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2010 Ohio Department of Insurance Transition Manual - Ohio

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2010 Ohio Department of Insurance Transition Manual - Ohio Powered By Docstoc
					Ohio Department of Insurance
     Transition Manual
                Ohio Department of Insurance Transition Manual
                             Table of Contents

Section 1   Agency Mission and Introduction – Page 4

Section 2   Basic Organizational Structure – Page 5
            Table of Organization
            Divisions and Descriptions
            Planning and Goal Setting
            Advisory Councils, Commissions, Regional/ National Associations

Section 3   Issues Requiring Immediate Attention and Action – Page 33
            Budget Development and Status
            Summary of Ongoing Major Issues
            Important Upcoming Dates
            Contracts and/or Rules Scheduled to Expire in the Next Six Months
            Administrative Rules – Five Year Rule Review
            Ohio NAIC Involvement and Status of Ongoing and Outstanding Efforts

Section 4   Budget, Finances and Procurement – Page 62
            Budget Performance for Fiscal Year 2011 (to date)
            Capital Budget Information
            Glossary of State Budget Terms
            Basic Financial Principles of State Accounting
            Records Retention Program

Section 5   Personnel Information and Policies – Page 73
            Number and Types of Employees
            All Employees and Position Classifications
            All Unclassified Exempt Employees
            Human Resource Information
            Union Contracts
            Department Policy Manual
            Continuity of Operations (COOP) Plan
            Pandemic Flu Plan
            New Employee Orientation

Section 6   Other Important Things to Know – Page 89
            Reporting Requirements
            Legislative Issues
            Lawsuits and Investigations
            Media Relations
            Constituent Groups
            Interagency Issues
            Intergovernmental Issues
            Fleet Management



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             IT Development Efforts

Section 7    Director’s Administrative Issues – Page 117
             Delegations of Authority
             Building Access
             Telephone Information
             Parking
             Car Allowance
             JLEC and Ethics Filing Requirements
             Transition Coordinator
             Drug Testing and Background Checks

Section 8    Health Care Reform – Page 119
             State Health Care Reforms
             Federal Health Care Reforms
             Grants
             Major Department Initiatives
             Communications

Section 9    Accomplishments – Page 151
             Executive Summary, Pages 151-153
             Progress Made for a Stronger Ohio
             Breakdown of Successes
             Creating and Retaining Jobs, Preparing Workers and Accelerating the Economy
             Finding Efficiencies and Cost Savings in State Government during the Recession
             Overall Successes that are Critical to your Agency’s Mission and Constituents

Section 10    Appendix
             A. FY12-13 Budget Request Letter to OBM
             B. DAS Procurement Handbook
             C. DAS Purchasing and Reimbursement Policy
             D. OAKS Travel Rule
             E. Office of the Ohio Insurance Liquidator Transition Information
             F. NAIC and IIPRC Relational Diagram
             G. 2011 NAIC Committee Assignment Request (submitted 11/2010)
             H. Budget Language Detail
             I. Insurance Economic Development Strategic Plan




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Section 1      Agency Mission and Introduction

Mission Statement

      The mission of the Ohio Department of Insurance is to provide consumer
      protection through education and fair but vigilant regulation while promoting a
      stable and competitive environment for insurers.

Introduction

      The Department is committed to the proper regulation and licensing of insurance
      companies, agents and agencies and the maintenance of a financially solvent
      industry. The Department is charged under Chapters 39 and 17 of the Ohio
      Revised Code (“ORC”) with the significant responsibility of regulating the
      activities of approximately 1,600 insurance companies, including 250 domestic
      companies, that write more than $55 billion in insurance premiums and pay about
      $435 million each year in premium taxes to the General Revenue Fund. Ohio is
      the ninth largest insurance state by premium volume in the United States and the
      19th largest insurance market in the world, and the Department is charged with
      ensuring that this market remains safe and sound. The industry is also the fourth
      largest employer in Ohio, employing more than 100,000 people not including
      agents (the seventh highest in the nation). Therefore, the economic impact of the
      insurance industry in Ohio is significant. The Department also issues licenses and
      monitors the conduct of more than 283,000 insurance agents and oversees 20,000
      insurance agencies.




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Section 2    Basic Organizational Structure

Table of Organization




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Divisions and Descriptions

1. Risk Assessment and Market Conduct Division

   1.1 Risk Assessment. The Risk Assessment unit licenses insurance companies and
       monitors the financial solvency of insurance companies licensed in the State of
       Ohio. The National Association of Insurance Commissioners (NAIC) accredits
       the Department for its financial oversight operations, and its ability to coordinate
       with other state regulators, in part through adoption of specified model laws.

      Risk Assessment reviews financial statements of every company licensed in Ohio
      and oversees complex transactions that can include billions of dollars in managed
      assets to ensure that insurance companies have enough money to pay claims filed
      by consumers. Risk Assessment also monitors insurers’ statutory and solvency
      compliance on an ongoing basis and conducts periodic on-site field examinations.

      This unit reviews the applications of insurers applying for Certificates of
      Authority to conduct business in the State of Ohio. The insurers are required to
      complete the Uniform Certificate of Authority Application (UCAA), as created by
      the NAIC. This division also reviews foreign insurers applying for approval as an
      excess and surplus lines insurer.

      Risk Assessment is funded through the special purpose Superintendent’s
      Examination Fund, Rotary Fund 555. The fund is authorized under ORC Section
      3901.071. The sources of funding are included in ORC Section 3901.07 and Ohio
      Bulletin 2002-1. The Administration Section is responsible for monitoring the
      adequacy of authorized spending authority and sources of revenue. Amount
      collected in Fiscal Year 2010 was $7.7 million.

      The Department, by statute, examines Ohio domestic insurers at least once every
      five years. Risk Assessment may also examine foreign insurers, in conjunction
      with the domestic regulator, or through targeted examinations. Risk Assessment
      uses various financial analysis tests to determine the required frequency of
      company examinations. Risk Assessment also calculates domestic and foreign
      insurance premium tax owed to the state.

   1.2 Market Conduct. The Market Conduct unit monitors insurers’ compliance with
       Ohio insurance laws and regulations related to underwriting, marketing and
       claims handling. The unit conducts this monitoring through analysis of data
       gathered from companies through the Market Conduct Annual Statement
       (MCAS), as well as through analysis of consumer complaints received by the
       Department, or data requested from the insurers. The unit also works with the
       Risk Assessment Division on insurer examinations, with a focus on internal
       compliance processes.




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       The Market Conduct Unit’s analysis priority areas are currently limited health
       benefit writers and also annuity suitability compliance. The current exam
       schedule includes 10 annuity suitability and agent activity examinations, and
       these examinations are scheduled out through March 2011.

       The Market Conduct Unit is currently acting as the lead state of a multi-state
       examination on a large limited health benefits writer. This examination started in
       October 2010, and a contracting firm is performing the examination. The target
       end date for this multi-state examination is January 2011, depending on the exam
       results.

2. Fraud, Enforcement & Licensing Division. The Fraud, Enforcement and Licensing
   Division reports through one Assistant Director to coordinate all activities over agents
   doing business in Ohio. The Division includes three units: Licensing, Enforcement,
   and Fraud.

   2.1 Licensing. The Licensing Unit issues insurance sales licenses to insurance
       agents, insurance agencies, surety bail bond agents, surety bail bond agencies,
       title agents, title agencies, managing general agents, third-party administrators,
       public insurance adjusters, reinsurance intermediaries and viatical settlement
       brokers and providers. The unit is also responsible for ensuring agents comply
       with Ohio’s continuing education and license renewal requirements, and also
       processes insurance company appointments of authorized agents and agent
       terminations.

       In order to streamline the agent licensing process, the Licensing unit has partnered
       with the National Insurance Producer Registry (NIPR), a non-profit affiliate of the
       NAIC, to provide one stop shopping for all aspects of producer licensing. As
       such, applicants and/or licensed agents can apply for new licenses, update contact
       information and report significant information electronically. As 90% of all
       licensing transactions are processed electronically, the partnership with NIPR
       enables the Licensing unit to offer quality customer service to those who are
       applying for or hold an Ohio insurance license.

       Pre-licensing testing, continuing education compliance tracking, and program
       certifications are handled through third-party vendors. The unit oversees these
       vendors, and also handles complaints and concerns raised by Ohio-licensed agents
       regarding vendor activities.

   2.2 Enforcement. The Enforcement Unit is responsible for conducting investigations
       of alleged agent/agency misconduct. The unit additionally investigates unlicensed
       individuals and entities that appear to be violating Ohio’s insurance laws. All
       investigations conducted are administrative in nature. Criminal matters are
       reported through appropriate law enforcement authorities.




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      Agents and agencies found to have violated Ohio’s insurance laws may lose their
      licenses or face other sanctions as deemed appropriate by the Superintendent of
      Insurance. Common sanctions include financial penalties, continuing education
      and suspensions. On average, the Enforcement unit receives in excess of 3500
      allegations each year. In FY2010, the unit opened 1750 administrative
      investigations and referred 534 cases to the Department’s Legal Division so
      administrative action could be pursued against those agents and agencies who
      violated Title 39 of the Ohio Revised Code.

   2.3 Fraud. The mission of the Fraud Unit is to prevent, detect, investigate and
       prosecute those who commit insurance fraud as such acts cost insurers and
       consumers millions of dollars each year. The unit additionally investigates other
       crimes outlined in Title 29 of the Ohio Revised Code that involve an insurance
       product or an insurance transaction. Suspects often include insurance agents,
       business entities, consumers and/or members of the general public, as well health
       care providers.

      As the unit is designated as a criminal justice agency, the unit often works with
      federal, state and local law enforcement and prosecuting agencies. In order to
      ensure those who commit insurance fraud are brought to justice, the unit has a
      prosecuting attorney on staff to assist agencies in prosecuting cases referred by
      our agency.

3. Product Regulation and Actuarial Services Division. This Division is comprised
   of the following units: Property and Casualty, Life and Health, and Actuarial
   Services. Descriptions of each unit are found below:

   3.1 Property and Casualty Unit. The Property and Casualty Unit is responsible for
       the review of policy forms, endorsements, manual rules and rates for insurance
       products marketed to Ohio consumers by licensed insurers for compliance with
       Ohio law. The regulated products include commercial lines (e.g., insurance for
       businesses -- auto, general liability, professional liability including medical
       malpractice, property, crime, fidelity and surety), personal lines (e.g.. insurance
       for individuals or families – auto, homeowners), title insurance products, risk
       purchasing and risk retention group registrations and notification forms, and
       surplus lines reports.

   3.2 Life and Health Unit. The Life and Health Unit reviews the contractual
       provisions of all life, health, managed care plans and accident policies to ensure
       compliance with Ohio and applicable federal laws, and monitors against deceptive
       or misleading products that could unfairly deny benefits to Ohio consumers or
       increase premium cost. The Unit reviews policy forms, endorsements, riders,
       applications; approves benefit plans of Multiple Employer Welfare Arrangements
       (MEWAs); issues Certificate of Authorities (COAs) for Small Employer Health
       Care Alliances; monitors company use of illustrations in the sale of life insurance
       policies; accredits Independent Review Organizations; regulates external medical



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       review processes; monitors companies offering Medicare Supplement policies;
       enforces open enrollment activity; oversees the activities of health insuring
       corporations (i.e., Health Maintenance Organizations); reviews health insuring
       corporation service area proposals; monitors IIPRC product standard and rule
       development; monitors and contributes to proposals for improvement of the NAIC
       System of Electronic Rate and Form Filing (SERFF); and contributes to the
       efforts to comply with healthcare reform requirements (e.g., Patient Protection
       and Affordable Care Act).

   3.3 Actuarial Services Unit. The Actuarial Services Unit provides actuarial
       expertise on a wide range of topics in support of several divisions within the
       Department. The Unit is responsible for the actuarial components of Risk
       Assessment’s surveillance and examination responsibilities for property &
       casualty, life and health insurers. The Unit values and maintains the reserve
       liabilities for policies and contracts for domestic life companies; verifies that
       property & casualty, life and health product filings comply with the actuarial
       aspects of Ohio law.
        
       Under Ohio law, the charged rates cannot be excessive, inadequate or unfairly
       discriminatory. The unit reviews the risk classification plans and benefits payable
       under the insurance contract to be certain that they are not unfairly discriminatory.
       Actuarial Principles and Standards of Practice are used to determine whether rates
       are in compliance. The Unit also provides support to Consumer Services Division
       with specific case review; reviews/adjusts credit insurance rates to ensure
       compliance with statutory loss ratios; reviews actuarial certifications; and collects
       and reports company health insurance data through the web-based Annual Report
       of Ohio Health Insurance Business. Further, the Unit reviews NAIC model laws
       and regulations, and serves on the IIPRC Actuarial Task Force.

4. Consumer Services Division. The Consumer Services Division provides direct
   services to Ohio insurance consumers by answering questions, investigating
   complaints, and distributing educational material. Division representatives assist Ohio
   insurance consumers through telephone, Internet and written communications, one-
   on-one meetings and community outreach activities. Other activities include
   counseling victims at disaster assistance sites, meeting with insurance industry
   professionals, and conducting insurance fairs across the state.

5. Executive Office. The Executive Office oversees the operations of the Department.
   Working as a team, the Director, Chief of Staff, Policy and Legislation, and
   Communications serve as the Department’s official link with federal, state and local
   governments, insurance companies and agents, the media and Ohio insurance
   consumers.

   5.1 Policy and Legislation. The Policy and Legislation unit represents the
       Department before the Ohio General Assembly and Ohio’s Congressional
       Delegation, and its staff serves as liaisons to the insurance industry and key



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   stakeholders. The Legislative staff serves as the primary point of contact with all
   elected officials including handling their constituent referrals and monitoring the
   activity of the General Assembly and Congress, including identifying legislation
   that needs outreach, comment, etc. The Policy staff work with the various
   regulatory divisions to address problem areas, identify necessary legislation or
   administrative rules, or to implement new national policy. Together with the
   Director, the Policy and Legislation staff prioritizes the Department’s legislative
   and administrative policy agenda. Policy and Legislation determine key issues
   based on the number of stakeholders, impact on the insurance industry and
   consumers and the urgency of the legislation. This can include drafting insurance-
   related legislation, writing rules to implement the Department’s regulatory
   authority and coordinating policy initiatives with other state agencies and state
   departments of insurance.

5.2 Communications Unit.

    5.2.1 General. A key element of a competitive insurance market is well-
          informed consumers. The Communications office directs and coordinates
          all aspects of the Department’s internal and external communications.
          Communications manages relationships with the media; writes and
          distributes news releases, columns and consumer alerts; prepares speeches
          and presentations; oversees the content and design of the Department’s
          web sites and publications; coordinates community outreach efforts; and
          educates the general public, major stakeholders and opinion leaders about
          the Department’s services and activities.

    5.2.2 Senior Outreach. The Unit created a Take Action: Protect Yourself from
          Fraud campaign, through the Fraud Protection Program Coordinator, with
          consumer guides, materials and an interactive website. The program
          educates consumers about ongoing scams, insurance and investment fraud,
          aging issues, predatory sales practices, and Medicare and health insurance.

    5.2.3 Ohio Senior Health Insurance Information Program (OSHIIP).
          OSHIIP, funded in part by state funds and by a grant from the Centers for
          Medicare and Medicaid Services (CMS), was founded in 1992 to provide
          Medicare beneficiaries with free, objective health insurance information
          and one-on-one counseling. OSHIIP’s speaker’s bureau, hotline experts
          and trained statewide volunteers educate consumers about Medicare,
          Medicare Part D prescription drug coverage, Medicare Advantage options,
          Medicaid, Medicare supplements, long-term care insurance and other
          health insurance matters. From January 1, 2007 to October 31, 2010,
          OSHIIP has served more than 900,000 people through nearly 4000
          training and public outreach events.
            
   5.2.4   Public Liaison. The Department has a vast and varied group of
           stakeholders, making it essential to create a public liaison program within
           the agency’s communications office. The agency’s public liaison


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               maintains contact information for the agency’s stakeholders, often using
               the listing to communicate on important regulatory issues, such as rules,
               bulletins and to garner input on new and existing initiatives.
 
               Over the past four years, the public liaison has brought stakeholders
               together to discuss health care reform, to provide input on the agency’s
               website, to build an online premium comparison report so that consumers
               can access premium quotes online, in real time, to serve as a focus group
               to improve the Department’s health claim external review program, and to
               develop toolkits so that consumers understand how the external review
               process works.

               The public liaison is also responsible for maintaining content on the
               agency’s website, and works with a group of web content managers from
               each division within the agency to ensure content is fresh and accurate at
               all times.

    5.3 Information Technology and Security Unit. The Information Technology and
        Security Unit assists the Department in achieving its regulatory oversight
        responsibilities through the application of technology. The unit designs,
        implements and maintains computer applications and maintains the technology
        infrastructure that assists the Department in achieving its goals. All of the key
        functions of the Department are now electronically available.

       The Department’s records management program, including public record
       requests, policies, procedures, handling and record retention schedules are
       managed by Information Technology and Security.

       Information Technology and Security manages the Department’s Administrative
       Rule program including rule filings, procedures, and five year review
       coordinating new rules, amendments, and/or rescissions with business units,
       Legal, Policy and Executive.

       Information Technology and Security administers programs that benefit the
       health, safety and security of Department employees. Overall administrative
       services are provided in the areas of security systems operation and maintenance
       including security policies and training and awareness programs.

       The Unit’s other responsibilities also include facility maintenance and cleanliness,
       and providing space planning and office/workstation reconfiguration
       management, assistance, and coordination.

    5.4 Legal Services Unit. Legal Services provides legal advice to all divisions on
        regulatory issues and transactions, administers public hearings on agent and
        company license and enforcement issues and conducts public hearings on
        proposed rules/rule changes. Additionally, Legal Services supervises litigation



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   involving the superintendent, other than liquidation-related litigation. Legal
   Services also provides day-to-day legal assistance to other divisions in the
   Department, including assistance in ongoing enforcement investigations, reviews
   of agent, bail bond agent, title agent, managing general agent (“MGA”), public
   insurance adjuster (“TPA”), viatical settlement broker, and reinsurance
   intermediary license applications, as well as viatical settlement provider license
   applications.

   Legal Services also reviews corporate transactions filed with the Department,
   including insurance holding company system changes of control, insurance
   company mergers, re-domestications and demutualizations, and the investment
   activities of domestic insurance companies. Additionally, Legal Services assists
   in the review of product form filings including those required to be filed for
   approval by professional insurance agents and viatical settlement providers and
   brokers.

   Other support services to other Department divisions include assistance in
   drafting proposed statutes, amendments, rules and bulletins; providing legal
   advice on human resource issues; evaluating contract compliance; assistance in
   formulating Department policies. Legal Services administers the public hearings
   conducted by the Department pursuant to ORC Chapter 119 (issuing notices of
   opportunity for hearing, tracking service of process, hearing scheduling,
   coordination with the Attorney General’s office, counsel for respondents, and
   court reporters, issuing witness subpoenas, updating the online Administrative
   Action database on the Department’s website for public access, etc.) ; drafting
   consent agreements, proposed Reports and Recommendations and proposed
   adjudicatory Orders for the Director’s approval; and assisting the staff of the
   Department’s records retention program. In addition, Legal Services assists other
   divisions in drafting and revision of applications for licenses and renewals of
   licenses, filing review checklists and other tools of the divisions’ day-to-day
   operations.

5.5 Fiscal Operations Unit. Fiscal Operations provides accounting and budgeting
    services. This Unit prepares the Department’s budget, manages revenue, monitors
    expenses, administers grants and deposits securities. In addition, Fiscal
    Operations is responsible for the Department's inventory control, fleet
    management and mail operations.

   5.5.1 Budgeting. The Unit prepares and implements the biennial budget by
         timely and accurately communicating budgetary issues to the Executive and
         divisions including regular budget reports and ad hoc information. Fiscal
         also submits annually financial and securities information to OBM in
         connection with the Statewide GAAP reporting.

   5.5.2 Accounts Receivable. The Unit processes the Department’s revenue on
         daily basis including billing to customers (insurance companies and



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             agencies/agents), depositing payments, monitoring revenue against
             projections, and reimbursement by employees to the Department. The Unit
             also maintains and updates the records of securities deposits made by
             insurance companies with financial institutions, and approves securities
             exchange requests.

       5.5.3 Accounts Payable. Processes the Department’s payments to vendors,
             reimbursements to employees for travel and miscellaneous expenses and
             dispenses petty cash to employees for qualified small purchases. The travel
             reimbursement parameters, petty cash hours and qualified reimbursement
             expenses are available on the Department’s Insider web page.

       5.5.4 Federal Grants. Currently, the OSHIIP program, and several health care
             oversight obligations are funded through federal grants. The Unit prepares
             budgets, tracking expenditures, requesting and depositing grant funds,
             submitting quarterly and annual reports to the federal government, and
             preparing single audit report to OBM.

       5.5.5 Security. Various ORC statutes require insurance companies doing
             business in Ohio to deposit investment items as security for policy-holders.
             The deposits must be made with FDIC insured financial institutions. This
             Unit approves and tracks those deposits for compliance with said statutes.

       5.5.6 Mail and Asset Management. Processes incoming and outgoing mail,
             receives and tags the goods and equipment purchased by the Department. In
             addition, this Unit manages the Department’s assets and its fleet. An
             employee who needs a fleet car for a business trip should contact the mail
             room to reserve a car. With a few exceptions, the cars are available for
             business trips on a first come first serve basis.

   5.6 Human Resources Unit. The Human Resources Unit directs and coordinates all
        personnel and labor relations activities. Activities include recruiting, selecting,
        hiring and training employees, EEO/AA programs, overseeing payroll
        processing and benefits for Department employees, administering the collective
        bargaining agreement, responding to grievances, mediating and arbitrating
        disputes and developing human resource policy. Human Resources also
        performs services that promote efficiency and employee productivity within the
        Department.

6. Office of the Ohio Insurance Liquidator. Under Chapter 3903 of the Ohio Revised
   Code, the Director has receivership authority. When an Ohio domestic insurer
   becomes insolvement or financially hazardous, the Director may take legal action
   against the company and be appointed as its receiver (rehabilitation or liquidation), in
   a fiduciary capacity, with oversight through the Franklin County Court of Common
   Pleas. These proceedings are similar to Chapter 11 or 13 in bankruptcy. Insurers are
   not subject to federal bankruptcy law. The Director, as rehabilitator or liquidator,



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   maintains a fiduciary office to administer these company liquidations. This office,
   known as the Office of the Ohio Insurance Liquidator, is a private trustee’s office and
   is not an operation of state government. The Chief Deputy Liquidator, appointed by
   the Director and approved by the court, manages the Office of the Ohio Insurance
   Liquidator. A detailed transition manual for the Office of the Ohio Insurance
   Liquidator is attached at Appendix E.

7. Planning and Goal Setting

   The Ohio Department of Insurance used a comprehensive process to set goals and
   develop performance measures for the work of the agency. Senior leadership came
   together to think through the development of an agency logic model that illustrates
   what the vision of the agency is and what goals we would need to achieve to realize
   that vision.

                                                          Ohio Department of Insurance
                   STRATEGIES: ODI WORK
                                                                                Outcomes
       (7.1) Provide information and
       protection to Ohio insurance
                  buyers.
     (7.2) Educate consumers about         (7) Educate and                     (2) Consumers
    Medicare through the Ohio Senior        protect Ohio’s                 understand products,
      Health Insurance Information             insurance                  policies and their rights.
                Program                       consumers
      (7.3) Mediate complaints from
               consumers

    (8.1) Manage Ohio’s Health Care                                         (3) Insurers meet
      Coverage and Quality Council                                        contractual obligations.
                                          (8) Promote access
       (8.2) Manage Ohio’s Health         to affordable health
                                             insurance and                                                  VISION
    Information Technology initiatives
                                         improved health care
                                         quality and efficiency
     (8.3) Lead health care coverage
              reform efforts                                              (4) The Ohio insurance         (1) All Ohioans
                                                                           market is competitive.        have access to
                                                                                                       reliable insurance.
     (9.1) License and monitor agents
    and companies selling insurance in
                   Ohio

    (9.2) Provide guidance, education                                     (5) Insurance companies
    and direction to insurance sellers                                     doing business in Ohio
                                                                             are safe and sound.
                                             (9) Promote a
      (9.3) Conduct surveillance on            regulatory
       financial, agent and market        environment that is
                  activities             conducive to a robust
                                           insurance market
    (9.4) Review, monitor and enforce                                    (6) Policies and strategies
         Ohio insurance laws and                                             are implemented for
                regulations                                                 improved health care
                                                                            coverage and quality
      (9.5) Conduct investigations of
    insurance fraud, agent misconduct
          and unlicensed activity
                                                                                                                Rev. 4/1/10




   Through this process, leadership determined that the vision of the agency was for all
   Ohioans to have access to reliable insurance. For that to happen, we would need to
   protect consumers while promoting a competitive insurance market in Ohio. We
   added a goal about affordable health insurance, given that our studies showed that
   most of the 1.3 million Ohioans that are uninsured are not covered because they
   cannot afford it, and their employers do not provide insurance. We also determined
   several ways of measuring those goals and looked at data over the course of several
   years, all of which can be found in the Department’s Flexible Performance
   Agreement.


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   After setting these goals for the agency, we worked with each division to determine
   how they contribute to the larger agency goals. We wanted to assure that each staff
   member understands how he or she contributes to the success of the agency. Each
   division also has a logic model and a set of performance measures that link to the
   agency model. (All information on performance measures is housed in a SharePoint
   site: “ODI Performance Measures.”)

8. Advisory Councils, Commissions, Regional/National Associations

   8.1 National Association of Insurance Commissioners (NAIC) (www.naic.org).

 8.1.1 General Information.

      The NAIC is a voluntary organization of the chief insurance regulatory officials
      of the 50 states and also all United States territories. It provides its members with
      national forums for discussing common issues, as well as for working
      cooperatively on regulatory matters. The NAIC’s objective is to assist state
      insurance regulators in protecting consumers and helping maintain the financial
      stability of the insurance industry by offering a wide array of expertise and
      services. The Department pays annual dues of approximately $70,000-$75,000 to
      the NAIC. The Director is a voting member of the NAIC, and the Director
      typically has a high level of involvement in NAIC activities, including service on
      committees and task forces.

      Various Department staff also serve in important roles in the NAIC process. The
      NAIC holds three national meetings each year, which the Director and senior staff
      attend. More than 100 separate sessions and meetings are convened at each
      national meeting. NAIC grant and zone funds are available to pay for the cost of
      travel and other costs for Fund 554 staff related to our participation in NAIC-
      related events. For 2010, the Department was granted $23,000 in grant funds, and
      $2,000 in zone funds. In addition, employees in divisions funded by the Rotary
      Fund 555 are able to travel on 555 funds.

 8.1.2 NAIC Committee System.

      The NAIC committee system is the primary means for regulators to become
      actively involved in the NAIC, and to coordinate national regulatory policy with
      other regulators. Each commissioner serves, or delegates a state insurance
      department staff member to serve, on various NAIC committees, task forces, and
      working groups.

      The NAIC is set up as a voting body for commonality and consistency among the
      states. Each state still pursues its own regulatory framework, but can utilize the
      NAIC as a basis for support. NAIC staff also provide states with a great deal of




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technical assistance, reviewing securities valuation, providing a centralized
technology source for all insurance financial, product and market conduct data.

The Plenary of the NAIC is comprised of all of the commissioners. Plenary is also
known as the Membership. This is the final voting authority, but the Plenary
cannot override a negative vote of the Executive Committee. The Executive
Committee (EX) is made up of 17 members: the elected NAIC officers (President,
President-Elect, Vice President, and Secretary), the immediate Past President, and
the three officers of each of the four regions.

The Executive Committee has seven standing committees and also various issue-
specific task forces and working groups. The seven “letter” committees are:

A – Life Insurance and Annuities Committee
B – Health Insurance and Managed Care Committee
C – Property and Casualty Insurance Committee
D – Market Regulation and Consumer Affairs Committee
E – Financial Condition Committee
F – Financial Regulation Standards and Accreditation Committee
G – International Insurance Relations Committee

There are other Committees that have special purposes to interact with different
groups: NAIC/Consumer Liaison Committee, NAIC/Industry Liaison Committee,
and the NAIC State Government Liaison Committee.

The general hierarchy is Plenary, EX, Letter Committee, Task Force, Working
Group, Subgroup. However, the lower group does not have to have a higher
group. For example, there could be a Subgroup under EX, or a Working Group
under a Letter Committee.

Membership of the Committees and Task Forces are selected annually (February)
by the Executive Committee. Each state submits a request in December or
January to be a member of specific committees and groups. Membership in the
Working Groups or Subgroups is available by asking the Chair of that Working
Group to become a member. States often become members of committees, task
forces or working groups based on expertise of staff members. Ohio is a member
of many committees, task forces, working groups and subgroups as illustrated in
the attached document.

A list of the various committees, working groups and task forces in which
Department participates, along with outstanding issues, is found in Section 3.




                                    25
8.2 The Interstate Insurance Product Regulation Commission
    (www.insurancecompact.org).

   The Interstate Insurance Product Regulation Commission (the “IIPRC”) is an
   interstate compact for national regulation of product standards for asset-based
   insurance products (life, annuity, disability and long term care). All state
   members of the IIPRC develop and adopt product standards. Insurance
   companies can register with the IIPRC and file their products utilizing the IIPRC
   product standards rather than the standards applicable within individual states.

   The IIPRC is operated through a Management Committee and all members, as a
   Commission, are a quasi-governmental entity. The Management Committee hires
   staff, and can also work with states to secure staff for assistance with filing
   reviews. The Management Committee is comprised of small, medium and large
   states, based on premium volume. Ohio is currently a member of the
   Management Committee as a large premium volume state. The IIPRC bylaws
   detail how the Management Committee membership is determined.

   The Department has been an active member of the IIPRC. In the spring of 2006,
   the General Assembly passed SB 268, which allowed Ohio to enter into the
   IIPRC. To-date, 36 states and Puerto Rico are members of the Compact, with
   New Jersey and Illinois likely to join by year end 2010. Fifty-six product
   standards (individual life and annuity) are now available for product filings, with
   an additional ten long-term care standards to be effective on December 1, 2010
   and an additional two standards to be available on Jan 15, 2011.

   The IIPRC maintains an active committee structure. Product standards are
   developed through the Product Standards Committee (PSC), and filing logistics
   are handled through the Rulemaking Committee. Before product standards are
   addressed by the PSC, the NAIC National Standards Working Group of the Speed
   to Market Task Force develops draft standards. The graphic attached at Appendix
   F depicts the NAIC and IIPRC roles.

   The Department has actively encouraged Ohio domestic companies to register and
   file with the Compact. Eleven Ohio domestics registered and made filings in
   2010: Western Reserve Life, Cincinnati Life, Nationwide Life, Columbus Life,
   Integrity Life, Western-Southern Life Assurance, Grange Life, Motorists Life,
   Great American Life, Nationwide Life and Annuity, and Western and Southern
   Life Insurance.

   Since joining the IIPRC, Ohio has been a member of the Management Committee,
   with membership automatic under IIPRC rules due to Ohio’s premium volume.
   Director Hudson served as Chair of the Compact in 2010, and held other offices
   since 2008. Staff members chaired the Actuarial Working Group (Pete Weber)
   and were members of the Finance (Bill Rossbach and Sue Real), Product
   Standards (Bill Preston), and Rulemaking (Sue Real and Bill Preston)
   Committees. In addition, the Director, as an officer, actively participated on the


                                        26
   Consumer Advisory Council, the Industry Advisory Council, and the Legislative
   Advisory Committee. In committee selections for 2011, the Department was
   named as Chair of the Actuarial Working Group (Pete Weber), Vice Chair of the
   Technology (Bill Preston and Chris Wright) Committee and members of the
   Product Standards (Bill Preston), and Communications Committees. The IIPRC
   staff will be doing outreach at the February Commissioners Conference and will
   be reaching out to new Management Committee members in January and
   February to provide education about how the Compact operates. A “Compact
   101” webinar will be available in December 2010.

8.2 Ohio Health Care Coverage and Quality Council (HCCQC). Established by
    the Ohio General Assembly in July 2009 following its initial creation by an
    Executive Order from Governor Ted Strickland, the Ohio Health Care Coverage
    and Quality Council (HCCQC) provides a forum for a public-private partnership
    designed to improve the coverage, cost, and quality of Ohio’s health insurance
    and health care system using market-driven and evidence-based methods. The
    HCCQC builds on Ohio’s participation in two national programs, the State
    Coverage Initiative (SCI) and the State Quality Improvement Institute (SQII),
    which produced two separate but related reports: “Covering Ohio’s Uninsured,”
    issued in July 2008, and the “Ohio Health Quality Improvement Plan (OHQIP),”
    issued in June 2009. Both initiatives included broad-based participation from
    diverse constituencies to build agreement around coverage and quality priorities.
    The SCI recommendations involved an advisory group comprised of over 40
    members; the SQII Quality Improvement Plan incorporated the comments of an
    estimated 400 individuals who participated in two summits and subsequent
    comment opportunities. More detailed information about this Council can be
    found in Section 8, Health Care Reform.

8.3 Ohio Insurance Guaranty Associations. Ohio has two guaranty associations:
   (1) the Ohio Insurance Guaranty Association, which provides Ohio policyholder
   protection in the event of an insolvency of a property and casualty company, and
   (2) the Ohio Life and Health Insurance Guaranty Association, which provides
   Ohio policyholders protection in the event of insolvency of a life and health
   insurance company. Both guaranty associations are solely funded by assessments
   from Ohio licensed insurers. The Director has approval authority over all board
   members, as recommended by the membership of both associations. Frank
   Gartland administers the two associations and can be contacted at 1840
   Mackenzie Drive Columbus, OH 43220, (614) 442-6601.

8.4 Ohio FAIR Plan. The Ohio FAIR plan was created in 1968 to provide insurance
    coverage for eligible properties in Ohio for which the owners are unable to obtain
    coverage in the open market. The Ohio FAIR Plan is governed by a board of
    governors consisting of 12 members, four of whom are appointed by the governor
    with the advice and consent of the senate (R.C. 3929.43). Norman Beal is the
    President of the Ohio FAIR Plan Underwriting Association, and he can be




                                        27
   reached at 2500 Corporate Exchange Drive, Suite 250, Columbus, OH 43231,
   (614) 839-6446.

8.5 Ohio Automobile Insurance Plan. The Ohio Automobile Insurance Plan is an
    involuntary program that guarantees liability coverage for those who have
    difficulty purchasing insurance through voluntary standard and nonstandard
    markets. With Ohio having a very competitive and affordable auto insurance
    market, currently there is no one in the personal auto line of the plan, and only
    three in the commercial auto line of the plan. The Department reviews rates, rules
    and policy forms. The plan is administered through the Ohio Insurance Institute
    172 E. State Street, Suite 201, Columbus, OH 43215-4321, (614) 221-2596.

8.6 Mine Subsidence Insurance Governing Board
    Representative: Maureen Motter
    Purpose: The board consists of the Directors (or designees) from ODNR, the
    Department, and the Treasurer’s Office and an elected member company
    representative. ODNR chairs the board. All insurers who write property
    insurance on 1-4 family dwellings are members. The statutory reference is
    3929.51 et al., and the rule is 3901-1-48. The MSIGB was created for the purpose
    of governing the OMSIUA and to administer the Mine Subsidence Insurance
    Fund (MSIF). The MSIF was created to provide insurance coverage against mine
    subsidence for 1-4 family dwellings in 37 counties in the state.

8.7 Reclamation Forfeiture Fund Advisory Board
    Representative: Ben Beckman
    Purpose: This board is responsible for ensuring the effective, efficient, and
    financially stable operation of the Reclamation Forfeiture Fund (RFF), which is
    the funding mechanism designed to provide revenues for reclamation of land and
    water affected by coal mining in a timely manner. This board works with and is
    comprised of many employees of the Ohio Department of Natural Resources.

8.8 Merger & Reinsurance Commission
    Representative: None currently
    Purpose: Domestic life, accident, or health companies wishing to merge or to
    reinsure specific portions of risk must present materials concerning the proposed
    transaction to the Commission. This is not a standing commission. The
    Commission is created as needed for specific transactions. The Commission has
    met three times in the most recent four year period. The Director, the Attorney
    General and the Governor all appoint one member to the Commission.

8.9 Ohio Reinsurance Board
    Representative: Bill Preston
    Purpose: The board is established to oversee the reinsurance of risk associated
    with the Ohio Open Enrollment program and the small employer market from
    health insurers in Ohio, in accordance with sections 3924.07 to 3924.14.




                                        28
8.10 Ohio Health Information Partnership (OHIP)
     Representative: Amy Andres
     Purpose: OHIP is a public-private partnership created to establish a sustainable
     statewide health information exchange health information exchange.

8.11 Insurance Agent Education Advisory Council
     Representative: Karen Vourvopoulos
     Purpose: Pursuant to Ohio Revised Code 3905.48.3, the Insurance Agent
     Education Advisory Council is to advise the Superintendent of Insurance in
     carrying out the duties associated with the licensing examination process. This
     Council is a terrific tool for the Department to utilize to oversee agent licensing
     concerns.

8.12 Emergency Management Advisory Committee
     Representative: Jarrett Dunbar
     Purpose: The EMA Committee serves as a permanent forum for partners and
     stakeholders to discuss trends in emergency preparedness and for coordinated
     input into Ohio’s emergency management program’s implementation, evaluation
     and continued improvement. The Advisory Committee fills a gap at the
     operational level where senior state agency and department officials would meet
     regularly to review and discuss preparedness and response issues, build upon
     existing relationships and strategic partnerships, and share information on latest
     developments in preparedness and response.

8.13 Emergency Operations Center (EOC)
     Representative: Jarrett Dunbar
     Purpose: Represents the Department at the Emergency Operation Center during
     disaster or other crisis and serves as a liaison between the Ohio EMA and the
     Department of Insurance.

8.14 Human and Economic Recovery Committee
     Representative: Jarrett Dunbar
     Purpose: This committee updates the Human and Economic Recovery portion of
     the Ohio Homeland Security Strategic Plan, which is used by local, regional, and
     State agencies when writing their investment justifications to apply for DHS
     funds. DHS requires that all investment justifications be tied back to the Strategic
     Plan. The State Preparedness Report also uses the Strategic Plan to report on what
     measures are being taken to secure the State.

8.15 Pan Flu Coordinator Committee
     Representative: Jarrett Dunbar
     Purpose: This committee updates and assesses pan flu preparedness throughout
     the various state agencies.

8.16 Severe Weather Awareness Committee
     Representative: Jarrett Dunbar



                                           29
     Purpose: Inform residents of weather hazards that typically affect the state, to plan
     ahead, organize emergency preparedness kits; and practice safety drills.

8.17 Minority Business Advisory Council
     Representative: Melissa Wheeler
     Purpose: The Council is charged with coordinating the state's efforts to maximize
     the opportunities and growth of minority businesses. The Council is staffed by
     the Ohio Department of Development.

8.18 Securities & Insurance Licensing Association
     Representative: Karen Vourvopoulos
     Purpose: SILA was established to bring together licensing experts whose
     occupations encompass all aspects of licensing and registration.

8.19 Hospital Measures Advisory Council
     Representative: Sarah Curtin
     Purpose: Created by the 126th General Assembly, the purpose of these
     committees is to determine a set of hospital performance measures to be collected
     and the requirements for a public website through which to disseminate this
     information.

8.20 Unified Long Term Care Services Working Group
     Representative: Cynthia Burnell
     Purpose: The UNLTCB group is to develop a unified approach to funding and
     providing a continuum of long term care service across state agencies. This is
     primarily related to Medicaid funds. The working group is staffed by the Ohio
     Department of Aging. The Department is impacted because it regulates long term
     care partnership products in conjunction with ODJFS.

8.21 Healthy Ohio Council
     Representative: Kyrsten Chambers
     Purpose: The Council is an intra-agency team led by the Ohio Department of
     Health which addresses health issues faced by Ohioans.

8.22 Ohio Family Health Survey Executive Committee
     Representative: Doug Anderson/Suparna Bhaskaran
     Purpose: The OFHS regularly conducts surveys of Ohioans on issues of
     healthcare.

8.23 Medical Home Education Advisory Group
     Representative: Mary Jo Hudson/Cynthia Burnell
     Purpose: Established in statute in June 2010, the Ohio Patient-Centered Medical
     Home Education Pilot Project is to create 44 Patient-Centered Medical Homes in
     four regions of Ohio (Dayton, Toledo, Akron/Canton and Athens). The pilot
     project is to be administered by the Patient-Centered Medical Home Education
     Advisory Group, which will be responsible for developing the criteria for



                                          30
     selection of the pilot practices, determining sources of funding, and developing a
     set of outcomes for the demonstration project.

8.24 Help Me Grow Advisory Board
     Representative: Robert Denhard
     Purpose: Advisory board that oversees Ohio’s birth to age three system that
     provides state and federal funds to county Family and Children First Councils.

8.25 OSHIIP Volunteer Advisory Board (OVAB)
     Representative: Rebecca Hayward
     Purpose: To assist OSHIIP to enhance efficiency and productivity of the statewide
     volunteer network. OVAB has no authority to direct actions or fiscal matters. It
     has only an advisory role.

8.26 Greater Cleveland Aging and Disability Network Advisory Board
     Representative: Gretchen Lopez
     Purpose: The board is part of the President’s New Freedom Initiative, which seeks
     to assist states in creating a single coordinated system of information and access
     for those seeking long-term care support services.

8.27 Ohio’s Aging Eye Public/Private Committee
     Representative: Gretchen Lopez
     Purpose: The committee is an advisory body for the Governor’s Ohio Aging Eye
     initiative which is led by the Ohio Department of Aging and Prevent Blindness
     Ohio.

8.28 National SHIP Steering Committee
     Representative: Gretchen Lopez
     Purpose: The body acts as a liaison between the SHIP community and CMS and
     serves as an advisory group to CMS.

8.29 Ohio Senior Medicare Patrol (SMP) Advisory Council
     Representative: TBD
     Purpose: The Council provides opportunities for members to collaborate to
     educate older adults and their caregivers/professionals throughout Ohio on how to
     protect themselves from Medicare and Medicaid fraud and identity theft.

8.30 Elder Abuse Task Force
     Representative: TBD
     Purpose: The Commission advances the recommendations contained in the Elder
     Abuse Task Force Report by bringing together public agencies involved in
     providing adult protective services to the growing elderly population.

8.31 Ohio Interagency Council on Women and Girls
     Representative: Carly Glick
     Purpose: The Governor’s Office for Women’s Initiatives and Outreach (GOWIO)



                                         31
     promotes public policy that advances the status of Ohio’s women and girls,
     thereby strengthening our communities and families.

8.32 OAKS Executive Board
     Representative: Amy Andres
     Purpose: To provide business oversight and approve large projects for the State’s
     ERP system. (OAKS) Additionally, the Board is a body for issue and risk
     management escalation and ensuring OAKs is operated and maintained in a
     manner that is contemporary with the State’s investment.




                                         32
Section 3     Issues Requiring Immediate Attention and Action

1. Budget Development and Status

   On November 1, 2010, the Department submitted its budget request to the Office of
   Budget and Management OBM. The request includes $38,229,705 in FY 2012 and
   $38,198,112 in FY 2013 for all funds. The requested funding for continuing
   operations is roughly the same as the funding for FY 2011, plus $3.4 million a year
   for three new federal grants related to implementation of the Federal Patient
   Protection and Affordable Care Act (“PPACA”). Detailed budget information is
   contained in the request (see copy of budget request at Appendix H).

2. Summary of Ongoing Major Issues

   2.1 Dodd Frank Reform Act. In 2010, a series of regulatory reforms were adopted
       by the federal government. Several provisions impact the Department’s
       regulatory authority, and require attention.

      2.1.1 Surplus Lines Licensing and Fees. Under Dodd Frank, within one year of
            enactment, states may no longer license non-resident surplus lines agents or
            collect surplus lines fees from insureds which are not domiciled in Ohio. In
            2009, Ohio collected over $21 million in surplus lines fees. Ohio law will
            now require an amendment to collect and receive surplus lines fees in
            cooperation with other states. The NAIC is working on a proposed model.
            NCOIL has endorsed a compact proposal but caution is urged, as a number
            of its provisions conflict with Ohio’s agent licensing code and would move
            adopting states to not be reciprocal under Gramm Leach Bliley, and would
            unwittingly cause preemption of Ohio’s non-resident agent licensing
            authority.

      2.1.2 Annuity Suitability. Under Dodd Frank, state regulation of certain indexed
            annuity sales is preempted unless the state adopts the current NAIC Annuity
            Suitability Model Act. Ohio does not have the current model. The
            Department has vetted the new model with all affected stakeholders, and has
            filed an amendment to our existing administration rule with JCARR. The
            rule will be heard on December 30, 2010, and effective on July 1, 2011.

      2.1.3. Federal Insurance Office. The bill creates the Federal Insurance Office
            (FIO) as a division of The Department of Treasury. The FIO has limited
            preemption authority, except as it relates to international issues. There are
            numerous issues being raised by the European Union, as companies are
            seeking to avoid regulation by states in the United States. The Department
            is advised to follow FIO activies through the NAIC, which is actively
            engaged with the FIO.




                                           33
2.2 Patient Protection and Affordable Care Act. A full summary of the PPACA is
    included in Section 8 of this transition manual. Immediate issues regarding
    PPACA are as follows:

   2.2.1 High risk pool oversight.
   2.2.2 Internal and external review of health claims require amendments to
         ORC Chapter 3923.
   2.2.3 Waiver of annual limits for open enrollment and limited benefit plans.
   2.2.4 Rate review grant implementation.
   2.2.5 Consumer ombuds grant implementation.
   2.2.6 Exchange planning grant implementation.
   2.2.7 Medical loss ratio reporting.
   2.2.8 Agent commissions and MLR.

   Information on each ongoing issue is detailed in Section 8.

2.3 Ohio External Review Law and Ohio Pension Plans. House Bill 4, the Patient
    Protection Act of 1999, gave consumers the right to have a review of denials of
    health benefit claims and charged the Department with administering the Act.
    Since the enactment of that legislation the Department has met resistance and at
    times refusal by some self-funded governmental plans and by the state retirement
    plans such as PERS. The Department’s internal legal analysis of the situation is
    that the statute applies to these entities and that the legislature intended to include
    these groups in the Department’s enforcement authority. Repeated
    communications with these groups on behalf of aggrieved consumers has not
    resulted in compliance with the statutes.

2.4 Long Term Care Insurance Agent Training. When the long term care
    partnership legislation was enacted in 2006, ORC Section 3923.443 required
    agents to complete four hours of continuing education training in each licensing
    cycle. The statute is not clear as to when the education calendar starts and ends.
    This statute needs to be amended to clarify these dates, as agents are losing their
    appointments for non-compliance issues with education requirements due solely
    to confusion about these dates.

2.5 Fraternal Benefit Society Code Update. The Ohio fraternal benefit society code
    is lacking numerous solvency oversight tools that all other insurers are subject to
    in Ohio. Many more fraternals are now writing annuity and medical supplement
    products. Proposed changes to the Ohio Fraternal Code have been vetted with
    appropriate stakeholders. These changes should strongly be considered in order
    to mitigate potential risks.

2.6 Liquidation Statutes.

   2.6.1 Payment of Interest. In 2010, the Ohio Supreme Court ruled that the
         Liquidator is not able to pay interest on any claims if a surplus exists in an



                                          34
         estate. This ruling adversely impacts claimants, especially the state
         insurance guaranty funds. ORC Section 3903.42 should be amended to
         address this ruling.

   2.6.2 Derivative Contracts and Netting Agreements. The NAIC Insurer
         Receivership Model Act (IRMA) includes a provision for specific treatment
         of derivative contracts and netting agreements in the event of an insolvency.
         Ohio domestic insurers engaged in derivative contracts and netting agents
         are encountering conflicts with their counterparties because Ohio has not
         enacted this model. Ten states have already adopted it. In order to assure
         that domestic investment relationships are not interrupted further, this model
         should be adopted.

   2.6.3 Liquidation Records. Liquidation proceedings are administered by the
         Office of the Ohio Insurance Liquidator, a private trustee’s office, with
         suspension through the Franklin County Court of Common Pleas. All
         proceedings in the liquidation (or rehabilitation) are administered through
         the courts, yet some claimants attempt to get estate records through public
         record requests directed to the Department. ORC Sections 3903.13
         (rehabilitations) and 3903.18 (liquidations), and 149.43 (public records)
         need to be amended to clarify that all records should be administered
         through the courts. The current process unnecessarily burdens Department
         staff and wastes estate assets. Proposed amendments are attached at
         Appendix H. This proposal also clarifies that the Liquidator is competent
         to testify regarding these records, per IRMA and a ruling in Womer
         Benjamin v. KPMG Barbados, et.al., 2005 Ohio 1959.

   2.6.4 Study to Defer or Appeal an Order of Liquidation. A recent liquidation
         order was appealed by multiple parties in an attempt by certain parties to
         delay the estate from seeking recourse against the principals of the
         company. This appeal caused a significant drain on the united assets of the
         company. The amendments proposed at Appendix H clarify that only the
         directors of a liquated insurer have standing to defend or appeal a
         liquidation order.

2.7 Health Insurance Scams. The Enforcement Unit has been investigating a large
    number of unlicensed individuals and entities who have been selling bogus health
    insurance or limited medical plans to Ohioans who are desperate to obtain health
    insurance coverage. The Department is preparing to pursue Cease & Desist orders
    against a large number of individuals and companies who have defrauded Ohio
    consumers and has been working with the Attorney General’s Office to ensure all
    necessary evidence has been gathered. As these entities continually shut down and
    reappear under a new business name, we believe this will continue to be an issue
    we will need to dedicate a great deal of time and resources.




                                        35
 2.8 Annuity Churning. The Department has identified a trend whereby agents are
     convincing consumers to initiate penalty free withdrawals from existing annuities
     so they can invest the proceeds in annuities offered by other companies. The
     motive behind the agent’s recommendation is the generation of commissions. The
     Department has identified instances where consumers have found themselves with
     upwards of 10 annuities or more, and their initial investment tied up for years
     beyond the initial surrender period of their original investment. Some consumers
     further stand to lose bonuses offered at the initial time of investment as
     withdrawals disqualify them from receiving the bonus rate of return. Market
     Conduct and Enforcement will be working together to identify those agents
     engaged in such a practice so administrative action can be taken against their
     insurance licenses.

 2.9 Uniformity in the Agent Licensing of Business Entities. The NAIC EX Task
     Force is currently looking to develop uniform standards for the licensing of
     business entities. The Department is concerned with several standards proposed as
     they would drastically impact the Department’s current revenue structure. The
     Department is additionally concerned that a consumer protection issue would
     exist. As members of the committee have been asked to come to a degree of
     compromise on this issue, the Department has identified those standards they
     would support the adoption of, and have come up with some new suggestions for
     the committee to consider. Conference calls will continue to be scheduled with
     regard to this issue and the matter is tentatively scheduled to be voted on during
     the Spring NAIC meeting in 2011.

2.10 Insurance/Bonding for Third Party Administrators (TPA’s). Over the past
     two years, the Department has investigated a number of third party administrators
     who have stolen proceeds from their clients and have failed to pay claims
     submitted on behalf of employees of the companies they represent. While ERISA
     mandates that third party administrators have bonds/insurance in place to cover
     employee theft, the Department is concerned that some TPA’s may not have the
     proper coverage in place. The Licensing Division will be reviewing the renewal
     applications of all TPA’s currently licensed in Ohio, and will be reaching out to
     those who do not appear to have proper bond/insurance coverage. Licensing will
     additionally determine if TPA license applications need to be revised to include
     specific language relative to this issue. This will help ensure that Ohio employers
     who are defrauded by a TPA will have some recourse for being made whole. And
     lastly, Ohio’s TPA statute will be reviewed in order to determine if amendments
     are warranted.

2.11 PEC Agent Investigations. In November 2008, the Department initiated an
     investigation into the activities of a pre-licensing/continuing education provider
     by the name of Professional Education Corporation (PEC). In July of 2009,
     George Armstrong, the owner of PEC, voluntarily surrendered his Ohio insurance
     license and agreed to the permanent surrender of his authority to teach pre-
     licensing and continuing education courses in Ohio after the investigation



                                          36
     revealed PEC failed to teach courses in accordance with Ohio’s continuing
     education rules, had agents falsify records so it would appear courses were taught
     properly, and submitted documents to the Ohio Department so agents would
     receive continuing education credits for courses that did not take place. After
     administrative action had been taken against PEC and George Armstrong, the
     Department initiated administrative action against those agents who knowingly
     participated in the scheme in order to receive credits to which they were not
     entitled. To date, a majority of the agent cases that were referred to Legal have
     been settled. A few remaining cases however will need to be settled in the first
     few months of 2011.

2.12 Accreditation for Market Regulation. The NAIC is working on an
     accreditation program for market regulation. The affect on the division will be
     that a number of processes will need to be reviewed to determine if they would be
     compliant to the accreditation program requirements, as well as the procedure
     manuals for the division will need to be reviewed and updated where applicable.

2.13 Computer System Upgrades. The Department has completed a significant
     portion of its Computer System Upgrade project. We have completed the design,
     development, and implementation of a state-of-the-art Web-based application
     environment based upon a unified enterprise architecture. The new architecture
     incorporates service oriented architecture (SOA) best practices, a centralized
     directory service, and enterprise authentication and authorization. The
     Department is well on its way to successfully completing half of the primary
     modules of the regulatory system. Modules completed or due to be completed
     during the first quarter of 2011 include the Executive Tracker (Ombudsman
     Application), Licensing, Fiscal, and Consumer Services. The remaining modules
     consist of Product Regulation, Legal, Market Conduct, Enforcement, and Risk
     Assessment. In addition to the new application architecture, the Department has
     completed the design, development, and implementation of a data warehouse and
     business intelligence environment which will support all future reporting and
     analysis needs of the Department.

2.14 Health Insurance Exchange Planning. The Department applied for and
     received a federal grant in the amount of $1 million to plan for a health insurance
     exchange in Ohio. The work to plan an exchange is moving forward with the
     assistance of the Health Benefit Exchange Planning Task Force of the HCCQC,
     which has held several meeting to make preliminary recommendations regarding
     creation and implementation of an exchange. Work has also begun with respect
     to the data collection and analysis required to make decisions regarding
     establishment of an exchange and implementation of the insurance market
     reforms to take effect in 2014. The exchange planning grant application, which
     includes a work plan and project narrative, and other materials related to
     exchange planning can be found at the following website:
     http://www.healthcarereform.ohio.gov/Pages/HIExchanges.aspx. This work will
     need to continue and a transition manual with respect to exchange planning will



                                         37
     be finalized when the Exchange Planning Task Force meets again on December
     15, 2010. The transition manual for exchange planning will be provided at that
     time as a supplement to the Department’s transition manual.

2.15 Coverage of Children Under the Age of 19 in Ohio’s Individual Market. The
     Department has filed an administrative rule with JCARR (3901-8-14) to establish
     open enrollment periods for carriers offering child only coverage in Ohio’s
     individual market. Carriers have voiced concern that offering child only coverage
     under new market rules will result in adverse selection and they desire a level
     playing field to avoid some insurers bearing the brunt of adverse selection. The
     proposed rule establishes a uniform open enrollment period during which carriers
     in the individual health insurance market may offer coverage to children under 19
     years of age on a guaranteed issue basis without any limitations or restrictions
     based on the health status of the child. The new rule establishes March as the
     annual open enrollment month and it is expected that carriers will begin to offer
     child only coverage in March, 2011. Although carrier participation in the child
     only market is voluntary, carriers that decide to offer child only coverage in
     Ohio’s market must give the Department 45 days notice to withdraw from the
     market. The rule requires the Department to conduct an annual survey of carriers
     to gather information as to this market segment.

2.16 Alternative Retirement Plans. Section 3305.03 of the Ohio Revised Code
     provides that the Department designate three or more entities to provide
     alternative retirement products to Ohio education professionals. OAC 3901-1-29
     outlines the Department’s process to obtain such certification. When this code
     section was adopted, the only providers of these products were annuity writers.
     Since then, mutual fund operators have begun offering alternative retirement
     products. The Department is not equipped to evaluate the products offered, other
     than through our perspective and expertise as an insurance regulator. As a result,
     OAC 3901-1-29 was amended in 2009 to provide for an approval process that
     relies on various certifications and licensure requirements from other regulatory
     bodies. Periodically, proposals are circulated to amend Chapter 3305 to alter the
     Department’s responsibilities. As future proposals are raised, be certain that the
     Department has the expertise and staffing to complete the required tasks.

2.17 OHA Class Action Litigation Settlement. On October 31, 2008, a Settlement
     Order was agreed to between the Department, ODJFS and the Ohio Hospital
     Association (the OHA litigation) settling a long-standing class action suit
     concerning Ohio’s Medicaid managed care program. As its part of the settlement,
     the Department agreed to hold a basic training seminar for providers on how to
     read the financial statements of managed care companies and a training session
     regarding the Department’s financial monitoring of these companies. This
     seminar, a webinar, was held on October 31, 2009. Pursuant to the terms of the
     settlement, the Department is scheduled to hold another training session in
     December of 2010, and annually until 2013.




                                         38
      The next task which the Department has undertaken pursuant to the settlement is
      to arrange twice annual formal, roundtable meeting between the Department,
      OSMA, OHA and ODJFS to discuss issues “related to the State’s operation of the
      Medicaid managed care system.” The first roundtable was held on January 20,
      2010, and a second roundtable was held on May 19, 2010. ODJFS (Dale Lehman)
      has volunteered to schedule subsequent roundtable meetings between the
      parties. The terms of the settlement require that the roundtable discussions be held
      twice annually for five years following the effective date of the settlement,

3. Important Upcoming Dates

December

   1. Health Care Coverage and Quality Council 2nd Annual Report. This report is
      due December 23, 2010.

   2. EPCH Steering Committee Meeting (HCCQC) December 14, 2010

   3. Payment Reform Task Force Meeting (HCCQC) December 14, 2010

   4. HCCQC Meeting December 15, 2010

   5. Health Benefits Exchange Task Force Meeting (HCCQC) December 15, 2010
       
   6. OHA Training Session. December 2010 (to be announced) (through 2013)

January

   1. NAIC Committees. Each year the NAIC requests each insurance department to
      submit its preferences for committees, subcommittees and task forces in which
      each department would like to participate. This list is submitted to the NAIC in
      early January (the 2011 Committee Assignment request is attached in Appendix
      G). The NAIC Officers make the final selections and announces committee
      assignments by the end of January. Ohio’s involvement on committees allows it
      to be active in setting national policy that is best suited for our markets. The
      Department has been active in many committees, and a list of our current
      involvement is located in Section 2 of this manual.

   2. HB 300. On January 1, 2011, Ohio’s new agent licensing laws and rules will go
      into effect and all insurance agents and business entities will be required to renew
      their insurance licenses on a biennial basis. Licensing has created a conversion
      schedule to ensure a seamless transition from a perpetual license system to a
      biennial license system and has been educating the agent community of the new
      changes. Licensing has further been working with the IT Division on the
      development of a new licensing module. It is imperative that the computer system




                                           39
     be up and running by March 2011 so the Licensing Division is able to maintain
     accurate licensing data.

  3. RFP for Licensing Examination and Education Vendors. The Licensing
     Division will need to release a request for proposal (RFP) in January 2011 in
     order to find a vendor to administer the Department’s insurance agent licensing
     examination. Action on the RFP will then need to be taken within the first three to
     four months of 2011 as the new vendor will be expected to take over the
     examination process in July 2011. In addition to finding an examination vendor,
     it will be necessary for the Licensing Division to issue an RFP for an education
     vendor within the first 3-4 months of 201l as a new vendor will need to be in
     place by July 1, 2011.

  4. Escrow Account Audits. Pursuant to Ohio Administrative Rule 3901-7-01, all
     licensed title agents and agencies will be required to file an annual audit of their
     escrow accounts by January 15, 2011. 5,000 reviews are expected to be received
     by the Enforcement Division by the aforementioned deadline. Each audit will
     need to be reviewed in order to determine if there are any potential areas of
     concern that would warrant an Enforcement investigation being opened. It will
     further be necessary for the Enforcement Division to open up investigations on
     those individuals and entities who fail to file a review with our agency.

  5. NAIFA Presentation on HB 300. On January 20, 2011, Michelle Brugh and
     Karen Vourvopoulos are scheduled to give a presentation on House Bill 300 to
     the Toledo chapter of NAIFA. The presentation will take place in Toledo, Ohio,
     at 9:00 a.m.

  6. Behavioral Health Integration Work Group Meeting (HCCQC) January 6,
     2010.
      
  7. EPCH Steering Committee Meeting (HCCQC) January 27, 2010.

February

  1. OSHIIP Grant Proposal. The Ohio Senior Health Insurance Information
     Program (OSHIIP) needs to submit its FY 2011 grant application to CMS, which
     is due in February. This grant represents a major portion of the funding that
     OSHIIP receives and is typically around $1.1 million. The grant award will be
     announced in April.

  2. External Review Report. As part of House Bill 4, the Ohio Patient Protection
     Act of 1999, the Department is required to submit a report to the Governor and
     the General Assembly showing the previous year’s internal and external reviews
     of denied health insurance claims. The report also shows the top 5 claim denials
     which were reversed and the amount of money saved for Ohio consumers. This
     report is compiled in the Executive Office during the first quarter of the calendar



                                           40
        year with the assistance of the Life and Health Unit of the Product Regulation
        Division. See ORC 3901.82; 3919.40.

   3. 2011 NAIC Commissioners Conference. This event is scheduled for February
      4-7, 2011, in Indian Wells, California.

   4. Behavioral Health Integration Work Group Meeting (HCCQC) February 9,
      2010.
         
   5. EPCH Steering Committee Meeting (HCCQC) February 24, 2010.

March

   1. Market Conduct Prompt Pay Data Call. Due March 1 per ORC 3901.381.

   2. Annual Statements. Risk Assessment receives the prior year annual statutory
      financial statements on March 1, and begins analysis of the information
      immediately. Risk Assessment Division staff and actuarial staff will be dedicated
      exclusively to this task for at least 90 days thereafter.

   3. Fraud Conference. In March of 2011, the ODI Fraud Division will co-host the
      Ohio Joint Insurance Fraud Conference in Columbus, OH. Fraud Supervisor Joel
      Demory is on the planning committee and can provide further details about the
      conference if needed.
         
   4. EPCH Steering Committee Meeting (HCCQC) March 3, 2010.
         
   5. HCCQC Council Meeting March 24, 2010.

April

   1. OSHIIP Annual Report. OSHIIP will be required to submit its annual grant
      report to CMS.

   2. Market Conduct Annual Report of Ohio Health Insurance Business (“HIB
      Report”).
      Filed on or before each April 1 for prior year’s data, the HIB Report addresses a
      number of important compliance issues for insurers which are licensed and
      writing health insurance in Ohio.

May

   1. Premium Taxes. The Risk Assessment Division is responsible for the annual
      calculation and audit of the premium taxes, retaliatory and fire marshal taxes of
      all licensed insurers. The final taxes are certified by the Director of the
      Department of Insurance for collection by the State Treasurer. The domestic



                                            41
     insurers’ taxes are certified by May 15th each year. Taxes certified in 2010 were
     $434,093,177.

  2. Medical Malpractice Closed Claim Report. Property and Casualty will begin
     collecting data on medical malpractice closed claims for the previous year. The
     Department is required to prepare an annual report summarizing the closed claim
     data. The first report will be issued in late October or early November.

  3. NAIC/NIPR E-Reg Conference. This event is hosted in order to promote an
     open exchange of information between regulators and industry representatives, is
     scheduled to be held in Kansas City, Missouri from May 1, 2011 - May 4, 2011.

  4. Cleveland “I” Day. This event has been scheduled for May 5, 2011. Each year
     personnel from the Licensing Unit assists Communications in providing
     manpower for a booth secured by the Department.

August

  1. ODI Official Report. There are three statutorily required reports that make up
     the ODI Official Report, which is submitted on an annual basis and is due August
     1 of every year (the 2010 report has already been delivered):

  2. ODI Annual Report. Contains the transactions and proceedings of the office for
     the fiscal year, including a summary of official acts and any proper
     recommendations. The Superintendent of Insurance is to coordinate the
     compilation of the report. Copies are to be sent to the Governor, Secretary of
     State, State Library, and a copy is to be kept on file at ODI. See ORC 149.01;
     121.18. The 2010 report has already been delivered.

  3. Record and Report of Superintendent. This is a concise statement of the
     general conduct and condition of each company authorized to transact insurance
     in the state. The Superintendent of Insurance to coordinate the compilation of the
     report. There are no recipients specified. See ORC 3901.14.

  4. Report to the Governor. The contents of this report are unspecified. The due
     date is five days before each regular session of the General Assembly. The
     required creators are the officers of the Executive Department, and the recipient is
     the Governor. See §3.20 of the Ohio Constitution. The 2010 report has already
     been delivered.
      
September

  1. Market Conduct Prompt Pay Data Call. Due September 1 per ORC 3901.381.

  2. Host Annual Fraud Directors Conference. In September 2012, the
     Department’s Fraud Division to scheduled to host the Annual Fraud Directors



                                          42
      Conference in Columbus, Ohio. The event is publicized by the NAIC Anti-Fraud
      Task Force and Fraud Directors from all over the country are encouraged to
      attend. Assistant Director Michelle Brugh is currently in charge of planning this
      event and can provide additional details if needed.

No Specific Due Date

   1. UM/UIM Status Report. This report is the study and completion of a status
      report of market availability and competition for UM/UIM coverage in Ohio. The
      first status report was due within two years of effective date of statutory
      amendment (10/31/01), and subsequent studies/status reports are due “from time
      to time.” The Superintendent of Insurance coordinates compilation of info for
      reports, and the recipients of the report are the Governor, the Speaker of the
      House, the President of the Senate, and chairpersons of the General Assembly
      who have jurisdiction over auto insurance. See ORC 3937.18(L).

   2. Interstate Compact Report (completed by IIPRC staff). This report is
      submitted on an annual basis, with no specific due date. Although the contents of
      the report are unspecified, the report is to include the independent auditor’s report
      of the Commission’s financial accounts and reports, including its system of
      internal controls and procedures. The creator is the IIPRC (comprised of the
      Compacting States, of which the Department is a member). The report gets
      submitted to the Governor and legislature of the compacting states. See ORC
      3915.16.

4. Contracts and/or Rules Scheduled to Expire in the Next Six Months

   4.1 Contracts

   Contracts executed by the Department are statutorily required to expire at the end of
   the fiscal year unless the contract provides for a renewal. No Department state
   contract can continue beyond the end of a budget biennium. The following is a list of
   the various contracts currently in place that will be up for renewal and action during
   the first six months. The following is a list of current contracts/obligations:

   Updated December 20, 2010:

                                            Expiration Obligated Liquidated                Amt to
             Vendor Name                      Date     Amount       Amt                   Voucher

Affordable Language Svcs                     6/30/2011          1,000 116             884

Armstrong & Okey Inc                         6/30/2011        21,000 7,591            13,409

Attorney Generals Off                        6/30/2011        85,000 21,825           63,175
COLUMBUS DEVELOPMENT CORP                    6/30/2011     1,023,920


                                            43
(lease)                                                      510,960   512,960

DIGITEK                                6/30/2011    824,920 176,764    648,156

FLAIRSOFT                              6/30/2011    278,000 116,774    161,226

Goodwill Columbus (Security Guards)    6/30/2011     87,330 29,110     58,220

HIRE CIO                               6/30/2011    214,000 93,037     120,964

INFORMATIO CONTROL                     6/30/2011    303,035 112,774    190,261

Inst for Healthcare Improvement        6/30/2011    300,000 126,059    173,941

LEE SMITH ASSOCIATES                   6/30/2011     20,000 7,232      12,768

LEIF ASSOCIATES                        6/30/2011     27,078 593        26,485

LEWIS & ELLIS Inc.                     6/30/2011     26,219 -          26,219

LEXIS NEXUS                            6/30/2011     13,392 5,580      7,812

Louis E Gerber                         6/30/2011     24,500 12,075     12,425

Milliman Inc                           6/30/2011     47,600 2,430      45,170

ORACLE CORP                            6/30/2011     18,778 4,695      14,083

Pan L Tek Inc                          6/30/2011     8,500 2,380       6,120
Pearson VUE                            6/30/2011    No Exp
Prometric Inc                          6/30/2011    No Exp

RESOURCE One                           6/30/2011    130,786 46,930     83,856

The Ohio State Univ                    6/30/2011    125,000 62,500     62,500

The Ohio State Univ                    6/30/2011     45,000 -          45,000

The Ohio State Univ                    6/30/2011   1,012,000 485,000   527,000

The Ohio State Univ                    6/30/2011    125,000 -          125,000

UNWIRED MEDIA                          6/30/2011    132,946 17,308     115,637

XEROX                                  6/30/2011     47,597 15,378     32,219


                                      44
     THE DEPARTMENT OF AGING                       6/30/2011      227,000 -                227,000
     The Department of Job and Family
     Services                                      6/30/2011      325,000 -                325,000

     Second Harvest FoodBanks                      6/30/2011      571,217 -                571,217

     The Department of Development                 6/30/2011      240,000 -                240,000


    5. Administrative Rules – Five Year Rule Review

        The following rules are scheduled for 5-year rule review in 2011. Immediate action
        is not required, and Information Technology and Security has procedures in place for
        internal review and recommendation to the Director for possible action on these rules.

        Rule #       Rule Name
        3901-1-07    Unfair Trade Practices
        3901-1-08    Unfair & Deceptive Military Sales Practices
        3901-1-10    Appointment of Insurance Agents
        3901-1-24    Public Insurance Adjusters
        3901-1-35    Solicitation and Sale of Medicare Supplemental Accident and Health Policies
        3901-1-40    Misconduct by Insurance Agents and Solicitors (RESCIND to New Chapter)
        3901-5-xx    Misconduct by Insurance Agents and Solicitors
        3901-1-54    Unfair Property/Casualty Claims Settlement Practices
        3901-1-59    Standardized Health Claim Form Rule
        3901-1-60    Unfair Health Claim Practices
        3901-5-02    Provider Approval
        3901-5-07    Regulation of Agent Prelicensing Education
        3901-5-09    Agent Licensing and Appointments
        3901-5-10    Rental Car Insurance Agent Limited License
        3901-7-01    Annual Review of Title Insurance Agent Escrow Accounts
        3901-7-02    Title Insurance Agents Maintenance of Surety Bond and Errors and Omissions
        Coverage
        3901-7-03    Title Insurance Agents Notice to Mortgagors
        3901-7-04    Title Insurance Controlled Business Arrangements

    6. Ohio NAIC Involvement and Status of Ongoing and Outstanding Efforts

       Group           ODI Primary                Purpose              Ohio’s Interest        Any Key
                         Person                                                              Outstanding
                                                                                               Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Plenary (Member)      Director          All Commissioners-final     Support of Ohio
                                        decision level              industry and



                                                 45
       Group             ODI Primary                  Purpose                   Ohio’s Interest            Any Key
                           Person                                                                         Outstanding
                                                                                                            Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

                                                                             consumers in Ohio


Executive (EX)          Director           Reviews all actions of
Committee (By                              Committees and the EX Task
Election)                                  Forces and Working Groups

AIG Special (EX)        Director           Wind down of initial AIG          follow for OH
Working Group                              issues                            policyholders
(Member)
Health Care Reform      TBD                Newly formed after PPACA
Cost Containment (EX)
Subgroup (Member)
Health Care Reform      TBD                Newly formed after PPACA
Interstate Compact
Standards (EX)
Subgroup (Member)
Market Regulation       Director/Lynette   Developing an accreditation       To promote inclusion      Seeking promotion
Accreditation (EX)      Baker              program for Market Conduct        of the risk assessment    of uniformity and
Task Force*                                to insure consumer protection,    and domestic              domestic deference
(Member)                                   communication and                 oversight approaches      links.
                                           uniformity from state to state.   that we use in Ohio.


Multi-State             Lynette Baker **   Oversees consent order            One of the first multi-
Enforcement (EX)                           development for multi-state       states that will fall
Task Force*                                market conduct exams.             under this task force
(Member)                                                                     is a multi-state exam
                                                                             Ohio is leading.
Producer Licensing      Director /         Develops and implements           Ohio has been             The group is
(EX) Task Force*        Michelle Brugh     uniform licensing standards,      extremely active in       currently
(Member)                                   respond to developments           promoting uniformity      developing
                                           related to licensing              in agent and business     standards for
                                           reciprocity, under Gramm          entity licensing and      uniformity in
                                           Leach Bliley requirements;        has a great wealth of     business entity
                                           coordinates priorities for        knowledge to offer        licensing and hopes
                                           licensing reform and works        the committee. Ohio       to make a final
                                           with the National Insurance       should remain active      recommendation in
                                           Producer Registry (NIPR)          in order to have a say    2011.
                                           Board of Directors on             in the standards that
                                           electronic producer licensing     will be adopted
                                           initiatives.                      because significant
                                                                             changes to the
                                                                             standards could
                                                                             impact the
                                                                             Department's current
                                                                             revenue structure.




                                                     46
        Group           ODI Primary                 Purpose                  Ohio’s Interest            Any Key
                          Person                                                                       Outstanding
                                                                                                         Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Regulatory             Director          Develop a plan for building      Improving state-
Modernization (EX)                       member consensus and             based regulation.
Task Force*                              necessary constituency
(Member)                                 support for national
                                         uniformity in areas that will
                                         enhance the existing strengths
                                         of state insurance regulation,
                                         and that are consistent with
                                         NAIC guiding principles on
                                         regulatory modernization.




Solvency               Director/Dale     Set direction for WGs to         While Ohio has direct     Group supervision;
Modernization          Bruggeman/Bill    update key elements of           input to several of the   corporate
Initiative (EX) Task   Harrington/Mary   solvency regulation              WGs, the ability to       governance; IFRS
Force* (Member)        Miller                                             review and vote for       conversion and
                                                                          items in other WGs is     SAP.
                                                                          important.

Corporate Governance   Bill Harrington   Outline high-level corporate     Ohio was a leading
(EX) Working Group                       governance principles.           state in the new Risk
(Member)                                 Determine the appropriate        Focused Exam
                                         methodology to evaluate          process which relied
                                         adherence with such              heavily on corporate
                                         principles, giving due           governance
                                         consideration to development     documentation.
                                         of a model law. Review the
                                         current IAIS principles and
                                         standards related to corporate
                                         governance. Consider the
                                         development of insurance
                                         regulatory education for
                                         members of insurers’ Boards
                                         of Directors.




International          Dale Bruggeman    Review and comment on            Ohio is one of top 10     IASB insurance
Accounting Standards                     direction taken by IASB to       states and a leader in    contracts liability
(EX) Working Group                       influence international          statutory accounting      accounting
(Member)                                 accounting




                                                   47
        Group              ODI Primary                 Purpose                   Ohio’s Interest           Any Key
                             Person                                                                       Outstanding
                                                                                                            Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

International Solvency    Dale               Review other international       Ohio is a leader in
(EX) Working Group        Bruggeman/Mary     jurisdictions' solvency          US Solvency
(Member)                  Miller             programs and provide             Regulation,
                                             recommendations to solvency      especially in risk-
                                             regulation in US.                focused examination
                                                                              techniques
Principles-Based          Pete Weber         Coordinates the work of the      Ohio has played a        Development of a
Reserving (EX)                               NAIC groups that are             key role in the          new model
Working Group                                impacted by the Principles-      development of PBR.      standard valuation
(Member)                                     Based initiative.                We provide valuable      law and the
                                                                              expertise.               accompanying
                                                                                                       valuation manual.

Statutory Accounting      Dale               Deciding on the appropriate      Ohio is one of top 10    The WG requested
and Financial Reporting   Bruggeman/Bill     accounting model to use in       states and a leader in   Commissioner
(EX) Subgroup             Harrington         light of FASB/IASB               statutory accounting     level involvement
(Member)                                     convergence. SSAP current                                 as this is a policy
                                             foundation is FASB.                                       decision. Action
                                                                                                       will be required in
                                                                                                       2011.



Speed to Market (EX)      Director/Maureen   Serves as the NAIC focal         From inception, Ohio     PPACA-related
Task Force*               Motter             point for modernization of the   has been extremely       issues.
(Member)                                     insurance product filing and     active with this TF.
                                             review processes                 Speed to market is
                                                                              critical for state-
                                                                              based regulation

National Standards        Bill Preston       Drafts national standards for    Ohio was a leader in     Individual
(EX) Working Group                           insurance products that are      the formation of the     disability; group
(Member)                                     eligible for inclusion in the    IIPRC and is             standards for all
                                             Interstate Insurance Product     instrumental in          asset-based lines
                                             Regulation Commission            setting standards.
                                             (IIPRC). Standards adopted
                                             by the working group and the
                                             Speed to Market (EX) Task
                                             Force are then taken up by the
                                             IIPRC for consideration


IC-Annuity (EX)           Dirk Rader/Jason   Reviews annuity products         same as above            Group standards
Subgroup (Member)         Wade
IC-Life (EX) Subgroup     Leslie             Reviews life products            same as above            Group standards
(Member)                  Wasserstrom
IC-LTC (EX) Subgroup      Matt Elston        Reviews long-term care           same as above            Implementation
(Member)                                     products




                                                       48
        Group             ODI Primary                Purpose                  Ohio’s Interest           Any Key
                            Person                                                                     Outstanding
                                                                                                         Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

IC-DI (EX) Subgroup      Dirk Rader       Reviews disability products      same as above            Most active-
                                                                                                    working on basic
                                                                                                    product standards
Operational              Maureen Motter   Oversees the implementation      From inception, Ohio     PPACA-related
Efficiencies (EX)                         and ongoing maintenance and      has always been          issues &
Working Group (Chair)                     enhancement of speed to          extremely                coordination
                                          market operational               active/involved with     project with
                                          efficiencies.                    this WG, actually        National
                                                                           developing some of       Treatment.
                                                                           the S2M tools.
Product Filing Review    Maureen Motter   Publish for the first time a     WG will disband.         WORK
Handbook(EX)                              Product Review Filing            Charge has been          COMPLETED
Subgroup (Chair)                          Handbook for regulator &         completed.
                                          industry use similar to Market   Maintenance of book
                                          Conduct & Financial              will continue through
                                          Examiner handbooks.              OEWG.


Annuity Disclosure (A)   Michelle Brugh   The main work of the             Because loopholes        While proposed
Working Group                             Working Group is to review       have been identified     changes to the
(Member)                                  the NAIC Annuity Disclosure      in the current annuity   model have been
                                          Model Regulation and             disclosure model, the    recommended, the
                                          improve the disclosure of        Department should        working group will
                                          information provided for         remain on the            still need to finish
                                          annuity products, including      workgroup in order to    developing
                                          indexed annuities.               recommend changes        consumer Buyers
                                                                           based upon patterns      Guides.
                                                                           of abuse detected.


Consumer Information     Anne Jewel       Lead the NAIC’s efforts to       Actively participated    Revisions to
(B) Subgroup                              implement two key consumer       in national consumer     documents will be
(Member)                                  information and enrollment       disclosure               ongoing.
                                          provisions of the Patient        documents.
                                          Protection and Affordable
                                          Care Act of 2010 (PPACA);
                                          Section 2715 and Section
                                          1311(c)(F).


Regulatory               Anne Jewel/      Develops NAIC model acts         Models must be           PPACA related
Framework (B) Task       Kathy Melton/    and regulations for state        acceptable in Ohio so    drafting ongoing.
Force* (Member)          Bill Preston     health care initiatives, while   we can follow to be
                                          considering policy issues        consistent across the
                                          affecting state health           country.
                                          insurance regulation.




                                                    49
       Group              ODI Primary                Purpose                 Ohio’s Interest           Any Key
                            Person                                                                    Outstanding
                                                                                                        Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

ERISA (B) Subgroup                        Monitor, report, and analyze    Follow ERISA
(Member)                                  developments related to         litigation updates and
                                          ERISA, and make                 TPA issues.
                                          recommendations regarding
                                          NAIC strategy and policy
                                          with respect to those
                                          developments.

Senior Issues (B) Task   Michelle Brugh   Considers policy issues,
Force* (Member)                           develops appropriate
                                          regulatory standards and
                                          revises the NAIC models,
                                          consumer guides and training
                                          material, as necessary, on
                                          long-term care insurance,
                                          Medicare supplement
                                          insurance, senior counseling
                                          programs and other insurance
                                          issues which affect older
                                          Americans. Also monitors the
                                          progress of the Federal Long
                                          Term Care Insurance
                                          Program, and the CMS
                                          educational initiative on the
                                          need for long term care
                                          planning.




Life and Health          Pete Weber       Considers actuarial issues      Benefits Ohio's          Testing of the new
Actuarial Task Force*                     related to Life and Health      insurance industry       Principle-Based
(Member)                                  insurance.                      and consumers by         Reserving (RBR)
                                                                          being at the front of    requirements
                                                                          potential controversy.
                                                                          Also, Ohio's domestic
                                                                          insurers appreciate
                                                                          the proactive role we
                                                                          take on LHATF.




                                                    50
         Group           ODI Primary                  Purpose                   Ohio’s Interest            Any Key
                           Person                                                                         Outstanding
                                                                                                            Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Accident and Health     Matt Elston/Mary   Develops actuarial rules for      Support of Ohio           Review of Health
Working Group           Miller             regulations.                      industry and              Actuarial Opinions,
(Member)                                                                     consumers in Ohio         compilation of
                                                                                                       Medicare
                                                                                                       Supplement refund
                                                                                                       data, and support
                                                                                                       the NAIC on ACA
                                                                                                       sections regarding
                                                                                                       risk and
                                                                                                       reinsurance
                                                                                                       provisions.
Catastrophe Insurance   Mary Miller        Monitor and assess proposals      Important that states     Federal catastrophe
(C) Working Group                          that address disaster insurance   other than FL and CA      backstop proposals;
(Member)                                   issues at the federal and state   have a voice to           federal regulation -
                                           levels; assess concentration-     protect the interests     optional federal
                                           of-risk issues and whether a      of OH companies and       charter; Chinese
                                           regulatory solution is needed     consumers.                drywall; adding
                                                                                                       wind to Federal
                                                                                                       Flood Plan


Catastrophe Reserve     Mary Miller        Review the current NAIC           Important that states     NY pre-catastrophe
(C) Working Group                          catastrophe reserve proposal      other than FL and CA      reserve proposal
(Member)                                   and make a recommendation         have a voice to
                                           whether to move the proposal      protect the interests
                                           forward, even if the IRS tax      of OH companies and
                                           code is not amended to allow      consumers.
                                           insurers to establish a tax-
                                           deferred catastrophe reserve.



Casualty Actuarial      Mary Miller        Provides reserving, pricing,      Ohio companies and        Title Insurance
and Statistical (C)                        ratemaking, statistical and       consumers benefit         proposals;
Task Force* (Vice                          other actuarial support to        from OH's leadership      international
Chair)                                     NAIC committees, task forces      position and ability to   accounting changes
                                           and working groups.               exert a positive          and the impact on
                                                                             influence on other        reserving and
                                                                             states.                   actuarial opinions;
                                                                                                       risk classification
                                                                                                       survey.
Profitability (C)       Tom Hess           Produces the Report on            Ensure OH data is         Annual Report due
Working Group                              Profitability By Line By State    properly accounted        soon
(Member)                                   annually.                         for




                                                     51
        Group               ODI Primary                  Purpose                  Ohio’s Interest            Any Key
                              Person                                                                        Outstanding
                                                                                                              Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Statistical (C) Subgroup   Tom Hess           Collects data and produces
(Member)                                      reports on the state of the
                                              market place by line and by
                                              state

Crop Insurance (C)         Michelle           Forum for discussing issues
Working Group              Brugh/Mary         related to the interaction of
(Member)                   Miller             federal crop insurance
                                              programs with state regulation

Market Regulation          Director/Lynette   Oversees (1) the collection of   This Committee            Development of
and Consumer Affairs       Baker              market data, (2) the Market      determines how            the accreditation
(D) Committee*                                Information Systems, (3)         market conduct is         program, changes
(Member)                                      automated applications, (4)      performed, what           to computer
                                              the use of desk audits,          information we            systems at the
                                              examinations, interrogatories,   collect and what          NAIC and new
                                              investigations and other         systems we use. It        lines of business
                                              resources for monitoring         has a great affect on     for the Market
                                              market activities, and (5) the   our everyday              Conduct Annual
                                              analysis of data relevant to     activities.               Statement used for
                                              market issues.                                             market analysis.



Antifraud (D) Task         Michelle Brugh     Promotes the detection,          Ohio has a very           The group has been
Force* (Member)                               investigation and prosecution    strong Fraud &            charged by Health
                                              of insurance fraud and/or        Enforcement               & Human Services
                                              crimes associated with           Division and has a        to develop a fraud
                                              insurance.                       great deal to offer the   reporting form that
                                                                               committee in terms of     specifically relates
                                                                               trends, training and      to health care
                                                                               investigative             fraud. The group
                                                                               strategies.               has further
                                                                                                         partnered with the
                                                                                                         Title working
                                                                                                         group to determine
                                                                                                         ways in which
                                                                                                         states can most
                                                                                                         effectively
                                                                                                         investigate and
                                                                                                         prosecute crimes
                                                                                                         associated with
                                                                                                         title insurance.




                                                        52
        Group           ODI Primary                Purpose                   Ohio’s Interest           Any Key
                          Person                                                                      Outstanding
                                                                                                        Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Antifraud (D) Task     Michelle Brugh   Develops training seminars        Assistant Director       Developing a
Force - Training &                      for state regulators and law      Michelle Brugh           training program
Seminar Committee                       enforcement officials that        currently serves as      which focuses on
(Chair)                                 focus on crimes associated        Chair of the             fraud in the title
                                        with insurance.                   committee as the         insurance industry
                                                                          Department is at the     so state
                                                                          forefront of offering    Enforcement
                                                                          training to those        personnel can gain
                                                                          within the industry.     a better
                                                                                                   understanding of
                                                                                                   the title industry
                                                                                                   and the crimes title
                                                                                                   agents most often
                                                                                                   commit.
Complaint Issues (D)   Lynette Baker    Oversees changes to the           These changes will       Developing a
Working Group                           complaint coding systems          affect our Consumer      reconciliation
(Member)                                used by the states and the        Services Division,       process for
                                        NAIC.                             Market Conduct           regulators and
                                                                          Division and the new     companies to
                                                                          OTIS complaint           insure the accuracy
                                                                          system. CSD will         of the complaint
                                                                          have to use the new      coding.
                                                                          codes and develop a
                                                                          reconciliation process
                                                                          if it is decided to be
                                                                          done at the state
                                                                          level. Market
                                                                          Conduct uses the
                                                                          complaints as the
                                                                          basis for our market
                                                                          analysis system.
Consumer Connections   Anne Jewel       Provides a forum for dialogue
(D) Working Group                       among the state consumer
(Member)                                service representatives to
                                        share best practices and
                                        enhance consumer advocacy
                                        efforts. They also oversee the
                                        consumer information
                                        portions of the NAIC's
                                        website.


Consumer Disclosures   Anne Jewel       Develops uniform consumer         To make sure that the
(D) Working Group                       disclosures for the industry to   disclosures developed
(Member)                                use. Folded into PPACA            provide the needed
                                        disclosure for HHS.               consumer protection.




                                                  53
       Group           ODI Primary                 Purpose                   Ohio’s Interest            Any Key
                         Person                                                                        Outstanding
                                                                                                         Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Market Actions (D)    Lynette Baker      Reviews insurance companies      We have a large           National analysis
Working Group                            that are identified with a       number of companies       and how this group
(Member)                                 current or potential market      that write in our state   will interact with
                                         regulatory issue of national     and need to stay on       the Multi-state
                                         impact, or companies or          top of what is            Enforcement Task
                                         issues that reach a certain      happening nationally      Force.
                                         mass of regulatory activity or   with them. We are
                                         interest. The Working Group      leading the
                                         initiates opportunities for      development of
                                         regulatory collaboration to      national analysis for
                                         reduce duplicative efforts and   this working group.
                                         promote efficiencies. Its
                                         members also provide
                                         expertise and guidance to
                                         ensure that appropriate
                                         regulatory actions are taken
                                         against insurers and
                                         producers, and that market
                                         issues are adequately
                                         addressed.


Market Information    Director/Lynette   Oversees the design and use      Ohio has lead the         Determining what
Systems (D) Task      Baker              of the NAIC's market             development of the        changes need to be
Force* (Vice Chair)                      information systems and the      market conduct            made to the
                                         market conduct annual            annual statement          systems to address
                                         statement development.           almost continuously       current market
                                                                          since the inception       conduct issues and
                                                                          and is currently          be more beneficial
                                                                          leading the               for market analysis.
                                                                          development of new
                                                                          lines of business for
                                                                          the statement. We
                                                                          are more
                                                                          computerized in our
                                                                          market analysis then
                                                                          most states and have
                                                                          contributed over the
                                                                          years to make sure
                                                                          the systems are useful
                                                                          and accurate.




                                                   54
       Group             ODI Primary                  Purpose                    Ohio’s Interest           Any Key
                           Person                                                                         Outstanding
                                                                                                            Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Market Analysis         Lynette Baker      Is the national forum for states   Ohio has lead the        Making changes to
Procedures (D)                             to share and coordinate their      development of the       the market analysis
Working Group (Chair)                      market analysis programs.          market conduct           chapters of the
                                           MAP reviews and coordinates        annual statement         Examiners
                                           state market analysis              almost continuously      Handbook, which
                                           programs and develops              since the inception      direct states on
                                           procedures for uniform,            and is currently         how to do market
                                           nationwide analysis using          leading the              analysis. Working
                                           their adopted Framework for        development of new       on instructions on
                                           Market Analysis. This              lines of business for    how to analyze the
                                           includes the Market Conduct        the statement. We        MCAS and
                                           Annual Statement                   have the background      developing new
                                           development.                       on the project and the   lines of business
                                                                              technical knowledge      for it.
                                                                              that is needed to lead
                                                                              this project.
Market Conduct          Lynette Baker      Evaluates the needs and            This handbook            Market Analysis
Examination Standards                      develops as necessary updated      outlines how to do       chapters changes
(D) Working Group                          market conduct examination-        market conduct and       from the MAP
(Member)                                   related procedural sections in     market analysis. It is   working group.
                                           the Market Regulation              important to
                                           Handbook.                          participate and stay
                                                                              up on the changes.

Retained Asset          Director/Lynette   Reviews the use of retained        Ohio has a number of     Working on the
Accounts (D) Working    Baker              asset accounts (RAAs) by           domestic life            disclosure
Group (Member)                             insurance companies and            companies so we          development.
                                           makes recommendations as           want to be involved
                                           necessary, including whether       in the development of
                                           there is appropriate consumer      the consumer
                                           disclosure.                        disclosures.



Financial Condition     Director/Dale      Provides direction to WG and       Top 10 state. Comm
(E) Committee*          Bruggeman/Bill     TF for Financial solvency          has numerous TF and
(Member)                Harrington         related items. Final vote          WGs of which Ohio
                                           before EX                          is not a voting
                                                                              member. Provides
                                                                              opportunity to vote
                                                                              on items of those
                                                                              groups.
Accounting Practices    Dale Bruggeman     Provides directions to WGs         Top 10 state. TF has
and Procedures (E)                         related to accounting and          key WGs of which
Task Force*                                reporting                          Ohio is not a voting
(Member)                                                                      member. Provides
                                                                              opportunity to vote
                                                                              on items of those
                                                                              groups.


                                                     55
        Group             ODI Primary                  Purpose                  Ohio’s Interest           Any Key
                            Person                                                                       Outstanding
                                                                                                           Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

P&C Line of Business     Dale Bruggeman     Evaluates PC lines of business   Control other states
(E) Subgroup (Member)                       for reporting purposes           need to have
                                                                             reporting on minimal
                                                                             lines of business on a
                                                                             national level.
Emerging Accounting      Dale Bruggeman     Discusses and provides           Ohio is one of top 10
Issues (E) Working                          guidance on FASB emerging        states and a leader in
Group (Member)                              topics and provides technical    statutory accounting
                                            guidance on questions about
                                            existing statutory accounting
                                            items.


Statutory Accounting     Dale Bruggeman     Reviews and considers            Ohio is one of top 10    Deferred Tax
Principles (E) Working                      changes to statutory             states and a leader in   assets, Pension
Group (Member)                              accounting based on changes      statutory accounting     liability
                                            to FASB or other requests.

Deferred Taxes (E)       Dale Bruggeman     Evaluating change to SSAP10      Ohio is one of top 10
Subgroup (Chair)                            to match tax filing              states and a leader in
                                            considerations and prudential    statutory tax
                                            control of future assets. Temp   accounting
                                            change sunsets 12/2011.


FAS 166 167 (E)          Dale Bruggeman     Evaluating GAAP changes to       Ohio was asked to be     just exposed for
Subgroup (Member)                           Accounting for Transfers of      a member                 comment first of 2
                                            Financial Assets                                          issue papers

Capital Adequacy (E)     Mary Miller/Dale   Evaluates and recommends         RBC is the key
Task Force*              Bruggeman          appropriate refinements to       component of this
(Member)                                    capital requirements for all     TF, and Ohio wants
                                            types of insurers.               to keep it strong yet
                                                                             balanced.
Property Risk-Based      Mary Miller/Dale   Makes changes to the PC          Ohio's expertise in
Capital (E) Working      Bruggeman          RBC formula and                  the PC industry
Group (Member)                              instructions.
Catastrophe Risk (E)     Mary Miller        Review if RBC charges            Ohio's expertise in
Subgroup (Member)                           should be implemented for        the PC industry
                                            catastrophic risks




                                                      56
       Group           ODI Primary                 Purpose                    Ohio’s Interest           Any Key
                         Person                                                                        Outstanding
                                                                                                         Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Examination           Bill Harrington   Monitors all aspects of the        Ohio leadership is       Key issues are at
Oversight (E) Task                      financial examination process      instrumental in          the WG level
Force* (Chair)                          and identifies, investigates,      establishing best
                                        and develops solutions to          practices for
                                        problems related to financial      examination and
                                        examinations.                      analysis
                                        Monitors aspects of the
                                        financial analysis process
                                        including the refinement of
                                        Financial Analysis Solvency
                                        Tools and the NAIC Financial
                                        Analysis Handbook.
Financial Examiners   Bill Harrington   Develops enhancements that         Ohio is a front runner   Meet at NAIC
Coordination (E)                        encourage coordination of          in coordinating          National Meetings
Working Group                           examination activities with        examinations of large    to discuss the
(Member)                                regard to holding company          insurance groups         coordination of
                                        groups. Provides ongoing           (Nationwide, Great       individual groups.
                                        maintenance and                    American,                Developing
                                        enhancements to the                Progressive)             additional guidance
                                        Examination Tracking System                                 and tools for
                                        (ETS). The Working Group                                    coordinating exams
                                        also will provide reports to the                            of holding
                                        Examination Oversight Task                                  company groups.
                                        Force regarding usage of ETS,                               Test and roll out
                                        including examination and                                   new Financial
                                        coordination statistics.                                    Exam Electronic
                                                                                                    Tracking System
                                                                                                    (FEETS).


Financial Examiners   Bill Harrington   Continually reviews the NAIC       Ohio was first to        Factors for
Handbook (E)                            Financial Condition                adopt the new            assessing
Technical Group                         Examiners Handbook and             approach and offers      likelihood of
(Member)                                revise as appropriate.             valuable insight to      occurrence and
                                                                           this WG.                 magnitude of
                                                                                                    impact.
                                                                                                    Guidance and new
                                                                                                    exhibit for
                                                                                                    Summary Review
                                                                                                    Memorandum.
                                                                                                    Glossary for the
                                                                                                    Handbook.
                                                                                                    Usage of
                                                                                                    materiality when
                                                                                                    selecting key
                                                                                                    activities/risks.




                                                  57
        Group             ODI Primary                Purpose                   Ohio’s Interest            Any Key
                            Person                                                                       Outstanding
                                                                                                           Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Risk Assessment          Bill Harrington   Recommends changes to the        Ohio has developed        Subgroup is still
Implementation (E)                         FCEHB due to the change in       many tools in this        refining elements
Subgroup (Member)                          examination approach.            new approach that         of the Risk Matrix.
                                           Develops new examination         would benefit all
                                           tools.                           examinations.


IT Examination (E)       Floyd Meeks       Monitors state usage of          Ohio leadership is        Oversee training of
Working Group                              automated exam tools,            instrumental in           examiners on the
(Member)                                   technology changes, and          establishing best         new IT review
                                           emerging issues to reevaluate    practices in this area.   process.
                                           examination processes
                                           relating to IT. Keeps states
                                           abreast of the latest tools,
                                           techniques, and training in
                                           these areas.


Financial Analysis (E)   Dale Bruggeman    Analyzes nationally              Ohio's expertise in
Working Group                              significant insurers and         handling troubled
(Member)                                   groups that exhibit              companies quickly.
                                           characteristics of trending      Membership of this
                                           toward or being financially      WG is by individual
                                           troubled; determines if          selection and not by
                                           appropriate action is being      state.
                                           taken by domestic state.
                                           Provides assistance


Health Reform            Bill              Completed guidance for MLR       Impact on Ohio            Solvency review
Solvency Impact (E)      Harrington/Dale   reporting. Reviews PPACA         health writers            set up not started.
Subgroup (Member)        Bruggeman         for solvency concerns

Investment of Insurers   Dale Bruggeman    Modifies the Investment          Ohio is evaluating        Finalizing
Model Act Revision (E)                     model acts, as needed, and       change to investment      recommendations
Working Group (Chair)                      recommends to E Comm             laws and was asked        for report to E
                                           whether to devote resources to   to chair this             Committee
                                           any change.                      evaluation group.


NAIC/AICPA (E)           Bill Harrington   Addresses financial solvency     The WG has                Updates to the
Working Group                              issues and works with the        implications for          Model Audit Rule's
(Member)                                   American Institute of            statutory accounting      Implementation
                                           Certified Public Accountants     and impacts reporting     Guide
                                           (AICPA) on various issues.       of all insurance
                                           The most significant issue       companies.
                                           was the new Model Audit
                                           Rule.




                                                     58
       Group             ODI Primary               Purpose                  Ohio’s Interest           Any Key
                           Person                                                                    Outstanding
                                                                                                       Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Separate Account Risk   Dale Bruggeman   Develops regulatory guidance     Several Ohio life
Charge (E) Working                       requiring the establishment of   companies could be
Group (Member)                           risk charges for the risk        affected by any
                                         assumed by the general           changes this group
                                         account in support of            would make.
                                         individual separate account
                                         products guaranteed by the
                                         general account. Provides
                                         recommendation to the
                                         Financial Condition
                                         Committee, including the
                                         need for Model Law
                                         Development/Change.




Financial Regulation    Director/Dale    1. Maintains and strengthens     Ohio needs to be        Changes to the
Standards and           Bruggeman/Bill   the Financial Regulation         assured that            Holding Company
Accreditation (F)       Harrington       Standards and Accreditation      companies domiciled     Model Act and
Committee (Member)                       Program. 2. Assists states in    in other states have    Guidance on
                                         implementing laws, practices     substantially similar   qualifications for
                                         and procedures, and obtaining    regulators to ensure    Reinsurance
                                         personnel required for           policyholder            Collateral.
                                         compliance with the              protection.
                                         standards. 3. Conducts a
                                         yearly review of accredited
                                         states. 4. Considers new
                                         model laws; new practices and
                                         procedures and amendments
                                         to existing model laws; and
                                         practices and procedures
                                         required for accreditation and
                                         determines timing and
                                         appropriateness of addition of
                                         such new model laws, new
                                         practices and procedures and
                                         amendments. 5. Renders
                                         advisory opinions and
                                         interpretations of model laws
                                         required for accreditation and
                                         on substantial similarity of
                                         state laws. 6. Reviews
                                         existing standards for
                                         effectiveness and relevancy
                                         and makes recommendations
                                         for change, if appropriate. 7.
                                         Produces, maintains and
                                         updates the NAIC
                                         Administrative Policies



                                                   59
        Group              ODI Primary                   Purpose                    Ohio’s Interest           Any Key
                             Person                                                                          Outstanding
                                                                                                               Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

                                              Manual of the Financial
                                              Regulation Standards and
                                              Accreditation Program to
                                              provide guidance to state
                                              regulators regarding the
                                              official standards, policies and
                                              procedures of the program. 8.
                                              Maintains and updates the
                                              NAIC Financial Regulation
                                              Standards and Accreditation
                                              Program pamphlet. 9.
                                              Performs enhanced pre-
                                              accreditation review services
                                              including, but not limited to,
                                              additional staff support,
                                              increased participation and
                                              enhanced report
                                              recommendations and
                                              informal feedback.
Survey Results (F)        Dale Bruggeman      Evaluated changes suggested        Top ten state            work is 99%
Subgroup (Member)                             by NAIC staff based on                                      complete
                                              consultant's review of process

NAIC/State                                    Discuss issues of common
Government Liaison                            interest to regulators and state
Committee (Member)                            officials.

SERFF Board of            Director Hudson     The Board, consisting of           Ohio is a strong         Much discussion is
Directors (By Election)   was appointed as    regulators & industry,             supporter of SERFF,      taking place about
                          a Commissioner      oversees the direction of          mandating its use for    accessibility to
                          rep to the Board,   SERFF, the system for              all product filing       public records of
                          serving as Chair.   electronic rate & form filing.     submissions. Ohio        filing submissions
                          This appointment                                       has also served on the   via SERFF. Ohio
                          is not                                                 Board in years past.     is extremely
                          transferable.                                          We are very              supportive of this
                          Maureen Motter                                         interested in the        idea. Many
                          participated as                                        direction of SERFF       changes to SERFF
                          interested                                             since it is the key      are necessitated by
                          regulator                                              speed to market tool.    PPACA.
                                                                                 While we will likely
                                                                                 not regain a seat on
                                                                                 the Board soon, we
                                                                                 should continue to be
                                                                                 an interested
                                                                                 regulator.
Other Current Key
Non-member




                                                        60
        Group             ODI Primary                Purpose                  Ohio’s Interest             Any Key
                            Person                                                                       Outstanding
                                                                                                           Issues
* The bolded items require annual request of the EX Committee. Others are done via request of the WG chair.
** Membership is specific to staff member, based on level of expertise.

Surplus Lines            Maureen Motter,   Develops and oversees           Legislation will be        Group is
Implementation (EX)      Felisa Brown &    implementation of state-based   necessary; a               attempting to draft
Task Force (Interested   Carol Schaefer    solutions addressing the        placeholder is in the      multi-state
Regulator)               participate as    surplus lines subtitle of the   budget bill. Ohio          agreement or
                         interested        Non-admitted and                collects approx $28        compact enabling
                         regulators        Reinsurance Reform Act that     million in non-            legislation. Ohio
                                           was incorporated into the       admitted tax, so it is     legislation will be
                                           Dodd-Frank Wall Street          important we protect       necessary; a
                                           Reform & Consumer               our abilities to collect   placeholder is in
                                           Protection Act.                 these monies.              the budget bill.


SERFF Product            Maureen Motter,   The Committee consists of       Ohio has always been       PPACA-related
Steering Committee       Chris Wright &    regulatory & industry SERFF     very active with           enhancements; best
(Interested Regulator)   Valerie Baader    users and oversees the          SERFF since it is          practices & general
                                           requirements of SERFF           THE speed to market        improvements to
                                           enhancements & best             tool. Val Baader did       SERFF system are
                                           practices.                      serve as a committee       in the works.
                                                                           member for a number
                                                                           of years.




                                                    61
Section 4         Budget, Finances and Procurement

Budget Performance for Fiscal Year 2011

   The following table shows fiscal year 2011 budget as of November 10, 2010:

 Fund       ALI               ALI Descr          Total Budget       Total Expense        Total          Remaining
                                                                                     Encumbrance         Balance
5540    820601     OPERATING EXPENSES-OSHIIP          200,000.00         32,372.70        30,654.50       136,972.80
3U50    820602     OSHIIP OPERATING GRANT            1,920,000.00       673,236.93      140,155.81       1,106,607.26
5AG0    820603     Ohio Family Health Survey         2,116,272.00        62,500.00     1,544,500.00        509,272.00
5550    820605     EXAMINATION                       9,294,668.00     3,166,181.11     1,075,133.27      5,053,353.62
5540    820606     OPERATING EXPENSES               22,884,736.00     8,014,197.76      925,083.56      13,945,454.68
3CX0    820608     ST COV INITIATIVE-HLTH IT    100,000,000.00                0.00             0.00    100,000,000.00
                   FED
5540    820609     ST COV INITIATIVE-COUNCIL          479,575.00         86,174.93             0.00        393,400.07
3EV0    820610     HEALTH INSURANCE PREMIUM          1,000,000.00             0.00             0.00      1,000,000.00
                   REV
3EW0    820611     HEALTH EXCHANGE PLANNING          1,000,000.00             0.00             0.00      1,000,000.00
3EX0    820612     CONSUMER ASSISTANCE GRANT         1,300,490.00             0.00             0.00      1,300,490.00
                                               140,195,741.00       12,034,663.43    3,715,527.14     124,445,550.43


   Appropriation Line Item Description

   820601 – This line item funds the Ohio Senior Health Insurance Information Program
   (OSHIIP) along with ALI 820602. The source of revenue is insurance regulation
   fees.

   820602 – This line item funds OSHIIP with a federal grant (State Health Insurance
   Program or SHIP. In recent years, the annual award amount is around $1.6 million.
   The appropriation is higher than the award amount to account for unspent awards in
   previous years as well as another grant passed through from the Department of Aging.

   820603 – This line item is a one-time funding source to implement strategies
   recommended by the Health Care Coverage and Quality Council. The FY2011
   budget amount is for implementation of strategies recommended by the Health Care
   Coverage and Quality Council, including the primary care home initiative, the
   reduction of hospital readmissions project, the payment reform summit and the
   chronic disease self-management program. The budget bill has specific language
   regarding its use:

        Notwithstanding section 3929.682 of the Revised Code, up to Am. Sub. H.
        B. No. 1 128th G.A. 2866, $2,116,272 of the foregoing appropriation item
        820603, Health Information Technology and Health Care Coverage and
        Quality Council, may be used to support the implementation of strategies
        recommended by the Health Care Coverage and Quality Council
        established in section 3923.90 of the Revised Code.




                                               62
   In FY 2010, $8 million was provided to Ohio Health Information Partnership Inc. or
   OHIP for health information technology initiatives.

   820605 – This line item funds the operations of Risk Assessment. The revenue
   comes from two sources: billing to insurance companies for the examination cost
   incurred by the Department and assessments on insurance companies doing business
   in Ohio. See ORC 3901.07.

   820606 – This line item funds the operations of the Department. The revenue comes
   from insurance regulations such as insurance agent appointment fees and insurance
   company filing fees. See ORC 3901.021.

   820608 – This line item is not used. When the legislature passed the budget, the line
   item was intended to account for federal dollars for health information technologies.
   Later it was decided that the initiative should be undertaken by a non-profit
   corporation, OHIP (see ALI 820603), which would receive the federal dollars directly
   as opposed to passing through the Department.

   820609 – This line item funds the support staff of Health Quality Council. The
   revenue comes from the same source as 620606.

   820610 – This line item was recently established by the Controlling Board for the
   Health Insurance Premium Review Grant the Department received from the federal
   government.

   820611 – This line item was recently established by the Controlling Board for the
   Health Exchange Planning Grant the Department received from the federal
   government.

   820612 – This line item was recently established by the Controlling Board for the
   Consumer Assistance Grant the Department received from the federal government.

Capital Budget Information

   The Department has no capital budget requests or appropriations.

Glossary of State Budget Terms

   Allotment. Prior to the start of each fiscal year, agencies decide how they will
   allocate, or allot moneys for each appropriation line item. Appropriation authority is
   allocated to spending authority codes (SACs), which are created for each line item.
   Operating appropriation line items are allotted on a quarterly or annual basis in the
   accounting system. See definitions for SAC and Object Codes below. Also, the entire
   appropriation of a line item is not always allotted. See definitions for unallotted and
   unassigned amount.




                                           63
Appropriation. An authorization granted by either the Ohio General Assembly or
the Controlling Board to make budgetary expenditures and to incur obligations for
specific purposes. An appropriation limits the amount that may be spent for a given
purpose in a given period of time. No appropriation may be made for a period longer
than two years in accordance with the state’s constitution. (Article II, Section 22)

Appropriation Line Item (ALI). ALI names indicate the specific purpose of
amounts appropriated or expended. ALI codes are six character codes used in the
accounting system for budgetary reporting and control. The first three characters
identify the administering agency, division, or activity responsible for the specific
purpose. The last three characters indicate the specific purpose. For example, in the
General Revenue Fund (GRF) and a few other funds, 100 is used to consistently
designate Personal Services; 200 for maintenance; 300 for equipment; 320 or 321 for
a combination of Equipment, Maintenance, or Personal Services; 400 series for
Special Purpose ALI’s operational to the agency; and the 500 series for subsidy. In
other funds, the 600 series is used for multiple purposes. In any fund, the 700 and
800 series are reserved for Capital Improvements and the 900 series usually indicates
a non-expense, such as revenue distribution payments or unique interfund transfers.
When necessary, the 900 series may be used for Capital Improvements. In these
cases, the ALI would begin with the letters “CAP” to designate Capital
Improvements. Only accounts with 4 or 6 are not restricted to object categories
indicated by the beginning number or number series.

Biennium. A two-year appropriation period used by state government that begins
July 1 and ends 24 months later on June 30. For operating funds the two-year period
begins on the even numbered year and for capital funds the two-year period begins on
the odd numbered year.

Budget. A plan for the financial operation of an agency, program, or project that
estimates proposed expenditures and obligations for a given period and a proposed
means of financing them.

Budget Fund Group. The categories used to group similar funds for Ohio’s
budgetary reporting purposes. Ohio's funds are categorized into fund groups
according to their revenue sources and the purposes for which they are used. For
more detailed information on Budget Fund Groups refer to Section II of the manual.

Budget Stabilization Fund (BSF). This fund is created in section 131.43 of the
Revised Code and is commonly referred to as the Rainy Day Fund. The BSF receives
a portion of the annual “surplus revenue” in the General Revenue Fund as defined in
section 131.44. The statutory goal is for the BSF to contain, at the end of each fiscal
year, a balance that is approximately equal to five percent of the previous fiscal year’s
GRF revenue. Update – general amount The BSF can be used for any purposes that
are authorized by state law.




                                         64
Capital Budget. The capital budget is the budget for the acquisition or construction
of major capital items, including land, buildings and structures, and equipment and is
completed in two year periods beginning in odd numbered years. Moneys for these
projects are typically appropriated from funds whose revenue comes from bond sales.

Cash. Actual balance of moneys available to support disbursements and
appropriations. Cash is accounted for at the fund level in OAKS. All state special
revenue funds (revenue generated by the agency), federal grants, and bond funds must
have an available cash balance to support disbursements. Agencies that receive a
GRF appropriation are not required to monitor cash balances for disbursements.

Controlling Board. The Controlling Board is comprised of the Director of OBM, or
his or her designee, and six members of the Ohio General Assembly. The board
provides legislative oversight over certain capital and operating expenditures by state
agencies and has approval authority over various other state fiscal and purchasing
activities.

Custodial Funds. Separate fiscal and accounting entities that are not maintained
within the state treasury, but for which the state serves as steward. They are funds set
aside for a specific purpose that are generally not available for other state purposes.
A custodial fund must have specific language that establishes it in the custody of the
State Treasurer.

Debt Service. The payment of principal, interest, and associated costs on the state’s
bonded indebtedness. Debt service appropriations are usually made to the agency on
whose behalf the bonds were issued, and are usually paid from General Revenue
Funds (GRF). Add piece about DAS and Fund 026.

Disbursement. A transaction that reduces a fund’s cash balance.

Encumbrance. Reservation of appropriation typically representing purchase orders
and contracts entered into by state agencies or institutions of higher education.

Equipment. Durable goods such as computers, desks, chairs, or cars. Such
purchases are indicated with an object code of 30 with the exception of OPI
equipment purchases that have an object code of 20.

Executive Budget Book. Also known as the “Blue Book”, the Executive Budget
Book provides the legislature and the general public with the Governor’s funding
recommendations for the next biennium. Proposed funding levels, historical funding
patterns, and descriptive narratives are presented for each agency. The budget book
also includes information about the budget process, revenue sources and estimates,
economic forecasts, capital improvements, state funds, and special program areas.
The budget book is the executive’s financial plan for state government and is made
available via the Office of Budget and Management website at
http://www.obm.ohio.gov/budget/operating/.



                                         65
Expenditure. A payment against an appropriation that reduces the cash balance,
after legal requirements have been met. A fiscal year’s expenditures are payments
actually made in that fiscal year, regardless of the state fiscal year in which the
appropriations were reserved or encumbered for such payments.

Federal Special Revenue Fund Group (FED). The FED consists of funds whose
revenues are federal grants or entitlements. Expenditures for these funds are made in
accordance with state and federal law.

Fiscal Year (FY). A 12-month period of time used for fiscal planning and reporting
purposes. The state fiscal year (SFY) begins July 1 and ends the following June 30
(e.g., FY 2003 begins July 1, 2002 and ends June 30, 2003). The federal fiscal year
(FFY) begins October 1 and ends the following September 30.

Fund. An independent fiscal and accounting entity that records the sum of revenue
and disbursements in OAKS. A fund created in the state treasury usually has one or
more appropriation line items used to account for expenditures from the fund. If the
fund has only one appropriation line item, the ALI name often is the same as the fund
name. Funds accounted for in the state treasury are categorized according to their
revenue sources and the purposes for which they are used. See definition for Budget
Fund Group.

Fund Balance. The unencumbered cash remaining in a fund at the end of a specified
time period, usually the end of the fiscal year.

Fund Group. See Budget Fund Group.

General Revenue Fund (GRF). The primary operating fund of the state. This fund
receives the unrestricted revenues of the state, primarily from such revenue sources as
the personal income tax, the sales and use tax, the corporate franchise tax, and the
public utilities excise tax. The fund also receives significant federal revenues in
support primarily of human services programs. About 50% of the activities of state
government are funded through the GRF.

General Services Budget Fund Group (GSF). The General Services Budget Fund
Group consists of funds not easily classified into or appropriately accounted for in
one of the other budget fund groups. Many of the funds in this group receive
payments from other funds for services provided. Also included in this group are
funds that receive interagency grants. The Income Tax Reduction Fund (ITRF) is one
of the many funds in this group.

Income Tax Reduction Fund (ITRF). This fund is created in section 131.44 of the
Ohio Revised Code. The ITRF receives a portion of any annual “surplus revenue” in
the General Revenue Fund as defined in section 131.44. Revenue that goes to the
ITRF is used to temporarily reduce the state’s personal income tax rates. The fund



                                        66
was last used in FY 2000 for a reduction in tax rates for FY 2001 whereby cash was
transferred from the ITRF to the GRF to keep the balance sufficient for the year and
allow a temporary tax cut.

Invoice. Itemized listing showing delivery of the supplies or performance of the
service described in the order, and the date of the purchase or rendering of the
service, or an itemization of the work done, material supplied, or labor furnished, or
the sum pursuant to contract or obligation.

Lapse. Appropriations not encumbered or expended prior to their expiration.

Line Item Veto. A provision that allows a Governor to veto components of an
operating budget on an item-by-item basis. Expand definition with what is allowable

Maintenance. Expendable goods and supplies such as utilities, gasoline, postage,
paper, pens, repairs, telephone and travel. Such purchases are indicated with an
object code of 20.

Multi-Program Series Agencies. Agencies that perform more than one distinct
activity are divided into program series, which may have multiple programs.

Nonrecurring/One-Time Appropriation. A nonrecurring appropriation is an
appropriation made for a one-time item or project. Examples include capital or major
equipment purchases, special studies, and information technology upgrades.

Account Code. Six-character code used to categorize expense as defined by state
accounting.

Ohio Administrative Knowledge System (OAKS). Statewide ERP system that
consists of a number of modules including, finance and procurement, human
resources, asset management, budgeting etc.

Operating Budget. The budget established for operation of a state agency or
program, typically based on legislative appropriation. In Ohio, the operating budget
is generally completed for two-year periods beginning with even numbered years, for
example, fiscal years 2006 and 2007.

Permanent or Codified Law. Language that remains in effect indefinitely and is
codified in the Ohio Revised Code. (online at onlinedocs.andersonpublishing.com) It
remains in effect beyond the end of the fiscal biennium until it is repealed or amended
by the General Assembly. Permanent law sections are usually subject to voter
referendum and, therefore, unless a referendum petition is filed or a bill specifies
otherwise, permanent law becomes effective ninety days after a bill passed by the
General Assembly is filed by the Governor in the Office of the Secretary of State.




                                        67
Performance Budgeting. Performance budgeting is similar to program budgeting.
Performance budgets are constructed by program but focus on program goals and
objectives; measured by short-term outputs, projected longer term outcomes, and
cost/benefits analysis. Appropriations are not only linked with programs, but also
with expected results specified by these performance criteria.

Personal Services. Payroll, including fringe benefits, and related services such as
consultants, physicians, and temporary services. Such purchases are indicated with
an object code of 10 (personnel services) or 13 (contracted or purchased personnel
services).

Program. A program has a narrower, more targeted focus on a specific type of
activity that promotes the general objective addressed by the program series.
Programs are grouped together under a program series title. Note that programs are
defined by activities, not dollars spent.

Program Budgeting. Program budgeting refers to budgets that are formulated and
appropriations that are made on the basis of expected results of services to be carried
out by programs. The focus on outcomes is usually over multiple years. The current
budget formulation is based on program series and programs. In order to do this, an
agency’s line items are grouped by program series.

Program Series. Each program series represents a governmental activity or closely
related group of activities intended to address an identified need, objective or
problem. A program series corresponds with a major area of focus or goal for a state
agency and in most cases is composed of two or more programs.

Purchase Order (ORD). Document used to reserve allotment in OAKS for goods or
services and to describe to the vendor the goods and services required.

Reappropriation. Legislative action that provides for the reauthorizing of a previous
capital appropriation for another two-year biennium. The reappropriations bill is
necessary because the General Assembly cannot appropriate beyond a biennium and
many times agencies do not spend what is in the current capital bill or the current
reappropriations bill by the end of the fiscal year. However, they will continue to
need the appropriation or a portion of the appropriation for projects designated in
those bills. The reappropriations bill often serves as a legislative vehicle for
corrective items from the operating budget.

Revenue. The amount of cash, including intrastate receipts and excluding operating
transfers-in, received in a fund during a budget period. Revenues are classified by
major sources.

Revenue Source Code. Three-character code used to categorize revenue as defined
by state accounting. The directory of all revenue source codes used in the state’s




                                        68
accounting system can be located on OBM’s website at
http://www.obm.ohio.gov/sa/revsrc.asp.

Single Program Series Agencies. For budget purposes, small agencies are generally
single program series agencies, as they usually have a more narrowly defined
purpose.

State Special Revenue Fund Group (SSR). The State Special Revenue Budget
Fund Group consists of funds that receive specific revenues for specified activities
that are required by law.

Subsidy. Moneys disbursed to public entities or other recipients that benefit a third
party. The state does not receive a service or product from the use of these moneys.
Such distributions are indicated with an object code of 50.

Temporary Law. Temporary law in the operating budget includes appropriations,
language describing the use of appropriations, and other uncodified law that is related
to the implementation of the operating budget. Temporary law is found in the agency
appropriation sections and in the back of the budget act after the appropriation
sections. Appropriations must be made in temporary law because an appropriation
cannot be made for a longer period than two years (Article II, Section 22 of the Ohio
Constitution). Temporary law in the operating budget that meets the requirements of
Section 1.471 of the Revised Code becomes effective immediately when the
Governor signs a bill passed by the General Assembly. Unless otherwise indicated in
the bill, temporary law in the operating budget expires at the end of the operating
biennium. If a language item should remain in effect indefinitely, codification of the
item is appropriate.

Uncodified Law. Uncodified law is law that is not permanent and is therefore not
codified in the Revised Code. Some uncodified law is temporary.

Voucher. OAKS spending document transaction that initiates payment to a vendor
and serves as a basis for distributing moneys. Used to transmit a claim for payment
and evidentiary matter related to the claim.

Warrant. A disbursement document (check) created after a voucher has been
approved for payment. A warrant is an order drawn upon the Treasurer of State by
the Auditor of State to pay a specified amount, including an order to make a payment
to a financial institution for the transfer of funds by direct deposit or electronic
transfer.

Zero-Based Budgeting. Exercise required by selected agencies where their budget
requests start out by describing the effect of having no authorized funding. For each
separate request for specific activities or groups of related activities in the agencies,
the agencies are required to submit justification for the funding request.




                                          69
Basic Financial Principles of State Accounting

   Key budget and control information
   Prepared by Office of Budget and Management, Sept. 2006

   The purpose of this information is to provide a basic fiscal introduction for agency
   managers. There are a number of resources that managers should consult in order to
   understand specific budgetary controls. Some of these include each agency’s internal
   fiscal area, the Office of Budge and Management’s State Accounting division (644-
   5759), and the agency budget analyst from the Office of Budget and Management
   (466-4034). Two specific documents are particularly helpful for additional
   information:

   Key Principles
   The following represent some key principles regarding the state’s financial policies
   and operations. While these may not be absolute for all circumstances, they represent
   good basic rules.

   •   Disbursements are limited to available cash in a fund.
       The state has over 900 different funds. Cash must be available in a fund before
       any payment can be disbursed. CAS allows agencies to verify available cash in a
       fund. While the appropriation amount represents the ceiling for spending from
       the fund, ultimately CAS will not process a payment if there is insufficient cash.

   •   Spending is limited to the amount of appropriation authority (ORC 131.33).
       OBM must certify that there is available appropriation authority before dollars
       can be encumbered or payments authorized. It should be understood that
       appropriation authority is different than available cash. Cases may arise when an
       agency has cash on hand and no appropriation authority or appropriation authority
       but no cash on hand. In either case, system edits will prohibit spending unless
       both cash and appropriation are available.

   •   Spending must benefit the agency and not another agency (ORC 131.331).
       When the General Assembly makes appropriations, those spending authorizations
       are designated for a specific agency. Document review by OBM’s State
       Accounting division verifies which agency is benefiting from a purchase.

   •   Spending must be appropriately based on line item purpose.
       The line item number has meaning. 100 can be used only for personal services,
       200 can only be used for maintenance expenses. 300 can be used only for
       equipment. 321 can be used for any operating expense, but not subsidy expenses.
       The 400 series refers to special purpose accounts. 500 series line items designate
       subsidy accounts and operating expenses cannot be paid from those items. Similar
       rules apply for other line items. Line item names are also important. Spending
       must be consistent with the name and definition of the line item.



                                           70
•   Spending must be for public purposes generally.
    The state must receive something in return for its expenditures and subsidies must
    be properly authorized and consistent with the agency’s purpose. The state does
    not make charitable contributions, purchase alcoholic beverages for consumption,
    or allow expense accounts or “entertainment” expenses. Agencies’ purchases
    must be for public purposes and must be consistent with their mission and legal
    authority.

•   Transactions must comply with applicable laws and rules.
    All purchases must follow and adhere to state purchasing laws, regulations, and
    policies. Certain contractual relations are prohibited with certain campaign
    contributors (ORC 3517.13). Purchases must also comply with the applicable
    purchasing laws, Controlling Board laws and procedures, the state travel rule,
    printing laws, and other laws and rules. Consult with agency purchasing experts
    or the Office of State Purchasing at the Department of Administrative Services for
    more information.

•   Bills must be paid promptly (ORC 126.30).
    Generally, the state must pay its bills within 30 days or the state is required to pay
    interest accrued to those to whom payment is due.

•   Payments may not be made in advance.
    The state pays for goods and services only after they are received.

•   Goods and services are paid for in fiscal year received.
    The state avoids shifting obligations between fiscal years.

•   Payment cannot be made without a proper Federal ID number (W-9).
    The Internal Revenue Service has become increasingly strict with Ohio regarding
    the state’s verification for accuracy of vendor identification numbers. OBM does
    not process payments to anyone who does not have a W-9 on file with the State
    Accounting division.

•   Travel Reimbursement must be in compliance with the state’s travel rule.
    Employees may be reimbursed for business travel expenses. The reimbursement
    must be in accordance with the State travel rule (see Appendix D). The travel
    reimbursement process consists of two steps. First, the traveler has to request
    travel authorization before the trip. Second, the traveler requests reimbursement
    after the trip has occurred, referencing the authorization. Both steps are processed
    electronically via the Ohio Administrative Knowledge System or OAKS.

•   The Department follows the State Procurement law in purchasing goods and
    services by using the purchasing manual from the Department of
    Administrative Services. While the purchasing process is decentralized,
    meaning each division handles its own purchasing needs, all purchases have to be
    reviewed and approved centrally due to the complexity of the state purchasing


                                          71
      guidelines. Currently the Department uses a Sharepoint site for the procurement
      officer and coordinator to review, approve and document purchases. For detailed
      information, refer to Appendix C, DAS Purchasing and Reimbursement policy.

Records Retention Program

   The Department has a comprehensive records retention program led by Information
   Technology and Security. The complete schedule can be found on our website at the
   following address: http://www.insurance.ohio.gov/Reports/RecRetention.pdf. For
   specific questions regarding records retention, please contact Information Technology
   and Security or Tina Chubb, the Department’s records administrator.




                                          72
Section 5    Personnel Information and Policies

Number and Types of Employees

   The Department as of October 25, 2010 has 272 employees, 266 full-time and 6 part-
   time.

All Employees and Position Classifications


Abbott, Beverly          Executive Secretary 1              Exempt   Full-Time   Classified
Adengada, Sharath        Database Admin. Specialist 3       Union    Full-Time   Classified
Adusei-Hawkins,          Ins. Exam./Analyst Spvr.           Exempt   Full-Time   Classified
Georgina
Allipuram, Ravi          Data Base Administrator 3          Exempt   Full-Time   Classified
Amerine, Amy             Attorney 5                         Exempt   Full-Time   Unclassified
Anderson, Douglas        Deputy Director 6                  Exempt   Full-Time   Unclassified
Andres, Amy              Assistant Director 4               Exempt   Full-Time   Unclassified
Angeleno, Patricia       Ins. Complaint Analyst 2           Union    Full-Time   Classified
Ankrom, Barry            Ins. Examiner/Analyst              Union    Full-Time   Classified
Arif, Mohammad           Ins. Examiner/Analyst              Union    Full-Time   Classified
Atkisson, Daniel         Ins. Compliance Supervisor         Exempt   Full-Time   Classified
Baack, James             Ins. Complaint Analyst 1           Union    Full-Time   Classified
Baader, Valerie          Ins. Contract Analyst 5            Union    Full-Time   Classified
Bain, Brian              Ins. Complaint Analyst 3           Union    Full-Time   Classified
Baker, Lynette           Ins. Compliance Manager            Exempt   Full-Time   Classified
Baker, Robert            Ins. Compliance Examiner 3         Union    Full-Time   Classified
Baldwin, Joya            Ins. Licensing Examiner            Union    Full-Time   Classified
Barney, David            Ins. Investigation Administrator   Exempt   Full-Time   Classified
Bartlett, Malika         Policy Staff                       Exempt   Full-Time   Unclassified
Becker, Jeffrey          Ins. Examiner/Analyst Spvr.        Exempt   Full-Time   Classified
Beckman, Benjamin        Ins. Actuarial Analyst 4           Union    Full-Time   Classified
Beetch, Rodney           Ins. Compliance Supervisor         Exempt   Full-Time   Classified
Behrendt, Jennifer       Administrative Assistant 3         Exempt   Full-Time   Classified
Bennett, Jennifer        Ins. Licensing Examiner            Union    Full-Time   Classified
Bergman, Lindsay         Administrative Staff               Exempt   Full-Time   Unclassified
Bhaskaran, Dimple        Policy Staff                       Exempt   Part-Time   Unclassified
Bidlake, Deborah         Fiscal Specialist 2                Union    Full-Time   Classified
Biler, Timothy           Ins. Examiner Administrator 1      Exempt   Full-Time   Classified
Black, Patty             Ins. Licensing Supervisor          Exempt   Full-Time   Classified
Blosser, Keith           Attorney 5                         Exempt   Full-Time   Unclassified
Boston, Mark             Ins. Examiner/Analyst              Union    Full-Time   Classified
Bowers, Angel            Ins. Investigation Officer 2       Union    Full-Time   Classified
Bradley, Jacqueline      Ins. Examiner/Analyst              Union    Full-Time   Classified


                                         73
Brewer, Gerald        Mail Clerk/Messenger            Union    Full-Time   Classified
Brown, Barbara        Administrative Assistant 2      Exempt   Full-Time   Classified
Brown, Felisa         Administrative Assistant 3      Exempt   Full-Time   Classified
Bruggeman, Dale       Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Brugh, Michelle       Deputy Director 6               Exempt   Full-Time   Unclassified
Burchfield, Gary      Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Burkart, James        Attorney 4                      Exempt   Full-Time   Unclassified
Burnell, Cynthia      Administrative Staff            Exempt   Full-Time   Unclassified
Butterworth, James    Ins. Contract Analyst 3         Union    Full-Time   Classified
Byrd, Maria           Ins. Examiner/Analyst           Union    Full-Time   Classified
Castrodale, James     Ins. Examiner/Analyst Spvr.     Exempt   Full-Time   Classified
Cathey, Linda         Ins. Complaint Analyst 1        Union    Full-Time   Classified
Chambers, Kyrsten     Policy Staff                    Exempt   Full-Time   Unclassified
Chaney, Tate          Management Analyst Spvr. 2      Exempt   Full-Time   Classified
Chase, Elizabeth      Administrative Assistant 3      Exempt   Full-Time   Classified
Chrappah, Felix       Infrastructure Specialist 2     Union    Full-Time   Classified
Christian, Mark       Ins. Complaint Analyst 3        Union    Full-Time   Classified
Chubb, Tina           Administrative Staff            Exempt   Full-Time   Unclassified
Clayton, Richard      Ins. Examiner/Analyst           Union    Full-Time   Classified
Cook, David           Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Crump, Jacquelyn      Ins. Contract Analyst 3         Union    Full-Time   Classified
Curtin, Sarah         Administrative Staff            Exempt   Full-Time   Unclassified
Daniels, Rhonda       Ins. Licensing Examiner         Union    Full-Time   Classified
Davis, Julius         Ins. Examiner/Analyst           Union    Full-Time   Classified
Deangelo, Alyson      Administrative Staff            Exempt   Full-Time   Unclassified
Debona, Steven        Ins. Investigation Officer 2    Union    Full-Time   Classified
Demory, Joel          Ins. Investigation Supervisor   Exempt   Full-Time   Classified
Denhard, Robert       Public Information Officer 2    Exempt   Full-Time   Classified
Diehl, Gary           Ins. Investigation Officer 2    Union    Part-Time   Classified
Diggs, Cathy          Ins. Complaint Analyst 3        Union    Full-Time   Classified
Doll, Renee           Administrative Assistant 3      Exempt   Full-Time   Classified
Dorris, Tomi          Attorney 4                      Exempt   Full-Time   Unclassified
Dorsey, Tynesia       Deputy Director 5               Exempt   Full-Time   Unclassified
Dozier, Derrick       Ins. Complaint Analyst Spvr.    Exempt   Full-Time   Classified
Dunbar, Jarrett       Management Analyst Spvr. 1      Exempt   Full-Time   Classified
Early, Crystal        Administrative Assistant 1      Union    Full-Time   Classified
Ebert, Jeffrey        Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Effiong, Valeria      Ins. Complaint Analyst 3        Union    Full-Time   Classified
Ehlinger, Garth       Ins. Contract Analyst 5         Union    Full-Time   Classified
Ellis, Marjorie       Ins. Contract Analyst Manager   Exempt   Full-Time   Classified
Elston, Matthew       Administrative Staff            Exempt   Full-Time   Unclassified
Emig, Trent           Ins. Contract Analyst 5         Union    Full-Time   Classified
Esprit, Jonathan      Fiscal Specialist 2             Union    Full-Time   Classified
Farrington, Barbara   Attorney 5                      Exempt   Full-Time   Unclassified
Ferris, Jeffrey       Ins. Examiner/Analyst           Union    Full-Time   Classified


                                     74
Finkler, David            Ins. Examiner/Analyst             Union    Full-Time   Classified
Flake, Kevin              IT Architect/Consultant 1         Union    Full-Time   Classified
Friend, William           Public Information Officer 1      Exempt   Full-Time   Classified
Garba, Ibrahim            Business Process Analyst 2        Union    Full-Time   Classified
Gibson, Ryan              Ins. Examiner/Analyst             Union    Full-Time   Classified
Ginther, Shannon          Administrative Staff              Exempt   Full-Time   Unclassified
Glick, Carly              Deputy Director 4                 Exempt   Full-Time   Unclassified
Goldstein, Amy            Attorney 5                        Exempt   Full-Time   Unclassified
Green, Sharon             Administrative Assistant 3        Exempt   Full-Time   Classified
Guess, Brent              Ins. Complaint Analyst 3          Union    Full-Time   Classified
Haas, Jerry               Ins. Contract Analyst 4           Union    Full-Time   Classified
Hampton, Carson           Ins. Actuarial Analyst 3          Union    Full-Time   Classified
Hannah, Teresa            Infrastructure Specialist 2       Union    Full-Time   Classified
Harrington, William       Ins. Examiner Administrator 1     Exempt   Full-Time   Classified
Hauck, Benjamin           Ins. Compliance Examiner 2        Union    Full-Time   Classified
Hayward, Rebecca          Public Information Officer 1      Exempt   Full-Time   Classified
Heskett, Lynn             Public Information Officer 1      Exempt   Full-Time   Classified
Hess, Thomas              Ins. Actuarial Analyst 5          Exempt   Full-Time   Classified
Hibbs, Aaron              Ins. Examiner/Analyst             Union    Full-Time   Classified
Hightower, Katriece       Fiscal Specialist 2               Union    Full-Time   Classified
Hinkle, Roger             Ins. Investigation Officer 2      Union    Full-Time   Classified
Hollingsworth, Leonette   Ins. Complaint Analyst 3          Union    Full-Time   Classified
Hombach, Stephen          Attorney 5                        Exempt   Full-Time   Unclassified
Howard, Vernard           Ins. Examiner/Analyst             Union    Full-Time   Classified
Hronek, Eric              Ins. Examiner/Analyst             Union    Full-Time   Classified
Hudson, Mary Jo           Director 3                        Exempt   Full-Time   Unclassified
Hughes, Melissa           Ins. Licensing Examiner           Union    Full-Time   Classified
Hughes, Virgil            Business Administrator 2          Exempt   Full-Time   Classified
Hugo, Vicky               Ins. Examiner/Analyst             Union    Full-Time   Classified
Hurm, Virginia            Ins. Complaint Analyst 2          Union    Full-Time   Classified
Hutchison, Mark           Infrastructure Specialist 3       Union    Full-Time   Classified
Ingram, Robin             Ins. Licensing Examiner           Union    Full-Time   Classified
Irvin-Brown, Christine    Fiscal Officer 2                  Exempt   Full-Time   Classified
Jackson-Carson, Phyllis   Ins. Licensing Examiner           Union    Full-Time   Classified
James, Eric               Deputy Director 6                 Exempt   Full-Time   Unclassified
Jameson, Kimberly         Ins. Contract Analyst 5           Union    Full-Time   Classified
Jarrett, Jana             Ins. Investigation Supervisor     Exempt   Full-Time   Classified
Jewel, Anne               Deputy Director 6                 Exempt   Full-Time   Unclassified
Jones, Cheryl             Ins. Investigation Officer 2      Union    Full-Time   Classified
Kabealo, Kenneth          Ins. Examiner/Analyst             Union    Full-Time   Classified
Keeler, Holly             Certification/Licensure Exam. 2   Union    Full-Time   Classified
Kelley, Robert            Ins. Contract Analyst 5           Union    Full-Time   Classified
Klinkosz, Paulina         Ins. Complaint Analyst 1          Union    Full-Time   Classified
Kochman, Martin           Management Analyst Spvr. 1        Exempt   Full-Time   Classified
Kostoff, Nicholas         Ins. Examiner/Analyst Spvr.       Exempt   Full-Time   Classified


                                         75
Kung, Chantana       Infrastructure Specialist 3       Union    Full-Time   Classified
Lacey, Raymond       Administrative Assistant 2        Exempt   Full-Time   Classified
Lacich, Dominic      Network Administration Mgr.       Exempt   Full-Time   Classified
Lane, Diana          Ins. Complaint Analyst 1          Union    Full-Time   Classified
Lawrence, Nicole     Ins. Investigation Officer 2      Union    Full-Time   Classified
Layson, Donald       Ins. Compliance Examiner 3        Union    Full-Time   Classified
Leitz, Ginger        Human Capital Mgt. Sr. Anal.      Exempt   Full-Time   Classified
Leming, Jennifer     Ins. Actuarial Analyst 2          Union    Full-Time   Classified
Lewis, Emili         Customer Service Assistant 1      Union    Full-Time   Classified
Lodge, Connie        Attorney 5                        Exempt   Full-Time   Unclassified
Loomis, Lynda        Deputy Director 6                 Exempt   Full-Time   Unclassified
Lopez, Andres        Ins. Investigation Officer 2      Union    Full-Time   Classified
Lopez, Gretchen      Ins. Complaint Analyst Mgr.       Exempt   Full-Time   Classified
Lowe, Sanna          Ins. Licensing Examiner           Union    Full-Time   Classified
Lowry, Kimberly      Human Capital Management          Exempt   Full-Time   Classified
                     Mgr.
Luke, James          Ins. Examiner/Analyst             Union    Full-Time   Classified
Lynch, Jennifer      Policy Staff                      Exempt   Full-Time   Unclassified
Manley, Elizabeth    Ins. Investigation Officer 2      Union    Full-Time   Classified
Mason, Cory          Software Development Spec. 2      Union    Full-Time   Classified
May, James           Ins. Examiner/Analyst             Union    Full-Time   Classified
Maynard, Kelly       Administrative Assistant 4        Exempt   Full-Time   Unclassified
Mays, Delphine       Labor Relations Officer 2         Exempt   Full-Time   Classified
Mazak, Mary Ellen    Certification/Licensure Exam. 1   Union    Part-Time   Classified
McCloskey, Beth      Ins. Investigation Officer 2      Union    Full-Time   Classified
McDanel, Colleen     Ins. Complaint Analyst 2          Union    Full-Time   Classified
McDaniel, Margaret   Ins. Complaint Analyst 1          Union    Full-Time   Classified
McIlvoy, Edward      Ins. Licensing Examiner           Union    Full-Time   Classified
McMeans, Howard      Ins. Complaint Analyst 3          Union    Full-Time   Classified
Meeks, Floyd         Ins. Examiner/Analyst Spvr.       Exempt   Full-Time   Classified
Melton, Katherine    Attorney 5                        Exempt   Full-Time   Unclassified
Mesler, Patricia     Ins. Examiner/Analyst             Union    Full-Time   Classified
Meyers, Joyce        Ins. Complaint Analyst 3          Union    Full-Time   Classified
Miller, Mary         Administrative Staff              Exempt   Full-Time   Unclassified
Mobley, Gregory      Ins. Complaint Analyst 3          Union    Full-Time   Classified
Moeller, Christine   Public Information Officer 1      Exempt   Full-Time   Classified
Moody, Linda         Ins. Licensing Examiner           Union    Full-Time   Classified
Moore, Marlene       Administrative Assistant 4        Exempt   Full-Time   Classified
Moran, Jacob         Ins. Examiner/Analyst             Union    Full-Time   Classified
Morgan, Robert       Info. Technology Consultant 3     Exempt   Full-Time   Classified
Moster, Leroy        Ins. Examiner/Analyst             Union    Full-Time   Classified
Motter, Maureen      Ins. Contract Analyst Manager     Exempt   Full-Time   Classified
Moulin, Darcy        Attorney 5                        Exempt   Full-Time   Unclassified
Mursch, Jennifer     Ins. Licensing Examiner           Union    Full-Time   Classified
Nagorny, Edward      Ins. Examiner/Analyst             Union    Full-Time   Classified


                                    76
Neiswander, Thomas     Ins. Investigation Supervisor   Exempt   Full-Time   Classified
Nesbitt, Marva         Ins. Complaint Analyst 3        Union    Full-Time   Classified
Newlin, Charlene       Ins. Complaint Analyst 1        Union    Full-Time   Classified
Newton, Lori           Ins. Complaint Analyst 2        Union    Full-Time   Classified
Nutter, Barry          Ins. Investigation Officer 2    Union    Part-Time   Classified
Nyangoro, Methuselah   Ins. Examiner/Analyst           Union    Full-Time   Classified
Oh, John               Ins. Actuarial Analyst 3        Union    Full-Time   Classified
Parker, Mary           Executive Secretary 1           Exempt   Full-Time   Classified
Patel, Jyotika         Ins. Examiner/Analyst           Union    Full-Time   Classified
Pease, Dwaine          Ins. Complaint Analyst 3        Union    Full-Time   Classified
Phillips, Julie        Management Analyst Spvr. 2      Exempt   Full-Time   Classified
Piatt, Clyde           Ins. Examiner/Analyst Spvr.     Exempt   Full-Time   Classified
Pierce, Jeffrey        Info. Technology Consultant 3   Exempt   Full-Time   Classified
Pokorny, Ronald        Publications Editor             Union    Full-Time   Classified
Pollock, John          Ins. Compliance Examiner 2      Union    Full-Time   Classified
Porto, Molly           Ins. Compliance Examiner 3      Union    Full-Time   Classified
Preston, William       Ins. Contract Analyst Manager   Exempt   Full-Time   Classified
Price, Angela          Ins. Investigation Officer 2    Union    Full-Time   Classified
Proehl, Joanne         Office Assistant 1              Union    Full-Time   Classified
Pullen, Lindsey        Ins. Investigation Officer 2    Union    Full-Time   Classified
Radecky, Louis         Ins. Examiner/Analyst           Union    Full-Time   Classified
Radel, Dwight          Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Rader, Dirk            Ins. Contract Analyst 5         Union    Full-Time   Classified
Rall, Mitchell         Software Development            Union    Full-Time   Classified
                       Specialist 4
Real, Susan            Policy Staff                    Exempt   Full-Time   Unclassified
Reedus, Teresa         Ins. Contract Analyst 5         Union    Full-Time   Classified
Reeg, Christina        Administrative Assistant 4      Exempt   Full-Time   Classified
Reynolds, Margaret     Project Manager 3               Exempt   Full-Time   Classified
Rhoades, Rick          Ins. Examiner/Analyst Spvr.     Exempt   Full-Time   Classified
Rice, Larry            Ins. Examiner/Analyst           Union    Full-Time   Classified
Richardson, Mary       Ins. Contract Analyst 5         Union    Full-Time   Classified
Rickman, Phyllis       Fiscal Officer 2                Exempt   Full-Time   Classified
Roach, Robert          Software Development            Union    Full-Time   Classified
                       Specialist 4
Roehll, Randall        Ins. Complaint Analyst 2        Union    Full-Time   Classified
Rose, Monica           Executive Secretary 1           Exempt   Full-Time   Classified
Rossbach, William      Administrative Staff            Exempt   Full-Time   Unclassified
Royce, Kathryn         Ins. Licensing Examiner         Union    Full-Time   Classified
Rupp, Jeffrey          Ins. Examiner Administrator 1   Exempt   Full-Time   Classified
Rupp, Kevin            Ins. Examiner/Analyst Spvr.     Exempt   Full-Time   Classified
Ryan, Molly            Administrative Staff            Exempt   Full-Time   Unclassified
Sarni, Ryan            Attorney 5                      Exempt   Full-Time   Unclassified
Schaefer, Carol        Attorney 5                      Exempt   Full-Time   Unclassified
Schimpf, Laura         Administrative Assistant 1      Union    Full-Time   Classified


                                      77
Schoen, Frederick     Business Process Analyst 3        Union    Full-Time   Classified
Schroer, Bradley      Ins. Actuarial Analyst 4          Union    Full-Time   Classified
Sefa, Osei            Ins. Complaint Analyst 3          Union    Full-Time   Classified
Selcer, Kevin         Ins. Investigation Officer 2      Union    Full-Time   Classified
Sells, Rebecca        Administrative Assistant 2        Exempt   Full-Time   Classified
Seri, Wendy           Administrative Assistant 3        Exempt   Full-Time   Classified
Setters, Linda        Ins. Investigation Officer 2      Union    Full-Time   Classified
Severs, Patricia      Ins. Examiner/Analyst             Union    Full-Time   Classified
Sheets, Michele       Ins. Examiner/Analyst             Union    Full-Time   Classified
Shidaker, Susan       Ins. Examiner/Analyst             Union    Part-Time   Classified
Short, Leslie         Ins. Complaint Analyst 1          Union    Full-Time   Classified
Shroy, Lana           Ins. Investigation Officer 2      Union    Full-Time   Classified
Skal, Andrew          Human Capital Management          Exempt   Full-Time   Classified
                      Mgr.
Smith, Larry          Ins. Complaint Analyst 1          Union    Full-Time   Classified
Smith, Patricia       Ins. Complaint Analyst Spvr.      Exempt   Full-Time   Classified
Smith, Rochelle       Secretary                         Union    Full-Time   Classified
Smith, Sonia          Ins. Licensing Examiner           Union    Full-Time   Classified
Smith-Bain, Barbara   Ins. Complaint Analyst Spvr.      Exempt   Full-Time   Classified
Snider, Vickie        Administrative Assistant 3        Exempt   Full-Time   Classified
Snow, Tracy           Ins. Examiner/Analyst Spvr.       Exempt   Full-Time   Classified
Somogyi, Kimberly     Ins. Examiner/Analyst             Union    Full-Time   Classified
Spencer, Kathryn      Ins. Contract Analyst 4           Union    Full-Time   Classified
Stang, Susan          Certification/Licensure Exam. 1   Union    Part-Time   Classified
Stephan, Michael      Business Process Analyst 3        Union    Full-Time   Classified
Stephen, Jeanine      Info. Technology Consultant 3     Exempt   Full-Time   Classified
Stewart, Lori         Management Analyst Spvr. 1        Exempt   Full-Time   Classified
Stinson, Mark         Ins. Complaint Analyst 3          Union    Full-Time   Classified
Stiverson, Chad       Ins. Investigation Officer 2      Union    Full-Time   Classified
Stovall, Heather      Ins. Complaint Analyst Spvr.      Exempt   Full-Time   Classified
Stovall, Larry        Ins. Compliance Examiner 3        Union    Full-Time   Classified
Stroup, Robert        Management Analyst Spvr. 2        Exempt   Full-Time   Classified
Sullivan, Sean        Ins. Complaint Analyst 1          Union    Full-Time   Classified
Thomas, Seserlie      Administrative Assistant 1        Union    Full-Time   Classified
Thompson, Doris       Fiscal Specialist 2               Union    Full-Time   Classified
Thompson, Kendra      Public Information Officer 1      Exempt   Full-Time   Classified
Turner, Terri         Fiscal Specialist 2               Union    Full-Time   Classified
Vamos, Stephen        Attorney 5                        Exempt   Full-Time   Unclassified
Vandenbark, Jeffrey   Ins. Examiner/Analyst             Union    Full-Time   Classified
Vourvopoulos, Karen   Deputy Director 4                 Exempt   Full-Time   Unclassified
Wade, Jason           Ins. Actuarial Analyst 4          Union    Full-Time   Classified
Walker, John          Attorney 6                        Exempt   Full-Time   Unclassified
Wallace, Richard      Ins. Examiner/Analyst             Union    Full-Time   Classified
Washburn, Christi     Administrative Assistant 3        Exempt   Full-Time   Classified
Washburn, Lee Anne    Management Analyst Spvr. 1        Exempt   Full-Time   Classified


                                     78
Wasserstrom, Leslie    Ins. Contract Analyst 5        Union    Full-Time   Classified
Weber, Peter           Ins. Actuary Associate         Exempt   Full-Time   Unclassified
Wells, Donnie          Ins. Examiner/Analyst Spvr.    Exempt   Full-Time   Classified
West, Jacqueline       Ins. Licensing Manager 1       Exempt   Full-Time   Classified
Wheatley, Janice       Management Analyst Spvr. 2     Exempt   Full-Time   Classified
Wheeler, Melissa       Policy Staff                   Exempt   Full-Time   Unclassified
Wiech, Larry           Management Analyst Spvr. 1     Exempt   Full-Time   Classified
Wiggins, Diane         Fiscal Specialist 2            Union    Full-Time   Classified
Wilson, Marny          Ins. Investigation Officer 2   Union    Full-Time   Classified
Wright, Christine      Management Analyst Spvr. 2     Exempt   Full-Time   Classified
Wulliger, Walter       Ins. Actuarial Analyst 4       Union    Full-Time   Classified
Xia, Jianming          Deputy Director 5              Exempt   Full-Time   Unclassified
Yoakum-Dingus,         Management Analyst Spvr. 2     Exempt   Full-Time   Classified
Angela
Young, Terri           Ins. Complaint Analyst 3       Union    Full-Time   Classifed

All Unclassified Exempt Employees

Amerine, Amy           Attorney 5                     Exempt   Full-Time   Unclassified
Anderson, Douglas      Deputy Director 6              Exempt   Full-Time   Unclassified
Andres, Amy            Assistant Director 4           Exempt   Full-Time   Unclassified
Bartlett, Malika       Policy Staff                   Exempt   Full-Time   Unclassified
Bergman, Lindsay       Administrative Staff           Exempt   Full-Time   Unclassified
Bhaskaran, Dimple      Policy Staff                   Exempt   Part-Time   Unclassified
Blosser, Keith         Attorney 5                     Exempt   Full-Time   Unclassified
Brugh, Michelle        Deputy Director 6              Exempt   Full-Time   Unclassified
Burkart, James         Attorney 4                     Exempt   Full-Time   Unclassified
Burnell, Cynthia       Administrative Staff           Exempt   Full-Time   Unclassified
Chambers, Kyrsten      Policy Staff                   Exempt   Full-Time   Unclassified
Chubb, Tina            Administrative Staff           Exempt   Full-Time   Unclassified
Curtin, Sarah          Administrative Staff           Exempt   Full-Time   Unclassified
Deangelo, Alyson       Administrative Staff           Exempt   Full-Time   Unclassified
Dorris, Tomi           Attorney 4                     Exempt   Full-Time   Unclassified
Dorsey, Tynesia        Deputy Director 5              Exempt   Full-Time   Unclassified
Elston, Matthew        Administrative Staff           Exempt   Full-Time   Unclassified
Farrington, Barbara    Attorney 5                     Exempt   Full-Time   Unclassified
Ginther, Shannon       Administrative Staff           Exempt   Full-Time   Unclassified
Glick, Carly           Deputy Director 4              Exempt   Full-Time   Unclassified
Goldstein, Amy         Attorney 5                     Exempt   Full-Time   Unclassified
Hombach, Stephen       Attorney 5                     Exempt   Full-Time   Unclassified
Hudson, Mary Jo        Director 3                     Exempt   Full-Time   Unclassified
James, Eric            Deputy Director 6              Exempt   Full-Time   Unclassified
Jewel, Anne            Deputy Director 6              Exempt   Full-Time   Unclassified
Lodge, Connie          Attorney 5                     Exempt   Full-Time   Unclassified
Loomis, Lynda          Deputy Director 6              Exempt   Full-Time   Unclassified


                                      79
Lynch, Jennifer           Policy Staff                       Exempt     Full-Time    Unclassified
Maynard, Kelly            Administrative Assistant 4         Exempt     Full-Time    Unclassified
Melton, Katherine         Attorney 5                         Exempt     Full-Time    Unclassified
Miller, Mary              Administrative Staff               Exempt     Full-Time    Unclassified
Moulin, Darcy             Attorney 5                         Exempt     Full-Time    Unclassified
Real, Susan               Policy Staff                       Exempt     Full-Time    Unclassified
Rossbach, William         Administrative Staff               Exempt     Full-Time    Unclassified
Ryan, Molly               Administrative Staff               Exempt     Full-Time    Unclassified
Sarni, Ryan               Attorney 5                         Exempt     Full-Time    Unclassified
Schaefer, Carol           Attorney 5                         Exempt     Full-Time    Unclassified
Vamos, Stephen            Attorney 5                         Exempt     Full-Time    Unclassified
Walker, John              Attorney 6                         Exempt     Full-Time    Unclassified
Weber, Peter              Ins. Actuary Associate             Exempt     Full-Time    Unclassified
Wheeler, Melissa          Policy Staff                       Exempt     Full-Time    Unclassified
Xia, Jianming             Deputy Director 5                  Exempt     Full-Time    Unclassified

Human Resource Information

   Civil Service/Bargaining Status.

   State employment can be categorized in many ways. Employees are either in the
   classified or unclassified service. Classified employees are then either certified or
   provisional. Finally, all employees are bargaining unit exempt or non-exempt. These
   categories are described below:

      Classified Service. Classified employees are subject to examinations and other
      provisions of civil service law (ORC §124). The law or union contract governs
      employee discipline, and they have the right to appeal or grieve disciplinary
      actions. Classified employees have an inherit property interest in their positions
      and can only be removed following due process.

      Unclassified Service. Civil Service law recognizes the need for flexibility in
      filling certain policy-making positions and positions of trust. Most of these
      positions exempt from the classified service (ie unclassified) are listed in ORC
      §124.11. Unclassified employees include directors, assistant directors, deputy
      directors and others in comparable positions. Each agency has additional
      positions that are unclassified, normally because they involve a fiduciary
      relationship or significant policy responsibility. Unclassified employees serve at
      the pleasure of the appointing authority.

      A subset of the unclassified service is Administrative Staff positions. These
      positions are designated in statute and the language creating the position will
      indicate that the appointing authority shall fix the compensation of the particular
      position. For example, the Director is authorized by Section 3901.02 of the Ohio
      Revised Code to hire actuarial fellows and also an administrator of financial
      regulation services (Risk Assessment Division). The Department has a solid


                                           80
group of in-house actuaries, led by Mary Miller. The Department would need to
budget significantly more for use of outside actuarial services if it did not have
authority to hire and pay actuaries in this manner. Numerous boards and
commissions have administrative staff positions as well as units within some
departments.

Fall Back Rights for Unclassified Employees. Ohio Revised Code 124.11 (D)
sets forth the “fallback” rights for those employees who are appointed from a
certified position in the classified service to a position in the unclassified service
within the appointing authority’s agency. ORC 124.11 (D) provides, in relevant
part:

An appointing authority whose employees are paid directly by warrant of the
director of budget and management may appoint a person who holds a certified
position in the classified service within the appointing authority’s agency to a
position in the unclassified service within that agency. A person appointed
pursuant to this division to a position in the unclassified service shall retain the
right to resume the position and status held by the person in the classified service
immediately prior to the person’s appointment to the position in the unclassified
service, regardless of the number of positions the person held in the unclassified
service. An employee’s right to resume a position in the classified service may
only be exercised when an appointing authority demotes the employee to a pay
range lower than the employee’s current pay range or revokes the employee’s
appointment to the unclassified service. An employee forfeits the right to resume
a position in the classified service when the employee is removed from the
position in the unclassified service due to incompetence, inefficiency, dishonesty,
drunkenness, immoral conduct, insubordination, discourteous treatment of the
public, neglect of duty, violation of this chapter or the rules of the director of
administrative services, any other failure of good behavior, any other acts of
misfeasance, malfeasance, or nonfeasance in office, or conviction of a felony. An
employee also forfeits the right to resume a position in the classified service upon
transfer to a different agency.

Reinstatement to a position in the classified service shall be to a position
substantially equal to that position in the classified service held previously, as
certified by the director of administrative services. If the position the person
previously held in the classified service has been placed in the unclassified service
or is otherwise unavailable, the person shall be appointed to a position in the
classified service within the appointing authority’s agency that the director of
administrative services certifies is comparable in compensation to the position the
person previously held in the classified service. Service in the position in the
unclassified service shall be counted as service in the position in the classified
service held by the person immediately prior to the person’s appointment to the
position in the unclassified service. When a person is reinstated to a position in
the classified service as provided in this division, the person is entitled to all
rights, status, and benefits accruing to the position in the classified service during



                                      81
   the person’s time of service in the position in the unclassified service.

   Certified/Provisional. Certified employees are classified employees who have
   the full protections of classified status. These employees became certified by
   either passing a civil service examination and being selected from an eligible list
   created as a result of the exam (see “Civil Service Examinations” on page 5), or
   they were certified authomatically after serving for two years without an
   opportunity to take an exam. Provisional employees were hired in the absence of
   an eligible list.

   Bargaining Unit Exempt/Non-Exempt. Exempt employees are usually
   supervisors, managers or human resources professionals and are not in the
   bargaining unit. Their employment is government by civil service law. Non-
   exempt employees are in the bargaining unit. Their employment is governed by
   their union contract and some aspects of civil service law.

   For more information regarding employee classification issues, please contact the
   DAS Office of Policy Development at (614) 752-5393 or the DAS Office of
   Workforce Administration at (614) 728-9154.

Recruitment and the Hiring Process

The Department of Administrative Services (DAS), Human Resources Division
(HRD) offers a variety of recruitment services to state agencies. HRD posts vacant
state jobs, refers qualified candidates, and assists job applications. The Office also
helps agencies develop recruitment plans, especially for hard to fill positions.

Hiring classified employee is governed by civil service law. There are additional
requirements if the position is in the bargaining unit.

Entry Level Hiring. Civil service exams are given for many entry-level jobs. When
exams are given, those who pass the exam are ranked in order of their scores and
placed on an eligible list. Appointment to those entry-level jobs must be made from
the top ten available persons on the eligible list. When no list exists, or when there
are fewer than ten names on the list, an agency may seek authorization to appoint a
person who meets the minimum qualifications for the position.

Non-Entry Level Hiring. When hiring for positions for which no civil service exam
exists, appointments must be made according to union contract provisions (non-
exempt jobs) or agency policies on posting and selection (exempt jobs).

Unclassified. Hiring for unclassified positions is at the discretion of the appointing
authority.

All newly hired and promoted classified employees serve a probationary period,
which usually lasts six months. Employees who do not perform satisfactorily may be



                                         82
removed or returned to their former positions any time during the second half of the
probationary period. All employees are to be evaluated mid-way through probation,
at the end of probation, and annually thereafter. A statewide performance evaluation
system has been established; however, after consultation with DAS and appropriate
union representatives, agencies may implement alternate performance systems.

For more information, please contact the DAS Office of Classification and
Compensation at (614) 466-7795.

Personnel Actions (PA)

A Personnel Action (PA) is required to initiate and document any activity
significantly affecting any employee in state service. It is the PA that triggers any
adjustment in payroll records and results in appropriate compensation for services
performed. The PA must be processed in accordance with standard procedures, civil
service law, administrative rules and applicable collective bargaining agreements.
Since there are many actions possible and many variables associated with each
possibility, it is difficult to develop a single document that covers every situation.
However, many of the main issues in PA preparation have been addressed the PA
manual which is currently being updated by DAS.

The PA form can be categorized by approximate thirds. The top third requests data
identifying the employee. The midsection designates the type actions and specifies
the required codes. The bottom third provides space for additional information
pertaining to the individual, a remarks section, and official approval, disapproval,
notification and certification. All appropriate information in each of the three
sections must be provided. The Remarks Section is to be used for pay supplement
data, any explanatory or interpretive information, or for any notations in reference to
attachments.

There are two types of agencies, centralized and decentralized. There are 22
decentralized agencies and 44 centralized agencies plus various other boards and
commissions.

Decentralized agencies have been delegated some authority by the Department of
Administrative Service’s (DAS) Director to approve personnel actions according to
policy. DAS randomly checks personnel actions throughout the year. A compliance
review is performed annually and a report is issued listing any findings as a result of
the review.

Centralized agencies send all personnel actions to DAS for approval or disapproval.
The personnel actions are received and approved within 10 working days.

Currently, unclassified personnel actions are routed to the Governor’s Office if the
compensation is over $20.00 per hour for approval. Classified personnel actions are
routed to DAS Certification to verify whether or not there is a certification list that



                                         83
must be used for hiring or to determine that the agency can hire provisionally. After
the PA has been approved either by the decentralized agency or DAS Human
Resource Unit, they are forwarded to the DAS Records Unit.

For more information, please contact the DAS Office of State Services at (614) 466-
4194.

Classification and Compensation

Class Plan maintenance is assigned to the Department of Administrative Services
(DAS), per Ohio Revised Code 124.14. The State of Ohio currently has
approximately 2724 classifications. Modifications to the class plan are generally the
result of agency request, in the form of a proposal letter signed by the agency’s
appointing authority.

Classes which are exempt from collective bargaining are listed in the Ohio
Administrative Code 123:1-7-15; therefore, any creation, deletion and/or modification
to those classifications must adhere to the requirements of the ORC Chapter 119 rule
filing process.

Bargaining unit classifications do not require a public hearing and are created, deleted
and/or modified as a collaborative effort between the agency, the Human Resources
Division, and the Office of Collective Bargaining, the union.

Union-mandated reviews are conducted on a select number of classifications at the
request of the Union in accordance with the terms set forth by the respective
collective bargaining agreement.

   •   AFSCME may request a review of up to eight job classifications each year of
       the contract, per Article 36.05.

   •   1199 may request review of up to five classifications the first year of the
       contract, four classifications the second year, and three classifications the third
       year in accordance with Article 39.

   •   FOP and OSTA contracts have separates for class plan reviews.

Point Factor analysis is the primary method used to establish compensation for state
classifications. Generally, whenever a classification is created or modified, one
analyst is “on-point” for that classification. After the job analysis and spec writing is
complete, the analyst conducts a point factor analysis on the classification(s). The
analyst then distributes the final draft of the classification specification to a blind
panel (usually comprised of 3-4 other analysts) and each member of the panel
performs his or her own point factor analysis. The original analyst and the panel then
meet to discuss the point factor results and to determine a consensus rating, which
will ultimately determine pay range assignment.


                                         84
Position audits may be requested by employing agencies, but are more commonly
requested by employees. When a classified, exempt employee feels that he or she is
performing duties that are more consistent with another classification, he or she may
request a position audit. The audit may result in the requesting employee’s position
being upgraded to a higher classification, downgraded to a lower classification, or
remaining the same. If the employee is dissatisfied with the findings, he or she has
30 days to appeal to the State Personnel Board of Review and a reclassification
hearing may be held at the Board. Position audits are not permitted for bargaining
unit employees. If a bargaining unit employee feels he or she is performing duties
outside the scope of his or her classification, the union may be contacted and a
Working Out of Class grievance (WOC) may be filed against the employing agency.
WOCs are handled through the Office of Collective Bargaining.

Job analysis is a detailed examination of a job that is used to determine the duties
and requirements for its performance. In the State of Ohio, job analysis is mainly
used in the creation and/or revision of Position Descriptions, selection instruments,
training criteria and Position Specific Minimum Qualifications. Job analysis ensures
the content validity, job relatedness and legal defensibility of these products in
accordance with the EEOC Uniform Guidelines of 1978.

Position Specific Minimum Qualifications (PSMQs) are minimum qualifications
related to a specific position, which differ from a classification’s Minimum
Qualifications. PSMQs must be vetted through job analysis and sent to DAS for
approval prior to implementation. Upon receipt of a PSMQ request, DAS will review
the job analysis data, the proposed Position Description and any other relevant
documentation in order to determine the validity of the request. If the PSMQ is
determined to be necessary to the performance of an essential function of the position,
DAS will notify the requesting agency of approval and the agency may proceed with
implementation.

Civil Service Examinations are conducted in accordance with the Ohio Revised
Code 124.23. All applicants for classified state positions are subject to examination
with the exception of professional and certified service. These examinations are
under the control of the Director of the Department of Administrative Services. If an
applicant takes and passes the civil service examination, he or she becomes certified
in that classification, and his or her name and rank is placed on a certification eligible
list, which is then requested by agencies for selection purposes. Use of the
certification eligible list is required for hiring external candidates (non-bargaining
unit candidates who are external to the agency) except in cases where there are less
than ten names of certified candidates (ORC 124.27).

An applicant who has taken an examination is not eligible to take it again for the
same classification within a four-month period unless the examination has changed or
an alternate form of the examination is given (OAC 123:1-9-01). All applicants who
take civil service examinations have the right to request a test review or an inspection



                                          85
of their examination papers within 10 days of receiving notification of their scores
(OAC 123:1-9-01). If the applicant chooses to invoke this right, he/she will not be
eligible to take the examination again for four months from the time of the test
review. If an applicant wants to protest or challenge the examination(s), they must do
so in writing or else the challenge will not be considered. The only exception to this
requirement the Ohio Administrative Code (123:1-9-01) allows for is instances where
there are suspicions of cheating or misconduct that requires the director to investigate.

Proficiency examinations are selection instruments given to applicants when
agencies require that they demonstrate meeting the minimum qualifications of the
position. These instruments are developed as valid assessments through a job analysis
method, and are designed to assess whether individuals have the knowledge, skills,
and abilities that are prerequisite to the position. The Department of Administrative
Services plays two roles with proficiency instruments. We create and validate
proficiency examinations for the bargaining unit classifications for which we
currently have a civil service examination, and we serve as consultants to state
agencies by assisting them with creating and validating their own proficiency
instruments. The proficiency examinations that DAS creates and validates are usually
only for bargaining unit classifications. State agencies use the scores to assist them
with selecting a qualified bargaining unit internal candidate for the position in
accordance with Article 17.05 of the OCSEA bargaining unit contract. The Ohio
Administrative Code 124.09 and OCSEA bargaining unit contract (Article 17.06)
both protect proficiency instruments that DAS creates from being public records.

Agencies are required to complete the job analysis prior to creating a proficiency
instrument, establish scoring criteria and pass points, and make valid selection
decisions based on the testing results and all applicable laws, codes, and bargaining
unit provisions. The DAS will assist the agencies with any part of the process, from
the job analysis to selection recommendation. Proficiency instruments created by
agencies (with or without assistance from DAS) are only protected by the OCSEA
bargaining unit contract Article 17.06 for bargaining unit positions. Neither the Ohio
Administrative Code nor the Ohio Revised Code protects agency created proficiency
tests (with or without assistance from DAS) from being public records.

For more information, please contact the DAS Office of Classification and
Compensation at (614) 466-7795.

Personnel Action Upon Taking Office

Upon taking office, agency heads are required to designate certain exempt positions
within 60 days of assuming office. Three clerical and administrative support
employees may be designated exempt from the classified service. The designation
must occur within 60 days after taking office. After that date, no change in the
designation of exemptions can be made during the incumbency of the agency head
absent a legislative agency reorganization.




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   During the first several weeks of transition, it may be desirable to retain certain key
   managers and supervisors to ensure a smooth transition. Once identified, key
   administrative positions may be dual-filled or “overfilled” for a period of thirty days
   so that an incumbent administrator may train and transition an incoming administrator
   pursuant to ORC 124.30. In rare instances where a longer transition period is
   urgently required and staffing level supports it, a temporary position may be created
   and filled for a period not to exceed six months.

Union Contacts

   The Department’s bargaining unit employees are governed by the collective
   bargaining agreement entered into by the state of Ohio and OCSEA. The following
   individuals are the union contacts at the Department:

      Mike Davis, OCSEA Chapter President/Steward
      Cheryl Jones, Vice President
      Rhonda Daniels, Secretary
      Trisha Mesler, Treasurer
      Colleen McDanel, Member At Large/Steward
      Garth Ehlinger, Member At Large

Department Policy Manual

   The Department has an employee policy manual, which is provided to all new
   employees and is also accessible on the Department’s intranet.

Continuity of Operations Plan

   The Department has a comprehensive Continuity of Operations Plan (COOP) in
   place. The plan was written and maintained by the COOP manager, Jarrett Dunbar,
   using Ohio Emergency Management Agency (OEMA) guidelines. It is updated by
   the COOP team, consisting of representatives from each division of the Department.
   The plan establishes critical functions that need to be continued, those responsible for
   carrying out those functions and Department lines of succession/delegations of
   authority in the event a natural or unnatural disaster disrupts operations at the 50 W.
   Town Street facility.

Pandemic Flu Plan

   A subset of the Department COOP is the Pandemic Flu Plan. This comprehensive
   plan establishes the staffing levels needed to maintain the Department’s critical
   functions during a pandemic. The plan, created using Ohio Emergency Management
   Agency, Department of Administrative Services, Ohio Department of Health and
   Centers for Disease Control guidelines, was authored by and is maintained by the
   Continuity of Operations Plan Manager. The COOP manager oversees the Pandemic




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   Committee. This committee, consisting of representatives from each division, meets
   regularly to discuss issues and changes to the Plan.

New Employee Orientation

   The Ohio Department of Insurance conducts New Employee Orientation once every
   six months for all new hires. The program is designed to give employees an overview
   of what the department’s functions are as well as introducing the vast benefits that are
   available for all state employees. Guest speakers from each division provide a
   presentation on what their responsibilities are. The Union also provides a
   presentation as well as contract books for all collective bargaining unit employees.




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Section 6      Other Important Things to Know

6.1 Legislative Issues

 6.1.1 Budget Language Background. This section is intended to provide additional
       background information about the SFY12-13 Operating Budget Language
       submitted via the OBM portal in Fall 2010. The actual language and official
       summaries are also attached in Appendix H.

       a. Long Term Care Insurance Agent Training
          ORC 3923.443: Adds language to the long term care insurance agent training
          section to clarify that the currently required four hour training must occur in
          every licensing renewal cycle after the initial eight hour training course. Karen
          Vourvopoulos in Licensing worked on this language. She had heard from
          many agents who had suffered some adverse consequences due to the
          confusion about the continuing education requirements. This language does
          not change the requirements, but, will make the requirements much clearer
          and eliminate confusion. This should be a non-controversial, technical
          change.

       b. (Placeholder) Health Care Exchange Implementation Language and
          Coordinating Changes to ORC 3923.91
          The Affordable Care Act authorized State Planning and Establishment Grants
          to help States establish health insurance exchanges. Ohio was awarded $1
          million in the first round of funding and the Controlling Board approved the
          spending authority request on 11/8/10. The grant funds will be used to
          conduct the research and planning needed to determine if and how an Ohio
          Exchange will be operated and governed. If Ohio does its own Exchange, it
          will need to be up and running by January 1, 2014. Enabling legislation will
          be needed for Ohio to stand up an exchange prior to that time.

            The biennial budget bill has been identified as a possible vehicle for this
            legislation. The Health Care Coverage and Quality Council established a new
            Task Force called the Health Benefits Exchange Task Force to coordinate
            public and stakeholder input. It is anticipated that the Health Benefits
            Exchange Task Force will make legislative language recommendations
            sometime in 2011. Depending on when the language is available, it could be
            inserted into the operating budget bill at some point in the legislative process.
            It is my understanding that the Exchange enabling legislation should be
            enacted during the 129th General Assembly. If the stakeholders on the Task
            Force reach consensus on the legislative recommendations, the language may
            not be too controversial.




                                             89
c. Long Term Care Insurance Rule Authority – Prompt Payment and
   Independent Review
   ORC 3923.44: Add a phrase to the existing long term care insurance rule
   authority section R.C. 3923.44(A) that allows rules to be promulgated
   concerning prompt payment of claims and independent review of benefit
   determinations. The language originated with Lynette Baker in Market
   Conduct. Market Conduct identified a need for more authority to request
   reports from Long Term Care companies on their payment and denial
   activities. The language will have good consumer protections benefits, but,
   this language has not been shared or vetted with industry. It is possible it may
   cause them some concerns.

d. Definition of Insurer – Discontinuation of Individual Product or
   Individual Market
   ORC 3923.57: Adds a phrase to the existing individual health insurance
   market section R.C. 3923.57(D) that defines insurer to include affiliates when
   discontinuing an individual market product or exiting the entire individual
   market. Currently, some insurers discontinue a product or leave a market and
   open a new book of business through an affiliate. This language would be a
   good regulatory tool and a good consumer protection.

e. Fraternal Benefit Societies Regulatory Reform Package
   This package of amendments to the fraternal codes makes changes to the
   following sections 3903.81, 3921.16, 3921.161, 3921.19, 3921.22, 3921.28,
   3921.30, 3921.31, 3921.33, 3921.35, 3921.38. The changes to ORC 3921.28
   were submitted separately from the package because it has a delayed effective
   date of 1/1/2012. These ORC changes have been pursued for a long time by
   the Risk Assessment Division and Bill Rossbach. Statutory changes include:
   RBC requirements (fraternals will now have the same RBC standards as
   commercial insurers); requirement that fraternals who have an RBC less than
   300% must maintain a minimum of 50% reinsurance if they provide hospital,
   medical or nursing benefits; Each fraternal must maintain surplus of at least
   $250,000; fraternals must have a disclosure saying that fraternal contracts are
   not covered by the state guaranty fund and that contract holders may be
   assessed; fraternals must provide a 60 day notice of assessment to ODI; no
   individual right to assets; fraternals must pay exam fees; anyone selling
   annuity contracts must be licensed agents and in compliance with Chapter
   3905 of the Ohio Revised Code. The package of statutory changes will
   provide ODI regulators with more regulatory tools to mitigate potential
   solvency risks and ensure Ohio consumers are protected. The changes will
   treat fraternals the same as other small insurers. This package includes
   regulatory tools that can be viewed as a proactive attempt to avoid a failure
   that could be catastrophic for consumers.

   We worked extensively to vet the proposal with the Fraternal Trade
   associations before including this language in the budget proposal. There are



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        ten fraternal benefit societies offering insurance in Ohio. Primarily we
        worked with Joe Annotti of the National Fraternal Congress of America,
        Anthony Spina of Vorys and their members. We reached consensus on the
        final product submitted. Please note that the delayed effective date for the
        changes to 3921.28 was part of the consensus reached with the Fraternals.

     f. Changes to Current Temporary Law including New Temp Law
        These are very technical items submitted as part of the OBM process. The
        current Temp law that is deleted was removed because this funding source no
        longer exists and this was considered a one-time appropriation during the
        FY10-11 budget process. The new temp law was requested because of new
        federal grant awarded since the SFY 10-11 budget process.

     g. Make Current Temp Law (Domestic Fraternal Benefits Society and
        Market Conduct Examination) Permanent
        Sections 3901.022 and 3901.072. This language has been in temporary law for
        about 15 years. We made the request because it is time to permanently codify
        it so that no reauthorization is necessary next budget cycle.

     h. Amend Ohio’s Consumer Health Insurance Appeals Process to Comply
        with the Patient Protection and Affordable Care Act (PPACA)
        The Patient Protection and Affordable Care Act (PPACA) provides consumers
        with the right to appeal claims and eligibility decisions made by their health
        carrier. PPACA makes changes to the internal and external appeal processes
        that patients can use to appeal decisions made by their health plan. Ohio has a
        similar law, but its terms vary from those of the PPACA. This language
        amends several Ohio Revised Code sections in order to comply with the
        changes required by the PPACA.

     i. Prohibition on the Use of Discretionary Clauses in Insurance Policies
        The Department receives many consumer complaints regarding claim denials
        based on discretionary clauses. Many insurance policies include discretionary
        clauses, which give an insurer broad discretion to interpret policy terms and to
        decide questions of benefit eligibility. These clauses are harmful to consumers
        and may deny consumer the protections of the Ohio courts. This amendment
        will give Ohio consumers the option of having the judicial system determine
        eligibility instead of allowing the insurer to make such a determination. This
        item has not been vetted with industry.

j.      Third Party Administrator to Notify Superintendent of Plan Sponsor
        Claim Payment Default
        While infrequent, the Department does receive complaints alleging that an
        employer has failed to pay for its employees’ health benefits. When this
        occurs, employees use their health benefits, believing they have coverage, and
        find out later that their employer has failed to pay for their health coverage.
        This amendment allows third party administrators (TPAs) to provide early



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     warning of misuse of employees’ benefits contributions and employer defaults
     on claim payments. It allows the Attorney General to take preventive action to
     preserve employee contributions and claims coverage. It also adds employee
     protections not previously in existence which could avoid hardships caused by
     employer bankruptcies. This item has not been vetted with industry.

k.   Liquidation Issues

     i. Records.
        Three proposed amendments clarifying that rehabilitation records are
        available through the overseeing court and are not public records. These
        changes have been vetted with the Ohio Insurance Guaranty Association
        and the Ohio Life and Health Guaranty Association. This also implements
        the IRMA provision to clarify that the liquidator is the custodian of
        records competent to testify in response to IRMA and Womer Benjamin v
        KPMG Barbados, et al, 2005-Ohio-1959.

     ii. Payment of Interest on Certain Claims By the Liquidator In Specific
         Instances
         This item amends Section 3903.42 to expressly provide that the liquidator
         may pay interest on certain claims, except for claims of the federal
         government, if a surplus exists before making a distribution to the
         liquidated company’s' shareholders. This item has been vetted with the
         Ohio Property/Casualty Insurance Guaranty Fund and the Ohio Life &
         Health Insurance Guaranty Fund.

     iii. Derivative Contracts and Netting Agreements Regarding Ohio-
          Domiciled Insurers
          This amendment enacts provisions of the Insurer Receivership Model Act
          (IRMA) for the treatment of certain derivative contracts and netting
          agreements where an Ohio domiciled insurer is a party to the contract or
          agreement. The treatment enacted by this amendment will result in those
          agreements and contracts being treated in an insurance insolvency in the
          same manner such contracts and agreements are treated under the U.S.
          Bankruptcy Code for general corporations, or under the Federal Deposit
          Insurance Act for banks. This was fully vetted with industry: Nationwide,
          AOLIC, OII, Western & Southern, and Cincinnati Life. It was also vetted
          with the Ohio Insurance Guaranty Association. All are fine with it. This
          was brought to ODI by industry (Nationwide). Ten states already have
          these amendments in their statutes, with two additional states pending.

     iv. Standing to Defend Against or Appeal an Order of Liquidation
         This item amends Section 3903.16 to clarify that only directors of the
         insurer have standing to defend against a motion or complaint for an order
         of liquidation. Further, it clarifies that only directors of the insurer who
         defend against the motion or complaint for liquidation of the insurer have



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                 standing to appeal an order of liquidation. This item has been vetted with
                 the Ohio Property/Casualty Insurance Guaranty Fund and the Ohio Life &
                 Health Insurance Guaranty Fund.

     l.      Surplus lines Insurance Premium Tax and Allocation Based on Multi-
             State Risks
             Several existing surplus lines tax laws conflict with provisions included in
             H.R.4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act.
             This item consists of concept language only, as several states, including Ohio,
             are working with the National Association of Insurance Commissioners
             (NAIC) on a model regulation. This model has yet to be adopted by the NAIC,
             but we expect it to be adopted within the next few months. Depending on
             when the final model is adopted by the NAIC, the budget has been identified
             as a possible vehicle.

6.2 Administrative Rules

 6.2.1 Annuity Suitability. In March 2010, the NAIC adopted revisions to the
       Suitability In Annuity Transition Model in order to strengthen the existing
       model’s provisions to better protect consumers from inappropriate and abusive
       marketing practices. The new language contained within the model was
       incorporated into the Department’s existing Annuity Suitability rule and vetted
       with industry stakeholders. The Department’s initial draft was modified to address
       industry concerns voiced, and is thus ready to proceed through the hearing /
       JCARR process.

6.3 Lawsuits and Investigations

   The following is an overview of litigation that the Department is currently involved
   or monitoring. For a more detailed list or specific information Legal Services
   oversees all non-liquidation related suits.

 6.3.1 Class Action Suits the Department is Monitoring

          Hensley v. Westfield – Miller County Arkansas Circuit Court – Case dismissed
          without prejudice in May 2009

          Metcalf v. City of Akron – Summit County Court of Common Please – Case
          pending outcome of Administrative Appeal Process in Franklin County Court of
          Common Pleas

          Hood v. Nationwide – In the Chancery Court of Rankin County, Mississippi –
          Case dismissed with prejudice. First Judicial District of Mississippi – Class
          action suit involving Hurricane Katrina Victims

 6.3.2 Agent Administrative Orders Pending Appeal



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     Brown, Charles, Sr. et al., v. ODI – Cuyahoga County Court of Common Pleas –
     Briefs filed with Court, awaiting Judges decision

     Carrasquillo, Herminio v. ODI – Hamilton County Court of Common Pleas – AG
     has filed Motion to Dismiss, awaiting Judge’s ruling

     Henneke, Debra v. ODI – Clermont County Court of Common Pleas – Oral
     arguments on Motion to Dismiss held, awaiting Judge’s ruling

     Roberts, Robert v. ODI – Cuyahoga County Court of Common Pleas – Court
     upheld Administrative Sanctions on November 19, 2010

     Schwab, Doug – Henry County Court of Common Pleas – Final Briefs have been
     submitted by both sides, awaiting Judge’s ruling

     Spencer, Bruce et al., v. ODI – Clarke County Court of Common Pleas –
     Certification of Administrative Action filed with the Court

6.3.3 Civil Cases Against the Department

     Grange v. Sgro – Cuyahoga County Court of Common Pleas – Case Management
     Conference pending

     Ohio Association of Independent Title Agents v. ODI – Franklin County Court of
     Common Pleas - Magistrate found for ODI on Summary Judgment Motion. We
     are waiting to see if Judge adopts Magistrate’s ruling

     Ohio Podiatric Medical Association v. Hudson – Franklin County Court of
     Common Please - Held hearing on Defendant’s Discovery request. Awaiting
     Judge’s decision

     Robb v. Hudson – U.S. District Court, Southern District of Ohio – Case is pending
     plaintiff’s exhaustion of all available state remedies

     Jeffrey Norman, et al., v. Supreme Court of Ohio, et al. – U.S. District Court,
     Northern District of California – We are preparing initial response to complaint

6.3.4 Cases in Which the Department has been appointed Special Prosecutor

     State v. Darryl K Ables – Allen County Court of Common Pleas – Defendant
     plead guilty; probation transferred to Marion County (Indianapolis), IN

     In re theft and theft-related offenses – Fairfield County Court of Common Pleas –
     investigation continues




                                         94
      In re theft and theft-related offenses – Allen County Court of Common Pleas –
      Grand Jury scheduled for first defendant; investigation continues

 6.3.5 Cases Involving Department Issues

      In Re: Hometown Health Plan v. Aultman Health Foundation - Tuscarawas Court
      of Common Pleas – Awaiting final report and recommendation from the
      Department appointed Hearing Officer.

      City of Akron v. ODI – Franklin County Court of Common Pleas – Appeal of an
      Order of the Director. Appeal and Answer have been filed. Discovery pending.

      Investigations conducted by the Department typically fall under the confidential
      provisions of insurance law. For an understanding and a briefing of active
      investigations please consult with Legal Services, Fraud and Enforcement and
      Market Regulation.

6.4 Media Relations

 6.4.1 Press Releases

      Releases are prepared and issued about Department accomplishments, services
      and actions. Examples include regulatory action taken against insurers and agents,
      legislative accomplishments, rate decreases, consumer outreach events and new
      hirings.

      Consumer Alerts are prepared and issued to warn and offer advice to Ohioans
      who may be or may have been affected by inclement weather, insurance scams,
      rogue agents, or other illegal practices.

      Other media inquiries may entail collecting information relevant to the inquiry,
      determining if the information is public or confidential, and answering the
      reporters’ questions.

      The Department also writes educational and informational columns and editorial
      letters.

 6.4.2 Publications

      The Department publishes an annual report which includes narrative information
      about each division and important accomplishments. In addition, certain financial
      information about Ohio licensed insurance companies is included. The report is
      done electronically and is distributed to key Department stakeholders and posted
      on the Department website.




                                          95
    Communications oversees the development of all Department consumer
    publications, which includes guides, tip sheets, brochures and reports.
    Communications relies on subject matter experts, mainly from the consumer
    services division, product regulation and legal services, to develop content. These
    publications are designed to inform and assist consumers researching and
    purchasing insurance products, are available on the Department’s website and are
    distributed upon request to consumers and at outreach events.

    Communications also oversees web content changes on the agency’s website. A
    web content manager is assigned within each division, who enters web content
    updates via Sharepoint. Communications approves and publishes the web content.
    Communications manages multi-agency websites as well, including Take Action,
    www.takeaction.ohio.gov, Health Care Reform, www.healthcarereform.ohio.gov,
    the Long-Term Care Partnership, www.ltc4me.ohio.gov, and the Health Care
    Coverage and Quality Council, www.hccqc.ohio.gov.

    Insurance Insights is the Department’s monthly newsletter, which is emailed
    monthly to a listserv of interested parties who subscribe via the Department’s
    website.

    SHIP Talk is OSHIIP’s monthly volunteer newsletter. It is printed and
    disseminated by U.S. mail to over 700 OSHIIP volunteers.

    The Confidential Informant is an electronic newsletter that is forwarded to those
    actively involved in the fight against insurance fraud. Subscribers include law
    enforcement officials, state, local and federal prosecutors, Special Investigation
    Unit Directors and industry investigators. The newsletter was created in the Fall
    of 2008 and is used to publicize the outcome of significant cases investigated,
    statistics, investigative tips and information regarding upcoming training
    opportunities. This is a quarterly publication.

    The Regulator is an electronic newsletter that is forwarded to insurance agents,
    agencies and insurance carriers who do business in Ohio. The newsletter was
    created as a way to open up the lines of communication with Ohio insurance
    agents and the goal of the newsletter is to share pertinent information regarding
    agent licensing laws, continuing education requirements, Department initiatives,
    the outcome of investigations conducted by the Enforcement Division and agent
    training opportunities. This is a quarterly publication.




6.4.3 Outreach

        a. Ohio State Fair



                                         96
   Communications and Human Resources manage a booth at the Ohio State
   Fair and at certain county fairs. Human Resources handles staffing of the
   booth while the Communications Office manages the contractual
   agreement and devises the message and booth design. OSHIIP
   promotional items are purchased to distributed from the booth, along with
   Department consumer guides and brochures.

b. Communications Division

   Communications manages speaking requests the Department receives.
   Communications will also develop talking points and assist with
   PowerPoint presentations in cooperation with the Department speaker’s
   bureau.

   The Communications Director oversees the work of Ohio Senior Health
   Insurance Information Program (OSHIIP), and communications staff work
   with OSHIIP staff to help promote its events in various communities.

   Communications works with Consumer Services to help promote
   educational outreach events in local communities. In addition,
   Communications promotes the presence of Department employees in
   communities following disasters.

c. Fraud Division

   When severe storms hit Ohio, the Fraud Division coordinates consumer
   outreach events with the Department’s Consumer Services Division, the
   National Insurance Crime Bureau, area Better Business Bureaus and the
   insurance carriers. Members from the above noted organizations, as a
   group, go door-to-door in neighborhoods impacted by a storm in order to
   warn consumers about unscrupulous roofing and siding contractors who
   intentionally damage their property in order to justify the need for repairs
   or who may attempt to defraud them of their insurance proceeds. The
   Communications Department assists the Fraud Division by promoting the
   presence of Department and industry representatives in communities
   following disasters.

   The Fraud Division often assists the National Insurance Crime Bureau
   with “Etch & Catch” events. The events take place several times per year,
   and are conducted at participating car dealerships located throughout the
   state. During an event, mechanics will “etch” the VIN number of the
   consumer’s car onto their catalytic converter as a fraud prevention effort.
   NICB and Department representatives handle the scheduling of
   appointments, the greeting of consumers who attend such events and the
   paperwork associated with the transaction.



                                97
             The Fraud Division periodically conducts outreach events for members of
             law enforcement, local, state and federal prosecutors, government entities
             and those who investigate insurance fraud. In addition to hosting an annual
             Joint Insurance Fraud Conference each year in March, the division hosts
             outreach events which highlight current industry fraud trends. The
             Division further conducts training for property and casualty agents and
             discusses ways in which they can help prevent, detect and/or report
             insurance fraud.

          d. Licensing Unit

             The Licensing Division has been reaching out to the agent community in
             an effort to educate all licensed agents about Ohio’s new licensing laws. In
             addition to sending correspondence to Ohio’s licensed agents, Licensing
             has put together a presentation regarding Ohio’s new licensing laws and
             has offered to present the information during meetings and/or conferences
             held by the various industry associations. The Licensing Division
             additionally attends specific industry conferences each year in order to
             represent the Department and serve as a resource to conference attendees.

          e. Enforcement Unit

             The Enforcement Division is often asked by members of the insurance
             industry and various consumer groups to present information about agent
             misconduct. In addition to providing information about current trends
             identified and significant cases investigated, Enforcement personnel will
             provide consumer groups with tips as to how individuals can protect
             themselves from becoming victims of unscrupulous insurance agents.

6.5 Constituent Groups (including usual contacts)

 6.5.1 Life and Annuities

      Association of Ohio Life Insurance Companies (AOLIC)
      Faith Williams, 100 South Third Street, Columbus, OH 43215
      614-227-2374, e-mail: fwilliams@bricker.com

      American Council of Life Insurers (ACLI)
      Bryan Cox, 101 Constitution Avenue NW, Washington, DC 20001
      202-624-2452, e-mail: bryancox@acli.com


      Life Insurance Settlement Association (LISA)
      Doug Head, 1011 East Colonial Drive, STE 500, Orlando, FL 32803
      407-894-3797, email: doug@lisassociation.org



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     National Association of Insurance and Financial Advisors (NAIFA)
     David Field, 17 S. High Street, Suite 200, Columbus, OH 43215
     614-228-4539, email: field@assnoffices.com

     Insured Retirement Institute (IRI)
     Lee Covington, 1331 L Street NW, Suite 310, Washington, DC 20005
     (202) 469-3002, email: lcovington@irionline.org

6.5.2 Health and Managed Care

     Ohio Association of Health Plans (OAHP)
     Kelly McGivern, 230 East Town Street, Columbus, OH 43215
     614-228-4662, e-mail: kmcgivern@oahp.org

     America's Health Insurance Plans
     Sean Mentel: sean@seanmentellaw.com

     Ohio Association of Health Underwriters (OAHU)
     Keith Shoemaker, 100 South Third Street, Columbus, OH 43215
     614-22-5771, e-mail: kshoemaker@mcgeough-inc.com

6.5.3 Property and Casualty

     Ohio Insurance Institute (OII)
     Dean Fadel, 172 East State Street, Columbus, OH 43215
     614-224-1040, e-mail: deanf@ohioinsurance.org

     National Association of Mutual Insurance Companies (NAMIC)
     Joe Thesing, 3601 Vincennes Road, Indianapolis, IN 46268
     614-262-4798, e-mail: jthesing@namic.org

     Ohio Association of Mutual Insurance Companies
     Dan Kelso,
     (614) 228-1593, email: dank@ohioinsurance.org

     Property Casualty Insurers Association of America (PCIAA)
     Thomas P. Pappas, Esq: Suite 2000, 66 E Lynn Street, Columbus, OH 43215
     614-621-2000, email: tom@tompappas.com

     Reinsurance Association of America
     Matthew Wulf: wulf@reinsurance.org


     American Insurance Association
     Miranda Motter: mmotter@bricker.com



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6.5.4 Agent Licensing

     Independent Insurance Agents of Ohio (“Big I”)
     Scott Nein, 1330 Dublin Road, Columbus, OH 43215
     614-464-3100, e-mail: snein@ohiobigi.com

     Professional Insurance Agents of Ohio (PIA)
     Vaughn Flasher, 17 South High Street, Columbus, OH 43215
     614-221-6408

     Ohio Association of Health Underwriters (OAHU)
     Keith Shoemaker, 100 South Third Street, Columbus, OH 43215
     614-22-5771, e-mail: kshoemaker@mcgeough-inc.com

6.5.5 Companies

     Aetna
     Elena Butkus, 1 S. Wacker Drive, Suite 1200, Chicago, IL 60606
     (312) 928-3062 office, email: butkuse@aetna.com

     Allstate
     David Field: 17 South High Street, Suite 200, Columbus, OH 43215
     (614) 228-4539: dfie0@allstate.com

     AmeriGroup
     Holly Saelens: (614) 220-4180: hsaelens@amerigroupcorp.com

     Anthem
     Lisa Bateson, 37 West Broad Street, Columbus, OH 43215
     614-438-3902, e-mail: lisa.bateson@anthem.com

     Buckeye Community Health Plans/MMO
     Dan McCarthy: dmccarthy@thesuccessgroup.com

     Delta Dental
     Keith Lake: 550 Polaris Parkway, STE 550, Westerville, OH 43082
     614-901-7134: klake@deltadentaloh.com

     Cincinnati Financial
     Scott Gilliam, P.O. Box 145496, Cincinnati, OH 45250
     513-870-2811, e-mail: scott_gilliam@cinfin.com


     Farmers
     Diane Chapman: 614-374-5125



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     Grange Life
     David T. Roark: 650 South Front Street, Columbus, OH 43206
     614-445-2649

     Humana
     Tim Snyder, 500 West Main Street, Louisville, KY 40202
     502-580-3580, e-mail: tsnyder1@humana.com

     Kaiser Permanente
     Mike Bateson, 5601 Indian Hill Road, Dublin, OH 43017
     614-792-1955, e-mail: batesonml@aol.com

     Medical Mutual
     Dan McCarthy, 172 East State Street, Columbus, OH 43215
     614-221-0971, e-mail: dmccarthy@ocpc.net

     Nationwide
     Kevin Baron, 1 Nationwide Plaza, Columbus, OH 43215
     614-249-6914, e-mail: kbaron@nationwide.com

     OHIC Insurance Company
     Alan Berliner, 10 West Broad Street, Columbus, OH 43215
     614-469-3268, e-mail: alan.Berliner@thompsonhine.com

     Progressive Casualty Insurance Co
     John T. Fitts: 440 395 3683: 6300 Wilson Mills Rd, Mayfield Village, OH 44143
     John_Fitts@Progressive.com

     State Auto
     Nancy Crespo, email: nancy.crespo@stateauto.com

     United Health Care
     Vaughn Flasher, 17 South High Street, Columbus, OH 43215
     614-221-6408

     Western Reserve
     Greg Brunn: 800.362.0426x2417, Greg_Brunn@wrg-ins.com

     Westfield Insurance
     Sally Estvanic: P.O. Box 5001, Westfield Center, OH 44251-5001
     330-887-0992: SallyEstvanic@westfieldgrp.com


6.5.6 Allied Medical Professions




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Academy of Medicine of Cleveland (NOMA)
Mike Wise, 600 Superior Avenue, Cleveland, OH 44114; O: 216-430-2034

Amercian Academy of Family Physicians
Ann Spicer: aspicer@ohiafp.org: 614-267-7867

American Academy of Pediatrics
Melissa Wervey Arnold: marnold@ohioaap.org
American College of Emergency Physicians- Ohio Chapter: Laura Tiberi:
ltiberi@ohacep.org

Amer. College of Ob-Gyns
Carol Rogers: cjrogers65@msn.com: 614-889-2247: 6601 Merwin Road,
Columbus, OH 43235

American College of Obstetricians & Gynecologists
Carol Rogers, 6601 Merwin Road, Columbus, OH 43235; O: 614-889-2247, e-
mail: cjrogers65@msn.com

American College of Surgeons
Dan Jones, 37 West Broad Street, Columbus, OH 43215; O: 614-224-3855, e-
mail: djones@capitol-consulting.net

Association of Ohio Children's Hospitals
Nick Lashutka: nlashutka@ohiochildrenshospitals.org: 155 East Broad Street,
Suite 23; Columbus, OH 43215

Association of Ohio Health Commissioners
Beth Bickford: aohc_1@aohc.net: 614-237-5414: 4000 East Main Street;
Columbus, OH 43213

Ohio Academy of Family Physicians
Dave Paragas, 88 East Broad Street, Columbus, OH 43215; O: 614-223-9307, e-
mail: dparagas@bfca.com

Ohio Association of County Behavioral Health Authorities
Cheri Walter: Cwalter@oacbha.org: 614 224-1111: 33 N. High St., Suite 500;
Columbus, OH 43215

Ohio Association of Free Clinics
Michelle Fitzgibbon, 61 Jefferson Avenue, Columbus, OH 43215; O: 614-378-
2156


Ohio Council of Behavioral Health Care Providers




                                  102
Hugh Wirtz: OCWirtz@aol.com: (614) 228-0747: 35 E. Gay St., #401;
Columbus, OH 43215

Ohio Dental Association
Keith Kerns, 1370 Dublin Road, Columbus, OH 43215; O: 614-486-2700, e-mail:
keith@oda.org

Ohio Hospital Association
Bridget Gargan, 155 East Broad Street, Columbus, OH 43215; O: 614-221-7614,
e-mail: bridgetg@ohanet.org

Ohio Nurses Association
Gingy Harshey-Meade, 4000 E. Main Street; Columbus, OH 43213, O: 614-448-
1020, email: gharsheymeade@ohionurses.org

Ohio Optometric Association
Dan Leite, 172 East State Street, Columbus, OH 43215; O: 614-224-9900, e-mail:
dleite@capitioladvocates.net

Ohio Osteopathic Association
George Dunigan, 53 West Third Avenue, Columbus, OH 43201; O: 614-299-
2107, gfdunigan@aol.com

Ohio Pharmacists Association
Ernest E. Boyd, CAE: eboyd@ohiopharmacists.org: (614) 586-1497 : 2155
Riverside Dr.; Columbus, OH 43221

Ohio Podiatric Medical Association
Dan Jones, 37 West Broad Street, Columbus, OH 43215; O: 614-224-3855, e-
mail: djones@capitol-consulting.net

Ohio Primary Care Assoc. & Ohio Assoc. of Community Health Centers
Julie DiRossi: jdirossi@ohiochc.org: 614-884-3101

Ohio Provider Resource Association
Maureen Corcoran: mcorcoran@opra.org: 614-224-6772: 30 Spruce Street, 2nd
Floor; Columbus, OH 43215

Ohio Psychological Association
Bobbie Celeste: bceleste@ohpsych.org: 614-224-0034: 400 E. Town St, Suite G-
20; Columbus, OH 43215



Ohio State Chiropractic Association




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     Dan Leite, 172 East State Street, Columbus, OH 43215; O: 614-224-9900, e-mail:
     dleite@capitioladvocates.net

     Ohio State Medical Association
     Tim Maglione, 3401 Mill Run Drive, Hilliard, OH 43026; O: 614-527-6762, e-
     mail: maglione@osma.org

6.5.7 Consumer Interests

     Legal Aid Chapter in Cleveland
     Bob Bonthius: RHBonthi@lasclev.org: 216-687-1900

     Legal Aid Society of Greater Cincinnati
     Col Owens: cowens@lascinti.org: (513) 362-2841: 215 E. 9th Street, Suite 200;
     Cincinnati, OH 45202

     Ohio Association for Justice
     John Van Doorn, Executive Director, 395 E. Broad Street, Suite 200, Columbus,
     Ohio 43215, O: 614-341-6800, email: jvandoorn@oajustice.org

     Ohio Legal Aid Foundation (OLAF)
     Bob Clyde: clyde@olaf.org : 614-752-8919: 10 West Broad Street, Columbus,
     OH 43215

     Ohio State Bar Association
     Bill Weisenberg, 1770 Lakeshore Drive, Columbus, OH 43216; O: 614-487-4414,
     e-mail: wweisenberg@ohiobar.org

     Ohio State Legal Services Association
     Gene King: gking@oslsa.org: 614-221-7201 : 555 Buttles Avenue; Columbus,
     OH 43215

6.5.8 Title Insurance/Interest on Trust Accounts (IOTA)

     Ohio Association of Independent Title Agents (OAITA)
     Robert Holman, Esq.: rholman@hfm-law.com: (216) 373-2800: 216 Bradenton
     Avenue, Dublin. OH 43017

     National Association of Land Title Agents (NAILTA)
     Charles W. Proctor, III, Esq., CLTP: info@nailta.org: 610-361-2655

     Ohio Land Title Association (OLTA)
     Bob Schmitz, 88 East Broad Street, Columbus, OH 43215; O: 614-629-0934, e-
     mail: rschm@msn.com




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      Ohio Title Insurance Rating Bureau (OTIRB)
      Joe Petrelli, 2941 Donnlylane Boulevard, Columbus, OH 43235; O: 614-761-
      8602, e-mail: jpetrelli@demotech.com

 6.5.9 Fraternals

      Ohio Fraternal Congress
      Sue Ann Seich, 1433 Saxony Circle NW, Canton, OH 44708; O: 800-886-7656,
      e-mail: sams330@aol.com

6.5.10 Bail Bonds

      Ohio State Bail Bond Association
      573 South High Street, Columbus, OH 43215; O: 614-229-3869, e-mail:
      osbba@ohiobailbonds.org

6.5.11 Health Care Purchasing Alliances

      Council of Smaller Enterprises (COSE)
      Carol Caruso, 50 Public Square, Cleveland, OH 44113; O: 216-592-2471, e-mail:
      ccaruso@gcpartnership.com

6.5.12 Business Related Issues

      Council of Smaller Enterprises
      Steve Millard, 50 Public Square, Suite 200, Cleveland, Ohio 44113,
      O: (216) 592-2436, email: smillard@gcpartnership.com

      Ohio Chamber of Commerce
      Carrie Haughawout, 230 East Town Street, P.O. Box 15159, Columbus, OH
      43215-0159; O: 614-228-4201, e-mail: chaughawout@ohiochamber.com

      National Federation of Independent Businesses
      Chris Ferruso, 10 West Broad Street, Columbus, OH 43215; O: 614-221-4107, e-
      mail: chris.ferruso@nfib.org

      Ohio Manufacturers’ Association
      Ryan Augsburger, 33 North High Street, Columbus, OH 43215; O: 614-224-5111,
      e-mail: raugsburger@ohiomfg.com

      Ohio Municipal League
      Cindie Grant: cgrant@omlohio.org: 614-221-4349: 175 South Third St, Suite 510,
      Columbus, OH 43215


      Ohio Council of Retail Merchants



                                         105
       Lora Miller, 50 West Broad Street, Columbus, OH 43215; O: 614-221-7833, e-
       mail: loram@ohioretailmerchants.com

6.5 Interagency Issues

 6.6.1 Department of Aging

       a. OSHIIP. OSHIIP works with the Department of Aging on multiple projects,
          including the Medicare Improvements Act (MIPPA) that provides funding for
          extra help for prescription drugs through the Low Income Subsidy program.
          Funding is provided to both Departments by the federal government for
          outreach to Ohioans to determine eligibility for extra help, so we have
          partnered to pursue this work through a team approach. Additionally, from
          September – January each year, the Department executes a contract with the
          Department of Aging so that their trained staff can assist with Medicare Open
          Enrollment calls coming into the OSHIIP toll-free hotline.

       b. Long Term Care Partnership. A federal law established the Long-Term
          Care Partnership, which is administered at the national level by the Centers
          for Medicare and Medicaid Services (CMS). The law gave Ohio and other
          states the ability to adopt their own long-term care insurance partnerships. The
          first four long-term care partnership states were New York, California,
          Connecticut and Indiana, where partnerships have been in place for about 20
          years. Ohio Revised Code (ORC) 5111.18 authorized the Ohio Department of
          Job and Family Services (ODJFS) to develop the partnership in conjunction
          with the Ohio Department of Insurance, the Ohio Department of Aging
          (ODA) and the insurance industry. The Department of Insurance maintains the
          Long Term Care Partnership website at www.ltc4me.ohio.gov. The OSHIIP
          trainers provide counseling and information services about the long term care
          partnership.

       c. Take Action. The Ohio Department of Insurance created a Take Action:
          Protect Yourself from Fraud campaign with consumer guides, materials and
          an interactive website in May 2010. The program educates consumers about
          ongoing scams, insurance and investment fraud, aging issues, predatory sales
          practices, and Medicare and health insurance. A collaborative effort among
          the Ohio Department of Insurance, the Attorney General’s office, the Ohio
          Department of Commerce and the Ohio Department of Aging has resulted in
          50 Seniors Fighting Fraud workshops at assisted living centers and senior
          independent living communities since June. In addition, the Department’s
          Fraud Protection Program Coordinator participated in 30 additional meetings
          and outreach events focused on consumer protection over the past six months.



 6.6.2 Department of Jobs and Family Services



                                          106
    a. Exchange Grant. The new federal fund will provide spending authority to
       the Ohio Department of Insurance for a recently awarded $1 million grant.
       The grant was awarded to Ohio from the Office of Consumer Information and
       Insurance Oversight (OCIIO), a division of the U.S. Department of Health and
       Human Services to evaluate and plan a health insurance exchange. A total of
       forty-eight states were awarded this grant. No state matching funds were
       required.

       The grant funds will be used to conduct the research and planning needed to
       determine if and how an Ohio Exchange will be operated and governed.
       These activities will include coordinating public and stakeholder input
       through a specially constituted task force, conducting market analysis,
       modeling Ohio’s public programs and private insurance markets to provide
       projections and analysis necessary for making decisions concerning the
       establishment of an Ohio Exchange. The Health Care Coverage and Quality
       Council established a new subcommittee called the Health Benefits Exchange
       Task Force to coordinate public and stakeholder input.

    b. Medicaid Managed Care Plans. The following Ohio Health Insuring
       Corporation have a contract with the Ohio Department of Job and Family
       Services to provide Health Care coverage to the Medicaid eligible citizens of
       Ohio:

            Amerigroup Ohio Inc
            Buckeye Community Health Plan Inc
            Caresource
            Molina Healthcare Insurance Company
            Molina Healthcare Of Ohio, Inc
            Paramount Advantage
            Unison Health Plan Of Ohio, Inc
            Wellcare Of Ohio Inc

6.6.3 Department of Commerce

    a. IT Disaster Recover Cold Site. The Office of Information Technology and
       Security put in place a Disaster Recovery site located at the Ohio Department
       of Commerce’s Tussing Road location through an interagency memorandum
       of understanding. This site has been declared as a Cold Disaster Recovery Site
       to be used for communication purposes in case of a Disaster. The site is
       currently operational with a dedicated T1 line at 1.5 MBs, protected with a
       Cisco ASA 5520 Firewall with rules to only allow traffic to flow outbound for
       emergency communications for email and internet traffic. The site is equipped
       with a Cisco 3560 capable of connecting up to 48 client computers. The site is
       protected with a SPAM appliance to filter email if needed in the case of a
       Disaster. Connectivity between the Tussing Road site and 50 West Town


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        Street consists of a VPN tunnel between the two locations. This allows us to
        continuously communicate with our Disaster site to ensure the communication
        link is active and able to transfer data.

    b. Take Action. The Department created a Take Action: Protect Yourself from
       Fraud campaign with consumer guides, materials and an interactive website,
       www.takeaction.ohio.gov, in May 2010. The program educates consumers
       about ongoing scams, insurance and investment fraud, aging issues, predatory
       sales practices, and Medicare and health insurance. A collaborative effort
       among the Ohio Department of Insurance, the Attorney General’s office, the
       Ohio Department of Commerce and the Ohio Department of Aging has
       resulted in 50 Seniors Fighting Fraud workshops at assisted living centers and
       senior independent living communities since June. In addition, the
       Department’s Fraud Protection Program Coordinator participated in 30
       additional meetings and outreach events focused on consumer protection over
       the past six months.

    c. Credit Union Share Guaranty Corporations. American Mutual Share
       Insurance Corporation, domiciled in the State of Ohio and doing business as
       American Share Insurance (“ASI”), is the only licensed Ohio credit union
       share guaranty corporation. ASI guarantees the share deposit accounts of its
       participating credit unions in twelve states (AL, AZ, CA, ID, IN, IL, MD, ME,
       NH, NV, OH and TX) and is the largest private (non-federal) insurer of credit
       union member shares. As a credit union share guaranty corporation, ASI is
       dually-regulated by the Ohio Department of Commerce and the Ohio
       Department of Insurance under Chapter 1761 of the Ohio Revised Code. ASI
       is subject to periodic examinations by both agencies and an annual
       independent audit and actuarial review. A wholly owned subsidiary of ASI,
       Excess Share Insurance Corporation (“ESI”), also is domiciled in Ohio and is
       licensed in thirty-two states and the District of Columbia as a property and
       casualty insurance company. ESI insures the share deposit accounts of its
       insured credit unions for up to $250,000 in excess of the insurance limit
       imposed by the credit union’s primary insurer. As an insurance company, ESI
       is regulated solely by the Ohio Department of Insurance.

6.6.4 Environmental Protection Agency

    a. Production Server Hosting. The Office of Information Technology and
       Security (OITS) has identified significant risks associated with the reliability
       of the electrical capacity, cooling system and the uninterruptible power supply
       (UPS) currently in the data center of Suite 300 of 50 West Town Street. In
       order to mitigate these risks the OITS has established a memorandum of
       understanding with the Ohio Environmental Protection Agency (EPA) that
       allows for the co-location of the Department’s production data center
       equipment. OITS is in the process of relocating all production network, server
       and storage equipment to the EPA’s data center located in suite 700 of 50
       West Town Street. The EPA’s data center is sufficiently equipped with a


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        backup cooling system and a redundant power supply provided by a diesel
        generator making the location a more desirable location for hosting IT
        equipment.

6.6.5 Department of Development

    a. Strategic Growth Plan for Ohio’s Insurance Industry

        Ohio is the 9th largest insurance market in the nation, and the 19th largest in
        the world, having almost $60 billion in premium. There are over 250
        companies domiciled in Ohio, as evidenced by the map at Appendix J.
        Insurance companies employ over 100,000 Ohioans and there are over 85,000
        licensed agents.

        Because the insurance industry is an economic engine for Ohio, the
        Department worked with the Ohio Department of Development and the
        insurance industry to develop and implement a strategic plan to grow the
        insurance industry in Ohio. The strategic plan can be found in the appendix.

        Four task forces were formed to implement the strategic initiatives: Workforce
        Education, Career Marketing, Internship, and Business Climate. The
        Workforce Education Task Force held three industry summits to bring
        together university and industry representatives. These summits were held at
        the University of Cincinnati, Kent State, and Ohio State. In addition,
        Columbus State hosted a workforce advancement meeting and is leading the
        development of the workforce advancement plan.

        The Ohio Means Insurance Jobs website was developed to bring together job
        posters and job seekers. The website is: www.ohiomeansinsurancejobs.com.

        A program was implemented to educate the ODOD Regional Economic
        Development Directors (REDDs) about the size of the insurance industry in
        Ohio. Regular meetings with insurance company executives have been
        scheduled to make certain that Ohio’s largest insurance employers receive the
        services they need from the state of Ohio to grow their companies. In
        addition, a letter was sent to CEOs of all insurance companies domiciled in
        Michigan, touting the attractive business climate in Ohio.

6.6.6 Ohio Department of Transportation

    a. Telecom Service Support. The Office of Information Technology and
       Security (OITS) established a memorandum of understanding to allow for the
       sharing of core telecom services with the Ohio Department of Transportation
       (ODOT). In November 2010 the OITS implemented a Cisco voice over
       Internet protocol (VoIP) solution that leverages ODOT’s primary gateway to
       local and long distance telecom carriers.



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6.6.7 Governor’s Office of Faith Based Initiatives

     a. Ombuds Grant/Benefit Bank. The goal of Ohio’s consumer assistance
        program is to provide information and assistance to consumers about their
        health care coverage options, to assist consumers with writing and filing
        appeals with their health insurance providers, and to provide assistance and
        guidance to uninsured Ohioans who are not eligible for public assistance and
        cannot afford health care coverage. Ohio received $1,100,000 in grant funds
        from the U.S. Department of Health and Human Services to implement its
        consumer assistance program.

        The Ohio Department of Insurance (the Department) will manage the
        consumer assistance program and coordinate closely with the Ohio
        Association of Second Harvest Food Banks (OASHF), UHCAN Ohio, Family
        Voices and the Ohio Association of County Behavioral Health Authorities
        (OACBHA).

        OASHF will serve as the initial point of contact to assist consumers with
        enrollment in public assistance options or to refer callers to the Department to
        assist with enrollment in a health insurance plan if the consumer can afford
        coverage or to answer questions about an insurance claim if the consumer is
        already insured. UHCAN Ohio, Family Voices and OACBHA will provide
        case management for uninsured Ohioans who are not eligible for public
        assistance and cannot afford health insurance coverage. The Department will
        also establish an independent consumer appeals program with trained legal
        interns managed by its legal division to provide assistance to consumers in
        writing and filing appeals with their health insurance plan.

        The Department will implement a data reporting process for all partners to
        follow so that Ohio has a robust data portfolio to deliver to the Secretary in
        compliance with this grant program. We also believe that data gathered
        through this effort will assist Ohio in planning for a health benefit exchange.
        The following narrative outlines the scope of work and deliverables in detail
        for Ohio’s consumer assistance program.

6.6.8 Ohio Attorney General

     a. Agent Tax Lien Project. Over the last two years, the Ohio Department of
        Insurance and the Ohio Attorney General’s Office have been working together
        in an effort to collect $16.5 million in outstanding state income taxes from
        licensed agents and agencies. In order to prompt compliance with Ohio’s
        insurance and tax laws, the Department contacted over 2500 insurance agents
        and business entities by mail and encouraged them to take proactive measures
        to satisfy their outstanding tax obligations. Administrative action will be taken
        against the licenses of those individuals and entities who failed to enter into a



                                         110
          payment plan with the AG’s office or pay off their outstanding debts to the
          state. The project itself is one which is ongoing as liens are filed against
          individuals and entities daily.

      b. Agent Background Checks. The Bureau of Criminal Identification and
         Investigation (BCI&I) conducts background checks for all individuals who
         have applied for an Ohio insurance license. The results are forwarded
         electronically, on a daily basis, to the Licensing Division.
           
      c. OPOTA Training. The Ohio Peace Officers Training Academy has asked
         the ODI Fraud Division to teach a half day training in January of 2011 at their
         training academy located in Richfield Heights, Ohio. The training will be
         offered to law enforcement officers across Ohio as part of the agency’s
         continuing education program.
       
 6.6.9 Ohio Secretary of State

      a. Newly Licensed Business Entities. The Licensing Division provides the
         Secretary of State’s Office with a list of all business entities who have been
         issued an Ohio insurance license.

6.7 Intergovernmental Issues

 6.7.8 FINCEN MOU. The Financial Crimes Enforcement Network (FINCEN) would
       like to enter into an MOU with the Department in order to share confidential data
       related to suspected money laundering transactions. Assistant Director Michelle
       Brugh has all pertinent paperwork the Department will need to complete.

 6.7.9 Ohio Legal Assistance Foundation (OLAF). All licensed title agents and
       agencies are required to have Interest on Trust Accounts” or “IOTAs” to protect
       client escrows. They are further required to remit their unallocated interest to the
       Oho legal Assistance Foundation. As all title agents and agencies are required to
       provide the Department with specific information related to their IOTA accounts
       as part of the annual review process, the Department shares the aforementioned
       information with OLAF so they are able to determine if they are receiving all
       interest owed to their organization.

 6.7.10        United States Department of Health and Human Services. Through
       the federal Patient Protection and Affordable Care Act, the Ohio Department of
       Insurance has received $ 3.1 million in federal funds to implement federal health
       care reforms. Funding was also provided to implement a high risk insurance pool
       in the state. More detailed information about these grant programs can be found
       under Section 8, Health Care Reform.

      a. High Risk Pool. In August 2010, Medical Mutual of Ohio rolled out Ohio’s
         High Risk Pool program, which will help individuals with pre-existing


                                           111
          conditions obtain premium subsidies for coverage. $152 million in federal
          subsidy dollars was provided to implement this program. With the current
          funding level, an estimated 5,500 Ohioans can be served through this
          program.

      b. Rate Review. Also in August, the Department received a grant totaling $1
         million to increase capacity for oversight of a high volume of complex of
         health insurance rate filings, as well as increase transparency and
         accountability.
      c. Health Benefit Exchange. In September 2010, the Department, in
         partnership with the Department of Job and Family Services, received a $1
         Million planning grant to support Ohio’s Health Benefit Exchange planning
         process. Through the planning process, Ohio will develop a vision and goals
         for an Ohio exchange and assess whether a state-operated or a federal
         exchange will best meet the needs of Ohioans.

      d. Consumer Assistance/Ombuds. Also in September, Ohio received $1.1
         Million to develop a comprehensive program to assist consumers in enrolling
         in insurance and filing appeals with their insurers. The Department has
         partnered with several consumer advocacy groups, including the Ohio
         Association of Second Harvest Foodbanks, UHCAN Ohio, Family Voices of
         Ohio and the Ohio Association of County Behavioral Health Authorities to
         carry-out the consumer assistance grant program.

 6.7.11       Center for Medicaid and Medicare Services. In 2007, the Department
       signed a Memorandum of Understanding with the Centers for Medicare &
       Medicaid Services (CMS) in order to promote cooperation, supervisory
       coordination and the sharing of information regarding companies and persons
       engaged in the Medicare Managed Care and Medicare Prescription Drug Benefit.
       Assistant Director Michelle Brugh and David Barney, Chief of Fraud &
       Enforcement, serve as the Department’s primary contacts.

6.8 Fleet Management

   The Department has a fleet of 14 vehicles, an inventory of which is listed below. Ray
   Lacey manages the fleet and can be reached at extension 8-1212.

      1 – 1993 Chevy Cargo Van
      3 – 2006 Dodge Stratus
      2 – 2007 Chevy Impala
      3 – 2009 Ford Focus
      2 – 2010 Ford Focus
      1 – 2010 Dodge Avenger
      2 – 2011 Ford Focus

6.9 IT Development Issues


                                         112
6.9.1 Information Technology Office Reorganization. The IT office was restructured
      to create a Business Support Services unit, IT Procurement, Security, Application
      Development, Network Services and Records Management in order to accelerate
      the enforcement of separation of duties.

6.9.2 Project Management and SDLC. The IT office has implemented a formal, but
      modified Project Management Methodology including the adoption of
      standardized processes and creation of associated documentation. ODI has most
      recently moved to an Agile application development methodology using best
      practices of SCRUM.

6.9.3 PC Refresh Project. Successfully completed the PC Refresh project on time, on
      budget and prior to planned agency relocation to downtown. This initiative
      included transitioning all ODI employees to Microsoft Office 2007 from
      Microsoft Office 2000 through an agency wide training program.

6.9.4 Data Center Relocation. The IT office successfully completed the agency
      relocation project by ensuring that network, data center, security,
      telecommunications and desktop support services were promptly installed, tested
      and in production resulting in limited downtime for the agency on May 9, 2008.

6.9.5 ACH Implementation. ODI successfully completed the Automatic Clearing
      House (ACH) for payment project on time and on budget. This initiative enabled
      electronic payment acceptance via our website.

6.9.6 Microsoft SharePoint. The IT office successfully implemented the Microsoft
      Office SharePoint Server (MOSS) project. Phase one included the roll-out of team
      collaboration sites for each ODI division. Phase two included the migration of
      ODI’s Intranet from .NET Nuke to a SharePoint environment. ODI continued to
      build upon its investment in Microsoft’s SharePoint product through the
      successfully migration its public-facing Web Site to a SharePoint publishing
      infrastructure allowing business owners, subject matter experts, and ODI’s
      Communications Office to author, approve and publish all Web Site content. ODI
      continued to promote the use of SharePoint Team Sites throughout ODI by
      forming a SharePoint Community of Practice allowing end-users to share
      common uses and brainstorm ideas to further the use of SharePoint as a
      collaborative tool. SharePoint has also been leveraged as an alternative
      application development platform where IT staff can quickly develop tightly
      aligned business applications. To date, ODI has developed the following
      applications on the SharePoint platform: IT Service Desk (help desk), Employee
      Training Registration and Tracking, Employee Onboarding/Offboarding
      Workflow, Request for Purchases, and the Ohio Senior Health Insurance
      Information Program (OSHIIP) Volunteer Application. Additionally, ODI has
      extended the SharePoint environment to allow for Extranet Sites and is hosting
      three new Web Sites within the SharePoint environment. ODI is currently hosting



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       Web Sites for the Health Care Coverage & Quality Council (hccqc.ohio.gov),
       Ohio’s Healthcare Reform Site (healthcarereform.ohio.gov), and the Take Action
       – Insurance Fraud Awareness Site (takeaction.ohio.gov).

 6.9.7 Intellivue Upgrade. The IT office successfully completed the Intellivue v6.0
       upgrade project on time, on budget. This project greatly enhanced the electronic
       document storage, retrieval and workflow management applications. The project
       was carried out in two phases. The first phase was to move from version 5.5 to
       version 6.0 and was completed in June 2007. In September 2007 phase two was
       completed, which was the consolidation of 11 separate SQL databases into 1
       department wide imaging database, which currently houses 9 million images. The
       upgrade not only offered more enhanced functionality, and security features, but
       also streamlined the administration and management of the application.

 6.9.8 SERFF Project. ODI successfully completed the SOLE SERFF (System for
       Electronic Rate and Form Filing) project. SERFF is the national standard for
       industry and states for file submissions. In October 2007 ODI accepted SERFF as
       the “main” repository for PCD and LHD Rate and forms Filings. Currently ODI is
       operating on version 5.5 of the NAIC SERFF application. Previous we were
       running/supporting dual systems, with SERFF and our in-house back file systems.
       Since more than 80% of all filings were coming via SERFF it was a prudent
       decision to go SOLE SERFF.

 6.9.9 VMware Consolidation. ODI has virtualized 33 servers on 9 ESX boxes. 15 of
       those servers were production servers that were migrated into the VM
       environment. 18 of the 33 are new servers, built for the VM environment, that
       include SharePoint, Infrastructure Production Servers and Application
       Development servers. VMWare’s management tool, vSphere, allows ODI’s
       Infrastructure group to easily create and manage servers while enabling the ability
       to create ‘snapshots’ of servers for faster disaster recovery.

6.9.10 Infrastructure Network Security. ODI successfully completed the Network
       Security project. ODI is protected by redundant Cisco 5520 ASA Firewalls that
       use access lists and routed protocols to protect the Agency from unwanted traffic.
       All network traffic is inspected by our Cisco Intrusion Prevention System. Other
       layers of protection include redundant DMZ load balanced firewalls by Barracuda
       Networks. The traffic is sent from a public IP address by protocol, to a virtual IP
       address by protocol inspected again by the DMZ IPS and then routed to the
       physical destination if approved. ODI network staff receives notification of any
       dropped traffic detected by the IPS.

6.9.11 SAAP (Secured Accounts and Applications Project). ODI successfully
       implemented a Web application Gateway. The Gateway is comprised of a single
       sign-on integration effort that combines both Active Directory accounts and
       Active Directory Application Mode (ADAM) for external accounts. This enables
       an implementation of an in-house ASP.NET administration application to manage



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       applications, accounts, and role access for each new application added to the
       Gateway.

6.9.12 O.R.C. 1347.15/H.B. 648. ODI has focused on implementing the requirements of
       O.R.C. 1347.15/H.B. 648 – Access to Confidential Personal Information (CPI).
       Statutory requirements include, but are not limited to, promulgation of a Rule,
       development and enforcement of policies and procedures, manual logging of
       access and mandatory training of employees who access CPI. ODI has
       successfully promulgated the rule, implemented a role and identity management
       program including on-boarding, off-boarding and access administration,
       developed CPI policies and procedures, implemented manual logging and has
       completed training of all employees. ODI mandates that all new information
       systems include an electronic logging mechanism that will eventually alleviate the
       need to manually log access to CPI and allow will audit and/or visibility of
       information accessed, utilized, deleted, etc.

6.9.13 IT Maintenance Cost Reduction. ODI successfully renegotiated all IT
       maintenance contracts resulting in a 30% reduction in cost.

6.9.14 Premium Comparison Application. ODI successfully implemented integration
       of authorization and authentication between the Department’s Gateway single
       sign-on application, SharePoint groups and Roles, and Active Directory. This
       combination of an ASP.NET application and SharePoint allows insurance
       providers to submit sample insurance rates to make comparative premiums
       available on ODI’s Web Site. The application allows Ohio consumers to view
       Auto Insurance premium comparisons based upon limited consumer information.

6.9.15 Executive Tracker Application. ODI successfully implemented an ASP.NET
       application consisting of a workflow management system allowing core ODI
       Executive, Communications, and Consumer Affairs personnel the ability to
       create, assign/delegate, manage and approve complaint cases from various parties
       (legislative referrals, consumers, etc.) which notify ODI regarding points of
       contention.

6.9.16 OAKS Data load. ODI successfully implemented an electronic transfer of
       demographic information from the OAKS Human Capital Management System
       (HCM) to sync with the Department’s Active Directory implementation and
       ODI’s Enterprise Directory (Oracle) repository. This implementation allows
       OAKS to be the automated source of employee information that updates ODI’s
       internal accounts and MS Outlook address book.

6.9.17 Application Management procedures. ODI successfully created and
       implemented 21 procedures including those relating to CPI access, application
       security, role and identity management, on/off boarding of employees, account
       setup and management, and Change Management.




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6.9.18 Role Management. ODI successfully implemented rules and procedures which
       provide a way to develop and maintain the criteria to access Confidential Personal
       Information (CPI) through role-based access and management.




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Section 7     Director’s Administrative Issues

Delegations of Authority

   Currently, all employment decisions involving hiring, firing or suspensions must be
   taken to the Chief of Staff. Legal must review any contract and approve it before the
   Department becomes obligated.

Signature Authority

   Below is a list of employees who have signature authority for the Director, and for
   which items:

   Orders issued in Enforcement cases where hearing not requested        Chief Counsel
   Orders issued in application cases where hearing not requested        Chief Counsel

   Consent Orders where applicant fails to disclose disorderly conduct   Chief Counsel
   conviction and is assessed a $400 civil penalty and $100 in
   administrative costs
   Consent Orders agreeing to revocation                                 Chief Counsel

   Consent Orders surrendering for cause                               Chief Counsel
   Dismissal Orders                                                    Chief Counsel
   Continuing Ed cases, including hearing order and dismissal order    Chief Counsel
   Child support notice of suspension                                  Chief Counsel
   Appointment of hearing officer                                      Chief Counsel
   Record certifications                                               Chief Counsel
   Letters of good standing to foreign companies                       Assigned
                                                                       attorney
   Orders of notice in merger commission hearings                      Assigned
                                                                       attorney
   Notice of opportunity for hearing                                   Assigned
                                                                       attorney
   Certification of administrative record when Order appealed to court Legal
   Subpoenas for witness attendance at hearing, including duces tecum Legal
   Timesheets of direct reports                                        AA to Director
   Invoices                                                            Chief of Staff
   Contracts                                                           Chief of Staff
   Personnel Actions                                                   Chief of Staff


Building Access

   Access to the building is controlled by key card (part of the Department’s employee
   identification badge). Once inside, several areas of the Department require the badge
   to gain access. Jennifer Behrendt, Facilities Coordinator for the Department, handles


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   identification badges and access to the building. She is located in the Human
   Resources Division, however reports to Information Technology and Security.

Telephone Information

   The telephone system at the Department is handled by Information Technology and
   Security. Wendy Seri manages all Department cell phones.

Parking

   Parking information including group discounts can be obtained by the Office of
   Information Technology and Security. Tina Chubb, Chief Information Security
   Officer can provide available information.

Car Allowance

   The current car allowance for the Director is $550 a month. The Director has a
   choice between the allowance and a state car. If the Director chooses to have a state
   car, everything will be covered including gas, maintenance and insurance.

JLEC and Ethics Filing Requirements

   The Director and senior management of the Department are subject to annual
   financial disclosure requirements with the Ohio Ethics Commission, pursuant to ORC
   102. All employees required to file a disclosure form will receive the form in
   January. The filing is due no later than April 15th. A $40 filing fee, per person, is
   required, and for state employees that cost is covered by the Department. Legal
   Services collects all of the forms and submits them as a batch with the appropriate
   filing fee.

   Employees who lobby the General Assembly are also required to register and file
   quarterly statements with the Joint Legislative Ethics Commission (JLEC).
   Submission of these forms is coordinated by Marlene Moore.

Transition Coordinator

   The transition document and other functions related to the transition have been
   compiled and prepared by Mary Jo Hudson, Director.

Drug Testing and Background Checks

   All exempt unclassified positions require the completion of a drug test and
   background check as conditions of hiring.




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Section 8       Health Care Reform

8.1 State Health Care Reform

     In 2007, more than 1.3 million Ohioans were uninsured and health care and insurance
     costs had been rising at an average rate of about ten percent per year for the prior ten
     years. For many Ohioans, health insurance was unaffordable and becoming more
     expensive with each passing year. As a result, Governor Strickland directed ODI to
     develop reforms that could be enacted into Ohio law to reduce the number of
     uninsured Ohioans and increase the number of small businesses that were able to
     offer coverage to workers.

     In June of 2007, Ohio applied to and was accepted into a Robert Wood Johnson
     Foundation (RWJF) Program called the State Coverage Initiative (SCI). SCI sought
     to help states like Ohio develop and implement policies that expand access to health
     insurance coverage in order to reduce the number of uninsureds. In connection with
     SCI, Governor Strickland appointed a 12 member team (the SCI team) to work to
     develop reforms to cover Ohio’s uninsured residents and make coverage more
     affordable. Recognizing that the SCI team did not include many key stakeholders,
     Governor Strickland appointed a larger bipartisan Advisory Committee representing
     the stakeholders involved in Ohio’s health care system. The SCI Team and Advisory
     Group worked together for over a year and developed a set of consensus
     recommendations designed to reduce the number of uninsured Ohioans, lower the
     cost of health care coverage, and improve the quality of the health care system.
     These consensus recommendations are contained in a report to the Governor found at
     Exhibit A attached hereto, and also at the following website:
     http://www.insurance.ohio.gov/Legal/Reports/Documents/SCIReportFINAL.

     Some of the recommendations were included in HB 1, Ohio’s biennial budget enacted
     into law in 2009, and are detailed below.
 
     In addition, from 2008 until 2010, healthcare reforms were the focus of several other
     initiatives of the Ohio General Assembly and also the President of the United States
     and the United States Congress. As a result, Ohio was presented with numerous
     opportunities and challenges regarding healthcare reform, from improving efficiency
     in communications among healthcare payors and healthcare providers, to training
     physicians to operate a patient-centered medical home, to expanding access to health
     information technology and electronic medical records, and also changing the way
     that health insurance is regulated. Many of these efforts were staffed by experts at the
     Department. This summary outlines those efforts over the past four years.

    8.1.1 Ohio Health Care Reform Efforts – H.B. 1

         Decreasing the number of uninsured Ohioans and making health insurance more
         affordable for individuals and small businesses was a priority for the Strickland
         Administration. Health care reform measures were enacted as a part of House Bill



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   1 to accomplish these goals. A full summary of the HB 1 reforms, including
   FAQs are found at Exhibit B, attached hereto, and also at the following link:
   http://www.insurance.ohio.gov/Consumer/Pages/HealthCareReformProvisions.as
   px
   The House Bill 1 (SFY 10-11 operating budget) reforms included:

a. Open Enrollment. Since the 1990s, carriers selling coverage in Ohio’s individual
   and non-employer group market were required by law to guarantee issue coverage
   to federally eligible and non-federally eligible individuals during open enrollment
   period. Ohio’s open enrollment laws limited the premium that insurers could
   charge to people with health problems, but those limits were so high that the vast
   majority of Ohioans could not afford open enrollment coverage. HB 1 reduced
   the premium rates insurers could charge for open enrollment coverage, making
   the coverage more affordable.

   On January 1, 2010, the rate caps for open enrollment coverage were reduced to 2
   times the lowest rate that the insurer charged for coverage in the individual
   market. If certain benchmarks are met, the cap will be reduced to one and one
   half times the base rate on January 1, 2012. To educate consumers about the open
   enrollment, ODI’s website includes information as to which companies offer open
   enrollment, the benefits that are available, and the premiums that insurers charge.

   In late 2010, ODI applied to HHS, on behalf of the carriers participating in the
   open enrollment program, for a waiver of the PPACA provision raising annual
   limits for plan years on and after September 23, 2010 to $750,000. The waiver, if
   granted, will allow all of the carriers to keep the annual limits in the basic and
   standard plans as they are for one year, avoiding a probable rate increase. The
   annual limit increases each year under federal law ($1.25 million in September
   2011, then $2 million in September 2012) and the waiver must be applied for each
   year, until annual limits are entirely eliminated in 2014. Carriers can also apply
   for the waiver of the annual limits increase on their own behalf. If Ohio receives a
   waiver on behalf of all carriers offering basic and standard plans, consumers
   would then have a choice from each carrier of a richer benefit plan that costs
   more, or a more limited benefit plan that costs less.

b. Continuation of Coverage for Unmarried Children Age Change: Under HB 1,
   insurers, health insuring corporations and public employee benefit plans must
   offer parents the opportunity to purchase coverage for their children up to age 28.
   Insurance policies and health insuring corporation contracts issued or renewed
   and plans established or modified on or after July 1, 2010, must provide for this
   new benefit. ODI has established a web page with information specific to this
   benefit including FAQs detailing how Ohio law coordinates with the new older
   age dependent provisions in federal law. See
   http://www.insurance.ohio.gov/Consumer/Pages/DependentAgeCoverageExpansi
   on.aspx , and also Exhibit C, attached hereto. ODI has also partnered with the
   Ohio Association of Health Plans on a media campaign targeted at the Young and



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   Invincibles, or young adults up to age 28. This campaign material is on the web
   at www.youngandinvincibles.com.

c. Section 125 (Cafeteria) Plans. HB1 includes provisions that would require
   employers with 10 or more employees to offer uninsured employees the
   opportunity to purchase individual health coverage with pre-tax dollars, saving
   about 40 percent off the cost of premiums by reducing the income taxes
   employees pay. HB 1 requires ODI to adopt administrative rules and obtain
   approval from certain federal agencies that the state law complies with the federal
   laws governing employee benefit plans before employers must comply. The
   Department has requested guidance from the Internal Revenue Service and the
   Department of Labor but has not yet received the requested guidance and
   therefore have not adopted rules in order to implement this new requirement.
   Because we have not yet received the federal guidance or adopted the rules, the
   requirement that employers must offer Section 125 plans to employees will not
   become effective beginning in January 2011.

d. State Income Tax Benefits for “qualifying relatives.” Under HB 1, individuals
   with employer sponsored health insurance can receive favorable state tax
   treatment for the coverage of “qualifying relatives” and members of the tax
   payer’s household, without regards to income and support. Definitions are based
   on the terms of the employer’s health plan. This new provision is found in the
   Ohio Revised Code Section 5747.01(11) (c) and (d).

e. Premium Rate Filings for Individual and Small Group Coverage. Insurers are
   now required to file all health insurance rates for individual and small group
   business with ODI.

f. Loss Ratio Reporting. ODI will be able to monitor Ohio’s insurance markets
   because of a new requirement that insurers file with ODI loss ratio data for the
   individual, small group and large group insurance markets.

g. Regulatory Oversight of Provider Networks. HB 1 created administrative
   efficiencies by consolidating within ODI the review and regulation of provider
   networks for health insuring corporations.

h. Independent Reviews of Health Claim Denials. HB 1 gave ODI the authority
   to order independent reviews of health claim denials where appropriate.

i. Mini-COBRA/State Continuation Coverage. Also referred to as Ohio’s “mini-
   COBRA” program, state continuation coverage was permanently extended from 6
   to 12 months and again temporarily extended to 15 months so that employees of
   small businesses (less than 20 employees) who lost their jobs could take
   advantage of the temporary offer of federal premium assistance. The permanent
   extension to 12 months became effective for policies and contracts issued,
   delivered or renewed on or after April 1, 2009. The temporary extension to 15


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    months became effective for policies and contracts issued, delivered or renewed
    on or after February 25, 2010 and ended on May 31, 2010, the date the federal
    premium assistance program ended. In addition, entitlement to unemployment
    compensation is no longer required for continuation coverage. Information on
    state continuation coverage, including a sample notice employers may use to
    explain this coverage can be found at Exhibit D, attached hereto, and also at
    http://www.insurance.ohio.gov/Consumer/Pages/Cobra.aspx

8.1.2 Ohio Health Care Coverage and Quality Council (HCCQC)

    Established first by Executive Order and codified in by HB1, the Ohio Health
    Care Coverage and Quality Council is a public-private partnership designed to
    improve the coverage, cost, and quality of Ohio’s health insurance and health care
    system. The Council builds on Ohio’s participation in two national programs, the
    State Coverage Initiative (SCI) and the State Quality Improvement Institute
    (SQII), which resulted in recommendations for improving Ohio’s health care and
    coverage systems contained in two separate but related reports: “Covering Ohio’s
    Uninsured,” issued in July 2008; and the “Ohio Health Quality Improvement Plan
    (OHQIP),” issued in June 2009.

    Funded by the Robert Wood Johnson Foundation and administered by
    AcademyHealth, the national SCI program offered an integrated array of policy
    and technical assistance services and products to help state leaders with coverage
    expansion efforts as well as with broader health care reform. Ohio’s participation
    was focused on the development of strategies to expand coverage to more
    Ohioans and make coverage more affordable, culminating in consensus
    recommendations after a year-long process of research, analysis, and modeling
    proposed reforms.

    One area of agreement by SCI participants was the need to address the overall
    quality and efficiency of the health care system in order to assure sustainable
    coverage, which led to Ohio’s participation in a second national program, SQII.
    This collaboration of AcademyHealth and the Commonwealth Fund offered
    technical assistance to a small group of states committed to quality improvement
    and the development of concrete action plans for ongoing progress. Ohio’s SQII
    participation continued through the end of the program in Fall 2010.

    Both the SCI and SQII initiatives included bipartisan, broad-based participation
    from diverse constituencies to build agreement around coverage and quality
    priorities. The SCI recommendations involved an advisory group comprised of
    over 40 members; the OHQIP incorporated the comments of an estimated 400
    individuals who participated in two summits and subsequent comment
    opportunities. Further information may be found at:
    http://www.hccqc.ohio.gov/Pages/sci.aspx




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a. Council Organization and Priorities

   The Council works to advance the recommendations contained in the SCI and
   OHQIP reports by bringing together public and private health care leaders, with
   state legislators, to identify, facilitate, and implement strategies to improve the
   quality and efficiency of the health care system. With the passage of federal
   health reform, the Council also provides an established connection to external
   stakeholders and pathway for ongoing communication.

   Over thirty members sit on the Council, representing provider, payer (both
   insurers and employers), consumer, and policy communities, along with state
   legislators and agencies responsible for heath care and insurance oversight. The
   Council encourages and provides regular opportunities for public comment, with
   full Council meetings scheduled at least quarterly. (During its initial 18 months,
   the Council met bi-monthly.) Task forces and related work groups meet more
   frequently in order to satisfy specified deliverables as directed by the Council.

   The Council has identified several key strategic areas as priorities: the
   advancement of primary care homes (also known as medical or health homes); the
   use of payment reform to promote efficiency and quality; enhanced consumer
   engagement, especially within a primary care home; and coordination with health
   information technology (HIT) initiatives through the Ohio Health Information
   Partnership. Through focused task forces, the Council has identified and
   supported initiatives related to these priorities, including the “Multi-Payer
   Enhanced Primary Care Home Initiative”; the State Action on Avoidable
   Readmissions (STAAR) project; and a Payment Reform Summit. Most recently,
   a Health Benefits Exchange Task Force has been created to advise and guide the
   state as it plans for the implementation of a state health insurance exchange. All
   task forces include private partners from key constituencies; all are public
   meetings with opportunities for broad participation.

b. Funding

   In the SFY 2010-2011 budget, the General Assembly appropriated one-time, non-
   GRF funding of $2,116,272 for Council initiatives. The Council recommended
   the use of funding for the following activities, each of which is described in more
   detail under “Accomplishments”:

   •   Ohio Family Health Survey and Employer Health Survey (partial support)

   •   State Action on Avoidable Readmissions (a project in partnership with the
       Ohio Hospital Association to reduce hospital readmissions through a contract
       with the Institute for Healthcare Improvement)

   •   Multi-payer primary care home initiatives across the state; to advance three
       current and encourage four emerging projects


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   •   Chronic Disease Self-Management; expansion of an existing Ohio Department
       of Aging evidence-based program in alignment with the primary care home
       initiatives

   •   Payment Reform Summit; in part to identify the use of payment reform to
       support the primary care home

c. Accomplishments. The Council’s accomplishments include:

   Implementation

       •   Identified Council membership following an open nomination process that
           elicited over 150 applications; convened the first meeting in July 2009.

       •   Confirmed and established task forces (Medical Homes; Payment Reform;
           Consumer Engagement) to further define activities in the key strategic
           areas identified by Ohio’s Quality Plan.

   Medical Homes/Enhanced Primary Care Home Initiative

       •   Completed, proposed, and received Council approval of the “Primary Care
           Home Definition and Characteristics” (December 2009)

       •   Identified the development and implementation of a Multi-Payer
           Enhanced Primary Care Home (EPCH) initiative as a Council priority,
           with the first step the creation of a small provider- payer work group to
           develop a detailed action plan and specifications. (December 2009)

       •   Implemented the action plan designed by the work group following
           approval by all three task forces (Consumer Engagement, Payment
           Reform, and Medical Homes) and the Council. (May – June 2010)

       •   In accordance with the action plan and recommendations, the EPCH
           initiative will:
           o Provide support to advance existing projects (located in Cincinnati,
                Columbus, and Cleveland)
           o Assist in develop emerging projects identified in four other areas
                consistent with those named under Am. Sub. H.B. 198 (128th General
                Assembly) related to medical homes education;
           o Create a primary care home model that can be adopted across the state
                and adapted to local circumstances;
           o Identify and recommend actions and tools to integrate behavioral
                health in the primary care home
           o Recommend an evaluation structure and measurements for use across
                projects


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       o Work to engage Medicaid participation

   •   A Steering Committee comprised of payers, existing and emerging project
       representatives, providers, and consumers guides the work of the EPCH
       initiative; more information and detailed work plan may be found at:
       http://www.hccqc.ohio.gov/Pages/SteeringCommittee.aspx

   •   The Steering Committee recommended the use of approximately $1
       million in Council funding to advance and expand multi-payer primary
       care home projects; the recommendation was supported by the Council
       (August 2010) and an intergovernmental agreement signed with the
       Government Resource Center at OSU (September 2010). Existing and
       emerging primary care home projects are eligible for funding of up to
       $200,000 per current project and up to $75,000 per emerging project.
       These one-time funds must be spent by June 3, 2011.

   •   Three current projects received funding in November 2010; emerging
       projects expected to receive funding in December 2010.

   •   The Steering Committee also recommended the use of $200,000 in
       Council funding to expand the Chronic Disease Self-Management
       program administered by the Ohio Department of Aging; the
       recommendation was supported by the Council and an interagency
       agreement signed with the Ohio Department of Aging (November 2010).

   •   A joint EPHC Steering Committee – HIT Task Force meeting took place
       to identify action steps for the integration of health information technology
       in the primary care home. A subgroup will be formed to work with OHIP
       on developing a toolkit/model for primary care homes to use to select and
       implement an EHR.

State Action on Avoidable Hospital Readmissions (STAAR)

   •   Identified the State Action on Avoidable Hospital Readmissions (STAAR)
       project as a priority based on the recommendation of the Payment Reform
       Task Force, leading to the development of a contract with the Institute for
       Healthcare Improvement (IHI) and the use of $300,000 of SFY 2010-2011
       funding. (May 2010)

   •   Controlling Board approval received for the use of $300,000 in non-GRF
       Council funding for STAAR. The contract with the Institute for
       Healthcare Improvement (IHI) and a written Memorandum of
       Understanding with the Ohio Hospital Association as the project’s partner
       were signed in September 2010.




                                   125
  •     The Ohio Department of Mental Health (ODMH) has initiated a parallel
        opportunity to reduce readmission rates among its seven state hospitals,
        including supporting a dedicated Improvement Advisor.

  •     IHI conducted the kickoff Learning Session on October 27 and 28 in
        Columbus, with the 18 participating hospitals and all (4) Improvement
        Advisors attending; ODMH staff and director also attended.

  •     On October 26, the Advisory Committee met for the first time and was
        introduced to the STAAR collaborative, including discussion of how their
        organizations could contribute.

Payment Reform

  •     Based on a the recommendation of the EPCH Steering Committee and
        Payment Reform Task Force, the Council agreed to move forward with a
        Payment Reform Summit. The Summit will bring together health system
        payers (public/private), providers, employers and consumers for a day-
        long discussion of health care payment reform. Through regional work
        groups, participants will consider payment reform strategies to improve
        quality and cost, identify challenges, and assist in designing a process for
        payment reform. The day will produce recommendations for review and
        further action by the Council and create momentum for reform across the
        state. More specifically, the Summit will focus on ways to reform payment
        to encourage the effective use of patient-centered primary care homes and
        services, improve the coordination of care, and avoid preventable
        utilization of more intensive services.

  •     The Council also concurred with the use of $45,000 in Council funding to
        support the Summit. An agreement was signed with the GRC to assist in
        planning and managing the event, scheduled for December 4, 2010. A
        planning committee is guiding Summit content and approach, as well as
        working to assure balanced participation in the regional work groups and
        overall.

  •     The results from the Summit will be reviewed by the Payment Reform
        Task Force and a report (due Dec. 31, 2010) prepared for discussion by
        the full Council.

Other

  •     Received Council support to use a portion of the non-GRF dollars
        appropriated for Council initiatives to assist in funding the Ohio Family
        Health Survey and Employer Health Surveys ($125,000 each).           The
        surveys, a partnership of the Ohio State University, the Health Policy
        Institute of Ohio, and the Ohio Departments of Job and Family Services,


                                    126
          Health, and Insurance, provide Ohio-specific information on health status,
          insurance coverage, and access that is essential to inform decisions related
          to health care and insurance policy development.

      •   Created the Health Benefits Exchange Task Force in October 2010 to
          assist the state in planning for an insurance exchange in accordance with
          federal health reform. The initial meeting was a discussion with Jon
          Kingsdale (founding and now former Director of the Massachusetts Health
          Connector); the second reviewed the group’s vision and work plan. At that
          meeting, the Task Force reached consensus that Ohio should pursue a state
          exchange. A two-day meeting was scheduled for November 21 and 22,
          with another planned for December 15.

      •   Director Mary Jo Hudson is the designated Council member of the
          Medical Homes Education Advisory Council (established under Am. Sub.
          H.B. 198, 128th General Assembly). This work of this Council coincides
          with that of the EPCH Initiative.

d. SFY 2011 Objectives. The Council’s 2011 objectives include the following:

      •   Continued implementation of the State Action on Avoidable Readmissions
          (STAAR), reaching at least 18 hospitals and communities with a
          collaborative, continuous improvement process to improve care transitions
          from the hospital to home and community, and achieve a reduction in
          avoidable (and costly) readmissions. By June 2011 and in partnership with
          OHA, the initiative will be positioned to expand to additional hospitals
          and communities across the state.

      •   Advancement of the enhanced primary care home model by:

          •   Assisting current primary care home projects to expand and transform
              a greater number of provider practices to primary care homes

          •   Establishing primary care home initiatives in four additional
              communities

          •   Creating a primary care home model for use statewide, yet adaptable
              to local circumstances

          •   Identifying strategies to improve the integration of behavioral health
              into the primary care home

      •   Identification of and recommendations for payment reform strategies for
          adoption by public and private payers by:




                                      127
            •     Presenting the results of the Payment Reform Summit and related
                  recommendations from the Payment Reform Task Force to the Council

            •     Creating consensus around the recommendations from the Payment
                  Reform Task Force among the Council

            •     Specifying arrangements that specifically support and sustain the
                  primary care home model

e. Ongoing Activities (as of December 2010). As of December 2010, the ongoing
   activities of the Council include the following.

   Funding (all contracts/agreements terminate June 30, 2011 unless otherwise noted):

        •   Contract with IHI: total = $300,000

        •   Agreements with GRC
            o Family Health Survey = $125,000
            o Employer Health Survey = $125,000
            o EPCH = $1,012,000
            o Payment Reform Summit = $45,000 (terminates Dec. 31, 2010)

        •   Agreement with ODA = $200,000

        •   Remaining [unobligated] Council funds = $218,544

            o 2nd Annual Report (due December 23, 2010)

     Scheduled Meetings:

                                 December 2010
               Date                             Event
            December 2        Council Meeting
            December 14       EPCH Steering Committee Meeting
            December 14       Payment Reform TF Meeting
            December 15       Health Benefits Exchange Task Force
                              Meeting
                                   January 2011
                  Date                          Event
                January 6     Behavioral Health Integration Work Group
                                               Meeting
             January 27          EPCH Steering Committee Meeting
                                  February 2011
               Date                             Event
             February 9       Behavioral Health Integration Work Group
                                               Meeting


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            February 24          EPCH Steering Committee Meeting
                                  March 2011
              Date                            Event
             March 3             EPCH Steering Committee Meeting
             March 24                   Council Meeting


8.1.3 H.B. 125 Contracting and Credentialing Requirements

     In June 2008, the Ohio General Assembly enacted, and Governor Strickland
     signed House Bill 125, which incorporated many issues of concern to healthcare
     providers. The bill sets requirements for the contracts between providers and
     those who contract with them. It also required studies on real time eligibility of
     determinations and claims adjudication, and also the use of most favored nation
     provisions in contracts between health plans and providers. It also addressed
     standardization of credentialing. All of these issues were required to be addressed
     by the Department.

     a. H.B. 125 – Credentialing

        H.B. 125 required the use of a standardized credentialing form for
        credentialing Ohio providers. Previously, Ohio required health insuring
        corporations to use a standardized credentialing form developed by the
        Department. HB125 mandated the use of a national credentialing form
        developed by the Council for Affordable Quality Healthcare (CAQH).
        CAQH’s form is an online form that utilizes a database. The law generally
        expanded the use of the form by requiring all contracting entities to use the
        standardized form when credentialing providers [as specifically defined in the
        ORC 3963.01(P)].

        HB 125 required the Department to develop a second form for other
        providers; the CAQH form is applicable only for individual providers.
        Therefore, the Department developed a standardized form for credentialing
        the facility providers (e.g. home health agency) that were included in the
        definition of provider. Both forms are currently in use with links available on
        the Department’s website.

     b. H.B. 125 - Most Favored Nation in Health Care Contracts

        The Joint Legislative Commission on Most Favored Nation Clauses in Health
        Care Contracts (“Commission”) was created in House Bill 125. The
        Commission was charged with studying the use and effect of most favored
        nation clauses in health care contracts, including the precompetitive and
        anticompetitive aspects of the clauses, and the impact of the clauses on the
        availability of and accessibility to quality health care.



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   The Department led the Commission, which met regularly for over a year. The
   Commission concluded its work upon the submission of its report to the
   General Assembly in March 2010. While the Commission was staffed by ODI
   and Director Mary Jo Hudson was a voting member of the Commission, the
   Department remained neutral on the issue of the use of most favored nation
   clauses. Also, Director Hudson did not cast a vote on any of the
   recommendations made the Commission.

   The Commission issued a report with its findings which can be found at
   Exhibit E, attached hereto, and also
   http://www.insurance.ohio.gov/Legal/Reports/Pages/ReportsIndex.aspx. In
   House Bill 198, which was signed into law in June 2010, the Ohio General
   Assembly, extended the moratorium on most favored nation clauses in health
   care contracts regarding hospitals. This moratorium will last until June 25,
   2011.

c. H.B. 125 - Real Time Claims Adjudication

   The Advisory Committee on Eligibility and Real Time Claim Adjudication
   (“Committee”) was created in House Bill 125 of the 127th General Assembly.
   The Committee was charged with assessing and providing recommendations
   to the General Assembly concerning standardizing the electronic
   communications for administrative functions within the healthcare sector in
   Ohio. The Committee also was required to consider the interoperability
   standards as created by the Committee on Operating Rules for Information
   Exchange (CORE). In addition, the Committee was asked to advise the
   General Assembly regarding the adoption of certain data elements and
   whether certain technologies for eligibility verification should be
   recommended. Finally, the Committee was required to discuss the issue of
   when providers may rely upon eligibility information provided by payors.
   The Department was directed by the legislation to staff the committee.

   After several meetings, the Committee reached consensus on an
   overwhelming majority of the recommendations, although not all. The
   Committee identified the following barriers to the widespread adoption of
   CORE certified eligibility verification technology: the costs associated with
   system upgrades for payors and providers, the time required to do so, the lack
   of generally accepted national operating standards for the information
   exchange, the lack of one simple agreed upon method of checking eligibility
   information for providers, and the concern regarding whether the eligibility
   information received electronically is adequate and reliable. The Committee
   agreed that additional information needed to be gathered and that some of the
   issues discussed needed further study. The Committee also acknowledged
   there is much work to be done in order to achieve real time eligibility and
   claim adjudication.




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           A copy of the report can be found at Exhibit F, attached hereto, and also on
           ODI’s website at
           http://www.insurance.ohio.gov/Legal/Reports/Pages/ReportsIndex.aspx.

8.1.4   Health Information Technology

   a. Ohio Health Information Partnership (OHIP)

        Background

        In January, 2009, the Department of Insurance hired a State Health Information
        Technology Officer to focus on coordinating and leveraging the efforts of several
        State agencies involved in Health Information Technology (HIT) activities as well
        as advise the Governor’s staff on HIT strategies and direction. In February, 2009,
        the American Recovery and Reinvestment Act (ARRA) appropriated $2 billion
        towards health information technology initiatives with a potential match of up to
        10 to 1 for health IT funding. The grant specifications and match requirements
        were not yet finalized, but during the HB1 budget process, hospital and physician
        stakeholders, the General Assembly and the Governor all agreed to utilize as
        matching funds non-GRF funds remaining in an ODI line item originally funded
        by fees from hospitals and physicians. Consequently, the State appropriated $8
        million non-GRF funds to Ohio Department of Insurance for health information
        technology and to draw on federal stimulus funds under ARRA. In addition, the
        ARRA allocated another $34 billion for Medicaid and Medicare incentive
        payments to providers who adopt certified electronic health record (EHR)
        technology. The Medicaid division under the Department of Job and Family
        Services is responsible for processing the Medicaid incentive payments (100%
        federally funded) to Ohio’s hospitals and physicians. Medicare payments are
        processed through the Federal Government.

        Ohio Collaborates with a Public-Private Partnership

        The administration felt that since the vast majority of electronic health record
        exchange happens in the private sector, the effort to support EHR adoption and
        exchange should be through a public-private partnership. In July 2009, Ohio’s
        major stakeholders began discussions on forming a public-private partnership to
        implement and support the statewide health information exchange (HIE). Those
        discussions lead to the formation of the Ohio Health Information Partnership
        (OHIP), a non-profit corporation with 501(c )(3) IRS status. OHIP’s mission is to
        advance the adoption and implementation of health IT among health care
        providers and facilitate and develop an electronic health information exchange
        (HIE) in order to improve quality and reduce cost of health care for Ohioans.
        OHIP was formed with five initial members from the Ohio State Medical
        Association (OSMA), the Ohio Osteopathic Association (OOA), the Ohio
        Hospital Association (OHA), BioOhio and the Department of Insurance (ODI).
        The five initial members are OHIP’s Executive Board. The Department has a
        permanent seat on OHIP’s Board. In February 2010, OHIP’s board expanded to


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   fifteen members, adding representation from Ohio business, physicians, payers,
   consumer advocates, hospitals, behavioral health providers, and Ohio Federally
   Qualified Health Centers. OHIP has a fulltime staff dedicated to fulfilling its
   mission. Although OHIP was initially funded through State and Federal funds, it
   is expected to be generating its own revenue and be fully self-sustaining by the
   end of calendar year 2014.

   OHIP’s Board:

   Executive Members
   Board Chair, Amy Andres, Chief of Staff, Ohio Department of Insurance
   Vice-chair, Jon Wills, Executive Director, Ohio Osteopathic Association
   Board Treasurer, Dr. Tony Dennis - President and CEO, BioOhio
   Interim President and CEO, Dan Paoletti, VP of Data Services, Ohio Hospital
   Association
   Executive Board Member, D. Brent Mulgrew, JD, Executive Director, Ohio State
   Medical Association

   Members
   Dr. Martin Harris, Chief Information Officer, Cleveland Clinic
   Dr. Richard Gajdowski, Medical Director for OH/MI, United Healthcare Health
   Services
   Joann Limbach, Ohio Chapter President, AARP
   Paul Apostle, Chief Information Officer, Medical Mutual of Ohio
   Amanda Lucas, Administrator for Behavioral Health, Nationwide Children’s
   Hospital
   Dr. Brian Bachelder, Associate Clinical Director, Family Practice, Akron
   Regional Medical Center
   Jeff Lowrance, CEO & CIO, Ohio Shared Information Services
   Charles Stark, President and CEO, Firelands Regional Health System
   Sandra Morris, Senior Manager of US Benefits Design, Proctor & Gamble
   Dr. Troy Edwards, DO, Family Practice Physician

   OHIP’s Contact Information:
   OHIP
   3455 Mill Run Drive, Suite 315
   Hilliard, OH 43026
   614-664-2600
   www.ohiponline.org

b. ARRA Funding - Health Information Technology for Economic and Clinical
   Health (HITECH)

   The Department of Health and Human Services created the Health Information
   Technology for Economic and Clinical Health (HITECH) grants to fund the
   development and implementation of statewide health information exchanges, and



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   the adoption of EHRs. Three main funding streams support HIE technology and
   the adoption of EHRs. The HIE grants were released to fund developing and
   implementing a statewide HIE. The Regional Extension Center (REC) grants
   were released to support technical assistance, EHR adoption, connectivity to the
   HIE and meeting the federal requirements for Meaningful Use. In addition to the
   HIE and REC grants, the federal government is offering substantial incentives (up
   to $63,000 per physician) in increased Medicaid/Medicare reimbursements to
   eligible physicians and hospitals that implement certified EHR software and meet
   federal Meaningful Use thresholds. Several other competitive grants have been
   released, such as the Beacon Community Grants, Strategic Health IT Research
   Grants, and various HIT workforce development grants.

c. OHIP’s Federal Grant Awards

   In January 2010, OHIP was officially awarded $14,872,199 to build a statewide
   Health Information Exchange (HIE). In February 2010, OHIP was awarded
   $28,500,000 to support adoption and implementation of electronic health record
   (EHR) systems for 6,000 priority primary care physicians (PPCP’s) in 77 of
   Ohio’s 88 counties. Another Ohio non-profit corporation, HealthBridge, was
   awarded $9 million to support approximately 1000 PPCP’s 11 counties
   surrounding the Cincinnati area. As Ohio’s designated Health Information
   Technology organization, the $8 million non-GRF funds were used to meet state
   match requirements, affording $17 million to build the HIE and $34.4 million to
   support EHR implementation. In early 2010, the Ohio Controlling Board
   unanimously passed two requests to transfer $2,106,801 for HIE and $5,848,199
   for REC services to OHIP via contract. Although OHIP was awarded the HIE
   grant for Ohio, the State is required to name a State HIT coordinator to ensure
   proper integration with Medicaid, Department of Health and other health related
   agencies. Currently, Amy Andres, the Department’s Chief of Staff, is the State
   HIT Coordinator.

d. How is OHIP using the money to develop, implement and support an HIE?

   Developing and implementing a statewide HIE for Ohio is a substantial effort in
   size and scope. Ohio will use a federated approach where data is shared, rather
   than stored in a central repository. OHIP initially issued a Request for Information
   (RFI) to vendors who wish to compete for the HIE contract in Ohio. The intent of
   the RFI was to inform the approach that Ohio ultimately adopts, as well as
   determine the invitation pool for the more detailed competitive request for
   proposal (RFP) process to select the final vendor. OHIP received, reviewed and
   scored 40 RFI submissions and culled the RFP invitee list to 8 vendors. The RFP
   evaluation process is in its final stages and is expected to be awarded and
   contracted by early January, 2011.

   The technical portion of implementing a statewide HIE is only part of the
   initiative. Although it is a substantial effort, an equally substantial effort is needed



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to move Ohio forward toward exchanging health records electronically. The
change management required to completely alter the way health records are
created, exchanged and used to improve patient care involves considerable
engagement with physician practices. In order for adoption to stick, it has to be
better for the physician and his/her staff to use electronic means over paper, so
many things have to change, such as implementing EHR systems, converting
paper records to electronic, changing business workflows within the practices to
work with the systems and training existing staff. Of physician practices in Ohio,
37% are solo and 45% are 2-6 physician offices, so this effort will be very
challenging throughout the state. OHIP recognized that Ohio has very different
markets and regional approaches across the state. Consequently, regional health
information organizations (RHIOs) have formed and made significant investments
in time and money over the past decade to implement and support regional health
information exchanges. As they have an intimate understanding of their markets
and the requirements to support physicians and hospitals in their region, OHIP
contracted with seven regional partners to provide coverage throughout 77 of
Ohio’s 88 counties. OHIP’s Regional Partner’s are currently signing support
contracts with physicians to offer support services physicians and hospitals within
their region. OHIP expects all 6,000 physicians to be under contract by April,
2011. See Regional Partners and map below.




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e. HIT State Interagency Team

   In addition to the Department’s participation in OHIP, the agency has also taken
   the lead on HIT coordination across state agencies. The purpose of the
   interagency HIT team is to maximize the use of the health information exchange
   at the state level. We want to look at all the data collected by state agencies that
   have anything to do with health care – clinical data, claims data, provider info,
   etc. and see where there are opportunities for streamlining with the health
   information exchange. The following sub-groups were formed to address the
   work:

   i. Data exchange between agencies
      Purpose: To create an efficient and effective way to exchange data between
      agencies. This effort would require no new data collection – just a way to
      know what data each agency has and an easy way to share those data. We
      determined that this effort probably did not require interaction with the HIE
      but rather strategic discussions between the agencies and Ohio’s Office of
      Information Technology.

      Agencies involved:
      Workers’ Compensation
      Rehabilitation and Corrections
      Job and Family Services
      Aging
      Alcohol and Drug Addiction Services
      Health
      Mental Health
      Rehabilitation Services

   ii. Claims
       Purpose: Use the HIE to facilitate the claims processes currently done by
       agencies, saving time and money.
       Agencies involved:
       Worker’s Compensation
       Health
       Mental Health
       Alcohol and Drug Addiction Services
       Medicaid

   iii. Licensing
        Purpose: To figure out a way to do the processing and record keeping of
        professional licenses in the HIE to save the state time and money.
        Agencies involved:
        Worker’s Compensation
        Nursing Board



                                        135
      Medical Board

   iv. State agency EHR
       To find an appropriate and cost effective EHR solution for those agencies who
       provide clinical care.
       Agencies involved:
       Mental Health
       Youth Services
       Rehabilitation and Corrections
       Alcohol and Drug Addiction Services
       Worker’s Compensation

f. HIT Workforce Development

   Across the nation, there is an inadequate supply of trained HIT professionals to
   meet the goals of the ARRA HITECH grants. The feds issued additional
   HITECH grants to address the workforce shortage. One grant went to a
   consortium of universities to develop a national HIT curriculum. Another was
   granted to consortia of community colleges to deliver the curriculum. Cuyahoga
   Community College in Cleveland is the leader of the Midwest HIT community
   college consortium, which is comprised of 17 colleges, four in Ohio (Cuyahoga
   Community College, Cincinnati State, Columbus State and Sinclair). Classes
   started in September, 2010 at each of those colleges.

   OHIP and the Department of Education are working with ODJFS, the Department
   of Development and the Board of Regents to ensure this effort is integrated with
   other statewide workforce development programs. Specifically, we have worked
   to find ways of recruiting Ohio’s dislocated workers – many of whom have
   relevant and transferable skills and experience – into the training programs.

   ODJFS contact: Alice Worrell
   Development contact: Sue McKitrick
   Board of Regents contact: Stacia Edwards
   Midwest HIT Community College Consortium contact: Norma Morganti

g. HIT Task Force of the Health Care Coverage and Quality Council

   The purpose of the HIT task force is to identify and assess the HIT needs of the
   other Council priorities. Working closely with OHIP, the main deliverable of the
   task force will be a toolkit that the RECs and providers can use when thinking
   about selecting and implementing an EHR in the medical home setting. Members
   of the task force can be found on the NCCQC website.




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8.1.5 Mental Health Parity

     Legislation at both the state and federal level was enacted or became effective
     during the Strickland Administration. The department received numerous
     inquiries from consumers, legislators, providers and other stakeholders on how
     the new legislative mandates impacted health insurance coverage. In an effort to
     provide guidance to stakeholders, ODI held public forums and had numerous
     stakeholder meetings to answer questions and provide guidance. Additionally,
     ODI created and updated a Mental Health Parity Toolkit that is posted on the
     website.

     The Ohio Mental Health Parity Act of 2007 (SB 116 of the 126th General
     Assembly) was passed in Dec. 2006 with a March 2007 effective date. The
     legislation made changes to ORC 1739.05, 1751.01, 1751.02, 3923.28, 3923.30,
     and 3923.51. This legislation created the Biologically Based Mental Illness
     Coverage Mandate or BBMI. The law requires health benefit plans, including
     individual, small group, fully-insured and private or public self-funded plans (to
     the extent not pre-empted by federal law) to cover the diagnosis and treatment of
     biologically-based mental illnesses, as defined in state law. Notably, however, this
     Ohio law does not generally apply to self-insured private employer plans
     governed by ERISA.

     At the Federal level, the Paul Wellstone and Pete Domenici Mental Health Parity
     and Addiction Equity Act of 2008 (MHPAEA, P.L. 110-343) further expanded
     parity requirements. The provisions were rolled into H.R. 1424 the Emergency
     Economic Stabilization Act of 2008 that was passed in October 2008.

     The legislation was effective for plan years beginning after October 3, 2009 and
     the Interim Final Rules issued in April 2010 took effect for plan years beginning
     on or after July 1, 2010.

     The Mental Health Parity and Addiction Equity Act of 2008 expanded parity
     requirements to treatment limitations, financial requirements (e.g., co-payments),
     and in- and out-of-network covered benefits. The law did not mandate the
     coverage of any specific mental health condition; rather, where an insurer chooses
     to cover both mental health and medical and surgical benefits, they are required to
     do so in compliance with these parity requirements.

     The ODI Mental Health Parity Toolkit (includes updated FAQs, compare chart) is
     attached as Exhibit G, and also can be accessed at
     http://www.insurance.ohio.gov/consumer/pages/mhparity.aspx

8.1.6 HB 198 – Medical Home Demonstration Project

     House Bill 198 established the “Patient Centered Medical Home Education Pilot
     Project” to address Ohio’s growing shortage of primary care providers and train



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      primary care practitioners in the patient-centered medical home (PCMH) model of
      care. The bill:

      •   Enables 44 practices affiliated with four medical schools and five nursing
          schools to design and implement the PCMH model of care;

      •   Addresses PCMH curriculum development at the medical school, nursing
          school, and residency levels; and 

      •   Allows students who intend to pursue primary care to participate in the
          Choose Ohio First Scholarships program.

      The Patient Centered Medical Home Education Pilot Project is administered by
      the newly-created Patient Centered Medical Home Education Advisory Group.
      The bill provides that the Boonshoft School of Medicine at Wright State
      University is to provide administrative support until the Advisory Group identifies
      an alternative. The Advisory Group includes representatives from the Health Care
      Coverage and Quality Council (HCCQC) appointed by the Superintendent of
      Insurance, the state medical board, the state nursing board, the Chancellor or
      designee, Medicaid Director or designee, and Department of Health Director or
      designee.

      The bill also adds responsibilities for the HCCQC. Specifically, the bill requires
      the HCCQC to review the medical home concept of care, propose the
      characteristics of a medical home, propose payment reforms that will encourage
      PCMHs, collaborate with the Board of Regents on workforce development issues
      that may obstruct the expansion of the PCMH, and recommend reporting
      requirements for practices converting to the PCMH model. There is no funding
      attached to the bill, but the bill authorizes the newly-created PCMH Education
      Advisory Group to apply for grants, seek federal funds, and accept private
      donations.

8.2 Federal Health Care Reform

 8.2.1 Patient Protection and Affordable Care Act

   a. Internal and External Review

      ODI has submitted new language and revisions to several internal and external
      review sections of the Ohio Revised Code through the OBM budget language
      portal for potential inclusion in the SFY12-13 ‘As Introduced’ Budget in order to
      comply with the changes required by ACA. Section 2719(b)(1) of the PHS Act
      and the associated regulations provide that, if a State external review process that
      applies to and is binding on a health insurance issuer includes, at a minimum, the
      consumer protections set forth in the Uniform External Review Model Act issued
      by the National Association of Insurance Commissioners (“NAIC Uniform Model


                                          138
   Act”), then the issuer is not required to comply with the federal external review
   process.

   Ohio’s current external review statutes were not based upon the NAIC Uniform
   Model Act and do not include all of the consumer protections set forth in the Act.
   The amendments proposed in the attached statutes to Ohio’s external review
   process are intended to be the minimum changes necessary to our current process
   to include the consumer protections required under the NAIC Uniform Model
   Act. States have until July 2011 to bring their external review statutes into
   compliance with ACA, or issuers must comply with the federal external review
   process.

   In addition to changes to the external review statutes, we have proposed a new
   statute ORC 3923.661 which places into state law the ACA requirement that
   insurers establish an internal appeal process that complies with the DOL Claims
   Procedure Final Rule (Published in the Federal Register on November 21, 2000)
   as amended by ACA. We have also made some amendments to the Independent
   Review Organization laws (ORC 3901.80 and 3901.82) and have added the ACA
   recordkeeping requirements (ORC 3923.682) and rulemaking authority (ORC
   3923.71) should the federal government amend the internal or external appeals
   process in the near future.

b. No Pre-existing Condition Exclusion for Under 19

   On September 26, 2010, the Governor issued Executive Order 2010-12S adopting
   an Emergency Rule establishing open enrollment market rules for carriers to level
   the playing field and encourage sales to children under 19. The rule establishes an
   agreed upon annual open enrollment period during which all carriers that have
   agreed to offer coverage in the child-only market will hold their open enrollment.
   We have also surveyed carriers in the individual market to determine which
   carriers will agree to resume offering coverage pursuant to the terms of the
   emergency rule. We have developed FAQs explaining how the open enrollment
   period would work in the individual market for child-only sales and family policy
   sales. See
   http://www.insurance.ohio.gov/Consumer/Pages/HealthInsuranceforChildrenUnd
   er19.aspx

c. Patient’s Bill of Rights

   An FAQ explaining the reforms known as the “Patient’s Bill of Rights” (including
   information on rescissions, patient protections, and annual and lifetime limits) can
   be found at
   http://www.healthcarereform.ohio.gov/Documents/Patient%20Bill%20of%20Rig
   hts%20FAQ%20August%202010.pdf




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d. Temporary High Risk Pool

   The Temporary High Risk Pool is a federally subsidized health plan, authorized
   under the Affordable Care Act, which makes coverage for individuals with pre-
   existing conditions more affordable for people who cannot purchase health
   insurance in the private market because of their health status. These high-risk
   pools are also referred to as the Pre-Existing Condition Insurance Plans under the
   Patient Protection and Affordable Care Act (PPACA). Ohio was awarded $152
   million to run the temporary high risk pool through 2014.

   In June 2010, the Ohio Department of Insurance (ODI) selected Medical Mutual
   to administer Ohio’s High-Risk plan through an Administrative Services Only
   (ASO) contract directly with the federal government (HHS). In their RFP
   submission proposal, Medical Mutual estimated that with the available funding
   they could cover more than 5,000 Ohioans through the duration of the program,
   with individuals paying a standard rate premium for their coverage. No state
   funds are currently being used to provide this coverage. The temporary high risk
   pool program began accepting applications in August 2010. The first enrollees
   began coverage on September 1, 2010 at which time they received a range of
   benefits including primary and specialty care, hospital care and prescription drug
   coverage. There are approximately 700 Ohioans enrolled to date (Nov. 2010).

   In order to enroll in Ohio’s temporary high risk pool, Ohioans must meet the
   following five criteria:

   •   Provide evidence of a pre-existing condition. Written certification by a
       licensed physician or nurse practitioner, issued within the past six months.
       Medical Records are not required. Or, a copy of letter or document verifying
       two carriers have refused to issue creditable coverage within the previous six
       months, or would issue coverage only with an exclusionary rider.

   •   Proof of Ohio Residence. (Valid Ohio driver’s license, state government ID,
       payroll stub, Ohio voter registration card, utility bills, rental agreement, Ohio
       Income Tax Return)

   •   Proof of U.S. citizenship or a national of the United States or lawfully present
       in the United States. (Birth certificate, passport or visa)

   •   Must be uninsured for six months prior to the date of applying for coverage.

   •   Must be ineligible for coverage under the Medicare program, the Ohio
       Medical Assistance Program, the Ohio Children’s Health Insurance Program,
       or an employer-sponsored group health plan, unless subject to a mandatory
       initial waiting period.




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   •   Medical Mutual of Ohio accepts applications through their website at
       www.ohiohighriskpool.com or by calling toll-free: 1-877-730-1117.

   Ongoing ODI Responsibilities for the High Risk Pool include assisting MMO
   with marketing and media on policy issues related to the HRP. Additionally, the
   ODI team provides oversight and policy direction to MMO regarding how the
   program is operated and any changes to the plan. Finally, key policy and
   communications staff participate in a weekly conference call with MMO to
   discuss opportunities and risks related to the HRP. Additionally, before any third
   party organization can pay for coverage issued to an enrollee in the Ohio’s high
   risk pool program, the organization must be certified by the Ohio Department of
   Insurance. To be considered for certification as a third party payor, an
   organization must complete the application in its entirety, and must certify to the
   statements in the “certification” section. The Ohio high risk pool will not accept
   payment from a third party payer unless and until it has been certified by the Ohio
   Department of Insurance. Enrollees must pay for their own coverage unless and
   until payment is made by a third party payer that has received the approval of the
   Ohio Department of Insurance. And finally, under MMO’s contract with HHS,
   enrollees can appeal adverse claim or eligibility determinations to the Department
   of Insurance. With respect to such appeals, ODI works closely with HHS to carry
   out the intent of the ACA.

   More background information and FAQs on the Ohio High Risk Pool can be
   found on the website
   http://www.healthcarereform.ohio.gov/Pages/Highrisk.aspx

e. Medical Loss Ratio (MLR)

   Beginning in 2011, the ACA requires that insurance companies publicly report
   how they spend premium dollars. Also beginning in 2011, insurers are required to
   spend at least 80 percent of the premium dollars they collect on medical care and
   quality improvement activities in the individual and small group markets. The
   minimum loss ratio for the large group market will be 85%. Insurance companies
   that are not meeting the medical loss ratio standard will be required to provide
   rebates to their consumers. Insurers will be required to make the first round of
   rebates to consumers in 2012.

   Financial Regulation will be required to review the forms companies must file as
   supplements to their annual statements and to follow up with any company that
   appears to have completed it incorrectly. The NAIC Health Reform Solvency
   Impact (E) Working Group is still discussing how to respond to solvency
   concerns that develop because of any MLR payment that may be required based
   on the 2011 year data.




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 f. Waiver

     The PPACA allows for the Department of Health and Human Services to grant a
     waiver to a company from compliance with the annual limit requirements of
     PPACA. Ohio has requested that HHS grant a waiver to companies writing in the
     Ohio individual market for purposes of providing the basic and standard plans
     under the open enrollment program. If this waiver is provided, companies will
     need to make 2011 rate and form filings for basic and standard plans that are
     PPACA compliant, and also for basic and standard plans that follow the pre-
     PPACA benefit guidelines.

8.2.2 Grants

 a. Exchange Planning Grant. ODI was recently awarded a grant in the amount of
    $1 million to evaluate and plan for a health insurance exchange in Ohio. The
    controlling board recently approved this expenditure. A total of forty-eight
    states were awarded this grant. No state matching funds were required.

     The grant funds will be used to conduct the research and planning needed to
     determine if and how an Ohio Exchange will be operated and governed. These
     activities will include coordinating public and stakeholder input through a
     specially constituted task force, conducting market analysis, modeling Ohio’s
     public programs and private insurance markets to provide projections and analysis
     necessary for making decisions concerning the establishment of an Ohio
     Exchange. The Health Care Coverage and Quality Council established a new
     subcommittee called the Health Benefits Exchange Task Force to coordinate
     public and stakeholder input.

 b. Health Benefits Exchange Data Subcommittee. At the request of the Health
    Benefits Exchange Task Force, a Data Subcommittee was formed to assess what
    kind of data and analysis are needed to plan and implement a Health Benefits
    Exchange.

     The Data Subcommittee was charged with doing an initial inventory of what kind
     of data and analysis are available and needed for Exchange planning and
     implementation and provide recommendations to the Task Force on how best to
     proceed. Additionally, the Subcommittee was tasked with commenting on the
     topic areas mentioned in Ohio’s Exchange planning and implementation grant and
     recommending any additional topics and issues for analysis.

     The recommendations of the data subcommittee were presented to and accepted
     by the Health Benefits Exchange Task Force on November 23, 2010.

 c. Consumer Assistance/Ombudsman Grant. The goal of Ohio’s consumer
    assistance program is to provide information and assistance to consumers about
    their health care coverage options, to assist consumers with writing and filing
    appeals with their health insurance providers, and to provide assistance and


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   guidance to uninsured Ohioans who are not eligible for public assistance and
   cannot afford health care coverage. Ohio received $1,100,000 in grant funds from
   the U.S. Department of Health and Human Services to implement its consumer
   assistance program.

   The Ohio Department of Insurance (the Department) will manage the consumer
   assistance program and coordinate closely with the Ohio Association of Second
   Harvest Food Banks (OASHF), UHCAN Ohio, Family Voices and the Ohio
   Association of County Behavioral Health Authorities (OACBHA).

   OASHF will serve as the initial point of contact to assist consumers with
   enrollment in public assistance options or to refer callers to the Department to
   assist with enrollment in a health insurance plan if the consumer can afford
   coverage or to answer questions about an insurance claim if the consumer is
   already insured. UHCAN Ohio, Family Voices and OACBHA will provide case
   management for uninsured Ohioans who are not eligible for public assistance and
   cannot afford health insurance coverage. The Department will also establish an
   independent consumer appeals program with trained legal interns managed by its
   legal division to provide assistance to consumers in writing and filing appeals
   with their health insurance plan.

   The Department will implement a data reporting process for all partners to follow
   so that Ohio has a robust data portfolio to deliver to the Secretary in compliance
   with this grant program. We also believe that data gathered through this effort will
   assist Ohio in planning for a health benefit exchange.

d. Health Insurance Premium Review Grant

   A $1 million grant was awarded to Ohio from the Office of Consumer
   Information and Insurance Oversight (OCIIO), a division of the U.S. Department
   of Health and Human Services, to enhance reviews of health insurance
   premiums. A total of forty-five states were awarded this grant. No state matching
   funds were required.

   The grant will fund increased capacity for oversight of a high volume of complex
   health insurance rate filings, as well as increase transparency and accountability.
   ODI has plans to develop and upgrade technology to meet reporting requirements
   and to purchase an actuarial database. Grant funding will be also be used to hire
   additional staff for premium reviews and to upgrade processes, systems and data
   analysis capabilities. These additional staff resources will enable the department
   to review product filings more efficiently thus expediting the process of getting
   products to market. ODI intends to develop a consumer-friendly web application
   on the ODI website which will assist consumers in using and understanding the
   rate filing information. It is anticipated that additional resources will be available
   in subsequent years to fund the staff positions on an ongoing basis.




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      On November 15, ODI issued an RFQ for information technology consulting
      services to assist in the development of the new complaint system to integrate
      changes required by the Affordable Care Act (ACA). On the same date, a second
      RFQ was issued to create appropriate data files to interact with SERFF data in
      order to fulfill the reporting requirements of the Agency.

      As of mid-November, OPRAS has hired one contract analyst and one actuary and
      has posted positions for an actuarial analyst and another contract analyst. OPRAS
      will be posting the data analyst position soon and are evaluating products in the
      marketplace to assist with trend analysis.

      As of mid-November, the Market Conduct Division has one data specialist
      position for which they will be interviewing soon and another one to be re-posted
      due to lack of qualified applicants.

8.3 Major Department Initiatives

 8.3.1 Independent Review Organization (IRO)

      If a consumer’s health plan denies, reduces or terminates a service or treatment
      because the plan determines the service or treatment is not medically necessary or
      experimental / investigative, the consumer’s case could be eligible for an external
      review with an independent review organization (IRO).

      ODI partnered with the Ohio State Medical Association (OSMA) and various
      other providers to develop a marketing plan that providers can use to inform
      patients about the IRO process – what the process is, when they should consider
      an IRO, etc. ODI also worked with Consumer Advocates on a similar marketing
      plan.

      ODI formed an internal work group to evaluate and improve our internal
      processes. The immediate task at hand for this group is to develop a searchable
      database whereby stakeholders can in a user-friendly manner access information
      about IRO decisions (by issue, final outcome or insurer).

      Between May 2004 and December of 2008, independent review organizations
      reviewed 771 decisions of insurers in cases involving Ohio consumers. Of these
      cases, 62% were affirmed and 38% were reversed, resulting in the insurance
      company either paying for or providing the requested service.

      ODI has implemented marketing tools for providers and consumers to help them
      better understand the independent review process. These tools are attached hereto
      as Exhibit H, and also are available on our website at
      http://www.ohioinsurance.gov/consumserv/healthcoverageappealtoolkit.htm.




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8.3.2 Choosing Healthplans All Together (CHAT)

    CHAT, also known as Choosing Healthplans All Together, is a proprietary educational
    and research tool developed by the University of Michigan and The National Institutes of
    Health with support from the Robert Wood Johnson Foundation. This computer-based
    program examines consumer healthcare choices in the context of limited resources.

    The Ohio CHAT program and research was funded by both public and private entities
    who were stakeholders in Ohio’s healthcare reform initiative. Ohio CHAT sought to
    answer for the State Coverage Initiative (SCI) team: What is most important to
    provide for uninsured Ohioans if we cannot afford healthcare coverage for
    everything? In order to determine these adequate protections, participants were asked
    through the CHAT process what was most needed and valued given a tight budget.
    Additionally, the CHAT program through one-on-one dialogue also provided an avenue
    to educate many Ohioans about health plans and coverage options.

    The Ohio CHAT program and report (“Ohio CHATS About Healthcare”) was completed
    in 2009 and was presented to the SCI team. Information from Ohio CHAT’s About
    Healthcare could be valuable for future discussions on benefit packages and public
    outreach concerning health coverage.

8.3.3 Ohio Family Health Survey (OFHS)

    The Ohio Family Health survey has been gathering information on health and
    insurance status of Ohioans since 1998. In 2008 (and 2010), along with various
    other agencies, ODI was a key sponsors of this survey. Information from this
    survey was used by the Department for various health care reform decision
    making matters such as the State Coverage Initiative, the Health Care Coverage
    and Quality Council, the Ohio High Risk Pool planning and the Health Benefits
    Exchange Benefits Task Force. Additionally, this survey served as an important
    resource for the Department when we received queries from the public and
    legislators on health policy related matters.

    The results of the 2010 OFHS will be released in December 2010. Possibly eight
    targeted white papers based upon the results of the OFHS and OEHS (see below)
    surveys will commence this December. The OFHS Executive Committee
    Members (of which ODI is a member) plan on overseeing the completion of these
    policy projects through June 2011.

8.3.4 Ohio Employer Health Survey (OEHS)

    The Ohio Employer Health Survey serves as a compliment to the 2010 Ohio
    Family Health Survey. It surveys Ohio’s employers by asking them what health
    insurance choices they provide to their employees, the cost of that insurance, and
    identification of the barriers that employers have to providing insurance for their
    workers and their families.




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      This survey is likely to begin this December and the final results are expected in
      Spring 2011. The OFHS and OEHS Executive Committee Members (of which
      ODI is a member) plan on overseeing the completion of this survey through June
      2011.

8.4 Communication

 8.4.1 Ohio’s Health Care Reform Website

      The Department hosts and manages content for the state’s health care reform web
      portal, located online at www.healthcarereform.ohio.gov. Through this website,
      stakeholders can read about new developments from the Patient Protection and
      Affordable Care Act, subscribe to a listserv for alerts whenever new information
      is available, and access information about public meetings. The Department of
      Insurance’s communications director works with communications directors from
      other state agencies that are implementing health care reforms to ensure new
      content is added as it is made available. The Department of Insurance’s
      communications director is responsible for using iContact.com to distribute all
      communications to the www.healthcarereform.ohio.gov listservs on behalf of the
      state.

 8.4.2 Bulletins

      a. 2009-01 – Notice of Major Provider Network Changes

          Bulletin 2009-01, issued on January 20, 2009, concerns the reporting of
          changes in health plan provider networks by sickness and accident insurers
          and health insuring corporations regulated by the Department under Titles 19
          or 39 of the Revised Code. The bulletin advises these plans to provide the
          ODI with specific information in the event of the expiration of a contract with
          a hospital or major physician group. Such notice must be provided to the ODI
          15 days prior to the notice being distributed to subscribers or insureds. This
          written documentation must include the following: the process and procedures
          of notification to the subscribers and insureds, and any affected participating
          providers; any options and rights to be provided to subscribers and insureds;
          and company contact information to be provided to subscribers, insureds, and
          participating providers.

      b. 2009-06 – Provider Discounts

          Bulletin 2009-06 was issued on February 10, 2009. This bulletin sets forth
          what constitute unfair and deceptive trade practices in relation to provider
          discounts. The bulletin advises that the Department considers the following to
          be unfair and deceptive trade practices as administered by the Department
          under Revised Code section 3901.19: not calculating the copayment paid by a
          covered individual on the basis set forth in the policy, and failing to disclose
          any method of calculating a covered individual’s copayment, if such a method


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   exists. Should a licensee of the Department fail to provide such a disclosure,
   the licensee will be subject to a Market Conduct examination.

   The bulletin also advises that if a health insurer or third-party payer has
   provisions in a contract which sets limits on payments, the Department
   considers it an unfair and deceptive practice to calculate such limit on a basis
   other than actual payments unless such calculation is in accordance with a
   specific provision within the contract.

c. 2010-01 – COBRA Premium Subsidy

   This bulletin was issued on February 26, 2010 to provide guidance on the
   COBRA premium subsidy offered by the federal government and to require
   carriers to provide notice of these changes. Changes were made to the state
   continuation program (also known as “mini-COBRA”) so that employees who
   involuntarily lost their jobs with small businesses could take advantage of the
   subsidy offered by the federal government. House Bill 300, which was signed
   into law on February 25, 2010, extended the availability of mini-COBRA to
   15 months, instead of 12 months, for policies renewed on or after HB 300’s
   effective date. This extension was temporary and lasted only as long as the
   premium subsidy was available. In order to be eligible for the premium
   subsidy, an employee had to be terminated, as stated in the bulletin, before
   February 28, 2010. The federal government extended this date to May 31,
   2010. The premium subsidy has not been renewed.

d. 2010-04 – Notice of High Risk Pool with Denials

   Bulletin 2010-04 was issued on August 23, 2010. In the Patient Protection and
   Affordable Care Act (PPACA), states were authorized to establish and operate
   temporary high risk pools. The high risk pools are entirely federally funded,
   and available to United States citizens who have been uninsured for at least
   six months and have a pre-existing health condition.

   Ohio’s temporary high risk pool was established in August 2010, with
   coverage beginning in September 2010. Coverage through the pool will be
   available until December 31, 2013. This coverage will then transition to
   coverage offered through health care exchanges, which must be operating by
   January 1, 2014.

   The bulletin encourages insurers who have denied coverage based on pre-
   existing conditions to notify these individuals about the temporary high risk
   pool. The bulletin provides suggested language for this notification. It also
   encourages insurance agents to help individuals obtain letters of such denials,
   as the temporary high risk pool also requires that an individual have been
   denied coverage from two insurers.




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   e. 2010-06 – Clarification Regarding 1751.60

      This bulletin, issued on November 9, 2010, clarifies the Department’s
      authority and provides guidance on Revised Code section 1751.60. It also
      rescinds and replaces Bulletin 2010-03. Revised Code section 1751.60 states
      that every provider or health care facility that contracts with a health insuring
      corporation to provide services shall seek compensation from the health
      insuring corporation and not the subscriber or insured.

      Revised Code section 1751.60 applies only to provider contracts involving
      health insuring corporations. It does not apply to third-party administrators,
      self-insured health benefit plans, or sickness and accident insurers. Revised
      Code section 1751.60 prohibits a provider or health care facility from balance
      billing, or seeking compensation from a subscriber, except for approved
      copayments and deductibles. The Department has authority to take action if
      this code section is violated.

8.5 Prompt Pay

   A healthcare provider may submit a prompt pay complaint to the Ohio
   Department of Insurance by completing the Prompt Pay Complaint Form on the
   Department’s website. A provider must follow all contract grievance and appeal
   procedures before filing a complaint with the Department.

   To assist in making the system more user-friendly for providers, the Department
   held focus groups in the spring of 2008 to garner input on how the system could
   be improved. Then, the Department formed an internal Prompt Pay work group to
   develop a plan to implement necessary changes in October 2008.

   This group is responsible for updating and improving the Provider Complaint
   Process through the online Ohio Complaint Handling and Monitoring Program
   (OCHAMP) – such as enhancing our data collection with the ability for us to be
   able to determine between specialties. This was based on consumer feedback –
   they want us to be able to capture the specialty of the provider so we can hone in
   prompt payment issues that relate to certain specialties.

   We are also working on adding more categories (or data call elements), such as
   type of company, so that we can document better/useful data. This is more of an
   internal resource because the data collection is something we regard as part of our
   tracking and monitoring tools. This will help improve our internal processes.

   There have been some changes to the provider section of our website recently,
   http://www.ohioinsurance.gov/Company/insprmpt5.htm, where we added a new
   forum for providers to exchange information and submit questions regarding the
   implementation of HB 125. We also recently added frequently asked questions to
   the prompt pay web area to assist providers with information about Ohio's prompt



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        payment laws and online complaint system.

        Finally, we are working with our market conduct division to continue to develop
        our abilities to review prompt pay complaints in a more detailed and sophisticated
        manner.
8.6 Fraud and Scams

    8.6.1 Health Care Fraud
 
        Health care fraud is an ever growing problem which plagues our public and
        private insurance systems. The most common types of health care fraud include
        medical providers:

        •   Billing for services not rendered.
        •   Billing for more expensive services or procedures than were actually provided
            or performed.
        •   Performing medically unnecessary services solely for the purpose of
            generating insurance payment.
        •   Misrepresenting non-covered treatments as medically necessary covered
            treatments for purposes of obtaining insurance payments.
        •   Falsifying a patient’s diagnosis to justify tests, surgeries or other procedures
            that aren’t medically necessary.
        •   Unbundling or billing each step of a procedure as if it were a separate
            procedure.
        •   Accepting kickbacks for patient referrals.
        •   Waiving patient co-pays or deductibles and over-billing the insurance carrier
            or benefit plan.

        According to the 2008, Ohio Annual Report of Health Insurance Business, Ohio
        insurance carriers paid over $314 million dollars in claims associated with
        individual health policies and over $6 billion dollars in claims associated with
        group policies. Applying a 3% - 10% fraud factor, Ohio carriers paid between
        $189 and $600 million dollars for fraudulent claim submitted by dishonest
        medical providers.

        As the result of the new federal legislation that passed, 1.3 million uninsured
        Ohioans will have the opportunity to secure health insurance coverage. As such,
        the number of insured Ohioans is expected to rise from 3 million lives to 4.3
        million lives. As the number of lives will rise more than 30%, claims payments
        could escalate to well over $8.9 billion dollars. Applying the same 3%-10%
        fraud factor, fraudulent claims in Ohio alone could equal $267 million – $890
        million by 2014 if proactive measures are not taken to prevent, identify and
        prosecute those who commit health care fraud.

        As health care fraud is a problem that no single insurance provider, government
        entity or law enforcement agency can handle alone, the Department, in May of


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        2010, hosted a Health Care Fraud Summit as a way to bring federal and state
        officials, law enforcement experts, private insurance carriers and prosecutors
        together to discuss the issue at hand and the problems that hinder our ability to
        bring those who commit health care fraud to justice. Over 80 individuals attended
        the event, and we found the summit enabled us to open up the lines of
        communication amongst our organizations, determine ways in which we can all
        streamline processes, develop a blueprint that we, together, and in the future, can
        utilize and build upon to overcome existing barriers, and discuss ways in which
        we can strengthen alliances.

        While the Health Care Fraud Summit was a great start in promoting partnership,
        our work is not done and there are a number of other initiatives the Department
        could pursue to emphasize the importance of preventing, detecting and
        prosecuting those who commit health care fraud.

        As consumers ultimately pay the price of health care fraud in the form of higher
        premiums, it would be extremely worthwhile for the Department, in 2011, to
        continue to make health care fraud a priority and allocate additional resources to
        this very worthy cause.
 
    8.6.2 Health Insurance Scams
 
        Over the past three years, the Department pursued administrative action against a
        number of unlicensed individuals and entities who sold bogus health insurance or
        limited medical plans to Ohioans desperate to secure health insurance coverage.
        The Department is further working with the Attorney General’s Office to pursue
        Cease & Desist orders against additional individuals and entities identified as
        marketing bogus insurance products in our state.

        In the midst of a tight economy and the new national health care reform bill, state
        and federal regulators believe they will continue to see a surge in health care
        related scams whereby the uninsured, the unemployed, small group employers
        and those with serious illnesses will be targeted.

        As the Coalition Against Insurance Fraud reports that 57% of the state fraud
        bureaus have seen higher instances of unauthorized individuals or companies
        selling fake insurance and/or medical discount plans, the Department, in 2011,
        will need to continue to focus its attention to this very disturbing trend and take
        the appropriate action against those individuals who are looking to defraud
        vulnerable Ohioans.

    8.6.3 Senior Fraud Protection Consumer Outreach

        The Ohio Department of Education created a Take Action: Protect Yourself from
        Fraud campaign with consumer guides, materials and an interactive website in
        May 2010. The program educates consumers about ongoing scams, insurance and


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investment fraud, aging issues, predatory sales practices, and Medicare and health
insurance. A collaborative effort among the Ohio Department of Insurance, the
Attorney General’s office, the Ohio Department of Commerce and the Ohio
Department of Aging has resulted in 50 Seniors Fighting Fraud workshops at
assisted living centers and senior independent living communities since June. In
addition, the Department’s Fraud Protection Program Coordinator participated in
30 additional meetings and outreach events focused on consumer protection over
the past six months.




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Executive Summary

Ohio Department of Insurance Accomplishments During Strickland Administration
The mission of the Ohio Department of Insurance is to provide consumer protection
through education and fair but vigilant regulation while promoting a stable and
competitive environment for insurers. The Department licenses and regulates the
activities of more than 283,000 agents, monitor the financial solvency and market
conduct of more than 1,680 insurance companies and 20,000 insurance agencies. The 29
staff members in our fraud and enforcement division respond to more than 4,400
insurance fraud and enforcement referrals each year.

OVERALL SUCCESSES THAT ARE CRITICAL TO YOUR AGENCY’S MISSION AND
CONSTITUENTS:
  • Financial Markets Crisis and the Ohio Insurance Markets. In September
     2008, the nation began one of its most challenging economic times in the last
     century in the United States. Ohio was not spared the impact of the harsh
     economic downturn. Despite these economic times, the Ohio insurance market
     was and continues to remain safe and sound.
  • Stress Testing and Analysis. After a series of stress tests in 2008, Ohio found
     that all of its domestic companies were safe and sound, based on strong
     diversification of their investments per Ohio law. Through the entire national
     financial crisis, no Ohio insurance company went into liquidation or had any
     liquidity issues due to the downturn.
  • Financial Reporting Efforts. The Department also worked with Ohio domestic
     insurers and developed tools to identify methods of assuring their capitalization
     remained strong.
  • Stopping Insurance Fraud – Initiatives and Criminal Convictions. Preventing
     fraud has been a top priority for the Department since 2007. The Fraud and
     Enforcement division has fostered many partnerships and has traveled the state on
     many occasions to reach out to stakeholders and consumers on various fraudulent
     schemes that had been detected in our state.

IMPACTING OHIO COMMUNITIES AND HELPING OHIOANS IN NEED:
   • Consumer Services Division. Between January 1, 2007 – October 31, 2010, the
     Department fielded more than 475,585 calls to our Consumer Services Division
     (CSD), and our Ohio Senior Health Insurance Information Program (OSHIIP).
     The division employs the help of a multilingual service language tool to ensure
     Department services are accessible to as many Ohioans as possible. We have
     assisted Ohioans in the recovery of approximately $38,100,000 from January
     2007 to October 31, 2010 through helping them resolve disputes with their
     insurers. Between January 1, 2007 – October 31, 2010, Department staff
     participated in more than 3500 public outreach events across the state.
   • External Review Process. Through the Department’s external review process,
     more than $950,000 was returned to Ohioans due to the review of 614 health care
     claim denials.



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   •   Healthcare Reform. In the fall of 2009, the Ohio legislature enacted health care
       reform provisions for insurance companies and businesses which could help more
       than 100,000 now uninsured adults obtain coverage. In March 2010, the federal
       government enacted the Patient Protection and Affordable Care Act, which
       provided resources to states to implement widespread reforms making coverage
       more accessible to 5500 more uninsurable Ohioans through the High Risk Pool
       program until full reforms take effect in 2014.
   •   Ohio Health Information Partnership (OHIP) – The Governor designated Ohio
       Health Information Partnership (OHIP), a private-public partnership, to apply for
       federal funds and lead a coordinated effort to implement a statewide health
       information exchange and support adoption and meaningful use of electronic
       health records.
   •   Missing Life Insurance Policy Search Project. The Missing Life Insurance
       Policy Search Service was implemented to assist Ohio residents and families of
       deceased Ohio residents in locating missing insurance policies that were
       purchased in Ohio.
   •   Senior Fraud Protection. In May 2010, the Department partnered with the Ohio
       Attorney General’s office and Departments of Commerce and Aging to create a
       Take Action: Protect Yourself From Fraud campaign with consumer guides,
       materials and an interactive website. In 2009, the Department adopted a rule,
       3901-5-11, to help protect Ohio’s seniors from those agents who hold themselves
       out as specialists in the senior insurance market by using misleading, non-
       accredited certifications and designations to scam trusting seniors and make a
       quick sale. In 2007, the Department worked with the Ohio General Assembly to
       amend Chapter 3916 of the Ohio Revised Code through HB 404 to prohibit
       stranger-originated life insurance (STOLI) transactions, as well as update the
       Ohio Viatical Sales code, recognize changes in the life settlement market, and
       protect Ohio’s seniors from predatory sales practices.
   •   Severe Weather Awareness. The Department partnered with the Ohio
       Emergency Management Agency and the Federal Alliance for Safe Homes, Inc.
       (FLASH®) in 2009 to offer disaster safety and prevention information to
       Ohioans. We also created the Ohio Insurance Disaster Coalition (ODIC) to serve
       as a conduit between the state and the insurance industry during times of disasters
       in order to keep information flowing from the state to the industry and vice versa.

CREATING AND RETAINING JOBS, PREPARING WORKERS AND ACCELERATING THE
ECONOMY:
  • Strategic Growth Plan for Ohio’s Insurance Industry. The Department worked
     with the Ohio Department of Development and the insurance industry to develop
     and implement a strategic plan to grow the insurance industry in Ohio. A
     program was implemented to educate the ODOD Regional Economic
     Development Directors (REDDs) about the size of the insurance industry in Ohio.
     Regular meetings with insurance company executives have been scheduled to
     make certain that Ohio’s largest insurance employers receive the services they
     need from the state of Ohio to grow their companies. In addition, a letter was sent



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       to CEOs of all insurance companies domiciled in Michigan, touting the attractive
       business climate in Ohio.
   •   HIT Workforce Development. Across the nation, there is an inadequate supply
       of trained HIT professionals to meet the goals of the American Recovery and
       Reinvestment Act (ARRA) HITECH grants. The feds issued additional HITECH
       grants to address the workforce shortage. One grant went to a consortium of
       universities to develop a national HIT curriculum. Another was granted to
       consortia of community colleges to deliver the curriculum. Cuyahoga
       Community College in Cleveland is the leader of the Midwest HIT community
       college consortium, which is comprised of 17 colleges, four in Ohio (Cuyahoga
       Community College, Cincinnati State, Columbus State and Sinclair). Classes
       started in September, 2010 at each of those colleges.
   •   HB 300 Agent Licensing. In February 2010, House Bill 300 became law, making
       changes to Ohio’s agent license standards. The law brings Ohio into uniformity
       with the National Association of Insurance Commissioners (NAIC) standards
       adopted by 46 other states related to insurance agent licensing and oversight. It
       allows Ohio agents to be more competitive with non-resident agents and provides
       them with the opportunity to do better in the national market. This will enable
       Ohio agencies to grow and add more employees.
   •   Improved Agent Application Process. The application process for resident
       individuals was revamped in 2007, and applicants now apply for an insurance
       license only after they have successfully passed the state examination. In addition,
       electronic submission option for resident and non-resident applications became
       available for individuals and business entities.

FINDING EFFICIENCIES AND COST SAVINGS IN STATE GOVERNMENT DURING THE
RECESSION:
   • Interagency Efficiencies. The Department developed numerous interagency
      cooperative relationships to preserve resources, including:
         o Disaster recovery services with the Department of Commence
         o Tax Lien Project between the Attorney General’s Office and the
             Department has identified $16.5 million in potential income tax
             collections owed to the State
         o Production server hosing at the Environmental Protection Agency
         o Leveraged Ohio Department of Transportation’s Telecom Service Support
         o Worked with the Ohio Attorney General’s office to facilitate Agent
             Background Checks.




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Section 9     Accomplishments During Strickland Administration

9.1 Introduction – Financial Markets Crisis and the Ohio Insurance Markets

   In September 2008, the nation began one of its most challenging economic times in
   the last century in the United States. Ohio was not spared the impact of the harsh
   economic downturn. Despite these economic times, the Ohio insurance market was
   and continues to remain safe and sound. The Department’s ongoing financial
   analysis tools, along with the collaborative efforts that state insurance regulators have
   developed, assured that the Ohio market was prepared for a crisis. The Department
   was involved in numerous extraordinary efforts during the uncertain times of 2008
   and early 2009 to assure that our insurance markets remained stable. Some of these
   extraordinary efforts are described below.

 9.1.1 Stress Testing and Analysis. The Department’s Risk Assessment Division
       worked with the NAIC to stress test and analyze insurers with investments that
       may have been adversely impacted by the economic downturn. The Department
       also worked with other states through the NAIC Securities Valuation Office
       (SVO) to identify new valuation methods for valuing mortgage-backed securities
       held by insurers based in Ohio, after rating agency valuations were widely
       discredited. The SVO retained Pimco Advisors to conduct this analysis. After all
       studies were completed, Ohio found that all of its domestic companies were safe
       and sound, based on strong diversification of their investments per Ohio law.
       Through the entire crisis, no Ohio insurance company went into liquidation or had
       any liquidity issues due to the downturn.

 9.1.2 Financial Reporting Efforts. The Department also worked with Ohio domestic
       insurers to identify methods of assuring their capitalization remained strong. One
       tool adopted by the Department was to allow for a change in calculating and
       reporting deferred income tax assets (DTAs). Another tool allowed for life
       insurers to make minimal changes to their minimum reserve liabilities, and a third
       tool allowed for variations on calculating variable annuity reserves where
       guaranteed living benefits are provided. The Department issued Bulletins
       regarding each reporting change. Companies were permitted to make the
       changes, so long as the changes were not used to impact risk based capital, and so
       long as the company met other financial strength criteria.

 9.1.3 AIG. At this same time, the Federal Reserve provided a large financial services
       company, American Insurance Group, or AIG, with a loan of approximately $85
       billion. This loan was made primarily to support a financial services unit of AIG
       known as AIG Financial Services, which was heavily involved with the credit
       default swap markets and had obligations to most of the major investment banks
       in the nation. However, the loan came with significant negative publicity of the
       federal bailout and also government ownership of almost 80 percent of AIG.




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      The AIG Group of insurers includes over 250 international insurance companies,
      with almost 50 of those companies licensed to do business in Ohio. None of these
      companies are domiciled in Ohio. However, the Department closely monitored
      the regulatory issues regarding the Federal Reserve involvement with AIG.
      Further, some companies and agents took advantage of the negative publicity
      surrounding AIG and began to attempt to move AIG business to other carriers.
      The Department published stern warnings about disparagement and also assured
      consumers about the solvency of the AIG insurance companies in order to avoid
      any contagion in markets where AIG was writing business.

9.2 Progress Made for a Stronger Ohio

   The Department of Insurance, under the Strickland administration, has led initiatives
   to increase access to healthcare coverage, supported market reforms to maintain a
   safe and sound insurance environment, and improved departmental processes to better
   serve the Department’s constituents.

   Breakdown of Successes

 9.2.1 Impacting Ohio Communities and Helping Ohioans in Need

   a. Healthcare Reform

      In 2007, Governor Strickland charged the Department with leading his
      administration’s healthcare reform efforts, starting with an application to
      participate in the State Coverage Initiative (SCI), a project of the Robert Wood
      Johnson Foundation. SCI required Ohio to develop a public-private partnership to
      determine how the state could improve access to healthcare coverage. The SCI
      project revealed that Ohio had at least 1.3 million citizens who were uninsured.
      Most of those individuals were uninsured because their employer did not provide
      health insurance coverage, they could not afford the coverage because of their low
      income level or they had a pre-existing health condition that made their coverage
      unaffordable or unavailable. This SCI Team studied possible methods of
      covering more Ohioans, and made several key findings: (1) there is no easy
      answer to the problem, (2) in order to provide widespread coverage through the
      private markets, some coverage must be subsidized, (3) the two fastest growing
      groups of uninsured were young adults up to age 28 and also self-employed
      individuals, and (4) Ohio needed to address quality and efficiency in the delivery
      of healthcare in order to reduce costs and make any proposed changes sustainable.

      After the SCI project, the administration participated in the State Quality
      Improvement Initiative (SQII), a project of the Commonwealth Fund. After the
      SCI and SQII projects, the Governor led a legislative effort through HB 1 to begin
      adopting the reforms recommended in the SCI and SQII projects. Additionally,
      several other state and federal legislative efforts targeting various healthcare
      reforms were also adopted in 2008, 2009 and 2010. Many of these efforts



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   required department staffing or involved health insurance reforms. The
   Department began implementation efforts designed to improve access to
   healthcare coverage for hundreds of thousands of Ohioans, train healthcare
   providers how to lead medical homes, reduce hospital readmissions, utilize a new
   Ohio health information technology system and improve communications
   between providers and payors. A summary of all of the healthcare reform efforts
   that the Department supported or initiated during 2007 to 2010 is attached hereto
   as Exhibit A.

b. Consumer Services Division Assistance

   The Department’s Consumer Services Division (CSD) and the Ohio Senior Health
   Insurance Information Program (OSHIIP) both assist Ohioans with insurance
   questions and complaints. Assistance is provided via telephone, web and in
   person visits to special events or the Department’s offices.

   Between January 1, 2007 – October 31, 2010, the Department fielded more than
   475,585 calls to our Consumer Services Division (CSD), and our Ohio Senior
   Health Insurance Information Program (OSHIIP). We have assisted Ohioans in
   the recovery of approximately $38,100,000 from January 2007 to October 31,
   2010 through helping them resolve disputes with their insurers

   Here is a breakdown of calls received and dollars recovered per calendar year:


      Services Delivered            Dollars                     Calls Received
         2007 - 2010               Recovered

                                   Combined           Combined         CSD          OSHIIP
                                     Total              Total
             2007                 $10,763,097           120,346       85,649        34,697
             2008                  $9,702,783           127,961       86,889        41,072
             2009                 $10,359,344           119,393       79,525        39,868
      2010 (through Oct            $7,590,074           107,885       71,650        36,235
            2010)
           TOTAL                  $38,415,298           475,585      323,713        151,872

c. Consumer Outreach

   Ohio has one of the most competitive insurance markets in the nation, from the
   perspective of the number of companies operating in our market. The mark of a
   competitive market is also well-informed consumers. Between 2007 and 2010,
   Department leadership and staff worked to assure that the Department was
   accessible to consumers, so they could make informed decisions about their health
   care coverage, and they better understood Ohio’s insurance markets. To this end,



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   the Department strongly emphasized public outreach, and engaged in the
   following outreach efforts:

   •   Director Hudson: More than 300 public outreach events.
   •   More than 100 public outreach events staffed by the Department’s senior staff.
   •   Consumer Requested: 200 public outreach events.
   •   Health Care Reform Stakeholder Meetings: 90
   •   Medicare Check-Up Events (OSHIIP): 256
   •   Mental Health Parity Focus Group
   •   Military Sales Focus Group
   •   Prompt Pay/IRO Focus Groups
   •   2400 OSHIIP Training and Public Outreach Events reaching more than
       700,000 people
   •   The Department created 20 online educational toolkits that assist consumers in
       insurance matters including health insurance (COBRA, H1N1, Health Care
       Reform, Mental Health Parity, IRO), Auto, Home, Life and Annuities,
       Medicare, Military Personnel and their Families and Severe Weather.

d. Missing Life Insurance Policy Search Project

   The Department worked with life insurance companies serving Ohioans to
   implement the Missing Life Insurance Policy Search Service. The service,
   launched in September 2009, assists Ohio residents, as well as families of
   deceased Ohio residents, in locating missing insurance policies that were
   purchased in Ohio.

   Now, Ohio is one of only two states family members can obtain forms from the
   Department’s Consumer Services web site for requesting a search for life or
   annuity policies of a deceased family member. Completed forms are submitted to
   the Department, validated for completeness, and then forwarded via secured
   electronic communications to more than 500 life insurance companies that are
   licensed in Ohio.

   Ohio life insurance companies then conduct their own computer searches to
   identify the existence of any life insurance policies or annuity contracts that were
   purchased in Ohio and issued on the life of, or owned by, the deceased family
   member named in the search request.

   Through September 2010, 259 missing life search requests were received and
   forwarded by the Department. In response to these search requests, Ohio life
   insurance companies found 196 policies or contracts.

e. Senior Fraud Protection Consumer Outreach

   In May 2010, the Department created a Take Action: Protect Yourself From
   Fraud campaign with consumer guides, materials and an interactive website. The


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   program educates consumers about ongoing scams, insurance and investment
   fraud, aging issues, predatory sales practices, and Medicare and health insurance.
   A collaborative effort among the Department, the Ohio Attorney General’s office,
   the Ohio Department of Commerce and the Ohio Department of Aging resulted in
   50 Seniors Fighting Fraud workshops at assisted living centers and senior
   independent living communities since June 2010. In addition, the Department’s
   Fraud Protection Program Coordinator participated in 30 additional meetings and
   outreach events focused on consumer protection in 2010.

f. Prohibiting Misuse of Senior Specific Sales Certifications

   In 2009, the Department adopted a rule, 3901-5-11, that makes it an unfair and
   deceptive sales practice for insurance agents to use senior-specific certifications
   and designations when selling life insurance, annuities, or health insurance,
   including Medicare products in the state. The rule is intended to help protect
   Ohio’s seniors from those agents who hold themselves out as specialists in the
   senior insurance market by using misleading, non-accredited certifications and
   designations to scam trusting seniors and make a quick sale.

g. Long Term Care Partnership Implementation

   Ohio’s Partnership for Long Term Care Insurance was created in 2007 to allow
   Ohioans to purchase qualified long term care insurance policies that may allow
   consumers to become eligible for Medicaid without using all of their personal
   assets. Individuals will be able to purchase private insurance through the program,
   prolonging the need for them to enroll in Medicaid. The Ohio Department of Job
   and Family Services, which oversees the state Medicaid program, developed the
   partnership in cooperation with the Ohio Department of Insurance and the Ohio
   Department of Aging.

h. Uniform Annuity Disclosure Pilot

   The Department, the American Council of Life Insurers (ACLI) and the
   Association of Ohio Life Insurance Companies (AOLIC) launched a pilot
   program in 2009 to test templates for written annuity disclosure. This initiative
   will help ensure that Ohio life insurance companies begin using uniform annuity
   disclosure templates to help consumers more clearly understand fixed and indexed
   annuity contracts before a purchase is made. Companies were providing annuity
   disclosure information in formats that vary from one insurer to another, making
   comparisons difficult for consumers. The templates will set a standard format that
   will assist consumers in making comparisons. The initiative also provides
   companies with guidelines and suggested language for explaining certain contract
   features in plain-English.




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i. HB 404 Fighting Stranger-Originated Life Insurance

   In November 2007, House Bill 404 (Hottinger, Barrett) was introduced. This
   legislation was necessary in order to prohibit stranger-originated life insurance
   (STOLI) transactions, as well as update the Ohio Viatical Sales code, recognize
   changes in the life settlement market, and protect Ohio’s seniors from predatory
   sales practices.

   A life settlement is a legal transaction in which a life insurance policy holder
   decides to sell his or her policy after the contestability period expires. The policy
   holder is able to obtain a negotiated payment, while the buyer of the policy
   becomes the beneficiary of the policy, which will be paid upon the initial policy
   holder’s death. A STOLI transaction differs in that STOLI transactions are
   purchases of life insurance policies arranged in some manner before the
   contestability period expires. In a STOLI transaction, the investor funds the
   premiums in exchange for the insured’s agreement to transfer the rights to the
   policy’s benefits after the contestability period expires. This ensures that the
   investor will collect the benefits when the insured person dies. A STOLI is
   essentially a wager on the insured’s life.

   HB 404 amends portions of Chapter 3916 of the Ohio Revised Code, and is based
   on models approved by the National Association of Insurance Commissioners
   (NAIC) and the National Conference of Insurance Commissioners (NCOIL).
   These models were the product of significant input and participation by
   consumers, insurers, regulators, and the life settlement industry. From the
   beginning, the Department worked with the same stakeholders in Ohio to ensure
   the bill protected Ohioans, while ensuring the legislation did not prohibit
   legitimate life settlements.

   This legislation was subject to extensive scrutiny with 19 hearings between the
   Senate and House. The bill was passed unanimously by the House in January
   2008, and was passed unanimously by the Senate in May 2008.

j. Premium Comparisons Calculator

   Recognizing a need to simplify the way sample auto insurance premium
   comparisons are updated, and wanting to give consumers a more dynamic way to
   compare these premiums, the Department launched an online Premium
   Comparisons Calculator. After working with trade organizations and the industry,
   the Auto Insurance Premium Calculator went live in October 2010. The Auto
   Insurance Premium Calculator is an online tool that allows consumers to answer
   questions about their life circumstances which produces a results page with
   sample auto insurance premiums and contact information for participating
   companies. This is a voluntary program for companies and the obligation to
   upload and update sample premiums is that of the company. As of November




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   2010 there are 16 participating companies with no deadline for additional
   companies to participate.

k. Insurance Rule Protects Ohio`s Military Personnel and Families

   A rule became effective that aims at protecting the state’s active military
   personnel and their families from unsuitable life insurance products and sales
   practices. The rule – adopted in response to the federal Military Personnel
   Financial Services Protection Act – gives the Department tools to take action
   against agents who mislead those in the military buying unsuitable life insurance
   products.

l. Multilingual Services

   In 2007, the Department partnered with Language Line Services to help answer
   insurance questions from consumers in up to 162 languages. This language tool
   ensures Department services are accessible to as many Ohioans as possible.

   In 2008, the Department launched the Insure U En Espanol section on the
   Department website and added new topic areas for consumers in four life
   situations: domestic partners, single parents, grandparents raising grandchildren
   and members of the military. The comprehensive public education program,
   provided by the National Association of Insurance Commissioners (NAIC), is
   designed to assist small businesses and consumers with information about
   business risks and insurance options.

m. Flood Awareness Partnership/FLASH

   The Department formed a partnership with the Ohio Emergency Management
   Agency and the Federal Alliance for Safe Homes, Inc. (FLASH®) in 2009 to
   offer disaster safety and prevention information to Ohioans. The partnership was
   formalized at a signing ceremony in Columbus on the one year anniversary of the
   Hurricane Ike windstorm. The three agencies have developed a web page with
   different flood safety informational pieces, including tips on protecting property,
   purchasing insurance and filing insurance claims. The website links are:
   www.flash.org, www.ema.ohio.gov or www.insurance.ohio.gov.

n. Ohio Insurance Disaster Coalition

   Formed in 2007, the Ohio Insurance Disaster Coalition (ODIC) is a group headed
   by the Ohio Department of Insurance and comprised of representatives from the
   insurance industry (Association of Ohio Life Insurance Companies, Ohio
   Association of Health Plans, Ohio Insurance Institute, Property Casualty Insurers
   Association of America, National Association of Mutual Insurance Companies,
   National Association of Insurance and Financial Advisors, and the National
   Insurance Crime Bureau) independent insurance agents and other state agencies



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      (Ohio Emergency Management Agency, Public Safety). The purpose of the
      OIDC is to serve as a conduit between the state and the insurance industry during
      times of disasters in order to keep information flowing from the state to the
      industry and vice versa. The chairperson of the committee is the Department’s
      Emergency Operation Center (EOC) representative (currently Jarrett Dunbar).

      During a disaster, the Department’s EOC contact would relay any important
      information about the current situation as well as any information concerning
      insurance needs to the members of the OIDC. Those representatives would then
      disseminate that information to their respective members. Also, if a member of
      the insurance industry has information that they deem important to relay to state
      officials, the industry member would send the information to the Department
      EOC contact, who would then pass the information along to state officials.

      This group has been working for the last four years with no cost to the public and
      has proven as a very effective way of passing along information in a timely and
      efficient manner.

   o. Alerts Regarding Minimum Auto Coverage

      The Department of Insurance and the Ohio Bureau of Motor Vehicles teamed up
      in 2008 to inform consumers about the state’s minimum coverage requirements
      for automobile insurance. The Department developed a consumer guide regarding
      minimum auto coverage limits and posted the guide on its website, as well as the
      Ohio Bureau of motor vehicles website. In addition, the Department worked with
      Ohio media outlets to communicate the importance of securing minimum
      coverage. Ohio law requires drivers who purchase automobile insurance to
      demonstrate Financial Responsibility (FR) to have at least $12,500 of Bodily
      Injury or Death Liability Coverage per person ($25,000 for 2 or more persons), as
      well as $7,500 of Property Damage Liability Coverage for any one accident.
      However, many times accidents result in damages that exceed those minimum
      coverage limits. If the at fault driver’s insurance policy limits are exceeded, then
      the “at fault” driver may be personally responsible to pay the difference not
      covered by the automobile insurance policy.

9.3 Creating and Retaining Jobs, Preparing Workers and Accelerating the Economy

 9.3.1 Ohio Health Information Partnership (OHIP) – Health Information
       Technology: HB 1 appropriated $8 million non GRF dollars to draw down $43
       million additional federal funds to support development of a health information
       exchange (HIE) and encourage adoption and meaningful use of electronic medical
       records (EMR). The Governor also designated Ohio Health Information
       Partnership (OHIP), a private-public partnership, to apply for federal funds and
       lead a coordinated effort to implement a statewide HIE and support adoption and
       meaningful use of EMRs. Through the HIT grant, workers have the ability to
       apply for education funding and receive certification in Electronic Medical
       Records. See Exhibit A for additional information.


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9.3.2 Creating High Paying Jobs in Ohio
      Advancing the use of technology to reduce cost and improve quality equates to a
      substantial expansion of Health Information Technology (HIT) development,
      implementation and support jobs. Conservative estimates forecast a 20% increase
      in HIT jobs over the next ten years. The state and OHIP are working together with
      Ohio and out-of-state companies to forecast and fill HIT jobs with Ohioans. In
      order to do so, we need to ensure we have qualified HIT professionals. See
      Exhibit A for additional information.

9.3.3 HIT Workforce Development
      Across the nation, there is an inadequate supply of trained HIT professionals to
      meet the goals of the American Recovery and Reinvestment Act (ARRA)
      HITECH grants. The feds issued additional HITECH grants to address the
      workforce shortage. One grant went to a consortium of universities to develop a
      national HIT curriculum. Another was granted to consortia of community
      colleges to deliver the curriculum. Cuyahoga Community College in Cleveland is
      the leader of the Midwest HIT community college consortium, which is
      comprised of 17 colleges, four in Ohio (Cuyahoga Community College,
      Cincinnati State, Columbus State and Sinclair). Classes started in September,
      2010 at each of those colleges.

     OHIP and the Department of Insurance are working with ODJFS, the Department
     of Development and the Board of Regents to ensure this effort is integrated with
     other statewide workforce development programs. Specifically, we have worked
     to find ways of recruiting Ohio’s dislocated workers – many of whom have
     relevant and transferable skills and experience – into the training programs.

     ODJFS contact: Alice Worrell
     Development contact: Sue McKitrick
     Board of Regents contact: Stacia Edwards
     Midwest HIT Community College Consortium contact: Norma Morganti

     See Exhibit A for additional information.

9.3.4 HB 300 Agent Licensing
      In February 2010, Governor Strickland signed House Bill 300 into law, making
      changes to Ohio’s agent license standards. The law brings Ohio into uniformity
      with the National Association of Insurance Commissioners (NAIC) standards
      adopted by 46 other states related to insurance agent licensing and oversight. It
      allows Ohio agents to be more competitive with non-resident agents and provides
      them with the opportunity to do better in the national market. This will enable
      Ohio agencies to grow and add more employees.

     Changes to agent license standards include:
     o A mandatory federal background check for licensure.



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     o 24 hours of Continuing Education, including three hours of ethics education,
       will be required for all major lines of authority.
     o License renewal on a biennial basis. Renewal at end of birth month.
     o Business entity licenses renew on September 30 of even years for domestics
     o No renewal fee if complete CEs

9.3.5 Improved Agent Application Process
      The application process for resident individuals was revamped in 2007.
      Applicants now apply for an insurance license only after they have successfully
      passed the state examination. In addition, electronic submission option for
      resident and non-resident applications became available for individuals and
      business entities.

9.3.6 Bail Bond Agents
      Over the past four years, the Department has outreached to the Ohio bail industry.
      We began holding joint meetings between the Department and the Ohio Bail
      Agent Association (OBAA) two times per year to discuss industry issues and
      concerns. The Department added a link to the OBAA website to our website. The
      Department also sought input from OBAA and other bail industry entities when
      drafting proposed rules for the Ohio Administrative Code and changes to the Ohio
      Revised Code sections dealing with the bail bond industry.

     In order to allow the industry to have more input into the licensure testing
     process, the Department increased the session wherein the vendor of the test,
     Person-Vue, meets with members of Department staff and industry
     representatives from a half day to a full day.

     The Department facilitated a partnership between OBAA and the Common Pleas
     and Municipal Courts systems of Ohio to change the Bail Court registration
     requirement statute so that all stake holders agreed on a proper process. Staff
     members of the Department (Keith Blosser, staff attorney with support from
     Michelle Brugh, AD) spoke with members of the bail industry, the Courts, and the
     Ohio Clerks throughout the state on bail issues on several occasions. The
     Department purchased undercover equipment for use in courthouses to view bail
     bond activity and we have increased our penalties on all bail bond infractions
     including solicitation. The Department also created posters and distributed them
     to Common Pleas and Municipal Court buildings to warn of illegal bond activities
     and how to report illegal activity. The Department is now reviewing all major
     market courts to in an effort to prevent abuse of the bail system. Hearings and
     prosecutions have increased in this area with the full support of the industry.

     The Department issued a rule designed to clarify appropriate surety bail bond
     agent conduct in Ohio in order to improve the integrity of this insurance market.
     The rule, 3901-1-66, was written in collaboration with the Ohio Bail Agents
     Association, with input being received from the Ohio Association of Municipal
     Court Clerks, the Ohio Clerk of Courts Association, and the Ohio Association for



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     Court Administration. The rule clears up confusion that bail bond agents may
     have when it comes to selling their products to Ohioans and assure that such sales
     are conducted fairly and in accordance with Ohio law.

9.3.7 Title Insurance

     In response to the requirements of Senate Bill 185, the Department promulgated
     rule 3901-7-01 related to the annual review of title agent escrow accounts and
     3901-7-02 related to required surety bond and errors and omissions coverage for
     title agents. Rule 3901-7-01 implements Revised Code section 3953.33 by
     identifying agreed-upon procedures CPAs use for annual review of title agent
     escrow accounts and provides procedures for filing the reviews. The rule
     provides exemptions for small title agents and agencies. Departmental processes
     were developed to examine the submitted reviews, identify and investigate
     reporting, escrow and IOTA issues, and to refer files to the Legal Section for
     further action. Rule 3901-7-02 sets forth requirements for amounts for Errors and
     Omissions coverage and for surety bonds for title agents.

     Also in response to the requirements of Senate Bill 185, the Department
     promulgated rule 3901-7-03 implementing the notice of owner’s title insurance
     information required by section 3953.30 of the Revised Code. This rule
     implements the statute by detailing that in real estate transactions where only a
     lender’s title insurance policy has been ordered, a title agent must send out a
     notice explaining what the owner’s policies do and how they differ from the
     lender’s policies.

     The Department promulgated rule 3901-7-04 setting forth the review of business
     entity title insurance agent applications and existing title agencies regarding
     controlled business. An entity cannot be licensed as a title agent if it is a
     mortgage broker, realtor, bank, bank and trust company, or other lending
     institution. This rule sets out the review process used to determine whether
     individuals or entities which are prohibited from being licensed themselves have
     ownership or control of title agencies.

     Internal procedures have been developed to more quickly review controlled
     business issues and contact the applicants as necessary for clarification and
     corrective action.

     The Department has increased its accessibility for both the agent community and
     title insurance underwriters through speaking engagements and Department
     employee availability.




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 9.3.8 Strategic Growth Plan for Ohio’s Insurance Industry

       The Department worked with the Ohio Department of Development and the
       insurance industry to develop and implement a strategic plan to grow the
       insurance industry in Ohio. The strategic plan can be found in the appendix.

       Four task forces were formed to implement the strategic initiatives: Workforce
       Education, Career Marketing, Internship, and Business Climate. The Workforce
       Education Task Force held three industry summits to bring together university
       and industry representatives. These summits were held at the University of
       Cincinnati, Kent State, and Ohio State. In addition, Columbus State hosted a
       workforce advancement meeting and is leading the development of the workforce
       advancement plan.

       The Ohio Means Insurance Jobs website was developed to bring together job
       posters and job seekers. The website is: ohiomeansinsurancejobs.com.

       A program was implemented to educate the ODOD Regional Economic
       Development Directors (REDDs) about the size of the insurance industry in Ohio.
       Regular meetings with insurance company executives have been scheduled to
       make certain that Ohio’s largest insurance employers receive the services they
       need from the state of Ohio to grow their companies. In addition, a letter was sent
       to CEOs of all insurance companies domiciled in Michigan, touting the attractive
       business climate in Ohio.

9.4 Finding Efficiencies and Cost Savings in State Government during the Recession

 9.4.1 Tax Lien Project between the Attorney General’s Office and the Department:
       Identifies Ohio licensed insurance agents with outstanding tax liens and began
       efforts to assure liens were being paid and addressed. This project has identified
       $16.5 million in potential income tax collections owed to the State.

 9.4.2 Effienciency.ohio.gov submission:     One of our employees, Molly Porto,
       submitted an efficiency suggestion that DAS will soon be implementing
       statewide. The suggestion was based on an article Molly read in the LA Times,
       and she suggested using the same methodology in Ohio to identify landlines not
       being used. The suggestion calls for review of all phone bills for the prior 12
       months and to identify all phone numbers that hadn’t received at least one toll call
       in that time.

9.5 Interagency Cooperation. The Department developed numerous interagency
    cooperative relationships to preserve resources. These cooperative relationships are
    summarized as follows:

 9.5.1 Department of Aging




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 a. OSHIIP. OSHIIP works with the Department of Aging on multiple projects,
    including the Medicare Improvements Act (MIPPA) that provides funding for
    extra help for prescription drugs through the Low Income Subsidy program.
    Funding is provided to both Departments by the federal government for outreach
    to Ohioans to determine eligibility for extra help, so we have partnered to pursue
    this work through a team approach. Additionally, from September – January each
    year, the Department executes a contract with the Department of Aging so that
    their trained staff can assist with Medicare Open Enrollment calls coming into the
    OSHIIP toll-free hotline.

 b. Long Term Care Partnership. A federal law established the Long-Term Care
    Partnership, which is administered at the national level by the Centers for
    Medicare and Medicaid Services (CMS). The law gave Ohio and other states the
    ability to adopt their own long-term care insurance partnerships. The first four
    long-term care partnership states were New York, California, Connecticut and
    Indiana, where partnerships have been in place for about 20 years. Ohio Revised
    Code (ORC) 5111.18 authorized the Ohio Department of Job and Family Services
    (ODJFS) to develop the partnership in conjunction with the Ohio Department of
    Insurance, the Ohio Department of Aging (ODA) and the insurance industry. The
    Department of Insurance maintains the Long Term Care Partnership website at
    www.ltc4me.ohio.gov. The OSHIIP trainers provide counseling and information
    services about the long term care partnership.

 c. Take Action. The Ohio Department of Insurance created a Take Action: Protect
    Yourself from Fraud campaign with consumer guides, materials and an interactive
    website in May 2010. The program educates consumers about ongoing scams,
    insurance and investment fraud, aging issues, predatory sales practices, and
    Medicare and health insurance. A collaborative effort among the Ohio
    Department of Insurance, the Attorney General’s office, the Ohio Department of
    Commerce and the Ohio Department of Aging has resulted in 50 Seniors Fighting
    Fraud workshops at assisted living centers and senior independent living
    communities since June. In addition, the Department’s Fraud Protection Program
    Coordinator participated in 30 additional meetings and outreach events focused on
    consumer protection over the past six months.

9.5.2 Department of Jobs and Family Services

   a. Exchange Grant. The new federal fund will provide spending authority to the
      Ohio Department of Insurance for a recently awarded $1 million grant. The
      grant was awarded to Ohio from the Office of Consumer Information and
      Insurance Oversight (OCIIO), a division of the U.S. Department of Health and
      Human Services to evaluate and plan a health insurance exchange. A total of
      forty-eight states were awarded this grant. No state matching funds were
      required.




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        The grant funds will be used to conduct the research and planning needed to
        determine if and how an Ohio Exchange will be operated and governed.
        These activities will include coordinating public and stakeholder input
        through a specially constituted task force, conducting market analysis,
        modeling Ohio’s public programs and private insurance markets to provide
        projections and analysis necessary for making decisions concerning the
        establishment of an Ohio Exchange. The Health Care Coverage and Quality
        Council established a new subcommittee called the Health Benefits Exchange
        Task Force to coordinate public and stakeholder input.

   b. Medicaid Managed Care Plans. The following Ohio Health Insuring
      Corporation have a contract with the Ohio Department of Job and Family
      Services to provide Health Care coverage to the Medicaid eligible citizens of
      Ohio:

             Amerigroup Ohio Inc
             Buckeye Community Health Plan Inc
             Caresource
             Molina Healthcare Insurance Company
             Molina Healthcare Of Ohio, Inc
             Paramount Advantage
             Unison Health Plan Of Ohio, Inc
             Wellcare Of Ohio Inc

9.5.3 Department of Commerce

 a. IT Disaster Recover Cold Site. The Office of Information Technology and
    Security put in place a Disaster Recovery site located at the Ohio Department of
    Commerce’s Tussing Road location through an interagency memorandum of
    understanding. This site has been declared as a Cold Disaster Recovery Site to be
    used for communication purposes in case of a Disaster. The site is currently
    operational with a dedicated T1 line at 1.5 MBs, protected with a Cisco ASA
    5520 Firewall with rules to only allow traffic to flow outbound for emergency
    communications for email and internet traffic. The site is equipped with a Cisco
    3560 capable of connecting up to 48 client computers. The site is protected with a
    SPAM appliance to filter email if needed in the case of a Disaster. Connectivity
    between the Tussing Road site and 50 West Town Street consists of a VPN tunnel
    between the two locations. This allows us to continuously communicate with our
    Disaster site to ensure the communication link is active and able to transfer data.

 b. Take Action. The Department created a Take Action: Protect Yourself from
    Fraud campaign with consumer guides, materials and an interactive website,
    www.takeaction.ohio.gov, in May 2010. The program educates consumers about
    ongoing scams, insurance and investment fraud, aging issues, predatory sales
    practices, and Medicare and health insurance. A collaborative effort among the
    Ohio Department of Insurance, the Attorney General’s office, the Ohio


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    Department of Commerce and the Ohio Department of Aging has resulted in 50
    Seniors Fighting Fraud workshops at assisted living centers and senior
    independent living communities since June. In addition, the Department’s Fraud
    Protection Program Coordinator participated in 30 additional meetings and
    outreach events focused on consumer protection over the past six months.

 c. Credit Union Share Guaranty Corporations. American Mutual Share
    Insurance Corporation, domiciled in the State of Ohio and doing business as
    American Share Insurance (“ASI”), is the only licensed Ohio credit union share
    guaranty corporation. ASI guarantees the share deposit accounts of its
    participating credit unions in twelve states (AL, AZ, CA, ID, IN, IL, MD, ME,
    NH, NV, OH and TX) and is the largest private (non-federal) insurer of credit
    union member shares. As a credit union share guaranty corporation, ASI is
    dually-regulated by the Ohio Department of Commerce and the Ohio Department
    of Insurance under Chapter 1761 of the Ohio Revised Code. ASI is subject to
    periodic examinations by both agencies and an annual independent audit and
    actuarial review. A wholly owned subsidiary of ASI, Excess Share Insurance
    Corporation (“ESI”), also is domiciled in Ohio and is licensed in thirty-two states
    and the District of Columbia as a property and casualty insurance company. ESI
    insures the share deposit accounts of its insured credit unions for up to $250,000
    in excess of the insurance limit imposed by the credit union’s primary insurer. As
    an insurance company, ESI is regulated solely by the Ohio Department of
    Insurance.

9.5.4 Environmental Protection Agency

 a. Production Server Hosting. The Office of Information Technology and Security
    (OITS) has identified significant risks associated with the reliability of the
    electrical capacity, cooling system and the uninterruptible power supply (UPS)
    currently in the data center of Suite 300 of 50 West Town Street. In order to
    mitigate these risks the OITS has established a memorandum of understanding
    with the Ohio Environmental Protection Agency (EPA) that allows for the co-
    location of the Department’s production data center equipment. OITS is in the
    process of relocating all production network, server and storage equipment to the
    EPA’s data center located in suite 700 of 50 West Town Street. The EPA’s data
    center is sufficiently equipped with a backup cooling system and a redundant
    power supply provided by a diesel generator making the location a more desirable
    location for hosting IT equipment.

9.5.5 Department of Development

 a. Strategic Growth Plan for Ohio’s Insurance Industry

    Ohio is the 9th largest insurance market in the nation, and the 19th largest in the
    world, having almost $60 billion in premium. There are over 250 companies
    domiciled in Ohio, as evidenced by the map at Appendix J. Insurance companies
    employ over 100,000 Ohioans and there are over 85,000 licensed agents.


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     Because the insurance industry is an economic engine for Ohio, the Department
     worked with the Ohio Department of Development and the insurance industry to
     develop and implement a strategic plan to grow the insurance industry in Ohio.
     The strategic plan can be found in the appendix.

     Four task forces were formed to implement the strategic initiatives: Workforce
     Education, Career Marketing, Internship, and Business Climate. The Workforce
     Education Task Force held three industry summits to bring together university
     and industry representatives. These summits were held at the University of
     Cincinnati, Kent State, and Ohio State. In addition, Columbus State hosted a
     workforce advancement meeting and is leading the development of the workforce
     advancement plan.

     The Ohio Means Insurance Jobs website was developed to bring together job
     posters and job seekers. The website is: www.ohiomeansinsurancejobs.com.

     A program was implemented to educate the ODOD Regional Economic
     Development Directors (REDDs) about the size of the insurance industry in Ohio.
     Regular meetings with insurance company executives have been scheduled to
     make certain that Ohio’s largest insurance employers receive the services they
     need from the state of Ohio to grow their companies. In addition, a letter was sent
     to CEOs of all insurance companies domiciled in Michigan, touting the attractive
     business climate in Ohio.

9.5.6 Ohio Department of Transportation

 a. Telecom Service Support. The Office of Information Technology and Security
    (OITS) established a memorandum of understanding to allow for the sharing of
    core telecom services with the Ohio Department of Transportation (ODOT). In
    November 2010 the OITS implemented a Cisco voice over Internet protocol
    (VoIP) solution that leverages ODOT’s primary gateway to local and long
    distance telecom carriers.

9.5.7 Governor’s Office of Faith Based Initiatives

 a. Ombuds Grant/Benefit Bank. The goal of Ohio’s consumer assistance program
    is to provide information and assistance to consumers about their health care
    coverage options, to assist consumers with writing and filing appeals with their
    health insurance providers, and to provide assistance and guidance to uninsured
    Ohioans who are not eligible for public assistance and cannot afford health care
    coverage. Ohio received $1,100,000 in grant funds from the U.S. Department of
    Health and Human Services to implement its consumer assistance program.

     The Ohio Department of Insurance (the Department) will manage the consumer
     assistance program and coordinate closely with the Ohio Association of Second



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     Harvest Food Banks (OASHF), UHCAN Ohio, Family Voices and the Ohio
     Association of County Behavioral Health Authorities (OACBHA).

     OASHF will serve as the initial point of contact to assist consumers with
     enrollment in public assistance options or to refer callers to the Department to
     assist with enrollment in a health insurance plan if the consumer can afford
     coverage or to answer questions about an insurance claim if the consumer is
     already insured. UHCAN Ohio, Family Voices and OACBHA will provide case
     management for uninsured Ohioans who are not eligible for public assistance and
     cannot afford health insurance coverage. The Department will also establish an
     independent consumer appeals program with trained legal interns managed by its
     legal division to provide assistance to consumers in writing and filing appeals
     with their health insurance plan.

     The Department will implement a data reporting process for all partners to follow
     so that Ohio has a robust data portfolio to deliver to the Secretary in compliance
     with this grant program. We also believe that data gathered through this effort will
     assist Ohio in planning for a health benefit exchange. The following narrative
     outlines the scope of work and deliverables in detail for Ohio’s consumer
     assistance program.

9.5.8 Ohio Attorney General

 a. Agent Tax Lien Project. Over the last two years, the Ohio Department of
    Insurance and the Ohio Attorney General’s Office have been working together in
    an effort to collect $16.5 million in outstanding state income taxes from licensed
    agents and agencies. In order to prompt compliance with Ohio’s insurance and tax
    laws, the Department contacted over 2500 insurance agents and business entities
    by mail and encouraged them to take proactive measures to satisfy their
    outstanding tax obligations. Administrative action will be taken against the
    licenses of those individuals and entities who failed to enter into a payment plan
    with the AG’s office or pay off their outstanding debts to the state. The project
    itself is one which is ongoing as liens are filed against individuals and entities
    daily.

 b. Agent Background Checks. The Bureau of Criminal Identification and
    Investigation (BCI&I) conducts background checks for all individuals who have
    applied for an Ohio insurance license. The results are forwarded electronically, on
    a daily basis, to the Licensing Division.
          
 c. OPOTA Training. The Ohio Peace Officers Training Academy has asked the
    ODI Fraud Division to teach a half day training in January of 2011 at their
    training academy located in Richfield Heights, Ohio. The training will be offered
    to law enforcement officers across Ohio as part of the agency’s continuing
    education program.
      



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 9.5.9 Ohio Secretary of State

   a. Newly Licensed Business Entities. The Licensing Division provides the
      Secretary of State’s Office with a list of all business entities who have been issued
      an Ohio insurance license.

9.6 Overall Successes that are Critical to your Agency’s Mission and Constituents

   a. General Operation

      The Department licenses and regulates the activities of more than 283,000 agents,
      monitor the financial solvency and market conduct of more than 1,680 insurance
      companies and 20,000 insurance agencies. The 29 staff members in our fraud and
      enforcement division respond to more than 4,400 insurance fraud and
      enforcement referrals each year.

   b. Regulatory Simplification

      In 2007, Governor Strickland issued an Executive Order requiring all
      administrative agencies, including the Department, to eliminate unnecessary
      regulations, assume that new regulations or amendments were fully vetted with
      stakeholders, and that regulations were more “reader friendly.”

      At ODI, we eliminated a number of outdated regulations and bulletins. More
      importantly, we began and have maintained a robust stakeholder outreach process
      for just about every regulatory matter we are considering.
      o We have a web notice and comment process for all rules.
      o We reactivated our Agent Education Advisory Council to review proposed
          national changes and keep our code and rules current and competitive.
      o We have a monthly e-newsletter with updates.
      o We host industry specific meetings on pending proposals, or compliance
          issues.
      o Director Hudson hosts periodical CEO roundtable sessions.

   c. Planning and Goal Setting

      The Ohio Department of Insurance used a comprehensive process to set goals and
      develop performance measures for the work of the agency. Senior leadership
      came together to think through the development of an agency logic model that
      illustrates what the vision of the agency is and what goals we would need to
      achieve to realize that vision.




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                                                           Ohio Department of Insurance
                    STRATEGIES: ODI WORK
                                                                                 Outcomes
       (7.1) Provide information and
       protection to Ohio insurance
                  buyers.
     (7.2) Educate consumers about          (7) Educate and                     (2) Consumers
    Medicare through the Ohio Senior         protect Ohio’s                 understand products,
      Health Insurance Information              insurance                  policies and their rights.
                Program                        consumers
      (7.3) Mediate complaints from
               consumers

    (8.1) Manage Ohio’s Health Care                                          (3) Insurers meet
      Coverage and Quality Council                                         contractual obligations.
                                           (8) Promote access
       (8.2) Manage Ohio’s Health          to affordable health
                                              insurance and                                                  VISION
    Information Technology initiatives
                                          improved health care
                                          quality and efficiency
     (8.3) Lead health care coverage
              reform efforts                                               (4) The Ohio insurance         (1) All Ohioans
                                                                            market is competitive.        have access to
                                                                                                        reliable insurance.
     (9.1) License and monitor agents
    and companies selling insurance in
                   Ohio

    (9.2) Provide guidance, education                                      (5) Insurance companies
     and direction to insurance sellers                                     doing business in Ohio
                                                                              are safe and sound.
                                              (9) Promote a
      (9.3) Conduct surveillance on             regulatory
       financial, agent and market         environment that is
                  activities              conducive to a robust
                                            insurance market
    (9.4) Review, monitor and enforce                                     (6) Policies and strategies
         Ohio insurance laws and                                              are implemented for
                regulations                                                  improved health care
                                                                             coverage and quality
      (9.5) Conduct investigations of
    insurance fraud, agent misconduct
          and unlicensed activity
                                                                                                                 Rev. 4/1/10




   Through this process, leadership determined that the vision of the agency was for
   all Ohioans to have access to reliable insurance. For that to happen, we would
   need to protect consumer while promoting a competitive insurance market in
   Ohio. We added a goal about affordable health insurance, given that our studies
   showed that most of the 1.3 million Ohioans that are uninsured are not covered
   because they cannot afford it, and their employers do not provide insurance. We
   also determined several ways of measuring those goals and looked at data over
   the course of several years, all of which can be found in the ODI Flexible
   Performance Agreement.

   After setting these goals for the agency, we worked with each division to
   determine how they contribute to the larger agency goals. We wanted to assure
   that each staff member understands how he or she contributes to the success of the
   agency. Each division also has a logic model and a set of performance measures
   that link to the agency model. (All information on performance measures is
   housed in a SharePoint site: “ODI Performance Measures.”)

d. Statement of Support for National Guard and Rescue

   In 2009, Director Mary Jo Hudson was presented with an Employer Patriot
   Award from the United States Department of Defense for her support of military
   issues, Ohio service members and Ohio Department of Insurance employees who
   serve in the National Guard and Reserve. She has provided the Ohio National
   Guard with soldier information support regarding insurance matters and has


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   supported the National Guard in rule and law promulgation. The Department
   monitors, and when appropriate, takes action involving the Federal Military
   Personnel Financial Services Protection Act which has given Ohio jurisdiction to
   federal military bases in the state to protect members of the U.S. Armed Forces
   from predatory and abusive insurance sales practices.

e. Stopping Insurance Fraud – Initiatives and Criminal Convictions

   Preventing fraud has been a top priority for the Department since 2007. The Fraud
   and Enforcement division has fostered many partnerships and has traveled the
   state on many occasions to reach out to stakeholders and consumers on various
   fraudulent schemes that had been detected in our state. Examples of these
   outreach activities are as follows:

   Cargo Theft Task Force
   Each year, billions of dollars of goods are stolen as they are being transported. As
   cargo theft appears to be a growing problem, the Ohio Department of Insurance
   hosted a Cargo Theft Summit in April 2009.

   The event featured several guest speakers discussing the rise in cargo theft and
   ways to prevent and combat the problem. There was also a round table discussion
   featuring representatives from the insurance industry, the National Insurance
   Crime Bureau (NICB), the Ohio State Highway Patrol and the Florida Cargo
   Theft Task Force.

   Fraud Seminar
   In March 2010, the Department co-hosted the Ohio Insurance Fraud Seminar. The
   day-long event included several keynote speakers covering topics including:

      o   Technology Trends
      o   Contractor Fraud
      o   Medical Fraud
      o   Pharmaceutical Cargo Theft
      o   Heavy Equipment Theft
      o   Legal Updates
      o   Insurance Agent Fraud

f. Storm Chaser Campaign

   On November 4, 2009, the National Insurance Crime Bureau (NICB) and the
   Ohio Department of Insurance hosted a “Storm Chasers Roundtable Seminar” so
   industry representatives could openly discuss fraudulent acts being committed by
   members of the roofing and siding industry.
   As carriers have seen an increase in property claims ultimately resulting from
   roofing and siding companies intentionally damaging consumer homes, the




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   Department and NICB developed a strategy to help combat fraud being
   committed by unscrupulous contractors.

   In 2010, the Department and NICB, as part of the new initiative developed:
   • Partnered with other entities and law enforcement agencies to investigate and
       prosecute contractors committing fraud.
   • Provided Special Investigation Unit members with resources and tools to
       identify or investigate vandalism claims.
   • Opened up the lines of communication with the National Roofing Contractors
       Association as well as the Ohio Roofing Association.
   • Educated law enforcement officials and area prosecutors of the problems
       identified.
   • Conducted a public awareness campaign in order to educate the public.
   • Department personnel travelled to storm ravaged areas of the state in 2010 and
       went door-to-door to warn consumers about storm chasers.

g. Etch and Catch

   Officials have noted that catalytic converter theft is on the rise in many parts of
   the country, including Ohio. The converters contain precious metals such as
   palladium, platinum and rhodium. With these metals trading at record levels,
   converters have become a hot item for thieves, fetching up to $200 per converter.

   As such, the Department joined with the National Insurance Crime Bureau
   (NICB) hold several “Etch-N-Catch” catalytic converter events throughout 2009
   in Columbus, Cincinnati and Cleveland.

   Ohio car owners brought their vehicles to the dealership, where a mechanic
   “etched” the vehicle’s VIN (Vehicle Identification Number) on to the catalytic
   converter. Stolen converters that have been etched will be harder to sell to scrap
   dealers. Replacing a catalytic converter is expensive. The cost can range from
   $200-$900 but the costs don’t end there. Repairing a damaged exhaust system,
   which is often necessary following a converter theft, can run over $2,000. By
   preventing catalytic converter theft, Ohioans will not only save themselves
   money, but also others in the form of lower insurance premiums.

h. Health Care Fraud Summit

   The recent passage of the Patient Protection and Affordable Care Act (PPACA)
   could potentially lead to an increase in health care fraud being committed by
   medical providers. In order to combat this growing problem, the Department
   hosted a health care fraud summit on Thursday, May 27, 2010 in the Studio
   Theater of the Vern Riffe Center in Columbus.

   The summit began with opening remarks from Director Hudson. Topics that were
   discussed included strengthening alliances to prevent, detect, investigate &


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     prosecute those committing health care fraud in Ohio, legislative initiatives
     impacting the health care community and the Department’s role in fighting health
     care fraud.

     Representatives from the Department of Insurance, insurance executives, Special
     Investigative Unit (SIU) Directors, compliance officers and members of the law
     enforcement community were in attendance.

i.   Medicare Predatory Sales

     Medicare is a federally-funded health insurance program for people 65 and older
     or people of any age with certain disabilities. People enroll in Medicare through
     the Social Security Administration. Most people then choose private plans to
     supplement what Medicare does not cover. Others choose a type of private plan
     called Medicare Advantage.
     While most insurance agents who sell Medicare Advantage plans match their
     clients with suitable plans, some agents have used questionable sales tactics to sell
     products.

     Such documented cases include:

     •   Removing beneficiaries from traditional Medicare without their knowledge.
     •   Enrolling beneficiaries in plans they can't afford.
     •   Misleading enrollees to believe their physician or hospital accepts their plan.

     In 2007, the Department held a summit for health insurers who sell Medicare in
     Ohio to discuss what agents can and cannot do regarding Medicare sales. That
     year, the Department also created an online toolkit,
     http://www.insurance.ohio.gov/newsroom/tips/pages/medicaresalespractices.aspx,
     to help agents and consumers understand allowable activities related to Medicare
     sales.

j. Convictions

     2007 Convictions
•    Sylvia Davido and Robert Nicholas of Connecticut were sentenced for their role
     in staged slip-and-fall accidents in central Ohio. On November 5, 2007, Judge
     Krueger of the Delaware Court of Common Pleas sentenced Sylvia Davido to
     serve 3 years in prison and ordered her to pay $34,976.97 in restitution. Robert
     Nicholas was ordered to serve 6 months in the Delaware County Jail and make
     restitution in the amount of $34,976.97. Nicholas was further sentenced to 5 years
     community control.

•    Former funeral director Brent Peters was sentenced Wednesday to 10 years in
     prison for stealing nearly $1 million from clients and insurance companies during
     the 10 years he owned the Mader-Peters Funeral Home in central Ohio. Pickaway


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    County Judge P. Randall Knece sentenced Peters on two counts of felony
    aggravated theft. Peters may not apply for early release until he has devised a
    workable plan to repay his 151 victims, the judge said. Peters, 43, pleaded guilty
    in May to charges accusing him of stealing from prepaid funeral contracts,
    forging documents and fraudulently collecting life insurance payments.

    2008 Convictions

•   As a result of a joint investigation conducted by the Department, the Delaware
    County Sheriff’s Office, the Delaware County Drug Task Force and the Ohio
    Chiropractic Board, Zahir Sherazee, a former Delaware-based chiropractor whose
    license was revoked in 2005, was ordered to serve a five year, two month prison
    sentence. He was also fined $20,000. During a four-month investigation that
    started in January 2008, it was discovered that Sherazee, from 2005 through 2007,
    fraudulently billed insurance companies in excess of $600,000 for chiropractic
    services he never rendered. A search warrant executed during the course of the
    investigation resulted in authorities seizing steroids from Sherazee’s home along
    with documents pertaining to his improper billing activity. Under a recent plea
    negotiation, Sherazee plead guilty to insurance fraud, engaging in a pattern of
    corrupt activity, unlicensed practice of chiropractic services and possession of
    drugs. He agreed to pay restitution in the amount of $250,000 to the three
    insurance companies he defrauded.

•   Frank Davis, a Dayton-area optometrist investigated by the Department for
    insurance fraud, pled no contest to a Bill of Information charging him with one
    count of insurance fraud, a felony of the fifth degree thereby waiving his right to
    be indicted. Davis was found guilty of illegally billing insurance entities Anthem,
    United Health Care and Tricare and fraudulently receiving nearly $11,500 for
    personal gain. Davis used several fraudulent schemes, including charging patients
    $21 for a “visual fields test” procedure. He would advise the patients that their
    insurance would not cover this test but that it was important that they have it. The
    patients would pay him their co-payments as well as the $21. He would only show
    the co-payments on the insurance submissions then bill the insurers and pocket
    the money. He would also bill for a bogus mucous membrane test that required a
    special allergen – which the office did not have – to be inserted into the eye
    membrane.


•   Multi-agency investigative efforts led by the Department and the Fairfield County
    Sheriff’s Office led to the discovery of a multimillion Central-Ohio fraud and
    theft ring that resulted in prison sentences and suspended sentences ranging from
    30 days to four years for six of the ring’s participants. The ring’s fraudulent
    conduct to date totals approximately $3.5 million in Licking, Franklin and
    Delaware counties. Huey Granderson of Millersport, Ohio will spend more than
    six years in prison for his involvement as the leader of the fraud ring. Judge
    Richard Berens sentenced Mr. Granderson in the Fairfield County Court of


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    Common Pleas to four years in jail for engaging in a pattern of corrupt activity,
    seven years for theft, and 11 months for failure to file an income tax return.
    Granderson is currently serving 17 months for a Delaware County theft
    conviction. Once he has completed that sentence, he will serve the four years for
    engaging in a pattern of corrupt activity and the 11 months for failure to file an
    income tax return. Once those sentences have been served, Granderson will be
    released on community control, with the understanding that if he violates that
    community control, he will serve the seven year theft sentence.

    Sentences for convicted ring participants (alphabetized by last name):

    •   Kyle Chaney, 21 – Sentenced July 21, 2008 to two years in prison consecutive
        to one year in prison from another case for one count of engaging in a pattern
        of corrupt activity and one count of theft.
    •   Corey Pack, 19 – Received a 30 day sentence on June 2 for one count of
        insurance fraud. This sentence was suspended.
    •   Allen Samsal, 23 – Sentenced July 31 to three years in prison for one count of
        engaging in a pattern of corrupt activity.
    •   Jared Watson, 25 – Sentenced June 2 to six months in prison for one count of
        insurance fraud. This sentence was suspended.
    •   Eugene Willis, Jr., 38 – Sentenced four years in prison on July 31 for one
        count of engaging in a pattern of corrupt activity.
    •   Randall Workman, 22 – Sentenced June 2 to 18 months in prison for two
        counts of insurance fraud and one count of theft. This sentence was
        suspended.
    •   Steve Clayton, the former owner of Miami Valley’s largest title insurance
        agency, Equity Land Title Insurance Inc., was sentenced 12 years in the
        Montgomery County Court of Common Pleas and ordered to pay more than
        $7 million in restitution for stealing escrow funds from hundreds of
        individuals and businesses. Clayton was found guilty of multiple counts of
        engaging in a pattern of corrupt activity, aggravated theft, and money
        laundering after the largest title insurance investigation in the history of the
        Department.
    •   Former Cincinnati insurance agent Darrius Wright was convicted of multiple
        felony counts of theft and forgery. The conviction comes as a result of a joint
        investigation by the Department and the Hamilton County Prosecutor's Office.
        Mr. Wright was convicted and sentenced to three years in prison by Hamilton
        County Court of Common Pleas Judge Jody Luebbers in Cincinnati, Ohio on
        November 17, 2008.

    2009 Convictions

•   On February 9, 2009, Darla Balka of Licking County pled guilty to money
    laundering as the result of her involvement in a 2006 fraud case. As part of the
    plea agreement, Ms. Balka will spend an additional year in jail. In 2008, Ms.
    Balka was convicted of tampering with evidence and received a two-year jail


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    sentence and three years of post-release community control. A joint investigation
    involving members of the Department, Ohio Attorney General Richard Cordray's
    Office and the Licking County Sheriff and Prosecutors offices found Ms. Balka
    helped her then-boyfriend, Timothy Snyder, defraud elderly individuals of more
    than $89,000. As part his scheme, Mr. Snyder solicited checks from the victims
    under the guise that he would perform home repairs. While Mr. Snyder failed to
    complete the work as promised, he cashed the victims’ checks and gave portions
    of money collected to Ms. Balka to deposit into her bank account.

•   On August 24, 2009, a Franklin County Grand Jury indicted Luther Watts,
    Lysandrous Mullins, Jr., and Patricia Irene Mullins on eight counts of insurance
    fraud each. Luther Watts and Lysandrous Mullins, Jr. are residents of Columbus
    while Patricia Mullins resides in Harts, West Virginia. In May 2006, the
    Department, the Delaware County Sheriff’s Office, the West Virginia State Police
    and the West Virginia Office of the Insurance Commissioner began investigating
    the three individuals as they had filed a significant number of insurance claims.
    Claims filed included acts of arson, theft, auto accidents and disability / personal
    injury claims. The investigation revealed the three suspects would purchase
    vehicles from local car dealerships using fraudulent documents and employment
    information, and would take out credit disability insurance. Shortly after
    obtaining vehicles, the suspects would then contact the insurance carrier and
    report they were injured and/or disabled. In order to maximize the length of time
    the insurance company would have to pay on the vehicle, the suspects would alter
    disability forms obtained from their provider and submit them to the insurance
    carriers.

•   On Tuesday, September 01, 2009, former Maineville insurance agent William R.
    Appleton, II, was sentenced in United States District Court to 97 months
    imprisonment for one count of mail fraud and 60 months imprisonment, to be
    served concurrently, for one count of income tax evasion. He was also ordered to
    pay $6,281,252 in restitution to his victims, including $1,099,267 to the Internal
    Revenue Service. Last March, Mr. Appleton pled guilty to one count of mail
    fraud and one count of tax evasion after he defrauded at least ten victims out of
    nearly $5 million. A joint investigation conducted by the Department and
    members of the FBI and IRS revealed that from 2003 to 2007, Mr. Appleton
    posed as an investment advisor and convinced insurance clients to invest
    inheritance proceeds and money from their insurance products in the financial
    markets. Instead of investing his customer’s money as promised, Mr. Appleton
    transferred the funds to his personal bank accounts and used the funds for
    personal living expenses, the operation of his companies, and payment to earlier
    investors who were seeking to withdraw funds from their accounts.

•   On Friday, October 23, 2009, former Granville title agent Karen Axline was
    sentenced in the Franklin County Court of Common Pleas to four years in prison
    for her role in a mortgage scam. Ms. Axline pled guilty to ten felony counts of
    theft, falsification and money laundering on August 11, 2009.


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    2010 Convictions

•   Four Ohioans were arrested on Thursday, January 28, 2010 as the result of a joint
    healthcare fraud investigation conducted by the Department, the Ohio Attorney
    General’s Office, the US Department of Health & Human Services and the FBI.
    Barbara Elise Miller of Coshocton and owner of Three Rivers Infusion and
    Pharmacy Specialists, was arrested and charged with two counts of witness
    tampering, two counts of obstruction of an official proceeding, and one count of
    concealment of records. Ms. Miller’s husband Dana Campbell, also of Coshocton
    and Vice President of finance for Three Rivers, was also arrested in and charged
    with one count of concealment of records. In December 2008, Three Rivers was
    served with a subpoena and ordered to produce 118 patient files, as the company
    is suspected of overbilling insurance companies for services never rendered. Ms.
    Miller only provided the government with 21 of the 118 files. In December of
    2009, government agents found many of the subpoenaed files concealed in the
    Coshocton home of Ms. Miller and Mr. Campbell.Two former employees of
    Three Rivers, James Ireland, 39, of Coshocton, and Douglas Bolden, 55, of
    Zanesville were also arrested. The two individuals were each charged with one
    count of obstruction of an official proceeding as they accepted “severance”
    payments from Miller in return for their silence about Miller’s activities.

•   Mark A. Schrader, a chiropractic physician, of Louisville, Ohio, was sentenced to
    two years of probation, fined $5,000 and ordered to perform 100 hours of
    community service by Judge John Adams in the United States District Court for
    the Northern District of Ohio Eastern Division. Mr. Schrader was convicted of
    one count of health care fraud on January 11, 2010. A Department investigation
    revealed that from 2000 to 2003, Mr. Schrader executed a scheme to defraud
    Aultcare, a health insurer located in Stark County, Ohio. Mr. Schrader owned and
    operated a chiropractic practice known as “Family Chiropractic” in Louisville,
    Ohio. He billed Aultcare for treatment services even though patients covered by
    Aultcare’s health care benefit program failed to present signs and/or symptoms to
    warrant treatment. As a result of the Schrader’s conduct, Aultcare paid
    $28,469.31 in fraudulent claims.

•   Former Ohio insurance agent Damon Bryan of Medina was sentenced to seven
    years in prison by Judge Christopher Collier of the Medina County Common
    Pleas Court after pleading guilty to nine counts of felony theft, which included
    theft from the elderly. Mr. Bryan will also be on probation for five years after his
    prison sentence is concluded. A Department investigation revealed that in 2007,
    Mr. Bryan took $685,000 in unauthorized loans from nine of his clients’ annuity
    policies, deposited it into his account and used the money for his own purposes.
    Mr. Bryan voluntarily surrendered his insurance license in May 2007 and was
    indicted on 27 felony counts in August 2009 in the Medina County Common
    Pleas Court. He then fled the country to Bucerias, Nayarit Mexico, where he was




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    apprehended by U.S. Marshalls in 2009. Mr. Bryan was then extradited from
    Arizona to Ohio in January 2010.

•   Michael Cox of Powell, Ohio was indicted by a Franklin County grand jury on ten
    counts of felony theft. A Department investigation revealed Mr. Cox had
    continued to accept insurance premiums from past clients and used these funds for
    his personal use, despite being an unlicensed agent. Many of these individuals
    believed they had insurance coverage since they were making payments to Cox,
    but, there was no actual policy in place. The Department referred the case to
    Franklin County Prosecuting Attorney Ron O’Brien, who filed criminal charges
    against Mr. Cox.

•   Jamie Smith of Bowling Green, Ohio was convicted on one count of felony theft
    in the Lucas County Court of Common Pleas. Director Hudson also revoked Ms.
    Smith’s resident license for violations of Ohio insurance law. A Department
    investigation, with assistance from the Toledo Police Department, revealed that in
    December 2008, Ms. Smith admitted to the misappropriation of premiums from
    the agency that employed her. On July 29, 2010, she pled guilty to the theft
    charge and was sentenced to three years of community control, ordered to pay
    restitution in the amount of $3,203.14 and to seek and maintain gainful
    employment.

•   Darryl Ables, a former bail bondsman from Indiana, was sentenced to four years
    probation and ordered to pay over $100,000 in restitution to his theft victim. The
    sentence stemmed from his guilty plea to one count of theft by deception in the
    Allen County Court of Common Pleas on August 12, 2010. Mr. Ables was also
    given a four year suspended prison sentence and will not serve the sentence unless
    he violates the conditions of his probation. A Department investigation revealed
    that Mr. Ables misled a prospective customer and took $100,000 for a bond, even
    though he was not licensed to do business in the state of Ohio. After realizing
    that Mr. Ables did not write a bond, the victim attempted to get her funds
    returned, but Mr. Ables kept the money.

•   Dr. Stacey Royal of Perrysburg, Ohio was sentenced to five years probation and
    was ordered to pay $234,144 in restitution to her victims, as well as a $10,000
    fine. If Dr. Royal violates the terms of her probation, she will be sent to jail. Dr.
    Royal was indicted by a Wood County Grand Jury on November 5, 2009, after a
    Department investigation revealed she billed insurance carriers in excess of
    $900,000 for inflated services or services that she, and the Royal Treatment
    Urgent Care, never provided. The investigation further confirmed she received
    more than $100,000 in payments as the result of her fraudulent billing practices.
    Dr. Royal pled guilty to all charges during her trial on August 19, 2010. The
    Wood County Prosecutor’s Office was responsible for the prosecution of the case.




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•   On Friday, November 5, 2010, Wood County Common Pleas Court Judge Alan
    Mayberry sentenced Christopher Davis of Toledo, Ohio to spend six months in
    jail and one year of probation for his role in an insurance fraud scheme involving
    Dr. Stacey Royal of Perrysburg, Ohio. He must also pay more than $133,000 in
    restitution to the identified victims and more than $18,000 in investigatory costs.
    He could face additional jail time if he violates the terms of his probation. Earlier
    this fall, Mr. Davis was found guilty by a Wood County Jury of engaging in a
    pattern of corrupt activity and complicity to theft and insurance fraud charges.
    Davis’ conviction stems from an investigation which found Dr. Royal billed
    insurance carriers in excess of $900,000 for inflated services that she, and the
    Royal Urgent Treatment Care, never provided. The investigation found Mr.
    Davis served as the office manager at Royal’s facility.

k. Bulletins.

    2007-3 Terrorism Risk Insurance Program Reauthorization Extension Act of
    2007
    The purpose of this bulletin was to advise insurers about provisions in the
    Terrorism Risk Insurance Program Reauthorization Extension Act of 2007
    (TRIA), which may require insurers to submit a filing to the Department of the
    policy language and applicable rates and rules. The bulletin also provides
    background information about TRIA, and explains how insurers can comply with
    the requirements. The bulletin was issued on December 31, 2007.

    2008-1 Notification Regarding Change to Initial Licensure Requirements for
    Nonresident Surplus Line Brokers and Nonresident Business Entities
    Applicants
    This bulletin, issued on January 31, 2008, provided information about changes
    made by the Department to certain nonresident licensing requirements. These
    changes were made to ensure Ohio’s licensing requirements remain uniform with
    NAIC models and regulatory uniformity requirements. This bulletin was
    applicable only to nonresident surplus lines broker applicants and nonresident
    business entity license applicants.

    2008-2 Agent Training --- Policies Issued Under Qualified State Long-Term
    Care Insurance Partnership ("Qualified Partnership")
    This bulletin, issued on February 1, 2008, provided information to agents,
    insurers, and continuing education providers about agent training, record keeping,
    and education requirements following legislative changes regarding long term
    care insurance. These changes, made to Ohio Revised Code Section 3923.443,
    prohibited any person from selling long term care insurance unless they were a
    licensed life or health and accident agent, and completed a one-time training
    course. The bulletin also advises agents of reciprocity for long term care training
    obtained in others states, so long as the training has received prior approval from
    the Superintendent.




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2008-3 Required Reporting by Insurance Companies of Agent Disciplinary
Actions Pursuant to the Military Personnel Financial Services Protection Act
This bulletin, issued on March 21, 2008, advised Ohio insurers to use the National
Association of Insurance Commissioners (NAIC) Military Sales Online Reporting
System (MSORS) to report any disciplinary actions required to be reported
pursuant to Section 12 of the Military Personnel Financial Services Protection
Act.

2008-7 Revision of Bulletin 88-1: Requirement of Certificate Authority for
Public Insurance Adjusters
This revised bulletin, issued on April 28, 2008, explains that no entity is permitted
to engage in public insurance adjusting without a certificate of authority issued by
the Department.

2008-9 Reporting Suspected Fraudulent Claims (Supersedes Bulletin 96-1;
see Bulletin 2008-08 in the list of Rescission Bulletins)
Issued on October 3, 2008, this bulletin outlines specific procedures an insurer
should follow when a consumer or health care provider is suspected of
committing insurance fraud.

2009-02 Interpretation of the Calculation of the Segment Length with respect
to the Life Insurance Model Regulation and use of the 2001 CSO Preferred
Class Structure Table to Determine Basic and Minimum Reserve Liabilities
Interpretation of the Calculation of the Segment Length with respect to the Life
Insurance Model Regulation and use of the 2001 CSO Preferred Class Structure
Table to Determine Basic and Minimum Reserve Liabilities

2009-03 Calculation of the Reserves for Variable Annuities that provide
Guaranteed Living Benefits (VAGLBs) in the Preparation of Statutory
Financial Statements
Calculation of the Reserves for Variable Annuities that provide Guaranteed
Living Benefits (VAGLBs) in the Preparation of Statutory Financial Statements

2009-04 Calculation of the Amount of Deferred Income Tax Admitted in the
Preparation of Statutory Financial Statements
Calculation of the Amount of Deferred Income Tax Admitted in the Preparation
of Statutory Financial Statements

2009-05: Bulletin that Rescinded Bulletins 14, 90-7 90-8, 94-8, 94-9, 97-1
2009-07 Revision of Bulletin 97-1: Basic Health Services and Infertility
Services
This Bulletin addresses the coverage of infertility services as basic health care
services under Chapter 1751 of the Ohio Revised Code.

2009-08 Certificates of Insurance



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This Bulletin addresses the use of certificates of insurance. It clarifies that agents
may not issue certificates of insurance that are not in compliance with the specific
terms of the underlying contract of insurance.

2009-10 Workers' Compensation Other-States' Coverage
This bulletin clarifies what documents must be filed with the Department by
insurers who issue private workers compensation policies in states other than
Ohio.

2009-11 Mandatory Use of SERFF for Product Filing Submissions
This bulletin required that as of December 31, 2009, all entities required to file
rate, rule and form filings with the Department file via the SERF on line filing
system which is made available through the NAIC.

2009-12 Loss of Control of Policyholder Information
This bulletin deals with the reporting requirements of ODI if an insurer or its
agent suffers a loss of control of policyholder information.

2009-13 Guidance Governing the Giving of Promotional or Advertising Items
This bulleting offers guidance on the giving of promotional or advertising items.
ORC 3911.20 and 3933.01 prohibit an entity from giving a prospective client any
valuable inducement to purchase insurance. This bulletin clarified that anything
with a value in excess of $50.00 was a valuable consideration.

2009-14 Guidance Regarding Use of the NAIC/NIPR Attachments
Warehouse for the Electronic Filing of Insurance Producer Licensing
Documents
This bulletin established that the Department would accept insurance producer
licensing related documents that were filed via the NAIC/NIPR Attachments
Warehouse.

2010-02 Deferral of Premium Payments and Policy Time Frames for Victims
of the Severe Weather and Tornadoes Event of June 5-6, 2010 Affecting
Wood, Ottawa, and Fulton Counties
This bulletin requested that all insurers and other entities conducting the business
of insurance in the state of Ohio to defer premium payments and extend any other
contractual obligations of policyholders that were affected by Severe Weather and
Tornadoes event that occurred on June 5-6, 2010. The bulletin expired on
September 10, 2010.
2010-03: This bulletin was rescinded and replaced by 2010-06.

2010-05 Title Agent Iota Escrow Accounts- Directed Funds
This bulletin clarified that title agents must deposit client escrow funds in either a
pooled IOTA client fund or a separate interest-bearing account for the benefit of
each individual client. Under no circumstance shall the entity benefit from any
interest on either of these types of accounts.



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2010-08 Announcing Mandatory Use of EFT for Product Filing Submissions
This bulletin delayed the implementation of OAC 3901-1-57 which required that
all fees associated with file rate, rule and form filings to be filed via SERF. The
compliance date was extended from November 22, 2010, to January 1, 2011.




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