Indiana Gov. Eric Holcomb and State GOP Form Joint Fundraising Effort

July 10, 2017

Indiana Gov. Eric Holcomb has started a new entity to raise money for his campaign committee and the state Republican Party.

The Team Holcomb political action committee that was launched in late June will split contributions, with 70 percent going to Holcomb's campaign and 30 percent to the state GOP.

State Republican chairman Kyle Hupfer tells The (Fort Wayne) Journal Gazette that the new PAC will help reduce the expense of having two separate fundraising staffs.

Hupfer is also Holcomb's campaign treasurer and says contributions can still be made directly to the governor's campaign or the state GOP.

While the PAC will have to file state reports identifying its donors, the governor's campaign and state GOP reports will just show that money as coming from Team Holcomb.

New Jersey Sets Horizon Blue Reserve Cap

July 4, 2017 | By Allison Bell Insurance Editor ThinkAdvisor

A last-minute deal reopened state beaches for the Fourth of July


New Jersey Gov. Chris Christie approved deals Tuesday that put a soft cap on how much capital Horizon Blue Cross Blue Shield of New Jersey can have, and reopened state campgrounds and beaches for the Fourth of July.A bitter fight over the carrier's reserves led to a partial state government shutdown that started early Saturday morning. Christie, a Republican, tried to frame the conflict as a battle between state health care funding needs and a multi-billion-dollar insurance company. Horizon worked hard to win support from state residents, including members of public employee unions. Many state residents ended up seeing the conflict as a battle between state officials who wanted to seize control of Horizon's money and people who wanted to go to the beach.


Horizon, a Newark, New Jersey-based company, provides or administers major medical coverage for 3.8 million people. It has $3 billion in capital reserves.

Horizon is the only company in New Jersey with a health care service corporation charter.

S2 v. S4

Originally, Christie backed S4. That bill would have given the state insurance commissioner the authority to set limits on how much capital a health care service corporation could have.

The commissioner could have required a health care service corporation to put any excess capital in a state health care quality and wellness program.

S4 would have also classified Horizon as an insurer of last resort. If the federal government eliminated the Affordable Care Act ban on medical underwriting, Horizon would have had to take applicants who were too risky to get individual medical coverage from other major medical coverage providers.

S4 supporters, including Christie, argued that Horizon was loosely regulated and had too much capital. Christie talked about using $300 million in excess Horizon reserves to pay for anti-opioid abuse programs.

Horizon argued that insurer-of-last-resort status would hurt its finances and force its enrollees to provide a subsidy for other carriers. The company argued that the reserve cap provision was so vague that it would have let state political appointees use Horizon's reserves to create a slush fund.

S2, the bill Christie actually signed, sets the maximum risk-based capital ratio for a health care service corporation at 725%. If a health care service corporation exceeds that RBC cap, the corporation is supposed to come up with a plan for using the excess capital to help its enrollees, not put the extra cash in a state fund.

S2 also eliminates the insurer-of-last-resort provision.

S4 would have required Horizon policyholders to elect 20% of the company's board members. S2 simply gives state officials the authority to appoint two members to the company's board.

Christie signed S4 shortly before midnight on Tuesday, and he signed a budget deal early today.

Horizon's Reaction

Horizon executives posted a statement praising the S2 compromise.

The compromise legislation "is reasonable, avoids higher costs for our members, and ... does not impose unfair or excess obligations," the company said in the statement.

The company made a point of thanking state lawmakers, and "a broad coalition of business, labor and consumer groups who stood up for Horizon's 3.8 million policyholders."

Horizon did not thank Christie.

Shutdown Fight

Last week, Christie accused Horizon and its supporters of playing a dangerous game, by blocking passage of S4.

Christie said Friday that the state government would have to shut down, because lawmakers had not sent him a budget he could sign.

Christie issued a shutdown order Friday. The order kept public safety agencies, schools and casino oversight operations open. It closed many state offices that serve the public, such as Department of Motor Vehicles offices and courthouses.

For members of the public, the most obvious immediate effect was a shutdown of the state's beaches and state campgrounds during the first hot, sunny weekend of the summer.

Angry travelers posted reports of being evicted from state park campsites they had reserved months in advance.

State troopers shut would-be beachgoers out of popular state beaches, including the beaches at Island Beach State Park.

The state opened the park in 1953. Christie's family and five other families still have beach houses in the park, according to the Newark Star-Ledger. State troopers let Christie's family enter, while they ejected other families with beach houses in the park and kept members of the public from entering.

News services published pictures of Christie sitting on a beach that was closed to the public. Some people used Twitter, Facebook and other social media services to post parody versions of the photos, with Christie sitting in his beach chair in new, absurd settings. The pictures, and the parody campaign, hurt Christie's effort to portray himself as a David standing up to an insurance company Goliath.

5 Worst States for Insurance Producer Fines

July 2, 2017 | By Think Advisor

Some states hit insurance producers with a lot more than others, and some are more likely to impose a fine than to get a producer to pay any ill-gotten money back to the customers.

The National Association of Insurance Commissioners gives a little information about trends in producer fines in volume one of its new 2016 Insurance Department Resources Report.

The NAIC is a Kansas City, Missouri-based group for insurance departments. It creates the resources report to show how many people and how much cash each state devote to regulating insurance, and how much insurance compliance activity each state handles.

Scammers target the mighty and the lowly, especially during tax season.

The report includes a great deal of interesting information about how insurance regulation works.

California, the state with the biggest department, has an insurance department staff of 1,392 and a 2016 budget of $204 million. Its deputy and assistant commissioners earned annual salaries ranging from $61,800 to $195,696.

Two U.S. territories, American Samoa and the U.S. Virginia Islands, had no insurance regulators in 2016. The state with the smallest insurance department staff, had 26 employees and an annual budget of $3 million. Wyoming's deputy and assistant commissioners earned annual salaries ranging from $84,960 to $127,440.

About half of state insurance departments expect to have a budget over $15 million in 2018, and about half expect to have 2018 budgets under $15 million.

Insurance agents and brokers might find the section on regulation of insurance producers interesting. The number of insurance producer fines in each state ranges from none to 4,671.

Here's a look at the number of insurance producer fines in each state. We also give the number of producer-related cases involving restitution. A low number of restitution cases might mean that producers in a state rarely harm customers, or that producers who do harm customers are unable to pay restitution, but it could also have something to do with how a state regulates producers.

New Mexico imposed no fines on producers in 2016

5. California

Number of licensed producers: 396,891

Number of fines in 2016: 158

Total value of fines: $1,176,666

Average amount per fine: $7,447

Number of producers who had to pay restitution to victims: 2

Number of fines in 2014: 124

4. Ohio

Number of licensed producers: 221,857

Number of fines in 2016: 207

Total value of fines: $60,550

Average amount per fine: $292

Number of producers who had to pay restitution to victims:

Number of fines in 2014: 0

3. Louisiana

Number of licensed producers: 127,141

Number of fines in 2016: 303

Total value of fines: $129,196

Average amount per fine: $426

Number of producers who had to pay restitution to victims: 0

Number of fines in 2014: 0

2. Massachusetts

Number of licensed producers: 130,514

Number of fines in 2016: 393

Total value of fines: $130,280

Average amount per fine: $331

Number of producers who had to pay restitution to victims: 39

Number of fines in 2014: 41

1. Delaware 

Number of licensed producers: 88,736

Number of fines in 2016: 4,671

Total value of fines: $1,260,850

Average amount per fine: $270

Number of producers who had to pay restitution to victims: 0

Number of fines in 2014: 5,671

In the technical notes for the producer fine table, the NAIC says Delaware has a large number of fines partly because late fees on license renewals are classified as fines.


10 big settlements in 401(k) excessive-fee lawsuits

July, 2017 | By Greg Iacurci

Lawsuits attacking allegedly excessive 401(k) fees, both for investment management and recordkeeping and administration, have proliferated since roughly the middle of the 2000s, when attorney Jerry Schlichter began bringing them en masse against large U.S. corporations.

Many have settled since then, including a recent self-dealing lawsuit involving American Airlines and an affiliated investment management firm. Parties in that lawsuit recently agreed to a $22 million settlement.

That, though, is small potatoes compared with some of the other paydays in these legal scuffles. Here are some of the largest settlements in excessive-fee cases, from smallest to largest.

10. First Union: $26 million

Case: Franklin et al. v. First Union Corp.
Year settled: 2001
Year filed: 1999
Court: Eastern District of Virginia

9. Ameriprise: $27.5 million

Case: Roger Krueger et al. v. Ameriprise Financial Inc. et al.
Year settled: 2015
Year filed: 2011
Court: District of Minnesota

8. International Paper: $30 million

Case: Beesley et al. v. International Paper Company et al.
Year settled: 2014
Year filed: 2006
Court: Southern District of Illinois

7. MassMutual: $30.9 million

Case: Dennis Gordan et al. v. MassMutual Life Insurance Co. et al.
Year settled: 2016
Year filed: 2013
Court: District of Massachusetts

6. Novant Health: $32 million

Case: Kruger et al. v. Novant Health Inc. et al.
Year settled: 2015
Year filed: 2014
Court: Middle District of North Carolina

5. Cigna: $35 million

Case: Nolte et al. v. CIGNA Corporation et al.
Year settled: 2013
Year filed: 2007
Court: Central District of Illinois

4. Northern Trust: $36 million

Case: Diebold et al. v. Northern Trust Investments N.A. et al.
Year settled: 2015
Year filed: 2009
Court: Northern District of Illinois

3. Boeing: $57 million

Case: Spano et al. v. Boeing Company et al.
Year settled: 2015
Year filed: 2006
Court: Southern District of Illinois

2. Lockheed Martin: $62 million

Case: Abbott et al. v. Lockheed Martin Corporation et al.
Year settled: 2015
Year filed: 2006
Court: Southern District of Illinois

1. Nationwide: $140 million

Case: Haddock et al. v. Nationwide et al.
Year settled: 2014
Year filed: 2001
Court: District of Connecticut

5 Things for Agents to Know About the Senate Health Bill

5 Things for Agents to Know About the Senate Health Bill

June 23, 2017 | By Think Advisor


The Senate's new Better Care Reconciliation Act bill might fail, but it could still pass.

Republicans hold just 52 seats in the Senate. Senate Majority Leader Mitch McConnell is struggling to get more conservative and more moderate Republicans to unite behind the version of the Affordable Care Act change bill released Thursday. At press time, at least eight Republican senators were publicly expressing skepticism about the idea of voting for the bill.

In the past, however, backers of other health bills have faced similar problems with rounding up votes and triumphed.

In 2009 and 2010, when the Democrats were working on the bills that created the Affordable Care Act, they had trouble with getting the most liberal Democrats and the most moderate Democrats to vote for the same bill.

In May, when House Speaker Paul Ryan brought the House ACA change bill, the American Health Care Act bill, to the House floor, no one knew what would happen. House members ended up passing it by a 217-213 vote.

Sen. John Cornyn, R-Texas, told Bloomberg today that he's confident the Better Care Reconciliation Act bill will attract enough Republican votes to get through the Senate.

The 142-page Better Care draft is written in a dense, confusing way, with many key provisions that would change the laws now in force by adding sentence fragments, deleting several words, or adding or deleting punctuation marks. The draft does not always explain what effect those changes are supposed to have.

Perhaps as a result, commentary on specific provisions in the draft has been scarce.

Here's a look at five of the more focused reactions that came out yesterday and today.

1. Insurers have mixed feelings.

America's Health Insurance Plans, a group for health insurers, is not taking an official position on the draft. It told Bloomberg that it likes the commercial insurance subsidies in the draft but has concerns about provisions that would phase in dramatic cuts in Medicaid funding.

The Blue Cross and Blue Shield Association is also praising the subsidy provisions, but it says the Senate needs to add strong incentives for people to keep themselves covered.

2. Experts think a state Affordable Care Act waiver program expansion program provision could be powerful.

The Patient Protection and Affordable Care, part of the ACA, already includes a Section 1332 waiver program provision. A state can use that provision to tinker with how its exchange program works, and with other ACA rules.

The Senate Better Care draft would let a state use Section 1332 to change many different ACA rules. The draft makes understanding which rules the draft could actually change difficult. The draft states that a state could ask to change the rules described in one paragraph in PPACA Section 1332. That paragraph in PPACA Section 1332 refers, in turn, to six major sections of PPACA. Some of those six sections may, in turn, refer to additional sections.

Joseph Antos and James C. Capretta of the American Enterprise Institute write in a on the website of Health Affairs, an academic journal, that they think a state could use a Better Care Section 1332 waiver to change its essential health benefits package, or standard benefits package, but not to bring back medical underwriting.