Ask Tim

2 Minutes With Tim: Hurricane Irene

This is a video version of the blog post I made earlier today about how to prepare for Hurricane Irene.

 

Download 2 Minutes With Tim: Hurricane Irene

Leave a Comment

URGENT: IIABNY Members Should Get Ready For Hurricane Irene

IIABNY strongly encourages members in the New York City metro area, including Westchester County and the two counties of Long Island, to make serious preparations today for the possibility that Hurricane Irene will strike the area. As of 8 a.m. today, the National Weather Service was predicting:

“The outer bands from Irene (are likely to begin) to impact the area late Saturday into Saturday evening. Conditions are then likely to rapidly deteriorate in torrential rain and strengthening winds late Saturday night. The worst conditions are likely late Saturday night into Sunday afternoon with increasing potential for damaging winds...flooding rains...and significant coastal flooding across much of the region. Depending on the exact track...intensity and timing of hurricane Irene...there is potential for moderate to major coastal flooding damage if the greatest surge coincides with the times of high tides Sunday morning and/or Sunday evening. This surge will be exacerbated by battering surf.”

Given the grimness of this forecast, IIABNY urges all members in the affected areas to take the following steps suggested by the New York City Office of Emergency Management (Note: Due to heavy Internet traffic, this link is not working consistently today):

• Assess the potential hazards (i.e., wind and water damage).
• If you don’t already have a plan for continuing operations, make plans now. To do so:
  • Identify critical business operations;
  • Create a management chain to include at least one person on-site and one off-site;
  • If possible, contact your clients before the storm and let them know how they will be able to contact you afterward;
  • Make sure that appropriate staff members have laptop computers or smart phones so that can retrieve and distribute information as needed;
  • Make back-up copies of your electronic records and store at least one copy off-site;
  • Store back-up paper copies of important documents off-site;
  • Determine how you will operate if your building and/or utilities are unavailable after the storm.
  • Keep handy claim reporting contact information for the carriers that insure your business.
• Discuss the situation with your staff. Collect landline and cell phone numbers so you can keep in touch. Make sure every employee understands what his or her role and responsibilities will be during and after the storm. Encourage them to take immediate steps to prepare themselves and their families for the storm. Be prepared for the likelihood that your employees will be experiencing their own personal emergencies because of the storm and will probably be distracted and anxious.
• To the extent possible and feasible, secure your facilities, building, equipment and records.
• Lastly, don’t be a hero. If authorities order you and your staff to evacuate, do so immediately. Unlike property, people can’t be replaced.

IIABNY is prepared to assist affected members during this emergency. If you have phone service, call (800) 962-7950, dial extension 212 and let us know how we can help.

Leave a Comment

Health Care Reform Primer: Getting Tax Credits and Cost-Sharing Reductions in Advance

We've been reviewing the premium tax credits and cost-sharing reductions eligible individuals can receive to help them pay for health care. Last week, we looked at how the government will verify that someone is eligible for these supports. The tax credits and co-pay reductions are great, but they help people a lot more if they can get them during the year so they don't have to wait until April 15 to get their money. The Patient Protection and Affordable Care Act has provisions to allow them to determine their eligibility and receive payment in advance.

The Department of Health and Human Services, working with the Treasury Department, must create a program whereby an individual's income eligibility can be checked in advance at the request of the state exchange. Upon making the determination, HHS notifies the exchange and Treasury; it gives Treasury the name and I.D. number of the individual's employer, if the employer does not provide minimum essential coverage or if the coverage meets the law's definition of "unaffordable"; and Treasury sends advance payments of the credits and cost-sharing reductions directly to the issuers of the health plans.

HHS will determine an individual's eligibility during the individual's open enrollment period, based on her household income for the most recent taxable year for which information is available. HHS must set up procedures for making advance determinations based on changes in circumstances. An individual claiming a 20 percent or greater decrease in income or filing for unemployment insurance may provide a later time period as the basis of estimated income. Also, the procedure must contemplate situations where the individual did not have to file a tax return in the second preceding taxable year.

HHS will pay the credits and cost-sharing reductions to plan issuers monthly or on some other basis established by the department. Issuers must then reduce the individual's premium, notify the exchange and HHS of the reduction, and show on the individual's bill the amount of the premium reduction. In cases where the individual fails to pay the premium, the issuer must notify HHS and give the insured three months to pay the amount due.

HHS may not make any payments, credits or cost-sharing reductions for illegal immigrants. States have the option to make payments to or on behalf of individuals that are in addition to the federal payments. 

HHS must create a program for screening individuals who apply for coverage through an exchange to see if they qualify for state health programs. The program will automatically enroll eligible individuals in Medicaid and or the state children's health insurance program. The deparmtnet must create an easy to complete application form in paper and online formats, but states can develop their own as long as they meet the law's standards. States will create secure electronic interfaces that allow the exchange of eligibility data for all health programs based on a single application form.  The state health programs will participate in data matching arrangements for determining eligibility, and they will verify eligibility using reliable third party data, unless they find that the cost outweighs the expected gains in accuracy, efficiency, and program participation. Exchanges can contract out the eligibility determination tasks to state Medicaid agencies if they meet standards for feduced administrative costs, eligibility errors, and disruptions in coverage. 

Lastly, the law authorizes the Treasury Department to provide taxpayer information to HHS, and HHS is authorized to notify excnahges of any inconsistencies between the information they have and the information HHS got from Treasury. Use of taxpayers' personal information is restricted to determining eligibility for participation in the exchanges and in state health programs. HHS and the exchanges are allowed to collect and use participating individuals' names and Social Security numbers. When participating individuals apply for other federal assistance, the amounts of their premium tax credits and cost-sharing reductions will not affect their eligibility.

Next time: What's in it for small business.

Leave a Comment

 

10 Years Later: Insurance Implications of 9/11/01

Dr. Robert Hartwig, president of the Insurance Information Institute and former at-large director for IIABNY, recorded this six-minute video about the terrorist attacks of September 11, 2001 from the perspective of 10 years later. Standing at the site of the former World Trade Center and the future Freedom Tower, he looks at what America in general and the insurance industry in particular have learned since that awful day. It's well worth your time.

Leave a Comment

No Coverage for a Child's Car Seat Under an Auto Policy?

Question from an IIABNY member: We have a client who made collision and Personal Injury Protection (No-Fault) claims against their own auto policy (provided by Company A.) Our client was rear-ended;  the driver and passenger sustained injuries. Our client’s auto was deemed a total loss. In addition to the damages to the auto and the personal injury, she is looking for reimbursement for a car seat that was in the auto at the time of the loss. (I am not sure if the child was in the car seat at the time of the loss- there are no notes on that.) 

Our client's insurer (company A) is advising that their own policy does not provide any coverage for the car seat, and she will therefore need to contact the other driver's insurer (company B) for reimbursement.  Our client had our office fax an invoice to Company B on her behalf- a claim had already been set up by the other driver. Now company B wants to conduct their own interviews with our client and the driver/passenger of her auto and/or have paperwork completed before they will consider payment for the car seat (apparently, liability has not yet been accepted or determined.)  

Our client does not feel she should have to go through this process with Company B since she already completed it with her own carrier- and I have to say, I was surprised her carrier 1) doesn’t consider the car seat “equipment” of the automobile; and 2) would want her discussing details of the loss with the other insurer (company B) not only from a liability standpoint but also from a customer service standpoint.

Answer: I’m curious as to why your insured’s carrier is denying coverage for the car seat. For purposes of discussion, I’m assuming that she bought the equivalent of the ISO Personal Auto Policy, PP 00 01 01 05, as amended by the Amendment of Policy Provisions – New York, PP 01 79 04 09. The Insuring Agreement for Part D – Coverage For Damage To Your Auto states, “We will pay for direct and accidental loss to ‘your covered auto’ or any ‘non-owned auto’, including their equipment, minus any applicable deductible shown in the Declarations…” (emphasis added).

Part D goes on to exclude some personal property exposures, including:

• Electronic equipment
• Tapes, records, discs, or other media
• Radar or laser equipment
• Custom furnishings or other equipment in pickup trucks and vans.

None of these exclusions appears to remove coverage for a car seat. In addition, since a car seat by definition is designed to be used in a motor vehicle, I think it’s reasonable to argue that it is a piece of automobile equipment. Consequently, without an exclusion, the policy should provide coverage. (I suppose an argument could be made for coverage under the insured’s Homeowners policy, but car seats are normally not left lying around the house. When put to their normal use, they’re in cars.)
 
Company B’s response seems excessive to me, considering we’re just talking about a $200 car seat. I think her own carrier should pay for the car seat, then subrogate against company B.

Leave a Comment

Financial Markets and Health Care: More in Common Than You Think

The similarity between financial markets and healthcare: uncertainty

Written on August 18, 2011 by Wendy Lynch, Ph.D. in HHCF Blog

A question: Does uncertainty in medicine mean consumers should be more or less involved in choices?

As the country watched wild swings in the stock market these past weeks, every investor faced unfortunate hindsight: if only I had cashed out at 12,500! Combined with the pain of continued uncertainty, many investors decided to remove their (remaining) funds simply to stop the discomfort of an unknown future.

While we all dread the anguish of downward market fluctuations and wonder daily what it is store for our dwindling nest eggs, no one can change the fundamental truths of investing: risk and uncertainty.  Yes, experts can advise us and help us assess varying degrees of risk among options, but no one can guarantee the success of our investment decisions, no matter how well informed.

If the world of financial markets is this uncertain, should investors be less involved in the decisions about where they place their money and how much risk they assume?   One could easily argue that the average investor is not capable of making good decisions.  So, should we all find a seasoned stock broker to make decisions for us, independent of our personal circumstances and preferences? After all, they are the experts—right?

What about letting someone else make decisions about our health?

There is more of a parallel between managing financial assets and health assets than most of us would like to believe. Would it surprise you to know that of more than 1,100  medical studies conducted on new treatments or therapies between 2006 and 2010, 92%  were labeled unreliable (1)?  Or that 75% of new treatments in the past 20 years provided no clinical improvement (safety, efficacy or compliance) over existing treatment (2)? Or that scientists conducting medical trials admit being pressured or influenced by the sponsors or manufacturers funding the research (3)? Or that the popular press (or researchers themselves) often exaggerates research findings to make the study results more compelling (4)?

And this is just the part of standard medical practice that has been studied; a large part has never been investigated carefully at all.  By some estimates, over half of what is accepted as the “right” course of treatment has no scientific basis; rather, they’ve simply became customary based on anecdotes and traditions passed on over time (5). Almost every week we hear of a study that disputes, updates, or flat-out reverses a medical “fact” proving that a standard practice has no proven basis (6).

To be fair, the presence of uncertainty does not imply a failure of medic

via www.hcmsgroup.com

This is a very thought-provoking post by Wendy Lynch, as it draws an analogy between investing and health care. We're all investors and we all need health care. So how much do we need to know, and how involved should we be in decisions affecting our financial and physical well-being? Lynch provides a compelling answer.

This discussion has implications for us as consumers of health care and as insurance professionals. The end goal of insurance is to restore the person who suffers a loss to the same position or condition she was in before the loss. Consequently, much of the property-casualty insurance claim dollar goes toward paying for (hopefully) effective medical treatment. The answers to the questions Lynch raises in this post have a great influence on just how effective that treatment will be.

Leave a Comment

Think a NY Insurer Can't Void a Policy for Misrepresentation? Think Again.

New York has a reputation as a state that's pretty friendly to consumers, so I think it's notable that an appellate court last month voided a Homeowners insurance policy because the insured lied on the application. George Perkins, who owned a dog, answered "no" to the question on the application asking whether he owned any animals or exotic pets. Two years later, his dog bit someone visiting the home; the victim suffered "significant injuries." When the insurance company received notice of the claim, it sent a cancellation notice on the grounds that the risk had changed -- the insured now had a "vicious dog." Almost a year later, the insurer found out that the protective pooch had been living there all along. The insurer sought to void the policy. As you can well imagine, lawsuits ensued. Incredibly, the trial court found the question on the application to be unclear and ruled against the carrier.

The Appellate Division's Third Department (the same department that will consider IIABNY's appeal concerning Regulation 194) reversed the trial court, saying, "(W)e find no ambiguity because, while a dog is not an exotic pet, it clearly is an animal..." This is a polite way of saying, "Give me a break."

It's fashionable to be cynical and believe that judges today lack common sense. This decision is exhibit A for the opposite argument. Long-time readers of this blog know that my heart melts at the sight of a dog, but both the insurer and the appellate court got it right on this one. The requirement for dealing in good faith goes both ways. Tell the truth on your insurance applications.

Leave a Comment

Health Care Reform Primer: Determining Eligibility for Help

The last few posts in the health care reform primer looked at the premium tax credits and cost-sharing reductions that will make health care more affordable for eligible individuals (that's the "affordable care" part of the Patient Protection and Affordable Care Act.) Now let's look at how the government will determine whether someone is eligible for help.

The federal Department of Health and Human Services must create a program for determining:

• Whether an individual seeking coverage through an exchange or claiming premium tax credits or reduced cost-sharing has citizen or legal immigrant status
• Whether an individual claiming premium tax credits or reduced cost-sharing meets the income and coverage requirements and, if so, the amounts of the credits and reductions
• Whether an individual's coverage under an employer-sponsored plan meets the criteria for being "unaffordable"
• Whether to grant an individual a waiver from the mandate to purchase insurance coverage.

Every applicant for individual coverage through an exchange will have to provide:

• Name, address and date of birth for every person to be covered
• Proof of citizenship or legal immigration status, including a valid Social Security number and/or evidence to be determined by HHS and the Department of Homeland Security

Applicants for premium tax credits and cost-sharing reductions must provide:

• Income and family size information
• Changes in income, family size, marital status or other household circumstances, tax filing status, filing for unemployment insurance benefits, or other significant changes that affect eligibility, 

Those claiming that their employer's plan does not meet coverage requirements or is unaffordable must provide:

• Employer's name, address and I.D. number
• Whether the individual is a full-time or part-time employee
• Whether the employer provides the minimum essential coverage
• The lowest cost coverage option the employer offers and the individual's required premium contribution under the plan
• Information on income, family size and changes in circumstances.

Employees who change jobs or take additional jobs must notify the exchange and provide the related information.

Individuals seeking an exemption from the individual coverage mandate must provide:

• Information prescribed by HHS in the case of a person seeking an exemption on religious grounds, as an Indian, or on the basis of hardship
• The information I described above regarding income, family size, circumstances, employer and employer-sponsored plans for those seeking an exemption based on lack of affordable coverge or because they have incomes below 100 percent of the poverty line.

The exchanges will provide individuals' information to HHS, which will, electronically or otherwise, verify citizenship or immigration status with the Social Security Administration and DHS and income and family size information with the Treasury Department. HHS has flexibility to modify the verification procedures to reduce administrative costs and burdens on coverage applicants, but it must meet IRS requirements for confidentiality, disclosure, maintenance and use of the information. HHS can devise its own methods for verifying information that does not have to be submitted to the SSA, DHS or Treasury Department. It has the option of requiring the exchanges to verify this information.

If DHS or the SSA finds inconsistencies regarding an applicant's citizenship or legal immigrant status, HHS will determine the person's eligibility the same way it does under the Medicaid program. If there are inconsitencies regarding income, family size, circumstances, etc., HHS will notify the exchange, which will:

• Make a reasonable effort to identify and address the causes of the inconsitencies, by contacting the applicant and other actions required by HHS
• Notify the applicant of unresolved inconsistences and provide 90 days for the applicant to resolve them.

If it cannot resolve the inconsistencies, HHS will refuse to grant the tax credit, cost-sharing reduction, or exemption. The applicant can appeal, following procedures set up by HHS in consultation with other agencies. Employers whose plans are found to be unaffordable or not meeting coverage requirements also have an appeals process. Employers generally cannot obtain employees' income tax returns when contensting an affordability claim. 

Last points:

• Individuals receiving applicants' private information are subject to security and confidentiality requirements
• There is a maximum $25,000 penalty for providing false information unless HHS determines that the person acted in good faith. The penalty for knowing and willful violations is up to $250,000. The penalty for improperly disclosing or using personal private information is up to $25,000.
• HHS and the Treasury Department must conduct a study to ensure that the rights of employees to confidentiality and the rights of employers to due process and adequate information are protected. They must issue a report and any recommendations resulting from the study by the end of 2012.

Next time: How individuals can get the amounts of their tax credits and cost-sharing reductions determined in advance.

Leave a Comment

 

Ask Tim, Episode #23 -- Commercial Lines Modernization

The latest episode of Ask Tim looks at the new almost-law that allows insurance carriers to write more policies in the so-called Free Trade Zone. I say "almost-law" because, while it has passed both chambers of the New York State Legislature, Gov. Cuomo has not yet signed it, though all indications are that he will.

Summary:

• Carriers can write policies free from rate and form filing approval requirements for "large commercial insureds".
• A large commercial insured generates at least $25,000 in annual commercial insurance premium, employs or retains a "special risk manager," and meets at least one of the following criteria:
  • Net worth of $7.5 million or more
  • Net worth of $1.5 million or more and gross assets of more than $10 million
  • For-profit business with net worth of at least $1.5 million and annual gross revenues of more than $15 million
  • For-profit business with annual gross revenues of more than $15 million and gross assets of more than $10 million
  • Not-for-profit or public entity with an annual budget of more than $20 million
  • Municipality with a population of at least 50,000
  • Has at least 50 employees or 100 employees within the corporate structure
• The special risk manager must be a licensed producer who meets specfic educational and experience criteria.
• Carriers must make informational filings, and the law contains other consumer protections.
• The law expires on June 30, 2013.

More information:

• The complete text of the bill
• Capitol Report, June 30, 2011

 

Download Ask Tim Episode #23

Leave a Comment

Look To The North: The Insurance Industry Doesn't Have To Be Unpopular

Canadians Show How Insurers Can Regain Consumer Confidence

   

August 8, 2011 | By Sam J. Friedman

Anyone who doubts whether U.S. insurers can do anything to influence how consumers feel about the industry hasn’t been paying attention to the efforts of their colleagues north of the border.

Mary Lou O’Reilly, senior vice president of issues management and communications at the Insurance Bureau of Canada (IBC), the national trade association for Canada’s property and casualty insurers, related her group’s proactive reputational risk management approach during the recent annual conference of the Insurance Marketing and Communications Association in Toronto.

I was on hand to deliver a speech about the industry’s outlook, and have her permission to share some of IBC’s success stories with you.

Setting the stage, O’Reilly described the 1990s as a “golden age” for Canadian insurers, with carriers “vocal and visible,” highlighted by a national campaign to combat insurance fraud, and a high-profile effort in the recovery from a massive ice storm.

The following decade, however, was another story altogether, as the industry’s approval ratings plummeted thanks to what O’Reilly called a “perfect storm” of negative developments. Escalating claim costs (particularly in auto insurance) hammered insurer bottom lines, prompting much tighter underwriting, rising prices, and heavy-duty criticism from lawmakers, media, and consumers. In one province, there was even talk of nationalizing auto insurance.

“The P&C industry had essentially lost its voice,” she recalled. “Ou

via www.propertycasualty360.com

I've really missed Sam Friedman's blog since he left National Underwriter for Deloitte Research, so it was with great pleasure that I read his guest post at PropertyCasualty360. The insurance industry's poor reputation was a recurring concern of his blog, so it's natural that he reported on a presentation about how the industry fought this problem in Canada. Every insurance professional should read this and adopt at least one of its suggestions.

We may never be beloved, but we don't have to be hated.

Leave a Comment