State Insurance Commissioner

HERE WE GO AGAIN. The state's trial lawyers once more are attempting to punish "deep-pocket" insurance companies who fail to pay claims on time or who act in "bad faith" by unreasonably denying a customer's claim. If the lawyers succeed in Annapolis, the result could be fat fees for them and their clients -- and a rise in insurances premiums for the rest of us.Under their bill, not only would insurance companies have to pay up for acting in bad faith, but they would also have to pay treble damages.

The battle between Blue Cross and Blue Shield of Maryland and the state medical society over a physician fee cut is a microcosm of the fundamental changes taking place in American health care.Last week, state Insurance Commissioner Dwight K. Bartlett III infuriated many doctors by approving the insurer's plan, which slashes specialists' fees as much as 24 percent. Fees paid to primary care doctors will increase, but the specialists' cuts are so deep that Blue Cross and its customers are expected to net $45.6 million a year in savings under the new payment system.

Faced with a daunting auto insurance bill, Alyson Jurcak figured she had two options: lie or leave.Ms. Jurcak, then a Curtis Bay resident, couldn't afford to pay the almost $2,000 annual insurance premium on a 1969 Dodge sedan, not on a $3.65-an-hour wage. So for years, she used a phony suburban address and cut her bill in half.Today, Ms. Jurcak lives in Glen Burnie and pays about $750 a year to insure her 1990 Nissan Sentra. Her experience with car insurance was one of the major reasons she fled Baltimore.

Offering potential relief to long-suffering city motorists, Gov. Parris N. Glendening yesterday unveiled plans designed to make it easier and cheaper to buy private car insurance in Baltimore.Proposed legislation would give incentives to major insurance companies to market their services as aggressively in the city as they do elsewhere across the state. A company that insures 10 percent of all Maryland drivers, for instance, would be expected to sell policies to at least 7.5 percent of all city drivers by 1998.

In a highly unusual action, the state insurance commissioner has shut down an Ellicott City settlement company after investigators determined that at least $500,000 in mortgage money was missing from company accounts.In addition, a federal judge has ordered the bank accounts of the company, Land Title Research of Maryland, and its president, Joseph E. Goldberg Sr., frozen so that investigators can unravel the company's financial records."It's a lot of money to be missing," said Joy Hatchette, an assistant attorney general who represents the Maryland Insurance Administration.

Martha C. Roach, a high-ranking state official until she became president of Agency Insurance Co. of Maryland in April 1993, is seeking more than $5 million in damages from the Linthicum company after being fired last October.Ms. Roach, who headed the Maryland Automobile Insurance Fund from 1988 to 1993 and also was a former acting insurance commissioner, filed the lawsuit in Baltimore County Circuit Court against Agency Insurance (AIC). The suit also names eight company officials, including Chairman Henry H. Stansbury.

Less than a month before a state law defining health insurance benefits for small-business employees goes into effect, insurance industry representatives say it's still unclear whether it will achieve its aim of reducing costs and encouraging more business owners to buy health insurance.Yesterday, the state announced that it approved the standardized benefits package from 10 companies, including the "heavy hitters in the market," said state Insurance Commissioner Dwight K. Bartlett III. Mr. Bartlett said his division was working hard to review and approve plans from 49 other insurance companies by July 1.Also facing the deadline are insurance brokers and many small business owners, who must decide whether to buy the new plan or drop coverage for their workers by the deadline.

The California Supreme Court yesterday upheld an insurance reform measure passed by California voters in 1988 that required insurance companies to roll back auto insurance premiums and gave the state insurance commissioner broad powers to control prices and profits.The ruling clears the way for the commissioner to order insurance companies to refund as much as $1 billion to millions of California auto insurance customers.The court decision, which was unanimous, also affirmed the authority of the commissioner to require the 700 insurance companies operating in the state to obtain approval for rate changes for all property and casualty insurance that includes homeowner policies.

In a highly unusual action, the state insurance commissioner has shut down an Ellicott City settlement company after investigators determined that at least $500,000 in mortgage money was missing from company accounts.In addition, a federal judge has ordered the bank accounts of the company, Land Title Research of Maryland, and its president, Joseph E. Goldberg Sr., frozen so that investigators can unravel the company's financial records."It's a lot of money to be missing," said Joy Hatchette, an assistant attorney general who represents the Maryland Insurance Administration.

Dwight K. Bartlett III has neither the attention-getting persona nor the maverick style of his predecessor, John A. Donaho. The former state insurance commissioner was fired in April by Gov. William Donald Schaefer after he took to the public spotlight last year to force Blue Cross and Blue Shield of Maryland to open its books and clean up its finances.But the man to be sworn in today at the helm of the state's insurance division may not need the spotlight as much.He takes over the Maryland Insurance Administration -- the name for the newly independent agency as of July 1 -- as it receives more attention and money than ever before.

Some folks celebrate their last home mortgage payment by setting fire to their loan agreement. Lately, people behind on their mortgages are setting fire to their homes. In what appears to the latest symptom of the U.S. mortgage and credit crisis, insurers, law enforcement agencies and state agencies nationwide have reported a jump in the past year in home and automobile fires set by owners unable to pay their debts. The numbers are small but are leading the insurance industry to scrutinize more closely what seem to be routine blazes.

Racketeering claims filed The Massachusetts owner of a Sparrows Point shipyard and certain affiliates were given two weeks to answer racketeering claims filed against them two weeks ago in U.S. District Court in Baltimore. If they don't, the defendants face a default judgment of up to $2.25 million, according to court documents. Jobless rate rises in Md. Unemployment in Maryland rose and job growth slowed last month as national economic troubles touched off by the slumping housing market continued to take a toll.

Extension of a state program that subsidizes doctors' malpractice insurance premiums appears unneeded in the face of $68.6 million surplus accumulated by the state's largest malpractice insurer, a key legislator said yesterday. Sen. Brian E. Frosh, chairman of the state Senate Judicial Proceedings Committee, said the subsidy had allowed the state's doctors to "weather the temporary storm" brought on by skyrocketing insurance premiums but won't need to be continued after it expires next year.

All along the Atlantic Coast, homeowners, insurance companies and state officials are trying to figure how to cope with the growing risk of catastrophic loss caused by hurricanes. What they've learned is: There are no easy answers. Yet with global warming playing havoc with the weather, the quest for a workable solution in Maryland must be addressed quickly - with an eye toward prevention of weather disasters and incentives to reduce risk as well as providing a safety net for those caught in circumstances beyond their control.

John A. Donaho, Maryland's former insurance commissioner who became such a critic of the industry he regulated that he lost his job, died of kidney failure and complications from diabetes Friday at Stella Maris Hospice. The Timonium resident was 88. In his nearly 70 years of work, Mr. Donaho had been an assistant to the federal budget director under President Franklin D. Roosevelt and later became a problem solver for two governors and mayors, Theodore R. McKeldin and William Donald Schaefer.

R. Steven Orr, an information technology executive, was named by Gov. Robert L. Ehrlich Jr. yesterday to become state insurance commissioner to complete the term vacated by Alfred W. Redmer last fall. Orr, 53, will fill the remainder of a four-year term that began in June 2003. The recess appointment is subject to approval by the Maryland Senate during the 2006 legislative session that begins next week. A relative unknown in local insurance circles, Orr was until Wednesday chief information officer for Universal Underwriters Group, an Overland Park, Kan., firm that sells insurance to auto dealerships and other auto service providers.

State Insurance Commissioner Alfred W. Redmer Jr., who came to office with a mandate to increase competition in Maryland's insurance industry, has resigned his post to head a Delaware health maintenance organization. The former Republican delegate and insurance broker from Perry Hall was admired by industry officials, but his two years in office were marked by several disputes. He eventually won over those who criticized his response to complaints stemming from Tropical Storm Isabel, but he was rebuked by Democrats for his political activity and for his decision to let HMOs pass along a tax increase to their customers.

Maryland's top insurance regulator invited a hand-picked gathering of industry leaders yesterday to play an active role in streamlining laws that govern their business. "We want to reduce the cost and the burden of being regulated," state Insurance Commissioner Alfred W. Redmer Jr. told a small group of insurance representatives who met with him at a downtown Baltimore law firm that specializes in insurance clients. The meeting had been criticized by some lawmakers and groups worried about the appearance of a close relationship between Maryland's insurance chief and the companies he oversees.

Acting on scores of complaints about how poorly insurance companies responded to Tropical Storm Isabel, community leaders and government leaders have scheduled a series of meetings in eastern Baltimore County over the next week to determine what went wrong and to help storm victims file insurance appeals. "This isn't going to be another town meeting where everyone stands up and says their piece," said Bernice Myer, president of the Millers Island Improvement Association and founder of the Isabel Victims Citizens Group.

The head of the state's Injured Workers Insurance Fund has been forced out at the agency, which provides workers' compensation coverage to about 23,000 Maryland companies and has assets of more than $1 billion. Employees were told of the departure of IWIF President and Chief Executive Officer Preston D. Williams in an e-mail this week but were given no explanation. Most board members contacted yesterday declined to comment, and employees have been instructed not to talk about the matter.