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Monday, July 15, 2024
HomeNewsLocal newsSenate OKs Tightened Insurance Regulations, 'Ban the Box' Bill

Senate OKs Tightened Insurance Regulations, ‘Ban the Box’ Bill

Members of the V.I. Legislature consult during Friday's session on St. Thomas. (Photo by Barry Leerman for the V.I. Legislature)
Members of the V.I. Legislature consult during Friday’s session on St. Thomas. (Photo by Barry Leerman for the V.I. Legislature)

Lawmakers went into recess Friday before completing their session’s agenda, but not before unanimously approving several bills tightening regulations on insurance companies and money-moving services, as well as a measure preventing employers from asking job seekers to disclose arrests that did not result in convictions.

The Senate was meeting in full legislative session Friday in the Earle B. Ottley Legislative Hall.

Senators expressed hope that the insurance regulation bills would help the territory gain accreditation from the National Association of Insurance Commissioners. The measures create clearer requirements on insurance companies’ financial reserves and bring the territory’s insurance regulation laws more in line with other jurisdictions. It also allows the Division of Banking and Insurance to exercise some authority over financial institutions not headquartered in the Virgin Islands or operating online.

Bill No. 32-0248 would require all insurance companies operating in the territory to prove they have sufficient reserves by submitting an actuarial opinion, an effort designed to protect policy holders if a company’s finances tumble. The Banking and Insurance Division under the Lieutenant Governor’s Office already requires this of companies seeking licenses, but the insurance code does not.

Another bill, called the Standard Valuation Law of 2018, affects companies offering life insurance policies by setting rules for determining how much in financial reserves an insurance company needs to be able to pay out on claims.

Lawmakers also unanimously approved the Uniform Money Services Act, Bill No. 32-0310, which would give the Banking and Insurance Division authority over what federal regulators call – and deem risky – “money service businesses,” such as MoneyGram and Western Union. The bill would allow the division to conduct inspections on licensed money transmitters without notice, suspend or revoke their licenses, or assess civil penalties against them if they are suspected of “unsafe or unsound practices.”

On Friday, bill sponsor Sen. Kurt Vialet (D-STX) lamented that millions of dollars – some $146 million in 2016, he said – leave the territory annually through money transmittal services.

“These same Virgin Islands that people want to complain about, these same Virgin Islands that people talk ill about, saying ‘we this, we that, we everything,’ these same Virgin Islands is sending out $146 million earned in this territory to other jurisdictions,” said Vialet.

Vialet added that the Legislature will deal with a bill shortly to “make sure that when monies are leaving the shores of the Virgin Islands, that we get a small portion.”

Hansen took issue with the bill’s use of the word “alien,” which is taken directly from the model laws, implying it is discriminatory. Her motion to replace it with the word “foreign,” however, was ruled out of order.

“I have a major problem because we know this territory has described people that are foreign to the Virgin Islands, but have made the Virgin Islands their home, and then we talk about them like something that dropped out of space, referring to it as alien. We need to stop,” Hansen said.

Lawmakers expressed support for the Virgin Islands Finance Lenders Law (Bill No. 32-0256), but never got to vote on the measure after confusion over a six-page amendment forced the bill’s sponsor, Sen. Nellie O’Reilly (D-STX), to move to push the bill to the end of the agenda.

O’Reilly’s bill, which appears to have the votes it needs to pass, would target non-bank lenders such as car dealerships or furniture stores giving out commercial loans of more than $5,000. The measure essentially would create licensing and regulatory requirements aimed at safeguarding against crushing terms and interest rates. Such non-bank lending transactions are not regulated under the Banking and Insurance Division, which has received numerous complaints from consumers.

“It seeks to rein in the retailers, these businesses that are engaging in in-house financing and charge exorbitant rates to individuals,” said O’Reilly. “These retailers are currently licensed under the Department of Licensing and Consumer Affairs, but in light of their lending practices, they should also be regulated by Banking and Insurance.”

DLCA General Counsel Frederick Norford said the agency supports the bill. In a Thursday hearing by the Rules and Judiciary Committee, Norford said “deceptive practices” and “onerous interest rates” are commonplace among automobile lenders in the territory. The bill’s regulatory framework would not only require such lenders to get a license from Office of the Lieutenant Governor, but also subject them to suspension or revocation of license if they fail to comply with regulations, Norford said.

“Ban the Box”

Lawmakers also approved Bill No. 32-0310, a “ban the box” legislation that would prevent employers from asking applicants to disclose arrests that did not result in convictions, or reveal sealed or dismissed convictions.

“Ban the Box,” a nationwide movement to ban employers from placing checkboxes on employment applications asking if the job seeker has any criminal record, has been adopted in some 32 states and 151 counties, according to bill co-sponsor Sen. Janelle Sarauw (I-STT).

“About 30 percent of our 18- to 35-year-olds have criminal records,” said Sarauw, saying this creates employment barriers. “That is a large, large percentage of people who are disenfranchised in this territory.”

Among the exceptions to the bill are situations where the job seeker is applying to become a police officer. A health facility could also ask applicants about police records for potential staff dealing with patients or with access to medications. An amendment approved on Friday also stated the bill would not apply if federal requirements require disclosure depending on the type of crime, or if the job environment involves care to minors.

Lawmakers approved the bill unanimously, but some raised concerns. Senator-at-Large Brian Smith said it is “a delicate balance,” and that records should be disclosed in cases involving child molesters. Sen. Janette Millin Young (D-STT) said that while she believes in second chances, employers should be allowed to a certain extent to ask questions based on the job being applied for.

“I think it’s important to know what the person has done, and if you’ve been charged and arrested and jailed for stealing, that then you wouldn’t be the cashier, that you’d have other positions,” said Sen. Janette Millin Young (D-STT).

O’Reilly said the legislation does not force employers, who still have the option to conduct background checks, to hire persons with criminal records.

“We are not forcing employers to hire individuals that they believe will not fit the bill,” said O’Reilly.

“What we are saying is, ‘Employers, you may not ask in the application anything about a person’s criminal history,’” O’Reilly said. “That gives that individual who already paid society, who has been rehabilitated, who perhaps went to school, to be given an opportunity to interview, to not be set aside, pushed aside simply because they checked a box.”

The Senate session went into recess Friday evening and is scheduled to reconvene Monday to tackle the rest of the agenda.

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