LA. RATING BILL NOW LAW:

Louisiana Gov. Mike Foster allowed Senate Bill 721—which lets insurance companies raise or lower their automobile and property insurance rates by as much as 10 percent per year without the approval of the Louisiana Insurance Rating Commission—to become law without his signature. The law facilitates Louisiana's most significant insurance deregulation in many years and goes into effect Jan. 1, 2004. According to the New Orleans Times-Picayune, Foster had "serious reservations" about the bill, which has its share of critics. Opponents fear it will give free rein to insurers to raise premiums unchecked, while its backers believe it will bring more insurance companies into the state and foster competition. SB 721 was sponsored by Sen. John Hainkel, R-New Orleans. National Association of Independent Insurers counsel, Greg LaCost, applauded the bill stating that it "provides more flexibility to the state's insurance rate-making process while maintaining government oversight of insurance rates." The NAII is a founding member of the Coalition to Insure Louisiana, a broad-based group of businesses and other organizations that supported enactment of SB 721, and has been pushing other insurance reform legislation in the state. Foster may have had reservations about the bill, but he noted in a statement that he talked with the South Carolina insurance commissioner, who said that competition has increased and rates have stabilized in the state since South Carolina began using the flex-band rating approach. The NAII, which believes the measure will help ease the availability and affordability crisis being experienced in Louisiana, said that during the past decade, the number of companies offering property insurance coverage in Louisiana has dwindled from about 120 to less than 20, and few of those that remain write new policies. Critics fear, however, that under the new law insurers would be able to raise rates in some areas by more than 10 percent, because that figure is a statewide threshold. A company could feasibly lower rates in some parts of the state in order to impose a greater than 10 percent hike in higher risk areas, such as New Orleans.

ARK. GETS TOUGH ON ILLEGAL PLANS:

Cracking down on illegal benefits plans that have cropped up in his state, Arkansas Insurance Commissioner Mike Pickens revoked the licenses of four insurance agents who sold or were involved in the marketing of an unauthorized health plan and, in a separate action, informed enrollees in Benefit Plans of America Inc. that they should immediately seek to find new dental coverage. According to the Arkansas Insurance Department, Pickens revoked the insurance licenses of former agents Billy Dean Mullins of Conway, Cassondra Ann Kimble, John Anthony Markovich, and Helen Marie Markovich, all of Pocahontas, for their involvement with TRG Marketing LLC. TRG Marketing was ordered in 2002 to cease and desist operating in the State of Arkansas due to the company's sale of an illegal health care plan. The department denied the company's claim that the multiple employer welfare arrangement (MEWA) plan was set up pursuant to the Employee Retirement Income Security Act (ERISA) and was therefore exempt from state regulation. As for the dental plans, the insurance department is conducting an investigation into the operations of Benefit Plans of America Inc., which among other things was found to be operating illegally in Arkansas. Pickens said the department has received reports that "indicate the Plan is five months behind in claims payments." According to a notice sent by Pickens to those enrolled in the plan, the department has learned that Benefit Plans of America Inc. may have been marketed as

a Federal ERISA plan, exempt from state regulation. However, to date, the department has found those claims to be false. Over the past several months a number of illegal health plans have been discovered to be operating in Arkansas.

SIIS LEGISLATIVE FORUM:

Southwestern Insurance Information Service will host a Public Policy Forum, "The Texas Legislative Session: Beyond the Debate," July 11, 2003 at the Intercontinental Hotel in Dallas, Texas. Panelists will include Lee Ann Alexander, assistant vice president-legislative counsel, Liberty Mutual Insurance; Beaman Floyd, director, Texas Coalition for Affordable Insurance Solutions; Jonna Kay Hogeland, Texas government relations director, Nationwide Insurance; Cyndi Taylor Krier, vice president, Texas government relations, USAA; Jo Betsy Norton, regional counsel, Allstate Insurance and Denise Ruggiero, state counsel, State Farm Insurance. The panel moderator will be James Langford, senior vice president, Texas Farm Bureau Insurance Companies. For more information, visit the SIIS Web site, www.siisinfo.org, or call SIIS at (512) 795-8214.

OKLA. AGENCY IN SUPERVISION:

Oklahoma Insurance Commissioner Carroll Fisher placed a Bethany insurance agency under supervision after charges surfaced that its owner may have stolen more than $100,000 from her customers in the form of hidden refunds. The Aviation Insurance Group Agency was placed under supervision and the licenses of its owner, Shirley B. Porter-Hart of Piedmont, and its vice president, Cynthia B. Pennington of Bethany, were suspended following an investigation

into the allegations. Porter-Hart and Pennington are alleged to have pocketed money refunded by the companies they represented to their customers. In most cases, money was refunded to the agency after policies were cancelled early but the agency did not notify the policyholders, eventually moving the money into its own accounts. In some cases, policyholders were aware refunds were due, but agency employees were allegedly told to withhold five percent. Fisher ordered the insurance companies with which the agency did business to continue paying commissions to the agency but to hold any commission payments to Porter-Hart and Pennington until a final determination is made as to their license. Money sent to the agency will be used to pay back the affected policyholders. An investigation is ongoing as to the amount stolen from policyholders, but officials believe the figure ultimately will exceed $100,000. Aviation Insurance Group Agency specializes in coverage for small, privately owned airplanes.