LEG-REG REVIEW
by Phillips Associates

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LEG REG REVIEW
2004, Sixth Issue
 
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 free 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.
 
REGULATORY AGENDAS RELEASED
 
Pursuant to Executive Order 1996-1, state agencies are required to list their regulatory agendas for the year.  Tops were the Department of State with 90-plus regulations governing the various occupational boards such as nurses, doctors, cosmetologists, CPAs, etc.  Next was Labor & Industry with 34.  Insurance came in third with 28 regulations. Fourth was DEP with 22.  These regulations are just proposals and need to have a period of public comment as well as a legal review by the Independent Regulatory Review Commission.
 
Regulations with insurance emphasis follow:
·        L&I: There are 3 Worker’s Compensation regulations dealing with medical costs, electronic claims processing, and licensing of vocational experts, all in Spring 2004
·        Securities has three regulations dealing with investment advisors (registration, capital requirements, financial records coming in May 2004 (G. Philip Rutledge 717/783-5130)
·        DEP plans a major overhaul of the Mine Subsidence Insurance Program with changes in coverage, limits, premium, policy duration, etc. in March. (Larry Ruane 783-9590)
·        Insurance Department: 
-         Producer Licensing regulations to implement Act 147 Spring/Summer 2004
-         HO and Auto Cancellations & Non-renewals in Fall 2004
-         Auto Forms, Proof of Financial Responsibility in Fall 2004
-         Life & Annuity Replacement and Variable Annuity Contracts (Fall)
-         Annuity Disclosures and Senior Protection Annuities(Spring)
-         Life Sales Practices (Spring) and Disclosures in Life Solicitation (Fall)
-         Variable Life (Fall)
-         Life Illustrations (Winter)
-         Forms Prior Approval repeal (Fall), P/C Filings (Fall)
-         Privacy (Winter/Spring)
-         Other Winter regulations include HMOs, Individual Accident
-         Other Spring/Summer regulations include Premium Financing, Mcare, Insurer Reserves
-         Other Fall regulations include Insurance advertising, Viatical Licensing, and unfair Claims Settlements
 
 
MED MAL CAP MEETING INCONCLUSIVE
 
The meeting of the Senate Judiciary Committee failed to gain consensus on any of the approaches to resolving tort issues.  The outcome was to pass a ‘shell’ bill (one that allows further action later on the Senate floor but that has no contents).  The impasse stems over addressing the mounting liability crisis via a constitutional amendment permitting the General Assembly to cap non-economic damages.  A resolution was adopted to have the Joint State Government Commission look into the liability issue.
 
DEPARTMENT ISSUES TWO REGULATIONS
 
The Insurance Department has issued two regulations for review by the Independent Regulatory Review Commission (IRRC) and interested stakeholders.  The first governs annual audits of continuing care providers and integrates that regulation (Title 31, Chapter 151, 151.7 Disclosure Statements) into a companion regulation, 31 PA Code, Chapter 147, on how insurance companies must conduct their annual audits.  This proposed regulation is also called the CPA Audit Rule.  Some provisions include:
-         The definition of insurer is updated to include PPO, employers’ mutual liability insurance associations, and the JUA.
-         A section on electronic filings is added, as are clarifications of procedures used to arbitrate disputes and correct errors.
-         Qualifications of CPAs doing insurer audits (Public Accountants are excluded from these audits per this Rule) are enhanced
 
BUDGET SEASON BEGINS IN EARNEST
 
The Budget cycle begins with hearings by the House and Senate Appropriations Committees this coming week.  Go to www.pcn.org for a schedule of televised hearings.
 
POLITICAL NOTES
 
·        Former U.S. Congressman and former State Representative Jon Fox is making a bid for his old job in the PA General Assembly.  The seat opened up when Rep. Ellen Bard (R-Montgomery) chose to run for Congress in the now open congressional seat vacated by Joe Hoeffel who is running as the Democratic nominee for U.S. Senate.  Fox will oppose Josh Shapiro, Hoeffel’s former chief of staff.
·        Eulogies are in order for former Bethlehem State Representative Bill Ryback (D) who died at age 82.  Ryback served two stints in the General Assembly, most recently from 1980-1990 when Joe Uliana defeated him.  Ryback served with distinction as the Democratic Chairman of the House Insurance Committee.  Personal Note:  Mr. Ryback was a people’s legislator.  With insurance, he was very tough but very fair.  I personally appreciated working with him because of his integrity and grit.
·        Retiring is Rep. Jim Lynch (R-Warren).
There will be a spirited primary contest in western PA as two incumbent Democratic legislators Joe Preston and Mike Diven were bypassed in favor of an Allegheny County Democratic Party endorsement of Anthony Coghill and Edward Gainey.

 

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