Self-employed and looking for a small group health plan?

We've heard from a lot of self-employed or sole-proprietors who want to take advantage of the new group of one law but are having trouble finding a health plan.

(The new law took effect in Oct. and allows qualified self-employed people buy health insurance in the less expensive small group market.)

We think we have something that can help: We've added a direct link to the federal government's Healthcare.gov site. Just type in your zipcode and you'll get a list of health plans available in your county. Of course you can also contact an agent or broker directly, but this gives you another option. Here's the link to information we've posted on our site.

If you want to bypass our website and go straight to the place that let's you enter your zipcode - here you go

Have you got enough life insurance?

Having adequate life insurance in place is of utmost importance should the worst happen. Anyone who has dependants needs to be properly protected; by investing in a life insurance policy, you can help to ensure your family will be taken care of financially. As situations change you need to review your policy, but with so many options it can be confusing to know which policy is best. Here's a guide to help you decide , whatever your time of life.

. Marriage: if you're in your twenties you might think you're too young to worry about insuring your life, but the younger and healthier you are, the cheaper your policy is likely to be. Once you are married and have joint financial responsibilities, you should consider taking out cover to protect your spouse and any children

. Your first home: when you buy your first home with your partner, you should consider taking out a life insurance policy that will cover the cost of the mortgage so your partner is able to continue living in the house. Which? recommends a joint policy which will pay out when the first person dies

. Children: when you have children, Which? recommends taking out individual policies rather than a joint policy. Each of you will need different levels of cover based on your age, fitness and salary, so taking out separate policies can help you get the cheapest deal. By choosing individual policies you also help to ensure your children will be covered; with a joint policy, the surviving partner would be left without cover when the first partner dies

. Health: honesty is always the best policy when it comes to declaring your medical conditions when applying for an insurance policy. If you don't disclose an illness, you could invalidate your cover. With all life insurance policies, you can bundle the product with critical illness cover. This policy pays out if you are diagnosed with a specific condition, or are permanently disabled.

. In trust: life insurance companies usually offer the option of writing your policy "in trust" at no extra cost. This enables the proceeds of your policy to be paid quickly, without waiting for probate, and could also decrease the chances of inheritance tax liability because the payout is likely to be excluded from your estate

Life insurance lures job seekers

A career in life insurance sales is now considered more attractive to job seekers, but employer inflexibility is holding businesses back from securing talented and eager candidates.

According to recruiting expert Hays, there is a growing interest from candidates, particularly at the entry level, in a career in life insurance.

“Candidate feedback shows that there is now a lot less stigma surrounding a career in life insurance compared to what there once was,” Senior Regional Director Jane McNeill says.


“It seems the downturn took some of the shine off the allure of a trading or other higher-risk finance career,” McNeill says.

However, she says there will continue to be a skills shortage in life insurance unless employers relax their focus on only recruiting candidates with five or more years of experience.

“Most life insurers are now looking for experienced life underwriters, either group or retail, as a result of growth in demand and competition within such products,” McNeill says.

“They want candidates that already understand the subject matter, can make decisions and add value immediately. They want someone who can hit the ground running,” she says.

‘UNWILLINGNESS TO INVEST’
Australia’s current supply of such candidates is disproportional to the demand for experienced life underwriters, according to McNeill.

She says despite this, employers will not consider recruiting and training an entry-level candidate, or employing an underwriter with two to three years experience.

“Such unwillingness to invest in candidates has not only led to a number of candidates being unable to pursue a career in life insurance, but it also has obvious long-term skills shortage ramifications.

Kreidler proposes health insurance rate reforms

News release issued by Washington State Insurance Commissioner today:

Insurance Commissioner Mike Kreidler is asking state lawmakers to preserve his authority to scrutinize health insurance rates, boost transparency, and to let him—for the first time—consider some insurers’ surpluses when reviewing rates.

“Some non-profit insurers have built up hundreds of millions of dollars in surpluses in recent years, while still seeking double-digit rate hikes,” said Kreidler. “I want the law changed so we can take a closer look at that, while still maintaining a vital insurance market.”

Under current law, surpluses—including investment income—cannot be taken into account when considering a company’s rate request.

Kreidler also will seek more transparency, so consumers can have a full picture on rate proposals by insurers. Today, most information included in a rate filing is not releasable to the public.

“Tens of thousands of Washingtonians who have to buy insurance on their own struggle to find and keep coverage,” said Kreidler. “We can help protect them by continuing to review rate hikes carefully. They also deserve to see how much of their insurance premium is spent on direct medical care versus administrative overhead and profit.”

Rate review: Kreidler gained the authority to review rates in the individual market in 2008, but it’s scheduled to expire after 2011. He’s proposing legislation to do away with that deadline.

Surpluses: The surplus proposal would only apply to non-profit health insurers, which account for most of the health insurance market in Washington. Also:

• Once a company amasses a surplus equal to 3 months of claims expenses, rate hikes would not be approved.

• The insurance commissioner could grant exceptions, however, if limiting the surplus or rates would pose a threat to the financial health of an insurer.

Transparency: The legislation would allow the public to see:

• What percentage of a specific rate request goes to profit, medical costs and administrative costs.

• How much, overall, a health carrier collected in premiums, how much money it made, and how much it paid out in direct medical claims.

• The medical trends the health carrier is using to project future rates.

“It’s simple: We need oversight of the health insurance industry,” said Kreidler. “And families deserve to see where their money’s going and how their rates are set.”

SJC holds that workers' compensation self-insurance group is an insurer

I posted here about a Superior Court decision in Mass. Care Self-Ins. Group, Inc. v. Mass. Insurers Insolvency Fund . That case held that a worker's compensation self-insurance group, Mass Care, is an insurer within the meaning of Mass. Gen. Laws ch. 175D, which creates a fund that provides insurance benefits when an insurer that would otherwise provide coverage has become insolvent.

Mass Care provided coverage up to a self-insured retention limit to an injured employee of one of its members. The group had an excess carrier over the SIR that had become insolvent. When the damages paid to the injured employee exceeded the SIR, the group sought coverage from the fund.

The Superior Court held that the group was not entitled to reimbursement, because the Fund does not reimburse insurers.

In Mass. Care Self-Ins. Group, Inc. v. Mass. Insurers Insolvency Fund, 458 Mass. 268 (2010), the SJC affirmed.

The SJC adopted the dictionary definition of insurer as "[o]ne who agrees, by contract, to assume the risk of another's loss and to compensate for that loss." The court noted that Mass Care accepts premiums in exchange for the provision of workers' compensation coverage, and described its functions as including many operations ordinarily associated with the insurance business. Without more, Mass Care would be considered an insurer.

The court then turned to the enabling statute, Mass. Gen. Laws ch. 152 §§25E-25U, under which Mass Care and other worker's compensation self-insurance groups are created. It noted that §25E states that self-insurance groups are not to be deemed insurers, and that the reason is to prevent such groups from being subject to the traditional framework of insurance regulation. However, the definitions section of the statute, Mass. Gen. Laws ch. 152 §1(7), makes self-insurance groups subject to consumer laws and regulations applicable to workers' compensation insurers.

The court reconciled the clauses and concluded that Mass Care is a member of the insurance industry whom ch. 175D was not intended to benefit.

The Hills Are Alive... With Danger

Deering v. Scugog (Township), [2010] O.J. No. 4229 (S.C.J.).
Howden, J. discussed the duty that road authorities owe to motorists in the case of Deering v. Scugog (Township), [2010] O.J. No. 4229 (S.C.J.), a case involving a motor vehicle accident that occurred on August 10, 2004, which left two teenage sisters severely injured.

Shannon Deering, the older sister who was 19 years old at the time, was driving her 2002 Pontiac Grand AM up a hill on Coates Road West in Oshawa, when the headlights of an eastbound vehicle appeared over the crest of the hill. The vehicle moved to the right, then arced left, and finally veered to the right over the shoulder of the road.

Justice Howden ultimately found that the segment of Coates Rd. West was in a state of non-repair because in his view, the hill where the accident happened “represented a virtually unique source of danger to ordinary drivers, particularly at night due to its combination of features likely to create an emergency situation with little or no preview time for westbound drivers to deal safely with it”.

At the time of the accident, Coates Road West was paved and flat for close to two kilometers, after which it climbed and fell away over three hills. The third hill was the most significant, and in August 2004, the road had no lane markings, no signage, and an un-posted speed limit of 80 km/hr.

In July 2004, the road was involved in a rehabilitation project to improve the road’s base and surface. The aim of the rehabilitation project was to provide an adequate sub-structure and surface treatment. By July 20, 2004, a dark-coloured sealant or emulsion was applied to the road as the final phase of the project. Immediately afterwards the road was re-opened in its otherwise previous state which was unsigned, unlit and unlined.

After a review of the relevant case law, Justice Howden determined that road authorities have a duty to ordinary motorists to keep their roads in reasonable repair, including the type and location of the road. The standard of care uses as the measure of reasonable conduct the ordinary reasonable driver and the duty to repair arises wherever an unreasonable risk of harm exists on the roadway for which obvious cues on or near the road are not present and no warning is provided, subject to certain defences.

Howden, J. stated that “The ordinary motorist includes those of average range of driving ability – not simply the perfect, the prescient, or the especially perceptive driver, or one with exceptionally fast reflexes, but the ordinary driver who is of average intelligence, pays attention, uses caution when conditions warrant, but is human and sometimes makes mistakes.”

He further declared that “the duty to repair under section 44 should no longer ignore the need in circumstances of pre-design age roads near areas of urban change and growth to incorporate assessments of safety measures into road rehabilitation and reconstruction projects”.

This blog contribution by articling student Alex Lacko.

Ice, snow and cars: Filing an insurance claim

Slick roads make for lots of fender benders (or worse), so here's some information on dealing with collisions and insurance companies.

First: Unless you signed a contract with an insurance company requiring you to take your car only to a specified shop, you can choose where to take it for repair. But the shop still needs to work with the insurer to come to an agreed-upon price. If not, and they still fix the car, you may be responsible for whatever the insurer doesn't pay.

For more details on "diminished value", non-OEM parts, getting a rental car, etc., please see our "How the auto insurance claims process works" page.

If you're in a wreck and it's more than a fender-bender, you might want to see our "What happens if my car gets totaled?" page. From it:

You have the right to payment of the actual cash value of your auto, and to expect a prompt and fair settlement. Don’t be surprised if your “value amount” and the insurer’s “value amount” do not match. Be ready to negotiate with the insurer when this happens.

The page has a lot more information on how insurers establish the cash value of the totaled vehicle, what happens if you can't find a comparable vehicle, and -- we get this question a lot -- what happens if you want to keep your damaged car.

If you have questions or problems with an insurer -- we're the state agency that regulates the insurance industry in Washington state -- give us a call at 1-800-562-6900 or e-mail us at AskMike@oic.wa.gov.

Thanksgiving Fires

From the Insurance Journal...



"For most Americans, Thanksgiving Day invokes memories of safe and warm family gatherings featuring hot turkey dinners. But for some 2,000 families a year, and for firefighters across the country, the memories are not so happy.



There are an estimated 2,000 fires in residential buildings in the United States each Thanksgiving Day. That's more than double the number on a typical day."



Read more: http://www.insurancejournal.com/news/national/2010/11/19/115027.htm#ixzz15mHyLHDn

Issaquah woman sentenced to $300,000 in restitution in insurance fraud case

A King County Superior Court judge today ordered Issaquah's Linda Ann Rose, 67, to pay and forfeit a total of $300,000 in restitution to insurance companies for fraudulent injury claims after a minor accident in a parking lot.

On Nov. 13, 2004, Rose was involved in a parking lot collision in Issaquah. An SUV backed out of a parking stall and struck Rose's rented Ford Mustang. Photos of both vehicles show minimal damage, but Rose claimed that she suffered severe back injuries as a result of the collision.

In 2007, her attorney demanded $656,874 from the SUV owner's insurer, and subsequently filed a personal injury lawsuit in the case.
Investigators from the Washington Insurance Commissioner Mike Kreidler's Special Investigations Unit subsequently concluded that Rose knowingly provided altered medical records to her attorney, and that she had had an injured back "well before" the accident.
 
Rose entered a modified guilty plea to 3 felony counts of using false claims or proof in an insurance claim. 
 
She was ordered to pay $250,000 to Progressive, $25,000 to Metlife, and to forfeit another $25,000 in a structured settlement from Metlife that had not yet been paid.

Flood coverage: Where to find it -- and what if you can't?

November in the Pacific Northwest generally means rain, and lots of it. (See also December, February, March, April and sometimes May.)

As the rivers swell, we tend to get nervous queries from consumers and businesses about flood insurance. Here are the basics, as well as some special information for businesses in Washington state's Green River Valley.

Does a standard homeowners' insurance cover flooding? No. Many people think it does. It does not.

Where do I get flood coverage? For most consumers and many businesses, the first stop is the National Flood Insurance Program, a federally run program that's been around for decades. But the business coverage maxes out at $500,000 per building and $500,000 for contents, so businesses may need extra coverage as well.

What's it cost? The average federal flood insurance policy costs less than $570 per year.

Am I in a flood zone? Here's a page to search flood maps. You can also get a quick risk estimate by typing your address into the feds' "one-step flood risk profile."

I heard that the federal flood insurance program was suspended. It was, but isn't anymore. The program lapsed several times this year, but Congress in late September reauthorized the program for another year.

Who sells it? Although it's a federally run program, it's sold by many insurance agents. To find a local one who sells it, see the program's agent locator.

And here's the special information for businesses in Washington's Green River Valley, which is in south King County. Last year, businesses in the area reported problems finding additional coverage. To help, we set up a "market assistance plan" that acts as a matchmaker between businesses and insurers. If you live in that area and can't find coverage for your business, the odds are good that the market assistance plan can help you.

For more, please see our flood information page.

More from our case files...

Having trouble with an insurance company, agent or broker? Give us a call; we can often help. We're the government agency that regulates the insurance industry in Washington state. (If you don't live in Washington, here's an easy map with contact info for our counterparts in your own state.)

In Washington state, we're at 1-800-562-6900 or AskMike@oic.wa.gov. You can now also file a complaint easily online.

Here's a sampling of the sorts of things we help with virtually every day:

• A woman contacted us on behalf of her 75-year-old mother, who had forgotten to pay her long-term care insurance premium due to health issues. The company had cancelled the policy for non-payment. After multiple attempts to have the policy reinstated, the daughter sought our help. The policy was reinstated.
• A company that had sold an illegal discount health plan here agreed to pay a consumer $3,825.
• A widow whose annuity request had been delayed complained to us. We contacted the company, which honored the request, sending her a check for more than $250,000.

Job openings

We have a couple of job openings:

We're looking for an administrative assistant 4 for a limited-duration position funded by federal grant dollars related to health care reform. This person will perform "a wide range of complex administrative duties related to planning and implementation of organizational change, grant management and program support functions." The job duties include compiling statistical information and preparing written reports for executive managers and the grant funding agency. The position is funded by federal grants through November 2011.

Here's the link to the job posting, but if you want to apply, please do it quickly. Applications are due by 4:59 p.m. this Friday.

We're also looking for a financial examiner 2 to work in our Seattle office. This person will plan and conduct financial examinations of insurance companies and other regulated entities. From the job listing:

This position works with Financial Analysts (certified public accountants, certified financial examiners, and accredited financial examiners), attorneys, and other regulators on a state, national, and international level. This position examines, audits, and verifies specific groups of insurance companies, including bonds and stocks, mortgage loans, real estate, policy loans, premium notes, collateral loans, policy reserves, and capital stock.

For qualifications, pay, and application information, please see this job posting. The deadline for applications is 5 p.m. on Dec. 3.

We're a small state agency -- we have a total of about 200 workers between our Tumwater, Olympia, Seattle and Spokane offices -- that regulates the insurance industry in Washington state. We have a pretty broad consumer-protection mission. We:

• monitor insurers' finances to make sure they can make good on their promises to policyholders.
• license tens of thousands of agents and brokers, and investigates complaints about them.
• scrutinize rate hike requests and makes sure that policies comply with the law.
• go after scams, both from unlicensed insurance companies and by people trying to defraud insurers.

And our consumer advocates and a small army of volunteers field thousands of calls and e-mails from consumers needing help with insurance claims or struggling to find affordable health coverage.

How Washingtonians can file an insurance complaint online

We've launched a new "online consumer complaint center" this week, and we think we're the first state insurance department in the country to offer this kind of service.

The system lets Washington state consumers file complaints against insurers using a new interactive and password-protected web tool.

The idea is to make it more convenient and efficient for consumers to file a complaint with our office. We help with thousands of complaints, but until now, the process has relied on people mailing documents back and forth. We think this will be faster and easier.

What sorts of complaints? They often involve what insurers are covering -- or not covering . We often get calls from drivers whose cars are totalled, and who are unhappy about the payment offered for their vehicle. We try to help with complaints about delayed payments, policies being canceled, getting companies to reopen a claim or negotiate on payment, etc.

At our site, Washington state residents can file a secure complaint online, track its status 24/7, upload documents/photos/etc. related to the case, add comments, and view, print and save information about the case.

Not a Washington state resident? Here's a map with contact info for your own state's insurance department.

Request for proposals re: insurance rate review

We're looking for proposals from firms interesting in participating in a project to improve our review of health insurance rates and to increase public transparency for how health insurance premiums are determined.

Interested in bidding? The full request for proposals document is here.

The estimated time period for the contract is Feb. 16, 2011 to Sept. 30, 2011. We reserve the right to extend it for up to three one-year periods; see the RFP for details. It includs the scope of work, evaluation procedures, minimum qualifications, etc.

All proposals are due no later than 5 p.m. PST on Dec. 27, 2010.

For additional details, see also our general RFP page, and see this news release, which contains more information about the federal grant that's helping pay for the project.

U.S. District Court holds that unsigned insurance application makes policy voidable

In RLI Ins. Co. v. Santos, __ F. Supp. 2d __, 2010 WL 4183836, RLI issued an umbrella policy to Beli Lima. Lima's 17 year old son was involved in an automobile accident. RLI denied coverage, in part on the ground that Lima had never signed the insurance application.

Lima had submitted an insurance application in July, 2006. RLI rejected it because it was incomplete. In August, 2006, RLI received an application by fax. Lima testified that she does not recall seeing the August form, completing it, or signing it. She testified that the signature on it was not hers. The implication is that the application was filled out and signed by the insurance agent. The application form included the statement, "APPLICATIONS WILL NOT BE ACCEPTED WITHOUT APPLICANT'S ORIGINAL SIGNATURE."

RLI issued to Lima an umbrella policy in September, 2006. When Lima sought coverage for the accident, the court ruled that the policy was voidable by RLI as a matter of law because the signature was a condition precedent to the insurance contract.

The court held in part,

There is no question that a reasonable insurer would consider an applicant's original signature important to its intelligent decision to issue a policy. An original signature assures the insurer that the applicant has attested to the verity of her answers and that she consents to entering into the insurance contract.

High winds and storm damage -- what insurance covers and what it doesn't

As you probably know if you live in western Washington, high winds swept across much of that part of the state last night, toppling trees and knocking out power to thousands of people.

Every time this happens, our office gets calls from people wanting to know what damage their homeowners/auto/business insurance covers. (We're the Washington state agency that regulates insurance.)

Here are a few common questions:

Am I covered if my car was damaged by falling limbs? If your car was damaged, that damage should be covered under the comprehensive coverage in your auto insurance policy. (If you opted for comprehensive coverage, that is. Some people, to save money, just get liability coverage.)

My yard is covered with branches from the storm. None of them hit the house or my fence, so there's no property damage. But would the cleanup costs be covered in this case? Sorry, probably not. Standard homeowner's policies typically only pay for such cleanup if your property was actually damaged. In other words, your home, garage, fence, etc. would probably have to first be damaged by the debris for the insurer to pay to remove it. Standard policies don't cover the loss of trees or shrubs because of wind.

My business has an awning over the sidewalk, and it's been damaged by the wind. Is it covered? Probably, but check with your agent or insurer to be sure, since business insurance can vary a lot. Also, many business policies have business interruption coverage, which can be very useful if a covered loss forces you to close the business. But there are often deductibles or other limits, so they may not apply if the business interruption is for just a few days.

Click here for our page with tips and storm-related Q&As re: insurance.

If you have damage and have questions or problems with your insurer (and live in Washington state), call our consumer affairs hotline at 1-800-562-6900. It's not a phone tree; it's staffed by live people.

Look for some more wind gusts tomorrow. Weather Underground is predicting a south wind 15-25 mph in Seattle and Olympia, and a lighter 10-15 mph in Tacoma.

If you've lost power, here are Puget Sound Energy's updates on progress restoring power, including a handy map of outages and progress.

And if you want the state version of a worst-case scenario survival guide, here's the link (it's a 5-meg pdf, sorry about that) to the Emergency Management Department's "Emergency Resources Guide." It tells you what to do in case of a pandemic, a terrorist bomb, biological weapons attack, or if you're trapped in debris (tap on a pipe). It's got questions to ask someone making a bomb threat, and what to avoid eating after a radioactive "dirty bomb" goes off, etc. etc. etc.

From our case files...

A sampling of recent cases our consumer advocacy staff has handled in the past few days (We get many consumer calls a day; these are very typical of the sorts of cases we deal with):

• A driver got into an accident with a business' truck in Seattle. The truck backed into his car. Yet the business' insurer initially offered to pay for only 70 percent of the nearly $2,400 in damage. The man complained to us. We contacted the insurer, which reviewed the case -- including photos provided by the car's owner -- and agreed to pay for all the damage.
• A Vancouver woman whose insurer wanted to cancel her policy due to a deteriorating roof asked for our help. We helped her get the company to renew the policy and keep her covered.
• An Issaquah man wanted to remove his daughter, who is a college student in another country, from his auto policy. The company refused. We asked them to review the decision. He got a $563 discount as a result.

If you live in Washington and need help with an insurance company, agent or broker, give us a call at 1-800-562-6900 or e-mail AskMike@oic.wa.gov. We won't send you to a phone tree try to sell you anything -- we're the state government agency that regulates the insurance industry in Washington state. We'll do our best to help.

One wrong denial for contraception coverage leads to company reprocessing nearly 1,000 other claims -- and paying $148,000

One consumer's call to our Insurance Consumer Hotline meant good news for nearly a 1,000 additional insurance consumers. A woman sought our help when coverage for her prescription contraceptive was denied by her insurance company. It turned out that the insurer had been violating a rule Insurance Commissioner Mike Kreidler enacted back in 2001. It had to pay her claim and reprocess 984 claims of other enrollees previously denied, making payments totaling more than $148,000.



From Jan. 1, 2002 to May 25, 2010, the insurer had repeatedly denied payment, under a variety of different codes. Among them: "Condition not covered by this contract", "This service for this condition is not covered by your plan", and "Medical necessity for this service or supply has not been established." The contraceptives in question were IUDs, and the requested coverage was payment for removal of the devices.



Of the 985 claims, only 3 women appealed the decision -- and all the denials were upheld.



But one of those women decided to contact our office. And that led to getting those years' worth of claims, for hundreds of women, paid.



Here's the rule: In Washington, all state regulated health plans that have comprehensive prescription drug coverage must cover prescription contraceptives. Want to know more? Here's a page describing your rights under this state law.



If you've got an insurance question or problem and you live in Washington, don't be afraid to call us for free help. We're at 1-800-562-6900 or AskMike@oic.wa.gov.



Note: Post updated to reflect what kind of contraceptive and service was involved.

Veterans Day

I grew up knowing my dad was in the Korean War.



When I got married I knew my wife's father was in WW2. (Both wives actually)



Ten years ago one of our sons joined the Navy.



A year ago another son joined the military - Army this time.



With two sons deployed I now have a new appreciation for those who serve.



Thank you to those who served and those who are now serving.

Update on Chubb fine and suspension: Suspension is stayed pending hearing

On Monday, we called for a $534,000 fine for Chubb & Son and a 9 month suspension of six of its subsidiaries (which would mean that they couldn't write new business; existing policies would remain in force, and renewals could still be done). The companies' attorneys yesterday demanded an adminstrative hearing on both matters. So the suspension, which was slated to take effect Nov. 18, is stayed for now.

In response to some media queries, here's a list of recent enforcement actions we've taken against these companies. All include the same sort of violations -- improper documentation of decisions about rates -- that led to these latest two orders. (All our disciplinary orders, including those for insurers, insurance agents, brokers, etc., are posted online here.)

2000: $67,000 fine for multiple violations, including failure to provide proper documentation for why credits and debits were applied to certain policies. The fine was actually $135,250, but about half ($67,625) was suspended so long as a compliance plan was followed to fix the problems.

2003: The balance of that fine -- $67,625 -- was imposed, after numerous violations continued, despite the compliance plan. From the 2003 order: "The company’s pattern of a continued high rate of filing and other violations are indicative of a systemic problem."

2007: We imposed a $250,000 fine for ongoing violations. Chubb & Son agreed to fully comply with a compliance plan, including multiple self audits, to fix the problems.

2010: We call for a $534,000 fine, based on hundreds of violations. The companies call for a hearing.

2010: Commissioner Kreidler orders a 9-month suspension of six Chubb subsidiaries' ability to sell new coverage. The companies call for a hearing.

Update: The case ended with a consent order that included a significant fine but no suspension. We posted the details here.

Filing Expert Reports as Exhibits at Trial - Part 2

In our last post, we discussed the Clark v. Zigrossi decision, where Justice Brown held that whether a party can file an expert’s report and call viva voce evidence from that expert is a matter of the court’s discretion.

In coming to this conclusion, Justice Brown undertook an analysis of the origins of the position that the report of an expert witness who testifies does not become an exhibit unless counsel agree or the court so orders. The approach was traced back to the 1974 Court of Appeal decision in Ferraro v. Lee (1974), 2 O.R. (2d) 417 (C.A.), in which the purpose of s. 52(2) of the Evidence Act was examined and it was found that the intention of the Legislature was to provide for the introduction into evidence of the medical report so that the party tendering it might be relieved from having to call the doctor to give evidence. It was then reasoned that a party cannot therefore proceed both to file the report and call the doctor. In drawing this conclusion, the Court of Appeal disagreed with the earlier case of Snyder v. Siutters, [1970] 3 O.R. 789 (H.C.J.), in which the trial judge granted leave to file the reports of doctors who were called to give viva voce evidence.

In Snyder v. Siutters, Wright J. held that it was in the interests of the administration of justice not only that the medical reports should be available in their entirety, but that if they are available, viva voce evidence of the practitioner should also be available. He went on to describe three great advantages of making both the reports and the experts’ testimony available to the jury, which Justice Brown found to possess a certain attractiveness. The advantages being that:

1) it enables a fixed and coherent opinion by the doctor to be put before the Court;
2) it enables the doctor, if he testifies to explain the technical language, and any other matters that arise by reason of evidence or other developments of the trial, and it gives the opposite party the right to cross-examine; and
3) it preserves for the jury room in an exact way the testimony of the doctor.

The Court of Appeal has subsequently interpreted Ferraro v. Lee and held that it is a matter of judicial discretion as to whether a party may both call an expert and file his report.

Thanks to our articling student, Alexandra Lacko, for contributing this post.

Are You Covered For The Anguish Of Mental Anguish?

The general liability policy insuring agreement states, "We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies."



Are lawsuits brought for mental anguish covered by general liability insurance? Sometimes yes. Sometimes no.



The policy says that "bodily injury" means bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time. My own keen sense of the language tells me that when you define a word as that word, you are already in trouble.



To further explain, I think the policy wants someone to bleed, or at the least be physically injured, in order for coverage to apply.



Some state courts have said that the above definition is ambiguous (imagine!) and that bodily injury does include mental injury and anguish. I find that ambiguous and try to get my clients' insurance companies to spell it out. Fortunately, many do.



Many insurers provide general liability broadening endorsements that specifically bring in coverage for metal injury. Some insurers have specific endorsements that can help clarify matters.



Many umbrella liability insurance policies provide coverage that is more broad than the underlying general liability insurance policies. Some policies specifically bring in mental anguish.



Example of an umbrella bodily injury definition: "Bodily Injury" means bodily injury, sickness, disease, disability, shock, mental anguish, mental injury and humiliation, including resulting death.



The only problem in relying on your umbrella to provide the first layer of coverage is that there may be a self insured retention (deductible) when there is no underlying coverage. Also be aware of sneaky endorsements that make the umbrella "follow-form" to the primary coverage - meaning the lesser coverage provided by the general liability insurance may rule.



Of course, the solution to the above is to retain an insurance consultant. Then you don't have to worry about any of these issues.

Job openings

Due primarily to some federal health care reform grants (and one employee who left for a sunnier climate, think of that), the Washington state insurance commissioner's office has a few job openings. Most are limited-duration posititions based on grant money.

Here they are. Click on the position for details about requirements, salary, duties, application process, etc.

Functional Program Analyst 4: Deadline for applying is Nov. 12. These staff advocate on behalf of consumers to ensure that they're being fairly treated by their insurance carriers and by helping educate consumers about insurance. This person will help develop and test online tools to help consumers. This is a project position funded by federal grant dollars, and the grant period runs from Oct. 15, 2010 to Oct. 15, 2011.

Investigator 3: We're looking for a senior investigator to investigate suspected violations of state insurance law. From the job announcement: The Investigator 3 position is an advanced investigative position responsible for conducting complex investigations from the initial discovery of suspected violations, through the prosecution of those involved in illegal activity. Deadline for applying for this job is Nov. 16.

Communications Consultant 4: This is another project job, funded by a federal grant that runs from Oct. 15, 2010 to Oct. 15, 2011. This person will work with our Consumer Protection division to develop and manage communications strategies for consumer assistance and education. Deadline for applying is Nov. 19.

Management Analyst 5: Another project job, with the same grant timeline as those listed above. This would be a project manager position, leading a diverse project team. See the link for much more information on technical details, duties, etc. Deadline for applying: Nov. 19.

Kreidler calls for $534k fine against insurer, issues order to suspend six subsidiaries from writing new coverage for 9 months

Washington State Insurance Commissioner Mike Kreidler on Monday issued an order that would suspend the insurance certificates of six companies, effective Nov. 18. The move – which does not affect existing policies or renewals – would bar the companies from writing new coverage for 9 months.

Kreidler is also proposing a $534,000 fine, contingent on a hearing, against the parent company, Chubb & Son.

The suspension order includes Federal Insurance Company, Pacific Indemnity Company, Great Northern Insurance Company, Executive Risk Indemnity, Inc., Vigilant Insurance Company, and Northwestern Pacific Indemnity Company. All are property and casualty insurers. All are wholly owned subsidiaries of Chubb & Son. The policies affected are all commercial policies.

“It’s highly unusual for us to suspend a company’s certificate to sell insurance. But we’ve repeatedly tried to work with Chubb and its subsidiaries to fix a number of ongoing violations of state law,” Kreidler said in a press release. “Some of the problems that triggered this decision have been recurring for a decade.”

A key issue is Chubb’s repeated failure since 1998 to properly document the reasons for charging higher or lower rates on certain policies.

Repeated examinations and a series of company self-audits ordered by Kreidler since 2007 found hundreds of violations of state law, including numerous recent ones. In some cases, more than half the sample files checked had violations. The $534,000 fine amount was based on 534 violations of state insurance law, at $1,000 per violation.

Chubb can appeal the suspension. The suspension order does not affect the companies’ obligation to honor policies issued prior to the effective date of the suspension. Nor does it affect their authority to renew existing policies. But it would prohibit them from selling new policies during the nine-month period of the suspension.

Note: We'll add a link to the press release shortly. Done. And we added a link up above to the hearing notice re: the fine.

Update: Chubb has demanded a hearing on both the fine and the suspension. See our post re: that here.

Another update: In the end, Chubb's subsidiaries were fined, but there was no suspension. See here for details of the order.

New health plans for small businesses

Small businesses in Washington state looking for health insurance for their employees should check out the new federally-funded Health Insurance Partnership (HIP). This is a new program administered by the state's Health Care Authority that provides small employers access to the same health insurance coverage available in the commercial market, but at significant savings.

The health plans available through the partnership include:
Kaiser Foundation Health Plan of the Northwest, Group Health Cooperative, Regence BlueShield, and Asuris Northwest Health and vary based on annual deductibles ($500-$5,000), co-pays, co-insurance, and prescription drug coverages.

Small employers (up to 50 employees) who don't currently offer health insurance qualify for the program if at least 50 percent of their employees are considered low-wage (their monthly wage doesn't exceed 200 percent of the Federal Poverty Level).

Also, premium subsidies of up to 90 percent are available to employees who qualify based on their family income. Get the details here.

Insurance Library looking for donations of insurance-related fiction

At the end of its latest email newsletter, the Insurance Library, one of my favorite resources, announced:

We have started a fiction section in our collection. So far, we've got the entire collection of Sue Grafton mysteries starring the former claims adjuster turned detective Kinsey Millhone. If you have any insurance fiction looking for a home, we'd welcome your donation!

I can't think of any liability insurance fiction at the moment, probably because I'm not a big fan of mysteries. But in the movie/tv category there's the great Double Indemnity; this Partridge Family episode; and wasn't there a Brady Bunch episode where Mike threw a briefcase in the courtroom and made the plaintiff ignore his fake neck brace and turn around?

Anyone know of any pop culture liability insurance plots that don't revolve around insurance fraud?

Issaquah woman pleads to 3 felony charges in insurance fraud case

An Issaquah woman has entered a modified guilty plea to 3 felony counts of using false claims or proof in an insurance claim.

Linda Ann Rose, 67, is scheduled for sentencing in King Couny Superior Court November 19th.

On Nov. 13, 2004, Rose was involved in a parking lot collision. An SUV backed out of a parking stall and struck Rose's rented Ford Mustang. Photos of both vehicles show minimal damage, but Rose claimed that she suffered severe back injuries as a result of the collision. In 2007, her attorney demanded $656,874 from the SUV owner's insurer, and subsequently filed a personal injury lawsuit in the case.

Investigators from the Washington Insurance Commissioner Mike Kreidler's Special Investigations Unit subsequently concluded that Rose knowingly provided altered medical records to her attorney, and that she had had an injured back "well before" the accident.

New York Man's Faked Store Fall Caught on Tape

Authorities say a central New York convenience store's surveillance cameras caught a man purposely pouring soda on the floor and then faking a fall so he could file an insurance claim against the business.



Full Story Here

Kreidler re: health insurance rates: "I share your frustration"

Our office continues to hear from people unhappy with health insurance rate hikes.

These can be particularly severe when you bump up into the next five-year "age band." Health insurance, which varies dramatically by age, is priced in 5-year groups. In other words, turning from 58 to 59 won't increase your rates more than usual, but turning from 59 to 60 will. These increases -- coming on top of annual rate hikes -- can be a very tough burden on folks who find themselves paying more and more for fewer and fewer benefits.

Washington state Insurance Commissioner Mike Kreider has issued an open letter to the state's health insurance consumers. From it:

Many of you have contacted me about your frustration at the rising costs of your health insurance. You’re tired of seeing your premium and out-of-pocket costs increase, at the same time you lose benefits. I don’t blame you for being mad. I share your frustration and take your concerns very seriously.

Kreidler said that his authority remains too limited, and that he'll be asking state lawmakers for more power to protect consumers and new rules to increase transparency, so people can see the details of what actually goes into an insurer's rate request. From the letter:

You deserve to know how your premium dollars are being spent and what's driving the cost increases.

The good news is that relief is coming; the bad news is that in many cases it won't be until 2014. That's when major provisions of the new federal health care reform law take effect, including a health insurance "exchange" where it's easy to comparison-shop, subsidies to help make insurance affordable, and rate caps based on a percentage of salary.

Here's a link to the full text.

Pet Insurance - Claims Experience

This past June I bought pet insurance on our puppy. The premium was $172.44 ($1,000 deductible, 80% copay, no coverage for preventative care). The insurer is PurinaCare - Central States Indemnity Co. of Omaha.



In September we discovered that the dog has liver problems. We worked with our vet and Tufts Veterinary School. She had an operation. Total cost: $3,000.



Also in September Chloe decided to tangle with a porcupine. Total cost: $1,500.



On October 9 I faxed the claim forms and bills to PurinaCare.



On October 20 I received a letter from PurinaCare asking for me to contact the vets and have info sent. I had the info from one vet and faxed it that day. My other vet sent info the next day.



Today, November 4, I got a check from PurinaCare for $2,800 (the $4,500, less deductible and copay).



I am very pleased with how this worked out. PurinaCare was professional and prompt. Turning the claim payment around in less than a month is quite reasonable.



The only way this would have been better is if it didn't happen at all.



Bravo PurinaCare.

Cease and desist order issued to ShieldStar Home Warranty

Washington state’s insurance commissioner on Tuesday ordered a New Jersey home warranty company to stop selling unauthorized service contracts in Washington.

ShieldStar, doing business as ShieldStar Home Warranty and http://www.shieldstar.com/, has sold at least 21 home warranty service contracts in Washington, according to a cease and desist order posted on Insurance Commissioner Mike Kreidler’s website.

This is the third cease and desist order that Kreidler has issued against a home warranty company in the past several months. (The other cases were unrelated to this one.)

In ShieldStar’s case, the contracts cover parts and labor necessary to fix major appliances and systems in the consumer’s home. But neither the company nor several affiliated individuals named in the report are registered in Washington as a service contract provider.

The company has been ordered to mail a copy of the Kreidler’s cease-and-desist order to all its customers in Washington and to report all premiums charged for Washington policies.

The company has the right to demand a hearing. The order is effective immediately.

Update: (12/8/2010) If you purchased a ShieldStar Home Warranty, we want you to know that the cease and desist order does not prevent the company from fulfilling the terms of your contract. Your current contract with ShieldStar is valid under its usual terms and conditions.

Similarly, the order does not prevent the company from providing a refund when requested by a Washington consumer.

If you have any questions or need any assistance with this or any other insurance-related matter, please feel free to call our consumer protection staff at (800) 562-6900

The Simmonds Business Insurance Index™ - November 2010

Notes for For Insurance Buyers - November, 2010



Here's my read of the current marketplace for upcoming business insurance renewals:



Renewal Premiums: -5%

Renewal Coverages: Liberal Terms

Buyer's Outlook: Long-Term: Prices Flat



No change from October. No change in the index and no change in my advice.



I see no change in the current insurance marketplace and no signs of prices firming up. With no competition for your account, you will see your premiums stay about the same. With competition on the renewal, you will see reductions and improvements in coverage.



At the end of the renewal, negotiations continue to push for coverage enhancements. Ask the underwriter to throw in earthquake coverage or the elimination of an exclusion.



Here are some of the things I am asking for:



--Earthquake

--Flood

--Defense costs outside the limit of liability on professional liability

--Lower deductibles

--Expansion of debris removal limits

--Per location aggregates on general liability

--Wage/hour claim defense costs on employment practices liability

--Removal or limitation of the known dishonest act exclusion on crime insurance

--Per loss deductible to combine property insurance and inland marine deductibles

--Employees as insured on auto policy

--Cybercrime

Filing Expert Reports as Exhibits at Trial - Part 1

Does Expert Testimony Preclude the Expert’s Report as an Exhibit?

In Clark v. Zigrossi, [2010] O.J. No. 3954 (Ont. Sup. Ct.), Justice Brown made a mid-trial ruling on whether an expert report can be filed as an exhibit even though the expert will be testifying at trial.

The plaintiff was seeking damages for injuries he alleged to have suffered in a July 2003 collision with the car driven by the defendant. The defendant had admitted liability and the jury was to assess damages. The plaintiff retained as an expert, Dr. Joseph Kwok, an orthopaedic surgeon who had prepared an expert report based on his examination of the plaintiff. The plaintiff served Dr. Kwok’s report on the defendant and gave the defendant notice pursuant to s. 52(2) of the Evidence Act, R.S.O. 1990, c. E.23. The plaintiff indicated his intention to adduce expert evidence “by either calling them to testify or by filing their reports.” At trial, plaintiff’s counsel sought leave both to call Dr. Kwok to give viva voce evidence and to mark his expert report as an exhibit, with copies of the report being provided to the jury so that they could follow the doctor’s evidence. Defendant’s counsel objected and submitted that the plaintiff must elect either to file the report or elicit viva voce evidence from the doctor. Defendant’s counsel acknowledged that if Dr. Kwok’s report was to be filed instead of him giving oral evidence at trial, she would require his presence to cross-examine him on his report, so Dr. Kwok’s attendance at trial would be necessary regardless of which path was taken.

Justice Brown held that the court possessed the discretion to permit an expert’s report to be filed where the expert intended to give viva voce evidence at trial. The needs of jurors to follow and understand the evidence should inform the exercise of judicial discretion.

Ultimately, in the circumstances of the case, Justice Brown did not think that the jury would encounter much difficulty in following Dr. Kwok’s evidence without having copies of his report and so it was not filed as an exhibit.

Justice Brown’s analysis affirms that there is no hard and fast rule that exists as to whether a party must elect either to file an expert’s report or call the expert to give viva voce evidence. In a jury trial, whether a party may call a health care expert to testify and also file his report as an exhibit remains a matter of discretion for the trial judge to determine.

The decision contains a good summary of the case law regarding filing expert reports and calling viva voce evidence. In our next post we will summarize those decisions.

Thanks to our articling student, Alexandra Lacko, for contributing this post.

Appeals Court affirms that subrogation agreement does not transfer ownership

About a year and a half ago I wrote about a Superior Court decision in Apthorp v. OneBeacon Ins. Group, LLC. In that case an insurer had paid a claim of $25,000 for a stolen painting. Decades later the painting was found and had increased in value to between $400,000 and $800,000. The insurer claimed ownership of the painting, because the insured subrogated to the insurer all its right, title and interest in the property. Judge Garsh disagreed, stating that subrogation of rights and transfer of ownership are not the same.

The Massachusetts Appeals Court has affirmed the decision in 78 Mass. App. Ct. 115 (2010), adopting the reasoning of Judge Garsh.