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GE & Insurance — An Accusation of Hidden Losses

Posted By Administration, Tuesday, August 27, 2019

Harry Markopolos is a forensic accountant. He’s the guy who blew the whistle on Bernie Madoff’s long-missed Ponzi scheme. Last week Markopolos offered up evidence that General Electric has hidden $40 billion in its long-term care business from investors and officials governing such businesses.

Markopolos said this is the biggest case of alleged book-cooking in his and his team’s experience.

“In fact, GE’s $38 billion in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” Markopolos noted in his 175-page report, and he said the solution to the problem of paying future claims will mean the infusion of large amounts of cash.

“GE has been running a decades-long accounting fraud by only providing top-line revenue and bottom-line profits for its business units and getting away with leaving out cost of goods sold,” Markopolos said.

The accusation saw GE stock fall significantly in spite of the company vehemently denying any wrongdoing. “The claims made by Mr. Markopolos are meritless,” the company said in its own statement and noted that it “has never met, spoken to or had contact with Mr. Markopolos, and we are extremely disappointed that an individual with no direct knowledge of GE would choose to make such serious and unsubstantiated claims.”

The company says Markopolos stands to gain financially from his accusations. He countered and said the investigation was done at the request of a hedge fund. Markopolos did — however — admit that he will receive a “decent percentage” of any proceeds the hedge fund gains.

GE CEO Lawrence Culp called the investigation “market manipulation — pure and simple.”

Steve Winoker is GE’s vice president of investor communications. He pointed to the firm’s reserves and said they are well supported. “We operate with absolute integrity and stand behind our financial reporting,” he said. “Our team remains confident in our company’s long-term strengths.”

 

Source links: Insurance Business America, The Washington Post

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Speeding & Driving & Speeding & Excuses

Posted By Administration, Tuesday, August 27, 2019

The riskiest of all aggressive driving behaviors is speeding. This comes as no surprise to anyone. The new, and current, study into risky driving belongs to the University of Waterloo in Canada. Researchers looked at 28 million trips to see if they could link four very bad driving behaviors:

  Speeding

  Hard breaking

  Hard acceleration

  Hard cornering

Speed — no surprise — got tagged as the riskiest form of aggressive driving from the study of the telematics devices onboard those vehicles. Researcher Stefan Steiner said it was linked to being able to predict crashes but the other three could not be linked to them.

“For insurance companies using this telematics data to assess who is a good risk and who isn’t, our suggestion based on the data is to look at speed, at people driving too fast,” he said.

Since speed is an obvious danger to the public, police are always looking for speeders. An estimated 41 million of us get speeding tickets every year.

The website CarInsurance.com asked 1,000 drivers about speeding. In the quiz were questions on when they speed, how often and how much they tend to speed. They also included a question about excuses they’ll give to a police officer when stopped.

The excuses — as we all know — are in hopes of not getting a ticket. Outside of the excuses, the study found some interesting facts:

  36% of those surveyed said they have never been pulled over for speeding

  71% of them are female

  29% male

  Most don’t have a problem with themselves or other drivers speeding

  80% admitted to driving as much as 15mph over the speed limit

  Just 35% say they’ve done 30mph or more over the posted limit

 

There is a big difference in the reaction to being stopped for speeding between genders. Women are less likely than men to ask for a warning instead of a ticket.

  53% of women say they’ve never asked

  33% of men say they’ve never asked

  25% of men still received a ticket after asking for a warning

  7% of women got one after asking for a warning

 

Of those giving excuses, 50% of drivers successfully avoided getting one. It’s the range of excuses that are fascinating.

  1% said they are bringing home hot food and don’t want it to get cold

  9% said they have a bathroom emergency

  11% said they didn't see the speed limit sign

  11% said they have a medical emergency

  11% said they are late dropping off or picking up a child

  14% say they were driving the same speed as everyone else

  18% claimed to be late for work

  24% said they didn't realize they were speeding

 

Source links: Insurance Journal, PropertyCasualty360.com

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Administration Appeals Drug Price TV Ad Disclosure Denial

Posted By Administration, Tuesday, August 27, 2019

The Trump administration wants pharmaceutical companies doing those really fancy drug ads you constantly see on TV to disclose the price of the drug in the ad. Last month a federal judge stopped the administration from implementing a rule that says those prices must be disclosed.

What the administration sought is information in the commercial on a 30-day supply of any drug that is covered through Medicare or Medicaid and that costs $35 or more. Since it is one of the president’s key points in the effort to lower drug prices for consumers, the Department of Health and Human Services has decided to appeal the ruling.

Drug companies hate the administrations push for that disclosure and three companies — Amgen, Merck and Eli Lilly and the Association of National Advertisers — filed suit and won the case.

They successfully argued that the rule will just confuse consumers because the price listed by the company doesn’t necessarily reflect the actual price they’ll end up paying. Discounts negotiated by providers, and those given by patient assistance programs are usually much different than the price the drug company would charge for a direct purchase.

While the judge didn’t necessarily agree with that reason, he did agree that the administration does not have the authority to issue such a rule.

 

Source link: The Hill 

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California — Wildfires Make it Harder to Find Insurance

Posted By Administration, Tuesday, August 27, 2019

California’s Department of Insurance — and its commissioner, Ricardo Lara — have a worry. Data the department collected has discovered that insurance in wildfire prone areas is getting harder to find. Worse, it’s getting harder to keep.

Lara said there has been a 6% jump in insurers non-renewal of homeowners insurance in Cal-Fire State Responsibility Areas between 2016 and 2017. Even more of a concern is the 10% jump between 2015 and 2017 in areas devastated by wildfires.

“We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” Lara said. “I have heard from many local communities about how not being able to obtain insurance can create a domino effect for the local economy, affecting home sales and property taxes. This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”

That’s renewals. As for availability, that’s problematic, too. The CDI said from 2015 to 2018 the number of new and renewed homeowners policies fell by 8,700 in the 10 counties with the most homes in high or very high risk areas. As a result, there was a 177% jump in the number of homeowners that purchased the insurance of last resort FAIR Plan policies.

 

  57% of new FAIR Plan policies are now written in the CalFire State Responsibility Areas

  That’s up from 47% in 2015

  Between 2015 and 2018 there has been a 49% rise in surplus lines policies in those areas

 

Lara said this data does not have the non-renewals that can be linked to the devastating fires that hit the state in 2018. Fires last year cost $12 billion in insured losses. In 2017 losses hit $11.8 billion.

The insurance industry responded to Lara’s information release. Mark Sektnan of the American Property Casualty Insurance Association (APCIA) and Rex Frazier of the Personal Insurance Federation of California issued a joint statement. “Recent data released by the California Department of Insurance shows a slight increase in the number of homeowners policies being non-renewed in the areas impacted by recent wildfires and in those areas with the highest risk of devastating wildfire,” they wrote. “The data, however, does not address the most important question — was the homeowner able to obtain insurance from another carrier?”

The two associations questioned the interpretation of the data and said that in high-to-moderate areas the non-renewal rates was just 2%. “For new policies, we see that carriers continue to write a significant number of policies in these areas,” the statement pointed out.

Insurance companies — Sektnan and Frazier said — paid out $26 billion in claims for the 2017 and 2018 fires yet are still committed to covering homes in high risk areas.

As a contrast, the CDI said non-renewals for the entire state was 3.4% between 2017 and 2018. That’s down from 3.9% in 2015 according to CDI spokesman Joel Laucher.

“For most of our population, it won’t seem like a big issue,” he said. “These are small towns, this causes so much strife. People have homes for sale and nobody even comes to look. They’ve heard about the price (of insurance) and the risk. For these people, it is a crisis because it has come on so quickly.”

Frazier disagrees and said the CDI fact sheet and the data don’t match. He pointed out that between 2015 and 2018 the number of new and renewal policies rose 1.8% and 1.7%. Then there’s the number of non-renewals caused by the customer not renewing. That figure is 1.8%.

 

Source links: California Department of Insurance, Insurance Journal, San Francisco Chronicle

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Employee Burnout — A Costly Mess

Posted By Administration, Tuesday, August 27, 2019

MeMD is a healthcare by phone provider. It just did a study on employee burnout, a condition MeMD considers an important medical issue. The study’s conclusion says burnout costs employers and costs them big time.

In fact, burnout is such a serious issue that the World Health Organization just declared it a disease. Here are a couple of factoids as to why it is a serious issue in 2019 in the U.S.:

  A Gallup poll said 23% say they feel burned out at work and feel it very often

  The Stanford Graduate School of Business says burnout costs $125 billion to $190 billion a year in additional healthcare spending

  These are the common burnout characteristics:

  Absenteeism

  Low morale

  Diminished commitment

  Dissatisfaction with job performance

  Frequent job hopping

MeMD said burnout affects every industry but those with high stress, high demand positions are the most impacted. These are the areas with a pressing need for mental healthcare services. The figures are higher than the general work population where just 20% of people develop burnout:

Public safety

  30% of first responders develop mental health conditions

Mental healthcare

  48% of social workers are under high levels of stress

Healthcare

  63% of nurses struggle with burnout

  40% have considered changing hospitals in the last year

Education

  On 11 days of each month teachers report having burnout

  That’s twice the level of the average worker

High tech

  Over half of tech workers say they suffer from burnout

MeMD’s chief medical officer is Dr. Nick Lorenzo. He said employers need to provide their employees with access to mental healthcare. He suggests the best way is via telecare. That helps with long wait times before care can be given and takes care of provider shortages and other issues common to regular therapy.

Source link: Insurance Business America

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A Big Congratulations to Spencer Gordon!

Posted By Administration, Tuesday, August 27, 2019

New CIC Designee, Spencer Gordon, Nasburg Huggins Insurance

Spencer Gordon, CIC

Nasburg Huggins Insurance | Coos Bay, OR

“I am so grateful for the Education the CIC designation has brought to me. I have applied so much of this formal training in my daily practice and continue to learn each day. The CIC has brought me confidence and has challenged me to never stop learning. I look forward to continuing my studies throughout my career.”

Spencer is the Vice President of Operations at Nasburg Huggins Insurance in Coos Bay Oregon. He also sits on the Board of Directors for the Bay Area Chamber of Commerce in Coos bay Oregon and participates in multiple committees. Previously, Spencer was the Executive Director at a Non-Profit organization where he created new infrastructure and grew the organization to new levels of success.

Spencer enjoys living on the Oregon Coast where he is an avid Kayaker, Golfer and outdoor enthusiast. He loves spending time with his family and engaging in many recreational activities.

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, August 27, 2019

California — California State Fund Dividend: Policyholders picking up work comp through the California State Compensation Insurance Fund will be getting a dividend. The State Fund said the dividend totals $105 million. That’s 15% of the annual premiums taken in by the State Fund and will total an average of about $1,400 per employer.

State Fund president and CEO Vern Steiner said to date there has been $662.5 million in premiums generated for 2019 and over $78.6 million in realized capital gains through July of this year.

“Declaring a dividend at this time helps tens of thousands of California businesses better understand their workers’ compensation insurance costs for the year and plan accordingly,” Steiner said. “Thanks to effective investment management and improved claims outcomes, we are in a strong, stable financial position and want to return money to our policyholders as quickly as possible.”

Payments should arrive by the second half of next year.

Source link: Insurance Journal

 

California — Work Comp Premium Drop: The Workers’ Compensation Insurance Rating Bureau of California has set a pure premium rate for 2020. The filing with the California Department of Insurance is 5.4% less than the average rate this year.

The average rate — if approved — will be $1.58 per $100 of payroll. It will be the 9th consecutive pure premium drop since 2015. The decrease from 2015 to 2020 is about 45%.

Source link: Insurance Journal

 

Idaho — Medicare Workshop: A free Medicare workshop for individuals turning 65 and those approaching Medicare eligibility will be held in Cottonwood on Wednesday, September 18th from 11:00am to 1:00pm at the Cottonwood Senior Center, 500 King Street.  Everyone, including caregivers, interested in learning how Medicare works is encouraged to attend.

Medicare workshops are designed to introduce the various parts of Medicare and to share some of the costs and benefits associated with the program.  Sessions cover enrollment timeframes for Medigap, Medicare Advantage, prescription drug plans, and how the different parts of Medicare work together.

Staff with the state’s Senior Health Insurance Benefits Advisors (SHIBA) program, a unit of the Idaho Department of Insurance, conduct the workshops.  To register for the upcoming session, please contact the SHIBA Helpline at 1-800-247-4422.

Montana — State ObamaCare Reinsurance Plan: Montana has a reinsurance plan now for ObamaCare recipients. It creates a pool of money — via a levy on insurance premiums — to help pay extremely high claims.

The federal government will pay $34 million of costs and the fees will generate $10 million. Under the program, once a person’s claims hit $40,000, the bills move into the reinsurance program.

Under the bill and agreed upon by the three companies that sell on the individual market — Blue Cross and Blue Shield of Montana, PacificSource and Montana Health Co-op — rates will drop in 2020 from 8% to 14%.

Governor Steve Bullock — who is, as you know, running for president — said he likes the idea. “We are taking action for the Montanans who purchase insurance on the individual marketplace and have been burdened by unaffordable health care costs due to federal inaction,” Bullock said. “The Montana reinsurance program will lower insurance premiums, make it possible for more Montanans to enroll by driving down costs, cultivate greater certainty in the market and protect consumer’s choices.”

Source link: Independent Record

 

Oregon — From the Department of Insurance: The Oregon Division of Financial Regulation has released the lists of Oregon’s most expensive and most prescribed drugs, as well as the prescription drugs that cause the greatest increase to health insurance plan spending.

Brand-name drugs such as Humira and Enbrel, prescriptions commonly prescribed for rheumatoid arthritis, topped the lists of most expensive and greatest increase to plan spending. Hydrocodone-Acetaminophen, a pain reliever, was the most prescribed, along with several generic drugs treating conditions such as high blood pressure and cholesterol.

“These lists highlight the goal of the drug price transparency program,” said Andrew Stolfi, insurance commissioner. “They provide a first step to transparency for Oregonians, and help all of us better understand which prescription drugs affect health care costs.”

Each of Oregon’s nine insurance companies submitted the drug lists to the division, which reviewed and aggregated them to provide consumers a look at the common prescription drugs that have the biggest effect on health insurance costs.

The Prescription Drug Price Transparency Act (House Bill 4005), from the 2018 Legislative Session, established Oregon’s drug price transparency program. The new law requires prescription drug manufacturers and health insurance companies to report specific drug price information to the division.

Another key component to the program is consumer reporting of price increases. All Oregonians are encouraged to report an increase in the cost of their prescription drugs one of three ways:

  Email rx.prices@oregon.gov

  Call 833-210-4560 (toll-free)

  Visit dfr.oregon.gov/drugtransparency

The division is excited to bring one of the nation’s first prescription drug price transparency programs to Oregon. Top 25 lists and drug price information from manufacturers is now available by visiting dfr.oregon.gov/drugtransparency

Later this year, the division will also hold a public hearing and begin providing annual reports to the legislature based on all the information received from manufacturers, health insurers, and consumers.

Washington — From the Department of Insurance: Correction of Language in Essential health benefit WAC 284-43-5642(3)(b)(i) (R 2019-09) stakeholder draft posted

We released a stakeholder draft for the Correction of Language in Essential health benefit WAC 284-43-5642(3)(b)(i) rule (R 2019-09).

Please send comments by August 30, 2019 to the Rules Coordinator — https://www.insurance.wa.gov/contact-rules-coordinator?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

For more information, please visit the rule's web page — https://www.insurance.wa.gov/correction-language-essential-health-benefit-wac-284-43-56423bi-2019-09?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

 

Affordable Care Act protections stakeholder draft posted

We released a stakeholder draft for the Affordable Care Act protections rule (R 2019-10).

We scheduled a stakeholder meeting to discuss the rule:

August 26, 2019, at 1:00 p.m.

OIC Tumwater office: 5000 Capitol Blvd SE, Tumwater WA 98501

Directions to the Tumwater office.

Call-in option:  (360) 407-3780   PIN Code: 292878 #

Please submit comments by September 3, 2019 to the Rules Coordinator — https://www.insurance.wa.gov/contact-rules-coordinator?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

For more information, including the text of the stakeholder draft, please visit the rule's web page — https://www.insurance.wa.gov/contact-rules-coordinator?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term= 

 

Surprise Billing:

We have posted the notice consumers must receive from their insurers, providers and facilities/hospitals about their new protections from surprise billing. Details about how the notice will be distributed will be decided during rulemaking, currently underway.

Click this link to see: https://www.insurance.wa.gov/surprise-medical-billing?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

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The Rumor Mill — Recession Worries & a Payroll Tax Cut?

Posted By Administration, Tuesday, August 20, 2019

This is an evolving story but here’s what Weekly Industry News knew when this was written on Monday evening at 10:30 pm Pacific time.

Worries about the economy and a possible recession are said to have prompted discussion at the White House of a payroll tax cut. The idea was first reported by The Washington Post.

Right after The Washington Post posted its story, The New York Times did one of its own and said included with payroll tax cuts is a consideration of rolling back or even reversing some of President Trump’s tariffs.

The New York Times also reported that the White House is considering a potential payroll tax cut and is also mulling whether to reverse some of President Trump’s tariffs.

Since the story broke the White House has been doing damage control and issued a statement saying, “As [National Economic Council Director Larry Kudlow] said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time.”

Both reports say President Trump has not been given an outline of a proposal and no one is sure where he’d land if one is proposed. Then there’s the president who contends everything with the economy is just fine.

In a tweet Trump said, “Our economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to ‘will’ the economy to be bad for purposes of the 2020 election. Very selfish! Our dollar is so strong that it is sadly hurting other parts of the world…”

When he was quizzed about a payroll tax cut, Senate Finance Committee Chairman and Iowa Republican Sen. Chuck Grassley said he hasn’t spoken with the administration about one and his spokesman Michael Zona said, “At this point, recession seems more of a political wish by Democrats than an economic reality.”

The Washington Post disagrees with Grassley’s statement and the White House denial and said it spoke with three people “familiar with discussions” who said discussions are going on with hopes the cut will slow down a slowing down economy.

Whether this is a good idea or not will be left to economists. Payroll taxes fund Social Security and Medicare. So it could hit the deficit hard and hurt the safety net programs funded from the tax.

The idea — by the way — is not unusual. President Obama did one to stimulate the economy early in his presidency.

Source links: The Hill, Fox Business, CNBC

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Fingers Crossed in California — Wildfire Bullet Dodged in 2019

Posted By Administration, Tuesday, August 20, 2019

From the governor on down, fingers continue to be crossed in California. CalFire says wildfire acreage burned in 2019 — so far — is down 90%. Compared to the death and destruction of the past few years, that’s astounding news.

Cal Fire said in 2019 — at least so far — there have been 3,198 fires. They have burned a total of 23,748 acres. The five-year average — at this point in the calendar year — is 3,753 fires. Acreage burned averaged 254,395.

That’s where the 90% drop comes into play. The number of fires is down but not close to as significantly as the number of acres burned. Here’s another — even more significant — way to look at the current figures. In 2018 burned acreage was 619,000 at this point in the calendar year.

This year’s total acreage is just 3.83% of that figure.

That’s CalFire’s statistics. Add the U.S. Forest Service statistics to the figure and it looks even better. So far this year not-so-whopping 47,476 acres have been burned on federal lands.

Here’s the asterisk. In a statement CalFire noted these “these are preliminary numbers and will likely change as dispatched wildfires may end up being other types of fires or false alarms. These numbers are subject to change until the final fire season reports are completed and tabulated.”

The asterisk also has an asterisk. Verisk Wildfire Risk Analytics provides fire data to insurers. It says the most dangerous wildfire months in California are late August, September and October. So things could blow up at any moment.

Verisk also points out that California’s nation-leading two million properties at risk is a worry. Second place is Texas with 715,300. So the number is significant.

Nationally, the wildfire picture seem better as well. The Insurance Information Institute (I.I.I.) did a statistics analysis of its own and found wildfires to be down around the country. So far in 2019, we’ve seen 3.2 million acres destroyed or damaged by fire. Last year at this time, the national figure was 4.8 million acres.

Back to California. For now — at least — the lower fire numbers continues to be good news.

 

Source link: Curbed San Francisco

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Vacations — Millions of Wasted Days

Posted By Administration, Tuesday, August 20, 2019

The U.S. Travel Association did some research along with Oxford Economics and Ipsos and found some alarming vacation statistics. Last year, we — U.S. workers — left 768 million days of vacation time unused. Put a different way, employees did not use 27.7% of their days off in 2018 and that’s up from 25.9% in 2017.

Both statistics are records. They also amount to billions of dollars in lost benefits and a 9% jump from the lost vacation days and hours in 2017. The days completely lost of the 768 million days totaled is 236 million.

That equates to $65.5 billion left on the table by employees.

Breaking it down a bit more, 55% of workers say they did not use all of their vacation days. That not only hurt the employees but it hurt the U.S. economy. The U.S. Travel Association said — for example — if those employees had used those vacation days for travel it would have amounted to $151.5 billion added to the economy and could have created some two million jobs.

A bigger question — and maybe a more important question — is why did those employees not use all of those vacation days. Interestingly enough, one of the main reasons is because they have too many days of vacation coming. We earned an average of 23.2 days off in 2017.

That figure rose to 23.9 days last year.

While lots of vacation days were not used, the average American worker took 17.4 days off in 2018. That compares to 17.2 the year before. But it is a drop from the 20.3 days employees used from 1978 to 2000.

U.S. Travel Association President and CEO Roger Dow believes the small rise in the number of days used shows that the U.S. economy is strong. He also points to the benefits of the tax reforms of 2017 as another reason.

“When I see how many vacation days went unused, I don't just see a number — I see 768 million missed opportunities to recharge, experience something new and connect with family and friends,” Dow said. “However, it's an unfortunate truth that cost is the top barrier to travel. Despite the financial challenges of traveling, there are affordable alternatives to explore America — whether it's a drive up the coast or a day trip to a neighboring town.”

Source link: CNN

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