State: New York

Area of Interest: Insurance Department Announces Worker’s Compensation Rates; Average Rate Level to Remain Unchanged - Overall Rate Cuts over 35% Since 1995

Superintendent of Insurance Gregory V. Serio announced today that there will be no change in the average workers’ compensation rate in New York State. Combined with a 1.2 percent decrease in assessments, this will mark the 8th consecutive year overall average rates remained stable or were decreased. Since 1995, New York State has seen an overall reduction of over 35 percent-- an over 28 percent reduction since the historic 1996 workers’ compensation reforms.

"The decision to keep workers’ compensation rates stable again this year provides for the continued restoration of the worker’s compensation system--which means even more jobs for New Yorkers and ensures New York's strong economic vitality. It is clear that the reforms championed by Governor Pataki in 1996 continue to work for New Yorkers," said Serio. "The reforms have made it possible for New York to make tremendous progress in reining in the cost of workers' compensation, while ensuring essential benefits to injured workers."

The rate decision will take effect October 1, 2002, and will be reflected in rate notices that insurers will send to employers immediately. In addition, the approved rate includes a new disaster preparedness component. For the first time, the State will allow insurers to build "catastrophe loads" into their reserves to better manage potential disasters and ensure continued stability in the workers’ compensation system.

The changes contained in the New York State Employment, Safety and Security Act, signed by the Governor on September 10, 1996 have reduced workers’ compensation costs for employers, while improving workplace safety. The law repealed Dole v. Dow, a court-imposed standard that permitted New York employers to be sued by manufacturers of injury-causing equipment; improved workplace safety by creating a new "safety first" mandate; and continues to fight fraud by making the crime of workers’ compensation fraud a felony, and by the creation of a Workers’ Compensation Inspector General.

In 1995 rates were reduced by 8.4 percent and in 1996 rates fell by 18 percent. In 1997 rates decreased an additional 7.5 percent and in 1998 rates were cut by 3.1 percent. After an unchanged rate level in 1999, rates declined 2.5 percent in 2000. Prior to the enactment of the Governor’s reform legislation, New York State had the second highest workers’ compensation costs in the United States.

Workers’ Compensation Rate Decreases
Year	% Rate Change
1995	- 8.4
1996	- 13.0
1997	- 7.5
1998	- 3.1
1999	0
2000	- 2.5
2001	0
2002	0

Source: State of New York

State: California

Area of Interest: California Department of Insurance Issues Warning on Unlicensed Agent Selling Bogus Insurance

SACRAMENTO - The California Department of Insurance (CDI) served a Cease and Desist Order on Clarence Joseph Hall, III, also known as Harbour Insurance or Harbour Entertainment & Sports for allegedly selling bogus insurance policies and conducting business in California without a license.

Investigators suspect Hall may have duped hundreds of consumers and insurance brokers to the tune of millions of dollars by allegedly writing bogus policies and pocketing the premiums.

“Our investigation is comprehensive and ongoing,” said Insurance Commissioner Harry W. Low. “We are doing everything in our power to protect brokers and consumers from illegal activity.”
CDI investigators are working with a number of allied agencies in California and other states in an effort to put a stop to Hall’s allegedly illegal business.

In April 2001, CDI permanently revoked Hall’s license based on a Cease and Desist Order by the Montana State Auditor and Commissioner of Insurance filed against him for transacting insurance while not properly appointed by an insurer, and for failing to respond to CDI’s pleadings.

Responding to reports that Hall was conducting business without a license, CDI’s Criminal Investigations Branch launched an investigation that revealed Hall was selling a variety of insurance products to individuals and businesses ranging from general liability and auto, to workers’ compensation and liquor liability. Additionally, Hall allegedly sold bogus special event and film production insurance for a number of large-scale public events and concerts.
Hall has purportedly sold insurance in Texas, Montana, New York, New Jersey, and Pennsylvania. He is under investigation in a number of those jurisdictions.

American International Group (AIG), one of the largest national insurers, discovered Hall was issuing policies under their name without the knowledge or authorization of the corporation or its member companies. In an effort to warn brokers nationwide, AIG placed announcements in the national print media and trade publications.

CDI is warning all consumers and brokers that Clarence Joseph Hall, III; aka Joseph Hall; aka Joe Hall and Harbour Special Events, Harbour Entertainment & Sports, Harbour Protective Insurance Services, Harbour Insurance, Harbour Insurance Management, and harbourinsurance.com are NOT licensed to sell insurance in the State of California.

Source: State of California

State: Washington

Area of Interest: Court decision upholds state’s ergonomics worker safety rule
The state’s new ergonomics rule was upheld today by Thurston County Superior Court Judge Paula Casey.

“We are pleased with the judge’s decision,” said Department of Labor and Industries Director Gary Moore. “This is good news for the workers of the state of Washington who suffer more than 50,000 ergonomic-related injuries every year. These are costly injuries and this ruling will save employers money on the bottom-line. This decision takes us a step closer to preventing these painful, debilitating injuries.”

The ruling rejected a business coalition’s contention that the department exceeded its authority under state law, acted arbitrarily and capriciously, and did not properly follow rule-making requirements.

Moore said that today’s court ruling affirms that the state acted properly when it adopted these regulations. “We will continue our efforts to work with employers and employees as the regulation is phased in over the next seven years,” he said.

The ergonomics rule was adopted in May of 2000. Each year, 50,000 Washington workers suffer work-related musculoskeletal injuries. The injuries cost the state’s workers’ compensation system more than $411 million a year in medical treatment and partial wage replacement payments.

The rule requires employers to protect their employees from work-related injuries such as back strain, tendinitis and carpal tunnel syndrome. The rule took effect July 1. Enforcement will be phased in, beginning July 1, 2004. L&I is working with businesses and employee groups to conduct comprehensive education and outreach efforts.

Source: State of Washington

Area of Interest: OSHA To Issue Final Rule on Recording Hearing Loss- Agency Will Seek Comments on Delaying MSD Provisions

The Occupational Safety and Health Administration plans to issue a final rule on July 1, 2002, that revises the criteria for recording work-related hearing loss. The agency will also seek comments on a proposal involving the recording of MSDs on OSHA's injury and illness logs.

Beginning Jan. 1, 2003, employers will be required to record work-related hearing loss cases when an employee's hearing test shows a marked decrease in overall hearing. Employers can make adjustments for hearing loss caused by aging, seek the advice of a physician or licensed health care professional to determine if the loss is work-related, and perform additional hearing tests to verify the persistence of the hearing loss.

"Hearing loss can result in a serious disability and put employees at risk of being injured on the job," said OSHA Administrator John Henshaw. "This approach will help employers better protect their workers and help all of us improve our national injury and illness statistics and prevent future hearing loss among our nation's workers."

Under the new rule, the criteria will record 10-decibel shifts from the employee's initial hearing test when they also result in an overall hearing level of 25 decibels. The old criteria recorded 25-decibel shifts.

The agency is also seeking public comments on a proposed one-year delay of the recordkeeping rule's definition of musculoskeletal disorders (MSDs), and whether to include MSDs and hearing loss columns on the OSHA Form 300 Log of Occupational Injuries and Illnesses.

Written comments on the agency's proposal to delay the recordkeeping rule's definition of "musculoskeletal disorders (MSDs), and whether to include MSDs and hearing loss columns on recordkeeping forms, must be submitted by August 30, 2002, in triplicate to the Docket Office, Docket R-02B, Room N2625, Occupational Safety and Health Administration, U.S. Department of Labor, 200 Constitution Ave. NW, Washington, DC, 20210, (202) 693-2350.

Because of security-related problems in receiving regular mail service in a timely manner, OSHA is requesting that comments be hand-delivered to the Docket Office, or sent by Express Mail or other overnight delivery service, electronic mail, or facsimile at (202) 693-1648.

The final rule on the criteria for recording work related hearing loss and the notice soliciting comment on the definition of MSDs and columns for MSDs and hearing loss is scheduled to appear in the July 1, 2002 Federal Register.

Source: Occupational Safety and Health Administration

State: Ohio

Area of Interest: Ohio First State to Launch Cooperative Consumer Complaint Resolution Application With Insurance Companies
ECHO (Expedited Complaint Handling Option) Introduced

COLUMBUS - This week, Ohio introduced ECHO (Expedited Complaint Handling Option), becoming the first state to launch a web-based application that allows the Department of Insurance to more effectively share consumer complaint information with the state’s licensed insurance carriers, Director Lee Covington announced today. As a result, the Department and insurance companies will be able to more quickly resolve consumer complaints and help both the Department and insurers detect and resolve complaint trends.

“Carriers will utilize this tool to better understand their customers’ needs and to expeditiously resolve issues when a complaint arises,” Covington said. “Ultimately, this new technology allows all parties involved in resolving complaints to focus on serving and achieving better results for consumers. ”

Five insurers (Nationwide, Progressive, Safe Auto, Erie, and Safeco) tested ECHO during a six-month pilot period before the application was granted full operational status on Monday. The Department’s goal is to extend this information sharing tool to all of Ohio’s nearly 1,800 licensed insurers.

ECHO makes the consumer complaint information exchange automatic and instantaneous. Easily accessible, secure information can now be exchanged between Department complaint specialists and designated company representatives using the Internet-based system until the complaint is resolved - saving time and money for both regulators and companies.

Last year, the Department responded to more than 12,200 written and on-line consumer complaints against companies and agents. The Ohio Department of Insurance Consumer Service Division saved Ohio insurance consumers a record $9 million, up from $6 million the previous year.

“I give special recognition to Nationwide Insurance for working so closely with the Department to develop this cutting-edge tool for resolving consumer complaints,” Covington said, “and I welcome the other insurers who have recognized the value of this initiative and have recently joined us to work at resolving consumer concerns more quickly and efficiently.”

The mission of the Ohio Department of Insurance is consumer protection through financial solvency regulation, market conduct regulation, and consumer education. The Ohio Department of Insurance is committed to providing the highest level of service to the citizens of Ohio.

Source: State of Ohio

State: Minnesota

Area of Interest: Mold and Minnesota homeowner insurance
Statement of Minnesota Commerce Commissioner Jim Bernstein

St. Paul - Earlier this year, the Minnesota Department of Commerce issued an advisory - known as a bulletin - to insurance companies regarding their attempts to limit mold coverage in homeowner insurance policies. The bulletin provided guidance on how insurance companies should proceed with insurance policies filed with the department. All homeowner insurance policies must be reviewed before they can be sold in Minnesota to ensure they comply with Minnesota law.

The insurance industry in Minnesota elected to file a petition with an administrative law judge that sought to have the bulletin withdrawn. They claimed their complaint was not about the "mold issue," but instead, it was about the process for issuing the bulletin.

Apparently there was some confusion, and that is certainly not what we wanted. Therefore, after review by department staff, I have decided to withdraw Bulletin 2002-3.

The bulletin may be gone but our legal responsibility to consumers remains intact. Consumers should know that under no circumstance will we ever approve a reduction in current coverage unless the insurance company either lowers its rates, or shows the department that the change is necessary because the coverage has cost the company significantly more than it expected when it set its rates.

In all my conversations with insurance companies to date, not one has provided any data that would indicate that mold has become a Minnesota problem. In fact, some insurers say they aren't even keeping track of mold claims.
With the huge increases in Minnesota homeowner insurance rates, consumers should not be expected to swallow a reduction in coverage without some solid reason. This includes mold damage caused by any peril currently covered by most homeowner policies.

Source: State of Minnesota

Area of Interest: Odometer Fraud is Pervasive, Costly to American Consumers, NHTSA Research Study Concludes

There are more than 450,000 cases of odometer fraud per year in the United States, according to a major new research report on the topic released today by the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA).

"Odometer fraud puts the safety and well-being of consumers at risk because it misleads them about wear and tear on the vehicle they are buying," U.S. Transportation Secretary Norman Y. Mineta said. "This crime preys on consumers who often can afford it least, the people who buy used cars, and I commend those authorities who are helping to protect consumers by enforcing laws against tampering with odometers."

Increased costs to U.S. consumers who buy passenger vehicles with rolled back odometers amount to an estimated $2,336 per vehicle purchased, or more than $1 billion per year, the NHTSA study concludes. These statistics do not include related costs such as inflated financing, insurance, taxes and vehicle repairs that consumers pay due to odometer fraud.

Odometer fraud is the illegal practice of rolling back odometers to make it appear that vehicles have lower mileage than they actually do. When sold on the used car market, vehicles whose odometers have been rolled back, or "spun," can obtain artificially high prices. This is because a vehicle’s odometer reading is considered a key indicator of the condition, and hence the value, of the vehicle. Unwary consumers typically pay more for cars that they believe have low mileage, assuming they will provide several years of trouble-free service.

All U.S. states now meet the minimum federal regulatory requirements developed through the Truth in Mileage Act (TIMA) of 1986, the latest of several measures passed by Congress to prohibit odometer tampering and protect consumers. Still, the NHTSA study found that very few states have a comprehensive detection program to identify cases of suspected odometer fraud.

The study estimates the probability of an odometer rollback to the extent that it can be detected in title transfer and other odometer reading data. The analysis used a nationally representative sample of 10,000 passenger cars, pickup trucks, vans and sport utility vehicles, as well as a national vehicle history database to identify vehicles with odometer discrepancies that suggest rollback.

The study estimated a 3.47 percent chance that a vehicle would have its odometer rolled back at any point during the first 11 years after it was produced (the scope of the research). Without a follow-up investigation, these data alone would be insufficient to prove or disprove fraud in individual cases. When an odometer has actually been rolled back and misrepresents the mileage of a car for sale, fraud has occurred and can be prosecuted

Source: National Highway Traffic Safety Administration