WOOLEY SAYS FLEX BAND SAVED $38M

The Louisiana Department of Insur-ance reported that information provided by Commissioner of Insurance Robert Wooley to a joint meeting of the Louisiana Senate and House Insurance Committees shows the positive results of flexible insurance rating, including more than $38 million in savings in the form of rate decreases for consumers.

Flexible rating, or flex band, was approved during the 2003 regular legislative session and became effective Jan. 1, 2004. It applies to all property and casualty lines of insurance. Flex band rating allows insurers to amend rates as many times as necessary in a 12-month period within the -10 percent to +10 percent flex band. The Louisiana Insurance Rating Commission (LIRC) continues to hear rate requests in excess of 10 percent, or those considered to be not actuarially justified by the department.

Commissioner Wooley said the data shows companies are not asking for the maximum 10 percent rate increase under flex band and the filings made are not being automatically "rubber stamped" by the department, as some opponents of the measure feared.

Wooley also said the rate reductions seen under flex band are significant because such large decreases have not been requested in recent years under the LIRC system. In 2002, the LIRC approved $1,973,984 in rate decreases. That number increased to $2,304,474 in 2003.

LONG-TERM CARE INS. GUIDE AVAILABLE

A 2005-2006 Long-Term Care Insurance Comparison Guide has been published by the Louisiana Department of Insurance's Senior Health Insurance Information Program (SHIIP). The updated guide is designed to give consumers a better understanding of long-term care insurance and detailed information for shopping for the insurance.

Commissioner of Insurance Robert Wooley said the SHIIP staff compiled information for the 39-page guide using the different long-term care insurance policies sold in Louisiana. "The guide gives consumers information on what these policies can cost, an explanation of terminology used in long-term care policies and shopping tips for buying long-term care insurance," Wooley said.

The easiest way to access the 2005-2006 Long-Term Care Insurance Comparison Guide is online, at www.ldi.state.la.us, but consumers can get a printed copy by calling the SHIIP toll-free number, (800) 259-5301.

LAWSUIT REFORM BILL MOVES TO SENATE

The Oklahoma House Media Services Division reported the House passed a lawsuit reform effort, approving a comprehensive measure designed to help boost the state's economy while preventing abuse of Oklahoma's legal system. Lawmakers passed House Bill 2047, the Justice & Common Sense Act of 2005, by a vote of 62 to 38. The bill now moves to the state Senate for action. Speaker Todd Hiett (R-Kellyville) is the author of the measure.

The Justice & Common Sense Act aims to create a stronger economic climate in Oklahoma by reducing the harmful impact of lawsuit abuse. Hiett said junk lawsuits hurt Oklahoma by ruining the lives of innocent people, by making health care more expensive, by preventing job growth and by levying a hidden tax on citizens.

Hiett says the Justice & Common Sense Act of 2005 would: Provide for quick and fair compensation for injured people; clean up class action; reduce health care costs for Oklahomans; and provide common sense protection for business owners.

"We applaud this vote by the Oklahoma House as a monumental move toward saving the Oklahoma economy from the scourge of frivolous lawsuits," said John Marlow, AIA assistant vice president, Southwest Region. "From an insurance perspective, the bill provides a much-needed level of certainty and predictability for our policyholders that will help businesses in the state grow and prosper."

GRAND JURY ISSUES FINAL REPORT ON FISHER

Oklahoma's ninth multicounty grand jury issued its final report, much of which focused on former Insurance Commissioner Carroll Fisher and the Oklahoma Insurance Department.

"This grand jury met for 46 days over 18 months, issued 1,623 subpoenas, heard from 227 witnesses and assisted 99 local and state law enforcement agencies," Attorney General Drew Edmondson said. "During the course of its service, the grand jury issued 21 total indictments naming 14 individuals on 79 separate counts."

According to Edmondson, in the Fisher investigation alone the grand jury returned eight indictments naming three defendants on 11 separate counts, including failure to register a non-exempt charitable organization, failure to provide receipts for contributions in excess of $2.00, failure to report contributions received by a non-exempt charitable organization, embezzlement, failure to pay over to the state, false claims against the state, bribery, filing false tax return and perjury. Named in those indictments were Fisher, his former special assistant Opal Ellis and the Fisher Foundation Inc.

"Our examination revealed blatant disregard for state statutes as well as policies and procedures," the report said. The report further stated Fisher, "responded to this body's investigation as if his conduct is without charge and innocuous."

Edmondson said his office will soon petition the Oklahoma Supreme Court to empanel another multicounty grand jury.

"There is still much work to do," Edmondson said. "Some of the investigations from this grand jury will carry over and new investigations will begin. The Multicounty Grand Jury is a powerful tool for law enforcement, and I hope to have a new grand jury up and running quickly."

FUTURE COMMISSIONER MAY BE APPOINTED

Oklahoma's insurance commissioner would be appointed by the governor instead of elected by the people under legislation that was sent to the Oklahoma House by a legislative committee, the Associated Press reported.

The measure, by Rep. John Trebilcock, R-Broken Arrow, responds to the legislature's attempt last year to impeach former Insurance Commissioner Carroll Fisher. Fisher resigned in September before a scheduled impeachment trial began. He is charged with embezzlement, operating a charity illegally, perjury, bribery and filing a false income tax return.

Trebilcock said Oklahoma is one of just 11 states where insurance commissioners are elected. The legislation requires voter approval to amend the Constitution to permit the governor to appoint future insurance commissioners, beginning in 2007.

UNINSURED DRIVER LEGISLATION FILED

Texas State Rep. Bill Callegari, Katy, filed House Bill 2573 to establish a motor vehicle financial responsibility program in Texas. According the House Media Services Division, HB 2573 is similar to a measure that passed the House of Representatives with widespread support in 2003 only to fall short of a deadline requirement in the Senate.

HB 2573 requires the Department of Public Safety to develop a program that will work to continually verify whether car owners have insurance coverage for their cars. The bill also requires that any program adopted by the agency ensure that the privacy of motor vehicle owners be protected.

According to the Texas Department of Public Safety, over 20 percent of Texas drivers carry no insurance while operating vehicles on state roads.

BILL RESPONDS TO CHOICEPOINT BREACH

On the heels of the revelation of a major security breach at data broker ChoicePoint Inc., State Rep. Eddie Rodriguez, Austin, introduced HB 1527, which would require companies to alert their customers if a breach of security has put them at risk of identity theft. Recent reports stated that a fraud ring gained access to the personal and financial information of an estimated 11,081 Texans from computer databases maintained by ChoicePoint. Rodriguez' announcement said an estimated 750 people were targets of an identity theft scheme as a result of the ChoicePoint security breach.

INSURERS MUST CONSIDER SECURITY BREACH

Insurers who use credit scoring in underwriting and rate setting must take into consideration the recent security breach at ChoicePoint Inc., according to a bulletin issued by the Texas Department of Insurance.

TDI's Commissioner's Bulletin directs the industry not to penalize consumers who may have been impacted by the leak of their personal information from ChoicePoint. Legislation passed in 2003 protects Texas consumers from inaccurate credit information being held against them by insurance companies that rely on credit scores to set rates or determine whether or not to accept a new customer.

Protections regarding the use of credit scoring approved by the 78th Texas Legislature provide consumers with an opportunity to fix incorrect information on their credit reports that might negatively affect their ability to secure insurance coverage or incorrectly raise the cost of coverage. Insurers are required to provide exceptions for any credit information that might have an adverse effect on consumers if it relates to any one of several life changing events including catastrophic illness or injury, the death of a close family member, the loss of a job, a divorce, or as in this case, identity theft.

According to the law, consumers must make a written request for such an exception. But in the bulletin TDI said insurers should also accept verbal requests for credit exceptions related to the ChoicePoint incident and to be proactive in making contact with ChoicePoint on behalf of their customers or applicants for coverage.

Responding to TDI's bulletin, Jerry Johns, president of Southwestern Insurance Information Service, said consumers should not worry about insurers in Texas penalizing customers who may have been affected by compromised computer security involving their credit histories.

He said the insurance industry strongly supported the 2003 legislation that created tough standards relative to the use of credit. Johns added, "Consumers in Texas can rest assured that insurers will adhere to the letter of the law."