WEST REGIONAL NEWS
The California Department of Insurance (CDI) has denied the Insurance Services Office (ISO) its request for limitations and exclusions to coverage for acts of terrorism in commercial lines and homeowners policies. The department cites five specific areas of concern:
* The $25 million countrywide damage threshold is unreasonably low.
* The 72-hour incident period may be arbitrary and/or unfair.
* A total exclusion for biological and chemical incidents may be overly broad and unreasonable.
* The 50-person death or injury requirement for liability exclusion may be unreasonably low and arbitrary.
* The proposal may have anti-competitive effects.
California Insurance Commissioner Harry Low explained: "There are a variety of concerns regarding an issue of this magnitude, ranging from limitations of coverage to definitions of terrorism. The term terrorism has been broadly used to define everything ranging from vandalism to hate crimes. Our goal is to assure that policy language narrowly defines terrorism to eliminate any possible confusion between insurers and policyholders, especially in personal homeowners coverage."
CDI said it is also closely monitoring the federal legislative packages regarding terrorism insurance and exclusions and is awaiting further developments and resolution by the United States Senate. A copy of the "Notice of Determination to Hold Hearing" is available from the California Department of Insurance communications office and through the department Web site (www.insurance.ca.gov).
Area News
Meetings planned
In the next few months, the following organizations will hold annual conventions: Utah Association of Independent Insurance Agents, May 5-8 in St. George; Professional Insurance Agents of Washington/Alaska, May 18-21 in Ocean Shores, Washington; Professional Insurance Agents of Oregon/Idaho, June 2-5 in Gleneden Beach, Oregon; IBA West Young Brokers and Agents Conference, June 6-8 in Reno, Nevada; Independent Insurance Agents of Idaho June 8-12 in Coeur D'Alene; Association of Wyoming Insurance Agents, June 12-14 in Cody; Nevada Independent Insurance Agents, June 22-25 in Sun Valley, Idaho.
California
Six HMOs join in new "quality care" plan
In January, six of California's largest health maintenance organizations (HMOs) announced a plan that will reward doctors for quality care. The initiative affects more than 8 million Californians and seeks to improve patient care by implementing a monetary reward system for doctors who get good marks. Proponents say the plan is a major step toward establishing a standard way to gauge physician performance. While the plan is limited to California for now, its supporters say other states across the nation could soon follow suit. Health Net, Inc., Aetna, Blue Cross of California, Blue Shield of California, CIGNA Corp., and PacifiCare Health Systems, Inc., are the HMOs participating in the so-called Pay for Performance model.
Oregon
Workplace injuries and illnesses drop
Oregon seems to be a safer place in which to work, according to figures recently released by the state Department of Consumer & Business Services, which showed that the rate of private-sector workplace injuries and illnesses dropped 10% from 1999 to 2000. The 2000 injury-illness
rate was a record low 6.3 per 100 full-time workers, compared with a rate of 7.0 in 1999.
Utah
State Farm verdict stands
Late last year, the Utah Supreme Court reinstated a $145 million verdict against State Farm, finding that the insurer "repeatedly and deliberately deceived and cheated its customers." The court found that "for over two decades, State Farm set monthly payment caps and individually rewarded those insurance adjusters who paid less than the market value for claims. Agents changed the contents of files, lied to customers and committed other dishonest and fraudulent acts in order to meet financial goals." A State Farm spokesman said that the case involves an accident that happened 20 years ago and, while the case could have been handled better, denied any fraudulent activity.
Washington
Court rules on alcohol
In reversing a lower court ruling, the state Court of Appeals has agreed that liability insurance is not designed to cover each drink served to an already intoxicated customer as a separate incident. The lower court ruled that the $1 million liability limit for selling alcohol to an intoxicated person under Crusader's policy applied to each time the person was served after becoming intoxicated, up to the $2 million aggregate limit in the policy. The case stems from a lawsuit filed against the owners of a pub and restaurant by individuals and heirs of individuals who were injured by a driver who became intoxicated while drinking at the establishment. *