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.

Kreidler remembers former State Auditor Bob Graham

Former Washington State Auditor Bob Graham passed away this week at the age of 93. Insurance Commissioner Mike Kreidler got to know Graham after he was first elected to the state House of Representatives in 1976. At that point, Graham had been state auditor for 12 years.

“Bob was highly respected and dedicated to public service,” said Kreidler. “I always enjoyed interacting with him. He was a real gentleman and a professional. I give my condolences to Bob’s wife Lloydine and his children.”

Graham was state auditor for 28 years, from 1965 until 1993.  Read more about Graham’s life and service on the Secretary of State’s blog and The Olympian.  

Kreidler, other insurance commissioners meet with President Obama this morning

Insurance Commissioner Mike Kreidler had an experience this morning that few people get--an hour with the President of the United States at the White House.

Kreidler shared that time with 43 other state insurance commissioners, whom the White House invited on short notice to discuss the progress of and the challenges ahead for the Affordable Care Act. The legislation is often referred to as President Barack Obama’s “signature” achievement during his tenure.

Vice President Joe Biden and key members of the White House staff also joined the discussion.

"It was a remarkable experience to spend an hour with the leader of the free world," Kreidler said. “The president was fully engaged.”

Key topics for the hourlong discussion were potential premiums for 2015, the adequacy of medical provider networks and changes at the U.S. Department of Health and Human Services, which oversees many of the national regulations of the Affordable Care Act. The agency is undergoing a change in leadership with the departure of former Secretary Kathleen Sebelius.

 

Kreidler said the president was scheduled to talk with representatives of the insurance industry in an afternoon meeting.
The National Association of Insurance Commissioners (NAIC) shared details about the visit in a news release and also posted a photo from the nation's capital of the insurance commissioners who participated.

This morning, we shared a photo of Kreidler in front of the White House as our inaugural Instagram post.

Wildfire season starts today

Today is the official start of wildfire season in Washington state (hat tip to Tom Banse with KUOW). While forecasters expect a “normal” fire season, it’s a good idea for people who live in areas prone to or near areas that are prone to wildfires to take some precautionary steps.

Photo courtesy of Washington Department of Natural Resources

• If you live in an area that could be near a wildfire, you should catalog your home’s belongings in case you need to make an insurance claim. The National Association of Insurance Commissioners has a printable home inventory checklist or you can try free iPhone/iPad or Android apps.
  
• Check your policy to make sure damage from wildfires is covered. Some policies include some coverage for emergency shelter, such as a hotel, if a home is uninhabitable.
• If you live in an area that’s prone to wildfires, read some tips to prepare and protect your home.
• Review your policy to make sure you have enough coverage. Things like fine art, jewelry and computer equipment may have limited coverage under a standard policy. But you can buy special coverage that gives you more protection for those types of items, called a rider. Contact your insurance agent or broker to ask about supplemental policies.
• You can help protect a rural home and limit the danger by clearing a natural fire break between your home and surrounding trees, brush and uncut fields. The Federal Emergency Management Agency has information on how to protect yourself and your home before, during and even after a wildfire.
• Have an emergency kit and a family communication plan. Know the location of your valuable papers, including insurance policy and contact information, mementos and anything you can't live without, so you can evacuate with them, if needed.
• Here's a list of recommended emergency supplies to keep on hand in the case of an evacuation.
• Don’t forget about planning for your pets. Ready.gov has tips for pet owners.

The Washington Department of Natural Resources has the most recent fire information available on its website and through the @waDNR_fire Twitter feed.

Planning for retirement: What is an annuity?

This week is National Plan for Retirement Week. Some people use annuities as part of a retirement strategy because they can provide a steady income after retirement, but they can be confusing.

Annuity basics
An annuity is a contract in which an insurance company agrees to make a series of payments in return for a premium (or premiums) that you have paid. Many consumers buy annuities to have a regular income after they retire. An annuity is an investment and shouldn’t be used to reach a short-term financial goal.

How annuities work

• You pay either one premium or make payments for a set period of time in exchange for future income.
• Annuities should increase in value over time and income taxes are deferred until you withdraw dividends. People who withdraw money before age age 59½ can be subject to a 10 percent income tax penalty
• You can request to receive payments in a lump sum or in periodic fixed amounts.
• A popular payout option is "lifetime income with 10 years certain." This means the annuity pays a monthly income for the life of the annuitant or for 10 years, whichever is longer.
• Annuities also pay a death benefit.

There are three types of annuities:

• Fixed annuities: Your money - minus any applicable charges - earns interest at rates set by the insurer, as specified in the annuity contract.
• Variable annuities: The insurer invests your money - minus any applicable charges - in a separate account. The company invests your money in stocks, bonds or other investment funds you choose, based upon how much you're willing to risk. If the fund doesn't do well, you may lose some or all of your investment.
• Equity-indexed annuities: The insurer offers a guaranteed minimum return, plus it offers a variable rate based on the return of a specific index. During the accumulation period, the insurer credits you with a return based on interest earned plus or minus changes in the index, subject to participation rates, caps, charges and other restrictions. The most commonly used index is Standard & Poor’s 500 Composite Stock Price Index (S&P 500).

Buying an annuity
Washington state law requires applicants to undergo a suitability analysis before the sale or replacement of any annuity. The analysis includes an evaluation of your financial position, income needs and the cost of liquidating any assets. This can help you determine which annuity is right for you.

As with other major purchases, it’s a good idea to shop around and compare information for similar products from several companies. While you do your research, keep detailed records and get all quotes and key information in writing.

When you are ready to purchase an annuity, carefully review the contract with your agent or broker. Ask for an explanation of anything you don’t understand. Be sure you are aware of all of the terms and conditions such as surrender charges and/or cancellation penalties.

Washington state has a 10-day “free look” period. Washington consumers have 10 days after purchasing an annuity to cancel for a full refund.

Protect yourself
Some insurance agents or brokers use inappropriate sales practices in an attempt to take advantage of uninformed consumers. Red flags include relentless sales pitches that pressure you into buying a product quickly or a deal that seems too good to be true.

The best way to protect yourself is to research the agent and company you’re considering,

• Find out if your agent or broker is licensed to sell insurance in Washington. 
• Agents and brokers who sell variable annuities also must be registered with the Department of Financial Institutions (www.dfi.wa.gov).

More information

• Read more about annuities on our website.
• Our consumer advocates can give you a list of the information your agent or broker should provide before you make a decision about purchasing an annuity. Call us at 1-800-562-6900.
• The National Association of Insurance Commissioners (NAIC) offers free consumer guides about different types of annuities and has a webpage about annuities.