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PIANH legislative update—February 2010
By Matthew Guilbault, Esq.
New Hampshire rebating proposal passes House, other insurance proposals considered
A proposal tracked by PIANH and introduced at the request of the Insurance Department, (H.B.1208), has cleared the first hurdle on its way to be law by being passed in the House on Feb. 22. The proposal would provide new exceptions to the anti-rebating law relative to the giving of a promotional item or items to a consumer in connection with marketing of contracts of insurance provided the item or items have a fair market value of $25 or less per consumer, per year; and raffles or drawings, conducted in connection with the marketing or promotion of property/casualty insurance products, if the total prize value for all raffles or drawings in a 12-month period do not exceed $1,000; there is no participation cost to entrants; and if the raffle is open to consumers who are not policyholders, the consumer is not required to purchase a policy in order to be eligible to enter the raffle or receive a raffle price.
New Hampshire lawmakers also recently considered proposals that would limit the underwriting and rating options available to personal lines insurers—specifically the use of credit, education and occupation and it appears these bills (H.B. 1268, et al.) are not likely to pass. Education and occupation seem to be the new frontiers in terms of underwriting tools that consumer advocates and some lawmakers would like to keep out of the mix. The thing is, most insurers do not seem to be using the education or occupation as underwriting or rating tools. It's a relatively isolated practice. Some insurers do not even use credit. Given that education, occupation, marital status, etc., have been around for quite some time, it may be that most insurers are not interested in using them currently. However, the other side of that coin is the fact that even if insurers are not using a tool, they don't want the ability to do so to be taken away. One proposal, however (H.B.1236) to declare that an insurer shall not base underwriting a policy of automobile or casualty insurance solely on a credit rating, a credit history or a credit-scoring model was passed by the House and sent to the Senate.
A number of tort-related proposals also were considered and deemed ought not to pass by their respective committees. These include proposals to increase the amount of medical payments coverage under motor vehicle liability policies (H.B. 1233); prohibiting insurers from including warning language regarding insurance fraud in communications with an insured or potential claimant (H.B. 1244); and restricting medical injury claims subject to pretrial screening panel review to claims exceeding $250,000 in damages (H.B. 1256).
It also was reported that the New Hampshire government has asked the state Supreme Court to reconsider its decision in the Medical Malpractice Joint Underwriting Association (JUA) case. The decision prevents the state from taking $110 million from the JUA surplus to add to the New Hampshire General Fund. Stay tuned as this issue continues to develop in the midst of a budget crisis. Although the majority of the court ruled with the plaintiffs—a series of health-care providers that had paid premiums into the JUA—a strong dissenting opinion felt that the court was making the wrong decision and it is that hope that the state will be pursuing as it tries to get the court to rehear the case. In the case of dissenting opinions, the fix generally involves the Legislature taking on the challenge raised by the court—thereby resolving the issue. However, in this instance, the law that the Legislature felt was a fix was deemed unconstitutional by the majority of the court. Therefore, it's interesting to contemplate how this situation could turn out favorably for the state.
Similarly, the fight to repeal the LLC tax continues to rage in the statehouse, where policymakers continue to struggle with filling a sizeable budget deficit (H.B. 1464, H.B.1661, H.B. 1607, et. al.). 2/10
