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From YouTube: House Insurance Committee- March 16, 2021
Description
House Insurance Committee- March 16, 2021
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C
You
chairman
kumar.
This
is
the
insurance
modernization
act
for
for
the
department
of
commerce
and
insurance.
This
year,
the
proposed
legislation
enacts
the
national
association
of
insurance
commissioners
model
act
that
is
necessary
for
the
department
to
avoid
federal
preemption
and
maintain
its
accredited
status
to
the
depart
to
to
the
benefit
of
the
department
and
our
domestic
insurance
industry.
C
Additionally,
the
department
seeks
to
update
tennessee's
captive
insurance
laws
to
allow
additional
coverages
and
by
removing
regulations
and
practices
that
are
unnecessary
for
the
protection
of
the
public,
and
that's
essentially
what
the
amendment
does
as
well.
It
lowers
the
amount
of
of
capital
for
an
individual
getting
into
the
captive
insurance
business
for
lack
of
a
better
word
from
down
from
250
000
to
one
hundred
thousand
dollars.
C
Additionally,
the
proposed
legislation
makes
additional
statutory
revisions
designed
to
make
regulatory
processes
more
efficient,
especially
in
regards
to
workers
compensation
with
that
happy
to
answer
any
questions
that
may
come
up
or
get
the
smart
people
to
come
answer
them.
If
I
can't
mr
chairman
and
members.
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Absolutely
good
morning,
mr
chairman,
patrick
merkel,
I'm
the
director
of
insurance
for
the
department
of
commerce
and
insurance,
and
while
it
this
will
lower
the
minimum
capital,
each
captive
goes
through
a
review
to
make
sure
that
they're
that
it's
the
statutory
minimum
to
make
sure
that
the
minimum
that
they
have.
Sometimes
it's
it's
going
to
be
higher
than
the
statutory
minimum
and
it's
determined
based
on
the
the
the
complexity
of
their
plan.
D
And
so,
if
it's
a
very
complex
plan
with
a
lot
of
premium
written,
the
capital
requirement
is
going
to
be
significantly
higher.
This
just
is
lowering
it
so
that
smaller
captives
in
the
protective
cell
structure
can
have
a
lower
entry
barrier,
and
we
are
comfortable
that
this
will
protect
the
consumers
and
the
state
of
tennessee.
D
So
we
have
on
the
in
the
captive
area
itself
over
700
captive
entities,
200
of
approximately
200
of
them
are
full
pure
captives
and
that
minimum
capital
is
not
changing.
We
have
about
500
or
so
cells
in
the
protected
cell
structure,
and
they
are
much
smaller
companies
they're
going
to
be
sort
of
more
your
smaller
to
middle
range
businesses,
as
opposed
to
the
big
fortune
1000
companies
that
are
in
the
pure.
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D
No,
they
can
do
some
stop.
They
can
do
stop
loss
on
health.
They
cannot
do
auto
third
party.
The
sell
a
captive
program
is
really
designed
for
a
company
to
do
their
own
risk,
and
so
it's
going
to
be
their
property
insurance.
It
could
be
terror
insurance.
It
could
be
cyber
insurance
risk,
ensuring
their
own
risk
and
not
going
out
to
third
parties,
so
it
wouldn't
be
a
captive
that
is
formed
in
order
to
sell
insurance
to
the
public
on
car
insurance
or
home
insurance.
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D
It
haven't
done
a
complete
survey
of
the
neighboring
states.
It
keeps
us
in
line
with
vermont,
which
is
sort
of
the
leader
in
in
the
united
states
on
captives
they
just
last
year
lowered
their
minimum
capital.
Capital
for
sales
to
100,
000
north
carolina
is
is
making
a
big
push.
Alabama
has
is
started,
so
this
definitely
will
keep
us
competitive
with
our
neighboring
states.
Okay
and
thank
the
rest
awards.
Thank
you.
Thank
you.
Chairman.
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Sorry,
sorry
for
potentially
the
redundant
question,
but
just
just
one
last
time
the
hundred
thousand
dollars
is
only
if
somebody
qualified
for
not
needing
to
have
more
set
aside
correct
if
it
was
a
larger.
So
if
it's
a
small
entity
that
only
would
be
required,
this
allows
for
a
statutory,
lower
limit
to
be
held
in
reserve.
Correct.
D
And
it's
for
in
this,
the
cell
structure
is
the
hundred
thousand,
is
at
the
core,
and
then
you
kind
of
think
about
this.
The
subsets
coming
off
the
hundred
thousand
would
have
to
be
sort
of
at
that
top
layer
as
a
as
the
minimum,
and
then
each
of
the
cells
are
going
to
have
their
own
structure
capital
requirements
based
on
their
their
structure
of
their
programs.
E
A
D
Chairman
hark
pointed
out
the
credit
for
reinsurance
piece.
That's
the
the
national
association
of
insurance
commissioner
model
act,
legislation
that
will
keep
us
from
being
federally
preempted
and
really
level
the
playing
field
to
make
it
easier
for
our
domestic,
especially
life
insurance
companies,
to
obtain
credit
for
their
reinsurance,
so
their
insurance
on
their
insurance
products.
D
We
talked
about
the
captives
there's
a
workers.
Comp
chairman
hawk
mentioned
that
as
well,
there's
a
filing
that
is
required
of
workers,
compensation
carriers
called
their
loss,
cost
multiplier,
and
currently
the
statute
says
that
the
that
multiplier
needs
to
be
filed
every
year
that,
regardless
of
whether
it
changes
and
more
often
than
not
in
our
statutes
it,
the
insurance
carriers
are
only
required
to
file
rates
if
they
change
their
rates.
And
so
this
creates
some
confusion
and
really
I
need
unneeded
and
unneeded
filing.
D
We
generally
have
about
10
carriers
a
year
that
forget
to
make
this
filing,
because
it's
just
such
an
odd
piece,
and
so
it
makes
it
easier
on
the
carriers
on
that.
Another
piece:
that's
in
it
is
the
health
care
liability
report
back
in
the
early
2000s
prior
to
the
medical
malpractice
reforms
and
the
tort
reforms.
A
law
was
passed
that
required
carriers
and
attorneys
and
hospitals
to
file
information
on
medical
malpractice
settlements
and
that
data
was
used
to
gather
some
data
that
was
used
to
sort
of
formulate
the
medical
malpractice
reforms
in
the
tort
reforms.
D
A
couple
years
after
that
that
data
is
still
being
filed
with
us.
After
and
the
medical
malpractice
industry
and
insurance
industry
has
sort
of
leveled
out
and
become
more
affordable.
The
the
probably
the
more
important
piece
on
this
is
that
data
is
available
from
the
federal
government
through
a
federal
website.
So
it's
publicly
available.
So
that's
just
a
redundancy
of
filing
that
that
we're
having
to
collect
and
then
the
final
piece
is
deals
with
the
service
of
process.
A
Well,
thank
you
for
the
explanation.
You're
right,
the
medical
malpractice
scene
has
settled
down
after
the
crisis
over
the
past
few
decades.
Members
any
other
questions
seeing
none.
Thank
you
very
much.
Thank
you
for
coming.
We'll
go
back
into
the
session
chairman
hawk,
you
recognize
is
anything
else.
We
need
to
know.
C
Thank
you,
mr
chairman,
for
for
pointing
out
how
how
better
prepared
I
need
to
be
when
I
get
to
the
floor,
and
obviously
with
the
deputy
speakers
urging,
I
think
he
should
join
me
in
the
floor
when
we
present
this
bill
whenever
it
comes
up.
If,
if
we're
fortunate
enough
to
have
have
the
positive
votes
on
this
legislation,
I
welcome
the
deputy
speaker
to
stand
with
me
to
arm,
as
as
we
express
what
the
deputy
commissioner,
with
insurance
just
expressed.