2014 NLC-RISC Staff Conference Planning Underway
Planning for the Staff Conference to be held in St. Paul, MN October 20-22, 2014 is underway. NLC-RISC member pool staff are invited to submit topic ideas to be considered by the Conference Planning Committee. Submit you suggested topics to Erin Rian by Wednesday, June 25th.
Health Care Reform Resources Available to RISC Member Pools
NLC and NLC-RISC staff have been working to identify potential resources that would help state leagues and RISC member pools provide information and education to member cities and towns about the requirements under the Affordable Care Act (ACA). Effective immediately, RISC member pools now have the option to access newsletters, webinars, timelines, and frequently asked questions at no charge through Arthur J. Gallagher & Co. (AJG). You may access this information directly here. You may also share this information at your discretion with your members. To sign up to receive the newsletter, information about webinars and updates to the FAQs, please contact Yvonne Johnson, Area Vice President, Public Sector, Arthur J. Gallagher & Co.
If you have developed information and resources on the ACA for your members, these materials may also be of interest to other pools that want to keep their members updated on the ACA requirements. We invite you to share your member resources on the ACA by sending information to Erin Rian.
NLC-RISC Presents at the Securities Industry Association Meeting
Claire Reiss, Program Director for NLC-RISC, provided comments to the Securities Industry Association meeting at the W Hotel in Washington, D.C. on June 3, 2014. She shared with the group a few concerns for the future, suggesting where their industries may be able to be of assistance to the pooling community. Topics included:
- Security for building and operations
- Train derailments
- Infrastructure inadequacy
The text of Claire's full comments can be found here.
NLC-RISC Board of Directors Approves No Increase in Membership Dues; Slight Increase in Conference Fees
At their May meeting in San Diego, the NLC-RISC Board of Directors approved no increase in membership dues for FY 2015. The Board did approve a slight increase in conference registration fees from $495 to $515 due to increasing conference costs. The guest registration fees will decrease slightly from $225 to $195.
Information about membership dues will be sent later this summer. The new conference fees will be reflected in registrations for the 2014 NLC-RISC Staff Conference.
Data Breach & Cyber Security
Public-Private survey finds cybercrime rising, companies and government ill prepared
The twelfth annual survey of 500 executives of businesses, law enforcement agencies and governments finds that three out of four respondents detected an security breach in the past year, with the average number of intrusions being 135 per organization. The top five types of intrusion detected were malware, phishing, network interruption, spyware and denial of service attacks. And 28% of respondents said that the attackers were insiders: contractors, current and former employees, or service providers.
Cyber failures spark search for new security approach
Security Week, 5/26/2014
Spearphishing attacks continue to be a major part of the cyber risk landscape. Symantec found a 91 increase in targeted spearphishing attacks in 2013. Experts differ on the best approach to address this exposure, with some suggesting the use of predictive analytics to predict and halt attacks, and others advocating a hardware security approach. A “white list” approach, which identifies what is supposed to be in the system rather than blacklisting items that should not be there, may have greater success. One thing that is agreed: anti-virus software is increasingly ineffective. One 2005 study found that antivirus software identified only 5% of malware. Another found that 82% of malware disappears after one hour, and 70% exists just once.
The Status of Data Breach Notification Laws in the United States
Property Casualty 360, 5/23/2014
A summary of the attributes of data breach notification laws, which provides citations for the full text of data breach notification statutes in all states.
Password’s days numbered, security experts say
The Record, 5/23/2014
Pools that are considering permitting members access to confidential information on their websites may want to consider the evolution of security, which seems to be away from traditional passwords. Enhancements include multi-factor authentication, where more than one piece of information is required to log in, as well as two-factor authentication, which uses a traditional password and an additional piece of authentication that is physically with the account owner, such as a code sent to his or her cellphone. As always, the trade off is between stronger security, the cost of the solution and member tolerance.
Cyber: Rising Interest, Insurers’ Response and Fears of a Mega Breach
Property Casualty 360, 5/22/2014
This summary of cyber risk discussions at the 2014 RIMS conference includes the exposure that insurers face when multiples of their clients store information with the same cloud provider. Breach of that cloud provider’s security could expose the insurer to multiple major losses. Pools that offer cyber coverage may want to gather as part of the underwriting process information about where their insureds store their data and what type of data is potentially exposed to compromise.
Carriers Take Cautious Approach as Security Fears Loom Large
Property Casualty 360, 5/1/2014
As do insurance companies, pools house in their systems data that is rich in the personally identifiable information sought by cyber criminals. A four-step process can help protect the data of those who are moving into the cloud environment:
- Identify the data maintained in the pool’s system and classify and prioritize it by the damage it can do in the event of exposure
- Evaluate cloud providers for transparency and take responsibility for security; Will the pool be able to know the clouds security processes and certifications, have access to security assessments; and be able to audit the cloud provider if desired? Encrypt the data before it leaves the pool’s system to go to the cloud.
- Know where the pool’s data is stored and what are the threats of the location. Does the pool have a private cloud, or will it share space with others? If the data is stored outside the U.S., what are the domestic and foreign laws related to storage in that location, and does that country raise any additional threats? Does the cloud provider provide back-up in the event that its primary location is disabled?
- Include in the contract clear language assigning liability for breach events.
Could Another 2008 Recession Be on its Way?
Zurich, May 2014
Concentration of services in the hands of a relatively small number of major IT vendors, such as cloud providers, could lead to a catastrophic consequences for the US economy if one of those companies failed.
Dangerous storms peaking further north, south than in past
MIT News, 5/14/2014
A study published in the journal Nature finds that hurricanes are reaching their peak intensity farther northward than they did in the past, threatening areas that have previously had less exposure to extreme weather events. RISC member pools along the eastern coast of the US have experienced their share of severe weather over the last few years, and this research may mean a continuation in this trend.
One-Time Marketplace Special Enrollment for COBRA Qualified Beneficiaries
AJG Healthcare Reform Update, 5/29/2014
COBRA enrollees may qualify for a special enrollment opportunity in the Federal Healthcare Exchange Marketplace if they enroll in a new plan by July 1, 2014. This special enrollment period may provide some COBRA enrollees with opportunities to find more affordable health coverage. Information about this limited enrollment opportunity can be found on Healthcare.gov. Arthur J. Gallagher, Co. has also developed a sample communication letter that can be sent to COBRA qualified beneficiaries. A link to this sample material can be found here.
Does the New Obamacare Rule Hurt Government Efforts to End Retiree Health Care?
A new Internal Revenue Service ruling taxes employers with more than 50 employees if they offer stipends to employees to buy individual health insurance coverage through the exchanges. The tax does does not apply to employers that take the same action with regard to their retiree plans. Some local governments are looking at this as an option for retirees who are not yet old enough for Medicare. A few are even suspending their subsidies and requiring retirees to apply for subsidies through federal exchanges. Not surprisingly some of these efforts are met with court challenges. Some have found that the actions constitute an illegal reduction in benefits and others have ruled that legal protection does not extend to health benefits. Pools may want to be aware of how their coverage documents might respond to this type of litigation.
Detroit, Chicago Stop Covering Retired Workers' Health Care
Some cities are making the move to stop providing retirees with health insurance. This move may require retirees to enroll in Medicare, obtain coverage through a spouse, or find coverage on the exchanges.
Experts Provide Tips on Handling Litigated Files
Claims Journal, 5/27/2014
A panel at the RIMS national conference discussed how and adjuster can strengthen the company’s position in a litigated claim. One suggestion was to develop in appropriate cases a surveillance action plan that provides for repeat surveillance. Surveillance is not a tool to be used in every case, however. Another action item is to understand the impact of medical marijuana in general liability, workers’ compensation and auto claims.
Fair Game? Legal Exposures Alter the Playing Field for Youth Sports
Property Casualty 360, 5/26/2014
Youth sports injuries are fertile ground for lawsuits, especially as sports participation is beginning at increasingly younger ages. In particular, organizations that offer baseball, football, soccer and gymnastics are seeing a trend of growing exposure. The claims often involve allegations that the organizer is not properly supervising the participants, which includes providing instruction appropriate to the player’s age and experience level. The success of affirmative defenses such as the ‘no duty rule” and “assumption of the risk” often turn on the child’s experience with the sport, knowledge of the associated risks, and the level of instruction provided by the organization.
Property & Casualty
Various Factors Contributing to Stability in Property/Casualty Insurance Market
My New Markets, 6/3/2014
Not surprisingly the P&C market is unlikely to change by the end of the year. The continued soft market is expected to continue for a variety of reasons including:
- Low cat losses
- High returns on equity
- Improving economy
These factors will probably keep current market conditions unchanged into 2015. The likely renewal of TRIA will support stability in the market because in some sectors of the economy up to 80% of members buy TRIA property protection. Given the key role of insurance, the terrorism backstop is required for the smooth operation of the economy. The future is also expected to witness a continued maturation of the broker-underwriter relationship.
Senate committee approves TRIA extension bill
Business Insurance, 6/3/2014
The Senate House and banking committee unanimously passed a seven-year extension of the TRIA program. The extension passed contains changes in the deductible the insurance industry must retain from 15% of loss to 20% of covered loss. The amount of TRIA coverage remains at $100 billion. Unlike other versions, the changes in this bill, while significant, do not markedly change the protection provided to the insurance industry. The House expects action on their reauthorization of the TRIA bill soon, but it may be a more difficult fight in the House.
NLC Federal Advocacy is actively involved in pursuing expedited TRIA reauthorization.
The Return of a Soft Market? Reinsurance Pricing Pressures Could Move to Primary Market
Property Casualty 360, 5/29/2014
The Japanese research firm Nomura has issued a report titled The Evolution of Reinsurance: Soft Market to Spur M&A. Nomura concludes that the continuing flow of alternative capital into the reinsurance market will continue to drive down prices, and these price reductions will ultimately flow into the primary market. As a consequence of the pressure on the traditional reinsurance business model, they predict resulting consolidation in the reinsurance industry. This trend will likely continue absent a major loss event, or change in interest rate environment. It is possible the reinsurance market may remain soft regardless of a major loss or changes in the reinsurance market.
10 Tech Trends Impacting P&C in 2014
Property Casualty 360, 5/27/2014
New technologies continue to be used in essential aspects of the insurance business. These tools are used to improve a positive efficient interface with insureds, and maintain profitability. This article contains a list of some of the most important factors affecting this change. Ten of the key aspects of this change are:
- Legacy modernization
- Cloud computing
- Risk management and compliance service
- User experience technologies
- Event-driven Architectures and Real-time Operational Intelligence
- Mobile Applications and Technologies
- Social and Collaboration Technologies
- Sales Force Automation and CRM Tools
- Internet of Things
- Advanced Analytics and Business Intelligence
The article explains these changes and what steps can be taken to ease the implementation of them.
The End of RICO? In Workers' Comp Cases in the 6th Circuit, Apparently So
Property Casualty 360, 5/26/2014
The Sixth Federal Circuit Court of Appeals has reached a decision that appears to preclude workers’ compensation claimants from filing RICO claims against insurers, claims administrators and employers for allegedly using false medical testimony to deny benefits. The court’s decision was based on a prior holding that loss or diminution of workers’ compensation benefits is a personal injury, not an “injury to business or property” under RICO. The court also noted that a contrary ruling would allow RICO to police fraud in the workers’ compensation system, an area of the law traditionally controlled by the states. A link to the full decision is provided in the article.
Other Topics of Interest
Obama judges tip appeals courts to Democrats
Washington Post, 5/29/2014
In 2009 President George W. Bush left federal appellate courts largely under the control of Republican appointed judges, with ten of the thirteen courts having majority Republican appointees. President Obama’s 49 appointees have significantly changed that distribution of power, with nine courts of appeal presently having majority Democratic appointees. With this change, the Democratic appointees are now in a position to control the outcomes in important cases coming out of nine of the thirteen federal appellate courts. Democratic appointees are believed by some to be more receptive to arguments by the plaintiffs’ bar. If this belief is accurate, and the Democratic judges vote together, the change in control could affect the outcome in pool matters pending in the federal court system.
A chart identifying the changed composition of each of the thirteen appellate courts is included.
Area poorly prepared for crude-oil train fires
Chicago Tribune, 5/25/2014
Chicago area fire departments have insufficient firefighting equipment and foam to respond to the oil fueled fires resulting from derailments of trains hauling millions of gallons of crude oil. Chicago area emergency responders do not know how much oil is passing through their area, and many have only enough foam to fight fires involving vehicles and tanker trucks. It is impractical for them all to staff up and acquire equipment sufficient to fight a derailment oil fire. Even with unlimited personnel and supplies, some events are so serious that it isn’t possible to approach the flames until they have burned themselves out. This is likely not a problem unique to the Chicago area.