News Briefs

Illinois

CCC Settles Class-Action Suit on Total Loss Vehicle Valuation: Chicago-based claims software-maker CCC Information Services Inc. and 15 of its customers signed a settlement agreement with plaintiffs in various class action suits pending in Madison County, Ill., relating to the valuation of vehicles that insurers have declared total losses.

The settlement includes no admission of liability or wrongdoing by CCC or its customers. The proposed classes represent all customers of the settling carriers who had a total loss claim from Jan. 28, 1989, to the present, for which CCC’s product and service (now called CCC Valuescope) were used to perform the valuation.

Terms of the settlement agreement require CCC to pay notice and administration fees and other costs associated with the settlement. The company estimates these costs will total about $8 million, and including available insurance proceeds of $1.8 million, the company is fully reserved for these payments. Other settlement costs, including claims by class members, will be paid by the insurers participating in the settlement.

CCC will also engage the services of an independent third party as a court-appointed monitor to periodically review CCC Valuescope’s methodology for five years following settlement and to oversee the performance of various product validation studies.

Anthem Owes $1.5 Million to Settle Overcharge Allegations: Indiana-based Anthem Insurance Companies will pay the United States $1.5 million to settle allegations that the company overcharged the Federal Employee Health Benefits Program (FEHBP). The corporation has served as a contractor within the FEHBP.

The government alleges that Anthem included profit in the cost of certain services billed to the program by a company under common corporate control and improperly calculated the amount of drug rebates due the program. The allegations relate to the period from 1992 through 2002.

The settlement resolves a whistleblower suit brought against Anthem under the False Claims Act. Under the Act, private persons, known as “relators,” may bring suit on behalf of the United States alleging fraud against the government and, in an appropriate case, receive a share of the proceeds.

The Defense Criminal Investigative Service and Office of Personnel Management Inspector General investigated the matter.

Kansas

Kansas Insurers Oppose Drivers’ License Renewals at AAA Offices: Kansas members of the National Association of Mutual Insurance Companies (NAMIC) are mobilizing opposition to a state program permitting drivers’ license renewals at local AAA offices.

The Kansas Department of Revenue (KDR) recently announced plans to expand the pilot program, which began in May in Lawrence. The expanded program will allow for the renewal of drivers’ licenses in Lawrence as well as Topeka, Manhattan, Hutchison, Pittsburg and Wichita.

Because AAA also sells auto and homeowners insurance, this program provides an unfair competitive advantage in the marketing and sale of insurance products. NAMIC estimates that expansion of this program could increase walk-in traffic at AAA offices by 30,000 people each year.

North Dakota

Officials Crack Down on Uninsured Contractors in Wake of Hailstorm: In the aftermath of last month’s hailstorms, North Dakota’s Construction Compliance Task Force has begun aggressively checking construction sites to ensure that contractors are insured and licensed.

Investigators from Workforce Safety & Insurance (WSI), the Attorney General, Secretary of State’s offices and Job Service North Dakota will be checking to ensure that contractors have the proper licensing, worker’s compensation coverage and unemployment insurance for their workers.

Out-of-state individuals, businesses and contractors need transient merchant licenses from the Attorney General’s office, must be registered with the Secretary of State’s office and have both WSI workers’ compensation for their workers and unemployment insurance coverage from Job Service North Dakota while conducting business in North Dakota.

Violators face fines, imprisonment, or both. In addition, unsuspecting consumers who hire unlicensed and uninsured contractors may be held liable for the damages or injuries that occur on their property.

To operate in North Dakota, a contractor must be licensed with the Secretary of State’s office for work that costs more than $2,000. To get that license, they must have liability insurance and coverage from WSI. Failure to do so is a class A misdemeanor. Contractors also must secure unemployment insurance from Job Service. Out-of-state firms must obtain a transient merchant’s license from the attorney general’s office and post a bond that can be used to cover claims by a client. If they don’t, it is a class B misdemeanor.

To determine if a contractor is registered with the state, contact the Attorney General’s Consumer Protection Division at (800) 472-2600.

OHIO

Comp Bureau Fires Asset Management Firm That Lost $60 Million: The Ohio Bureau of Workers’ Compensation announced it is terminating investment dealings with Allegiant Asset Management, a wholly-owned subsidiary of National City. BWC has asked that all remaining holdings in their large cap growth domestic equity fund be liquidated. Of the fund’s $71 million in losses, about $60 million resulted from management decisions by Allegiant. As of May 31, BWC’s carry-basis for the Allegiant Asset Management was $51.1 million, and its market value was $53.4 million. Despite writing off losses of approximately $50 million in fiscal year 2002 and approximately $20 million in fiscal year 2003, the bureau was still able to return nearly $2.2 billion in dividends to public and private employers during both of those years. The losses “have no impact on the value of the State Insurance Fund today,” BWC Interim Administrator Tina Kielmeyer said in a statement. In January 2001, BWC reallocated $250 million from other equity investments to provide initial funding to Allegiant. They received funding in March 2001. BWC drew down Allegiant’s account $75 million in April 2004 and an additional $50 million in May 2005. As of May 31, BWC has a carry-basis of $1.17 billion with 13 large-cap value managers. The market value of these firms was $1.25 billion. BWC said its fund continues to be fully-funded with an approximate value of $14.3 billion. It also possesses a surplus.

WISCONSIN

Gov. Doyle Signs Health Insurance Bill: Wisconsin Gov. Jim Doyle signed a bill designed to allow farmers and others who lack health insurance to join a cooperative that will negotiate health insurance plans on their behalf. A.B. 5 expands access to health care cooperatives in the state, and makes it easier for farmers and small business owners and senior citizens to get affordable health insurance.

Farmers pay about three times more in health insurance premiums than those who can take part in company sponsored health plans. As a result, many farmers choose to do without.

In 2003, Governor Doyle signed legislation creating five regional health care purchasing alliances to bring farmers and other small employers together to negotiate directly with health plans and use their buying power to negotiate better coverage, and lower premiums.

Topics Workers' Compensation Agribusiness Contractors Kansas