A Newsletter from the Georgia Insurance and Safety Fire Commissioner September-October 2006 Commissioner's Corner October is an important month to me. While most of us concentrate on the changing season, fall festivals and pumpkin carving, I am preoccupied with working to get the message out to every Georgia citizen to change the battery in their smoke alarms when they change their clocks to adjust to the end of Daylight Saving Time. Bush Signs Military Personnel Financial Services Protection Act New Law Result of Oxendine Led Investigation You can also be a part of this program by reminding your family and friends that smoke alarms help save lives. Also, if you know of someone who cannot afford a smoke alarm, have them call my office at 1-800-6562298 and we will make sure they get one for free. Georgia Insurance Commissioner John W. Oxendine, along with the other members of the National Association of Insurance Commissioners (NAIC), applauds President George W. Bush for signing into law S. 418, the Military Personnel Financial Services Protection Act. The legislation, sponsored in the Senate by Mike B. Enzi (R-Wyo.) and in the House by Geoff Davis (R-Ky.), clarifies the application of state insurance and securities protections on military installations, and outlaws the sale of certain high- S. 418 Continued Pg. 3 John W. Oxendine, Georgia Insurance and Safety Fire Commissioner 2 Martin Luther King, Jr. Dr., Atlanta, Georgia 30334 404-656-2056 www.gainsurance.org inscomm@mail.oci.state.ga.us Agents Licensing, 404-656-2100 Consumer Services, 404-656-2070, 1-800-656-2298 Industrial Loan Division, 404-656-2078 Regulatory Services, 404-656-2074 Arson Hotline, 1-800-282-5804 Fraud Hotline, 1-800-726-6070 Jason M. Shepherd, INSURANCE FACTS Editor, 404-651-8719 Jason.Shepherd@mail.oci.state.ga.us INSURANCE FACTS is published monthly by the Georgia Department of Insurance. SEPTEMBER-OCTOBER 2006 INSURANCE FACTS Page 1 of 4 Telemedicine 41,060 Consumers Helped So Program Receives Far in 2006; $18.2 Million in USDA Grant Insurance Claims Recovered At the end of the third quarter of In addition to phone calls and letters, 2006, Insurance Commissioner the Consumer Services Division can John Oxendine's Consumer Services also take questions or complaints by and Managed Care Divisions had email, Oxendine said. In the first three helped more than 41,060 Georgia con- quarters of this year, 5700 consumers sumers settle disputes with their insur- have made their initial contact via the ance companies, returning Internet. Consumers can obtain a com- $18,246,493 in insurance claims to plaint form at the Department's web- these consumers -- money they might site at www.gainsurance.org. not have received without his help. Consumers with "Investigators in insurance ques- our Consumer Services and Managed Care Divisions work "Whether the consumer has a claims dispute or simply a question about tions or problems can also contact the Consumer Services Division every day to insurance, our at 404-656- help Georgians, both individual citizens and businesses," representatives can provide invaluable expert advice." 2070, or toll-free at 1-800-6562298. Or write to: Georgia In- Oxendine said. surance Depart- "Whether the ment, Consumer consumer has a claims dispute or sim- Services Division, 716 West Tower, 2 ply a question about insurance, our rep- Martin Luther King Jr. Drive,Atlanta, resentatives can provide invaluable ex- GA 30334. pert advice." Oxendine also sends field representa- "Our office takes calls Monday tives to every county outside the im- through Friday from 8 a.m. to 7 p.m., mediate metropolitan Atlanta area on so we can offer the convenience of as- scheduled basis. Consumers can meet sisting consumers by phone after tradi- with an investigator for face-to-face tional working hours," Oxendine advice on any type of insurance prob- added. Specialists in Oxendine's Con- lem. Georgians can call the number sumer Services Division can help with above to find out when an investigator problems in life, health, auto and will be in their area. -IF homeowners insurance. Consumers can call even if they just want their in- surance policy explained or reviewed. Commissioner Oxendine announced October 10, 2006, that his Rural Health Initiative has received a grant of $489,085 from the U.S. Department of Agriculture (USDA) Rural Development. "The value of our telemedicine program has been recognized at the national level," Oxendine said. "Telemedicine has great promise for the people of Georgia, and I greatly appreciate the grant provided by the USDA to help us bring access to specialty healthcare to all Georgians." Telemedicine is a healthcare delivery method that applies high-speed telecommunications systems, computer technology and specialized medical cameras to allow doctors to examine, diagnose, treat and educate patients at a distance. The Georgia telemedicine program is a statewide network with 51 rural presentation sites tightly linked with major teaching hospitals. Oxendine said the grant, applied for earlier this year, was one of 103 Distance Learning and Telemedicine grants awarded by the USDA to provide improved educational and medical services to residents of 38 states. USDA Rural Development programs support such essential public facilities and services as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. -IF SEPTEMBER-OCTOBER 2006 INSURANCE FACTS Page 2 of 4 S. 418 Continued cost mutual funds and insurance products that are targeted toward military personnel. Over 900 Agents Attend Industry Days "We commend President Bush and Congress for recognizing the important role of state insurance commissioners in protecting all consumers, including those serving in the military," said Oxendine. "This legislation ensures that members of the armed forces, who are protecting us, are also protected." The legislation is the result of more than a year of investigation into predatory insurance sales practises on military installations; first in Georgia, and then around the nation. The national investigation, headed by Oxendine, has resulted in several insurance companies receiving massive fines, one of the most notable of which was the $70 million fine levied against the American-Amicable Life Insurance Company of Waco, Texas and its affiliates. -IF Statistics Give Snap-Shot of Industry in Georgia By comparing statistics from various divisions of the Commissioner's Office, you can get an overall picture of the status of the insurance industry in our state. Nine hundred and twenty-six agents and other insurance professions turned out across Georgia to attend one of the seven Industry Day events hosted by Commissioner Oxendine and Promissor. Panelists from both the Georgia Insurance Department and Promissor presented various topics including recent law and regulation changes and took questions from the audience. Insurance professionals earned three hours of Continuing Education credits (ethics) by attending one of the free Industry Day events. "After two very successful years of this program, we have been able to learn a lot from the give and take we have with the industry professionals who stop by," said Oxendine. "We have been taking their suggestions to make real changes on how we approach some key issues that affect our agents." Meetings were held in Savannah, Augusta, Atlanta, Duluth, Dalton, Columbus and Albany. -IF Blue Cross Blue Shield Fined Let's take a look at a fundamental element of the business: the number of companies licensed to do business in Georgia. Currently there are a total of 1490 licensed companies; 953 property and casualty insurance companies, and 537 life and health companies. $600,000 for Violations Commissioner Oxendine has fined Georgia's largest health insurer, Blue Cross Blue Shield, $600,000 for violations of state insurance law. I'm also happy to report that there are approximately 349 companies offering workers compensation coverage. Recently more companies are interested in writing workers comp, and increased competition, along with other factors, is helping to reduce the cost of this type of coverage. Managed care continues to be a hot subject, currently there are 14 health maintenance organizations (HMO) licensed in Georgia. "Any time we find consumers or businesses being mistreated, my office will step in and take corrective action," Oxendine said. "Violations of the law by Blue Cross or any other insurer will not be tolerated in this state." The fine was ordered by Oxendine because, among other violations, Blue Cross refused to offer quotes for group health coverage to certain small businesses, as required under the Georgia insurance code. The company was also using sales agents who were not properly appointed. And where would the industry be without someone to sell the product and service the policyholders? As of October 1, we had 134,938 licensed insurance agents, sub agents, adjusters, counselors, and surplus lines brokers in Georgia. STATISTICS Continued Pg. 4 "Companies that refuse to offer quotes for health insurance are reducing competition by limiting the availability of health insurance to Georgia consumers," Oxendine said. "Small businesses are the backbone of Georgia's vibrant economy and I will not allow them to be taken advantage of by large insurance companies." -IF SEPTEMBER-OCTOBER 2006 INSURANCE FACTS Page 3 of 4 Actions Against Agents STATISTICS Continued Note: The actions listed below reflect cases that have been finalized and are currently closed in the Enforcement Division of the Insurance Commissioner's Office. Each case is determined on a case-by-case basis. Brunken, Stephen (2005-1818) Salt Lake City, Utah 84116 On August 2, 2006, Mr. Brunken agreed to have his Georgia nonresident license issued on a probationary status for a period of 12 months. Colon, Jason (2006-1403) Lawrenceville, Georgia 30045 On August 21, 2006, Mr. Colon agreed to have his Georgia temporary resident license issued on a probationary status for a period of 12 months. Daigle, John (2006-1444) Duluth, Georgia 30097 On August 29, 2006, Mr. Daigle agreed to have his Georgia resident license issued on a probationary status for a period of 12 months. Davis, Karvel (2005-1879) Phoenix, Arizona 85040 On August 8, 2006, Mr. Davis agreed to have his Georgia nonresident license issued on a probationary status for a period of 12 months. Hoten, Linda (2006-1229) Lawrenceville, Georgia 30044 On August 1, 2006, Ms. Hoten agreed to have her Georgia temporary resident license issued on a probationary status for a period of 24 months. Knight, Robert (2005-1250) Decatur, Georgia 30035 On August 29, 2006, Mr. Knight agree to have his Georgia resident insurance agent's license issued on a probationary status for a period of 12 months. Brimmer, Frederick G. (2006-1799) Griffin, Georgia 30223 On September 21, 2006, Frederick G. Brimmer agreed to have his Georgia temporary resident license issued on a probationary status for a period of 12 months. Feery, Christopher C. (2005-1511) Hainesport, New Jersey 08036 On September 8, 2006, Christopher C. Feery agreed to have his Georgia nonresident agent license issued on a probationary status for a period of one (1) year. Feldman, Donald (2006-1163) Sheldon, South Carolina 29941 On September 22, 2006, Donald Feldman agreed to pay a fine in the amount of $500. Hoh, Bohdan (2006-465) Harrisburg, Pennsylvania 17111 On September 6, 2006, Bohdan Hoh agreed to have his Georgia nonresident license issued on a probationary status for a period of 24 months. Reyes, Jamie (2006-1539) Rabun Gap, Georgia 30568 On September 26, 2006, Jamie Reyes agreed to pay a fine in the amount of $300. The bottom line in the insurance business is paying claims. In the first nine months of 2006, our Consumer Services and Managed Care Divisions helped Georgians receive $18,246,493 in claims and premium refunds from insurance companies. In that same nine-month period, Consumer Services and Managed Care Investigators responded to 117,653 telephone inquiries about insurance. These inquiries were questions about various insurance policies or issues regarding claims. In instances were the Divisions needed additional information the inquiry would turn into a case file. Finally I'd like to mention the Georgia Arson Control Program. This organization, funded by the property and casualty industry, gives rewards of up to $10,000 to anyone who provides information leading to the arrest and conviction of an arsonist. Informants can choose to remain anonymous, and many do. Arson is a difficult crime to prove, and often investigators rely on the testimony of witnesses to solve the really tough cases. So far this year the Georgia Arson Control Program has presented $57,500 to citizens who helped solve arson cases. Since the start of the arson reward program in 1979, over $1 million has been awarded. This money is contributed by insurance companies who are part of the Georgia Arson Control Program. The 24-hour toll-free hotline is maintained by the Safety Fire Division of my office. The number is 1800-282-5804. -IF SEPTEMBER-OCTOBER 2006 INSURANCE FACTS Page 4 of 4