East States See Health, Flood Coverages as Key in 2019 with Insurtech, Recruitment Raising Concerns

January 7, 2019

From big data and blockchain to autonomous vehicles and new technology that isn’t yet on the radar, “change is inevitable” for the insurance industry in 2019.

“Insurance companies, insurance producers and insurance regulators alike will be making decisions this year and in the years to come about how we prepare for and implement those changes,” Pennsylvania Insurance Commissioner Jessica Altman told Insurance Journal.

Some of the change won’t come in legislative form per se.

According to Altman, Pennsylvania will be watching what she sees as an overlooked concern related to adapting to new technology; that is the insurance industry’s workforce. “Recruitment, retention, training, attracting new talent and even attracting new types of talent with skill sets steeped in these new technologies will be critical to the success of the insurance industry in this endeavor,” she said.

East region states cited efforts regarding reauthorization of the National Flood Insurance Program as a priority in 2019 that, while national in scope, has a local impact. “The reauthorization is critically important to anyone purchasing or selling a home within a flood zone, since most lenders require flood coverage in those areas,” said Massachusetts Association of Insurance Agents President and CEO Nick Fyntrilakis. “There have been several temporary reauthorizations, but a comprehensive fix remains elusive, with strong differences of opinion on how best to make the needed structural changes with the program.”

The focus on the flood program comes as its debt exceeds $20 billion. “It’s the National Flood Program in debt to the U.S. Treasury. It’s kind of like my right pocket’s in debt to my left pocket,” John Tomassi, president-elect of the Professional Insurance Agents of New York, said. “So we’re trying to get something that involves more risk-based pricing.”

Maine Insurance Commissioner Eric Cioppa beleives consumer-facing products such as app-based insurance are going to be a focus for next year. “Many insurers see opportunities to attract younger customers with electronic interfaces and, behind the scenes, to speed up underwriting and claims-handling with technology,” he said.

Beyond technology challenges and the flood program, health insurance and the Affordable Care Act (ACA) have received and are expected to continue receiving lots of attention from states as well.

Maryland Insurance Commissioner Al Redmer believes the most significant accomplishment for the state in 2018 was implementing a waiver that created a reinsurance program for the individual market, leading to a double-digit reduction in health premiums for Maryland this year.

“It’s too early to tell exactly what’s going to pop up regarding legislation, but the cost of health insurance and the ACA continues to be of major concern,” he said.

Similarly, in Maine, Cioppa cited the approval of the state’s federal insurance waiver and relaunch of the Maine Guaranteed Access Reinsurance Association as two big accomplishments in 2018 that brought individual market rates down for the 2019 plan year and brought another insurer back to the ACA Exchange. He said health coverage will continue to be a priority next year.

In New York, health care costs are also expected to present challenges, according to Scott Hobson, director of government relations at Big I New York, as he sees the public debate around The New York Health Act – a proposal to create a single-payer health plan – gaining momentum. Reports say the bill calls for $139 billion in new state tax revenue by 2022.

“That is an issue that is going to be front and center for independent agents in 2019,” he said. “We’re supportive of increasing healthcare coverage. We want people to have affordable health insurance, but we’re just concerned about it being done entirely by the state. I think there are some major cost concerns there.”

New Jersey Insurance Commissioner Marlene Caride pointed to two laws signed by Governor Phil Murphy as steps forward in improving access to health coverage. The first law takes effect January 1, 2019, and continues a shared responsibility payment in the state after its repeal at the federal level. The law requires residents to have health coverage or pay a penalty unless they qualify for an exemption.

Governor Murphy also signed a law to create a state reinsurance program. Combined, the two laws resulted in an average overall 9.3 percent reduction in rates in the individual market for 2019, Caride stated.

“The governor and this department believe that access to quality affordable coverage and care plays a key role in creating a stronger and fairer New Jersey for all of its residents,” she said.

East region leaders are positive about the upcoming year and changes from the November mid-term elections.

“For us this year in New York, we have a whole new set of players,” Tomassi said. “We’re trying to get our arms around that to see what it’s like and what their outlook is in regards to some of the insurance issues we have.”

Maryland’s Redmer said his administration has always tried to be proactive as well as transparent and collaborative. “While there has been a turnover and there will certainly be a learning curve for those new legislators, our process will be the same and the way we conduct business will not change at all,” he said.

New York

Governor: Andrew Cuomo, D, re-elected 2018

Insurance committees: Assembly Insurance; Senate Insurance

Insurance commissioner: Maria T. Vullo appointed in 2016; stepping down Feb. 1.

New Jersey

Governor: Phil Murphy, D, elected 2018

Insurance committees: Assembly Financial Institutions and Insurance; Senate Commerce

Insurance commissioner: Marlene Caride, appointed in 2018. The first Hispanic to head the department, which oversees insurance, banking and real estate.

Pennsylvania

Governor: Tom Wolf, D, re-elected 2018

Insurance commissioner: Jessica Altman appointed in 2018. Served as chief of staff for former Insurance Commissioner Teresa Miller beginning in June 2015.

Massachusetts

Governor: Charles D. Baker, R, re-elected 2018

Insurance committees: Joint Committee on Insurance

Insurance commissioner: Gary D. Anderson, appointed 2017. Joined as its First Deputy Commissioner in February of 2014.

Connecticut

Governor: Ned Lamont, D, elected 2018

Insurance committees: General Assembly – Insurance and Real Estate

Insurance commissioner: Katharine Wade stepped down on December 19, 2018. Incoming Gov. Lamont will appoint a new commissioner. Life & Health Director Paul Lombardo will serve as acting commissioner in the interim.

Maryland

Governor: Larry Hogan, R, re-elected 2018

Insurance committees: House Economic Matters; Senate Finance

Insurance commissioner: Alfred W. Redmer, Jr. appointed in January 2015. His term ends May 30, 2019. Former member of General Assembly and executuve with insurance businesss.

Maine

Governor: Janet Mills, D, elected 2018

Insurance committees: Joint Health Coverage, Insurance and Financial Services; House Insurance and Financial Services

Insurance commissioner: Eric A. Cioppa, re-appointed in 2017 for another five-year term. Joined the staff in 1988 as a statistician, then served as supervisor of Workers’ Compensation.

New Hampshire

Governor: Chris Sununu, R, re-elected 2018

Insurance committees: Senate Finance; House Finance

Insurance commissioner: John Elias, approved by executive council to serve a five-year term beginning June, 2018.

Rhode Island

Governor: Gina Raimondo, D, re-elected 2018

Insurance committees: House Finance; Senate Finance

Insurance commissioner: Beth Dwyer, appointed in 2016. Prior to this appointment, Dwyer was with the Department of Business Regulation for 15 years, first as General Counsel to the Insurance Division and later as Associate Director.

Vermont

Governor: Phil Scott, R, re-elected 2018

Insurance committees: House Commerce and Economic Development; Senate Finance

Insurance Commissioner: Michael S. Pieciak, appointed in 2016. Regulates financial services, including the insurance, captive insurance, banking and securities industries.

Virginia

Governor: Ralph Northam, D

Insurance committees: House Finance; Senate Finance

Insurance commissioner: Scott White, appointed in January 2018. Joined in 1998 as a research analyst; later moved to the general counsel office.

Delaware

Governor: John Carney, D

Insurance committees: House Economic Development/Banking/Insurance/Commerce; Joint Finance

Insurance commissioner: Trinidad Navarro was elected in 2016.

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