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PIANH 2006 legislative wrap-up

By Steven Imbriaco, Esq.

The New Hampshire General Court concluded the 2006 legislative session recently and is now adjourned for the summer and this fall's primary and general elections. PIANH followed numerous bills this year and actively participated in the public debate on several of the issues. Below is a recap of issues of particular interest to PIANH members.

Document retention. A bill PIA requested to have filed this year was relative to document retention requirements for insurance companies. This bill would have required companies to retain responsibility for certain documents so that the producer is not the only source for this information. The language presented by H.B. 1769 was as follows:

(a) An insurer that requires, by contract or other means, a related entity or other person authorized to act on its behalf in connection with the doing of insurance business to maintain records that the insurer would otherwise be required to maintain shall be responsible if the person or entity either fails or is unable to maintain the records in the required manner.

The proposal was unfortunately, but predictably, opposed by insurance companies. The Insurance Department also believed the issue was already addressed in another section of the Insurance Law. RSA 400-A:37 addresses examinations and documents, and while vague about the absolute or final responsibility, it appears to require both the insurer and producer to bear some of the responsibility. That same responsibility, however, can be shifted by contract. PIANH initiated the proposal because insurers are in the best position to maintain these records for the benefit of the insured, but the Legislature did not agree with that position and the bill failed.

Automobile insurance. Two bills that were introduced concerned situations where an insured driver lives in the same home with an uninsured driver. Clearly, this relationship creates an additional risk for the insured driver. PIA's position was that appropriate insurance rating required the policyholder to assume additional premium for the coverage of their vehicle. The Legislature agreed and swiftly found these bills inexpedient to legislate. Had the proposals become law, additional regulations would have been necessary to provide a method of determining whether uninsured drivers are financially responsible and a process would have been required to ensure financial recovery from these uninsured drivers when an accident occurs with a vehicle insured by someone else.

Identity theft. Two measures addressing identity theft were passed this year. These new laws bring New Hampshire into line with legislation passed in surrounding states in recent years. H.B. 1660 requires any person engaged in business in New Hampshire to notify consumers of a security breach of computerized data that compromises the confidentiality of consumers' personal information. Personal information includes a person's name in combination with their Social Security number, driver's license number, any other government identification number or any account, credit or debit card number that would permit access to an individual's financial account.

The second bill, S.B. 334, authorizes the use of a credit freeze as a means of deterring identity theft. Consumers are empowered to put a "freeze" on their consumer reports and consumer reporting agencies must provide notice of this right to the consumer. Victims of identity theft may request copies of their consumer reports at no charge. Insurers and their agents will still have access to the reports, however, for setting or adjusting an insurance rate or claim and for underwriting purposes.

Premium tax. In an effort to keep domestic insurance companies in New Hampshire and attract new ones, along with the accompanying revenue and jobs, the Legislature passed H.B. 678. The bill provides for a reduction in insurers' premium tax rates beginning in July 2007. Over the four-and-a-half years that follow, the tax will be reduced from 2 percent to 1 percent. The 1 percent reduction is a truly significant and somewhat risky change.

Workers' compensation. Also receiving the support of the General Court was S.B. 265. The bill makes nonresident employees and employers doing business in New Hampshire subject to New Hampshire's Workers' Compensation Law. This new provision becomes effective July 14, 2006. 9/06

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