information from chiropractic experts. After Adams filed for medical dispute resolution, TWCC ruled in his favor. In the SOAH appeal an expert witness, another chiropractor, called by Texas Mutual explained that when a chiropractor manipulates a body part, the manipulation includes a preliminary joint mobilization. Texas Mutual Insurance Co. also provided a 15-minute videotape demonstration of a mobilization and manipulation performed to the same body area. The expert went on to say that chiropractors view the joint mobilization as part of the manipulation for billing purposes. Adams did not attend the hearing. SOAH found that the joint mobilizations in the context provided were not separately reimbursable as provided by law, and that Texas Mutual had correctly reimbursed Adams. SOAH also ruled that a chiropractor cannot manipulate a body area without first mobilizing the body area, and could not bill for both services because it would be double-billing for the same service.
FEDERAL OVERSIGHT FOR INDUSTRY CONSIDERED
Federal lawmakers met recently to discuss the possibility of allowing insurance companies to have the option to be regulated by the federal government as opposed to the current system of state regulation, according to the Washington Post. The issue continues to divide insurers, some of whom were present at the meeting in support of federal regulation. They told a House Financial Services committee that larger, national companies would likely benefit from a standardized set of regulations. Those opposed to such plan argued that insurance is a local product that is best served by regional oversight. The Post noted that much of the support in favor of federal regulation comes from the life insurance sector. Two bills have been introduced to create a new federal regulatory system, but both are lacking support to move forward. One, introduced by Sen. Charles E. Schumer (D-N.Y.), models the banking industry's' dual state-federal regulatory system, giving insurance companies the option to choose between state and federal regulation. The other, introduced by Rep. John J. LaFalce (D-N.Y.), proposes the creation of an optional federal charter for insurance companies, but keeps agents and brokers under state regulation.
TX MUTUAL WINS ONE MORE
In another Texas Mutual case, SOAH ruled that chiropractor, David Olson, D.C., misrepresented group physical medicine as individual treatment. The case began when Olson billed Texas Mutual for one-on-one sessions because an injured worker was frequently the only patient in his physical medicine facility at the end of the day. Chiropractors may charge for each 15 minutes of treatment during one-on-one sessions; group physical medicine sessions, however, entail flat fees that are less expensive. According to expert testimony from another chiropractor, one-on-one physical medicine would be appropriate for severely injured patients, such as stroke patients, those with significant gait problems, or those with profound neurological deficits. The chiropractor also testified that Dr. Olson's physical medicine session was no different than what is available at a health club for far less expense or in a home setting if the patient had the right equipment. For Texas workers' compensation cases, health care providers bill for their services using Current Procedural Terminology (CPT) codes from the Texas Workers' Compensation Commission Medical Fee Guideline. The guideline also includes ground rules that govern the use of the CPT codes. SOAH agreed with Texas Mutual that Dr. Olson did not perform one-on-one physical medicine and that CPT code 97110 (one-on-one physical medicine) is not a "default code" just because the claimant is the only patient in the clinic at the end of the day. SOAH also agreed that Texas Mutual had correctly reimbursed Olson.
AAI URGES MODIFICATION ON SAFEGUARDING INFORMATION
Regulations being proposed in three states aimed at safeguarding consumer information should be modified so as not to encourage private lawsuits against insurers, according to the Alliance of American Insurers. The three states, Arkansas, Oregon and Utah are considering regulations that closely track the recently adopted 2002 National Association of Insurance Commissioners' Standards for Safeguarding Customer Information Model Regulation. They are the first to consider the model regulation. Eventually, all states will have to adopt standards to comply with provisions in the federal Gramm-Leach-Bliley (GLB) Act. The GLB provisions require regulators to establish standards to protect the confidentiality and security of customer records, protect against threats to security or integrity of the information and to protect against unauthorized access to customer records. The proposed state regulations require insurers to implement a comprehensive written information security program that includes administrative, technical, and physical safeguards for the protection of customer information. The program must be appropriate to the size and complexity of the insurer and the nature and scope of its activities. The regulations give examples of methods of developing and implementing an information security program. These include steps to assess risk, manage and control risk, oversee service provider arrangements, and adjust the program. Violations would be considered unfair trade practices. Hearings will be held in the near future on the above-states' regulations and the Alliance plans to submit comments at each.
