News Briefs

Arkansas

Conference to Aid Business Leaders

The Arkansas Workers Compensa-tion Commission will hold the 18th Annual Workers’ Compen-
sation Educational Conference Oct. 12-14 in Little Rock. The AWCC said businesses and their insurance agents are invited to attend the three-day session and find answers to their questions about workers’ comp.

Presentations will include: “Commission Shoptalk,” at which employers and their representatives can meet the commissioners and division heads; Dr. Michael Lack, MD will speak on how people being tested for drugs “Beat the Tests;” Dr. Joe Thompson, MD, will present “A Healthier Arkansas;” and a panel discussion will consider “Wellness Programs: Return on Investment.” Speaking will be representatives of L’Oreal, JB Hunt, and TrestleTree.

Register online is at www.awcc.-state.ar.us. For more information, contact AWCC’s Alice Jones, special projects coordinator, at ajones@awcc.state.ar.us or (501) 682-2692 or (800) 622-4472.

Compensation Disclosure Guidelines

The Arkansas Insurance Department issued a bulletin containing guidelines for insurance producers regarding compliance with the state’s Producer Licensing Model Act. For the vast majority of producers who do not act as brokers, the disclosure requirements will simply be to tell the customer: (a) the source of their compensation for that placement of insurance; and (b) that the producer represents the insurer and will be providing services to the consumer on behalf of the insurer.

Greater disclosures are required for an insurance producer who acts as a broker, or who receives compensation from the customer. This producer must disclose whether he will receive additional compensation from the insurer or other third party and provide the customer an estimate of the amount of such compensation if the customer requests it.

The following summarizes the department’s responses to questions about the Act: (1.) The producer disclosure requirements only apply to new customers. After the initial disclosure is made, no disclosure needs to be made at renewal unless the information previously disclosed has substantially changed. (2.) The disclosure may be made verbally, though a producer would be wise to document the specific date the disclosure was made to the customer. A written disclosure signed by the customer, though not required, is the preferred way for a producer to prove that the disclosure was actually made. The department will not pre-approve any written disclosures. (3.) The Act requires the disclosure to be made “before the placement of insurance business.” The department interprets this to mean that the required disclosures should be made before the customer has committed to purchasing the product. (4.) In some instances, a producer may sell a product for an insurer but will not be compensated by that insurer. The compensation may come from the insurer’s parent or other affiliate, or from a third party. The source of the producer’s compensation must be disclosed and the relationship must be explained.

Contact the department’s Legal Division at (501) 371-2820 for more information.

Louisiana

Fake Ins. Cards Bring Arrests

Three Baton Rouge, La., men were arrested and charged with making and selling fake automobile insurance cards and inspection stickers, according to the Louisiana State Police. Investigating a complaint regarding a fraudulent insurance identification card purchased in 2004 from Daniel Sanders, the LSP Insurance Fraud Unit located multiple individuals who had purchased fraudulent insurance ID cards and fraudulent Motor Vehicle Inspection stickers from Sanders.

Troopers arrested Sanders at his residence in the Red Stick Trailer Park in Baton Rouge after he admitted he was selling the fraudulent cards and MVI stickers. At that time troopers also noticed several vehicles in the near vicinity bearing fraudulent MVI stickers.

The fraud unit discovered that Lee Hawkins III of Baton Rouge was supplying the forged MVI stickers and Lajunar Raynell Gauff of Baton Rouge was supplying the fraudulent insurance cards to Sanders. On Aug. 5, 2005, state police conducted search warrants at the residences and businesses of Hawkins and Gauff.

Gauff was arrested on seven counts of forgery and one count of illegal possession of a firearm by a felon. Hawkins was arrested on 16 counts of forgery.

According to the Associated Press, Sanders sold the inspection stickers for $20, while the insurance cards were going for at least $80.

Former Agent Charged

Louisiana Commissioner of Insurance Robert Wooley announced that a former insurance producer from Mansura, La., was arrested and issued a cease and desist order for allegedly misappropriating insurance funds. Gordon Mark Scallan, 39, was arrested by the State Police Fraud Unit and booked into the Avoyelles Parish Jail on charges of forgery, unfair trade practices and theft. At the same time, DOI Fraud Unit investigators served Scallan with a cease and desist order and summary suspension of his license. The C&D states that he misappropriated funds in the amount of $23,980.84, which he received from a client for the purchase of two life insurance policies.

DOI records show Scallan held a life and health insurance license from May 23, 1993, until the current action. Department records list his address as P.O. Box 342, Mansura.

WCRI to Present Study Results

On Sept. 22, 2005, in Baton Rouge, La., the Workers Compensation Research Institute will present the preliminary findings for Louisiana from the 6th Edition of the annual WCRI CompScope multi-state benchmarks study that will be published in February 2006.

This study compares the workers’ compensation system performance for Louisiana with that of 12 other major states. WCRI will also present very preliminary findings for new medical cost and utilization benchmarks for Louisiana from the 6th Edition of the WCRI Anatomy benchmarks.

The presentation is from 1:30 p.m. to 3:00 p.m. at the Baton Rouge Marriott. For more information visit the WCRI Web site at www.wcrinet.org.

Oklahoma

Bonding Company Ordered to Stop

Oklahoma Insurance Commissioner Kim Holland ordered Global Bonding to stop conducting unauthorized business involving insurance in Oklahoma. The order states the company violated state law by misleading consumers, construction companies and subcontractors regarding surety bonding for construction projects.

The action resulted from a complaint received by the Oklahoma Insurance Department from a subcontractor working on a construction job for Newcastle Independent School District. An investigation revealed that Global Bonding, a company based in Las Vegas and operated by Robert Joe Hanson, was not licensed to conduct insurance business in Oklahoma.

Global Bonding has also been ordered to cease and desist doing insurance business in Nevada, Texas, Montana, Washington, Georgia and Florida.

Investigators believe the company is targeting small and disadvantaged businesses that sometimes have difficulty obtaining bonding. The Department of the Army issued a Criminal Alert Notice citing Global Bonding and Robert Joe Hanson, with the alias of Dennis R. Lyon, and several other affiliated companies and individuals. Hanson allegedly had submitted fictitious bonds on numerous U.S. government contracts.

Former Agency Employee Charged

The Oklahoma Attorney General’s office reported that a former employee of Gore’s Southlake Insurance Agency was charged with multiple violations of the state’s computer crimes act and embezzlement. Sabrina Diane Sands, 27, was charged in Sequoyah County District Court with six counts of violating the Oklahoma Computer Crimes Act and four counts of embezzlement. According to the state’s complaint, Sands profited more than $6,000 from her scheme.

Sands is accused of converting policyholder premium payments to her own personal use. Three of the computer crime charges involve incidents where Sands allegedly pocketed the premium payments and then electronically submitted payments to the insurance company by debiting the Southlake account, causing a loss to the agency. The remaining computer crimes allegations involve three incidents where Sands is accused of electronically securing insurance for herself or her husband, and debiting the premium payments from the Southlake account.

The embezzlement counts represent four incidents where Sands allegedly accepted premium payments but converted the money to her own use.

Texas

ICT to Host Workers’ Comp Conference

The Insurance Council of Texas will host its 2005 Workers’ Compensation Conference in Austin on Sept. 7. State Representative Burt Solomons of Carrollton, author of House Bill 7, the broad workers’ compensation legislation passed during the regular session of the 79th Texas Legislature, will be the keynote speaker.

Solomons will be followed by Shannon Phillips Meroney, a senior attorney with Thompson Coe Cousins & Irons, who will provide an overview of the workers’ comp legislation. Following Merony will be a panel discussion with: State Rep. Helen Giddings of Desoto, chair of the House Business & Industry Committee; Lucinda Saxon, Governmental Affairs Manager at the Texas Association of Business; Richard Levy, Legal Director of the Texas AFL-CIO; David Henkes, M.D., a Texas physician representing the Texas Medical Association; and Richard S. Geiger of Thompson, Coe, Cousins & Irons.

The luncheon speaker is Jane Stone, a partner at the law firm of Stone Loughlin & Swanson, who will discuss the use of ethics in business.

The afternoon session will offer an overview of legislative changes impacting the indemnity benefit dispute resolution process by Robert Graves, Jr. of the law firm of Burns Anderson Jury & Brenner. Lisa Hannusch, president of the The Hannusch Group will explain the role of healthcare networks in workers’ comp insurance.

The conference concludes with a presentation by Julie Shank, R.N., who will discuss the impact of workers’ comp reform legislation on medical benefits, and other significant issues.

Online registration for the conference is available at www.insurancecouncil.org/

WorkersComp. For more information, contact ICT’s Cynthia Haywood at (512)

444-9611 or e-mail chaywood@insurancecouncil.org.

Topics Carriers Texas Fraud Legislation Workers' Compensation Louisiana Oklahoma Arkansas