Insurance column: professionals granted 6% fee cut
By Dan Verel, Business Journal Staff Reporter
Dan Verel
California insurance brokers, agents and adjusters received a 6 percent fee decrease last week courtesy of Insurance Commissioner and gubernatorial candidate Steve Poizner.
The reduction will apply to about 300,000 people across the state, according to an announcement made last week, and the latest reduction has resulted in about $22 million cumulative for insurance workers when factoring in previous cuts, he said.
The latest reduction – a 6 percent decrease in fees associated with license renewals for brokers, agents and adjusters – will take effect on July 1 and will save a total of $3.4 million a year.
The renewal fee will drop to $128 from $136. That’s an additional drop from $144, when Mr. Poizner first took office. The spate of reductions comes as Mr. Poizner attempts to position himself against former eBay CEO Meg Whitman in the GOP primary.
The fee cuts are also part of Mr. Poizner’s answer to a projected $17 million deficit in fiscal 2010-2011 for the department’s fees and license account when he first took office. Now, after a series of cost-cutting measures and streamlining processes, the account is projected to have a $3.6 million surplus when the budget year ends, according to a statement he issued announcing the latest reduction.
Previous reductions have included a separate 6 percent fee decrease back in January for insurance agents, brokers and adjusters, most of whom work in smaller businesses throughout the state. The estimated total savings from that cut was put at $3.3 million annually. The fee had never been reduced since 1990, when the insurance commissioner became an elected position.
In November 2009, fees paid to CDI’s regulatory activities were cut 9.8 percent, which is estimated to save $2.4 million in fiscal year 2009-2010 and an additional $2 million in fiscal 2010-2011. Lastly, a fraud assessment was reduced to $2,100 from $5,100, which was a result of lower estimated operating costs. Approximately $3.8 million will be saved by ratepayers.
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After months of negotiations in the U.S. Senate, the COBRA subsidy that expands eligibility to individuals who lost or will lose their health insurance as a result of reduced work hours and subsequent layoffs has been extended through the end of the year.
The Temporary Extension Act of 2010 gives employees an additional opportunity to opt for COBRA coverage should they lose their job, thus allowing them to be eligible for the subsidy. It provides an additional period for employees to elect for coverage even if they had originally declined the subsidy or if they had it and let it expire.
The extended COBRA benefits had previously been approved only through the end of March, but after a vote last Wednesday, the Senate granted a year-long extension as employees continue to grapple with high unemployment and underemployment.
Along with COBRA, unemployed insurance benefits were extended, and a temporary prevention in Medicare payment cuts to doctors and an extension of federal Medicaid assistance was approved.
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Submit items for this column to Dan Verel at dverel@busjrnl.com, 707-521-4257 or fax 707-521-5292.
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Does this mean that cobra will be extended past the 18 month total period.
by fremsing
So the insurance companies, the BIG insurance companies who pay application fees for their amazing transactions received fee cut so that Poizner can give all of the agents and brokers 5 cent.
And there are many of them that “might” vote for him.
Rrrrrriiigghtttttttttttt.
by T. Malla