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House | August 19, 2015 | Committee Room | Judiciary I

Full MP3 Audio File

The committee of Judiciary One will come to order. We have Sergeant-at-Arms Barry Moore, B. H. Powell, David Linthicum, and Rey Cooke. We have two Pages Jeff Matt Harden and Ugly Storage. I never dreamed that we would be taking up this bill because it was highly controversial but I have been told by a number of people that the committee substitute which Representative McNeill moves that we adopt unfavorable to the original bill [xx] on by saying aye, is something that everybody has been support and it is what the state [xx] believe is a good bill. I think Representative John Szoka has an amendment he'd like to send forward. Yes Sir I and would you please read the amendment?  If you go to page two of the bill, line two there's a [xx] the definition of beneficiary, actually the way it's awarded in there as beneficiary [xx], so that's my memory says correct incorrect wording. I think it makes sense All in favor of this so called amendments [xx] saying aye, the opposed no and the ayes have it, [xx] would you explain the bill? The committee substitute The proposed policy would require individual or [xx] authorise [xx] North Carolina is at a crossmatch that are available to them and the death master file that is compiled [xx] information similar to that [xx]. It will be done on any annual basis? It would not require [xx] of any policies that had active premium payment in the 18 months before the [xx] match. Active premium payments are those that common checking an account for [xx] a bank [xx], a payroll [xx] and not from the policy. The offer did not apply in the insure fund on [xx] perjury that the insurer did not particular exception, it would not apply to policies that were issued or delivered on or before October 1st of this year. If the insurers find an alternative perjury, where the insurer did not engage in [xx] conduct and historically has complied with the requirements of the [xx] and has historically monitored the limiting age of the policy as stated in the policy and perform its obligation underneath the said statute with a limiting age will reach policies that were delivered or delivered on or before October 1st of this year. Eight [xx] an issue, identify the important person to a deceased, in order to terminate benefits, but not determine whether the insured under the insurance policy and non- active premium payment status are deceased for the purpose of paying something, they were new. The insuror[sp?] was using the death's-an-answer[sp?] file in order to determinate messes[sp?] [xx] [xx] And ensure of him one [xx] [xx] would actually prevent this [xx] It is the death of the insured [xx] then the insurer has [xx] [xx]

Determined for [xx] [xx] [xx] and roughly anything that is not paid everybody can do this [xx] and walk with the The commissioner of insurance and There are a number of people of another likelihood. Ask those who would like to speak about the bill be given an opportunity, I particularly would like to hear from the auditor, the insurance commissioner and the treasure. How many can you go for [xx] About 17 hours for the committee. I'm talking sorority and Director of Government Relations for the Treasury's office. Erica did a great job of describing for you the more technical aspects. We have our judiciaryl for young [xx] property division here, and she can answer more technical questions, but let me just say that what brought to this bill is that there is a tension the tension between the treasurer's offices requirement to audit insurance companies to make sure the policies meeting certain requirements or has cheated to the state in a timely manner and the industry is concerned that those olive requirements added capability doesn't unduly impact their bottom line. I mean that's a legitimate concern, it was a concern that the treasury's office heard very clearly very early on in this issue so there is a tension ability to audit to make sure that policies are brought forward, and then the impact on their business, [xx] show up and they're forced to assign staff and go down and look at records and some of the policies we're talking about here are very small policies there's no a lot of profit in them. They were very concern that it would impact that negatively. They wouldn't make any money on the policy and then frankly that's what their business is for. So that's what brought us here, we negotiated for many months on this, and I can say from our perspective that I want to thank Micheal Mann and Franklin Freeman and other folks in the room Jeff [xx] and staff here. We worked longtime on this bill and we think we've to come to a good place, those are my comments again Brenda is here to answer technical questions.  If you've any questions of Brenda, Miss Wiggins I want to speak from their Insurance economist Thank you.  Thank you Mr commissioner Mr chairman excuse me, here you don't tell my boss. I would like to comment that stakeholders on these bill, we were approached and commented earlier on about some of the issues that Tony had raised, and certainly we would like to commend everybody whose worked on these we command like we've very diligently worked. The issue is that we had had some potential concerns about that had been addressed draft stand strongly on behave of consumers to be able to get benefits for they paid for and also to make sure their potential concerns of any they hold off is about an intending consequences are addressed in careful of your statement this door have done that and we certainly carpenter is working on it. About the treasurer's office. I just I have one thing to add as I had just said mutual returns.  Company Tony solorli[sp] again from the treasurer's office. The mutual insurance company has we got big part in this to authorize the process and we want to make sure we recognize on this as well. And how about someone from the industry?  Who wants to speak? I'm Kimberly Moore work on

 North Carolina mutual Life Insurance Company and I agree with everything Tony mentioned. This is a very aguas process but we all left smiling and then beginning I would say we didn't have that, so to say that we've that speak a lot to the commissioner and laying in and industry as a United Force. Thanks. Is there anyone else that would like to speak on the bill. Representing national rights of insurance companies. I just like to thank you for encouraging us to work towards an agreement, you've been very diligent in that, and I appreciate you for doing that and appreciate your allowing the bill to be heard today and and appreciate hopeful consideration of most if not all the members to committee, thank you. Is there any member of the committee wish to ask a question or make a statement? Yes sir, Representative Burr. No questions at this point the but from hearing the problem comments from the Treasurer's office, from the Commissioner's office, and obviously from those interested with the public perspective, and I think the recognition that was done somehow contribute controversial [xx] work out arrangement and I move it into correction that it's where most Southern States have [xx] and I believe [xx] of 20 states have similar along to this but they can certainly [xx] to be appropriate time [xx] Representative Szoka? I was going to make a motion. Representative Robinson? A question either to the bill sponsor or just anyone in the room who would like to answer it. On page 3 line 49 is there an issue if they're unable to confirm the debt of purchase pooling to be in that much an ensure made it from and no further good as described in this subsection are required and respect such policy on civil if they're unable to determine the debt is there any other agency either the state treasure or result of insurance that this may then to got to, I mean it sounds like it's permissive but they may do it and if they did do it then is there any kind of database of this persons who may or may not have passed away They can't confirm it before that step to maybe further investigate it just because it seems pretty permissive to me. Miss. Wigans, if you going to want to try to answer that. And Kimberly or someone else with the industry can back me up, but in that case where they are unable there is a death, I think the DMS is most reliable available resource, so they cannot confirm through DMS, the assumption is the person is either not deceased or they would wait to the limiting age where the person they can assume based on actuarial charge that they have deceased and at that point they would either look for them or [xx] the fund that someone from the industry could back me up on that. Hi Shirley A. Kemper, if we can't confirm the death then the most logical thing is to assume that the person is not deceased and to put the policy back into active status because otherwise what would you do with it, so it would be searched again, it would be then part of the continuing database and be searched again on a semi-annual basis and if nothing came up it would come up again at the limiting age and that's what that means. I mean at some point I'm able to state to the. That's right, if the limiting age, if we hadn't confirmed the death in the entrance. But it would eventually stick to the state, yes. And last question, limiting age is in the policy, is that right? It is. It is an actuallily determined age set actually by the NAIC, The National Association of Insurance Commissioners, as the date by which all people are presumed deceased at that point, and it's changed over time, but when the policy is sold it's the limiting age is determined at the time the policy is sold, yes.

So you would have if Representative Steinburg had a policy, you would know about when he's going to die. [xx] That definitely fall under my purview, but there are folks that get paid to assume that by a certain age he would be deceased, yes. Any other questions about the bill? Representative Burr you're recognized.   Thank you Mr. Chairman I move that we give the proposed committee substitute House amendment to Senate Bill [xx] a favorable report [xx] [xx] all in favor let be known by saying aye? All oppose? Thank you very much. Mr. Chairman do we have a referrals? For insurance, we'll make that referral.