AIA Sees Comp, Privacy As Top Issues

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By Caroline McDonald

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NU Online News Service, Jan. 8, 1:17 p.m.EST?Legislators in Western states will churn out billsthis year on a variety of topics of concern to insurers- includingworkers' compensation, financial privacy and construction liabilityinsurance, a trade group predicted yesterday.

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Describing the extent of legislation in progress, BillGausewitz, vice president of the American Insurance Association,noted that in California "we've had slightly over 100 billsintroduced, and typically in a legislative session we will end upwith 2,500-3,000 bills introduced each year, so it's literally justgetting started."

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Mr. Gausewitz, in Sacramento, Calif., made his comments in ateleconference briefing.

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He forecast that privacy?online privacy and identity theft?wouldbe a major issue in California.

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Among the California measures he focused on is one requiringthat companies, before sharing information with non-affiliatedfirms, secure their customer's permission or "opt in." It wouldalso create a system for policyholders to "opt out" and requestthat information is not shared with affiliates.

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The measure, (SB 1) sponsored by Sen. Jackie Speier,D-Hillsborough, modifies a privacy bill, which was introduced lastyear.

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Also in California, he said, "There is a great deal of attentionbeing placed on the homeowners market, which is tightening in thestate." In particular, he said, are issues related to the use ofcredit history, underwriting homeowners insurance, and the use ofclaims history reports from the Comprehensive Loss UnderwritingExchange data bank.

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A hearing to examine the financial privacy issue is scheduledfor Jan. 15 by the California Senate Insurance Committee. TheAssembly Insurance Committee also has scheduled a hearing for Jan.15, Mr. Gausewitz said.

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"We haven't yet seen Senate legislation on the use of CLUEreports, although there is one Assembly bill that will deal withthat issue," he said.

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Mark Sektnan, AIA assistant vice president, said that mold willcontinue to be a big issue in California. A legislative study begunabout two years ago was supposed to be concluded this month with aseminar in Sacramento, Jan. 13-14. The conference has beenpostponed, however, until the study is completed, he said.

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The AIA said it expects that legislation limiting an insurers'ability to exclude mold damage coverage from homeowners coveragewill be introduced by Sen. Deborah Ortiz, D-Sacramento.

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Workers' comp will be a continuing issue in the Golden State,Mr. Sektnan said.

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AIA executives said the group is concerned that because of thebudget crisis injured workers will face extended delays beforereceiving benefits.

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Gov. Gray Davis has proposed that the employer community "stepup from providing 20 percent of the funding of the division ofworkers' comp to providing 100 percent," he said. Employers,however, say that if they are going to "pitch in another $60million they want to see the reforms in AB 749 implemented," Mr.Sektnan related.

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When the Alaska legislature convenes Jan. 21, Mr. Sektnan said,it is expected that credit scoring will again be a big issue.

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Mr. Sektnan said the AIA would continue to work with thedepartment to implement an AIA-sponsored bill from two years ago toestablish deregulation of the commercial lines market inAlaska.

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He added, "We'll continue to monitor the privacy regulations,which have been circulated by the department but not yetadopted."

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Mr. Sektnan said Nevada "has just about any insurance problemthat one state could possibly have."

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The Nevada legislature, during special session this past summer,adopted a bill placing some caps on medical malpractice awards aswell as providing a method for judges to supercede the caps, hesaid.

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However, "the Nevada Trial Lawyers Association has already saidthey will try to overturn that bill," he said. The Nevadalegislature does not meet until February, he explained.

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Another area of concern in Nevada, he said, is constructiondisputes. A task force has been appointed by the state's governorto examine the issue.

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Mr. Sektnan said the AIA is on the task force, which hopes toget some proposal to the governor by Jan. 23 for a solution toNevada's crisis in construction liability insurance.

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He explained that "Construction is a very big issue in Nevada."Las Vegas, the fastest growing city in the country, is in "direneed of new homes, but the insurance market has almost driedup."

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Mr. Sektnan said credit scoring is expected to be a big issue inUtah. House Bill 110 last year was passed that limits itsapplication with auto insurance coverage. Representatives of theHouse have suggested they will come back with a bill to prohibitcredit scoring for any line of insurance, both personal andcommercial, he said.

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The Utah Department of Insurance has been trying to develop arule to implement the most recent credit scoring measure, but theyhave not yet done so, he reported. House representatives have askedthe department not to because they want to introduce a bill, Mr.Sektnan said.

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