Social Security Administration (SSA).
In prior notices published in the Federal Register, we provided guidance on the requirements for participation in the Non-Attorney Direct Payment Demonstration Project mandated by Section 303 of the Social Security Protection Act of 2004 (SSPA). In this notice, we are announcing that we are revising our earlier guidance in two respects. First, we have decided to replace the requirement that insurance policies must be underwritten by a firm that is licensed to provide insurance in the State where the individual practices with a requirement that the underwriting firm be legally permitted to provide insurance in that State. This change will allow us to accept insurance policies offered by “surplus lines carriers.” Second, we are changing the manner in which we will make open-book reference materials available to test-takers.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Marg Handel, Social Security Administration, Office of Income Security Programs, 252 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-4639.End Further Info End Preamble Start Supplemental Information
Liability Insurance Requirements
Section 303(b)(3) of the SSPA requires non-attorney representatives who want to participate in the direct payment demonstration project to secure and maintain “professional liability insurance, or equivalent insurance, which the Commissioner has determined to be adequate to protect claimants in the event of malpractice by the representative.” In a notice published in the Federal Register on January 13, 2005, we announced that to satisfy this requirement the insurance policy must be underwritten by a firm that is licensed to provide insurance in the State in which the non-attorney representative conducts business (70 FR 2447, 2449). At the time, we believed this requirement was needed to ensure legitimacy of the insurance policy and provide protection for the claimants in the event of the carrier's insolvency.
In the 2007 application period, several applicants relied on insurance policies obtained from so-called “surplus lines” insurers or “non-admitted” carriers. These carriers provide insurance for unusual or unique situations where coverage is unavailable from authorized or traditional insurers. Though some of those carriers may be licensed to provide insurance in the particular State where the policyholder conducts business, more often they are not. Therefore, under the guidance set out in our January 13, 2005 notice, policies underwritten by such “surplus lines” insurers or “non-admitted” carriers generally would not satisfy the insurance prerequisite for participation in the direct payment demonstration project.
Upon further examination, we have decided that insurance provided by surplus lines insurers or non-admitted carriers can be adequate to protect claimants in the event of malpractice by the representative. Surplus lines insurance policies are legally valid contracts. As with traditional professional liability insurance policies, the quality, type and scope of the professional liability protection afforded by the “surplus” policy depends exclusively on the provisions of the policy itself and has no relationship to whether the policy was issued by an admitted/licensed carrier (conventional policies) or a “surplus lines” carrier. Our earlier guidance that the policy “must be underwritten by a firm that is licensed to provide insurance in the State in which the non-attorney representative conducts business” unintentionally excluded such policies from consideration. Accordingly, we have decided to revise our earlier Start Printed Page 46122guidance. We have decided that it is sufficient that a representative's insurance policy is underwritten by a business entity that is legally permitted to provide professional liability insurance in the State in which the non-attorney representative conducts business.
Except for the change described above, the liability insurance requirements previously announced remain in effect.
Available Reference Materials
In our January 13, 2005 notice, we also announced that we would provide each applicant eligible to sit for the examination required by SSPA section 303(b)(4) a copy of the Compilation of Social Security Laws, Volume 1 (Compilation), to use as an open-book reference during the examination. Based on experience we have gained in the first four examinations, we have decided that providing a limited number of copies of the Compilation at each testing site for test-takers to consult during the examination is sufficient. Therefore, instead of giving each test-taker a copy of the Compilation, we will make available at each testing site sufficient copies of the Compilation for use by test-takers during the examination.
Additional information on the demonstration project is available on our Representing Claimants Web site at http://www.ssa.gov/representation/ or can be obtained by writing to:
- CPS Human Resource Services, SSA Non-Attorney Representative Demonstration Project, 241 Lathrop Way, Suite A, Sacramento, CA 95815-4242; or
- E-mail, sent to SSA@cps.ca.gov.; or
- Telephone, toll free at 1-800-376-5728. The local number in Sacramento is 916-263-3600.
(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security-Disability Insurance; 96.002, Social Security-Retirement Insurance; 96.004, Social Security-Survivors Insurance; and 96.006, Supplemental Security Income)Start Signature
Dated: August 8, 2007.
Assistant Deputy Commissioner for Disability and Income Security Programs.
[FR Doc. E7-16187 Filed 8-15-07; 8:45 am]
BILLING CODE 4191-02-P