NAIFA/WAHU Day On The Hill was held Thursday, January 26, 2017. Close to 100 producers from Health Underwriters and NAIFA met at the Double Tree Hotel in Olympia for a morning session. Mel Sorensen, our lobbyist extraordinaire, led the combined meeting of both professional associations.
Earlier in the morning, Mel and the two presidents, Neal Kloke of NAIFA and Keith Wallace of WAHU, testified before legislative panels on key topics important to our business.
We heard from; Michael Marchand, Director of Marketing for the Washington Health Benefit Exchange; John Mangan, Regional VP for the American Council of Life Insurers; Grace Campbell, of AHIP; and comments from Neal Kloke and Keith Wallace.
Michael Marchand acknowledged the positive role of brokers in increasing the participation and growth of the exchange. It is a dubious acknowledgement, however. Whether we agree with necessity of an exchange, we’ve certainly helped get more folks covered and at the same time I’ve spoken to a number of agents who are now charging fees to help folks with their decision making. I don’t even focus on health insurance and I’m getting calls daily from people who were referred by the exchange. I’m wondering why we need the exchange? (paragraph submitted by Richard Miller)
Before breaking for lunch and our own lobbying efforts on “the Hill” we discussed the talking points for the day. Some were pertinent to health insurance, some to life insurance:
- Agents and brokers know the markets, know the applicable laws and regulations, are trained and certified by the OIC, know their clients and provide valuable service to the communities we serve
- Oppose any legislation that would impose adverse tax impacts on licensed insurance producers or the insurance industry
- The Business & Occupation Tax is equal to an income tax on producers with no recourse to pass the tax on to our clients. We oppose any increase in the B&O which Governor Inslee has proposed.
- Life insurers pay millions of dollars via Premium Taxes to support the State General Fund and fund the costs associated with the Office of Insurance.
- Washington allows life insurers to take a credit against Premium Tax obligations for their assessments paid to the Guaranty Association-20% each year over a 5-year period. There are bills to either increase the tax burden on life and health insurers OR eliminate the credit allowance currently in place.
- Oppose HB 1185 and SB 5242 – bills that would alter the Washington Insurance Inducements Requirements and destroy the agreement reached between the OIC and licensed producers in 2015.
A controversial San Francisco-based employee benefits firm is apparently behind the introduction of HB 1185 and SB 5242 – companion measures that would allow insurers, insurance producers, or title insurance agents to offer goods that are free or for less than fair market value incident to an insurance sale or solicitation. The bills were introduced at the request of Zenefits after Insurance Commissioner Mike Kreidler ordered the company last month to cease offering free employee benefits software, finding that the activity is in violation of Washington’s law against inducements. The company was fined by the OIC in 2016 for allowing unlicensed individuals to sell insurance in Washington. Last November regulators in California imposed significant fines and penalties against the company for licensing violations in that state.
HB 1185 was considered at a hearing of the House Business & Financial Services Committee for consideration, and a hearing has been scheduled to consider the measure on Wednesday, January 25. SB 5242 was considered by Senate Financial Institutions and Insurance Committee at a hearing on Thursday, January 26. NAIFA, together with other producer associations and the Office of the Insurance Commissioner, testified in opposition to the measures. NAIFA President Neal Kloke, together with Keith Wallace, the President of the Washington Association of Health Underwriters, along with representatives of the Professional Insurance Agents of Washington/Alaska and the Independent Insurance Agents and Brokers of Washington, testified that the measures would unravel recently-enacted revisions to Washington’s Insurance Inducement provisions that were the result of careful negotiations between the OIC and producer groups only two years ago. They also expressed concern that the bill would provide competitive advantages to large entities who are able to offer large financial inducements to build client relationships that are completely beyond the reach of main street agents and brokers. The OIC also testified against the bills.
- An out-of-state firm wants to eliminate the $100 maximum allowance for gifts to insurance prospects or clients.
- This firm offers a software suite for no charge that most small businesses would normally pay thousands of dollars to purchase. While they say the software is free to any small business, the firm strongly seeks to take over insurance plans by BOR and remove the local producer, forcing the small business to deal with an 800 number on all issues.
- This firm does almost all business by phone and email using unlicensed representatives.
- Support HB 1338 and SB 5253 to continue the Washington State Health Insurance Pool – WSHIP – which is designed to sunset at the end of 2017.
- With changes coming to the Affordable Care Act, the Insurance Commissioner as well as all insurance associations (NAIFA, WAHU, PIA, etc.) believe the WSHIP should not be allowed to sunset but be available as a lifeboat for the 200-300 insured individuals that have coverage through WSHIP. Most of the WSHIP insureds are in ESRD and unable to obtain coverage elsewhere.
Producers met with dozens of Representatives and Senators during the afternoon and discussed these issues. For the most part, legislators, both Democrats and Republicans, seemed to better understand the impact of these bills and most of them agreed with our positions.
Thanks to Mel Sorensen and all the members of NAIFA that sacrificed a day from their normal business activities to be at Day On The Hill. Your participation is appreciated. Now is the time to contact your own representatives and Senator. Make sure they know you stand ready as a resource to their office on insurance and investment topics.
Richard Ek, IFAPAC Co-Chair
Richard Miller, Advocacy/Legislative Chair
Mel Sorensen, NAIFA-Washington Lobbyist