Kreidler: Premera doesn't want you to see what's behind your health rates

 

 

Insurance Commissioner Mike Kreidler called out Premera Blue Cross for attempting - again - to gut a bill that would give the public access to health insurance rate filings.

 

"I'm extremely disappointed in Premera," said Kreidler. "Their latest attempt to gut our legislation is very troubling. What don't they want the public to see?"

  

Kreidler's proposal (ESHB 1220) makes the information in a health insurance rate filing public shortly after his office receives it. This includes how much of the proposed rate will go to:

  

• Pay medical claims
• Cover administrative costs -- including salaries
• Profit

 

Kreidler added, "People who pay their premiums year after year -even when their rates go up - deserve to see what's behind those increases. Today, state law prevents me from sharing that information with the public. Now, more than ever, people struggling to pay for health insurance deserve full transparency."

 

Under the latest amendment sought by Premera, the public would see only summaries of rate filings, and only for those filings with increases greater than 10 percent. They could not see the entire rate filing.

 

"Premera's latest attempt to water down transparency is nothing more than a cruel charade on the public," said Kreidler. "Giving people a pre-canned summary of only certain rate filings is meaningless. Washington consumers deserve better."

 

A vote on the bill could come as early as tomorrow.

 

Read the full release and see letters of support from two other major health insurers.

Five Life Insurance Questions You Should Ask

It's fairly simple; if you die while your policy is active, your family will receive a death benefit, but the many types of term insurance and options can be confusing. Is term life insurance likely to pay off for you? Start by asking yourself the following five questions.

1. What am I trying to accomplish?
Before you buy any kind of life insurance, think about why you're buying it. Are you protecting your family in case of an early death? Have you taken on additional debt that requires you to provide coverage? Are you looking to leave an inheritance to a charity?

Understand that in most cases, term insurance policies do not pay a claim - most people who buy term insurance "outlive" their policy's term. As a result, if you're shopping for insurance to protect financial obligations you may have for a very long time - possibly for the rest of your life - consider exploring another type of policy, called permanent insurance.

If you're in a cash crunch and have immediate obligations to your family, business partners, or lenders, term insurance can provide you with a quick, simple, short-term solution. (For more insight, read Buying Life Insurance: Term Vs. Permanent.)

2. What's available?
Most people will have access to at least one of the two types of term insurance policies: group or individual.

Group - Most companies offer their employees some form of term life insurance as an employee benefit. This is called group term insurance, because you're getting protection as part of a larger group. Usually it's deducted right from your paycheque and the only requirement for coverage is to complete a brief questionnaire with details of your health history. Here are some of the advantages of group term insurance:

It's easy - You can usually sign up for a policy when you take a new job and enroll in your company's benefits program. You may also have an opportunity to sign up during the annual enrollment period at your company when you sign up for other benefits, such as medical, dental, or an employer-sponsored retirement plan. (To learn about these employer plans, see Are You an Active Participant? and Common Questions About Retirement Plans.)
No medical - Most group plans don't require a physical exam. A statement of good health, along with a medical history, is usually all that's required to secure coverage. (To read more, see Steering Clear Of Medical Debt and Health-y Savings Accounts.)
Automatic payments - Through payroll deduction, you'll hardly feel the financial hit of paying premiums every month.

Individual - As its name implies, an individual policy is one in which you apply for coverage on your own. You - or typically a family member - will own the actual policy. In order to obtain an individual policy, you'll probably have to undergo a medical exam of some sort, provide a detailed medical history, and give the insurance company permission to look into your medical records and perform a background check on any driving offenses and criminal activities. This might sound a little invasive, but there are some great benefits to owning an individual life insurance policy.

It's portable - If you take a new job at a different company, you don't have to worry about losing your life insurance protection.
Level premiums - Generally, individual policies can be structured to have level premiums for the duration of the policy; typically this is a 10-, 20- or 30-year period.
Flexibility - If you ever want to upgrade or convert your term policy to a permanent policy, you might have more options available with an individual policy than you would with a group plan.

3. What if I don't die?
Ironically, some people who buy term life insurance get upset when they find out that if they don't die, they don't get anything back.

If this is a concern for you, it's important to get an understanding of what will happen to your policy as you near the end of the term.

Premiums go up - Many term policies offer level premiums for several years (10, 20 and even 30 years, for example). As you approach the end of that term, you may have the option of keeping your policy. If you do, you can expect a hefty jump in your premium.
Might need a new policy - If you are still healthy at this time in your life and you want to keep the coverage, it may be best to apply for a new policy.
Drop in coverage - Perhaps you only wanted your policy to cover you as long as you had a mortgage, or until your children's college education was paid for. If that's the case and you have no other obligations to protect, you might want to let the coverage expire.
Upgrade the policy - Most term policies come with a "conversion privilege." This allows you to essentially trade in your old term policy for a new permanent policy.

4. How can I upgrade this policy?
As mentioned previously, most term policies allow you to convert from a term policy to a permanent one. This is a great feature that provides future flexibility but because some policies have limitations, you should familiarize yourself with the conversion rules of any policy you're considering.

When can I convert?

The conversion privilege might have a time limitation on it, to age 70, for example. Some policies allow conversion during the entire term of the policy.

What can I convert to?

The most generous term policies allow you to convert to any type of permanent policy available, such as whole life, universal life or variable universal life. Some term policies may force you to convert specifically to just one type, and some companies may not offer all types, which can also limit your options down the road. (Keep reading about this in Variable Vs. Variable Universal Life Insurance and What is the difference between term and universal life insurance?)

5. Where do I buy a policy?

Chances are you'll probably hit the major Internet search engines first when looking for information about buying a policy. A number of online distributors can provide you with a term insurance policy. These distributors typically focus on finding the lowest cost policy, given the personal information you provide.

For a more personalized experience, you might consider finding a professional. An insurance agent will help you understand all the different variations of insurance - both term and permanent - and should be able to answer any questions you might have. You can find one by visiting any of the major company websites or combing through your local phone book, but probably the best way to find a representative is to ask around for a referral from a friend or business associate.

Finally, for group coverage, you can check with your employer. If you're self-employed, you may have access to a group plan through a professional association, or you may even be able to put a group plan in place for yourself and your employees.

After going through these five questions, you will be able to decide for yourself if that million-dollar coverage ad is really what you need to provide for you and your family. If it's not, don't be afraid to pass it by - there are hundreds of policies waiting to provide you with the peace of mind you're looking for.

Smart ways to save on insurance

30/03/2011

Looking for some simple ways to save on your home, contents, car or health insurance? We show you how!

Insurance is a necessary evil in life: it provides you with peace of mind, but it’s really only there to cover you in case something goes wrong.

And insurance premiums can quickly add up. Between home and contents, landlords, car, health and life insurance policies, you can be spending upwards of $5,000 per year to try and keep you and your family protected.

If you’re keen to trim your annual premiums without sacrificing any of your policies, Paul Modra executive manager, product and marketing with Ian Berry Insurance, offers the following tips:

Shop around
Firstly, shop around and compare different insurance policies to find one that suits you and your needs. “It’s not a case of one policy fits all,” Modra says. Make sure you compare apples with apples when you’re evaluating potential policies, such as similar excesses and similar inclusions.

Read the fine print
“Always read the product disclosure statement before purchasing any form of insurance and make sure that you understand exactly what it covers – this can save you big dollars down the track,” Modra says.

Boost your excess
Your excess is the initial amount you’ll have to pay yourself if you make a claim. For instance, on your car insurance policy you might have an excess of $500, which means that if you have an accident, you’ll be required to pay the first $500 towards repairs. “Some insurance providers offer variable excess, and the higher the excess you choose, the lower the premium you’ll pay,” Modra says.

Loyalty discounts
If you can, combine home, contents and car insurance policies with the one insurance provider, as “you may then be eligible for a multi-policy discount,” he says.

Use age to your advantage
“Some insurance providers offer full comprehensive car insurance at a discounted rate for more experienced drivers, generally over the age of 30,” Modra explains. So where possible, make sure you nominate the older drivers on your policy in an effort to reduce your premium.

Be boastful
If you’re a fabulous driver or you’ve never made a claim on your home and contents policy, let it be known! “If you’ve been claim-free for a period of 12 months or more, you may qualify for a no-claim bonus of up to 60% off the base premium,” Modra says.

Why you should buy a variable life insurance plan

A variable life insurance plan (VLIP) combines investment and insurance, just like a unit-linked insurance plan (ULIP).

Variable life insurance schemes offer flexibility in the proportion of mortality and savings components.

These plans also offer more transparency, simplicity, quick liquidity, guaranteed minimum returns, transparent charges and ample risk cover.

This type of life insurance allows you to participate in several investment options simultaneously targeting your premiums to separate accounts.

Generally, the optional investment funds include stocks, bonds, money market funds, equity funds, or a combination of them all Variable Life Insurance allows you to switch from one sub-account to another.

You can also apply the interest earned on these investments toward the premium, reducing the amount you pay. In a departure from the ULIPs, the returns are declared by insurance companies annually and are not linked to the stock market.

One part of the premium is allocated to buy life insurance.

The balance is invested in bonds or equities. The premium amount cannot be altered in the course of the policy, but the death benefit and savings element can be reviewed and altered as the policyholder's circumstances change.

You can increase your insurance protection and decrease the investment component, or vice versa. Another feature of this plan is that it does not get automatically cancelled if the policyholder fails to pay the premiums as long as the premiums paid till date meet policy requirements.
Under the plans, the premiums paid by the holder, after deduction of charges, will be credited to the account maintained separately for each policyholder.

If all due premiums are paid, the amount held in the policyholder's account will earn an annual interest which will be guaranteed for the entire policy term.

In addition to this guaranteed return, if all due premiums are paid, the individual policyholder's account may earn an additional return depending upon the experience under the plan.

There is an option to pay additional (top-up) premiums without any increase in risk cover to the extent of total basic premiums paid under the policy.

The premiums can be paid regularly at yearly, halfyearly, quarterly or monthly (through ECS mode only) intervals over the term of the policy. The sum assured ranges from 10 to 30 times the annualised premium, depending on age of entry.

WA insurance commissioner issues more than $167,000 in fines against insurers

Insurance Commissioner Mike Kreidler has fined insurance companies more than $167,000 for violations including wrongly denying medical claims and overcharging customers.
“It’s important that companies follow the law, and when they don’t, we’ll hold them accountable,” said Kreidler. “Consumers, competitors and the marketplace all rely on insurers following the rules.”
In 2010, Kreidler’s office levied $583,750 in fines. Fines collected by the state insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.
Fines and disciplinary actions so far this year include:
■Aetna Life Insurance Co., of Hartford, Conn., was fined $65,000 for violations, including unreasonably denying 220 claims for acupuncture treatment. The company also refunded $16,427 to policyholders.

■Ace American Insurance Co., of Philadelphia, Penn., was fined $50,000 for violations, including using rates that it had not filed with the state.

■Progressive American Insurance Co., Progressive Northwestern Insurance Co, and Progressive Max Insurance Co, all of Mayfield Village, Ohio, were fined $30,000 for improperly deducting sales tax and fees from cash value calculations in more than 1,700 auto claims. The company also refunded $415,299 to customers.

■Homesite Insurance Company of the Midwest, of Mandan, N. Dakota, was fined $12,000 for overcharging more than 300 policyholders for renter’s insurance. The policyholders are receiving refunds.

■Austin Mutual Insurance Co., of Maple Grove, MN, was fined $10,000 for issuing insurance policies that weren’t in accordance with the rates it had filed with the state. As a result, 324 policyholders were overcharged a total of $26,200. The company also agreed to refund the overcharges to policyholders within 60 days.

■Doctors and Surgeons Benefit Association, of Charlestown, Nevis, West Indies; and several related entities were ordered to stop selling unauthorized insurance in Washington state.

In addition, Kreidler also took the following actions against agents or brokers:
■Mitchell A. Steitz, of Cashmere: License revoked, effective March 31, for misappropriating $12,500 from clients and spending it himself, rather than investing it.

■Allen D. James, of Sumner, agreed to pay a $1,000 fine for failing to promptly pay a premium refund to a client.

For details on cases, please see the agency's disciplinary orders site.

U.S. District Court finds no coverage for agency that provided therapy to girl who was abused in foster care

The tragic case of a girl in foster care who at age 11 was beaten nearly to death by her aunt and stepfather has been periodic front page news for years. The abuse put the child into a coma in 2005. Over the opposition of her stepfather, who purportedly sought to avoid a murder conviction, the Department of Social Services brought suit to allow her doctors to terminate life support, as she was in a vegetative state from which there appeared to be no hope of recovery. The Supreme Judicial Court ruled in favor of DSS. The child, however, began to breathe on her own and eventually recovered to the point that she could talk. The aunt committed suicide and the stepfather is in jail.

And now we move on to the insurance issues.

The child's current guardian sued a clinic that provided therapy to the child when some of the abuse took place. The defendant's insurer, Valley Forge Insurance Company, filed suit seeking a declaratory judgment that its policy does not cover the allegations.

The policy contained an exclusion for the "actual or threatened sexual or physical abuse or molestation by anyone to any person while in the care, custody or control of the insured."

At issue is the meaning of "in the care of." The insureds argued that the phrase means "physically in the care."

In Valley Forge Ins. Co. v. The Carson Center for Human Servs., Inc., 2011 WL 884802 (2011) the United States District Court for the District of Massachusetts disagreed. Finding little case law on point, the court turned to the dictionary definition of "care" to find that physical proximity is not required. Rather, the phrase means "under the supervision or charge of the insured."

The court held that the provision of bi-weekly therapy was sufficient to meet this definition.

The court also noted that in the underlying complaint the child's guardian alleged that she was in the care of the insured. "The word cannot carry one meaning for the purposes of liability and a different one for the purposes of coverage."

Action dismissed due to failure to comply with Municipal Act notice provision

Zogjani v. Toronto (City), [2011] O.J. No. 1002 (S.C.J.)

In this slip and fall case against the City of Toronto, the City brought a motion for summary judgment on the basis that the plaintiff failed to comply with the 10 day notice period provided by section 44(10) of the Municipal Act. The plaintiff slipped and fell on December 22, 2005 on snow and ice on a Municipal sidewalk. She consulted a lawyer in February 2006 and notice was provided to the City on March 1, 2006. The plaintiff swore that until she met with the lawyer on February 28, 2006, she was not aware of the 10 day notice requirement in section 44. Since the plaintiff failed to comply with section 44(10), it was her onus to show that she fit within subsection 44(12) of the Municipal Act, which provides that the failure to give notice is not a bar to the action if a judge finds that there is reasonable excuse and the Municipality is not prejudiced in its defence.

The City’s argument was that because it did not receive notice of the claim in a timely manner, the City’s investigator was unable to investigate the location promptly and could not observe or record the conditions of the location at the time of the accident. The plaintiff’s response was that snow would have melted in the days immediately following the incident and so even if the 10 day notice period had been met, there was no practical prejudice to the City.

The City’s field investigator swore an Affidavit indicating that he patrolled the area 4 days before the date of loss and 6 days after the date of loss. If he had been notified immediately, he would have been able to recall what the road and sidewalk conditions looked like during his patrols; however, because the City did not receive notice until 2 ½ months later, he was unable to recall what the location looked like at the time of his patrols.

Justice Lauwers was satisfied that the Municipality was practically prejudiced by the effect of the delay on the field investigator’s memory. He granted summary judgment.

At times it may seem that section 44(10) is a limitation period without teeth; however, in the right circumstances and with the right evidence proffered on a motion for summary judgment, section 44(10) can be a useful tool with which to dispose of an action at an early date.

Tom Hanks sues his insurance broker

Actor Tom Hanks and his wife, Rita Wilson, are suing their former insurance brokers of 20 years, alleging that the brokers:

-falsely inflated and overcharged the couple, "misrepresenting the amounts of the premiums on insurance policies"
-"altering insurance documents and related records to conceal their fraudulent scheme"
-"and...taking other acts to engage in, and conceal, their embezzlement scheme through manipulation and deceit."

(All these quotes are from the Hanks' legal complaint.)

How much, you ask? The complaint says "hundreds of thousands, if not millions, of dollars."

How'd they find out? The couple last month got a new broker, who promptly told their business managers "that he was concerned that the insurance premiums from policies in the last year to two years appeared extraordinarily high for the coverage provided."

The complaint also alleges that the brokers illegally issued certificates of insurance without appointments, charged the Hanks for insurance that was never procured (or overcharged them), and bought "unecessarily duplicative insurance coverage," among other things.

Where Are Your New Insurance Ideas Coming From?

If you have been buying your insurance from the same agent for 10 years, where are your new insurance ideas coming from?



Insurance is not a one-size-fits-all proposition. It is also not a once-and-done deal.



Your operation changes. The insurance marketplace changes. Exposures that we never thought of five years ago are now costing businesses millions of dollars.



Is your insurance changing? Where are the new ideas coming from? Where are you getting new perspectives?

Free app helps you create a home inventory

If you're like most of us, you know you need to create a home inventory, but you haven't taken the first step.

The National Association of Insurance Commissioners has just made it easier. They've developed a cool app for your iPhone - and it's free.

The myHOME app helps you capture photos, bar codes and serial numbers of your items. It also organizes the information for you, room by room, and creates a back-up file for e-mailing.

A False Alarm at the IRS for TPAs

We normally report on actual legislative/regulatory developments, but this post discusses a false alarm coming from the IRS that appeared to subject health care TPAs to burdensome new reporting requirements in order to help head off any potential industry confusion.

At issue is Department of Treasury Final Rule 6050 W, which was published way back in August of last year. The rule is intended to define “third party transaction settlement organizations” in furtherance of the IRS’ goal of creating a mechanism to better track the flow of money within the economy.

A section in the preamble labeled “Healthcare Networks and Self-Insured Arrangements” got the belated attention of small circle of IRS observers who have a health care focus. The actual preamble language for this section (just three paragraphs) is as follows:

The proposed regulations included an example to demonstrate that health insurance networks are outside the scope of section 6050W because a health care network does not enable the transfer of funds from buyers to sellers. Instead, health carriers collect premiums from covered persons pursuant to a plan agreement between the health carrier and the covered person for the cost of participation in the health care network. Separately, health care carriers pay healthcare providers to compensate providers for services rendered to covered person pursuant to provider agreements. This example is retained in the final regulations.

A commenter requested that the final regulations clarify that a self-insurance arrangement is also outside the scope of Section 6050W. According to the commenter, a typical self-insured arrangement involves a health insurance entity, health care providers, and the company that is self-insuring. The company submits bills for services rendered by a health care provider to the health insurance entity. The health insurance entity pays the healthcare provider the contracted rate and then debits the self-insuring company’s bank account for the payments made to the healthcare providers.

This suggestion was not adopted because this arrangement could create a third party payment network of which the health insurance entity is the third party settlement organization to the extent that the health insurance entity effectively enables buyers (the self-insuring companies) to transfer funds to sellers of healthcare goods or services. If so, payments under a self-insurance arrangements are reportable provided the arrangement meets both the statutory definition of a third party payment network and de minimis threshold (that is, for a given payee, the aggregate payments for year exceed $20,000 and the aggregate number of transactions exceeds 200).

First, it was curious that the IRS received a single comment regarding self-insurance. Moreover, the commentator described self-insured arrangements in an odd way by using the term “health insurance entity” in an apparent reference to TPAs

Based on this interpretation, it would seem that the IRS did construe TPAs as third party payment networks. As a practical matter, this would mean that TPAs would have to expand their current 1099 Misc. reporting procedures to include payments to providers broken down on a monthly basis, which would be complicated and burdensome.

But upon a more detailed legal review of the full text of the regulations, it was concluded that TPAs did not meet the statutory definition of third party payment networks. One of the key considerations is that it is the employer and not the TPA which contracts with provider networks.

In this regard, it seems that the IRS may have indeed wanted to make TPAs subject to the rule, but the statutory language does appear not support this intent, possibly due to ignorance on the part of the Agency on how self-insured health plans operate and the role of the TPA.

Of course, it’s not uncommon for IRS rules to be tested in court so we will be watching to see if any enforcement actions and/or legal challenges arise on this issue.

Need health insurance for your kids?

If you'd like health insurance for your kids - don't wait to enroll! You have until April 30 to get an individual health plan or add them to your coverage. (Individual plans are for people who don't get health insurance through their employer).

Until April 30,you can get health insurance for your kids without having them take a health screen.

Use this map to see which companies are available in your county. Then, contact the company directly to enroll. If you have any problems, call our Insurance Consumer Hotline at 1-800-562-6900.

The next chance to get an individual plan for your kids is Sept. 15-Oct. 31. There are some exceptions for people to enroll outside of these time periods. You must apply 31 days after one of the following events:

• You no longer qualify for a state program.


• You lose your coverage due to a divorce.


• You lose your employer's health plan (including COBRA).


• You move and your plan is not available where you live.


• Also, parents or guardians can apply year-round for a health plan with 60 days of birth, adoption.

More tips and what if you miss an enrollment period?

A New "Life Line" for Group Workers' Comp. Funds in New York

In the wake of several high profile group workers’ compensation funds (SIGs) failures a few years ago, the future for other SIGs operating in that state has been looking bleak.

With the state on the hook for unpaid claims totaling between $300 million and $800 million (depending if you believe industry or government estimates) , policy-makers were formally recommending that most funds be shut down and impose such rigorous new regulations on the remaining funds that it would be almost impossible for them to continue to operate.

But just as the obituary for the state’s SIG industry was being written, the conversation has apparently turned from focusing on shutting everything down to finding a solution for letting the well run SIGs continue thanks to an effective lobbying campaign initiated by industry leaders and Group participants.

Specifically, a serious proposal has been floated to allow SIGs to post some form of security in amounts calculated based in their anticipated liabilities to satisfy regulatory concerns about solvency issues going forward.

This proposal may well serve as the framework for a solution, but there are key details which still need to be resolved in order secure “buy in” from both the state and the industry.

The first detail to determine how the security amount should be calculates so that it satisfies regulator concerns but still allows funds sufficient access to cash to pay claims. This is not such an important issue for well-established SIGs with large cash reserves, but is critical to those SIGs that have not had the opportunity to build up such large reserves.

Another open question is the specific "security vehicle" the state would require and the additional transactional expense to the Group. Industry experts have expressed concerns about surety bonds that are fully secured with irrevocable letters because the bond underwriter has the LOC in their hand, so SIGs could never use that cash until it is given back and then replaced with a lesser LOC (assuming it goes down), which can be a difficult process and can be further complicated if the state remains inflexible to changing requirements that could occur depending on cash needs.

As an alternative, it has been suggested the security vehicle be in the form of a restricted investment/ cash account that would require signoff by the state Workers’ Compensation Board but is not wrapped up in an instrument such as an LOC or surety bond.

Another alternative suggestion would be to utilize Reg 114 trusts in which the reinsurer post the cash, freeing up SIG assets to capitalize a captive.

We’ll see how all this plays out but at least there is a viable “lifeline” in the water for the state’s well run SIGs.

In the meantime, we are aware that the state has received proposals for loss portfolio transfer arrangements in order transfer future liabilities back to the private sector, but out sources tell us that disagreement regarding the amount of the liabilities has prevented any deals from being finalized so far

Finally, we continue to wait on an appeal from a State Supreme Court ruling that determined it was constitutional for the state to assess member companies of financially solvent SIGs for the claims liabilities incurred by now insolvent funds.
This should be an easy ruling assuming an objective review of the law, but this is New York after all, so stay tuned. We will report on the ruling when it is announced.

Stop-Loss Insurance, Reinsurance and "Partially Self-Insured" -- We Need to Talk

Forgive me for stating the obvious, but words mean things. I make this seemingly odd comment because I continue to observe a couple words being misused by self-insurance industry professionals on a regular basis and we all need to get on the same page.

Perhaps most aggravating is the term “partially self-insured,” which continues to get tossed around to describe self-insured health plans that utilize stop-loss insurance. Of course there is no such thing as being “partially” self-insured so the term is sloppy at best and can actually be harmful.

I say harmful because from a lobbying perspective, we are continually emphasizing the distinction between fully-insured and self-insured health plans. This “partial” description is often thrown back in our face in attempt to undermine our public policy and legal arguments, so this objection to the term is strictly academic. And those who use it against us have picked it up….from us!

The more subtle yet equally problematic imprecise word choice is when “reinsurance” is used interchangeably with “stop-loss” insurance. Reinsurance involves an insurance contract between two insurance entities, so by saying reinsurance when you really mean stop-loss insurance this implies that self-insured employers are insurance entities, which confuses policy-makers and has created legal uncertainty in some cases. Again, we have only ourselves to blame.

And that concludes our self-insurance vocabulary lesson (and sermon) for the day.

CAPS HURT ONLY THE HURT

Lawsuit Damage Caps Threaten the Most Seriously Injured Tennesseans

Non-Economic Damage Caps Disproportionately Affect Children, Elderly and People with Disabilities

Nashville— Five year old Amanda Travis went to a Nashville surgery center for a routine tonsillectomy. She never returned home. During her stay nurses administered the wrong dosage of Demerol and Valium as well as the wrong type and dosage of IV fluids—four times the normal amount. Due to vomiting of blood and mucus caused by the medication error and an understaffed facility, Amanda suffered a loss of oxygen, and soon after was pronounced brain dead.

The surgery center altered Amanda’s medical records three times in an attempt to cover up the medical errors which caused her death. It was also revealed that her nurse-anesthetist had a history of drug abuse and later died from a drug overdose during another patient’s surgery.

Non-economic damage awards compensate for real injuries and losses that are not easily measured by a dollar amount like lost wages or medical bills. Losses like paralysis, disfigurement, or a child’s loss of a mother are more significant than medical bills or lost wages. Caps on non-economic damages are unfair and discriminate against individuals who have little to no income, such as women or men who work inside the home, children, people with disabilities, and the elderly. Caps arbitrarily limit damages in cases where the injuries are the most severe and often where the conduct is the most reprehensible.

“Since a five year old obviously has no source of income, non-economic damages provided the only recourse the Travis family had to hold those who were responsible for the senseless death of their little girl accountable,” stated Phillip Miller, President, Tennessee Association for Justice. “The government should not be legislating the price of someone’s life when their death unnecessarily occurs as a result of blatant medical negligence. A Tennessee jury, after hearing all the facts, should be trusted with determining the amount a negligent defendant should be responsible for when wrongful conduct takes the life of a little girl.”

Caps on non-economic damages means the lives of children, seniors, women and low wage earners who do not work outside the home are worth less than the lives of a businessmen. Entire classes of low–income or non-earners would be branded as being worth less than their wealthier counterparts. Without non-economic damage awards to these vulnerable citizens, care decreases and wrong doers are not properly held accountable for their negligence.

“We trust our fellow Tennesseans in the ballot box,” said Miller. “We should continue to trust them in the jury box.”

BOOMERS HAVE REGRETS

BABY BOOMERS HAVE SOME REGRETS

A recent article by Rebecca D'Angelo in USA TODAY found that there are some common regrets among those born between 1946 and 1964.

This is what they wished they had known earlier:

•The stock market can go down as well as up.

•Your home equity line should not be used as a personal ATM.

•Youth doesn't last forever, but moving more, and eating less can delay old age. Comments like, "Why didn't I start with the sunscreen sooner so I wouldn't be so wrinkled?” as well as consternation over bulging waistlines, weight-related illness or ailments, and decreased physical capabilities are common.

•Our parents weren't blowing smoke when they said "Live within your means" and "Save for a rainy day." Now "they're afraid they'll outlive their money" because they didn't plan and save enough and certainly didn't predict the economy's meltdown.

In general their comments might be summarized as: “A little less ice cream and a lot more saving.”

If they live another 30 or 40 years, they will find longevity brings challenges. Some folks are realizing that 35 years of work cannot easily support 35 years of retirement.

It is not as if Baby Boomers did not have great role models. The generation that fought World War 2 has often been called the “Greatest Generation.” I am sure that the Depression era that preceded World War 2 did more good than harm to the character of Americans. It seems that the further we have gotten from those awful financial times, the more spoiled and selfish we have become.

Is there anyone now who will rise up and claim that Generation X, Generation Y or whatever we have now, will be the greatest generation? I certainly can’t imagine it.

But, the folks in the mid 1920’s never thought they would see a full out stock market crash in 1929, ushering in the worse Depression in American History. It is fairly well accepted that there were five causes or aggravations of the Great Depression.

1. Stock Market Crash of 1929: One of the major causes that led to the Great Depression.

2. Runs on Bank as Banks Failed: Over 9,000 banks failed and deposits were uninsured, so the money was just gone. You can recall a run on the banks in the classic Christmas movie, “It’s a Wonderful Life.”

3. Spending and Jobs Dried Up: Lack of money and fear kept many from purchasing items, which led to a reduction in the workforce. Foreclosures and repossessions followed. The unemployment rate rose above 25%, and that was likely not even accurate due to the conditions of that day. In many places it was much higher. My Granddaddy used to say, “There just wasn’t no money back then.”

4. American Economic Policy: Desperate for anything that would help, the government tried the Smoot-Hawley Tariff in 1930 to help protect American companies by charging high tariffs on imports. Trade stagnated further.

5. Dustbowl: The Mississippi Valley’s epic drought in 1930 caused many to have sell their farms. This was the topic of John Steinbeck's “The Grapes of Wrath.”

Today, we may be looking at similar conditions. Rising unemployment, stifled spending, a lack of production, foreclosures, less credit availability, rising food and gas prices and a staggering and growing national debt. If a natural disaster, a terrorism cyber attack or other unforeseen tragedy occurs, that may be all it takes to begin building a couple of truly great generations.

Mr. Peel may be available to address your civic club or church, please contact his office at www.PeelLawFirm.com

Big Win for Captives in the Big Sky State -- And Related News

The Montana State Legislature only meets for two months every two years so getting a bill passed requires a certain amount of precision. So it is particularly impressive that legislation to significantly improve the state’s captive insurance statute cleared the House and Senate by near unanimous votes and is expected to be signed into law by the governor.

Among other things, the legislation allows for the formation of incorporated cell and special purpose captives, which will make Montana one of the most progressive captive domiciles in the United States.

The interesting backstory is the amount of meaningful consultation that took place between industry proponents and key regulators within the state auditor’s office in developing the legislative language. There was genuine push and pull over the course of several meetings spanning several months. The final product met industry’s objective in creating new opportunities for captive formations, while incorporating sufficient safeguards to provide the regulators with a level of comfort.

We will now be watching to see if companies take advantage of the new law.

In related news, an incorporated cell captive bill is now pending in the Vermont state Legislature. Perhaps they were inspired by Montana.

The long slog continues in South Carolina to push through captive legislation dealing with incorporated cell captives and other updates to the statute there. The outcome still remains uncertain but headwinds seem to prevail.

Rounding out our domicile legislative round-up, a captive bill has been introduced in the Tennessee Legislature that was put together by taking the best provisions from captive laws in multiple domiciles. It’s too early to say whether the legislation will pass this year, but if it does Tennessee is sure to attract national attention.

A new era of captive regulatory structures seems to be emerging across the country. Will our industry’s “big thinkers” be up to the challenge on delivering the next generation of innovative ART programs to prove the potential is real?

Repeat After Me, Coinsurance Is Bad!

For the 432,234th time now, I have had an agent send me a proposal of insurance that includes coinsurance.



Insurance buyers, ask your agent if you have coinsurance on your property insurance policy. If the answer is yes, ask your agent why they have allowed your insurance company to include a penalty that might hit you when you have a loss.



For the insurance buyer, a coinsurance penalty is ALWAYS bad. It means that there is a chance that a partial loss might not be covered like you think it will be.



If you are interested in knowing how coinsurance works and how the penalty hits you, send me an email (or use the search bar to the right).



Frankly, all you need to know is that coinsurance is a penalty - penalties are never a good thing. Your agent is supposed to be helping you avoid bad things, and if you have coinsurance, YOUR AGENT IS NOT DOING HIS OR HER JOB!!!!



(Note to Insurance Geeks: Please do not send me emails lecturing me on the benefits of coinsurance. Do not tell me that it is a rating necessity that really benefits insurance buyers. Insurance buyers should buy the right amount of insurance - if they do that there should never be a coinsurance penalty. No individual insurance buyer has ever been better off at the time of a loss by having a coinsurance clause in his policy.)

The test for compensable psychological injury

Thank you to Jennifer Stirton for this week's contribution.

The Ontario Court of Appeal has recently confirmed that plaintiffs seeking damages for psychological injury independent of any claim for physical injury are required to show that they suffer from a “recognizable psychiatric illness”.

In Healey v. Lakeridge Health Corp., [2011] O.J. No. 231 (C.A.), the plaintiffs received notices to be tested for tuberculosis as a result of exposure to two infected patients at the defendants’ facility. The plaintiffs alleged that these notices caused them mental anxiety, depression, fear, shock, anger, distress and sleeplessness. They feared for the health and safety of friends and family and temporarily disrupted their social and family lives.

The plaintiffs admitted that the harm suffered fell short of a “recognizable psychiatric illness”. Rather, the plaintiffs alleged that the 2008 Supreme Court of Canada decision in Mustapha v. Culligan, in which the plaintiff found dead flies in an unopened bottle of water and was very upset by the idea that his family had been consuming tainted water, lowered the threshold for compensable psychological injury.

The Court of Appeal concluded that although there were some academic and judicial opinions to the contrary, there is a strong line of authority that to recover damages for psychological injury independent of physical injury, plaintiffs are required to show that they suffer from a recognizable psychiatric illness. The Court of Appeal concluded:

“As has been repeatedly stated in the case law, there are strong policy reasons for imposing some sort of threshold. It seems to me quite appropriate for the law to decline monetary compensation for the distress and upset caused by the unfortunate but inevitable stresses of life in a civilized society and to decline to open the door to recovery for all manner of psychological insult or injury. Given the frequency with which everyday experiences cause transient distress, the multi-factorial causes of psychological upset, and the highly subjective nature of an individual’s reaction to such stresses and strains, such claims involve serious questions of evidentiary rigour. The law quite properly insists upon an objective threshold to screen such claims and to refuse compensation unless the injury is serious and prolonged.”

The Court of Appeal acknowledged that the threshold for compensable psychological injury is the subject of debate and that it could be revisited on a proper factual foundation. For the moment, however, the test for compensable psychological injury remains unchanged.

Where did you get your name?

What’s in a Name?

I have taken to researching my family tree of late. This practice, known as “genealogy,” depends upon last names, sometimes called “surnames.” Sometimes they are unfortunate names. I have a relative named “Allavina Longbottom.” As quickly as she could, it appeared she changed her name to “Viney Bottom.” I am not sure it improved her situation much.

However, do you realize that surnames did not exist, in most cases, till about 1000 years ago! Before that, a less crowded society was mainly agrarian and the whole world consisted of only five miles from their home place. First names worked fine in most cases, and we see that surnames were still developing even in the Bible’s New Testament. “Jesus of Nazareth,” “Saul of Tarsus,” and “Mary of Magdalene” come to mind.

The middle ages, saw a change. A certain Peter might be called "Peter son of John" to distinguish him from his a fellow villager known as "Peter the goldsmith" and his friend "Peter of the hills." These names were not passed down as we do our surnames, as each person had their own.

Surnames’ origins can be divided into four main categories:

1. Place Names:

If they lived near a forest, hill, stream crossing (a “ford”), or cliff, this might be used to describe them, such as: FORREST, ATWOOD, GLEN, EASTMAN, BANKER (lives on hill side), WESTWOOD, DUNLOP (on muddy hill), BROOKS, CHURCHILL, CLIFF, HILLLMAN, BRITTON (from Britain), FORD, HARTSFORD, and WEATHERSFORD.

2. Parents’ Names:

Adding a prefix or suffix denoting either "son of" or "daughter of" made these common surnames. Names ending in "son", "Mac," "Fitz," "O," and "ap" are all derived from parents’ names such as: PETERSON, JOHNSON, FITZHUGH, O’MALLEY, and MACDONALD.

3. Nicknames:

Only 5-10% of all surnames involve these oddities, like: WHITE, BLACK, STRONG, ARMSTRONG, GOODMAN, or even FALLOWELL or FALWELL (picking on a family member who once fell down a well.)

4. Occupational Names:

FLETCHER made arrows

SMITH was a gold, silver or iron smith

TURNER made table legs and chair legs on a lathe

TAYLOR, one that makes or repairs garments

COLLIER was a coal miner

MILLER was essential for grinding flour from grain

COOPER was a barrel maker

WAINWRIGHT was a wagon builder

BISHOP was in the employ of a Bishop

ALDERMAN, an official clerk of the court

SHOEMAKER was a cobbler

CARTER, a maker/driver of carts

OUTLAW, an outlaw or criminal

Whatever your name, God has gifted you to add to its meaning and heritage something only you can provide. Now go do it!

Mr. Peel is often asked to address church and school groups, clubs and meetings. To check availability, contact www.PeelLawFirm.com.

Insurance Matters: Used Up and Left Out

My latest column for CU Management:



Your credit union undoubtedly buys directors’ and officers’ insurance to cover your board members. There is a fly in the ointment, though. What you have for insurance may not be enough. If it is enough, it may not be the right kind. If it is the right kind, it might get all used up.



First, we have to talk about indemnification, which is the act or process of securing against loss. The idea that D&O protects directors and officers is actually a bit off. Your credit union bylaws state that if a director is sued, the credit union will indemnify the board member. Your directors’ and officers’ insurance reimburses the credit union for that indemnification.



In most cases, it is really the assets of the credit union that protect a board member. The D&O policy (up to the limit of coverage) keeps the credit union from being out the cost of the lawsuit. In most cases, the D&O policy really protects the credit union.



Except when it doesn’t.



Full article...

Japan and the US Insurance Marketplace

I was asked today if I thought the disaster in Japan would have an impact on the US business insurance marketplace.



Not even a noticeable ripple.



A US disaster costing several billion dollars would have an impact.



A more likely cause of a change from buyer's market to seller's market would be a dramatic increase in the demand for insurance coverage or a drop in the capacity of insurers.



Supply and demand - simple economics. Right now there is lower demand (due to the economic decline) while capacity (supply) is at unprecedented levels.

Quake and Tsunami in Japan

The pictures are horrific. You cannot watch without shaking your head at the humanity.



Standard Publishing put out an email blurb today on disasters. It included the following:



"...While economic losses from the disaster will be huge, the particular nature of these events will make most of that loss uninsured. So far, estimates of insured loss range from $12 billion to $35 billion. The Japan Earthquake Reinsurance Pool (JERP) is expected to cover from $2 billion to $4 billion USD of the direct shake losses..."



I have fielded calls from several media outlets on earthquake insurance in the US.



Most of us in the US do not have earthquake insurance. Your home insurance probably excludes it. Your business insurance does too.



Earthquake is the only catastrophic cause of property loss for which most Americans are not insured. Get quotes and buy the coverage.



Also, send a check to the Red Cross while you are at your desk.

How do you get tsunami insurance?

How do you get tsunami insurance?

Buy a flood policy.

Earthquake coverage generally doesn't include damage and flooding from a tsunami. But flood policies under the National Flood Insurance Program, a federally run program that insures millions of homes and businesses, do cover tsunami damage. The surge of water is treated the same way as a storm surge from a hurricane would be.

We double-checked this with the NFIP, which steered us to the following definition of flood in the National Flood Insurance section of federal law:

Sec. 1370 (42 USC 4121)

(1) The term “flood” shall have such meaning as may be prescribed in regulations of the Director and may include inundation from rising waters or from the overflow of streams, river, or other bodies of water, or from tidal surges, abnormally high tidal water, tidal waves, tsunamis, hurricanes, or other severe storms or deluge.

The federal flood program has issued more than 5 million policies across the country, insuring more than $1.2 trillion in property. Here in Washington state -- a quake-prone region with hundreds of miles of coastline -- some 51,000 policies are in force. Coverage is particularly heavy in places like Centralia, Aberdeen, King County and Snohomish County.

Here's a plain-language summary of federal flood coverage.

And we should also point out that the federal program does not cover things like business-interruption coverage, which can be crucial for businesses. Also, NFIP commercial coverage maxes out at $500,000 for a building and $500,000 for contents. The good news: insurance brokers can find additional flood coverage for you, often through what are called surplus line insurers.

The Appraisal Process in s. 128 of the Insurance Act

Letts v. Aviva Canada Inc., [2010] O.J. No. 5801 (S.C.J.)

This case deals with the appraisal process in s. 128 of the Insurance Act.

The plaintiffs made a fire loss claim and prepared a 56 page Request to Admit which contained an inventory of items they allege were destroyed or damage by the fire. They argued the insurer was required to specify the items took issue with as a condition precedent to the appraisal process.

Justice James disagreed:

While this may make sense in an appropriate case, I do not agree with the insureds that the insurer must provide a detailed response to the claim of the insureds before being able to invoke the appraisal mechanism contemplated by Section 128 of the Insurance Act.

Section 148 of the Act sets out what needs to be done prior to the appraisal process: a specific demand must be made and proof of loss delivered. Nothing else is required.

WA insurance agent arrested in alleged $1 million theft

Investigators from the Washington state insurance commissioner’s office on Tuesday arrested a King County woman on suspicion of stealing more than $1 million in retirement funds from five elderly insurance clients.

Jasmine Jamrus-Kassim, of Kent, was arrested in Factoria by members of the insurance commissioner’s Special Investigations Unit and the Washington State Patrol. She was booked into the King County Jail on 21 counts of first-degree theft.

“This is an appalling abuse of trust,” said state Insurance Commissioner Mike Kreidler. “Vulnerable people trusted this agent with much of their life’s savings. And she just pocketed the money.”

A months-long investigation by Kreidler’s office found that several of Jamrus-Kassim’s clients repeatedly cashed out large portions of their annuities with Bankers Life and Casualty. Jamrus-Kassim was an agent for the insurer.

“We want to see justice done,” said Kreidler. “We also want to see if there’s any way to make these victims whole. We’re still investigating to what extent Bankers Life may have any liability for the actions of their agent.”

The victims, who ranged from age 74 to 90, typically made out their checks to “S.A. Saad” and gave them to Jamrus-Kassim. Several said they believed that S.A. Saad was an insurance company official. They thought their money was being reinvested.

In reality, Jamrus-Kassim has two daughters, both with the initials and surname “S.A. Saad.” Most of the money was deposited briefly in the girls’ accounts, then moved to Jamrus-Kassim’s personal credit union account. Jamrus-Kassim’s financial records show thousands of dollars spent on clothes, jewelry, and a trip to Mexico. They also show large payments to online psychic advisors, including $20,000 in charges from one psychic website in one month.

In total, Jamrus-Kassim is believed to have stolen at least $1,052,088 from the five victims between late 2007 and late 2009. She returned $25,503 to a 90-year-old Renton woman after the woman complained to the insurance commissioner’s office. That’s one of two complaints that triggered the state investigation.

Jamrus-Kassim submitted a letter of resignation to Bankers Life on Jan. 13, 2010.

Subsequent investigation by state insurance officials found three other victims. Last week, investigators interviewed an 83-year-old Seattle man who had no idea that Jamrus-Kassim had taken his $352,000.

Want a health plan for your kids? Enrollment starts today

If you're looking to add your children to your own individual health plan or want to buy health insurance for your children, you have from today through April 30 to do so.

Be sure to apply early. In most cases, applications received after March 20 will not have coverage until May 1.

This is the first of two open-enrollment periods this year for children in the individual health insurance market -- the second is from Sept. 15-Oct. 31. During these times, health plans cannot screen children or deny them coverage because of a pre-existing medical condition.

Federal health care reform prevents health insurers from deny coverage to children because of a pre-existing medical condition. However, individual plans -- like most employer-sponsored health plans -- can create open-enrollment periods.

If you need a health plan outside of the enrollment dates, you can apply either to the Washington State Health Insurance Pool (WSHIP), or if you qualify, to the new Pre-existing Condition Insurance Plan (PCIP-WA).

Exceptions where you can apply for individual coverage anytime include the birth or adoption of a child or if a child or parent:
No longer qualifies for a state program.

• Loses coverage due to a divorce.
• Loses employer-sponsored coverage (including COBRA).
• Moves and their plan is not available where they live now.

In 2014, when the full federal health reforms take effect, no one of any age can be denied health insurance because of a pre-existing condition.

What a Seattle tsunami would look like

Due to a spike in visits, we're reposting this post:

The experts say it's inevitable that the Seattle area will be hit with another tsunami similar to the one from 1,000 years ago. Here's a computer-generated video of what a tsunami hitting Seattle would look like:

(video courtesy of NOAA's Center for Tsunami Research)

The animation assumes a magnitude 7.3 quake on the Seattle Fault.
Here are similar projections, based on a 9.1 quake, for Long Beach, Ocean Shores, and Bellingham, all modeled on a quake similar in size to what Japan experienced last week. (These are very big files; give them plenty of time to load. Smaller, less-detailed versions are at the NOAA link above.)

Republicans in Congress working on flood insurance

I write periodically about the imminent expiration/actual expiration/retroactive extension of the National Flood Insurance Program, or NFIP. NFIP is a program of the Federal Emergency Management Agency ("FEMA") that issues standard flood insurance policies, mostly through private insurers. NFIP is created by statute, and was originally set to expire in October, 2008. Congress has issued several short-term extensions to it.

Even though there is now a whopping six months until NFIP expires again, this time round, according to this article in Insurance Journal, one side of the aisle is already working on the issue. The Republican draft of legislation will phase out subsidies (and therefore the entire program; the whole point of NFIP is to provide subsidies).

Daylight savings time: Move your clocks AHEAD 1 hour

OK, so this has nothing to do with insurance. But just a friendly reminder: Daylight Savings Time begins at 2 a.m. Sunday.

Don't forget to move your clocks ahead 1 hour.

Why to wear your seatbelt

A British team put together this extraordinary video to encourage people to wear seat belts. It's a big change from the scary crash ads we've all seen -- and it's probably more effective.

What a tsunami would look like in Seattle

The experts say it's inevitable that the Seattle area will be hit with another Tsunami similar to the one from 1,000 years ago. But now we have the technology to show you what it would look like.

(video courtesy of NOAA's Seattle Inundating Mapping Project)

Tsunami and insurance - what's covered

A Tsunami advisory was issued today in response to Japan's 8.9 earthquake. An advisory means that a tsunami capable of causing strong currents or waves dangerous to people near the coast is expected --- although widespread flooding is not expected.

What counties are affected? Check Washington's Emergency Management Division site for specific county information.

If you're concerned about property damaged by flooding or high waves, the National Flood Insurance Program has helpful information on:

Preventing flooding around your home
Sandbagging
Pumping out a flooded basement
Protecting your home from back flow
Cleaning up and drying out your home

Unfortunately, if your home, business or property is damaged by increased waves or flooding, your typical homeowner's policy or commercial policy most likely will not cover it. You must have a flood insurance policy from the National Flood Insurance Program

Learn more about flood insurance, See if your home or property is in a flood zone and if so, what's your level of risk.

Money

Money

There are a lot of myths of about money. The one most repeated is that “money is the root of all evil.” However, that is incorrect.

The verse actually says it is love of money that is the problem:

“For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” 1 Timothy 6:9-11 (NIV)

All evil comes from the heart, and not from inanimate objects made of paper or metal. Thus, money is neither moral nor immoral. It can be used for evil or for good. Much like guns, they do nothing on their own, but can be a tool used for an evil thing like murder or the noble defense of victims.

However, there are some facts about money that I found interesting:

-Pennies now contain 97.5 percent zinc and only 2.5 percent copper. However it costs more than penny to make them: it costs 1.8 cents to make a one-cent coin! (With thinking like that, it is no wonder our government is broke!)

-According to the U.S. national debt clock, we stand today at $14,200,727,372,615.35. The estimated population of the United States is 310,175,903, so each citizen's share of this debt is $45,782.82!

-The National Debt has continued to increase an average of $4.12 billion per day since September 28, 2007! To help visualize this, for just one day’s $4.12 billion you could buy a 2012 Ford Mustang for each of your 186,000 closest friends!

-Your odds of winning huge in the a Powerball are something like 1 in 120,526,770, which means you have a better chance of being in a car accident on the way to buy the ticket than to win!

-If you have a $3,000 credit card balance and you pay the minimums you will pay for over 10 years and almost double the repayment.

-A million is a thousand thousands. A billion is a thousand millions. A trillion is a thousand billions.

-How much does $1 million weigh? Since there are 490 notes in a pound, if you used $1 bills it would weigh a staggering 2,040.8 pounds, but if you used $100 bills it would weigh only 20.4 pounds.

-If you had 10 billion $1 notes and spent one every second of every day, 24 hours a day, 7 days a week, it would require 317 years for you to go broke.

-“Being well off” is usually defined as those that make about 20%-30% a year more than you. In other words, if you make $25,000 a year, the guy making $32,500 looks pretty well off. But the same is true for the one who makes a million and who looks at the neighbor making 1.3 million.

-Ecclesiastes 5:10 (NIV) summarizes this: “Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.”

*Mr. Peel, a Christian Injury Lawyer, may be available to speak to your church or community group. He may be reached through www.PeelLawFirm.com. Other articles maybe found on his blog at www.insurance-coveragelaw.blogspot.com

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"My dog was hit by a car. Will the driver's auto insurance cover the vet bills?"

Here's what happened: A woman was walking her dog. Both got hit by a car. Both survived.

The woman's medical bills were covered by the driver's Personal Injury Protection (PIP) coverage. (This is a little-known fact, by the way: PIP also covers pedestrians.)

But for the dog, the insurer only offered what it considered the animal's value: $75. The company wouldn't pay the veterinary bills for the badly injured dog.

The sad fact for pet owners is that under insurance law, pets are considered personal property. An auto policy's medical coverage doesn't cover pet injuries. Under the law, it's as if the driver had struck a mailbox. The company estimates the value of the personal property, then offers to pay that amount.

That said -- and this is not legal advice -- the owner might be able to sue the driver for the dog's medical expenses, as they are part of the dog owner's damages and may be covered under liability for property damage. But the owner would have to weigh the costs involved.

And if the animal was a fancy show dog, for example, the owner could likely prove a higher value for the dog. Our Consumer Advocacy folks once helped intervene to get a higher insurance payment for a dead goat.

The key point, however, is probably this: It often pays to buy health insurance for a pet. Here in Washington state, 11 insurers sell a total of 39 different policies covering pets. Some cover accidents only. Others include annual physicals, vaccines and cancer coverage. Most cover only dogs or cats; one company also offers coverage for birds and exotic pets. Every policy offers a multi-pet discount, and some offer discounts for pets with a microchip, etc.

What's it cost? According to the rates they've filed with our office,

• Coverage for cats ranges from $83 to $926 a year; most policies are $150-$250 annually.
• Coverage for a dog ranges from $107 to $1,059 a year, but most coverage is between $225 and $400 annually.

Coming soon: dog exclusions

According to this article in Claimsjournal.com, the American Association of Insurance Services (AAIS), which develops policy forms, has drafted endorsements for homeowners and umbrella policies which exclude coverage for damages caused by dogs owned by the policyholders.

Given the range of lawsuits that are brought against dog owners (I recall a case in which a dog barked from an enclosed lawn, startling the plaintiff and making her fall) and the high damages that can be awarded in dog bite cases, I recommend that dog owners avoid these endorsements even if it means paying higher premiums.

Proportionality in Discovery

Master Short recently conducted an exhaustive review of the principles of proportionality in discovery. In Warman v. National Post (2011), 103 O.R. (3d) 174 (S.C.J.), the defendant brought a motion seeking production of a mirror copy of the plaintiff’s computer hard drive. The action was a libel action brought under the Simplified Procedure.

Master Short held that the new rules changing the test from “relating to” to “relevant to” a matter in issue signal a shift away from the broad and liberal discovery practice that has existed in Ontario. The default rule should start with proportionality and a recognition that not all conceivably relevant facts are discoverable in every case. Master Short adopts an eight factor proportionality test for e-discovery used in an American case (Rowe Entertainment v. William Morris):

1. The specificity of the discovery requests;
2. The likelihood of discovering critical information;
3. The availability of such information from other sources;
4. The purposes for which the responding party maintains the requested data;
5. The relative benefit to the parties of obtaining the information;
6. The total cost associated with production;
7. The relative ability of each party to control costs and its incentive to do so;
8. The resources available to each party.

Master Short held that although relevancy should remain a threshold requirement, proportionality should replace relevancy as the most important principle guiding discovery.

This decision will no doubt garner attention as a guideline for discovery. It will be interesting to see if the eight factors become the new standard for discovery in general or limited to e-discovery.

Med Mal filings down in TN, where's the crisis???

Civil Justice System Under Attack with False Propaganda

Groups Working to Increase Profits by Taking Away Tennesseans Constitutional Rights

Nashville— Tennessee’s civil justice system works by promoting responsible behavior and holding wrongdoers accountable for the harm they cause others. Groups have recently started using propaganda based on fictitious numbers to try and convince Tennesseans to give up their right to a trial by jury while giving big business and insurance companies more profits. Real facts, published by credible sources not one-sided “think tanks”, show Tennessee provides a great environment for business, large and small, while maintaining a system of civil justice that works for all of its citizens, rich and poor.

“Most of the information circulating recently regarding so-called “lawsuit abuse” has been spun to misrepresent the facts and mislead the public.” said TAJ President Phillip Miller. “The real facts, backed up by real sources, prove there is no “lawsuit” crisis in Tennessee. Blaming “the civil justice system” for job loss is just a smokescreen for the real intent of these groups – finding yet one more “bail-out” for business that everyone else will pay for.”

“The current civil justice system is the only system of checks and balances ordinary citizens can use to protect them and their rights. Unfortunately, people who are the biggest beneficiaries of the Constitution are working to take the Constitutional rights of others away so they can line their own pockets. That is a sad reality,” continued Miller.

Texas and Mississippi are often used as positive examples in the lawsuit propaganda. Facts illustrate “lawsuit reform” did not benefit either state. According to the U.S. Bureau of Labor Statistics, Mississippi’s unemployment rate is at an all time high, and they are also ranked 46th in the nation for business climate. Texas currently faces a $25 billion deficit, and according to the U.S. Census Bureau, contains the nation’s highest rate of uninsured citizens – 24.5 percent.

Prior to the passage of “lawsuit reform” in Texas, 152 counties did not have a single obstetrician, four years later, the same number of counties still do not have an obstetrician. Rural counties do not have OB/GYN or other specialty doctors because there are not enough people and patients, not because of fictitious lawsuit abuse. However in Tennessee, medical malpractice filings have dropped 44 percent over the last 3 years and the premiums paid by doctors have dropped 23 percent.

“There are those that think false propaganda and phony statements will fool Tennesseans and scare them enough to give up their constitutional rights.” said Miller. “We are the Tennessee Association for Justice, and our members are sworn to uphold the Constitution. For us, that’s not an empty promise. Tennesseans deserve better than this. They are trusted in the ballot box, they can be trusted in the jury box as well.”

###

www.tnaj.org/TAJFACTS

Jill Hudson

Communications Director

o. 615.329.3000

c. 615.715.4494

Bill to end secrecy of health insurance rate info passes WA House

A bill that would let the public see far more health insurance rate information has passed the Washington House of Representatives.

Under state law, Washington Insurance Commissioner Mike Kreidler's office is now barred from releasing virtually all the information that insurers submit to justify premium increases. House Bill 1220 -- requested by Kreidler -- would end that secrecy.

"In today's tough econmic climate, people deserve to see where their money's going," said Kreidler

Here's a link to a press release about the bill.

Appeals Court holds that judicial estoppel doctrine bars assignment of some claims to prevailing plaintiff

Stephen Hanlon sued Becky Sandman for injuring him when she was driving while intoxicated.

At trial Hanlon received a judgment of approximately $17 million.

Hanlon, as the assignee of Sandman's rights, then sued Sandman's insurer, Homeland, for breach of its duty to defend and breach of Mass. Gen. Laws chs. 93A and 176D. He alleged that the insurer and the insurance defense attorney failed to adequately prepare for and defend at trial, exposing Sandman to an excess judgment; and that they failed to explore settlement opportunities and convey them to Sandman.

Hanlon later substituted Sandman as the plaintiff. Homeland moved to dismiss on the basis of judicial estoppel. That motion was allowed, on the ground that Hanlon was the real party in interest regardless of the substitution of Sandman as the named plaintiff.

In Sandman v. McGrath, 78 Mass. App. Ct. 800 (2011), the Massachusetts Appeals Court noted that judicial estoppel "is an equitable doctrine that precludes a party from asserting a position in one legal proceeding that is contary to a position it had previously asserted in another proceeding." The court held that the doctrine must be applied to the real party in interest.

The court held that the doctrine of judicial estoppel bars Hanlon from bringing claims reqardng the adequacy of preparation for and actions at trial, because in the underlying action he had successfully argued that the damages award was not exessive.

The court held that the doctrine does not apply to claims regarding failure to pursue settlement opportunities. Hanlon's claim that he would have settled the underlying lawsuit is not inconsistent with the argument that Sandman was negligent and liable to him for damages.

Power restored at our main building

Just fyi: Our main office in Tumwater, lost power at about 9:19 this morning. It's still out. Many of us are working on backup power.

UPDATE: Power's back on. (10:30 a.m.) This post headline originally said "Power's out at our main building."

What Your Credit Union Board Wants To Know About Directors' and Officers' Insurance

My newest white paper for credit unions...



Actually, this is the same white paper I announced the other day - I just customized it a bit for credit unions.



A clear explanation of directors' and officers' insurance designed specifically for credit union board members. What's covered? What's side A? Can I depend on my umbrella policy for protection? Can we buy coverage for civil money penalties? Explain claims-made.



I have included answers to the questions I get when I do seminars and presentations to board members. Thirty years of board member questions in nine pages. Free for credit union leaders and board members. Just send me an email - Scott@insurance-coveragelaw.com.

Oregon Workers' Compensation Report Out

Every two years the OR Department of Consumer and Business Services puts out a report of the workers' compensation rates of the 50 states. It does a pretty good job of outlining where everyone is. It appears on its face to be fair.



Check out your state.



Montana has the highest rates at 163% of the median.

North Dakota has the lowest rates at 50% of the median.



My state of Maine is at number eight, down from five in 2008.



Look at Appendix 4 to see a direct comparison of the state rates for different employment classes. Class 8810, Clerical shows rates in MT at $0.75 and $0.13 in MA and DC!



The sales codes range from $1.04 to $.15.

Digesting Health Care Reform

So we hurry up and wait.

That is perhaps the most apt description of how self-insured employers and their business partners have adapted to the new health care law and the ongoing reform process it has triggered.

For obvious reasons, we saw a flurry of activity immediately after the passage of PPACA to first determine what was actually in the legislation and then to move forward with compliance planning. This stage seems to have largely passed and now we are in an extended waiting period until 2014, which is when the health insurance exchanges are scheduled to come on-line and the next wave of regulatory requirements, such as the employer mandate, are upon us.

With that timeline framed, let’s take a look at where things stand today and possible legislative/regulatory developments over the next three years.

Clearly there is curiosity with regard to self-insured employer reaction to PPACA as we approach the first anniversary of the law’s enactment. A recent outreach effort to employers of various sizes generated feedback that concluded the law has not created any significant hurdles for them to continue to self-insure, at least in the short run.

The biggest issue seems to be whether or not employers want to retain grandfather status of their health plans. Although unscientific, the feedback suggests it is almost an even split regarding grandfather status decision.

We also received feedback on other issues such administrative burdens, plan design changes, wellness programs and stop-loss cost. When this information was aggregated, the observation is that while there is general discomfort with adapting to the new law, employers are sticking with self-insured health plans, at least for time being.

More on the longer term employer view later, but first we need to stay focused on health care reform developments that will play out in the coming weeks and months, which could influence events before 2014.

Separate HHS and DOL reports dealing with self-insured health plans will likely be released this month and despite efforts to ensure that the regulators are fully educated about self-insurance, there is probably a better than average chance that these reports will contain negative commentary.

Key members of Congress and their staff have already been briefed in advanced about possible biased findings, and we have been generally encouraged by the supportive responses. That said, we could very well see self-insured health plans being one of the focal points in future legislative developments if official government reports conclude that such plans impede overall health reform implementation efforts.

The most likely threat would be legislation to restrict smaller employers from self-insuring, similar to a provision actually included in an early version of the PPACA legislation that SIIA was able to have stripped.

As previously reported, the IRS is also looking to define stop-loss insurance, which was an unanticipated consequence of the health care law. We expect a face-to-face meeting any day to get a better understanding of the agency’s thinking and I will be sure to publish a recap of this meeting, so be sure to check back regularly.

It was interesting to hear President Obama’s comments at the National Governors Association meeting this week that he is agreeable for moving up the timeline for states to be available to apply for waivers to the health care law if they develop their own reform plans that achieve the same access and affordability outcomes as the administration anticipates through PPACA implementation.

This offer was made in response to complaints from numerous governors that the new health care law will greatly increase costs to the states due to expanded Medicaid obligations. And of course, it was classic Obama rhetoric – a politically appealing sound bite that doesn’t square with reality.

Of course, the hitch with this offer is that a state-based plan must meet an artificially high bar for outcomes in order to be approved, so the reality is that it is unlikely that any waivers will actually be granted. As such, it is probably premature to be concerned about ERISA preemption issues, but we will certainly keep an eye on things.

In a bit of positive news, some of our reliable sources in Congress have signaled a renewed interest in association health plan (AHP) legislation, which would include a self-insurance option. They tell us, however, that the one hurdle to overcome is the perception that AHPs would contribute to adverse selection and therefore compromise larger health care reform objectives.

We are working to address these concerns now, so stay tuned for a possible return of AHPs as a serious topic for discussion on Capitol Hill.

Then there are the legal challenges to PPACA. Just today, Florida Federal Judge Robert Vinson put the Obama on notice that they have seven days to file an motion for expedited appellate review of the individual mandate constitutionality question or 26 state will be allowed to hold off on any PPACA implementation actions pending a final ruling by the Supreme Court. This has made things even more interesting.

There will be more short term health care reform legislative/regulatory developments for sure, but I thought it would be useful to highlight those on the radar screen today.

Now let’s return to the longer view of PPACA from the self-insured employer perspective. The real uncertainly arrives in 2014 when companies are required to provide health coverage or pay a penalty (play or pay).

From talking with several employer representatives, we have learned that most companies have been running numbers to test both scenarios, but are generally keeping tight-lipped about any conclusions at this early date. So essentially, the self-insurance marketplace has moved quickly to adapt to the new health care regulatory environment and now the waiting begins for potentially bigger shoes to drop going forward and the resulting reaction from self-insured employer and there business partners.

Settle in…it’s going to be a long ride.