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FEMA, PG&E, Wildfire Victims & $4 billion

Posted By Administration, Tuesday, January 14, 2020

The Federal Emergency Management Agency (FEMA) says Pacific Gas and Electric (PG&E) owes FEMA $3.9 billion to cover its response to wildfires caused by company equipment in 2015, 2017 and 2018.

As you know, PG&E is in Chapter 11 bankruptcy and the current plan does not include reimbursing FEMA. So anything given to FEMA will have to come out of the $13.5 billion the firm has promised to use to settle the claims of the victims of those fires. If it can’t get the money from PG&E then FEMA is willing to take its cut from that pot.

The lawyers representing the victims say no. That figure would take up nearly 30% of the settlement.

Bob Fenton is FEMA’s regional manager. Once the statement was issued that the agency was going to go after the $3.9 billion from the victim fund he said FEMA has no interest in taking dollars away from fire victims but it does need to recoup those costs somehow.

“What we are interested in doing is holding PG&E responsible and accountable for the billions of dollars taxpayers provided to assist individuals and communities affected by the wildfires,” he said. “The last thing I want to do is have to go after these individuals that have received claims from the bankruptcy where certain parts of that claim may duplicate funding that we’ve already given them.”

At that point he said it will be easier to go to PG&E directly and deal with the company. That’s up front. If that’s a no-go, then FEMA has a difficult choice.

But is that difficult choice that difficult or that expensive for the victims? Documents from the court shows that just $282 million of the $3.9 billion went directly to the victims. The rest went to other government agencies and to administrative costs.

FEMA’s David Passey acknowledges that and says the agency will not go after the cost of non-financial help like temporary housing. So FEMA might go after even less than the $282 million.

The fallout for the FEMA push extends to Congress where 40 members penned a letter to the agency administrator criticizing the effort to go after the money from the victims if PG&E won’t pay up.

 

Source link: San Francisco Chronicle

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PIA National’s PIA Partnership Perpetuation Planning

Posted By Administration, Tuesday, January 14, 2020

If you haven’t seen the email from PIA National or read PIA National’s weekly news digest the PIA National Newsline, then this story is one you will want to read.

The National Association of Professional Insurance Agents (PIA National) and its carrier council, The PIA Partnership, have unveiled a new agency perpetuation planning program for PIA members and agents appointed by carriers participating in The PIA Partnership.

The PIA Partnership’s new Agency Journey Mapping program, available at www.agencyjourneymapping.com, explains the means and methods of determining agency valuation based on cash flow potential and future earnings potential. The program then expands to identify how agencies may plan for their own internal or external succession to achieve the goals of the perpetuator, the successor, and the staff and clients of the agency.

“Every agency will eventually perpetuate at the death, disability or retirement of its owners or earlier sale of the agency,” said PIA National President Dennis Kuhnke, CIC, CPIA, of Milwaukee, Wisconsin. “Yet few agency owners adequately prepare for perpetuation and fewer still understand the principles of valuation to properly calculate their business’ value in a succession or perpetuation. Our goal is to help agents understand the issues surrounding agency perpetuation, while making it easy for them to create a personalized perpetuation plan for their agencies.”

“Not preparing for the ownership transition of their agencies costs agency owners in multiple ways,” said Al Diamond, president of Agency Consulting Group, Inc., The PIA Partnership’s content partner for the Agency Journey Mapping program. “Some lose tens of thousands of dollars or more of value by assuming that every agency is worth the same ‘multiple.’ Others don’t prepare themselves or their successors until very close to ownership conversion—too late to be very effective. Sadly, many never plan for a crisis requiring immediate perpetuation—the very thing that they counsel their own clients to avoid. Agency Journey Mapping addresses all of these issues and more without divulging anything about the individual agencies.”

Agents using the Agency Journey Mapping program will learn about agency valuation, internal perpetuation methods, external perpetuation methods and contingency buy/sell agreements. They will learn how to maximize their retirement income when they leave their agency while protecting their family’s income should they die or become disabled before then.

Agency Journey Mapping began as a series of live seminars held in cities across the country. That live program has been recorded and is now available on-demand along with an extensive resource library that agents can use to create a perpetuation plan that is personalized to their agency.

Agents who prefer a live seminar to the on-demand option can indicate that on the Agency Journey Mapping website. They will then receive a personal invitation when a live seminar is scheduled near them. The live seminars generally qualify for 4-hours of continuing education (CE) credits—the on-demand seminar does not. Live seminars also include a 30-minute private consultation with PIA’s perpetuation partner, Al Diamond of Agency Consulting Group.

The PIA Partnership is a joint effort of leading insurance carriers and PIA. PIA and the companies belonging to The PIA Partnership work together to develop hands-on tools for PIA members and agents appointed by Partnership carriers, specifically addressing areas of opportunity in the agency-company partnership.

“The PIA Partnership has long identified agency perpetuation as important to the continued viability of the independent agency system,” said 2019 PIA Partnership Chair Tom Hamilton, CLU, ChFC, from the Sales Division of Erie Insurance. “The group introduced Perpetuation Central back in 2007.”

“Perpetuation Central was a self-service, online resource that has long been among the most popular Partnership programs,” said 2020 PIA Partnership Chair Ryan Dawson of The Hanover. “In rejuvenating that toolset, we saw the opportunity to add live seminars to the program and to reorganize the offering around those seminars. The resulting program is both comprehensive yet easy for agents to understand and utilize.

The PIA Partnership was established in 1996. PIA would like to thank the PIA Partnership companies who helped to develop Agency Journey Mapping: Central Insurance Companies, Encompass Insurance, Erie Insurance, Liberty Mutual Insurance, MetLife Auto & Home, National General Insurance, Progressive Insurance, Selective Insurance Group, State Auto Insurance Companies and The Hanover Insurance Group.

Attend a short webinar to learn more about Agency Journey Mapping.

Date/Time: January 30, 2020, 1:00-1:30 PM EST.

Register:https://attendee.gotowebinar.com/register/2858443663736902658 

Learn more about The PIA Partnership at www.ThePIAPartnership.com.

 

Source: PIA National

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The Employee in 2020 — We Want More Choices

Posted By Administration, Tuesday, January 14, 2020

The Robert Half Company says to retain top talent and to get top talent interested in working for you, the right incentives need to be put in place. The global staffing firm did a recent survey and found that a lot of companies might be focusing their benefit efforts in the wrong areas. Here’s what it found:

  88% want flexible work schedules

  66% want a compressed work week

  55% want to telecommute

 

These are the non-monetary benefits desired by the employees surveyed. When the Robert Half Company checked in with employers and asked the same questions it found:

  62% have flexible work schedules

  17% offer shorter work weeks

  14% offer telecommuting options

 

When it comes to salaries and money the workers looking to go to work for you want:

  77% annual and biannual bonuses

  49% want profit sharing plans

  49% want a sign on bonus

 

Employers — on the other hand — said:

  44% offer annual or biannual bonuses

  33% offer profit sharing plans

  19% say they give sign-on bonuses

The survey talked with 1,500 workers and with over 600 human resources managers at North American firms.

Source link: Carrier Management

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U.S. Weather Disasters in 2019 — 14 with $1 Billion or More

Posted By Administration, Tuesday, January 14, 2020

Munich Re said the United States had 14 weather disasters in 2019 that caused $1 billion in damages or more. The U.S. total is $45 billion. Flooding in the Midwest accounted for most of those dollars. Those floods — on the Missouri, Mississippi and Arkansas rivers — hit $20 billion in damages.

The $45 billion figure is pretty close to that of 2018 but more than double the inflation-adjusted figure from 1980.

Wildfires in California and Alaska, Hurricane Dorian and Tropical Storm Imelda and several tornadoes on the Great Plains and the Midwest accounted for a lot of the rest of the disaster losses.

Gratefully, there weren’t as many hurricanes last year when compared to 2018. That means the U.S. share of global catastrophe losses dropped from the average of 35% to 31%.

Losses in the hurricane season hit $3 billion and of that $2 billion is insured.

Here’s more disastrous news about U.S. disasters in 2019. There have been 119 one-billion dollar disasters in the U.S. in the last decade. That’s double the number between 2009 and 2009.

Addressing climate change the report said 2019 is the second-wettest year on record. It had 34.78 inches of precipitation and that matches 1973’s all-time high. North Dakota, South Dakota, Minnesota, Wisconsin and Michigan all reported the most precipitation in their histories.

The average temperature in the contiguous 48 states was 52.7 degrees Fahrenheit or 11.5 Celsius. It is the coolest year since 2014 but still a lot warmer than average. Georgia and North Carolina had their hottest years ever.

Globally there were 820 natural disasters that caused over $150 billion in losses. That includes $52 billion in losses due to injuries. Both are about average for the last 30-years.

Over 9,000 people lost their lives to natural disasters in 2019. That compares to the 15,000 in 2018. Better prevention measures are being credited for the drop.

The insured portion of the overall losses worldwide is just above 35%. That’s the average from the last decade. But at 35% that means huge swaths of the globe are uninsured.

Source links: Insurance Journal, Carrier Management

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Commercial & Personal Lines Rates End 2019 on High Note

Posted By Administration, Tuesday, January 14, 2020

MarketScout has released the 4th quarter numbers for commercial and personal lines rates. On average commercial rates rose 5% in the quarter. MarketScout says this finishes a year in which rates were on a steady rise.

Insurers increasing prices is the main reason. The only exception is workers’ compensation and the two best performing lines in the fourth quarter are D&O and professional rates. They saw a “significant” increase, MarketScout CEO Richard Kerr said.

Here is the average by account size:

  Small accounts (under $25,000) — up 5%

  Medium accounts ($25,000-250,000) — up 4.5%

  Large accounts ($250,000-1,000,000) — up 5.5%

  Jumbo accounts (over $1 million) — up 5.5% over $1 million

 

Personal lines did well in the fourth quarter, too. Rates averaged a 4.5% hike.

“We must all keep in mind, the barometer results include all types of personal lines insurance across the U.S. Massive placements for homes/autos/jewelry in the $300,000 to $800,000 value, which are in non-cat prone areas, impact the rate,” Kerr said. “If we were to measure homes over $5,000,000 in brush-exposed areas of California, the average rate increase would be over 35%.”

This is how the final quarter ended:

  Homeowners under $1,000,000 value — up 4.25%

  Homeowners over $1,000,000 value — up 6.25%

  Automobile — up 4.5%

  Personal articles — up 3.5%

 

Source link: PropertyCasualty360.com

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Washington Insurance Professionals Gain Insight into Earthquake Risk — New Tool to Assess Multiple Property Risk Factors

Posted By Administration, Tuesday, January 14, 2020

WSRB, provider of unbiased property risk data to insurance companies, has announced a new tool for insurance professionals seeking more comprehensive data on earthquake risk. The tool provides not just distance to fault line but also several other risk factors, all of which relate to whether a property will suffer damage during an earthquake. The tool is free for a limited time for all WSRB registered users.

“Western Washington is prone to earthquakes, but many homeowners and business owners don’t have earthquake coverage. We hope this tool will help agents better educate customers about potential risk so more people can get earthquake coverage if they need it,” said WSRB Vice President and COO Bryan Stanwood. “We’re always working to increase the value we offer our customers, and the Earthquake Risks tool is our latest effort on that front.”

The Earthquake Risks tool provides five earthquake-related data points for any location in Washington state:

  Modified Mercalli Intensity Scale (MMI): a measure of the strength of shaking from an earthquake at a specific location.

  Lahar: a damaging type of mudflow that earthquakes near a volcano can trigger.

  Tsunami risk: potential for a tidal wave to cause property damage after an earthquake.

  Susceptibility to soil liquefaction: a measure of how likely the soil a building rests on is to liquefy and act like quicksand during an earthquake. 

  Distance to fault line: a measure, in miles, from the property to the closest major fault line. 

The tool is easy to use: just a street address or a latitude-longitude is necessary to get all these data points. WSRB has also produced multiple resources to support users:

A blog post providing an overview of the data points, with links to other in-depth blog posts: https://www1.wsrb.com/blog/earthquake-risk-look-beyond-fault-lines

How-to articles on using the tool: https://help.wsrb.com/earthquake-risk

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California’s Prescription Solution — Do Your Own Label

Posted By Administration, Tuesday, January 14, 2020

California Governor Gavin Newsom wants his state to have its own line of prescription drugs. It’s part of his 2020-2021 budget. The goal — he says — is to lower drug prices as a part of a plan to lower health care costs to Californians. If it passed the California Legislature — and it probably will — California would become the first state to have its own drug label.

Newsom’s idea is to allow drugmakers to manufacture generic drugs on behalf of the state. Since the state does not need to make a profit, this should — he believes — bring down the cost of prescription drugs for everyone.

“A trip to the doctor’s office, pharmacy or hospital shouldn’t cost a month’s pay,” Newsom said. “The cost of health care is just too damn high, and California is fighting back.”

To make sure costs drop the governor wants to make drug companies place price bids in order to sell drugs on the state’s health insurance marketplace.

Putting the plan another way, the idea is to have all purchasers of drugs — public plans, private insurers, self-insured employers and so on — to combine their power to purchase. This would work something like California’s Medicaid program that has the power to negotiate prices for drugs picked up from other state agencies.

Another part of the plan would set up a “most favored nation” status in the state’s marketplace. What that means is that manufacturers — in order to sell on the marketplace — would have to offer the lowest price offered anywhere in the world for this drug or that.

This part of the plan is similar to what the Trump administration has proposed. Experts say Trump’s plan won’t work because the U.S. is too big but in smaller increments — like a state — it might work.

 

Source link: The Hill

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Want Good Mental Health? Try Ice Cream for Breakfast

Posted By Administration, Tuesday, January 14, 2020

It the new year and with the new year comes the standard New Year’s resolution. For some of us it is better health. Here’s a rather delicious idea that might get you there.

Yoshihiko Koga of Japan’s Kyorin University is pushing a theory. Ice cream for breakfast — he believes — will improve your day’s mental performance and alertness. Weekly Industry News Editor Gary Wolcott — who is an admitted ice cream addict — is elated and encouraged the publication of this story.

Koga compared the brain activity of participants that ate ice cream right after waking to those that did not. On computer tests, those that ate ice cream had faster reaction times and were less mentally irritated.

Before you — like our editor — start tossing out boxes of those wonderful sugary cereals you regularly eat, or even your granola, and before you hop in your car and head to the supermarket to stock up on your favorite flavor of ice cream, do note that there are some asterisks that go along with Koga’s study.

Koga also found those that ate breakfast right away were also more mentally alert. However, they did not have faster reaction time. To test that theory, Koga had people drink cold water upon awaking. They also did not have faster reaction time nor were they more mentally alert.

So it’s not necessarily the cold.

Another problem is the website that originally posted the study. It is supported by a company that produces sweets. The website also doesn’t have a direct link to Koga’s study. So while it is hard to really fact check this, the idea is — you must admit — intriguing.

The story we found to do this story on talks a lot about Ben & Jerry’s ice cream. It’s of the homemade variety and is made with egg yolks, sugar, whole milk and heavy cream. That ice cream — like many conventional ice creams — also has soybean oil, corn syrup and pectin as an ingredient.

A single serving of Ben & Jerry’s ice cream has:

  260 calories

  23 grams of sugar

  14 grams of fat

 

If you eat — let’s say — Cheerios for breakfast, it has the same amount of calories but only a gram of sugar and two grams of fat. Neither are close to the breakfast diet the Harvard Medical School would have you eat. It points out the risk of heart disease with a high sugar diet. Even if you’re relatively fit and not overly heavy, sugar is bad for the heart.

The American Heart Association takes the Harvard concern a step farther. It says women ought not consume any more than 100 grams of sugar a day. Men ought to consume less than 150. Ice cream — yes, we’re back there again — and a single serving of such, has 100% of the recommended total amount of sugar for a day.

So the association doesn’t think too much of the ice cream for breakfast theory.

Sugar also is cancer food. The group Beat Cancer says cancer cells are fed by sugar. It also suppresses the immune system and creates an environment in the body where cancer cells thrive. So sugar is related to:

  Breast cancer

  Prostate cancer

  Endometrium cancer

  Pancreatic cancer

 

It also causes obesity and obesity is linked to cancers of the:

  Esophagus

  Pancreas

  Kidney

  Gallbladder

  Breast

  Colon

Source link: Remedy Daily, radio.com

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A Big Congratulations to Suzanne Paschke!

Posted By Administration, Tuesday, January 14, 2020

New CIC Designee, Suzanne Paschke, Risk Placement Services

Suzanne Paschke, CIC

Risk Placement Services | Poulsbo, WA

Like many people I did not aim to land in the insurance industry but have been in it now for more than 12 years. I have worked at two managing general agencies and a retail agency. My favorite job has been as a social services and school underwriter. I get to research, learn and explore coverages, rating, and all sorts of interesting risks. Plus, I get to connect with retail agents across the USA who are out there helping businesses and public entities to get insurance for their operations that help others. It is not glamorous or exciting, but it is meaningful and fulfilling.

Earning the CIC designation means that I get to join a group of professionals dedicated to excellence and continuous professional improvement for the betterment of our customers. 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, January 14, 2020

Alaska — From the Department of Insurance: Regulatory Order R 20-01.

Here is a link to the order: https://www.commerce.alaska.gov/web/Portals/11/Pub/INS_R20-01.pdf

Surplus Lines Placement List

On November 6, 2019, in accordance with 3 AAC 25.040, the Division of Insurance hearing officer on behalf of the director held a hearing pursuant to Alaska Statute (AS) 21.06.180-21.06.230 to receive testimony concerning the kinds of insurance for which insureds generally are unable to secure coverage from admitted insurers. Written testimony closed at 4:30 p.m. November 14, 2019. Based on this testimony, the director has decided what types of insurance coverage to include on the surplus lines placement list.

For the reasons set out in the linked regulatory order, the director orders that the 2017 surplus lines placement list as presented in Regulatory Order R 17-02 issued on January 27, 2017, will be amended for the change to cyber liability.

The list in the regulatory order is the surplus lines placement list to be used until a replacement order is issued.

This order is effective January 8, 2020.

Regulatory Order R 20-01: https://www.commerce.alaska.gov/web/Portals/11/Pub/INS_R20-01.pdf

California — Commissioner Lara Likes Governor’s Budget: Insurance Commissioner Ricardo Lara issued the following statement on Governor Gavin Newsom's 2020 budget.

“The Governor's priorities align with the needs of California's consumers and working families for a secure and healthy future. I and the Department of Insurance will continue to be his partner in combating the rising price of prescription drugs and preparing our communities to confront climate change. Insurance non-renewals due to wildfires continue to threaten the integrity of real estate markets and local revenues for emergency services. With the Governor's $100 million commitment to hardening homes to withstand fires, I urge the insurance industry to come to the table to help us create a fire-safe state — because we must do more to keep insurance available to all.

“Stronger consumer protections through the creation of a new state department of financial protection will help us resist the Trump Administration’s corporate-driven agenda that is shifting wealth from working families to the richest Americans.

“Extending Medi-Cal to our undocumented seniors will bring dignity to thousands of people who have helped build California’s economy over decades and are still contributing to our future. So many of our seniors have died too early because they put off care for cancer and other diseases they could not afford to treat or caught too late. Thank you to Governor Gavin Newsom, Senator María Elena Durazo and Assemblymember Joaquin Arambula for finally delivering on this dream that so many have shed blood and tears to make a reality.”

Source link: California Department of Insurance

 

California — Gig Worker Law & Truckers: Los Angeles Superior Court judge William Highberger says the state’s new gig worker law does not apply to independent truck drivers. They — he said — are subject to a federal statute that supersedes the state’s law.

The new law — opposed by Uber, Lyft and other companies — took effect on January 1st. It makes it harder for companies such as those just mentioned to classify workers as contractors.

Source link: Insurance Journal

 

California — State Fund Salaries: A high-priced team of pros were hired to turn around the state’s broken workers’ compensation fund. The six-figure salaries execs — after a few years — managed to get the job done. However, some are now being critical of those high salaries and at how much they overshadow the salaries of other state workers.

The criticism started after an article in the Los Angeles Times. Among other things it said, “Bonuses and incentives awarded by State Fund’s board have boosted compensation to more than $500,000 each for its seven top managers including its CEO, whose annual pay is some $732,000 — more than three times the $210,000 salary of the governor. The salaries have prompted some lawmakers to call for an oversight hearing to determine whether the compensation is justified.”

Consumer Watchdog agrees and says the salaries are top-heavy and “out of proportion.”

Source link: Insurance journal

 

Montana — $3.1 Million More For Elections: A few weeks ago, on the winter solstice, federal legislation was signed into law which provides $3.1 million to Montana for Elections.  We have five years to spend the money, else it reverts back to the U.S. Treasury.

This money is similar to an additional $3 million we received a couple years ago, and traces its authorization origin to 2002 Help America Vote Act (HAVA) money. HAVA money has fundamentally changed the way our nation funds elections, centralizing certain aspects which had previously been done by the 50 states.

Of course, with federal money comes strings attached!  Montana has to put up a twenty percent match, and we have to spend the money (officially called "Election Security Grants") on things like enhanced election technology, security improvements, and generally improving the administration of Montana's federal elections.  More to follow.

We'll update you over the next few months, as our office has to submit a budget and 'program narrative' to the Elections Assistance Commission (EAC) by April 27, 2020.

Corey Stapleton

Montana Secretary of State

Nevada — Las Vegas Cyber Attack: A cyber attack hit Las Vegas a couple of weeks ago and was aimed at the city’s computer systems. No word yet if any data was compromised.

City spokesman David Riggleman said the city took the necessary steps to stop the attack and that it get hit about 279,000 times every month.

Source link: Insurance Journal

 

Oregon — Bulletin for Controlled Substances: The Division of Financial Regulation (DFR) is issuing the attached proposed bulletins for public comment. The proposed bulletins provide guidance on the use of exclusionary language with regards to controlled substances and intentional acts.

Public comments may be submitted to Raven.V.Collins@oregon.gov. The deadline for comments is 5 p.m., Friday, January 24. Please be aware that comments received by DFR are part of the public record and may be published on the division’s website.

DFR will be hosting a conference call on Friday, January 10 at 1:30 p.m. to discuss the proposed bulletins and to answer any questions. 

Dial in: (888) 278-0296

Access: 831-6956

Last day for public comment: Friday, January 24, 2020

Proposed Bulletin on Controlled Substances.pdf — https://content.govdelivery.com/attachments/ORDCBS/2020/01/06/file_attachments/1352987/Proposed%20Bulletin%20on%20Controlled%20Substances.pdf

Proposed Bulletin on Intentional Acts Exclusions.pdf — https://content.govdelivery.com/attachments/ORDCBS/2020/01/06/file_attachments/1352988/Proposed%20Bulletin%20on%20Intentional%20Acts%20Exclusions.pdf

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