Ride-sharing businesses cause confusion among consumers, drivers

Ride-sharing through Transportation Network Companies (TNCs), including Lyft, Uber and Sidecar, are causing a stir nationwide from an insurance perspective. These services are available to consumers through a smartphone app and allow drivers in certain cities to use their personal vehicles to give people rides, like a taxi.

A handful of states have issued consumer notices about these companies, including California, Hawaii, Ohio and, most recently, Connecticut. The debate revolves around when drivers and passengers are covered in a collision. Most personal auto policies have an exclusion for “livery,” which means times when drivers are being paid to transport people. In that case, the drivers would need a supplemental policy to cover the commercial use of their vehicles.

Today, a TNC called Lyft announced it is partnering with MetLife insurance to “develop insurance solutions that further protect Lyft’s drivers and passengers when utilizing this new sharing economy platform.” However, that’s about all the information that appears to be available at this time.

The TNCs advertise their own liability policies for drivers. Here’s an example from Lyft: “The Lyft platform now provides drivers with excess liability insurance up to $1,000,000 per occurrence.” Uber seems to offer a similar policy. Sidecar offers a little more information on its site, including a disclaimer that its $1 million policy “is liability only and does not provide coverage for collision, comprehensive, or wear and tear damage to a driver’s vehicle.”

Lyft is available in Seattle and recently announced it is expanding into Spokane. Uber is available in Tacoma, Seattle and Spokane. Sidecar is available only in Seattle. 

This issue is sure to stick around as more consumers start using ride-sharing services. The Seattle City Council is currently considering how to regulate TNCs. You can read about one Seattle blogger’s experience with Lyft when he was involved in a collision.

If you have a problem with an insurance company, you can contact our consumer advocates at 1-800-562-6900 or online.

Unlicensed jewelry service contract company makes things right with OIC

Zale Delaware Inc., a company connected to Zales Jewelers, Gordon Jewelers and Piercing Pagoda, and the Office of the Insurance Commissioner recently agreed that Zale would pay $300,000 fine and more than $290,000 in unpaid premium taxes for unauthorized sales of service contracts for jewelry repairs. Companies pay a 2 percent premium tax on all service contracts, which is deposited into the state’s general fund. All disciplinary fines are also deposited into the state’s general fund.
Zale sold more than 425,000 jewelry service contracts worth $14.5 million to Washington consumers from 1999-2013 without being licensed. Washington state law requires that all service contract providers be registered with the Insurance Commissioner; the law took effect in 1999 as a way to protect consumers. Zale self-reported to our office that it was selling the contracts without being licensed, and it agreed to suspend further sales until it could comply with state law.

Like insurance companies, companies that sell service contracts assume a certain level of risk and it’s our job to make sure they are able to provide consumers the service they paid for when they purchase the contract.

Noteworthy in this case is that the company approached our office in order to comply with state law. Often, we find out about unlicensed service contract sales from consumer complaints. It is unusual for a company to approach us in the interest of following the law. Zale agreed to pay the fine and the premium tax within 30 days.

Before you buy a service contract, you can make sure the company islicensed to sell contracts in Washington.

Health insurers' proposed 2015 rates due today

Today is the deadline for all health insurance plans that are sold in Washington to be filed with our office. All health insurers must file their individual and small group health plans and rates for plans sold both inside and outside the Exchange, Washington Healthplanfinder. The review process will likely continue through the summer.

The rates will be available to the public 10 days after the filing is determined to be complete by our office – most likely on May 10. Consumers can sign up to receive an email when the rates are posted on our website. You can select one just company or all of them. If you sign up before May 10, you will receive an email alert once the new proposed rates are posted. And you’ll get an email once we’ve made our decision.

We also have information about how rates are reviewed and frequently asked questions.

OIC seeks innovator who wants to help implement ACA statewide

OIC has a unique job opening in our Rates and Forms Division as a Health and Disability Insurance Forms/Contracts Manager (WMS Band 3). The position reports to the Deputy Commissioner for Rates and Forms, which is the division that reviews insurance plans and rates.

This is an exciting opportunity for someone who wants to work on the cutting edge of Affordable Care Act implementation in Washington state. We need someone who can lead a team of expert staff; work closely with people in the division who review rates and provider networks; and who understands insurance and contracts. The person in this position needs to be innovative and adaptable.

Here are a few of the position’s duties, as outlined in the job announcement:

• Serves as the statewide expert on health and disability forms filings.
• Plans and directs the review and approval or disapproval of health and disability contracts submitted by regulated entities; analyzes filing data to discover complaint trends or patterns of unfair, inequitable or unlawful insurance practices; prepares files and recommends referral of such practices for enforcement action.
• Attends and participates in assigned and agency training to enhance requisite skills and knowledge needed to supervise professional staff.
• Represent the OIC on a local and national level, attending NAIC events, speaking on behalf of the agency, and providing leadership on work groups and task forces.

We are requiring:

• A bachelor of arts or bachelor of science degree.
• Expert knowledge of insurance products.
• Expert knowledge of the insurance code and related rules and case law related to insurance products.
• Extensive experience analyzing contracts, and providing effective oral and written communication.
• Five years' supervisory experience of professional-level staff.

The salary will depend on qualifications, with a maximum of $80,000 per year.

Read more about the job and how to apply. 

Consumer tip: Don’t toss notices from your lenders

If you get a notice in the mail from one of your lenders – whether it be auto, boat, home or any other item you are paying for with a loan – make sure you read it. Lenders can require you to prove the item they’ve paid for is insured against damage or loss with an auto, homeowner or other applicable policy.

If you fail to prove the item is insured, the lender has the right to apply its own insurance policy, called “force placed” or “vendor’s single interest (VSI),” to your loan. The policy doesn’t protect you against property loss or liability—its sole function is to pay the lender the loan balance if you default on the loan. These policies are very expensive, they are added to your loan balance and you pay interest on them. One consumer was charged $2,680 for a policy on a $15,000 loan—that’s nearly 18 percent of the loan, not counting the interest the consumer paid.

The good news is that lenders typically allow you to drop the policy once you prove you have your own insurance on the item.

Don’t get stuck with a huge insurance cost that could have been prevented. When you get notices in the mail from a lender, read them. 

If you have questions, contact our consumer advocates at 1-800-562-6900 or through our website.

Did a medical provider refuse service based on your plan? We want to hear from you!

Our consumer advocates in recent weeks have heard from a handful of consumers that medical providers have refused to see them because they purchased health insurance through Washington Healthplanfinder, our state’s health benefit exchange. The consumers reported a couple of scenarios:

• They scheduled an appointment with a medical provider. The provider’s office later canceled the appointment because they say they are not accepting insurance that was purchased through the Exchange.
• Consumers contact providers listed as being in their network to find out if new patients are being accepted, and are told yes. The provider’s office later calls the consumer and tells the consumer they aren’t accepting plans purchased through the Exchange. In most cases, the insurance plans are confirming the providers are in the plan’s network.

We’ve heard of this happening with several plans and in several areas of the state. If you experienced one of these scenarios or something similar, please contact our consumer advocates at 1-800-562-6900 or file a complaint online. We regulate insurance companies and we want to make sure consumers receive the services they are entitled to in their insurance policies. 

Career opportunity for a financial examiner

Do you have experience with auditing or accounting and want to work in the Olympia area? We are hiring a Financial Examiner 2 (Assistant Financial Analyst) position in our Company Supervision division at our Tumwater headquarters. Financial examiners review insurance companies' financial statements to make sure they are following state rules and laws that exist in part to make sure they remain financially solvent and able to serve Washington consumers. 

 

This is what the person in the job will do:

• Examine and analyze insurance company and health carrier filings to discern financial condition, difficulties, trends, and compliance.
• Read and interpret applicable laws, regulations, and standards to ensure analyses and examinations are appropriately conducted. 
• Assess analysis-examination risk, materiality, and other matters by reviewing and analyzing regulated entity's history and OIC Priority Rating, biographical affidavits of its key staff, and qualifications of its management and accounting personnel, as well as current filings for the entity, prior analysis reports, and file information.
• Prepare and complete analysis-examination procedures in accordance with accreditation standards.
• Read and analyze the regulated entity’s filings, documents, and other information to assess the entity’s financial condition, statement assertions, and compliance with insurance laws, regulations, and standards.
• Prepare analysis-examination reports for assigned regulated entities, including updating the risk assessment, profile summary, and supervisory plan.
• Write correspondence to regulated entity personnel to obtain documents and information and to explain determinations.
• Analyze Charitable Gift Annuity (CGA) issuers' and other auxiliary lines entities' Annual Reports and accompanying additional documentation, audited financial statements, and IRS Form 990s (if applicable) for statutory compliance.
• Other duties as assigned. 

We will start reviewing applications on May 2. Read more about the job and how to apply.