Maryland | District of Columbia

Transcription

Rx for savings
6
Lower retail
prescription
costs mean
shrinking U.S.
health care
spending.
Maryland
District
of Columbia
Required reading for successful insurance and financial service professionals
Volume 11, Issue 12 |
‘Concierge’ control
‘Concierge’ medicine
may be regulated as
insurance by Maryland
Insurance Commissioner Ralph S. Tyler.
Page 12
2
By Keith L. Martin
With the economy prompting consumers to
look for deals, some agents say
the practice has found its way
into the market for homeowner’s insurance.
Exactly 24% of homeowners surveyed, representing
about 39 million of all U.S.
homeowners, said they have
Mike McCartin
made changes to their cover-
age in response to financial concerns, according
to a national study released by Trusted Choice
and the Independent Insurance Agents & Brokers of America. Furthermore, 60% have either
made or considered changes, blaming the current economic situation.
In the mid-Atlantic, insurance agents say customer behavior is fluid.
Kathleen Glattly, president of Factoryville,
Pa.-based DGK Insurance, has seen the results of
the study mirrored closely among her clientele
looking for guidance.
“They are asking ‘What can we do? What can
we do to trim costs?’” Glattly said. “So we look to
see where they are at, look at
See “Rates” on p11
Counting on Computers
Cutbacks :: page 4
A new PIA survey
shows independent
agents are embracing
technology at a
higher rate.
Page 18
3
25
Tyler states case in
regulation debate
Judge drops former
CEO Jews’ pay case
16
By IFA staff
‘Important state interests’ require Md. court
to rule on $18 million severance package
Departments
CALENDAR
LEGAL BRIEFS
NEW PRODUCTS
Aetna cuts jobs in
Maryland , other offices
8, 20
PEOPLE
14
RECORD/FINES
26
Subscription information
available online at:
IFAwebnews.com/
subscribe
Maryland Insurance Commissioner Ralph
S. Tyler called it “inconceivable” that state residents would
want to seek help from Washington for insurance issues.
Citing the challenges people face with self-insurance,
which is regulated by the U.S.
Department of Labor, not state
Ralph S. Tyler
insurance regulators, Tyler
made a case against broader federal regulation
of insurance.
Speaking at the Baltimore See “Regulation” on p22
Senator Mike Enzi (R-Wyo.)
Senator: Don’t pit
feds against private
health insurers
By Keith L. Martin
During his U.S. Senate nomination hearing to
oversee the U.S. Health and Human Services office, nominee and former Sen. Tom Daschle was
urged not to rush into federalizing health care.
Sen. Mike Enzi (R-Wyo.) voiced his skepticism for President Barack Obama’s intention to expand government
See “Senator” on p16
You go, girl!
Who do women seek out
for financial advice?
By Keith L. Martin
A federal court will allow a Maryland court
to decide whether former CareFirst CEO William
Jews is entitled to the $18 million severance
package he negotiated with the heath insurer.
A U.S. District Court judge made the determination Jan. 16, permitting the request of Maryland Insurance Commissioner Ralph S. Tyler to
dismiss the case and defer to state courts.
Tyler cut the compensation package in half
last year, prompting the fedSee “Ruling” on p8
Spouse
24%
Parents
16%
Friends
13%
Insurance
Agent
12%
Accountant
7%
Source: State Farm
Insurance & Financial Advisor
10600 York Rd. Suite 203, Hunt Valley, MD 21030
1
Survey indicates 60% of homeowners made,
considered policy changes given current
economic climate; regional outlook varies
DATED MATERIAL
Consumer compensation
The MIA fined several
auto insurance companies for failing to
compensate claimants
under a 2008 law.
Page 3
Shrinking budgets at home
mean more policy shifting
Change Service Requested
Three must-see articles
include the MIA enforcing a
vehicle transfer fee law,
Maryland’s insurance commissioner learning about
“concierge” medical services
and agents finding more innovation through technology.
Please deliver by February 3, 2009
Three to ”C”
February 2009
PRSRT STD
U.S. POSTAGE
PAID
PHILA PA
PERMIT NO. 6438
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2 | Maryland / Washington D.C.
|
IFAwebnews.com
February 2009
Insurers fined for
violating new Md.
transfer fee law
By Bob Graham
A number of auto insurance companies were ordered to pay a $5,000 fine in
Maryland after failing to properly compensate claimants with respect to a new
transfer fee law that took effect last year.
Two companies, AAA Mid Atlantic Insurance Co./Keystone Insurance Co., both
of Wilmington, Del., and Dairyland Insurance Co. of Stevens Point, Wis, were ordered to pay $10,000 fines because they
failed to pay any required vehicle transfer
fees to several policyholders, according to
the Maryland Insurance Administration.
The Maryland law that took effect Jan.
1, 2008, calls for the payment by the insurer of transfer fees of $50 per title when
policyholders receive cash settlements
for the total loss of their vehicles, MIA
records show.
Violations started at outset of law
The MIA found in an investigation that
the companies had paid an incorrect fee
to policyholders from the date the law
took effect.
In the AAA Mid Atlantic/Keystone
case, three policyholders received no
transfer fee payments through June 6,
2008, while another 62 claimants received the wrong amount, leading to
restitution of $1,854, plus $96.12 in interest, MIA records show.
In the Dairyland case, two policyholders did not receive any transfer fees and
15 other policyholders were paid the
wrong amount through Aug. 13, leading
to restitution of $1,864.84, plus $111.89 in
interest, MIA records show.
The $5,000 fine was levied against California Casualty Indemnity Exchange of
San Mateo, Calif., Mutual Benefit Insurance Co. of Huntingdon, Pa., Amica Mutual Insurance Co. of Providence, R.I.,
and Seminole Casualty Insurance Co. of
Sunrise, Fla.
Others fined $5,000 include Horace
Mann Insurance Co., Teachers Insurance
Co., Horace Mann Property & Casualty
Insurance Co., all of Springfield, Ill.; and
Safeco Insurance Company of America
and Safeco Insurance Company of Illinois, both based in Seattle, Wash.
In the Mutual Benefit case, 63 policyholders received the wrong amount
through Aug. 11, 2008. The company paid
$1,764 in restitution and interest. IFA
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Over Thirty Carriers, Including:
|
IFAwebnews.com
February 2009
|
3
Aetna cuts 10 positions
in its Maryland offices
Health insurer eliminates nearly 1,000
positions nationally citing nation’s
economy, positioning for future growth
years, Aetna has added about 5,700 jobs,
meaning after the cuts that the insurer
gained 4,700 jobs.
“We’ve been growing, and by scaling
back we are realizing what all companies
By Bob Graham
Among the nearly 1,000 jobs eliminated are seeing. But we are performing well and
by national health insurer Aetna in Decem- growing,” Laberge said.
Company officials said the cuts were
ber were about 10 jobs in Maryland, comdesigned to align adminispany officials said.
trative expenses with the
Larger cuts occurred at
company’s growth outlook
the company’s Blue Bell,
// IFA_FAST FACT
for 2009 and redirect rePa., offices and at its HartDoing more with
sources to areas with a
fewer people
ford, Conn., headquarters,
greater potential for future
which lost 375 jobs, comAetna cut nearly 1,000
positions, effective Jan. 1.
growth. Neither Laberge
pany officials said. About
They included:
nor other company officials
six people lost jobs in
State
Positions
would identify those areas.
Aetna’s Virginia offices.
Maryland
10
“These actions will reEmployees were notified
Virginia
6
duce our operating costs
in mid-December that their
Pennsylvania
165
and allow us to manage
jobs would be terminated
Conn HQ
375
through the economic
by Jan. 1, part of the comSource: Aetna
downturn from a position
pany’s efforts to respond to
of strength,” said Ronald A.
a worsening economy and
position itself for future growth, company Williams, chairman and CEO, in a prepared statement. “While changes like this
officials said.
The company had been contemplating are never easy, they will help us maintain
cuts for several weeks, said Fred Laberge, a our strong competitiveness and ensure our
spokesman for Aetna, who told Insurance continuing success.”
Aetna officials said they expect to incur
& Financial Advisor most cuts were to administrative and IT functions and will not about $35 million, after tax, in restructuraffect the company’s ability to deliver serving charges in the fourth quarter of 2008.
ices to customers.
Eligible employees received severance
“We were careful to target jobs that did- benefits based on length of service as
n’t target claims or customer services,” he well as outplacement and other support
said.
programs.
About 3% of Aetna’s entire workforce
Aetna serves 37.2 million people across
was to be cut, according to Laberge.
the country with a staff of about 35,200, afLaberge added that over the last two ter the cuts are completed. IFA
IFAInsights
// Editor’sNote
Buzzing about consumers
The buzzword among state insurance
regulators these days is “consumer,” best
spoken before the words “protection” or
“interests.” One wonders if the National
Association of Insurance Commissioners is
keeping a tally of how often each member
commissioner utters these important words.
If a tally is being kept, add one for Maryland Insurance Commissioner Ralph S.
Tyler – who invoked it repeatedly when he
was appointed in 2007– and invoked it in
November when he battled nine premium
finance companies over how they calculate
interest charges. Give one to former
Delaware Insurance Commissioner Matt
Denn, who invoked it in December when
spanking Delaware Blue Cross Blue Shield
with a $150,000 fine for mistakenly disclosing the private medical information of
3,800 members.
And in Pennsylvania, Insurance Commissioner Joel Ario might deserve two tick
Howard Co. reopens health program for uninsured residents
Bob Graham
Executive Editor
// OnlineDigest
Most read onine stories
|
1 Delaware insurance commissioner
fines Blue Cross $150,000 for
privacy violations
|
2 AIG sells HSB Group to Munich Re
Group for $742 million
// HEALTH INSURANCE
Health officials in Howard County are
reopening the enrollment period for their
new program to provide medical care for
the uninsured.
The Health Howard Initiative, launched
in October, offers legal county residents
basic medical care for as little as $50 per
month, according to the Washington Post.
More than 1,100 people expressed interest
in the program during the initial enrollment period, but the vast majority were
eligible for coverage under existing private, state and federal programs, hence
opening up more space in the initiative,
according to the report.
marks for reorganizing his department to
put consumer protection and enforcement
staff under one leader, which he says should
help his staff better combat “rogue” agents
committing crimes against consumers.
The tally is important to the NAIC and its
members as they work to bolster the argument – which we support – that state insurance department provide far better insurance regulation than federal authorities.
Lost in the public relations effort is how
agents and carriers’ concerns fit into this
consumer-first approach. Successful insurance regulation at any level requires a balance among consumer, carrier and agent
interests. Losing that balance at the state
level will make it more of what is feared if
insurance regulation is federalized.
That’s my take,
|
3 ‘Hybrid’ health insurance approach
could eliminate private insurers
County officials estimate that more
than 15,000 residents lack coverage, but
the initiative can only accommodate as
many as 2,200. As of late December, only
66 have enrolled and paid their fees, according to the report, and began receiving
care in January.
Additional people will begin receiving
services when their eligibility is confirmed
and fees are paid. IFA
- Frank Lazarus
responding to “Pa. commissioner
turns blind eye to LTC insurer’s
irresponsible actions”
10600 York Rd., Suite 203
Hunt Valley, MD 21030
phone: 410-667-0864 fax: 410-667-7977
Tony Ondrusek
Publisher
[email protected]
Bob Graham
Executive Editor
[email protected]
News straight to your inbox.
Subscribe at
Sharon Schafer
Advertising Sales Director
[email protected]
“This action actually invites
and incents companies to do
ANYTHING to undercut
competition to get business,
and if (or WHEN) the
business turns bad, simply
walk away from it.”
|
IFAwebnews.com
Localized
Contacts
placed here.
[email protected] [email protected]
Insurance & Financial Advisor MARYLAND & WASHINGTON, D.C. EDITION is published by New Horizon Group Inc. The paper is free for retail insurance and financial service professionals in Maryland and D.C. ■ The
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February 2009
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IFAwebnews.com
February 2009
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5
// HEALTH INSURANCE
Health-care spending slowed by lower retail prescription costs
By Bob Graham
U.S spending on health care grew in
2007 by the lowest rate since 1998, slowed
by the smallest increase in retail prescription drug expenditures in four decades.
The overall cost of health care in the U.S.
– including doctor visits, prescriptions, hospital construction and all other related expenses – increased by 6.1% in 2007, to $2.24
trillion, according to a new government report in the journal Health Affairs.
The report comes as Congress and President Barack Obama consider ways to bolster the American economy and provide
more options for coverage to uninsured
Americans, as the new president seeks to
fulfill a campaign promise.
Health-care spending per American was
$7,421, the equivalent of 16.2% of the gross domestic product. One year earlier, the spending
was 16% of the gross domestic product.
In 2007, Americans paid a total of $228
billion for prescription medications, a 4.9%
rise from the previous year, the report said.
Researchers said the increased number
of generic drug alternatives helped hold
down prescription medication costs.
Generic alternatives to high blood-pressure
medicine Norvasc, and cholesterol-lowering prescriptions Pravachol and Zocor hit
pharmacists’ shelves in 2006 and 2007, and
most managed care plans encourage their
policyholders to choose them by offering
lower co-payment rates. IFA
// RECOGNITION
Easton agency gets Travelers’ ‘High Achiever’ award
The Avon-Dixon Agency of Easton, Md.,
has received the Travelers Insurance Personal Lines 2008 High Achiever Award. The
award is presented to the outstanding personal lines team in each territory.
Avon-Dixon, offering a full range of coverages including life and property-casu-
alty, was chosen among 90 other agencies.
Headquartered in Easton, the agency also
has offices in Maryland in Grasonville and
Centreville, Chestertown and Annapolis.
Travelers recognizes areas such as professional development and superior underwriting through the award. IFA
Trip Franklin and Regina Sullivan are pleased to
introduce two new members of the Brokerage team.
Bethesda Brokerage Office
6500 Rock Spring Drive, Suite 400
Bethesda, MD 20817
877-330-0171
Margaret E. Simonds
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Brokerage Assistant
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over 65 years of combined industry experience
Two Locations
providing exceptional service
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Timonium, MD 21093
888-560-2403
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Brokerage Administrator
Life Insurance • Disability Income • Long Term Care
Maryland, eight other states settle
bid-rigging case with Marsh
By Keith L. Martin
Nine attorneys general have settled
with insurance broker Marsh & McLennan, resolving a four-year investigation
into the New York-based insurer’s role in a
nationwide bid-rigging scheme.
Marsh allegedly made collusive
arrangements whereby brokers entered
into agreements with insurers to receive
undisclosed compensation and engaged
in anticompetitive conduct in the market
for commercial liability insurance, according to a statement by Massachusetts
Attorney General Martha Coakley.
Florida, Hawaii, Maryland, Massachusetts, Michigan, Pennsylvania, Oregon,
Texas and West Virginia will divide the $7
million settlement, one of several with insurers over bid-rigging schemes.
“Marsh’s conduct underscores the need
for strong enforcement and deterrence in
the insurance arena,” Coakley said in a prepared statement. “Customers need to know
they can trust their brokers and that their
insurance brokers are working with the customer’s interests at heart. We will continue
to closely monitor the marketplace in order
to protect insurance customers against unfair and deceptive conduct.”
In the alleged scheme, Marsh would
create the appearance of a competitive
bidding process, instructing certain insurers to submit inflated, intentionally
uncompetitive bids. The schemes gave
commercial policyholders the impression they were receiving the most competitive premiums, when in fact, they
were being overcharged.
Additionally, Marsh is accused of a “payto-play” arrangement centered on its receipt of contingent commissions, in addition to standard commissions and fees,
from certain insurance companies.
Among the insurance companies Coakley’s office alleges benefited from the
Marsh schemes are Zurich American Insurance Co, Pennsylvania-based ACE
Group Holdings, Travelers Insurance Co.,
and AIG. Coakley’s office has reached a
consent judgment with Travelers and a settlement agreement with AIG of $1.3 million in both cases.
Under the terms of the states’ agreement, Marsh must disclose to its clients
all compensation received from insurance
companies in connection with the placement of an insurance policy, obtain the
client’s written consent to the compensation, and disclose at the end of each year
annual totals of compensation received in
connection with a client’s policy.
Clients have already been offered restitution based on previous agreements with
relevant insurance companies and via the
State of New York’s prior settlement with
Marsh & McLennan Cos. IFA
Health insurance coverage rates in
Maryland stable through 2007
Maryland’s most recent non-elderly
uninsured and employment-based coverage rates are not significantly different
from those rates in 2004-2005, according to
a new report by the Maryland Department
of Health.
In 2006–2007, about 760,000 non-elderly state residents lacked health insurance, amounting to 15.4% of Maryland’s
non-elderly population. However, the latest uninsured rate is significantly higher
than the state’s rate of 14.4% in 2002-2003.
Maryland’s 2006–2007 uninsured rate is
below the comparable national average,
17.5%, due to a higher rate of employmentbased coverage in the state than in the nation as a whole.
The details come from a report entitled
“Health Insurance Coverage in Maryland
|
IFAwebnews.com
through 2007” which contains information
on the characteristics of Maryland’s uninsured non-elderly residents, as well as the
coverage rates for many subsets of the population, including children, young adults,
workers, and racial and ethnic minorities.
As in the larger population, the coverage
rates for most subgroups did not change
from 2004–2005 to 2006–2007. The uninsured rates among children (10%) and nonelderly adults (17%), were stable, reflecting no significant changes in their private
or public coverage rates. The demographic
composition of the state’s non-elderly
uninsured shifted slightly with respect to
income (relatively fewer poor residents),
race/ethnicity (relatively more Hispanics),
and employment (relatively fewer from
families lacking an employed adult). IFA
February 2009
MHIP cuts rates
for its limitedincome members
Maryland Gov.Martin O’Malley has announced that the Maryland Health Insurance Plan will reduce premiums for its
limited income members, which will
benefit 25% of subscribers. The reduced
premiums take effect this month.
MHIP is the state’s high-risk pool for
individuals with pre-existing health conditions who cannot obtain commercial
health coverage.
Qualifying MHIP members who already receive discounted premiums
through the “MHIP+” program may save
an additional 4% to 10% on their monthly
premiums. For individual members, savings will be $18 to $99 per month.
Monthly individual MHIP premiums
range from $90 to $556 per month, and
vary based on age, plan option, income
and family size.
“This rate reduction serves to provide relief to Maryland’s middle class
families who are struggling to maintain access to critical health coverage,”
said O’Malley in a prepared statement.
“This reduction will make coverage
more affordable for current MHIP
members whose health condition prevents them from having any other insurance option, and for future members, many of whom may be losing
their existing health coverage due to
the national recession.”
MHIP has served thousands
Since opening in 2003, the MHIP highrisk pool has provided health insurance
coverage for more than 27,000 individuals and currently provides coverage to
15,000 qualified individuals, regardless
of income.
Because of the higher medical costs
associated with the high-risk individuals
served by MHIP, premiums typically are
higher than most traditional private individual insurance. However, to keep
coverage costs affordable, MHIP premiums are currently capped at 33% above
the rates charged on standard, medically
underwritten, individual health insurance policies. Premiums are then discounted up to 62% for limited income
participants, who have individual yearly
income below $31,200, and thereby qualify for “MHIP+”. MHIP is funded by member premiums and a subsidy from Maryland hospitals. IFA
associationnews
NAIFA-Baltimore helps
Habitat program
The Baltimore chapter of the National Association of Insurance
and Financial Advisors (NAIFA) held its 13th Annual Legislative
Breakfast in Baltimore, with guest speaker, Maryland Insurance
Commissioner Ralph S. Tyler. In addition, the organization
outlined its community involvement programs that the Baltimore
Life Underwriters Charitable Foundation initiates, including
scholarships, soup kitchens and work with local children’s
hospitals. Shown above at the event, Foundation President
Dennis Bauernschub (right) and NAIFA-Baltimore President
Steve Pursley (left), present a check for $55,000 to Mike Mitchell,
president of Chesapeake Habitat for Humanity, to support its
programs.
For more photos from this event, go to
IFAwebnews.com and click on “Photo Gallery.”
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IFAwebnews.com
February 2009
|
7
Ruling: Judge defers on $18M pay case
From page 1
eral suit. Tyler said Jews’ severance pay of
$18 million violated a 2003 state law that
limits executive compensation for CareFirst executives to that which is “fair and
reasonable . . . for work actually performed
for the benefit of” the health insurer.
Nearly a month later, Jews filed suit in
federal court, arguing among other
things that the 1998 severance package
deal he signed predated the 2003 General Assembly action and, therefore, is
unconstitutional. Jews, who left CareFirst
in 2006, also filed a state case in Baltimore County Circuit Court.
A spokesman for CareFirst declined
comment on the decision. Jews’ lawyer,
Andrew Graham, did not
comment.
The federal court said
it wanted the state court
to address “important
state interests” before it
might intervene.
“I am pleased, but not
William Jews
surprised, that the court
concluded that Mr. Jews’ attempt to circumvent the state process was improper,”
Tyler said in a prepared statement. “Mr.
Jews has the right to challenge the decision
finding his compensation excessive, but
he must do so in state court.”
In a 20-page decision, the federal court
concluded that it was required to “abstain”
in deference to the state proceedings. IFA
NEWPRODUCTS
Insurance & Financial Advisor | IFAwebnews.com
Insurer has new employment practices liability option
Property/
Casualty
OneBeacon Professional Partners has new employment practices liability
insurance for both large and small professional firms.
The coverage offers a number of specialized features, including broad definitions of discrimination, harassment, retaliation, workplace torts and wrongful termination; protection
for harassment or discrimination claims by third parties; and choice of counsel for qualified firms, the company said. Full prior acts coverage is available, as is worldwide
coverage.
New Accumulation VUL product available
John Hancock Life Insurance unveiled its new Accumulation VUL product, a
variable universal life policy that offers cash value and retirement income
potential to pre-retirees.
Life
Insurance
The policy is ideal for a variety of applications, including supplemental retirement income,
bonus plans, deferred compensation plans and supplemental executive retirement plans,
company officials said.
The new Accumulation VUL is priced and designed using the 2001 CSO mortality table,
which allows for an extension of the benefit period to age 121.
Policyholders may choose from many underlying investment accounts that represent
nearly every major asset class and investment style, or may choose the company’s
Lifestyle Portfolios option. With either option, policyholders obtain tax-deferred growth of
policy values and tax-favored treatment of policy withdrawals, the company said.
The policy also offers a 20-year No-Lapse guarantee, no policy charges after age 100 and
zero net-cost loans.
Wait-period choices added to dental plan
Two new options that add flexibility to Assurant Employee Benefits’ Freedom Preferred voluntary dental plan by shortening or eliminating waiting
periods are now available for quoting, company officials said.
Health
Insurance
Employer groups with plan participation levels of 50% or more may now select zero or
six-month waiting periods for their basic and major dental services.
The new options enable insured employees who enroll on a timely basis (during initial
open enrollment) the ability to receive basic and major services more quickly than before,
company officials said.
The Freedom Preferred options of 12- or 24-month waiting periods for basic and major
services also remain available. No waiting period exists for preventive services covered
under an Assurant Employee Benefits voluntary dental plan. The new options are not
currently available in all states.
Pollution coverage for contractors expanded
Exton, Pa.-based XL Insurance is offering several program enhancements to
its pollution coverages for contractors, extending environmental coverage
for all aspects of a contractor’s operations, both on and off the jobsite.
Property/
Casualty
The enhancements, available through a group of endorsements, are designed to extend
contractor’s pollution coverage for waste disposal, owned locations, emergency
response, installations and natural resource damages, the company said.
The XL Insurance Contractor’s Pollution Liability Construction endorsements include
emergency cleanup costs up to $500,000 for a period of seven days without pre-notification; coverage against sudden and accidental pollution that originates and migrates from
owned locations such as offices and equipment yards; and disposal of construction and
demolition debris at non-owned disposal sites.
For the latest New Products go to IFAwebnews.com.
|
IFAwebnews.com
February 2009
WE’RE
REVOLUTIONIZING
HEALTH CARE AGAIN.
OUR NEW EXPANDED PRODUCT PORTFOLIO WILL CHANGE EVERYTHING YOU THINK
ABOUT KAISER PERMANENTE.
It’s time to look at Kaiser Permanente again and discover our new
personal health record. Members can e-mail their doctor’s office
levels of convenience and flexibility. Our HMO now features new
or pharmacist, check lab results, manage appointments, and view
provider networks, a PPO network option, a POS plan design, and
portions of their medical records 24/7. A new, integrated Health
high-deductible and health savings account products. In addition,
Risk Assessment tool will notify members and their physicians of
only Kaiser Permanente enhances the doctor-patient relationship
possible health issues. Call Patrick Durbin at (301) 816-6509 or
with the combination of an electronic medical record and an online
Rob Tidgewell at (703) 208-6295.
kp.org
Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc. 2101 East Jefferson Street, Rockville, MD 20852
|
IFAwebnews.com
08075 02/08 - 12/08
February 2009
|
9
Md. insurance regulators adjust for furloughs
78% of department’s staff will take
additional furlough days before July
By Keith L. Martin
The Maryland Insurance Administration is hoping to minimize the effects of a
state employee furlough, which will force
78% of its staff to plan for some unpaid
time off before June 30.
The office, like a majority of non-emergency state agencies, closed on Dec. 26 and
Jan. 2 under the executive order of Gov.
Martin O’Malley, but will also have to account for staff taking additional time off.
Employees earning more than $40,000
were required to take an additional 16 to 24
furlough hours between Jan. 14 and June
30, under the policy.
Exactly 200 of the department’s 256 employees earn at least $40,000, according to
Karen Barrow, a spokeswoman for the
Maryland Insurance Administration.
State employees’ lost income will be
spread over the remainder of the fiscal year,
which ends June 30, according to O’Malley’s order. The measure is expected to save
the state more than $34 million in the cur-
Statewide furloughs expected to save
Maryland $34 million in the current fiscal year.
“Because of the time period that employees have to use the remainder of their
required furlough time, the agency hopes
to be able to minimize the impact to our
consumers, licensees and other constituents,” Barrow told Insurance & Financial Advisor.
rent fiscal year as Maryland faces a possible
$1.9 billion revenue gap.
In announcing the furlough plan,
O’Malley said given the “deepening national recession, there are some difficult
decisions before us that we wish we did
not have to make.” IFA
// RATINGS NEWS
U.S. personal lines sector
outlook dropped to ‘negative’
The U.S. personal lines insurance sector’s outlook has dropped from stable to
negative, according to Standard & Poor’s
Ratings Services. Automobile and homeowners’ coverage is included in this group.
The revised outlook reflects Standard
& Poor’s belief that in the next 12 to 18
months the number of personal lines
companies with negative outlooks
should increase, and downgrades should
exceed upgrades in 2009. Most downgrades are likely to be only one or two
notches, the ratings service added.
The negative outlook is based on the
likelihood of sector-wide weaker operating performance stemming from significant catastrophe losses of 2008, lower investment income, and sizable asset and
investment losses triggered by general
credit and equity market deterioration.
The ratings service also pointed to reduced financial flexibility resulting from
limited access to the capital markets, and
recessionary fears, which potentially affect growth and earnings prospects, as
reasons for the sector ratings change. IFA
// NEW PRODUCT
Online roofing contractor
rating available in Maryland
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both fully-insured and self-funded products, we provide you with strategic advantages to
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|
IFAwebnews.com
Atlantic Specialty Lines is one of the first
brokers to offer online rating for roofing contractors, according to Greg
Provenzo, a senior vice president who
works in the broker’s Richmond, Va., office.
The online quoting, binding and paying for residential and commercial roofing coverages is available through Atlantic Specialty Lines in Virginia,
Maryland, North Carolina, Delaware and
Washington, D.C, through an A+, 15rated carrier. The minimum premium is
$3,500.
Limits
range
from
$100,000/$200,000 up to $1 million/$2
million, with a $1,000 deductible.
Provenzo said his office hopes to be
able to provide the online rating for roofing risks to several other states, including
Tennessee, Pennsylvania and New York,
within the next six months.
The roofing classes are two of about 55
online artisan classes available through
the company’s Web site at simplerates.com. IFA
February 2009
Rates: Policy price shopping varies
From page 1
their deductibles and get them a quote
from our five carriers to save them money
where we can. Most often, we are able to
provide better coverage at less cost.”
As an independent agency for 1,200
policyholders and multiple carriers, DGK’s
clients were not the only one changing
policies to save money. Last year, 50% of
the company’s insurance staff, including
Glattly, made changes to their auto and
home policies to cut costs, taking advantage of new packages and products.
In College Park, Md., Mike McCartin, a principal with Joseph McCartin Insurance, says
80% of his clientele have auto coverage attached to their home policies, so they
aren’t shopping around as much. They are
already getting a package rate, so by splitting up coverage between two different
companies, they’ll spend more.
The agency has 3,800 policyholders and
does business in several states, including
Delaware, Maryland, Pennsylvania and
Virginia, and the District of Columbia.
“By and large, any homeowner we deal
with won’t see a tremendous difference in
price,” he said. “We ensure they have the
right deductible and that the amount of
coverage is accurate, and after that, there
may be a few bells and whistles we can
knock off, but not many.”
Glattly said she feels more policy shifting is occurring not just because of the
economic climate, but because of the soft
property-casualty market, companies are
being more aggressive to get business and
issue competitive pricing.
The Big I survey also urges consumers to
consult with a licensed agent before making
a decision that may save in the short-term,
but could bring serious financial loss later.
Glattly called matching the right coverage while also taking advantage of competitive pricing a “win-win for everybody.”
“The client walks away with better coverage at a reduced cost and we did not lose
them to another company,” she said. “But
you have to look at their circumstances
and at the end of the day, provide them
with the best coverage.”
McCartin said independent agents definitely have the edge when it comes to
meeting customers’ needs for both pricing
and attention. IFA
// APPOINTMENT
//FINANCIAL SERVICES
Insurance Roundtable of
Baltimore names chairman
New life expected for federal
‘death tax’ under Obama
The Insurance Roundtable of Baltimore has named Craig
English as its chairman.
English serves as
senior vice president
for PSA Insurance and
Financial Services of
Hunt Valley, Md.
Created in 1947, the Craig English
Roundtable is comprised of 30 members including 20
agents from local insurance agencies and
10 representatives from insurance carriers. The group holds monthly meetings
to discuss general business news and industry issues such as the effect of the federal bailout plan on insurance companies and new requirements for products.
As chairman, English will develop and
lead the dialogue, helping to identify and
react to the most pertinent issues.
“I’m looking forward to serving as
chairman of this prestigious group,” English said in a statement. “I’ve been a member for many years and it is an honor to be
selected by my peers, as chairman.” IFA
President Barack Obama and other
Democrats want to keep the federal estate tax in place, rather than accepting
its planned repeal in 2010.
The Wall Street Journal reported that
the Senate Finance Committee will
move quickly to prevent the scheduled
repeal of the tax, while Obama plans to
offer his proposal for estate-tax preservation as part of his budget plan next
month.
The much-debated estate tax has
been a political football for Congress for
months, as opponents, especially farmers’ associations, small businesses and
affluent families, seek its demise.
The so-called “death tax” had made
financial planning for people seeking
to preserve and protect their estates especially difficult as some small business
owners, have sold their businesses.
However, with a flagging economy
and government seeking to halt declining revenues, repealing the estate tax
would deprive the government of more
than $500 billion over 10 years. IFA
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|
IFAwebnews.com
February 2009
|
11
Tyler considers prescribing ‘concierge’ medicine regs
Insurance commissioner to determine if service agreement between doctors, patients constitutes insurance
By Keith L. Martin
Maryland’s insurance commissioner is
expected to weigh in soon on whether the
services of “concierge” medicine constitute
insurance and therefore require regulation.
where patients pay an annual fee in exchange for varying medical services with a
physician, who sees fewer individuals than
a traditional primary care doctor. In some
arrangements, patients receive 24/7 access
Opinions differ on whether ‘concierge’
medicine helps or hurts health care system.
In December, Maryland Insurance Commissioner Ralph S. Tyler held a hearing to
examine arrangements between a physician and a select group of patients, known
as “concierge” or “retainer” medicine,
to their personal physician.
“I thought the hearing was helpful and I’m
glad we did it,” Tyler told Insurance & Financial Advisor. “I certainly learned more about
[concierge medicine] and the details about it”
After hearing testimony from eight health MDVIP “or leave the practice,” seeing 25
care representatives, Tyler said he expected patients a day and “trying to incorporate
to issue a report on his findings and possi- preventative care in my practice, but unble regulations by mid-January. At press able to do it consistently with that patient
volume” and time constraints.
time, Tyler had not released that report.
A representative for the Maryland HosMost of the testimony centered on the
delivery of services by doctors and its pos- pital Association testified that the group
sible effects on the state’s health care de- finds concierge medicine “troublesome.”
“We are seeing huge disruption of palivery system, not on insurance issues.
Representatives of several health care in- tients transition out as practices downsize,”
surers, including Aetna, CIGNA and Care- Pegeen Townsend, senior vice president for
First, were among the 50 attendees of the hearing, but
// Potential regulation derails Md. firm’s
did not testify.
shift to ‘concierge’ medicine approach
Concierge comes at a price
in
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While concierge medicine practices across Maryland
MDVIP, a Florida-based
await potential regulation by the state’s insurance
concierge practice with 26 afdepartment, one Columbia, Md., doctor’s office is forfiliate physicians, has operated
going a planned change before any new laws are
in Maryland since 2003, with
enacted.
practices limited to a maximum of 600 patients rather
Charter Internal Medicine, a five-doctor practice, had
than the 2,500 they say tradiinformed patients of its intended switch to “retainertional primary care physicians
based” primary care as of Jan. 1, but on the day of the
carry, allowing more attention
MIA’s hearing on the practice, reversed that decision.
and detailed patient examinations. For between $1,500 and
In a letter to patients, the firm cited the desire of both
$1,650 a year, patients get prestate and county officials to explore whether or not the
ventative care services, such as
model of medicine is subject to additional regulations.
screenings and testing, with
“We feel it would be imprudent to proceed with a pracsubsequent wellness planning.
tice change until our state government provides clearer
“We realize $1,500 is a signifdirection,” read the letter posted on the firm’s Web
icant amount of money, but it
site. “We will monitor Maryland’s position on retainerseems not to be prohibitive for
based primary care and continue to explore innovative
the middle-class,” said Darin
methods to increase the level of care for our valued
Engelhardt, president of MDVIP.
patients.” - Keith L. Martin
“That’s $125 a month and $4 a
day. If someone goes to Starbucks, that’s $4 a day or smokes
at the cost of a pack of cigarettes, MDVIP legislative policy for MHA, said. “We are
only increasing the reliance of hospital
doesn’t appear prohibitive.”
Regarding insurance, Englehardt said emergency rooms for primary care.”
She urged the administration to ensure
with respect to state law, there is no contingent event associated with the provision those transitioning out of primary care
of MDVIP services based on the annual fee. practices are being treated and not abanThe services, he said, are provided proac- doned in the switch to concierge medicine.
Robert Greenfield, chairman of the
tively to patients regardless of medical condition “in order to prevent illness or detect health and public policy committee of the
illness before the manifestation of disease.” Maryland chapter of the American College
MDVIP does not assume any risk of loss ei- of Physicians, asked for regulations on how
ther, he said, another indicator of insur- all primary care doctors can operate within
state law to offer additional services rather
ance arrangements.
With the exception of UnitedHealthcare, than join “middle companies” like MDVIP
who does not recognize the services in or “employ expensive law firms” to find
Maryland, Englehardt said, MDVIP is com- loopholes in laws. IFA
patible with other insurers and Medicare.
More online:
Dr. Alan Sheff, one of MDVIP doctors
IFAwebnews.com
with an office in Bethesda, Md., testified
Check IFAwebnews.com for the latest on
that for him, it was either align himself with
this breaking story.
|
IFAwebnews.com
February 2009
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13
Property-casualty groups say GAO report
affirms state-based regulatory approach
By Bob Graham
A new government report on the U.S.
financial regulatory system is being used
by two property-casualty insurance organizations to bolster the continuance of
state-based insurance regulation.
The new Government Accounting Office report suggests that Congress could
“consider the advantages and disadvantages of providing a federal charter option for insurance and creating a federal
insurance regulatory entity;” however, it
does note that creating a federal insurance charter could “have unintended
consequences for state regulatory bodies
and for insurance firms as well.”
The report falls short of entering the
debate on an optional federal charter.
“The establishment of a federal insurance charter and regulator could help alleviate some of these challenges, but such
an approach could also have unintended
consequences for state regulatory bodies
and for insurance firms as well,” the report states.
The Independent Agents & Brokers of
America and the National Association of
Mutual Insurance Companies, or NAMIC,
said the GAO report supports the argument to retain the state regulatory system, according to officials for both organizations.IFA
PeopleNews
Terry Hogan has joined Lockton Cos. in
Washington, D.C., as vice president. He will
be responsible for coordinating the industry
and technical resources of the firm to
develop and execute property/casualty insurance, risk management and employee
benefits strategies for client companies.
Pawitra Kc has joined
the Investment
Research and Analytical Group of the
Baltimore headquarters
of Asset Strategy Consultants in Hunt Valley,
Md., as an associate
Pawitra Kc
investment analyst. She
is responsible for the analysis of quarterly
reporting, performance attribution reports,
investment manager searches and special
analytical projects.
Owings Mills, Md.-based CareFirst named
David Grosso vice president of public policy.
Matt L. Warye
See it all. Now.
Local and national news, information and resources.
In print and online.
Joseph Lesko
Matt L. Warye was
named vice president of
Safeco Insurance and
mid-Atlantic regional general manager, responsible
for growth throughout
Safeco’s seven-state territory, including Maryland.
Christina Berg
Also joining Safeco’s midAtlantic Personal lines field operations as
agency manager for Maryland is Joseph
Lesko and as marketing manager,
Christina Berg.
William J. Casey Jr. was
named executive vice
president of the Northeast region for Arch
Insurance Group, a division of Arch Capital
Group. Casey, who most
recently served with
William J.
Casey Jr.
Zurich North America, is
responsible for the overall direction of the
|
IFAwebnews.com
region, which includes the District of Columbia and Maryland.
Atlantic/Smith, Cropper
& Deeley of Willards,
Md., announced that
Nicole Brushmiller was
the top producer for
November. Brushmiller, a
property-casualty account Nicole Brushmiller
executive, specializes in
commercial and transportation insurance.
Erie Insurance, with offices in Hagerstown
and Silver Spring, Md., has named Mark
Dombrowski as department manager of
government relations. He also has held roles
in the insurer’s communications and marketing departments.
Andrew Sirpis has been
elected president of the
Northern Virginia Estate
Planning Council. Sirpis
is chief operating officer
and director of financial
planning with The Washington Group, a general
Andrew Sirpis
agency of MassMutual.
Slocum Insurance & Financial Services of
Salisbury, Md. added Jack Harper, who has
more than 20 years in the insurance and
financial service industry and is licensed to do
business in Maryland, Delaware and Virginia.
Scott D. Butler of Columbia, Md.-based
Northwestern Mutual
Financial Network has
been honored by parent
company Northwestern
Mutual with its 2009 Eastern Region Leader
Scott D. Butler
Managing Director Award.
The honor recognizes Butler for an outstanding year of performance, serving the financial
security needs of clients and policyholders
throughout the region.
Send Your News
• The easiest way to submit events is online:
Phone: 410.667.0864 Fax: 410.667.7977
Email: [email protected]
February 2009
Excess & surplus stakeholders
align to boost technology use
Companies collaborate to prompt
technology use among agents, others
By Bob Graham
Several influential groups within the
excess and surplus lines industry are working to boost technology use among agents,
carriers and general agents over the next
12 to 18 months.
The Agents Council for Technology of
the Independent Agents & Brokers of
practices for the Web sites of managing general agents, including expansion of online
applications and policy issuance, as well as
better integration of information from MGA
sites to agent management systems.
Driving the need for change are several
factors. The success of greater technology
use within the standard market is obvious;
about 90% of personal lines and 50% of
commercial lines data can be downloaded,
Yates said.
Subcommittees addressing retail & general
agent interfaces, best practices development
America, the American Association of
Managing General Agents and the National Association of Professional Surplus
Lines Offices recently began a joint initiative to improve the efficiencies for retail
agents interacting with managing general
agents and wholesale brokers in the E&S
market. The groups also hope to promote
the electronic exchange of data among
those parties.
“For E&S to compete on the same footing as the standard market they need more
efficiency,” Jeff Yates, executive director of
the Big I’s Agents Council for Technology,
told Insurance & Financial Advisor.
Yates said the initiative, which involves
about 100 people, builds on the successful
integration of real-time quoting capabilities and other improvements in the standard lines market.
Three prongs of project
The project has three prongs, each being tackled by a subcommittee.
One group is working to improve the
retail agent interface so that the supplemental applications of E&S carriers are
streamlined. The group also plans to migrate as many ACORD standards, those
used for standard lines, to applications,
thus eliminating the redundancy when filing applications.
A second group is working on the general agent interface to both concentrate
data transmission streams and automate
the flow of data to general agents. Yates
said the goal would be better use of realtime transaction methods, similar to those
being used, Applied’s Transformation Station and AMS' Transact Now, in the retail
marketplace.
A third group is hoping to develop best
Youth, efficiency are factors
The need to both entice younger people
to join agencies and to make agencies
more efficient – to better face job cuts
likely with the failing economy and to
boost an agency’s appeal for sale as its
owner nears retirement – are pushing
much of the effort, Yates said.
“These improvements will enable agents
to focus on more sales, which means they
can make more money,” he said.
Yates said the group working on the
changes is made up of “a lot of GAs, lots of
retail agents and a few E&S carriers. We
need more E&S carriers.”
Participants in the sub-committees
meet regularly electronically and by phone,
while the large group is expected to gather
for an update at the March 15 meeting of
the American Association of Managing
General Agents in San Diego, Calif. IFA
Agents First
95 % of our business is written
through independent agents like
Carl, thank you!
// LIFE INSURANCE
None stand tall among asset
managers, study finds
Carl Magee Jr
A Top Producer in Maryland
None of the big wealth management
firms have taken control of the market, a
new study finds.
Phoenix Marketing International’s report on high net-worth clients finds that
assets are being spread widely among the
big players.
While Fidelity has consistently been the
most successful in penetrating the HNW
segments, firms like Merrill Lynch, Smith
Barney, Morgan Stanley and Wachovia are
about equal in HNW client loyalty and satisfaction, the report said.
The study, performed in October, was
released in mid-December. IFA
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|
IFAwebnews.com
February 2009
|
15
Senator: No need for private/public battle
From page 1
health care in direct competition with
private coverage.
Enzi and other members of the Senate’s
Health, Labor and Pensions (HELP) Committee held a hearing to hear from and
question the former South Dakota senator.
The committee chairman, Sen. Ted
Kennedy (D-Mass.), has made his intention clear to draft universal health care legislation soon for introduction soon after
Obama took office
Enzi warned that expanding insurance
coverage through more government-run
bureaucracies would lead to less competition and therefore more complexity, inefficiency and higher costs for taxpayers, according to a statement. The senator also
urged Daschle to bring any reform measures
through the proper Senate committees as
circumventing the groups “leads to bad legislation with astronomical price tags.”
“Forcing private plans to compete with
federal programs, with their price controls and ability to shift costs to taxpayers,
will inevitably doom true competition
and could ultimately lead to a single
payer, government-run health care pro-
gram,” Enzi said. “Any new insurance coverage must be delivered through private
health insurance plans.”
Enzi added that he was hopeful for
collaboration “to reduce the number of
uninsured Americans, contain costs, improve quality and make health care more
accessible.”
Daschle concurred with the need for
collaboration to change the system, calling
for “input and involvement and engagement,” according to published reports.
He did not offer any specifics of Obama’s
health care plan during the hearing.
In the past few weeks, Daschle and others as part of the Obama-Biden transition
team have been sponsoring community
health care discussions, urging citizens,
doctors, agents and brokers and insurance
companies to weigh in on possible reform.
The administration said it will take all input on the matter into consideration when
forming new policies. IFA
LEGALBRIEFS
Florida executives charged in $30M life settlement
Top officials of a defunct Fort Lauderdale, Fla.-based viatical- and life-settlement firm have been charged in connection with the alleged defrauding of
28,000 investors of more than $30 million. The charges against Mutual Benefits follow a
four-year investigation by the U.S. Justice Department in Miami.
Financial
Services
A 25-count indictment accuses Joel Steinger, 59, who was identified as Mutual Benefits’
principal executive, his brother and company founder Steven Steiner, 56, and two
lawyers in Fort Lauderdale, Michael J. McNerney and Anthony Lovoti Jr., of conspiracy
to commit money laundering and wire fraud, among other charges. If convicted, they
could face up to 20 years each in prison.
Almost five years ago, federal regulators shut down the company and placed it in
receivership.
Prosecutors allege that Mutual Benefits was operating a massive Ponzi scheme, which
used money from new investors to pay premiums for older policies and that Joel
Steinger hired doctors to provide bogus life expectancy statements for the elderly and
AIDS patients who sold policies to the firm
Louisiana hurricane victims nearing settlement
More than three years after the flooding caused by Hurricanes Katrina and
Rita in Louisiana a court is notifying those who may have been affected in
four parishes in New Orleans of a possible $20.8 million class-action settlement.
PropertyCasualty
News straight to your inbox.
Subscribe at
The fund was gathered from the defendants’ insurers in response to the hurricanes that
hit the Gulf Coast in September 2005, causing at least 1,836 deaths and an estimated
$81.2 billion in damage, mostly from storm surge and overflowing levees.
The notifications, ordered by U.S. District Court Judge Stanwood R. Duval Jr., are going
to those affected by flooding due to any failures or overtopping of levees that occurred
within the Parishes of Jefferson, Orleans, Plaquemines and St. Bernard.
The civil suit alleges levees and other flood and water control structures failed and/or
were overtopped as a result of Hurricanes Katrina and Rita because they were not properly designed, inspected or maintained, and that this failure caused property loss,
property damage and personal injury. Defendants said in court papers that the levees
failed for reasons beyond their control and that they did not do anything wrong.
Midland National settles deferred annuity suit
Civil
Settlement
Midland National Life Insurance Co. has settled with the Minnesota Attorney General’s Office over its sale of deferred annuities in Minnesota.
“Midland National entered into the settlement agreement because the agreement is
consistent with Midland National’s procedures,” said Esfand Dinshaw, president of Midland National’s annuity division, in a prepared statement.
Terms of the settlement were not disclosed. Midland National said it did not enter into a
consent judgment, and in announcing the settlement continued to argue its case.
Calif. life agent allegedly bilked elderly woman of $100K
A former life agent in California was arrested and charged with three felony
counts in connection with allegedly stealing $100,000 from an 83-year-old
woman who had been his client, according to the California insurance commissioner’s
office. Ian Max Henriquez, 42, of Los Angeles, was charged with grand theft, identity
theft and theft from an elder. Bail is set at $150,000.
Life
Insurance
In January 2008, Henriquez illegally completed life insurance company surrender documents, forging the signature of his client to obtain $100,000 from the client’s life annuity
policy, prosecutors said. When the victim had stopped receiving her annuity policy statements, she notified her son-in-law. Her son-in-law contacted the insurance company,
which informed him that the mailing address for his mother-in-law had been changed
and that a $100,000 check had been issued in her name against her annuity policy.
For the latest Legal News, go to IFAwebnews.com.
|
IFAwebnews.com
February 2009
Partnership with bank in Maryland to push HSAs
notableevents
Hunt Valley provider joining with SunTrust
for Health Saving Account administration
ConnectYourCare, a Hunt Valley, Md.based provider of consumer-directed
health care account management solutions, is partnering with SunTrust, one of
the nation’s largest banks with branches
in Maryland and Virginia, to deploy a
turnkey solution for administering Health
Savings Accounts (HSAs).
The solution will re-brand ConnectYourCare’s consumer-directed health platform integrating financial claims adjudication, a healthcare payment card,
account management, and a single signon portal for access to healthcare account
management, online healthcare tools
and HSA investment options, company
officials said.
“SunTrust’s movement into the consumerdirected health care marketplace reinforces
the growing need to provide employers with
solutions that empower individuals and help
control healthcare costs,” said Marc Palmer,
CEO of ConnectYourCare.
Atlanta-based SunTrust operates 1,692
retail bank branches in Alabama,
Arkansas, Florida, Georgia, Maryland,
Mississippi, North Carolina, South Carolina, Tennessee, Virginia, West Virginia
and the District of Columbia. IFA
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Planner finds way onto tailgate show
Most financial planners don’t get to tailgate with celebrity chef Emeril Lagasse, but Jared Rosen, special care planner for The Washington Group, an agency of the Massachusetts Mutual Life Insurance
Co., had just that experience. Rosen was spotted at a Washington Redskins tailgate party and chosen
to appear on Lagasse’s “Emeril Green” tailgating special for Planet Green. Pictured from left:
Stephanie Custer (Emeril’s friend), Emeril Lagasse, Jared Rosen and chef Charles Hines.
Send photos of your company events and happenings: [email protected]
// LIFE INSURANCE
Insurer with offices in Baltimore changes mind on TARP funding
AEGON N.V. has changed its mind and will
not seek economic relief from the U.S.
Treasury Department.
The company, whose AEGON USA division has corporate offices in Baltimore,
Md., said it is withdrawing its application
for participation in the Troubled Asset Relief Program (TARP).
“AEGON has decided not to seek access
to TARP funds,” said AEGON Chief Financial Officer Jos Streppel in a statement.
“The ongoing steps we are taking have positioned AEGON to enter 2009 with a
strong capital position.”
AEGON has also withdrawn its application to the Office of Thrift Supervision in
the United States to gain a thrift charter, a
prerequisite for participation in TARP.
AEGON is one of the world’s largest life
insurance and pension groups.
Its Americas group has more than 20
million customers and works with about
100,000 agents. Its companies include
Transamerica Life, Transamerica Occidental Life, Monumental Life, Transamerica Financial Life, Merrill Lynch Life Insurance Co., Western Reserve and Life
Investors. IFA
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N Competitive products and pricing.
Potorti opens new Allstate Insurance office in Baltimore
Allstate Insurance Company has opened
a new office in Baltimore, offering insurance and financial services products.
The new office is owned and operated by
Steve Potorti Jr., according to the company.
The personal lines division of the new
agency offers auto, property and life insurance along with a number of retirement
and investment products.
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Potorti’s staff will offer guidance and
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best meet their needs.
In Maryland, Allstate is responsible for
538 employees and 309 agents. IFA
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IFAwebnews.com
February 2009
|
17
Agents booting up technology more
On the Hill
PIA survey says agents’ use of real-time transactions, comparative rating increasing
Independent agents appear to be embracing technology more this year than last, according to a new survey of members of the
Professional Insurance Agents in four states.
The survey results, based on responses
from PIA members in Connecticut, New
Hampshire, New Jersey and New York, indicate that agents are using real-time
transactions and comparative rating in
greater numbers this year than last.
The results demonstrate a new understanding and appreciation for technology
among independent agency owners.“Independent insurance agents realize that technology is the key to their success moving
into the future,” said Diane Fowler, execu-
tive director of the Professional Insurance
Agents of Connecticut, New Hampshire,
New Jersey and New York State Inc. “PIA’s
survey results underscore this growing
trend and further emphasize the opportunity for our members to embrace technology in order to remain competitive.”
The same survey in 2007 found that
agents transact in real time with more of
their companies and that comparative rating use increased more than other transactions. “Technology, particularly real-time
functionality, has become a critical factor
in agency-company relationships, and in
an agency’s ability to meet the needs of
customers,” Fowler said. IFA
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News From The Nation’s Capitol
Health reform unlikely before
2010, key congressman says
A vote on serious national health insurance
reform isn’t likely to occur before early 2010,
according to the chair of the U.S. House of
Representatives’ Ways and Means Health
Subcommittee.
Rep. Pete Stark (D-Calif.) said during a press
conference on proposed health reform that
he hopes to see a national health reform
plan introduced and debated in Congress
throughout 2009, with a vote on national
health reform, regardless of what approach
is taken, in early 2010. If the process of
reform drags on into summer and fall of
2010, it could jeopardize the re-elections of a
number of members of Congress, he said.
Stark said many stakeholders will need most
of 2009 to weigh in on various proposals. In
talking about those stakeholders, Stark said
doctors, consumer groups and private insurers would have to have time to comment.
Obama to boost Medicaid,
employer health subsidies
President Barack Obama and Congressional
Democrats are considering an expansion of
Medicaid and subsidies for employers providing health coverage as part of his
two-year economic recovery plan.
Obama wants to allow workers who lose
jobs where insurance coverage was not
available to apply for coverage under Medicaid. Those workers are not now eligible for
federal health insurance assistance.
He also plans to provide subsidies to
employers who must continue health insurance benefits under COBRA to workers
who are either laid off or retire, as well as
their dependents, the newspaper reported.
Groups welcome Daschle to
health reform dialogue
A pair of insurance industry organizations are
welcoming the nomination of Tom Daschle
as the next Secretary of the U.S.
Department of Health and Human Services.
“It signals that the incoming administration
intends to prioritize comprehensive health
care reform,” Karen Ignagni, president and
CEO of America’s Health Insurance Plans,
|
IFAwebnews.com
said in a statement. “Senator Daschle is
exceptionally well qualified to bring people
together in support of universal coverage,
cost-containment, and improved quality.”
The statement came on the heels of AHIP’s
board of directors issuing a comprehensive
health care reform proposal to cover all
Americans, reduce the growth of health care
costs and improve the quality and value of
care.
In addition to AHIP, Washington, D.C.-based
Business Roundtable also praised Presidentelect Barack Obama’s selection. John J.
Castellani, president of the association of
chief executive officers of a collection U.S.
companies, including Aetna, CIGNA and
Liberty Mutual Group, said, “We look forward to working together with
President-elect Obama and Secretary-designate Daschle to ensure that all Americans
have access to high-quality, affordable health
N.M. senator to take Clinton’s
spot on universal health team
Sen. Jeff Bingaman (D-N.M.) will focus on
insurance coverage as part of Sen. Ted
Kennedy’s legislative team working to create
universal health care.
Bingaman takes the place of Sen. Hillary
Rodham Clinton (D-N.Y.), President Obama’s
nominee for secretary of state. Bingham
joins Sen. Christopher Dodd (D-Conn.), who
is serving as chief deputy for health reform,
Sen. Tom Harkin (D-Iowa), who is heading a
work group on prevention and public health
and Sen. Barbara Mikulski (D-Md.), leading a
similar group on improvements in quality.
FINRA head is Obama’s pick
for next chief of SEC
Mary Schapiro, the current head of the
Financial Industry Regulatory Authority, is
President Obama’s pick to lead the U.S.
Securities & Exchange Commission.
Shapiro has been a key critic of indexed
annuities and insurance regulations and a
key proponent of Rule 151A, which places
indexed annuities under the SEC’s jurisdiction and FINRA as its enforcement arm.
Rule 151A was approved by the SEC and
goes into effect on Jan. 12, 2011.
February 2009
More than third of drivers
comparison-shop for auto
coverage, new study finds
More than four in 10 American drivers
consider at least two insurance companies when looking for automobile insurance coverage, a new GMAC Insurance
study found.
About 43% of drivers report comparison-shopping when looking for an auto
insurance policy. Another 33% of drivers
just renew their policy without concern,
the survey found.
About one-third (34%) of licensed
American drivers have not reviewed their
auto insurance policy in the last year,
GMAC Insurance said. Taken as a whole,
that means about 68 million people have
not taken stock of their automotive coverage in the last year.
Variable, universal life sales down 33% in third quarter
Latest report indicates 11% decrease in
annualized premium for individual life
Variable life and universal life products
dropped by one third in the third quarter
of 2008, fueling an overall decrease of 11%
drop in new annualized premium for individual life insurance policies, according
to LIMRA’s quarterly sales report.
“Variable life and variable universal life
products saw the steepest decline, plunging 33% for the quarter,” said Ashley
Durham, LIMRA analyst for product research.
“Given the current equity market environment, it’s not surprising that variable
products took the biggest hit. Not only
are individual VUL sales suffering, a num-
ber of companies have noted that corporate owned and private placement sales
are much lower than they were this time
last year,” she said.
Whole life sales rise 7%
Sales in whole life products saw a dramatic jump in the third quarter—up 7%
for the quarter and 2% year-to-date.
The quarterly report, while lagging behind the general acknowledgement that
the economy had sunk into a recession, is
the latest available. The fourth-quarter report, expected in March, could show similar results, according to industry experts.
According to survey responses, most of
the increase came from the traditionally
top sellers who have been trying to renew
interest in their whole life products this
year. They attributed the increases to factors such as product introductions and
fire sales.
After seven straight years of considerable growth, universal life premium is experiencing a significant decline in 2008.
Third quarter premium dropped 12% over
the same period in 2007 and is down 2%
year-to-date.
LIMRA said term sales are holding their
own, with new premiums flat for the quarter and down 1% in the first nine months
of the year, compared to 2007’s numbers.
About 45% of the participating term
writers have increased their sales over the
first nine months of 2007, according to
the report. IFA
Reviews encouraged
The company is encouraging people
to review their policy as part of a full financial review at the beginning of the
new year.
“We encourage drivers to make this
one of their New Year’s resolutions not
just this year, but every year,” said Wade
Bontrager, vice president of marketing
for GMAC Insurance.
The GMAC Insurance survey demonstrated that the tendency to evaluate
one’s policy becomes more routine with
age. Drivers between the ages of 45 and
65 were mostly likely to report reviewing
their auto insurance policy in the past
year. About 70% of respondents in this
age group had reviewed their policy in
the last year. Just over half (51%) of drivers aged 16 to 24 say they have conducted
an assessment, the survey found.
The national sample was comprised
of 5,524 licensed drivers in the United
States between ages 16 and 60. IFA
// PROPERTY-CASUALTY
Lexington to manage AIG
Specialty Excess policies
Your Business Needs. Our Reliable Solutions.
When looking for a General Agency, it’s important to choose the right partner. When you work with
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You need: Proactive business processing.
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You need: Efficient renewals management.
Our solution: We help you maintain your book of business
with a wide range of renewal options for your clients.
Choose the partner you can count on for the solutions you need.
Count on BenefitMall. Call your local BenefitMall office today or
visit www.benefitmall.com to get started.
AIG Commercial Insurance is shifting
the servicing of all casualty insurance
coverage for the public sector to its Lexington Insurance Co. unit.
Starting Jan. 1, AIG’s Lexington’s Casualty Division began to manage the public
entity commercial umbrella and excess
casualty portfolio of AIG Specialty Excess, a division of AIG Excess Casualty,
which along with Lexington specializes in
addressing the risks of public entities,
utilities and transit agencies. IFA
©2008 BenefitMall®. All rights reserved. BenefitMall, the circle “B” logo and the corporate logo are registered trademarks
of Centerstone Insurance and Financial Services, Inc. California License #063979.
Partnership. People. Products.
www.benefitmall.com
Rockville 800-472-4961 Towson 800-825-6650
|
IFAwebnews.com
February 2009
|
19
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NEWPRODUCTS
New software for filing surplus lines taxes available
Property/
Casualty
WillComply recently released its newest software application, a second version of its surplus lines taxes information Web site.
Company officials said the enhanced Web site gives insurance agents, program administrators, and insurance companies the ability to more accurately file complicated surplus
lines taxes in all 50 state and is continuously updated by tax specialists that are aware of
changes to each of the states’ requirements prior to the changes becoming effective.
Enhancements include a cleaner layout with enhanced calculator functions; a printable
account checklist; “live chat” with tax specialists; and an online training video.
Bi-monthly life settlement trade report unveiled
Financial
Services
A new bi-monthly life settlement and longevity markets trade report has
been launched by Life-Exchange Inc.
The Life-Exchange Trade Report features information on the growing life settlement and
longevity risk markets, including volume statistics, trade data, yields and other key industry specific data. The proprietary data and analysis is based on a compilation of trade data
from Life-Exchange’s auction platform, industry participant surveys, government statistics and public sources, the company said.
The company said that in order for the market to grow, there needed to be a regular
stream of information available for individuals to make informed investment decisions.
The Life-Exchange Trade Report is updated twice monthly for subscribers.
Coverage for payment card security breach offered
Property/
Casualty
Looking for Job Security?
Fireman’s Fund Insurance Co. has introduced coverage for retailers that
experience a breach of their payment card security system.
The new product is designed to avoid the payment for a single breach of a payment card
security system of tens of thousands of dollars in penalties and extra expenses, company officials said.
Start Your Own Independent Agency!
Payment card security insurance offers the following coverages: reimbursement for contractual penalties, chargebacks and payment card reissuing expenses outlined in the
business’ merchant service agreement; upgrades to software and hardware systems
(including installation and re-scanning services) to bring the payment system into compliance; extra expense for late payment fees and other bank service charges related to the
data breach; crisis management expenses to restore reputation; and extra expense for
promotional items such as restaurant gift certificates or service coupons for the affected
individuals in the data breach.
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Online tool ranking mutual funds debuts
Arlington, Va.-based MUTUALdecision has launched an online tool for
investors and financial service professionals to forecast mutual fund
performance based on several academic models.
Property/
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While traditionally mutual funds ratings are based on past performance, the academic
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For the latest New Products go to IFAwebnews.com.
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|
IFAwebnews.com
February 2009
Health insurer reaches settlement
with New York over billing database
By Keith L. Martin
UnitedHealth Group has reached a
settlement with New York regulators in
which it will overhaul national databases
used to make sure patients are fully reimbursed for care when using an out-ofnetwork physician.
New York Attorney
General Andrew Cuomo
ordered the database overhaul to conclude a yearlong investigation by his
office that found the data
had shortchanged patients by as much as 28%. Andrew Cuomo
Two days later, UnitedHealth announced a $350 million settlement in a similar suit filed by the American Medical Association, health plan
members, health care providers and state
medical societies.
Cuomo’s office said in a statement on
the first settlement that the industry had
engaged in “a scheme to defraud customers” by underpaying patients across
the nation hundreds of millions of dollars
over the last decade by “manipulating reimbursement rates” through Ingenix, a
subsidiary of UnitedHealth that provides
billing information for numerous insurers.
The deal with New York calls for a $50
million payment by UnitedHealth for creation of a new independent database, to be
run by a “qualified nonprofit organization,” according to the statement. Aetna
also pledged $20 million for the database.
Cuomo’s investigation alleged that the
Ingenix database intentionally skewed
“usual and customary” rates downward
through faulty data collection, poor pooling procedures and a lack of audits, resulting in consumers being forced to pay
more than they should have.
Cuomo determined that having a health
insurer determine the “usual and customary” rate creates incentive for the insurer to
manipulate the rate downward, something
that can be avoided through a new, independent database.
“Our agreement with United removes
the conflicts of interest that have been inherent in the consumer reimbursement
system,” Cuomo said in the prepared
statement. “This has been an industrywide problem, and it demands an industry-wide reform.” IFA
U.S. life insurance sector could see problems
continue in 2009, predicts ratings service
The damage from continued turmoil in
the credit and equity markets is likely to
cause more problems for the U.S. life insurance sector, according to Standard &
Poor’s Ratings Services.
The ratings service is maintaining its
negative outlook on the sector because it is
expecting higher-than-normal credit losses,
lower fee-based revenues, increasing equity market-based reserves and reduced financial flexibility.
The ratings service expects to take negative rating or outlook actions on several life
insurers in the next six months, it said.
These negative effects have dampened
profitability and capital levels during the
first nine months of 2008, trends expected
New tools can make term life sales
easier, more profitable for agents
Life insurance marketing group provides
new avenues to process policies
By Bob Graham
Agents who choose not to write term
insurance policies – typically because they
require a lot of work for little compensation – should rethink that policy, according
to the president of the Life Insurance Direct Marketing Association.
New tools make it easier and beneficial
for agents to revisit their approach to term
life, which historically flourishes in tough
economic times, said Pat Wedeking, who
founded the national organization of direct marketers of life insurance products
four years ago.
“They need to see that if they can get them
for term, that’s better than nothing,” said
Wedeking, president of Quick Life Center, a
Denver, Colo.-based company that provides
agents and financial service professionals
with a quick way to sell term insurance.
“And I can convert it down the road,”
Wedeking added.
Mark Your Calendar
Maryland ‘I’ Day
March 10, 2009
His company and others in the association, which also includes many life carriers
as members, provide agents with easier
tools to process term policies. In one scenario, the agent fills out contact information, then receives between 50% and 75%
of the commission. In another scenario,
the agent completes an application and
keeps the entire commission. The term solution provider is paid with the override,
Wedeking said.
LIDMA recently held its annual conference and its members suggest that interest
among agents is growing.
Wedeking said his 1-year-old firm,
which provides agents and financial service professionals with tools to easily sell
term insurance, is on track to sell $20 million in cumulative premium by its third
year. It also intends to sell $50 million in
premium in its fifth year.
He said property/casualty agents,
lawyers, estate planners, as well as health
insurance brokers are all using the services
to boost business. IFA
to continue.
“The higher-rated companies, ‘AA-’ and
above, have the largest proportions of stable
outlooks, confirming our views of their sustainable business models, greater diversification, and better financial flexibility,” said
Standard and Poor’s.
Nonetheless, it could be hard for companies with higher ratings and stable outlooks to maintain their strengths amid the
market volatility and dislocations, though
less so than it will be for their not-as-welldiversified (and lower-rated) peers, S&P officials said.
They believe the credit fundamentals of
the industry are strong, though would suffer in a steep or very prolonged recession. IFA
W!
NE
The Conference Center
at the Maritime Institute
592 Maritime Boulevard
Linthicum Heights, MD. 21090
‘I’ Day Committee:
INDEPENDENT INSURANCE AGENTS OF
MARYLAND, INC.
INSURANCE WOMEN OF BALTIMORE
MARYLAND CHAPTER CPCU
|
IFAwebnews.com
February 2009
|
21
Broker involved in plane crash owes $533,000 to Maryland insurer
OM Financial Life gets default judgment
imposed on one of Ind. man’s companies
By Keith L. Martin
An Indiana securities and insurance
broker who authorities say tried to fake his
own death by intentionally abandoning
and crashing his airplane was recently ordered by a federal court to pay $533,564 to
a Maryland insurer.
According to the Birmingham (Ala.)
News, Marcus Schrenker, 38, was ordered to
pay OM Financial Life Insurance Co. of Baltimore, Md. thorough a default judgment
against one of his companies, Heritage
Wealth Management Inc., Jan. 9. Schrenker
is president of the company, based in Indianapolis, according to the report.
In 2007, OM Financial Life filed suit
claiming “unjust enrichment” against the
company, claiming the defendants repeatedly failed to pay back “unearned” commissions related to OM Financial products,
the report states.
Fake distress call alleged
In addition to returning $433,314 in
commissions, the judge also ordered the
company to pay $33,852 in interest and attorney’s fees of $66,397.
According to published reports,
Schrenker’s small plane crashed in the
Florida Panhandle Jan. 11, after the broker
issued a fake distress call, reporting the
windshield of the aircraft was blown out
and he was bleeding profusely.
Alabama authorities say he exited the
plane, which he put on autopilot, and later
checked into a hotel under a fake name. The
Birmingham News says Schrenker was last
seen when he spoke to local police at a store
in Childersburg, Ala., indicating he was in a
canoeing accident with friends. Officers said
he was wet from the knees down, but had no
other injuries.
Authorities identified Schrenker through
his driver’s license and goggles that appeared to be for flying that were in his possession, according to the report. He was
Tyler: State system beats national plans
From page 1
chapter of the National Association of Insurance and Financial Advisors’ Annual
Legislative Breakfast, Tyler said he expects
“substantial debate over the next year and
beyond” on the financial services regulatory structure, including how insurance
should be regulated.
“Largely for reasons of history, perhaps
more than logic, traditionally, insurance
regulations have been principally, not exclusively, a state function,” Tyler said. “Overall, that system has worked quite well.”
In April 2008, U.S. Treasury Secretary
Henry Paulson called for greater federal
regulation of insurance, and since then
several proposals chipping away at state’s
rights to regulate insurance have been introduced in Congress.
Tyler said any failures of the state regulation system with solvencies have been
“modest in scale mechanisms to address
them.” He noted that when American International Group’s failures occurred, they
were not insurance matters, but a large
holding company that was not regulated.
AIG has obtained nearly $150 billion in
U.S. aid since last September.
“It’s not fair to say that the insurance
subsidiaries, the state-regulated subsidiaries, are solvent; because when the
holding company fails, it puts the whole
company in jeopardy,” Tyler said.
Tyler said one possible response to the
AIG situation is to prohibit insurance companies from being part of unregulated
companies, a move he said would have
prevented much of the AIG crisis. He
pointed to the alleged Bernard Madoff
swindle and Ponzi scheme as indications
that federal regulation is failed.
“There is certainly irony in talking about
a broader federal role, in the federal gov-
later arrested by authorities in Florida.
With the Maryland issue behind him,
Schrenker still faces additional trouble.
The Indianapolis Business Journal indicates that regulators in that state accuse
him of shifting numerous clients from one
annuity to another, generating excessive
surrender charges. Schrenker is also accused of misappropriation of money and
other wrongdoing.
He is also being sued by a marketing
company for more than $1.4 million, according to the report. IFA
|
IFAwebnews.com
ernment’s failure in the securities industry,
banks and others.” Tyler said. “Inevitably,
there will be a broader federal role in regulation,” but mostly in financial services.
Tyler called it “inconceivable” that Maryland residents would want to seek federal
help for their local insurance issues.
The states need to protect their ability to
tax premiums, a key revenue source for
states, regardless of the economy, he said.
Tyler called on the insurance industry to
participate in the debate over the future of
insurance regulation. IFA
In Memoriam
■ Quentin C. Aanenson, 87, of Bethesda, Md.;
noted WWII fighter pilot; 32-year agent at
Mutual of New York.
■ Rose Fernandes Gaiser, 95, of La Plata, Md;
former secretary for North America
Insurance Co.
■ George E. Glessner, Jr., 81, of Colora, Md.;
independent life and health insurance agent.
■ William Gerald Vincent, 91, of Cambridge,
Md.; 23-year agent with State Farm
Insurance; first charter president of
Chesapeake Association of Life
Underwriters.
■ Robert Burnette White, 91, of Salisbury,
Md.; former employee of Travelers Insurance
Co. member of National Association of Life
Underwriters; member and past president of
the Delmarva Life Underwriters Association
and the General Agents and Manager
Association.
■ Mary Jane Willen, 82, of Arnold, Md.; office
manager for various insurance agencies.
■ Gerald “Jerry” Kenneth Willison, 72, of
LaVale, Md.; retired claims adjustor for the
Travelers Insurance Co.
February 2009
Focus: Economy signals new P-C opportunities
Looking at how clients are affected can yield new areas to build business relationships
By Curtis M. Pearsall
This is not going to be an article on the
economy – none of us have to look too far
to hear the latest news. Instead, the purpose here is to review how the economy is
affecting your clients and what actions they
the premium in themselves.
People may want to delete certain coverages right around the premium due
date and look for a recalculated premium
due. The best approach is to advise them
to pay the correct amount due and that
Knowing what actions clients may take can
improve an agency staff’s response.
may be taking that your agency should be
on the lookout for.
When we addressed this topic at the recent Massachusetts Big Event in Boston,
there was some great discussion from the
group with some real life stories on what is
happening in their shops. Based on that
feedback, I offer these areas to consider,
possibly at the next staff meeting.
What we are seeing
Here are some of the things that we are
seeing:
Vacancies – There is no doubt that vacancies, whether on the personal lines side or in
the commercial lines area are on the rise. In
fact, my oldest son and his wife have moved
back to Utica from Albany, leaving in Albany
a house that they are trying to sell. When I
asked him if he has advised his insurance
agent that the house is vacant, he asked “Why
would I need to do that?” It was evident that
he was not aware of how his homeowners
policy responded to a vacant dwelling. Many
companies differentiate between a house
that is vacant and one that is up for sale.
Make sure that your customers do!
In the ongoing effort of educating policyholders, this would be a great topic to
cover in a newsletter and to put on an
agency Web site. Generally, the public is
probably not as knowledgeable on this
topic as we may think.
Payments – Are more customers paying
at the very last minute? Are some people
paying after the policy has been cancelled?
On the personal lines side, I presume that
most of that business is direct bill. Be alert
to customers coming into the office to
make payments; advise staff, especially receptionists and CRSs, to check the policy
status before accepting payment. Some
agencies have taken a position of not accepting the premium when it is right
around the due date, instead giving the
customers an envelope for that company
and advising them to go ahead and send
any overpayment will be credited toward
their next installment.
Means to save money
not have the money today. Virtually every
agency contract has a clause that refers to
the necessary way to handle these and
when they need to be turned back to the
company. Be certain the staff knows the
right way to handle these.
Some of these issues should resonate
with agency owners and staff. Take the time
to discuss these issues with staff so they
will understand the implications and exercise the necessary judgment. IFA
Curtis M. Pearsall is vice president of errors and
omissions for Utica Mutual Insurance Co. He can
reached at [email protected].
Coverage deletions – There is no doubt
that policyholders are going to look to their
insurance program as a potential means of
saving some money. This will translate into
dropping various coverages, such as comp
and collision on their auto, dropping their
jewelry / fine arts floaters, maybe even
dropping their personal umbrellas. If customers advise that they wish to make these
changes, be sure to get the request in writing. This will serve as a defense should
something happen and they disavow any
knowledge of asking to delete the coverage.
Asking for lower limits – Instead of totally dropping the coverage, the policyholder may ask that you reduce the limit.
For example, if it is an auto account and
the insured wants to drop his or her limits,
be certain that a gap between the auto limit
and any applicable umbrellas is not being
created. In regards to property coverages, be
alert to any co-insurance clauses that could
result in a penalty at the time of a claim.
If the insured understands the implications and wants it anyway, get it in writing.
In the event of a claim, a customer may
disavow any knowledge of this or state that
they didn’t understand it. An agency’s file
needs to reflect the discussion that took
place and the ultimate decision.
Wilner Award luncheon
planned for March 19
The Greater Washington chapter of the
National Association of Insurance and
Financial Advisors has scheduled its annual Wilner Award Luncheon for March
19 at the Congressional Country Club in
Bethesda, Md.
The luncheon and award presentation
runs from noon to 3 p.m.
The Bernard L Wilner Award is presented annually to someone in recognition of his or her outstanding commitment to furthering the ideals and spirit of
the life insurance industry.
For
more
information,
visit
www.naifa-gwdc.org. IFA
Commercial insurers
use our network:
Your self insured
companies
should too.
From its inception, Virginia Health Network (VHN) has been
one of the state's largest Preferred Provider Organizations. Now
we're even larger, with our network covering 95% of Virginia.
The over 80 hospitals in VHN include virtually every major
hospital in the state. VHN providers number more than 12,000
and can be found in cities and towns both large and small
throughout Virginia. And we can partner with other provider
networks in areas where ours isn't offered.
Wherever a company has employees in Virginia, we make
the best health care providers available.
Our numbers speak for themselves. And at this number –
Exposures get ‘low balled’
Audits – Oftentimes, on policies that are
subject to audit based on sales, receipts
and payroll, policyholders may “low ball”
on the exposure since they really are not
sure what their exact names will be. This
way the premium is lower. When the policy
is eventually audited, if there is an additional premium, make sure staff understands the appropriate way to handle these
and what the implications are if the insured
refuses to pay or states that he or she does
// UPCOMING EVENTS
804-320-3837 – you can speak to Jim Gore to get more information
about one of Virginia's largest attractions.
Virginia Health Network
7400 Beaufont Springs Drive, Suite 505
Richmond, Virginia 23225
804-320-3837
Contact Jim Gore at [email protected] • vhn.com
|
IFAwebnews.com
February 2009
|
23
Garage Done Simply
•
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Tow Truck Operators
Motorcycle Sales & Service Shops
Mobile Mechanics
Emergency Vehicles Sales & Service
Body & Paint Shops
Truck / Tractor Sales & Service
Oil & Lube Stations
Gas Stations w/repair
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to Cho
From
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Auto Physical Damage
UM / UIM / Med Pay
Tools & Equipment
Dealers Open Lot
Your Garage Experts are:
*Rod Kegley *Dave Adcock *Priscilla Owens *Sarah Akin
Atlantic Specialty Lines, Inc.
800-368-2095
Capital “I” Day ’09
Excellence Through Education
March 20, 2009
Hilton Hotel
1750 Rockville Pike, Rockville, MD
*on the Redline @ Twinbrook
Morning Sessions:
• Mock Trial "Poof, It's Gone!" (strange name, but it deals with a
massive corporate identity theft and material misrepresentations
in an application for D&O Insurance); Presented by the Law Firm
of Budow and Noble located in Bethesda, MD. The attorneys are
Michael Budow, Laura Basem Jacobs and J. Charles Szcezesny
Lunch:
• Luncheon speaker: Kevin Quinley, CPCU, ARM, AIC
Afternoon Sessions:
• D&O Liability Insurance: Emerging Claims and Coverage Issues,
presented by Nancy Adams, J. D., CPCU of the Boston office of
the law firm of MIntz Levin
• Flood Insurance presented by Annette Winston, Flood Territory
Manager, Selective
• Insurance Fraud for Agents presented by Fred Wharton of North
American Training Group
• Ethics for Insurance Producers presented by Jim Ehrich, RHU
Emeritus, Client First Brokerage Services
Sponsored by:
• 6 P/C and L/H CE
Credits (pending)
• Exhibit Hall • Networking
• Luncheon Included
Join 200 other fellow
agents for this annual,
informative event!
For more Information:
www.clientfirst.com
[click on “continuing education”]
Exhibitor / Sponsor info:
Stanley Lipshultz, CPCU
301-468-5511
Media Sponsor:
CareFirst awaits D.C. mayor’s action
on proposed reserves cap legislation
Health insurer calls D.C. bill on reserves cap,
premium percentage donation ‘fatally flawed’
By Keith L. Martin
Regional health insurer CareFirst is
hoping District of Columbia Mayor
Adrian Fenty uses his veto power on legislation passed by the D.C. Council it calls
“fatally flawed.”
In December, the D.C. Council approved
The Medical Insurance Empowerment
Amendment Act of 2008 by a 12-0 margin.
The bill requires CareFirst’s District affiliate,
Group Hospitalization and Medical Services
Inc., to pay a percentage of its premium toward the District’s health care programs. The
legislation, introduced by D.C. Councilmember Mary Cheh, also caps the amount of
money GHMSI can hold in reserve for unforeseen expenses.
In November, Maryland Insurance Commissioner Ralph S. Tyler said the bill was “unwise,” adding that CareFirst BlueCross
BlueShield of Maryland, which serves 2.1 million Maryland policyholders, is except from
premium taxes, but GHMSI pays premium
taxes to the District, making the legislation, in
effect, double taxation on the company. Because most of GHMSI’s policyholders are not
in District, “this legislation is the ultimate
form of taxation without representation,”
Tyler said then.
This provision could be a major obstacle
if CareFirst were to seek to become a forprofit entity, a move the insurer has denied
repeatedly. If the company wanted to shift
from non-profit to for-profit, it would need
approval from regulators in the District,
Maryland and Virginia.
Currently, the health insurer has $1.27 billion in reserves, with about $753 million of
those reserves with GHMSI, and $513 million
controlled by CareFirst BlueCross BlueShield
of Maryland, which primarily serves about
2.1 million Maryland policyholders.
GHMSI covers about 1.2 million policyholders, with about 150,000 in the District, 700,000 in Montgomery and Prince
George’s counties in Maryland, 300,000 in
Northern Virginia and another 50,000 elsewhere, the company said.
In a statement to Insurance & Financial
Advisor, Owings Mills, Md.-based CareFirst said the company is “disappointed
that the council chose to pass this fatally
flawed bill which creates circumstances
under which the D.C. government could
require CareFirst to contribute some of its
subscribers’ money toward purposes beyond their direct benefit.”
‘Controversy and disagreement’
A letter to Cheh sent
by CareFirst President
and CEO Chet Burrell
prior to the Council’s decision questioned the
District’s intent for
GHMSI’s contribution.
“At a time when there
is extreme and growing Chet Burrell
health care cost pressure
on all businesses and individuals that
strains their ability to afford health care coverage, the idea that the District can compel
our subscribers to fund public health purposes beyond their direct benefit is not
something we think they would countenance,” Burrell said. “And, it would be inconsistent with congressional intent.” IFA
More online:
IFAwebnews.com
Check IFAwebnews.com for the latest on
this breaking story.
// NEW RESEARCH
COBRA costs claim 84% of average unemployment benefits
COBRA costs consume almost 84% of average unemployment benefits, according
to a new study.
On average, national unemployment
benefits provide $1,278, while COBRA
monthly premium payments for family
coverage average about $1,069, according
to a report from Families USA, a health
benefit advocacy group.
COBRA family coverage premiums in
41 states, including Delaware, Maryland,
Pennsylvania, New York, Virginia and the
|
IFAwebnews.com
District of Columbia, consume more than
three-fourths of average unemployment
insurance benefits, the study found.
In nine states, including Delaware,
Florida and Alaska, the average COBRA
premiums equal or exceed average unemployment benefits, the study found.
In 17 states, including Delaware, and
the District of Columbia, COBRA premiums for single coverage of workers consume, on average, more than one-third of
unemployment insurance income. IFA
February 2009
Calendar
of Events
■
February
4 – Board Meeting – SFSP-Baltimore. 8
a.m. Capital Financial, Hunt Valley, Md.
17 – Sections Meeting – SFSPBaltimore. 8:30 a.m. PSA Learning
Center, Hunt Valley, Md.
25 – CRIS Commercial Liability for
Contractors – IIAM. 8 a.m.-5 p.m.
Contact: 410-766-0600 or email
[email protected].
■
March
5 – Errors & Omissions Loss Control –
IIAM. 9 a.m.-4 p.m. Contact: 410-7660600 or email [email protected].
17 – DVD Program – SFSP-Baltimore.
8:30 a.m. PSA Learning Center, Hunt
Valley, Md.
Commercial lines agencies dominate banks’ carrier list
St. Paul/Traveler ranks as leading carrier
in list of top 100 banks in insurance
Commercial lines insurance agencies
dominate a new list of the top 100 banks in
insurance, with St. Paul/Travelers ranking
as the leading carrier to those agencies.
Almost four out of five (78%) banks cited
commercial insurance as their leading line.
Personal lines and employee benefits were
most often cited as the second leading insurance line – 40% and 34%, respectively –
according to the 2008 edition of Who’s Who
in Bank Insurance, published by the Bank
Insurance Market Research Group.
In its annual survey of the top 100 bank
insurers, 28% of 40 banks that responded
listed St. Paul/Travelers as their leading insurance carrier by revenue. Among those
listing St. Paul/Travelers as their leading
carrier were large bank insurers like Wells
Travelers appeared on the ‘top three’ carrier list of 48% of bank respondents. By
comparison, Chubb appeared seven times
(18%) and The Hartford and Cincinnati In-
Travelers, Chubb, The Hartford and Cincinnati
Insurance place best in carrier rankings.
Fargo, which ranked second in the study,
and Wachovia, which ranked sixth.
Citigroup ranks high
Citigroup, which sells mostly life products through its Primerica Financial division, ranked as the top banking insurer in
the survey.
surance were each cited six times (15%).
To be included in the top 100 banks in
insurance for fiscal 2007, banks had to have
$3.7 million in annual insurance brokerage, down 10% from $4.1 million in the previous year, according to the study distributed by the Bank Insurance & Securities
Association. IFA
19 – Wilner Award Luncheon – NAIFAGW. 11:30 a.m.-3 p.m.
25 – CRIS Commercial Auto, Surety,
CIPS & Miscellaneous Lines – IIAM. 8
a.m.-5 p.m. Contact: 410-766-0600 or
email [email protected].
■
April
21 – Sections Meeting – SFSPBaltimore. 8:30 a.m. PSA Learning
Center, Hunt Valley, Md.
22 – CRIS Workers Compensation for
Contractors – IIAM. 8 a.m.-5 p.m.
[email protected].
■
May
12 – DVD Program – SFSP-Baltimore.
8:30 a.m. PSA Learning Center, Hunt
Valley, Md.
21 – Errors & Omissions Loss Control –
27 – CRIS Contractual Risk Transfer in
Construction – IIAM. 8 a.m.-5 p.m.
[email protected].
■
June
3 – Annual Breakfast
Meeting/Installation of Office – SFSPBaltimore. 8 a.m. Baltimore Country
Club-Five Farms, Lutherville, Md.
■
July
Errors & Omissions Loss Control –
Send Your Events!
• The easiest way to submit events is online:
Phone: 410.667.0864 Fax: 410.667.7977
Email: [email protected]
|
IFAwebnews.com
February 2009
|
25
For the Record
voked for failing to remit premiums while acting as
an agent for Southwestern Life Insurance Co. and
Federal Life Insurance Co.
Carrier/Agent Actions
The following are based on information
provided by the Maryland Insurance
Administration.
Case MIA-2008-10-021
■
■
piratory distress in patients with recent anaphylaxis
with a swollen tongue.
Synopsis: An independent review organization
found that the criteria used by MAMSI in making its
coverage decisions for patients with anaphylaxis was
not compatible with established principles of health
care.
Jessie Calvin Williams Jr.
Washington, D.C.
Action: Revoked license
Synopsis: Williams failed to truthfully answer several questions on his non-resident producer license
application about prior incidents. He failed to disclose that he was arrested and charged March 17,
1997, with theft over $300, misappropriating funds
over $300 and embezzlement and was sentenced to
six years of probation and ordered to pay $7,410 in
restitution. He also failed to disclose that in January
1993 he agreed to have his producer’s license re-
Leroy Hamwright
Baltimore, Md.
Action: Revoked license
Synopsis: Hamwright was terminated by New York
Life Insurance Co. for cause in March 2008 because
he took a check issued by New York Life to a woman
and had the check endorsed and cashed by someone
else, which he later admitted to an MIA investigator.
Case MIA-2008-10-019
■
MAMSI Life & Health Insurance Co.
Rockville, Md.
Action: Ordered to submit new criteria for allergic
reactions that take into account the potential for res-
American Casualty Company of
Reading Pennsylvania
Chicago, Ill.
Action: Pay a $5,000 administrative fine
Synopsis: Carrier failed to send notice of a coverage
reduction to 119 policyholders between Sept. 1,
2007, and March 31, 2008, and failed to describe a
specified change in a general “Important Notice for
Healthcare Professionals” mailing about reduced
Group Hospitalization and Medical
Services Inc.
Washington, D.C.
Order: Pay a $1,000 administrative fine
Synopsis: GHMSI failed to notify a policyholder
after bilateral breast reduction surgery of its denial in
the specified 60-day time period.
Case MIA-2008-06-010
■
Case MIA-2008-09-014
■
coverage, sent to 2,175 in policyholders between
Sept. 1, 2007, and March 31, 2008.
Case MIA-2008-10-014
Administrative Actions
The following are based on information
provided by the Maryland Insurance
Administration.
■
AETNA Health Inc.
Action: Ruled that the carrier improperly denied a
claim for a patient’s PathFinder TG test.
Synopsis: The carrier paid $40.78 for precancer/cancer laboratory testing, the usual and customary rate, for PathFinder TG, while the claim
sought $4,500.
INSURANCE MARKETPLACE
Case MIA-CC-33-08-26705
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■
THANK YOU !!
As we look forward to 2009, ASL wants to thank
each and everyone of our PROFESSIONAL
RETAIL AGENT - PARTNERS!
Because of your partnership and our commitment to each
of you, we had a GREAT 2008 and achieved all of
our goals.
Case MIA-CC-33-08-26737
■
Maryland Insurance Services
Maryland Automobile Insurance Fund
Action: Affirmed MIA and carrier’s decision
Synopsis: A policyholder alleged that the two companies improperly allowed his auto insurance policy
to expire. The MIA ruled for the insurer.
ASL APPRECIATES and VALUES your business!
Lets keep it rolling in ‘09
Atlantic Specialty Lines, Inc.
Your dedicated wholesale broker !
800-368-2095
www.atlanticspecial.com
www.simple-rates.com
State Farm Fire and Casualty Co.
Synopsis: A policyholder alleged that State Farm
improperly denied a claim for a collapsed ceiling at
her home after a Feb. 8, 2008, incident. The MIA
ruled for the insurer.
Case MIA-CC-33-08-24271
■
Erie Insurance Exchange
Synopsis: A policyholder alleged that the carrier improperly denied a claim for water damage, on Oct.
25, 2007, in the basement of her home. The MIA
ruled for the insurer.
www.bsibroker.com
Case MIA-CC-33-08-26734
■
Baltimore Equitable Society
Synopsis: A policyholder alleged that the carrier’s
failure to pay for lost luggage and for a portion of the
claim for damage because snow and ice accumulation, because he allegedly failed to supply documentation of the loss, was an unfair claim settlement
practice. The MIA ruled for the carrier.
trucks
Business & Public Auto, Trucking
Liability, Phys. Dam., Cargo, Excess
Case MIA-CC-33-08-30116
Call Geoff for a fast phone quote!
// UPCOMING EVENT
800-396-6226 ext. 105
[email protected]
CPCU Society sets Capital
I-Day for March 20
Let us work for you.
The District of Columbia chapter of
the Chartered Property Casualty Underwriters has scheduled its annual Maryland I-Day for March 20 at the Rockville
Hilton in Rockville, Md.
For more information, contact Stan
Lipshultz at [email protected]. IFA
www.commund.com
|
IFAwebnews.com
February 2009
Leading the Way
Experience and Compliance — Unmatched.
Over $1 Billion of Life Settlements Sourced Since 2005
Proven Industry Leadership
Integrity and Accountability
866.509.5534
www.lifesettlementproviders.com
Form#: LSP080923. Material intended for licensed life producers only, and not for use with the general public.
Services not available in all states. Call for state approval and availability. ©2008 Life Settlement Providers, LLC.
|
IFAwebnews.com
February 2009
|
27