SESSION DISPATCH – WEEK 4
by Timothy J. Meenan, FAIFA Lobbyist

LEGISLATIVE ACTION – WEEK #4

SENIOR ANNUITY REFORM BILL ADVANCES TO SENATE FLOOR

FAIFA has continued to work with the sponsor and the regulators to remove onerous provisions in the senior annuity reform bill (SB 2082, HB 1003), a bill aimed at reforming the way agents determine suitability for selling annuities and life insurance to senior consumers. The bill increases penalties for “twisting” and “churning”; makes it an unfair trade practice to misrepresent agent qualifications to falsely imply expertise or special knowledge in financial matters; requires standards to objectively measure for suitability of life insurance or an annuity; and gives rulemaking authority to DFS and OIR to articulate specific suitability standards. So far, the sponsor has been willing to work with FAIFA to eliminate many of the offensive provisions, but this bill continues to forge ahead as it has become a priority of the Senate President. I am concerned and fighting because the bill still applies the suitability requirements to all life insurance products and imposes criminal penalties on companies and agents for churning and twisting.

AGENT CE BILL GAINS APPROVAL FROM SECOND HOUSE COMMITTEE

Another amended version of House Bill 565 passed through a House Council this week. The main content of the amended bill remains similar to the most recent version, however, it was amended to remove provisions regarding credit for CE courses offered by Citizens. The original language stated that an appointing entity could not require attendance at an approved CE course as a condition of appointment for any appointee or potential appointee. This language was aimed squarely at Citizens Property Insurance Corporation, who is trying to make our members take additional CE courses, even if they only underwrite a few Citizens policies. The amendments to the House bill removed these provisions, but they are expected to be added back in at the next stop.

The bill also establishes requirements for obtaining the newly-created license to become an “unaffiliated insurance consultant” requiring that he/she has an agent’s license for the type of insurance he or she transacts; is not appointed by an insurer or authorized appointing entity; does not sell or service insurance on behalf of an insurer, insurance agent or agency in connection with the sale or service by the insurer, agent or agency; does not receive any compensation or commission from any insurer, agent, or agency for the sale or servicing of insurance on behalf of the insurer, agent, or agency in connection with the sale or servicing of insurance on behalf of an insurer or by the insurance agent or agency; and is appointed by himself or herself with DFS and has paid applicable fees. This provision was substantially amended from previous versions, which I opposed, as it allowed unlicensed individuals to obtain this designation. We stopped that. It amends certain continuing education requirements for insurance agents, including allowing exemptions from the customer representative examination requirement for individuals who have obtained certain degrees of education, creates an additional independent study option for fulfilling continuing education requirements, and eliminates the Continuing Education Advisory Board within DFS.

CREDIT LIFE LIMITS LEGISLATION ADVANCES FOR THIRD YEAR

CS for CS for HB 343, which exempts debt waiver products from regulation as insurance, and lifts the $50,000 cap on credit life insurance face values, is moving for the third year in a row. This bill has been enacted in the two prior years, but has been vetoed both years due to other provisions added to the bills during the final minutes of the 2007 and 2006 legislative sessions. The bill also mandates that credit life policies may not be issued for amounts exceeding the indebtedness for which it covers.

BILL REQUIRING HEALTH ID CARD ADVANCES ONCE AGAIN

House Bill 535 advanced through a House Council this week and now awaits a hearing in the appropriations committee. This bill requires health insurers and HMOs to provide ID cards to policyholders and subscribers which help identify the insured individual, type of health plan, authorization for services, and an estimate of financial responsibility. It also amends the definition of “bone marrow transplant” to include nonablative therapy and transplants needed to prolong life, for purposes of required insurance coverage.

BILL EXPANDING HEALTH FLEX PLAN PROGRAM ADVANCES TO HOUSE FLOOR

House Bill 461 was approved by its final committee of reference this week and will now be placed on the calendar of bills that can be called up for consideration by the full House of Representatives. This bill expands eligibility for the Health Flex Plan program and extend the expiration date of the program from July 1, 2008 to July 1, 2013. Since the creation of the program, there has been limited provider participation and this bill seeks to provide incentives to expand the program.

“SILENT PPO” LEGISLATION ON FAST TRACK IN SENATE

Despite significant opposition from the health plan industry, Senate Bill 1012 was approved with only one negative vote by a Senate Committee this week and is scheduled for another hearing next week. The bill, with strong support from the healthcare provider industry, addresses several reimbursement issues for healthcare providers: shortening the “lookback” period for insurers or HMOs to determine overpayments made to physicians; allowing “silent PPO” arrangements which allow any willing medical provider to contract with a PPO in order to gain access to the PPO’s contracted discount; and requiring health plans to allow assignment of benefits to the provider of the patient’s choice. FAIFA remains strongly opposed to this legislation as it prevents insurers from controlling utilization and other costs by eliminating closed panels of physicians and creates a disruption in the market.

HOUSE AND SENATE GEARED TO UPDATE FLORIDA’S INSURABLE INTEREST LAW

House Bill 375 and Senate Bill 648 both gained approval from legislative committees this week. These bills create standards for the sale of personal insurance policies to individuals who are seeking to insure someone other than themselves. The bills limit who can have an insurable interest and require the insured to give consent in order for the life insurance policy to be written, in some cases. FAIFA supports these bills as they would have a chilling effect on deceptive “stranger-owned life insurance” or “STOLI” schemes.

SENATE COMMITTEE VOTES OUT PROPERTY INSURANCE SELECT COMMITTEE RECOMMENDATIONS

This week, a Senate committee approved legislation that was spawned by the Senate Select Committee before which Allstate, Nationwide, and others testified in January. The following are among the more notable provisions: mandating a guaranteed renewable policy for mitigated homes, eliminating the state antitrust exemption for insurers, requiring pre-approval for non renewals exceeding 10,000 in one year, eliminating profit contingency factors for at risk capital, mandating expected reinsurance recoveries on affiliated reinsurance exceed 40%, instituting criminal penalties on insurers filing a materially false rate filing, forcing the filing of all claims procedures, creating new unfair trade practices, elimination of arbitration permanently, and many other changes. At this time, there is no similar legislation filed in the House. Although this legislation is expected to pass in some form, FAIFA will fight to remove as many provisions as possible that seek to further discourage the property insurance market from participation in Florida.

SENATE APPROVES BILL REDUCING CAT FUND EXPOSURE

Senate Bill 2156 was introduced through an effort of CFO Alex Sink. It lowers the top layer of the Florida Hurricane Catastrophe Fund by approximately $3 Billion, in an effort to begin lowering the states financial risk from a major storm. CFO Sink has testified that this bill will not cause any insurers to file rate increases, notwithstanding that the top layer of coverage currently obtained by insurers at approximately 2.5 rate online will now be more costly to purchase.

INSURANCE CAPITAL INCENTIVE BUILD-UP PROGRAM LEGISLATION INTRODUCED IN HOUSE AND SENATE

Although this is the worst budget year in modern history, the House and Senate appear poised to re-fund the Insurance Capital Build Up Incentive Program. This program was funded with $250 million in 2006 to provide surplus notes to match private capital to encourage more insurers to write homeowners insurance in Florida. The House has proposed $100 million, and the Senate $250 million for this program. Both houses will mandate that recipients remove a percentage of their policies from Citizens Property Insurance Corporation.

UPDATE ON ADDITIONAL MANDATES

HB 53/SB1010 Relating to Health Insurance (Prostate Cancer Mandate): Senate Bill on committee agenda; House Bil referred to committees

SB 174 Relating to Infant Eye Care/ Mandatory Examinations: Referred to committees, no House companion

HB 363/SB 448 Relating to Breast Cancer Treatment: Senate bill on committee agenda; House bill referred to committees

SB 364 Relating to Cystic Fibrosis Treatment/Insurance Coverage: Withdrawn from further consideration

SB 460/HB 465 Relating to Congenital Craniofacial Anomalies/Coverage Study: Referred to committees

HB 709/SB 1290 Relating to Optional Coverage for Health-Related Disorders: House Bill advanced through first committee; Senate bill is referred to committees

SB 2730 Relating to Colorectal Cancer Screening Coverage: Referred to committees, no House companion