Insurance commissioner: Premera is "stonewalling" on public disclosure of rate information

Washington State Insurance Commissioner Mike Kreidler today issued an open letter to health insurance consumers, calling for public disclosure of health insurers' rate requests.

"This is a critical week of the legislative session," Kreidler wrote. "Our biggest battle is still underway -- ending the secrecy of health insurance rates."

Under current law, the insurance commissioner's office is barred from disclosing virtually all the information submitted by insurers to justify health insurance rate requests. Kreidler wants to release those documents to the public, so they can see what’s driving health rates and comment on rate requests. Oregon and nearly a dozen other states have similar policies already.

Two of the state’s largest health insurers – Regence BlueShield and Group Health Cooperative – agree that rate information should be transparent. But a third – Premera Blue Cross – is balking, and only wants insurers to see the information once rates have been decided.

"I'm deeply troubled that Premera isn't willing to let you -- and their own policyholders -- see what's really driving health care premiums," Kreidler wrote, adding that he hopes they'll change their mind and help "put an end to the pointless secrecy of health insurance rates."

"We all know that health insurance rates have been rising dramatically in recent years," he wrote. "I believe that the people paying the premiums deserve to see why."

Pet insurance tips

We're hearing more from consumers about pet insurance, which will come as no surprise to anyone who's paid a vet bill lately.

To help, we put together a pet insurance tips page, with advice on:
-what to look for when comparing coverage
-how to find out how many complaints have been made about a pet insurer
-and questions to ask (such as "Do you give discounts for multiple pets?")
Overriding an NAIC "Veto" In Congress

Overriding an NAIC "Veto" In Congress

It’s not often that the self-insurance/ART industry successfully pushes back against the National Association of Insurance Commissioners (NAIC) on an important legislative/regulatory matter, but I am pleased to report one initial small victory.

For the past few years, I have been involved in lobbying for federal legislation that would modernize the Liability Risk Retention Act (LRRA). This legislative initiative has included three basic objectives: 1) allow risk retention groups to write commercial property coverage; 2) establish standardized corporate governance standards, and 3) create a new federal arbitration mechanism that RRGs can utilize in cases of disputes with non-domiciliary regulators.

This last objective has attracted predictable opposition from the NAIC and individual regulators warning that such federal oversight would compromise state-based regulation of insurance. This is a canard, of course, because our approach actually strengthens state regulation by allowing for the validation of decisions made by an RRG’s domiciliary regulator.

In spite of the this common sense analysis, the NAIC has demonstrated de facto veto power in Congress on getting LRRA legislation passed with an arbitration provision, blocking bill introduction last year in the Senate. Apparently, however, this veto power now has some limits.
It was recently confirmed that Senator Jon Tester (D-MT) will introduce LRRA legislation this session including the arbitration provision. This is notable because Senator Tester had resisted supporting this initiative during the last Congress in deference to home state insurance regulator Monica Lindeen who had been pressing the NAIC party line.

We are not sure why Senator Tester has chosen to change course on this, but the heavy lobbying by many of his constituents, including the Montana Captive Insurance Association (MCIA), has certainly contributed to this positive momentum.

Of course, this is just one development in a lengthy and difficult process to get the legislation passed and signed into law. But the fact that the NAIC has not been able to successfully exercise a veto at this early stage confirms that it is possible for our industry to make good things happen despite state regulator angst.

We fully expect to bump up against NAIC opposition as the congressional session continues. Stay tuned to see how the balance of power tilts.
A Fresh Look at Mandating Health Insurance Coverage

A Fresh Look at Mandating Health Insurance Coverage

Requiring individuals to maintain health insurance coverage is a good idea. There, I said it despite my libertarian leanings.

Yes, an individual mandate may be unconstitutional. And the prospect for more government control is not appealing but there is a strong case to be made that this is perhaps the one redeemable provision (in concept) within the 3,000-page health care law.

The obvious advantage is that by creating a health care system where everyone has insurance you dramatically expand the risk pool, which is a proven way to drive down costs especially when more younger and healthier individuals are covered.

On this latter note, high deductible plans should certainly be an option to fulfill a coverage requirement.

Proponents of an individual mandate cite the auto insurance analogy to support their position that there is precedent for compelling individuals to take responsibility for financial risk but they get caught flat-footed with the counterpoint that driving a car is voluntary activity and therefore it is appropriate for government to establish conditions unlike health insurance where there is no such activity.

But let’s take a closer look at this comparison.

If someone gets in an automobile accident and does not have insurance, their car will not be towed into an automotive emergency room and fixed without consideration to ability to pay. Rather, The car will remain damaged, or totaled until such time the owner can pay to repair or replace it. The financial liability is not shifted to anyone else.

Now if the driver gets admitted to the hospital as a result of this accident they will get “repaired” regardless of their ability to pay. And if they aren’t able to pay the cost will be shifted to other health care payers, including self-insured employers.

This fact should give even libertarians pause in opposing an individual mandate because a person’s decision not to maintain insurance has an adverse impact on the larger population and compromises the principal of self-reliance. After all, when is the last time you heard of someone refusing essential treatment because they knew they could not pay?

Requiring health insurance coverage would also benefit the self-insurance industry because more individuals would chose to enroll in their employers’ group plans, thereby expanding the risk pools for employers while increasing revenue potential for service providers.

To be sure, the way the individual mandate provision as incorporated in the PPACA is flawed, largely because the specific penalties and incentives will not likely achieve the desired results. But that is not to say that this approach should be rejected outright. Properly structured, an individual mandate could help put our health care system on the right track.

It’s unfortunate that President Obama and the Democratic Congress wrapped so much bad stuff around this targeted health care reform approach that we will likely never know how it may have worked.
Job openings: market analyst and market conduct examiner

Job openings: market analyst and market conduct examiner

We have a couple of job openings:

Senior Market Conduct Examiner: Among other tasks, this person will review and analyze insurance company records and procedures, including advertising, agency activity, complaint/grievance procedures, corporate structure, rate and form filings, provider networks, underwriting and claim administration. The application period ends March 2 at 5 p.m.

Senior Market Analyst: This person will plan, coordinate and perform market analysis of insurers and other regulated entities, reviewing company data statements and assisting in the design of audit programs. Applications are due by March 9 at 5 p.m.

The links have much more information about duties, qualifications, education, etc., as well as information on how to apply.

Car accident? How to file an insurance claim

Lots of snow, packed snow and ice on roads in Puget Sound this morning, which likely means a lot of fender benders. Here are some tips on filing an insurance claim and key information to know.

First: try to warn oncoming traffic, if it can be done safely. Give reasonable aid to the injured. Call police and, if necessary, an ambulance. If property damage exceeds $700 -- which is very often the case -- you must notify law enforcement.

Then: call your insurer. They can start the claims process and talk you through the details.

Who was at fault? Insurance adjusters typically gather information from the drivers and passengers, any witnesses, and accident reports filed with the state patrol or local law enforcement. If fault isn't clear, adjusters may decide that the fault is shared between drivers.

Which auto body shop to go to? In Washington state, unless you signed a contract with an insurer to take your car only to a specified repair shop, you can choose where to take it. But the shop still needs to work with the insurer to agree on a price. If they don't, and the car's repaired, you may be responsible for costs not covered by the insurer.

What if my car was totaled? We get this question all the time, and have a lot of information available about how to determine the vehicle's value (be ready to negotiate), how to keep your damaged vehicle, etc.

Check if your policy -- or the at-fault driver's -- covers "diminished value." This is the difference between the value of an undamaged vehicle and what it's worth after repairs are made.

Rental car? If the other driver was at fault, his or her insurer will negotiate with you for rental car payment. If you were hit by an uninsured driver, your insurance may pay for a rental.

Finally, what's "subrogation?" Subrogation allows your insurer to recover its costs from the person legally responsible for the accident. In other words, they seek reimbursement from the at-fault person.
The discoverability principle in third party claims

The discoverability principle in third party claims

White v. Mannen, 2011 ONSC 1058 (S.C.J.)

This was a motion by the third party, Brant County, for summary judgment on the basis that the action against it was commenced out of time.

The main action arose out of a motor vehicle accident that occurred on May 22, 2004. The plaintiff was a passenger in the defendant's vehicle, which crested a hill and swerved to avoid a parked car, leaving the roadway and striking a tree. In the third party claim, the defendant alleged the road and hill obstructed his view.

The claim was issued December 2, 2005 and served on the defendant February 21, 2006. The third party claim was issued September 24, 2009. The defendant argued that it was only after examinations for discovery and receipt of an engineering opinion that he discovered he had a cause of action against the municipality.

Justice Gordon conducted a useful review of the case law with respect to discoverability, and specifically the due diligence required: a party must only learn of sufficient facts upon which to commence a claim and need not be in a position to prove it. Legal advice or an expert opinion is not necessarily required, and an examination for discovery may not be required. In resisting a motion for summary judgment, the responding party must address the due diligence requirement and provide full disclosure.

Justice Gordon held that the defendant knew at the time of the accident that there was restricted visibility on the hill. The failure of the defendant to tender evidence on due diligence was fatal to his position. The third party claim was well out of time and was dismissed.

This decision is a good review of the principles pertaining to discoverability and should be reviewed both by those pursuing third party claims and those defending them.
Winter storm watch -- and info on how to file auto insurance claims

Winter storm watch -- and info on how to file auto insurance claims

A winter storm watch is in effect from Wednesday morning through Thursday morning for much of western Washington, with snow accumulations of up to 6 inches possible.

Anyone who lives in Puget Sound knows that much-feared snowstorms sometimes turn out to be, well, just more rain. But if this one turns out to be real, and west-siders are trying to drive around in it, here's a link to keep handy. It's our page about how auto insurance claims work -- diminished value, repairs using aftermarket parts,  rental cars, deciding who's at fault, etc.

Also: Many school districts in Washington state use to put out information on school closures.

Drive carefully.

White Swan fire victims: We may be able to help you with insurance claims

On Saturday, a wind-whipped blaze tore through the town of White Swan, southwest of Yakima, torching 18 homes and leaving 120 people homeless.

If you're one of those families and you had insurance, our office may be able to help. We're the state agency that regulates insurance in Washington state, and we have a toll-free consumer hotline where analysts can help any Washingtonian with insurance questions or problems.

If claims are wrongly denied or delayed, we can contact insurers on your behalf and try to resolve the situation quickly.Call us at 1-800-562-6900 or send an e-mail to

If you'd like to help the White Swan families, MSNBC has put together a list of local donation sites. Any Bank of America branch can also accept donations in the name of the "White Swan Relief Fund."
Important note to agents, brokers, insurers and insurance educators

Important note to agents, brokers, insurers and insurance educators

Our office recently adopted new rules that  affect licensees (like agents and brokers), insurance companies, and people who provide insurance continuing education and pre-licensing education.

Under these new rules, licensing must be done online. Licensees must provide a valid e-mail address, which will be the point of contact for all communication from our office, including renewal notices. We will no longer be printing and mailing licensing documents, such as appointments, affliations, etc.

Here's the timeline:

  • For licensees (like agents and brokers, which are now known as producers), renewals and applications must be done online starting June 1, 2011.

  • For insurance companies, new appointments, appointment renewals and appointment terminations must be done online starting May 1, 2011.

  • For insurance education providers, all education courses submitted for our approval must be sent in electronic format (such as an e-mail attachment), starting Feb. 28, 2011.
For more details, please see our "new online licensing rules" page.
Tavern Liability - Section 39 of the Liquor Licence Act

Tavern Liability - Section 39 of the Liquor Licence Act

Dickerson v. 1610396 Ontario Inc. (Carey’s Pub and Grill), 2010 O.N.C.A. 894 (CanLII)

Section 39 of the Liquor License Act creates civil liability for commercial establishments selling liquor. Section 39 reads as follows:

39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication such that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person.

In Dickerson, the Court of Appeal had occasion to comment on the standard of care set out in section 39. The Court disagreed with the plaintiff’s assertion that the standard is breached by simply overserving a patron to the point of intoxication. The Court held that section 39 requires a risk assessment by the commercial establishment. The plain and ordinary meaning of the section describes the level of overservice that attracts liability because of the risk it creates. The overservice must produce the patron’s intoxication or increase it sufficiently that the patron will be in danger of injuring another person. Section 39 requires only that the risk of injury be reasonably foreseeable, not that the type or kind of injury actually suffered be reasonably foreseeable. In addition, this section requires only that there be a reasonably foreseeable risk of injury to another person, not that the person injured be within the category of persons foreseeably at risk.

Those involved in tavern liability cases before juries may want to review this decision as a useful precedent for the charge to a jury in a tavern case, as well as the appropriate questions to be put to the jury.
Job openings

Job openings

We have three jobs -- two non-permanent positions, and one project position funded by a federal grant -- that we're trying to fill:

  • Communications Consultant 4: This is a project position funded by federal grant dollars from the U.S. Department of Health and Human Services. The project is expected to end on Oct. 15, 2011. The person will work with our consumer protection staffers to develop and manage communication strategies, techniques and tools. The work includes a variety of projects, all of which involve translating complicated health insurance information into materials that can be understood by an average consumers. For more information, see the job listing. Applications will be accepted through Feb. 28, 2011.

  • Health Insurance Advisor 1 - Regional Trainer (non-permanent): We're looking for someone who's bilingual in Korean and English to help provide training and technical assistance to volunteer health insurance benefit advisors in Clallam, Jefferson, King, Kitsap, Snohomish and Pierce counties. For details, here's the job listing. Note: The application period ends Friday afternoon.

  • Forms and Records Analyst 2 (non-permanent). Among other tasks, this person will act as a publications liaison between a health insurance advisory program and the state Department of Printing. For more details, salary information, etc., here's the job listing. Note: This application period also ends Friday afternoon.

Wind gusts tonight in western WA

Weather Underground is predicting gusts of up to 45 miles an hour in Seattle this evening.

To answer common questions about what storm damage is covered by insurance, we built a web page largely devoted to wind damage and insurance.

Hope you don't need it, but if you do, it may help. (And yes, that ladder doesn't look too safe to us, either.)
D&O Insurance: The Policy Prevails

D&O Insurance: The Policy Prevails

The Ontario Courts have reiterated the old insurance law adage that the wording of a policy prevails.

In Dunn v. Chubb Insurance, 2011 ONCA 36, the Court of Appeal recently upheld an application judge's decision requiring the insurer Chubb to pay 90% of certain defence costs of the respondents Dunn and Beatty, pursuant to a directors’ and officers’ liability insurance policy.

This proceeding arose out of allegations against Dunn and Beatty, former Nortel directors and/or officers.  They allegedly committed some "Wrongful Acts" (a term defined in the policy) in 2001 and then again in 2003.  The policy was a "claims made" policy and covered the period 2001. 

The insurer Chubb agreed to provide defences for Dunn and Beatty for proceedings relating to the 2001 conduct.  However, the insurer refused to pay the full defence costs for other proceedings arising out of both the 2001 and 2003 conduct.  The insurer argued that it was not responsible for the defence costs to the extent that those costs relate exclusively to the 2003 conduct.

There was however in the policy a special endorsement requiring the insurer to pay 90% of defence costs where there is a claim that includes both covered and uncovered matters.  However, the insurer took the position that the claims still had to fall within the period of 2001 and that the endorsement applied to allegations against insureds of wrongful conduct engaged in by an insured which is excluded from coverage, e.g. allegations of wrongful conduct in some capacity other than as a director and/or officer.

In the result, the application's judge and the Court of Appeal agreed that the endorsement in the policy applies and that the insurer is to pay 90% of defence costs per the terms of the endorsement.

This case emphasizes once again the importance of the terms of the policy itself.
Show Me The Money -- Politics and the Self-Insurance/ART Industry

Show Me The Money -- Politics and the Self-Insurance/ART Industry

The self-insurance/alternative industry is a major force in the U.S. economy, but it is largely invisible to most members of Congress. It is similarly cloaked at the state level.

So why the disconnect? Follow the money trail, or should I say the absence of such a trail.

While it’s rare these days that political contributions can explicitly “buy votes,” the reality is that financial support normally does get you access to politicians, which allows interest groups to deliver their messages in an unfiltered way.

Almost every major industry gets this concept. Sadly, our industry is one of the few notable exceptions.

This conclusion is easily quantified by looking at the political contributions made by the business community generally and the traditional insurance industry more specifically. They dwarf what has been contributed by those with an interest in protecting and promoting self-insurance.

As my role within our industry has evolved over the past few years, I have become what political operatives call a “money man,” which means I am responsible for passing the hat to collect contributions for politicians that we hope will support various legislative/regulatory priorities.

Obviously this role has provided me a unique perspective on our industry’s historic stinginess and naivety about how the political process really works.

Now of course there are exceptions. Many companies and individuals reach for their checkbooks immediately upon request and do this enthusiastically. But in my experience, soliciting political contributions is a tough sell in most cases.

Complicating matters is that political contributions at the federal level must be done through personal checks or credit cards. No corporate money is allowed.

Interestingly, there are countless individuals who have made a very nice living though their involvement in the self-insurance/ART industry, but hesitate when asked to financially support political initiatives that will help the industry. It’s difficult to square this reality.

Other individuals have the mindset that they are willing to write a check, but only when there’s a hot issue. That’s short sighted.

For those of us who clearly understand the concept of insurance, you know you can’t purchase property insurance when your house is burning down or health insurance when in an ambulance on the way to the hospital.

Making targeted political contributions is the equivalent of purchasing insurance to mitigate possible future legislative/regulatory risks.

One complication is that our industry is comprised of corporate buyers (employers) and service providers. These two segments have different motivations and capabilities for political involvement.

Service providers generally have a top-line interest in legislative/developments. In other words, they consider how such developments will affect revenue generation. In my experience this is the most powerful motivation to write a check.

Risk/benefit manager types, on the other hand, are focused on the expense line. They just want to be able to utilize self-insurance vehicles to control costs with minimal regulatory hassles. And while most view this as important, it’s uncommon that they will write a personal check in support of a corporate objective for which they do stand to directly benefit financially.

That’s not a criticism, it’s simply reality. And because of this reality, a large number of people in our industry will be confined to the sidelines of political involvement making it even more important that service providers pick up the slack.

Despite our industry’s historical underperformance in the money game, I am actually cautiously optimistic for the future. My sense is that the messaging just needs to be sharpened so that political contributions are viewed as both insurance and investments.

I will be directly involved in some targeted political fund-raising efforts over the next couple months and expect to have many one-on-one conversations as part of passing the hat. This will give me a new opportunity to test my assumptions.

Will people show me the money? I’ll circle back on this topic in the near future and let you know.

"I'm self-employed. How can I get `Group of 1" health coverage?"

We get this question all the time. And we've got an answer for you.

First, a little background: Last year, a new state law law took effect that allows sole proprietors to be considered "groups of 1." This way, they can qualify for small-group health coverage, instead of having to find coverage on the individual market. Small-group tends to have better benefits, lower costs, and no health screening.

To find out who's selling these policies in your area, type in your zip code here and scroll down the page to see a list of insurers, contact information and tips on picking plans. For more information, you can also contact an insurance agent or broker. Here's an online tool to help you find an agent in your city.
Interesting reports

Interesting reports

No, really.

Oregon has put out its annual "Health Insurance in Oregon" report. Among the findings:

-About 17 percent of Oregonians had no health insurance in 2009.

-Enrollment in commercial health policies through Oregon's 7 largest insurers fell 15 percent from 2007 to 2009.

-Reforms under federal health care reform "have typically accounted for no more than 4 percentage points of the rate increases submitted to the division" recently.

-And Oregon regulators in some cases approved lower rate hikes than an insurer requested, due to the size of insurer's surpluses.

-Oregon, under a federal grant, is studying how to use its rate review authority to help lower medical costs.

And in much sunnier Tampa, the Insurance Information Institute's Robert Hartwig yesterday released a new report looking at long-term trends -- 80 years of them -- in the property/casualty insurance market. Claims paid since 1931, he said, total $12.5 trillion, after adjusting for inflation.

Among Hartwig's points: that "claim payouts in recent years are volatile but have reached a jagged plateau."
Negligent Supervision of Children

Negligent Supervision of Children

Can parents or grandparents be liable for negligently supervising children in their care?

In Connolly (Litigation guardian of) v. Riopelle, [2010] O.J. No. 5798 (S.C.J.), the eight year old plaintiff was injured in an automobile accident. The defendant driver brought a third party claim against the boy’s grandfather, alleging that the grandfather was negligent in his supervision of the child and this caused or contributed to the accident. The child was visiting his grandparents’ home and was left outside to play alone when the accident occurred.

The grandfather brought a motion to strike the claim. He alleged that the child had been taught appropriate safety rules, was generally well behaved and did not require a greater level of vigilance than other children his age.

The motion was dismissed.

The Court held that is was open to the trier of fact to conclude that the grandfather ought to have looked out from time to time to ensure the child was adhering to the rules that were set, and there was an absence of evidence as to the accepted standard of care of other caregivers in the neighbourhood where the accident occurred.

Justice James concluded that the question of negligent supervision was better assessed in a trial setting.
ADA 2.0 Packs a Sharper Edge for Workers' Comp. Self-Insurers

ADA 2.0 Packs a Sharper Edge for Workers' Comp. Self-Insurers

The landmark Americans with Disabilities Act (ADA) of 1990 substantively changed workplace rules in ways that required employers to adapt a variety of hiring and return-to-work practices in order to maintain compliance.

Now 20 years later, the ADA has been amended and the implications for workers’ compensation self-insurers are significant. At issue is that ADA 2.0 will impose several new restrictions on how return-to-work programs can be structured.

The new final regulations are expected to be released this spring, but in anticipation of this expanded regulatory reach some self-insured employers have already felt the sting.

Over the past the year, the Equal Employment Opportunity Commission (EEOC) has been quietly adding nearly 300 investigators to enforce ADA requirements. Most recently, they have been targeting larger companies (generally self-insured) to determine if their return-to-work programs are ADA 2.0 compliant.

This is a fundamental change in EEOC’s historical approach of investigating claims made by specific employees. In other words, the EEOC is now essentially conducting on-site “audits” to determine possible ADA 2.0 violations.

Companies are already starting to pay big fines as part of negotiated settlements as the EEOC flexes its muscles in advance of the release of final regulations – proactive enforcement, indeed.

For example, late last year Sears settled an EEOC complaint for $6 million in connection with its employee absence policy that was deemed to improperty accommodate disabled workers. United Airlines recently paid more than $600,000 for a policy that refused the allow returning workers with disabilities to work reduced hour shifts.

With the EEOC investigative staffing ramp up, it’s clear that audit and enforcement efforts will pick up significantly this year and likely entangle many workers’ compensation self-insurers with carefully structured return-to-work programs.

The good news is that there are ways that employers can make sure they are ADA 2.0 compliant and we’ll report on that in the coming months.

In the meantime, the march of big government continues.