Proposed Mass. Budget Reportedly Includes Burdensome Provisions for Insurers

July 2, 2003

The Massachusetts Senate and House have agreed on a budget which would reportedly impose several burdensome provisions on the insurance industry, including funding the Department of Insurance (DOI) with a special assessment on companies doing business in the state.

“We are disappointed with the fact that H.B. 4400 includes the DOI assessment, but recognize the state budget is very tight,” said Gerald Zimmerman, assistant general counsel for the National Association of Independent Insurers (NAII). “If the money is used to actually provide adequate staffing to the DOI, it may prove to be worthwhile.”

NAII opposes the so-called welfare intercept provision, which would require insurers to determine whether the state has any outstanding liens against a policyholder before issuing claims payment. The provision, which resembles Massachusetts’ child support intercept law, would result in payment delays to claimants as well as service providers such as doctors and body shops, primarily because of the use of a system that is incompatible with the child support system already in place.

In a recent letter to Massachusetts Gov. Mitt Romney, NAII urged the governor to veto the section of the budget dealing with the welfare intercept.

“It makes no sense to require insurers and the Commonwealth to create entirely new and additional systems for the new information sharing programs,” the letter stated. “The duplication of systems will not only mean extra costs but inefficiency and additional likelihood of errors. These unnecessary burdens will be reflected in higher premiums and costs.”

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