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The world's best insurance companies and executives revealed at Reactions Global Awards Dinner

2009-02-02T22:40:00.001-08:00

The world's best insurers, reinsurers, brokers and service providers were revealed in front of a packed crowd at the Reactions Global Awards Dinner in New York on August 28.

The world's best insurers, reinsurers, brokers and service providers were revealed in front of a packed crowd at the Reactions Global Awards Dinner in New York on August 28.

The winners, voted for by their peers, picked up their awards at the prestigious Rainbow Room on the 65^th floor of the Rockefeller Centre in New York

The big winners of the night were AIG and Swiss Re, each coming away with three awards.

AIG picked up the awards for Best North American Insurance Company, Best Asia-Pacific Insurance Company, and Best Global Insurance Company. Swiss Re came away with awards for Best Global Reinsurance Company For Casualty/Liability, Best Global Reinsurance Company for Life and Best Global Reinsurance Company Overall.

There was also individual success for both companies. Martin Sullivan, chief executive officer of AIG, picked up the award for Insurance CEO of the Year. Jacques Aigrain, Swiss Re's chief executive, was voted Reinsurance CEO of the Year.

Sullivan commented: "I'm delighted and honored to accept the Insurance CEO of the Year award on behalf of AIG's 106,000 talented employees worldwide. Without their entrepreneurial drive, dedication, creativity and commitment to customers across the world, AIG would not be the company it is today. Together with the awards for 'Best Global Primary Insurance Company', 'Best North American Primary Insurance Company', and 'Best Asia-Pacific Insurance Company' from the readers of Reactions, this is important recognition of AIG's performance in our industry."

Under the broker section Grahame Chilton, chief executive officer of Benfield, won the award for Broking CEO of the Year.

It was also a good evening for Marsh & McLennan Companies, with both its insurance and reinsurance broking units winning awards. Brian Storms, CEO of Marsh, accepted his firm's award for Best Global Insurance Broker, while David Priebe, managing director of Guy Carpenter, accepted Guy Carpenter's award for Best Global Reinsurance Broker. Priebe was also recognised by Reactions readers as the executive to watch as he collected his personal award for Rising Star of the industry.

XL also figured strongly, picking up two awards as well as its CEO Brian O'Hara receiving the award for lifetime achievement.

O'Hara commented: "I am particularly proud of my XL colleagues having been recognised by Reactions readers with these two awards – 'Best Bermuda Market Primary Insurance Company' and 'Capital Raising of the Year'. To be recognised by their industry peers is a true testament of their dedication, expertise and hard work. And I am especially humbled by my 'Lifetime Achievement Award' – I will continue to strive in having XL provide value to its customers, maintain underwriting excellence and foster a culture based on transparency, mutual respect and dependability."

The full list of Award categories and winners is:

Primary Insurance Companies

Best North American Primary Insurance Company – AIG
Best European Primary Insurance Company – ALLIANZ
Best Asia-Pacific Primary Insurance Company – AIG
Best Latin American Primary Insurance Company – MAPFRE
Best London Market Primary Insurance Company – HISCOX
Best Bermuda Market Primary Insurance Company – XL
Best Global Primary Insurance Company - AIG
Reactions Global Awards Insurance Chief Executive of the Year – Martin Sullivan – AIG, CEO

Reinsurance Companies

Best Global Reinsurance Company for Property – MUNICH RE
Best Global Reinsurance Company for Casualty/Liability – SWISS RE
Best Global Reinsurance Company for Speciality Lines – ASPEN RE
Best Global Reinsurance Company for Life – SWISS RE
Best Global Reinsurance Company - SWISS RE,
Reactions Global Awards Reinsurance Chief Executive of the Year – Jacques Aigrain – SWISS RE, CEO

Capital Raising of the Year – XL – STONEHEATH

Brokers

Best Global Reinsurance Broker for Innovation – BENFIELD
Best Global Reinsurance Broker – GUY CARPENTER
Best Global Insurance Broker for Innovation – AON
Best Global Insurance Broker – MARSH
Reactions Global Awards Broking Chief Executive of the Year – Grahame Chilton – BENFIELD

Service Providers

Best Global Rating Agency of the Year – STANDARD & POORS
Best Risk Modelling firm of the Year – RMS
Best Law Firm of the Year – LEBOEUF, LAMB, GREENE & MACRAE
Best Investment Bank of the Year – MORGAN STANLEY
Best Consultancy of the Year – TILLINGHAST
Best Accounting firm of the Year – KPMG

The Top 10 Personal and Business Insurance Tax Dos and Don'ts

2009-02-02T22:38:00.001-08:00

When tax preparation time comes there can be an array of questions about federal tax deductions and what to report as income on your federal tax return. This Insurance Tax Dos and Don'ts list of federal tax tips will hopefully help many with federal tax questions regarding insurance whether on a personal or business level.

Although some of the federal tax preparation points below may be confusing if one is not familiar with the federal tax laws, this list will still be very beneficial to even those who use a tax preparer. Just print out the list below and give it to your tax preparer to make sure they don't forget any deductions you may have coming on your tax return.

1. Do remember to include insurance as a deduction for your vehicle on your federal tax return: If one uses their car for business purposes and chooses to deduct their actual expenses instead of their mileage (only one can be chosen), besides deducting depreciation, gas, oil, tires, licenses, repairs and the related, the insurance premiums may also be deductible. Remember, if one chooses to take the actual expenses deduction instead of the mileage deduction they cannot choose the mileage deduction in later returns.

2. Do deduct your health and long-term care insurance premiums on your federal tax return: A self-employed person may be able to deduct 100% of health and long-term medical costs for themselves, their spouse, and their dependants. When doing your tax preparation be aware that this deduction is taken as an adjustment to income and it can only be taken if the self-employed person or spouse are not covered by an employer health insurance plan.

3. Do see if you qualify to deduct medical expenses on your federal tax return: Depending on one's income, certain medical expenses including health insurance and dental insurance premiums along with some amounts paid for long-term care insurance contracts may be deductible. This deduction is limited to costs over 7.5% of one's income.

4. Do plan your medical procedures and expenses for the maximum deduction: Since certain medical expenses are limited to costs over 7.5% of one's income, when doing your tax preparation don't forget to schedule and pay for procedures before December 31 of the tax year the deduction is desired may be beneficial to certain persons.

5. Do find out if you have any miscellaneous insurance expenses that can be deducted on your federal tax return: Various miscellaneous expenses may be deductable on your federal tax return for some persons but are subject to amounts over 2% of one's adjusted gross income. Insurance related miscellaneous expenses may include unreimbursed employee malpractice insurance and liability insurance premiums, appraisal fees for casualty losses not reimbursed by insurance, safe deposit box rentals to store investment papers such as insurance annuities. The remaining unrecovered investment in an insurance annuity may be deducted from a retiree's tax return if they are deceased before the entire investment is recovered.

6. Do see if you can deduct any job-related moving storage expenses: Some persons may be able to deduct certain moving expenses including the cost of storing and insuring household goods and personal items. The deduction is only eligible during any 30 consecutive days after the items are moved from the previous home and before they are delivered to the new home.

7. Do check your previous federal tax returns for the above insurance deductions: Federal tax returns can be amended for up to three years so if one feels they had qualifying deductions on previous federal tax returns that they did not claim, they may be able to amend the return to include the deduction and receive any refund if applicable. Additional copies of previous year's tax returns can be purchased from the IRS.

8. Don't forget to report unemployment insurance benefits: It is important to remember that unemployment insurance compensation is considered taxable income so one must report any state or federal unemployment insurance benefits they received during the tax year they are filing for.

9. Don't report casualty and theft losses reimbursed by insurance: Damages from losses due to perils on your home such as floods and tornadoes, and losses due to damage to one's automobile may be deductible if one itemizes deductions. The losses need to be reduced first by any insurance amount received + $100 and then the loss must furthermore be reduced by 10% of one's adjusted gross income.

10. Don't report worker's compensation insurance benefits as income: Worker's compensation along with child support payments, military allowances, veteran's benefits, welfare benefits and cash rebates from a car purchase are not considered taxable income.

Understanding and Controlling Your Finances [Incentives ]

2009-01-20T22:20:00.002-08:00

One of the very hardest things about "controlling your finances" is getting started down the path. During high school and college, and even after college for most people, finances are mysterious and maddening. There is never enough money.

One way to start down the path of control is to give yourself some sort of incentive to do so. If you feel that you are getting something from controlling your finances, then it is much more likely that you will do it. Different incentives work for different people. Let us try two approaches that might incent you to at least look into the prospect of starting to control things better.

Approach 1: Becoming a Millionaire

Many people find it hard to believe, but becoming a millionaire is fairly easy. Becoming a millionaire overnight is more difficult, but doing it over time is a reachable goal for every American citizen who is 25 years old.

Here is how you can become a millionaire. Start at age 25 and simply deposit $20 every week in an account that earns 12% interest. $20 is not a lot of money. If you smoke, it is the amount of money you are probably spending on cigarettes each week. If you go out to eat for lunch every day, it is less than what you are probably spending on your lunches. It is less than $3.00 a day. Every American - even homeless Americans begging at a New York subway stop - can put together $3.00 each day.

If you added that much money to an interest bearing account earning 12% every week, and you did that starting at age 25, then by age 65 you would have a million dollars. If you started at age 20 instead of 25 you would have a whole lot more.

Here is another way to think about it. Imagine your first child. Imagine that your first child is to be born tomorrow. If, on that day, you opened an account earning 12% and deposited just $20 per week in that account, then at age 20 you would be able to write your child a check for about $80,000. Hard to believe but true. Small amounts of money, accumulated consistently and earning interest over a long period of time, really add up.

You probably have three questions:

What, are you kidding? That is all I have to do?
Why didn't anyone tell me?
Why didn't my parents do this for me when I was born? I sure could use $80,000!

One other question you need to ask is, "Where can I find an account that pays 12% interest?" We will discuss this question later in this series.

The point is, with just a little discipline over time you can accumulate huge amounts of money. That is what "control" is all about. You will learn a lot more about accumulating wealth in the other articles in this series.

You can use the Weekly Investment Calculator to help you calculate the future value of small weekly contributions to an account. You will be amazed. (To run this calculator you will need a web browser that understands JavaScript. The later versions of NetScape, the MS Internet Explorer, etc. all do)

Approach 2: Getting Something You Really Want

Let's say that the thought of a million dollars in 40 years doesn't do anything for you. You want something now. Here is another way to think about your finances.

Television is a funny thing. The technology behind it is simple and seemingly harmless: television transmits moving pictures to your home. What could be the problem with that? The weird thing about television is that if the proper images are transmitted to your home, they can change the way you think. In particular, they can increase your desires. Take, for example, the Salad Shooter. Would it have ever sold without the mind-bending influence of TV? No. At the same time television tends to encourage you to satisfy all of your desires immediately. That is why, two weeks after you have purchased a brand new car, commercials can make you believe that you need another one.

Let's try to imagine an alternate and parallel universe without television. In this universe, a person who wants something stops and says, "in order for me to have that something, I need to save up enough money to buy it first. Then I will go purchase it." Would this work? No it would not in some cases. For example, is it worthwhile to wait 30 years until you save up enough money to buy a house, and then go buy one? No. See the section on buying a house for a discussion of this particular purchase. Is it worthwhile to save money for five years before you buy a car? Not necessarily, mainly because you have to have a car to survive in most American environments.

But let's say that on all other desires in your life you were to follow a "save first, buy later" rule. What would happen? Two things: first, you would notice that your desires might suddenly change dramatically. Second, you would have to find a way to accumulate money over time and hold it so you could realize your desires.

It is this simple but fundamental change of thinking - the "save first, buy later" rule - that can lead to the concepts of "controlling your finances" and "accumulating wealth". If you can make that change, it will cause you to modify your thinking so much that in a short period of time things like stocks, bonds, CDs and all the rest suddenly become interesting and relevant.

You may find yourself thinking one of three things right now:

"There is no way I want to live my life that way. It is too constricting."
"There is no way I can organize my life enough to live that way. Things are too chaotic."
"There is no way my life will ever be organized that way. I'm too far in debt now to ever get out of it."

If you find yourself thinking one of those things, let me ask you simply to put the idea on hold for a few minutes. Suspend your disbelief long enough for a new concept to enter your mind.

In order to organize your life in this "save first, buy later" way, you have to determine your financial priorities. This can be hard, and to do it right it helps to have some experience with other financial concepts. Therefore, a later article will help you to see how to do it right. In this article let's ignore doing it right and simply try out the concept to gain some experience with the process.

To determine your financial priorities, the first thing you have to do is think of the things you would like to have in the future, and then organize them. Therefore, I would like you to try taking 15 minutes to come up with a list of "things you would like to have one day." Simply take out a sheet of paper and list as many of your desires as you can think of. It may take a few minutes to get started; if you find yourself staring at a blank sheet of paper here are some thoughts to help you get started:

Do you want or need a new car?
A new house?
New furniture?
An encyclopedia?
A computer?
A new spring wardrobe?
A comfortable retirement?
A new riding lawn mower?
A deck or swimming pool?
A college degree for your kids?
A trip to Paris?
An engagement ring for your girl friend?
No more payments on your credit card?

Just start imagining all the things you would love to have one day, and write as many of them as you can think of down on the sheet of paper. For most folks, if you think about all of the things you want to have both short- and long-term, you end up with a pretty long list. If you have a spouse create the list together. Come back in about 15 minutes.

Now you have a list. Take another five minutes and write down prices next to everything. If you don't know the exact number, write down an approximate number. If you don't know an approximate number, just guess and then double that number.

Now take your list and find the one thing on that list that you REALLY want. The thing that would make you happiest or solve the most problems or bring the most joy to you or a friend. On that list there is one thing that brings the biggest smile to your face when you think about it. Put a big star next to it and focus your attention on it.

Now here is an important fact: You can have that thing. It will take some work but you can have it, and you will have it if you can gain control of your finances.

Let's go back to Bob from the previous article. He made his list. He put prices next to everything. Then he took about half an hour to think about everything on the list and discovered the one thing that he really wants, more than anything, is a pilot's license. Bob wants to learn how to fly. He can't exactly explain why. He just wants to get his license and he has wanted it since age 13. He called a local airport, and it costs about $4,000 for a person to get a private pilot's license. So what Bob needs is $4,000. And his question is this: "This is great. Now I know exactly what I want, and I can taste it I want it so bad. But where in the world am I going to get $4,000???"

You may find yourself thinking exactly the same sort of thing. In the next article we will discuss this problem and how to solve it.

Understanding and Controlling Your Finances[The Basics ]

2009-01-20T22:20:00.001-08:00

Part of the problem with the "world of finances" is that it is a huge space with hundreds of options and its own peculiar vocabulary. If you take it step by step, however, you actually can penetrate this field and completely understand it. So let's start at the beginning and see how the most basic things in life directly affect you and your finances.

If you are like most normal folks, you have a job. You go to your job every day. Every week or two weeks or month you get a pay check for some amount. For the sake of example let's imagine a fictitious person named Bob, a 24 year old computer programmer out of college two years. Bob is paid $3,000 each month, or $36,000 per year.

You have taxes. The government, in an effort to make your life easier, politely lifts something like a third of your pay check without your having to do a thing. Poof, it's gone - you never even get to touch it. The federal government takes perhaps 23%. The state government takes perhaps 7%, depending on the state. The social security administration (FICA) and Medicare take another 7.5% or so. Bob's $3,000 paycheck therefore diminishes to perhaps $1,850 by the time he sees it:

         $3,000 gross income
     - $  690 Federal income tax (23% of gross)
     - $  210 Typical state income tax (7% of gross, depending on state)
     - $  250 FICA, medicare, and other witholdings
       ------
       $1,850 Bob's net take-home pay

The amount subtracted depends on whether Bob is married (and if so whether his wife works), whether he owns a house, and so on.

You have expenses. As you live your life it costs money. A normal person in America has some pretty typical monthly expenses. Bob is a single guy, and his monthly expenses look like this:

Rent: $700
Car payment: $300
Car maintenance (gas, insurance, repairs, etc.): $200
Power: $80
Phone and Long distance: $50
Cable TV: $50
Cell Phone: $50
Groceries: $120
Entertainment, eating out, etc.: $300

[For many people it would mark a major financial milestone if they could create a simple, clear monthly vision of their expenditures like this one. See the article on "Understanding your current position" for details.]

The total expenditures shown here are $1,850 per month. If that were all there were to life, Bob would be set to some degree, because in this example expenses exactly match income. Unfortunately in life there are two other things…

You have problems. For example, you get a speeding ticket one day. The court fines you $60 to begin with, and then your insurance goes up $30 per month. Or your car blows a gasket and it costs $500 to repair. Or you meet "special friend" and feel compelled to take him or her out to dinner 14 times in one month, tripling your entertainment budget. Or you lose your job.

Then you have desires. All humans do, some more than others. You might desire new living room furniture, a new TV or stereo, a nice gift for your mother or spouse at Christmas, a special piece of jewelry, new clothes…. Whatever. You may desire all of it all at once. Occasionally you cannot control yourself and one of your desires is filled. Perhaps one month Bob buys a $400 TV without realizing it.

Therefore you have debt. Debt makes up the difference between income and expense. For most people day-to-day debt goes on a credit card, and large items like cars and houses are handled with more formal loans. Debt itself is not bad. The problem arises when debt accumulates for no apparent reason. In Bob's case, problems and desires would push his credit card balance upward each month because there is no other place for the money to come from. Since his expenses match income in a normal month, any abnormal spending will go on the credit card.

Notice what Bob does not have in the above scenario. There is no mention of a "savings program", for example. Nor a "retirement plan". There is no particular hope of reaching future financial goals (in fact, no goals to begin with). No "safety net." And most importantly, no peace of mind. Let me make an assertion: For a thinking person, it is very difficult to feel comfortable when you have no savings and a rising credit card balance. It feels uncomfortable because you know it cannot last; it is not sustainable. It also eliminates any sense of control, and most thinking people would like to have control of their lives and therefore their finances. It is as simple as that. This is a bad place to be because there is not a lot of future in it.

Let's say I waved my magic wand and doubled Bob's salary. Wouldn't that be nice? It would indeed, except that 99% of us (Bob included) would feel an irresistible urge to double our expenses at the same time. In fact, it is likely that if I told 100 people that their salary would double in six months, 99 of them would begin doubling their expenditures immediately, in anticipation of the actual funds. They would immediately move to a nicer place, drive a nicer car, buy more stuff, and so on until they got in exactly the same expenditures-are-greater-than-income position again. Clearly, making more money is not going to solve this problem, because we seem to have a natural tendency to spend what we earn in the same way that we eat everything on our plate and fill all available closet space. It is normal. That is why there was a "welcome to the club" message in the introduction to this series. The vast majority (90% or 95% of the people in the U.S.) live their lives just this way.

So is there a solution to this problem? The answer is "maybe." It requires a big mental shift. If you are willing to make the mental shift the answer is "yes." It turns out there is a different way to live life. This way of life involves figuring out what you really want to do, and what is really important to you as an individual, and then working toward those goals rather than proceeding randomly. What you gain in the process is a sense of control and satisfaction, and a sense of achievement, that is difficult to beat.

UnitedHealth Agrees To Pay $350M To Settle Class-Action Lawsuits Filed Over Alleged Underpayment For Out-of-Network Services

2009-01-20T22:15:00.001-08:00

UnitedHealth Group on Thursday agreed to pay $350 million to settle three class-action lawsuits filed by physicians and health plan members over allegations that the company underpaid for out-of-network medical services, the New York Times reports (Abelson, New York Times, 1/16). On Tuesday, UnitedHealth agreed to settle an investigation by New York state Attorney General Andrew Cuomo (D) that found health insurers understated the portion of reimbursements for which they are responsible for such services by as much as 28% in some cases, or hundreds of millions of dollars over the last 10 years.

Health insurers pay for a certain percentage of the usual and customary rates for such services, based on an estimate of the cost for such procedures in the same geographic area. Ingenix, a subsidiary of UnitedHealth, operates the Prevailing Healthcare Charges System, a database used by most health insurers that determines the usual and customary rates. The database contains information on more than one billion claims from more than 100 health insurers. Health insurers compare out-of-network claims with those found in the database and reduce the claim to a "reasonable" amount before they reimburse providers or members.

Under the agreement with Cuomo, UnitedHealth will pay $50 million to finance the development of a new database that an undetermined university will operate (Kaiser Daily Health Policy Report, 1/13). The latest settlement, which requires court approval, will pay health plan members and physicians for out-of-network services provided since 1994 (Fuhrmans, Wall Street Journal, 1/15). UnitedHealth will admit no wrongdoing under the settlement.

Reaction
Reed Tuckson, chief medical officer and a vice president at UnitedHealth, said, "We are so pleased to put the issue behind us so we can focus on the important work of assisting physicians."

Nancy Nielsen -- president of the American Medical Association, which participated in a federal class-action lawsuit filed against UnitedHealth in New York state -- said, "The Ingenix database has corrupted the system for paying out-of-network medical bills, resulting in patients and physicians being cheated by health insurers" (Japsen, Chicago Tribune, 1/15).

Plaintiff attorney Barbara Quackenbos filed an objection with one of the judges involved in the lawsuits over concerns about the amount of the settlement. She said, "We believe the amount agreed to is inadequate and does not reflect as meaningful a settlement as could be negotiated."

Objections from Quackenbos and other plaintiff attorneys raise questions about whether the two judges in New York state and New Jersey who have overseen the lawsuits will approve the settlement, the Times reports (New York Times, 1/16). According to the Chicago Tribune, the settlement could prompt other health insurers that use the database operated by Ingenix to reach similar agreements (Chicago Tribune, 1/15).

Aetna
In related news, Aetna on Thursday agreed to contribute $20 million to help finance the development of the new database, the AP/Minneapolis Star Tribune reports (Murphy, AP/Minneapolis Star Tribune, 1/15). Aetna will pay the $20 million in installments over five years.

Cuomo said, "With this agreement, the tide is turning against the corrupted reimbursement system that took hundreds of millions of dollars from the pockets of patients nationwide," adding, "Health insurers will no longer be able to distort their data, leaving patients with unfair bills" (Levick, Hartford Courant, 1/16). In addition, Cuomo said, "We will not stop until the entire industry has been reformed. We are aggressively pursuing the other health insurance companies" (Yaniv, New York Daily News, 1/16).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

House Democrats Announce $825B Economic Stimulus Package With $157B For Health Care

2009-01-20T22:12:00.000-08:00

House Democrats on Thursday announced a two-year, $825 billion economic stimulus package that includes more than $157.5 billion for health care programs, CQ HealthBeat reports (Carey/Attias, CQ HealthBeat, 1/15). The package includes a provision that would provide $87 billion to increase temporarily federal funds for state Medicaid programs (Herszenhorn, New York Times, 1/16). In addition, the package includes funds for a provision that would allow low-income workers who lose jobs that did not include health insurance to apply for Medicaid through 2010 (Wayne, CQ Today, 1/15).

The package also includes a provision that would provide $39 billion in federal subsidies for COBRA -- which allows recently laid-off workers to retain their group health insurance, provided that they pay 102% of the premiums (Hall/Lightman, McClatchy/Miami Herald, 1/16). Under the provision, workers who lost their jobs and their health insurance after Sept. 1, 2008, could receive subsidies to cover the cost of two-thirds of their premiums under COBRA (Taylor, AP/Philadelphia Inquirer, 1/16). The package also includes a provision that would extend the period of time recently laid-off workers ages 55 or older could retain their health insurance under COBRA (McClatchy/Miami Herald, 1/16).

The package also includes provisions that would provide $20 billion for health care information technology and $1.1 billion for comparative effectiveness research conducted by the Agency for Healthcare Research and Quality.

Other Health Care Provisions
Other provisions in the economic stimulus package related to health care spending include:

$550 million to modernize technology at Indian Health Service hospitals and health care facilities;
$3.75 billion for construction of new Department of Defense health care facilities and $455 million for renovations of such facilities;
$950 million for repairs and renovations of Department of Veterans Affairs health care facilities (CQ HealthBeat, 1/15);
$2 billion for renovations at NIH facilities and new agency research grants and $1.5 billion for renovations at university laboratories that conduct research sponsored by the agency;
$3 billion to promote preventive care and wellness programs;
$1.5 billion for renovations and expansions of community health centers;
$600 million to train primary care physicians who agree to enter the National Health Service Corps;
$900 million for research into an experimental pandemic flu vaccine and countermeasures for potential chemical and biological attacks; and
$462 million for construction and renovations of CDC facilities (CQ Today, 1/15).

Prospects for Passage
House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) said that they seek to complete work on the economic stimulus package before the Presidents Day recess. The House Appropriations Committee and the House Ways and Means Committee plan to hold mark ups on the package next Thursday, with the House scheduled to vote on the package on Jan. 28. The Senate plans to consider the package during the first week in February. According to the Washington Post, Senate Democrats have said that that their "stimulus wish list" could include many provisions not included in the House version of the package and cost as much as $900 billion (Murray/Kane, Washington Post, 1/16).

Reaction
According to the New York Times, the package announced by House Democrats "emphasized mostly Democratic principles," such as "helping the unemployed pay health care costs," and raised concerns from Republicans (New York Times, 1/15). House Minority Leader John Boehner (R-Ohio) said that the package appears to "be grounded in the flawed notion that we can simply borrow and spend our way back to prosperity" (Bendavid et al., Wall Street Journal, 1/16). House Appropriations Committee ranking member Jerry Lewis (R-Calif.) said, "This legislation appears to blanket government programs in spending with little thought toward real economic results, job creation or respect for the taxpayer" (Dennis/Kucinich, Roll Call, 1/15).

Paul Ginsburg of the Center for Studying Health System Change said of the provisions in the package related to COBRA, "That is a pretty dramatic health policy step to address the difficulty some near-elderly have in getting health coverage" (USA Today graphic, 1/16).

Robert Bixby, executive director for the Concord Coalition, said, "These may be worthwhile things like health care, technology and scientific research," but "these are all things that require some long-term strategy." He added, "I question whether shoveling money out the door in a stimulus bill is the way to do it" (Hook/Puzzanghera, Los Angeles Times, 1/16).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

N.Y. medical education assessment to rise

2009-01-01T20:50:00.000-08:00

Employers with workers living in New York will pay more in 2009 to help fund a state pool used to pay for graduate medical education, among other things.

The pool is funded by a so-called covered-lives assessment on employers with employees in New York. The highest assessment will be imposed on employers with employees living in New York City. Their annual assessment will increase in 2009 to $543.20 for employees with families, up from $494.50, while the annual assessment for employees choosing single coverage will rise to $164.61 from $149.95.

The amount of the assessments is lower in other parts of the state. For example, the annual assessment for family coverage in 2009 will be $102.08—up from $87.28—per employee for employers with employees living in Western New York, which includes Allegany, Erie and Niagara counties, while the assessment per employee for those choosing single coverage will be $30.93, up from $26.54.

Those annual assessments are levied in addition to a special, six-month supplemental assessment that expires in April 2009. For example, employers with employees in the New York City region pay an additional supplemental assessment of $22.60 for each employee choosing single coverage and a supplemental assessment of $74.58 for each employee opting for family coverage.

Massachusetts nears universal health insurance coverage

2008-12-29T22:42:00.000-08:00

BOSTON—More than two years after Massachusetts passed groundbreaking legislation to move the state closer to universal health insurance coverage, the Bay State has achieved that milestone, according to a survey released last week.

Some 97.4% of Massachusetts residents now have health insurance, by far the highest coverage rate of any state.

In 2007, according to the U.S. Census Bureau, just under 95% of the state's residents had coverage.

State officials hailed the findings, which are based on a survey conducted between June and August by the Urban Institute, a Washington-based research organization.

"Massachusetts has succeeded in covering the uninsured at an amazing rate. Massachusetts now has both the lowest rate of (uninsured residents) in the country and a rate that is less than half of the next-lowest state….This is a remarkable achievement," Secretary of Health and Human Services Dr. JudyAnn Bigby said in a statement.

In 2007, Hawaii had the second-lowest uninsured rate with 7.5% of the population lacking health insurance, according to the Census Bureau.

Several provisions in Massachusetts' 2006 reform law have been key in increasing coverage, experts say, including state premium subsidies for the low-income uninsured, imposing financial penalties of more than $900 a year on those who are not covered under a health plan and a $295-per-employee assessment on employers who do not offer coverage.

Coverage tied to income

The report found that of those with health insurance coverage, 68% received coverage from employers, while 17% obtained coverage from public or other programs, while 15% of the insured population—chiefly those age 65 and older—had coverage through Medicare.

Even though Massachusetts subsidizes health insurance premium for eligible low-income uninsured residents, insurance coverage was directly related to income, according to the survey.

For example, 5.4% of residents with incomes less than 150% of the federal poverty were uninsured, while 5.1% of those with annual incomes between 150% and 299% of the federal poverty level were uninsured.

By contrast, just 1.9% of those with incomes between 300% and 499% of the federal poverty level were uninsured, while 0.3% of those with incomes at least 500% of the federal poverty level lacked coverage.

The survey is based on responses from 4,910 households in Massachusetts.

Medicare mandate raises liability worries

2008-12-29T22:37:00.000-08:00

A government effort to ensure that Medicare does not pay expenses for which casualty insurers and self-insured employers are primarily responsible could hamper the settlement of liability claims, observers warn.

The government's effort, which includes a mandate to report information to Medicare, also could increase litigation, said Roy Franco, director for risk management strategies at Pleasanton, Calif.-based Safeway Inc.

And it comes as risk managers are likely to face more liability claims filed by Medicare beneficiaries because of an aging population. Medicare compliance issues affect 15% of Safeway's open liability claims, Mr. Franco said.

Mr. Franco also serves as steering committee co-chair for a recently formed Medicare Advocacy Recovery Coalition, which met last week with the Centers for Medicare & Medicaid Services.

The U.S. administrative agency is eager to help resolve some of the potential problems that policyholders, insurers, self-insureds, attorneys, third-party administrators and others in the liability industry could face as CMS implements the claims data reporting mandate that goes into effect on July 1, 2009, Mr. Franco said.

Precisely what payers will have to do to be in compliance still is under development, Mr. Franco said.

But legislation may become necessary and its makeup would depend on CMS' ability to address payer concerns, said Katie A. Fox, manager of a Medicare secondary payer compliance unit of Franklin, Tenn.-based MedInsights Inc.

MedInsights is a managed care subsidiary of GAB Robins North America Inc. Ms. Fox also is a steering committee co-chair for MARC, which has periodic meetings planned to provide CMS with input on the mandate.

The reporting mandate was contained in the Medicare, Medicaid and SCHIP Extension Act of 2007 that President Bush signed a year ago. Among other measures, it aims to help Medicare collect medical expense reimbursements.

The law is part of a congressional attempt to ensure the government saves money in cases where Medicare is supposed to be a secondary payer for its beneficiaries, after health plans, liability insurers and self-insured employers pay their primary share of claims.

Data that payers are to provide will enable Medicare to review all liability and workers compensation settlements, judgments and awards owed to Medicare beneficiaries.

The reporting mandate potentially poses several problems for settling liability claims, but many employers remain unaware of it, Mr. Franco said.

One potential problem for payers stems from a requirement that anyone paying a general liability claim must report the activity to Medicare if the claimant is a Medicare beneficiary.

Verifying that a liability claimant also is a Medicare beneficiary would require obtaining their Social Security number, Mr. Franco said.

Managing liability claims already can be an adversarial undertaking, Mr. Franco added. Asking for a Social Security number could cause additional friction that would undermine an established risk management practice of settling some claims quickly and amicably before attorneys are called.

"For the claims examiner to ask as (one of) their first questions, `what is your Social Security number?' tends to, unfortunately, push the claim in a direction we don't necessarily want to push at that time," Mr. Franco said.

One hope is that CMS will provide a work-around or help payers collect Social Security numbers, birth dates and other necessary information from Medicare beneficiaries, said Marcia Nigro, assistant vp and complex claim consultant in Philadelphia for Sedgwick Claims Management Services Inc.

"Elderly people are told by many organizations, `You never give your Social Security number out,"' Ms. Nigro said. "It's going to be hard to crack that nut. That is one of the major issues we are all going to have."

Sedgwick also is a MARC participant.

Another concern is that Medicare does not recognize state laws apportioning liability among claimants and defendants who share fault, Ms. Fox said.

Medicare wants 100% reimbursement from claims payers regardless of contributory negligence laws in some states, Ms. Fox said, and one MARC goal is to encourage Medicare to follow states' contributory negligence laws.

While group health and workers comp payers must report information under the new Medicare mandate, doing so for general liability claims is likely to present additional complications, several sources said.

Under group health plans and workers comp systems, payers typically pay a claim immediately, before Medicare pays. But because general liability claims regularly require determining fault, which can be a time-consuming process, Medicare is more likely to pay first and then require reimbursement, sources said.

Yet Medicare cannot provide payers with a final dollar amount they are responsible for until all necessary medical treatment has been provided. That could leave payers that want to settle a claim quickly not knowing how much they may have to reimburse to Medicare, Mr. Franco said.

Additionally, to cover its medical payouts, Medicare could require reimbursements totaling the entire amount an insurer or self-insurer would otherwise provide to a beneficiary.

Mr. Franco said that could mean claimants would not receive money because it all would go to pay Medicare instead. Those claimants would be less likely to settle and, instead, pursue litigation in hopes of obtaining dollars for themselves, he said.

"Ultimately, it could be a significant cost driver," Ms. Fox said.

Apart from claims-settlement issues, self-insured employers should assure all of their contracted third-party administrators are positioned to provide Medicare with required information, said Darrell Brown, workers comp practice lead for Sedgwick in Long Beach, Calif.

"Employers are concerned because the penalty for failure to report is $1,000 per day per claim," Mr. Brown said. "You have to get the reporting piece of it right because the penalties are pretty steep."

So far, though, the government has focused more on smoothing the reporting mandate's implementation than on penalizing payers, Mr. Franco said. But if the process is proving complex for sophisticated payers, beneficiaries are even more likely to be caught in the middle, he added.

FM Global to expand research campus, increase workforce

2008-12-29T22:35:00.000-08:00

WEST GLOCESTER, R.I.—Factory Mutual Insurance Co., which does business as FM Global, has announced a $38 million expansion of its 1,600-acre research campus in West Glocester, R.I.

FM Global says the enhancements of the facility will ensure that it can keep pace with its clients' loss prevention needs, particularly with the growing impact of globalization and increased supply chain risks.

FM Global said the expansion will see the company increasing its workforce at the research campus by 7% over the current 108.

Research at the current research campus replicates warehouse-size fires, dust explosions and virtually every type of natural disaster, according to FM Global. Research at the site helps FM Global customers better protect their facilities from property risks and related business disruptions.

Construction on the existing research campus began in 2001 and cost $85 million. The expansion will add capabilities for studying the effects of such natural hazards as wind, flood and earthquakes, as well as what FM Global says will be the world's largest fire-testing laboratory. The expanded facility will also include a new 4,500 square foot multimedia center.

The insurer says the improvements will provide higher quality research and testing, enabling it to better serve businesses looking to deal with evolving exposures.

NAMIC to partner in study of P/C policy systems

2008-12-29T22:34:00.001-08:00

INDIANAPOLIS—The National Assn. of Mutual Insurance Cos. will partner with management consulting, advisory and research firm Insurance Technology Group Inc. on a comprehensive survey of the business drivers influencing property/casualty insurers' policy administration practices and processing.

The survey will shape the business context for a policy administration study Toronto-based ITG is conducting with the sponsorship of Industry Focus and the support of O'Brien Communications Group L.L.C.

The partnership with Indianapolis-based NAMIC will include a telephone survey beginning this month of NAMIC members investigating insurers' business strategies and their experiences with policy administration practices and solutions.

the partnership will also include a webcast reporting initial results, and a survey of summary results.

The ultimate policy administration study will be an in-depth collection of information on vendors and their solutions. The study will begin in January, with results to be published and available in the second quarter of 2009.

In a statement, Bart Anderson, NAMIC's senior vp of member services and communications, said the survey "will help NAMIC better serve its members by providing valuable information for aligning business and IT strategies."

Mass. ups penalties for lack of health cover

2008-12-29T22:29:00.000-08:00

BOSTON—Massachusetts residents who are not covered under a health insurance plan in 2009 face higher financial penalties under newly proposed rules.

The maximum penalty next year for those with incomes exceeding 300% of the federal poverty level will be $89 for each month an individual does not have coverage, or $1,068 for a full year of noncompliance, according to the guidelines proposed by the Massachusetts Department of Revenue.

In 2008, the penalty for noncompliance was $76 a month, up to a maximum of $912 a year. Penalties for those with income of up to 300% of the federal poverty level would remain the same as in 2008. Penalties, though, do not apply for whose income is less than 150% of the federal poverty level, as such individuals are eligible for free health insurance coverage with premiums completely subsidized by the state.

In addition, individuals can obtain an exemption from the penalty if they can prove that affordable health insurance coverage is not available. In 2007, though, only 1.9% of tax filers—roughly 76,000 adults—were uninsured and deemed by state regulators as unable to afford health insurance and exempt from the penalty, which then was only $219.

XL downgrade hurts business with other insurers

2008-12-22T11:25:00.001-08:00

HAMILTON, Bermuda—XL Capital Ltd.'s financial troubles are causing some insurers to rethink their underwriting relationships with the Bermuda-based insurance company.

Market sources say some insurers are reacting to the recent financial-strength rating downgrade to A from A+ of XL's core companies by Standard & Poor's Corp. by refusing to participate in coverage programs that include XL on long-tail exposures.

Allianz Global Corporate & Specialty confirmed that it has made such a move. A spokesman for the Munich, Germany-based insurer said in an e-mail that the S&P downgrade of XL's financial-strength rating "reflects the belief that XL's prospective competitive position and resulting underwriting performance have diminished because of perceived franchise issues stemming from a number of material earnings and capital charges over the past several years and a belief that renewal activity will be below historical norms."

Allianz remains confident that XL can meet its obligations regarding short-tail business, the spokesman said. "However, we can no longer front long-tail business for XL. This is not a negative move against XL but rather a result of the recent downgrade because it affects our own risk exposure."

XL's downgrade means the insurer's rating "no longer meets Allianz Group criteria for long-term business," the spokesman said.

Meanwhile, A.M. Best Co. recently decided to leave unchanged the A financial strength rating it has assigned to XL's core operating companies.

A spokeswoman for XL could not be reached to comment on the move by Allianz.

Pollution exclusion used to deny fire death claims

2008-12-22T11:22:00.000-08:00

HOUSTON—Commercial specialty insurer Great American Insurance Co. is claiming that a pollution exclusion in its policy exempts it from owing damages to families of three people killed in a 2007 Houston office building fire.

Great American argues that its policy, which contains limits of $25 million, includes an "absolute pollution exclusion" that prohibits payout on a loss that arises from or is related to smoke, soot and fumes. Great American is asking the U.S. District Court in Houston to rule that the deaths caused by those elements not be covered by the policy.

A hearing on the matter will be held in February.

According to court documents, Cincinnati-based Great American provided the excess liability policy for defendant Boxer Property Management Corp. in excess of the primary liability policy issued to the property company by Lexington Insurance Co. Several underlying lawsuits for wrongful death, personal injury and property damage were filed against Houston-based Boxer Property Management, causing the company's excess liability coverage with Great American to be triggered.

A spokeswoman for Great American said that its policy "stands on its own merit" but would not elaborate further, saying the matter was still in litigation.

The case, Great American Insurance Co. vs. Boxer Property Management Corp., stems from a March 28, 2007, fire at a commercial building located in the North Loop in Houston. The fire was caused by Misty Ann Weaver, a nurse, who set fire to some paperwork that she had not completed and feared she might lose her job over.

Ms. Weaver pleaded guilty to three counts of felony murder and one count of first-degree arson and was sentenced to 25 years in prison on Oct. 27, 2008.

Health plans ease access to essential treatments: Study

2008-12-22T11:17:00.000-08:00

More health plans are reducing barriers to essential treatments in response to employers' requests, according to the 2008 findings of the National Business Coalition on Health's eValue8 tool, which coalition members use to assess the quality of health plans as part of the request for proposal process.

For example, for patients with diabetes, 27% of health plans currently waive copayments, and 33% reduce copayments, for essential drugs and equipment such as blood glucose monitors. For patients with asthma, 19% of health plans waive copays for essential drugs, and 32% reduce them.

For patients with hypertension, 20% of health plans waive copays for drugs and equipment, and 28% reduce copays for such treatments. In the area of wellness and health promotion, 43% of health plans waive copayments for preventive health care visits.

Although employers are asking health plans to provide more detailed quality information to plan members so they can make better-educated decisions regarding provider selection and treatments, only 47% display such quality information, and only 16% enable plan members to search for physicians based on quality, the eValue8 RFP tool found.

And while employers are demanding that health plans adopt electronic medical records to improve information flow, patient safety and reduce gaps in care, so far only 25% of health plans indicate in their provider directories whether the physicians use electronic health records, according to eValue8.

The 2008 eValue8 findings also showed health plans need to do more to ensure plan members are receiving preventive treatment such as cancer screenings. For example, only 57% of health plans remind members about colorectal cancer screening, and only 53% of health plans tell members when their colorectal screening is overdue. Moreover, only 40% of the plans report to physicians if their patients have received colorectal cancer screenings.

For more information on the eValue8 tool and its findings

Secured loan

2008-12-22T02:22:00.000-08:00

Secured loan

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower. From the creditor's perspective this is a category of debt in which a lender has been granted a portion of the bundle of rights to specified property. The opposite of secured debt/loan is unsecured debt, which is not connected to any specific piece of property and instead the creditor may satisfy the debt against the borrower rather than just the borrower's collateral.

There are two purposes for a loan secured by debt. In the first purpose, by extending the loan through securing the debt, the creditor is relieved of most of the financial risks involved because it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, this permits the second purpose where the debtors may receive loans on more favorable terms than that available for unsecured debt, or to be extended credit under circumstances when credit under terms of unsecured debt would not be extended at all. The creditor may offer a loan with attractive interest rates and repayment periods for the secured debt.

United States Law of Debt Secured by Property
In the case of real estate, the most common form of secured debt is the lien. Liens may either be voluntarily created, as with a mortgage, or involuntarily created, such as a mechanics lien. A mortgage may only be created with the express consent of the title owner, without regard to other facts of the situation. In contrast, the primary condition required to create a mechanics lien is that real estate is somehow improved through the work or materials provided by the person filing a mechanics lien. Although the rules are complex, consent of the title owner to the mechanics lien itself is not required.

In the case of personal property, the most common procedure for securing the debt is described through the Uniform Commercial Code or UCC. This statute provides a system of forms and public filing of documents by which the creditor's interest in the property is made known.

In the event that the underlying debt is not properly paid, the creditor may decide to foreclose the interest in order to take the property. Generally, the law that allows the secured debt to be made also provides a procedure whereby the property will be sold at public auction, or through some other means of sale. The law commonly also provides a right of redemption, whereby a debtor may arrange for late payment of the debt but keep the property.

How to create secured debt
Debt can become secured by a contractual agreement, statutory lien, or judgment lien. Contractual agreements can be secured by either a Purchase Money Security Interest (PMSI) loan, where the creditor takes a security interest in the items purchased (i.e. vehicle, furniture, electronics); or, a Non-Purchase Money Security Interest (NPMSI) loan, where the creditor takes a security interest in items that the debtor already owns.