Stonington, CT — For more than a half century, the Westerly Ambulance Corps has allowed a large number of Pawcatuck residents to buy a $35 annual subscription that pays for any costs not covered by their own insurance or medicare.

But the ambulance company had to end the offer and refund the subscription fees last year after discovering Connecticut insurance law does not allow the ambulance company to sell subscriptions, because it is not an insurance company.

On Tuesday, First Selectman Ed Haberek plans to travel to the State Capitol to testify in favor of a bill that would allow the corps to once again offer the subscriptions. The hearing on HB 5305 is scheduled to begin at 1 p.m. in room 2B in the Legislative Office Building before the Insurance and Real Estate Committee.

The $35 fee offers subscribers emergency and non-emergency transport within 100 miles when requested by police, a doctor or a 911 call. The corps then waives any balance not covered by the patients’ insurance company. Haberek said he has heard from many residents who want the subscription reinstated.

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Tech giant joins banking, insurance firms in litigation with the government

Hewlett-Packard Co. has become an unlikely member of a group of companies targeted by the U.S. Internal Revenue Service in a coordinated legal assault on suspect international tax credits.

H-P is one of roughly a half-dozen firms, nearly all in the banking and insurance industries, now ensnared in the IRS’s “three-and-out” litigation strategy targeting so-called foreign tax credit generators, experts say. The IRS has pegged a handful of such cases as promising enough to pursue, in hopes of winning at least three decisions in a row — and thereby gaining a more solid legal footing on the issue.

“Usually the government does a good job of starting with cases that are very weak for the taxpayer, and developing law,” said University of Southern California Law Professor Edward Kleinbard.

Foreign tax credit generators are investments by U.S. companies that earn income and result in taxes overseas. Companies can then claim foreign tax credits, to offset their tax payments in the U.S. However, the IRS alleges that many are designed to unnecessarily load up on foreign tax credits, and create an artificial financial benefit.

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On the eve of major demonstrations in Iran, California Insurance Commissioner Steve Poizner demanded Wednesday that insurers doing business in California withdraw $6 billion of investments they indirectly hold in Iranian nuclear, energy and defense companies that he said are backing the nation’s “rather evil” regime.

California law bans insurance companies doing business in the state from investing in Iran, which the State Department considers to be a state sponsor of terrorism. This week, Iran announced that it would begin producing more highly enriched uranium – which would bring it closer to producing weapons-grade nuclear fuel.

While no California insurer is directly investing in Iran, Poizner said some of them have found “a big loophole,” by funneling money to Iran through third-party companies based in other parts of the world.

On Wednesday, Poizner published on his department’s Web site a list of 50 companies that the agency found to be holding such investments.

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BROCKTON, MA — Homeowners with oil heating systems that were installed before 1990 will have to pay up to $300 to comply with a new state law that will take effect in July.

The “Oil Heating System Upgrade and Insurance Law” requires either a sleeve around the pipe that feeds the burner or a safety valve to prevent leaks.

Once the upgrade is completed, a homeowner can apply for leak coverage on his insurance policy.

“This new law will definitely benefit all homeowners who use oil to heat their home,” said Wayne C. Perkins, an insurance agent and retired director of the state insurance Rating Bureau.

He said this type of insurance coverage was not available in Massachusetts in the past because policies carried a pollution exclusion.

The new law allows all homeowners to buy insurance coverage for the cleanup of a leak if their system is in compliance.

Diane Chaplin, branch manager of the Farrell Backlund Insurance Agency in Taunton, said the rates have not been set.

“First the industry has to write the coverage form, then the state has to approve the form and the rate filing,” she said.

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Torsten Kjellstrand/The OregonianOregon drivers who hold their cell phones to talk now a $142 traffic ticket. But a new study says handsfree laws don’t do much to reduce crashes.

As Oregon motorists continue adjusting to the state’s month-old ban on handheld cell phones, a surprising new study says hands-free phone laws don’t reduce crashes.

“Obviously, it runs counter to a lot of predictions about cell phones and crashes,” said Russ Radar, a spokesman for the Highway Loss Data Institute, which conducted the study, “but this is the first study in which have been able to look at what’s happening in the real world.”

A recent Insurance Institute for Highway Safety study in two states and the District of Columbia, focusing on handheld cell phone use, found that bans have reduced the activity significantly.

Just last week, a National Safety Council study found that 28 percent of all crashes nationwide involved drivers talking on their phones or texting — an increase to 1.6 million collisions in 2008 compared with 1 million in an earlier review.

But the Highway Loss Data Institute for the first time looked at actual insurance collision claims in California, New York, Connecticut and Washington, D.C., all of which ban drivers from using handheld phones while behind the wheel.

The study compared data from surrounding states without cell phone bans at the time. The study, for example, says the frequency of collision claims in California before and after its hands-free law passed were no different from those in Nevada, Arizona and Oregon, where the handsfree law didn’t go into effect until Jan. 1.

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Louisiana Citizens Property Insurance Corp., the state-run insurer of last resort for about 130,000 policyholders, failed to control access to its computer systems and may have violated state law by not having contracts in place when it hired two information technology consultants in 2008, according to a state audit.

The findings are contained in a 107-page audit of Citizens procedures and books for 2008 released on Monday. The audit is expected to be discussed at the Legislative Audit Advisory Council’s February meeting, said temporary Legislative Auditor Daryl Purpera.

The council is made up of House and Senate members who oversee enforcement and compliance of audits.

“This was in 2008 and now this is 2010,” Citizens President John Wortman said. He said many management changes have been instituted since auditors’ findings for 2008 were compiled.

Purpera and his staff of auditors said internal controls of Citizens information systems and accounting records “contained major inadequacies. . .(and) made it impractical to apply sufficient auditing procedures to enable us to express an opinion on the fair representation” of Citizens financial condition.

Wortman said things have improved since auditors looked at the books and practices of the company two years ago.

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West Virginia may be on the path to helping municipalities pay for debris removal of abandoned buildings with insurance payments in a way that insurers can live with.

The issue of how to pay for the cleanup has irked property insurers since last year when one city, Huntington, initiated its own process of requiring insurers to place funds in escrow. Insurer members of the West Virginia Insurance Federation (WVIF) went to court to block that ordinance because they said it conflicted with state insurance law.

Gov. Joseph Manchin, insurers and the West Virginia Municipal League, as well as the city of Huntington, are now embracing legislation that will allow any city or county to obtain a lien on insurance proceeds for a total fire loss if the municipality has reason to believe the owner will abandon the property and not take care of cleaning up after the fire.

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NORFOLK, Va. — Last year was the worst Don Miller had seen in more than 20 years of running a graphic printing business here.

Business slumped 15%, and he had to lay off two of the three workers who helped him print stickers and signs for Navy ships.

Miller hopes to bring them back, but hiring will be more expensive for all Virginia business owners this year. The recession has emptied Virginia’s unemployment insurance trust fund, and the state is making up for it by raising taxes on employers and cutting jobless benefits for seniors.

In 2009, the average business owner paid $95 per employee. This year, the tax will be $171, according to estimates by the state workforce agency. “It’s another added expense to hiring somebody,” Miller says. “Everything’s going up, and business is going down.”

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The Missouri Supreme Court today [1/14/10] will hear arguments in a case that could have far-reaching political implications. (Read more about the battle here).

The case, filed by Mary and James Klotz of Arnold, seeks to overturn a 2005 law that set a hard cap of $350,000 for non-economic damages in medical malpractice lawsuits. The law was a major part of Gov. Matt Blunt’s agenda to bring down costs in certain kinds of lawsuits. Proponents argued that the cost of malpractice insurance was driving doctors out of the state and that the lawsuits were the culprit.

Lawyers who work in the malpractice field argue that the caps discriminate against primarily poor victims of malpractice and that there were other reasons for high insurance costs back in 2005.

Were the court to overturn the caps, it would set of a major political battle in Jefferson City. The court today [1/14] will be full of lawyers as many big players, from the Chamber of Commerce to the state’s public medical schools, have filed briefs in the case.

The court will hear arguments today [1/14] and rule at a later date.

Found here.

Timothy Geithner is back in piñata mode, with House Oversight Chairman Edolphus Towns asking him to testify next week about bailout giant AIG. By all means Members should swing away at the Treasury Secretary, but only if they focus on the right questions.

The trigger for the Towns hearing is the release of emails between the Federal Reserve Bank of New York and AIG in November and December 2008. The New York Fed urged AIG to limit disclosure of its deal to buy out derivative trading partners at 100 cents on the dollar. But since AIG went ahead and disclosed it anyway, this line of inquiry doesn’t get to the heart of the taxpayer interest.

Likewise, asking if Mr. Geithner helped write the emails will allow him to continue avoiding the bigger questions: Why did he believe AIG could not fail? Why should he receive more authority to declare firms systemically important, when he won’t fully explain his previous multibillion-dollar judgments in the name of countering “systemic risk”?

Mr. Geithner was president of the New York Fed when it began sending what has become $182.3 billion in taxpayer assistance to AIG in September 2008. Much of this money was used to meet collateral calls from big banks that had bought AIG’s credit default swaps. AIG had resisted handing over more collateral. But once Mr. Geithner was in charge of AIG, the cash flowed freely to these bank counterparties.

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