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Marsh on Insurance Rates 2nd Quarter — A Mixed Bag

Posted By Administration, Wednesday, August 24, 2016

 

 

Marsh’s just released Global Insurance Market Quarterly Briefing looks at the second quarter of 2016. At best the results — Marsh says — are a mixed bag. Around the globe rates fell for the 13th straight quarter. That’s the bad news.

 

The good news? In the second quarter the rate decline saw an on-average slowdown. It’s the second quarter in a row that’s happened.

 

Overall rates fell — worldwide — an average of 3.6%. In the first quarter we saw a 3.8% decline. So things are improving. Here’s a deeper look:

 

  Casualty renewals fell 2.9%

  Property renewals dropped 4.5%

 

Other tidbits from the report:

 

  The U.S. saw a bigger renewal rate drop than the rest of the world and was the only region to do so.

  U.S. cyber insurance renewals came in down 7% on average. That’s good because in quarter one the drop was 12%.

 

Source link: Career Management

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Marsh on Insurance Rates 2nd Quarter — A Mixed Bag  Weekly Industry News 

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Understanding Millennials: Easier Said than Done

Posted By Administration, Wednesday, August 24, 2016

Millennials, millennials, millennials. On and on marketing gurus rave about the importance of reaching them and continually offer advice on how to get the job done.

Insurers and independent agents know a lot about the age of millennials. And we know what they like.

 

But knowing those things don’t always translate to business.

 

Or so said marketing expert Michael Parrish DuDell at the recent Property Innovation Summit. And he starts with advising that you look to influence when it comes to millennials and not drive revenue.

 

In other words — DuDell who is a millennial — said mind share beats market share and eventually leads to market share. Size and business growth means very little to a millennial. What does is how influential your brand is in the minds and in the hearts of your consumers because that is where that loyalty comes from.”

 

Realistically you have to think about revenue but don’t make it more important than being what he calls a “visible personality” in the millennial world. Put a different way, market share is where you are today. Mind share is where you want to be in the future and to be there you need to ask these questions:

 

  What is your story?

  How are you telling that story?

  How are you making your brand visible in society and not just in marketing campaigns?

 

You have to really think about your business on the market share, the mind share piece and figure out what the right calibration is. For me, personally, in my business it’s 60/40,” DuDell said.

 

Next look at creating a seamless experience from online to offline. An Accenture study put it best and said, 68 percent of all millennials demand an integrated, seamless experience regardless of the channel. That means being able to transition effortlessly from smartphone to personal computer to physical store in their quest for the best products and services.”

 

In other words, they might shop for insurance on their mobile device and check out your website at lunch to get answers to a couple of questions, and then pop in the door of your office on the way home to seal the deal.

 

What’s important to millennials is a continuity between all the channels. They want to go from one to the other without having to start over.

Another piece of advice. Be yourself. Don’t try to market yourself as something you are not. You don’t have to be cool. You just have to be real. Millennials are very good at picking up on faking.

 

For older millennials 1990s nostalgia works. It — says DuDell — was a time of prosperity and optimism. So incorporate some of that into your marketing. Pick a gem from pop culture in that decade and build it into a marketing campaign that will resonate with the millennial.

 

We look at our youth, and we are very sentimental about it, frankly,” DuDell said.

 

DuDell completed his millennial thoughts with this gem. Try to walk in their shoes. And know and understand the era in which they grew up. Technology was huge in their lives. They grew up with it and it grew with them. The economy was flourishing at an astronomical pace and they enjoyed it as did their parents.

 

When you start to think about our need, our desire, our want for immediate interaction, immediate gratification, it comes down to this idea that we were raised on it. We were raised on the notion that we can have what we want when want it, especially as it relates to information,” he said.

 

Also it’s important to understand the financial condition of many millennials. Even those that are employed are struggling with money. Many are held down by student loan debt and are increasingly using credit cards that they struggle to pay off. So many need help from mom and dad or other relatives to make ends meet.

 

At least that’s the conclusion of a survey of 1,000 millennials by the Society of Grownups. It’s a financial literacy group. The study concludes — to no one’s surprise — that over half of those age 21 to 29 are getting financial support from a relative or relatives.

 

Don’t expect that to last.

 

Society CEO Nondini Naqui says 41% of the 21 to 29 age group say they plan on helping their parents later in life. Move the age to 21 to 45 and the number going to help parents in the future jumps to 51%.

 

“What's interesting about these millennials wanting to be able to provide assistance is that they are coming from a place where they have seen financial difficulty,” she said and added millennials aren’t alone in the financial squeeze. Generation X and the younger baby boomers are also struggling.

 

Here’s what else the survey found:

 

  68% of millennials say they manage money better than their parents at the same age

  72% say they’re better off financially than their parents at the same age

  79% say they’re on track to meet their financial goals

  71% think they’ll eventually receive Social Security benefits

 

Source links: Carrier Management, Employee Benefit News

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Millennials  Understanding Millennials: Easier Said than Done  Weekly Industry News 

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Road Debris: An Increasing New Danger

Posted By Administration, Wednesday, August 24, 2016

We’ve all seen vehicles packed to the max and cruising down a highway or freeway. The load teeters this way and that and is just looking for one more bump in the road. And when that bump arrives — well, you know.

 

Here’s a shocking — but not surprising — statistic. Since 2001 the number of motor vehicle crashes caused by road debris has skyrocketed and is up 40%. In the last four years alone there have been 200,000-plus crashes.

 

AAA’s Foundation for Traffic Safety did a study of the statistics and found between 2011 and 2014 those crashes caused 39,000 injuries and 500 deaths. Jurek Grabowski — an AAA spokesman — said, This new report shows that road debris can be extremely dangerous but all of these crashes are preventable. Drivers can easily save lives and prevent injuries by securing their loads and taking other simple precautions to prevent items from falling off the vehicle.”

 

Here are some horrifying facts from the research:

 

  37% of those deaths resulted from the driver swerving to avoid something in the road.

  33% of the crashes happened between 10 a.m. and 3:59 p.m. which is when most people haul heavy items like furniture.

  Debris crashes are most likely to occur on an Interstate highway.

  Crashes on Interstates at high speeds increases the risk of vehicle parts becoming detached or cargo items to falling onto the highway.

  66% of crashes are because of loads poorly secured or vehicles being improperly maintained.

 

Here’s what we see falling from vehicles the most:

 

  Tires, wheels, etc.

  Furniture, appliances and other unsecured items.

  Trailers being towed coming loose and hitting another vehicle or stopping suddenly on the roadway after they’ve come loose.

 

AAA also offers tips on how people hauling said items can avoid such troubles:

 

  Keep your vehicle well-maintained — good tires that are properly inflated, exhaust systems that are solid and not falling apart.

  Tie large loads down with rope, straps or netting.

  Tie large objects directly to the vehicle or the trailer.

  Cover the load — all of it — with a tarp or a net.

  Never overload a vehicle.

  And do that final inspection — twice or three times — before moving on.

 

 

Source link: PropertyCasualty360.com

 

Tags:  Insurance Content  Insurance Industry  Insurance News  Road Debris: An Increasing New Danger  Weekly Industry News 

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Mark Your Calendars! Three Important PIA Western Alliance Events

Posted By Administration, Wednesday, August 24, 2016

Four PIA Western Alliance states have events happening between now and early October. So grab your calendars and plan to attend. Two are joint conferences and the third is our annual K-Klub appreciation day.

 


 

PIA Washington/Alaska and IIABW Joint Conference

The annual joint conference and trade show will be September 14 - 16 at the Davenport Grand Hotel in Spokane. It is — as every year — the only annual statewide insurance event that gives agents, brokers, CSRs and insurers, wholesalers and other companies the opportunity to meet. Plus, the event has some of the best education available in the state.

 

Learn more: www.wajointconference.com

 

On the joint conference website, the two agent associations said, We encourage agents/brokers, CSRs, and marketing reps to attend to learn from industry experts, network with fellow agents and company representatives as you enjoy one of the finest resorts in the Northwest.”

 

Click here to register.



 

 

PIA Montana & IIAM Joint Conference

The PIA Montana and the Independent Insurance Agents of Montana (IIAM) are going to do a joint conference. It will be the largest industry event ever held in the state and it happens on October 3 - 5 at the Double Tree Hotel Edgewater in Missoula.

 

PIA Montana board chairman Tyler Holland said, After several years of discussion and communication with IIAM, we entered into a partnership to do a joint conference. This combination of forces is needed because of the size and scope of Montana offering a concentrated way of assisting agents, carriers, etc. in one spot,” he said.

 

The idea also makes sense to the carriers who urged both associations to make it happen. We feel this is a good thing. The logistics and simple numbers in the state and the duplication of doing events each year in the same month just didn’t make sense anymore,” he said.

 

The joint conference gives hundreds of agents/brokers the opportunity to meet with and learn from insurance companies, wholesalers and other companies they do business with.

 

The trade show is the largest in the state, showcasing the latest in products and services available.” And if you’re a company or an exhibitor in Montana — or elsewhere for that matter — you are invited to participate.

 

Learn more: www.mtjointconference.com

 

Click here to register.



  

 

K-Klub Appreciation Day

The annual PIA Western Alliance Member Appreciation Day will be held September 8, 2016 at the Camas Meadows Golf Club in Camas, Washington. All agents, agencies and company personnel — members or not — are urged to attend.

 

This is the day to celebrate, network and recognize all our PIA members and with particular appreciation to our KKlub company members for two reasons: 

 

  First, it is a day of education, information and fun.

  Second, our KKlub carriers recognize the importance of preserving the independent agency system.

 

PIA Western Alliance Executive Vice President Clark Sitzes said, “Their support in partnering with us allows the association to work in depth on legislative issues that affect the industry and your business. Our PIA KKlub Appreciate Day is our way of saying thank you,” he said.

 

Click here to register.

 


Tags:  KKlub Appeciation Day  Mark Your Calendars! Three Important PIA Western A  MT Joint Conference  WA Conference  WA Joint Conference 

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Around the PIA Western Alliance States

Posted By Administration, Wednesday, August 24, 2016

Arizona — Receivership Order Issued Against Meritus Health Insurers

This came to us from the Arizona Department of Insurance.

 

The Maricopa County Superior Court today issued an Order for Appointment of Receiver and Injunction (https://insurance.az.gov/sites/default/files/documents/files/CV2016-011872_Meritus_Receivership_Order_20160810.pdf) against two Arizona health insurance companies, Compass Cooperative Health Plan, Inc., a health care services organization doing business as Meritus Health Partners, and Compass Cooperative Mutual Health Network, Inc., a disability insurer doing business as Meritus Mutual Health Partners.  Arizona Department of Insurance (ADOI), Interim Director, Leslie Hess, filed suit against the health insurers on August 1, 2016, requesting that the Court find both companies insolvent and issue an order appointing the Director of ADOI as the receiver for both companies.

 

Both companies were placed under supervision by the Director of ADOI on October 30, 2015.  As a result, the companies were ordered to stop writing new and renewal business as of December 31, 2015.  With the issuance of the Director’s supervision order, Meritus enrollees were eligible to participate in open enrollment to obtain other health insurance for plan year 2016.

 

Under the Department’s Supervision, both companies have been winding down their operations and paying provider claims (hospitals, doctors, etc.).  However, the companies ran out of money and were unable to continue to pay provider claims without liquidating assets.  The Director sought an Order of Receivership to be able to liquidate the companies’ assets in order to pay provider and creditor claims in accordance with Arizona law.

 

Requesting the Court issue an order placing any company into receivership is not an easy step for me to take,” said Interim Director Leslie Hess.  Our agency’s number one priority is to protect the citizens of Arizona and I believe this order is necessary to do just that.”

 

Meritus was incorporated December 7, 2012, as a nonprofit corporation and was one of the original 23 consumer operated and oriented plans (CO-OPs) that were formed around the country to offer health insurance.  The two Meritus companies provided health insurance coverage for approximately 59,000 Arizona residents in Maricopa, Pima and Pinal counties.

 

Copies of the Complaint (https://insurance.az.gov/sites/default/files/documents/files/CV2016-011872_MeritusComplaint_20160801.pdf) and the Receivership Order (https://insurance.az.gov/sites/default/files/documents/files/CV2016-011872_Meritus_Receivership_Order_20160810.pdf) are available on the Department’s website under the Meritus link.

 

California — Bad Roads Study

The Washington D.C. based non-profit transportation research group TRIP says the average Californian is paying a high cost for too many bumps in the road.

 

California Transportation by the Numbers: Meeting the State’s Need for Safe, Smooth and Efficient Mobility looked at the state’s road and bridge conditions, congestion, economic development, highway safety, and transportation funding and determined inadequate road repairs and other transportation funding cost people in:

 

  Los Angeles-Long Beach-Santa Ana — $2,826

  San Francisco-Oakland — $2,824

  Sacramento — $2,270

  San Jose — $2,471

  San Diego — $1,858

 

TRIP also says the state’s “inadequate” transportation system costs Californians $53.6 billion a year in the cost of operating a vehicle, congestion-related delays and crashes.

 

Here’s more:

 

  Extra vehicle costs because of poor roads — including depreciation, additional repair costs, tire wear and increased fuel costs — $18.3 billion.

  Crashes because of poor road design and the loss to households and workplace productivity, insurance costs and other financial costs — $7.3 billion.

  Congestion costs in the form of lost time and wasted fuel — $28 billion.

 

Source link: San Diego Union-Tribune

 

 

Idaho — Fraud Conference

Register to attend the Idaho Fraud Conference. Once again our speakers and presenters will share their insights and fraud issues in Idaho.

 

Date: October 18th & 19th, 2016

Time: 7:30 a.m. to 5:00 p.m.

Location: Washington Group Plaza

Central Plaza

720 E Park Blvd

Boise, Idaho

 

Conference Fee:

By October 1st: $99.00

After October 1st: $119.00

 

Conference fee includes lunch, refreshments, and conference materials

 

This year’s topics include: Open Source Internet Investigative Techniques – 8 hour comprehensive course covering the following topics:

 

  Tool Set up

  Legal Overview

  Ghost Account Creation

  Evidence Collection & Retention

  Searching Social Networks

  Geo-located Searches

  E-commerce

  Morality/Ethics investigations

  Deep/Dark Web

  Social Media Monitoring

  Photo/Video Searches

  Arson & Fire in Idaho

  Workers Compensation/Disability Fraud

  Finding & Investigating Digital Footprints

  Organized Crime & Insurance Fraud

  The Sky is Falling” – Hail Damage Fraud

  Pharmaceutical Fraud

 

And More…..

 

We will explore all facets of insurance fraud and the investigative process.  You will have the opportunity to hear from experts in their fields and network with other professionals from law enforcement, SIU, producers, state fraud directors and more!

 

Questions??  Contact Lori Braseth at (208) 334-4346 or by email at lori.braseth@doi.idaho.gov.

 

Click here to register.

 

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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PIA Has Gone Mobile And You Can Too!

Posted By Administration, Wednesday, August 17, 2016

 NEW TAILORED MOBILE APP.

IT'S READY FOR YOUR AGENCY!



 

It’s here!  Professional Insurance Agents Western Alliance is pleased to report that our NEW MOBILE APP program is ready!


PIA has also gone mobilethe PIA mobile app provides you access to all that the association has to offer.  It also makes it very easy for you to refer others to the PIA. Our app is FREE; try it out!

 

  1. Load the PIA application on one or more of your devices.  It’s simple.
    Download PIA Western Alliance's Mobile App! (piawest.insurancetapp.com)

  2. Fill in your name and phone number, click Send App.

  3. Then you will promptly receive a text “Here's a link to Professional Insurance Agents Western Alliance's mobile tool kit for your insurance needs: piawest.insurancetapp.com”. Tap the link and follow the prompts.

 

If you need assistance, there is a “How to Install the App on Android and How to Install the App on iPhone” on the bottom left hand page of this page: piawest.insurancetapp.com.

 

Do you want your own Agency App?  The PIA mobile app designer - Insurancetapp – can design a mobile app specifically for your agency.  As a member of the PIA we have secured a very special discount for you.  The PIA was able to negotiate a discount off the price of your personal app.  As a PIA member, your app will cost you only $399.99/yr (not including state sales tax) … saving you $200/yr! Get an exclusive demo: grow.cardtapp.com/pia


Did you know smart phone users are checking their phones 150 times per day that 88% of business cards are lost or tossed within the week, and over 80% of mobile app users purchase their goods and services via mobile apps! Using a mobile app can decrease missed referrals, reduce missed or lost phone connections, reduce delayed decisions and business lost to the competition. Your mobile app can be used to increase business by generating more referrals, build brand awareness and convert more leads. Your app can be referred from one person to another by a simple tap.

 

Learn more! Sign up for one of our mobile app webinars:

Webinar 1 - Wednesday, Aug 24, 2016 12:00 PM - 12:30 PM MDT

attendee.gotowebinar.com/register/7751478187546227971

 

Webinar 2 - Wed, Sep 7, 2016 12:00 PM - 12:30 PM MDT

attendee.gotowebinar.com/register/3315854767069892356

 

If you participate in one of the above mobile app webinars, you will have a chance to win a FREE MOBILE APP for 1 YEAR! So hurry and get registered to learn more!

 


 

 

Errors and Omissions

Don’t forget that the PIA is the front runner when it comes to writing your E&O insurance.  We have several markets to choose from including: Liberty, Utica National and more.  For a premium indication and to learn more visit www.piawest.com/EOCoverage.  If you have any questions, please call Kim Cottrell, E&O Agent at 888-246-4466 x112.

 

Market Access Program

PIA has a host of companies you can write personal and commercial lines through including Nationwide, The Hartford, Foremost, Fireman’s Fund, Kemper, MetLife, Red Shield and more!

 



NEW BIS Rater! We are excited to announce that we recently added a new convenience to our Builders Insurance Service (BIS) website page. You must be a PIA Member and signed in on our website to gain access.  (Carriers)

 

 

Mark Your Calendar


KKlub Appreciation Day and Charitable Golf Tournament: September 8, 2016

The PIA Western Alliance and its Board of Directors invite ALL PIA Members to join us for our meeting with board and PIA members and at our annual golf tournament at Camas Meadows immediately following the meeting. ($89 Golf Tournament; $31 Dinner)

 

WA Joint Conference: September 14-16, 2016 - www.wajointconference.com

MT Joint Conference: October 3-5, 2016 - www.mtjointconference.com

 

Webinars  |  Education

 

If you have any questions, please call Elizabeth Muthandi, Membership Coordinator at 888-246-4466 x124.

 

 

Tags:  Insurance Content  Insurance Industry  Insurance Mobile App  Insurance News  mobile app  PIA Has Gone Mobile! You Can Too!  technologyWeekly Industry News 

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The Legendary Big One: Maybe in Oregon & Washington not California

Posted By Administration, Tuesday, August 16, 2016

Earthquakes are devastating for those impacted by them. The accompanying property losses and death are also difficult for insurers. Quakes are getting growing attention. For decades we’ve looked at how dangerous the San Andreas Fault is for California and how it could cut loose at any minute. Plans for what to do when it goes evolved out of all that attention.

 

But maybe geologists and scientists have been focusing on the wrong area.

 

Many are now saying a far greater danger to the West Coast is the Cascadia Subduction Zone in the Pacific Northwest. And out of that discussion has come some disturbing predictions about Oregon and Washington and the dangerous tectonic plate that sits just offshore.

 

Juan de Fuca is a small plate that has been slowly sliding underneath the much larger North American plate. That’s been going on for something like 30 million years. The last time it cut loose was on January 26, 1700. A 9.0 magnitude quake caused devastation to much of Oregon and Washington, wiped out a Native American tribe and sent a huge tsunami to Japan.

 

Today instead of just a few thousand people living in the Pacific Northwest the count is millions. So the impact — when it happens and it’s when and not if — will be tremendous.

 

Oregon State University geologist Chris Goldfinger and his researchers say in the last 10,000 years there have been 43 major earthquakes along the Cascadia Subduction Zone. The last was the one in 1700. Here’s what the team found:

 

  Washington has a major earthquake every 430 years on average instead of the previous estimate of 500

  Northern Oregon’s estimate now drops from 430 years to every 350 years

 

Breaking it down and relating it to today, Goldfinger and his group say:

 

  Northern Oregon — Portland and Astoria — has a 20% chance of seeing an 8.0 or higher quake in the next 50 years

  The last estimate was 12%

  Washington’s estimate is 14% to 17%

  That’s up from 8% to 14%

 

That compares to much lower numbers for the San Andreas Fault. San Francisco is looking at a 50% chance of a 7.0 or higher quake in the next 30 years. Los Angeles is facing a 93% shot.

 

And while that looks ominous, some geologists — including Goldfinger — say a rupture in the Cascadia zone would be much more powerful and much more destructive.

 

Almost all the angles that have been tried result in almost exactly the same answer. You have to go back to the 1970s to find a viable alternative hypothesis. In the early days of plate tectonics, there was an idea for a short time that Cascadia was very recently a subduction zone but that it was no longer. But then in 1980, Mount St. Helen’s went off — and evidence was found that other volcanoes had erupted in relatively recent time periods, too — and we realized that theory probably wasn’t a great one. The sure end came in the 1990s, when GPS was invented and we could easily measure plate motion. And, yep, North America and the Juan de Fuca plate were converging at the rate we thought,” he said.

 

Mika McKinnon — who is a geologist not associated with Goldfinger’s research — said it’s really hard to piece all of this together to give a more accurate prediction.

 

Geology is a badly edited tape, and we lose lots of evidence along the way. We lose evidence of drowned forests, we lose evidence of faults moving, we bury everything in new volcanic floes, we run glaciers over everything 15,000 years ago and completely erased the older history,” she said.

 

Other factors — too — make it impossible to predict anything accurately. They can go back about 10,000 years to the end of the last ice age “yet even in that little, limited time span, we found [earthquakes] as close together as 100 years, and as far apart as 1,000 years. Averaging doesn’t work very well when you’re using very small numbers,” McKinnon added.

 

Thus: It is not surprising that we are finding more evidence of more earthquakes,” she said.

 

Source link: The Atlantic

 

Tags:  Earthquake  Insurance Content  Insurance Industry  Insurance News  The Legendary Big One: Maybe in Oregon & Washingto  Weekly Industry News 

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AIG & Too-Big-to-Fail — Not a High Priority?

Posted By Administration, Tuesday, August 16, 2016

Three insurers — so far — have been designated too-big-to-fail by the Financial Stability Oversight Council (FSOC). Those receiving the non-bank systemically important financial institution (SIFI) designation are AIG, MetLife and Prudential.

 

MetLife sued and got a federal court to overturn the designation. The U.S. Treasury is appealing. Meanwhile, MetLife is shedding assets to put itself under the radar if the appeal goes against them. General Electric — another non-bank SIFI designee — also sold assets to have the designation removed.

 

AIG could do the same thing but CEO Peter Hancock says that’s not a high priority right now. He’s more interested in pumping up the company’s returns. Of all of the strategic issues that we face as a leadership team, this doesn’t even make the top 10,” he said.

 

Working now on a reversal of the designation would be — as he put it — hugely distracting to management and is based on a flawed premise that the binding constraint holding us back from returning more capital to shareholders is the regulatory framework that we have from the Federal Reserve.”

 

After a lot of pushing from billionaire investor Carl Icahn to break AIG up into three parts to avoid the designation, Hancock refused to budge. Without naming names, the most recent court challenges and events have demonstrated staying focused on the fundamentals is perhaps the right thing to do. So we’re going to stick to our guns.”

 

And guns in this case means job cuts and selling assets to simplify the company.

 

Plus, Hancock says the designation removal is overrated. It’s not like you remove this label and suddenly you’re an unregulated company. We’re constantly navigating these multiple constraints in a way that keeps us focused on our true north, which is being really well capitalized to serve our customers,” Hancock concluded.

 

Source: Insurance Business America

 

Tags:  AIG  AIG & Too-Big-to-Fail — Not a High Priority?  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Suit to Stop Corporate Inversion Regulations

Posted By Administration, Tuesday, August 16, 2016

Lots of political talk these days about U.S. jobs and about corporations based in this country sending jobs — and worse — assets overseas. It’s a tax ploy known as inversion.

 

Political candidates from Hilary to The Donald to Bernie Sanders have decried the process. So has President Obama and in April of this year the U.S. Treasury put new regulations in place to stop — or at least slow down — the process.

 

It hit the U.S. Chamber of Commerce wrong and the Chamber is tag-teaming with the Texas Association of Business and going after the Treasury’s new regs. A suit was filed in a Texas federal court claiming the administration overstepped its authority.

 

Here’s how inversions work. Companies started doing them in 1983. They purchase a small company in a foreign country with a lower corporate tax rate. The U.S. company then makes it the legal tax domicile. But it’s only on paper. Corporate operations remain in the U.S.

 

What it does is erode the nation’s tax base. And it must be noted here that inversions are legal. These days Ireland, England and Canada are the most popular destinations.

 

Critics — and the Obama administration is among them — say this is nothing more than a complicated way to avoid tax obligations and put more profits in the hands of stockholders.

 

What brought all this to light is the new Treasury rules scuttling a merger between Ireland’s drug company Allergan Plc and Pfizer. It was a $160 billion deal and the largest inversion ever — if it had gone through.

 

While not commenting on that transaction specifically, Tom Donohue — who heads the U.S. Chamber — said, Treasury and the IRS ignored the clear limits of a statute, and simply rewrote the law unilaterally. This is not the way government is supposed to work in America.”

 

The Treasury disagrees and said the rules are within its legal authority. And the spokeswoman said the Treasury will continue to defend the new regulations.

 

Legal experts say the 1867 Anti-Injunction Act says no legal challenge can be brought against a tax until it is assessed. The Chamber and the association disagree and say the administration must follow the Administrative Procedure Act which spells out how agencies must do regulations.

 

The two plaintiffs also contend the Treasury acted in an arbitrary and capricious manner and did not give the public notice or allow it to comment.

 

Source link: Insurance Journal

 

Tags:  business  corporate  Insurance Content  Insurance Industry  Insurance News  Suit to Stop Corporate Inversion Regulations  Weekly Industry News 

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Special Report: Inheriting the ObamaCare Mess

Posted By Administration, Tuesday, August 16, 2016

The next president — and the next Congress, as well — is going to have to deal with the disaster known to the nation as ObamaCare. To be more technical and more accurate, it’s the Affordable Care Act and the fourth sign-up period starts just a week before the November election.

 

Enrollment numbers — as well see in a bit — are critical to the Affordable Care Act’s continuation. So is the number of insurers participating in the federal and state insurance exchanges or marketplaces as they are now known. Losses on insureds have some insurers thinking of dropping out.

 

That means either a president Trump or a president Clinton — when they take office — will need to make some critical decisions and quickly. What are their plans for ObamaCare? Corporate Synergies — an employee benefits consultancy — looked at what both candidates have said and did an analysis.

 

Surprisingly, they agree on more than they disagree. One area of disagreement is the Affordable Care Act itself. Clinton wants to build on ObamaCare successes. Her idea is to tweak it in some places and increase access to pharmaceutical benefits.

 

Trump wants ObamaCare repealed but he’ll keep some parts like the pre-existing condition regulations.

 

The two candidates agree on repeal of the Cadillac Tax. If you don’t remember, the Cadillac Tax puts an excise tax of 40% on every dollar spent for health insurance over $10,200 for an individual or $27,500 for a family. It is set to happen in 2020.

 

On the high cost of coverage, Trump wants to increase consumer choices for health insurance. To help consumers pay for insurance he’d do tax relief for individuals rather than fund it through Medicaid.

 

Trump also wants to modify laws to allow people to buy insurance across state lines. Clinton hasn’t commented on the topic.

 

Both Trump and Clinton don’t like what Corporate Synergies terms “health insurance monopolies.” Clinton — in particular — has a plan to dramatically cut out of pocket health insurance costs. Trump and Clinton are against the Humana and Aetna and Anthem and Cigna mergers.

 

They agree it leads to fewer options for consumers.

 

And when it comes to insurers, both want more transparency and Clinton says she’s going to do some work on surprise medical bills and will do away with them.

 

Trump and Clinton also agree on the cost of medication. It needs to drop and fast. The two agree Medicare ought to set drug prices to cut the cost of health care.

 

On the topic of consumer driven health care, Trump wants tax free HSAs and more access to CDHPs. Clinton has made no comments on the subject.

 

Here’s where they separate. As noted earlier, Trump wants to do away with the Affordable Care Act and Clinton says it just needs some fixes. Surprisingly, Trump says he’s open to a single-payer system and free health care for all.

 

And what do they need to fix? The number of people registering this year is critical to the act’s survival. And within that number more people need to be healthy. To date a huge percentage of those registering are not. Because of that insurers lost lots of money in 2015 and in the three previous years. Young, healthy people are needed in the marketplaces — or exchanges — to offset costs and losses. If more healthy people don’t register the cost of insurance will continue to go up and up.

 

The Kaiser Foundation’s senior vice president Larry Levitt said, The next open enrollment period is key.” How key you ask? The average price hike is going to be an unacceptable average of 9%.

 

At least that’s the analysis from data collected in 17 cities. Some will see even greater increases.

 

As a P.S. to that figure, most larger corporations say the health insurance costs to employees is only going up an average of 6%. While that’s unacceptably high, it’s much lower than what people forced to use the exchanges are going to see.

 

Last year 11 million people participated in the exchanges. That shocked the Obama White House because the Congressional Budget Office predicted a figure 21 million — or nearly double the actual amount.

 

That leads us back to the need for healthy people signing up. Without them insurers can’t make their participation work. In fact many like UnitedHealth are saying — to quote boxer Roberto Duran — “No mas.”

 

Adding to the problem is the failure of the administration’s market stabilization program. Cash strapped — probably because of the high number of unhealthy people signing up and the low number of healthy people participating — the program hasn’t been able to subsidize insurers as much as expected.

 

The original idea was to have insurers in the red at the end of two years. It didn’t happen and — again — without the government help via the market stabilization program insurers had access to just $1 for every $10 in claims.

 

That’s the bad news. The good news for insurers is the federal government’s reinsurance program helped control costs for insurers. The Commonwealth Fund — a nonprofit group — says insurer claims were just 2% higher than projected after the reinsurance payments.

 

And that leads some to think the exchanges — or marketplaces as they’re officially called — are on the brink of success.

 

On the brink or not, insurers — even at just a 2% loss — are close to having enough of ObamaCare. Aetna and Anthem both said they are scrapping plans to expand into exchanges they have not been involved with and all five insurers say they’re losing money.

 

And the government reinsurance program will soon be ending.

 

UnitedHealth consultant Michael Abrams of Numerof & Associations said, From a policy point of view, we’re basically seeing the exchanges unravel. More than anything else, it’s a serious symbolic blow to ObamaCare,” he said.

 

Source links: The Hill, Employee Benefit Advisor

 

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  ObamaCare  Special Report: Inheriting the ObamaCare Mess  The Affordable Care Act  Weekly Industry News 

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