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- LEG REG REVIEW
- 2004, Second
Issue
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- LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES,
a professional lobbying and consultant firm based near the State
Capitol. It contains
news on the Legislative and Regulatory scene in Pennsylvania that
may be of use to insurance producers, companies, and interested
parties. It is a
Member Service if you are a member of the Pennsylvania Association
of Health underwriters (PAHU) or the PA Surplus Lines association
(PSLA). Subscription
information may be obtained by contacting PHILLIPS ASSOCIATES at
717/728-1217, Fax 717/728-1164 or E-mail to xenobun@aol.com.
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- THEY RETURN
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- Legislators
return to Harrisburg this week with the Senate reconvening Tuesday
and the House the following week.
High on the House Republican agenda will be a caucus vote
to fill the post of Policy Committee Chairman after Rep. Roy
Cornell’s death. This,
in turn, may open up a committee chairmanship.
One item for the Senate is the nomination hearing of Jerry
Peppert for the position of Attorney General convened by the
Senate Judiciary Committee. If
confirmed, Peppert would fill that position as a caretaker since
he is not running for that position.
Peppert has served as Acting Attorney General since
December 15, 2003, when Mike Fisher was sworn in as a Federal
judge. He had also
served as First Deputy Attorney General since 1997.
Peppert is a Villanova and University of Notre Dame Law
School graduate.
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- UPCOMING HEARINGS
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The
Senate Judiciary Committee plans to hold a hearing on bills
designed to cap jury awards for non-economic damages.
Discussed will be SB 1000 sponsored by Sen. Stewart
Greenleaf (R-Montgomery) giving the General assembly the
constitutional authority to cap medical malpractice awards.
The other bill, SB 50 sponsored by Sen. Jake Corman (R-Centre),
is also a constitutional amendment to do the same except that all
pain and suffering jury awards could be capped, not just Medical
Malpractice awards. A third bill, HB 1326 (Turzai -R-Allegheny) will also be
discussed. Similar to
SB 50, it passed the House last June.
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The
House Health and Human Services Committee expects to address the
topic of mental health advance directives (similar to living
wills) for those who want to plan for their mental health care if
and when they may not be able to make those decisions.
The hearing is set for January 29 in Harrisburg.
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Other
committee hearings of possible interest include one on counties
using recording fees to fund county economic development projects
(HB 722 sponsored by Rep. Matt Wright-R-Bucks) before the House
Commerce Committee and two days of hearings on the Earned Income
Tax by the House Finance Committee.
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- L&I ISSUES FINAL UCC RULES
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- The
January 10th PA Bulletin (www.pabulletin.com)
contains the full text of the massive Universal Construction Code
(UCC) as Title 34. Part XIV, Chapters 401 (Certification of Code
Officers), 403 (Administration and description of UCC
requirements), and 505 Elevators and lifting devices).
The lengthy document also publishes comments received from
affected interests and the Independent Regulatory Review
Commission and the Labor & Industry’s response.
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- CHANGE UPDATE FOR PA GENERAL ASSEMBLY
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There
were two House legislator retirements announced last week.
Conservative two-term Rep. Jeff Coleman (R-Armstrong) and
veteran Rep. Susan Laughlin (D-Beaver) decided not to run again.
Coleman’s district is a swing district that could easily
revert back to the Democrats while Laughlin’s Democratic
district has trended Republican in national races.
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March
9 is the date chosen for the special election in Montgomery and
Philadelphia Counties to fill the vacancy left by the death of
Republican Roy Cornell. Designated
as the standard bearers by the two local party organizations are
Democrat Ross Schriftman, a licensed insurance producer and
nationally known expert on Long-Term Care Insurance versus
Republican Susan Cornell, daughter of the late Representative and
Hatboro councilperson. The
race will pit the GOP-leaning southern part of the district
against Democratic Philadelphia with a competitive northern part
of the district being a pivotal battleground.
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High
stakes is the media spin on the late March special election in
Columbia County late in March to succeed Senator John Gordner.
According to media, each side is pouring several hundred
thousand dollars into this Republican trending district.
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- BLUES CALLED UPON TO JUSTIFY SURPLUS LEVELS
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- The Blues (Highmark, Capital, Northeast and Independence) have
been given until April 15 to supply documentation to the Insurance
Department justifying the size of their surpluses relative to
state required surplus levels under the Risk-Based Capital (RBC)
system. According to
Notice 2004-1, the Department noted that the Blue Cross Blue
Shield national association held that 350% RBC was low enough to
trigger an early warning of possible overexposure and that 628% is
the U.S. norm.
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- In PA,
Department follow up to a September 4, 2002 hearing ascertained
that the Pennsylvania Blues have reserves of $2.4 billion and
surplus of $3.5 billion. The
Notice says that surplus “in excess of 650% are likely
excessive”. Notice
2004-1 directs each company to determine its RBC percentage and,
if it exceeds 650%, to justify the level and to distribute the
surplus over that amount to Plan participants and to the
underinsured and uninsured. This
action comes shortly after the Department denied Blues’ rate
increases for individual and Medicare supplement health insurance
because of insufficient data on the surpluses.
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- INDUSTRY NEWS
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OneBeacon
is purchasing Atlantic Mutual’s commercial insurance business.
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S&P
announced that Hartford Financial services settlement of a $1.15
billion asbestos claim would not affect its ratings.
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Marsh
& McLennan Companies Inc. was sued by Schatz & Nobel PC,
in U.S. District Court for allegedly not notifying securities
customers that Putnam Investments LLC was allowing selected
customers to engage in market timing.
This class action lawsuit affects MMC security purchasers
of Putnam from January 3, 2000, through November 3, 2003.
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NOTE
to surplus lines licensees: State taxes must be paid by January
31, 2004 and a complete copy of the SL tax form must be sent to
PSLA, 211 Welsh Pool Road, #200, Exton, PA 19341, 610/594-1340.
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