Office of the Lieutenant Governor
Honorable Osbert E. Potter,
Lieutenant Governor
Division of Banking, Insurance and Financial Regulation
Testimony before the Committee on
Health, Hospitals and Human Services
Bill No. 32-0020
Monday, April 10, 2017
Presenter: Gwendolyn Hall Brady, Division Director
Good Day, Senator Nereida “Nellie” Rivera-O’Reilly, Chairman, other members of the
Committee on Health, Hospitals and Human Services of the Thirty-Second Legislature, all other
Senators present, and the listening and viewing audience. I am Gwendolyn Hall Brady, Director
of the Office of the Lieutenant Governor, Division of Banking, Insurance and Financial
Regulation (“Division”).
Chairman O’Reilly, I am here today on behalf of Lieutenant Governor and Commissioner of
Insurance Osbert E. Potter to provide testimony on Bill No. 32-0020, “(An Act amending Title 3,
Virgin Islands Code, Sections 6 & 7 relating to the composition of the Government Employees
Services Commission and re-designating the GESC as the Health Insurance Board of Trustees
and for other related purposes).
Our testimony today will focus solely on the Bill’s proposed amendment to Title 3, Virgin
Islands Code, Chapter 1, Section 6, Subsection (b), wherein after the second sentence a new
sentence is recommended to read as follows:
“Of the five members appointed by the Governor, one must be a health insurance
broker or agent, with at least 5 years of non-government health insurance experience,
and licensed with the Division of Banking and Insurance, and in good standing”;
We begin by respectfully recommending an amendment to the Bill, by asking that the proposed
new sentence in Title 3, Virgin Islands Code, Section 6, Subsection (b) reflect our Division’s
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new name as the “Division of Banking, Insurance and Financial Regulation”, the name change of
which was made effective January 20, 2017 by the enactment of Act No.7962.
Notwithstanding, the Office of the Lieutenant Governor, Division of Banking, Insurance and
Financial Regulation fully supports Section 6, Subsection (b) of Bill No. 32-0020 for the
following reasons:
1. State legislation governing nearly all health insurance boards with responsibility for the
proper operation of government employees health insurance plans, have designated
positions for certain professions, requiring in most instances, specific experience for
board members appointed by the Governor with the advice and consent of the
Legislature. Notably among these are a licensed health care provider, and individuals
with risk management and health insurance experience.
2. The Government of the Virgin Islands Health Insurance Board’s membership already
consists of a licensed health care provider.
3. There would not be a conflict of interest for a health insurance broker or agent, licensed
with the Division of Banking, Insurance and Financial Regulation (“Division”), to serve
on the Government of the Virgin Islands Health Insurance Board of Trustees (‘Board”).
4. The Board’s rules and regulations can establish that any broker or agent nominated and
approved to serve thereon shall be prohibited from submitting a solicited proposal to the
Board in response to the Board’s RFP for a health insurance company to provide
coverage under the Government of the Virgin Islands Health Insurance Plan.
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Accordingly, the broker, while serving as a Board member, will not have a paid
contractual relationship with the Board on behalf of a health insurer.
5. The Board is the only “person” who can authorize the health insurance contract
negotiation process and approve the proposal. The broker or agent would be just one
vote. One individual cannot, acting alone, coerce totally the contract in his or her favor.
6. A licensed health insurance broker or agent is well qualified to serve on the Board.
Legislation was recently enacted which governs the qualifications and procedures for the
Division’s licensing of producers (which includes brokers and agents) and adjusters,
thereby strengthening their professional capabilities and enabling them to better serve
Virgin Islands consumers. The legislation referred to is Act No.7964, known as the
“Virgin Islands Producer and Adjuster Licensing Act”, which was signed into law by
Governor Kenneth E. Mapp January 20, 2017 and will be codified as the new Title 22,
Virgin Islands Code, Chapter 31.
7. In Act No. 7964, “Broker” means any person who, on behalf of the insured, for
compensation as an independent contractor, for commission, or fee, and not being an
agent of the insurer, solicits, negotiates, or procures insurance or reinsurance or the
renewal or continuance thereof, or in any manner aids therein, for insureds or prospective
insured other than himself. Additionally, in the Act, “Agent” means any person
appointed by an insurer to solicit application for insurance on its behalf, and if authorized
so to do, to effectuate and countersign insurance contracts except as to life or disability
insurances, and to collect premiums on insurance so applied for or effectuated.
8. At present, the total number of licensed health insurance brokers and agents residing in
the Virgin Islands are as follows:
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A. Total number of Resident Brokers licensed as a Health Agent: 10
B. Total number of Resident Agents licensed as a Health Agent: 105
9. We therefore recommend a second amendment to the Bill, by requesting the proposed
new sentence in Title 3, Virgin Islands Code, Section 6, Subsection (b), read: “Of the five
members appointed by the Governor, one must be a resident health insurance broker…”
Our reasoning is because the Division licenses a resident (where the licensee is required
to be a resident of the U.S. Virgin Islands) and non-resident (where the licensee cannot be
a U.S. Virgin Islands resident) health insurance broker and agent.
The Board Member
should be a Virgin Islands resident in order to attend the regularly held meetings without
the Board incurring travel reimbursement costs. A resident agent or broker will also have
personal knowledge of and experience with the Virgin Islands health insurance market.
10. Under Act No. 7964, brokers and agents will be required to obtain twenty-four hours of
continuing education training every two years. Training will be available online, or
through a Division-approved provider offering accredited courses.
11. We acknowledge the fact that Board Members receive regular health insurance training.
However, a licensed broker or agent would be an immeasurable resource on and asset to
the Board because of this professional’s theoretical and applied knowledge of health
insurance industry standards, gained by and based upon day-to-day work experience,
health insurance education and the Division’s licensure requirements for continuing
education.
12. Many licensed resident health insurance brokers and agents have licenses or were
licensed in other United States jurisdictions and therefore have had to comply with multistate licensure requirements. It would be to the benefit of the Virgin Islands Government,
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its employees and their dependents that we take advantage of these years of extensive
health insurance experience and training by affording them the opportunity to serve on
the Board.
13. A legislative mandate that the Board’s composition always consist of “a resident health
insurance broker or agent, with at least 5 years of non-government health insurance
experience, and licensed with the Division of Banking, Insurance and Financial
Regulation, and in good standing”, will provide the following benefits to the Board:
i.
reduce the Board’s extensive reliance on a paid consultant to review the technical
terms of a proposal and a health insurance contract by allowing the broker or
agent, as a Board Member, to also provide viewpoints on the same issue from an
industry trained perspective, based upon years of direct awareness of health
insurance issues impacting Virgin Islands residents, and
ii.
aid the Board significantly in its review of claims payment-related complaints
filed with the Board against the Plan’s insurer, such complaints as received from
participants in the Government’s Health Insurance Plan.
A licensed resident
health insurance broker or agent is immersed in experience and is required
regularly to resolve issues between a policyholder and a health insurance
company as part of his or her work responsibilities.
In closing, the Division fully supports Bill No. 32-0020, subject to the inclusion of our
recommended amendments.
These amendments can only serve to enhance the Health
Insurance Board of Trustees’ ability to fulfill the Bill’s legislative mandate, once it is
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enacted, requiring a designated position for a U.S. Virgin Islands licensed resident health
insurance broker or agent to serve as a Board Member.
Chairman O’Reilly, Members of the Committee on Finance, and other Senators present, this
concludes our testimony on Bill No. 32-0020.
I am available to respond to any related
questions you may have for the Office of the Lieutenant Governor, Division of Banking,
Insurance and Financial Regulation.
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