Layman's Terms

Layman's Terms Advocacy Update: 111th General Assembly Adjourns with a Wild Finish

Insurors Director of Government Relations, Jim Layman, J.D., breaks down the legal and legislative issues facing our industry.

At about 3:00 am on Friday, June 19, 2020, the Tennessee General Assembly concluded their two-year session sine die which means, barring any specially called sessions, the legislature should not return until January 12, 2021. It was a dramatic and tense end to session, and disagreements flared between the House and the Senate up until the very end. Following disagreements on how to address a significant state revenue shortfall in the State’s budget, the two chambers also quarreled over a proposal to provide liability protection to businesses from frivolous lawsuits related to COVID, as well as a proposal to expand reimbursement requirements for telemedicine. Ultimately, the Chambers came to an agreement on the budget fueled in part by the Senate’s willingness to consider an extensive abortion restrictions proposal. The chambers passed the budget and the new abortion restrictions, but failed to come to an agreement on telemedicine and liability protections.

This was truly a unique year for the Tennessee General Assembly. On March 16, as the virus spread and session was entering its final 4-6 weeks of the year, the Legislature decided to bar the public from legislative offices. On March 19, the Legislature passed the budget and recessed until June 1st. When the Legislature resumed in early June, leadership from the House and the Senate disagreed strongly on what the scope of its work should be during the midst of this health crisis. The Chambers never resolved their disagreement on the scope, and several pieces of legislation were passed in the House and not taken up in the Senate. Virtual Legislative Town Hall Set for August 11 Due to the timing of legislative session and ongoing COVIDrelated restrictions, we have moved our Legislative Town Hall event to a virtual program that will be held on Tuesday, August 11 at 10 am CT. The program, provided free to members by our partners at Arlington/Roe, will include a legislative update on important pieces of legislation from last year, a political update and news on the elections this Fall, and addresses from legislators and other government officials. You can check out insurors.org for more details and registration information for this event.

Prospect of Special Session on COVID Liability Looms The day after session ended, Lieutenant Governor Randy McNally (R-Oak Ridge) took to social media to chastise House members for failing to pass the liability protection measure and supporting a call for a special session to reconsider this issue. Much of the criticism came from the fact that the two chambers could not agree on whether it should be retroactive. A conference committee produced a report that left the retroactivity piece in. The bill then passed again in the Senate, but failed in the House by 4 votes when the bill’s sponsor and several members of House leadership came out against the inclusion of retroactivity. Insurors joined the TN Chamber of Commerce, NFIB, and a coalition of over 30 associations and stakeholders in support of the measure to provide protection to businesses, nonprofits, schools, and other entities from frivolous lawsuits related to COVID exposure. On July 1, 2020, Governor Bill Lee issued Executive Order 53 which provided limited liability protection to healthcare providers, but not to businesses, schools, churches, and the other entities the liability bill originally addressed. Right now, it appears likely

that a special session will be called for the week following the state and federal primary election on August 6th to address the liability issue and possibly a handful of other issues such as telemedicine.

While the liability bill may have been the single biggest issue for the association when the legislature reconvened in June, there were several other important issues we worked on prior to the recess:

Certificates of Insurance On March 20th, Governor Lee signed Public Chapter 608 into law. This law defines what a certificate of insurance is, and makes it violation of the law to prepare, issue, or request a certificate that purports to alter, amend or extend the terms of the underlying policy or that is otherwise unlawful. Insurors advocated for the passage of this legislation, and it passed through both chambers unanimously. We wish to thank our sponsors, Sen. Paul Bailey (R-Sparta) and Rep. Ron Travis (RDayton) for their hard work in passing this bill. The law took effect on July 1, 2020.

Workers’ Compensation Bills Insurors worked on several proposals related to workers’ compensation this year. The first was a bill that grew out of the efforts of the Employee Misclassification Advisory Council (EMAC) which Insurors has served on for several years. This administration bill brought by the Bureau of Workers’ Comp and the Lee administration seeks to expand the Bureau’s enforcement efforts related to misclassification penalties, to help ensure that construction workers are appropriately covered.

The bill requires construction service providers working on projects located in Tennessee to have 3A coverage in this state. Additionally, the bill makes it easier for the Bureau to enforce monetary penalties against successors-in-interest to bad actor companies that misclassified workers. Just before the legislature recessed in March it passed an extension of the Advisory Council of Workers’ Compensation, a small state agency that provides input and recommendations on work comp proposals and the annual loss cost multiplier.

Other Issues One of the more concerning proposals of the legislative session was a proposal by the Department of Commerce and Insurance to create what is called a “regulatory sandbox” by allowing insurance companies and other professions the Department regulates to pilot an innovative product or service by allowing the company to not follow laws or regulations which stand in the way of its delivery or implementation. Insurors expressed many concerns with the proposal to the Department and worked to amend the bill to make it more equitable and provide additional safeguards. Ultimately, the Department dropped its pursuit of the legislation and the bill did not pass.

Another bill was proposed by a member of the House Property & Casualty Insurance Subcommittee to require carriers to provide coverage for diminution of value of vehicles following accidents. The law currently allows for injured parties to recover either the monetary value of their vehicle immediately prior to the accident (which would include diminution) or to have the car repaired to substantially the same condition before the accident, but not both. We watched this bill closely – as the carriers opposed the bill – and it was ultimately defeated.

Now is a time of great uncertainty in the legislative and regulatory landscape here in Tennessee as COVID continues to make an impact. It is more important than ever to contribute to InsurPACTN to make sure we elect leaders who understand the benefits of the independent agent system. Please contribute today at insurors.org or by reaching out to jlayman@ insurors.org.

About the Author

Jim Layman, J.D. is the Director of Government Relations for Insurors. He previously worked for the Tennessee Dept. of Mental Health and Substance Abuse Services as legislative liaison and rules coordinator. Prior to that, he worked for the Dept. of Health as a legislative liaison and the Dept. of Labor and Workforce Development as director of unemployment insurance appeals. Jim graduated from the University of Memphis Cecil C. Humphreys School of Law and received his undergraduate degree from the University of Tennessee. He may be contacted at jlayman@insurors.org. u

Association Update

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