Senate Vote Keeps NFIP Waiting

June 17th, 2010

Hopes the insurance industry had of politicians putting disagreements aside to reauthorize the National Flood Insurance Program (NFIP) were dashed today in Washington, as the Senate voted against legislation to restart the program.

The NFIP expired May 31, marking the third lapse of the program this year.

Industry trade organizations said politicians are scrabbling over certain provisions in the bill unrelated to the NFIP.

These provisions in the “tax extenders bill” would allegedly add to the federal deficit, those against the measure claim.

“We cannot afford to have political disagreements get in the way of protecting millions of Americans from flood losses,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies. “The lack of action by Congress is unacceptable.”

Complicating matters is the fact hurricane season began June 1 and an active season is forecasted. The only way for homeowners to get flood insurance is through NFIP, but right now no NFIP policies can be written or renewed, which also prevents real estate closings from occurring if a property is in a floodplain.

More – Property Casualty – June 16, 2010

Beware the ‘Jiggler’

June 16th, 2010

Thieves Use Bits of Metal to Feast on Older Hondas, ToyotasHonda owners, beware of the jiggler.

 Jigglers, thin pieces of key-shaped metal with a name that sounds like a comic-book villain, helped make the Honda Accord and Civic the favorite targets of city car thieves last month. In the last four weeks of May, 68 Accords and 65 Civics were stolen, according to a New York Police Department memo on stolen-car trends reviewed by The Wall Street Journal.

 The next five most-stolen models were the Nissan Maxima (54 stolen), Ford Econoline vans (51), Dodge Caravan (49), Toyota Camry (40) and Nissan Altima (18).

 [CARS]

According to the memo, the thieves are using jigglers, “thin pieces of metal that…come in sets that are designed to mimic the general shape of manufacturers’ key sets,” to steal many older Hondas and Toyotas.

 Such keys are used by locksmiths to gain entry to vehicles when people get locked out of their cars.

 For illegal use, jigglers work best on cars with worn ignition cylinders, according to the memo issued by the New York Police Department’s Organized Crime Control Bureau.

 The memo says that jigglers can be purchased online for about $25, and possession of the key sets isn’t illegal.

More $$ Wall Street Journal – June 16, 2010

SIIA Rejects New York Task Force Findings Regarding SIGs

June 16th, 2010

June 16, 2010 – The Self-Insurance Institute of America, Inc. (SIIA) today denounced the findings of a task force created by the New York state Legislature concluding that all group self-insured workers’ compensation funds (SIGs) operating in the state should be shut down by the end of the year and encourages the state to consider industry-backed alternative solutions.

The Task Force Report on Group Self-Insurance was prompted by the failures of several SIGs over the past two years and has now been submitted to the Legislature and the governor for consideration.

“Clearly there were some New York SIGs that were operated in a negligent way, but we believe the task force recommendation is an overreaction,” said SIIA Chief Operating Officer Mike Ferguson. “The industry is prepared to work with the state to develop a new regulatory structure which would greatly reduce the possibility of future failures and also assist the state is addressing the financial deficit associated with the failures.”

Interestingly, the report also acknowledges the benefit that groups have offered their members, through the years, particularly the emphasis on safety and loss prevention, aggressive return to work programs and rate stability. However, it seems the Task Force made its recommendations based solely on the actions by the SIGs that become insolvent, while failing to consider the benefits that groups offer to more than 4000 employers in New York State. Those employers should be allowed to make their own informed decisions regarding their involvement in group self insurance.

Moreover, active New York SIGs have successfully complied with ever increasing regulatory standards. The report concludes that these efforts have resulted in these groups having an overall funding ratio of 109% and surplus of more than $64 million. Such results compare favorably to the traditional insurance industry.

More – Self Insurance Institute – June 16, 2010

Fixes coming for NY’s medical malpractice crisis

June 15th, 2010

Docs’ insurance-financing reforms to include state surcharge on homeowner and auto policies. Tort reform not part of mix, however.

New York will soon get a look at a long-awaited proposal for reforming medical malpractice insurance. With a two-year state moratorium on rate hikes for medical malpractice insurance due to expire July 1, a new package of proposals is floating in Albany’s executive branch.

Tort reform is not currently included in the package, but a $362 million surcharge on homeowners’ insurance and auto insurance is part of the deal. And although doctors will likely see lower increases than they had feared, they will not get a hoped-for $87 million state subsidy that would have reduced premiums.

Gov. David Paterson has not discussed the malpractice insurance package publicly, but his office arranged a background interview with a lawyer who is involved in drafting a bill that would include the reforms. “We think we’ve included something for everyone,” the source said, “and we’re hopeful there’s nothing in it that hurts anyone.”

A spokeswoman for the administration denied reports that the reform package that’s now under consideration includes a proposal to increase the percentage of a judgment a plaintiff’s lawyer can get.

The plan does include setting up what’s called a “rating service organization,” an expert panel that would annually review medical malpractice claims data to help guide the setting of premiums. It would send those numbers as recommendations to the state Superintendent of Insurance, who now has sole responsibility for setting rates.

Likely to be more controversial is a proposal to bill property and casualty insurance carriers as a way to wipe out deficits incurred by the state’s Medical Malpractice Insurance Pool, or MMIP. Due to the moratorium on medical malpractice rate hikes, the fund does not currently have enough in reserve for the $362 million it is likely to need to cover doctors insured by the MMIP, the source said.

More – CrainsNY – June 15, 2010

Commercial insurance prices remain flat: Survey

June 15th, 2010

U.S. commercial insurance prices were flat during the first quarter of this year, the fifth consecutive quarter of flat or slightly rising prices following five years of steady declines, Towers Watson & Co. said in a study released Monday

In its “Commercial Lines Insurance Pricing Survey,” the New York-based consulting firm said excess capacity in nearly every line of commercial insurance combined with below-average catastrophic losses to keep prices flat during the first quarter of 2010 compared with the same period in 2009

 The survey compared prices charged on policies underwritten by 37 participating insurance companies that account for about 20% of the commercial insurance market excluding workers compensation, Towers Watson said.

 The survey found that accident year-to-date loss ratios deteriorated 5% during the first quarter of this year compared with the first quarter of 2009.

More – Business Insurance – June 14, 2010

Rules lay out exemptions to health care reform law

June 15th, 2010

Final interim rules issued Monday detail situations in which group health care plans will be exempt, or grandfathered, from complying with certain requirements of the new health care reform law.

While the law bans certain plan features, such as exclusions for pre-existing medical conditions and lifetime dollar limits for all health care plans, other requirements such as full coverage of preventive services do not apply to grandfathered plans.

 In addition, the requirement that employers extend coverage to employees’ adult children up to age 26 does not apply to grandfathered plans until Jan. 1, 2014, in situations where the adult child is eligible for coverage from his or her own employer.

 The rules released Monday by the Internal Revenue Service, Department of Labor and the Department of Health and Human Services lay out changes that current plans can make and still keep their grandfathered status.

 For example, a grandfathered plan would lose its status if it eliminated coverage of a specific condition, even if the condition affects few individuals. The interim final rules cite cystic fibrosis as an example.

 In addition, plans cannot boost coinsurance requirements and retain their grandfathered status.

 However, grandfathered plans can boost deductibles and out-of-pocket limits, but only up to a certain percentage. The maximum percentage is defined as the increase in medical care component of the Consumer Price Index since March 23, plus 15 percentage points.

More – Business Insurance – June 14, 2010

ACA: Empire State Adopts Health Rate Law

June 15th, 2010

The New York State Insurance Department now has the authority to review and approve health premium increases before they are implemented by carriers.

New York Gov. David Paterson, D, has signed Governor’s Program Bill Number 278 into law.

The new health rate review law replaces a “file and use” system that gave the department little authority to control health premium increases, officials say.

New York already prohibits health carriers from using health status and health history information in setting rates, but Paterson says the law is needed to ensure that health premiums are “fair and justified.”

The new law will make coverage more affordable, Paterson says.

The new law will require health insurers and health maintenance organizations to apply for New York department approval of rate increases. The rate applications will be reviewed by the department and can be approved, modified or disapproved.

Policyholders and members of the public can comment on the rate applications, and the New York department will post relevant comments on its website.

The law is set to take effect Oct. 1.

More – Life-Health – June 10, 2010

Geico Files $1.8M Lawsuit over Alleged No-Fault Fraud in New York

June 14th, 2010

Insurer Geico has filed a $1.8 million lawsuit alleging a Queens radiology center orchestrated a no-fault auto insurance fraud scheme that involved thousands of suspect claims for service.

Geico did not identify the 10 defendants by name, but said they include the radiology center, its non-physician owner, two medical corporations, two doctors, two lawyers and a Long Island-based law firm.

The suit seeks recovery of more than $1.8 million in compensatory and treble damages, as well as punitive damages.

Geico said its special investigations unit identified the fraud based upon a systemic pattern of irregular and repetitive billing for radiology services and the filing of litigation against the company using forged documents to support their prosecution.

More – Insurance Journal – June 14, 2010

USING PERSONAL AUTO AS LIVERY CAR IS FRAUD, FORFEITS NO-FAULT BENEFITS

June 9th, 2010

American Arbitration Association
New York No-Fault Arbitration Tribunal

In the Matter of the Arbitration between: Atlantic Radiology Imaging PC and The Hartford Insurance Company
AAA Case No. 412009017888
AAA Assessment No. 17 991 14631 09

Insurer’s Claim File No. YXHAF70863
Gary D. Peters, Esq., Arbitrator

Edited by Lawrence N. Rogak

 In this no-fault arbitration award, the insured’s admission that he used the insured vehicle as a livery car, and his untruthful denial of prior accidents in the face of evidence to the contrary, resulted in the upholding of a denial to the medical provider.

 ”The issues in dispute are the Applicant’s unpaid bills for radiological studies, denied by the Respondent claiming that their insured provided material misrepresentations, concerning the use and ownership of the insured vehicle within the application for insurance and during the making of the instant claim. Accordingly, Respondent maintained that they do not provide coverage for ‘anyone making fraudulent claims seeking benefits under the subject policy of insurance’.”

“The assignor was apparently involved in a motor vehicle accident on August 26, 2008 and came under the care of various medical providers, including Dr. Kentia Jean Charles who recommended radiological studies. The assignor submitted to lumbar spinal radiological studies at the applicant’s facility on November 17, 2008 wherein the studies revealed degenerative disc change at L5/S1 with degenerative spurs.”

More - Rogak Report – June 7, 2010

When a renter is driving a rental car, the rental car pays the PIP claims

June 9th, 2010

In the Matter of the Arbitration between: Continental Medical PC and State Farm Mutual Automobile Ins. Co. and Citiwide Auto Leasing Inc.
AAA Case No. 412009051436
AAA Assessment No. 17 991 01956 10 

Burt Feilich, Esq., arbitrator

Edited by Lawrence N. Rogak

This no-fault award came to two significant conclusions: (1) That when a renter is driving a rental car, the rental car pays the PIP claims; and (2) When an insurer issues a denial before the time to do so runs out, the statute of limitations does not begin to run on the date of denial, but on the date that the bills would have become overdue (i.e., the day after the time to pay or deny runs out).

 ”This claim is for $6,962.22 and involves medical, chiropractic, physical therapy, electrodiagnostic testing and MRI testing all rendered by applicant for the allegedly eligible injured person/assignor for the care and treatment of injuries sustained in an accident that occurred on June 27th, 2003. Both respondents contend that applicant did not commence this proceeding within the applicable statute of limitations and consequently this claim should be time barred.”

 ”Respondent State Farm contends that claimant was operating a non-insured motor vehicle at the time of the accident and that primary no-fault coverage rests with the registered owner of that vehicle, which was Citiwide Auto Leasing, Inc. doing business as Dollar Rent A Car. Respondent Citiwide Auto Leasing contends that claimant used her own insurance policy with State Farm by declining contractually offered coverage and that therefore primary no-fault coverage should be provided by her household automobile insurer, State Farm Insurance.”

 ”The underlying accident took place on June 27th, 2003, at about 8:15 AM, in Brooklyn, NY, when claimant was operating a 2003 Chevrolet motor vehicle that she had rented earlier that very same morning from Citiwide Auto Leasing, Inc. d/b/a Dollar Rent A Car.   A copy of the car rental agreement was submitted by the parties. It appears that claimant declined to purchase optional coverages that were offered. To my understanding, none of the optional coverages either purchased or declined by claimant involve mandatory no-fault coverage required to be provided by the owner of the vehicle.    It is alleged that claimant sustained injuries in this accident for which she received treatment at applicant’s facility.”

 More – Rogak Report – June 4, 2010