The 2004 Tennessee General Assembly passed a number of insurance-related bills this year, including several on the use of credit scoring, workers’ compensation and tort reform measures.
“We’re especially pleased with the workers’ compensation bill, which includes a number of provisions we worked hard to have included in the final version,” said Robert Herlong, vice president and regional manager for the Property Casualty Insurers Association of America (PCI).
S.B. 3424/H.B. 3531, the workers’ comp reform package, is the result of ongoing negotiations between legislators, business and insurance interests, noted Herlong.
Some of its major provisions include:
· Requiring the commissioner of labor and workforce development, the medical care and cost containment committee and the Workers’ Compensation Advisory Council (WCAC) to develop a workers’ comp medical fee schedule;
· Authorizing workers’ comp specialists to assess penalties of 25 percent of the delinquent benefits after requesting documentation as to why the penalty should not be assessed and making a determination that the employer was not in compliance with the benefit commencement time requirement;
· Changing the cap on permanent partial disability (PPD) awards where there is a meaningful return to work from two and one-half times the impairment rating to one and one-half times the impairment rating;
· Requiring impairment ratings to be based on the American Medical Association (AMA) Guides unless the AMA Guides do not cover the particular case;
· Creating a new statute of limitations to apply to all injuries that arise on or after Jan. 1, 2005; and
· Expressing the legislative intent that workers’ comp insurance premiums be adjusted downward to reflect the cost savings resulting from this bill within 15 months of the date the bill becomes a law.
S.B. 2259 and H.B. 2339, the credit scoring bills, closely track the National Conference of Insurance Legislators (NCOIL) model act supported by PCI.
As enacted, the bills remove the 12-month frequency for recalculation of credit scores and allow insurers to not comply with recalculation if the insurer provides an annual notice to the policyholder that their score be rerun based on current information available.
The bill also reduces to 30 days the multiple lender inquiries; prohibits insurance scores determined by income, gender, address, ethnic group, religion, marital status, nationality, education or occupation; and requires an insurer to disclose that it may obtain credit information with an application.
S.B. 3252/H.B. 3252, the tort reform bill, is the result of a Tort Reform Study Committee. In part, the bill requires insurers to use department-prescribed forms; requires medical malpractice insurers and self-insured entities to submit reports to Department of Commerce and Insurance regarding claims and lawsuits on forms prescribed by the department; and holds individual information confidential to the public but requires a compilation of the aggregate data to be reported to the general assembly.
Other insurance-related bills that passed include:
· S.B. 2606, which makes violation of the seat belt law a primary offense.
· S.B. 2668, which requires the development of recommendations for a catastrophic insurance pool by Feb. 1, 2005.
· S.B. 3186/H.B. 3413, which prohibits unsolicited facsimile advertisements and requires any facsimile transmission to include the date and time of the transmission, and the sender’s identification and telephone number.
· S.B. 3364/H.B. 3403, which creates the offense of identity theft trafficking, a Class C felony; requires entities and businesses that maintain records containing personal identifying information to destroy the information before discarding the records, excluding entities already complying with the federal privacy law.
· S.B. 3430/H.B.3486, which restricts issuance of driver licenses to U.S. citizens and lawful permanent residents.
Several bills that were passed last year have just been enacted, including:
· S.B. 1042/H.B. 1004, which allows a judge to approve tort claim settlements involving minors by relying on an affidavit from a legal guardian, establishes that structured settlements do not apply, and sets the settlement amount limit at $10,000.
· S.B. 563/H.B. 527, an extra-territorial application of workers’ comp law which includes as a factor authorizing the extra-territorial application of Tennessee workers’ comp law, the substantial connection between this state and the particular employer and employee relationship.
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