Agent News

Kentucky

The governor recently signed workers’ compensation reform House Bill 2. Kentucky Department of Insurance recently approved NCCI’s advisory loss cost filing relating to House Bill 2. The filing reflects an overall decrease of 5.3% from the most recent filing that became effective Oct. 1, 2017, with a proposed effective date of July 14, 2018. The majority of NCCI’s decrease can be attributed to a portion of the legislation that in all but the most serious PPD claims, terminates the employer’s obligation to pay medical benefits after 780 weeks (15 years) from the date of injury or last exposure.  Positive portions of the bill initiated by the industry are the implementation of a drug formulary and creation of an evidence based medical fee schedule.

Wisconsin

The proposed workers’ compensation reform package, which included a medical fee schedule and was endorsed by the state Workers’ Compensation Advisory Council (WCAC), was introduced in the form of SB 665, but faced very strong opposition from the hospitals and did not progress. It was a very difficult time to move such a proposal because of it being an election year, compounded with a very short legislative session. 2019 not being a major election year statewide in Wisconsin, may possibly increase the likelihood of a proposal gaining more traction. AF Group will remain engaged throughout the process.

Indiana

Positive workers’ compensation drug formulary legislation SB 369 has been signed into law. This formulary will protect workers by addressing the appropriate utilization of all FDA approved medications and limit compound medications within the workers’ compensation system.  Except during a medical emergency, the bill prohibits workers’ compensation and occupational disease compensation reimbursement for drugs not specified in the ODG Workers’ Compensation Drug Formulary.

Illinois

Summary – SB1737 which contains workers’ compensation rate approval language — and a portion that carriers cannot adjust discretionary rating more than 5% up without sending notice 30 days out to policyholders/agents — passed the legislature and awaits consideration by the governor. AF Group doesn’t view the change to prior approval for the rate process as an extremely significant issue because we execute prior approval in numerous other markets. The rating notices is a concern and will initiate the development of new processes internally and externally to comply. AF Group will take steps to produce an effective communication process with agents and insureds that aims to reduce confusion.

Specific Detail Regarding Notices – All workers’ compensation policies issued, delivered, amended or renewed require the insurer to provide notice to the policyholder and to the authorized agent its intention to renew where the premium will result in excess of 5% above the rate recommendation filed with DOI (less increased loss costs, experience rating, etc.). Such notice is to be provided at least 30 days before expiration of the policy and must indicate: 1) the amount of premium increase or an estimate; and 2) the reason for the increase in premium above the rates recommended to DOI. All policies currently in force today will have to comply with this new law as of 1/1/2019  – So 1/1 renewals, which increase rate as defined in the bill, will require notices by Dec. 1, 2018.

California Election Results

All and all, not a bad result in governor primary, which potentially has the most impact on our industry moving forward.

Governor: Lt. Governor Gavin Newsom (D) and San Diego businessman John Cox (R) will face off in the General Election.  There was some speculation that two Democrats would move through to the General Election, but Republican voters coalesced around Mr. Cox and pushed him through.  Lt. Gov. Newsom enters the race as a heavy favorite in a state where Democratic registration outpaces Republican registration by nearly 20 points.

Attorney General:  Insurance Commissioner Dave Jones failed to move forward to the General Election, coming in fourth amongst the four candidates.  Xavier Becerra (D), the current Attorney General, will face Steve Bailey (R).

Insurance Commissioner:  Former Insurance Commissioner Steve Poizner was the leading vote-getter among the candidates, edging out Senator Ricardo Lara (D) who will be his opponent in November.  Mr. Poizner dropped his Republican affiliation and is running without a party affiliation.  This is shaping up to be a close race.  Mr. Poizner is well funded and has some name ID from his prior term as commissioner.  Sen. Lara has the advantage of running as a the only Democrat in the race in a very blue state where the Democrat turnout is expected to be higher in November.