CALIF. DMV HIT WITH INSURERS' LAWSUIT

California's Department of Motor Vehicles (DMV) was hit with a lawsuit May 22 by a number of insurance associations wishing to halt a fee hike that would reportedly double the price for motor vehicle reports. Filed in Sacramento Superior Court by the Personal Insurance Federation of California (PIFC), the National Association of Independent Insurers (NAII), the American Insurance Associations (AIA), the Alliance of American Insurers (AAI) and the Association of California Insurance Companies (ACIC), the lawsuit attempted to halt the proposed $4 fee the DMV was seeking to institute on June 1. Just a month ago, the DMV sought and filed for an emergency adoption of the fee hike, claiming the fee had not been raised in over a decade. Nicole Mahrt, Director of Public Affairs/Western Region for AIA, told Insurance Journal, "We think the Department is illegally taxing the industry. The entire industry feels it is important we be able to access these records as part of Prop. 103. A 1997 audit by the state auditor documented the costs for the DMV to make this information available is actually $.50. Recent information we obtained through a public records act showed that it actually costs the Department $.13 to access these records." No date for a hearing on the filing has been instituted.

CALIF. COMMISSIONER APPROVES PURE PREMIUM RATE INCREASE

California Insurance Commissioner Harry Low recently approved a 10.1 percent average increase in workers' compensation pure premium rates. The increase, which was proposed by the Workers' Compensation Insurance Rating Bureau (WCIRB), will go into effect on July 1 for new and renewal policies. The decision was in response to a filing submitted by the WCIRB on March 28, which recommended a mid-year increase as the result of continued deterioration in loss development. A hearing was held by the California Department of Insurance (CDI) on May 14 to consider the WCIRB's filing.

The CDI has advised the WCIRB that those insurers who choose to change their base rates to reflect the July 1 change in pure premium rates may request an early effective date pursuant to California Insurance Code Section 11735(a). Following submission of a complete filing, insurers may utilize those rates rather than waiting 30 days to implement the new base rates. Additionally, the CDI will accept electronic filings using the State Electronic Rate Filing Form (SERFF) system. Information on SERFF submissions will be available on www.insurance.ca.gov in the "Regulating Insurers" section, under the "Rate Filings" link.

CALIF. WORKERS' COMP TRENDS INCREASE

A study by the Washington-based National Academy of Social Insurance revealed that California's workers' compensation benefits have increased 13.9 percent to $8.9 billion in 2002, signaling the end of a decline relative to wages that has occurred over the past several years, says the Los Angeles Times. The number of workers covered by the state program rose 3.4 percent, as totoal wages paid rose 13.5 percent in 2000, resulting in a firm $1.49 for workers' comp benefits for every $100 in wages. Benefits rose from $43.1 in 1999 to $46.1 billion in 2000 nationally. For every $100 in wages, the national average benefits decreased from $1.04 to $1.03, indicating the eighth decline in the national average for some period of time, with a peak in 1992 of $1.68.

The decline has been credited to a downward trend in benefits to strong wage growth, as well as a decrease in reported accidents, managed health care and workers' comp reforms since the early and mid-1990s by the study's authors. They also expect that increases in workers' comp benefits may soon outnumber total wages. According to the president of the California Labor Federation, AFL-CIO, the benefit increase in California of 13.9 percent for 2000 went directly to pay increased medical costs. Additionally, the study found that nationally, employer costs relative to wages dropped slightly in 2000.

WASH. L&I REFUNDS WORKERS' COMP PREMIUMS

The Department of Labor and Industries (L&I) is returning more than $78 million in workers' compensation premiums to Washington employers and associations enrolled in retrospective rating plans. Twenty-nine professional organizations and trade associations will be receiving checks from L&I and distributing the refunds to member employers who participate in their programs. The Building Industry Association of Washington (BIAW) will get the largest check—nearly $29 million.

The Retrospective Rating program is an optional program within the state's workers' comp system. It allows qualified employers and associations to earn refunds for reducing workplace injuries by meeting agreed upon goals such as safety education, hazard reduction and improved management of claims from injured workers. Since the Retrospective Rating program began in 1981, the program has refunded more than $1 billion to participants. Refunds are distributed four times a year. Employers can participate in retrospective rating on their own or through group plans sponsored by professional organizations or trade associations. Employers have four opportunities to enroll in the program each year. Depending on their performance, employers could see refunds as early as 10 months after an enrollment period. Nearly 16,000 employers currently participate in retrospective rating options. While most receive a refund, some don't meet their goals and have to pay more. L&I has assessed seven program participants, with worse-than-expected safety records, an additional $4.8 million in premiums.

INSURERS DAMAGED BY SPRING STORMS

According to the Insurance Services Office (ISO), U.S. insurers will pay out $700 million for damage from storms that wrecked havoc through 17 states at the end of April. The losses are the largest to hit the country since Tropical Storm Allison last year, which

ended up hitting insurers with a $2.5 billion price tag. Seventeen states, from Arkansas to New York, were impacted by storms and tornadoes between April 27 and May 3, with Tennessee and Virginia the worst-affected states.

The number of claims reported to insurers in the five hardest-hit states breaks down as follows: Tennessee—38,000; Virginia—28,000; Maryland—39,000; Kentucky—33,000; and Ohio—22,000. Insurers' losses from the tornado that nailed La Plata, Md., devastating the center of the town, will alone total approximately $25 million in claims.

ACORD HONORS COMPANIES AT 2002 CONFERENCE

The 2002 ACORD Conference "Real World Solutions" wrapped up with a host of companies and individuals taking home awards for their performances over the last year in the industry. Among the winners were: (Business Automation Improvement Award): Acuity, AIG, Aon, Aon Re, The Benfield Group, CNA Re, Converium Reinsurance North America, CSC Financial, Guy Carpenter, The Hartford, IVANS and Applied Systems, Principal Financial Group, SCOR, Spidertek, Transamerica Life Insurance Company, Travelers; (Business Process Redesign): Acuity, AIG, AON, AON Re, Applied Systems, ASCnet, CNA Re, Converium Reinsurance North America, Guy Carpenter, The Hartford, InsureHiTech, Insurance Technologies, JCRS, Kemper Insurance Companies, Marsh, Inc., OneBeacon, Royal & SunAlliance, SAFECO, SCOR, St. Paul Fire & Casualty, Swiss Re, Travelers. Also, (Trading Partner Award): ACUITY, AIG, AON Re, Cincinnati Equitable Insurance, Converium Reinsurance North America, First Insurance Company of Hawaii, Ltd., The Hartford, IVANS and Applied Systems, Kemper Insurance Companies, OneBeacon, St. Paul Fire & Casualty, Travelers; (Reinsurance/Large Commercial Early Implementor Award): Applied Systems, Swiss Re, Travelers, Xchanging Ins-sure Services; (NAILBA/NAVA Implementor Award): AEGON, Allfinanz, AnnuityNet, BISYS, Blue Frog Solutions, CSC Financial Group, Depository Trust Clearing Corporation (DTCC), E-Z Data, Fiserv, Inc., GE Financial, ING Americas, Lincoln Financial, Manulife Financial, MONY Life Insurance Company, Pivot/Info-One, Principal Financial, Prudential Insurance Company, Spidertek, ZeBu.

Also, (Dollar Volume Award): SCOR; (Upload Company of the Year for Percent of Growth): Liberty Regional Agency Markets; (Upload Company of the Year for Total Implementations): State Auto Insurance Companies; (Download Company of the Year for Percent of Growth): Safety Insurance Company; (Download Company of the Year for Total Implementations): Applied Systems; (Upload Vendor of the Year for Percent of Growth): AMS Services; (Upload Vendor of the Year for Total Implementations): Applied Systems; (Download Vendor of the Year for Percent of Growth): InStar Corporation; (Download Vendor of the Year for Total Implementations): SAFECO.

SHIELDS, BARNES FEATURED AT IIABA

National political columnist Mark Shields and Weekly Standard editor Fred Barnes will be featured commentators during a political roundtable at the Independent Insurance Agents & Brokers of America's (IIABA) upcoming New Orleans InfoXchange. More than 2,500 independent agents, brokers and other insurance professionals are expected to attend IIABA's New Orleans InfoXchange. The event will be held Sept. 21-24 at the Hilton New Orleans Riverside and the nearby Ernest N. Morial Convention Center. Shields and Barnes will participate in a candid discussion of current political developments and a spirited debate of public policy issues with IIABA CEO Robert A. Rusbuldt during the closing general session Sept. 24. For more information on the conference, log onto www.independentagent.com.