The RISC eNews Blast is intended to provide relevant and timely news information from a number of sources to member pool staff. If you see articles in the journals, email and sources you subscribe to that may be of interest to the RISC membership, please feel free to forward them to Erin Rian for inclusion in the eNews Blast. The eNews Blast will be delivered weekly, and the RISC Report newsletter will be delivered every two months.
In this week's edition of the RISC eNews Blast:
DATA SECURITY & CYBER RISK
As Cyber Coverage Soars, Opportunity Clicks (Property Casualty 360, 1/21/2013): As the market for cyber coverage matures, carriers that offer cyber coverage are starting to see claims, several per week for insurers that have been in the business the longest. Crisis management – forensics, notification, call-center staffing, credit monitoring and legal advice – accounts for much of the claims activity because it comes into play in most cases, even where there are no damages.
Experts Defend Password-Based Security (Advisen, 1/20/2013): Supplements to password protection are being investigated. Options include device-assisted security, such as a cryptographic card for inserting into a USB reader, and tapping a smartphone or smart card on a computer. A combination of these device-based approaches and stronger passwords would be expected to produce better results.
Social Media Bills to Protect Online Privacy Filed in Texas (Governing, 1/18/2013): Texas legislators have introduced several bills that would affect the use of social media. One law would “prohibit employers from requiring or requesting access to personal accounts of employees or job applicants through electronic communication devices.” It would apply to devices owned by the employer. A similar bill was introduced to protect students’ social media accounts. Another would require registered sex offenders to disclose their status and substantial personally identifying information on their social media accounts.
Delaware Sets Early Example for Partnership Health Exchanges (Governing, 1/23/2013): With the deadline for states to declare whether they will create a state-based marketplace, HHS is working to persuade the 33 states who didn’t go that route to consider a partnership with the federal government. States have until February 15th to decide if they want to partner with HHS or default to a fully federal exchange.
New HIPAA Rules Fortify Patient Privacy (MedPage Today, 1/21/2013): The Department of Health and Human Services recently released stronger rules and protections governing patient privacy last week. The rules enhance the Health Insurance Portability and Accountability Act of 1996 governing health records and patient information. With the new rules, HHS expands the scope to include note only healthcare providers and health plans, but also “business associates”.
Food Service Vulnerable to Food Allergy Lawsuits (USA Today, 1/18/2013): A settlement by a Massachusetts college with a student who alleged that the lack of gluten free alternatives violated the Americans With Disabilities Act raises the possibility of similar actions against other organizations that fail to honor requests for accommodation of food allergies. Especially vulnerable are organizations that have a close and ongoing relationship with the affected party, such as a college with a mandatory meal plan.
PROPERTY & CASUALTY
A Future Without the Terrorism Backstop? (Insurance Journal, 1/18/2013): The future of the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), the successor to the Terrorism Risk Insurance Act (TRIA) is under debate in Congress. TRIPRA is up for reauthorization in December 2014 and the opposition argues that it is no longer necessary because a private marketplace has now been developed. Proponents, including the insurance industry, argue that TRIPRA remains necessary to a workable terrorism insurance marketplace because it remains difficult to model and price terrorism risk. Limited availability of embedded coverage and increased pricing for standalone coverage may result, along with reduced reinsurance capacity.
Third-Party Bad Faith Litigation – Insurers’ Attorney Client Privilege and Work Product Doctrine Protections Limited by Tripartite Relationship in Underlying Liability Action (Mondaq, 1/17/2013): An insurer’s communications with defense counsel that it retains for its insured in a liability suit are discoverable and not protected by attorney-client privilege in a following bad-faith lawsuit, according the a federal district court in Georgia. However, the joint defense/common interest exclusion did not apply to communications solely between the insurer and its in-house claims counsel, and the insurer was permitted to redact from documents it was ordered to produce the mental impressions, conclusions, opinions and legal theories of the insurer’s in-house counsel and claims representative regarding the litigation.
Medical Services for Claims 20 or More Years Old (National Council for Compensation Insurance, 1/21/2013): The National Council on Compensation Insurance has published a study finding that more than 10% of the medical costs for workers’ compensation claims that occur this year will be paid more than 20 years from now. The report looks at the demographics of the claimants in long-term treatment and the breakdown of the services that drive the costs. Key findings include that these patients are primarily male, costs are not driven by elderly patients deteriorating as they age, and drugs are the largest component (38%) of cost of care 20 to 30 years out from the injury. Access the full report here.
Connecticut Considers Workers’ Comp for First Responders (Boston Globe, 1/19/2013): The Connecticut Legislature Labor Committee plans to introduce legislation that would expand worker’s compensation for emergency workers who are exposed to horrific scenes by permitting coverage for mental-mental claims, where there is an emotional impact but no physical injury. Mental-mental claims were part of the Connecticut workers’ compensation law in the past, but were ended in 1993.
OTHER TOPICS OF INTEREST
New NAIC CEO Nelson: "No Need for Dual Regulation" (Insurance Journal, 1/23/2013): The new CEO of the NAIC, former Senator Ben Nelson, says that there is no need for dual regulation of insurance and that the federal government should have a limited role, to be executed in partnership with state regulators. He does not support a regulatory role for the federal government, including the Federal Insurance Office created by the Dodd-Frank Wall Street Reform Act.
Industry Applauds Nelson Selection at NAIC (Property Casualty 360, 1/22/2013): The National Association of Insurance Commissioners has named former Nebraska Senator Ben Nelson as its new chief executive officer. Insurance lobbyists support the appointment because they believe he will help convince senators to renew the Terrorism Risk Insurance Act. Insurance interests have also brought Nelson together with the director of the Federal Insurance Office with the goal of developing a stronger relationship that will enable the agencies shape international regulatory initiatives in a manner that will be helpful to the industry.
Superstorm Challenges Definition of Basement in New Jersey (Claims Journal, 1/22/2013): Homeowners and businesses that are located on the lower level of buildings, even slightly below grade level, are finding that those premises are classified as “basements” under NFIP, and they are being denied many of the flood insurance benefits they would receive for higher levels of the building. In cramped urban areas, residents make use of lower levels for living and commercial space, exposing them to greater uninsured losses in the event of a flood. Robert Hunter, the director of insurance for the Consumer Federation of America and former federal insurance administrator, says that basement rules are interpreted too stringently.
Police Verify Dangers First to Reduce False Alarms (Governing, 1/21/2013): The Urban Institute has issued a report finding that 90 – 99% of alarm system calls to police in three jurisdictions it studied are false alarms. This saps police resources and imposes additional costs on jurisdictions. Among the tools used by the three jurisdictions to reduce false alarms are requiring verification by another means such as telephone or remote cameras (“verified response”), sending a private guard to the alarm site rather than police, registration and licensing of alarm companies, discontinuing police response after a specified number of false alarms, and charging escalating fees for false alarms. A link to the full report, including more detailed reports on the approaches used in Montgomery County, Maryland, Seattle Washington and Salt Lake City, Utah is in the article.
Mendocino County Spars With Feds Over Conflicting Marijuana Laws (Los Angeles Times, 1/20/2013): The conflicting approaches of California and the U.S. government to marijuana are coming to a head in Mendocino County, California, which adopted regulations designed to permit and regulate marijuana growers. The U.S. Justice Department has subpoenaed county records regarding the cultivation program, including information about growers who applied for permits. The county adopted the program to allow registered growers to cultivate up to 99 plants after it experienced a surge in marijuana cultivation and attendant problems associated with major cultivators that were operating outside the law.
Federal Court of Appeals Upholds Walker’s Act 10 Union Law (Bloomberg Business Week, 1/18/2013): A panel of the 7th Circuit Court of Appeals has upheld the Wisconsin law prohibiting collective bargaining for most public employees. Among the law's requirements are annual recertification of unions and a ban on the voluntary deduction of dues from paychecks. Public safety workers are exempt from most of the law’s provisions, amid allegations that only unions that backed the governor’s 2010 election were exempted.
Kansas, Missouri Could be Hit by Disaster Aid Fight (Insurance Journal, 1/18/2013): Some Midwestern Congressional representatives from states that have received substantial disaster aid in past years are advocating cessation of federal disaster assistance unless other government spending is stopped to pay for it.
NYC Council Eyes Disaster Planning After Sandy (ABC News, 1/16/2013): New York’s city council is looking at a variety of issues, including gas shortages, food distribution delays, utility restoration, and 911 denial of service.
Information about NLC-RISC conferences, workshops and regional meetings can be found on the NLC-RISC website under the Events tab. Please contact Erin Rian if you have questions. Save the date for the following events:
Essentials in Risk Pool Management Certificate Program ~ Online courses start February 7, 2013: Essentials in Risk Pool Management is a one-course certificate program, developed through a collaboration of NLC-RISC, the Association of Governmental Risk Pools (AGRiP), California Association of Joint Powers Authorities (CAJPA) and Insurance Educational Association (IEA). The curriculum provides a risk pool participant with theoretical and practical knowledge, which provides a solid foundation to successfully work within or manage the risk pool. Completion of Essentials in Risk Pool Management satisfies one of the five required courses for the Associate in Risk Pool Management Designation. Registration for NLC-RISC members is $399. Register here.
Southern Municipal Underwriting Group (SMUG) Meeting
April 8-9, 2013 ~ Louisville, Kentucky
Hosted by the Kentucky League of Cities Insurance Services
Southeast Regional Loss Control Meeting
April 16-19, 2013 ~ Annapolis, Maryland
Hosted by LGIT (Maryland)
Questions? Contact Dick Furst, LGIT.
Midwest Regional Loss Control Meeting
May 2-3, 2013 ~ St. Paul, Minnesota
Hosted by the League of Minnesota Cities Insurance Trust
Questions? Contact Chris White, LMCIT.
Marketing Communications Workshop
May 15-16, 2013 ~ Sheraton Denver Downtown Hotel
2013 NLC-RISC Trustees Conference
May 16-18, 2013 ~ Sheraton Denver Downtown Hotel
Western Regional Loss Control Meeting
July 17-19, 2013 ~ Bend, Oregon
Hosted by CIS (Oregon)
2013 NLC-RISC Staff Conference
October 21-23, 2013 ~ Portland, Oregon