[Federal Register Volume 72, Number 158 (Thursday, August 16, 2007)]
[Notices]
[Pages 46121-46122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16187]


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SOCIAL SECURITY ADMINISTRATION

[Docket No. SSA-2007-0057]


Demonstration Project on Direct Payment of Fees to Non-Attorney 
Representatives

AGENCY: Social Security Administration (SSA).

ACTION: Notice.

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SUMMARY: 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.

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.

SUPPLEMENTARY 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

[[Page 46122]]

guidance. 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

    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 [email protected].; 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)

    Dated: August 8, 2007.
Marianna LaCanfora,
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