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Legislative Report

February 14, 2014 BOSE PUBLIC AFFAIRS GROUP INSURANCE BULLETIN XIV, NUMBER 6

In This Issue

GENERAL ASSEMBLY OVERVIEW


In a rare occurrence this week, Governor Pence testified in front of the Senate Education and Career Development Committee in support of HB 1004 dealing with early childhood learning. It was his first time testifying as Governor in support of a bill. Pences remarks centered on his administrations goal of reducing childhood poverty and addressing pre-kindergarten programs as outlined in HB 1004. To view Pences full testimony, please click here. Mass transit legislation for Central Indiana is on the move once again as the House Roads and Transportation Committee heard SB 176 this week. The Senate had placed an amendment in the bill to impose a county income tax or a county employment tax on C corporations in eligible counties. The House Committee removed this language that would have affected C corporations. House Joint Resolution 3 faced discussion in the Senate this week after being amended in the House to remove language which would have banned civil unions. HJR 3 was heard in the Senate Rules Committee on Monday, and Senate President Pro Tem David Long (R-Fort Wayne) was adamant that any proposed amendments be offered and discussed on second reading in front of the entire Senate. HJR 3 was up for second reading amendment on Thursday where there were amendments filed to add in the civil union language that was removed in the House; however, the amendment authors did not call down the proposals for discussion due to a lack of votes. The measure now moves to the full Senate for a final vote as early as Monday. If it passes the Senate, the proposed amendment would have to be approved again by a future General Assembly and couldn't come before voters until at least 2016. The business personal property tax proposals continue to work their way through the Indiana General Assembly. The two proposals, HB 1001 and SB 1, are different from one another. HB 1001 is basically a county option to eliminate the personal property tax on new equipment purchases. SB 1 eliminates the business personal property tax for businesses with less than $25,000 worth of business equipment and supplies. According the calculations, the SB 1 proposal would include about 70% of Indiana businesses. Governor Pence and fiscal leaders continue to receive pressure from mayors across the state. However, just this week Governor Pence stated that he was open to proposals to fully replace the revenue that local governments might lose under the SB 1 proposal.

General Assembly Overview Unclaimed Life Insurance Benefits IDOI Bill House Considers Repeal of Key Insurer Tax Credits Electronic Delivery of Insurance Documents Motor Vehicle Financial Responsibility Pollution Exclusion Lawsuit Lending Abortion Coverage Mandate Biosimilar Drug Bill

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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 for policies and contracts issues or entered into after June 30, 2015. Due to concerns by the Attorney Generals office, the prospective treatment of the bill may be taken out and application would then be to all in-force policies and contracts. The bill is scheduled for hearing on Wednesday (2/19) at 10:30am in the House Insurance Committee.

IDOI BILL
HB 1206, authored by House Insurance Chairman Matt Lehman (R), does the following: (1) removes a requirement for life insurers to submit individual investments to the Department of Insurance; (2) removes a requirement that a foreign or alien insurer submit an application for admission to do business in Indiana in duplicate; (3) changes from March 15 to July 1 of each year the due date for certain insurance holding company filings; (4) adopts ORSA; (5) repeals a provision requiring the Commissioner to examine and publish a foreign or alien insurers annual condensed statement of assets and liabilities; and (6) specifies requirements for service contracts. The bill is scheduled for hearing next Thursday (2/20) at 10am in the Senate Insurance Committee.

HOUSE CONSIDERS REPEAL OF KEY INSURER TAX CREDITS


SB 367, originally filed as a property tax bill, was amended late in the Senate committee process and now includes a sunset on numerous tax credits; including, a sunset of the following: Indiana Life and Health Guaranty Association Tax Credit (12/31/17), Indiana Insurance Guaranty Association Tax Credit (12/31/17) and the Indiana Comprehensive Health Insurance Association Tax Credit (1/1/17). A repeal of these credits will certainly have a negative financial impact on insurers that have already paid assessments and that have assessments coming in the future. The bill has been assigned to House Ways and Means, and Chairman Tim Brown is the lead sponsor. The bill has yet to be scheduled for a hearing, but we anticipate that the hearing may occur next Tuesday afternoon.

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 requires a recipient's consent to electronic delivery and a method to withdraw consent. It also includes provisions regarding electronic posting of documents on an insurers website. The bill is scheduled to be heard on Thursday in the Senate Insurance Committee.

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. This bill is scheduled to be heard on Tuesday in the Senate Homeland Security, Transportation, and Veterans Affairs Committee.

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. Amendments were adopted on second reading in the House which include additional consumer notification provisions as well as language that would apply the bill prospectively. The bill is scheduled to be heard on Thursday in the Senate Insurance Committee.

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 caps the interest rate at 38%. The bill is scheduled to be heard on Monday (2/24) in the Senate Civil Law Committee.

ABORTION COVERAGE MANDATE SCHEDULED FOR HEARING


A bill mandating that abortion coverage be offered as a rider to major medical coverage will be heard next week in the Senate Insurance Committee.

HB 1123 was amended in the House to make this mandate effective upon renewal on or after June 30, 2014. At the request of some insurers, the bill will be amended to make that effective date 1/1/2015. This change will provide necessary flexibility for insurers to update systems to accommodate this bill.

BIOSIMILAR DRUG BILL HEARING SET FOR WEDNESDAY


SB 262 will be heard Wednesday in the House Public Health Committee. The bill regulates the circumstances under which a biosimilar drug, once available, could be substituted for a brand name biologic. Opposition to the bill in the past has been intense, however recent versions of the bill have softened opposition however insurers and PBMs remain opposed because it seeks to limit the availability of more cost-effective pharmaceuticals.

For more information


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

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