CALIF. COMMISSIONER GRANTS PETITION BANNING RATES BY ZIP:
California Insurance Commissioner John Garamendi recently granted a statewide petition filed by consumer and community groups and the cities of Los Angeles, Oakland, and San Francisco to bar insurance companies from basing their auto rates mostly on a driver's ZIP code. The petition filed in May had asked Garamendi to open a rulemaking proceeding to amend the Insurance Department's regulations so that auto insurance rates are based primarily on how well a policyholder drives, not where he or she lives. The broad-based coalition of the community and consumer groups and cities filing the petition comprises of Consumers Union, the National Council of La Raza, the Southern Christian Leadership Conference of Greater Los Angeles, Foundation for Taxpayer and Consumer Rights, Spanish Speaking Citizens' Foundation, and the cities of Los Angeles, Oakland, and San Francisco. The petition asks Commissioner Garamendi to require auto insurers to base their rates primarily on three mandatory factors—driving record, miles driven, and years of driving experience—as Proposition 103 requires. The consumer groups allege that basing auto rates primarily on where a driver lives is unfair to all Californians, but it has a particularly disproportionate impact on the poor and exacerbates the widespread problem of uninsured and underinsured drivers. They also allege that ZIP code rating will have a negative impact on drivers living in more rural communities.
WASH. WC BENEFITS INCREASE 1.9 PERCENT:
Workers currently receiving Washington workers' compensation time-loss or pension benefits were to receive a 1.9 percent cost-of-living increase effective on July 1. The new maximum monthly benefit will be $3,794, which is 120 percent of the state's average monthly wage for workers injured after June 30, 1996. The increase is based on the average annual wage of all workers in Washington. That wage—set by the Employment Security Department—rose to $37,940, or 1.9 percent above 2001's average wage of $37,229. State law requires that maximum time-loss benefits be recalculated each July 1 to reflect the change in the state's average wage from the previous calendar year. An injured worker's maximum time-loss or pension rate coincides with the date of their injury. For workers injured between July 1, 1995, and June 30, 1996, the maximum monthly benefit will rise to $3,635.91. Injuries occurring July 1, 1994, through June 30, 1995, will have a maximum rate of $3,477.83. Injuries occurring July 1, 1993, through June 30, 1994, will have a maximum rate of $3,319.75. The new monthly maximum for injuries occurring July 1, 1988, through June 30, 1993, will be $3,161.66. Maximum time-loss and pension benefits for injuries occurring before July 1, 1988, amount to 75 percent of the state's average wage, or $2,371.25 a month. Time-loss benefits partially compensate workers for lost wages due to a job-related injury or illness. Pension benefits are paid when a work-related injury or illness prevents a worker from becoming gainfully employed. Pensions also are paid to a worker's surviving spouse and dependent children when a workplace accident or illness results in death. The amounts differ because over the last decade the state Legislature increased the benefits based on when a worker was injured or became ill. The July 1 increase applies to both State Fund and self-insured employers. Labor and Industries manages the State Fund, which insures about 1.9 million workers for 160,000 employers.
SCF OF ARIZONA FILES SUIT TO PROTECT ASSETS:
State Compensation Fund of Arizona (SCF) recently filed a lawsuit in Maricopa County Superior Court challenging a provision in the state's 2003 fiscal budget that forces SCF to purchase Arizona government-owned buildings to help balance the state's budget. The action has been taken to protect and to defend the assets that are held in trust for employers throughout the state who insure their workers through SCF. SCF considers having to file the lawsuit very disappointing but believes the requirement in the 2003 state budget (HB 2002), passed during a special session is invalid. Although the Senate passed HB 2195 unanimously, SCF took the action after the bill was not allowed to go to the floor of the House in the final week of the legislative session. According to SCF, it believed lawmakers would approve HB 2195, which would have provided a clear statement that SCF's assets are not subject to appropriation. In exchange for that recognition, SCF would have been willing to voluntarily participate in the purchase of the state assets, if necessary, to ease the state's budget crisis. This plan had received unanimous acceptance in the Senate, by more than 2/3 of the House and from the governor's office. The lawsuit was filed on behalf of SCF of Arizona, the Arizona Farm Bureau, the Greater Phoenix Chamber of Commerce, the Tucson Metropolitan Chamber of Commerce, the National Federation of Independent Business and an individual workers' compensation claimant. Defendants named in the lawsuit in their official capacities are: Arizona State Treasurer David Petersen, Director of the Arizona Department of Administration Betsy Bayless; Arizona Attorney General Terry Goddard; and Arizona Governor Janet Napolitano.
NAII APPLAUDS HOUSE FOR INTRODUCING LEGISLATION TO PRESERVE NATIONAL CREDIT REPORTING SYSTEM:
Recently, a bill to permanently reauthorize the expiring provisions of the Fair Credit Reporting Act (FCRA) and to help consumers combat identity theft was introduced by several members of the House Financial Services Subcommittee on Financial Institutions. Sponsors of the bill include Chairman Spencer Bachus (R-Ala.), Rep. Darlene Hooley (D-Ore.), Rep. Judy Biggert (R-Ill.), and Rep. Dennis Moore (D-Kan.), along with 28 additional members. "The National Association of Independent Insurers (NAII) applauds Chairman Bachus for rallying bipartisan support and introducing legislation to reauthorize the FCRA. NAII strongly supports the uniform treatment of credit information and the renewal of the seven expiring FCRA provisions," said Carl Parks, senior vice president, government relations. "NAII also recognizes the need to help consumers fight the growing crime of identify theft." The seven federal preemptions are slated to expire on Jan. 1, 2004. The introduction of The Fair and Accurate Credit Transactions Act (FACT) is reportedly a significant step by Congress in assuring reauthorization of these provisions, that deal with issues ranging from sharing credit information between affiliated companies to procedures by which consumers may dispute the accuracy of credit information occurs. "Reauthorization of the FCRA provisions will provide businesses of all sizes with an opportunity to continue to best meet consumer needs, fight fraud, and help prevent identity theft. As the legislative process continues, NAII and its member companies look forward to working with Congress on this important legislation," added Parks.
