News Briefs
Arkansas
P/C Claims Reports Hearing Scheduled
The Arkansas Insurance Department will hold a public hearing July 27 to determine whether Insurance Commissioner Julie Benafield Bowman should revise and re-adopt Rule and Regulation 61, “Insurer Reports of Arkansas Property and Casualty Claims Experience Pursuant to Act 166 of 1993.”
The hearing will take place at 10:00 a.m. in the First Floor Hearing Room, Arkansas Insurance Department, 1200 West Third Street in Little Rock.
The proposed revisions to Rule 61 relate mainly to how the claims reporting form may be filed when such reports are due. Under the proposed Rule, the claims reports are now due no later than May 1 annually, unless the Commissioner grants an extension of time to the insurer. Additionally, the proposed Rule allows insurers to submit the claims reporting form electronically, as well as providing insurers an electronic version of the form on the department’s Web site. Finally, how insurers must make a “zero” report is clarified.
The proposed Rule 61 is viewable on the DOI Web site at www.accessarkansas/org/ insurance.
AWCC Adds POC Search to Website
Effective July 1 the Arkansas Workers’ Compensation Commission changed its proof of coverage (POC) procedures, added a POC search link on its Web site at www.awacc.state.ar.us, and eliminated a form it had required for decades.
On July 1 the AWCC discontinued the use of Form AR-I and replaced it with an electronic POC by accepting data filed with and stored by the National Council on Compensation Insurance.
The AWCC stated it cannot gurantee the accuracy of data from any third party and it is not reponsible for coverage information provided by a third party.
Louisiana
More Choices in Homeowners Market
The market for homeowners insurance in Louisiana is expanding, according to Associated Press and New Orleans Times-Picayune reports. More companies are apparently writing policies, and those that already were in the state are offering more coverage.
Louisiana has been struggling to attract insurers to its homeowners market after Hurricane Andrew hit the state in 1992. Swamped with claims, insurers backed off from the state, especially the coastal areas.
Legislative measures aimed at reforming the tort and insurance regulatory environments seem to be working in the state’s favor, as companies are reconsidering coverage offerings there. However, in some coastal areas south of Interstate 10, insurance may be available only through Louisiana Citizens Property Insurance Corporation, the state’s insurer of last resort.
According to press reports, firms such as Texas-based Colonial Lloyd’s and Sunshine State Insurance, a Florida insurer, are companies new to the state that are looking to insure properties north of Interstate 10.
Two carriers reportedly willing to consider properties south of I-10 include Fidelity National Insurance Co. and Encompass, a division of Allstate Insurance Company.
Insurance Commissioner Robert Wooley told the Associated Press the insurance department is working on programs to encourage storm proofing of houses in coastal areas and to reduce coastal erosion. Such programs would hopefully give insurers incentives to write new policies there. The programs, which would include grants to policyholders to install shutters and roof tie-downs, would be paid for in part with Citizens’ policyholders’ premiums.
Applications to the Citizens plan reportedly fell 37 percent during the first five months of this year, compared with the same period in 2004.
Former Agent Pleads Guilty
Louisiana Attorney General Charles C. Foti, Jr., announced that Phyllis Malveaux Breaux of Lafayette, a former licensed insurance agent, pled guilty on June 27 to felony theft over $500.00.
According to the AG’s office, Breaux sold insurance to customers and then kept the premium payments, rather than forwarding them to insurance companies. Breaux was placed on one-year active supervised probation and ordered to pay restitution in the amount of $2,128.54. She is permanently banned from the insurance business, having been ordered not to apply or reapply for an insurance license in Louisiana or any other jurisdiction.
LSP Arrests Alexandria Man for ID Theft
The Louisiana State Police announced the arrest of Sam Medica, age 42, of Alexandria, who is charged with LRS 14:67.16 Identity Theft (1 Count).
Medica’s arrest follows a year-long investigation that began when insurance fraud detectives received a complaint from the Federal Bureau of Investigation regarding a possible “identity theft” case.
Medica allegedly posed as the vice president of a local construction company and applied for credit at a local equipment company. In addition to using the company name, the investigation revealed that Medica also used the companies’ Federal tax ID number and State Contractor number. Credit was approved for Medica and he eventually purchased/leased equipment totaling in the amount of $96,454.91.
Medica was arrested at his residence without incident and booked into the Rapides Parish Detention Center.
LWCC Returns $15.8M in Dividends
The Louisiana Workers’ Compensation Corporation for second year in a row declared a dividend and will return $15.8 million to qualifying policyholders this year. The company believes it to be the largest single dividend ever declared in the state of Louisiana by a workers’ compensation insurer, topping the $10 million LWCC returned to policyholders in 2004.
Individual awards are based upon a calculation taking into account the policyholder’s earned premium and a measure of profitability for the individual account for the previous five-year period.
LWCC is a private, nonprofit mutual insurance company. It is the state’s largest writer of workers’ compensation insurance, covering about 23,000 policyholders and 38.5 percent of the insured market in Louisiana.
Oklahoma
Construction Co. Owner to Pay $20K
The owner of a Tulsa construction company will pay $20,000 in restitution after pleading guilty last week to workers’ compensation fraud, Attorney General Drew Edmondson said.
William R. King, 41, was sentenced June 29 to a two-year deferred sentence and ordered to pay $20,000 restitution, a $1,000 fine, as well as a victim compensation assessment and court costs. King, the owner and manager/construction coordinator of W.K. Construction Inc., was charged March 24 in Tulsa County District Court. King also did business as King Construction.
According to the state’s complaint, King defrauded CompSource Oklahoma by concealing important information on his application for workers’ compensation insurance.
King was accused of concealing information regarding the true number of employees and the full nature of his business operations. By concealing this information, King could lower the risk associated with his coverage, thereby lowing his premiums.
This case is the result of a joint investigation and prosecution by the attorney general’s Workers’ Compensation Fraud Unit and CompSource Oklahoma. King’s restitution payment will be made to CompSource.
Firm Told to Stop Insurance Business
Oklahoma Insurance Commissioner Kim Holland ordered First Choice Healthcare to stop conducting unauthorized business involving insurance in Oklahoma. The order states that the company has violated state law by misleading consumers regarding health related discount cards.
The action resulted from a complaint received by the Oklahoma Insurance Department that the company overcharged an Oklahoma couple after selling a discount card called the First Choice Healthcare Services Comprehensive Health Plan. The company also failed to properly provide services to the couple as promised after debiting their bank account in excess of the amount agreed.
Commissioner Holland may impose a penalty of $25,000 on the company for each act of violation against the order or force them pay back Oklahoma residents damaged by the violation.
Texas
Dallas County DA Racking up Success
The Texas Department of Insurance reported that Dallas County Assistant District Attorney, Kyson Johnson, has been on the job for only a few months but has made the most of that time. In first quarter of 2005, Johnson oversaw cases resulting in two-dozen indictments for insurance fraud related crimes.
In what is believed to be the first such arrangement in the country, Johnson is officially a TDI employee, but works in the Dallas County District Attorney’s Office. A memorandum of understanding between TDI and the Dallas County DA assigns Johnson to insurance fraud cases with the full authority of the DA’s office.
Johnson said the impressive early track record is a reflection on the sheer case load. “All the cases I’ve worked on would have been prosecuted whether I was here or not, but having one person dedicated to insurance fraud helps free-up the other DAs in this office to focus on other crimes.”
Johnson added that clearing fraud cases serves a dual purpose, punishing the wrong doers and acting as a deterrent to those who may be considering these crimes.
TDI Associate Commissioner of the Fraud Division, Dennis Pompa, said his office is always seeking to improve efficiency in prosecuting insurance fraud cases.
“The results of the MOU thus far have really exceeded everyone’s expectations,” Pompa said. “I think what makes it work is having Kyson become part of the team there in Dallas, as opposed to being an outsider looking for ways to mesh the work of the two distinct entities.”
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