September 2006
Utah Insurance
Industry
Newsletter
CONTENTS:
The Insurance Department is pleased to announce the appointment of Jake W. Garn, CPA, MBA, as chief financial examiner. Jake replaces Steven Fry who left for new opportunities outside of state government.
Jake has 20 years of experience in state & local tax, regulatory compliance issues and internal audit. For the past seventeen years Jake has worked for the O.C. Tanner Company in Salt Lake City. Recently he earned the Certified Anti-Money Laundering Specialist designation, and obtained a producer life license.
As chief examiner, Jake sees as one of his major responsibilities, that of "determining how market trends affect the financial health of insurers. My focus will be on identifying problems, then working towards solutions." In working towards solutions Jake has learned that by observing three principles, solutions can be achieved to the benefit of all parties: "First, disagree without being disagreeable; Second, be honest and treat others with respect and dignity; and Third, do your homework and present your points in an orderly way."
As the son of Senator Jake Garn, Jake has seen the value and importance of being involved in ones community and government. So, when the opportunity came to apply for the position of chief examiner, Jake considered it to be an chance to become more involved in government and the broadening of his horizons.Jake and his wife Sharon have five children. He enjoys biking, hiking and involvement in community affairs.
We appreciate the work Steve did for the department and wish him well and look forward to the addition of Jake Garn to our office.
We now have a single consumer complaint form on the department's website instead of eight. It is an interactive form that changes, depending on the way the questions are answered. As noted above, a barcode is automatically added to the form when the consumer indicates the type of insurance the complaint involves. Once the form is filed electronically with the department it will go directly to the person in the department who will work on the complaint. No more waiting for the mail, distribution to the proper person, and setting up a file. All is automatically done with the push of a button.
The electronic form will again speed up the communication process between the insurer and the department as we try to help the consumer with their issues.
To view our new complaint form click on this link - http://idas00spr.dts.utah.gov/UID_Complaint/GetComplaintsForm.
Doing away with Filing Cabinets
The department is now using an electronic storage system for consumer complaints and market conduct investigations. These records will now be maintained in an electronic format that will allow the department to have continued access to them, speed up the communication process, eliminate filing cabinets and free up much needed space.
Instructions for submitting a response to the department will be included with each department request to the industry for information. Accompanying the department’s letter will be a separate sheet with the barcode for that file. The sheet contains the dedicated facsimile number for the system and the request to place the barcode sheet as the first of your fax. Responses by mail are also to have the barcode sheet on the top of the response. For email responses, the email address is provided on the sheet and the file number is to be entered in the subject line.
The department’s employees have been trained and are now “enjoying” the challenge of working with a new system. If you have questions about this process and need assistance, please contact the department representative requesting the information. We appreciate your cooperation in making this new system a success.
As a reminder, Utah insurance law requires an individual and agency licensee to notify the department of changes in their business or residence mailing or post office box address and telephone number. This must be made within 30 days of the change.
The department has recently made the option available for producers to process their own changes electronically through Sircon Corporation. To do so, go to www.sircon.com , and click on the link inside the "Producer Services" box entitled, "Update your name or address." Next click on the link called "Change Your Name or Address." There is no charge to update your name and address.
We believe this will be a more convenient way for producers to maintain their contact information on file with the department. If you have questions regarding this process contact the department at licensing.uid@utah.gov.
Failure to change your address as required, will result in your being charged a $35 change of address fee to cover the department's expenses of researching your new address and updating our database.
The department no longer issues letters of certification. Licensees can now obtain letters of certification electronically through the Sircon Corporation. To do so, go to www.sircon.com , and click on the link inside the "Producer Services" box entitled, "Request a letter of certification." Many state insurance departments are no longer requiring letters of certification, as most are utilizing the Producer Database (PDB) through the National Association of Insurance Commissioners (NAIC).
"Education is the power to think clearly,
the power to act well in the day's work,
and the power to appreciate life."
Brigham Young,
to the Board of Regents
February 28,1850
Issues before the Commissioner
D. Kent Michie
There are a number of important issues the Department of Insurance and the National Association of Insurance Commissioners (NAIC) are working on.
The department has established a new captive insurer website at http://www.captive.utah.gov/.
The 2003 Legislature gave us the authority to license captive insurers. Since then we have licensed 22 captives. In 2005 we licensed 13 giving us a 650% increase in one year and the largest percentage of growth of licensed captive insurers in the United States during that year. Eric Showgren is our assigned analyst and captive expert.
We are also growing in the number of traditional carriers we have licensed. In 2005 we issued Certificates of Authority to 38 new insurers. Since the beginning of this year we have licensed an additional 20 with 12 pending. At the same time we are gaining a reputation among insurers for our 30 day turn-around time.On the national scene, a bill reforming the National Flood Insurance Program is moving through Congress. In June it passed the House of Representatives and has now moved into the Senate. It is entitled H.R. 4973, the Flood Insurance Reform and Modernization Act of 2006. The bill will help provide funding to pay outstanding claims stemming from the 2006 hurricane season, it will modernize the structure of the program, and will include state-sponsored, non-binding mediation. It is hard to tell at this point, if or when it will pass the Senate.
On June 13, 2006 the Commission of the Interstate Insurance Product Regulation Compact held its first meeting to begin the process to make the compact fully operational. Assistant Commissioner, John (Mickey) Braun and others in the department are participating on subcommittees developing rules and standards to guide the operation of the Compact. It is anticipated that the Compact will be fully operational sometime in early 2007. Once this happens, insurers will be able to file their life, annuity, disability and long-term products at a central point of filing. This will speed the process of getting these products to market. We are watching this process carefully and will keep you up-to-date on its progress.
Also in June the NAIC testified before the House of Representatives on the role of insurance in preparing for a large natural catastrophe. These large natural catastrophes are a national economic problem. The goal is to develop a comprehensive plan that will minimize their effect. Under consideration are the enforcement of building codes, better land use policies, tax-deferred catastrophe reserves, state catastrophe funds, and a federal catastrophe backstop. When the next natural catastrophe occurs, the ability of the affected housing markets and regional economies to endure and recover is going to be dependent, in part, on how we prepare now for that day.
And finally, I have been elected to the Executive Committee of the NAIC to represent the Western Zone. I look forward to this opportunity to learn and to make what contributions I can to the direction of this organization.
As of June 30, 2006 the Insurance Fraud Division completed a record year. They:
· completing 321 investigations;
· initiating 147 new prosecutions;
· arresting 135 defendants;
· charging 703 felonies; and
· collecting $933,882 in fines/restitutions/investigative costs.
· opening 410 new cases;
· sentencing 83 defendants;
· arresting 13 licensed insurance agents; and
· charging 5 doctors and 8 nurse practitioners.
The division has been involved in a number of major cases in the past year. They successfully charged one doctor with 83 felony counts for his involvement in the Oxycontin organized crime ring. They also broke-up a national internet crime ring, the Dorean Group, that defrauded title insurance companies and individuals out of millions. And, they have charged and convicted the owners of the most notorious medical billing mill known to Utah, Doctors Plus, and charged the owner of a diet center for a similar fraudulent billing scheme.
Their tremendous work in fighting fraud in Utah made them the likely candidate to spearhead the Governors "Insurance Fraud Awareness Month" in November of 2005.
The following charts show the growth in the number of referrals received and investigations completed in the past several years. All of this has been done through the work of seven investigators, three attorneys and three assistants under the direction of Joe Christensen.
"To see what is right and not to do it
is a want of courage."Author Unknown
The Surplus Line Association of Utah hosted the 2006 Western States Surplus Line Conference July 19th - 22nd at The Canyons in Park City.
Muffy Davis, 2002 Paralympics Silver Medalist, was the keynote speaker. Attendees also heard comments from Assistant Insurance Commissioner Mickey Braun; Colin Bird from England, who updated attendees on the Lloyds of London markets; Chris Austin, who addressed the topic of hurricane modeling; and James Carey, who spoke on cycles and opportunities in the marketplace. A panel discussion moderated by Richard Bouhan of the National Association of Professional Surplus Lines Offices (NAPSLO), with representatives of the surplus lines companies, discussed relevant topics of the day, including legislation of a streamlined multi-state filing process.
There were 355 attendees who enjoyed many activities, such as the Utah Olympic Park, golf at the Homestead, Mormon Tabernacle Choir rehearsals, ancient indian rock art, river rafting and hot air balloon rides.
Many volunteers from various local agencies donated their time to help make this conference a huge success.
The following two title rules became effective July 19, 2006.
R592-3, Submission of a Title Schedule of Escrow
Change FilingsR592-4, Standards for Charges for Title Escrow
Settlement Services and Title FeesThe requirements of these rules apply to title insurers, agencies and producers. They require the filing of a new Schedule of Minimum Charges for Escrow Services form no later than October 17, 2006.
The text of these rules and related forms may be found on the department's website at:
http://www.insurance.utah.gov/ruleindex.html.Questions regarding this matter should be directed to Gerri Jones or Sheila Curtis by email at:
Enforcement: Actions against
licenseesLink - http://www.insurance.utah.gov/Enforcement.html
Rules: In process & completed
Link - http://www.insurance.utah.gov/ruleindex.html
