At the last possible moment, the Chairman of the Senate Finance Committee cancelled the 03/20/13 confirmation hearings for the appointment of a new Director of ADOI. The appointee is Gerrie Marks, current Acting Director and former Deputy Director of ADOI. ACS had intended to press hard on the point that ADOI has refused to enforce the Unfair Claim Settlement Practices Act (UCSP), including the chiropractic insurance equality law, in spite of a clear mandate in law that the Director "shall enforce all insurance laws in this state." ACS had asked committee members in a letter, see below, to not approve the new Director unless she commits to enforcing all provisions in the UCSP Act. We will alert you when this hearing is rescheduled. Here is the letter from Dr. Immerman to the committee members:
Please consider the following before you vote on the appointment of Arizona Department of Insurance (ADOI) Acting Director Germaine Marks as Director of ADOI on Wednesday, 3/20/13, in the Senate Finance Committee.
There is something outrageously wrong going on at ADOI that must be rectified. ADOI is refusing to consistently enforce all provisions of the Unfair Claim Settlement Practices (UCSP) Act in spite of a clear legal mandate to do so. The only protection for insurance consumers in state law is the Unfair Claim Settlement Practices (UCSP) Act, ARS 20-461. This law prohibits insurance companies from, for example, "misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue." It also prohibits insurers from "failing to adopt and implement reasonable standards for the prompt investigation of claims arising under an insurance policy" and "refusing to pay claims without conducting a reasonable investigation based upon all available information." The UCSP Act also prohibits discrimination against chiropractors.
Over the past few years, ADOI has decided for the first time ever that it has "no duty" to enforce the provisions of the UCSP Act when there are violations. This is an unprecedented position not taken in any of the other 49 states in which the same uniform Act is in place. ADOI made the "no duty" statement in litigation in 2012, see attached transcript, page 16. We ask that you not tolerate this policy which leaves Arizona consumers unprotected and at the mercy of insurance companies. The UCSP Act prohibits third party cause of action and so only ADOI can enforce the provisions. Now that ADOI has decided not to enforce the Act whenever they so choose, citizens are at risk from insurance company misconduct with no recourse. We ask that you not appoint a director who agrees with this position.
At the beginning of Title 20, under the section "20-142 Powers and duties of director," the law states that "The director shall enforce the provisions of this title." (Emphasis added.) This includes the UCSP Act which begins with the following mandate: "A person shall not commit or perform with such a frequency to indicate as a general business practice any of the following." Nonetheless, in spite of this clear legal duty to act, you will see in the attached transcript from an ongoing lawsuit that ADOI believes it has "no duty" to take enforcement action if there are clear violations of the UCSP Act. This is analogous to a CPS caseworker stating that there is no duty to act even if child abuse is taking place or a police officer stating there is no duty to act even if a burglary is in progress.
But ADOI's outrageous behavior goes even further. In the same litigation, the ADOI attorney was asked the following by one of the judges in the Arizona Court of Appeals on June 6, 2012:
"Let's assume for a moment that a Director, some hypothetical Director said 'you know what, I hate this statute I'm just not going to enforce it'. I believe this goes back to Judge Gould's question. Could the Director do that and be immune from mandamus?" The ADOI attorney answered: "YES THE DIRECTOR COULD."
This means that if ADOI does not like a statute passed by the Legislature, on that basis alone, ADOI is free to not enforce that statute. We ask that you not approve the nomination of a potential director who agrees with the position that ADOI can act contrary to mandates passed by the Arizona Legislature.
ADOI has stated it has full discretion not to take enforcement action when there are clear violations of the UCSP Act. In the case of the chiropractic section of the law, ADOI has decided to completely stop enforcing the law. This policy has decimated the chiropractic profession. ADOI has simply ignored scores of complaints filed by chiropractors and their patients over the past five years.
Enforcement of all provisions of the UCSP Act is essential whenever there is a violation of the law in order to protect insurance consumers in Arizona. We ask that you not confirm Acting Director Marks unless she commits to enforcing all provisions of this Act whenever there is a violation according to the will of the Legislature. Anything short of that leaves Arizona consumers at risk and the Legislature neutered.
Thank you very much for your consideration of my comments. I would be glad to answer any questions you might have if you want to contact me prior to the hearing. My cell number is 602-284-9979.
Alan M. Immerman, D.C., President
Arizona Chiropractic Society
You can count on one thing for certain: ACS will NEVER give up until we achieve full insurance equality for chiropractors in Arizona. If this is what you want and you are not already a member, join today.