Data Breach & Cyber Security
NetDiligence 2013 Cyber Liability & Data Breach Insurance Claims (NetDiligence, 2013)
NetDiligence, an NLC-RISC partner, has released its third annual report on Cyber Liability and Data Breach claims. The highlights, based on 145 insurance claims, include:
• Personal identifying information was the most frequently exposed data, in 28.7% of all breaches.
• Lost or stolen laptops or devices were the most frequent cause of loss (20.7%), followed by hackers (18.6%). Rogue employees were third (12.1%) and paper records were fourth (8.6%).
• The median number of records lost was 1,000 and typical claims ranged from $25,000 to $400,000.
• The median claim payout was $242,500 and the average was $954,253, but many claims are unpaid and those numbers could rise.
• The median per record cost was $107.14 and the average was $6,790, but excluding outliers with few records exposed and very high cost the median was $97 and the average per record list was $307.
• The median cost for crisis services – forensics, notification, credit monitoring and legal advice) was $209,625 and average was $737,473.
No U.S. Action, So States Move on Privacy Law (New York Times, 10/30/2013)
In the absence of federal legislation to strengthen privacy laws, states are moving to fill the gap. These bills and legislation cover a multitude of very specific topics. Accessible through a link in this article from the phrase “data breach notification law” is a series of Data Breach Charts by the law firm BakerHostetler, which categorize state privacy laws according to various characteristics.
IRS Announces Modification To "Use-It-Or-Lose-It" Rule For Health Care Flexible Spending Accounts (Mondaq, 11/6/2013)
The Internal Revenue Service has announced a new rule for Flexible Spending Accounts made available by many employers under a cafeteria plan. The employer may now permit employees to carry over up to $500 to the following plan year and use it for expenses incurred in that plan year. To implement the new option, employers must amend their cafeteria plans on or before the last day of the plan year from which amounts would be carried over and notify employees of the change. Employers that already have a grace period rule in place, which allows employees to use remaining funds from a prior year during the first 2.5 months of the subsequent year, will need to consider whether their employees would be better off with carry over of $500, which could be used at any time during the year.
Guidance on the Application of Certain ACA Market Reforms to Employer Health Plans (Mondaq, 11/4/2013)
On September 13th both the U.S. Department of Treasury, the Internal Revenue Service and the U.S. Department of Labor released guidance regarding the application of certain market reform provisions under the Affordable Care Act on health reimbursement arrangements (HRAs), health flexible spending arrangements (FSAs) and Employee Assistance Programs (EAPs). While the guidance provides some relief, complicated compliance issues remain particularly with respect to stand-alone HRAs, employment payment plans, and non-excepted FSAs. The guidance is effective for plan years beginning on or after January 1, 2014.
Many RISC member pools are being asked by their members to help navigate the complex world of ACA compliance. If you have tools and resources you are using to help educate your members about these requirements and think they would be helpful to other RISC member pools, please send copies to Erin Rian, NLC-RISC Program Manager.
Property & Casualty
Data Quality Continues to Challenge Insurers (Insurance Networking, 11/4/2013)
According to a vendor survey, insurers that are using predictive analytics believe that their top challenges are lack of access to sufficient quality data and skilled modelers. Although as many as 82% of survey respondents are currently using predictive analytics in a line of business, most commonly for pricing, the use is more prevalent among large insurers.
Cat Bonds Remain Popular Despite Soft Traditional Market (Best’s News Service, 10/30/2013)
The highlights of this subscription piece are:
• Traditional reinsurance faces pricing pressure pressure in January renewals, but not as sizeable as might have been expected.
• The alternative market, especially for catastrophe bonds, is doing well because institutional investors are seeking higher returns.
• 29 new insurance-linked securities vehicles have formed in the Bermuda market in 2013, about half of them cat bond vehicles, and the rest being related to collaterized reinsurance and sidecar formation.
• Bermuda is looking at about $7 billion in capacity for CAT bonds in 2013, with high demand and over-subscribed volume.
• Cat bonds issued so far this year total $5.44 billion and may ultimately top the record $7.4 billion issued in 2007.
• Seven new sponsors brought $1.12 billion in exposures to the market so far in 2013, among them the Florida Municipal Insurance Trust.
• Despite some recovery in traditional reinsurance in terms of better investment return and income results, cat bonds remain attractive to institutional investors who are large enough to absorb the inherent risk.
• Capital-market investors are likely to remain in the market even when losses occur.
• After 2014, coupon prices may rise somewhat in response to already-seen losses, just as traditional reinsurance pricing rises in response to higher losses.
• Munich Re findings show that natural catastrophe losses totaled 17 billion euros (US$23.3 billion) in Europe for the first nine months of 2013, with floods dominating --- accounting for 75% of those losses.
This article is available on a subscription basis from Bests’ News Service.
Without TRIA, Risk Managers See Drop in Limits or Terror Cover to Vanish (Property Casualty 360, 10/30/2013)
A RIMS pool finds that 45% of risk managers expect terrorism limits to fall if TRIA is not reauthorized, and 25% expect terrorism coverage to become unavailable. 85% of RIMS members responding to a survey say they have purchased or renewed terrorism insurance in the U.S. in the past year.
New guide from IAIABC offers advice on opioid policies (Risk & Insurance, 11/4/2013)
The International Association of Industrial Accident Boards and Commissions has developed a guide designed to help policymakers make decisions about how to address opioid abuse problems. The guide explores agency coordination, treatment guidelines, documentation and reporting by physicians, preauthorization and formularies, denial of treatment and drug tapering, continuing education requirements for physicians, prescription drug monitoring programs, and dispute reconciliation. The full guide is available online here.
Apps Put Safety at Your Fingertips (Pools in the Spotlight: CIRSA)
NLC-RISC member CIRSA has compiled this list of 12 free or low cost safety related apps.
Other Topics of Interest
Police firing GPS tracking 'bullets' at cars during chases (CNET, 10/25/2013)
Police in Iowa and Florida are testing a new tool that may help avoid dangerous car chases. The technology is a compressed air “cannon” mounted under the front of the car that allows police to fire a sticky GPS device that adheres to the fleeing car and allows police to find the car without keeping it in sight during a chase.
Webinar: Prepare Your Employees. Protect Your Organization.
FREE Agility Recovery Solutions Webinar
Nov. 21st from 2-3pm EST
You may already have a rock-solid continuity of operations plan, but if your employees are unwilling or unable to report to work, having your systems back up and running means very little. NLC-RISC partner Agility Recovery Solution is presenting a webinar that discusses:
Tips and best practices on encouraging employees to take action today. Learn more or register here.
For questions or more information, please contact Scott Teel, Agility Recovery’s Education Director.
Employment Opportunities in Pooling
Visit the NLC-RISC website under the Resource tab for details about the following positions, or click on the job title to be directed to the pool's job posting on their website.