Tag Archives: consumer

Sinkhole insurance bill bashed as anti-consumer; still wins approval

Despite some bipartisan objections, the House has narrowly approved legislation that intended to reduce or prevent homeowner claims against insurance companies damages caused by sinkholes.

Sponsor Rep. Roger Kane, R-Knoxville, contended the bill (SB880) is needed to replace a 2006 statute modeled after Florida’s law on insurance coverage for sinkholes that led to a 1,200 percent increase in claims and “millions of dollars in unnecessary costs.” Florida revised its law in 2011, he said.

But the measure was roundly condemned as anti-consumer by other legislators in debate Monday night before it was approved on a 53-33 vote with more than a dozen perhaps confused lawmakers declining to vote either way. It has already passed the Senate on a 30-0 vote, but must now return to that chamber for concurrence on a minor amendment.

“This is a horrible bill,” said Rep. Curry Todd, R-Collierville, who said the measure allows insurance companies to cancel policies “in mid-term on anyone” if they feel a claim may develop. He also disputed Kane’s contention that the bill had been vetted thoroughly in committees of the House and Senate, saying he had reviewed tapes of the meetings and there was hardly any discussion at all.

“This is one of the most blatant bills I’ve seen to benefit one particular industry at the expense of the consumer,” said House Democratic Caucus Chairman Mike Turner of Nashville.

Rep. Ron Travis, R-Dayton, said the bill is a case of inappropriate government involvement in insurance and sets a bad precedent.

“Today’s it’s sinkholes. The next day it’s going to be earthquakes and the day after, it’s going to be hail,” Travis said.

Kane said the bill had been reviewed by the state Department of Commerce and Insurance and found “not consumer unfriendly.” He said most insurance companies also support the proposal. Both Kane and the Senate sponsor, Republican Sen. Jim Tracy of Shelbyville, are insurance agents by profession.

Responding to Turner’s claim that bill was unfair to consumers, he declared: “That’s not true, sir!”

Kane said most, but not all, policies now include sinkhole coverage. Critics said that, after passage, companies are likely to insure only homes at no risk of damage.

At one point in debate, Kane remarked, “This doesn’t change anything.”

Declared Todd in response: “Why are you putting this into statute if it doesn’t change anything?”

A legislative staff review of the bill says it “specifies that sinkhole loss coverage is not mandated to be included in homeowner property insurance policies” but must be offered by companies. Companies will also have a right to inspect property for potential sinkhole problems before agreeing to coverage or setting a rate.

It also puts in place an array of provisions governing the sinkhole loss damage for which an insurer is liable and rules for both insurers and policy holders in dealing with claims.

AG: Haslam Bill Makes It Easier for Utilities to Raise Rates

Attorney General Bob Cooper’s office warned Wednesday that Gov. Bill Haslam’s plan to streamline rate setting for utilities shifts their “business risks” onto households and businesses, effectively making them guarantee the monopolies’ profits, reports Andy Sher.
“What this does in our opinion is make it more likely that rates will increase for business and households,” Assistant Attorney General Vance Broemel told House Business and Utilities Committee members Wednesday.
Broemel is the chief attorney in the attorney general’s Consumer Advocate Division, which often intervenes in rate hearings on increases sought by utilities.
But Tennessee Regulatory Chairman Jim Allison sought to assure lawmakers, saying similar changes have been put into place in states like Georgia. Tens of thousands of customers served by companies like Tennessee American Water and Chattanooga Gas need not be fearful, he said.
“The attorney general is focused in a very narrow sense on the rate of return” for utilities, Allison said. “But what they’ve missed is before TRA will allow anyone to enter into one of these, we have to go into a process to establish that this is in the public interest.”
The panel approved the administration bill, sponsored by House Majority Leader Gerald McCormick, R-Chattanooga, on a voice vote.
Haslam’s bill, developed in conjunction with the governor’s recently reshaped TRA, creates a new regulatory framework for dozens of investor-owned utilities.
It won’t apply to public power distributors or AT&T and some other telecommunications companies under “market regulation.” The bill also cuts regulatory fees paid to the state by some companies, including AT&T, while increasing them for others like the water and gas utilities.
Lowered fees will reduce TRA’s revenues for operations by an estimated $1.1 million annually and result in staff reductions, according to a fiscal note on the bill.
The bill creates “alternative regulatory” methods that can be used instead of full-blown rate hearings utilities now must go through. But it keeps such hearings for utilities that wish to continue them.

See also The Tennessean report. An excerpt:
In his Tuesday letter to the House Business and Utilities Committee, the attorney general said the bill would effectively shift the utilities’ “business risks to Tennessee households and businesses,” ensuring that the companies make “monopoly profits” regardless of how well they are managed.
“Furthermore, under the proposed annual rate review mechanism, utility customers who have enjoyed rate stability under the current system can expect yearly rate increases in many cases,” Cooper wrote.
Despite Cooper’s warning, the bill was cleared by the committee Wednesday on a voice vote and was sent to the House Finance Committee. The companion Senate bill has yet to see any movement, the attorney general’s office said Thursday

Governor Says TennCare Will Eat State’s Revenue Growth in Next Budget

Gov. Bill Haslam says he expects to have about $369 million in new revenues for his proposed 2013-14 budget, but expected cost increases in TennCare will swallow most of the money, reports the Chattanooga TFP
That will put pressure on him and lawmakers to look at cuts elsewhere to pay for increases in key areas ranging from education to prisons, the Republican governor warned last week.
Of the expected new revenue, $350 million — or 95 percent — is going to TennCare — the Republican said.
“You can’t do anything [else]. I mean, you can’t do anything in higher education. You can’t give anybody a raise. … It’s literally sucking up all the money in state government, and we have to have a different approach to health care.”
…House Minority Leader Craig Fitzhugh, D-Ripley, a former House Finance Committee chairman, is skeptical of the governor’s estimates.
“To say we have $369 million in new revenues before the State Funding Board meets, that’s kind of hard to figure,” Fitzhugh said.
The funding board, which sets ranges for revenue growth estimates, will meet this week. Haslam spokesman David Smith said $369 million is the funding board’s preliminary estimate.
Fitzhugh said Republican officials earlier this year refused to acknowledge much-larger-than-anticipated revenue increases for the 2012 fiscal year that ended June 30.
And so far this year, revenues were already $72.9 million higher than projected in the $31.5 billion state budget.
“I think it’s a bit premature to say how much we got there and that 95 percent of it is going to be consumed by TennCare,” Fitzhugh said.

Insurance Bill Seen as Anti-Consumer

Mary Mancini at Tennessee Citizen Action says a pending bill, brought forth by a recent amendment to a caption bill, could let insurance companies take advantage of consumers and is part of an overall erosion of consumer rights underway in the Legislature.
With it’s shiny new amendment, HB2454 now reads that if an insurance company changes your policy and notifies you in the fine print of a flyer they send to you with your bill, the change to your policy will take effect and bind you to that change by the simple act of you paying your bill. In other words, HB2454 says that your written and cashed check or automatic bill payment is enough to allow them to completely change your policy.
And this isn’t a bill that would just hurt consumers. It would harm any entity that buys insurance — including small businesses that hire and administrative person to handle all their bill payments. How many bookkeepers read every piece of paper included in a bill and how will you be able to prove that they didn’t?
The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry. This is just another example of how they still engage in dirty tricks and unethical behavior at the consumer’s expense to boost their bottom line even further.

Ticketmaster Bill Criticized as Anti-Consumer

Press release from Fan Freedom Project:
NASHVILLE, Tenn. – Legislation supported by Ticketmaster, which already controls with its partners the vast majority of ticket sales in Tennessee, will further tighten its grip on the ticket market, specifically the resale market, while stripping ticket-buyers of their property rights.
The latest measures go so far as to declare that ticket issuers can take away consumers’ tickets “at any time, with or without cause,” and without refunds being provided. Moreover, it empowers Ticketmaster and its partners with control over all that consumers do with tickets they have purchased, including the right to give them to charity, share them with friends or resell them.
Dubbed the “Fairness in Ticketing Act of 2012,” the bill includes several provisions that significantly benefit Ticketmaster, its parent LiveNation and its affiliates TicketsNow and TicketExchange.
(Note: The bill is SB3441/HB3447, according to the PR firm sending the release. The Legislature’s website still shows the measure as only a caption bill without amendments. Its’s sponsored by Sen. Mike Faulk, R-Church Hill, and Rep. Ryan Haynes, R-Knoxville.)

Continue reading

White House Prods Alexander, Corker on Consumer Protection Vote

U.S. Sens. Lamar Alexander and Bob Corker are under pressure from the White House to vote to confirm Richard Cordray as the director of a new federal agency responsible for protecting consumers who deal with the financial industry, reports Michael Collins.
The Obama administration said Monday it intends to wage an aggressive public relations campaign to persuade the two Tennessee Republicans and GOP senators from six other states to confirm Cordray as the director of the Consumer Financial Protection Bureau.
The agency was created under the Wall Street reforms that President Barack Obama signed into law last year. Obama nominated Cordray, a former Ohio attorney general, to head the agency back in June.
But Alexander, Corker and most other Republicans have said they won’t vote to confirm anybody for the position until changes are made in the way the agency operates

Consumer Groups Decry Banks Bill to Reduce Foreclosure Notice

The Tennessee Banking Association is pushing legislation that would reduce foreclosure costs for financial institutions, drawing some criticism in a state where it’s already easier to foreclose on homeowners than in most other states.
Excerpt from a story by Chas Sisk:
One of Tennessee law’s few requirements is that banks have to publish a notice of foreclosure three times in a local newspaper. Banks want to cut detailed information about the property from the listings and reduce the number of times they have to run to just once.
Banks and some state lawmakers say that the advertisements are confusing and rarely read and that they simply add to the cost of foreclosures.
“The only people that are guaranteed to get paid are the newspapers,” said state Rep. Jimmy Matlock, the bill’s main sponsor in the House of Representatives.
But opponents of the bill say the advertising cost is small compared with the sums involved in a mortgage and foreclosure. They argue the requirement is the main way in which the broader community learns a foreclosure will take place, opening new opportunities to save homes from foreclosure and bringing more bidders to the sale if one occurs.
… Foreclosure activity in Tennessee rose more than 50 percent from 2006 to 2008, and it remains high, according to data from RealtyTracs and Moody’s Analytics.
“I can’t say that (the bill) is precipitated by the rise in foreclosures,” said Tim Amos, the TBA’s senior vice president and general counsel. “But it may have created awareness.”

(Note: The bill is HB1920. It’s on the calender for House Judiciary Committee Tuesday.)
.…Eight other House members have signed on as co-sponsors. The group includes House Democratic leader Craig Fitzhugh, a West Tennessee bank executive who serves as the bankers association’s president.
In the Senate, the bill is sponsored by state Sen. Jack Johnson, a former banker and chairman of the Senate Commerce Committee. Lt. Gov. Ron Ramsey has expressed limited support for the bill.
Other lawmakers may be sympathetic to the industry. Banks gave more than $200,000 to Tennessee candidates for the state legislature and governor last year, including $184,750 that went to 134 candidates through the TBA’s political action committee. The contributions were in line with the TBA’s donations in previous years.

TN Consumer Protection Act No Longer Applies to Insurance

A Tennessee law that allows consumers to collect three times their actual damages when defrauded or deceived will no longer apply to insurance companies and agents under a bill given final legislative approval Monday night.
Critics contend the bill (HB1189) lessens citizen rights against insurance companies that refuse to pay legitimate claims and engage in other abusive practices. Tennessee Citizen Action, which advocates for consumer rights, said in an alter that it “attempts to gut the Tennessee Consumer Protection Act.”
But Senate Speaker Pro Tempore Jamie Woodson, R-Knoxville, who is Senate sponsor of the bill, said ample consumer protections will remain in state law.
She said the bill “clarifies legislative control over the insurance industry” in response to “judicial activism” that caused insurance companies to be covered by the Consumer Protection Act.

Continue reading

New Director of TN Consumer Affairs Division

News release from Department of Commerce and Insurance:
NASHVILLE, TN – Commerce and Insurance Commissioner Julie Mix McPeak is pleased to announce her appointment of Gary Cordell as director of the Tennessee Consumer Affairs Division.
“We are very excited to welcome Gary to our department,” said McPeak. “Consumer Affairs does an immeasurably large amount each year to help resolve disputes within the marketplace and to educate consumers. Gary brings a wealth of knowledge and experience to the position.”
Cordell, who started work as director this week, previously served as the finance director with the Better Business Bureau of Middle Tennessee. A business leader with experience in operations management, finance and staff development, Cordell also was chief operating officer at Clayton Associates and was president of Cherokee Equity Corporation. He is a member of the Student of Integrity Scholarship Committee with the Better Business Bureau of Middle Tennessee, and is a past chairman of the BBB’s board. He also is a past chairman of the Board of Goodwill Industries of Middle Tennessee. In 1986, he was campaign manager for former Gov. Winfield Dunn.
Cordell earned a Master of Arts in Organizational Management from Trevecca Nazarene University and a Bachelor of Arts in Organizational Behavior from Covenant College. A retired licensed real estate broker, Cordell was an adjunct professor for three years at Aquinas College in Nashville, where he taught management and strategic business.
Cordell also was a Grassland Athletic Association youth baseball coach. He and his wife, Kathleen, reside in Franklin and have five children.
During fiscal year 2010, Consumer Affairs (www.tn.gov/consumer/) addressed more than 5,396 written complaints, returning $3.1 million to consumers through mediation. Consumer Affairs is a division of the Tennessee Department of Commerce and Insurance, which works to protect consumers while ensuring fair competition for industries and professionals who do business in Tennessee. www.tn.gov/commerce/
Note: Under former Gov. Phil Bredesen, the position was held by Mary Clement, wife of former U.S. Rep. Bob Clement.

Haslam Tort Reform Includes Limiting Consumer Protections

Gov. Bill Haslam is proposing new limits on the Tennessee Consumer Protection Act, including a ban on class-action lawsuits against violations of the 34-year-old law, reports Richard Locker.
The governor also wants to exempt securities from the act’s coverage on the grounds that equities are regulated by federal and state laws tailored to them. The changes are part of a broader Haslam initiative that, if approved by the legislature, would place new limits on civil liability lawsuits in Tennessee.
The broader bill imposes lower limits on noneconomic damage awards in personal-injury cases and bans punitive damages in some of them. Senate Bill 1522 is sponsored by Majority Leader Mark Norris, R-Collierville, but has not been set for a hearing.
The bill’s revisions would also: Ban class-action lawsuits under the Tennessee Consumer Protection Act, which would codify a 2008 Tennessee Supreme Court ruling in a Memphis case that the act allow only lawsuits by individuals.