NAPSLO Member Dues - Fiscal year Aug. 1, 2008 - July 31, 2009

NAPSLO member dues notices were mailed in late June and are due August 1. The dues reflect an 8% increase recently approved by the Board of Directors.

Dues Payment Amounts (Fiscal year Aug. 1, 2008 - July 31, 2009)

Wholesale Broker
Main office - $1,000
Branch Offices - $325 per branch location

Company
Main Office - $7,125 (Annual Premium Volume =>$100 million)
- $3,600 (APV < $100 million) Branch office - $325 per office Underwriting Manager Main Office - $7,125 (APV =>$100 million)
- $3,600 (APV $25- $100 million)
- $1,425 (APV < $25 million) Branch office - $325 per branch location

Associate Riskbearer (such as reinsurer, syndicate, non-U.S./Canada insurer) Main Office - $7,125 (APV =>$100 million or more)
- $3,600 (APV < $100 million) Branch office - $325 per branch location

U.S. Based Reinsurance Intermediary Firm
Main Office - $3,600
Branch office - $325 per branch location*

All Other
Main office - $1,000
Branch Offices - $325 per branch location*

* Wholesale Broker, Company and Underwriting Managers must list all branch offices. Associates are not required to list all branch offices.

Top 10 Regulatory States for P&C Insurers

Vermont and Ohio had the best property and casualty insurance regulatory environments in the U.S. in 2010, followed by Illinois, Maine, and Wisconsin, according to a report recently released by the Heartland Institute.

The Heartland Institute, a national nonprofit research and education organization, has issued its 2011 Property and Casualty Insurance Report Card (available in PDF), a state-by-state analysis of insurance regulatory burden.

The report ‘asks fundamental questions about the nation’s property and casualty insurance regulatory environment’ such as the following:

• ‘How free are consumers to choose the property and casualty insurance products they want?’ and


• ‘How free are insurers to provide the property and casualty insurance products consumers say they want?’[1][2]

Vermont and Ohio had the best property and casualty insurance regulatory environments in the U.S. in 2010, followed by Illinois, Maine, and Wisconsin, according to the report.

The report notes that federal regulatory reforms of the financial services industry and health care did not have any major effects on property and casualty insurance, despite the fact that both the Patient Protection and Affordable Care Act (PPACA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act included provisions affecting property and casualty insurance.

Reviewing the data on insurance in 2011, we see once again a modest, uneven, but nonetheless real trend towards more freedom for consumers and businesses in the homeowners’ and automobile insurance realms. Although state-level insurance bureaucracies make it difficult, sometimes impossible, for insurers to offer consumers the products they need, want, and deserve, burdensome regulation shows signs of easing.[3]

State insurance regulation is graded in the report based on a number of factors, including politicization, regulatory clarity, residual insurance markets, market concentration and rate regulation.

For the fourth year in a row, Florida was ranked last on the list with an ‘F’ letter grade.

For the fourth year in a row, Florida was ranked last on the list with a letter grade of ‘F’ and a numerical score of -35. The report is very critical of the Florida regulatory environment, but notes that Florida’s legislature, with bipartisan majorities, did attempt ‘to reduce the size and scope of the state’s extensive insurance market interventions.'

The report also indicates that Florida ‘experienced a wave of insurer insolvencies mostly from over-regulation of the market’ including many insolvencies that ‘the Florida Office of Insurance Regulation kept secret from consumers in the early months of the year [that] ended up sending consumers and regulators scampering to other companies and the state’s residual market, the Florida Citizens Property Insurance Corporation.'

1. 2011 Property and Casualty Insurance Report Card, The Heartland Institute, May 2011.
2. See also the Heartland Institute's article regarding the report, written by Eli Lehrer, Vice President of Heartland.
3. 2011 Property and Casualty Insurance Report Card, The Heartland Institute, May 2011.

Louisiana Insurance Regulatory Law

More information on Louisiana insurance regulatory law, Louisiana insurance industry news and other Louisiana insurance information is available from Louisiana Insurance Regulatory Law.

Child Booster Seats

The institute for Highway Safety has provided a method to take much of the guesswork out of selecting the proper booster seat for your child. Seat belts are designed with adults in mind- so a child booster seat is an absolute necessity, and extra care needs to be taken when securing young children.

Children usually resist wearing a seatbelt because it is uncomfortable. Boosters elevate children so that the safety belts installed in the vehicles by manufacturers will fit the child better. The booster seat allows the lap belt to fit properly over the child’s thighs and not their abdomen. The shoulder belt should fit across the middle of the child’s shoulder. Not only will the belt be more comfortable, it will provide maximum protection in a crash.

The institute’s researchers used a specially designed test dummy configured as a 6 year old child. The researchers determined the effectiveness of how a 3-point lap and shoulder belt fit the dummy under a range of configurations representing many different automobile models. Based on a range of scores, a booster seat rating was assigned to each seat.

NAPSLO Offering State-by-State Review of NRRA Compliance Legislation on Website

NAPSLO has added to its website a state-by-state review of legislation passed at the state level during the past few months to bring states into compliance with the Nonadmitted and Reinsurance Reform Act (NRRA).

The NRRA mandates that beginning July 21, 2011 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance. Also, many states have passed laws based on NRRA with differing requirements and effective dates.

Earlier this year NAPSLO put together a new section of the website - New Surplus Lines Law - which included a section reviewing legislation under consideration at the state level. With more than 30 states passing legislation NAPSLO has now added a section reviewing the laws enacted by each state.

In the State Update Review section there is a table listing all of the states and links to reviews to most of the legislation completed. Additional states are being added as the review process of the legislation is completed.

The pages include information on state bulletins/regulations/rules; the status of joining compacts or other tax sharing agreements; the new laws definition of "home state"; exempt commercial purchaser (ECP) status; eligibility information; tax reporting status; tax processing fee information; and contact information for the state insurance department or stamping office.

Georgia’s Supreme Court Upholds Diminution In Value Recovery Ruling

The Georgia Supreme Court has ruled that insurance policyholders may recover losses for “diminution in value” in addition to the repair costs associated with damages to real estate property.

The court ruled in Royal Capital Development LLC v. Maryland Casualty Co., that a 2001 Georgia Supreme Court decision, which allowed coverage for the cost of repair plus diminution in value under automobile policies, should also be applied to claims for damage to real property, including damage to commercial buildings.

 The court said the ruling would place “injured parties, as nearly as possible, in the same position they would have been in if the [property damage] had never occurred.” Under the ruling, insurers now must pay for damage repairs to a home or business and also for the diminished value of the property.

As a result of the decision, insurers that insure property risks in Georgia and wish to exclude “diminution in value” would have to include the exclusionary language in their policy wordings.

The Court rejected a 2007 Georgia Court of Appeals decision holding that allowing damages for diminution in value as well as for the costs of repair would be an impermissible “double recovery.” Maryland Casualty has filed a motion asking the court to reconsider its opinion.

Supreme Court Upholds Constitutionality of Obamacare and the Individual Mandate

The U.S. Supreme Court upholds the constitutionality of the Patient Protection and Affordable Care Act, and related healthcare reform legislation. The Court determined that the most controversial aspect of Obamacare, the individual mandate, was constitutional because it is a tax.

The Supreme Court of the United States has released its ruling in the matters of National Federation of Independent Business v. Sebelius, U.S. Department of Health and Human Services v. Florida and Florida v. Department of Health and Human Services. These three cases were decisions out of the 11th Circuit of the United States Court of Appeals that challenged the constitutionality of some or all of the Patient Protection and Affordable Care Act, and related healthcare reform legislation, known colloquially as Obamacare.

The principal issues set forth in the 11th Circuit cases that the Supreme Court agreed to review can be simplified and summarized as follows:

• Whether Congress has the power under the Constitution to require virtually all Americans to obtain health insurance or pay a penalty;
• Whether, if the Court concludes that the provision of the Act requiring virtually all Americans to obtain health insurance or pay a penalty is unconstitutional, the rest of the Act can remain in effect or must also be invalidated;
• Whether Congress can require states to choose between complying with provisions of the Patient Protection and Affordable Care Act or losing federal funding for the Medicaid program; and
• whether the Anti-Injunction Act, which prohibits taxpayers from filing a lawsuit to challenge a tax until the tax goes into effect and they are required to pay it, prohibits a challenge to the Act’s provision requiring virtually all Americans to obtain health insurance or pay a penalty until after the provision goes into effect in 2014.[1]

The most controversial matter has been what is known as the "individual mandate" issue — whether the federal government can compel practically all Americans to acquire health insurance coverage or pay a penalty.[2]

The Supreme Court's ruling today generally upholds the constitutionality of Obamacare, although it narrowly reads the federal government's authority to terminate Medicaid funds. The individual mandate is upheld as a tax, and the Court reinforces that individuals can simply refuse to pay the tax.[3]

1. Remaining Merits Cases: In Plain English, SCOTUSblog, Amy Howe, June 15, 2012.
2. Health care: Time to sum up, SCOTUSblog, Lyle Denniston, June 26, 2012.
3. SCOTUSblog, live blog coverage of public reading of the Court's opinion, Amy Howe, Lyle Denniston, Tom Goldstein, June 28, 2012, 9:45 AM CST.

Richard Bouhan Recognized in National Underwriter's Living Legends Series

Richard Bouhan, former NAPSLO Executive Director, was recognized as one of the insurance industry's Top 10 Living Legends by the National Underwriter in their June 25 Property & Casualty issue.

The magazine selected the industry’s Top 25 Living Legends and the Top 10 were featured in the magazine. The full list of Top 25 Living Legends were profiled online. The magazines said the selected individuals were "people whose accomplishments will be remembered for a long, long time" and that "their contributions to P&C insurance have been epic, monumental—and are sure to be discussed and studied for decades to come. Each profiled visionary has fundamentally changed the way insurance is done, likely forever."

Mr. Bouhan, who is continuing his work as Counsel on Special Projects for NAPSLO, has been with NAPSLO for more than 30 years, joining the Association as Government Relations Director and later serving as Executive Director from 1987 to 2011.

Mr. Bouhan joined Edmund Kelly, Jack Byrne, Richard Scruggs, Karen Clark, Barney Frank, Pat Ryan, Brian Duperreault, Peter Lewis, and Hank Greenberg in the Top 10. Other major E&S industry representatives in the Top 25 included William R. Berkley, Peter Levene, and Alan J. Kaufman.

PIAA Takes Lead in Helping Fix Workers’ Comp Exposure for Ohio Employers

PIAA wrote the following article on 6/27/14 with news on the resent Ohio Workers Compensation program.  The article is as follows:

GOVERNOR SIGNS BILL TO PROTECT BUSINESSES WITH EMPLOYEES WHO WORK IN OTHER STATES

Did you know some states do not recognize Ohio’s workers’ compensation insurance coverage? Many Ohio business owners have no idea that they are at risk for compliance audits and fines when their employees travel to other states for business.

As of June 16, 2014, this issue is on its way to no longer being a problem. Gov. John Kasich signed House Bill 493 into law, which offers an insurance coverage solution for all Ohio employers whose employees cross state lines.

 

H.B. 493 permits the Ohio Bureau of Workers’ Compensation (BWC) to enter into an agreement with an insurer to provide limited other-states’ workers’ comp coverage for Ohio employees who are temporarily working in another state. With this arrangement in place, Ohio businesses will no longer have to fear the repercussions of aggressive states like Pennsylvania and Kentucky that do not accept Ohio’s workers’ comp because they require local workers’ comp coverage for all work performed in-state, regardless of whether coverage exists in Ohio.

While local workers’ comp coverage can be obtained in these states, it is not necessarily cost-effective. In addition, obtaining blanket cost-effective out-of-state workers’ comp coverage has been a challenge in the current marketplace where such a product is hard to find. With H.B. 493, this will soon be an issue of the past, as BWC works to create the opportunity to provide guaranteed issue workers’ comp coverage to resolve the problems many Ohio businesses have faced due to other states workers’ comp requirements.

How did this issue surface?
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.

The Professional Independent Agents Association of Ohio, of which your agent is a member, created a task force of independent insurance agents who serve a variety of businesses. These agents worked with the Ohio BWC and representatives from other industries, like trucking and contracting, to develop a solution to this problem.

What’s Next?
Now that the bill has been signed into law, BWC will begin the competitive bid process to identify an insurance carrier(s) to provide limited other states’ coverage for Ohio employers who need it.

 

While this process will take some time, the outcome will ensure that Ohio businesses will finally have guaranteed access to a workers’ comp insurance product that provides the type of out-of-state coverage that will protect their business and meet their needs. Furthermore, employers and insurance agents will no longer have the burden of trying to determine all the different workers comp requirements of each and every state where work is performed, since there will be access to a workers’ comp product that is accepted in all states.

The Two-Headed Beast: Should California Stop Having Two Health Insurance Regulators?

Representatives from both the healthcare and the insurance industry met with California insurance regulators last week to discuss the future of the overlapping bureaucracies that regulate health insurance in the state.

Currently, California's health insurance industry is regulated by both the California Department of Insurance ('CDOI'), headed by an elected insurance commissioner, and the Department of Managed Health Care ('MHC'), a separate agency under the Governor's office. While the CDOI is charged with regulating traditional health insurance carriers, the MHC regulates HMOs and other managed care programs.

Some suggest that a single agency would be better equipped to serve the public and tackle a maze of new healthcare rules from the federal government.

According to an article in the Los Angeles Times, the 'two regulators enforce different sets of laws and require insurers to provide varying levels of health benefits for consumers. They also are seen as widely different in their dealings with insurers and in their enforcement powers.'

Healthcare lobbyists, insurance industry representatives and regulators met last week in Sacramento to discuss the possibility of combining the two regulatory agencies. From the Los Angeles Times article:

Some suggest that a single agency would be better equipped to serve the public and tackle a maze of new healthcare rules from the federal government. Others say such a move would distract from more pressing issues facing lawmakers and regulators.

California's Deputy Insurance Commissioner Janice Rocco said the event was only the first step in a public conversation about who whill regulate insurers and HMOS in the state, according to the article.

Read the full article:

Should California stop having two health insurance regulators?
Duke Helfand | Los Angeles Times
June 23, 2011.

D&O and Cyberinsurance Executive Summary: What You Need to Know Before You Walk into the Boardroom

Scott N. Godes of the Corporate Insurance Blog will be part of a free webinar on July 19, 2011, at 2:00 pm Eastern, about D&O and cyberinsurance: What You Need to Know Before You Walk into the Boardroom, part of the Executive Summary webinar series presented by Woodruff-Sawyer & Company.

More information is available here.

Alaska Approves Legislation to Enter NIMA-type Agreement to Share Premium Taxes

Alaska has enacted legislation which provides authority for the Director to enter into a NIMA-type agreement with other states to share premium taxes.

Alaska is among the latest of states to pass NonAdmitted and Reinsurance Reform Act (NRRA) related implementation legislation. During the session NAPSLO provided draft legislation, supplied comments on legislation and Director of Government Relations Steve Stephan and Executive Director Richard Bouhan testified during hearings.

The NRRA mandates that beginning July 21, 2011 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance

Alaska's bill provides authority for the Director to enter into a NIMA-type agreement with other states to share premium taxes. Allocation would be done according to a schedule set forth by regulation, and the tax rates of each state would apply to multistate exposures. There are also requirements for allocating premium when a policy covers more than one classification. Brokers would be required to file quarterly allocation reports, even though the NRRA only permits annual reports. Alaska would retain any premium tax not allocated and paid to another state when Alaska is the home state.

The bill incorporates the exempt commercial purchaser (ECP) exemption from the NRRA and adopts the NRRA's uniform eligibility requirements for U.S. domestic and non-U.S. insurers (retaining alternative criteria for non-U.S. insurers besides International Insurers Department listing), but the Director would retain existing statutory authority to declare an insurer ineligible based on any number of factors including quality of management, financial condition, capital and surplus of a parent company, underwriting profit, investment income trends, trade and claims practices, reserving practices, company record and reputation within the industry, all of which eligibility requirements are preempted by the NRRA. The Director would be authorized to participate in an interstate agreement to develop alternative nationwide uniform eligibility requirements for U.S. domestic insurers.

NAPSLO praises introduction of NARRA

The National Association of Professional Surplus Lines Offices, Ltd. (NAPSLO) the nation's leading trade association for surplus lines brokers and companies, praised the introduction of the Non-Admitted and Reinsurance Reform Act of 2006 (H.R. 5637), during a congressional hearing on June 21.

In testimony before the House Financial Services Committee, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, Richard Bouhan, Executive Director and General Counsel for NAPSLO, praised Subcommittee Richard Baker and Representatives Ginny Brown-Waite (R-FL) and Dennis Moore (D-KS) for introducing this important regulatory reform legislation.

Many of the bill's provisions, including the creation of a uniform system of premium tax allocation and remittance, uniform standards for producer licenses, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated purchasers are concepts long endorsed by NAPSLO.

For more information, read NAPSLO's press release.

Cavalcade of Risk No. 186: Health, Life and Other

Insurance Regulatory Law is proud to once again host the Cavalcade of Risk, a biweekly rotating collec tion of articles and links (also know as a "blog carnival") from insurance and other risk-related resources that provides some great information and insight about risks and risk management.

The 186th Edition of the Cavalcade focuses on health issues, life matters, and some "other" concerns:

• This just in: a late entry to the Cavalcade From Bob's Cluttered Desk... Robert Wilson explains why Workers' Compensation Should Be Called Workers' Recovery. Bob explains that the increasing trend to disability means the workers' compensation industry needs to shift from a claims mentality of "Process and Close" to one of "Recover and Return" – and there's no better place to start that process than with a new name that better reflects what the industry can be. Check out Bob's article for more details.


• On the health side, Louise from the Colorado Health Insurance Insider gives us some great information on the "Affordable Care Act" in her article: Clearing up Confusion Around the Health Insurance Provider Fee. According to Louise, "the fee is an amount that will be collected from health insurance carriers starting next year, and the funds will be used to help pay for the state and federal health insurance exchanges." Get more information from the article.


• Jason Hull from Hull Financial Planning gives us a rundown on what a high deductible healthcare plan is, and how it may be better than the health insurance you're currently carrying, in his article: HDHP – Not a Medical Condition, But It May Reduce Your Medical Expenses.


• Jason Shafrin at the Healthcare Economist asks: Does Increased Hospital Spending Reduce Mortality? Find out the answer in his article.


• The Health Business Blog takes a look at the different ways of protecting your skin from the risks of sun damage in Welcome to summer – and sun protection.


• On the life side, InsureBlog's Bob Vineyard goes back to (life insurance) basics with his take on why final expense policies beat backyard burials in his article: Burial Insurance.


• If backyard burials aren't your thing, Jeff Root of the Rootfin Life Insurance Blog explains that, when life insurance is included as a decree in a divorce, things can get complicated. His article on Divorce and Life Insurance tells you what you need to know.


• Jeff Rose of Good Financial Cents brings it back to the pocketbook in his article discussing the Top 5 Non-Medical Factors That Affect Your Life Insurance Rates.


• Hopping out of the life and health insurance arenas, Nancy Germond of Insurance Writer provides a timely reminder of the potential high cost of cut-rate insurance in her article: Cut Rate Auto and Homeowners Insurance May Cost You.


• Michael at Financial Ramblings discusses the results of his personal quest to find out what a speeding ticket means to your car insurance in his article: Effects of a Speeding Ticket.


• Last, but certainly not least, Bob Lotich at Christian Personal Finance lets us know that the Federal Housing Administration (FHA) has put an end to the decade-long provision that allows for mortgage insurance cancelation ability in his article: FHA Ending Mortgage Insurance Cancelation Ability.

The next edition of the Cavalcade of risk is currently without a host, and we want you! Contact the Cavalcade of Risk now to volunteer to host the next edition.

NAPSLO applauds passage of H.R. 1065

NAPSLO applauded Monday’s passage of the Non-Admitted and Reinsurance Reform Act of 2007 (H.R. 1065) by the U.S. House of Representatives and expressed optimism that the Senate would take up a companion bill soon.

“This approval is an important step toward ultimately improving the operation and regulation of the surplus lines market,” said NAPSLO President William Newton. “NAPSLO is pleased that the House of Representative has approved H.R. 1065 and we are hopeful the Senate will also approve a bill.”

H.R. 1065 is, in part, aimed at making access to the surplus lines market more efficient for consumers and the brokers and agents who assist them.

“We believe that once this legislation is enacted it will make access to the surplus lines market more efficient and ease the consumers' burden of obtaining insurance coverage in difficult insurance markets,” said NAPSLO Executive Director Richard Bouhan.

H.R. 1065 was submitted by Reps. Dennis Moore (D-Kan.) and Ginny Brown-Waite (R-Fla.). Cosponsors included Financial Services Ranking Member Rep. Spencer Bachus (R-Ala.), and Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises Chairman Paul Kanjorski (D-Penn.). House Financial Services Chairman Barney Frank, D-Mass., and and Deborah Pryce, R-Ohio, also assisted in passage of the legislation.

The bill, which was approved unanimously Monday by voice vote, would establish national standards for how states regulate the surplus lines market and reinsurance and would create a uniform system of surplus lines premium tax allocation and remittance, one-state compliance on multi-state surplus lines risks, and direct access to the surplus lines market for sophisticated commercial purchasers.

The Senate version of the bill, S 929, was introduced in March by Florida Senators Mel Martinez and Bill Nelson and has been referred to the Banking, Housing and Urban Affairs Committee.

"With such broad, bipartisan support, I'm hopeful that this legislation, which is long overdue, will be approved by the Senate soon and signed into law," Rep. Moore said in a news release. "It's the right thing to do."

NAPSLO’s Washington D.C. representative, Maria Berthoud of B&D Consulting said "we have been meeting with members of the Senate Banking Committee and look forward to working with the full Senate on passing this bill.”

California amends surplus lines codes

Sections 1750 and 1765 of the California Insurance Code relating to broker licenses and license fees were recently amended following the implementation of AB-1699 which was approved in mid-June.

Under the changes, the commissioner will now require a surplus lines broker fee of $250 where the broker is an individual transacting only on behalf of a surplus lines broker organization.

In addition, the filing fee for a license to act as a surplus lines broker will be $1,000 every two years, or for any initial fractional license year. For an individual licensed as a surplus line broker who only transact on behalf of a surplus line broker organization, the filing fee is $500 every two years, or for any initial fractional license year.

Also the code was amended to read that for each surplus line office maintained by the licensee from which the licensee transacts business with California residents, this law requires the licensure, as a surplus lines broker, of each natural person or persons located at these offices who is or are to be responsible for the discharge of all duties placed upon the licensee acting as a surplus line broker at the office.

NAPSLO Applauds Senate for Introducing the Surplus Lines & Reinsurance Bill

NAPSLO officials applaud Senators Evan Bayh (D-Ind.), Mel Martinez (R-Fla.) for introducing, and Senators Bill Nelson (D-Fla) and Mike Crapo (R-Id) for cosponsoring, the Nonadmitted and Reinsurance Reform Act of 2009 in the Senate. The bill, which was also recently introduced in the House of Representatives, was introduced in the Senate on Thursday.

“We are pleased to see Senators Bayh and Martinez taking the lead on the surplus lines bill and look forward to Senate consideration of this needed piece of insurance reform legislation,” said NAPSLO President John Wood. “This bill would help consumers by making property/liability insurance more readily available and improving the efficiency of the surplus lines insurance market.”

The NRRA (HR 2571 in the House and S 1363 in the Senate), is aimed at streamlining and reducing barriers in state regulation of surplus lines insurance and reinsurance. It would create a uniform regulatory system, while preserving the role of the state regulator.

“This bill would simplify the tax remittance and compliance responsibilities surplus lines brokers must discharge and bring efficiency and cost reduction of regulatory compliance in placements with multi-state exposures,” said NAPSLO Executive Director Richard Bouhan. “Such reform would benefit not only the brokers and underwriters who provide surplus lines insurance but also consumers who ultimately pay the price for the inefficiencies.”

In May, Representatives Dennis Moore (D-Kan.) and Scott Garrett (R-NJ), introduced H.R. 2571 in the House. The House passed similar versions of the bill in the last two sessions of Congress and the Senate took up a similar bill in 2007 but it took no action prior to the end of the 110th Congress, requiring that the bill be reintroduced in the 111th Congress. NAPSLO has been informed that H.R. 2571 will be passed under suspension in the House in early July. NAPSLO officials said they are hoping to see action take place soon on the surplus line reforms and believe there will be wide support for the legislation, noting that NAPSLO and other industry organizations have worked together in advocating enactment of this type of legislation.

“With the introduction of the bill in both the House and Senate, and wide support from the industry, we believe that this bill will be approved and signed into law,” said Maria Berthoud, Partner, B&D Consulting. “Financial services reform is currently front and center in Washington which gives us an excellent opportunity to have this bill included and passed in any larger reform measure.”

In addition to congressional action, insurance regulatory reforms are also under review by the White House. In early June NAPSLO was among a select group of insurance trade associations attending a Listening Discussion with White House officials on regulation of the financial industry Ms. Berthoud and other industry representatives met with Diana Farrell, Deputy Director of the National Economic Council and Deputy Assistant to the President, and Michael Barr, Assistant Secretary for Financial Institutions at the Department of Treasury. On June 26, NAPSLO will attend another White House meeting to discuss how this surplus lines fits into the Administration’s regulatory reform plans.

New Travelers Insurance Commercial

Travelers always comes out with funny, clean commericals. This is a great example of one. Great little tune as well.

‘Twist’ in Health Care ‘Simplification’ Provisions: 3 Million More Eligible for Medicaid in 2014

Up to three million more people, mostly middle-class retirees, will qualify for Medicaid in 2014 under provisions of PPACA meant to simplify health care law, in addition to the estimated 16 million to 18 million additional people that PPACA will already bring into the program.

The Associated Press is reporting that the Patient Protection and Affordable Care Act (‘PPACA’) signed into law by the Obama administration will qualify up to three million more, mostly middle-class, people for Medicaid, a program originally intended for the poor.

In 2014, a married couple earning as much as $62,000 a year could still qualify for Medicaid.

This new ‘twist’ was only recently ‘discovered’ nearly a year after PPACA was signed into law. Described as part of PPACA's effort at 'simplification' of federal health care law, the twist is this: in 2014, Social Security benefits will no longer be counted as income for determining Medicaid eligibility.

According to an example cited by the Centers for Medicare and Medicaid Services ('CMS'), a married couple retiring at age 62 in 2014 and each receiving the maximum Social Security benefit of $23,500 could get $17,000 from other sources, for a total income of $64,000, and still be eligible for Medicaid. A $64,000 income is about four times the federal poverty level for a two-person household.

Read the full article:

A twist in Obama's health care law
Ricardo Alonso-Zaldivar | Associated Press | Yahoo News
June 21, 2011

Rhode Island Amends Surplus Lines Gross Premium Tax to 4%

The Rhode Island General Assembly enacted into law Article 15 of House Bill 7397 Substitute A as Amended, which amends the Surplus Line Gross Premiums Tax to 4% on the gross premiums charged the insured by the insurers, less the amount of premiums returned to the insured, effective July 1, 2010.

The Rhode Island Division of Taxation issued a notice noting that for the period of January 1, 2010 through June 30, 2010 the Surplus Line Gross Premium Tax Rate was 3%. For the period of July 1, 2010 and thereafter the Surplus Line Gross Premium Tax
Rate is 4%.

The legislation requires that the Surplus Line Broker Estimated Tax Payments due October 30, 2010, December 31, 2010, and thereafter, reflect the 4% tax rate.

CY 2009 Form T-71A Surplus Line Broker Return of Gross Premiums and CY 2010 Form T-69ESSLBDEC Surplus Line Broker Estimated Tax Coupons are available on its website www.tax.ri.gov on the left click FORMS, then Business: Corporate Tax Forms. The CY 2010 Tax Return and CY 2011 Estimated Tax Forms will be available about January 1, 2011. The Rhode Island Division of Taxation does not print and mail forms.

Payment of the Surplus Line Gross Premiums Tax may be made by Electronic Funds Transfer. Questions regarding Electronic Funds Transfer (EFT) should be directed to (401) 574-8732.

Montana CSI to assume stamping office functions

Effective July 1, 2009 the Montana Commissioner of Securities and Insurance will review and process surplus lines insurance submissions, determine applicable stamping fees owed, and send surplus lines agents tax and fee statements.

All of these functions were previously performed by the Montana Surplus Lines Agents Association (MSLAA).

In a letter to surplus lines agents, the department said the "decision to bring these functions under the direct control of the CSI from the MSLAA was a difficult process and was brought about by many factors, including the uncertainty of the surplus lines insurance market and proposed federal legislation."

In addition, the CSI noted that it had revised the surplus lines submission/endorsement forms for all surplus lines transactions reported after July 1, 2009. The updated surplus lines forms can be obtained at http://csi.mt.gov. In the near future, the CSI said it would implement an electronic filing system for surplus lines submissions.

Man Alleges $1 Bank Robbery an Effort to get Prison Medical Care

Unorthodox treatment plan (seeking health care for medical conditions while in prison for bank robbery – at least until eligible for social security) may be thwarted by the banality of the heist.

James Verone of North Carolina alleges that his attempt to rob a bank of one dollar was just part of his scheme to get prison medical care. Verone told a reporter from WCNC-TV of Charleston that he has ruptured discs in his back and a growth on his chest. Unemployed, Verone says he has no money and could not afford health care on his own.

Verone handed the teller a note that read: "This a bank robbery and I need medical attention."

Earlier this month, Verone walked into a bank in Gastonia, North Carolina, and handed the teller a note that read: "This a bank robbery and I need medical attention," according to USA Today. He then took a seat and waited for the police to arrive and arrest him.

Verone's unorthodox medical treatment plan was to receive free health care while in prison for his crime until he becomes eligible for social security in three years.

However, because he only demanded one dollar and did not use a weapon, he is only being charged with larceny, which imposes much less jail time than bank robbery.

Read the full article:

Man says he robbed bank of $1 to get access to medical care in jail
By Douglas Stanglin | USA TODAY
June 21, 2011

Reinsurance Courses Available to NAPSLO Members at a Discount

Two upcoming Reinsurance Association of America programs, The Art of Designing Reinsurance Contracts and Programs and ReUnderwriting: An Educational Forum for Underwriting Professionals, are available to NAPSLO members at a discounted rate.

The Art of Designing Reinsurance Contracts and Programs is set for July 14-17 in New York City and will be a four-day seminar for professionals who need an in-depth treatment of reinsurance contracts. The program will focus on:

• Design property and casualty reinsurance contracts from the perspective of the insurer, reinsurer, and intermediary;
• Learn the impact of different contract clauses;
• Structure a contract to avoid gaps in coverage;
• Determine risk transfer and its implications on the financial statement;
• Experience the consequences of line decisions by playing Gen Re's PRIME game, a simulated management exercise.
  

The course is designed for Underwriters, contract writers, claims and accounting professionals, attorneys specializing in reinsurance, intermediaries, regulatory staff, and insurance company professionals. The 2008 program was awarded 28.5 CLE credits (can vary depending on state), including one credit hour for ethics. CPCU, CPD and CPA, CPE credits are also awarded. Hotel Accommodations are just $200 per night at the New York Helmsley Hotel.

You can review the Agenda, Brochure, and Register online. NAPSLO members qualify for the Association Partner registration rate.

The second program, ReUnderwriting: An Educational Forum for Underwriting Professionals is set for July 30 in New York City and will be a one-day program focusing on relevant topics and concerns to (re)insurance underwriting professionals.

• A reinsurance buyer's perspective about the drivers of a company's decision to purchase reinsurance;
  
• Practical hands-on session to enhance business practices, including an underwriting workshop to analyze and take active steps to improve a company's net results;
• Challenges facing underwriters and actuaries in the dynamic insurance and reinsurance market;
• V.J. Dowling's perspective on market trends;
• Panel discussion on underwriting hot topics.
  

The program is for mid-to-senior level underwriters, chief underwriting officers, brokers, actuaries, claims professionals, attorneys, and other professionals from the reinsurance and primary insurance sectors.

Hotel Accommodations are available at $200 per night at the New York Helmsley Hotel and the 2007 program awarded 6 CLE credits. CPCU, CPD and CPA, CPE credits are also awarded.

You can review the Agenda, Brochure, and Register online.

Oregon Legislative Counsel Questions Delegation of Authority in Compact Bill

Legislation delegating legislative authority to insurance departments as part of laws allowing states to enter into unspecified tax sharing agreements or interstate compacts is unconstitutional, according to an opinion issued by the Oregon Legislative Counsel Committee.

In a written response to a state senator regarding a bill under consideration by the Oregon Legislature, the Legislative Counsel Committee stated that under Oregon’s constitution, the authorization in HB 2679 to allow the Director of the Department of Consumer and Business Services “to enter into a compact, or other tax sharing arrangement, constitutes an “unconstitutional delegation of authority.”

Oregon, along with other states, are considering, or have considered, legislation to enter into a compact or establish agreements with other states to allocate premium taxes paid to an insured’s home state.

some States have considered such legislation in connection with other legislation updating state laws to bring them into compliance with the Nonadmitted and Reinsurance Reform Act, which goes into effect on July 21.

The Oregon counsel’s office said that the “Legislative Assembly may delegate some portion of its authority to state agencies, as it deems appropriate”, however the authority to enter into an interstate compact has not been delegated by the Legislative Assembly in the past (with one exception), and the bill “does not contain sufficient standards and safeguards regarding the delegation of legislative authority and because the subject of the delegation, the power to tax, is a core legislative function.”

Citizens and Catastrophe Fund Assessment Base Under Review by Florida Insurance Officials

Principals with the Office of Insurance Regulation, Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund are reviewing the premium assessment base for Florida policyholders relating to multi-state risks when Florida is the home state, according to the Florida Surplus Line Service Office.

The FSLSO noted that after reviewing the language of the federal NRRA and provisions of SB 1816, it appears that the assessments levied against Florida policyholders will be limited to the portion of premium covering only the exposures in Florida and not the entire gross premium of the policy.

The FSLSO also noted Surplus lines agents and Independently Procured Coverage filers will be required to submit the gross policy premium allocated by state for multi-state new business and renewal policies, and any subsequent endorsements to those policies, effective on or after July 1, 2011. As provided, SB 1816 dictates that multi-state exposures filed with Florida will be taxed on the gross premium using the tax rates of the states applicable to the premium allocated for each state where the risk is located. Service fees will be calculated at Florida's fee on 100% of the gross premium of the policy.

More Than 1,000 Registered for NAPSLO Convention

More than 1,000 people registered for the NAPSLO Annual Convention, set for October 11-14 in Atlanta, during the first week of registration.

Registration for the convention opened June 15 and members can register online for the meeting, which will take place at the Atlanta Marriott Marquis and the Hyatt Regency Atlanta, by using the Registration link on the Convention webpage at http://annual.napslo.org.

Registration fees are $795 for Delegates and $395 for Spouses until September 1 and $895 and $425 after that date. Hotel rooms are available at the Atlanta Marriott Marquis ($219) and the Hyatt Regency Atlanta ($199). The two hotels are connected by a walkway.

Connecticut Enacts NRRA Bill Authorizing Revenue/Insurance Commissioner to Enter Tax Sharing Agreement

The Connecticut Governor signed into law a bill on Tuesday that authorizes the Commissioner of Revenue Services and/or the Insurance Commissioner to enter into a tax sharing agreement or compact.

Connecticut is the 34th state to enact Nonadmitted and Reinsurance Reform Act (NRRA) related implementation legislation. During the session NAPSLO provided draft legislation, offered comments on legislation, and spoke with insurance department officials.

The NRRA mandates that beginning July 21, 2011 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are working to bring their laws into compliance.

Connecticut's bill (HB6652) as amended, authorizes the Commissioner of Revenue Services and/or the Insurance Commissioner to enter into a tax sharing agreement or compact including, but not limited to, NIMA.

The agreement/compact may provide for the application of the premium tax rate(s) for surplus lines and independently procured insurance of each state where there are insured risks, a standardized allocation formula and for taxes to be allocated to Connecticut when it is the home state and the other state where insured risks are located has not entered into the agreement/compact.

The agreement/compact may also provide for certain enumerated requirements and procedures that appear to be based on NIMA. The agreement/compact would control over any conflicting statutory provisions. The bill would require premium tax payments to Connecticut when it is the home state to be based on 100% of the entire premium basis and applying Connecticut's 4% tax rate, though as noted this requirement would not apply if there is a conflicting tax agreement/compact provision. Premium tax payments would need to be made quarterly (again subject to any agreement/compact).

The changes to the premium tax provisions would apply to insurance "that is procured, continued or renewed on or after July 1, 2011." This bill also incorporates the NRRA's exempt commercial purchaser (ECP) exemption.

iPhone Apps for Insurance Companies

Over the last year mobile applications for smart phones have begun to pop up amongst the different insurance companies that Fey Insurance represents. It started with Travelers and Progressive and has expanded into Safeco, Chubb and now Cincinnati Insurance Company. The applications all allow you to view your current policies and auto ID cards. They help give you contact information to report claims as well as advice on what to do during a claim. Some of the applications actually allow you to report the claim directly from the mobile device.

So how do you get your insurance carriers mobile application? First go to your most recent insurance policy declaration page for either your home or auto insurance. Double check which company you have. Once you know which company you have your insurance with then pull up the applications icon on your iPhone. In the search box type the company name. Once you have located the insurance company's application be sure to download it to your device. Some of the applications will allow you to setup your account right in the app but others may require that you first go to the insurance companies website and create a login.

When you are all finished creating a log in you are then set to use the app and have your personal insurance information handy at any time. Each app also has a button you can press to give us a call directly for more detailed assistance. Try it out today.

TRIA takes step forward to advance in the U.S. House of Representatives along with NARAB II

Today the House Financial Services Committee voted to advance H.R. 4871 the TRIA Reauthorization Reform Act of 2014 for consideration by the full membership of the U.S House of Representatives. NAPSLO previously reported on the proposed legislation here and here. NAPSLO is especially pleased and applauds Chairman Randy Neugebauer for successfully offering an amendment that will include the National Association of Registered Agents and Brokers (NARAB II) as part of this legislation.  NAPSLO strongly supports NARAB II.

The next step for the TRIA legislation is consideration and final vote in both chambers. NAPSLO is hopeful TRIA will be reauthorized in the coming months and that NARAB II will continue to be attached. NAPSLO will continue to provide updates as this legislation progresses. 

Employment Practices Liability

A popular insurance text starts with, “The growth of federal and state legislation dealing with employment discrimination and sexual harassment, the changing legal views on wrongful termination, and the increasing tendency of aggrieved parties to turn to the courts for settlement of such disputes have caused insurers to specifically exclude coverage for such employment-related claims in the commercial general liability policy.”

To fill this gap, a number of insurers are offering employment practices liability (EPL) coverage as an endorsement to the commercial general liability policy or as a stand-alone policy. Independently developed by each company, the EPL coverage forms vary by company, however, most policies are similar in terms and conditions.

EPL policies are usually written on a claims-made basis, which means that for a claim to be covered, it must occur during the policy term. Extended reporting periods from one to three years can be added for an additional premium.

In addition to damages paid for judgments or settlements, the cost of defense is covered. However, it is usually paid from the limit of liability, not in addition to the limit of liability. Most EPL policies specifically cover back pay. Back pay is commonly awarded to successful claimants in discrimination and wrongful termination actions.

Typically, the definition of “insured” in an EPL policy includes the corporation, its directors and officers, its employees, and, in most policies, its former employees. Some policies limit the definition of “insured” to include only managerial employees.

The deductible for this coverage ranges from $1,000 to $250,000, depending on underwriting factors. One difference from other types of policies is that the EPL policy usually requires the insured to participate in losses exceeding the deductible. The amount that the insured contributes after the deductible has been satisfied is based on the “participation rate.” Participation rates are usually 5 to 10 percent, but can reach as high as 25 percent depending on underwriting factors.

Insurance Regulatory Implications of the Federal Orderly Liquidation Authority and Systemic Risk Determinations

The Orderly Liquidation Authority of the Dodd-Frank Act authorizes the FDIC to act as receiver and liquidator for failing financial companies, including insurance companies and their affiliates in certain circumstances, that pose a systematic risk to the financial stability of the United States.

Section 113(a)(1) of the Dodd-Frank Act[1] authorizes the federal Financial Stability Oversight Council (‘FSOC’) to assume supervision of any ‘nonbank financial company’ if it determines that the financial stability of the United States could be threatened by ‘material financial distress’ at the company, or by the ‘nature, scope, size, scale, concentration, interconnectedness or mix of activities’ at the company.

Under the Dodd-Frank Act, federal regulators can assume supervision of certain financial companies, including insurance companies, that are determined to pose a 'systemic risk' to the financial stability of the U.S.

The term nonbank financial company is defined broadly enough under the Dodd-Frank Act to encompass companies that are engaged in activities including ‘[i]nsuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing’ in the United States.[2]

In other words, the FSOC is authorized under the Dodd-Frank Act to directly regulate specific insurance companies, as well as financial holding company systems involving insurance companies, under certain circumstances.

The stated purpose of Title II of the Dodd-Frank Act, known as the Orderly Liquidation Authority, is to authorize liquidation under federal law for failing financial companies that pose a ‘significant risk to the financial stability of the United States’ and, as receiver, to do so ‘in a manner that mitigates such risk and minimizes moral hazard.’[3] The Orderly Liquidation Authority thus empowers the Federal Deposit Insurance Corporation (the ‘FDIC’) to liquidate failing companies that are determined to pose a systemic risk to the United States financial system.[4]

The FDIC is authorized to act as the receiver for and liquidate impaired or insolvent insurance companies subject to the provisions of the Dodd-Frank Act.

The Dodd-Frank Act expressly directs the FDIC, as the receiver of a failing financial company, to take all steps necessary and appropriate to assure that all parties – including management, directors and third parties – having responsibility for the condition of the financial company will ‘bear losses consistent with their responsibility, including actions for damages, restitution, and recoupment of compensation and other gains not compatible with such responsibility.’[5]

This appears to suggest the prospect of litigation against directors and officers of failing or insolvent insurance companies in federal court under federal law, which could have a significant impact upon the corporate governance of insurance companies across the industry.

But the Dodd-Frank Act also provides that if an insurance company is determined to be subject to the Orderly Liquidation Authority of the FDIC, the liquidation or rehabilitation of that insurance company, and any subsidiary or affiliate thereof that is also an insurance company, is to be conducted as provided under applicable state law.[6] Thus, the potential of direct federal litigation against directors and officers of a failing or insolvent insurance company in liquidation under the Orderly Liquidation Authority of Dodd-Frank seems unlikely.

The liquidation of an insurance company subject to the Orderly Liquidation Authority of the FDIC is to be conducted as provided under applicable state law.

However, the term ‘insurance company’ under the Orderly Liquidation Authority is defined to include any entity that is engaged in the business of insurance, subject to regulation by a state insurance regulator and ‘covered by a state law that is designed to specifically deal with the rehabilitation, liquidation or insolvency of an insurance company.’[7]

Depending on how these provisions are applied in conjunction with specific state laws, the possibility exists that the directors and officers of certain affiliates, such as management companies or service companies, of a failing or insolvent insurance company could, at the very least, find themselves in federal court arguing the applicability of the exceptions to the Orderly Liquidation Authority in order to avoid federal insolvency proceedings and/or litigation.

1. The Dodd–Frank Wall Street Reform and Consumer Protection Act, Pub.L. 111-203, H.R. 4173.
2/ See § 102(a)(4)(B) and (6) of the Dodd-Frank Act; § 4(k)(4)(B) of the Bank Holding Company Act of 1956.
3. § 204(a) of the Dodd-Frank Act.
4. See § 203(b) and § 204(b) of the Dodd-Frank Act.
5. § 204(a)(3) of the Dodd-Frank Act.
6. § 203(e) of the Dodd-Frank Act.
7. § 201(a)(13) of the Dodd-Frank Act.

Obamacare Insurance Regulator to Join Private Health Insurance Group

The chief insurance regulator in the Department of Health and Human Services is resigning to join UnitedHealth Group, Inc., as an executive vice president.

Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight, has announced that he is leaving his post as the chief insurance regulator in the U.S. Department of Health and Human Services ("HHS") to become an executive vice president at the Optum unit of the UnitedHealth Group, Inc.[1]

Larsen directed the enactment of federal insurance regulation arising out of Obamacare.

Larsen was charged primarily with directing the development and enactment of federal insurance regulations arising from recent healthcare reform legislation such as the Patient Protection and Affordable Care Act of 2010, sometimes referred to as "Obamacare." Mike Hash, an adviser to HHS Secretary Kathleen Sebelius, has been tapped as Larsen's temporary replacement.[2]

Larsen has said the departure is for personal reasons, but some insurance insiders have speculated that Larsen may have gotten "some indication" that the pending Obamacare decision from the Supreme Court "is not going to be good" and that Larsen "doesn't want to start over or try to pick up the pieces."[3]

Others are convinced that Larsen really is leaving for personal reasons though. “I don’t think it has anything to do with anything policywise, just that he has kids and he needs to find a way to pay tuition,” said Tom Scully, a lobbyist who was the Centers for Medicare & Medicaid Services administrator under President George W. Bush.[4]

Before joining the HHS, Larsen worked for Amerigroup Corp, a Medicaid plan insurer, and he served as Maryland's insurance commissioner. Now, Larsen is moving back to the private sector by joining Optum.[5]

The Optum division of Minnetonka, Minnesota-based UnitedHealth, the largest U.S. health insurer, provides health- care services including pharmacy benefit management, consulting, and wellness and disease-management programs for employers. [6]

1. HHS Official's Exit Stirs Speculation, J. Lester Feder, Politico, June 17, 2012; U.S. Health Insurance Regulator to Leave Oversight Job, Alex Wayne, Bloomberg Businessweek, June 15, 2012.
2. U.S. Health Insurance…, id.
3.  HHS Official's Departure…, id.
4.  HHS Official's Departure…, id.
5. U.S. Health Insurance…, id.
6. U.S. Health Insurance…, id.

NAPSLO encouraged by proposed financial services reforms

Representatives of NAPSLO are encouraged that the initial draft of the financial services reform package outlined by the Treasury Department proposes the continued use of state regulation of the insurance industry.

The Treasury Department proposal is consistent with the outline of regulatory reform NAPSLO presented to the administration after it, along with other national groups, met with representatives of the White House and Treasury Department officials earlier this month.

"During our discussions, the Treasury asked for additional information on surplus lines and how it is regulated and NAPSLO’s views toward financial services regulation reform. We submitted the information and we are delighted that the report is in line with the views we presented, particularly in regard to insurance regulation,” said Maria Berthoud, NAPSLO's Washington Representative with B & D Consulting.

"We believe state regulation offers consumers better protections and stronger regulation and are encouraged that the Treasury Department proposal incorporates the continuation of state insurance regulation,” stated NAPSLO President John Wood. “We agree that adding enhancements to state regulation is the best approach and are pleased that the Treasury took into consideration our recent comments," Wood added.

"While the structure of the regulation of the financial services industry will be altered under the Treasury proposal, insurance regulation will remain the responsibility of the states, as it is now," Richard Bouhan Executive Director of NAPSLO stated. "We are further encouraged that with the report’s emphasis on regulatory reform, the passage of HR 2571 ---- the Nonadmitted and Reinsurance Reform Act (NRRA) ---- is even more critical. When enacted, the NRRA will facilitate the efficient placement and taxation of surplus lines insurance and would work well with the Treasury Department’s proposals,” Mr. Bouhan added.

House Introduces TRIA Reauthorization, Schedules Markup of Legislation

 The National Association of Professional Surplus Lines Offices (NAPSLO) commends the continued progress from Congress on the reauthorization of the Terrorism Risk Insurance Act. Earlier this month, the Senate Banking Committee approved its reauthorization proposal. In recent days, the House Financial Service Committee released legislation which would extend the program for five additional years while making a series of reform to the program. NAPSLO appreciates the Committee's outreach and collaboration with industry as this process has progressed, and also appreciates the Subcommittee’s work on reforms contained in the NARAB II legislation.  NAPSLO continues to support the attachment of NARAB II to the final TRIA reauthorization legislation.

As the process moves forward, NAPSLO continues to urge swift action on the part of Congress to reauthorize TRIA before the program expires at the end of 2014.  A markup has been scheduled for Thursday, June 19 and NAPSLO looks forward to continuing to work with Congress to address this program’s reauthorization.