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.
In this week's edition of the RISC eNews Blast
DATA SECURITY & CYBER RISK
Class Action Plaintiffs Lack Standing Under Clapper To Sue Barnes & Noble For Credit Card Data Breach (Mondaq, 9/12/2013): The federal district court for the Northern District of Illinois has dismissed a class action lawsuit that arose from the use of skimming devices at Barnes and Noble locations in nine states, which may potentially have resulted in the theft of customer credit card information. The court based its decision on its finding that the plaintiffs did not suffer injuries. An increased risk of identity theft was insufficient to establish standing. Only one plaintiff alleged a fraudulent charge on her credit card, and the court found that even if the fraudulent charge was traced back to the Barnes and Noble breach, she suffered no damages because her credit card company eliminated the charge. This case continues the approach by courts that has so far protected organizations that suffer a data breach from class actions based on speculative future damages.
Study: 66% of Businesses Struggle With Cyber Breach Detection (Property Casualty 360, 9/11/2013): Technology changes daily and so do the ways that it can be attacked. A study by the Information Security Media Group finds that more than half of the respondents to a survey face significant challenges in detecting cyber breaches at all, detecting them in a timely manner, determining the extent of the threat, and eradicating it. These are significant potential problems for pools and their members, given the possible legal and regulatory requirements associated with a breach. Properly trained staff and automated detection and containment tools are two important resources for identifying and eradicating threats as quickly as possible. Realistically many small cities will not have the financial ability to make these investments, even though their risk from the legal and regulatory consequences of undetected breaches may be as high as a private sector organization.
Is Google Glass A Passing Fancy? (Property Casualty 360, 9/10/2013): Google Glass is the newest buzz in technology. It is a hands free computer that is worn as headgear and allows the user to film from his or her perspective, creating significant privacy concerns. Its positioning in front of the user’s eye increases distraction, whether the user is driving, walking, or performing an important work task. It isn’t in general use yet, but state legislatures and organizations are already starting to react to the potential implications. Some types of organizations have begun to ban its use within their walls, largely due to privacy concerns. Several state legislatures are seeking to ban its use while driving, due to potential for distraction. It seems likely that Google Glass or similar technology will become commercially available, so both pools and their members should begin to consider its effect on their exposures and how they can best manage resulting risk.
Insurers' cyber risk exclusions for energy firms 'unsustainable': Marsh (Business Insurance, 9/4/2013): The breadth of the energy sector’s exposure to catastrophic losses due to cyber risk has led the insurance industry to effectively exclude cyber incident coverage in that sector. Marsh questions the sustainability of that position, noting the clear need for such coverage if insurance is to remain relevant to the sector. Given the degree to which technology has penetrated all areas of endeavor, a similar concern could also be raised about absolute exclusions of cyber related losses outside the energy sector.
No employer penalties imposed for lack of health exchange notice: DOL (Business Insurance, 9/12/13): While employers should provide notice to employees by October 1st about the availability of public health insurance exchanges, the Department of Labor has said in a Q&A format that employers will not be fined by federal regulators if they fail to distribute notices to employees. The Department released model notices back in May, which can be found here.
Workzone: Clumsy dismissals may come back to bite you (Pittsburgh Post-Gazette, 9/8/2013): People are uncomfortable with firing others, and thus tend to say things that can land the employer in a lawsuit. While some are obvious – such as referring to the terminated employees age, seniority, status as a parent or other protected classification, others are less so. An employee that is terminating another should not say that they disagree with the decision, that terminating the employee is hard on them too, or that the employee should have been told of deficiencies in performance sooner. Also, ensure that any performance deficiencies are documented in advance. Getting qualified legal advice before termination is also a good investment, and providing that advice is one of the value added services that many RISC member pools offer.
MEDICARE SECONDARY PAYER
CMS Takes Step Toward Rule Making for Future Medicals for Liability Claims and Reporting Penalties – Still Long Road Ahead (Franco Signor, 9/10/2013): CMS has submitted to OMB for review a Notice for Proposed Rulemaking that addresses protection of CMS interests in liability claims. This is just the beginning of the process. Including comment periods, it may take until the first quarter of 2014 before the final Report & Order is issued. CMS also submitted to OMB an Advanced Notice of Proposed Rulemaking regarding safe harbors for mandatory insurer reporting penalties. There are no time periods within which CMS must act on the Section 111 penalties.
PROPERTY & CASUALTY
Evolving Coverage Obligations: The Additional Insured Endorsement (Property Casualty 360, 9/10/2013): Additional insured endorsements can be a significant source of confusion and unintended consequences. Among the many points worth considering are the following:
•In some states, an additional insured may have standing to sue the named insured’s insurer for bad faith
•An indemnification agreement between the parties to a contract may, in some states, supersede the insurance policy language and terminate the insurer’s right to contribution.
•An additional insured endorsement confers contractual benefits, which may make the insurer’s duties to the additional insured similar to its duties to its own insured.
Covering Sinkhole Losses (IRMI, 9/2013): Sinkhole and catastrophic ground cover collapse are an increasingly visible problem, and not just in Florida. Go to the USGS website for a US map that shows where sinkholes are a problem. Pools located in states with these exposures should be aware of what their state law requires with respect to insurance coverage, and how the various coverage lines associated with business interruption may be affected by associated losses.
Understanding Comparative Fault, Contributory Negligence and Joint & Several Liability (Claims Journal, 9/5/2013): Pure contributory negligence is relatively rare, being the law in only four states and the District of Columbia. Pure comparative fault, where a plaintiff can recover from the defendant the percentage of the plaintiff’s losses caused by the defendant, regardless of the degree of the plaintiff’s negligence, is recognized in 13 states. The greatest number of states – 33 – recognize modified comparative fault, which imposes a limit on what percentage of negligence a plaintiff can contribute to the loss and still recover, generally limited to 50 or 51%. Included is a link to a table that identifies into which category each of the 50 states falls.
Limitations period not renewed for claim against subsequent employer (Risk & Insurance, 9/9/2013): The Oregon Court of Appeals has held that the statute of limitations on an occupational disease claim does not begin to run again when the claimant changes employers, even if the employee has subsequent exposure at the new job. If the claim is for the same condition that the employee experienced with the prior employer, it is barred once the statute of limitations has run.
State legislators advance best practices guideline for opioids (Risk & Insurance, 8/30/2013): The National Conference of Insurance Legislators has developed model reforms aimed at reducing the misuse of opioids in the workers’ compensation space. The panel will vote on the model reforms at its November meeting, and is seeking comments. NCOIL summarized its recommendations as address how to:
•"Establish, evaluate, and fund prescription drug monitoring programs (PDMPs);
•Create strong evidence-based prescribing standards that recognize “one-size-does-not-fit-all” and that crack down on “pill mill” pain clinics;
•Promote enhanced and effective education of physicians and the public, including opportunities for safe drug disposal;
•Pursue options for encouraging treatment and recovery, including use of certain drug treatments and of drug courts”
The full model reforms are available here.
OTHER TOPICS OF INTEREST
California city backs plan to seize negative equity mortgages (Reuters, 9/11/2013): The Richmond California city council has voted 4-3 to adopt the plan that would use eminent domain to assist homeowners who are underwater on their loans. Opponents on the council expressed concern that the plan would put the city at risk of lawsuits that would destroy its finances. Investors holding the targeted mortgages have sued to block the plan.
Agility Webinar: The Effective Use of Social Media During Disasters (Agility Recovery Solutions, 9/17/2013 at 2:00 pm EDT): Agility Recovery Solutions is hosting a webinar on Tuesday, September 17th at 2:00 p.m. ET on social media and disaster recovery - tips for municipalities and public sector entities. Any NLC-RISC member pool is welcome to participate and/or to invite your members to participate, regardless of whether or not you are a member of Agility. Register here for this free webinar.
NLC-RISC 2013 Staff Conference - Registration and Preliminary Agenda Now Available! (October 21-23, 2013 at The Nines in Portland, Oregon): The NLC-RISC Staff Conference Provides staff of state municipal league-sponsored risk pools with the opportunity to learn about trends, programs, services and best practices in a variety of coverage lines and functional areas, and offers a great opportunity to network with pool staff from across the country ~ all in a non-competitive, collaborative environment! A preliminary agenda and online conference registration, as well as hotel reservations can all be found on the 2013 NLC-RISC Staff Conference Event Page. Contact Erin Rian with questions or concerns.
Southern Municipal Conference IT Conference (October 16-18, 2013 in Columbia, South Carolina): The Southern Municipal Conference has sponsored the SMC IT meeting for 11 years. The group meets twice each year to share the IT experiences of each league and/or Risk pool. Presentations by IT experts on the latest hardware and software help keep the participants up to date on the cutting edge of technology. Registration for the SMC IT Group meeting is open to all State Municipal Leagues and League Risk Pools.
Property Inspector - Rhode Island Interlocal Risk Management Trust: Property Inspector for non-profit self-insurance pool for RI local governments. Provide detailed loss prevention inspections, identify potential hazards and design preventive programs. Extensive field work. Knowledge of governmental risks and OSHA Construction Standards. Undergraduate degree in insurance or risk management preferred. Professional certifications/designations (ARM, NFPA, OSHA) desired. 3-5 years field experience. Proficiency in Microsoft Office. Salary commensurate with education and experience; excellent fringe benefits. Resume ASAP to Brian T. Ahern, Director of Risk Management Services, RI Interlocal Risk Management Trust, 501 Wampanoag Trail, Suite 301, East Providence, RI 02915; by fax to 401-438-6990; by email to email@example.com.