Utah Insurance
Industry
Newsletter
Title & Escrow Commission:
Formed & Operational
During the 2005 Legislative Session, Senator
Thomas V. Hatch sponsored and pushed to passage
S.B.40, "Regulation of Title Insurance Industry." The bill created
a commission that, with the Insurance Department, would oversee Utah's
title and title escrow business.
The Commission has authority to make rules
related to rating methods, licensing, continuing education, examination
procedures and standards of conduct. In addition the
Commission can set the assessment on title insurance agencies or
insurers, and address provisions that are related to controlled
business. In both rulemaking and assessments, the Commission and the
Insurance Commissioner are actively involved together.
The Commission is composed of five members from
all areas of the state, four of whom have a title license and one who is
a member of the general public. Membership includes: Commission
Chairman Joyce Clark, from Washington County; Glen W. Roberts from Utah
County; R. Curt Webb from Cache County; and David M. Lattin from Salt
Lake County.
Commission meetings are open to the public and
are held on the second Wednesday of the month at 9:30 a.m. in Room 3112
of the State Office Building. The agenda for the next meeting can be
found at
http://www.insurance.utah.gov/Title_Com_Agenda.htm.
Fraud Prosecution Team
Receives Award
Tuesday, October 4, at 9:00 a.m., the National Fraud Bureau recognized the prosecutors of our Fraud Division for their effort to prosecute and support the effort to reduce insurance fraud. The prosecutors recognized were:
Jay Stone, Denis Kroll, and Daryl Bell
Our Insurance Fraud Division, under the direction of Joe Christensen, has become a national role model. This is because they have in-house prosecutors working hand-in-hand with fraud investigators to prosecute insurance fraud. The Fraud team currently consists of six investigators and three prosecutors.
To give you an idea of the work accomplished by this division, take a look at the stats for the past three years. We are very proud of this very dedicated team and the work they are doing.
|
|
2002 |
2003 |
2004 |
|
New Cases Opened |
175 |
522 |
569 |
|
Investigations Completed |
173 |
191 |
212 |
|
Arrests |
86 |
90 |
98 |
|
Cases Sentenced |
82 |
65 |
97 |
|
Administrative Resolutions |
2 |
35 |
43 |
|
Restitutions Ordered |
$6,463,755 |
$6,648,929 |
$8,108,026 |
|
Investigative Costs Collected |
$27,001 |
$32,508 |
$37,830 |
Regulating Annuity-Sales Tactics
The push is on nationwide to crack down on the improper sale of individual deferred annuity products to seniors. Why? - because these contracts lock money away for long periods of time and impose harsh penalties for early withdrawal.
Last year the sale of annuity products totaled $1.65 trillion. Most were targeted at seniors. So far, eight states, including Utah, have new laws to protect individuals from unsuitable sales.
These new laws require insurance companies to have a system to supervise their agents and detect and prevent violations. Disclosure documents are required to explain annuities in clear language and limitations are imposed on surrender charges and maturity dates. Sellers are required to gather financial data to ensure that the annuity they are selling to a particular purchaser is appropriate.
We need your help to enforce this law. Please call if there are questions we can help you with or if you have information about possible violations. To become more familiar with the senior protection laws go to Chapter 22, Part 4 of Title 31A and Rule R590-230, "Senior Protection in Annuity Transactions."
Workers' Comp Fund v. State of Utah
August 23, 2005, the Supreme Court of the State of Utah affirmed "the district court's decision that the 'State of Utah has no ownership interest in the Workers' Compensation Fund (WCF) or its assets other than as a policyholder.'" The Supreme Court further stated in its decision that, "As a quasi-public corporation, the WCF exists to serve an essential public purpose, providing workers' compensation insurance, all the while being private in ownership. Furthermore, apart from the Legislature's ability to modify its governing statutes, the State has no managerial, financial, or operational control of the WCF. The same is true of the WCF's assets, the Injury Fund; and we reaffirm our prior decisions, which have held that those assets belong to the WCF policyholders and not to the State."
Insurance Fraud Awareness Month
Thursday, October 6, 2005, at 1:30p.m, Governor Huntsman signed the Insurance Fraud Awareness Declaration making October, 2005, Insurance Fraud Awareness Month. Joe Christensen, Director of the Fraud Division, wrote and promoted the signing of this document. He has also promoted the creation of seven public service announcements (PSA) to be shown in movie theaters and on TV, specifically Channels 4, 5, and 13. These stations have promised to run a total of 60 PSAs during October.
2004 Annual Report to the Governor
The 2004 Annual Report to the Governor is now available on our website at http://www.insurance.utah.gov/2004GovRpt/2004AnnualReport_Index.html. This report includes market share reports for 32 different lines of insurance, insurer financial information and directories, liquidations, tables showing the breakdown of total Utah business, total national business, legislation, rules and the department's budget and revenues.
C.E. Requirements
The following continuing education (C.E.) requirements are for all Utah resident full-line producers, adjusters and consultants, excluding title producers. Non-resident full-line producers, adjusters, and consultants whose home state does not require C.E. must comply with the following Utah C.E. requirements.
Beginning January 2006, 24 hours of continuing education will be required, of which:
· 12 hours must be in the classroom;
· 3 hours must be in ethics training; and the remaining 21 hours can be in any line of insurance.
· Only continuing education hours approved by the Department can be used to satisfy the continuing education requirement.
Producers, whose licenses renew through December 31, 2005, will need to follow the current rule in place, which is:
· 5 hours per line of authority, with an overall minimum of 12 hours and maximum of 23 hours;
· included in the 12 to 23 hours of C.E. must be 3 hours of ethics education; and
· one-half of the required hours must be met through classroom attendance.
Exempt from CE requirements are producers who hold and maintain the following professional designations: CLU, ChFC and RHU with completion of the PACE program; CPCU with completion of the CPD program; and CFP, REBC, CIC, ACSR, CRM, SOFE, or IRES with completion of their continuing education requirements.
Anyone with questions about CE requirements should contact Michael Covington at (801)538-3809 or mcovington@utah.gov.
Market Regulation Surveillance Changes
Market regulation surveillance in Utah and throughout the nation is changing. The purpose of market regulation surveillance is to assess how well the insurance market (purchasers, producers, agencies, insurers, adjusters) is meeting consumers' needs. When problems are identified, licensees are directed to take appropriate corrective action.
In the past market regulation surveillance was accomplished by:
1. performing market conduct examinations, audits, and investigations of specific licensees; and
2. conducting surveys and requiring periodic reporting.
Now Utah, and other state insurance departments are adopting a third activity:
3. performing a market analysis using existing information that the department and the National Association of Insurance Commissioners (NAIC) are collecting, i.e., consumer complaint data, financial statement data, etc.
We anticipate that market analysis will help the department react to significant market issues earlier, make more informed decisions, and limit the harm to consumers. For licensees this will mean less disruption because market regulation surveillance examinations and audits will be focused on issues identified from market analysis rather than on a scheduled total review of the licensee.
To handle this new strategy we have moved our experienced market conduct examiner, Brian Hansen, into the position of market regulation analyst. For the past eight years Brian has worked as a financial and market conduct examiner for the department.
In addition to Brian Hansen, our market conduct team includes: Tara Buehner - Licensing; Darrel Powell - Licensing; Nancy Askerlund - Health; Randy Overstreet - Life; Cathy Howick - Property & Casualty; Gerri Jones - Title; and Sheila Curtis - Title.
Market conduct examiners seated are left to right, Tara Buehner
and
Gerri Jones; rear, left to right, Brian Hansen, Randy Overstreet,
Cathy Howick, Nancy Askerlund and Darrel Powell.
Sheila Curtis
was not present.
Failure to Forward Insurance Premiums
Did you know that it is now fraud to intentionally and knowingly fail to forward insurance premium to the insurer as described in the Insurance Code, Section 31A-31-103?
Prior to May 2004, a fiduciary violation would have resulted in an administrative action that would have involved the probation, suspension or possibly the revocation of an individual's license, and/or the assessment of a fine.
Now the bar has been raised. After an administrative action has been taken, the case is forwarded to the Fraud Division for investigation and possible criminal prosecution. Criminal and civil penalties may be assessed, as described in Section 31A-31-109, which would include: making full restitution; payment of investigators, attorneys and other public employee costs; and possible jail time.
For further information about a licensee's fiduciary responsibility see Section 31A-23a-409, Trust obligation for funds collected.
Thank You
The department would like to thank Steven Burrows for his efforts to give direction and purpose to the Small Group Think Tank Committee. Commissioner Merwin Stewart first organized this group in 2001 in an effort to find ways to fight the rising cost of health insurance and healthcare. Commissioner Michie has continued to support and encourage this group.
Nine months ago Steve joined the group as an independent consultant. He volunteered to help increase participation, organize strategies and to develop steps that would help the group achieve their goals.
Earlier this year Steve took a job with Blue Cross Blue Shield of Minnesota as director of Strategic Consulting and Alliances. His expertise will be used to anticipate where the health insurance market is going and build relationships and alliances. We will miss him and appreciate the forward momentum and direction he has given us.
Publishing 2005 Insurance Code Books
Do you remember the old Amish saying, "A bird in the hand is worth two in the bush?" Well, it describes how many feel about the insurance codebook. A published, hardcopy of the insurance code "in the hand" is worth far more than the entire Utah Code, rules and bulletins on the web or in any other electronic form.
For many, a hard copy is more convenient to take to meetings, to study and to make notes in. Due to an increased demand for the published version the department has had 300 copies printed. They are available now in our office for $37 plus $3 for mailing. It contains insurance laws, rules, bulletins and related laws.
To obtain a copy you may either:
1. make out a check to the Utah Insurance Department and mail it to: State Office Building, Room 3110, Salt Lake City, UT 84114; or
2. call 801-538-3803 with credit card information.
New web pages
Title & Escrow Commission:
Members
Meeting Schedule
Agenda
Governor's Reports for 2004, 2003, 2002
Medicare Part D2006 Department Legislation
