LEG REG REVIEW 2013, 1st Issue January 2, 2013 LEG REG REVIEW is a periodic newsletter produced by PHILLIPS ASSOCIATES, a professional lobbying and consultant firm located near the State Capitol. It contains news on the legislative and regulatory scene in Pennsylvania that may be of interest to the Insurance and Business Communities. It is a free member benefit for those who are members of the Pennsylvania Association of Health Underwriters (PAHU) or Manufacturers Association of South Central PA (MASCPA). Subscription information may be obtained by contacting PHILLIPS ASSOCIATES at 717/728-1217 FAX 717/232-7005 or e-mail to [email protected]. Please email [email protected] supplying both your name and e-mail address if you wish to be removed from this list. GENERAL ASSEMBLY SESSION BEGINS The 2013-14 session of the PA General Assembly begins with swearing in of members January 1, 2013 and election of House Speaker Sam Smith (R-Jefferson) and Senate President Pro Tempore Joe Scarnati (R- Clearfield etc.). With committee chairs selected, the next item to note is the formal selection of committee members. Committee organizational meetings will take place mid-month. So far, only one committee has announced a meeting in 2013. The Senate Finance Committee will hold a hearing on liquor store privatization on January 14. NEW PA BANKING RULES IN EFFECT Effective December 24, 2012 were three pieces of legislation designed to help Pennsylvania comply with provisions of the Dodd-Frank Act. The laws are HB 2368 (Act 170), HB 2369 (Act 171), and HB 2370 (Act 172). Of particular importance to banking and other regulated financial institutions, Act 170 expands the enforcement authority of the PA Department of Banking and Securities allowing it to impose fines of up to $25,000 for abuses of fiduciary responsibility by a regulated financial institution; eliminates an advance warning requirement for an enforcement action and allows the immediate suspension of an individual officer, director, trustee, or employee and (if a post-removal hearing finds in favor of the Department) possibly prevent them from working for any Pennsylvania financial institution in the future; strengthens the authority to order corrective action such as a fine. Act 171 brings PA into compliance with federal law. Act 172 amends PA’s civil usury statute to comply with federal law regarding variable rate transactions re mortgages. (Thanks to the law firm of Reed Smith for an excellent summary of the new laws. (Client Alert 12-287) http://www.reedsmith.com/Now-in-Effect-Pennsylvanias-Banking-Modernization-Package-12-27-2012/ PA DEMOCRATS NAME SENATE COMMITTEE CHAIRS The Senate Democratic Caucus announced committee chairs for the upcoming 2013- 14 legislative session. Aging & Youth - Minority Chairman LeAnna Washington (D-Philadelphia); Agriculture & Rural Affairs - Minority Chairman Judy Schwank (D-Berks); Appropriations - Minority Chairman Vince Hughes (D-Philadelphia); Banking & Insurance - Minority Chairman Mike Stack (D-Philadelphia); Communications & Technology - Minority Chairman Larry Farnese (D-Philadelphia); Community, Economic & Recreational Development - Minority Chairman Wayne Fontana (D-Allegheny) ; Consumer Protection & Professional Licensure - Minority Chairman Lisa Boscola (D- Northampton) ; Education - Minority Chairman Andy Dinniman (D-Chester) ; Environmental Resources & Energy - Minority Chairman John Yudichak (D-Luzerne) ; Finance - Minority Chairman John Blake (D-Lackawanna) ; Game & Fisheries - Minority Chairman Rich Kasunic (D-Fayette) ; Intergovernmental Operations - Minority Chairman Sean Wiley (D-Erie) ; Judiciary - Minority Chairman Daylin Leach (D-Montgomery) ; Labor & Industry - Minority Chairman Tina Tartaglione (D-Philadelphia) ; Law & Justice - Minority Chairman Jim Ferlo (D-Allegheny) ; Local Government - Minority Chairman Rob Teplitz (D-Dauphin) ; Public Health & Welfare - Minority Chairman Shirley Kitchen (D- Philadelphia) ; Rules & Executive Nominations - Minority Chairman Jay Costa (D-Allegheny) ; State Government - Minority Chairman Matt Smith (D-Allegheny) ; Transportation - Minority Chairman John Wozniak (D-Cambria) ; Urban Affairs & Housing - Minority Chairman Jim Brewster (D-Allegheny) ; Veterans Affairs & Emergency Preparedness - Minority Chairman Tim Solobay (D-Washington) 1 FEDERAL ITEMS YOU MAY HAVE MISSED… With the Nation’s attention focused on the Fiscal Cliff, overlooked are other items of interest such as an uncertain increase in borrowing authority for the National Flood Insurance Program (NFIP) needed to make good on claims arising from Superstorm Sandy. In addition: PA congress people continue to gain positions of influence in the upcoming session of Congress. Pittsburgh Republican Tim Murphy is poised to take over the chairmanship of the Energy & Commerce oversight subcommittee, a post which can review administrative decisions made in implementing the Patient Protection Affordable Care Act (PPACA). Montco Democrat Allyson Schwartz is the second- ranking Democrat on the House Budget Committee. Blair County GOP Rep. Bill Shuster chairs the powerful Transportation & Infrastructure Committee in a position held by his father, Bill Shuster. On December 21, Congress sent HR 5859 to the President. This repeals an obscure 1972 requirement that new car-dealers keep on hand a federally-produced handbook about auto insurance. HR 5859 co- sponsor PA Rep. Mike Kelly owns an auto dealership in northwest PA. JANUARY 1 EFFECTICE DATE FOR NEW MARYLAND LAW A new P/C law is in effect January 1 in Maryland. HB 1059 (Chapter 627) / SB938 (Chapter 626) on personal automobile insurance – rescission of policy or binder. The new law authorizes an insurer — under certain specified circumstances — to rescind a policy or binder of personal auto insurance if the initial premium payment for the policy or binder is made by a non-sufficient funds check or other remittance. REGULATORY NOTES The PA Department of Health released the annually amended list of permissible charges for medical records. These adjustments are based on changes in the CPI. HIPAA requires that a person may receive records but allows the health care provider to charge for them. These charges do not apply to insurance companies seeking the data relative to a claim. - Amount per page from 1-20 $1.42 - Amount per page from 21-60 $1.05 - Amount per page from 61- end 34 cents - Flat fees of $26.70 are charged re Social Security or any Federal or state financial needs program such as Medicaid or CHIP. District attorneys are charged a flat fee of $21.08. Two items that will infuriate some consumers are that the Department of Health says that it is not authorized to enforce these fee charge limits and that the per page price applies to electronic records where there may not be physical copying. There may also be additional charges for postage and handling. On December 15, 2012 the Banks & Securities Department codified its regulations because of the merger of the Securities Commission into the Department of Banking. (www.pabulletin.com ) The Independent Regulatory Review Commission (IRRC), the entity responsible for reviewing proposed regulations, issued its 2013 meeting schedule. All meetings take place in Harrisburg and meeting changes are accessible from www.irrc.state.pa.us. Dates are: January 17, February 21, March 14, April 4 and 18, May 16, June 6 and 20, July 18, August 1 and 22, September 19, October 10 and 24, November 21, and December 12, 2013. IRS business mileage rate for 2013 is 56.5 cents (up from 55.5 cents in 2012); medical rate is 24 cents; charitable miles rate is 14 cents per mile. (IRS Notice 2012-72 www.irs.gov) K2 Insurance Services is seeking Insurance Department approval to buy PA-domiciled stock property Aegis Security Insurance Company and PA-domiciled stock casualty American Sentinel Insurance Co. Posted December 15 was the Coal Mine Compensation Bureau’s Workers’ Compensation Lost Cost Filing with an overall decrease of 12.6% which, if approved, would take effect April 1, 2013. (www.cmcrbpa.com) This follows a PA Compensation Rating Bureau Loss Cost Filing with a 4.01% overall cost increase (www.pcrb.com ). 2.