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PIA Western Alliance knows you want to be the best in the field, and the best way to stay on top is to stay informed. PIA Weekly Industry News Brief is an informative e-news brief that delivers the most relevant industry content.


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S&P Downgrades AIG

Posted By Administration, Monday, June 12, 2017

The hiring of Brian Duperreault to lead AIG into a new promised land impressed Standard & Poor’s but at the same time didn’t impress the rating’s firm. Last week S&P revised AIG’s ratings downward to negative from stable.

The struggling property and casualty commercial insurance division is the reason.

S&P’s Global Ratings credit analyst Tracy Dolin made the call and said, “The outlook revision reflects AIG’s protracted period of delivering P&C Commercial Insurance underwriting initiatives, which we believe may be a predictor of its executional effectiveness on a prospective basis.”

The ratings firm did — however — have nice things to say about AIG but noted Duperrault is the sixth CEO in nine years. And S&P continues to wonder if AIG will make its adjusted accident year loss ratio performance target of 62. The original prediction was 60.

However, S&P is impressed with how AIG continues to do well in product diversification.

Other reasons for the downgrade:

  For two years AIG’s commercial division has produced weaker than expected profitability

  In the last two years strengthening measures had to be taken for U.S. liability lines

  The accident loss ratio in 2016 hit 66.7 for AIG’s commercial insurance and that’s a deterioration from 68.7 in 2012

  S&P’s prediction is AIG will hit a combined ratio of 104 in 2017 which is weaker than many of its multiline peers


The good news for AIG is its consumer insurance division is offsetting some of the troubles of the commercial division. And more good news is in how S&P affirmed the ratings for AIG:

  A+ for insurance financial strength rating

  BBB+ for long and short-term counterparty credit ratings

  A+ for AIG’s core subsidiaries

The AIG reinsurance deal with Berkshire Hathaway is a significant step in the right direction to reduce the volatility of its reserves. And in the end, S&P said AIG has a “very strong business risk profile and strong financial risk profile.”


Source link: Carrier Management

Tags:  Insurance Content  Insurance Industry  Insurance News  PROPERT  S&P Downgrades AIGWeekly Industry News 

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The Senate Goes to Work on ObamaCare

Posted By Administration, Monday, June 12, 2017

The U.S. Senate is now going to work on the repeal and replacement — maybe — of the Affordable Care Act. The House’s American Health Care Act (AHCA) is pretty much dead on arrival. While some parts of the House plan will survive, a lot of it will have to change.

Republicans also must find a way around a potential — but very likely — filibuster.

And while both political parties pose and posture, insurance commissioners in state after state are doing all they can to keep the few insurers participating in the ObamaCare exchanges in the game. To do it they are offering new — and never heard of before — incentives to stick with it for another year.

Insurers meanwhile continue to look to Washington and at Congress and the Trump administration for some sign of what they should do. They’re not sure if the Trump administration is going to continue to subsidize the out-of-pocket costs for lower-income households.

That’s a deal-breaker for most.

On the table is $7 billion that will help keep insurers participating. The president has said yes to the money but has made no move in that direction. That has insurance commissioners extending rating filing deadlines and giving other concessions that would not be the normal order of business.

John Franchini is the insurance commissioner of the PIA Western Alliance state of New Mexico. He said, “As a regulator, instead of being rigid on timelines, the type of pricing I’m going to want, I’m being more open about this. I’m trying to be more flexible to give them confidence that if things change, we as regulators will be flexible with them.”

In California — also a PIA Western Alliance state — commissioner Dave Jones has let insurers submit two different sets of rate requests. One is if ObamaCare continues and the other if it goes away. “Based on what we were hearing from insurers, we anticipated Trump rates would be double-digit increases over the past year. I wanted to give insurers the opportunity to file rates based on Trump,” Jones said.

In the PIA Western Alliance state of Washington Insurance Commissioner Mike Kreidler said he’s thinking of following Alaska’s lead and developing a reinsurance program that is a mix of state and federal money to help subsidize insurers. However, Kreidler said, “I don’t have any leverage to tell a health insurer they have to stay in the market. The GOP is scaring the bejesus out of them, and I’m trying to calm things down and work it out.”

House Ways and Means Chairman and Texas Republican Rep. Kevin Brady said the administration needs to make those payments to keep insurers involved. “We should act within our constitutional authority now to temporarily and legally fund Cost Sharing Reduction payments as we move away from ObamaCare and toward a patient-centered system that truly works for the American people,” Brady said.

Republicans — upon the election of Donald Trump — said they’d immediately repeal and replace ObamaCare. The self-imposed deadline at that time passed about two months ago. In other words, it’s kind of a mess.

Senate Majority Leader Mitch McConnell has vowed to take a vote on something by the end of July before the annual August recess but what that something will look like is anybody’s guess. And McConnell and others in Republican leadership admit that it is going to be hard to get enough votes to pass reforms.

A sort of a plan was put forth last week and it is already raising hackles on hardcore conservative Republicans and on the more moderate of the party. The issues range from preexisting conditions to essential health benefits and a plan to let states dump them to allowing states to repeal all ObamaCare regulations.

And then there’s Medicaid and what to do with it.

Part of the problem is there are four groups vying for control. A task force of 13 men started the process but criticism that no women are involved led the group to open its planning to any senators wanting to come.

Then there’s the group led by Louisiana Republican Sen. Bill Cassidy and Maine Republican Sen. Susan Collins. They have blasted the House’s American Health Care Act and crafted a plan of their own called the Patient Freedom Act.


A conservative group led by Ohio Republican Sen. Rob Portman is completely focused on Medicaid expansion.

The last group is made up of ultra-conservatives led by Texas Republican Sen. Ted Cruz and Utah Republican Sen. Mike Lee. They want whatever the Senate does to be as close as possible to the House bill.

In what may be bad news for employers, some Republicans want to tax employer-sponsored health insurance plans to help support and stabilize the public health insurance market. As it stands today, those plans aren’t taxed but the tax-favored status of employer-sponsored insurance cost the federal government $250 million in 2016.

Taxing that insurance could affect 177 million employees around the country.

Joel Wood does government affairs for the Council of Insurance Agents & Brokers (CIAB). His group is totally opposed to the idea. “I’m not saying we feel naked, but we feel vulnerable. All we are trying to do is keep that drumbeat going on whatever Congress decides to do to resolve issues associated with exchanges, high risk pools, Medicaid. [We want to ensure that Congress does not] solve those problems at the expense of the employer-provided system,” he said.

Nevada is a PIA Western Alliance state. Sen. Dead Heller is that state’s Republican in the Senate and he thinks in the end the Senate will move more in the direction of preserving much of what is good about ObamaCare.

Dan Holler of the group Heritage Action for America said that kind of talk is going to make it difficult for the party’s very conservative Senators to vote in favor. “There has to be a give and take, and right now it seems like conservatives are being told just to take it all and not get anything,” he said.

And while the Republicans in the Senate can’t quite figure out what they want to do, President Trump took to criticizing Democrats. “We're having no help; it's only obstruction from the Democrats. The Democrats are destroying health care in this country. If we gave you the greatest health plan in the world we would get no votes. The Democrats are really in our way,” the president said.

Source links: The Hill — link 1, link 2, link 3, link 4, The Washington Post, Employee Benefit Advisor

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance news  ObamaCare  The Affordable Care Act  The Senate Goes to Work on ObamaCare  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Monday, June 12, 2017

Arizona — Flood Control
The federal government — via the Army Corps of Engineers — has given Flagstaff $1 million for a Rio de Flag flood control project. It gives the city the resources to acquire the land, do the flood control design and start the project.

City officials say the project is critical to controlling flooding and avoiding damage to 1,500 structures. It will also do away with the need for those owning those structures to purchase flood insurance.


California — Insurance Fraud Scheme
Ten lawyers and six other people have been arrested over a multi-million dollar workers’ compensation crime. The Orange County District Attorney’s office did the investigation that it says targeted Latinos.

The scheme involved 30,000 patients and $300 million in billing. The group used flea markets and other places to entice Latinos into participation.

No charges were filed against doctors and hospitals.


California — Data Breach Law
A new bill has been floated in the California Legislature to require public agencies to provide data protection for a year if a breach happens. This law already applies to hospitals and health care businesses and retail businesses.

Right now, it is stalled because public agencies don’t really have the cash available to make consumers whole. And some critics say once a person’s ID has been compromised, it is compromised forever.

The stall has not deterred Assemblyman Matt Dababneh — and Democrat from Woodland Hills — who says his point is to force government agencies to make themselves more secure. California agencies — according to authorities — have been victim to many hacking schemes and the records of millions have been compromised.

By the way, these are the six largest California breaches:

  Anthem 2015 — 10.4 million records stolen

  Target 2013 — 7.5 million records stolen

  Living Social 2013 — 7.5 million records stolen

  UCLA Health 2015 — 4.5 million records stolen

  PNI Digital Media (Costco, RiteAid, CVS) 2015 — 2.8 million records stolen

  T-Mobile 2015 — 2.1 million records stolen

Source link: Los Angeles Times


Nevada — Electronic Insurance Notice
Nevada Governor Brian Sandoval said yes to a law that gives consumers the option to get their insurance policies and other documents and consumer notices electronically. He signed Assembly Bill 455 into law last week.

Property Casualty Insurers Association of America (PCI) spokesman Mark Sektnan said, “Increasingly consumers want to conduct their personal business online using their smartphone or tablet. They want fast access and user-friendly ways to see their documents. Assembly Bill 455 gives insurance customers more choice, convenience and flexibility in managing their insurance.”

Nevada is now the 23rd state to do allow electronic delivery and Sektnan said it’s also a cost saver that can be passed onto consumers. “These modernized delivery options reduce energy consumption, paper use and other consumables associated with conventional mail. This is a win-win for everyone,” he said.

Source link: Financial Regulation News


Washington — Actions from the Insurance Commissioner
Notice of rulemaking on Obsolete citations to domestic insurer investments (R 2017-02)
. We are starting rulemaking (R 2017-02) to consider repealing and/or amending the obsolete statutory citations to the rules regarding domestic insurer investments.

Comments are due July 20, 2017; please send them to rulescoordinator@oic.wa.gov.

Prior authorization rule adopted. We adopted the prior authorization processes and transparency rule (R 2016-19) on June 5, 2017. The rule will take effect July 6, 2017 though some requirements are being phased in over time. The rule is intended to standardize the process of prior authorization and to streamline the prior authorization process to ensure it is more transparent for consumers and providers.

For more information, including the adopted rule (CR-103P) and the concise explanatory statement, please visit the rule's webpage.

Insurance Commissioner’s Emergency Powers rule withdrawn. We have withdrawn the pre-proposal (CR-101) on the Insurance Commissioner’s Powers during a state of emergency rule (R 2015-17). We withdrew the pre-proposal for the rule because we have determined that this rulemaking is not necessary at this time.

For more information, including the withdrawal letter, please visit the rule's webpage.

Notice of rulemaking on Federal model privacy form (R 2017-01). We are starting rulemaking (R 2017-01) to encourage carriers to use the federal model privacy form by providing a safe harbor of compliance. The rule will be identical to the recently revised NAIC Model Privacy of Consumer Financial and Health Information Regulation.

Comments are due July 21, 2017; please send them to rulescoordinator@oic.wa.gov.

For information on any of these changes go to the commissioner’s website: https://www.insurance.wa.gov/obsolete-citations-domestic-insurer-investments-r-2017-02?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=


Washington — Kreidler’s Health Insurance Concerns
Eleven health insurers have filed 71 plans for Washington state’s 2018 individual health insurance market:

Six insurers inside the Exchange, Washington Healthplanfinder: Coordinated Care Corporation, Kaiser Foundation Health Plan of Washington, Kaiser Foundation Health Plan of the Northwest, Lifewise Health Plan of Washington, Molina Healthcare of Washington, and Premera Blue Cross.

Seven insurers outside the Exchange: Asuris Northwest Health, BridgeSpan Health Company, Health Alliance Northwest Plan, Inc., Regence BlueCross BlueShield of Oregon, Regence BlueShield, Kaiser Foundation Health Plan of Washington, and Kaiser Foundation Health Plan of the Northwest.

Two insurers selling both inside and outside the Exchange: Kaiser Foundation Health Plan of Washington and Kaiser Foundation Health Plan of the Northwest.

Currently, no insurer has filed plans in two counties – Klickitat and Grays Harbor.

Two insurers, Community Health Plan of Washington and Kaiser Foundation Health Plan of Washington Options, Inc., announced earlier this year that they will not participate in the 2018 individual health insurance market.

However, Kaiser Foundation Health Plan of Washington and Kaiser Health Plan of the Northwest will remain in both the Exchange and outside Exchange market for 2018.

As of March 2017, 1,119 people in Klickitat County and 2,227 in Grays Harbor County were enrolled in the individual market.

Under current state law, if no health insurer is available in a particular county, the only coverage option is through Washington state’s high-risk pool, WSHIP. However, because WSHIP is not a qualified Exchange insurer, subsidies would not be available.

“I will be reaching out to our health insurers this week to strongly encourage them to reconsider their participation in the two counties that have no options for 2018,” said Insurance Commissioner Mike Kreidler. “After that, I will look for whatever options are available at the state level to protect the stability of our health insurance market. The more than 316,000 consumers who buy their own health insurance are counting on us to do no less.”

All proposed rates for 2018 will be public 10 days from the June 7 filing deadline. No decisions will be made until early fall. Rates as well as coverage areas may change during the review.

Insurers and number of proposed individual market plans by county for 2018 (PDF, 88.90 KB)

“I’m deeply troubled by the changes we’re seeing for next year’s health insurance market,” said Kreidler. “The proposed drop in insurers and coverage areas clearly indicates to me that the uncertainty the Trump administration and the GOP-controlled Congress has sowed for months is sabotaging the progress we’ve made. Their actions, including failing to commit to fund the cost-sharing subsidies, not enforcing the individual mandate, and continuing to push in secret the severely flawed American Health Care Act are eroding confidence health insurers have in the market here and across the nation. These actions only increase premiums and decrease insurer participation.

“The Affordable Care Act has worked in Washington state because we fully embraced the reforms it offered – including expanding Medicaid and creating our own state Exchange. These decisions helped increase competition, provided better coverage and access, and fueled the largest drop in our uninsured in decades. Much more could be done to improve upon our progress, but that would take congressional action focused on shoring up the law, versus taking it down.

“For months, we’ve worked closely with our health insurers and other stakeholders in a concerted effort to try to explain to the Trump administration and congressional leaders what the impact could be to our market and most importantly, to our consumers, if this level of uncertainty and volatility continued. Today, our predictions came true."

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance news  Weekly Industry News 

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PIA Oregon/Idaho’s EXPO: The Incredible Trade Show

Posted By Administration, Tuesday, June 6, 2017


PIA Oregon/Idaho’s EXPO is Wednesday, June 21st at the Sheraton Portland Airport. It is — as we’ve noted many times — a revolutionary approach to connecting agents with agents and companies, and agents with companies.

And new this year with the generous support of the EXPO’s company partners — we can offer all Agents and CSR’s the ability to attend FREE.

And with two exhibition times on that day, it means agencies can keep it affordable by allowing more of the staff to attend at lunch or after work.

All you have to do is get there. And even that is convenient. The Sheraton Portland Airport Hotel is easily accessible from I-205 or the Max and there is plenty of free parking.

The sold-out trade show featuring 45 companies will make it worth your time. The diversity of products and services offered by our company attendees is staggering. There is so much available that you’ll want to get there early and stay to the end. Plus, in addition to the items vendors are giving to attendees, there’s always the chance to win cash and prizes.

And the EXPO trade show model make attendance a must. The networking and the trading of solutions to problems with other agents alone make EXPO something you don’t want to miss.

To register for EXPO click here. You do not have to be a PIA member to attend. However, if you’re not a PIA member — and you really should be if you’re not — you can become one by calling 888-246-4466 or you can click here to join online.

EXPO is more than just the trade show. Continuing education is available the day before EXPO on June 20th and on the 21st. Several of the courses offered — especially the cyber boot camp course and learning how to keep your business open after unanticipated closures — will be exceptionally valuable to you and to others in your agency.

To learn more about EXPO click here. You can surf the EXPO pages to learn more about EXPO or scroll down once you land on this page and see the schedule.

Tags:  #piaexpo2017  pia expo  PIA Oregon/Idaho’s EXPO!  PIA Oregon/Idaho’s EXPO: The Incredible Trade Show 

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Special Report: Oregon’s Continuing Tax Battle

Posted By Administration, Tuesday, June 6, 2017

PIA Oregon has been carefully watching this unfolding tax battle. The association is about worried will impact independent insurance agents.

Corporate taxing Measure 97’s November election battle ended in a very lopsided no vote. The people of Oregon — after some $50 million was spent on the campaign — gave a resounding no to tax increases on corporate sales of over $25 million a year. Voters appeared to believe those taxes would be passed onto them in the form of higher prices.

Undeterred, Measure 97’s proponents have now moved the battle to the Oregon Legislature and again to the initiative process. One of the more active proponents is the Oregon Education Association (OEA). It is filing a new initiative for the November ballot that would raise $1.75 billion a year for K-12 public schools and for higher education.

And — yes — it’s a corporate tax.

Plus, the union — one of the major members of the tax-raising group Our Oregon — wants a second initiative on the ballot to make it easier for the Oregon Legislature to raise corporate taxes. That permission — said OEA President Hanna Vaandering — would remove the need to get a 3/5th supermajority for a tax raise. But — if passed — the initiative will only let the Legislature do the jump for education purposes.

“Parents and students are fed up with having the third largest class sizes in the nation. Having strong public schools is an Oregon value, but you would never know by looking at the Oregon legislature. These ballot measures seek to put the power back in the hands of the people not the powerful business lobbyists that control Salem,” she said.

The union’s tax proposal would set the rate at 0.95% compared to Measure 97’s rate of 2.5% and it will raise considerably less money.

PIA Oregon Lobbyist Lana Butterfield said the association is currently reviewing the initiative proposals.

Meanwhile, in the Legislature the corporate taxing effort is being led by Beaverton Democrat Sen. Mark Hass. He thinks there’s a good chance a gross receipts tax could actually pass this session of the Legislature.

“We're at a crossroads. We have a choice to do nothing because it’s too hard. We have a choice to do some tried and true short-term changes, tax increases. And third, we have a choice to reform our system that will add a measure of stability and reform I think is the key,” Hass said.

His proposal basically reduces personal income tax rates and while imposing a corporate activities tax of somewhere between 0.4% and 0.7% on gross income over $1 million. Those businesses with gross receipts under $1 million will pay a flat tax of $250. And all businesses operating in Oregon must register with the Oregon Department of Revenue.

In addition to the new tax, Hass’ proposal does away with corporate excise and income taxes and adds what is basically a corporate sales tax.

Lana Butterfield said the PIA Oregon is very concerned and on top of the bill. She said she and others on the PIA Oregon Legislative Committee met with Sen. Hass and Legislative Revenue staff and told them that:

  Insurance agents don’t set the price of their product and can’t pass it along to consumers.

  Insurance agents work on commission.

  The tax reform measure shouldn’t include premium value as gross revenue; insurance agents should be taxed only on commissions.

  The tax reform measure should have a special, much lower rate, for businesses which have high levels of pass through income (such as insurance and advertising).

She said the committee learned, “Agents won't be exempted. They will pay the minimum amount depending on what the floor is finally set at. They will be taxed on commissions, not premiums.”

The idea of another corporate tax battle is not appealing to Oregon’s business community and Republican leadership. The Oregon Business Plan Coalition — who successfully fought Measure 97 — is now called Brighter Oregon. Spokesman Pat McCormick said, “It's disappointing to learn that the government-employee-union-funded ballot measure advocacy group behind last year's failed Measure 97, has filed three new measures for the November 2018 ballot. Oregonians don't benefit when a single interest lobbying group uses the initiative process to work around the legislature just to get its own way.”

He said all that was accomplished in last year’s Measure 97 vote was the spending of $50 million by both sides and deep polarization of conservatives and liberals.

Brighter Oregon contends just raising taxes is not the solution. Any support the group — and other conservatives and conservatives in the Legislature — for the idea will have to be accompanied by spending cuts and especially in public pensions and other benefits.

Democrats have countered that they’ll only consider spending cuts if Republicans agree to increase corporate taxes.


Source links: OregonLive.com link 1, link 2

Tags:  business tax  Insurance Content  Insurance Industry  Insurance news  Special Report: Oregon’s Continuing Tax Battle  Taxes  Weekly Industry News 

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The Summer of 2017: Driving

Posted By Administration, Tuesday, June 6, 2017


The month of June starts one of the more worrisome months for parents of teenagers and for the auto insurers who insure those families. How worrisome? Very. In fact, it’s uppermost on the minds of the Students Against Destructive Decisions (SADD) and Liberty Mutual.

The two organizations combined to sponsor a study of teen driving and found a startling, but not all that surprising, fact. Teenagers drive like their parents. And their parents are often not very good drivers and have bad driving habits like using their smartphone while driving for all kinds of things like talking, texting and checking email.

SADD’s Gene Beresin put it in perspective, “Parents are not great role models. As a matter of fact, they’re pretty poor role models for teenage driving.” And this is especially important when you remember that distracted driving now accounts for 25% of all car crashes. That’s one in four.

The SADD-Liberty Mutual survey checked in with 2,500 teens and 1,000 parents and found:

  55% of parents use applications when driving

  62% admit to using their phone to take calls while behind the wheel

  50% admit to calling their teenagers when they know the teen is driving

  And 33% — if the call is missed — expect a response from the child before they arrive at their destination

And the kids? A whopping 33% say they’ve asked their parents to stop that behavior while driving. Beresin said, “The good news is this sets the stage for a conversation between parents and teenagers.

The report also offers some suggestions to parents to help prevent fatal car crashes:

  Don’t let teenagers drive when they are tired

  Why? 10% of teens admit to falling asleep behind the wheel because they’re tired

  The study asks parents to instruct their kids to call for a ride or take a cab when they’re tired

  Set up a distinctive ring tone or text tone for emergency calls from the parent so they can ignore all other calls.

  Tell teenagers to program the two biggest driving distractors navigation and music before the trip starts

Beresin said, “Program a playlist ahead of time. If the phone is within reach and you hear or see a notification, you’re going to be very tempted to either look down or pick it up. And the bottom line is you don’t need to.”

Another study by the Insurance Institute for Highway Safety (IIHS) looks at the cars that are most likely to be involved in fatal collisions for teens and their parents this summer.

And for winter, spring or fall, too, for that matter.

Minicars and small cars have the most potential for a fatal collision because they don’t have the protective bulk of larger vehicles. Four door minicars are the most dangerous and four-wheel drive large luxury SUVs had the lowest number of fatalities.

The two most dangerous minicars — according to the number of fatalities recorded — are the Hyundai Accent and the Kia Rio. The Accent is first and had 104 deaths per million vehicles registered.

The 11 with zero driver deaths from 2012 to 2015 are:

  Volkswagen Tiguan

  Toyota Tacoma Double Cab

  Mazda CX-9

  Audi A6

  Audi Q7

  Jeep Cherokee

  Mercedes Benz M-Class

  BMW 535 i/is

  BMW 535xi

  Lexus RX350

  Lexus CT 200

David Zuby of IIHS told Forbes magazine, “Vehicles continue to improve, performing better and better in crash tests. The latest driver death rates show there is a limit to how much these changes can accomplish without other kinds of efforts.”


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

Tags:  driving insurance  Insurance Content  Insurance Industry  Insurance News  The Summer of 2017: Driving  Weekly Industry News 

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UnitedHealth Group May be in Trouble with Feds

Posted By Administration, Tuesday, June 6, 2017

The Department of Justice has filed charges against UnitedHealth Group for overcharging the federal government more than $1 billion through its Medicare Advantage packages.

The suit — filed in a Los Angeles court — said UnitedHealth made patients appear to be much more infirm than they actually were so they could collect higher Medicare payments.

A report from Salon.com said the federal government’s conservative estimate is that UnitedHealth “knowingly and improperly avoided repaying Medicare” for the more than $1 billion in overcharges during the decade ending in 2016.

U.S Attorney Sandra Brown said, “To ensure that the program remains viable for all beneficiaries, the Justice Department remains tireless in its pursuit of Medicare fraud perpetrated by healthcare providers and insurers. The primary goal of publicly funded health care programs like Medicare is to provide high quality services to those in need — not to line the pockets of participants willing to abuse the system,” she said.

This is the second time UnitedHealth has been under Justice Department scrutiny under the False Claims Act. In 2011 a similar complaint was filed by the firm’s former finance director.

UnitedHealth is the nation’s biggest Medicare Advantage participant and in 2016 it covered 3.6 million policyholders. The price tag for that insurance was $56 billion.

The company denies any wrongdoing and spokesman Matt Burns said it will go to battle over the accusations. “We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with (Centers for Medicare and Medicaid Services) about our approach under its unclear policies.”

CMS declined to comment.


Source link: Insurance Business America

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  UnitedHealth Group May be in Trouble with Feds  Weekly Industry News 

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Mergers & Acquisitions: High Prices Going Even Higher

Posted By Administration, Tuesday, June 6, 2017

The value of insurance agencies continues to grow. In fact, MarshBerry CEO John Wepler said they’re as high as they’ve ever been and those high prices are not deterring those wanting to purchase them.

At a conference in Las Vegas late last month Wepler told 500 agency execs that the M&A market is “explosive” and “private equity has literally taken over the insurance brokerage business. I will tell you today valuations are at the highest point they’ve ever been.”

Wepler said there is now “no oxygen” left at the top with averages topping 10.12 times the EBITDA. “I don’t think it’s a fad. There’s $114 billion in capital on the sidelines trying to get in,” he said.

On another topic, Wepler also said insurance — and brokerages in particular — need to seriously worry about insuretech. “I’m telling you it’s going to be a massive, massive disruption. The insurance industry is ripe for innovation and disruption. I think you can expect disruption in every single type and size of account in your book of business.”

Estimates say there are likely 1,500 tech entrepreneurs, investors and insurance executives involved in insuretech. Those startups are said to be disrupting — as Wepler said — every line of insurance. They are improving the customer experience via the cost of providing insurance, increasing transparency, simplifying processes and empowering customers and it’s all done by employing big data.

Plus, proponents say it even makes the claims process “enjoyable.”


Source links: Insurance Journal — link 1, link 2

Tags:  Insurance Content  Insurance Industry  Insurance News  Mergers  Mergers & Acquisitions: High Prices Going Even Hig  Mergers and Acquisitions: Some E&O Words of Wisdom  Weekly Industry News 

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Who has Cyber Insurance? Not that Many

Posted By Administration, Tuesday, June 6, 2017


A new survey by the research firm Ovum says 50% of U.S. businesses don’t have cyber risk insurance. Just 16% of the 100% have full coverage. The survey was done for the analytics company FICO and it also found 27% of that 50% say their companies have no plans to purchase said insurance.

Ironically — and dangerously — 61% say they expect cyber attacks increase in the next year.

The survey found U.S. companies lag in cyber coverage when compared to Canada and the United Kingdom. The report says 40% of firms report no cyber coverage in those countries.

And why? Mistrust of insurance pricing is what most say.

The survey is wide-ranging. It connected with 350 c-suite executives and senior security officers. They come from sectors like:

  Financial services





  Media service providers

Company sizes:

  30% have 500 to 1,000 employees

  28% have 1,001 to 4,999 employees

  17% have 5,000 to 9,999

  25% have more than 10,000

Bob Shiflet of FICO said the Ovum survey finds U.S. healthcare to be father behind than most when it comes to cyber insuring. None of those surveyed in healthcare have insurance that covers all risks and 74% had no insurance at all. Shiflet said this is troubling but some of that must be laid at the feet of the insurance industry.

“There are steps the insurance industry can take to make guidelines clearer and explain premium adjustments, but companies need to be willing to dedicate the resources required to protect themselves from the breaches they themselves see as likely, if not inevitable,” Shiflet said.

Cost and lack of clarity from the industry is problematic:

  Just 25% of those responding think premiums reflect their risk profile

  Only 23% think the insurance industry is clear and transparent in its approach to pricing

  29% of the executives think insurers need clear guidelines about how premiums are chosen

  28% want clearer communications on why premiums are adjusted when that happens

  23% want insurers to introduce a standard for benchmarking cyber risk

Hiscox did a similar survey that said 55% of U.S. firms have taken out cyber insurance but these businesses are — as with the Ovum survey — confused about what cyber coverage actually entails and what is protected.

For those who don’t have cyber insurance:

  26% do not plan to purchase

  41% said cyber insurance policies are not relevant to their business

  17% say they have no plans to take out insurance — ever — and agreed with this statement: Cyber insurance policies are so complicated — I don’t understand what cyber insurance would cover me for.

Deloitte also did a survey that found buyers just don’t understand cyber risks or options for insurance. And all — the report found — want standardized policies. “Similar cyber insurance products offered by different providers often include alternative features, which makes it difficult for buyers to compare policies by value and price,” the report said.

Deloitte also outlined steps similar to those of Ovum for insurers to take:

  Standardize policy language

  Develop a risk-informed model rather than a definitive predictive model for cyber risks

  employ more targeted underwriting by industry or exposure

  Offer more holistic cyber risk management programs

RAND Corporation did a different report and hit the real nail on the head. Companies — it found — just don’t see cyber insurance as a good investment. The typical cost of a breach according to RAND is $200,000 which means an event will cost a company about 0.4% of annual revenues.

Sasha Romanosky of RAND put it in perspective. “Relative to all the other risks companies face, the cyber risks often aren’t as big a deal as we think. It may be bad for you if you are the victim, but it doesn’t change the behavior or strategy of a company. Like you and me, companies are self-interested and operate in ways that minimize their costs. You can’t begrudge them for working that way,” Romanosky said.

Ponemon seriously disagrees with RAND’s conclusions. It’s report from May of 2014 found the average data breach costs something like $3.5 million for super-sized companies.


Source link: Insurance Journal

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News  Who has Cyber Insurance? Not that Many 

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Update: WannaCry — Most Would Pay

Posted By Administration, Tuesday, June 6, 2017

Carbon Black surveyed 5,000 U.S. consumers about their trust in corporations for keeping their data safe. Part of the questioning involved the WannaCry ransomware virus. The crisis a few weeks ago in 150 countries is the first most had heard of ransomeware. That’s odd because ransomeware has been a problem for a decade or more.

What is most surprising is the number of people who’d pay the ransom if it happened to them:

  52% said they’d pay the ransom if their computer or data is taken hostage

  Only 12% said they’d pay $500 or more

Experts are advising people to be prepared. Verizon did a report in 2014. Then ransomeware was the 22nd most common form of malware. Today it is number-five. The quick-buck approach to profits means it could even rise above that point in the future.

As for the rest of the world. Financial institutions and healthcare providers are trusted by about 70% of us. But only 52% trust retailers.

Consumers — overall — think the responsibility of keeping their data safe lands at the feet of the individual business. They do not believe it is the responsibility of cybersecurity vendors, software vendors and providers like Microsoft, Apple and Google and government agencies like the FBI, NSA and CIA to keep their data safe.


Source link: BizReport

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance news  Special Report: The WannaCry Virus Aftermath  Update: WannaCry — Most Would Pay  virus  Weekly Industry News 

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