California’s new Insurance Commissioner, Dave Jones, identified his priorities at his inauguration on January 3. He plans to accomplish his objectives by making the California Department of Insurance “the strongest consumer protection agency in the nation”, and he plans to “set the standard for other consumer protection agencies.” His priorities are:
- Implementation of federal health care reform, and that includes continuing his fight for the authority to reject excessive health insurance premium increases;
- “[T]o level the playing field for consumers and business as they deal with insurance companies . . . to make sure that consumer complaints are being addressed and that insurance companies are not taking advantage of consumers;”
- Ensuring that California has a viable and competitive insurance market.
To implement his first priority, Jones has created a new senior leadership position titled “Deputy Commissioner for Health Care Policy and Reform.” He will also continue efforts to provide the “Insurance Commissioner and the Department of Managed Health Care the legal authority to reject excessive health insurance and managed care premiums,” and he will see to it that he has the “legal authority to enforce the new federal health care reform law.” Jones has already signed anemergency regulation giving him the authority to enforce in “California, the new federal 80% medical loss ratio for the individual health insurance market.” Existing California law requires insurers to spend at least 70% of premiums from the individual market on medical care. Jones’ proposal aligns California’s regulations with national Medical Loss Ratio rules established under the federal health reform law. The federal MLR regulations took effect on January 1, 2011.
To succeed in the protection of consumers, Jones has directed the Department of Insurance to file by January 30, 2011 “annuity suitability” regulations aimed to “protect consumers from being sold annuities that are not suitable for them.” Additionally Jones has directed the Department of Insurance to develop regulations to protect “life insurance beneficiaries from the abusive use of retained asset accounts.”
To ensure California has a functioning and competitive insurance market, Jones wants to see new products brought to consumers in California. “Consumers and businesses need choices, and keeping a viable, robust market, with competition, is important.”
Jones also feels that it is “essential that we root out fraud, which is a burden on the market, insurer and consumers alike – fraud by policy-holders, fraud by scam artists, fraud by vendors, and fraud by insurers and agents who promise one thing and deliver another – or don’t’ deliver at all.”
The next four years under Insurance Commissioner Jones promises to be one of the most consumer oriented terms ever in California. It will be interesting to see how the insurance industry responds to him and his proposals.
