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PIANH 2011 legislative wrap-up

By Matthew Guilbault, Esq.

The 162nd session of the New Hampshire General Court opened with many promises for small business. Efforts to avoid new taxes; reduce regulation; eliminate fees and enact tax incentives; and balance the budget all led to what everyone hoped to achieve—the creation of new jobs and the reduction of the deficit.

For insurance producers, PIANH monitored proposals ranging from issues such as the definition of reasonable compensation; workers’ compensation medical-fee schedules; and revisions in the business profits tax; as well as industry-specific issues like the implementation of health-care reform; and the related development of a state-wide health insurance exchange; surplus-lines taxation collection and much-needed clarification for certificates of insurance.

After a contentious legislative session with far-reaching changes for the Granite State’s political, economic and social landscape, small businesses were the winners under the new Republican control. Economic issues from a 10-cent cigarette tax cut, to extending the time for business tax credits, and shifting the burden of proof from business owners to state enforcers in tax disputes over compensation comprised the business-friendly agenda. Chambers of Commerce also hailed a new law easing small businesses’ access to health insurance.

New laws
2011 saw the enactment of some new insurance-related laws. They are as follows:

Employment-related bills
H.B.647 (Chapter 140): Withholding of wages. Rep. Gary Daniels, R-6. This legislation allows for the withholding of wages “for any purpose on which the employer and employee mutually agree that does not grant financial advantage to the employer, when the employee has given his or her written authorization and deductions are duly recorded. The withholding shall not be used to offset payments intended for purchasing items required in the performance of the employee’s job in the ordinary course of the operation of the business.” Signed by governor, June 7, 2011. Effective Aug. 6, 2011.

S.B.86 (Chapter 92): Employee warnings. Rep. Pamela Tucker, R-17; Rep. Daniel Itse, R-9; Rep. David Welch, R-8. The bill requires the Department of Labor to issue one warning to employers for certain violations before a fine may be imposed. Signed by governor, May 27, 2011. Effective May 27, 2011.

H.B.133 (Chapter 204): Minimum wage. Rep. Carol McGuire, R-8. This bill dictates that the state minimum-wage level mirror the federal level. Vetoed by governor; Effective Aug. 21, 2011, Veto overridden 6/22/2011; Section 2 effective Dec. 31, 2011; remainder effective Aug. 21, 2011.

S.B.121 (Chapter 146): WARN Act. Sen. Jim Luther, R-12; Sen. John Barnes Jr., R-17; Sen. Peter Bragdon, R-11; Sen. Tom De Blois, R-18; Sen. John Gallus, R-1; Sen.  Gary Lambert, R-13; Sen. Andy Sanborn, R-7; Sen. Raymond White, R-9. This bill amends the definition of “employer” in the Worker Adjustment and Retraining Notification Act. The qualifications are now “100 or more employees, excluding part-time employees; or 100 or more employees who in the aggregate work at least 3,000 hours per week, exclusive of hours of overtime.” The previous level was 75 employees. Signed by governor, June 7, 2011. Effective Jan. 1, 2012.

Health reform
H.B.601-FN (Chapter 264). Establishes an oversight committee whose approval the insurance commissioner must get before implementing the federal law. It also directs the governor to decline $666,000 in federal planning grant funds and tell the federal government to use it to lower the deficit. The grant is meant to defray costs of establishing a health insurance exchange that will help consumers find affordable insurance. States that don’t create an exchange will have one imposed on them by federal authorities. Enacted in accordance with Article 44, Part II, of New Hampshire Constitution, without the signature of the governor, July 14, 2011. Effective July 1, 2011.

Excess and surplus lines
H.B.424 (Chapter 191). Sponsored by Rep. James Headd, R-3. This bill enables premium taxes for nonadmitted insurance, including surplus-line insurance, to be collected and disbursed. This bill also allows a foreign insurance company to be designated as a surplus-line insurer under certain circumstances. Signed by the governor, June 14, 2011. Effective Aug. 13, 2011.

Life and health
H.B.175 (Chapter 189): Life, accident and health insurance. Sponsored by Rep. James Headd, R-3. Made a number of technical changes to life, accident and health insurance law requested by the New Hampshire Insurance Department. Signed by the governor, June 14, 2011. Sections 8 and 9 took effect upon signature. Sections 10 and 11 shall took as provided in Section 12. Remainder took effect Aug. 13, 2011.

H.B.401 (Chapter 98): Training program for those with disabilities. Rep. Cindy Rosenwald, D-22; Rep. James MacKay, D-11; Rep. Charles McMahon, R-4; Sen. Nancy Stiles, R-24; Sen. Molly Kelly, D-10. This bill authorizes the labor commissioner to establish a practical experience/training program for individuals with disabilities. Signed by governor, May 27, 2011. Effective July 26, 2011.

H.B.26 (Chapter 254): Unemployment services. Sponsored by Rep. Lawrence Kappler, R-2; Rep. Lucien Vita, R-3; Rep. Pamela Tucker, R-17; Rep. Robert Willette, R-6; Rep. Robert Greemore, R-3; Sen. Jeanie Forrester, R-2; Sen. Sharon Carson, R-14; Sen. John Barnes Jr., R-17. This legislation restricts an employee’s eligibility for unemployment services. The new law provides that if an unemployed individual has been discharged for a single theft or multiple thefts in the aggregate of an amount greater than $100, but less than $250 where such conduct is connected with his or her work, the individual shall be disqualified for benefits. Such disqualification shall continue until a period of not less than four weeks, nor more than 26 weeks, from the date of discharge and until such individual has earned wages. The bill also lowers the threshold for the definition of gross misconduct from a theft of greater than $500 to single or multiple thefts that are in the aggregate greater than $250. Such a disqualification for gross misconduct shall cause the person to suffer the loss of all wage credits earned prior to the date of such dismissal. Signed by governor Aug. 13, 2011. Effective Sept. 11, 2011.

Producer-related issues
H.B.419-FN (Chapter 137): Certificates of insurance. Sponsored by Rep. William Infantine, R-13. This legislation, designed to address the improper use of certificates of insurance, prohibits a person from issuing a certificate of insurance that does not contain a statement indicating that the certificate is issued as a matter of information only and confers no rights upon the certificate holder, nor does the certificate amend, extend or alter the coverage, terms, exclusions and conditions afforded by the policy or policies referenced therein. Further, the bill prohibits any person from demanding or requiring the issuance of a certificate of insurance from an insurer, insurance producer or policyholder that contains any false or misleading information concerning any policy of insurance to which the certificate makes reference, nor preparing or issuing one that contains any false or misleading information or one that purports to amend or extend the coverage provided by any policy of insurance referenced in the certificate.

Moreover, persons are prohibited from issuing certificates of insurance that are misleading, deceptive or encourages misrepresentation, or one that violates any law. Of course, agents should never unilaterally revise certificate wording or issue proprietary certificates that have not been tested in court. Attorneys and risk managers often counsel their employers or clients to reword certificates to clearly state that they are part of the contract and that they grant an enforceable interest in the policy to the certificate holder. While there is general legal consensus that certificates do not create contractual obligations or rights, there are exceptions based on unique circumstances. The commissioner is authorized to publish sample certificates of insurance that provide templates as to form and content, which, in his opinion, meet the requirements of this law and are acceptable for use by insurers and insurance producers. In addition, insurance industry trade organizations, and supporting entities, are allowed to submit templates for consideration and inclusion in the set of sample certificates so published. Signed by the governor, June 7, 2011. Effective Jan. 1, 2012. 11/11

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