Boozell proposing NAIC constitutional amendment
New audit & reporting requirements for local
government joint self-insurance pools
Cook County sales tax impacts auto insurance
settlements
The redlining solution -- as simple as a
phone call away?
Department rules review
Financial exam reports adopted and filed
Industry survey on domestic violence
Rates lowered for IL work comp insurance pool
Producer regulatory action Hearings
Company action
Correction
Illinois Director Mark Boozell is seeking support from the nation's insurance commissioners to amend Article IX (1) (a) -- Executive Committee Structure and Composition -- of the NAIC Constitution. His proposal was submitted during the January 1996 Commissioners Conference in Kansas City, Missouri. The Illinois Director serves as Secretary of the NAIC Midwest zone.
The NAIC Executive Committee is currently made up of the three national officers, the immediate past president, the twelve zone officers and, "all other past presidents who have continuously remained members of the NAIC since completing their terms in the office of NAIC president." Boozell's proposal would delete "all other past presidents . . ." beginning in January of 1997.
Boozell's interest in parliamentary procedure prompted him to review the Association's constitution and question the appropriateness of the provision. Proponents believe it provides the Executive Committee with the expertise and institutional knowledge of past leadership, and while Boozell does not dispute that sentiment, he disagrees with the prospect of a lifetime vote on the Executive Committee.
"Organizations most definitely benefit from the experience and ideas of veteran members," Boozell says, "but after checking with a number of other national groups, I've yet to find one that extends a lifetime vote to its former leadership." Those surveyed are the National Association of Insurance Brokers, the American Bankers Association, the American Trial Lawyers Association, the National Association of Life Underwriters, the Reinsurance Association of America, the Alliance of American Insurers, the American Heart Association, the American -Red Cross, the American Bar Association, the American Cancer Society, the United Way of America, and the American Lung Association.
"The amendment would not deprive the NAIC of experienced voices. Every commissioner has the right to appear before the Executive Committee and express his or her opinion and concerns. I am not suggesting that past presidents be shut out of the discussion or debate process; only that they not be allowed a permanent vote. And those who do want to retain their vote always have the option to run for an office in their own zones."
Boozell notes two other interesting by-products of the current provision: the Executive Committee has an unknown and unlimited number of members; and as such, it becomes nearly impossible to maintain equal zone representation.
A constitutional change requires an affirmative vote of two thirds of the NAIC membership. The amendment will most likely come before the Plenary Session during the Spring National Meeting in March.
by Cynthia Stephenson
Under a recently approved amendment to state law, local governments that self-insure through joint insurance pools authorized by Section 6 of the Intergovernmental Cooperation Act (5 ILCS 220/6) are required to provide annual audited financial reports to the Director of the Department of Insurance. This provision was adopted in House Bill 2331 (P.A. 89-97, effective July 7, 1995). The law authorizes the Director to promulgate rules for the annual audit and report and to establish a due date for the initial annual audited financial report.
The Department of Insurance has drafted a proposed rule establishing audit and reporting requirements applicable to these joint self-insurance pools. The rule is expected to become effective on January 1, 1997, and will require filing of reports for fiscal years ending on or after that date. The pools will have 150 days after the end of their fiscal year to file the required reports.
Under the proposed rule, audited financial statements must be prepared in accordance with generally accepted accounting principles. A report of an independent certified public accountant will be required, as will an independent actuarial opinion regarding the sufficiency of loss and loss adjustment expense reserves. The report must also contain a balance sheet, statement of gain or loss from operations, statement of cash flows, statement of changes in surplus funds, and notes to the financial statements.
To facilitate enforcement of the rule, each pool will be required to register with the Department within 60 days of the effective date of the rule and annually on March 1st thereafter. The registration will provide essential information such as the name and address of participating entities, as well as basic information about the person responsible for conducting the affairs of the pool.
This rule is scheduled for publication in March. Requests for copies should be directed to the Secretary of State's Index Department at (217) 782-8570. Those with questions regarding the substance of the rule may call Cynthia Stephenson at (217) 782-1785 or Etta Mae Credi at (217) 782-1757.
In its quest to generate more revenue, Cook County has started collecting a three-year-old vehicular sales tax effective December 1, 1995. The tax adds 0.75 percent to the cost of all new or used vehicles (including motorcycles, boats and airplanes) registered in Cook County, regardless of where the item was purchased.
Insurance companies operating in Illinois should be mindful of this tax when settling auto insurance claims. The Department's Improper Claims Practices Rule 9.19 requires insurers to pay the applicable sales tax on first party collision and comprehensive claims. Companies must now add the Cook County tax, as well.
The only insurance companies that might be exempt from this requirement are those that write a stated value policy. If the addition of the Cook County tax to the claims payment would exceed the policy limit, the policyholder would not be entitled to reimbursement for the sales tax. However, if the company opts to replace a vehicle, the sales tax would be included in the settlement.
Questions on this issue should be referred to Dale Emerson in the Department's Springfield office at (217) 785-5044.
by Pamela Donnewald, CPCU
Could the answer to all of our redlining problems be as simple as a phone call away? Perhaps not entirely, but your phone call could go a long way toward solving some of the urban insurance issues faced by the insurance industry in recent years.
For the past three years, the Department of Insurance has worked with various industry and consumer groups to develop viable solutions to perceived insurance availability and affordability problems in Illinois. Because regulators, industry and consumer groups have worked together, the products that have been developed encompass the needs of all concerned.
To all of the companies, producers and consumer groups who have worked diligently on these projects, we extend our thanks. For those who have not yet become involved, but wish to become a part of the solution, we urge you to read on.
Insuring Urban America: Perceptions vs. Realities is a three-hour program developed by the Department and insurance company and producer representatives specifically to help companies, producers and other industry groups become more aware of and sensitive to consumer perceptions about urban insurance issues. The panel discussion covers the history and various definitions of redlining and focuses heavily on generally used underwriting practices that consumers perceive either discriminate or result in disparate impact.
Who Should Attend: The program is aimed solely at insurance industry professionals. It can be presented to one insurance company's personnel, an agents' association meeting, CPCU Society meeting or any other insurance related audience.
Cost: The panelists are industry volunteers and are not paid for their participation. There usually is no or little cost involved.
How to Find Out More: To learn more about the program or to schedule a presentation for your company or industry group, contact Pamela Donnewald at (217) 785-5987.
Homeowners Insurance for Home Purchase Counselors and Homeowners is a comprehensive consumer education course developed by the Department, insurance industry representatives, and the University of Illinois Cooperative Extension Service representing consumers. Many consumer counseling organizations will be using this program (or the National Insurance Task Force version of it) to teach consumers about homeowners insurance.
Counseling groups are always in need of qualified insurance professionals to assist them with the insurance portions of their programs. Taking advantage of these opportunities will help you develop successful partnerships with consumers and community based organizations.
Who Should Request a Copy: The eleven-part course is designed as a training tool for home purchase counselors and community-based consumer organizations. However, producers, CPCUs, or others who teach consumer groups about homeowners insurance will find the information useful. Non-insurance- industry groups that work with homeowners (e.g., realtor associations or lending institutions) may also find the information helpful in training their members.
Cost: The training materials are free. However, limited printing funds preclude us from providing multiple copies to other than not-for profit groups. The material may be duplicated as long as you include the proper acknowledgments when reproducing it.
How to Obtain a Copy: Contact Susie Smith at (217) 785-1258. Please contact us, too, if you know of groups in your community that could benefit from the course.
Pathways to Partnership: Sharing the Journey to Neighborhood Change is a guide developed by the National Insurance Task Force. This book helps insurers and community-based organizations understand the importance and benefits of becoming partners to solve urban insurance issues. It explains how to form partnerships, how to measure the success of partnerships and gives examples of successful partnerships already in place in many U.S. cities.
Who Should Request a Copy: Insurers, producers, community-based organizations, consumer groups and anyone interested in learning how to form partnerships should request a copy.
Cost: The Pathways guide is free. However, limited printing funds preclude us from providing more than one copy. The material may be duplicated as long as you include the proper acknowledgments when reproducing it.
How to Obtain a Copy: Contact Pamela Donnewald at (217) 785-5987.
Our efforts to address redlining problems over the past few years have been enlightening for all of us. Regulators, as well as many of the insurance companies and consumer groups with whom we've formed partnerships, have learned a great deal. Although it will take some time to change attitudes and eliminate redlining allegations, we firmly believe the long-term solution to urban insurance problems is education of consumers and the insurance industry.
The materials and programs outlined above are a positive step in that direction. With the Pathways guide to help you form partnerships and the consumer education guide to give you an immediate idea of what you can do to get started, you are well on your way to becoming one of the many in our industry working to erase the negative perceptions surrounding the redlining issue and to improve the overall image of the industry.
Is the solution to urban insurance issues just a phone call away? The answer to that question is really up to you.
The full text of Department rules is printed in the Illinois Register published weekly by the Illinois Secretary of State's Index Department, 111 E. Monroe St., Springfield, IL 62756. Subscriptions are available from that source for an annual fee of $290. Issue numbers and a Department contact person are listed below after each rule summary.
Copies of rules are also available upon written request to the Department of Insurance at a $1 per page charge. Adopted rules are codified in Title 50 of the Illinois Administrative Code.
Rule 951 (Credit Life and Credit Accident and Health Insurance) was amended on December 19, 1995, to adjust rates for these lines of insurance. Section 951.60(b) requires the Department to triennially review and adjust credit life rates. Based on meetings with industry and a review of the entire credit life insurance market in Illinois, the Department determined that an adjustment was in order and reduced prima facie credit life rates by 6 percent. (Vol. 19, #52; Gerald Lucht)
Rule 2007 (Minimum Standards of Individual Accident and Health Insurance) was amended on December 5, 1995, to make minor housekeeping changes and to add language to Section 2007.70 concerning specified disease limitations for skin cancer. In addition, the Department is allowing for specific exclusions not previously included in the rule. (Vol. 19, #50; Cindy Colonius)
Rule 2011 (Transitional Requirements for Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions) was repealed effective November 6, 1995. Rule 2011 was initially promulgated to ease the transition into the Medicare requirements under Rule 2008. Since Rule 2008 is now in place, Rule 2011 is no longer needed. (Vol. 19, #46; Denise Fuchs)
Rule 6602 (Cost Containment Form and Data Reporting Requirements) was amended on November 7, 1995, to expedite the Department's handling of data and to reduce errors and the number of refilings. (Vol. 19, #46; Bruce Hrabak)
Standard Mutual Insurance Company -- 11/03/95
First Assurance Company -- 11/07/95
Millers Mutual Insurance Association -- 11/08/95
Assumption Mutual Insurance Company -- 11/15/95
Alliance General Insurance Company -- 11/30/95
Amex Assurance Company -- 11/30/95
Bond Safeguard Insurance Company -- 11/30/95
Zurich Life Insurance Company of America -- 12/07/95
Allstate Indemnity Company -- 12/12/95
Allstate Property & Casualty Insurance Company -- 12/12/95
Northbrook Indemnity Company -- 12/12/95
Northbrook National Insurance company -- 12/12/95
Northbrook Property & Casualty Insurance Company -- 12/18/95
Increased public attention to insurer underwriting practices with respect to domestic violence and abuse issues has prompted the Department of Insurance to survey all life and accident and health insurers doing business in Illinois.
Feedback from the survey will allow the Department to better assess whether Illinois insurers consider domestic violence and abuse in underwriting both new and renewal policies for life, health and disability income coverage. The survey will also solicit information about underwriting practices in situations where a person's underlying health condition may have been caused or adversely affected by domestic violence or abuse.
Insurance Director Mark Boozell has approved a rate decrease that will lower the overall cost of insurance purchased through the Illinois Workers Compensation Assigned Risk Plan by an average 13.6 percent. The new rates which took effect on January 1, 1996, for both new and renewal business, are expected to reduce premiums by $30 million.
The Assigned Risk Plan serves hard to place risks, and accounts for about 11 percent of the total Illinois workers compensation insurance market. The National Council on Compensation Insurance (NCCI) filed the rate request on behalf of the Plan's approximately 300 member companies.
Revocation of Licensing Authority William E. Douglas 9826 Sayer, Apt 17 Chicago Ridge, IL Effective 11/30/95 Cornell L. Fitch 4410 W. Flossmoor Road Country Club Hills, IL Effective 11/29/95 Jubilee Associates, Inc. 8280 Janes Ave, Suite 24A Woodridge, IL Effective 12/20/95 Chyonne McKay 2476 Meadowdale Ln, Apt 202 Woodridge, IL Effective 12/20/95 Lawrence C. McKay 2476 Meadow Ln, Apt 202 Woodridge, IL Effective 12/20/95 Timothy J. Koeller 1608 W. Morgan Trail McHenry, IL Effective 11/13/95 Janie B. Morgan 16565 S. Paulina Markham, IL Effective 12/20/95 Robert Edward Wills 1608 W. Morgan Trail McHenry, IL Effective 11/13/95 Voluntary Revocation Roderick J. Bolden 7308 S. Eberhart Chicago, IL Effective 11/16/95 Ralph F. Carbone 6550 S. Richmond St Clarendon Hills, IL Effective 11/16/95 Chicago Taxi Insurance Services, Inc. 1227 S. Michigan Ave Chicago, IL Effective 12/15/95 Michael D. Christy PO Box 404 Sullivan, IL Effective 12/15/95 Minnie S. Donovan 2800 St. Mary's Hannibal, MO Effective 12/15/95 John W. McBride 1412 W. Downer Place Aurora, IL Effective 11/21/95 John E. Moutrey, Jr. 1212 S. Michigan Ave, #2908 Chicago, IL Effective 12/15/95 Terry A. Shaikh 1199 S. Barrington Rd Barrington, IL Effective 12/15/95 Mark Tellez 4344 W. 26th Chicago, IL Effective 12/8/95 Tellez Realty/Insurance Corp. 4344 W. 26th Chicago, IL Effective 12/8/95 Denial of Request for License Elliott Brenghause 31708 North Highway 83 Grayslake, IL Effective 11/16/95 William R. Fowler, Jr. 110 Abingdon Ave Kenilworth, IL Effective 11/13/95 Fouad H. Haleem 5933 S. Albany Ave Chicago, IL Effective 11/29/95 Stipulation and Consent Order - Civil Forfeiture Paid Ronald G. Baxter PO Box 138-418 4229 N. Wolcot, 2nd Floor Chicago, IL Effective 7/28/95 Susan E. Chang 707 S. Chris Mt. Prospect, IL Effective 11/21/95 Ronald S. Gallo 1712 Smokey Court Naperville, IL Effective 10/24/95 Richard W. Hoffman 2001 N. 74th Court Elmwood Park, IL Effective 11/16/95 John F. Leydon 2018 N. Oakland, #202 Milwaukee, WI Effective 10/27/95 John Michael McCarthy 960 Bristol Trail Rd Lake Zurich, IL Effective 11/3/95 James D. Schlater PO Box 96, 68 Deer Chase Collinsville, IL Effective 10/30/95 Kevin P. Schmitt 101 Welton Court East Peoria, IL Effective 10/24/95 James A. Stewart 522 Pear Mt. Carmel, IL Effective 9/26/95 Nathan R. Sutton, II 5687 Broadway Rd Groveland, IL Effective 10/24/95 Stipulation and Consent Order - Civil Forfeiture Paid Rick Sutton Insurance Agency, Inc. PO Box 2507 East Peoria, IL Effective 10/24/95 Sandra L. Sutton 5687 Broadway Rd Groveland, IL Effective 10/24/95 Robert L. Tisinai 4735 N. Octavia Ave Harwood Heights, IL Effective 11/27/95 Other Department Actions Joseph Raymond Bayer, Jr. PO Box 403 Alton, IL Suspension effective 11/30/95 Russell William Johnson, Jr. 8439 W. Catherine, #321 Chicago, IL Suspension effective 11/21/95 to 12/5/95 Jeffrey B. Wolf 2184 Mallard Ln Hanover Park, IL Nonrenewal effective 11/9/95 Cancellation Due to Dishonored Check Emanuel Beals 2007 Georgetown Ln Waukegan, IL Effective 10/28/95 Burrell Burns 9238 S. Pleasant Chicago, IL Effective 11/19/95 Beverly R. Cole 1302 S. Morris, Lot 23 Bloomington, IL Effective 10/12/95 Richard Collingbourne, Jr. 470 W. Spring St, PO Box 194 South Elgin, IL Effective 11/7/95 Lelia M. Collins 606 Preston Dr, #220 Bolingbrook, IL Effective 10/1/95 Lisa D. Cox 1630 Moonglow Rd Centralia, IL Effective 10/24/95 Tony S. Crawford 5418 W. Monroe Chicago, IL Effective 9/14/95 Jeffery A. Fabish 1110 Henkle Dr Pawnee, IL Effective 11/22/95 Michael J. Gapinski 860 Foxworth Blvd, Apt 206 Lombard, IL Effective 10/18/95 William Gardner 853 Sanders Rd, Apt 299 Northbrook, IL Effective 11/21/95 Cancellation Due to Dishonored Check Joann Joshua 6857 Wabash, 2nd Floor Chicago, IL Effective 12/1/95 Murat H. Kaya 8917 N. Kormar Skokie, IL Effective 11/14/95 David F. Onesto PO Box 475 Palos Park, IL Effective 10/24/95 Chad A. Wallace RR 1, Box 146 Ashland, IL Effective 11/22/95 Other Dishonored Checks Pamela E. Beers 704 W. 4th St Johnston City, IL Darrett Brown 221 Diane Ln Bolingbrook, IL Jeffery S. Burgner 1416 S. Yale O'Fallon, IL Jerry Dello 1749 Gold Rd, Apt 342 Mt. Prospect, IL Rosalba Diaz 6940 S. Talman Ave Chicago, IL Adamantios Frangiadakis 9022 N. Cumberland Ave Niles, IL Peter E. Jimenez 4623 North Chest St Chicago, IL Nancy A. Obernberger 2740 S. Lombard Berwyn, IL Patricia A. Patrick-Hess 405 1/2 Morgan St Elgin, IL Daniel P. Wachs 1807 N. Hermitage, 1st Fl Chicago, IL
Scheduled Hearings:
Charles and Patricia Crawford dba John's Drive-In State Farm Fire & Casualty Co. Cancellation; 1/12/96 Hearing No. 3400 Terrence Michael Harty American Manufacturers Ins. Co. Cancellation; 1/17/96 Hearing No. 3398 Insurance Company of the Prairie States Certificate of authority revocation; 1/17/96 Hearing No. 3392 Daniel and Janet Ring Prudential Property & Casualty Ins. Co. Nonrenewal; 1/23/96 Hearing No. 3399 Dragan Djordjevic Cease and Desist Order; 1/30/96 Hearing No. 3373 Fred W. Klokonos Illinois Farmers Insurance Company Cancellation; 1/30/96 Hearing No. 3401 Angelo Barra Illinois Farmers Insurance Company Cancellation; 2/7/96 Hearing No. 3403 GWYA, Inc. Angel Resch License revocation; 2/16/96 Hearing No. 3404 Kathleen M. Konieczny Konieczny Insurance Agency License revocation; 3/15/96 Hearing No. 3397 Matters Settled without Hearing: Trenchless Construction Inc. Hearing dismissed; 12/6/95 Hearing No. 3346 American Health Care Providers, Inc. Hearing dismissed; 12/12/95 Hearing No. 3368 Henry & Gwendolyn Hayes State Farm General Insurance Company Hearing dismissed; 12/13/95 Hearing No. 3393 Completed Hearings: Federal Kemper Life Assurance Co. and Kemper Investors Life Insurance Co. by Conseco, Inc., Conseco Partnership Management, Inc., Conseco Capital Partners II, L.P. and CCP II Holding Corp. Form A approved except as to any dividends referenced by Form A application; 8/28/95 Hearing No. 3301 William E. Douglas Licensing authority revoked; 11/30/95 Hearing No. 3379 Michael Agone Auto Club Family Insurance Co. Nonrenewal effective; 12/14/95 Hearing No. 3389 Concklin Ins. Agency, Inc. Illinois Automobile Insurance Plan Request to overturn Auto Plan's decision to amend Rule 114E of Plan is denied; 12/14/95 Hearing No. 3360 Elfreeda Hughes American Family Mutual Ins. Co. Nonrenewal effective; 12/14/95 Hearing No. 3395 Roman W. Ko State Farm Fire & Casualty Co. Nonrenewal effective; 12/14/95 Hearing No. 3386 Amalgamated Life & Health Ins. Co. Fine assessed for late filing; 12/22/95 Hearing No. 3372 George Bernth State Farm Mutual Automobile Ins. Co. Nonrenewal effective; 12/22/95 Hearing No. 3390 Hilda Ozinga State Farm Fire & Casualty Co. Nonrenewal effective; 12/22/95 Hearing No. 3394 Protest of Denial of Guaranty Fund Claims Petitioner request to over-turn decision of HMO Guaranty Association denied; 12/22/95 Hearing No. 3356 Jeffrey Scott Zalay Order of Revocation rescinded; 12/24/95 Hearing No. 3348 Association Underwriters of America Agency, Inc.; Jord C. Hauge, President Cease and Desist Order; 12/29/95 Hearing 3402 Spiros J. Arvanitis State Farm Mutual Automobile Ins. Co. Cancellation effective; 1/4/96 Hearing No. 3381
New Companies
North Pointe Insurance Company of Illinois, Chicago, was granted
a certificate of authority effective 1/4/96 to write all property
and casualty lines.
Terminations
The following insurance companies are no longer doing
business in Illinois:
Kentucky Central Insurance Company, KY, was merged with and into
Kentucky National Insurance Company which is not licensed in
Illinois, effective 11/3/95.
Foresters Indemnity Company, Ontario, Canada, cancelled its
Illinois certificate of authority, effective 12/31/95.
Sierra General Life Insurance Company, NV, filed a Plan of
Liquidation and Dissolution with Nevada; the Illinois certificate
of authority was cancelled, effective 11/20/95.
Correction
Please note the following correction to the article entitled
"Changes ahead for producer continuing education," which appeared
in our December 1995 issue:
Page 1, column 3, line 1 should have read
"require provider reporting within 10 days."
We apologize for the error.
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