Senate Insurance Committee
January 28, 2025
Senator Blake Johnson [00:00:06] Please find your way to your seats. I'm fixing to see a quorum. Welcome to Insurance and Commerce. Chair sees a quorum. Today we're going to be going over those reports that the pro tem has asked us to look at to see if we can remove some of these to lessen the burden of our agencies. So, Alan, if you would come up, if your deputy wants to. I think everybody's got a copy of the reports at their chairs. We'll just start with the first one. Arkansas Health Insurance Marketplace Report. Just introduce yourselves, and you don't have to do that but once, and you're welcome to begin.
Insurance Department [00:01:22] Alan McClain, Insurance Commissioner.
Insurance Department [00:01:27] Jimmy Harris, Deputy commissioner, Market regulation.
Insurance Department [00:01:34] So, Mr. Chair, you just want me to just give a summary of the report and kind of what our recommendation, keep or get rid of type thing?
Senator Blake Johnson [00:01:43] Yeah, that'll be fine. And then we'll have discussion on what we want to do with each one as a recommendation from the committee.
Insurance Department [00:01:51] Okay. All right. Well, I'll start with the first one that I have in order, and that would be the Arkansas Health Insurance Marketplace Report. We suggest removing that report. It is not one that is necessary for the department to do anymore. Once upon a time it was when we did charge the user fees for that program. But the way the structure of that has changed, so we don't really need to do that report anymore. So that would be one. I'm happy to give more information on that reasoning for that in more detail if you want it.
Senator Blake Johnson [00:02:25] Go ahead. Senator Flowers.
Senator Stephanie Flowers [00:02:29] You say the structure has changed. So what is the new structure, and does that require a report?
Insurance Department [00:02:39] Okay. No, when AHIM transitioned to AID, the user fees ceased so we stop collecting user fees for the marketplace. So there's really no need for the report anymore. The report was meant to let the legislature know what was being done with those user fees.
Senator Stephanie Flowers [00:03:08] And so the new structure is that this goes under AID and so AID has no reporting requirement for anything related to this health insurance?
Insurance Department [00:03:28] The Arkansas Health insurance marketplace used to be a much larger entity that was sort of in charge of the administration of the state based exchange on the federal platform.
Senator Stephanie Flowers [00:03:45] I'm not sure your mic is on.
Insurance Department [00:03:50] All right. So let's try. How about that? Okay. So previously there was an expense charge on every policy that was included in the premium, a user fee. Those fees were then used to fund the operations of AHIM. AHIM is a much smaller entity now that it has been rolled underneath the Arkansas Insurance Department's umbrella. So expenses are down and we don't collect that fee anymore. The report was for just to report the assessment of our user fees and what we spent that money on. And there are no fees anymore.
Senator Stephanie Flowers [00:05:03] So is there a balance in the account where those fees were collected? And when was this done so that it's now under the insurance department's umbrella?
Insurance Department [00:05:19] Okay. So AHIM expenses by fiscal year, they were around $2 million in the year ending 2019 when it was rolled under the insurance department. Currently those expenses are around 330,000. In 2020 and 2021, they decreased to 234,000. Funds remaining from those fees, I can get that number for you. I'm not sure what that is if there is any funds remaining.
Senator Stephanie Flowers [00:05:57] Well, what are the funds used for now then?
Insurance Department [00:06:06] We spend approximately half a million on marketing that's required by the federal government on the state-based exchange. For instance, open enrollment, navigators, agents that help ensure.
Senator Stephanie Flowers [00:06:26] I thought we didn't have any navigators.
Insurance Department [00:06:35] We have a navigator program.
Senator Stephanie Flowers [00:06:38] Really?
Senator Blake Johnson [00:06:41] Senator Flowers, Senator Irvin did extensive work--
Senator Stephanie Flowers [00:06:47] Maybe she can help me understand that because I thought that was--
Senator Blake Johnson [00:06:50] The changeover to ARHOME. It used to be this, but we changed it.
Senator Stephanie Flowers [00:06:56] Maybe she can answer whether there are any navigators. I thought that was deleted.
Senator Missy Irvin [00:07:03] So. And I apologize. I came in. So we're discussing the report submitted to the legislature by AID. Is that correct? Okay. So on number one. So that's actually the health insurance marketplace. We actually did away with the structure of the marketplace. Is that not correct? And so this report should not be necessary anymore. Is that correct? I mean, that's the way I understand it. The reason why we did away with that part of it was because we did do the expansion that went up to 139. And yes, we do have people that do work in conjunction with AID to try to transition people from if they roll off because of eligibility. If they roll off the program, then we're trying to get them into the marketplace if they're above the 139% of federal poverty level. That's for the expansion population. Now, there are some other eligibilities that are above that. Like maternal is up to 209 of federal poverty level. But we do have people that coordinate and try to get folks, if they've rolled off of ARHOME, to try to get them into the marketplace if they've exceeded their eligibility requirement.
Senator Stephanie Flowers [00:08:18] So that's called navigator.
Senator Missy Irvin [00:08:22] I would have to defer to Insurance Department.
Senator Stephanie Flowers [00:08:27] I think that DHS would have something to do with getting people back on if they've been removed. And if he says it's a half a million a year for the navigator, is that what you're saying? And so you don't have.
Insurance Department [00:08:47] No, no, no, no, no. Half a million is our total budget that that is spent on marketing programs, open enrollment marketing. You see commercials, that sort of thing around open enrollment. There's a kind of a minimum amount of marketing that we are required to do as users of the federal platform.
Senator Stephanie Flowers [00:09:17] Which is half a million a year.
Insurance Department [00:09:20] I can get you those exact numbers, but.
Senator Stephanie Flowers [00:09:23] It doesn't sound like your balance is going to cover maybe one year if it's half a million. I mean, what are you going to get the money for doing your marketing?
Senator Blake Johnson [00:09:34] Senator Flowers, those fees have been removed, so they are not what covers that marketing plan. And their report is what we're kind of focused on. And that's outside of that. So.
Senator Stephanie Flowers [00:09:53] Well, I'm just curious about the balance. If there's half a million, what is it, does it return to general revenue? Where does it go?
Insurance Department [00:10:06] I can get you that information by the end of the day today.
Senator Blake Johnson [00:10:11] Senator Irvin.
Senator Missy Irvin [00:10:12] Yeah, it could be a federal pass through as part of the marketplace. I mean, there's probably some federal funding there that requires us to, which is the appropriate thing to do and the right thing to do. We should be spending that money on marketing so that people understand it's open enrollment time. This is the time where you've got to, you know, enroll in health care insurance and we want to promote that. I think that's probably what it is. But yeah, this probably should have been removed when we removed the marketplace and it just never was.
Insurance Department [00:10:48] Okay. The balance of the fees that we used to collect back when AHIM salaries were $1 million a year. Now they're zero because they're funded by AID. The balance in that fund is around 3.1 million. And correct, we use around 220,000 annually on marketing. And then the rest goes to AFMC to cover call centers. So we spend around 500,000 a year. Once those funds are exhausted, AID is going to have to start covering the expenses.
Senator Blake Johnson [00:11:31] Thank you. Is there any objection to-- I have a bill that has all these included already, but I'll remove the ones that we want to keep. I just wanted to do that upfront. But is there any objection to removing this report?
Senator Missy Irvin [00:11:55] Nope.
Senator Blake Johnson [00:11:55] Seeing none-- yes.
Senator Stephanie Flowers [00:12:00] It's not an objection. But I'm trying to understand how is this accounted for to the legislature, your balance? At least maybe having a final report that shows a balance and what they use this for, for the balance? I mean, it just seems like this is going to just disappear and we'll never know really what you're doing with it.
Insurance Department [00:12:32] mean, we can continue doing a report and show the decreasing balance, as Jimmy described balance there is a balance that is able to use it for the reasons that Jimmy said. And at some at some point in the years down the road we'll have to use our own agency budget to cover those expenses.
Senator Stephanie Flowers [00:13:03] But well, do you report the balance on anything else that you send to the legislature for review or just?
Insurance Department [00:13:15] It's reflected in our budget.
Insurance Department [00:13:17] It's reflected in our biannual budget.
Senator Stephanie Flowers [00:13:19] It's reflected as a balance from this.
Insurance Department [00:13:23] Yeah. Yes, ma'am.
Senator Stephanie Flowers [00:13:24] Well, I don't have any objection if they're reporting it already.
Senator Blake Johnson [00:13:32] Senator Irvin.
Senator Missy Irvin [00:13:32] I think Senator Flowers makes a great point and which highlights the redundancy. It should be a fund balance that's reported in the budget, in a line item in their budgets. And I think Senator Flowers makes an excellent point there. So we do definitely want the information about your spend, your balance, what you're doing with it. And I think her point is well taken. But also she highlighted the redundancy of of doing two reports when it's already in the budget mantle. So, yeah, I think we're good.
Senator Blake Johnson [00:14:03] We'll move move on to number two, the report on operations of Arkansas Health Care Transparency Initiative.
Insurance Department [00:14:12] That's a report that looks like this. You don't have a copy of it or anything, but you can't see it from here. I apologize. But it's the biennial report of the ACHI Arkansas Health Care Transparency Initiative. And they prepare the report. We file it. It's largely details the administration of the all payer claims database and their use of insurance carrier data to do research. I think it's a good report to keep. It shows their activity and the accountability for the funds that they get. So I would suggest keeping this one here.
Senator Blake Johnson [00:14:52] Any questions from members? Without objection, we will retain that report. Moving on to a comprehensive performance review of Arkansas worker's Compensation insurance plan.
Insurance Department [00:15:08] And this one's a little more detailed, but I do recommend retaining this one. It is gives us the authority to do examinations of basically our assigned risk plan for worker's compensation. Arkansas enjoys a fairly low participation in the residual market, the assigned risk plan because rates in Arkansas are very low and most people can get it on the private market. But there is a plan for people who have to go in the assigned risk pool, if you will, when they do the higher risk. And so there is a mechanism for us to examine the plan and the people, the insurance companies that are participating in that plan. I think it's something we need to retain. I can give you more information. I think it's pretty granular in terms of the regulatory aspect of it, but it really is to ensure that the people, the insurance companies that are participating in that assigned risk plan are qualified carriers.
Senator Blake Johnson [00:16:20] Any questions? Members, that began whenever our workers compensation, the pool was really low, low funding, right?
Insurance Department [00:16:32] It began when it was really needed in that there was so many people going to the plan because they couldn't get insurance coverage, worker's comp coverage anywhere else. So that's when the plan was very much more active. But it's still something we have to monitor on a regular basis.
Senator Blake Johnson [00:16:57] Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:17:00] I don't know how this is related, but you know, the surplus lines bill we had the other day, does that assist with these companies being able to get this high risk insurance?
Insurance Department [00:17:23] No. No, ma'am. So our worker's compensation insurance plan, NCCI is our plan administrator. What number three on this list does, the comprehensive performance review, that's a multi-state exam that takes place over three years on NCCI. High risk is going to mean something a little different in worker's comp than it does your property insurance market. Our worker's comp pool for higher risk or residual market, your contractors and that sort of thing, NCCI administers the plan. And there's four carriers that have bid on a portion of our market and says, hey, we will accept this many, you know, this percentage of your residual market and will administer it. No one is turned away. Fees are very, very tightly monitored and NCCI does does an exceptional job administering this program.
Senator Stephanie Flowers [00:18:50] So this is a kind of a blended multi state.
Insurance Department [00:18:55] Well, no, it's only for Arkansas. NCCI only administers Arkansas' workers comp pool, residual market workers comp pool.
Senator Stephanie Flowers [00:19:11] And you all review what they report?
Insurance Department [00:19:18] Number three on this list is the comprehensive performance review. We rely on a multi-state exam where there's, I think there were 15, 16 states that signed on to the last exam of our plan administrator NCCI. And what this refers to is if there were any findings or recommendations made in that Exam to NCCI, we would come report those to you. And that's what that is. It's every five years. For instance, domestic insurance companies, we have a statute that we are required to examine them every five years. HMO are every three years. Farmers, mutual aid every three years. NCCI is an advisory organization. It's not really an insurance company. So we have a mechanism that requires an exam on that advisory organization running our workers compensation pool. So we're going to do an exam on them every five years.
Senator Stephanie Flowers [00:20:34] Okay. Thank you. Thank you, Mr. Chair.
Senator Blake Johnson [00:20:36] Thank you. So without objection, we will retain number three. Number four is annual review of Arkansas Worker's Compensation Insurance plan operations. Now, that was the one that was done whenever we were really low on funds in that balance. So go ahead.
Insurance Department [00:20:59] Yes, sir. Mr. Chair, this one we do recommend removing. And again, it highlights several things about the Arkansas worker's comp market. It does go into just giving a report on some of the things Jimmy just referenced as far as our assigned risk plan and some data involved in that. But a big part of the report has morphed into a report on Act 796 of 1993. And in the last few years that I've presented this to you all in ALC more than once. I've been asked, why do you keep coming back and presenting this report? And so it's kind of because it's kind of the same thing every year, because the worker's comp market in Arkansas is so very stable. And I'm old enough to have been around in 1993, when this law was passed and the market, there were like three insurance carriers in the state at the time doing worker's comp and now there's several hundred. Anybody can do it. The rates are low and the frequency of injuries are down. Technology is up. So when Act 796 was passed, it was asked that we include some of this performance information. So it's just probably just outlived its usefulness.
Senator Blake Johnson [00:22:17] Thank you. Are there any questions? Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:22:22] And it sounds like to me, I might be wrong, but number three kind of covers anything that would have been and would be in this number four.
Insurance Department [00:22:34] It covers the important parts of number four, and that's addressing the residual market and the plan that we used to do that. You're right.
Senator Stephanie Flowers [00:22:46] One question. Weren't you weren't you over the Workers Compensation Commission?
Insurance Department [00:22:52] Yes, ma'am. I was director there for a few years several years ago. I sure was.
Senator Stephanie Flowers [00:22:56] All right. Thanks.
Senator Blake Johnson [00:23:01] Thank you. Is there any other questions? Without objection, we will remove number four. Number five, Wendell's Craniofacial Law craniofacial coverage report. Go ahead.
Insurance Department [00:23:21] This one I will defer to the committee for a recommendation. I have put on there to remove it. In our review of this, and Senator Irvin sponsored the legislation, so I'm kind of looking at her. It itrequired that we do two reports a year, a bi annual report, not biennial. And we only discovered that in the last few weeks, I have to say. And so we have not done any reports on this. And just having to throw myself at your mercy on that. The law didn't actually specify what we were to report on. But I think the intent was to streamline the complaint process for medical providers trying to get some of these special procedures done. And so we have that data and my staff is preparing it right now to do our first ever report. So, again, up to you all, whether you want to continue keeping this as part of the law or not.
Senator Blake Johnson [00:24:19] Senator Irvin.
Senator Missy Irvin [00:24:21] Is it a matter of practice from the insurance department to not follow the law?
Insurance Department [00:24:26] No, ma'am.
Senator Missy Irvin [00:24:28] That's not acceptable. It's not acceptable for somebody to, one, a legislator to pass a law that you've never complied with. That's not acceptable. And so I, you know, this is 2021. We are now 2025. So four years, you never followed the law. And that's just, I'm sorry, but that's not acceptable. You must follow the laws that we pass. That is part of the reason why the rules and regulations, a constitutional amendment was referred to the people of the state of Arkansas, and the people of the state of Arkansas voted to allow this legislature approval authority over rules and regulations because of stuff exactly like this. And it's offensive not just to me, but to every legislator, it should be offensive that if we pass laws, then we expect that the agencies will implement those laws to the letter of those laws. And so that's not okay with me. And so before we remove this, I would want to see one report at least. So at this time, and I will remove it. If I see that report within the session from you and you have complied with the law, then I will run a bill myself and I will remove that provision. But, you know, unacceptable.
Senator Blake Johnson [00:26:04] Thank you, Senator. I'm in no big hurry to run this, and I need to, once we decide, I need to get with the House end on the removal of these reports because I think they'll probably have to do the same thing on their end. And so. Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:26:27] I understand what Senator Irvin is saying, but does cranial facial coverage exist in Arkansas Insurance plan?
Insurance Department [00:26:43] Is it exempted?
Senator Stephanie Flowers [00:26:45] Does it exist? Is it available?
Insurance Department [00:26:48] Yes, it's typically done by a craniofacial specialist and specialist insurance.
Senator Stephanie Flowers [00:27:00] I'm trying to understand what is is. Obviously some type of procedure. Cranial, I guess. Your brain or something.
Senator Blake Johnson [00:27:16] Senator Irvin.
Senator Stephanie Flowers [00:27:17] Or something that.
Senator Blake Johnson [00:27:19] You might help clarify.
Senator Missy Irvin [00:27:23] So I probably could answer your question, Senator Flowers. These are very complicated cases of individuals that have severe disorders that require multiple surgeries. Cranial facial would mean the front area of your-- your cranium is obviously your head. But it's it's with the mouth and the teeth and the dental because they can't speak or they can't eat. And so it's a very specialized procedure. And so and requires multiple surgeries. So they have severe abnormalities. And so the reporting mechanism was really a level of accountability to make sure that we knew what was being covered, because several of these these individuals would have to go out of state in order to seek the treatment. And it became very complicated. So we I worked very closely with Blue Cross Blue Shield and the other insurers on the legislation just to make sure that we had some good steps in place for review of of what would be medical necessary for these individuals, for their surgeries and their treatment. But I can describe it to you more offline.
Senator Stephanie Flowers [00:28:45] I appreciate that. I'm just trying to understand if it's a matter of people having access to treatment or some type of procedure that will help them with this issue. Is that it? As opposed to whether the insurance plans of Arkansas offer it?
Senator Missy Irvin [00:29:12] Yes. Yes, I think it's two things, because you want to make sure that if they do have an insurance plan that does cover it, that they're able to get the surgeries that they need through authorizations.
Senator Stephanie Flowers [00:29:26] From the insurance company.
Senator Missy Irvin [00:29:27] Yes, ma'am. Yes, ma'am. Yes, ma'am.
Senator Stephanie Flowers [00:29:29] And so does that require AID to collect information from insurance companies or doctors?
Senator Missy Irvin [00:29:43] The ability to make sure that they're not just denying every claim that comes through or every request that comes through, but that there's an actual, that they're following the law. And the law states--
Senator Stephanie Flowers [00:29:56] I'm trying to follow.
Senator Missy Irvin [00:29:58] The insurance companies would follow the law in following what the law says, which is a team of people that review these cases and go through kind of a plan of care that looks.
Senator Stephanie Flowers [00:30:11] Is that team at the Arkansas Insurance Department>
Senator Missy Irvin [00:30:12] No, it's with the insurance companies. But the insurance department, it is their purview. They're the insurance commissioner. And all insurance companies are under their purview. And so they are the Consumer Protection Agency.
Senator Stephanie Flowers [00:30:29] So collect the data. Have you been collecting this information from these insurance companies?
Insurance Department [00:30:36] So occasionally we will get a complaint from a provider, generally always a provider, that says this insurance company considers these services as dental insurance, not necessarily medical coverage or medical benefits. So they'll deny the claim because they're health insurance. And they say, well, that dental. And then they'll reach out to us, the provider. We've received one complaint in 2024, none in 2023. There were 11 complaints filed in 2022, four which directly involved interpretation of services. The other were related to timely prior authorization, recoupment, unfair claims practices, that sort of thing. Which I assume that's what we would include in the report, the amount of claims and which we will get. But that generally, that's how they start. It's an interpretation of, hey, this is not a covered medical benefit.
Senator Stephanie Flowers [00:31:58] So I would ask Senator Irvin, since they indicate on the sheet no purpose stated, and I haven't read the act, did you intend for the insurance department to reach out to insurance companie about whether or not they should have approved?
Senator Missy Irvin [00:32:16] I don't know why they-- I don't know wh. On this piece of paper it says No purpose stated. The act itself is the purpose.
Insurance Department [00:32:31] And, there's a line at the end of the legislation that says we shall report bi-annually, which is twice a year, I think, on the law. Se I think the things we talked about would be perfect to put it in the report.
Senator Missy Irvin [00:32:49] That's what we're trying to see is we want to know where the problems are and where the issue is and so that things can be more clearly defined. That what is authorized, what is medical and what is dental. Because these are people, Senator Flowers, I'm not sure if you remember the movie Mask.
Senator Stephanie Flowers [00:33:07] What?
Senator Missy Irvin [00:33:08] Mask. The movie, Mask. It was a long time ago anyway. There is a certain syndrome and I can't remember the name of it, but where there's severe facial abnormalities that occur. And in order for these people to be able to eat or speak, they have to have both dental work and medical surgery. And so a lot of times that was being denied because they're saying, that's dental. No, this was very intensive medical necessity surgery so that somebody could eat. And so that should be covered. And so those are the types of things. The insurance department is a consumer advocacy department. They are there to protect consumers. They are there to regulate the insurance industry. And so this is a consumer driven piece of legislation. I don't want to rehash all of it. I worked really hard on it. My point is, there is a reason why we wanted the reporting was to see where we needed to go in and change, if anything, the way that the law was written. And it was an agreed to bill with Blue Cross Blue Shield in the insurance industry that we have a very specific guideline on how these things are determined. And so the reporting is, is it working? Is it not working? Where does it need to be retooled? So there is a purpose for these reports and that purpose would be, for us as legislators, we pass legislation, sometimes it works and sometimes it needs to be tweaked. And so the reporting kind of gives us that ability. So again, I think, you know, I'd like to see that information and that data. And then if it becomes unnecessary, then we could address that at that time. Thank you.
Senator Blake Johnson [00:34:58] Alan. So y'all can give a comprehensive report from 21 through current, correct?
Insurance Department [00:35:05] Yes. Right. We'll get everything up to date.
Senator Blake Johnson [00:35:07] I would suggest that as soon as possible and bring it back to the committee. And I'm going to hold all these until we can do them all at once. And we'll make that decision. And with Senator Irvin's input on on this one. So that way, we don't have to run a bunch of individual legislation.
Insurance Department [00:35:30] We had most of it together this morning. Just this one just slipped through the cracks and we apologize for that. It's really easy to get the information.
Senator Blake Johnson [00:35:38] I know you haven't been in place since 2021.
Insurance Department [00:35:44] And the law was a big process. And then the rulemaking process was really extensive after this one, too. It took a year after the law was passed to get settled on the rule. And we had a big exhale at that time because it was a big lift for everybody. But we should have done better in making sure these reports were done. So we'll get it all up to date.
Senator Blake Johnson [00:36:05] All right. Thank you. We'll go on to number six, which is a report of the Administrator of Risk Management Division.
Insurance Department [00:36:13] Now we have a risk management division, which handles all the state property insurance and a portion of the public schools. And so there was a requirement for the risk manager to do a report. And a number of years ago, apparently, we were told to quit doing it. But no law was ever changed to do that. So but in our annual report, which is our last one on here, there is a section for our risk management division. And of course, this is one that we plan on asking to retain. I think it makes sense to include. And we already have a section in there saying essentially the risk management division has been providing a report.. Just it's aggregated into this annual report of ours and not a standalone report.
Senator Blake Johnson [00:36:58] So if we remove this and it's already rolled into the last one you're asking to retain.
Insurance Department [00:37:04] Right. And then we can always add more rigor to that report if we need to.
Senator Blake Johnson [00:37:10] Is there any questions? Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:37:14] So you say add that to the last one we're going to retain. The last one is number three.
Senator Blake Johnson [00:37:22] No, the last one is number eight.
Senator Stephanie Flowers [00:37:25] The last one?
Senator Blake Johnson [00:37:27] The last. Yeah. Last report that we're going to review is already contains the risk management report.
Senator Stephanie Flowers [00:37:35] What did you just say about school plans? What did you just say? I can't hardly hear.
Insurance Department [00:37:42] I'm sorry. I need to get closer to the mic, senator. We have a public school property insurance program that some public schools in the state are part of. Other public schools are part of the Arkansas School Board Association program. So we do have a number of public schools, not even half of them, but we do have a program that public schools can be a part of for their property insurance. So that's one of the things that the risk management. But we also cover this building and all public buildings in the state, all state owned buildings.
Senator Stephanie Flowers [00:38:22] And so these policies that cover the school districts, I guess they're going to be included in this number eight, is that what you're saying?
Insurance Department [00:38:32] Yes, ma'am.
Senator Stephanie Flowers [00:38:34] Okay. I've never seen these reports. I don't know that I would.
Senator Blake Johnson [00:38:40] That's why we're getting rid of a number of them.
Insurance Department [00:38:45] Yes, ma'am. And then we have that information in our annual report already. Well, I think the annual report is going to prove to be a good composite of some of these things for you.
Senator Blake Johnson [00:38:57] Thank you. Without objection, I will remove that. And we're still on hold with all these until we make a decision on number five. But number seven is a criminal investigation Division annual report on health insurance fraud.
Insurance Department [00:39:19] Also, we have a section in our annual report for the Criminal Investigation Division. It does not report the particular medical insurance fraud, which is very important. We do have that as a separate report. We can continue doing that as a separate report or you can eliminate this one and allow us to break out that health insurance fraud information into our annual report, which I'm going to do anyway, because I think it's good to have it all in one place. I think it'd be duplicative to continue doing a separate report. So with your permission, I would like to just fold this into our regular annual reporting.
Senator Blake Johnson [00:40:00] So we'll have to remove this code and you'll just include it in into your annual report. Right?
Insurance Department [00:40:09] That's right, sir.
Senator Blake Johnson [00:40:10] Without being mentioned in code.
Insurance Department [00:40:15] That would be totally up to you. If you want to leave it in code that we include it in our annual report, that's fine. That's the plan, because right now we have aggregate numbers of criminal referrals, investigations, prosecutions, convictions in our annual report for all lines of insurance fraud. But we will break out this, which can be any number of insurance fraud. Right. But includes the health insurance fraud. But we'll break out the health insurance sector in the annual report.
Senator Blake Johnson [00:40:43] Go ahead, Senator Irvin.
Senator Missy Irvin [00:40:45] Yeah, I think it's an important reporting. I think it's important information. But I agree just to move it to the annual report, but maybe leave it in code, but just change it to where it's part of your annual report. That's what I would do, because I think that's important information to leave in the code.
Senator Blake Johnson [00:41:01] I will get that in the draft to put it in code that it goes into the annual report rather than removing it completely and just make an assumption that you're going to include it. Is there any objection to that? All right. Thank you. We're going to number eight, which sounds like it's becoming more important all the time.
Insurance Department [00:41:29] All right. That is our Arkansas Insurance Department annual report. And Les Galbraith's here, our chief deputy, and it fell under his charge to produce the last one. So that's what has a lot of great data in it that I think you will enjoy. I actually emailed a copy of this to all the insurance and commerce before January 1st, that membership. So I'm sure you get tons of emails. You probably didn't take time to thumb through it. You may have. But I did submit this to both House and Senate Insurance and Commerce committees back in December. So I'm happy to send another copy around and get you all hard copies, for that matter.
Senator Blake Johnson [00:42:20] Go ahead.
Senator Stephanie Flowers [00:42:22] I'd like a hard copy. And also, Mr. Chair, I'd ask, so are these all the reports that you all are required to give?
Insurance Department [00:42:37] Yes. Yes. Yes.
Senator Stephanie Flowers [00:42:41] I guess you say that's a no, huh?
Insurance Department [00:42:43] Yeah. That's kind of what I'm saying. Yeah. But happy to do more. We always want to make sure we're operating in full transparency and giving you all the data you need because, you know, you make the laws for us.
Senator Stephanie Flowers [00:42:54] I'd ask them if they have any recommendations for any new reports.
Insurance Department [00:43:00] I hadn't really thought about that, Senator.
Senator Stephanie Flowers [00:43:06] Thank you.
Senator Blake Johnson [00:43:06] Go ahead, Senator Irvin, then Senator McKee.
Senator Missy Irvin [00:43:11] I do think Senator Flowers makes a good point. And, you know, sometimes it's just basic communication for the agency to ask the committee, hey, we'd like to present this report, you know, and with a hard copy. I actually think that's a good thing to do. Whether the law requires it or not, it's just a matter of good business for the state of Arkansas. You know, and I know that, you know, and I think doing it part of the committee's, I think, is a good idea versus just doing it in a report and filing it. I think it's, I think it should behoove you as an agency to reach out to the committees and say or to the chairs and say, hey, I think we'd like to have this report done. I mean, I'm just speaking from my perspective on public health. We have a lot of reports. It's really good information. And so a lot of times that an agency contacts me, absolutely wanting to put them on the agenda because we all need to be updated and educated because we may find through your report something needs to be changed within the law. And that's that's kind of our job. So I think it's very beneficial and helpful.
Senator Blake Johnson [00:44:23] Thank you, Senator Irvin. So whenever you get that report on the number five and whenever you do that and bring this annual report with a hard copy, and hopefully there'll be a lull in the action of bill and hearing bill so we can go over that those two reports and make a decision. So. Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:44:57] Well, I'm just wondering about the bill we passed the other day, about the surplus line brokers and the fees that are charged for that, as well as there was the regular property insurance. Is that in your report, too? Do you all give us an idea of how much individual fees are charged? Do the insurance companies report that to you? I mean, does that come to you in the way of a complaint or something?
Insurance Department [00:45:48] No, ma'am. Fees are generally not reported to us. Surplus lines rates are not filed with us either. So the short answer is no.
Senator Stephanie Flowers [00:46:01] Well, what about the other, I think it was called property casualty insurance, is that reported? The fees?
Insurance Department [00:46:18] No. Individual producer fees are not reported. There is a cap on any property and casualty agent.
Senator Stephanie Flowers [00:46:30] 20%.
Insurance Department [00:46:31] That can exceed 20% of total premium. You know, adding up commissions, fees and everything. Cannot exceed 20%.
Senator Stephanie Flowers [00:46:39] Unless it's reasonable to charge a little more.
Insurance Department [00:46:42] That was what the bill was addressing for surplus lines only.
Senator Stephanie Flowers [00:46:51] So with the property and casualty insurance, there is no room for anything above the 20%?
Insurance Department [00:47:01] In the admitted market. You are correct, Senator Flowers.
Senator Stephanie Flowers [00:47:05] Okay. Just seems like, well, I'll leave it at that.
Senator Blake Johnson [00:47:14] Thank you, Senator. Is there any other business? We will hear bills on Thursday. I just have to probably do it at 9 on Thursday. Go ahead, Senator Boyd.
Senator Justin Boyd [00:47:31] So, Mr. Insurance Commissioner, while you're there, or Jimmy, either of you. We had talked about a potential special order of business on resiliency legislation. Do you have some dates when we could potentially get a an expert here that we could ask Mr. Chair to consider while you're here?
Insurance Department [00:47:56] We don't have the specific dates but our expert has indicated he is very flexible. So I think they only had a few that he ruled out. Right?
Insurance Department [00:48:04] Yeah. He would like to target maybe the week of the 10th of February or the following week after to allow him to make some travel arrangements to fly in from Kansas City.
Senator Justin Boyd [00:48:20] That's perfect. I'll get with Mr. Chair and be in touch. Thank you.
Senator Blake Johnson [00:48:26] Go ahead, Senator Flowers.
Senator Stephanie Flowers [00:48:28] Are you talking about, is it a bill that's been filed that we are going to consider?
Senator Justin Boyd [00:48:36] I'm working on some resiliency legislation, so that has to do with how you build your home. It hasn't been filed yet. I've got to finalize some touches, but I'm going to need some expert testimony to help us understand. And while we're here, while we have them at the end of the table, just to get some input while we're here as a committee. And so I've got what I need and I'll file a bill pretty soon.
Senator Stephanie Flowers [00:49:00] Okay. So you don't plan to run it when they come and present whatever they are going to present?
Senator Justin Boyd [00:49:05] No. I plan to file it soon and then run it when I have some people here who can help us understand what's happened in other states.
Senator Stephanie Flowers [00:49:17] I'm trying to understand this.
Senator Justin Boyd [00:49:20] So resiliency is, for instance, Arkansas is the only state that is 100% in Tornado Alley now. So our insurance rates are going up. So resiliency refers to building homes that are resilient against storms. They're more resilient. And so when I say resiliency legislation, that's what I'm talking about. So insurance rates, property and casualty rates are going up and we need to work to stabilize them. And there are some things that other states have done that I think Arkansas needs to take a serious look at. And so I'm drafting legislation, but I'm going to need some outside expertise to help explain it to the committee.
Senator Stephanie Flowers [00:50:02] So are we going to have a weatherman here to say that Arkansas is the only state that 100% in a tornado.
Senator Justin Boyd [00:50:10] I don't know that I'll have a weatherman.
Senator Stephanie Flowers [00:50:12] I've never heard that before.
Senator Justin Boyd [00:50:14] Well, in the previous General Assembly, we had testimony that from property and casualty insurers that we are the only state. So it used to be Oklahoma, but it is shifted back towards Arkansas. And so, hailstorms and tornadoes are an issue. And part of that is going into what's causing rights to property and casualty rates then to go up. And then, as you know, to have a mortgage on your home, you got to have property and casualty insurance. So now then that affects mortgage rates or people paying their mortgages because that's escrowed in there. So wasn't prepared to say a lot about it today. There's not been a bill filed, but there will be one soon. And I just wanted to ask them when we could get an expert here while they were at the end of the table.
Senator Blake Johnson [00:51:06] Thank you, Senator.
Senator Missy Irvin [00:51:07] And so just Senator Boyd, did you, do you, did you follow what we did with property and casualty insurance as it pertain to all the school properties? Because we have some experts come in and testify. Basically, I think maybe along the lines of what you're talking about. But I would just recommend maybe you could pull those reports as well that might be beneficial to you.
Senator Justin Boyd [00:51:30] Yes. So that was creating a captive for a specific thing. So, yes, it's been an ongoing discussion and we're going to continue it.
Senator Blake Johnson [00:51:44] If there's no other business, will probably come back at 9 on Thursday because normally we will be at 11 for the floor. So we will begin our our business at 9. Not this week. So apparently the the Bankers Association is here. Does anybody have a question?
Senator Stephanie Flowers [00:52:21] I'd like for them to come up here and talk about digital currency.
Senator Blake Johnson [00:52:25] I was just kidding. And Senator Boyd is working on that legislation and we'll bring that back whenever he's able to. But we appreciate you being with us. We are adjourned.
