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
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