Legislative Report

January 17, 2014 BOSE PUBLIC AFFAIRS GROUP INSURANCE BULLETIN XIV, NUMBER 2

In This Issue

GENERAL ASSEMBLY OVERVIEW

This week began with the House Judiciary Committee hearing on House Joint Resolution 3, legislation aimed at defining marriage between one man and one woman. After hours of testimony both in opposition and support, the committee adjourned without voting on the resolution. House Bill 1153 was also discussed by the House Judiciary Committee which is an effort to provide the legislative intent of HJR 3. It is not yet clear if there are enough votes to pass HJR 3 out of committee. The committee report deadline is quickly approaching so any committee action on HJR 3 must take place in the next two weeks. Speaking of deadlines, it is important to reiterate rapidly approaching deadlines in the House and Senate: January 28 House committee report deadline January 30 Senate committee report deadline; House Second Reading deadline January 31 House fallback Second Reading deadline February 3 House Third Reading deadline February 4 Senate Second Reading deadline February 5 Senate Third Reading deadline

General Assembly Overview State Assisted Retirement Plan Unclaimed Life Insurance Benefits Group Life Insurance Beneficiary Electronic Delivery of Insurance Notices and Documents Motor Vehicle Financial Responsibility Insurance Credit Scoring Nonparty Immunity Pollution Exclusion Lawsuit Lending Workers Comp

Useful Links House Committee Schedule Senate Committee Schedule Contact Your Legislator Indiana Register Contact Us 111 Monument Circle Suite 2700 Indianapolis, IN 46204 317-684-5400 www.bosepublicaffairs.com

There are hundreds of other bills Bose Public Affairs professionals are tracking throughout the Indiana General Assembly. Although the bill filing deadlines have passed, each session day this week numerous bill lists were handed down consisting of hundreds of new bills to review. On Tuesday, Governor Mike Pence delivered his second State of the State address. Pence focused on many of his agenda items including an elimination of the business personal property tax, road funding, and healthcare issues. The following day, Chief Justice Brent Dickson delivered his second State of the Judiciary address. As you may have noticed, the new General Assembly website has been experiencing some access issues. House and Senate leaders have acknowledged the technical problems surrounding the state website in terms of accessing bills and amendments. Committees had the goal of recording votes electronically, but some have reverted back to pen and paper for efficiency purposes. Expect a hectic committee week next week as legislators attempt to hold hearings on many bills before the committee report deadline

occurs. Our track lists have grown significantly as we review bills that have an impact on your interests. Stay tuned for alerts! Follow Bose Public Affairs Group on Twitter Get timely updates on the legislative session by following the Bose Public Affairs Group on Twitter @BosePAG or visit

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STATE ASSISTED RETIREMENT PLAN

SB 66, authored by Sen. Greg Walker (R-Columbus), and supported by Treasurer Mourdock and the AARP, establishes a state-assisted retirement plan for private employers and employees. It provides that the treasurer of state is the administrator of the plan and the manager of the plan will be contracted out to a third party. Employers can participate in the plan only if the employer does not offer its employees a pension or retirement system of any kind. It also provides a tax credit to individuals that participate in the plan. This puts the govt in direct competition with private industries that offer retirement products. After growing opposition to the bill due to its impact on life insurers, banks (and other entities that provide retirement planning) as well as challenges of trying to implement this concept, Sen. Walker is withdrawing his effort to move this legislation. Alternatively, he may concentrate his efforts on marketing Individual Development Savings Accounts through the Indiana Housing and Community Development Authority, a federal and state initiative to help lowincome individuals and families build wealth as a way out of poverty.

UNCLAIMED LIFE INSURANCE BENEFITS

SB 220, authored by Sen. Travis Holdman (R), requires insurers to use the SSAs Death Master File or a database as inclusive to help with the accurate administration of unclaimed death benefits. The bill received a hearing yesterday in the Senate Insurance Committee and passed by a vote of 8-0. The bill now moves to second reading in the Senate.

GROUP LIFE INSURANCE BENEFICIARY

HB 1094, authored by Rep. Bob Heaton (R) and Rep. Dick Hamm (R), allows a key employee (as defined under federal law) insured under an employer group life insurance policy to name the employer as a beneficiary. Issue with this bill is that COLI policies are already available on the market and can accomplish the intent of the bill.

The bill remains on the sidelines in the House Insurance Committee.

ELECTRONIC DELIVERY OF INSURANCE NOTICES AND DOCUMENTS

HB 1058 (Rep. Peggy Mayfield) provides for the electronic delivery of insurance notices and documents instead of other modes of delivery otherwise required for such notices and documents. The bill also requires a recipient's consent to electronic delivery and a method to withdraw consent. The bill was heard in the House Insurance Committee last week and received support from the Committee. However, due to several committee members being absent due to weather, the bill was held. The bill received a vote in committee this week and passed unanimously. It is now eligible for second reading in the House.

MOTOR VEHICLE FINANCIAL RESPONSIBILITY

HB 1059 (Rep. Matt Lehman) makes various changes to the motor vehicle financial responsibility law, including the: (1) definition of "registration" to include the license plate issued in connection with the registration of a vehicle; (2) requirement of proof of financial responsibility and reinstatement fees; (3) suspension of a registration as a consequence of operation of the vehicle without financial responsibility in effect; and (4) requirement of proof of future financial responsibility for five years related to operating a vehicle without financial responsibility in effect. The introduced version of this bill was prepared by the interim study committee on insurance. HB 1059 was recommitted to Ways and Means because the increase in reinstatement fees for individuals who are uninsured and driving was interpreted as a fee increase and triggered a fiscal. Nevertheless, the bill passed out of Ways and Means yesterday by a vote of 20-2. HB 1059 will be eligible for second reading next week.

INSURANCE CREDIT SCORING

HB 1077 (Rep. Lehman) generally prohibits an insurer from considering credit information in connection with the renewal of a personal insurance policy. The bill also provides that: (1) if an insurer uses a credit report or insurance score to re-underwrite or re-rate a personal insurance policy at the request of the insured or the insured's agent at annual renewal; and (2) if the result is that the insured is eligible to be placed in a less favorably priced tier; the insurer is required to maintain the insured in the insured's current tier. Lastly, HB 1077 removes a disclosure exemption. HB 1077 has been assigned to the House Insurance Committee. At this point it is not expected to receive a hearing.

NONPARTY IMMUNITY
Senator Brent Steele filed SB 40 which prohibits a defendant from asserting a nonparty defense, under which a defendant asserts that the damages of the claimant were caused in full or in part by a nonparty, if an Indiana statute grants the nonparty immunity from liability. The bill provides that the failure to assert a nonparty defense naming as a nonparty a person granted statutory immunity does not constitute legal malpractice. SB 40 was heard this week in the Senate Judiciary Committee and received much concern by the Committee and through public testimony. Senator Steele has committed to not advance the bill this session but instead study the issue over the summer.

POLLUTION EXCLUSION
HB 1241, authored by Rep. Martin Carbaugh (R), is a resurrection of last sessions HB 1269, which clarifies when environmental coverage is excluded from a commercial general liability insurance policy. The bill passed out of committee on party lines by a vote of 8-4. Those who testified in favor of the bill (Insurance Institute of Indiana, American Insurance Association, Independent Insurance Agents of Indiana, and several others) were unified in their position that this legislation will restore stability and predictability for insurers and policyholders by codifying an insurers authority to use a pollution exclusion in a general liability insurance policy. Similar to last year, the only opposition was the Plews Shadley law firm. The bill now moves on to second reading in the House.

LAWSUIT LENDING
HB 1205, authored by House Chairman Matt Lehman (R), regulates the practice of lawsuit lending subject to the jurisdiction of the Indiana Department of Insurance. It also provides an interest rate cap of 25%. The bill has been assigned to the House Insurance Committee and is expected to receive a hearing next Wednesday morning.

WORKERS COMP
If youll recall from last session, HEA 1320 created law governing the reimbursement of costs to medical service facilities (i.e., hospital, hospital based health facility or medical center) relative to workers compensation claims. In particular, the act caps reimbursement at 200% of the Medicare reimbursement rate unless otherwise negotiated between the hospital and the employer, employers insurance carrier, billing review service or direct provider network. The act also did the following: specifies reimbursement amounts for repackaged drugs; increases the benefit amounts to injured workers; and provides added confidentiality provisions relative to information filed with the Indiana Workers Compensation Bureau .

This year, Senator Boots has filed SB 294 to continue work on our Worker Comp laws. The bill includes the following: provides additional restrictions on repackaged prescription drugs; reduces the reimbursement cap to 150% of Medicare; puts a cap on reimbursement for implants and provides that a medical service provider may not receive more than one reimbursement for an implant; clarifies the definition of medical service provider . The bill is scheduled for hearing next Wednesday in the Senate Pensions and Labor Committee.

For more information

Trent Hahn tfhahn@bosepublicaffairs.com Mike OBrien mobrien@bosepublicaffairs.com Telephone: 317/684-5400 Fax: 317/684-5432