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Special Report: Cybercrime, the Latest & Biggest Attack & Solutions

Posted By Administration, Tuesday, May 16, 2017

The cyber attack impacted over 150 countries. At the time you read this the story will have evolved and maybe a complete solution will have been found. Hackers planted ransomeware in computers and networks worldwide and demanded money from governments, businesses, hospitals and doctors and others in order to get back control of their computers.

As of the time this story is written, no one is quite sure who is behind the attack but some are saying it bears the marks of North Korea. Others say whoever they are, they’re amateurs.

The virus hit a security flaw in Microsoft software. Earlier Microsoft sent a patch but a lot of IT people didn’t apply the patch or their companies are using outdated software.

Paul Lipman of the cybersecurity firm BullGuard said systems are vulnerable and crippled by human error and by people to fail to do routine software updates and by employees who unknowingly click on email attachments and then open the attachments that contain the malware.

“This was a completely preventable attack — to the extent that organizations have comprehensive patching systems in place. However, life is never that simple,” he said.

The disaster could have been worse except for the quick thinking of a 22-year old researcher who found a “kill switch” to stop the virus. It involved the purchase of the domain name of that kill switch.

What’s ironic is the research firm IDC said companies and organizations spent $73 billion on cybersecurity in 2016. It may not have paid off.

So what now? How can we protect ourselves from this kind of thievery? The McAfee Threat Report said in 2016 just one criminal picked up $121 million in six-months and netted $94 million in profit after expenses. So cybercrime is very profitable and won’t go away anytime soon.

In 2015 cybercrime losses hit $3 trillion. By 2021 that figure is expected to double. At least that’s the estimate of Cybersecurity Ventures. The 2017 Thales Data threat Report, Federal Edition says a third of federal agencies in this country were hacked and had at least one data breach last year. The report says 96% of federal government agency respondents said their agency is vulnerable to a breach.

The same report says:

  61% of federal agency respondents are increasing security spending this year

  That’s up from 58% last year

  That’s still lower than healthcare which is increasing at 81%

  Retail is upping security spending by 77%

  Financial services are updating spending by 78%

Cyber security is increasingly important to smaller financial institutions. Data from Nationwide Insurance says bigger companies are doing better but the smaller players are way behind. From 2015 to 2016 smaller financial firms saw a 40% increase in malicious data breaches and a 68% rise in network disruptions.

Tim Nunziata of Nationwide said financial institutions of all sizes needed to be cyber-vigilant.

“Speaking to cyber and E&O claims, I think people when they think about it they think of Target and Home Depot [both suffered massive data hacks in 2013 and 2014 respectively], but the fact is the growing area of claims is in the smaller companies. We’re starting to see these smaller institutions being targeted. We’re seeing an increase in data breaches in smaller financial institutions across the board. They’re maybe not getting as many headlines, but they’re certainly driving trends,” he said.

Worse, the attacks are coming from all kinds of different sources.

“It’s a whole slew of security breaches — there’s the malicious data breaches, privacy, unauthorized contact, unintentional disclosure… Everybody knows the world is getting smaller, everyone is gathering more and more information, and it’s just creating more and more opportunities for there to be a potential issue — whether it’s a breach or a security privacy issue,” Nunziata said.

What all cyber experts say is it is critical that people begin to understand cyber attacks and how to protect themselves from them. An article from Dark Reading concludes there are 10 myths that individuals and businesses believe that basically set them up for a fall.

1. Only large entities are attacked. Not so says a report from Radware. The 2016-2017 Global Application & Network Security Report said 98% of all organizations were attacked at least once in 2016 and 31% of those attacks were aimed at small and mid-size businesses with 250 employees or less.

2. Threats are overrated. The McAfee Labs’ Threats Report said the average mid-size company of 1,000 to 1,300 employees sees 11 to 20 incidents a day. Larger companies with up to 5,000 employees experience 21 to 30. The biggest companies of 5,000 or more employees get hit about 31 to 50 times a day.

3. The bad guys are on the outside. Nope. Radware’s report says 27% of crimes are from malicious insiders or someone on staff who accidentally does something. Some think the figure is low. A report from Verizon said 30% of phishing messages are opened. And 12% of those actually click on the malicious attachment. It just takes one to cause major problems.

4. Companies are well-prepared. Again, no. BMC and Forbes talked to companies and found 68% plan to beef up incident response capability in the next year. Translation: most are still unprepared. Reports say 40% have no incident response plans and 70% have no cyber insurance.

5. Insurance. Cyber insurance is booming, yes and PricewaterhouseCoopers (PWC) says annual gross written premiums are likely to triple from $2.5 billion in 2015 to $7.5 billion by 2020. Insurance is helpful but it’s expensive and doesn’t cover all attack expenses or damages and helps but can’t take complete care of one of the most serious — reputation damage.

6. Personal computers have antivirus and encryption and that makes them safe. Not. And it’s a big-time NOT. By 2020 PCs will have a minor impact when it comes to cyber attacks. Most people by then will be functioning entirely on mobile devices like smartphones and tablets. Wireless devices — says Cisco — account for 66% of all IP traffic worldwide already. They are almost all used from time-to-time at insecure environments like Wi-Fi hotspots. And a lot of devices end up stolen and aren’t password protected and are easy to break into anyway.

7. Firewalls work very well and so does network security so no need to worry. Again a big NOT. The attacks usually aren’t at the network level. They’re aimed — at least of 57% of them — at applications and not all applications are all that secure. Oddly, though most attacks are aimed at applications, just 18% of IT security funding is spent protecting them.

8. Millennials are savvy and digital geniuses and therefore more cautious. Wrong. In fact, it’s more than likely exactly the opposite. They’re too relaxed and less concerned about privacy than their older brothers and sisters, parents and grandparents.

9. Strong passwords are the solution. They are powerful, yes. But they only work well when other measures are put into place like two-tier authentication. Strong passwords are also problematic because people have trouble remembering them. So they put those passwords in some document on their computers. That’s a bad idea. The solution some think is to use strong passwords and to then change passwords more frequently. That is another huge set of problems.

10. Just hire more IT security gurus and all will be well. Again, a huge myth. finding and recruiting IT people who can actually do the job is very difficult. Keeping them is another issue. Currently there are — worldwide — one million job openings. By 2019 — Cyber Security Ventures says — there will be 1.5 million openings.

Source links: The Washington Post, Dark Reading — link 1, link 2, Business Insider, Insurance Business America

Tags:  Cyber Crimes  E&O Claims  Insurance landscape  Insurance news  Insuranse and cybercrime  PIA Weekly Industry News  PIA Western Alliance  Security Breaches 

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The WannaCry Attack — What it is

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

Here’s what the WannaCry ransomeware does. It locks down all files on the affected computer. Each computer freeze could be fixed by paying a $300 ransom. It is still dangerous and active.

The virus was first discovered in April by the U.S. National Security Agency (NSA) when the tools to apply the ransomware was made public by a hacking group called Shadow Brokers. Microsoft immediately released a security patch.

Unfortunately many corporations do not automatically update their security systems. Why? This has been a serious problem for years. Many companies say one reason is Microsoft updates screw up their legacy software programs.

Another reason? Microsoft Windows 10 forces the updates. Older computers can disable updates and those with them and older systems shut them off for the reason quoted above. And by the way, Microsoft took the unusual step of developing a patch for those older computers.

Apple computers are not — at least so far — affected.

The European law enforcement agency Europol said the attack hit 150 countries and affected 200,000 computers. Among the victims: FedEx, Nissan and the United Kingdom’s National Health Service’s antiquated computer system.

Others hit Deutsche Bahn, the Russian Central Bank, Russian Railways, Russia’s Interior Ministry, Megafon and Telefonica. 

So how do you protect yourself? Bitdefender — the cyber security firm — said do these five things:

1. Disable your computer's Server Message Block service.

2. Install Microsoft's patch.

3. Back up your data on an offline hard drive.

4. Install all Windows updates.

5. Use a reputable security software to prevent attacks in the future.

Again, no one knows who’s behind the attack. Some say North Korea is behind it and others say it’s rank amateurs because so far they’ve made just over $50,000.

Here’s the problem. Experts on this sort of thing say the virus is still active and the hackers are putting out new versions. Efforts are being made to counter them and eliminate the threat completely. 

Tags:  Cyber Attack  PIA Weekly Industry News  PIA Western Alliance  Randsomeware  Wannacry Attack 

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A Final Insurance Look at 2016

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

ISO and the Property Casualty Insurers Association of America (PCI) said insurers had a bad year in 2016. Net underwriting losses hit $4.7 billion. Unusually higher catastrophe losses are one reason why.

Direct insured property losses were $21.6 billion in 2016 compared to $15.2 billion in 2015. That figure is also a couple of billion above the $19.2 billion average direct catastrophe losses in the last decade. 

The new report highlights why the $4.7 billion is so dramatic and compared the $4.7 billion to a gain of $8.9 billion in 2015.

Private U.S. property/casualty insurers lost big in 2016, reporting a $4.7 billion net underwriting loss driven, in part, by significantly higher catastrophe-related property losses, according to ISO and the Property Casualty Insurers Association of America.

The results stand in sharp contrast to the $8.9 billion net underwriting gain insurers reported for 2015. That was also a 25% cut in after-tax net income. That figure is $42.6 billion down from $56.8 billion.

The combined ratio fell to 100.7 in 2016 from the 97.8 figure of 2015.

ISO President Beth Fitzgerald put it in perspective. “Catastrophe losses continued to hurt insurer performance in 2016. There were 43 catastrophe events in 2016, the highest number of such events since 1980,” she said.

Other conclusions from the report:

  Net investment income for 2016 is $46.3 billion and compares to $47.2 billion in 2015.

  Commercial lines direct premiums in 2016 rose 3.1% to $258.6 billion.

  The growth is from small commercial and middle market risks including specialty trade contractors, building construction, real estate and auto dealers.

  Industry surplus in 2016 is $700.9 billion industry surplus compared to $674.2 billion at the end of 2015.

Source link: Insurance Journal

Tags:  Causualty Insurance  Insurance  ISO  PIA Weekly Industry News  PIA West  property insurance 

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What’s Happening at Berkshire Hathaway — Underwriting Losses?

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

For eons billionaire Warren Buffett’s Berkshire Hathaway has enjoyed underwriting profits. So it shocked the insurance world a couple of weeks ago when Berkshire Hathaway reported a pre-tax underwriting loss of $379 million.

GEICO and BH Primary Group did well and saw underwriting profits but the BH Reinsurance Group and General Re had huge losses. A big part of the losses is increased loss estimates that related to the year before and the $10 billion reinsurance deal with AIG.

The AIG deal has Buffet’s right-hand man and long time partner Charlie Munger — who is Berkshire’s vice chairman — worried. He said there’s scary risk but the opportunity is there for profit. “It’s intrinsically a dangerous kind of activity, but that’s one of its attractions. Get me in a lot more of those businesses and I’ll accept a little extra worry,” Munger said

Buffett agrees. “We’ll do well by getting $10.2 billion today, with a maximum payout of $20 billion between now and Judgment Day. The question is how fast we pay out the money,” Buffett said.

In his annual address to Berkshire Hathaway shareholders, Buffett couldn’t resist a political potshot at the Republican effort to repeal ObamaCare. While admitting that healthcare costs are eating at the U.S. economy like a “tapeworm,” he also said what the Republicans are doing isn’t all that helpful either.

He calls the American Health Care Act a tax cut for the rich and said under this plan his personal federal income taxes will drop 17%. “So it is a huge tax cut for guys like me. And when there’s a tax cut, either the deficit goes up or they get the taxes from somebody else,” Buffett said.

And then he came to a conclusion that many of us can not only understand but can find relatable. He said neither party “can think rationally” about healthcare because they “hate each other so much.”

Source links: Insurance Business America — link 1, link 2, Insurance Journal — link 1, link 2

Tags:  Berkshire Hathaway  Geico  Insurance  Insurance News  Pia Weekly Industry News  PIA Western Alliance  Underwritting  Warren Buffet 

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Greenberg Appeals AIG Ruling to Supreme Court

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

*** Caption: Maurice “Hank” Greenberg

AIG founder and former firm CEO Maurice “Hank” Greenberg sued the U.S. government and said it had no right in 2008 to bailout AIG. Though AIG’s board ousted Greenberg in 2005, he remained — along with his other company Starr Insurance Holdings — the firm’s largest stockholder.

In the original suit and in the 2015 court case, Greenberg claimed he and other stockholders had their stock value diminished and it cost them millions in losses. Greenberg and Starr won the case when a federal judge agreed the government overstepped its bounds. However, the judge refused to award them compensation saying it would bankrupt AIG.

Greenberg and Starr appealed the financial ruling.

The Federal Circuit Court of Appeals has now ruled and it tossed out the ruling that the government acted illegally and said Greenberg and Starr have no standing in any court challenge.

Only AIG can challenge and AIG decided not to sue.

In the ruling Chief Judge Sharon Prost wrote, “While punitive measures against a corporation may ultimately be borne by its shareholders, a finding that those measures targeted shareholders directly is a wholly different matter. The alleged injuries to Starr are merely incidental to injuries to AIG, and any remedy would go to AIG, not Starr.”

Starr and Greenberg attorney David Boies said, “we respectfully disagree.” He indicated that they will appeal to the U.S. Supreme Court.

Source link: Insurance Journal

Tags:  AIG  David Boies  Greenberg  PIA Weekly Industry News  PIA Western Alliance  Starr Insurance 

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Credit Scores — How They Affect Premiums

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

Credit scoring is an important insurance topic. The PIA Western Alliance has fought several credit scoring battles in many of its nine-represented states and won. Each battle comes along with the realization that many Legislators wanting to limit credit scoring have no idea how it actually helps consumers rather than hurting them.

It keeps rates lower for those with good credit and those who work hard to maintain their credit are usually a lower insurance risk anyway.

InsuranceQuotes.com did a study and as an example found credit scoring does — as opponents point out — have a big effect on homeowners insurance premiums. Those with poor credit often see higher rates:

  Those with fair credit pay 34% more for homeowners than those with excellent credit

  That’s up from 32% in 2015 and 29% in 2014

  People with poor credit rating pay an average of 91% more and that can go as high as 114% more

As you know credit scoring and its effect varies depending on the state. The insurance quote firm said poor credit in South Dakota can having you paying 288% more while in North Carolina the 0.2% more is almost insignificant.

And then you have the PIA Western Alliance state of California where credit scoring is outlawed. Also outlawing credit scoring is Massachusetts and Maryland.

When credit drops from excellent to poor, these states — including three PIA Western Alliance states in bold — see the greatest home insurance premium increases:                   

1. South Dakota — 288.1%                      

2. Arizona — 268.6%                    

3. Oklahoma — 248.0%                

4. Nevada — 235.3%                    

5. Oregon — 234.9%

 

These states show the smallest increase:

1. North Carolina — 0.2%

2. Florida — 25.7%

3. New York — 29.3%

4. Wyoming — 43.9%

5. Hawaii — 53.1%

These five states — three of them PIA Western Alliance states in bold — showed the greatest average premium increase for someone with fair credit as opposed to excellent credit:

1.    Arizona — 75% increase

2.    Oregon — 67% increase

3.    Montana — 67% increase

4.    Washington, D.C. — 65% increase

5.    Oklahoma — 59% increase

Insurance Quotes senior analyst Laura Adams says it is important to also note that different insurance companies use credit scoring differently. “My advice to consumers is do everything you can to build and maintain excellent credit so you pay less for credit accounts and home and auto insurance. To maintain good credit make payments on time, keep balances low, and avoid opening many new accounts,” she said.

Source link: Insurance Journal

Tags:  Credit Scoring and Insurance  Credit Scoring Battles  Homeowners  Insurance News  PIA Weekly Industry News  PIA Western Alliance 

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Agents, Insurers & The Uncertainty of ObamaCare Repeal

Posted By Megan McGreevy, Tuesday, May 16, 2017
Updated: Thursday, May 18, 2017

While Congress and the Trump administration really haven’t helped health insurers when it comes to what’s going to happen with the Affordable Care Act, it is reaching out to small business and is trying to ease their health insurance burdens. This is not only a big plus for small business, it could be a perk for the independent insurance agents of the PIA Western Alliance that sell health insurance.

Rule changes will go into effect starting January 1st next year that will allow small business to go around the marketplaces of the Affordable Care Act's Small Business Health Options Program (SHOP) and purchase insurance directly from an insurance agent.

The reason? SHOP hasn’t been very successful.

Selema Verma is the administrator of the Centers for Medicare and Medicaid (CMS). She said SHOP was expected to insurance millions but in reality has covered just 85,000 people from 11,000 small businesses.

“Our goal is to reduce ACA burdens on consumers and small businesses and make it easier for them to purchase coverage. The ACA has failed to provide affordable insurance to small business and to the American people. This new direction will help employers find affordable healthcare coverage for their employees and make the SHOP exchanges function more effectively,” she said.

Businesses will still have to go through HealthCare.gov to determine eligibility. However, insurers will be able to use their own enrollment systems going forth.

As for health insurers, Aetna said last week that it’s pulling out of the last of the ObamaCare exchanges. All that remains is Delaware and Nebraska. Financial losses and worries over more of them are the reason Aetna — and others — pulled out.

In the final pull out statement Aetna said, “Our individual Commercial products lost nearly $700 million between 2014 and 2016, and are projected to lose more than $200 million in 2017 despite a significant reduction in membership.”

Aetna isn’t alone. Insurers — says Kaiser Family Foundation health expert Cynthia Cox — are completely in the dark as to what the Trump administration and Congress are going to do with the Affordable Care Act. The indecision could lead to double-digit rate hikes in 2018 and some insurers — she noted — are already talking jumps of 50% or more.

“It’s a significant factor in pricing this year. I think it’s fair to say these rates are higher than we would have expected to see in the absence of uncertainty,” she said.

Meanwhile, the administration — via the Department of Health and Human Services (HHS) — is doing all it can to keep insurers in the market but Cox says that may not be enough.

Insurers don’t really know which to believe. They don’t know whether to believe the signs Congress and the administration will work to stabilize the market in the short term or to believe the signs they will work to destroy the market,” she said.

California Insurance Commissioner Dave Jones is so unsure of what’s happening that he has asked insurers working in his state to submit two sets of rates for next year. One will be rates that assume ObamaCare will continue and the second is rates that assume TrumpCare will pass.

Source links: The Hill — link 1, link 2, Insurance Journal

Tags:  ACA  Affordable Care Act  Health Insurance  Insurance  ObamaCare  Obamacare Repeal  PIA  Trump Administration  Uncertainty of Obamacare 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, May 16, 2017

California — Earthquake Authority Evaluator:

The California Earthquake Authority (CEA) has developed a new tool to help home inspection  specialists evaluate vulnerability to an earthquake online.

It’s called QuakeGrade and CEA CEO Glenn Pomeroy says it analyzes information entered by a home inspector and the collects data about the geological risks compared to the home’s structure. Then it calculates a vulnerability score and puts it in a report sent to the homeowner or buyer.

“We want to help Californians learn more about their risks for earthquake damage to their homes. QuakeGrade is a great new tool and will help homeowners see what specific steps they can take to lower the risk of shake damage to their house,” he said.

The great thing about QuakeGuard — Pomeroy said — is it can be used on desktop computers, tablets and smart phones.

Source link: Insurance Journal

 

California — Jones Approves State Farm Inland Marine Reduction:

 Insurance Commissioner Dave Jones has approved rate reductions for two State Farm inland marine policies that will bring millions of dollars in premium savings for tens of thousands of boat owners and homeowners with jewelry and higher value collections.

"The department's rate analysts reviewed State Farm's rate filings and determined that the rates should be lowered, resulting in an estimated total premium savings of $18 million annually to California consumers," said Insurance Commissioner Dave Jones. "Once again, Californians have benefited from the insurance commissioner's rate regulation authority."

As part of the department's annual Excessive Rates Review Project, letters were sent to insurers where there was concern that existing rates for a given line of insurance may be excessive. Companies in receipt of an excessive rates letter were asked to demonstrate that its rates were not excessive or submit a rate decrease filing to be reviewed by the department. The department's rate analysts reviewed the State Farm rate filings and found that the company's requested rate decreases needed to be further reduced. The company lowered their rates on those insurance products where the department found the data supported a reduction.

The first rate reduction is for State Farm's standalone boat owner's policies that can cover liability, medical payments and physical damage for a variety of watercraft including sailboats, outboard, inboard and inboard/outboard boats. The second is State Farm's standalone Jewelry and Personal Articles program used to insure higher values and variety of items including scheduled jewelry, silverware, fine arts, sports equipment, memorabilia and collectibles like stamps and coins, which offers more deductible options than are offered with their standard homeowner policies.

 

California — State Farm Issues Refunds:

Insurance Commissioner Dave Jones announced today that State Farm has issued refunds totaling $13,335,701 for overcharged premiums to 241,356 California consumers-finally complying with the Commissioner's rate reduction order after losing twice in court.

The refunds with interest resulted from an order by Commissioner Jones that State Farm reduce its homeowners' and renters' rates by seven percent overall. Jones issued the order, which went into effect on December 8, 2016, after an extensive public hearing and found that State Farm's rates were excessive. Instead of complying, State Farm sued the Commissioner and asked the court for a stay while State Farm challenges the order over the next year or years in court proceedings. The court denied State Farm's request to stall reducing its rates, and ruled that the Commissioner's rate reduction order should go into effect immediately. Even though State Farm lost the motion, the company still refused to comply with the order. The Department of Insurance filed a notice of noncompliance threatening an enforcement action, and State Farm again asked the court to intervene and block the notice of noncompliance. The court again rejected State Farm's request, and finally State Farm started complying with the Commissioner's rate reduction order, including issuing refunds with interest to policyholders overcharged since December 8.

"California voters gave me the responsibility under Proposition 103 to make sure that insurance companies do not charge consumers rates that are excessive," said Commissioner Jones. "Rather than reduce its excessive rates for its customers as ordered, State Farm chose to sue. We have used all our legal remedies to make sure State Farm's customers are not overcharged and to make sure that State Farm complies with the rate reduction order. It is past time that State Farm's rate payers receive the rate reductions to which they are entitled."

As a result of the lawsuit and delay, approximately 250,000 California consumers were charged excessive rates from approximately December 8, 2016 through approximately mid-February 2017. Overcharged State Farm policyholders should receive an average savings of $54.92 per policy in refunds of overcharged premiums with interest.

The Commissioner and his staff are working to ensure that all consumers who were overcharged for their homeowners' premiums after December 8, 2016, receive a full refund or a credit as appropriate. Of those approximately 250,000 State Farm policyholders who were overcharged, 191,746 have received or should be receiving refund checks in the mail. Another 49,610 have elected to receive their refunds in the form of credits on their account with State Farm. Additionally, there are approximately 10,000 State Farm policyholders still owed refunds that State Farm says it is experiencing difficulty in contacting.

 

Nevada — Marijuana DUIs:

Nevada — like a lot of states — is trying to figure out how to measure whether someone is under the influence of marijuana while driving. A new measure has hit the Legislature to eliminate urine samples as one way.

The proposal — which is bipartisan — says police will need to use blood tests only and the THC content cannot exceed 5 nanograms per milliliter.

Source link: Insurance Journal

 

Oregon — From the Department of Insurance:

 The Oregon Division of Financial Regulation recently announced the following Proposed Rulemaking hearing:

Amendment to 2018 standard bronze and silver health benefit plans

These proposed rules establish the requirement that the standard bronze health benefit plan be HSA eligible, in order to promote consumer choice. HSA plans are high deductible plans that allow consumers to pay for medical expenses with tax-free dollars. Consumers are responsible for initial health care costs until the deductible is met. The proposed rules further clarify that the insurer or health care service contractor shall clearly indicate on any applicable plan and benefits template or other plan or product specific filing document that the plan is HSA eligible.

The proposed rules also bring the standard bronze and standard silver plans into compliance with federal law by amending the exhibits for the plans for plan years beginning on or after January 1, 2018, to meet federal minimum actuarial value (AV) requirements. The amended rule does not contain new requirements, but rather adjusts certain benefits within these plans.

The Agency requests public comment on whether other options should be considered for achieving the rule’s substantive goals while reducing negative economic impact of the rule on business.

Public hearing: June 22, 2017, 10:00 a.m.

Notice of Proposed Rulemaking

Last day for public comment: June 29, 2017, 5:00 p.m.

For more information on this proposed rule, please visit the Division's website:

dfr.oregon.gov/laws-rules/Pages/proposed-rules.aspx

The agency requests public comment on whether other options should be considered for achieving the rule's substantive goals while reducing the negative economic impact of the rule on business.

 

Washington — Kreidler disciplines, fines insurance companies and professionals for law violations:

Insurance Commissioner Mike Kreidler in April disciplined and issued fines totaling $14,000 against insurance companies, agents and brokers who violated state insurance regulations.

Amco Insurance Co., Des Moines, Iowa; fined $5,000, order 16-0249

The insurance commissioner found that Amco charged some commercial customers rates that had not been filed and approved by the OIC, resulting in some overcharges and undercharges. The company also didn’t properly apply some rating factors, issued policies with incomplete underwriting information and was employing producers whose appointments and affiliations were expired.

American Strategic Insurance Corp.; St. Petersburg, Fla.; fined $4,500, order 17-0044

The company allowed 108 insurance producers whose appointments had lapsed to conduct 584 transactions totaling more than $151,000. State law requires insurers to file a notice and pay a fee to the insurance commissioner for each licensed producer who will act as an agent of an insurer. A total of 359 of its producers had lapsed appointments for 22 days.

5 Star Life Insurance Co., Baton Rouge, La.; fined $2,000, order 17-0045

The company allowed seven insurance producers whose appointments had lapsed to conduct 106 transactions totaling more than $6,153. State law requires insurers to file a notice and pay a fee to the insurance commissioner for each licensed producer who will act as an agent of an insurer. A total of 62 of its producers had lapsed appointments for 21 days.

Great Northwest Insurance Co., St. Paul, Minn.; fined $2,000, order 17-0047

The company allowed five insurance producers whose appointments had lapsed to conduct 41 transactions totaling more than $8,041. State law requires insurers to file a notice and pay a fee to the Insurance Commissioner for each licensed producer who will act as an agent of an insurer. A total of 22 of its producers had lapsed appointments for 17 days.

American Home Guard, Philadelphia; ordered to cease and desist, order 17-0085

The company sold service contracts, also known as warranties, to Washington consumers for home appliances and home systems. The company is not registered in Washington state, as required by state law.

Donna K. Stephenson, Everett; license revoked, order 17-0039

Stephenson ran an insurance business, Newcastle Insurance LLC dba Glen Gay Agency, with her husband, John Glen Gay.

Stephenson and Gay made an agreement with a client that they would pay his monthly health insurance premium to Premera in exchange for the client placing an ATM machine owned by the couple at his marijuana business. It is illegal for an insurance producer to pay a client’s premium.

Stephenson made the payments to Premera by forging the client’s signature on money orders, a violation of state law.

The couple stopped paying the client’s insurance premium after six months because of a dispute with the client, so Premera canceled the policy for nonpayment. The client complained to Premera, which in turn reported the case to the insurance commissioner. Premera canceled its affiliation with the agency in June 2016.

Stephenson’s license was revoked on March 17. The insurance commissioner has separate actions against Gay and Newcastle Insurance.

Jeffrey Byron Gordon, Tulalip; license revoked, order 17-0041

Gordon applied for an insurance producer license in November 2015. He disclosed eight felony charges and was issued a probationary license under the guidance of a mentor. In November 2016, the mentor notified the insurance commissioner that Gordon had again been charged with a new felony and would no longer be his mentor. The probationary license requires Gordon to report future charges or convictions against him. Gordon did not report the charges or resulting plea. As a result, his license was revoked on March 24.

Larry D. Andre, Puyallup; fined $250, order 17-0060

Andre sold a customer a Medicare Advantage Plan that was not suitable for the customer’s needs. Andre failed to get complete information about what types of health plans the customer needed and qualified for, and also misrepresented the benefits of the plan the customer bought. The customer filed a complaint with the insurance commissioner, and Andre agrees to pay the fine.

Joshua D. Hemstreet, Bremerton; fined $250, order 17-0053

Hemstreet applied for an insurance producer’s license in March 2017 and said he had no criminal history. The background check revealed two previous convictions. He agrees to pay the fine in order to obtain his license.

Ella Hipes, dba Measured Wealth, Spokane; ordered to cease and desist, order 17-0051

Hipes is not licensed as an insurance producer in Washington state. She solicited business in Washington state and sold four annuities for nearly $600,000 to three Washington consumers along with another unlicensed producer, Justin W. Smith. Hipes kept nearly $35,000 in commission and paid over $4,400 in commission to Smith. She has failed to respond to all inquiries from the insurance commissioner and refused delivery of the final notification letter. The state of Tennessee is also taking action against Hipes for allegations of misappropriation and fraud. 

Tags:  PIA Western Alliance  Quake Grader  State Farm Issues Refunds  Weekly Industry News 

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Political Giving & Insurance

Posted By Administration, Wednesday, May 10, 2017

The Center for Responsive Politics did an analysis of who gave what to the political candidates for last November’s presidential election. Overall — the center said — the candidates raised $1.5 billion for their campaigns. Outside groups working on behalf of individual candidates picked up another $615 million.

Overall, the amount was well over $2 billion.

Insurers and insurance associations and groups representing insurance have political favorites just like the individuals who inhabit the country. Their contributions totaled $23.5 million and that money was given to 25 different presidential candidates.

Republican Jeb Bush picked up the most money from insurers. The $11.8 million didn’t help much. And it comes with an asterisk. A whopping $10 million of the $11.8 million came from Hank Greenberg’s C.V. Starr company which gave $15 million to candidates overall.

Sen. Marco Rubio took second with $5.7 million and Hillary Clinton is third at $2.5 million. President Trump picked up $726,000. That — believe it or not — was good enough for 4th.

Here’s the list:

Candidate                                 Amount

Jeb Bush (R)                         $11,819,572

Marco Rubio (R)                      $5,712,907

Hillary Clinton (D)                    $2,458,032

Donald Trump (R)                       $726,811

Ted Cruz (R)                              $675,521

John Kasich (R)                         $518,245

Bernie Sanders (D)                    $384,898

Chris Christie (R)                       $279,965

Ben Carson (R)                         $258,214

Rand Paul (R)                           $160,574

Scott Walker (R)                       $150,733

Carly Fiorina (R)                         $98,804

Bobby Jindal (R)                         $50,850

Mike Huckabee (R)                     $41,930

Lindsey Graham (R)                    $34,005

Martin O’Malley (D)                     $25,129

Rick Santorum (R)                      $20,750

Rick Perry (R)                            $17,800

Gary Johnson (3)                        $16,464

Jill Stein (3)                                $10,101

George Pataki (R)                        $9,700

Jim Webb (D)                              $4,100

Jim Gilmore (R)                           $3,450

Lawrence Lessig (D)                    $1,195

Evan McMullin (I)                           $642

The dollars given in 2016 were significantly higher than those put out by insurers during the 2012 presidential election. It totaled $7.4 million and of that Mitt Romney got $4.7 million and Barack Obama received $1.7 million.

The website opensecrets.org lists the top insurance political action committee giving for the 2016 election for the presidential, senate and House candidates. These are the top 10:

 

PAC NAME

TOTAL

DEMOCRAT

REPUBLICAN

National Assn of Insurance & Financial Advisors

$2,128,200

$706,500

$1,421,700

New York Life Insurance

$1,993,950

$847,750

$1,145,200

Indep Insurance Agents & Brokers/America

$1,461,475

$321,500

$1,139,975

Council of Insurance Agents & Brokers

$1,428,500

$556,500

$872,000

AFLAC Inc

$1,281,500

$601,000

$680,500

USAA

$1,233,000

$316,500

$916,500

Massachusetts Mutual Life Insurance

$970,000

$416,500

$553,500

American Council of Life Insurers

$935,500

$378,000

$555,000

Liberty Mutual Insurance

$911,550

$344,300

$567,250

State Farm Mutual Automobile Insurance

$781,875

$348,250

$433,625

 

Others in the top 50            

  National Association of Health Underwriters         

  Prudential Financial  

  National Association of Mutual Insurance Companies    

  Pacific Life Insurance            

  Association for Advanced Life Underwriting         

  Property Casualty Insurers Association of America         

  Nationwide      

  Blue Cross & Blue Shield

  MetLife

  Northwestern Mutual Life Insurance

  Cigna Corp      

  Farmers Group           

  TransAmerica

  Marsh & McLennan

  Travelers Companies            

  America’s Health Insurance Plans

  Principal Life Insurance        

  RGA Reinsurance

  AXA Equitable Life Insurance          

  Allstate Insurance      

  Unum Group   

  Genworth Financial

  Assurant

  Jackson National Life Insurance     

  Blue Cross/Blue Shield of various states

  ACE INA          

  Hartford Financial Services  

  Lincoln National Corp           

  American Insurance Association

  Primerica

  Guardian Life Insurance       

  Chubb INA      

  Doctors’ Co

  Zurich Insurance        

  WellCare Group         

  AON

Source link: Insurance Journal

Tags:  Hillary Clinton  Insurance  Insurance funding  Jeb Bush  Political Agenda  Political Funding  Political Giving  Rubio  Trunmp 

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What is Your Memory Worth in the Courtroom?

Posted By Curt Pearsall, CPCU, AIAF, CPIA, Wednesday, May 10, 2017

The answer to the question posed in the headline is “not much." When errors and omissions (E&O) claims occur, the discovery process involves sworn statements provided in depositions or in the actual courtroom in the vast majority of the cases. When these statements are provided, the best scenario is that there is documentation, such as agency system notes, letters, emails, etc., to support them. However, all too often, statements are based on the memory of the people providing them.

Using the scenario in which the producer alleges that the client declined a specific coverage from the proposal, which of  the following has more credibility: the producer relies on his or her memory or a document that memorialized the decision  to decline a specific coverage?

Document, document, document

A common phrase often used in litigation matters is  “if it is not in the file, it didn’t happen.” It would be challenging to find a more accurate phrase when it comes to E&O loss prevention. When an E&O matter develops, both of the attorneys have a right to all of the various pieces of a file. This includes agency notes, e-mails, letters, the proposal, and more. The goal  is that the documentation will tell a story that aids in the agency’s defense. Therefore, a lack of documentation significantly impacts that defense.

The courts typically do not look favorably on a person’s use of their memory; it is referred to as “hearsay” and does not carry the same weight as actual written documentation. There is the definite possibility that testimony based on memory may be considered inadmissible.

What does good documentation look like? Consider these key elements:

  • Be mindful about what you’re documenting as your email or agency notation handled today could be read by someone who is suing you tomorrow.
  • The documentation should be handled promptly and accurately
  • The documentation should be detailed and contain the necessary “who,” “what,” “why,” “when,” and “where.”
  • The person doing the documenting should be the same person who had the conversation with the client.
  • Discussions with carriers and intermediaries should be documented. While you believe that the underwriter will work with your agency in the event of a problem, what if that underwriter is no longer with the company when you need them?
  • Declinations or rejections of coverage must be documented. To ensure that there is no misunderstanding about what the client said and what your agency heard, it is strongly suggested that there be written communication back to the client memorializing the discussion. You will be surprised about what the client will say after a loss when they are told there is no coverage!
  • The agency should have written standards and procedures established that clearly delineate where documentation of various types should be stored in the agency system.

Done Right

For insurance producers, there should be concise documentation of producer–client meetings. This can be at the initial stage of the relationship or at the numerous times when the interaction occurs. Notes should be taken detailing the discussion and then memorialized not only in the agency system but also, as noted above, through some form of written communication back to the customer or prospect. The documentation should include who was present for the meetings, what was discussed, and what was agreed upon.

Quality and effective documentation may not be easy and will be time consuming, especially if it is done right. However,  it really is that important.

Tags:  Court Room  Courtroom Cases  E&O  Errors & Omissions  Insurance cases  Insurance News  Insurance Talk  Loss Prevention  Memory in the Courtroom  Risk Management 

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