Kreidler on Supreme Court case and the state health-care exchange

Commissioner Kreidler sat down with TVW's Christina Salerno yesterday for a Q&A on health care reform, including this week's three days of arguments in the U.S. Supreme Court and the shape of the state's upcoming Health Benefits Exchange.

From the discussion:

What would change if they overturned the act?

People are directly benefiting from parts of the act today. People can stay on their parents’ insurance until 26, they can get preventive care with no deductibles — all of that would go away. (Attorney General) Rob McKenna’s lawsuit would undo all of that. The entire law may go down. We’d be back to square one, which is a system that’s failing us as a country and as a state. For many individuals, it was making a difference between life or death decisions.

Emergency Funds & Go Bags

Emergency Funds & Go Bags

“Let our advance worrying become advance thinking and planning”

~ Winston Churchill (British Prime Minister during World War II)

There are things that are sure to happen in life, but we are unsure as to when. For instance, do we really believe that we will never die? No, most of us are in touch with reality enough to know we will die. So, do you have a will? If you have custody of children, whom have you picked to raise them? Waiting for the rapture is not a valid excuse to plan, either, because you will be declared legally dead if missing for a long period of time.

It has been said, “No one plans to fail, they just fail to plan.”

Our ancestors knew that “Murphy’s Law” applies. Bad things happen, and often in groups. How can you keep Murphy from succeeding in ruining everything?

Here are a couple ideas:

Keep an “Emergency Fund.” It is surprising how expenses take every available dollar. If we have nothing held back for the unforeseen, we live in a constant crisis. Everything, from a power bill to the failing transmission, is an emergency.

Dave Ramsey, the famous debt-free financial speaker heard locally in the afternoons on AM990, suggests that the first step to winning financially is a $1,000.00 emergency fund. To some, that will seem impossible. To others, it may seem miniscule. However, it is important to have a way to get emergency funds for the inevitable urgency.

The difference in the psychology of just having a bit of cushion or “margin” is hard to estimate. Without it, many have a tight belly, unable to sleep well or even take a deep breath. With it, you know there is at least a fighting chance. While money should be no substitute for faith, planning for the fact of emergencies is wise and is taught in Scripture.

The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty. Proverbs 21:5

A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences. Proverbs 27:12 (NLT)

The so-called “Go-Bag” is a great idea once shared with me. Since we all will probably have to rush to the hospital for some reason, either for our infirmities or a loved ones’, we can prepare. A Go Bag is just a tote bag or large zip lock with a few items in it. Usually, people include a toothbrush, toothpaste, warm socks, a jogging or comfy sweat suit, clean underwear and a couple days’ worth of each of any prescriptions.

If your husband has chest pains, you just grab and go! That way, you do not have to leave the hospital and come home. It is infuriating to wait for hours for a doctor to make rounds, and finally you just give up and go home to change. Murphy’s Law says the doctor you need to speak to, will come by while you are gone.

Pack a Go Bag today, and stash away an emergency fund (usually in a different, out of the way bank) as soon as you can. By doing so, you will be planning for the unplanned and demonstrating a rare thing, seldom seen anymore in this world… wisdom.

David B. Peel is a local injury attorney, who lives in rural Arlington maintains his accident, disability and injury practice in Millington (just north of Chic-Fil-A). Mr. Peel speaks frequently in the area, most recently to First Baptist, the Millington Library Club, and an Arlington Bible Study Group. To contact him or see more articles see www.PeelLawFirm.com.

Subrogation in South Carolina Part II: Proper Parties to the Action

Subrogation in South Carolina Series: Part II

Post by Lee Floyd

An initial question when evaluating and bringing a subrogation claim is who are the proper parties to identify as bringing suit?  While ordinarily a fairly simple question in most litigation, this issue creates numerous complexities when dealing with subrogation claims, and resolving these issues can have a substantial impact on the perceived value of a subrogation claim. 

The impact of the named parties is apparent when you consider whether a jury will be directly informed that not only is insurance involved, but any award will be for the partial or complete benefit of an insurance company.  Further, because South Carolina law firmly prohibits any reference to the existence of (or non-existence of) liability insurance, the jury will not expressly know whether the burden of an award will be placed on the defendant or the defendant’s insurance carrier.  This scenario can easily present a situation in which a jury perceives the case as one where a multi-million dollar insurance company is asking to recover damages from a small company or an individual.  In short, the parties may present a picture of Goliath pursuing David. 

While some issues remain unanswered in South Carolina, the following general rules exist for the proper parties for bringing a subrogation claim.  Each depends upon the total amount of the loss the insurer has paid. 

1. The insured alone may bring the claim:  It appears that in most situations the subrogation claim may be brought exclusively in the name of the insured.  In South Carolina, an insured is the only proper party to institute a subrogation claim where an insurer has not yet paid for the loss or disputes coverage depending on the outcome of the claim against the third party.  While obvious in its reasoning, this rule has important implications: an insurer appears capable of always bringing a subrogation claim solely listing the insured as the plaintiff and still retains control over prosecution of the claim under the terms of the insurance policy. Using this rationale, there is no need to identify the plaintiff as “insurance company X as subrogee of” or similar language. 

2. The insured and the insurer are both proper parties to the action: This approach has been recognized in South Carolina where an insurer pays only a portion of the insured’s loss due to the actions of the defendant. This rule is consistent with South Carolina’s recognition of equitable subrogation as automatic on a pro-rata basis.

3. The insurer may bring the action solely in its own name: An insurer may file a Complaint solely in its own name only where it is has paid the total loss.  It is unclear, in South Carolina, whether this requires the insurer to have waived any amount due under the policy for the deductible or if this amount is excluded from calculating the total loss.

While this issue can be overlooked, determining the proper parties to Complaint in a subrogation claim may have significant ramifications on how the claim is presented to a jury and the perceived value of a claim.  As it currently exists, South Carolina law appears to permit an insurer to institute a subrogation claim in solely the insured’s name in most, if not all, circumstances.  It appears that this approach may be underutilized or overlooked in current practice.

This blog post is the second in a series by Collins & Lacy attorney Lee Floyd that seeks to identify some common issues that arise in subrogation claims for property damage and provide some general guidelines for resolving those issues.  Read the first post Subrogation Claims in South Carolina.  To learn more about how Collins & Lacy handles subrogation claims, visit our subrogation webpage.  

What my 7 year old daughter says about insurance

I think it is good to have insurance in case of a hurricane or tornado, or someone robs your house.

I couldn't have said it bettery myself!

State website access.wa.gov among the top nationwide

Well-deserved kudos to the folks who run Access.wa.gov, a Washington state website that helps make much of what government is doing available on one easy-to-navigate site.

The Sunshine Review, a nonprofit group focused on government accountability, recently awarded the site with an A+ grade, meaning that it's one of the most accessible state government sites in the country. From the group's report card on the site:

Elected officials are listed with contact information
Budgets are posted
Audits are posted
Contracts are posted in a searchable database
The site includes information on requesting public records
Lobbyist lists and reports are posted in a searchable database
etc.

(And a hat tip to The HDC Advance for the heads up on this.)

Invasion of Privacy Recognized as a Tort

The Ontario Court of Appeal has recognized a tort of invasion of privacy.

In Jones v. Tsige, 2012 ONCA 32 (C.A.), the plaintiff discovered the defendant had been surreptitiously looking at her banking records. The parties worked at the same bank and Tsige was in a relationship with Jones’ ex-husband. Despite these connections, the parties did not know each other. Tsige claimed she had a financial dispute with Jones’ ex-husband and was accessing the account to confirm whether he was paying child support to Jones. Tsige was contrite and apologized for her actions.

A motions court judge dismissed the action on a motion for summary judgment on the basis that Ontario does not recognize a tort of invasion of privacy. The Court of Appeal allowed the appeal.

Justice Sharpe cited Professor Prosser in setting out four categories of invasion of privacy:
1. Intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs.
2. Public disclosure of embarrassing private facts about the plaintiff.
3. Publicity which places the plaintiff in a false light in the public eye.
4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.

This case falls within the “intrusion on seclusion” category. In order to make out a cause of action, a plaintiff must show:
1. an unauthorized intrusion;
2. that the intrusion was highly offensive to the reasonable person;
3. the matter intruded upon was private; and,
4. the intrusion caused anguish and suffering.

Justice Sharpe held that damages for intrustion on seclusion should be modest, and up to the range of $20,000. The quantum will depend on factors such as the nature of the intrusion, the effect on the plaintiff, the relationship between the parties, distress or embarassment suffered by the plaintiff, and the conduct of the parties, including any apology by the defendant. Justice Sharpe granted summary judgment to Jones in the amount of $10,000.

Will we see the floodgates open with these types of claims now? Privacy seems to be a “hot button” issue right now, and it seems that we may see more cases involving breaches of privacy in the future.

- Tara Pollitt

How to appeal when your health insurer says no

Seattle's KING 5 TV recently did a story on the case of a Tacoma man diagnosed with stage 4 cancer. After trying other treatments, his apparent only remaining option is an experimental anti-cancer drug that his insurer refuses to cover.

He contacted our office, and we're helping him navigate the appeals process. Many people don't realize that a denial by your health insurer is not the final word on the matter. There are multiple rounds of appeals available, including to what's called an "independent review organization," which is a group that has the power to require your insurer to cover a treatment or procedure. And more than a quarter of the people who appeal to an independent review organization win.

How to appeal the decision? We've put together a detailed appeals guide with sample letters to send your insurer. Take a look -- and don't give up.

Here's the story from KING 5:

Hearing next week on Humana's request to acquire Arcadian Health Plan

From our public notices web page:

The Insurance Commissioner has scheduled a hearing for March 27, 2012 at 10:00 a.m. Pacific Time in his Tumwater, Washington office to consider whether he should approve or deny Humana Inc.’s request to acquire Washington-based Arcadian Health Plan, Inc.

Arcadian Health Plan, Inc. offers Medicare Advantage health products through the federal Centers for Medicare and Medicaid Services, and is wholly owned by its parent company, Arcadian Management Services, Inc. Arcadian Management Services, Inc. is currently owned by five venture capital investment funds affiliated with Morgan Stanley Dean Witter, and by Arcadian employees. Humana Inc. proposes to purchase the parent company and all of its subsidiaries including Arcadian Health Plan, Inc.

Humana Inc., which had $36.8 billion in revenue in 2011, and has 11.2 million covered individuals in its medical plans and another 7.3 million in its specialty plans nationwide, is proposing to acquire all outstanding stock of Arcadian Management Services, Inc.. If approved, Humana Inc. would wholly own Arcadian Management Services, Inc. and all six of its subsidiary health carriers including Arcadian Health Plan, Inc.; Arkansas Community Care, Inc.; Arcadian Health Plan of North Carolina, Inc.; Arcadian Health Plan of Georgia, Inc.; Arcadian Health Plan of Louisiana, Inc.; and Arcadian Health Plan of New York, Inc.

The public is notified that all interested parties may submit letters of support or objections and/or may participate in the hearing by appearing in person or by telephone. To view the Notice of Hearing, which includes advice on how to participate and other related documents, go to http://www.insurance.wa.gov/orders/hearings_proceedings.shtml

Our complaint- and rates Web applications will be down over the weekend

Two of our most popular Web applications will be off-line this weekend because of scheduled maintenance to our imaging software.

From 5 p.m. Friday until 8 a.m. Monday, these two systems will be down:

• Online complaint filing (where consumers can file complaints against their insurance company)
• Our health insurance rate request lookup (where you can see which insurers have filed proposals to increase health insurance premiums)

Thanks for your patience and understanding.

Health care reform: Two years later, what's changed?

From a press release we put out this morning:

The Affordable Care Act’s most controversial component – the mandate requiring everyone to have health insurance – is still two years away. But two years after the law’s enactment, many Washington consumers are quietly benefitting from many of the laws lesser-noticed provisions.

“The Affordable Care Act’s individual mandate gets most of the attention, but it shouldn’t overshadow the success stories of the early reforms,” said Insurance Commissioner Mike Kreidler. “By far the most popular benefit of health reform that we hear about is the ability for parents to keep their adult kids on their health plans – especially in today’s economy – and there are many more.”

Among the changes that have already taken effect here in Washington state:

■More than 2.4 million Washingtonians no longer face lifetime limits on their health benefits.

■More than 52,000 young adults up to age 26 have been able to stay on their parents’ health plans.

■More than 1.2 million Washingtonians now have coverage for preventive care with no co-pays or deductibles.

For much more information about what's changed and is changing, click on the link above.

Police Personnel File Not Subject to Production

Andrushko v. Ontario, [2011] O.J. No. 3693 (Div. Ct.)

This decision will be of interest to those defending claims against police officers.

The plaintiff was suing for wrongful arrest and assault. He sought production of the officer’s personnel file on the basis that it might reveal a pattern of using unnecessary and excessive force. The Crown resisted on the basis that Part V of the Police Services Act contains a statutory prohibition against production. The motions court judge ordered production.

Part V of the Police Services Act contains the following provisions:

69.(8) No person shall be required to testify in a civil proceeding with regard to information obtained in the course of his or her duties, except at a hearing held under this Part. 1997, c. 8, s. 35.

(9) No document prepared as the result of a complaint is admissible in a civil pro-ceeding, except at a hearing held under this Part. 1997, c. 8, s. 35.
(10) No statement made during an attempt at informal resolution of a complaint is admissible in a civil proceeding, including a proceeding under subsection 64(15) or 65(17) or a hearing held under this Part, except with the consent of the person who made the statement.

...
1. Every person engaged in the administration of this Part shall preserve secrecy with respect to all information obtained in the course of his or her duties under this Part and shall not communicate such information to any other person except,

(a) as may be required in connection with the administration of this Act and the regulations;
(b) to his or her counsel;
(c) as may be required for law enforcement purposes; or
(d) with the consent of the person, if any, to whom the information re-lates.


The Divisional Court overturned the lower court decision. It held that any documents prepared as a result of a Part V complaint are not subject to production or admissible in a civil proceeding. If any documents in the personnel file were not prepared directly as a result of a Part V complaint, they would not be protected by its confidentiality provisions.

- Tara Pollitt

Subrogation Claims in South Carolina

Lee Floyd

South Carolina

law recognizes the doctrine of subrogation in the context of insurance as permitting an insurer to recover amounts it has paid for loss by bringing an action against the tortfeasor(s) whose wrongful act caused the loss.[1] At its heart, subrogation is concerned with imposing the burden of a loss on the responsible party.

Efficiency and effectiveness are central to maximizing the value of a subrogation claim. This is accomplished in a variety of ways, and often involves resolving a myriad of issues unique to subrogation claims. Only some of the issues presented are within the control of the subrogated insurer. This blog post is the first in a series  that will identify some common issues that arise in subrogation claims for property damage and provide some general guidelines for resolving those issues.

Subrogation Claims: Types of subrogation in South Carolina

South Carolina generally recognizes both contractual subrogation and equitable subrogation in the context of insurance.[2] The doctrine of equitable subrogation (also referred to as “legal subrogation”) provides that an insurer’s right to bring a subrogation claim is not dependent on the insurance policy; instead, the right rests upon principles of equity. The creation of the right is automatic with payment of the loss for the benefit of the insured. Thus, an insurer may have a right to subrogation once it pays a loss even where the insurance policy is silent as to subrogation. The insured and tortfeasor cannot extinguish this right through settlement where the tortfeasor is aware of the insurer’s interest. However, a settlement made in good faith or a settlement before the loss is paid will bar the subrogation claim against the tortfeasor.

The recognition of equity as the fundamental basis for subrogation means the right can be forfeited and is subject to traditional equitable defenses, such as laches, waiver or estoppel. An insurer may forfeit its right to subrogation through inequitable conduct toward the insured.

Contractual subrogation arises under the terms of the policy. The rights and duties of the insurer as subrogee and insured as subrogor are defined by the policy.  Those terms are generally subject to the traditional rules and principles of contract law.

While basic, the foregoing fundamental principles are important to keep in mind when understanding and attempting to forecast South Carolina decisions interpreting and applying subrogation law. Because the doctrine rests on principles of “fundamental fairness” and “natural justice,” South Carolina courts tend to focus on whether the principles they adopt will render the fairest possible result for the insured, insurer and tortfeasor.

To learn more about how Collins & Lacy handles subrogation claims, visit our subrogation webpage.

---

[1] E.g., Calvert Fire Ins. Co. v. James, 236 S.C. 431, 435, 114 S.E.2d 832, 835 (1960).

[2] In this is not true in the context of all first-party policies. For example, equitable subrogation is not recognized in the context of health insurance policies, Shumpert v. Time Ins. Co., 329 S.C. 605, 496 S.E.2d 653 (Ct. App. 1998), but contractual subrogation can exist because it is statutorily authorized. S.C. Code Ann. §38-71-190 (1976 & Supp. 2012).

Live Richly

LIVING LIKE A MILLIONAIRE?

Everybody wants to be a millionaire, right?

Wrong.

I think most folks just want to live like a millionaire. It is actually different. It is not the having seven figures in the bank that dictates living richly.

This old story illustrates the difference:

A young man is lying shirtless on dock in the sun, with a hat pulled over his eyes, dozing gently in the ocean breezes. Abruptly, he is jolted awake by a crocodile skin shoe. The youth squinted up at his rude visitor.

“What are you doing asleep, here on the dock?” the well-dressed man demanded incredulously.

“Mister, I was just resting. I fished early this morning,” the young man explained.

“Well, you should not be laying around. There is plenty of daylight left! Get out there and fish some more!” the older man insisted.

“Why?” asked the sleepy-eyed youngster, yawning.

“Because, if you ran that boat twice a day, you could save enough to buy another boat,” he explained, as he tightened his tie.

“What then?” the fisherman inquired.

“Then, you could hire a crew and fish even more boats!” the businessman exclaimed, getting even louder.

“What then?” the lounging youth asked.

“Then, one day, you could control this whole seaport, and make money off every single fishing boat here, and become a very rich man!” the well-dressed man proclaimed, his arms waving wildly with every word.

“Then what?” he asked.

“Then, you could lay back, and take it easy and finally relax!” the successful businessman concluded, smugly.

The young man looked up, saying, “Mister, that’s just what I was doing when you disturbed me.”

You see, when we can truly relax—even for a little while--we are living a rich life, indeed. Whether you are relaxing in the sun by an inflatable backyard baby pool or on the beach in Mexico, it feels pretty similar when you close your eyes.

Those who live richly are not those who have all they want. It is those who passionately want whatever they have.

Where -- and why -- to find flood coverage

Another post for National Flood Safety Awareness Week: Here in the rainy Northwest, we can't say this often enough: a standard homeowners insurance policy does NOT cover flooding.

The good news is that flood insurance is widely available through the National Flood Insurance Program. It's a federally run insurance program, but sold by local agents and brokers. For most homeowners, the NFIP is the first stop for flood coverage.

If you live in an area with a high chance of flooding (a "Special Flood Hazard Area"), your lender will generally require you to have flood insurance. Even if you live in a minimal or moderate flood hazard area, you may still want to buy it.

There are, however, limits to federal flood insurance. For commercial structures, for example, the NFIP maximum is $500,000 for the building and $500,000 for the contents. Businesses also may need additional coverage that isn't available through the NFIP, such as business interruption coverage.

Insurance company claims representative pleads guilty to fraud on her own car

A Puyallup woman has pleaded guilty to attempted forgery and attempted insurance fraud after submitting a bogus receipt for a $1,609 windshield repair to her insurance company.

Candice Leigh Chapman, 31, was sentenced last week to 45 hours of community service and a deferred sentence.

In June of 2010, Chapman filed a claim saying that she'd had a damaged windshield replaced in her Volkswagen Touareg and had paid for the repair herself. She emailed a copy of a quote from a Seattle auto glass company, with "paid" stamped on the  bottom.

But when her insurer, Farmers, called the glass shop to confirm the bill, the shop said it had never repaired or replaced the windshield. Nor do they use a "paid" stamp. At that point, Farmers turned the investigation over to the state insurance commissioner's Special Investigations Unit.

The unusual wrinkle in this case is what Chapman did for a living: She was an insurance company claims representative at a different insurance company. And her primary job responsibility was handling auto glass claims.

Costs - Reasonableness of Disbursements

Hamfler v. 1682787 Ontario Inc., [2011] O.J. No. 6190 (S.C.J.)

This is a useful case with respect to recovery of disbursements for expert reports following a trial. Justice Edwards applied a deep discount on several of the plaintiff's doctors’ and accountant’s fees for reports and trial preparation.

The jury awarded the plaintiff $188,000 in damages. He sought $87,600 in fees and $93,500 in disbursements. The main issue was the reasonableness of the disbursements.

Justice Edwards quoted Justice Borins in Moon v. Sher (2004), 246 D.L.R. (4th) 440 (C.A.) in holding that “a disbursement will be recoverable provided that it is both reasonable, not excessive and has been charged to the client." The following factors should be taken into account in determining reasonableness:

1. Did the evidence of the expert make a contribution to the case, and was it relevant to the issues?
2. Was the evidence of marginal value or was it crucial to the ultimate outcome at trial?
3. Was the cost of the expert or experts disproportionate to the economic value of the issue at risk?
4. Was the evidence of the expert duplicated by other experts called by the same party? Was the report of the expert overkill or did it provide the court with the necessary tools to properly conduct its assessment of a material issue?
(paragraph 17).

- Tara Pollitt

Flood awareness week: How to spot a flood-damaged car

In honor of National Flood Safety Awareness Week, here are some pointers on spotting a flood-damaged car:

-Smell. Particularly here in the rainy Pacific Northwest, it's very hard to dry out a flooded car quickly enough to prevent mold and mildew in the carpets, padding below the carpets, and the upholstery.

-Moisture in odd places inside the car. For example, look for moisture or condensation behind the gauges on the dashboard, a clock, and the display panel of a stereo. (Note: It's fairly common in the Northwest to see water or condensation in exterior lights, like taillights, turn signal lights, etc. in older vehicles. That's not necessarily a sign of flooding. Rain may have just seeped in through the gaskets that are supposed to seal the lights.)

-Check the car's unique Vehicle Identification Number to see if it has been reported as a salvage vehicle. These numbers are typically found on a small metal plate visible through the front windshield at the front of the dashboard. The National Insurance Crime Bureau runs a website where you can check VIN numbers -- up to 5 a day -- for free. (Hint: it's case-sensitive.)

-Dampness, mold, silt, mud or rust in low spots on the vehicle, such as under the spare tire in the trunk, the interior crevices of the trunk behind the wheels or in the glove compartment.

-Interior rust, such as springs under the seats.

-Check the car's oil. Engine oil contaminated with water will often look like chocolate milk.

NAIC survey: Most homeowners have no home inventory (and how to easily make one)

The National Association of Insurance Commissioners today released the results of a survey indicating that most Americans don't have a home inventory of their possessions.

The February survey indicated that 59 percent of consumers haven't made a list of what they own. Of those that had, nearly half didn't have receipts. More than a quarter didn't have photos of their property.

Home inventories are a key tool for recovering from a tornado, flood, earthquake or other disaster. They can speed up and dramatically simplify the insurance claims process. They can also help you and your agent decide if you have enough coverage if you have a rare collection or other high-value items. (On average, home contents are reimbursed only up to 50 percent of the home's insured value. In other words, if you're house is insured for $200,000, the maximum contents reimbursement would typically be $100,000.)

Last year, severe weather disasters inflicted more than $43 billion in the United States, according to the NAIC.

How to prepare a home inventory? There are smartphone applications to help. The myHOME Scr.APP.book app lets users capture images, descriptions, bar codes and serial numbers of personal possessions and stores the information electronically for safekeeping. The app organizes information by room and creates a back-up file for email sharing. There's a version for the iPhone and another version for Android phones.

For those without a smart phone, the NAIC offers a downloadable home inventory checklist and tips for effectively cataloguing your possessions.

More consumer tips: Company lookup, agent lookup, and where to look up financials

More tips for National Consumer Protection Week:

How to look up an insurer, including complaint history and disciplinary actions

How to look up an agent, insurance agency, or broker, including complaints and discipline

And how to find the company financial statements that show how your insurance company is doing.

We're the insurance regulator for the state of Washington. Not in Washington? Here's a map with links and contact info for every state's insurance regulator.

Consumer tips: How to look up complaints, available health plans and rate hikes

More tips for National Consumer Protection Week:

-Look up the number of consumer complaints against specific insurance companies

-Buying health coverage on your own? Here's how to find a health plan in your area

-And see if your health plan wants a rate increase.

(We're the state insurance regulator in Washington state. Don't live in Washington? Here's a handy map with links and contact info for your state's insurance regulator.)

Direct Buy Auto Warranty ordered to stop unauthorized insurance sales in WA

For the second time in less than a week, our office is ordering a New York-based company to stop selling unauthorized insurance in Washington state.

This time it's a company called Direct Buy Associates, Inc., although it also does business under several similar names, including Direct Buy Auto Warranty, Direct Buy Warranty, and DirectBuy Warranty. The order also includes AHMT Corp.

Direct Buy Associates and AHMT -- with have adjacent offices on a street in Brooklyn -- do business through websites like directbuyautowarranty.com, directbuywarranty.com and directbuyautowarranty.net. The companies have also listed mailing addresses that include a mailstop in New Jersey, a virtual office in New Jersey, and a European headquarters in Cyprus.

In 2011, we began getting complaints from Washington consumers who had bought plans from these companies. The plans, sold since at least 2009, purported to cover vehicle repairs. The companies sold at least 57 such plans to Washingtonians. At least one Washington consumer who paid the fees monthly was charged international transaction fees from Cyprus.

None of companies or principals named in the order are authorized to transact insurance in Washington. Nor are they registered here as service contract providers.

Our order requires the companies to send copies of the order to all their Washington customers, and to report to us all premiums they've collected for business here.

The order also names a number of individuals, including Albert V. Hakim, Michael A Hakim, R.D. Frazier, Jon Braidsworth and Robert Harrington.

How Demographics are Going to Change Everything

Demographics are the art and the science of statistics about population. Before you immediately assume they are boring and irrelevant, read one more paragraph.

In the late 1990’s, the U.S. economy had ten new working-age taxpayers to help support each newly retiring senior. That’s ten to one. (10:1) But in 2012, for the first time in our country’s entire history, we have more newly retiring seniors than we have new working-age population! (I know it is unpopular, but we have aborted 40 millions potential workers, too).

It gets worse. Much worse. By 2022, there may well be only one new working-age citizen for ten new senior citizens. (1:10). It is a total reversal of the system, as we know it.

Understand, that all of Social Security, taxes and even the stock markets are based on the idea that new workers will be funding those that have retired. After all, if the seniors sell their stocks to live, who will buy them when ten sell and only one worker is buying?

How will Social Security survive with only one worker’s taxes trying to support ten retirees? Unless it changes, it cannot. We live a lot longer now, too. In 1950, most people expected to live only five to eight more years after reaching age 65. Currently, that has doubled to about fifteen years, and it’s climbing.

With this kind of increase in the sheer numbers of retirees, and with retirees living twice as long as they ever have, cuts will have to be made and they will be unpopular. It might just be political suicide to touch this electrified “third rail” of politics.

Someone--sooner or later--will have to deal with this issue. As for me, I do not think that Social Security can survive, as we know it. The problem is in the demographics.

Costs in Cases Where There are Multiple Defendants

Lawson v. Vierson, 2012 ONCA 25 (C.A.)

How will a court apportion costs where both the plaintiff and a co-defendant fail to accept offers to settle/contribute?

Lawson was in two motor vehicle accidents seven months apart. The actions were consolidated and proceeded to trial. The first defendant, Hart, offered to settle for $300,000. The second defendants, the Viersons, offered to settle or contribute by making a $100,000 payment to Lawson. Lawson’s offer was $1,250,000.

The jury found the injuries suffered were separate and distinct, and made separate damages assessments for each accident. The net amount awarded against the Viersons was $7,926.71 and $344,260.37 against Hart. The trial judge awarded Lawson costs of $482,000 apportioned 35% against the Viersons and 65% against Hart. The Viersons appealed.

At issue was the interplay of the costs consequences of r. 49.10 and r. 49.11. Rule 49.11 provides that where there are multiple defendants “alleged to be jointly or jointly and severally liable to the plaintiff in respect of a claim and rights of contribution or indemnity may exist between the defendants, the costs consequences prescribed by rule 49.10 do not apply to an offer to settle”.

The Court of Appeal held:

[49] In the circumstances of this case, it is significant that the combined Viersens and Hart offers exceeded the Lawsons’ recovery. The reason that the combined total exceeded the Lawsons’ recovery was because of the Viersens offer. When the Viersens offer is viewed in context rather than in isolation, it is therefore apparent that the offer was a genuine and generous offer to settle and, particularly when taken together with the Hart offer, complied with the spirit of rule 49.10. In these circumstances, the Viersens offer is the type of offer that, as contemplated by rule 49.13, ought to be given considerable weight in arriving at a costs award.

[50] Further, the trial judge appears to have discounted the fact the Viersens offer far exceeded the amount of the award made against them. Although the allegation of joint and several liability meant that pursuant to rule 49.11 the presumption of costs consequences in rule 49.10 did not apply, it would not, as the trial judge found, have been “impossible” or “negligent” for Ms. Lawson to have accepted the Viersens offer. The claim of joint and several liability that made the Viersens offer non-compliant with rule 49.11 was not made out at trial. In light of the jury’s award, the Viersens offer can, therefore, only be seen as having been very reasonable. Contrary to the view expressed by the trial judge, it would have been no more impossible or negligent for Ms. Lawson to have accepted the Viersens offer, than for any plaintiff to accept an offer to settle for an amount substantially less than the amount claimed. Given the outcome at trial, an accurate assessment of Ms. Lawson’s claim was that there was no joint and several liability. As a result, accepting the Viersens offer would not have prejudiced the claim against Mr. Hart and, therefore, would have been the correct decision.

Justice Rouleau awarded costs against the Viersons up to the date their offer was served equal to 35% of Lawson’s costs incurred to the date of the offer. The Viersons were entitled to their partial indemnity costs from the date of their offer payable by Hart since their offer was also an offer to contribute.

Although this case may have somewhat unusual circumstances, I suggest that those defending cases where there are multiple defendants should take it into consideration when making offers.

- Tara Pollitt

How to file a complaint against an insurance company

Having trouble getting an insurance claim paid? Waiting months?

We can often help. We're the insurance regulator for the state of Washington state, and we field thousands of calls a year from folks having trouble with claims. Last year, we got consumers $8 million in previously-denied or delayed claims.

There are two ways to reach us:

• Our toll-free hotline: 1-800-562-6900.
• Or file a complaint 24/7 with our online filing application.

Important note: If you don't live in Washington state, contact your state's insurance regulator. Here's a handy map with contact info.

Self-Insurance Industry Can Learn By Example in the Political Influence Game

This blog has commented previously about how the self-insurance/alternative risk transfer industry needs to get its act together if it wants to exercise the same amount of political power in Washington, DC as many other industries of comparable size.

If you need to be convinced of this conclusion, you may want to take notice of legislative
developments related to whether broker commissions will be excluded from health insurer medical loss ratio calculations in accordance with the Affordable Care Act.

A few months ago, HHS determined that broker commissions would not be carved out of MLR calculations. This prompted the brokers to ramp up their political efforts in Congress to pass legislation to override the HHS final rule.

To put a finer point on this description, the brokers have been making more political
contributions and showing up in Washington, Dc to press their case with key members of Congress.

As of today, the political action committee sponsored by one of their trade groups is more than five times as large as the PAC supporting the self-insurance/ART industry. Another broker trade group expects to have nearly 1,000 members come to Washington, DC for a dedicated lobbying event.

This activity has produced initial success. The Access to Professional Health Insurance Advisors (H.R. 1206), originally introduced in the House last March, now has nearly 180 co-sponsors. A companion bill (S. 2068) has now been introduced in the Senate and has attracted bipartisan
support.

While it still remains a heavy lift to pass significant legislation in an election year, the brokers have made solid progress by any objective standard. The self-insurance/ART industry could learn by example.

Self-insurers and captive insurance companies have good stories to tell for sure, but that is not enough to have real political influence in Washington, DC.

This blog estimates that about five percent of those individuals active in the self-insurance/ART industry directly support political advocacy efforts that would directly benefit their business
interests. Such political participation rate is certainly much higher among the brokers -- and we have illustrated their return on investment.

Clearly, expectations would be different if the self-insurance/ART industry did not have the necessary financial and human resources to leverage significant political influence.

But it does.

The NAIC's Identity Crisis

So just who is the National Association of Insurance Commissioners (NAIC)? Apparently the answer depends on particular circumstances. This has actually been the case for some time,
but more people seem to be paying attention now because of the organization’s “mission creep” at both the state and federal level.

Case in point is a February 28, 2012 letter from Rep. Ed Royce (R-CA) to NAIC president Kevin McCarty and CEO Therese Vaughan requesting clarification of exactly how this collection of insurance regulators is defining themselves.

Rep. Royce’s interest was sparked by recent press reports that the NAIC is re-branding itself
as a “standard –setting” organization rather than a private non-profit organization, as it has previously cited its 501 ( c) (3) status to distance itself from exercising any regulatory authority, thereby enabling the NAIC to sidestep open meeting and Sunshine law requirements.

While there have been grumblings about NAIC’s organizational structure and status for some time, it is now getting more attention largely because of the establishment of the Federal Insurance Office and health care reform implementation requirements, which have more
clearly exposed the NAIC’s activist nature.

So let’s explore the NAIC’s identify crisis a bit.

It is on record stating that “when individual insurance commissioners gather as members
gather as members of the NAIC, they are not considered a governmental or public body, but rather are a private group. As an organization, the NAIC does not have any regulatory
authority.”

Well, I guess the validity of this statement depends on how you define the term authority.
While technically true that the NAIC cannot mandate state compliance with any
“standards” it develops, such authority is effectively exercised indirectly through the organization’s accreditation program.

Another interesting observation is that 501 ( c ) (3) organizations are generally restricted
from engaging in political or lobbying activities. But apparently the NAIC does not feel
confined by the U.S. tax code as it regularly dispatches lobbyists to the U.S. Capitol to influence members of Congress on insurance-related legislation.

They certainly have been engaged in an ongoing effort to kill or neuter legislation designed
to modernize the Liability Risk Retention Act. Their most recent objections include
giving the Federal Insurance Office any oversight responsibility with regard to RRG regulation and the establishment of federal corporate governance standard for RRGs.

In related news, the NAIC represented itself as a “standard setter” on insurance issues in a
recent friend of the course brief to the Maine Supreme Court involving premiums charged for health insurance. As part of its brief, the NAIC said it had the right to participate because ‘through the NAIC, state insurance regulators establish standards and best practices, conduct peer review and coordinate their regulatory oversight.”

Rep. Royce concludes his letter by asking NAIC officials to respond to three specific questions:

1. What is NAIC’s status? Is it a trade association? Is it a formal part of “the national system
of state-based insurance regulation in the U.S..”? If so, why did it (a) testify to Congress,
when asked specifically about its status, that it does not “hold ourselves out as some kind of …national regulatory system”; and (b) insist to NCOIL that is not considered a public body” and “does not have any regulatory authority”?

2. Does NAIC agree that as a self-described “private group,” it may not “regulate in the field
of interstate commerce”?

3. As a 501( c ) ( 3) non-profit corporation, does the NAIC not file a Form 990, a routine financial statement for non-profits, with the Internal Revenue Service (IRS)? If the NAIC has been formally exempted by the IRS from filing this information, please provide written documentation of this exemption, and explain why the NAIC feels it necessary to keep this disclosure from public scrutiny.

We look forward to seeing the NAIC’s response and will report on it accordingly. In the
meantime, this blog can report that there is no record of the NAIC filing 990 reports.

It's National Consumer Protection Week - March 4-10

Have you ever had your insurance claim denied or maybe you filed a claim and received less than you thought you deserved. Ever have trouble reading an insurance policy? If you're reading this now, you know about the Office of the Insurance Commissioner and the services we provide. But you probably know a handful of people who've never heard of us.

This week (March 4-10) is National Consumer Protection Week. Tell a friend about our consumer services and follow us on Facebook.

More than 500 people a month file complaints with us. Last year alone, we recovered more than $8.5 million for Washington state insurance consumers who had their claims denied or delayed.

Just in last few months we helped:

• A Redmond consumer get a $29,000 health insurance claim paid


• A Lake Stevens consumer collect an additional $2,553 on an auto claim


• A Rochester consumer get a $7,574 refund on their auto warranty


• A Sammamish consumer get their homeowners policy reinstated

Maybe we can help you! If you or someone you know has an insurance question or complaint, visit http://www.insurance.wa.gov/. We take complaints online and you can track our progress 24 hours a day, seven days a week. Or call our Insurance Consumer Hotline at 1-800-562-6900, Monday-Friday, 8 a.m. -5 p.m.

Kathleen's Pregnant Pause

“I’m not sure that is going to work,” commented House Energy and Commerce Committee Chairman Fred Upton.

Fellow committee member Rep. Phil Gingrey chuckled later as he asked out loud “So, what is she talking about? Here’s the bill, pay it – that’s what they do.”

These pointed comments were prompted in response to testimony delivered by HHS Secretary Kathleen Sebelius during a March 1 committee hearing on the Administration’s evolving policy on health plan contraceptive coverage requirements for religious institutions.

Ms. Sebelius began her testimony by explaining that organizations affiliated with religious institutions would not have to cover contraceptives if they objected on grounds of conscience.
Instead, insurers would be required to offer birth control free of charge to the employees of those organizations.

So what about self-insured religious organizations (of which there are many)?

After pausing to consider the question, Secretary Sebelius replied that the organizations’ third party administrators might be enlisted to provide contraceptive coverage.

Of course, TPAs are not insurance entities and therefore by definition cannot provide “coverage” for anything. Same issue for ASO providers event though they are connected to insurance entities. These are inconvenient facts to be sure.

But not to worry, as Secretary Sebelius reassured everyone that the department would reach out and “have dialogue with folks”before proposing a rule in the near future.

Perhaps there should have been some “folks” in the room when this health care reform plan was hatched in the first place.

Fourth Circuit Rules that FLSA Claims Constitute “Wrongful Act” Under CGL Policy

Post by Logan Wells

In a decision published February 24, 2012, the United States Court of Appeals for the Fourth Circuit held that an insured’s violation of the Fair Labor Standards Act (“FLSA”) constituted a “wrongful act” under the terms of the defendant school board’s commercial general liability (“CGL”) policy, thereby reversing a decision by the United States District Court for the Western District of Virginia.


In Republic Franklin Insurance Company v. Albemarle County School Board, employees of the Albemarle County School Board (“Board”) filed an action against the Board alleging the Board had violated the FLSA by failing to pay them the overtime rate when they worked in excess of forty (40) hours a week. The Board tendered the defense of the underlying suit to its insurer, Republic Franklin Insurance Company (“Republic”).


Under the terms of the CGL policy issued by Republic to the Board, Republic agreed to "pay for all ‘loss’ resulting from a ‘claim’ for a ‘wrongful act’ to which this insurance applies." The policy defined "loss" as "any amount which an insured is legally obligated to pay as damages," and the term included coverage for punitive damages "where insurable by law." "Loss," however, did not include "fines or penalties imposed by law" or "operating costs of [the insured’s] institution such as would be included in [the insured’s] ‘educational institution’s’ budget. "The policy defined "wrongful act" as "any breach of duty, neglect, error, omission, misstatement, or misleading statement in the discharge of ‘educational institution’ duties."


Republic agreed to defend the underlying action with a reservation of rights to challenge coverage, and filed a declaratory judgment against the Board seeking a declaration that Republic owed no duty to defend the Board in the underlying action, and owed no duty to indemnify the Board for any judgment that might be entered in the underlying action. Specifically, Republic asserted that (1) FLSA violations were not “wrongful acts” as covered by the CGL policy Republic issued to the Board; and (2) that any judgment that might be entered against the board would no impose “losses” on the Board, as “loss” was defined in the policy. The Board counterclaimed for a declaratory judgment that Republic had a duty to defend the underlying action and a duty to indemnify the Board for the amount of any judgment that might be entered.


The parties filed cross-motions for summary judgment. The district court denied the Board’s motion and granted Republic’s motion, declaring that Republic owed no duty to defend or indemnify the Board, and finding that, inter alia, the FLSA complaint did not allege a “wrongful act.” The district court also found that because the claim for back wages was not a claim for “damages,” as required by the definition of loss, but rather an existing operating cost, the claim liquidated damages and attorneys’ fees was also not a loss “because that claim did not exist independently of the claim for back wages.”


The Board subsequently appealed the ruling of the district court, leaving the Fourth Circuit to decide two issues: (1) whether the underlying FLSA complaint alleged a claim for a wrongful act; and (2) whether liquidated damages and attorneys’ fees claimed because of the FLSA violations were losses covered by the policy.

Wrongful Act

With regard to the “wrongful act” issue, Republic argued the Board’s failure to comply with the FLSA could not be a wrongful act because the Board had a preexisting duty to comply with the FLSA, and contended that the Board’s obligation to pay wages arose as soon as the work at issue was performed and therefore could not constitute a later wrongful action covered by the policy.


Rejecting Republic’s argument, the Fourth Circuit found that, “while a preexisting duty might be relevant to whether an insured suffers an insurable loss, it cannot be relevant to whether the insured is the subject of a claim for a wrongful act.” The court further explained:

Every duty breached or violated is necessarily a preexisting duty, and it is the breach or violation of that duty which constitutes a wrongful act. And, this is precisely how the insurance policy in this case defines a wrongful act: "‘Wrongful act’ means any breach of duty, neglect, error, [or] omission.” In the underlying FLSA complaint, the employees allege that the School Board failed to pay them wages for all work done and for overtime work, in violation of the duties imposed by the FLSA. The School Board’s alleged failures are thus breaches of the duty imposed by the FLSA and therefore wrongful acts. By its plain language, the policy covers claims for the wrongful acts alleged in the underlying complaint.

(Emphasis in the original).

The court further noted that Republic’s argument “conflate[d] the concepts of ‘wrongful act’ and ‘loss’”:

Confusingly, [Republic] conflates the concepts of "wrongful act" and "loss," failing to recognize that a breach of a preexisting duty to pay is a wrongful act but that the resulting obligation to pay back wages may not be a loss resulting from that wrongful act. Such loss could only arise if the failure to fulfill the preexisting duty to pay wages caused "damages" apart from the back wages not paid. See Pacific Ins. Co. v. Eaton Vance Mgmt., 369 F.3d 584, 590-91 (1st Cir. 2004).

See also Macy Dep’t Stores v. Fed. Ins. Co., 305 F.3d 597 (7th Cir. 2002); Oktibbeha Cnty. Sch. Dist. v. Coregis Ins. Co., 173 F. Supp. 2d 541 (N.D. Miss. 2001). The court explained:

[A] judgment ordering an insured to pay money that the insured was already obligated to pay, either by contract or by statute, is not a "loss" covered under an insurance policy that requires that the loss be caused by a "wrongful act." The alleged "loss" in such cases arises from the contract or the statute itself, not from the failure to abide by it....[However, the rule is not] that the failure to comply with a preexisting duty cannot be a “wrongful act.” Such a rule would not only be incompatible with the definition of "wrongful act" in such policies—defined broadly to include "any breach of duty"— but also is counterintuitive because no violation of the law could ever be a "wrongful act" as there would always be preexisting duty to follow the law.

Accordingly, the court found that the underlying complaint alleged “wrongful acts” on the part of the Board within the meaning of the policy issued by Republic.

Losses

With regard to whether liquidated damages and attorneys’ fees claimed because of the FLSA violations were losses covered by the policy, Republic argued that the liquidated damages and fees were not covered losses because (1) they are inextricably connected with the claims for back wages and overtime pay, which are not losses; (2) they are "fines or penalties imposed by law" and therefore excluded under the policy; and (3) they are restitutionary in nature and therefore not "damages," as required by the policy’s definition of "loss." The Board disagreed and argued that unlike back wages, the liquidated damages and attorney’s fees were damages resulting from its alleged wrongful acts.

The Fourth Circuit rejected Republic’s argument and held that “because the underlying FLSA complaint .... demand[ed] not only back wages, but also liquidated damages and attorneys’ fees resulting from the School Board’s wrongful acts....any judgment against the School Board, to the extent it would include liquidated damages and attorneys’ fees, would amount to a ‘loss’...resulting from a claim for a ‘wrongful act.’” In so finding, the court relied on controlling Supreme Court precedent “holding that liquidated damages as authorized by the FLSA are not penalties, but rather, compensatory damages ‘for the retention of a workman’s pay which might result in damages too obscure and difficult of proof for estimate other than by liquidated damages.’”  (Quoting Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 (1944)). Thus, the Fourth Circuit found that Republic’s policy provided coverage for the liquidated damages and attorneys’ fees as a loss, as defined by the terms of the policy.



The insurance industry is doing just fine, apparently

Van Mayhall, consistently one of the most interesting bloggers on big-picture insurance issues (and, no, I'm not trying to damn with faint praise), has done it again. Over at Insurance Regulatory Law he has written this post asserting that in contradiction to public perception the insurance industry has suffered few losses in recent years.

CARS AS CHARACTERS

Cars as Characters

Like most guys, I like cars and trucks. They sometimes represent how we feel about ourselves or what we think is important.

Certain cars seem to reflect a time in our lives. For instance, when I think of the “General Lee” (1969 Dodge Charger R/T) from “Dukes of Hazzard,” I recall scenes form my childhood, usually some after-school snacking.

The highly modified 1969 Dodge Charger had the doors welded shut so you had to climb in and out through the windows. The bright orange Charger featured “01″ on both sides and had a huge Confederate flag on the top. I think I even played Dixie when you blew the horn. What was really amazing was its uncanny ability to squeal its tires on dirt roads! There several of these cars and one sold at auction for $450,000.

Many other vehicles really became their own characters. You can probably add some. I bet you remember these as well.

I now only loved the television version of the Ferrari 308 GTS used in “Magnum, P.I.,” I love my Matchbox and Hot Wheels versions. Affable Tom Selleck made this one famous. He also made all of us want to be head of security for an estate in Hawaii.

A similar series that really made the car the main character featured the 1982 Pontiac Trans Am used in “Knight Rider.” David Hasselhoff was second-fiddle to “KITT,” the black talking car with the cool red scanner in the hood. It even drove itself.

This was not the first cool black Trans Am. Remember “Smokey and the Bandit?” Eastbound and down? The black 1977 Trans Am with the obnoxious golden firebird covering the ample hood? In that movie we learned that, for some reason, Coors used to be illegal east of the Mississippi. Second only to Star Wars that year, this movie was an epic hit.

How is that two of this list are basically the same car? Black Trans Ams. And now, you cannot even buy one, or even a Pontiac at all. Pontiac closed up shop a couple years back.

Speaking of cool black cars, was there even one cooler at the time than the Batmobile? I had no idea what kind of car it was, but turns out it was a 1955 Ford Lincoln Futura concept car. You might recall the silliness of the predicaments Batman and Robin found themselves in, or the childish “Bam!” graphics when Batman really slugged the bad guy, but you cannot forget the Batmobile.

If we are talking silly, another intelligent car must be included. Not because it is cool. It is imposible for a VW to be cool to me, but the “Love Bug,” alias “Herbie,” was a cute little 1964 Volkswagen Beetle.

From silly to scary, I must also mention the creepier cars. “Christine,” the red 1958 Plymouth Fury that terrorized us all. The movie “Ghostbusters” (was that really made back in 1984?) featured the Ectomobile (Ecto-1)which really was a1959 Cadillac Miller-Meteor Ambulance. Who ya gonna call?

But there are two character cars that stand out to me as the coolest ever. I base this on the highly scientific view that I would still want to driver either of these even now. The first is “Bullitt’s” dark green 1968 Mustang GT 390 CID Fastback piloted by Steve McQueen’s fastback through San Francisco in the most famous car chase in movie history. By the way, it was being pursued by a pretty cool black 1968 Dodge Charger 440 Magnum. I was surprised to find that the chase was shot at normal film speed, though it looks downright frenetic.

A very different kind of cool, British cool, is shown by the tastefully powerful 1963 Aston Martin DB5 driven by none other than, “Bond…James Bond,” in “Goldfinger.” It currently sits in The Spy Museum in Washington, D.C. But if it ever sells, it will be a large number. One DB5 used in Goldfinger and Thunderball was auctioned for over $4,000,000. I guess someone else thought it was cool, too.

But the coolest to me, is nowhere near the most expensive. Nor is it the fastest. Shoot, it’s just a V6. But it was the hit Michael J. Fox movie, “Back to the Future” which introduced most of the world to the 1982 DeLorean DMC-12. The stainless steel car had gull wing doors. Oh, and a flux capacitor that sent it back in time. Though made in real life (without the flux capacitor) they were slow and unreliable. When John DeLorean was indicted on drug charges, they became extinct. Oddly, he beat the charges, but the company went bankrupt. I understand a new company has started to make them again, up to more modern standards. They need to at least be faster than a SUV to look that cool.

So there is my list. If you want to drop off a DeLorean for me, please have it turbo-charged first. What would you add to this list?

___________

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What is a Deposition??

Depositions

As part of lawsuit, parties and witnesses are often asked to give depositions. A deposition consists of attorneys asking questions to a person, called a deponent, under oath.

The deponent is asked to “swear or affirm” that she is telling the truth. In the old days, they used to end that with, “so help you God.” That, like most mentions of the Almighty in courts, has fallen out of fashion. The reason for the word “affirm,” as opposed to “swear,” are Biblical verses like James 5:12 and Matthew 5:34 which say, “do not swear.”

At any rate, the attorney asking questions has great latitude to during this process, known as “discovery,” to seek a broad range of information. In injury cases, this includes prior health history, educational background, family history, work record and injuries claimed from the accident. Also, there are lines of questions regarding loss of wages and any permanent restrictions related to the accident.

It is important to be accurate during a deposition. Even so, there are almost certainly some things that the deponent will forget or misremember. However, if the person being deposed has been truthful in all other respects, a flaw or two in memory are usually are not fatal to the credibility of the deponent. In fact, it is usually perceived as normal for there to be an occasional memory lapse. If someone is overly rehearsed is sometimes even a sign of dishonesty.

When lawyers ask “never” they mean “never.” Those without legal training (those that are still normal) will often use “never” to mean “usually not” or “rarely.” This causes a lot of problems. It is important to be clear in depositions, and in talking to any investigative authorities. Inconsistencies are the undoing of many a deponent.

I also recommend against giving recorded statements after an injury, for similar reasons.

________

New York company ordered to stop selling unauthorized insurance in Washington

Update (June 1, 2012): The order has been rescinded. UCAA participated in an investigation of this program and provided information showing that the company had committed no violations.

Our office today ordered the United Consumer Awareness Association to stop selling unauthorized health insurance in Washington state.

The company, a not-for-profit entity incorporated in Missouri, appears to have its home office in Syosset, New York.

The company, which is not licensed to solicit and sell limited-benefit medical insurance in Washington, nonetheless sold policies to 44 Washingtonians.

The order takes effect immediately. The company has the right to demand a hearing.