Annual Report of the Superintendent of Insurance - ? ‚ of the Superintendent of Insurance to the ... Annual Report of the Superintendent of Insurance ... P/C Insurance Security

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  • Annual Report of the

    Superintendent of Insurance to the

    New York Legislature

    Calendar Year 2005

    Governor George E. Pataki

    Superintendent of Insurance Howard Mills

    www.ins.state.ny.us

  • The One Hundred Forty-Seventh

    Annual Report of the

    Superintendent of Insurance

    A Report to the New York State Legislature for the Year Ending December 31, 2005

    George E. Pataki Howard Mills Governor Superintendent of Insurance

    www.ins.state.ny.us

  • Data in this report are subject to small table-to-table variations. Such variations are attributable to the fact that data are retrieved at various times throughout the year.

    Selected portions of this report are available on the Departments Web site at www.ins.state.ny.us

    This report is printed on recycled paper.

    K: gen/AnnualReport05/ANNRPTCY2005

  • TABLE OF CONTENTS I. MAJOR DEVELOPMENTS

    A. Superintendent Mills Marks First Full Year in Office................................... 1B. Auto Insurance Premium Rates Fall for Second Straight Year................ 1C. Landmark Settlement Agreements Reached with Insurance Brokers .. 2D. Disaster Preparedness .......... 2E. Property Bureau (Automobile).................................................... 3F. Property Bureau (Non-Auto)......................................... 4G. Health Bureau..................................................................... 5H. Life Bureau....................................................... 6I. Consumer Services Bureau...... 6J. Frauds Bureau.......... 7K. Capital Markets Bureau...... 8L. Systems Bureau Internet Developments........ 8

    II. REVIEW OF NEW YORK STATE INSURANCE BUSINESS

    A. Life Bureau 1. Licensed Life Companies..................................................................................... 102. Domestic Life Companies.................................................................................... 103. Organizations Under Life Bureau Supervision..................... 104. Licensed Fraternal Benefit Societies...... 145. Private Retirement Systems................................................................................. 156. Public Retirement Systems...................................................................................... 157. Segregated Gift Annuity Funds for Charitable Organizations.................................. 168. Employee Welfare Funds..................................................................................... 16

    9. Viatical Settlement Companies............................................................................... 1710. Examinations of Insurers Conducted ........................................................... 1711. Auditing of Financial Statements......................................................................... 1812. Real Estate Review............................................................................................. 1813. Actuarial Submissions and Reviews... 1814. Insurable Interest... 2015. Market Conduct.. 2016. Life Bureau-Albany. 21

    B. Property Bureau 1. Entities Supervised by the Financial Regulation Division.................. 282. Property and Casualty Business.......................................................................... 283. Financial Guaranty Insurance................................................................... 364. Mortgage Guaranty Insurance............................................................................. 385. Title Insurance...................................................................................................... 406. Advance Premium Co-operative and Assessment Corporations......................... 417. Special Risk Insurers (Free Trade Zone)............................................................. 428. Risk Retention Groups..................................................................................... 429. Financial Examinations of Insurers ................................................... 43

    10. Lloyds of London................................................................................................. 43

  • 11. Finite Risk Reinsurance 4412. Certified Capital Companies.... 4413. Service Contract Providers... 4514. Filings Involving Rate Changes, Policy Forms, etc. ... 4615. New York Property Insurance Underwriting Association ... 4916. Medical Malpractice Insurance....... 5017. Workers Compensation... 5218. Insurance Availability Issues.... 5319. Automobile Insurance ..................... 5420. Homeowners Insurance.... 5621. Market Conduct Activities. 5922. Excess Line Insurance..... 6323. Consumers Guide to Automobile Insurance...... 7024. Circular Letters ........................... 7025. Individual Policyholder Complaints, Inquiries & FOIL Requests........ 7226. Casualty Actuarial Unit...... 72

    a. Private Passenger Automobile Insurance.............................. 72b. New York Automobile Insurance Plan............................................................. 75c. Workers Compensation Insurance................................................................. 81d. P/C Insurance Security Fund (PCISF) Net Value and Contributions... 86

    C. Health Bureau 1. Entities Under Health Bureau Supervision......................................... 872. Accident and Health Insurers...................................................... 873. Article 43 and Article 44 Corporations........ 884. Examinations Conducted by the Health Bureau... 915. SERFF.. 916. Review of Accident and Health Policy Form Submissions................................... 927. Review of Rate Filings by the A&H Rating Section...... 938. Inquiries and Complaints...... 939. Utilization Review Reports........................................................................ 94

    10. External Appeal Law & Program..... 9411. Market Stabilization Mechanisms 9612. Health Care Reform Act of 2000 Individual Market Reform.......................... 9613. Health Care Reform Act of 2000 The Healthy NY Program........... 9714. Federal Tax Credit Initiative.. 10015. COBRA Subsidy Demonstration Project 10016. Continuing Care Retirement Communities ....... 10117. Long Term Care Insurance .. 10118. Managed Long Term Care Plans.......................... 10219. Medicare Modernization Act (MMA).... 10320. Health Savings Accounts ..... 10421. Child Health Plus ... 10422. Early Intervention Program... 10423. Eating Disorder Legislation .. 10424. Contraceptive Equity Lawsuit ..... 10425. Innovations in Prescription Drug Coverage....... 10426. Innovative Health Insurance Products 10527. Explanation of Benefits Circular Letter... 10528. Discontinuations, Withdrawals and Mergers.. 10529. Financial Risk Transfer Agreement 105

    D. Consumer Services Bureau 1. Consumer Complaints... 107

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    2. Prompt Payment Statute... 1083. External Review.. 1094. The Healthcare Roundtable...... 109

    5. Special Investigations............................................................................................. 1106. Investigations...... 1117. Other Bureau Activities............................................. 113

    E. Insurance Frauds Bureau 1. Operational Overview 120 2. 2005 Highlights.. 120 3. Team Building. 121 4. The Staff.. 121 5. Investigations.. 122 6. Arrests. 122 7. Fines 123 8. Civil Enforcement... 123 9. Fraud Prevention Plans/Public Awareness Programs. 123 10. Major Cases 124 11. Staff Recognition Awards. 126 12. Foreign Delegations.. 127 13. Partnering with Prosecutors. 127 14. Moving Up... 128 15. Upstate Seminars.. 128 16. World Trade Center Update. 128 17. Directions for 2006. 128 18. Legislation... 129

    F. Liquidation Bureau.. 131 G. Information Systems & Technology Bureau. 132 1. Web Site.. 133 2. Intranet. 134 3. Annual Statement Filings.. 134 4. Imaging/Workflow... 134 5. Domino Portfolio Workflow Applications. 135 6. E-Commerce... 135 7. Sybase Enterprise Portal.. 136 8. Infrastructure... 137 H. Office of General Counsel.. 138 1. Legal Opinions 138 2. Enforcement Matters.. 138 I. Capital Markets Bureau. 139 1. General Overview... 139 2. 2005 Highlights... 140

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    J. Disaster Preparedness & Response Bureau.. 146 1. General Overview... 146 2. Disaster Response/Business Continuity Circular Letters 146 3. Disaster Response Questionnaires and Plans.. 147 4. Business Continuity Plan Questionnaires and Plans 147 5. Pre-Disaster Data... 147 6. The Departments Disaster Recovery/Business Continuity Plan 147 7. New York Information Network (NYIN)... 148 8. Public Access Defibrillator (PAD) Program 148 9. West Workspace. 148 10. The Incident Command System. 148 11. Life Safety Procedures. 148 12. Disaster Recovery Assistance. 149 13. Mobile Command Vehicle 149

    K. Captive Insurance Group.... 150 1. General Overview... 150 2. Legislative Proposals. 150 L. Training & Professional Development.............................. 151 M. Motor Vehicle Accident Indemnification Corporation............................................ 152

    III. INSURANCE LEGISLATION ENACTED. 154 IV. REGULATIONS PROMULGATED OR REPEALED. 161 V. CIRCULAR LETTERS

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