News Briefs

ARKANSAS

The Workers’ Compensation Research Institute reported that Ar-kansas’ workers’ compensation system has experienced a period of stability after extensive reforms were passed in 1993, but maintained that some concerns still remain.

According to a recent report published by WCRI, some employer representatives say several court decisions have diluted the impact of the reforms. On the other hand, some worker representatives are critical of the exclusion of many workers with job-related, but gradually occurring injuries, delays in resolving disputed claims and the relatively low statutory maximum weekly temporary disability benefit levels.

The study found that medical and indemnity payments per claim were system cost drivers in recent years. Average incurred medical benefits per indemnity claim (inflation adjusted) rose 7.9 percent annually from policy years 1999 through 2002, while average incurred indemnity benefits per claim (inflation adjusted) grew 4.7 percent in the same time period.

Arkansas is one of ten states that ties the maximum weekly temporary total disability (TTD) benefit to less than 100 percent of the statewide average weekly wage. About one in six injured workers was affected by the state’s relatively low statutory maximum weekly TTD benefit.

Among cases closed in fiscal year 2003, there was a statewide average of 6.5 months from hearing request to a formal hearing and opinion by a judge. This interval was shorter than in six of nine other states (for which comparable data are available) WCRI studied in the past 10 years.

Assistance for Displaced Producers

State Insurance Commissioner Julie Benafield Bowman announced the Arkansas Insurance Department’s efforts to provide assistance to producers, consultants and business entities located in areas devastated by Hurricane Katrina.

The assistance will include providing duplicate licenses, waiving fees for certification requests, waiving fees for license renewals, and penalty relief for late license renewals.

Generally, the department sends renewal notices 60 days prior to the expiration date of the license. However, due to mail delivery problems and the dislocation of many residents, the department will automatically renew those currently active licenses for individuals and business entities whose residence or physical business location is reflected to be in the Zip Code areas most heavily damaged in the states of Louisiana, Mississippi and Alabama. This special arrangement will be in effect for one year beginning Aug. 29, 2005.

Additionally, licensed producers and consultants from the affected areas of Louisiana, Mississippi and Alabama who have relocated to Arkansas as a result of Hurricane Katrina, and desire to solicit business in the State of Arkansas, will have the usual non-resident license fees waived. Those individuals will be required to complete and submit to the department a non-resident application. However, home state certification will not be required. Verification of licensure and resident address will be conducted through the National Producer Database of the National Association of Insurance Commissioners .

LOUISIANA

Gov. Extends State of Emergency

Gov. Kathleen Babineaux Blanco extended Louisiana’s State of Emergency until Oct. 25, effectively extending the emergency insurance rules implemented by the state’s Commissioner of Insurance Robert Wooley. The governor signed the law in early Sept. granting Wooley temporary authority to implement certain emergency rules in the wake of Hurricane Katrina and its aftermath. The State of Emergency tentatively had been set to expire Sept. 26.

Section 4 of Executive Order KBB 2005-40 states this limited transfer of authority “specifically includes, but is not limited to, the authority to suspend applicable statutes, issue any rules, regulations, directives or take any other actions that the commissioner deems necessary to protect the public health, safety, and welfare of the citizens of Louisiana, who were affected by Hurricane Katrina and on August 29, 2005 resided in the following parishes: Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Mary, St. Tammany, Tangipahoa, Terrebonne and Washington.”

As part of the executive order, Commissioner Wooley has issued Emergency Rules 15, 16 and 17 (Title 37, Part XI, Chapter 27), retroactive to Aug. 26, 2005, that include the following provisions:

(1) Insurance companies cannot cancel or non-renew insurance policyholders in the affected parishes listed above. These are policyholders who have all types of insurance, including, but not limited to flood, homeowners, auto, life, health and workers’ comp; (2) No policy can be canceled or non-renewed solely because of a Hurricane Katrina claim;

(3) Citizens affected by Hurricane Katrina in the above-listed parishes will receive an automatic extension of time to pay insurance premiums due on or after August 26, without any late fees or penalties;

(4) Citizens with health insurance coverage in the above-listed parishes may receive medical care out-of-network and prescription medication out-of-network without penalty;

(5) Public adjusters must register with the Department of Insurance and admitted insurance companies must register their adjusters with the department;

(6) Public adjusters cannot charge a percentage of the final claim as payment for their services. They can charge a flat fee or an hourly fee.

This limited transfer of authority shall remain in effect for the duration of the state of emergency and/or any subsequent state of emergency declared thereafter with regard to Hurricane Katrina and its aftermath.

To view Emergency Rules 15, 16 and 17, visit the department’s Web site at www.ldi.state.la.us.

Evacuees Urged to File Address Change

The Louisiana Department of Labor is urging Hurricane Katrina evacuees from Louisiana who filed for Unemployment Insurance and Disaster Unemployment Assistance to immediately contact the department to file a change of address if their current address is now different from the one listed in their application. The department has set up a new, toll-free number, (800) 430-8076, for claimants to call.

Evacuees from the southeast region of the state, where postal services were halted, as well as those who may have moved since they filed for UI or disaster unemployment assistance benefits are urged to make sure the labor department has their current mailing address for delivery of their UI payments.

Failure to make the change of address can delay receipt of benefits.

A claimant can file a change of address by phone at (800) 430-8076 or (866) 783-5567; on the department’s Web site at www.LAWORKS.net; or by going to one of the department’s job centers around the state.

OKLAHOMA

Man Accused of Faking Surety Bond

Oklahoma Insurance Commissioner Kim Holland issued a Cease and Desist Order to a Seminole businessman suspected of writing his own surety bonds to cover costs associated with plugging abandoned oil and gas wells.

The action re-sulted from a complaint referred to the Oklahoma Insurance Department by the Oklahoma Corporation Commission. The complaint alleges Ronald Kent Springer provided the commission a surety bond underwritten by G.C.S. Financials Inc. When the commission attempted to verify the surety bond, all mail was returned and no telephone calls were completed.

Springer provided to the Oklahoma Insurance Department a copy of a check he claimed was proof of his purchase of a surety bond. But investigations by the department revealed the check was never processed and the account number on the check had not been active for five years.

“This man had no authorization to engage in insurance business in Oklahoma and has misrepresented the existence of insurance policies. His actions were hazardous to public safety,” Holland said.

If Springer violates the cease and desist order, Holland may impose a penalty of $25,000 for each act of violation or force him to pay back Oklahoma residents damaged by the violation.

The Oklahoma Insurance Department is not aware of any other false bonds sold to other companies or individuals by Springer.

Teubner/Wood Forum Set for Oct. 6

The Independent Insurance Agents of Oklahoma is hosting its Teubner/Wood Insurance Forum on Oct. 6 at the IIAO Conference Center, 1000 NW 50th Street in Oklahoma City.

The association said the insurance industry’s top experts will be on hand to discuss relevant topics that affect insurance agency operations on a daily basis.

Forum attendees will be able to: Explore the changes in the new 1998 CGL Policy. Network with others who experience the same things on a daily basis. Understand fully the ins and outs of credit scoring. Have their voice heard in the Uninsured Motorist Summit that will lead to the writing of the “White Paper,” from which new legislation will be drafted.

The fee is $110.00 for members and $125.00 for non-members, and includes the cost of instruction, lunch, refreshment breaks and study material.

For more information visit the IIAO Web site at www.iiaok.com.

TEXAS

TDI Staff Assisting Storm Victims

The Texas Department of Insurance announced that beginning Sept. 26, staff members were deployed to its Houston Insurance Assistance Center to assist Hurricane Rita victims with their insurance questions and claims, including workers’ compensation claims. The IAC is located at 6059 South Loop East in Houston, the same location as the FEMA Disaster Recovery Center opened to assist Hurricane Katrina victims.

TDI staff will help consumers obtain prompt res-ponses from the insurance industry regarding their insurance claims and questions. The faster homeowners and automobile policyholders can talk with their carriers, the sooner the claims process can commence. For homeowners policyholders, this means the possibility of payment for additional living expenses.

If an evacuee is an injured worker and was being paid workers’ compensation benefits on the date the day evacuations were ordered, TDI can assist those injured workers with their workers’ comp claims. Injured workers should call TDI’s Division of Workers’ Compensation at (800) 372-7713. Division staff will forward information to the appropriate authorities of the state or insurance carrier for further handling and communication with the injured worker.

Hurricane Rita and Hurricane Katrina insurance information is also available at the department’s Web site at www.tdi.state.tx.us or by calling TDI’s Consumer Help Line: (800) 252-3439.

TMLT to Reduce Rates 5%

Texas Medical Liability Trust announced that effective Jan. 1, 2006, it will reduce medical liability rates for new policyholders by 5 percent across the board. Current TMLT policyholders will receive this rate decrease when their policy renews. TMLT has reduced rates three times since the passage of House Bill 4 and Proposition 12, 12 percent in 2004, 5 percent in 2005 and another 5 percent in 2006.

TMLT’s Board of Governors also voted to pay TMLT policyholders dividends based on projected 2005 Trust earnings and a strong capital position, beginning Jan. 1, 2006.

The dividend declared for 2005 is $10 million. For each policyholder, the dividend amount will equal approximately 5 percent of their expiring 2005 premium. Dividends
will be credited to each policyholder’s premium as a lump sum when their policy renews in 2006.