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PIA Participates in NCSL Fall Forum

PIA National participated in the National Conference of State Legislatures (NCSL) Fall Forum, held December 8-10 in Phoenix, Arizona addressing a wide variety of critical...
December 14, 2010

PIA National participated in the National Conference of State Legislatures (NCSL) Fall Forum, held December 8-10 in Phoenix, Arizona addressing a wide variety of critical issues affecting producers.

Healthcare reform issues: Healthcare was a main focus of this meeting. PIA conveyed our message to the legislators we support the role of the independent agency system in health insurance delivery and we will be partnering with state regulators to help them answer any questions they may have about setting up state health insurance exchanges.

A discussion on health insurance policy focused on helping legislators make the best policy decisions for their states, including health insurance exchanges, was facilitated by Oklahoma State Representative Mark McCullough. They discussed state waivers under the affordable healthcare act, with several noting that the want to have the authority to tailor their exchange to best serve their consumers.

Health insurance exchanges: While many states have taken initial steps to set up an exchange, others reported they were unsure whether they will or not. Two states - Utah and Massachusetts - have functioning health insurance exchanges that were up and running prior to the passage of the federal health reform law. Utah strongly urged states not to wait to begin setting up an exchange. Arizona admitted it has taken no steps to do so.

Representative Dave Clark (R), speaker of the Utah House of Representatives, recommended that states put together a legislative package in time for their next session to have enough time to properly debate all the related issues. He also asked the states whether any of them had applied for grant money from the Department of Health and Human Services (HHS) to help set up a health exchange infrastructure. Only one state, Vermont, said they were planning to apply for the grant.

The possibility exists that states could proceed with setting up exchanges even if the courts were to declare aspects of the law unconstitutional. In addition, according to section 1332 of the law, states can receive waivers starting in 2017 on several items including the individual mandate, employer penalty for failure to provide coverage, standards for a basic health insurance policy, establishment of a health insurance exchange and the design for how federal subsidies would have to reduce premiums and co-pays.

The Empowering States to Innovate Act (S. 3958), introduced on November 17, 2010, sponsored by U.S. Senator Ron Wyden (D-OR) and co-sponsored by U.S. Senator Scott Brown (R-MA), moves the effective date of the waiver from 2017 to 2014 and requires the HHS Secretary to start receiving state waiver applications within six months of passage of the Act. We expect other bills to be introduced in the next Congress that will attempt to revise the PPACA and PIA National's Government Affairs Committee will be following the developments and making comments as necessary.

Surplus lines regulation: The Communications, Financial Services and Interstate Commerce Committee, chaired by Maryland State Senator Delores Kelley (D) discussed ways to preserve state regulation. They held a discussion on a resolution that calls on NCSL to urge states to amend their insurance laws to conform to the Nonadmitted and Reinsurance Reform Act (NRRA) adopted as part of the Dodd-Frank Act, and support the enactment of the Surplus Lines Insurance Multistate Compliance Compact (SLIMPACT).

During the meeting, Commissioner Jim Donelon (LA) made a presentation on behalf of the NAIC and their Nonadmitted Insurance Multistate Agreement (NIMA). The Committee also heard presentations from State Representatives Brian Kennedy (RI) and Robert Damron (KY) on the NCOIL approach ("SLIMPACT-Lite"). The Committee voted in favor of supporting NCOIL's version and to request that Congress grant the states an additional year to comply.

PIA National has long supported a multi-state agreement, or compact, to help facilitate insurance regulation and dispersing premium taxes. PIA will continue to work with all interested parties to make sure the requirements of the federal law are fulfilled by implementing an efficient state based system for regulating surplus lines brokers.

Other issues: During the NCSL meetings, PIA reiterated our steadfast opposition to federal insurance regulation, whether it's an "optional federal charter" or a more comprehensive approach; we let the legislators know that they have our support as we work together to continue to modernize our national state-based system of insurance regulation.

Please continue to send comments to: David Eppstein
PIA National Assistant Vice President for Regulatory Affairs.