On February 11^th the Iowa Foster and Adoptive Parents Association sponsored a Legislative Breakfast at the Capitol, where foster and adoptive parents, along with their children, dined with legislators.  It was my pleasure to have in attendance Don and Debbie Bean and their 5 children:  Logan, Abbie, Callie, Coy and Sam.

Don and Debbie just recently adopted the five young people so it was a really happy occasion.

Several members of the Columbus Junction State Bank’s Traveler’s Club, including my parents Sam & Juanita Sands, journeyed to the Capitol of the same day and spent part of the day with me.  We spent the time talking about the workings of the Legislature and about key bills that are soon to hit the House floor.  So Tuesday was a very nice day for me.

James Forney, the Iowa Superintendent of Credit Unions, announced this week that the University of Iowa Community Credit Union would not be allowed to purchase Hawkeye State Bank.  The credit union does not have enough capital to buy the bank and still maintain the federally required minimum seven percent ratio of capital-to-assets.  The superintendent enforces the required minimum ratio to ensure financial soundness of credit inions.  Capital from the bank was not included as part of the sale, and would have caused the capital-to-assets ratio to fall below seven percent.   

Superintendent Forney indicated in his comments that the credit union’s acquisition of the bank is legal and within current laws.  He also did not rule out the possibility of this occurring again.  It is possible for the credit union to rework its net worth and reapply to purchase the bank.  However, the credit union industry claims they have no plans to resubmit an application to acquire the bank.  Other financial institutions previously interested in acquiring Hawkeye State Bank will likely be contacted again in order to find another buyer for the bank. 

Terri Vaughan, the Iowa Insurance Commissioner, presented an insurance update to the Commerce, Regulation and Labor Committee on Thursday, February 6.  Over the last year, the Insurance Division has seen an increase of 35 percent in consumer complaints.  Most of the complaints are due to rate increases and non-renewal of policies in the areas of homeowners insurance and farm insurance.  Iowa had hail damage over the last two years, leading to the increases of non-renewals.  In addition, the effects of September 11 are still within the market, causing rate increases.  Homeowners’ rates have increased over the last three years 60 percent.  Insurance companies are paying out $1.60 for every $1.00 in claims. 

The rates and availability of medical malpractice insurance is a major issue throughout the United States.  In 2001, only two companies offering medical malpractice insurance were left in Iowa.  Currently, no national carriers are offering medical malpractice insurance; only regional carriers remain that offer coverage.  While the market seems to have started to stabilize over the last few months, the division plans to continue monitoring the market.

Health insurance rates are also continuing to increase.  The small group market has increased 20 to 25 percent, while the individual market has increased 15 to 20 percent over the last year.  There have been some concerns over the lack of competition within the Iowa health insurance market, but Commissioner Vaughan believes there is adequate competition within the market.  Consumers have the choice between 31 companies within the individual market or 34 companies within the small group market in addition to the one national carrier offering health insurance in Iowa. 

Within the insurance market, pressure has increased for a federal insurance regulator.  Insurance companies would like to have similar regulations within all 50 states for products.  The life insurance market in particular is pursing a national system, and as a result, an interstate compact for product development has come together.  Iowa is actively taking part within these activities so each individual state can still regulate its insurance market, but also make it easier for insurance companies to develop new products.

The Iowa Farm Bureau announced a set of bold plans on funding economic growth in the state of Iowa.  Their plan is referred to as STIR Iowa, which stands for Statewide Tax Increment Renewal.  Their idea is to sunset all present TIF plans and replace with a statewide plan.  STIR Iowa has caused quite a stir within the rotunda and around the state.

I think that the most important thing to remember is that it is extremely easy to sit back and criticize, but much more difficult to come up with a plan of your own.  When some people approached me by the possible dangers of changing the present system, I would reply you might be right, so what is your plan?  That comment was usually followed by silence. 

I believe that it remains important to keep an open mind and lets sort threw the plan and see if it will work.  The fiscal bureau is running some independent numbers of different case scenarios. 

The worst case scenario that I see is, if this plan won’t work in its entirety, we may still be able to use part of it or it may spark another idea that will be better.  We need to congratulate Farm Bureau for having the courage to stick their necks out and share their idea.  So far that is more than any other group has been able to do.

The pace is starting to pick up and this will continue until the end of the session.  I ran my first bill threw committee today, Thursday, February 13, 2003 and it passed without opposition.  I will most likely run the bill on the house floor in the next couple of weeks.  I presently have four more bills that I am the Chair of within their respective committees.  They are HSB 73, HSB 88, HSB 96, HSB 104, and it was HSB 8 that I ran in Commerce Committee.

HSB 8 simply removes the requirement that State Charted banks have in making the list of their stockholders available to the general public.  Other financial institutions do not have to make this list available, so it makes sense that State Charted banks should not as well.

Until next week,

Tom Sands