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Crash Dummies & Real Life

Posted By Administration, Tuesday, February 7, 2017

You’ve seen them. The auto manufacturer does a test on the safety of its vehicle or maybe it’s an independent scientist. They buckle in a male or female or child dummy into the front seat and let ‘err rip. Those dummies and height-weight proportionate and look pretty buff.

 

The typical American person — these days — is anything but buff.

 

Humanetics makes crash dummies. It recently started making them to be more like real life. For example, a 273-pound obese dummy is 106 pounds heavier than the traditional dummy. They also did a prototype of a 70-year-old woman who is also obese.

 

This change came about years after Dr. Stewart Wang — a trauma surgeon from Michigan — complained that crash dummies look very little like his patients. He works with the International Center for Automotive Medicine and said, “You can’t talk about injuries without talking about the person — it’s individuals who are hurt. The condition, size and shape of an individual is hugely important in how severe their injuries are in any given crash.”

 

How a person is built very often determines whether a person is injured in a crash and how those injuries — if the occur — will harm the person in the crash. And, bluntly put, “The typical patient today is overweight or obese — they’re the rule rather than the exception,” Wang said.

 

Source link: Insurance Journal

 

 

Tags:  Crash Dummies & Real Life  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Shock! Some Republicans Now Talk ObamaCare Repair Not Repeal

Posted By Administration, Tuesday, February 7, 2017

Oregon Rep. Greg Walden

 

Utah Sen. Orrin G. Hatch is the chairman of the Senate Finance Committee. His committee will be a pivotal player in the ObamaCare repeal legislation. Or will the Affordable Care Act actually be repealed?

 

Maybe not.

 

Lately Hatch and a few other prominent and powerful Republicans have started talking repair not repeal. “I’m saying I’m open to anything. Anything that will improve the system, I’m for,” Hatch said.

 

Tennessee Sen. Lamar Alexander — who is the chairman of the Senate Committee on Health, Education, Labor and Pensions — apparently agrees with Hatch and — who with his Utah colleague — waffles between repeal and repair.  

 

“I think of it as a collapsing bridge. You send in a rescue team and you go to work to repair it so that nobody else is hurt by it and you start to build a new bridge, and only when that new bridge is complete, people can drive safely across it, do you close the old bridge. When it’s complete, we can close the old bridge, but in the meantime, we repair it. No one is talking about repealing anything until there is a concrete practical alternative to offer Americans in its place,” Alexander said.

 

Republicans at the recent GOP retreat all expressed concern about the fallout from out and out repeal. One of those heard on a recording is Alexander who said, “The word ‘repair’ is a lot better than the word ‘repeal’. Saying we’re going to repair the damage is more accurate.”

 

A few days later Alexander addressed the issue again.

 

“I think it is more accurate to say repair ObamaCare because, for example, in the reconciliation procedure that we have in the Senate, we can't repeal all of ObamaCare. ObamaCare wasn't passed by reconciliation, it can't be repealed by reconciliation. So, we can repair the individual market, which is a good place to start,” he said.

 

That sentiment has some in Republican leadership backpedaling and explaining. House Speaker Paul Ryan and others keep insisting repeal is the ONLY option. “There’s a miscommunication going on. If we’re going to repair the U.S. health-care system … you must repeal and replace Obamacare,” Ryan said in an interview on Fox & Friends.

 

Later Ryan told reporters, “Our job is to repair the American health-care system and rescue it from the collapse that it’s in. And the best way to repair a health-care system is to repeal and replace Obamacare. It’s not an either/or.”

 

The number-two Republican leader in the Senate is Texas Sen. John Cornyn. He also got out the fire extinguisher. “It gets a little confusing. I don’t think even if we wanted to repair Obamacare we could do it. That’s why I believe we’re going to do repeal and replace.”

 

No matter what Ryan says, moderate Republicans in the House keep tossing around the word “repair.” Oregon Republican and House Energy Committee Chairman Greg Walden — who will have a lot to say about ObamaCare in the House — has put out a different word.

 

He’s used the term rebuild.

 

“Working with the Trump administration, we’ll take a multi-step, multi-pronged approach to deliver relief and rebuild our health care system so it works for patients,” Walden in an op-ed piece for Morning Consultant co-written by fellow committee member Rep. Michael Burgess of Texas.

 

Later Walden told reporters, “I'm trying to be accurate on this that there are some of these provisions in the law that probably will stay, or we may modify them, but we're going to fix things, we're going to repair things. There are things we can build on and repair, there are things we can completely repeal.”

 

One possible reason for the GOP softening is a recent Associated Press-NORC Center for Public Affairs Research which found:

 

  53% want to keep ObamaCare’s law in some form or another

  56% are extremely concerned that repeal means they’ll lose their insurance

 

Democrats haven’t missed a chance to criticize. Sen. Richard Durbin is the Senate’s Democratic Party second in command. He said, “It puts the burden on them to come up with the so-called repairs. What a departure from repeal it, walk away from it and America will be a better place.”

 

Some worry about what out and out repeal will do to insurance and insurers. In the next two months, insurers will be coming up with their 2018 rates. Marilyn Tavenner — who heads America’s Health Insurance Plans (AHIP) — testified before Alexander’s committee. She said insurers need Congress to figure this out and figure it out quickly.

 

“The absence of this funding will further deteriorate an already unstable market and hurt millions of consumers who depend on these programs for their coverage,” Tavenner said.

 

Alexander agrees. “What we’re told is if we don’t act by March or April, is that in many states there won’t be an insurance company there to sell you insurance. It’s also an area where Republicans are going to have to do some things we may not normally do, like cost sharing or reinsurance. We may not like those things, but we may have to do those things for the next two to three years to make sure people can buy insurance,” he said.

 

Another aspect of the ObamaCare repeal issue — or repair if it goes that way — is intriguing. And that’s President Trump’s pushing drug companies to lower prices. It caught the attention of Walden and his House Energy Committee. Walden attended a meeting at the White House with the president and the CEOs of several major drug firms.

 

The congressman doesn’t think price controls are going to happen but does think the approval process can be changed and speeded up at the Federal Food and Drug Administration for a new drug to compete with a drug that has no competition.

 

On what Trump wants, Walden said, “I can tell you, having been party to it, he had a pretty serious conversation with the CEOs of the major drug companies. They had some good ideas, frankly, what can be done, but he was insistent the prices are too high, they've got to come down, we've got to tackle this problem together. So, I think it's going to be high on our agenda. There are lots of ways to get at it.”

 

And it all focuses on competition. “That's where we see the biggest failures, is where there's no competition. We may look at some legislation, that's bipartisan, that allows people to kind of jump the line if there is no competitor out there, to get an approval process sooner,” Walden said.

 

Source links: The Washington Post, Insurance Business America, The Hill — link 1, link 2, link 3, link 4

 

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Shock! Some Republicans Now Talk ObamaCare Repair   Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, February 7, 2017

California — Drought Might be Ending

 The Sierra Nevada in California has seen record-breaking snowfall this winter. Two blizzards dropped snow that made the snowpack 173% above what is considered average.

 

California’s Department of Water Resources spokesman Frank Gehrke said, “It gives everything a brighter outlook.” But brighter outlook or not, Governor Jerry Brown won’t decide until sometime in April when the Spring rains come whether to drop the state’s drought emergency designation.

 

Source link: VOA News

 

 

California — Death Master File Settlement

 This came to Weekly Industry News from the California Department of Insurance.

 

Insurance Commissioner Dave Jones announced a multistate $1.5 million settlement agreement with RiverSource Life Insurance Company, a wholly owned subsidiary of Ameriprise. Ameriprise has agreed to use the Social Security Death Master File database to identify life insurance policyholders who have died and then to search for and pay benefits to their beneficiaries.

 

"The Ameriprise settlement brings the total to 28 major life insurers that are doing the right thing for policyholders," said Insurance Commissioner Dave Jones. "Ameriprise has set a great example through the examination process by fully cooperating and agreeing to change their practices to benefit their policyholders. I strongly urge other life insurers to follow Ameriprise's lead."

 

Insurance Commissioners for California, North Dakota, Florida, New Hampshire, and Pennsylvania have led the national investigation into life insurers' use of the Social Security Administration's Death Master File database, which came about after it was discovered life insurers used the database to their benefit to identify deceased annuity holders, so they could stop making payments to them, but failed to use the database to identify deceased policyholders so that benefit could be paid to their beneficiaries. The practice violated California's Unfair Insurance Practices Act and similar laws in other states. 

 

To date, state insurance regulators have either reached settlements or concluded the investigation of 28 of the top 40 companies and as a result life insurers have paid $7.3 billion to life insurance beneficiaries nationwide.

 

 

Montana — Punitive Awards

 The Montana House of Representatives has passed a measure to reduce the amount of punitive damages a court can award. Currently the cap for a company or a business is the greater between $10 million or 3% of the defendant’s net worth. The 60 to 40 vote says punitive damages cannot be more than three-times what a plaintiff will get in actual, or compensatory damages.

 

Business groups like the bill because they believe it will attract businesses to Montana.

 

Source link: Insurance Journal

 

 

Nevada — State on Insurance Data

 The Nevada Department of Insurance has sent out a bulletin to insurers designed to reduce the use of some analytics models. It is Bulletin 17-001 and it — quote — remind[s] insurers that any mathematical model used in underwriting or rating of any personal line of property and/or casualty insurance, or other line of property and/or casualty insurance subject to regulation of rates ... [must] be filed with the Division for approval.

 

More specifically, the bulletin defines this as “any underwriting rule or model used in underwriting that affects the premium that any insured would pay.”

 

This is a practice that 19 states have banned and that the National Association of Insurance Commissioners (NAIC) is targeting and has written a white paper about.

 

falls under this requirement. The clarification pulls under the regulatory umbrella practices that related to so-called "price optimization," a controversial practice that has been banned by 19 other states and targeted by the NAIC.

 

Nevada takes the ban a bit farther and the bulletin said, “The proliferation of complex predictive models that some insurers have termed 'underwriting models' has led to the necessity to reiterate such requirements. Nevada’s filing and prior-approval requirements continue to apply irrespective of the complexity of the algorithms utilized by insurers or the labels given to those algorithms.”

 

“Price optimization is a more nuanced and complicated strategy than how some consumer groups have characterized it. Initially a few states issued bulletins with unclear or overly broad definitions of price optimization. However, the Nevada bulletin is similar to the vast majority of other states and simply restates long-standing statutes and precedents that the industry has followed. State insurance laws incorporate well understood standards and those standards should be applied to the practices of insurers as set forth in those laws as Nevada is doing,” the bulletin said.

 

Source link: Insurance Networking News

 

 

 

Oregon — PIA Response to SB 271

 PIA Oregon Lobbyist testified about this bill in the Senate Health Care Committee. The following is her written testimony.

 

Senate Health Care Committee

RE: SB 271

 

Dear Madam Chair and Members of the Committee:

 

The Professional Insurance Agents of Oregon/Idaho strongly supports Senate Bill 271, which codifies that “small employer” means an employer who employs an average of at least one but not more than 50 full-time equivalent employees.

 

The Division held an advisory committee on this subject and we participated prior to session. 

 

There are points to be considered by limiting the definition to 50, in terms of not including groups 51-100.

 

  Employers with 51-100 employees have bargaining power with insurance companies that they cannot afford to lose by being included in the definition of small employers in Oregon.

 

  Groups with 51-100 employees have the ability to design and manage their group insurance costs and benefits to attract and retain good employees and to remain stable and competitive in their marketplace.

 

  Employers with 51-100 employees are unique in the State of Oregon and represent a unique demographic in specialized industries, including a significant number of non-profit organizations. These businesses foster innovation and high productivity, a characteristic that does not need to be disrupted. If included in the small business definition they would lose this distinct advantage.

 

  Presumably, these 51-100 employee businesses would end up subsidizing smaller employers, thereby increasing the 51-100 employee business’s costs and reducing their competitiveness or unique attraction to hiring and retaining high quality employees.

 

  These employers are “large employers” in the context of employers in Oregon.

 

As an association of professional insurance agents serving all sizes of clients, we encourage you to vote yes on Senate Bill 271.

 

 

Washington — Fraud Investigation

 Washington Insurance Commissioner Mike Kreidler issued this news release last week. He said the criminal insurance fraud unit investigated 150 cases in 2015 and 2016.

 

Many people don’t know that the Office of the Insurance Commissioner investigates criminal insurance fraud, much of which is referred to us by insurance companies themselves. The work is done by the OIC’s Criminal Investigations Unit (CIU), staffed by law enforcement and criminal analysts. They refer the results of their investigations to state and local prosecutors, who bring charges against the people who are suspected of committing the fraud.

 

The CIU:

 

  Received 3,571 referrals, which are questionable insurance cases that consumers and the insurance industry send to us to review.

 

  Opened 150 criminal fraud cases.

 

  Submitted 52 cases to a prosecutor.

 

  Had 40 criminal cases charged; 37 of those were heard before a judge.

 

  Had 44 convictions for various crimes.

 

  Saved $3.6 million in immediate and projected insurance claim payouts. These efforts resulted in $857,353 of restitution ordered paid back to victims and $26,760 in court costs ordered back to the judicial system.

 

  The vast majority – 73 percent – of the cases we investigate involve personal property or property damage. Bodily injury frauds are 11 percent, fraud by insurance agents and brokers (called producers) is 6 percent, and the rest involve disability, a medical provider, staged auto collisions or other types of cases.

 

  Other information about CIU:

 

  CIU was established by the Washington state Legislature in 2006. Since then, we have pursued 434 cases and adjudicated 105 of them. Our workload has steadily increased each year.

 

  It maintains a list of insurance fraud most wanted suspects, who have been charged with a crime but did not appear in court to face the charges.

 

  In November 2016, the CIU earned law enforcement accreditation from the Washington Association of Sheriffs and Police Chiefs (WASPC), joining the 20 percent of law enforcement agencies in the state to have it.

 

  CIU hosted the 19th annual 2016 Fraud Directors Conference, a gathering of more than 70 insurance fraud professionals from 26 states and DC. It was the first time the conference has been held in Washington state.

 

  The insurance commissioner is required by law to appoint a 10-member volunteer board to advise him on fraud investigations.

 

 

Washington — Insurance Department & the Legislature

 This came to Weekly Industry News from the Washington Department of Insurance.

 

Insurance Commissioner Mike Kreidler posts his departments Legislative agenda and gives updates on SB 5619, SHB 1043 and SB 1850.

 

Click here to read his post

 

 

Washington — Health Insurance Proposed Plans Deadline

 This came to Weekly Industry News from the Washington Department of Insurance.

 

Insurance Commissioner Mike Kreidler has set May 5, 2017, as the date that health insurers in Washington must file their proposed plans and rates for 2018. 

 

“I want to reassure the insurance-buying public and insurers that I am committed to stability in our state’s market,” Kreidler said. “Insurers and consumers are understandably concerned about stability because of the uncertainty in Congress over changes to the Affordable Care Act (ACA) and no viable replacement.

 

“Republican leaders and the President have said they intend to repeal and replace the ACA with something better. This must be done simultaneously. As long as their plan does not decrease the number of people covered, reduce benefits, or pass costs on to the state, I wish them well. The ACA is working well for Washingtonians. At this point, we have no idea if an alternative will or can be enacted.”

 

The May 5 deadline marks the formal start of Kreidler’s review of individual and small-group health plans and stand-alone dental plans for 2018. Kreidler’s office consulted with insurers and others to help determine the filing date.

 

“The ACA remains in effect and stability of the market should take priority over the unnecessary rush to put political considerations ahead of basic insurance principles,” said Kreidler. “The sooner insurers file plans, the quicker we can review them and have a viable market available for Washingtonians.”

 

Once plans and their rates are approved, Washington’s Health Benefit Exchange must certify them for sale on Washington Healthplanfinder (www.wahealthplanfinder.org).

 

Open enrollment for 2018 health plans begins Nov. 1.

 

About 750,000 more state residents now have health insurance since the Affordable Care Act took effect in 2010. Washington’s uninsured rate also has dropped from 14 percent to just under 6 percent in the same period.

 

 

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

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A Message from Capital Premium Financing President

Posted By Administration, Tuesday, February 7, 2017

David Gabrielsen
President, CEO and Founder

 

The New Year is here and we are so excited! We're excited to strengthen our existing relationships and create new ones. We are consistently looking for new ways to improve service and innovation. This New Year we challenge every agency to partner with us!

* Partner with us by allowing us to provide service as unique as a two-dollar bill to your agency and your insureds

* Partner with us by allowing us to help you lower your cancellations with our Capital Touch program.

* Partner with us by allowing us to increase your revenue through our patented agency revenue programs.

I promise you as President, CEO and Founder of Capital Premium Financing that now is the best time to join our family. After 33 years in business, we are still privately held, have over 80 employees and partner with over 4000 agencies nationwide. We care and want your business more than anyone else.

Partner with us! (video) 


Tags:  A Message from Capital Premium Financing President  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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I.I.I. Annual Forum: Insurers Positive about 2017

Posted By Administration, Tuesday, January 31, 2017

The U.S. economy is sputtering. It grew just 1.9% in the fourth quarter of 2016. The total output of goods and services ended up below the 2.1% average we’ve seen since 2010.

 

But Donald Trump is president now and judging by the Dow hitting over 20,000 last week, business thinks that might change. Maybe.

 

Insurers at the Insurance Information Institute’s (I.I.I.) 21st Annual Property and Casualty Insurance Joint Industry Forum have expressed what is being deemed, “cautious optimism.”

 

New England Asset Management CEO William Rotatori addressed the elephant in the room and said one of the things to watch is what the Trump administration brings to the economic table.

 

“There’s a level of uncertainty that doesn’t necessarily correlate well to higher levels of activity. There are some trends already in place that are going to be tough to change, such as the levels of debt in the overall economy, the aging population and the labor force participation rates that are still in secular declines. These are things the new administration is walking into, and I’m not sure it’s going to change that trajectory,” he said.

 

Risk management — Rotatori added — is key to financial success in 2017. He predicts the Federal Reserve will continue to “normalize” interest rates which means an end to the bond bull market. And he said look for changes in taxes, healthcare and trade policies.

 

“It’s going to be a year more so than other years where it won’t be smooth, straightforward or easy. Tactical positioning throughout the year will be a greater source of value added than it has been in prior years,” Rotatori concluded.

 

When it comes to opportunity, Dowling & Partners partner Gary Ranson said mergers and acquisitions top the list.

 

“One of the interesting things about the deals that have happened over the last few years is that there really haven’t been a lot of acquisitions of U.S. companies by U.S. companies of any significance. Those outside the U.S. have an advantage coming in to purchase a U.S. company because of the inefficient tax structure of the U.S. today. With the new administration’s potential change in taxes, all of a sudden, the U.S. can be back in the game. If there are a lot more companies competing for any given acquisition, then U.S. companies will have a better economic view to allow them to do deals…It sort of levels the playing field,” he said.

 

Dr. Steven Weisbart — the I.I.I. chief economist — said 50% of those polled say mergers and acquisitions are needed because of economy of scale.

 

“Size can bring economies of scale when certain costs, such as regulatory costs, are increasing, Companies are also concerned about the need to diversity across product lines. Lack of diversification could result in highly volatile earnings and decreasing profitability for insurers.” he said and noted 27% of the attendees raised that issue.

 

Barclays managing director Jay Gelb is one of the 200 members of the industry who showed up. Gelb thinks one of the biggest challenges insurers will have is excess capital. His firm’s research said there is $165 billion available and Gelb said that’s about 25% over-capitalization.

 

“That is essentially the equivalent of four Hurricane Katrinas happening at once. Obviously, we never want that to happen, and it’s highly unlikely, but I think it will be a tough road from a profitability standpoint for the next couple of years,” he said.

 

Gelb and Barclays also predict insurers will find if very hard to avoid — at the very least — moderate underwriting losses.

 

Going forward, he stated he expects it will be difficult to avoid at least moderate underwriting losses. As catastrophe losses saw a relatively meaningful increase in 2016 compared to prior years, underwriting losses were negatively impacted, he said.

 

Most panelists loved the idea of the lower tax rates and regulatory reform promised by Trump and congressional Republican leadership.

 

As for trends:

 

  55% expect commercial lines to grow more than personal lines in 2017

  88% think cyber insurance will grow faster than other P&C lines

 

I.I.I.’s Weisbart said, “This is not surprising given businesses within personal data-driven industries such as health care, finance and banking, retail, and communications view cyber risk as a real threat. Growth in the cyber insurance market will also be driven by increasing demand for business interruption coverage.”

 

What Congress is going to do in 2017 also piqued the interest of attendees:

 

  45% want Dodd-Frank’s systemically important financial institution (SIFI) designation done away with or reformed

  Others want the Federal Insurance Office (FIO) done away with completely

  Many want the Financial Stability Oversight Council (FSOC) done away with

 

As for the industry:

 

  43% are focused on attracting new talent to the dwindling insurance workforce

  23% are enhancing technology

  23% worry about the cost of regulation and complexity of doing business

 

While insurance representatives attending the I.I.I. event are fairly positive, Wells Fargo’s annual insurance survey might bring them back to Earth. It says insurers will likely see a 10% drop in property and casualty prices overall.

 

Doug O’Brien is the head of Wells Fargo’s Casualty and Alternative Risk Group. He put the survey in perspective.

 

“In the property and casualty segment, the market will continue to see rate reductions for the majority of customers, although slightly lower than prior years. Potential changes to the Affordable Care Act could also impact workers’ liability, as injured workers may file more workers’ compensation claims in lieu of healthcare claims,” O’Brien concluded.

 

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

 

 

Tags:  I.I.I. Annual Forum: Insurers Positive about 2017  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Insurance & the SIFI Designation: Changes on Tap?

Posted By Administration, Tuesday, January 31, 2017
Ted Nickel

Ted Nickel is Wisconsin’s insurance commissioner and the new president of the National Association of Insurance Commissioners (NAIC). He spoke at the recent Insurance Information Institute (I.I.I.) 23rd Annual Joint Industry Forum and made the case for radical changes in the direction the Financial Stability Oversight Council’s (FSOC) has been taking.

 

Nickel said the FSOC and its liberal use of the SIFI (systemically important financial institution) and how it arrives at decisions about who should or should not be SIFI designated, is misguided.

 

We’re going to be advocating for a repeal of the FSOC designation process,” Nickel said.

 

And if the FSOC should survive, Nickel said the NAIC wants “a vote on that board, particularly when they’re voting on matters of financial significance to insurers.”

 

The current insurance commissioner position on the council has no vote. Today it’s Peter Hartt who directs New Jersey’s insurance division. “I think monitoring solvency of insurance companies is best done at the state level. I don’t think the federal labeling of insurance companies [as systematically important] through the FSOC process has been particularly helpful given the fact that there’s no off ramp,” Nickel said.

 

That said, Nickel told the group that not everything about the FSOC is negative. “Its best purpose would really be to gather on a regular basis and talk about and identify areas of systemic importance to the financial system of the U.S,” he noted.

 

And it in those conversations — Nickel said — where positive change will occur.

 

“I think that’s one of the two jobs that they have that — my understanding is — they don’t spend a lot of time doing. My understanding is they spend a lot of time on the designation process. And if they would spend more of their time on gathering information on trends in the economy or trends globally that could wash up on our shores and result in financial peril, I think it would be beneficial to everybody. If they refocus their efforts, that would provide a lot of value,” Nickel concluded.

 

The new NAIC president and Ian Adams of the R Street Institute and The Wall Street Journal Editor Leslie Scism also talked about the fate of the Federal Insurance Office (FIO) under a Trump administration bent on limiting the power of the Dodd-Frank Act.

 

Scism thinks a rollback of Dodd-Frank will happen and will likely be in one of three ways. “One way is to do this legislatively. Another might be through the FSOC process as Trump’s appointees…populate the FSOC,” she said.

 

The editor pointed out that the Democrats never did make the case for Dodd-Frank being able to put enough roadblocks in place to prevent another Great Recession or an economic collapse.

 

“From what my colleagues in Washington have picked up, there’s a lot less enthusiasm — maybe there’s no enthusiasm to have insurers designated as systemically important. The case hasn’t been made that Dodd-Frank will prevent a collapse. There just aren’t the signs that these insurers are putting the financial system at risk. That hasn’t been presented in materials made public,” she added.

 

Looking at AIG, Scism said the big problem that led to its collapse and the danger to the world’s economy is that it was not overseen by state insurance officials but by the federal Office of Thrift Supervision. “I think a lot of what the states have done since the collapse is to recognize that they have to take into consideration other parts of a big financial conglomerate that aren’t regulated by the states and have a handle on those other parts,” she said.

 

Nickel agreed. “If an insurance regulator start[s] doing an analysis of a very large company, we don’t have to have a special designation. We just, we get in there and we take care it. We take care of the financial issues as they arise at varying levels of increasing oversight,” he said.

 

Peter Hancock — who is AIG’s CEO — doesn’t think much about Dodd-Frank or think a change will let AIG off the hook. “To date, designation as a SIFI has not hindered us in pursuing our true north of maximizing intrinsic value, returning capital and optimizing our business in a way that makes sense. There’s a modest cost for complying with SIFI regulation over and above what we are already investing in controls,” he said.

 

And what if Dodd-Frank and its regulations are changed by President Trump and Congress? Hancock said, “For us, it just simply isn’t a binding constraint on our capital returns and our objectives …. We’re focused very much on managing our capital prudently, being compliant with whatever regime exists. And even if FSOC’s SIFI designation authority were to change, AIG would still have FSB [Financial Stability Board] and G-SIFI to worry about — and 200 other regulators.”

 

Nickel got in the last word and said, “I don’t have any problem with a gazillion-dollar company. If they’re handling themselves, if they’re working [through] problems. If they’re collecting premiums, paying claims, doing their investments. I don’t care how big [the insurers] are. It shouldn’t be the size of the company that just automatically puts them in the crosshairs of a third party, in this case, FSOC, and in many cases on the European front [with] some of the designations that FSB makes. The role of the regulator shouldn’t be to strong arm and … threaten companies to get smaller or else. That’s just not a good way to regulate,” Nickel said.

 

And the bottom-line?

 

“I regulate, and my folks regulate based on risk. Too big is not a risk to me. A risk is doing dumb things and not having yourself positioned accordingly, not thinking about future areas that might be of concern and addressing those upfront” he said.

 

Source link: Insurance Journal

 

 

 

Tags:  Insurance & the SIFI Designation: Changes on Tap?  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Top Lobbyists & the 113th Congress: Insurance in Top 10

Posted By Administration, Tuesday, January 31, 2017

 

For years, many of individuals and organizations and politicians have been complaining about lobbyists influencing government. Democrats and former President Obama spent a lot of the last eight years pushing for reforms.

 

No surprise — considering the amount of money involved — that no legislation was introduced to curb lobbyist spending or reform government involvement by lobbyists. 

 

The top 50 contributors lobbying for their causes in the just finished 113th Congress totaled $100 million shy of $1 billion at $900,616,000. Over half of that is from the top 10 contributors who gave $447,524,000.

 

Insurance — in bold in the chart — ranks sixth with $37.17 million going to political causes. Of that, 66% went to Republicans and the top recipient of that money was House Speaker and Wisconsin Republican Rep. Paul Ryan.

 

That’s lobbying to Congress. For all lobbying, the industry spent $146,662,996. That money was spent on 168 clients and was spent by 857 different lobbyists representing several companies. 

 

It’s down from $157,810,809 spent on 173 clients in 2015.

 

For insurance, the top 10 lobbying spenders are:

 

  Blue Cross / Blue Shield — $13.84 million

  Prudential Financial — $9.4 million

  America’s Health Insurance Plans — $6.96 million

  MetLife — $5.11 million

  Northwestern Mutual — $4.7 million

  American Council of Life Insurers — $4.5 million

  Cigna — $4.5 million

  USAA — $4.5 million

  New York Life Insurance — $4.26 million

  Property Casualty Insurers Association of America — $4.2 million

 

The chart below looks at the top 10 contributors who — again — gave over half of the over $900 million contributed to the 113th Congress. 

 

Rank

Interest Group

Total

Democrat %

Republican %

Top Recipient

1

Retired

$94.38 million

27%

73%

Republican Sen. Ted Cruz

2

Lawyers / Law firms

$56.76 million

56%

44%

Democrat Rep. Chris Van Hollen

3

Securities / investment

$55.05 million

35%

65%

Republican Sen. Marco Rubio

4

Real estate

$49.48 million

37%

63%

Republican Sen. Marco Rubio

5

Health Professionals

$42.68 million

39%%

61%

Democratic Sen. Bernie Sanders

6

Insurance

$38.17 million

34%

66%

Republican Rep. Paul Ryan

7

Leadership / PACs

$33.24 million

24%

76%

Democratic Sen. Rob Portman

8

Democrat / Liberal

$30.81 million

99%

1%

Democratic Sen. Bernie Sanders

9

Oil & gas

$24.26 million

10%

90%

Republican Sen. Ted Cruz

10

Pharmaceutical / health products

$22.71 million

38%

62%

Republican Sen. Richard Burr

 

 

Others — rounding out the top-20 — giving high double-digit figures with most going to Republicans:

 

  Lobbyists — top recipient: Rep. Chris Van Hollen (D-Maryland)

  Commercial banks — top recipient: Sen. Pat Toomey (R-Pennsylvania)

  Conservative Republicans — top recipient: Sen. Ted Cruz (R-Texas)

  Education — top recipient: Sen. Bernie Sanders (D-Vermont)

  Miscellaneous finance — top recipient: Sen. Marco Rubio (R-Florida)

  Electric utlities — top recipient: Sen. Lisa Murkowski (R-Alaska)

  Manufacturing/distributing — top recipient: Sen. Ted Cruz (R-Texas)

  Business services —  top recipient: Sen. Bernie Sanders (D-Vermont)

  Electronics — top recipient: Sen. Bernie Sanders (D-Vermont)

  Crop production — top recipient : Sen. Ted Cruz (R-Texas)

 

The list is the top 50 and except for these contributors, a usually much higher dollar amount goes to Republicans than Democrats. And this margin is usually huge. The percentage of lobbyists pushing money to Democrats is just 20% of the list:

 

  Lawyers — 56% to 44%

  Democrat/liberal — 99% to 1%

  Education — 73% to 27%

  Electronics — 52% to 48%

  TV & movies — 62% to 38%

 

Donations predominantly to Democrats in single digit millions:

 

  Public sector unions — 86% to 14%

  Transportation unions — 66% to 34%

  Building trade unions — 78% to 22%

  Civil servants — 65% to 35%

  Industrial unions — number 50 on the chart — 92% to 7%

 

In the top-10 contributors Sen. Ted Cruz (R-Texas), Sen. Marco Rubio (R-Florida) and Sen. Bernie Sanders (D-Vermont) were each top recipient twice. And Sanders knocked it out of the park with lobbyists with 18 of the top 50 contributors making him the top recipient.

 

What’s most odd about that figure? Of the 18, a whopping 11 of them gave a higher percentage of their lobbyist dollars to Republicans.

 

  Cruz was second at 7 times as the top recipient

  Rubio had 5

 

Of the PIA Western Alliance state members of Congress just two were top recipients and both are Republicans:

 

Alaska Sen. Lisa Murkowski — Number 16 — Electric utilities

Oregon Rep. Greg Walden — Number 31 — Telecom Services

 

Source links: Center for Responsive Politics — link 1, link 2

 

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Top Lobbyists & the 113th Congress: Insurance in T  Weekly Industry News 

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Oregon Ordered to Reinstate Fired Work Comp CEO

Posted By Administration, Tuesday, January 31, 2017
John Plotkin

In Oregon, Marion County Judge Claudia Barton ordered the state’s workers’ compensation department — SAIF — to reinstate John Plotkin. He was terminated in 2014 by the SAIF board after two private meetings where the board plotted to rid itself of Plotkin.

 

His management style rubbed the board the wrong way and the former director was accused of telling off color jokes and making insensitive remarks.

 

The judge said in determining how best to oust Plotkin, the board violated the state’s open meeting laws. So, she ordered the state to give Plotkin over two-and-a-half years of back pay, PERS benefits and to pay his legal fees.

 

The SAIF powers-that-be aren’t sure what they’re going to do. Agency spokesman Mike Watters said SAIF is still digesting Burton’s decision.

 

“We recognize this ruling puts us in an unusual position, but we have confidence in our board’s ability to make the best decision for SAIF. Regardless, we will continue to focus on workplace health and safety, and our core mission of taking care of injured workers and helping them get back to work. In the past few years, we’ve welcomed new board members and executive leadership, who have reaffirmed SAIF’s historic role as Oregon’s leader in workers’ compensation,” he said.

 

Shortly after firing Plotkin, the board hired Kerry Barnett. Since he’s the exec now, Plotkin probably won’t be rehired. That said, he’s practicing law in Arizona, and is grateful for the judge’s ruling and is available to work if SAIF wants him back.

 

“The SAIF board has to make a decision. It obviously would be a little bit awkward for Kerry and I to share that chair. If the board wants me to come back as CEO of SAIF, I remain available,” he said.

 

Plotkin also said the firing caused him distress and made it hard to find work. And he wasn’t sure in the first place why there was a problem. Adding to the confusion is the woman who allegedly complained about Plotkin. She ended up saying her comments were misconstrued and she was misquoted.

 

By that time though, Plotkin was long gone and had lawyered-up.

 

Costs have been estimated and Plotkin’s firing will end up at about $800,000 for his back pay and then there’s the benefits and his attorney fees and the state’s.

 

Source link: Insurance Journal

 

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Oregon Ordered to Reinstate Fired Work Comp CEO  Weekly Industry News  Work Comp 

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The High Cost of Regulation & Not Just Insurance

Posted By Administration, Tuesday, January 31, 2017

 

Most insurers and a great many independent insurance agents will tell you — while admitting some are necessary — there are too many insurance regulations. Other businesses feel the same way about regulation.

 

As a society, we are faced with increasing regulations and the urge of government to use them is happening at an alarming rate. It’s a fact not lost on President Trump who has promised to start doing away with regulations and rules on a wholesale basis.

 

How bad is it? Take the case of federal regulation. When Donald Trump was sworn in a couple of weeks ago, the Federal Register had a record 89,535 pages of regulations. Add to that the number of state, county and local government regulations and the number of pages is staggering.

 

So, Trump — who has promised to cut federal regulations by 75% — has issued an executive order saying for every one regulation introduced, two will be eliminated. Trump said, “If you have a regulation you want, number one, we’re not gonna approve it because it’s already been approved probably in 17 different forms. But if we do, the only way you have a chance is we must knock out two regulations for every new regulation. So, if there’s a new regulation, they have to knock out two.”

 

Second, Trump said, “This will be the biggest such act that our country has ever seen. There will be regulation, there will be control, but it will be a normalized control where you can open your business and expand your business very easily. And that's what our country has been all about.”

 

Third, the president said this is really more about small business. “We’re cutting regulations massively for small business — and for large business. But they're different. But for small business, and that’s what this is about today. And we’ll be reducing them big league and their damaging effects on our small businesses, our economy, our entrepreneurial spirit. And it’s been very badly damaged. The American dream is back.”

 

And Trump emphasized that the decision is not a knock-on President Obama though — he said — “it got particularly bad in the last eight years.”

 

So how much do regulations cost business? Tons says the Office of Management and Budget (OMB). It estimates the cost at between $68.5 billion and $101.8 billion for salaries and somewhere between $261.7 billion and $1,042 billion for benefits.

 

The National Association of Manufacturers says the OMB’s numbers are too conservative. It estimates the cost of complying with regulations at $2.028 trillion or 12% of the gross domestic product.

 

As the president and a lot of Republicans — and even some Democrats — say, many regulations are outdated and some duplicate what other rules say or contradict what other rules say.

 

Competitive Enterprise Institute spokesman Clyde Wayne Crews said in 2015 there were 81,611 pages published. That’s much higher than 2014’s 77,687 and higher than 2010’s old record of 81,405 pages but not close to 2016’s 89,535 pages.

 

Trump’s proposed cuts — says Amit Narang of the left of center group Public Citizen — will not happen. “There is no way for President Donald Trump to slash regulations by 75 percent without cutting into bedrock public protections that hold Wall Street accountable, keep our water and children safe from lead poisoning, and contain food contamination outbreaks,” he said.

 

Narang said all Trump is going to accomplish is to “permit corporations to rip off consumers, poison our environment, [and] cheat and mistreat workers.”

 

Other than to specify the percentage, the president has not offered many specifics about what he wants to do and when. But House Republicans have gone there. Leadership in the House is looking at passing the Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act.

 

It’s purpose is to put a commission in place to wade through the regulations and introduce legislation to eliminate or update them.

 

Source links: The Hill — link 1, link 2, National Association of Manufacturers, Congressional Research Service, USA TODAY, Politico, Yahoo

 

 

Tags:  Insurance Content  Insurance Industry  Insurance News  The High Cost of Regulation & Not Just Insurance  Weekly Industry News 

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No Surprise: 2016 Record Data Breach Year

Posted By Administration, Tuesday, January 31, 2017

Risk Based Security published a report on data breaches for 2016. The year set records and saw more major businesses — like Yahoo — successfully attacked.

 

  Data breaches exposed 4.3 billion records

  That’s up from the old record of 1 billion in 2013

  Yahoo’s breach alone saw 1.5 billion records compromised

 

Inga Goddijn is the executive vice president of Risk Based Security. She said, “We have been tracking breach activity since 2005, and the number of breaches this year was not really higher or lower than prior years, but the severity was off the charts.”

 

  The average data breach in 2016 involved 101 to 1,000 records

  In 2015 that number was 1 to 100 records

  The number of breaches topping 1 million records or more hit 94 in 2016

  That’s up from 60 in 2015 and 34 in 2014

  Hackers got email addresses, passwords and names from most

  Hacking accounted for 93% of all exposures

  The rest were misconfigured websites and leaks

 

The report said business services, retail and technology accounted for 30% of the breaches.

 

A report from the Identify Theft Resource Center took a different angle:

 

  It found 1,093 data breaches in 2016

  A 40% hike from 2015

 

Yahoo, Wendy’s and the Democrat National Committee — and depending on who you ask, maybe even the Republican National Committee — grabbed the hacking headlines.

 

Spending on hardware to secure servers and websites jumped from $68.2 billion in 2015 to $73.7 billion last year. Estimates from experts say we’ll see that figure at $90 billion by 2018.

 

Eva Casey Velasquez is the CEO of Identity Theft Resource Center. She said, “We are extremely confident that breaches are undiscovered and under-reported, and we don’t know the full scope. This isn’t the worst-case scenario we are looking at; this is the best-case scenario.”

 

Like Risk Based Security, the Identity Theft Resource Center said the target of hackers is names and passwords and Social Security numbers.

 

By the way, a huge percentage — 56% — of breaches are from phishing when an employee gets an email they are tricked into opening. That’s up from 38% in 2015.

 

“When we look at these massive numbers of records and percentages, it’s very easy to forget that each of these data points is a person, and there’s someone behind this who is being very adversely affected,” Velasquez said.

 

Source links: eWeek, PropertyCasualty360.com

 

 

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  No Surprise: 2016 Record Data Breach Year  Weekly Industry News 

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