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Attend a Town Hall Meeting

This is a challenging time for the insurance and financial planning industry. Legislators are contemplating a number of initiatives that will affect not only the continued success of your business, but also the way in which you conduct that business.

Your elected representatives from Congress are currently back home in their respective districts. We encourage you to take advantage of this “August Recess” to schedule a face-to-face meeting with your Congressperson to tell them how their decisions on any of these issues will affect you and your business.

Many elected representatives also take part in “Town Hall Meetings” with their constituents. These meetings provide yet another opportunity to see your representative.

Additionally, the Town Hall format will allow you to educate the public on the seriousness of these issues – people will be able to hear you make your points to the representatives, and will begin to think about how these issues may also affect them.

We have compiled a list of meetings being held by Iowa's Congressional Delegation. We need you to attend a meeting in your area to educate your representative and the public about our position on Healthcare Reform and other important issues. I encourage you to review the talking points that can be found here.

Further background materials, including materials you can share with your clients to educate them about this important issue can be found here.

New York Governor David Paterson Announces Administration Appointments

Governor David A. Paterson today announced the appointments of James J. Wrynn to serve as New York State Superintendent of Insurance and Wendy Saunders to serve as Deputy Secretary for Health, Medicaid and Oversight. The Governor also announced the appointments of Kristin Proud to serve as Deputy Secretary for Human Services, Technology and Operations and Senior Advisor to the Office of Taxpayer Accountability, and Mark Leinung to serve as Deputy Director for State Operations.

“I welcome Jim to his new position within my Administration. As an experienced insurance lawyer with expansive involvement in government, I am confident that he will serve both the Department and State well,” Governor Paterson said. “I thank Acting Superintendent Kermitt Brooks for his leadership and am pleased that he will continue to work with the State in the Department of Insurance as First Deputy Superintendent, assisting Jim through the transition and in the months ahead.

“I also welcome Wendy to the Executive Chamber from the Department of Health, where she has served New York State with distinction. Her talent and impressive career will be instrumental in the coming months as we address health issues and policy,” the Governor added. “I look forward to working with Wendy, as well as with Kristin and Mark, who will continue their critical work within my Administration in their new roles.”

James J. Wrynn is the Executive Director of the New York State Insurance Fund. He is a founding partner of MacKay, Wrynn & Brady LLP, where he has litigated cases focused on insurance issues and claims on behalf of major companies, their policyholders, municipalities, and public authorities. Prior to that, Mr. Wrynn worked from 1982 to 1992 as a trial attorney with McCormick, Dunne & Foley, specializing in civil trials and appellate practice related to professional malpractice, subrogation, property and casualty coverage disputes, liabilities and insurance. His professional career has provided considerable experience in the areas of insurance, accounting and tax issues.

Mr. Wrynn is admitted to the Federal and State Courts in both New York and New Jersey, and the United State Supreme Court. He has received an Associates in Risk Management and an Associates in Captive Insurance. He is a member of the New York and New Jersey State Bar association, has served on the New York City Economic Development Corporation and is an active participant in his community. Mr. Wrynn is a graduate of St. John’s University College of Business Administration and received his juris doctorate from St. John’s University School of Law.

Effective August 20, 2009, Mr. Wrynn will begin to serve as Superintendent-designate and assume the permanent appointment pending Senate confirmation.

Wisconsin Department of Insurance Releases Draft Legislation Addressing STOLI in WI

Late in 2008, Wisconsin Insurance Commissioner Sean Dilweg formulated an advisory group to assist his agency in developing legislation to address STOLI in Wisconsin.  NAIFA Wisconsin was invited to have a designated person at the table.  Plus, the American Family Insurance representative is a NAIFA member and agency producer.  The company association (WCLI) was part of the process as were  representatives of the settlement industry none of which “do STOLI transactions” but who have nonetheless been very interested in gutting certain provisions of the two primary models that NAIFA feels are critical to good legislation.

The working group is finished and the Commissioner has released a draft to be sent over to the legislative reference bureau for review and introduction by the end of August.  NAIFA has experienced an excellent cooperative experience with our companies here (including our ACLI liaison) and we are satisfied with the draft as we anticipate it will come out.  Our legislature will consider it in its September 09 floor period for the first time.

We will keep you posted as the process unfolds.

-Susan Linck, NAIFA-Wisconsin  Executive Vice President

The District of Columbia Insurance Department to Consider Commission Disclosure

NAIFA has recently learned that the DC Insurance Department will be looking at commission disclosure. Insurance Commissioner Thomas E. Hampton said that he intends to have new regulation in place to require agents to disclose any compensation they receive from the selling of insurance products by the end of the year.

The Commissioner indicated that a draft regulation would be released and then the public would be given an opportunity to comment. The Commissioner also indicated that he does not intend to eliminate contingent commissions. NAIFA Senior Counsel Ron Panneton will be coordinating with our DC lobbyist and other interested parties to discuss the plans of the department and formulate strategy to deal with these developments.

NAIFA will keep you apprised of developments. If you hear of similar developments in your state, please let your NAIFA Government Relations staff know.

For further information, please contact Ron Panneton, NAIFA Senior Counsel, at (703) 770-8187.

Guaranty Association Measure Still Alive This Session in Texas State Legislature

Texas Senate Bill 1493, to increase consumer protections for the present value of annuities to $250,000 under the state's guaranty law, was added as an amendment by the Senate yesterday to another insurance measure H.B. 2752 (Eiland, D-Galveston).

As passed with Senate amendments, H.B. 2752, sponsored by Sen. Kip Averitt (R-Waco), offers the best chance for passage this session of the agreed upon language in S.B. 1493, by Sen. Tommy Williams (R-The Woodlands). "The goal now is to help insure the amendment is not stripped from H.B. 2752 in conference committee," said NAIFA-TX CEO Des Taylor. Major bills including S.B. 14, funding for TWIA, and S.B. 1007, renewal of TDI, appear dead barring a two-thirds vote in the House to suspend rules to consider the measures.

A special session called by the Governor following adjournment June 1 of the Regular Session appears likely. 

Insurance Claims Consumer Protection Amendment Act of 2009

NAIFA-Greater Washington, DC has joined with other interested groups such as the District of Columbia Insurance Federation (DCIF) and the Property Casualty Insurers Association of America (PCIAA), to oppose B18-103, Insurance Claims Consumer Protection Amendment Act of 2009.  NAIFA-Greater Washington, DC believes that bad faith legislation is unnecessary, will hurt the affordability of coverage, and could threaten the availability of coverage in the District.  The coalition is seeking to defeat this initiative in Committee and intends to show that the current systems for claims dispute resolution are effective and have resulted in satisfactory outcomes according to past claimants. 

This bill, introduced by DC Councilmember Mary M. Cheh,  addresses the imbalance of power between insurance companies and the insured by creating a cause of action in tort law for plaintiffs who are harmed by bad faith insurance acts.  Currently, District law protects insurance consumers only if their insurance company commits the bad faith offense often enough to be seen as a "general business practice."  This bill allows action by an insurance claimant after the commission of a single unfair insurance act:  "To refuse to pay the amount due to the insurance claimant within 30 days of receipt of sufficient documentation of the insurance claimant's loss, where such refusal to pay is wrong, mistaken, in error, or unreasonable, regardless of any insurer intent." The bill would also provide for recovery of interest, attorney fees, expenses and punitive damages up to three times the amount of the unpaid claim.

A public hearing on B18-103 will be held on Thursday, June 4, 2009 at 10:30 am in the Council Chamber, Room 500, of the John Wilson Building, 1350 Pennsylvania Avenue, NW. 

Florida Annuities Bill Dies

A great deal of national attention was focused this year on Florida CFO Alex Sink’s efforts to pass an annuities regulatory bill. The bill as initially drafted contained numerous provisions of concern to NAIFA Florida. These included broad felony penalties, limiting penalties for early surrender to five years/five percent, and extending the “free look” to 60 days.

NAIFA Florida worked tirelessly to amend these provisions in order to both strengthen consumer protections and lessen the adverse impacts the bill would have on members, and was largely successful in its efforts. The bill, however, died in the House without being voted on. NAIFA Florida expects to see this bill re-introduced in the 2010 session. Reprinted below is a report on the bill from "NAIFA Florida’s Advocacy in Action, Session Dispatch-Week 9".

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ANNUITIES BILL HEAVILY AMENDED BY NAIFA (HB 981/ HB 141 /SB 1372) – DIED

The Chief Financial Officer, Alex Sink, spent the year advocating for stronger, felony penalties for the practices of twisting or churning to senior consumers.  The bill also limited to five years and five percent the penalties for early surrender of an annuity purchased by a senior over age 65.   We supported the increased felony penalties for agents, as long as our language requiring that the offender also exhibit fraudulent conduct, however, the legislation being promoted by the CFO, sponsored by Senator Bennett (SB 1372) and Representative Fitzgerald (HB 981), originally contained other provisions that were extremely problematic to NAIFA-Florida members.  NAIFA was successful at amending the following provisions into this bill to make the legislation less egregious to our members: 

• Increased the early surrender period and charges to 10 years and 10 percent, from the original five years and five percent.

• A “free-look” period that is reduced from 60 days to 30 days;

• Defines “accredited investor” as someone who has net worth of over $1 million or has had an individual income of over $200,000 in each of the past two years or combined income of $300,000 in each of the past two years.  “Accredited Investors” over age 65 purchasing annuities would be exempt from the 10 year and 10 percent surrender penalty provisions.

• Amends the monetary restitution provisions to allow DFS to order monetary restitution only for willful violations and requires DFS to order monetary restitution in the event that the agent misappropriated, converted, or unlawfully withheld moneys belonging to the senior consumer; however, an amendment on third reading in the Senate removed the word “willful” which is a step backwards from the progress we made initially

• Amends the felony penalty provisions to include a specific offense in the criminal statutes rather than the insurance code and applies them to all types of financial professionals

The House companion bill remained unchanged, without a single hearing in the House.  The Senate sponsor managed to get a unanimous vote on the Senate floor during the last week, but the House concluded all non-budget related measures without moving this bill.  We do anticipate that the CFO will continue her campaign for increased penalties throughout the summer and fall and we will likely see this bill re-filed for the 2010 Legislative Session.

Senators Bennett and Peaden (SB 724 and SB 2520) and Representative Ford (HB 141) also had initiatives to reform sales of annuities to seniors, which required agents who sell equity indexed, fixed equity indexed, and indexed annuities to have a securities license.  We STRONGLY opposed these initiatives.  None of these bills received a hearing.

New Mexico Becomes Latest State to Join Interstate Insurance Product Regulation Compact

New Mexico became the 35th member of the Interstate Insurance Product Regulation Commission (the compact) on April 8, 2008 when Governor Bill Richardson signed New Mexico Senate Bill 15 into law. NAIFA – New Mexico supported the passage of this legislation and was actively involved in the process.

“Joining the Compact has been one of my top priorities, as I strongly believe New Mexico and its consumers will benefit from having access to products reviewed under detailed uniform standards with strong consumer protections — and its companies will benefit tremendously from this efficient, cost-effective filing process,” said New Mexico Insurance Superintendent Morris J. Chavez. “I appreciate the support from the legislature and Governor Richardson to enact this important Compact between the states.”

The Interstate Compact aims to improve the speed-to-market conditions for life insurance, annuity, disability income and long-term care products through the use of one regulatory body to review new insurance products. The ability to obtain approval from a single source for the sale of insurance products in multiple states gives insurers a more efficient and uniform product approval process than the multistate product review system. Faster product review benefits consumers and NAIFA members by making new protection products available sooner.

NAIFA has been a strong supporter of the Interstate Compact since helping the National Association of Insurance Commissioners (NAIC) draft the model Compact law in 2002. This support continues today as NAIFA, and its health insurance conference AHIA, are the only groups representing the agent community on the Compact Commission’s Industry Advisory Committee. NAIFA state associations across the country have also been critical proponents of Compact legislation as it’s introduced in state houses across the country. The Compact became operational in 2006 and began accepting its first product filings in 2007.

New Mexico is the second state to pass compact legislation in 2009, with Mississippi joining the compact in March. It is expected that several other states will advance legislation this year. NAIFA will continue to follow any developments and will keep members informed.

To learn more about the Interstate Compact and NAIFA’s involvement, please visit here.

Universal Health Care Bill Introduced into NYS Legislature

Universal Health Care Bill Advances in Albany

"New York Health Plus," a universal health care bill, has been introduced in Albany by the chairs of the Assembly and Senate Health Committees.  Under the plan, all New Yorkers would be eligible to enroll in a comprehensive health plan offered by New York State free of premiums and deductibles.

"We can get better coverage, get all of us covered, and save billions by having New York offer a publicly-sponsored health coverage option, like Medicare or Child Health Plus but for everyone.  And people who want to can keep the coverage they have,"  Assembly Health Committee chair Richard N. Gottfried said.

"New York Health Plus builds on the state's existing healthcare programs to ensure that all New Yorkers have access to the health coverage that they need," Mr. Gottfried said.  "New York State needs to take a leadership role in the national conversation on healthcare coverage and New York Health Plus is an important step in that direction."

"During this economic downturn, it is critical that working families have the security of healthcare coverage as more and more New Yorkers lose their jobs and health benefits.  New York Health Plus would provide access to healthcare for over 2 million uninsured New Yorkers," said George Gresham, President of 1199 SEIU, representing 275,000 health care workers.

David T. Hannan, MD, MPA, President of the Medical Society of the State of New York said, "MSSNY recognizes the NY Health Plus proposal as a possible first step toward addressing the problem of the uninsured and health care delivery in the State of New York."

"The New York State Nurses Association was pleased to work with Assemblyman Gottfried and Senator Duane on this important legislation," said Tina Gerardi, RN, chief executive officer of the New York State Nurses Association.  "Nurses believe that quality, affordable health care should be accessible to all.  New York Health Plus is an opportunity to show the nation how to achieve that goal.  We support this bill."

How "New York Health Plus" Would Work

The new plan--called New York Health Plus--builds on the highly popular and successful Family Health Plus and Child Health Plus programs to provide a full benefit package that is more comprehensive than most commercial health insurance programs.  All New Yorkers would be eligible, regardless of wealth.  Individuals would choose from among participating health plans, as is now done under Family Health Plus and Child Health Plus.  The state would also run a fee-for-service option.

Under this plan, no one would have to give up the doctors or other providers they use.  Instead of individuals and employers paying premiums, the state would set and pay the premium.  Deductibles would also be eliminated and co-payments would be non-existent or nominal, as they are under Family Health Plus.  The bill is A 7854 and S. 4884.

In Washington, President Obama and key congressional leaders have made a priority of including a public insurance option in proposals for health care reform.

Assembly Member Gottfried said, "By eliminating the need for any employer to provide health coverage for its workers, we would make New York dramatically more job-friendly, especially for small businesses, start-ups and low-margin businesses, while offering better and more secure coverage to every New Yorker. The current system of substandard coverage, maddening bureaucracies, and skyrocketing costs that sap our economy is indefensible."

"People ask whether this is politically realistic," said Gottfried.  "New York Health Plus would make New York more job-friendly by cutting the cost of health coverage, let people keep the coverage they now have if they want to, and offer better coverage with fairer financing.  I think that's politically realistic."

"People talk of 'building on the existing system' and 'a building-block approach' for universal coverage. New York Health Plus builds on the parts of the system that make sense and work, instead of the parts of the system that do not," said George Gresham, President of 1199 SEIU.  "All patients who choose to join the plan-rich and poor-and health care providers would be in the same boat.  That is the best guarantee that the Governor and the Legislature (not insurance companies) would make sure it is the best possible boat by balancing pressure to control costs and pressure to provide better care."

"Patient protection is paramount," said David T. Hannan, MD, MPA, President of the Medical Society of the State of New York.  "Five health insurers in New York state insure 75% of the managed care market.  We believe that NY Health Plus not only offers a potentially meaningful vehicle to address the uninsured but also it could be an effective counterbalance to proprietary health insurance company abuses  particularly in the area of unfair coverage limitations placed on patients and gross disincentives to physicians, hospitals and other providers."

"Premiums are a regressive 'tax' we pay to insurance companies.  They charge the same premium, regardless of whether the person being covered is a receptionist or the company president, and regardless of whether an employer is a huge prosperous company or a small business struggling to get by," said Gottfried.  "We wouldn't pay for public education that way.  New York Health Plus would apportion the cost of health coverage with fairness and equity."

New York Health Plus would save $20-$30 billion of the over $100 billion we now spend on premiums, deductibles and co-payments.  New York State would pay for the coverage (plus Federal matching funds where eligible), using revenue based on ability to pay, from an assessment modeled on the Medicare payroll assessment, plus an assessment on upper-bracket non-wage-and-salary-taxable income. 
The cost of New York Health Plus would not be new spending by taxpayers.  For most, it will be a substantial reduction in what they are now spending.  When employers and individuals don't have to be 'taxed' by insurance company premiums and deductibles, most people's take-home pay will go up. 

For those who choose to opt out of New York Health Plus, the proposal includes a tax benefits to ensure that they are not forced to "pay twice" for insurance coverage.

Praise for New York Health Plus

A number of organizations representing consumers, health care professionals and providers, clergy, and labor are already commending Gottfried for his proposal. 

Karen Scharff, Executive Director of Citizen Action of New York said, "New York Health Plus would offer quality affordable health care to all New Yorkers, form a choice of health care plans and providers while making health care more affordable to families, businesses and taxpayers.  It will make New York a much more healthy place to live, work and do business.  It sets a high standard that we hope other reform proposals will also reach."

Elizabeth Swain, CEO of the Community Health Care Association of New York State (CHCAANYS) said, "Community health centers know first hand how important Child Health Plus and Family Health Plus have been in improving access to quality health care.  Coverage matters: reliable, affordable, comprehensive insurance coverage for all New Yorkers is essential to keep costs down by keeping people healthy and ensuring that they can get primary and preventive care and manage chronic conditions.  New York Health Plus will provide the coverage everyone needs so that all New Yorkers get the health care they deserve."

"This is an exciting and ambitious plan to achieve health care for all new Yorkers by building on our State's innovative and beloved Child Health Plus and Family Health programs that have provided care to millions of New Yorkers for the past twenty years."  said Elisabeth Benjamin, Director of the Community Service Society's Healthcare Restructuring Initiatives.

"The New York Health Plus bill put forward by Assembly member Gottfried and Senator Duane has much merit and deserves serious consideration by the Legislature," said Jessica Wisneski of Citizen Action of New York, representing Health Care for All New York, a statewide consumer health advocacy coalition.  "Our campaign uses ten standards to evaluate all reform proposals, and the New York Health Plus bill does an excellent job of meeting them.  The expansion of New York's Family Health Plus program through public financing would mean that all New Yorkers, regardless of income, would have access to affordable, comprehensive, and reliable coverage."

Lara Kassel, Coordinator of Medicaid Matters New York said, "Medicaid Matters believes that the state's public health insurance programs are critical components of New York's health care system.  New York Health Plus builds on the strength of these programs.  Family Health Plus, one of New York's great health policy successes, works well because it is comprehensive in scope, covers health conditions across the spectrum, and is administratively efficient.  MMNY applauds Assembly Member Gottfried's and Senator Duane's shared goal of expanding and strengthening Family Health Plus, making it available for all New Yorkers."

"There are few problems in New York State graver than the plight of those who are uninsured and who need health care services.  We see this everyday with the women who come to family planning agencies.  These agencies do their best to serve the uninsured and underinsured despite limited resources."  said M. Tracey Brooks, President and CEO of Family Planning Advocates of New York State.  "Studies have shown that insurance coverage has a direct affect on health outcomes.  So we applaud Assemblymen Gottfried and Senator Duane for taking this bold step toward achieving health insurance for all."

Donald Distasio, CEO, American Cancer Society of NY & NJ said, "Surviving cancer can depend on whether or not you have health insurance and the quality of that insurance.  Right now, thousands of New Yorkers, including cancer patients, are putting off screenings, not taking prescription medicines and skipping appointments because they can't afford it.  We recognize and commend Assembly Member Dick Gottfried and Senator Tom Duane for seeing the value in driving the debate forward in the midst of this wrenching recession.  Our economy will only recover once healthcare reform is achieved, and New York Health Plus will provide accessible, affordable health coverage for all New Yorkers.  It is time for action, not only in Albany, but in Washington as well."

The Rev. Daniel B. Hahn, Director of Lutheran Statewide Advocacy and public policy consultant to the New York State Council of Churches noted: "We can no longer wait for the comfort zones of the privileged few to expand ever so slowly in order to accommodate the human rights of all.  For years people have framed the goal of attaining the basic human right to health care in terms of incremental steps, while millions more people are uninsured and underinsured, and the numbers continue to escalate.  If you would not take baby steps out of a burning building, you should not take baby steps out of this crisis of health care access.  This is the time for bold steps, and I applaud Chairmen Gottfried and Senator Duane's bold step forward today." 

Shelly Nortz, Deputy Executive Director for Policy with Coalition for the Homeless said:  "We are very pleased to support New York Health Plus.  It would supply the foundation we need to assure access to comprehensive quality health care for all New Yorkers based on a realistic, inclusive and timely approach to the health insurance crisis in our state."

Judy Wessler, Director of The Commission on the Public's Health System (CPHS) said, "CPHS is committed to fighting for equal access to health care services for all New York residents, regardless of ability to pay, race, ethnicity, or primary language spoken.  CPHS supports public health programs that are available and accessible, and assist people in accessing health care services.  We applaud the New York Health Plus proposal as an important step forward in making this coverage available to all residents."

Trilby de Jung, Senior Health Law Attorney for the Empire Justice Center said, "Empire Justice is excited about Assembly Member Gottfried's proposal to make one comprehensive, affordable public health insurance plan available to all New Yorkers.  His proposal builds on our strong public health programs and avoids an insurance mandate.  We look forward to working with the Assemblyman to ensure that the plan for New York includes all essential services and guards against possible inequities based on age, gender, or income.:

Catherine Abate said, "As President and CEO of Community Healthcare Network, we recognize the importance of providing health care coverage to everyone.  Too many are uninsured or underinsured.  New York Health Plus gives New York the ability to set high uniform standards, create incentives for primary and preventive care, control costs, and finance health care fairly."

Dr. Lou Levitt, convener of Rekindling Reform, said "New York Health Plus is clearly a serious effort to achieve truly comprehensive coverage for New York, and, as such, Rekindling Reform welcomes it.  We look forward to supporting and contributing to its further development."

Emma Jordan-Simpson, Executive Director of the Children's Defense Fund - New York (CDF-NY), said, "CDF-NY applauds New York Health Plus, a broad and sweeping proposal aimed at covering every child and adult.  Making coverage available to all of our children, regardless of their family's income, helps New York fulfill its commitment of giving every child a healthy start in life."

"Overall, New York Health Plus represents a very positive approach to achieving universal health care coverage in New York.  However it does not create a single-payer system which the Academy strongly supports and therefore it does not address some of the most serious deficiencies in the present multi-payer system.  Our hope is that the 'Medicare for all' approach inherent in New York Health Plus will be so popular with the public that the program will evolve into a truly streamlined and cost-effective single payer program, with equal coverage for all."  said Vito Grasso, Executive Vice President for the New York State Academy of Family Physicians.

Maryland Insurance Department to Consider Commission Disclosure

NAIFA has recently learned from our lobbyist in Maryland that an article from the MD edition of Insurance and Financial Advisor indicates that the Maryland Insurance Department will be taking a look at commission disclosure.

The article indicates that a hearing will be planned some time in the future for interested parties to give their views. NAIFA Senior Counsel Ron Panneton will be talking in depth with our MD lobbyist today to further discuss the issue, provide a status report on NY and think of the best strategy for NAIFA-MD moving forward.

We will certainly keep you apprised of developments and please let us know if you hear of anything similar being considered in your state.

For further information, please contact Ron Panneton, NAIFA Senior Counsel, at (703) 770-8187.