Today's Vision: Tomorrow's Reality Tomorrow S Reality

Today’s Vision: Tomorrow’ s Reality

Industryyp Issues Update October 21, 2010 Robert H. Katz Miranda C. Motter

• Recent Regulatory Activities by the Ohio Department of Insurance • Recent Judicial Developments of Interest • Recent Legislative Developments and Potential Future Issues for Monitoring • The November 2010 Elections

• Agent Licensing Rules - ODI and the Insurance Agent Education Advisory Council have been working to revise a number of Ohio’ s administrative rules to implement the amendments to Ohio's agent licensingg( laws (H.B. 300 ) that were enacted earlier this year. - ODI filed amended versions of OAC 3901-5-01 to 3901-5-07 and 3901-5-09 with JCARR on October 1. A public hearing is scheduled for November 1.

• Agent licensing rules (continued) - Amendments to: (1) OAC 3901-5-01 implement the increase in agent CE hrs required by H .B . 300 (2) OAC 3901-5-02 clarify the application and renewal procedures for providers of CE courses (3) OAC 3901 -5-03 id entif y approve d me thod s of CE course instruction, provide course application procedures, and clarify requirements for professional association membhiCEditbership CE credits (4) OAC 3901-5-04 clarify provider notification of course changes and/or cancellation to agents and course roster filing requi rements to ODI

• Agent licensing rules (continued) (5) OAC 3901-5-05 identify additional conduct which may result in administrative action (6) OAC 3901-5-06 clarify pre-licensing and CE service and transaction fees and procedures (7) OAC 3901-5-07 clarify qualifications and procedures for pre-license education exemptions and set out the procedures for application as a pre-license education provider and/or instructor (8) OAC 3901-5-09 implement the license application and renewal requirements of H.B. 300

• Targeted Economic Development Efforts – ODI has been collaborating with ODOD’s Office of Insurance and Financial Development to implement the Strategic Plan for Ohio’s Insurance Industry. – Recent efforts have focused on: (1) Implementing a marketing program to promote insurance job creation opportunities (http://ohiomeansinsurancejobs.com). (2) Creating a Tax Incentive Task Force to explore existing tax incentives/programs available to insurance companies, and examine the feasibility of expanding specific new tax incentive programs. (3) Partnering with higher education to develop a demand-driven Ohio Insurance Education curriculum.

© Bricker & Eckler 2010 Judicial Update Allstate Insurance Company et al. v. Dailyn Campbell et al., Ohio Supreme Court Case No . 2009 -2358 • Accepted jurisdiction on March 10, 2010 • Issue: Whether the doctrine of inferred intent as applied to an intentional act exclusion in an insurance policy is limited to cases of criminal wrongdoing, such as sexual molestation or homicide, or extends to any case where the undisputed facts establish that harm was substantially certain to occur as a result of the insured’s conduct. •Facts • Oral argument was held on September 29, 2010

• Accepted jurisdiction on January 27, 2010 • Issue: Whether an insured can bring a class action lawsuit for breach of contract to recover litigation-related expenses where the insured never presented a claim to the ifhinsurer for such coverage an d never gave notice to the insurer of the alleged loss. • Facts • Oral argument was held on September 28, 2010

• Accepted appeal on September 29, 2010 • Issue: Whether a policy provision that requires a UM/UIM claim against an insurer to be brought within three years of the accident is unambiguous and enforceable when read in conjunction with the exhaustion provision and the provision requiring the insured to fully comply with the terms of the policy before filing suit against the insurer. •Facts • Oral arguments have not been scheduled.

• Pending Bills – Collateral Benefits Legislation. H.B. 361 limits evidence of medical damages in a personal injury or wrongful death case to only the amount of the original prewrite-off medical bill.

– Cy Pres Legislation. S.B.157 & H.B. 427 require all undistributed class action proceeds tbdto be dona tdtted to a ch hitarity.

• Competitive Workers’ Compensation Task Force – Crea te d by Sena te Reso lu tion 118, the Compe titive Workers’ Compensation Task Force is charged with studying alternatives, including marketplace competition, w ith respec t to Ohio’ s work ers’ compensation program. – The Task Force is comprised of 23 members representing employees, employers, insurance companies, managed care organizations, third-party administrators,,,g business owners, and legislators. – Report is expected to be issued in the near future.

• Issues to Monitor in 2011 – Ohio’s next biennial budget (FY 2012-2013) • Various groups have already started to meet to address Ohio’ s budget “crisis”. • Early projections indicate Ohio will face an estimated $8 billion budget gap.

– Proposals to reorganize state government • H.B. 25, leggygislation currently pending in the Ohio House, would reduce the number of cabinet level agencies. Ohio Department of Insurance would be a “division” under a “Department of Business.”

• Executive Branch Leadership • Ohio Apportionment Board • U. S. Senate Seat • All of Ohio’s 18 congressional seats • The Ohio Genera l Assem bly • The Ohio Supreme Court

• Ohio will elect an entirely new slate of executive branch leadership. • Offices for the Governor,,y the Secretary of State, the State Auditor, the Attorney General and the Treasurer are all up for election.

• Control of Ohio’s Apportionment Board is at stak e with three o f th e execu tive branc h races • The Board is tasked with redrawing the legislative districts. • Members include: – Governor – Secretary of State – Auditor – Two additi onal memb ers (A R epubli can an d a Democrat each appointed by state legislative leaders.)

• Governor Ted Strickland (D) - Running mate: Yvette McGee Brown - Contributions: $12.7 million • John Kasich (R) - RiMtMTlRunning Mate: Mary Taylor - Contributions: $11.3 million

• Jon Husted (R) - Former Ohio House Speaker - Current Ohio Senator - Contributions: $3.15 million • Maryellen O’Shaughnessy (D) – Franklin County Clerk of Courts – Con trib u tions: $732, 839

• David Pepper (D) – Hamilton County Commissioner – Contributions: $1.7 million • David Yost (R) – Delaware County Prosecutor – Contributions: $575,596

• Mike DeWine (R) – Former U.S. Senator – Contributions: $2.8 million • Richard Cordray (D) – Incumbent, elected in 2008 to fill former Attorney General Marc Dann’s unexpired term endinggy January 2011 – Contributions: $4.2 million

• Kevin Boyce (D) – Incumbent, appointed by Governor Strickland to file the vacancy created when Cordray took office as AG in January 2009 – Former Columbus City Councilman – Contributions: $1.4 million • Josh Mandel (()R) – Current Ohio House Member – Contributions: $3.6 million

© Bricker & Eckler 2010 U.S. Senate & Key Congressional Races • U.S. Senate Seat – Lee Fisher (D) vs. Rob Portman (R) • Key Congressional Races in – District 1: Driehaus (D) vs. Chabot (R) – District 13: Sutton (D) vs. Ganley (R) – District 12: Tiberi (R) vs. Brooks (D) – District 15: Kilroy (D) vs. Stivers (R) – District 16: Boccieri (D) vs. Renacci (D) – District 18: Space (D) vs. Gibbs (R)

• Ohio Senate – 21 to 12 Republican majority – Highly unlikely Democrats will improve their position – Contributions to date • Sena te R epu blican Caucus: $3 m illion • Senate Democratic Caucus: $251,053 • Ohio House – 53 to 46 Democratic majority – In 2008, Democrats won 7 seats – Republicans need to pick up 4 seats to regain control – Contributions to date • Ohio House Democratic Caucus: $6.1 million • Ohio House Republican Caucus: $2. 5 million

• There are 3 seats up for election on the Ohio Supreme Court. – The Chief’s Seat • Appointment of Chief Justice Eric Brown by Governor Strickland after the unexpected passing of Chief Justice Moyer in April • Justice O’Connor is challenging Chief Justice Brown • Contributions – Chief Justice Brown: $461,003 – Justi ce O’C onnor: $756, 868

– Justice Judith Lanzinger is up for re- election • Judge Mary Jane Trapp, who sits on Ohio’s 11th District Court of Appeals in northeastern Ohio , is challenging Justice Lanzinger • Contributions – Justice Lanzinger: $674,281 – Judge Trapp: $261,700 – JtiPlPfifJustice Paul Pfeifer iiis running unoppose d

Questions? Robert H. Katz 614.227.2397 [email protected]

Miranda C. Motter 614.227.4810 [email protected]