SACRAMENTO – The California Department of Insurance (CDI) today announced the latest edition of the Automobile Insurance Premium Comparison Survey on its Web site at www.insurance.ca.gov/. The new Automobile Insurance Premium Comparison Survey provides a baseline of premium information and is another tool consumers and policyholders can use when shopping for automobile insurance.

While the survey does not provide rate quotes, it does offer consumers useful information when searching for automobile insurance. Because individual driver characteristics are unique, consumers should contact an agency or company directly for rate quotes for their specific situation.

The survey consists of premium data available from 2001 insurer information and is just one of several Premium Comparison Surveys available on CDI’s Web site. Other informative insurance premium surveys include homeowners, title, long-term care and Medicare supplement insurance.

CDI’s Web site is a tool to help consumers familiarize themselves with insurance and gather information that will protect them. Information such as the new Automobile Insurance Premium Comparison Survey is what keeps people coming to the CDI Web site. In November 2001, the CDI Web site registered more than 1.2 million hits with activity continuing to grow. For consumers without convenient Internet access, CDI’s Consumer Services staff can facilitate CDI Web site functions via a toll-free call to the Consumer Hotline at (800) 927-HELP.

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Further Information about the Automobile Insurance Premium Comparison Survey:

In accordance with California Insurance Code Section 12959, the California Department of Insurance (CDI) surveys the licensed insurers admitted to transact insurance in California and asks them to provide premium comparisons for various lines of personal insurance. These premium comparisons provide consumers with a premium comparison for what premium the consumer may be charged in a specific scenario. These surveys are good indicators of the differences in insurance premiums for insurance companies that consumers are likely to find when shopping for insurance. The results of these surveys provide consumers with a premium comparison for what the consumer may be charged by an insurer in a specific scenario. Please note: the results of these surveys are not premium quotes.

The automobile premium survey is based upon several scenarios or hypothetical risks, which take into account the most common variables used to calculate automobile insurance premiums. Answering the questions that follow will allow selection of the scenario that most closely represents your specific situation.

California law mandates that all drivers carry bodily injury liability insurance of $15,000 per person, with a total of $30,000 in coverage per accident for injuries sustained by others, and $5,000 in property damage liability insurance for physical damage done to other property, such as another driver's vehicle. Policies that only meet these minimum coverage limits are typically known as basic liability-only policies. Since January 1, 1997, California motorists have been required to provide proof of insurance at the time of registration or when stopped by a peace officer.

Source: State of California

Atlanta - Georgia Insurance Commissioner John W. Oxendine announced today that Life Insurance Company of Georgia and Southland Life Insurance Company have agreed to provide approximately $51 million in relief to millions of consumers across the nation in a major settlement reached with the Commissioner regarding the companies’ unfair underwriting and pricing practices, including the use of race-based premiums.

The settlement follows a market conduct examination Commissioner Oxendine called for after it was learned that the company historically charged African-Americans higher premiums than whites for similar or identical life insurance coverage.

Oxendine announced the settlement this morning, which calls for Life Insurance Company of Georgia, the state’s largest domestic life insurance company, and Southland Life Insurance Company to provide some $51 million in relief. (Both companies are now owned by the ING Group.) Georgia’s portion of the relief will be nearly 30 percent based on an estimate of the number of policyholders who reside in Georgia. Some 2.5 million policyholders nationwide will be affected by the settlement, including some 677,000 in Georgia, the Commissioner said. The final value of the settlement may increase if additional policyholders are located after relief is actually granted to policyholders. The company will also pay an additional $4 million fine to be distributed among the states. Georgia’s portion of the overall fine is expected to be more than $1.1 million, Oxendine said.

Georgia conducted the examination on behalf of all of the states with affected policyholders. States must agree to the terms of the settlement in order for it to become effective, and in order for the companies to avoid further examinations and regulatory actions in Georgia and other states.

"I believe this settlement concept will provide fair resolution for affected policyholders that will restore them to the level of benefits that otherwise would have been available without the consideration of race," Oxendine said.

Those affected by the settlement include certain non-white policyholders or their beneficiaries who purchased "substandard" Industrial Life and President’s Thrift Series policies sold by Life of Georgia; holders of "upside down" policies (policies in which premiums paid exceed face amount) sold by LOG; and non-white policyholders or their beneficiaries who had "substandard" Industrial Life policies written by companies acquired by Southland LIC.

A popular insurance product in the 1960s, industrial life policies were primarily marketed to low-income individuals who purchased them to cover funeral expenses in the event of their death. Also known as "burial policies," industrial life policies were often sold door-to-door with premiums payable weekly. When the practice started four decades ago insurance companies charged African-Americans higher premiums than whites, based on mortality tables that showed their life expectancies were shorter. Even though many companies long ago discontinued charging different premiums based on race for new policies, some – including Life of Georgia -- continued to collect the higher premiums on already-existing policies.

The Life of Georgia examination began in 2000 after the Commissioner requested information from all industrial life insurance companies in the state following a similar nationwide settlement in June 2000 with American General Life and Accident Insurance Company over race-based premiums.

Life of Georgia has set up a toll-free number, 1-877-477-0960, for the purposes of answering questions about the settlement. The settlement requires the companies to contact affected policyholders or their beneficiaries about the terms of the settlement, and the actions, if any, the consumer must take to participate in the settlement. Consumers may also contact Commissioner Oxendine’s Consumer Services Division at (404) 656-2070 or toll-free at 1-800- 656-2298, from 8 a.m. to 7 p.m., Monday through Friday, for further information.

Source: State of Georgia

Superintendent Gregory V. Serio today announced the Top 10 list of worst cases of insurance fraud in New York State during 2001. These cases were part of over 900 new cases investigated by the Department’s Frauds Bureau.

"The Department releases the Top 10 list as a way to educate consumers and make them aware of the various ways insurance fraud can occur. Some people think that insurance fraud is a victimless crime. That could not be farther from the truth, because the victims are you and me. No-fault insurance fraud alone is estimated to cost New York’s drivers $1 billion a year," said Serio. "Every time someone rips off an insurance company or defrauds the workers’ compensation system, insurance premiums increase for all of us. We ask that you review the Top 10 list, educate yourself about insurance fraud and contact the Department if you have concerns about potential insurance fraud activity."

During 2001, the Frauds Bureau opened 939 investigations and made 554 fraud arrests. Below are the Top 10 ‘Rotten Apples’ for 2001:

Operation Whiplash - 112 individuals and four corporations were charged in connection with the operation of a multi-million dollar automobile insurance fraud ring in the metropolitan area. Among those charged were three medical doctors, two medical clinics, two chiropractors, a physical therapist, an acupuncturist, two lawyers, and an NYPD Administrative Aide. The 14-month investigation, dubbed "Operation Whiplash," uncovered an organized network engaged in a scheme to defraud insurers by filing false accident reports and fictitious claims of physical injury. In many instances, fraudulent accident reports, doctors’ records, prescriptions and affidavits were created as part of the scheme. The scheme involved staged accidents, bogus accident reports allegedly generated by the NYPD Administrative Aide, and the use of runners to steer "victims" to medical providers and facilities that were part of the scheme.

A Million Here, A Million There - An Armonk man allegedly filed applications with numerous insurers seeking life insurance for a relative who was 70 years old at the time. In all but one of the applications, the defendant was named beneficiary of $20 million in life insurance benefits on the life of his elderly relative. He presented false documentation in support of his claim of insurable interest and allegedly provided false net worth and income information about the relative.

Not Dented Enough - Charges were brought against 67 individuals involved in one of the largest no-fault fraud rings ever to operate in New York. The ringleader, by his own admission, had been staging accidents for more than 20 years. Other participants indicted were two New York City police officers, the manager of a medical clinic, a police officer with the Health and Hospitals Corporation and an NYPD school safety officer. The fraud scheme worked in two ways. In the first scenario, two cars generally driven by knowing participants in the scheme deliberately collided. The drivers called the police who filed accident reports based on the false information provided to them. In one such accident, one of the indicted New York City police officers allowed his car to be used to deliberately collide with a second car. After inspecting the damage, the two drivers decided to collide again, causing further damage. In the second scenario, this same New York City police officer accepted bribes to fabricate accident reports. After the alleged accidents – whether staged or fabricated – the defendants went to one of several medical clinics, which paid the ringleader a cash fee per patient. The clinics would prescribe additional forms of therapy including large amounts of durable medical equipment and would bill the insurance carriers for the services and equipment. In addition, these multiple visits gave the defendants a better chance to obtain a fraudulent personal-injury settlement after they retained lawyers. Some were paid hundreds of dollars per accident, while others were promised the prospect of an insurance settlement at a later time for alleged pain and suffering.

Record Breaker - A 129-count indictment charged nine individuals and four businesses in a criminal enterprise that staged accidents, created "paper" accidents and enhanced damage claims primarily involving motorcycles. In a typical scenario, a person known as a "hitter" would report that he had an accident with a "claimant," i.e., the person who would submit a claim for payment. The hitter would accept full responsibility for the accident. Then the defendants would put damaged parts on the claimant’s motorcycle and submit false repair bills, estimates and towing and storage receipts. The investigation uncovered over 200 suspicious claims involving payments by insurers of approximately $2 million. More than 140 arrests have been made in this ongoing investigation which is the largest insurance fraud case in Suffolk County history.

Five County Sweep – A major sweep covering five upstate counties led to the filing of criminal charges against 81 residents of the Capital Region. The Frauds Bureau worked closely with the District Attorneys of Rensselaer, Albany, Saratoga, Schenectady and Washington Counties, as well as other State agencies and state and local law enforcement agencies, on the five-month investigation.

Revoked Broker Busted - A former insurance broker was arrested on charges that he was engaged in the sale of phony auto insurance identification cards. An undercover investigator visited the office of the revoked broker and requested an identification card. The broker quoted a price of $600 and the investigator purchased the cards. The investigation later revealed that there was no insurance policy covering the investigator’s car. A search warrant turned up evidence that he had issued at least 56 other fraudulent cards, netting him $33,600 in illegal proceeds. In an interesting endnote, the broker himself was driving without insurance (his vehicle was impounded). In addition, to lend an air of legitimacy to his operation, he had on display a broker’s license with current effective dates. However, the license listed the name of a former Superintendent of Insurance who left the Department in December 1996.

Statewide Clean Up - More than 40 suspects were arrested in the first statewide sweep ever conducted by the Frauds Bureau. In the downstate area, Frauds Bureau investigators assisted with the execution of search warrants at 11 auto body shops that netted more than 20 arrests for auto-related fraud in Kings, Queens, Nassau and Richmond Counties. On the same day, Frauds Bureau investigators conducted sweeps in Syracuse and other upstate areas that resulted in the arrest of 21 individuals for various crimes of insurance fraud. The majority of those arrested during the upstate sweep were charged with workers’ compensation fraud.

Sweep Nets Unlucky 13 - Thirteen suspects were charged with various counts of insurance fraud, workers’ compensation fraud and welfare fraud. Among those arrested was a Colonie resident charged with collecting more than $20,000 in disability benefits while working as the owner of a moving company that earned nearly $200,000; a Troy man charged with claiming total disability and receiving $12,000 while working as a bartender; and an Albany resident accused of submitting inflated theft claims in a scheme to defraud her insurer.

A Family Affair - A two-year investigation led to the arrest of a family of five accused of defrauding an insurance company of more than $40,000 in medical and disability benefits. The parents and their three grown children allegedly forged the signature of a physician on claim forms, submitted the forms to their insurer and collected the benefits to which they were not entitled. They were charged with insurance fraud, criminal possession of a forged instrument and grand larceny.

This is Customer Service? -A woman was arrested and accused of using stolen credit cards for personal purchases. While working as a customer service representative at a telecommunications company in Utica, the defendant obtained customer credit card numbers which she then used to purchase auto insurance for her two cars.

Source: State of New York

COLUMBUS — Department of Insurance Director Lee Covington announced today that Ohio is among the first states to no longer require insurance companies to make paper financial statement filings to the Department of Insurance. The Department has eliminated almost all of the paper filing requirements by obtaining, organizing, and analyzing electronic data filed by insurers with the National Association of Insurance Commissioners (NAIC).

The Department has adopted a policy to eliminate paper financial statement filings for all property and casualty and life insurers by 2003. This year, the Department will eliminate annual and quarterly financial statement filings for out-of-state property & casualty and life insurance companies and quarterly financial statement filings for in-state property & casualty and life companies. Insurance companies are required to file quarterly and annual financial statements with the state department of insurance in each state in which they conduct business.

"By utilizing electronic filings in its regulatory capacity, the Department of Insurance will increase its efficiency and make better use of its fiscal and human resources," said Covington. "Insurance companies will save significant printing, postage, shipping, handling, and personnel costs – savings they will be able to pass on to consumers."

The change in Ohio will reduce paper filings by more than 80 percent in 2002, cutting the number of required paper filings by nearly 7,500. The number of filed documents this year will be reduced by 350,000 pages – more than two tons of paper that could cover a football field end zone to end zone five layers deep.

According to the NAIC, Ohio, Kansas and Rhode Island are the first states to initiate the process of eliminating paper filings and begin relying on electronic records. Ohio is also encouraging other states to eliminate paper filings.

"The efficiencies gained by this modernization initiative are tremendous," said Covington. "But for companies and consumers to fully experience the positive effects of electronic filings, all states will have to utilize the electronic filings and eliminate paper filings by adopting an electronic filing policy."

Delivering on Governor Taft’s promise to move Ohioans from in line to on-line, the Ohio Department of Insurance is aggressively utilizing technology to reduce costs and paperwork, while creating higher customer service, greater public access to industry information, and more efficient regulation of the insurance market in Ohio. In July of 2001, the Department was recognized as one of the top insurance agencies in the country.

An NAIC Accreditation Review Team awarded the Department some of the highest scores in the nation, including the highest score ever granted for quality of staff.

The Ohio Department of Insurance has been a national leader in using technology to make regulation more efficient. More than 65% of its more than 250,000 agent licensing transactions every year are now completed on-line on a same-day basis without the need for any staff activity. More than 11,000 people visit the Department’s website (www.ohioinsurance.gov) every week, with the agent locator being the most popular feature for both industry members and consumers. The Department received the NAIC`s Technology of the Year Award just nine months into Covington’s administration.

The Department’s mission is consumer protection through financial solvency regulation, market conduct regulation and consumer education. The Ohio Department of Insurance continues to implement technology initiatives aimed at providing the highest level of service to companies, agents and consumers.

Source: State of Ohio

TUMWATER — The Department of Labor and Industries (L&I) has reached a settlement in its self-insurance decertification case against Wal-Mart. The settlement allows the Bentonville, Arkansas-based retailer to remain self-insured, but prohibits it from self-administering its workers’ compensation claims in Washington for at least the next eight years.

L&I moved to decertify Wal-Mart after five audits, conducted between 1993 and 1999, showed the company failed to open legitimate claims, and was not processing open claims in a timely manner. Wal-Mart is one of about 400 large companies in Washington that are self-insured.

The settlement provides greater workers’ compensation protection for Wal-Mart employees. Under its terms, Wal-Mart must hire an independent third-party administrator to handle claims. The administrator must be certified to do that job in Washington State, and cannot have any affiliation with Wal-Mart. The company that currently processes their claims, Claims Management Inc. (CMI), is a subsidiary of Wal-Mart.

Under the agreement, Wal-Mart claims will have to be handled more quickly than is required of other self-insured employers, and the handling of those claims will be closely scrutinized by L&I auditors during a two-year corrective action phase. Wal-Mart cannot apply to again self-administer its self-insurance program until 2010.

Also, when Wal-Mart appeals a decision by the department on a workers’ compensation claim to the Board of Industrial Insurance Appeals, the settlement agreement requires the company to pay its injured workers all benefits ordered by the department pending the outcome of the appeal. This does not apply to claims where allowance of the claim is at issue. This provision will be in effect for eight years, and is an additional worker protection not required of other self-insured employers under existing law.

"Wal-Mart has said that it wants to create a model workers’ compensation program here," said Gary Moore, director of the Department of Labor and Industries. "This agreement allows that to happen. It’s a good settlement. Our goal has always been to ensure that workers’ rights were protected."

In addition to the settlement, the company has donated $175,000 to Kids’ Chance, a non-profit organization created by business and labor to provide scholarships to the children or survivors of workers catastrophically injured or killed on the job in Washington.

The settlement is contingent upon Wal-Mart building a regional food distribution center in Washington State. The 870,000-square-foot warehouse is expected to cost $40 million to build and will eventually employ 600 to 700 people. When fully operational, the distribution center’s annual payroll is estimated to be $18 million. Under the agreement, Wal-Mart will start construction of the food distribution center within 18 months.

L&I’s audit findings were supported by complaints from numerous Wal-Mart employees, who said the company denied them benefits they were entitled to under Washington State law. In November 2000, L&I moved to decertify Wal-Mart, taking away its right to self-insure.

Wal-Mart appealed the state’s actions to the Board of Industrial Insurance Appeals and to Thurston County Superior Court. L&I prevailed in Superior Court, and Wal-Mart appealed that decision to the state Court of Appeals.

Wal-Mart wanted to settle the decertification case as part of its decision to locate in Washington State. The company also raised questions about the state’s new ergonomics rule, which takes effect July 1 and will be phased-in over the next five years. Wal-Mart’s deadline for complying with the rule is July 2004.

Wal-Mart was concerned about the food distribution center meeting the rule’s requirements. Moore contacted Wal-Mart representatives and offered to conduct an ergonomics assessment at one of the company’s food distribution centers. In December, L&I staff evaluated a distribution center in Texas similar to the one Wal-Mart plans to build in Washington State.

L&I officials found the warehouse to be ergonomically well-designed. On Jan. 7, Moore sent a letter to the company’s executives, telling them, " . . . we are confident that you can locate a similar food distribution center with comparable operations in Washington and be in compliance with the Washington State Ergonomics Rule."

Source: State of Washington

SEATTLE - During the month of February, employers with 11 or more employees must post a summary of the total number of job-related injuries and illnesses which occurred in 2001, according to the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA). The summary must remain posted from Feb. 1 to March 1, 2002.

Since 1972, employers have been required to post the annual totals of the information contained on the right-hand portion of the OSHA Form 200, "Log and Summary of Occupational Injuries and Illnesses." The form is to be displayed wherever notices to employees are usually posted.

The right-hand portion of the OSHA Form 200 includes information on type of injury and illness, extent and outcome. This information alerts employees to possible hazards. Access to the entire OSHA Form 200 for an establishment may be requested by employees, former employees and their designated representatives, and OSHA officials.

Companies with no injuries and illnesses in 2001 must post the form with zeros on the total line. The person who prepares the annual summary must certify that the totals are correct and sign the form.

Employers must make a copy of the summary available to employees who move from worksite to worksite, such as construction workers, and employees who do not report to any fixed establishment on a regular basis.

Employers with ten or fewer employees and employers in certain industry groups are normally exempt from federal OSHA injury and illness recordkeeping and posting requirements. As of Jan. 1, 1983, employers in certain statistically safe industry groups were also exempt, such as certain retail trades; finance, insurance, and real estate; and certain service industries.

Exempted employers may still be selected by the Labor Department's Bureau of Labor Statistics to participate in an annual statistical survey. All employers covered by OSHA must continue to comply with pertinent safety and health standards and must report verbally within eight hours to the nearest OSHA office for all accidents which result in one or more fatalities or in the hospitalization of three or more employees. After hours calls to report accidents can be made toll free by calling 1-800-321-OSHA.

Source: Occupational Safety and Health Administration

Insurers last week cheered a published report that the U.S. Securities and Exchange Commission is considering requiring businesses that do not have terrorism insurance to disclose that fact to investors.

"Reuters Newswire" quoted SEC Chairman Harvey Pitt as telling reporters that terrorism coverage is an issue that the SEC has to examine in the aftermath of the Sept. 11 tragedy, and is on the agenda of the SEC's Division of Corporate Finance.

Mr. Pitt was quoted as saying that the issue could be addressed by either providing additional accounting guidance to corporations or by issuing a formal regulation, although no decision has been made.

Rodger Lawson, president of the Alliance of American Insurers in Downers Grove, Ill., praised Mr. Pitt's statement, calling it "absolutely appropriate and necessary." He said that insurance is fundamental to the financial security of business and essential to making markets work, and that if insurance is not available, markets will not work as well. There is an increased risk of terrorism since the Sept. 11 attacks, Mr. Lawson said, adding that while everyone hopes there will be no additional events, there is a higher awareness and concern about this exposure.

Moreover, Mr. Lawson said, in the wake of the Enron debacle, investors and consumers will demand information on the availability of terrorism insurance for a given corporation.

Regarding the impact of Mr. Pitt's announcement on pending legislation creating a federal role in the terrorism reinsurance market, Mr. Lawson said it is critical that members of Congress and the administration understand the severity of the issue.

He noted that many questions have been asked about the "sky falling" on Jan. 1, 2002, and that such questions have been used as an excuse for not adopting the legislation. However, Mr. Lawson characterized the problems in the terrorism reinsurance market as "rolling thunder."

Requiring disclosure of the absence of terrorism insurance would make it clear there is a problem, and that Congress needs to act and act quickly, he said.

A representative of a major business group, the Washington-based National Association of Manufacturers, declined to comment on Mr. Pitt's statement.

Source: National Underwriter Company Feb 11, 2002