Ask Tim

More on the Big "I" National Legislative Conference & Convention

Last month I wrote a post about why New York insurance producers should make the trip to Washington, D.C. at the end of April for the Big "I" National Legislative Conference and Convention. National Underwriter's Mark Ruquet published an article about the event in the online magazine's March 23 issue. He interviewed IIABA CEO Bob Rusbuldt, who laid out the stakes very clearly and starkly. Well worth the read if you've been on the fence about whether to attend.

Calling All IIABNY Members: Come To Washington in April!

I think we can all agree that last year's elections pretty dramatically altered the political landscape. We have a popular new president with large ambitions and a Congress controlled by the president's party. We also have some issues on the table that have some serious implications for insurance agents and brokers. Consequently, if you haven't done it before, this is the year you should make the trip to Washington, D.C. for the Big "I" Legislative Conference & Convention, April 29 through May 1.

Why is it so important to get involved this year? The big reason: The drive for federal regulation of the insurance industry seems to be gathering momentum. IIABA and IIABNY have steadfastly opposed taking insurance regulation away from the state governments, but the collapse of the banking system has many in Congress thinking that increased regulation of the financial services sector (including insurance) is desirable. This may well be the year that a federal insurance bill begins to move. If you believe in state regulation of insurance, your participation this year is vital.

Other key issues include modernization and reform of the National Flood Insurance Program, health care reform, reform of non-resident licensing rules, changes to the crop insurance program proposed in the president's budget, and funding for natural catastrophes. If these issues are important to you, you need to come to Washington.

The deadline for booking hotel rooms at the Marriott Wardman Park Hotel is March 20, so don't delay in making your reservations. Both IIABNY and IIABA will provide you with materials to get you up to speed on the issues, and there will be briefing on Wednesday, April 29 put on by IIABA's highly-regarded lobbying team. I'm your contact for New York if you have any questions about this event, and you can reach me through the usual channels. This not being a podcast, I won't even throw anything.

I hope to see you all in Washington.        

Episode #10 -- The Self-Insured Trusts Reform Law

As I write this, I have just gotten off the phone with an attorney representing an employer who belonged to an under-funded group self-insured trust. Fortunately, he was just looking for information, not threatening to bill or sue me. His client, however, is staring at an assessment bill for a rather large amount of money. That's one story out of far too many that arose this year with the surprising decline in the group self-insured trust industry. The state legislature enacted reform legislation last June to prevent repeats of stories like this one, and that law is the focus of episode 10 of Ask Tim.

SHOW SUMMARY:

• The law is Chapter 139 of the Laws of 2008, formerly known as Senate Bill S.8708
• It clarifies that the New York Workers' Compensation Board has authority to assess group self-insured trusts
• It requires the board to assess employers in an insolvent trust within 120 days of the trust's insolvency
• It contains several anti-fraud protections
• It requires trusts toreport on their financial conditions to the board at least annually
• It requires trusts to be fully funded
• It authorizes the board to borrow up to $52 million to meet short-term claim obligations
• It places new limits on the ability of employers to join a trust or move from one to another
• It creates an advisory committee and a task force to make recommendations for system improvements

Our sponsor this episode is AgentQuote.com.

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Dems Solidify Grip on Albany; What Will the Future Hold?

New York voters on Tuesday sent a shock wave through Albany by giving the Democrats a majority in the State Senate. The last time the Senate was out of GOP control, many (if not most) Americans did not yet have color television. The last time the Democrats controlled both legislative chambers and the governor's mansion, Joe DiMaggio had yet to play a baseball game for the New York Yankees.

What will it all mean for New Yorkers in general and the New York insurance industry in particular? For one thing, the industry's long relationship with Republican Senator James Seward has been rudely interrupted. Seward, long-time chair of the Insurance Committee, will be replaced by an as-yet unknown Democrat. The industry had a relatively cooperative relationship with Seward; many insurance players fear a cooler reception from the new sherriff.

However, the champagne glasses hadn't yet dried before the new majority ran into problems. As Tom Precious reported in the Nov. 6 Buffalo News:

But while they high-fived in the hallways in Albany on Wednesday, Democrats, who enjoy a long New York tradition of infighting, provided a sizable dose of political intrigue as four New York City lawmakers — dubbed the Gang of Four — refused to back the current top Democrat as the next majority leader.

The possible renegade Democrats sent signals that one or more could even join up with Republicans to block a Democratic takeover, a theory prodded along when the four huddled to discuss their strategy and what they want in return for their support of a new Senate leader. They even released a photograph of their session just for good measure.

Top Democrats, however, insisted all was fine, though insiders note that Gov. David A. Paterson is not a major fan of Malcolm Smith of Queens, the senator in line to take over the Senate.

Meanwhile, the Associated Press reported that people living in Upstate are worried that, with the Senate in Democratic (read: New York City) control, the state government will forget that New York State extends north of Yonkers. Some commentators believe those fears are exaggerated:

But Smith, the Senate Democratic leader, has given greater attention to upstate concerns in recent years. He formed an upstate caucus within his delegation to draw up laws and programs to help those lawmakers' regions, proposed revamping economic development programs aimed at upstate to make them more effective and sought the hardest cap on property tax growth.

"Just because it's Democratic controlled doesn't mean it's liberal control," said Steven Greenberg of the Siena College poll, noting that a narrow Senate Democratic majority can't afford to lose any upstate Democrats.

Democrats clearly know the potential power of an upstate vote. Brooklyn-born Democrat Sen. Charles Schumer and Westchester County resident Sen. Hillary Rodham Clinton often travel upstate to talk about the likes of apples, dairy farming and rural truck traffic.

With the state government facing a large and growing budget deficit, insurance issues may get short shrift when the new legislature convenes in January. When former Governor Eliot Spitzer took office in 2007 and chose Assemblyman (and Insurance Committee chair) Pete Grannis to run the Department of Environmental Conservation, the legislative session nearly ended before Assembly Speaker Sheldon Silver picked Rochester Assemblyman Joseph Morelle to head up the committee. If the new Senate majority leader, whoever that may be, takes a similar approach to naming a Senate Insurance Committee chair, the insurance industry can probably look forward to a whole lot of not much legislative activity in 2009.

One never knows what may happen in the state capitol, however, so don't touch that dial.

Episode #9 -- The Late Notice Reform Law

In episode #9, I discuss the new law that reforms insurers' ability to deny liability claims on the grounds of late notice by the insured or claimant.

• The law applies only to bodily injury and property damage liability claims

• For the first time, New York law defines the rights and responsibilities of insurers, insureds and claimants with regard to claim reporting.

• If the insurer receives the notice within two years of the time the policy requires, it has the burden of proving that the late notice prejudiced its interests. After two years, the insured or claimant must prove that the late notice did not prejudice the insurer's interests.

• The law defines "prejudice" as when "the failure to timely provide notice materially impairs the ability of the insurer to investigate or timely defend the claim."

• More information on the IIABNY Web site in the Research section under New and Notable and Market Conduct Rules & Regulations.

• Closing song:

“I’m Gonna Procrastinate” by Rob Balder
Used with permission
www.thefump.com
Licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 License

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U.S. House of Reps Approves NARAB II

Now that things with AIG have settled down a bit, it's time to focus on some good news. The House of Representatives approved the NARAB II bill yesterday. Now the bill moves to the Senate for consideration. NARAB II will make it much easier for insurance agents to get non-resident licenses in other states. The members who call me about licensing tell me that the hurdles they have to jump to get non-resident licenses border on the ridiculous. NARAB II will go a long way toward improving the situation.

It's an open question as to whether the Senate will have time to act on it before it adjourns for the election, but at least the bill has passed the first major test.

Episode #7: New Legislation, Part One -- The Coastal Property Bill

You may have always suspected that I'm all wet, but you never had conclusive proof until now. Take a look at part one of my discussion of the coastal property insurance bill enacted last month by the New York legislature and the governor. This is the first in a series of episodes that will examine recent legislation and its effect on your business.

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NARAB II Clears Its First Hurdle in Congress

A congressional subcommittee has taken the first step toward making the National Association of Registered Agents and Brokers Reform Act (aka NARAB II) bill law. The Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, part of the House Financial Services Committee, approved NARAB II yesterday. It now moves to the full Financial Services Committee for consideration.

NARAB II is designed to create reciprocity among the 50 states for licensing of insurance producers. The IIABA is a strong supporter of the bill; it was high on the agenda during the Big "I" National Legislative Conference and Convention in Washington last April. No word yet on when the full committee will consider it. Because of the upcoming presidential nominating conventions, Congress has a relatively small number of work days left in the session before it recesses in early October for the elections.