Insurance Q&A

2012-01-31T13:23:00.001-05:00

Floodsmart from FEMA: Answers to Possible Questions Regarding the October 2009 Change

2009-11-03T11:10:00.003-05:00

Answers to Possible Questions Regarding the October 2009 Change

On October 1, 2009, important changes to the NFIP will take effect. There will be an increase in rates, the standard deductibles, and the basic insurance limits. These combined changes will result in an average premium increase of 8 percent . Many policyholders will have questions about these changes. To help you best serve your clients, we have developed a number of “answers to possible questions” to help your customers better understand how these changes will affect them.

Q: Why are my premiums going up?
A: It is not uncommon for insurance companies to implement annual rate increases to help offset their increased costs, including inflation. The NFIP, like most insurance companies, has found it necessary to implement these important program changes to ensure that current premiums more accurately reflect the current risks.

Q: Are the rates increasing to collect the premium dollars that were used to pay for claims as a result of Hurricane Katrina?
A: No. It is a misconception that rate increases happen to offset debts attributed to Hurricane Katrina or any past event. Actually, Federal regulations clearly state that the NFIP cannot raise rates to recoup for previous losses. Simply put, NFIP premiums only reflect expected future losses and expenses. There is no charge contained in the premium to recoup past losses.

Q: Why is my deductible doubling?
A: The NFIP’s previous minimum deductibles were in place for more than 10 years. The NFIP found it necessary to discontinue the minimum deductible of $500 and increase the new standard deductibles to avoid overall larger premium increases.
It is important to remember, that in most cases the deductible is only a fraction of the average flood insurance claim, which can cost tens of thousands of dollars.

Q: Why are the basic limits of coverage on the Standard Flood Insurance Policy (SFIP) for residential and non-residential buildings increasing?
A: The NFIP takes many steps to financially prepare for future flooding. In order to do so, the basic limit of coverage, the level which sustains the most damage in a flood, needs to be brought into better alignment with the typical NFIP paid claim. If you purchase flood insurance beyond the basic limit, you will receive more coverage at a lesser charge. And, to get full replacement cost for your primary residence in the event of a flood, you must insure your building to at least 80 percent of its replacement value (or $250,000, whichever is less).

Click here for the new Flood Insurance Rate Manual that reflects these changes as well as additional information from the NFIP. Please email us at info@femafloodsmart.com with any questions.

Umbrella Insurance Protects Your Assets

2008-07-21T03:26:00.002-04:00

By: Jim Pretin

At some point, you have probably heard of umbrella insurance, but have no idea what it is. Well, first off, it does not cover the umbrella you protect yourself from the rain. It is a figure of speech. An umbrella policy is designed to shield you from almost everything that your home and auto insurance does not, as well as fill in gaps in coverage when the limits of your regular policy are exhausted.

Every day, there are personal lawsuits filed against ordinary citizens, with the reasons ranging from the frivolous to the justified. When and if this happens to you, you need to be prepared. More often than not, people are sued and have no extra protection to block the plaintiff from going after their personal assets in the lawsuit. To protect yourself from such a quandary, you need to have umbrella insurance.

An umbrella is often referred to as excess liability. This excess liability coverage kicks in when the underlying limits on your home or auto policy have been exhausted, or if you are sued personally for something that neither your home nor your auto insurance covers. Depending on the company, you can purchase anywhere from 1 to 5 million dollars worth of excess coverage, sometimes as high as 10 million.

The amount of coverage you select really depends on how much you are worth. If you have 5 million dollars worth of personal assets, you should get a 5 million dollar umbrella. It is not uncommon for someone to buy a 5 or 10 million dollar umbrella policy even if that number far exceeds their net worth, because the coverage is so cheap to buy.Most insurance companies will not offer you the coverage unless you have both your home and auto already insured with them. Also, the insurer will require that you maintain a certain level of liability on the home and auto policies in order to qualify for the excess policy. Usually, you must maintain at least $250,000 of bodily injury liability per person, $500,000 per accident, and $100,000 for property damage for your autos, and $500,000 of liability for your home.

The coverage is cheap. It is possible to obtain 1 million dollars worth of excess liability for as little as $120 dollars. The more cars and homes you have, the higher the price for the insurance, but the cost is still low. In addition to your home and cars, liability associated with any other conveyances you may have, such as boats, motorcycles, and other recreational vehicles, may also qualify for coverage under the umbrella, depending on the insurance company.

You are probably wondering when the umbrella would actually come into play. Here is an example: If you are involved in an auto accident where you crashed into a pedestrian who was walking on the sidewalk, resulting in medical expenses for that person that costed more than what your auto policy covered, the umbrella would be used. Or, if that pedestrian then decides to sue you for negligence and seeks punitive damages, your umbrella can be utilized to cover your legal expenses and to pay any judgements levied against you.

It is also important to understand that the excess liability covers you for all sorts of things that have nothing to do with your cars or homes. Things such as personal injury protection are covered. This includes false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction.

Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member. You may have to contact your insurance company and pay an extra premium for this type of coverage.

I hope this has helped illuminate to you the importance of having umbrella insurance. Without it, your personal assets are totally vulnerable in any lawsuit or legal action. Talk to your agent about it and ask how much it costs. Even though multi-million dollar lawsuits are not common, they can happen. So, an umbrella is probably worth it.

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How Dental Plans Differ from Dental Insurance

2008-07-20T12:14:00.002-04:00

By: S. Geetha

It is unfortunate that people do not give the required attention to their teeth and dental care as they do for other kind of diseases and illnesses.

In order to minimize the costs on dental treatments and to prevent dental diseases it is good to have a dental plan to take care of all such problems.

Dental plans differ from the dental insurance by the type and feature. Almost all the dental plans take a membership fee which varies from one plan to another plan. Also, dental plans can be either offered to individuals or to the family on the whole.

The family dental plans offer higher discounts than the individual dental plans.

Before selecting the appropriate dental plan it is good to check the rates charged under different plans. Also the type of coverage provided to the dental services matters a lot while selecting the dental plans.

Dental services covered under the dental plans:Normally most of the basic dental procedures like the regular dental check ups, treatments like the cleaning procedure, oral examination, teeth filling, fluoride treatment and teeth extraction are covered by dental plans.

But, the dental plans do not cover major dental treatments like oral surgeries, restorative dental care, root canal treatments, dental implants, braces etc.

Under such circumstances the dental plans allow the policy holder to get reimbursement for the amount spent on the basic dental treatment and the other expenses should be born by the patient himself.

Certain dental plans may not allow selecting a dentist of the policy holder’s choice and the patient has to undergo dental care treatments from the dentist mentioned in the dental plan.

Hence, the policy holder before selecting the dental plan should check for a dentist present in his area and also for any schedule is mentioned in the dental plan or not. Dental plans can be availed either monthly or annually.

The annual dental plan is supposed to be more cost efficient than the monthly dental plan.

Discount dental plans:Discount dental plan is considered to be an affordable option. This dental plan offers discounts on all dental care treatments ranging from 10 – 60 percentages. It also covers dental works like braces, bridges, dentures, root canal treatments etc. This is possible by showing the membership card to the dentist while taking the dental treatment of any kind.

Reasons for choosing discount dental plans: The main reason for choosing discount dental plan is that, it is very cost effective. The premium to be paid towards the dental plan is very low in spite of the coverage being much better. The money paid up front is also very low.

Discount dental plans can be availed for even pre existing dental diseased conditions and there is no exclusion. Discount dental plans help people when they are needed and for the purpose they avail it.

There is no hassle of filling forms as the person has to present the discount card and avail discounts from the dentists. Even the dentists are happy about discount cards as their time and energy is saved. It also offers a large list of dentists to choose from. The very important aspect is that even cosmetic dentistry is covered under dental plans making them very lucrative.

S. Geetha regularly writes informative articles on dentistry, tooth whitening procedures and dental insurance.

www.lisyinsurance.com

Getting the right Life Insurance

2008-06-26T19:44:00.002-04:00

Q: "I need life insurance. What's the best way to shop around? "

"I'm 29, and my wife and I just had a baby! I need life insurance. What's the best way to shop around? I've seen many families that either had no life insurance or own the wrong type of life insurance."

It's great that you are taking a step to protect your family.

The first thing you need to do is understand the different types of life insurance out there.

There are two basic types of life insurance.

The first type is called "cash value life insurance." They go under the name as whole life, universal life, variable life, or a mixture of those words together.

Cash value life insurance is a term insurance plus a savings attached to it. Whole life insurance is a level term to age 100, Universal life insurance is an increasing term insurance (that means the insurance goes up internally every year) to age 100, and Variable life is also a level term to age 100, but the death benefit may increase if there is growth in the cash value. If you see the word "Variable" it means that a portion of your premiums is invested and when you are investing, you must know that there is no guarantee that there will be growth.

All cash value life policies provides protection to age 100.

But the bad news is that they are generally expensive to the average consumer and most people who buy these types of life insurance are under-insured (meaning they don't have enough coverage).

Majority of cash value life policies have a low rate of return. They usually average around 3%. The highest I ever seen was 6%. The lowest I ever seen was 1%. If you ever wanted to take money out of the cash value, you will have to borrow it and pay a loan interest on it (usually around 8%).

In some life policies, the cash value is included in the death benefit, but you have to pay more premiums to get this feature.

The second type of life insurance is known as "term insurance."

Term insurance does not build cash value, therefore premiums are very low. You can buy lots of coverage for a low amount of premiums.

There are level term policies that are as short as 1 year (you want to avoid these) and as long as 35 years. Longer term is always better since it will give you enough time to build wealth for your future.

Right now, you probably have a mortgage to pay, you have a child to take care of, and you probably have some other personal debt such as credit cards. You probably don't have much saved right now, so the need for life insurance is very high. If you die tomorrow, not only would it be emotionally devastating, it will also be financially devastating.

Which will have a longer impact on the family, their emotional loss or financial devastation?

The financial devastation because without life insurance, your child may not be able to afford college, the family will have to move out to a cheaper place, and your personal debt may go toward your spouse.

In the later years, your kids grow up and maybe move out of the home, your mortgage gets paid off, and hopefully you don't have much personal debt. So the need for life insurance is very low. You are nearing retirement, so you better have lots of money saved.

Buying term now will provide the right amount of protection needed to protect your family's income. At the same time, you want to start investing toward your future.

Federal Appeals Court in New Orleans Hears Katrina Case

2007-09-07T19:36:00.001-04:00

By Michael Kunzelman
September 7, 2007

insurance company invoked to deny Gulf Coast homeowners' claims after Hurricane Katrina is at the center of a case that was scheduled for a hearing Sept. 6 in a federal appeals court in New Orleans.

State Farm Fire & Casualty Co. says its policies cover damage from hurricane-force winds, but not from rising water, and has refused to pay for any damage from Katrina's monster storm surge.

The Bloomington, Ill.-based insurer also says damage from a combination of wind and rising water is excluded from coverage. Last year, however, a federal judge in Gulfport, Miss., ruled that this "anti-concurrent cause'' policy language is ambiguous and therefore can't be enforced.

In the same ruling, Judge L.T. Senter Jr. refused to throw out a lawsuit filed by John and Claire Tuepker, State Farm policyholders whose home in Long Beach, Miss., was reduced to a concrete slab by the Aug. 29, 2005, storm.

State Farm appealed Senter's ruling to the 5th U.S. Circuit Court of Appeals in New Orleans. A three-judge panel was scheduled to hear arguments Sept. 6 from attorneys on both sides of the case.

In court papers, the Tuepkers' attorneys suggest that State Farm's policies are "craftily ambiguous'' and are "woven so as to not give away their true intent.''

"Indeed, since Katrina, it has become painfully obvious that, in anticipating the risk posed by a powerful hurricane, State Farm intended all along to exclude damage ostensibly caused by a combination of water and water, the one-two punch without which a meteorological event is something other than a 'hurricane,''' the couple's attorneys wrote.

In a different case, however, the Mississippi Court of Appeals found that State Farm's anti-concurrent cause language is "clear'' and unambiguous, the company's attorneys say.

"Courts in many other jurisdictions have likewise upheld the validity of this same language,'' State Farm attorneys wrote in court papers.

The Tuepkers are among thousands of homeowners in Mississippi and Louisiana who have sued their insurers after the Aug. 29, 2005, storm. The couple is represented by attorney Richard "Dickie'' Scruggs, who helped negotiate a multibillion dollar settlement with tobacco companies in the mid-1990s.

Last month, Scruggs appeared before a different three-judge panel of the 5th Circuit to challenge similar language in policies written by Nationwide Mutual Insurance Co. But the judges sided with Nationwide, ruling Aug. 30 that the Columbus, Ohio-based insurer's policy language isn't ambiguous.

David Rossmiller, a Portland, Ore.-based lawyer who closely follows Katrina insurance litigation, said policyholders shouldn't expect a different result in the State Farm case even though its policy language is different from Nationwide's.

"The handwriting is on the wall,'' he said. "It would be shocking to me if the result was substantially different.''

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Judge Throws Out All Federal Antitrust Charges Against Insurers, Brokers

2007-09-07T19:35:00.001-04:00

September 6, 2007

Finding the charges lack any factual support, a federal judge has dismissed a big antitrust conspiracy case that was lodged against large commercial insurance brokers and insurers back in 2004 when bid rigging and account steering probes were in full sway.

In dismissing the antitrust complaint for the second time, Chief Judge Garrett E. Brown Jr. of the U.S. District Court for New Jersey said the plaintiffs had no proof that there was any sort of conspiracy among insurers and brokers to secretly allocate accounts, refrain from competing, or pay incentive bonuses on certain commercial accounts.

The plaintiffs alleged that the defendants had engaged in both a global conspiracy and so-called "hub and spoke" conspiracies in which brokers acted as hubs to coordinate illegal distribution of commercial insurance accounts among insurers (the spokes).

Defendants in the suit that have now been cleared of federal antitrust charges are some of the largest insurance companies and brokerages including American International Group, The Hartford, Fireman's, Liberty Mutual, American Re, Travelers, Chubb, Marsh, Willis, Aon and Hilb Rogal & Hobb.

The case was a consolidation of suits from around the country brought under federal antitrust statutes. It developed in the wake of investigations by state attorneys general including New York's Eliot Spitzer over alleged bid rigging, account steering and improper contingent commission payments.

These consolidated lawsuits took those charges to another level—claiming that they were part of a conspiracy among certain large insurers and insurance brokers and accusing the players of antitrust violations and racketeering.

This week, Brown put the antitrust conspiracy charges to rest in granting the defendants' motions to dismiss. He had also agreed with defendants in April but gave plaintiffs one last chance to amend their complaint.

But Brown found the amended complaint was even less convincing than the earlier one. In completely dismissing the conspiracy allegations, Brown wrote:

"While this Court previously held that the conspiracy allegations were faulty because they failed to show some sort of recognizable allocation of the market (a way for the insurers to understand what they were actually agreeing to divide), it appears that the allegations as presently drafted suffer from a more serious defect. This hub and spoke conspiracy is devoid of a factual basis for this Court to infer that an agreement existed among the competitors - in this case, the Insurer Defendants. Plaintiffs want this Court to view the specific facts regarding the 'incumbency protection racket' through their lens - which colors each demand from a broker to an insurer as being part of an agreement to restrain competition that already exists. However, when stepping back and viewing these facts in the aggregate, there is nothing in this record to suggest that there was any sort of express agreement among the insurers. While it is not necessary for the agreement to be explicit, the facts are simply too tenuous to intimate an implied agreement - a rim to this hub and spoke conspiracy. The brokers demanded certain behavior of the insurers, but that does not constitute a horizontal agreement among insurers to collude."

Brown found no evidence to support the charges of a global conspiracy among brokers to keep secret their contingent commissions and not tell clients about them. Plaintiffs had argued that the defendants' membership in the same trade group, the Council of Insurance Agents and Brokers, was proof. But for Brown, "membership in various trade groups and the sharing of information are insufficient to support an inference of actual concert of action."

He wrote that since plaintiffs failed to prove that the insurer defendants colluded among themselves in the broker-centered conspiracies, "it is improbable that they colluded to further this global agreement as well."

While this dismissal affects the antitrust complaint brought against the defendants, charges of violating federal racketeering laws are being judged separately and remain before the court.

Some insurers and brokers have settled similar antitrust complaints with officials in New York, Connecticut and other states, although they have not admitted doing anything illegal. Among those that have settled are insurance broker Arthur J. Gallagher & Co. and Zurich American Insurance Co.

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Mississippi Attorney General Wants to Compel Insurer to Stay in State

2007-02-19T10:10:00.001-05:00

http://www.fee.org/in_brief/default.asp?id=1116

February 19, 2007

"Mississippi Attorney General Jim Hood said Friday he will seek legislation aimed at blocking State Farm Insurance Cos. from refusing to write new homeowners and commercial policies in the hurricane-battered state. State Farm, Mississippi's largest homeowner insurer, said Wednesday it has had enough of the 'untenable' legal and political climate in the state and is suspending writing new homeowners and commercial policies. The company said the suspension would begin Friday and continue until the business climate in the state is more palatable."

For Better or Worse...Travelers Launches Wedding Insurance

2007-02-14T17:33:00.001-05:00

February 14, 2007

More than 3,000 weddings take place every day in the U.S., with the average cost now reaching $27,000 each. Recognizing that the "big day" comes with a mighty financial commitment, Travelers announced today the launch of the Wedding Protector Plan, an insurance policy covering weddings.

"A wedding is a large investment both emotionally and financially," said Alan Tuvin, vice president of product management for Travelers. "There are a lot of moving parts to a wedding and things can go wrong. It is important to protect such a significant financial investment."

The Wedding Protector Plan provides coverage, with no deductible, for a variety of unfortunate occurrences associated with a wedding event. For example, coverage is provided if a hurricane causes the necessary and unavoidable cancellation or postponement of the event. Other coverages include postponement for withdrawal of military leave, forfeited and lost deposits, extra expenses associated with special attire, transportation, photographs, and entertainment expenses.

"A lot goes into planning your wedding within your budget," said Tuvin. "Travelers wants to ensure that your budget will not spiral out of control when the unexpected happens."

The top wedding claims and problems typically include damage to wedding attire, mishaps with event photography, cancellation due to illness or bereavement, and no-shows by contracted vendors.

Travelers created www.ProtectMyWedding.com, which offers a Risk Quiz to help consumers determine how much risk surrounds their wedding, plus examples of coverages provided. Consumers can then use the online agent locator to find a nearby Travelers independent agent to discuss purchasing protection. As long as the wedding is more than 14 days away, it's not too late. The Web site also offers an e-newsletter for newlyweds, which covers topics from lifestyle to money management tips, designed to help couples become in-synch with their lives as one.

The Wedding Protector Plan can cover events in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Bermuda, Bahamas, Turks and Caicos, the Caribbean Islands (excluding Cuba and Haiti) and cruise ships leaving from a port within those territories (some restrictions apply).

For more information on how to protect a wedding, contact a Travelers independent insurance agent or visit www.ProtectMyWedding.com.

Travelers is a business of The St. Paul Travelers Cos., Inc., a property casualty insurer selling primarily through independent agents and brokers.

Source: The St. Paul Travelers Cos.

State Revokes License of Indiana Insurance Agent

2007-02-12T19:37:00.001-05:00

February 12, 2007

Indiana state regulators are seeking more than more than $365,000 from a former insurance agent for misusing money from premium payments made by more than 100 customers.

The state Department of Insurance on Thursday permanently revoked the license of Daneile Frydrych, the owner of All Star Insurance in South Bend. That action following allegations that she spent money intended for customers' home and vehicle policies at casinos in Las Vegas and Michigan City, at clothing and book stores, and at a local adult entertainment store.

The agency's order included a $285,000 fine against Frydrych and said customer losses exceed $80,000.

Regulators will forward the case to the state attorney general's office for collection, said Nick Mann, investigations chief at the insurance agency.

"This brings some amount of closure to the case,'' Mann said. "I know everyone wants their money back. We've tried to be realistic from the get-go that that might not happen, and I think people are aware of that.''

One of Frydrych's customers, Elizabeth Fuentes, said she paid $1,300 for a home insurance policy, but ended up with nothing.

"Frydrych would probably be best to do some time and learn a good lesson in jail,'' Fuentes said.

Frydrych did not attend a Dec. 28 hearing by regulators on the allegations. She could not be located for comment as no home phone number was listed in her name in the South Bend area.

No criminal charges have been filed in the case.

Federal Judge Puts Part of State Farm Katrina Settlement on Hold

2007-01-27T17:20:00.000-05:00

By Andrew G. Simpson, Jr.
January 27, 2007

The federal judge who must sign off on a proposed $50 million class action settlement involving State Farm's handling of Hurricane Katrina claims has said he needs lots more information before agreeing to the deal affecting as many as 35,000 policyholders.

U.S. District Judge L.T. Senter of the U.S. District Court of Southern Mississippi on Friday declined to approve the widely-reported settlement and did so "without prejudice," but he also made it clear that the parties have a lot of explaining to do.

"In the absence of substantially more information than I now have before me, I am unable to say, even preliminarily, that the proposed settlement establishes a procedure that is fair, just, balanced, or reasonable," wrote Judge Senter.

The ruling affects the proposed settlement of a class action on behalf of an estimated 35,000 State Farm claimants who did not sue the company. The agreement promises that their claims and any denials will be reconsidered.

Read complete article online here- http://www.insurancejournal.com/news/national/2007/01/27/76356.htm

S.D. Legislature Nixes Booster Seat Proposal for Older Kids

2007-01-26T23:01:00.000-05:00

January 26, 2007

A bill to require booster seats for children from the age of 5 through 7 was killed this week in the South Dakota Legislature.

Supporters said many parents don't realize that older children often suffer serious injuries or are killed because seat belts and safety harnesses do not properly restrain them.

Most parents know they should use infant seats for the youngest children, but they don't follow through when those children get older, said Dick Tieszen, lobbyist for State Farm Insurance.

"The use of safety seats dramatically decreases for older children, and that as a result of that, the older children are experiencing injuries,'' he said.

But opponents of the bill said the governor has a good program that distributes booster seats and it could be hurt if state law is changed to require them.

They also said it would be difficult to enforce a law that would require booster seats for children ages 5 through 7 who are not yet 57 inches tall. Police couldn't tell their ages by looking at them or how tall they are, opponents of HB1134 said.

"I don't think the time has come when we want to arrest mothers and traumatize the kids when we don't know what we're doing as far as making arrests goes ... with a measuring stick,'' said Rep. Gordon Pederson, R-Wall.

The bill failed 6-7 in the House Transportation Committee.

Auto Insurance Fraud Crackdown Paying Off for Drivers

2007-01-26T20:03:00.000-05:00

January 26, 2007

High-profile crackdowns on auto insurance fraud have resulted in dramatic savings for drivers in some Massachusetts communities.

The statewide average premium is scheduled to drop by nearly 12 percent on April 1, but drivers in some communities where antifraud task forces have been operating will see even greater savings, with premiums falling 24 percent in Lawrence and more than 15 percent in some Boston neighborhoods.

Drivers in Lawrence, the first Massachusetts community to target insurance fraud in 2003 following a case in which a grandmother died in what police called a staged accident, will see the average annual premium drop to $1,379 from $1,815.

In Boston's Dorchester section, drivers will see the average premium fall to $1,670 from $2,033, a reduction of almost 18 percent.

The new rates apply to what insurance companies call experienced drivers, who represent the most common category of insured driver.

The industry's calculations are based on a driver with six or more years of experience, a vehicle that is a couple of years old, an average driving record, and comprehensive and collision coverage with a deductible of $500.

"We've said that if we could take fraud out of the system, rates would come down,'' said Daniel Johnston, president of the Automobile Insurers Bureau of Massachusetts. "Now we finally have proof.''

The antifraud campaign has led to charges against or the arrest of 528 people, including lawyers and chiropractors, Johnston said.

Reduced fraud has also led to a reduction in claims filed with insurers, which allows regulators to cut premiums.

In communities where fraud is less of a problem, and where the average premiums are lower, the percentage reduction coming on April 1 is also less. For example, experienced drivers in Newton will see their average premium drop 8.6 percent.

"This is exactly how the system should work, and we can lower premiums even more in the future if we apply a similar approach to reducing accidents,'' said Stephen D'Amato, a consultant to the Center for Insurance Research in Cambridge.

Massachusetts is the only state where auto insurance rates are set by state regulators.

Some insurers say rates would drop even further if regulation was reduced and companies were allowed to compete for drivers' business.

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Information from: The Boston Globe, http://www.boston.com/globe

Study: Many Teens Tired and Distracted While Driving

2007-01-25T23:45:00.000-05:00

January 25, 2007

Teen drivers are often behind the wheel when they are tired or being distracted by cell phone chatter or others' behavior, according to a new national survey of high schoolers.

In the survey, 5,665 high school students said they are driving under extremely dangerous conditions -- fatigue, talking on cell phones, strong emotions, multiple passengers -- and many are still not wearing seatbelts. The National Teen Driver Survey, released by The Children's Hospital of Philadelphia and State Farm, represents 10.6 million 9th, 10th and 11th grade students in all public high schools in the United States.

"Research has told us a lot about which teens get into crashes, but we don't know enough about the why," says Flaura K. Winston, M.D., Ph.D., co- scientific director and founder of the Center for Injury Research and Prevention at Children's Hospital of Philadelphia and principal investigator of the National Teen Driver study. "With this survey, we asked teens directly: what is happening when your peers drive that is making them unsafe?"

Key findings about the teen experience in cars shows:
-- 75 percent of teens see peers driving fatigued
-- 90 percent see passenger behavior that distracts the driver
-- 20 percent of 11th graders report being in a crash as a driver in the past year

The survey also revealed the important role that the teens see for their parents:
-- 66 percent say that they care about their parents' opinion on cell
phone use while driving
-- 56 percent of them rely on parents to learn how to drive
-- 39 percent of their parents provide total financial responsibility for
their driving

"Teens described a driving environment that would be challenging even to experienced drivers," says Winston. "Combine this driving environment with lack of training and inexperience and you have a deadly mix."

In 2005, almost 7,500 15-to 20-year-old drivers were involved in fatal crashes according to the National Highway Traffic Safety Administration. The fatality rate for drivers aged 16 to 19 years, based on miles driven, is four times that of drivers aged 25 to 69 years.

"Our aim is to help young drivers make safe decisions," says Laurette Stiles, vice president for strategic resources at State Farm. "We want to give them tools to help them avoid hazards and ultimately to save lives and make our roads safer for all."

Parents and teens can learn more about safe driving for teens at http://www.chop.edu/youngdrivers

Ohio Nationwide Insurance Members' Data Taken in Theft from Vendor

2007-01-25T23:44:00.000-05:00

January 25, 2007

Computer records containing medical claim information, health data and Social Security numbers of 28,279 Nationwide insurance customers were stolen from the office of a vendor in Massachusetts, the company said.

A lockbox that contained computer backup tapes was taken during a break-in Oct. 26 at Concentra Preferred Systems in Weymouth, Mass., Nationwide Mutual Insurance Co. said Tuesday.

A break-in of Concentra's office in Dayton happened the same day, with someone stealing a lockbox with backup tapes of medical claim data of about 130,000 Aetna Inc. health insurance members, Aetna said. Hartford, Conn.-based Aetna reported that break-in last month.

A message seeking comment on the thefts was left Wednesday at Naperville, Ill.-based Concentra.

When Aetna reported the break-in at Concentra, the vendor said accessing information from the backup tapes would require commercial equipment and special software packages. The company said the backup tapes could not be used on a standard personal computer.

Cash, DVD players and other items also were stolen in Dayton, making it unlikely the culprits were trying to obtain information needed to commit identity theft, authorities said.

Columbus-based Nationwide, informed of the theft two weeks after it happened, mailed letters last week to customers, most of whom live in central Ohio. The company delayed customer notification while it determined the risk of identity theft, which it believes is low, spokesman Mike Switzer said.

Nationwide said it would offer affected customers a free year of credit monitoring and identity theft insurance. Aetna said last month that it would make a similar offer.

AIG Looks to Acquire Outstanding Shares of Auto Insurer 21st Century

2007-01-25T23:42:00.000-05:00

January 25, 2007

American International Group, Inc. (AIG) has submitted a letter to the board of directors of 21st Century Insurance Group proposing to acquire the outstanding 38.1 percent publicly held shares of 21st Century for $19.75 per share in cash.AIG and its subsidiaries own approximately 61.9 percent of the outstanding shares of 21st Century. The aggregate cash consideration payable would be approximately $690 million. Following the transaction, 21st Century would become a wholly owned subsidiary of AIG.

Founded in 1958, 21st Century is a direct-to-consumer provider of personal auto insurance. With $1.4 billion of revenue in 2005, the company insures 1.5 million vehicles in 17 states (Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Minnesota, Missouri, Nevada, New Jersey, Ohio, Oregon, Pennsylvania, Texas, Washington and Wisconsin).

The proposed per share price represents a 19.0 percent premium to yesterday's closing price and a 25.5 percent premium to the average closing price during the last 12 months. The proposed per share price also represents a multiple of 19.6x the consensus estimates of 21st Century's 2007 earnings per share (based on a current First Call estimate of $1.01 per share).

"Our proposal represents an excellent opportunity for 21st Century's shareholders to monetize their investment at a full and fair value for their shares. For AIG, this is an opportunity to make a substantial additional investment in a business we know well," said Martin J. Sullivan, president and chief executive officer of AIG.

AIG contemplates that the transaction would be implemented through a merger agreement which would be negotiated and approved by a special committee comprised of directors of 21st Century who are independent of AIG. This proposal is subject to AIG's satisfactory completion of due diligence and satisfaction of regulatory requirements.

AIG has advised 21st Century that AIG's sole interest is in acquiring the remaining shares of 21st Century held by the public shareholders and that it has no interest in a disposition of its controlling equity stake in 21st Century.

Source: American International Group, Inc.

More than 100 people charged with car insurance fraud in LA

2007-01-13T21:25:00.000-05:00

LOS ANGELES - More than 100 people were indicted in what authorities say is one of the state's largest cases of auto insurance fraud for allegedly bilking companies out of hundreds of thousands of dollars, officials announced Wednesday.

In the scam, employees at a dozen San Gabriel Valley law firms would steer accident insurance claim cases to a chiropractic clinic, prosecutors said. The clinic in turn would overbill insurance companies by signing off on claims that inflated the number of visits for treatment, with payouts shared among clients, clinics and the firms.

Total losses were hard to estimate, but investigators said insurance companies were defrauded about $500,000 during the two-year probe.

Los Angeles County District Attorney Steve Cooley said the defendants were "fueled by greed."

"People who make a career out of defrauding insurance companies will be exposed and will suffer the consequences," he said.

The number of defendants - 101 in all - made it the largest auto insurance fraud case in Los Angeles County and one of the largest in California, authorities said. Thirteen are office administrators who allegedly worked as "cappers," two are attorneys and 86 are insurance claimants.

Indictments unsealed last week charged about 200 counts of insurance fraud, 64 counts of soliciting fees for referrals - known as capping - and three counts of unauthorized practice of law. One defendant, Jorge "JC" Yang, faces 117 counts alone.

The investigation itself was opened in September 2004 after an informant at a clinic complained to authorities about employees at law offices who allegedly referred cases in exchange for fees and kickbacks from chiropractic centers. Throughout the two-year probe, an investigator worked undercover as an office manager at a clinic in Alhambra.

At least 88 people have been arrested, with the rest either overseas or at large. All but a handful have posted bail. Arraignments were scheduled through next week.

According to state Insurance Commissioner Steve Poizner, insurance fraud of all types totals about $15 billion a year.

The investigation was conducted by the district attorney's office, the California Highway Patrol and the state Department of Insurance.

Car Crash Death Rate for Seniors, Already High, Expected to Rise

2006-06-15T13:58:00.000-04:00

June 15, 2006

A study co-authored by a University of Virginia professor suggests that seniors citizens will die in car accidents at a higher rate in the years ahead as America's 75 million baby boomers age, grow more frail and continue to drive.

Already, seniors 65 and over are second-most likely to die in car accidents, after young people aged 15-24, according to a National Institute on Aging report on America's elderly, "65+ in the United States: 2005."

"In general, older people are more susceptible to injury than younger people," said Richard Kent, assistant professor of mechanical and aerospace engineering at U.Va.s' School of Engineering and Applied Science. "As the population ages, the ratio of women to men also changes, going from 1-to-1 for young people to 100 women for every 35 men by age 85. And women tend to be more frail than men, making them more susceptible to injury."

Kent studied the characteristics of car accidents and the nature of injuries sustained by older drivers in a research project titled "On the Fatal Crash Experience of Older Drivers." The resulting paper, co-authored with Basem Henary, research associate, mechanical and aerospace engineering at U.Va. and Fumio Matsuoka, project manager for vehicle safety, Vehicle Engineering Division, Toyota Motor Corp., Japan, was recently named the Best Scientific
Paper for 2005 by the Association for the Advancement of Automotive Medicine in Barrington, Ill., an organization dedicated to the prevention and control of injuries from motor vehicle accidents.

The researchers' goal was to identify unique aspects of older-driver crashes -- in particular, the body region injured, the severity of the crash and the circumstances surrounding fatal crashes in which they were involved –- with an eye to identifying patterns that could be used in developing new technologies to assist seniors in driving safely.

The researchers studied police reports on thousands of vehicle accidents for the years 1992-2002. They examined the accidents and injuries for three groups of drivers: young adults (16-33), middle-aged adults (34-64), and seniors (65 and older).

The researchers' findings included:

• Drivers 65 and over killed in car accidents were significantly more likely to die of a chest injury (47.3 percent vs. 24.0 percent in the youngest group)

• Younger drivers were more likely to die of a head injury (22.0 percent vs. 47.1 percent in the oldest group)

• Older drivers were more likely to die at a date after the crash date ("delayed death")

• Frailty or pre-existing health conditions played a significant role in the deaths of the older group, but not in the younger group (50.0 percent of the deaths of the older group vs. 4.3 percent of the younger drivers' deaths)

• Despite driving at lower average speeds than younger and middle-aged drivers, and a greater likelihood of wearing seatbelts, older drivers were more likely to be injured or die in an accident than younger drivers.

According to the paper, published in the September 2005 Annual Proceedings of the Association for the Advancement of Automotive Medicine: "The archetypical elderly driver fatality involves a belted, sober driver pulling into the path of an oncoming vehicle during the day and dying several days after a collision of moderate severity. Pre-existing health issues are often related to the death. In contrast, the archetype for a 30-45 year-old driver fatality involves an unbelted, impaired driver losing control of his/her vehicle at night and dying during an extremely severe, single-vehicle crash."

The study recommended that government and industry officials consider changes that would help reduce seniors' injuries and deaths from motor vehicle collisions. Areas deserving of attention included: roadway design, road signage, vehicle controls and active and passive safety systems.

Researchers also identified technological developments that could help older drivers. These included seatbelts that would limit the force of a crash on a driver's body, crash-avoidance systems, technologies that would prevent elderly drivers from crossing the centerline or pulling into an intersection without having the right-of-way.

Source: U.Va. School of Engineering and Applied Science
For more information, visit http://www.seas.virginia.edu.

The Basics 16 ways to slash your insurance rates

2006-05-26T09:25:00.000-04:00

To cut your premiums, you've got to know how insurance companies are going to size you up.

By Dana Dratch, Bankrate.com

If you're buying life, disability, long-term care or health insurance, your insurance company wants to know more about you. Depending on the type of policy, it could inquire about your habits, medical records and family history. Based on the answers, it will slot you in one of several categories that will help determine just how much you pay for coverage.

What you say and how you say it can make a difference in how your insurance company sees you and what it charges.

"It's not enough to say you got a good rate," says Randy Herz, senior vice president of Herz Financial, an insurance advisory firm in Farmington, Conn. "You have to look at what their classifications are. Then you have to understand your own health. Health is one of the biggest factors in determining the cost of your insurance."

Here are some tips from insurance insiders to help you get the best health ranking -- and the lowest rates:

Communication counts
Tell the truth, the whole truth and nothing but the truth. Think that leaving something shady out of your health history might help? Wrong, for two reasons. First, the insurance company will likely find out (it is reading your records, after all), and it will assume the problem is severe because you didn't mention it. Even worse, if you withhold information that the company regards as material, it could cancel your life policy within the first two years, says Bob Hunter, director of insurance for the Consumer Federation of America.

Give your complete health story, but do it on your own terms and give the complete picture. Don't just say you have high blood pressure. Say you were diagnosed with high blood pressure five (or however many) years ago and have successfully controlled it with medication.

"The consumer should think about it from the side of the insurance company," says Robert Hoyt, head of the risk management and insurance program at the University of Georgia and president of the American Risk & Insurance Association. "To the extent you give them good, complete information and reduce the uncertainty, then ultimately you're going to get a fairer price."

If your agent or broker knows what wrinkles might give you a problem, he can shop you to the companies most likely to take you on at a good rate.

Watch your language. Sometimes incomplete answers can paint a bad picture. And insurance underwriters are trained to assume the worst. So be clear and complete in your answers. If you had a nonaggressive cancer removed from your face one time several years ago, don't simply say you had cancer removed, says David Johnson, an insurance agent and board member with the Georgia Association of Health Underwriters. List the specific type -- basal cell, for instance -- and that it was done once with no recurrence.

Sometimes an application will ask the ever popular question, "Which of the following conditions have you been treated for?" Instead of just checking "chest pains," include the fact that it turned out to be indigestion and no follow up was needed.

Know the rules of the game. "You need to ask what the (health) ranking is based on," says Hunter. "There should be objective criteria. And you really should shop a little. The criteria vary."

Find out what your ranking is with a specific company and why, says Hunter. It could be that something they don't know will improve your ranking and decrease your premium.

Shop around. It's common consumer advice, but it can be even more important with insurance. Two different companies can view a person's health and the risk he or she poses very differently.

"Most companies try to put you in the right slot," says Hunter. "But if they make a mistake, you don't want that to be the only one you talked to."

Even the lingo varies from company to company. A ranking of "preferred" or "standard" might mean two very different things, with different rates, at two different companies.

Smart shopping is very important for smokers, especially people who only occasionally smoke a cigar or pipe. While some companies will automatically put you in a less-desirable category with a higher premium, others won't penalize you for that once-a-year stogie.

Your physician can help
Alert your doctor. Insurance companies want to talk with your doctor's office and look at your most recent records. Failing that, they might have to use only the records from the Medical Insurance Bureau (a repository for medical records used by insurance companies), which might not be to your advantage. Sometimes a doctor can give some perspective to a condition that might look worse in black and white (for example, a high cholesterol condition that's being treated successfully).

But a busy doctor's office can sometimes drop the ball, says Dave Evans, vice president and publisher for the Independent Insurance Agents & Brokers of America. And the insurance company will only try so many times before it gives up.

So let your doc know you're applying for insurance. A little advance notice can ensure the call isn't overlooked and give you the best chance at a good rating.

Make sure the company gets all of your records, not just some. To get the most complete, up-to-date picture of your health, the company needs all of your records.

"If you've moved or migrated doctors, the fact of the matter is you probably have to be more proactive," says Evans.

Shop quietly. Similar to a lot of inquiries on your credit, a lot of inquiries on your insurability can throw up a red flag, says Herz. Instead, choose an agent or broker who can quietly do some informal shopping to narrow your options before you do anything official. "It avoids you getting declined or rated," says Herz.

In addition, if you use several different agents or brokers, let them know you're shopping around. That way, "everyone knows what they're working with and it might make them more competitive," says Herz.

Pick your insurance professional carefully. Not every agent is up to the task, especially if you've had some health problems in the past.

"If you're dealing with someone who does this a lot, they can help coordinate and shepherd you along because they are comfortable with the process," says Evans.

If you anticipate problems, it's especially important to have someone who knows the system. This can be an agent or broker who knows which companies are likely to give you the best rates and someone who knows how to talk to underwriters to convey the true risk -- or lack of risk -- you would pose.

"The worse your health is, the more this matters," says Herz.

About your vices: Cut them out
Develop good habits. The insurance company probably won't ask how many times a week you work out, how many grams of fat you consume or how many glasses of water you drink. But all of those things impact the criteria they will examine. So hit the gym, lose those extra pounds and keep yourself healthy.

"These things can make a difference for people, not just in getting coverage but in the price you'll get," says Evans.

Want to drop 30% from your life insurance premium? Kick the cigarettes.

"Smoking can add up to 30% to the cost of your life, disability and health insurance premiums," says Johnson.

Avoid drugs and alcohol. If you take illegal drugs, you're not going to find an insurance company that wants to take you, says Johnson.

"If (a person) has a recent history of drug use, they're not going to be able to get insurance," he says.

If you're a recovering alcoholic, "You're probably going to be able to get coverage, but it could be a higher premium," says Johnson. Emphasize, with medical records to back you, how long you've been sober. The insurance company could see a relapse as a risk to them, so the more you can show how unlikely that is, the better for your rates.

Prepare for your exams. In some cases, the insurance company will require either a physical or a short exam by a paraprofessional, which can include taking your vital signs and drawing some blood.

To get the most accurate reading, schedule it first thing in the morning on an empty stomach. (Obviously, if you have a condition that makes that tricky, talk to your doctor first.) Give up vigorous exercise like that three-mile run 24 hours in advance. Get a good night's sleep. And some experts recommend forgoing your morning coffee, or even water.

Follow up on the details of your medical records. Do your records contain a recommendation for a test that you never got? The insurance company could see that as a bad sign, says Herz. "Have the doctor note in your records that you didn't need it after all -- or get it done," he says. Otherwise the company is likely to think that you could have some undiagnosed problem.

Think about your future. If you're healthy now and considering buying term life insurance, make sure that it's renewable and convertible, says Evans. "What that means is that you can convert to permanent coverage without a physical. That would be worth paying extra for," he says.

Keep trying and keep asking questions
Try to get coverage even if you've had health problems. Work with a professional you trust and have him quietly look into what kind of ratings you would get, says Herz. Bear in mind that a number of conditions aren't the black marks they used to be.

"A person who had open-heart surgery used to be declined," says Herz. "Now they can get regular rates."

Ditto for folks who are using medications to control conditions such as high blood pressure and high cholesterol.

"I've seen people who have cancer, heart (problems), all sorts of things, get insurance because they were able to get a favorable prognosis," says Evans.

Ask why. If you are declined or end up with rates higher than you were expecting, find out why. Talk with your agent and ask how to get a copy of your records from the Medical Information Bureau, says Evans.

Don't give up. "Don't consider a (lower health ranking) or decline in the past as indicative of future events," says Herz. It could be that last time around your agent didn't work hard enough for you, or it could be that today, with new drugs and treatments, your condition wouldn't pose as much of a risk, he says.

And time does heal -- even in the insurance business. "Sometimes, the further you get from (an event)," says Herz, "the better off you are."

Auto Insurance Costs Holding Steady; Average Nationwide Premium at $867

2006-05-08T09:25:00.000-04:00

The cost of auto insurance is expected to rise by just 0.5 percent in 2006, the smallest increase in six years, reports the Insurance Information Institute.

A declining number of auto accidents, safer cars and fraud-fighting efforts are some of the forces contributing to the cost slowdown.

However, rising medical care and vehicle repairs continue to put upward pressure on rates, along with hurricane-related claims, the industry group also noted.

The average cost for auto insurance nationwide for 2006 is estimated at $867—an increase of just $4 per vehicle from last year, according to the I.I.I, despite record vehicle-related losses arising from the 2005 hurricane season. The projected increase represents a continued slowdown from 2005 when auto insurance costs rose by 2.5 percent.

"The cost of auto insurance is increasing by about one-sixth the rate of inflation and little more than a single gallon of gasoline," said Robert Hartwig, senior vice president and chief economist of the I.I.I.

"Many people who, for example, drive safe cars, have excellent safety records and good credit-based insurance scores may see their rates go down, often by 3 to 5 percent or about $25 to $50 per vehicle. This is welcome news for drivers who have been battered by record high gas prices over the past year," he added.

What's more, Hartwig said, people who trade-in their expensive gas-guzzlers for smaller, more fuel efficient and less expensive vehicles may see even lower insurance costs in many cases. Smaller cars that cost less with fewer horsepower are often less expensive to insure because repair costs are less. Some insurers now even offer special discounts for hybrid vehicles.

It may also pay to just leave the car at home. "People who make the switch to public transportation may also qualify for lower insurance premiums if they no longer use the vehicle commuting and drive it significantly fewer miles each year," said Hartwig.

Hartwig cited the declining number of auto accidents, safer cars, new auto theft technology, fraud-fighting efforts and graduated licensing laws for teen drivers as additional key factors contributing to the cost slowdown.

However, he observed that rising costs for medical care and vehicle repairs as well as defense costs and jury awards remain a problem, according to I.I.I.'s analysis.

Restrictions on the use of credit-based insurance scores in several states are also a cost threat to millions of drivers, according to its analysis.

"Insurance scores are highly accurate predictors of future loss, allowing insurers to more accurately price insurance and create a more fair and equitable rating environment for all drivers. Efforts to ban scoring will lead directly to higher insurance rates for good drivers while, ironically, lowering rates for people who are involved in the most accidents," said Hartwig, adding that efforts by some states to restrict other underwriting factors that have been used by some insurers for decades could have a similar negative impact.

Katrina Clobbered Cars Too
Record catastrophe losses associated with Hurricanes Katrina, Rita, Wilma, Dennis and Ophelia (the five storms that hit the Southeast in 2005) and predictions by leading meteorologists of more of the same for the next 15 to 20 years are putting pressure on the cost of auto insurance in some parts of the country.

Insurers received nearly 674,000 claims for vehicles that were damaged or destroyed by last year's storms. Those claims occurred across a wide swath of southern states and cost insurers some $3.2 billion," said Hartwig.

Florida, Louisiana and Mississippi saw the most claims, but large numbers of claims were also filed in Texas, Alabama, Georgia and North Carolina. Even the landlocked states of Arkansas and Tennessee reported significant numbers of claims despite being located hundreds of miles from where the storms made landfall.

Weather-related damage to vehicles, including flooding, is covered under the "comprehensive" portion of auto insurance policies. Banks issuing car loans and leasing companies generally require vehicle owners to carry comprehensive coverage. People who own their vehicles outright are not required to carry comprehensive coverage, though many do. The coverage is frequently dropped, however, on older vehicles.

Claim Severity Continues to Rise
"Unfortunately, while drivers today are filing fewer claims, those that are filed cost more," Hartwig said. "It costs more to repair cars, particularly following accidents involving sport utility vehicles."

This year insurers will pay between $15 and $20 billion in medical claims, the I.I.I. reported. Higher costs for hospitalization and pharmaceuticals, and state regulations that encourage abuse of medical treatments and associated legal costs are also to blame. "Collectively, these high costs in some states more than offset the decline in accident frequency, pushing overall rates upward," Hartwig observed.

Cost Drivers in Insurance
Medical costs are an important factor in the auto insurance market. Each year more than three million car accidents involve injuries. More than one in four auto accidents resulted in injury claims in 2003, according to the Insurance Research Council (IRC).

The average cost of a bodily injury claim exceeded $10,000 in 2005, but can easily run into the tens of thousands of dollars.

Higher jury awards in vehicular liability cases continue to put additional upward pressure on auto insurance rates. The average jury award in auto liability cases was $261,000 in 2003, according to the most recent available data from Jury Verdict Research.

"Auto insurance litigation is very expensive," said Hartwig. "In 2004 auto insurers spent more than $4.1 billion defending policyholders from lawsuits brought against them. Auto liability issues are much more important than people realize," he continued. "About 60 percent of auto premiums paid in 2005—almost $60 billion—was for liability coverage. As we look at 2006 and into 2007, we see this trend continuing."

Auto theft is another significant factor that affects rates. According to the Federal Bureau of Investigation (FBI), an automobile is stolen every 26 seconds in the United States. While the number of auto thefts decreased by 1.9 percent in 2004, the first decrease in five years, there were still 1.24 million vehicles reported stolen. The good news is that preliminary FBI data for the first half of 2005 indicate that the auto theft rate fell by 2.1 percent. Declines were posted in every region except the West.

The decreases over the past two years come on the heels of a 1.2 percent increase in auto thefts in 2003, 1.5 percent in 2002, 5.9 percent in 2001 and 0.7 percent in 2000. The nation's highest theft rates were found in the West and South, with the lowest rates occurring in the Midwest and Northeast. Automobile theft is a much bigger problem for some cities than others. Modesto, California, was the auto theft capital of the United States in 2004, with an auto theft rate nearly quadruple that of the country overall. Other problem cities include Las Vegas, Phoenix and Seattle.

New vehicle security devices, such as electronic tracking systems can help police find stolen vehicles and keep premiums down. Some insurers offer car owners these tracking systems at a special price in combination with premium discounts.

Fraud and abuse remain major problems in some states, such as New York, Maryland, Florida and Massachusetts. However, crackdowns by law enforcement agencies and insurers have put a definite dent into organized insurance fraud.

Factors Affecting What People Pay for Auto Insurance
The average driver will pay $867 in 2006. But what an individual driver pays will vary by state, insurance company and motorist characteristics."

Factors that influence the cost of coverage may include:
* Type of car and specific safety features;
* Number of miles driven and type of driving;
* Family claim record, including the number of accidents and their severity;
* Driving record, including speeding tickets;
* Age, gender and experience of driver; and
* Credit-based insurance score.

For more information on auto insurance, go to the I.I.I. Web site: http://www.iii.org/individuals/auto.

Source: The I.I.I. is a nonprofit, communications organization supported by the property/casualty insurance industry.
www.iii.org

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Make Health Care More Affordable And Available For All Americans Through HSAs

2006-05-08T09:22:00.000-04:00

White House Fact Sheet: Making Health Care More Affordable and Accessible for All Americans

From the White House: http://www.whitehouse.gov/news/releases/2006/05/20060501-8.html

Today, President Bush Discussed His Comprehensive Strategy To Make Health Care More Affordable And Available For All Americans Through Health Savings Accounts (HSAs), Improved Transparency, And Other Innovative Reforms. The Administration is determined to reduce health care costs by pursuing practical, commonsense reforms that will improve quality and increase choice. America leads the world in health care because we believe in a system of private medicine that encourages innovation and change. The best way to reform our health care system is to preserve this system of private medicine, strengthen the relationship between doctors and patients, and make the benefits of private medicine more affordable and accessible.

Our Reforms Are Guided By Two Clear Goals. The first goal is to meet America's obligation to seniors and the poor. The second goal is to make care and coverage more affordable and available for all American families.

The President Is Working To Meet America's Obligation To Seniors And The Poor

Beneficiaries Are Enrolling In The Medicare Prescription Drug Benefit. Medicare drug coverage enables the typical senior to spend about half of what he or she used to spend on prescription drugs each year. About a third of seniors are eligible for prescription drug coverage that includes little or no premiums, low deductibles, and no gaps in coverage. On average, Medicare will pay for more than 95 percent of the costs of prescription drugs for low-income seniors. More than 30 million people now have prescription drug coverage through the Medicare program, and hundreds of thousands more are signing up each week. The May 15 deadline for seniors to sign up at the lowest cost is approaching, and the President encourages our Nation's medical community to continue getting the word out to seniors about the benefits of this program.

We Are Strengthening Medicaid. Earlier this year, the President signed legislation making it easier for states to offer alternative benefit plans, provide coverage to more people, and design their Medicaid program to meet their needs and budgets.

We Are Expanding Community Health Centers. These centers provide primary health care for the poor, so they do not have to go to hospital emergency rooms for routine care. Since the President took office, the Administration has funded about 800 new or expanded Health Centers – bringing our total to more than 3,700 Health Centers serving more than 13 million Americans a year. Over the next two years, we will fund the opening or expansion of 400 more Health Centers.

We Are Making Medicare And Medicaid Financially Sound. Today, the Medicare and Social Security Trustees release their annual report. Each year, the Trustees remind us that these programs are not structured in a way that they will be financially sound for our children and grandchildren. The good news is that we do not need to cut these programs, but we can save them by restraining the growth in spending to levels we can afford. The President continues to call on Congress to join him in creating a commission to examine the full impact of baby-boom retirements on Social Security, Medicare, and Medicaid.

The President Has Five Key Policies To Make Health Care More Affordable And Available For All American Families

1. Expand Health Savings Accounts (HSAs). HSAs lead patients to demand more value for their money by enabling them to control their health care spending.

HSAs Have Two Components: Low-Cost Catastrophic Insurance Coverage And Tax-Free Savings Accounts. Catastrophic coverage provides protection in the event of a devastating medical illness. HSAs allow Americans to contribute to a tax-free account to pay for routine medical needs and to build up savings by rolling over any contributions unspent in a given year. HSAs can help us move our health care system away from one where a third party pays for most of the costs to one where consumers make their own health care decisions.
HSAs Are Making Health Care More Affordable And Accessible. From March 2005 to January 2006, the number of HSAs tripled from 1 million to more than 3 million. Forty percent of those who own HSAs have family incomes below $50,000. More than one-third of those who bought HSAs on their own had previously been uninsured.
HSAs Are Helping American Hospitals. More insured Americans means fewer people arriving at our Nation's hospitals needing uncompensated care.
The President Believes Congress Needs To Give Americans Who Buy HSA Policies On Their Own The Same Tax Breaks As Those Who Get Their Health Insurance From Their Employers. Under current law, the self-employed, the unemployed, and workers at companies that do not provide health insurance are at a great disadvantage. The President also believes Congress should fix the tax code to raise the limit on tax-free contributions to HSAs. In addition, the President has proposed a refundable tax credit to help low-income Americans purchase health coverage on the individual market. Under his proposal, low-income families can receive up to $3,000 in a refundable tax credit to purchase HSA-qualified insurance.
Health Insurers Should Be Allowed To Sell Portable HSA Policies Nationwide. Today, the savings in health accounts are portable, allowing savings accounts to be taken from job to job. However, the health insurance within HSAs is often not portable because of outdated laws and practices that prevent insurers from offering portable policies.
The President Calls On Congress To Move Bills That Improve Tax-Free Health Savings Accounts. These bills will end many of the biases in the tax code, provide a tax credit of up to $3,000 for low-income families, and make HSAs more attractive to millions of Americans.

2. Increase Transparency. To get the best quality care for the best price, patients need to know in advance what their medical options are, the quality and expertise of doctors and hospitals in their area, and what their medical procedure will cost. HHS Secretary Michael Leavitt is encouraging leaders in the health care industry to post their "walk-in" prices to all patients, and the President has directed HHS to make data on Medicare's price and quality publicly available on the Internet. The Administration is also asking insurance companies to increase health care transparency by providing their negotiated prices and quality information to their enrollees – and the Federal government will do the same.

To Help Spur This Transparency Revolution, The Administration Will Require Transparency From Insurance Plans Participating In Federal Programs. Beginning this year, the Federal Employees Benefits program and the military's Tricare system are asking contractors to provide price and quality information. The President is also asking hospitals and insurers to make information on prices and quality available to all patients, increasing transparency without the need for legislation from Congress to require transparency by law.

3. Apply Modern Information Technology. Too many doctors' offices and hospitals have the most advanced technology of the 21st century but still use last century's filing systems for managing medical records. A nationwide information network will protect the privacy of a patient's medical information while making health information available in real-time. We are making good progress toward the President's goal that most Americans have an electronic health record by 2014.

4. Enact Association Health Plans (AHPs). Unlike big businesses, small companies cannot negotiate lower health-insurance rates because they cannot spread their risk over a large pool of employees. AHPs would allow small firms to band together across state lines and buy insurance at the same discounts available to big companies. The House has approved AHP legislation four times during the President's Administration, and it is now time for the Senate to pass legislation that makes health insurance more affordable for small businesses.

5. Enact Medical Liability Reform. The glut of frivolous lawsuits are driving good doctors out of practice and driving up costs by forcing many doctors to practice defensive medicine – ordering unnecessary tests and writing unnecessary prescriptions. The total cost of defensive medicine to our society is an estimated $60 billion to $100 billion per year, including $28 billion billed directly to taxpayers through increased costs of Medicare, Medicaid, VA, and other Federal health programs. Junk lawsuits are a national issue requiring a national response. The House has passed a good medical liability reform bill, and it is time for the Senate to act.

# # #

How to Get Your Health-Care Coverage

2006-02-04T00:03:00.000-05:00

From Business Week

Not getting health insurance through your employer? Here are some tips on alternative methods to help you lower the expense

In his Jan. 31 State of the Union address, one of the items on President Bush's lengthy wish list was improved access to health care for all Americans. But like the other lofty goals set out in the speech, that would be no small trick (see BW Online, 2/1/06, "Bush's Health-Care Scheme Needs a Dr.") The world's largest health-care system is unwieldy, and notoriously slow to incorporate technologies and innovations that could make it better, especially the antiquated back-office practices of many health-care providers that add so much to the cost of care.

And rapidly rising health-care costs present a vexing problem, making it ever more difficult for many Americans to get insurance. According to the Census Bureau, in 2004 45.8 million Americans (15.7% of the population) lacked health insurance.

STAY INSURED. It's not just the less well off. Too many people lack coverage for them to all fall within any one demographic or earnings range. Even affluent Americans can find themselves without a net, perhaps when they leave a large organization to start a new business or seek early retirement before they qualify for Medicare.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) program provides an insurance option for 18 months or more after leaving a job, but premiums can be expensive and stints between jobs with benefits can last longer. Letting insurance expire isn't an attractive option either. Among other problems, it can make subsequent attempts to enroll more difficult. Carolyn McCalahan, a Jacksonville (Fla.)-based doctor and financial adviser, says, "The day people let their insurance lapse is when they break an ankle."

Especially for the young and healthy, the prospect of ducking premiums (perhaps vowing to spend a portion of the savings on healthy living) and going without any sort of coverage might be a tempting option. By all accounts it's not a good idea. So, in the interest of keeping our readers healthy, Five for the Money offers strategies for getting health insurance -- or at least lowering health-care costs -- to those working without a net.

1. Buy insurance through Sam's Club. Wal-Mart Stores (WMT ) has taken heat for not providing enough of its hourly employees with health coverage, but a program offered through its Sam's Club warehouse stores could potentially change how Americans buy insurance. Sam's Club members -- the people who pay to shop at the cavernous discount stores -- can now also buy their health insurance through the retailer.

Offered with Salt Lake City benefit management outfit Extend Benefits Group, the program is designed to allow Sam's Club members to choose between plans based on their family's needs and budget. For example, a 30-year-old man in Los Angeles could choose from more than 40 plans with monthly premiums ranging from $50 to about $400.

Employers can also sign up to get their employees into the program. A Sam's Club spokesman declined to say how many people have signed up for health insurance since the program kicked off in early January, but the store says it has 46 million members.

2. Use a Health Savings Account. For those who can afford it, combining a Health Savings Account (HSA) into medical costs can be an attractive option. Signed into law by President Bush in 2003, the accounts enable people to set aside funds, tax free, to be used for future health care.

The money can also be used to fund retirement. The accounts must be paired with an eligible "high-deductible health plan," according to the Treasury Dept.

Because they are often coupled with relatively inexpensive insurance policies, HSA users can save money, "especially if they're healthy," says financial adviser Donald Whalen of Alpharetta, Ga. The program provides protection from the costs associated with disastrous medical problems, but not, typically, a family's routine medical expenses. "Insurance is supposed to protect you against catastrophes, it's not supposed to subsidize your doctor's visits," Whalen adds.

3. Work part-time. In addition to placing enormous burdens on individuals, the price of health insurance has forced many employers to reel in their offerings. Nonetheless, part-time employees at a few companies qualify for attractive benefits. For example, Starbucks (SBUX ) employees who clock at least 20 hours a week are eligible for health insurance.

Start slinging lattes and you'll also be eligible for a 401(k) and stock options. These days, that looks like a bona fide retirement plan, particularly by the flinty standards of the service sector. For many freelancers, the part-time jobs can also be an attractive option because they often offer a degree of flexibility along with the benefits.

4. Find an independent insurance broker. If you're too busy for a part-time job, there are still other avenues available. Whalen says the uninsured often flock to Web sites such as eHealthInsurance.com and INSweb.com, which allow consumers to compare the offerings of different private health insurers. He says it may be smarter to meet with an independent broker first.

"Being turned down for health insurance is kind of like being declined for credit," Whalen says, in that it can affect how future potential insurers will evaluate you. "It's much better to have someone work with you from the start," to ensure a good fit. He suggests starting the search with the National Association of Health Underwriters, which represents brokers and offers listings on its Web site.

5. Broaden your search. Large employers aren't the only ones offering group plans. A surprising number of professional and independent organizations offer health insurance. In a search for insurance options it's a good idea to check with bar associations, chambers of commerce, and similar groups. A Brooklyn (N.Y.)-based group called Working Today offers a health insurance program to qualifying freelancers.

In addition to these outfits, states offer health insurance of widely divergent price and quality. Financial advisers say that in some cases it's a last resort for those rejected by private insurers, but other states have made an effort to provide more attractive packages. Maine, for example, has instituted Dirigo Health, a program designed to provide coverage to everyone in the state, using mechanisms like subsidized premiums to include those in lower income brackets.

Tom Rogers, a financial adviser based in Portland, Me., says the Dirigo program has been only "partially successful" as it smoothes out growing pains, but has nonetheless provided a model that other states may follow. As the ranks of the uninsured grow, the expansion of public and private plan options may be the best medicine.

Hillary Clinton Revives Hillarycare, Opposes HSAs

2006-01-24T00:52:00.000-05:00

Monday, Jan. 23, 2006 11:20 p.m. EST

From NewsMax.com

Sen. Hillary Clinton is reviving her disastrous health care reform crusade, saying she intends to "fix" President Bush's Medicare prescription drug plan, then adding: "I'm determined to do the same with access to affordable health care as well."

In an email sent to supporters on Monday, the former first lady blasts Bush's proposal for private health savings accounts, warning: "Just as they did with their Medicare Drug bill, the Bush Administration is putting the special interests first and wishing everybody else the best of luck."

Clinton declared that she knows a thing or two about the subject at hand, reminding: "Now, I've had some experience with health care. I know that making health care more accessible for every American family will not be easy."

Then, in rhetoric that could have been lifted from her 1994 Hillarycare campaign, Mrs. Clinton complained:

"There are now over 45 million uninsured Americans. There are over 13 million uninsured children . . . Premiums are rising at over twice the rate of inflation and the number of employers offering coverage is dropping."

In another Hillarycare flashback, Mrs. Clinton tells her supporters: "This is a national crisis and a flat-out moral failing."

The top Democrat announced that she's "hosting a roundtable on health care this week in Rochester, New York -- the first in a series" - and asked her supporters to email her office with their own health care horror stories.

Hillary concludes her health care missive by declaring: "We need to make sure all Americans and their representatives know the truth about how our present health care policies are impacting you and your family."

You'll get better health care when you foot your own bill

2006-01-22T17:06:00.000-05:00

Andrew Carroll
The Arizona Republic

Family Medicine Specialist
Jan. 22, 2006 12:00 AM

Health insurance was invented as a health benefit that employers could offer employees as an incentive to hire on. The theory was that healthy employees would be consistent employees, and the health of their families would be ensured.

Much more today, we see health insurance as a burden, not only to employers but to employees, families, doctors and society.

The rise in health insurance premiums has far outpaced inflation, and yet the health care delivered is no more comprehensive, and likely less so, than even just a few years back.

General Motors used health insurance as a major bargaining chip with the United Auto Workers group recently in its contract negotiations. The union relented and allowed the sweeping changes. However, GM still will pink-slip 30,000 employees.

From a doctor's point of view, we could see it coming. The drive toward technological health care delivery and increased active longevity comes at a high price: research dollars for new scanners, new medications, new chemotherapy agents, and availability of highly subspecialized physicians.

And yet the obesity rate continues to rise and, subsequently, the rate of diabetes, hypertension and heart disease. Cigarette smoking is still at a 20 percent rate in the United States. As we move to being less of a manufacturing society and more of an information-based technological society, our sedentary lifestyles are becoming a huge burden on the system.

Insurance is the great equalizer for patients. For one co-payment, you can see a physician straight out of medical school or a university professor in practice 25 years with a stellar bedside manner. A physician who has been sued 20 times (though less likely to be credentialed with an insurer) with an awful bedside manner will make the same amount of money as a respected pediatric neurosurgeon for an evaluation and management visit. The insurance companies pay them both the same. A standard visit with those doctors will pay about $50 on average. How fair is that?

Patients will continue to see benefits decline for the benefit of insurance company shareholders. They profit at your loss. In my opinion, shareholder-owned for-profit health insurance runs counter to any notion that health care is a public good.

There's only one solution for the system, and that is coming slowly but surely. You will begin to spend your own money for health care.

Health Savings Accounts allow patients to store money, much like an IRA, for use in health care. To make this system work well, though, doctors and patients need to learn what health care really costs. And that's what makes this system much more viable in the long term.

I think the key to this change, though, will be balance billing, which will allow physicians and hospitals to bill above contract rates. This will allow the better and more patient-friendly doctors to bill what they're actually worth. Providers will compete for your business, both from a price and quality-of-care delivery standpoint.

Why is this better? For one, it will help reduce your or your company's premium. It will reduce intervention from the insurance company, like prior authorizations, because it's your money.

It will force doctors to become much more cognizant of the costs of health care because they will no longer be spending big corporation money in your workup, they will be spending yours.

And finally, you, the patient, will become much more involved in your health care because it's coming out of your pocket. Because it's your money, doctors will be much less likely to practice "defensive medicine" and more likely to discuss at length the merits of their workup plan and options.

You will become intimately involved in the decision-making about whether to have a CAT scan done, or an MRI, or a colonoscopy, or picking a brand name vs. a generic medication.

And when you become involved, you're more likely to demand better pricing, better evidence and better behavior from the people that deliver health care to you.

Including the doctors.

Dr. Andrew Carroll is a family medicine specialist in private practice in Chandler. He is also clinical assistant professor at the University of Arizona College of Medicine and a regular guest on "Sonoran Living Live."

Attorney General Cautions Floridians Against Flood-Damaged Vehicles

2006-01-20T20:56:00.000-05:00

January 18, 2006

Attorney General Charlie Crist has issued a consumer alert cautioning Floridians against buying used vehicles that may have been flood-damaged by Hurricanes Katrina, Rita and Wilma. As many as 600,000 vehicles throughout Louisiana, Mississippi, Alabama and Florida may have been affected by the storms and are now being shipped to other states by auto wholesalers.

A flooded car is the personal property of the owner and it is not illegal to sell it, but both the buyer and the seller should be aware that the car has been flooded. Some sellers may try to scam the buyer by concealing the car's water damage, and the buyer would end up with a car that has serious problems caused by the flood water.

"Citizens should be extra careful when buying an automobile, especially a used car," said Crist. "By concealing the damage, unethical individuals can pass a car off as a good bargain, when in fact it is nothing more than a water-soaked lemon. If a deal seems too good to be true, it probably is."

Safety is one of the primary concerns when buying a flood-damaged car. An unsuspecting buyer could be stuck with a car that does not function properly and could place them and their loved ones in serious danger.

Common problems with flood cars include engines, anti-lock brake systems and airbag systems that may malfunction, ruined electrical components and mold and mildew throughout the air conditioner and heating systems.

Several services are available for consumers and auto dealers to check Vehicle Identification Numbers to help determine if a particular vehicle has a flood-damage record. The National Insurance Crime Bureau has compiled a database of vehicles affected by the hurricanes, which can be searched by the public free of charge. The database is available at www.nicb.org. Carfax is also helping protect unsuspecting buyers by making all of its flood information available to consumers and dealers free of charge at www.carfax.com/flood.

Crist said consumers and dealers should be wary of someone trying to sell a car for well below the retail value. One obvious sign is a moldy smell from the seats and carpeting, although determined ripoff artists can conceal this through new carpeting and interior components. Sand, silt and salt under the carpeting is another indication that the car may be a flood car. Buyers should also check the engine compartment, trunk, and inner doors for silt and be aware of any electrical problems that recur or change on a daily basis.

Ohio Business Groups Push for Workers' Comp Reforms

2006-01-20T20:55:00.000-05:00

January 19, 2006

Business groups in Ohio are pushing lawmakers to enact reforms to the state insurance fund for injured workers that were agreed upon before a scandal broke over the fund's investments, according to a recent account by the Associated Press.

The scandal involved the removal of the agency's longtime administrator, an overhaul of the agency's investment policy and indirectly to the conviction of Ohio Gov. Bob Taft on ethics charges related to gifts he did not report as required under state law.

The Ohio Chamber of Commerce, the Ohio Council of Retail Merchants and the state chapter of the National Federation of Independent Business were among the business groups scheduled to meet with Republican lawmakers Wednesday about the bill. The Ohio Farm Bureau and the Ohio Manufacturers' Association also plan to meet with House and Senate GOP lawmakers who pushed the original reforms.

In June of 2005 a reform package was passed by Senate, just as the scandal including $300 million in investment losses heated up.

In response, lawmakers expanded the agency's oversight committee to include investment experts as part of the state budget approved last summer. Other bills aimed at the investment policies are working their way through the Legislature.

The bill business groups are pushing would reduce the period that workers can file claims for wages lost from on-the-job injuries and claims for medical payments. The legislation would also eliminate some payments for loss of limb. For instance, a worker who loses a leg can also file a claim for loss of a foot. The bill would count both as one limb.

Labor groups and attorneys representing injured workers had decided not to challenge the original bill, but now say it shouldn't go anywhere until the scandal is resolved.

The Ohio Trial Attorneys have said that the agency needs to improve, based the scandel charges. Rep. Stephen Buehrer, sponsor of the legislation, countered that the bill he is sponsoring is "about benefits, not investments."

Source: Bureau of Workers' Compensation

Millions Of Young Adults Forgo Health Insurance

2006-01-18T11:05:00.000-05:00

NEW YORK -- In 2003, more than 13 million young adults lived without health insurance -- a decision that could lead to serious consequences later in life.

NBC News reported the combination of expensive health insurance and low entry-level wages force many people to go without insurance. Further, most young people are healthy and don't see the need for health insurance.

"Even though this is the lowest-cost coverage that they're going to face in their careers, it's still high relative to their incomes," said William Custer, a professor of risk management and insurance at Georgia State University.

Custer added, "If they don't feel they're going to need health care, they don't feel they're going to need health insurance."

But that could mean serious health and financial problems in the future.

"I'm afraid our society is playing Russian roulette when young adults go without health insurance," said Joel Miller, senior vice president for operations at the National Coalition on Healthcare. "They deny needed care ... and it increases out-of-pocket expenses for them and their families."

Experts said families should search the Internet for health insurance providers that offer plans specifically designed for young adults.

"Some plans are coming around to the fact that this is the fastest- and largest-growing population of the uninsured population -- they're trying to market some different plans," Miller said.

At the very least, experts advise healthy young adults to carry catastrophic insurance. The plan may require a high deductible with limited or no routine medical coverage, but it will cover serious accidents or illnesses.

"Having a catastrophic plan, even with a large deductible, may mean this individual will have access to health care that can save their life," Custer said.

As with any large purchase, families need to do their research and find the policy that best fits the lifestyle for the young adult in their life.

State-subsidized House insurance changes coming

2006-01-18T11:03:00.000-05:00

By Lesley Stedman Weidenbener
The Courier-Journal

INDIANAPOLIS — House Speaker Brian Bosma said yesterday that, starting next year, he is ending state-subsidized, lifetime health insurance for any House members who leave the body.

The change won't affect the 25 former lawmakers and spouses already taking advantage of the benefit. They get health insurance at the same price — or in some cases an even lower one — than current state employees pay, even if they are eligible for Medicare.

And it will allow members of the House with more than six years of service to retire after their current term and still take advantage of the benefit.

But those elected in November and thereafter — even if they're now serving — will have to pay the full cost with no state subsidy to remain part of the state health-insurance plan when they retire, and then only until they are eligible for Medicare.

That's expected to cause some members to rethink whether to run for re-election in November or retire now to take the insurance.

Rep. Dave Crooks, D-Washington, said there might be a "mass exodus" of lawmakers who decide the retirement deal is too good to pass up.

"If you do the math, it adds up," Crooks said. "It's probably more valuable than any income that legislator may have made in their years of service."

Bosma acknowledged that could happen. But he said he believes members are not serving for the pay or benefits.

"They're here to serve the public, and I do not believe that putting this benefit back where it should be will change that dedication," he said.

Bosma said he has been "uncomfortable" for some time with the insurance program, which was authorized by a series of provisions slipped quietly into bills in 2001 and 2002 and then instituted by former House Speaker John Gregg, D-Sandborn, and Senate President Pro Tem Robert Garton, R-Columbus.

But he didn't want to revoke it for members serving now.

"While I disagree with the current benefit, it was in place when each of us ran for our office in 2004, and is part of the contract between the voter and their elected officials, whether the voter realized it or not," Bosma wrote in a letter distributed to members yesterday.

The program allowed any member retiring with at least six years and one day of service to lock in relatively modest health-insurance rates for the rest of their lives.

Essentially, they would continue to pay the same percentage of the total health-care premium that they did when they were lawmakers. The state would pick up the remaining costs.

This year lawmakers — just like state employees — can choose among health-insurance plans that have a total cost of between $3,826 and $14,511 annually, depending on the amount of coverage they choose and the number of family members covered.

The recipient's share of that total premium can be no higher than 24percent, depending on the plan, with the state picking up at least 76percent, according to the Legislative Services Agency. One plan requires no payment from a lawmaker or employee.

Retired lawmakers (or their surviving spouses) have simply continued to pay the same percentage of the total state premium as when they were actively serving.

The state's share of the current retired lawmakers' insurance premiums costs about $300,000 annually.

Senate President Pro Tem Robert Garton, R-Columbus, also has been looking into the issue. But he hasn't announced any changes for current or former members of his chamber.

Bosma voted for the bills that authorized the speaker and president pro tem to put the subsidized health insurance in place. So did the vast majority of lawmakers.

But in 2004 several Republican candidates for the House used the issue against the Democratic incumbents they were trying to unseat.

Rep. Billy Bright, R-North Vernon, who that year defeated Democrat Markt Lytle of Madison, was one of them.

Yesterday he called Bosma's decision "courageous."

"It was the right thing to do," Bright said.

Rep. Troy Woodruff, R-Vincennes, introduced legislation this year to do away with the health-insurance program, even for the former retirees now using it. Woodruff used the insurance issue in his campaign in 2004 when he defeated Democratic incumbent John Frenz.

Yesterday Bosma said that the legislation probably is not necessary now. However, a future speaker could decide to change Bosma's policy.

Several members said the change will cause them to think about quitting.

Crooks, who owns radio stations in Daviess County, said he will have to evaluate it.

"You'd be foolish not to take a close look at it because of the cost of insurance and the availability of it, and I still have two very young children," Crooks said. "It would be irresponsible not to consider it."

Rep. Bill Cochran, D-New Albany, said he believes the decision will affect the re-election decisions of some lawmakers. But he added that he won't be among them.

"That wouldn't be the reason I'd decide not to run," he said.

House Minority Whip Dennie Oxley, D-English, also said the change won't affect his decision to run again. He said he doubted it would affect many other members.

"A mass exodus?" Oxley said. "I haven't heard of anything like that."

Health Plan to aid farmers

2006-01-18T11:01:00.000-05:00

Cargill AgHorizons will hold a teleconference 7 p.m. Thursday at the Sheraton Hotel in Sioux Falls to introduce a new way for farm families to to pay for health care expenses and save for the future.

The plan, called Harvest Health, combines a health saving account provided by Wells Fargo with funding for the account provided by Cargill. The plan gives farm families the opportunity to more closely manage their own health care spending, control their health insurance premiums and set aside tax-favored dollars for future medical expenses.

Health Insurance for One

2006-01-16T19:36:00.000-05:00

By Morgan Kelly
Staff writer

Without an employer to cushion the blow, the price of individual health insurance can hit an independent buyer rather hard.

“If all of us had to have it, we’d probably be lucky to get it for a couple thousand a month,” said Debbie Kimble of Charleston’s Peanut Shoppe. Fortunately, the store’s three employees — all family — get coverage through spouses or the government.

“Anytime you have to put an extra $2,000 out, it’ll be harder,” she said. “But that’s when you tighten up your belt and cut back somewhere else.”

Although independently sought policies do not fall into most people’s view of reasonable, the average person can buy health coverage without breaking the bank as long as they can part with the usual workplace benefits, insurance experts say.

“If you’re young, the premiums can be relatively modest, but you’re talking about the deductibles in that market being $1,000 sometimes,” said Gary Claxton, director of the Kaiser Family Foundation’s Health Care Marketplace Project.

“You’re not going to get what most of us call a good policy for not a whole lot of money, but you can avoid making mistakes.”

First of all, avoid being roped in by your own health problems, Claxton said. Some insurers won’t sell to people who are already sick. Even if you do manage to secure a policy, there are several ways you can still be left uncovered when you can least afford it.

In West Virginia, insurers can set your premiums based on your health by 30 percent more or less than the standard cost, said Jessica Waltman, director of health policy research for the National Association of Health Underwriters, or NAHU, an insurance trade group.

“The rate you see online is the best-case-scenario rate,” she said.

Companies can also look at your health for the last year and refuse to cover conditions you had before applying for the policy, or pre-existing conditions, Waltman said. These conditions can go on for up to two years.

The point, of course, is to keep people from getting insurance just because they are sick, Waltman said.

But these exclusions can be somewhat arbitrary, said Trudy Lieberman, director of the Center for Consumer Health Choices, part of Consumers Union, which publishes the magazine “Consumer Reports.” A case of asthma could lead an insurer to deny all claims involving respiratory illnesses.

“These can be very minor problems, but you’re still not wanted by insurance providers,” Lieberman said. People looking for a policy should contact a broker who represents more than one company to get a good variety of choices.

The point of group- or work-based insurance is to spread the cost out over a large group of people, Waltman said. The larger the group, the less everyone pays (more or less the principle behind national health coverage). The idea is that if someone gets sick, there will be money flowing in to cover that person’s health needs.

On the other hand, when a single person or a small family gets a policy, the risk of illness shoots up while the chance of having enough cash to cover your health expenses goes down. Therefore, the policy costs more, Waltman said.

Plans employers buy — particularly those with good benefits — are more expensive than the average individual plan, but the employer fronts a lot of the cost, she said.

“It’s not that the [individual insurance] costs more. It’s just what people are used to paying out of pocket themselves,” she said. “Medical costs are still the same. Most people don’t realize what employers were paying for them.”

Until they try to pay for that policy themselves, that is. The Consolidated Omnibus Budget Reconciliation Act, or COBRA, lets people stay on a company’s insurance plan for a year and a half as long as they pay the premium themselves. Premiums can increase by several thousand dollars.

“COBRA is really a rock and a hard place,” Claxton said. “It’s usually too expensive, but it’s good coverage.”

Employees who opt for COBRA can eventually buy an individual policy without worrying about pre-existing conditions, their age or their health, Lieberman said. But you have to stay with your COBRA policy to the very end of its life. You could lose thousands before you start to save anything.

More people are being pushed into the private market as health-care costs skyrocket and employers trim back on health benefits, she said. For older employees, this can mean the inevitable ailments of age become a huge problem, Lieberman said. “The individual market is a pretty dark place.”

As the only employee of Charleston’s Shear Cut barbershop, John Ciampanella would need individual health coverage if not for his wife’s work-based insurance. (In West Virginia, a small business, for insurance purposes, means two to 50 employees, according to NAHU’s Web site.)

With his diabetes, he would be a tough sell to an insurance company.

“If you’ve got diabetes, no insurance company will take you on,” he said. “If I didn’t have [my wife’s insurance] I’d probably be up there standing in line for free shots.”

West Virginians who have been turned down for insurance because of chronic problems like diabetes can join AccessWV. Known as a “high-risk pool,” the rates and deductibles are a tad higher than the state average because mostly everyone in the plan is sick.

For instance, if the average rate is $100, the AccessWV rate would be $125, Waltman said.

On the opposite spectrum, people in good health could consider a health savings account. People going this route buy a cheap policy with a high deductible ($1,000 to $2,700 for individuals), Waltman said. Each year, the account holder can deposit money into the account up to the amount of the deductible.

The theory is that you’ll have a lot of money saved for medical care if you want it or need it. Unfortunately, it really only works if you never get sick, Lieberman said.

“They’re a gamble,” she said. “How many people can say they’ll never get sick? We don’t know.”

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2006-01-15T23:20:00.000-05:00

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Do Authorities Smell a Rat? Mouse Blamed for Burning Down N.M. House

2006-01-14T13:15:00.000-05:00

January 11, 2006

What sounded a little too good to be true may be just that. Could a mouse on fire be responsible for destroying a New Mexico man's house as first reported over the weekend?

According to KOAT-TV, the story may have more holes in it than a piece of cheese.

An 81-year-old Fort Sumner resident first reported that he had captured a mouse inside his home over the weekend. He then reportedly took the unwanted guest out into a pile of burning refuse and disposed of it. The man then reported that the mouse, on fire, scurried back into the home and found its way into a window area. From there, the mouse reportedly set fire to the home.

When firefighters arrived, the man, who reportedly did not have insurance on the home, was trying to douse the fire with a garden hose. The property was destroyed, but the man escaped injury.

Officials now believe that winds from the refuse fire outside may have spread to the home and ignited the house fire instead of the unwanted guest.

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U.S. Rep. Taylor Joins Lawsuit Against Mississippi Insurer

2006-01-14T13:13:00.000-05:00

January 11, 2006

U.S. Rep. Gene Taylor, D-Miss., has joined the thousands of Mississippians suing State Farm Fire & Casualty Co., challenging the insurance company's refusal to cover property losses resulting from Hurricane Katrina.

Taylor's lawsuit comes less than a month after U.S. Sen. Trent Lott, R-Miss., filed a suit against State Farm. Both Taylor and Lott are represented by Lott's brother-in-law, attorney Richard "Dickie" Scruggs.

Taylor and his wife, Margaret, seek an insurance settlement on their waterfront home in Bay St. Louis. Lott wants a State Farm settlement on his Pascagoula home. Both homes were destroyed on Aug. 29.

"State Farm said (Taylor) had no wind damage," said Beau Jex, Taylor's chief of staff. "It makes you wonder, because all he had left was slab ... it went from a two story home to a slab."

Taylor had lived in the house since 1978 and was insured through State Farm for about 20 years.

Scruggs, best known for his success in taking on tobacco companies, is pursuing a court ruling requiring major insurance companies operating in Mississippi to pay for all damages from the hurricane.

The lawsuit is part of a continuing wind-versus-water-damage debate between insurance companies and policy holders on the coast. The battle has become a personal one for Scruggs.

"Given the fact that I grew up down there, and I raised my family down there, and I lost my home down there and all my neighbors were wiped out not only by Hurricane Katrina, but by hurricane insurance, yeah, it's damn personal," Scruggs said. "I'm very appalled at the corporate culture of the insurers trying to dodge their responsibilities."

A group of law firms have agreed to work together as the Coast Katrina Group. The organization's goal is to assist people who have lost their homes to Katrina and have had their insurance claims denied, Scruggs said.

The number of Mississippi households suing insurance companies continues to grow each day.

"It changes every hour, in terms of the number of people being denied," Scruggs said. "But it's in the range of 3,000 families."

State Farm has become the target of many of the lawsuits, because it is one of the largest and because many policy holders in Mississippi had purchased the standard policy and an additional hurricane endorsement, Scruggs said.

The issue is whether a storm surge should be considered flooding, in which case thousands of hurricane victims would be left struggling to recover from the losses of their homes without help from their insurance providers.

Insurance companies say they shouldn't have to pay for water damage for insurance holders who did not have flood policies. Scruggs insists the damage caused by storm surge cannot be defined as flooding.

State Farm declined to comment on the specifics of the lawsuit.

"Regarding Representative Taylor, there is no question Katrina caused horrific damage in Mississippi and elsewhere along the Gulf Coast," said State Farm spokesman Fraser Engerman. "We cannot comment on this litigation. We handle each claim on its own merits, and we pay what we owe based on our contract with the policy holder."

Gov. Haley Barbour has said he prefers to negotiate with insurance companies, saying lawsuits could force the companies out of Mississippi.

But state Attorney General Jim Hood, who filed a lawsuit on behalf of Mississippians with standard homeowner's policies, says the companies should cover hurricane damage whether the loss is from wind damage or a storm surge. Hood says damages could cost billions.

Scruggs, who also lost his Pascagoula home, has promised to use his clout to get insurance companies to pay up.

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Personal Lines Doing Fine, Even Without Price Changes, Suggest P&C Analysts

2006-01-14T13:10:00.000-05:00

By Andrew G. Simpson, Jr.
January 11, 2006

The year 2005 is looking like it was a relatively good one with solid financial news for property casualty insurers overall, despite record catastrophe losses, and 2006 could bring even better news, according to analysts at a recent New York meeting of executives.

The analysts said that the good news is most apparent in personal lines, where it appears insurers have refrained from typical cyclical behavior of cutting prices to build market share.

For the year just ended, property casualty insurers are likely to show a slight underwriting profit, with a combined ratio around 99. Insurer stocks outperformed the Standard & Poor's 500 by 10 percent, with only utilities and energy coming in better.

According to Franklin Nutter, president, Reinsurance Association of America, results like this made 2005 a "remarkable" year and 2006 looks to be just as remarkable. According to a poll of analysts, there should be another underwriting profit in 2006. Credit Suisse Boston is projecting a return for the property casualty industry in 2006 of 15 percent.

Nutter was among the experts at the annual Property Casualty Joint Industry Forum sponsored by the Insurance Information Institute who wondered how long the good news in personal lines will continue.

"We're in a spot now and for whatever reason, and I think people are smarter about their business and have more data, people are saying, 'We can't grow by cutting prices,'" noted Brian Sullivan, publisher of Auto Insurance Report and Property Insurance Report. So instead they are saying, "let's not do anything," continued Sullivan, who termed 2005 as a "let's not do anything year" when insurers decided to just keep making money.

"It's a very unusual marketplace in personal lines," the noted personal lines authority added.

While he thinks it may not be as profitable as surface numbers suggest, personal lines, particularly auto, is still a good place for insurers right now, according to stock analyst V.J. Dowling.

Auto is seeing returns of 15 percent, he said, not because rates are going up or because settlement costs are going down but because accident frequency is down.

"As long as that keeps happening, results will be stronger than anticipated but at some point you can't keep having fewer and fewer accidents and things will turn," predicted Dowling, whose firm, Dowling & Partners Securities LLC, in Hartford, specializes in property casualty stocks.

Companies may have stopped cutting personal lines prices but that does not mean that the cycle is dead, warned another analyst. "The key is not to get too intoxicated by the good times," said David Schiff, editor of Schiff's Insurance Observer. Schiff stressed that while cycles may be longer and less predictable, they still exist.

Standard & Poor's chief quality officer, Mark Puccia, along with Sullivan and others note that stagnant investment income and the hurricanes kept the pressure on insurers to maintain rather than reduce personal lines prices in 2005.

The analysts also credit insurers' use of better underwriting tools and risk information for the underwriting results in personal lines. "Progressive has more underwriting cells in some states than there are people," commented Sullivan.

History suggests that in a soft market there may be mergers in the agency ranks but Dowling questioned whether there would be much consolidation activity among carriers in the coming year. "Nobody's getting out with 15 percent return on equity," the stock expert said.

S&P's Puccia agreed, maintaining that there are not many "white elephants" in personal lines today that are looking to be bought out and that insurers in personal lines now want to stay in.

Sullivan suggested that mergers don't make as much sense as they did years ago. Today, insurers can grow by simply winning over business from weaker competitors that lack the skills and market presence to compete.

"One of the key factors in personal lines is a lot of companies have recognized that it's more profitable and possible to grow by just taking customers from those 'weak sisters,'" Sullivan said.

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NAMIC Warns Regulators All-Perils Policy Could Worsen CAT Problems

2006-01-12T09:04:00.000-05:00

A "Natural Catastrophe Risk Plan" drafted by the National Association of Insurance Commissioners has the potential to "damage private insurance markets and exacerbate the very problems it seeks to correct," warned the National Association of Mutual Insurance Companies in comments submitted to the NAIC over the weekend.

NAMIC's largest member company is Bloomington, Illinois-based State Farm Insurance Company was recently sued in a Hurricane Katrina related class action suit by policyholders who have purchased an all-perils policy that excludes flooding, according to a recent Insurance Journal story.

However, the NAIC plan is not the same all-perils policy currently offered by many insurance companies. NAIC in its Cat Plan proposal would offer an all-perils policy that have only one exclusion "war," and this policy would be offered to every policyholder across the country. The proposal was a controversial agenda item, debated extensively at the public hearing held in Chicago during the NAIC Meeting in early December.

The Indianapolis-based national insurance trade association submitted its comments in direct response to the NAIC's plan, embodied in a 10-page white paper that the organization released just days before its December meeting.

The NAIC plan calls for the creation of a multi-layered system of risk-bearing capacity to finance losses due to large-scale natural disasters. The first layer of protection, provided by the private insurance industry, would be backstopped by a second layer consisting of a network of state and regional catastrophe reinsurance funds. The second layer would be backstopped by a third layer, consisting of a federally-funded reinsurance program to be administered by a new federal agency.

A central feature of the plan is a provision that would require property insurers to sell, on a nationwide basis, an "all-perils" homeowners policy "containing no exclusions except for acts of war." NAMIC's comment stresses that the plan fails to disclose whether the price of the policy would be determined by market forces or by government fiat.

"If the latter," said NAMIC Public Policy Director Robert Detlefsen, "coverage for property owners in high-risk regions would likely be subsidized by property owners in low-risk regions."

NAMIC's comment identifies three negative consequences that would ensue if insurers were compelled to offer all-perils coverage at prices suppressed through regulation:

*Unless all homeowners are required to purchase an identical all-perils policy, the plan will lead to adverse selection. An all-perils policy whose price does not reflect the greater risk associated with particular perils in particular regions will attract a disproportionately large number of high-risk buyers and a disproportionately small number of low-risk buyers, thus increasing the likelihood that losses will outstrip private sector capacity and trigger recourse to the taxpayer-funded reinsurance mechanisms envisioned by the plan.

*If, on the other hand, all homeowners are required to purchase an all-perils policy, the plan will be unfair to policyholders who choose not to live in high-risk areas.

*The plan would increase the potential loss costs from natural disasters by decreasing incentives for risk mitigation and aggravating moral hazard. For some individuals, the optimal risk mitigation strategy may be to avoid owning property in certain regions altogether. A plan that combines mandatory coverage, cross-subsidies through price suppression, and taxpayer-funded government reinsurance will ultimately discourage risk mitigation. Moreover, if premiums in high-risk areas are artificially low to begin with, providing mandatory discounts and tax credits to policyholders who invest in risk mitigation measures could actually make matters worse.

"Instead of using regulation to force insurers to offer comprehensive homeowners coverage, NAMIC urges policymakers to consider removing government barriers that prevent insurers from offering such coverage voluntarily," said Detlefsen. These include insurers' inability to create dedicated tax-deferred catastrophe reserves, as well as "the current system of government price controls that prevents insurers from pricing coverage based on risk."

NAMIC's comment acknowledges that in high-risk areas, the risk-based price that insurers would need to charge for comprehensive coverage may prove unaffordable for some property owners. In such cases, policymakers "could determine which government interventions, if any, are appropriate."

While the NAIC plan represents one possible approach, NAMIC urges that others be considered as well. For example, programs could be created to provide direct financial assistance to individuals whose insurance costs society wishes to subsidize. Such subsidies could be provided on a means-tested basis and would operate much like current government programs that provide food and housing subsidies for low-income individuals.

"There are a variety of potential public and private responses to the problem of managing and financing natural disaster risk," NAMIC's comment concludes. "All are worthy of careful study and deliberation."

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Standard Life chairman to go shortly after flotation

2006-01-11T22:58:00.000-05:00

In an unexpected move, UK life insurer Standard Life is coming to terms with the reality that it will lose its chairman within a year of its flotation on the FTSE 100.

11 Jan 2006, 09:33 GMT - According to reports in the UK press, Standard Life's chairman Sir Brian Stewart has decided to leave his position at the insurer within 12 months of its initial public offering in order to concentrate on his other chairmanship role. Mr Stewart is currently also the chairman of major UK brewer Scottish and Newcastle.

Mr Stewart was expected to give up one of his chairs following Standard's float because holding the chairmanship of two FTSE-listed companies at once is seen as running counter to corporate governance standards.

However, the revelation comes as a shock to the mutual life assurer, which had expected Mr Stewart to give up his brewery chairmanship to stay on at Standard. The company had hoped the experienced boardroom head would guide the company in its fledgling years as a public company.

Furthermore to the management disruption, the revelation of Mr Stewart's departure could also damage Standard Life's share valuation when it floats.

Source: Datamonitor Newswire

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Hybrid Health Insurance

2006-01-11T22:53:00.000-05:00

Nashville (WVLT) - Governor Bredesen says he wants to focus on helping Tennessee's 600,000 uninsured residents once the special legislative session, which begins Tuesday, ends.

Bredesen, who's up for re-election this year, says he envisions developing a type of hybrid health insurance plan.

In it, the working poor, their employers, the state, and possibly the federal government would each kick-in part of the health insurance premiums.

Details of the plan are still being worked out.

The hope is the new plan would be a partner to the state's current TennCare plan.

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Mass. Man's Auto Insurance Fraud Scheme Placed in Park

2006-01-10T23:46:00.000-05:00

January 9, 2006

A Groton, Massachusetts man has pleaded guilty to charges he submitted false documents to an auto insurer to collect insurance money, Attorney General Tom Reilly announced.

Peter Lombardini, 48, of Groton, pleaded guilty Dec. 27 to one count each of motor vehicle insurance fraud and attempted larceny. Middlesex Superior Court Judge Paul Chernoff sentenced him to two years probation and ordered him to pay a $1,000 fine.

Lombardini purchased a 1994 Oldsmobile Achieva on Aug. 10, 2004. He reportedly claimed that on Aug. 20 he left the car at an intersection in Billerica after placing a "for sale" sign in the window.

On Aug. 22, the Billerica Police Department recovered the car at a different location. The car had been burned and completely destroyed. Lombardini filed a police report and a claim with Plymouth Rock Assurance Company.

With the insurance claim, Lombardini reportedly submitted an affidavit for a stolen vehicle stating he had purchased it from an ex-girlfriend for $1,000. He also submitted an invoice from a tire retailer for custom tires and rims totaling $2,189, and a receipt from an auto body shop for $1,400 in bodywork.

The investigation found that Lombardini's submissions to Plymouth were false documents.

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Health care shake-ups on way

2006-01-08T21:55:00.000-05:00

By ANDY MILLER
The Atlanta Journal-Constitution
Published on: 01/08/06

Each year, the surest bets in health care are that medical costs will rise, consumers will pay more for insurance, and the number of people without health coverage will rise.

2006 promises to continue those trends but also bring changes that will mean, in some ways, a fundamental rewrite of Georgia's health care system. Experts predict it will be the biggest year of change for the state's health industry and patients.

The new landscape includes renovations of government insurance programs Medicare and Medicaid, more cost-cutting by employers, scrutiny of state retiree health costs, and a potential turf battle between hospitals and general surgeons.

Perhaps Georgia's most sweeping change will come in April, when the state moves 1 million people covered by the Medicaid insurance program for the poor and disabled into HMOs. The overhaul also affects 200,000 children with PeachCare coverage.

The shift of 1.2 million Georgians into HMOs ''by itself is enormous,'' said consumer health advocate Linda Lowe.

But other new and revised programs will affect how hundreds of thousands more get health care in the state.

The whirlwind of 2006 started with last Sunday's debut of Medicare's biggest revision in its history: offering prescription drug coverage to its beneficiaries.

Many state employees and privately insured workers also face revisions in their health plans this year.

Bill Custer, a health insurance expert at Georgia State University, said the momentous changes of 2006 are a product of many years of health care cost inflation, coupled with a recent economic slowdown.

"Medical providers are feeling squeezed; employers, especially small employers, are feeling the pinch; and a higher percentage of our family budgets is going to health care,'' Custer said.

"As health care costs grow, there are fewer options,'' he said. "I think we'll see more years like this."

Reining in Medicaid

Gov. Sonny Perdue, who pushed the cost-cutting HMO initiative, has called Medicaid's annual spending increases ''unsustainable.''

Under the new Medicaid plan, HMOs will closely monitor patient care by connecting them with primary care doctors.

The switch will be good for patients if they get a regular medical home with a doctor, Lowe said.

But Lowe said she's concerned whether there will be enough doctors in the HMO networks, and whether Medicaid members will get accurate information and help during the transition.

Hospital groups say the state now is pressuring hospitals to join the HMO networks — or receive lower payments for medical services.

Meanwhile, Georgia officials may develop another sweeping proposal to alter the funding formula behind Medicaid, in exchange for more flexibility from federal restrictions in running the program. Medicaid's low-income patients could be required to pay more for doctors' visits and prescriptions, and see some benefits reduced. Other states such as Florida are moving ahead on similar reforms.

"There's a lot of experimentation going on,'' said Christopher Kane, a health care consultant with Tatum Partners in Atlanta. The orientation is, 'Let's try something.' "

Medicaid, jointly financed by the state and federal governments, devours more than 40 percent of new state revenue, and state officials point to that fact as an impetus for the program transformation.

Yet consumer advocate Lowe said much of the Medicaid cost increases come from growing enrollment in the program, and that its per-person medical costs are lower than with private insurance. "Medicaid is a tool for solving our health care issues — it's not a problem,'' Lowe said.

Nevertheless, the Medicaid revolution will test medical providers. "We've got more issues involving Medicaid than any year I've been around,'' said Joe Parker, president of the Georgia Hospital Association. "I don't remember a year like this, with all the significant changes coming.''

Medicaid restructuring and related funding issues will create cash-flow problems for rural hospitals, said Jimmy Lewis, CEO of HomeTown Health, an organization of rural hospitals in Georgia. "This will be a year of seismic changes, without a shadow of a doubt,'' Lewis said.

Troubled transitions

Many seniors will save hundreds of dollars by enrolling in the new Medicare drug benefit. But the change has created confusion for patients and instant bottlenecks at pharmacies.

"Some people are not getting their drugs,'' Buddy Harden, executive vice president of the Georgia Pharmacy Association, said during the benefit's chaotic first week.

Medicare's drug benefit, of course, has been launched across the nation. But another new year change affects about 300,000 Georgians. On Jan. 1, the medical network serving state employees, schoolteachers and retirees came under the control of Minnesota-based insurance giant UnitedHealthcare.

The new contract is expected to save the state $60 million annually. And the state emphasizes the United switch helped keep employee premiums at the same level.

The change in networks, though, created tension in weeks leading up to the rollout. Teachers complained their doctors or local hospitals weren't in the United preferred provider organization, or PPO. Peggy Nielson, a state Board of Education member who has tracked the transition closely, predicted that employees will experience ''a rolling crisis,'' driven especially by confusion over whether their longtime medical providers are in the network.

Barbara Haralson, a Gwinnett County teacher, said her family's physician of 14 years has declined to join the United network. But she and her family, members of the state PPO, have decided to keep seeing that doctor, even though they likely will pay hundreds of dollars more in out-of-pocket costs.

"He knows our family and our health problems,'' Haralson said. "We're very upset. I feel like we're being forced to change our doctor or pay more out of pocket.''

United said it has built a comprehensive network of doctors and that it's still adding physicians. Both the insurer and the state Department of Community Health, which oversees the State Health Benefit Plan, said the transition is going smoothly so far.

Increasing costs

Private employers, meanwhile, are raising their employees' out-of-pocket costs, including deductibles and co-pays, to rein in spending. A growing number of businesses have also introduced high-deductible policies or health savings accounts to shift more responsibility for medical decisions to their workers.

"These plans are a very attractive product to some small employers and workers who don't have access to large group plans,'' said Custer of Georgia State University. But they are not a silver bullet, Custer said, and their impact will be limited.

And both taxpayers and people with private insurance are picking up the tab for increasing numbers of uninsured getting care in hospital emergency rooms, the most expensive medical setting, he added.

Covering retirees

Lurking in the background this year is a financial wild card: the requirement that Georgia, along with other states and local governments, determine its long-term obligations to pay health benefits for retired public employees. The Governmental Accounting Standards Board, a nonprofit organization that writes accounting rules for the public sector, is requiring governments to publicly report that liability.

The state Department of Community Health says it's in the process of calculating Georgia's figure.

Maryland, for example, recently disclosed its retiree liability at $20 billion. States are scrambling to devise ways to meet this liability, including reducing retiree benefits.

Credit-rating agencies say they will watch how governments handle the liability. That's important for Georgia, one of a only a handful of states that carry the top "AAA" bond rating by all three major agencies.

That "AAA" rating allows Georgia to borrow at the lowest rates of interest.

Other changes

The Georgia General Assembly, meanwhile, may consider a major industry change with an expected bill to allow general surgeons to open ambulatory surgery centers without going through the state certificate-of-need process. The proposal would pit doctors against hospitals.

Now, only surgeons the state considers ''single specialty,'' such as orthopedic surgeons, can do so.

Such health care regulatory fights, though, may slip into next year.

With those and other government and private insurance changes looming, Lewis of HomeTown Health says 2006 may not be the last tumultuous year in Georgia health care.

"It may only be the start of bigger things,'' he said.

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Changes for Student Health Insurance

2006-01-04T22:56:00.000-05:00

By HOLLY RAMER
Associated Press
01/04/2006

CONCORD, N.H. -- In the months before colon cancer took her life, aspiring teacher Michelle Morse attended Plymouth State University in Plymouth, N.H., full time, often wearing a chemotherapy pump on her hip to class or when she did her student teaching.

To remain covered under her mother's health insurance, Morse had to either maintain a full course load or pay about $550 a month. She chose the former, even though her doctors urged her to cut back.

"I'm scared for my mom and dad," she wrote in her journal in December 2003, just after she was diagnosed. "I want to make this easier on them."

By the time she died in November at age 22, Morse had become a reluctant celebrity, lending her name to a bill aimed at sparing others the tough decision she faced.

"Michelle's Law" would require health insurance companies that cover college students under their parents' plans to continue the coverage if a student takes a medical leave of absence.

Morse's mother, AnnMarie Morse, has become the driving force behind the legislation. "I have a lot of energy," she said in a recent interview. "I knew the odds were against us ... but I knew I had to do something else."

A New Hampshire House committee unanimously recommended the bill in November, and the full House will vote on it today.

Other states have taken a broader approach by allowing young adults to remain on their parents' plans longer, regardless of whether they are in college.

Those laws are aimed at addressing the nation's fastest-growing uninsured population: young people ages 18 to 24, said Laura Tobler, a health policy analyst at the National Conference of State Legislatures.

Thirty percent of Americans in that age group had no health insurance in 2003, according to a report issued in December by the National Center for Health Statistics. Many young people work only part-time or have jobs that do not offer coverage.

Children typically lose health care coverage under their parents' plans when they turn 19, though full-time students often are given an exception. But in the past year, at least 12 states have considered or enacted laws broadening coverage of college-age dependents, Tobler said.

Starting Jan. 1, Colorado residents up to age 25 can be covered under their parents' plans as long as they are unmarried, financially dependent on their parents or living with them.

New York, which already has a law like the one proposed in New Hampshire, is considering raising the maximum age for dependents from 23 to 25. A New Jersey bill would allow dependents up to age 30 to remain on their parents' plans, though companies could charge more for such coverage.

Delaware does not have such a law, but Insurance Commissioner Matt Denn said he supports introduction of one in the upcoming session of the General Assembly.

Such laws will not solve the larger problem but are a good stopgap measure, said Trudy Lieberman, director of the Center for Consumer Health Choices at Consumers Union, which publishes Consumer Reports magazine.

"For people who are betwixt and between jobs and school, until we have a more inclusive system, this is an OK thing to do," she said.

The insurance industry generally hasn't opposed such changes because, aside from expensive cases like Morse's, carriers are getting paid higher family-plan premiums to cover the healthiest segment of the population, said New Hampshire state Rep. Will Infantine, an insurance agent who sponsored the New Hampshire bill.

"Demographically, this is a profitable part of their business," he said.

Realizing that the nature of higher education has changed, many insurance plans are allowing college students to remain on their parents' plans longer, said Larry Akey, spokesman for America's Health Insurance Plans. Students are taking longer to complete their college educations and are increasingly pursuing advanced degrees.

But, he said, the insurance industry has sought to limit the definition of dependents to students or those who are financially dependent on their parents, because opening the definition too widely would result in increases premiums.

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Health-care deductions for self-employed Q&A

2006-01-02T21:07:00.000-05:00

Q&A from Bankrate.com

Dear Tax Talk,

Health insurance premiums are allowed as an adjustment to earnings for the self-employed. Is the amount paid over the premium for medical services and prescriptions, in the case of a $1,000 deductible and the 20 percent paid out of pocket, tax deductible for the amounts that may exceed the insurance deductible?
-- Ken

Dear Ken,
An individual with self-employment earnings, including self-employment earnings passing through from a partnership, can claim as an adjustment to adjusted-gross income, or AGI, (line 29 of Form 1040) the premiums paid on a health insurance policy maintained under that business.

The deduction arriving at AGI is limited to the earnings from the business reduced by the deduction for one-half of your self-employment tax (line 27 of Form 1040) and any pension plan contributions deducted on line 28 of Form 1040. Only the amount paid for premiums is deductible as an adjustment to AGI. Any medical expenses such as deductibles, prescriptions and patient co-pays are considered medical expenses deductible as an itemized deduction on Schedule A. In addition, any premiums that exceed the deductibility limit because of income limitations can be deducted on Schedule A.

You can also claim on line 29, subject to the income limitations, amounts paid for long-term-care insurance. You can include premiums paid on a qualified long-term-care insurance contract for you, your spouse or your dependents when figuring your deduction. But, for each person covered, you can include only the smaller of the following amounts.

1) The amount paid for that person.
2) The amount shown below. (Use the person's age at the end of the year.)

a) Age 40 or younger - $260
b) Age 41 to 50 - $490
c) Age 51 to 60 - $980
d) Age 61 to 70 - $2,600
e) Age 71 or older - $3,250

A qualified long term care insurance contract is defined as one that only provides coverage of qualified long-term-care services, such as nursing home or in-home nursing care.

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Minn. AG Backs Ban on Insurance Credit Scores

2006-01-02T20:46:00.000-05:00

From www.insurancejournal.com

January 2, 2006

A bill to ban insurance companies from using a consumer's credit score in setting premium for home or auto coverage is backed by Minnesota Attorney General Mike Hatch and two state legislators.

The proposed bill contends that an increasing number of insurance companies utilize credit scoring to deny coverage or bump up the rates for customers who have low credit scores.

State Senator Lary Pogemiller, DFL-Minneapolis, the bill's sponsor in the Senate said that it is not logical for people to have car accidents because of poor credit.

His co-sponsor, Rep. Joe Mullery, DFL-Minneapolis and the House sponsor said the the use of credit scoring unfairly targets lower-and middle income consumers as well as consumers who pay their bills promptly. Mullery said that a low-risk customer should not have to create credit debt to get the best insurance rate

Hatch reported that his office has received hundreds of consumer complaints on the issue. According to Hatch, who plans to run for governor next year, consumers complained that they received higher insurance rates because of a lack of credit history, a low debt level or a credit score that dropped after multiple credit report requests.

The Insurance Federation of Minnesota's Mark Kulda countered Hatch and the sponsors' comments by saying that credit scores actually are more accurate and better predictors than traditional criteria used for determining an insured's risk. Kulda added that a ban would result in a more unfair system for consumers who have been able to reduce their premiums because of good credit scores.

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Hurricane Insurance Will Be of 'Utmost Concern' in 2006

2006-01-02T20:43:00.000-05:00

from www.insurancejournal.com

Florida Insurance Council EVP Predicts Hurricane Insurance Will Be of 'Utmost Concern' in 2006

Hurricane insurance will be the most significant property and casualty issue on a state level in 2006, just as it was in 2005, Sam Miller, executive vice president of the Florida Insurance Council told Insurance Journal.

"Congress, at a higher level, is considering a national hurricane fund seriously for the first time in five years," Miller said. "The eight hurricanes which struck Florida in 15 months, Hurricane Katrina, the largest natural disaster insurance event in world history and one of the largest events period, and the likelihood we face another decade of high hurricane activity, have policymakers and the insurance community struggling to ensure we can continue to finance our hurricane losses."

Miller said everything is on the table. "This includes additional rate increases from private property insurers and a major rate increase package being proposed by Citizens Property Insurance Corp. up to 80 percent for residents in some coastal areas, according to media reports. Citizens' rate should be adequate to reduce subsidization of southeast Florida property by other regions of Florida through the statewide assessments.

"At the same time," Miller said, "policymakers are considering charging more for vacation homes and less for primary residences and providing relief to low income Floridians having trouble paying their insurance premiums, as we provide relief today to help some people pay electricity and telephone bills.

Miller said the "everything is on the table" list includes a plan by the Florida House Democratic Caucus to create a state fund providing hurricane insurance and remove this peril from private insurance companies, although passage is probably not likely.

Other proposals include dedicating a portion of sales tax revenues to the insurance system to supplement insurance premiums. The funds could go to Citizens to prevent a $1 billion 11 percent statewide assessment next year and/or to the Florida Hurricane Catastrophe Fund to rebuild the Fund's $7 billion cash reserves depleted by the 2004 and 2005 hurricane seasons.

Federal issues include a national catastrophe fund, a tax exemption to allow private insurance companies to accumulate hurricane reserves tax-free in years when there is no hurricane, assuming we will ever have a year without hurricanes again; allowing homeowners to set up tax-exempt savings accounts to cover their hurricane deductibles; and reassessing the National Flood Insurance Program.

The Task Force for Long-Term Solutions to Florida's Hurricane Insurance Market, will provide a roadmap on many issues for the Florida Legislature in reports in February and again in April. Other groups are preparing recommendations, including a commission appointed by Governor Jeb Bush to investigate over-development and high hurricane losses in coastal areas; the House Democratic Caucus as noted above; and various insurance community groups, including the Florida Association of Insurance Agents and the Florida Insurance Council.

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N.Y. Rates Auto Insurers on Complaints

2006-01-02T20:41:00.000-05:00

from www.insurancejournal.com

The New York State Insurance Department's 2005 Annual Ranking of Automobile Insurance Complaints shows Progressive Insurance Group placed highest among the 10 auto insurers with the largest New York market share, finishing in 16th place.

The three auto insurers with the most complaints in relation to their premiums written were: Long Island Insurance Company (46th), Infinity Property & Casualty Insurance Group (47th), and Empire Insurance Company (48th).

When compiling the ranking, the department analyzes the number of complaints consumers filed against their auto insurer in the previous calendar year, assesses how many were determined to have merit, and calculates these trends in the context of an insurer's total premiums written statewide.

"This is a great time to be an auto insurance consumer in New York. Most drivers saw their premiums decline by anywhere from 3 to 10 percent in 2005," said Insurance Superintendent Howard Mills. "But price is only one factor to consider when purchasing an auto insurance policy and the department's annual complaint ranking gives New Yorkers a sense of an insurer's customer satisfaction level."

The department's Consumer Services Bureau closed a total of 13,023 private passenger complaints in 2004, with 7,233 of them either withdrawn by the consumer or not upheld. Upheld complaints are ones deemed to have had merit after the CSB assessed the facts in each individual case.

New Yorkers spent more than $10 billion in 2004 for auto insurance and the 2005 complaint report found that there was one upheld complaint for every $5 million in premiums written.

The companies at the top of the 2005 report ranked best in terms of consumer complaints closed in 2004. A total of 48 insurance companies or groups of companies were incorporated into the report, with auto insurers having written premiums totaling at least $10 million eligible for ranking.

Among the highlights of the 2005 ranking:

American Modern Insurance Group of Ohio placed first while Electric Insurance Company, a Massachusetts-based insurer, ranked second. Neither American Modern Insurance Group nor Electric Insurance Company received any consumer complaints that were upheld by the New York State Insurance Department in 2004. Amica Mutual Insurance Company of Rhode Island finished in third place.

Progressive Insurance Group placed highest among the 10 auto insurers with the largest New York market share, finishing in 16th place.

The report is posted on the department's Web site at http://www.ins.state.ny.us.

Source: New York State Insurance Department

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Insurers Inflated Med-Mal Claims to Justify Rate Hikes says FTCR

2006-01-02T20:38:00.000-05:00

from insurancejournal.com

In documents filed with state regulators and in statements to public officials, medical malpractice insurance companies consistently inflated the amount they estimated they would pay out in claims, according to a study by the nonprofit Foundation for Taxpayer and Consumer Rights

The report maintains that insurers then used the overstated figures to justify increases in doctors' premiums and pressure legislators to enact lawsuit restrictions.

The group charges that malpractice insurers inflated their losses by an average 46 percent each year between 1986 and 1994. During that period, insurers reported $39 billion in losses to regulators, but actually paid out only $27 billion in claims, according to the report.

FTCR called for an investigation of industry accounting practices that it said enable insurance companies to misrepresent their financial condition and charge potentially billions of dollars in excessive premiums.

The study, first reported Friday in the Washington Post, is available at: http://www.consumerwatchdog.org/malpractice/rp/5714.pdf

The study suggests that the alleged inflation of insurers' losses, as reported in the annual statements they submit to regulators, is greater during periodic economic downturns when insurers' investment income falls.

"By inflating their estimated 'losses' as much as 66 percent, medical malpractice insurance companies have misled regulators, lawmakers and the public and overcharged physicians and other health care providers," said FTCR's Harvey Rosenfield. "Because all insurance companies use the same flawed accounting practices, it is likely that the insurance industry is responsible for several billion dollars in premium overcharges over the last few years, a period during which premiums have soared. The nation's economic stability and security demands that the insurance industry's accounting practices be investigated, and reforms put in place such as those that were made after widespread financial fraud was uncovered at Enron, WorldCom, Arthur Andersen and other corporations."

The FTCR compares the dollar amount medical malpractice insurers initially reported they would pay out on policies in effect between 1986 and 1994 with insurers' reports made ten years later of what they actually paid out in claims under policies in effect in each of those years.

FTCR said it examined incurred loss data reported by insurance companies to state insurance regulators and published in A.M. Best's Aggregates and Averages. Jay Angoff, a former insurance commissioner and nationally recognized insurance expert, advised FTCR on the study.

"The study shows that malpractice insurance companies consistently overstate how much they expect to pay in claims and in amounts far beyond the margin of reasonable error," said FTCR's Rosenfield. "By manipulating their books to misrepresent their 'losses,' the insurers have profited in two ways. First, they have used the inflated numbers to justify rate increases that were unnecessary and excessive. Second, they have invoked their exaggerated loss estimates to promote legislation allowing these insurers to limit how much compensation they have to pay out to victims of medical negligence."

FTCR also called for stronger disclosure and regulatory oversight of insurers.

Source: FTCR

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Courts Insurance Headlines in 2005

2006-01-02T20:34:00.000-05:00

from Insurance Journal

www.insurancejournal.com

From New England to Virginia, Courts Made Insurance Headlines in 2005

By Andrew G. Simpson, Jr.
December 30, 2005

From Maine to Virginia, many of the insurance headlines in 2005 dealt with compensation and reinsurance probes, just as they did across the country, casting the industry's reputation in a bad light.

But much of the most interesting regional and local insurance news in 2005 took place in the courts of law and not in the court of public opinion.

Among the year's noteworthy court developments affecting the insurance industry:

A New Jersey Supreme Court ruling allowing people who suffer permanent injuries in auto accidents to sue over pain and suffering, even if their injuries don't meet a so-called "serious life impact" test caused great concern for the industry.

A Massachusetts court blocked a plan to convert that state's auto reinsurance facility into an assigned risk plan.

A federal jury in July awarded Vermont's insurance commissioner $120 million to distribute to creditors of the Ambassador Insurance Co., which failed more than two decades ago.

A federal court ruled against independent agents who claimed a Massachusetts law governing bank sales of insurance trumped the federal Gramm Leach Bliley provisions.

The Pennsylvania Supreme Court permitted four corporations to bypass the state regulator's liquidation procedures involving failed carrier Legion Insurance Co. and obtain their settlement monies directly from Legion's reinsurers.

Rhode Island Workers' Compensation Court Judge Bruce Q. Morin ordered the owners of the West Warwick nightclub The Station to pay lost wages and funeral expenses to the families of four employees who were among the 100 who died in the fire at the club in February 2003.

A Pennsylvania court ruled unconstitutional a key component of tort reforms enacted in 2002. Commonwealth Court ruled that a measure that abolished joint and several liability was invalid because it was not germane to the DNA testing legislation to which it was attached.

The Supreme Court of the State of New York, County of Nassau, reversed a lower court decision that found an insurance agent could potentially be held responsible for misrepresentations in a life insurance application.

Insurers had to go to court in Rhode Island to challenge a new lead paint law and in Delaware to challenge the commissioner over new restrictions on homeowner policy cancellations.

New York's highest court upheld the plan to convert Empire Blue Cross and Blue Shield into a for-profit company.

The Pennsylvania Supreme Court held that property insurance coverage for the "collapse" of a building is ambiguous and should be construed in favor of policyholders. The court granted coverage in instances where collapse is imminent.

A New York excess lines insurance broker's use of "sham declinations" to skirt the law on placing coverage with a non-admitted carrier could cost the broker a lot more than just regulatory fines, if a Nassau County Supreme Court ruling stands.

The Connecticut Appellate Court upheld the license suspension of a Connecticut man identified as a repeat drunken driver after a driving under the influence of alcohol (DUI) conviction in Vermont.

A Waterbury, Conn. jury awarded $32.1 million to a Bristol construction worker paralyzed in an accident more than a decade ago.

Another jury in Waterbury Superior Court jury awarded $36.5 million to the family of a 6-year-old boy who is blind, brain damaged and suffering from cerebral palsy since he was injured during his delivery via a surrogate mother at Hartford Hospital. The judgment may have set a new record for a Connecticut malpractice award.

The U.S. Supreme Court ruled against Virginia renters who claimed they were sickened by toxic mold in their apartment building, in a decision that clarifies where personal injury cases should be heard.

In one of the largest malpractice verdicts in state history, a Suffolk County, Massachusetts jury awarded $23.8 million to the parents of a girl born with cerebral palsy after a traumatic delivery at Massachusetts General Hospital.

Jurors in New Jersey said Merck & Co. should not be blamed for the death of a 60-year old Idaho postal worker who suffered a heart attack after taking the company's Vioxx painkiller. Merck lost an earlier trial in Texas and was told to pay $253 million to the widow of a Vioxx user. Merck is appealing that verdict.

The Port Authority of New York was negligent in the 1993 terrorist bombing of the World Trade Center and can be sued for damages, according to a New York State Supreme Court jury in Manhattan. The jury decided that the Port Authority, which owned the World Trade Center, should have provided better security for the underground parking garage that was hit by Islamist militants in Feb. 1993. The bombing killed six people and injured more than 1,000.

Spitzer fallout
The multiple investigations begun in 2004 by New York Attorney General Eliot Spitzer may yet end up in court. In the meantime, they tarnished the insurance industry's public image during 2005 but do not appear to have altered the private behavior of most in the industry.

Marsh, Aon and the other large brokerage houses caught up in the investigations paid restitution and agreed to halt certain practices. Connecticut passed a compensation disclosure law. Then for most in the industry in 2005, it was business as usual.

Except it was not exactly business-as-usual for Maurice Greenberg, the former head of AIG, who was forced from that company he helped build into a powerhouse and is still reportedly under investigation by Spitzer. Nor was it business-as-usual for sellers of finite reinsurance, the subject of another of Spitzer's ongoing probes.

AIG's Greenberg was not alone in finding new work in 2005. In New York, New Jersey, Maryland, Pennsylvania, Rhode Island and the District of Columbia, chief regulators resigned or were replaced, while in Delaware, the newly-elected commissioner, Matt Denn, came out swinging.

Pennsylvania Commissioner Diane Koken served double duty as president of the National Association of Insurance Commissioners during a trying year for regulators and was succeeded in the fall by Maine's insurance chief, Alessandro Iuppa.

On the medical malpractice front, state lawmakers in Maryland overrode a gubernatorial veto of reforms. New Hampshire adopted a medical malpractice claims screening system. Pennsylvania renewed its subsidies for malpractice premiums amid signs of an improving market, while New Hampshire reinstated prior approval of rates in response to a report showing the market was not competitive.

Workers' compensation rates held steady or declined. New York's workers' comp system including its insolvency fund showed signs of strain, but lawmakers did not advance reform proposals from Gov. Pataki.

Auto rates, too, stayed even or went down across the region. New Jersey's private passenger auto market continued to attract new companies, including Progressive, and auto insurers in New York continued to lower rates.

Political wars broke out in Massachusetts, within and outside the industry, over whether and how to reform the state's auto system, with Gov. Mitt Romney leading the charge to end what he termed the state's "Soviet-style" price fixing system. The insurance commissioner tried hard to make changes to the residual market through regulation and succeeded on some levels. But by year's end, auto rates were slashed by close to 9 percent and Romney's legislative reforms were stalled on Beacon Hill.

Connecticut officials, unhappy over potential job loses, reluctantly approved the deal in which MetLife acquired Citigroup's Travelers Life & Annuity in Hartford. Soon thereafter, Gov. Jodi Rell created a special agency devoted to maintaining and attracting insurance jobs to the state.

Virginia municipal officials debated the use of cameras at red lights to catch scofflaws, while Rhode Islanders dealt with a report that its laws against drunk driving are among the nation's weakest.

The region's insurers faced more natural storms than political ones during 2005, although none as devastating as what Katrina, Wilma and Rita did to the Gulf Coast and Louisiana. Residents in New Hampshire, Pennsylvania, New Jersey and New York faced severe flooding at times during the year.

While flood victims of 2005 turned to insurers and FEMA for assistance, some of those who were flooded years ago were still fighting over claims. More than 140 victims of the 2003 tropical storm Isabel sued Homeland Security and the National Flood Insurance Program, 17 insurance companies and others charging that these officials conspired and knowingly paid claimants far less they deserved to repair their flooded homes and properties.

New Hampshire implemented changes to its small group health system while controversy swirled about Maine's Dirigo health plan and its costs. Massachusetts Gov. Romney proposed a plan that would require all residents to buy health insurance.

At least two financially-strapped insurers, Pawtucket Mutual in Rhode Island and Mutual Fire Insurance of Carroll County in Maryland, were revived during the year. There were reports that Frontier Insurance Co. in New York would soon be released from rehabilitation as well.

The Green Tree Perpetual Assurance Co., in Philadelphia, one of the nation's oldest insurers with roots in the 1700s and one of only a handful of companies still selling perpetual homeowners insurance policies, terminated all remaining policies in February.

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Insurance is a must if driving in another land

2005-12-12T16:17:00.000-05:00

By Susan Spano
Los Angeles Times

I had been driving all day, and now it was dark. I had rented a car in Phoenix and was heading across the border to Kino Bay on the Gulf of California in the Mexican state of Sonora.

Tired and impatient to get to a motel, I was going too fast on an unpaved, shoulderless highway detour just outside Hermosillo. A big four-wheeler roared past in the opposite direction just as a cow stepped onto my side of the road. I couldn't swerve into oncoming traffic, so I hit the animal. The cow walked away from the crash without a moo, but it put a huge dent in the front right fender of the SUV.

That was the worst but not the only accident I've had with rental cars in my travels. Another time in the Yucatan, a Mexican driver hit my rented Volkswagen, though when I finally collected the police report -- required for an insurance claim -- it said I hit him.

I had a fender-bender with a truck in Jamaica, and destroyed a side-view mirror on a narrow lane bordered by picturesque but obstructive hedgerows in rural England.

Incidents like these used to upset me, partly because I didn't own a car when most of them happened and didn't have personal auto insurance, which often -- but not always -- covers policyholders for rental car accidents in foreign countries. I relied on the auto insurance that came with my credit cards.

But to make a claim on them required onerous paperwork, I found, and the cards covered damage to a rental but not to another vehicle, which worried me.

Now I rest easier, having decided that you can't drive rental vehicles in unfamiliar places without hitting the occasional cow.

I started routinely taking out the full auto insurance package when renting, which can be expensive. On my recent trip to Mexico, I rented a big SUV for off-road explorations from Dollar Rent a Car in Phoenix, one of the few agencies that allows its vehicles across the border. The collision damage waiver and liability cost more than $50 a day, and I also had to buy Mexican insurance for about $25 a day, which is obligatory for U.S. drivers there.

Given the price, some renters say no to insurance from rental agencies. But the expense was worth it to me in Mexico, especially because I no longer have personal auto insurance (because I no longer have a car). When I returned the vehicle to Dollar, I filled out one form and walked away.

Mike Nelson, author of Live Better South of the Border in Mexico, thought I was joking when I told him I hit a cow while driving at night in Sonora, which is a classic, stupid, gringo mistake. Despite his vast experience on the roads of Mexico, Nelson totaled his old Ford Bronco there. And he almost hit a cow while testing the Mexican theory that you see better at night without headlights. "It is a falsehood," he said of the theory.

Charles Nelson, founder of Nelson Insurance Agency in McAllen, Texas, which specializes in covering American drivers south of the border, said I was lucky not to have hit another vehicle or a pedestrian and that it was a good thing the cow was unharmed, because otherwise I'd be the owner of a lot of steak.

Americans who have personal auto insurance should check before they leave home to make sure they are covered for vacation car rentals, Nelson said. Some personal auto policies don't handle rental car accidents or liability abroad. And credit card coverage has limitations. For instance, my American Express gold card pays for repairs only if the damaged vehicle has been rented on the card; my Signature Visa doesn't cover rentals in Israel, Jamaica and Ireland; and my corporate American Express card carries no auto rental coverage.

Driving in developing nations is especially dangerous; 70 percent of auto accident deaths occur in the Third World, according to the U.S. State Department.

Mexico is a special problem in that regard. Road conditions are inconsistent, and Americans who drive there often seem oblivious to the dangers of driving in a foreign country. For them, the chief causes of accidents are the lack of familiarity with their rental vehicles, speeding and driving under the influence.

Nevertheless, American drivers with comprehensive Mexican auto insurance from an established provider can expect payment on claims, Nelson told me.

Mariana Field Hoppin, a spokeswoman for Avis, said the best way to avoid accidents on the road is never to drive at night in unfamiliar territory and to take out collision damage waiver insurance, which means you won't be financially responsible if your rental is damaged.

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Checkup on Health Insurance Choices

2005-12-12T16:06:00.000-05:00

From CommunityDispatch.com

Today, there are more types of health insurance, and more choices, than ever before. The information presented here will help you choose a plan that is right for you. You may be buying health insurance for the first time, or you may already have health insurance but want to consider changing plans. Married or single, children or no children, this information will help you to find out how to choose a health insurance plan that best meets your needs and your pocketbook.

Choosing and Using a Health Plan

Thinking About Health Insurance Choices
Which of these statements best describes your thoughts on health insurance?

"I get health insurance through my job. I have the coverage I need... I think"

Many employers offer a choice of plans. The information provided will help you figure out the plan that's best for you.

"I know I need health insurance, but I'm not sure how to get the best protection at the lowest cost."

You're not alone. Many people have questions about how to select a health insurance plan. The information provided will help you find some answers.

"I can't afford health insurance right now. I have too many bills to pay and other things I need to buy."

Health insurance is one of your most important needs. Without it, one serious illness or accident could wipe you out financially. The information provided will help you decide which is the best plan you can afford.

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Life Insurance Rates Continue to Drop

2005-12-07T12:16:00.000-05:00

Press Release

Term life insurance rates are continuing their downward trend. These lower rates are shown at the unique lifeinsure.com anonymous and instant life insurance quoting engine.

(PRWEB) December 6, 2005 -- A recent study showed that rates for individual term life insurance and permanent life insurance (whole life and universal life) will likely drop by 3 percent in 2006.

This is because people are living longer (what the insurance business calls "mortality improvements) and also because of competition.

One will be able to see these improvements instantly on the www.lifeinsure.com insurance quotes engine as these changes come about.

Term life insurance rates have been in a downward trajectory for the last 20 years or so.

The biggest rate reductions that we have seen have been for the most healthy people who don't use tobacco which the life insurance companies call the "best risks".

The lowest rates available in 2005 are more than 50 percent lower than term life insurance rates from a decade ago.

There are two major types of life insurance; permanent life insurance and term life insurance. Permanent life insurance is called "permanent" because unlike term life insurance it is either guaranteed to last for life (whole life insurance) or projected to last for life based on interest rates and other factors (universal life insurance).

Over the last few years there have been other new factors introduced into the life insurance market besides the lowering of cost. For example, there are now universal life policies now that overcome a deficiency that used to exist in these kinds of policies - that, unlike whole life, they could lapse if interest rates fell or the cost of insurance increased. Now, universal life insurance can be guaranteed with a "rider" (extra) that guarantees that the universal life policy will last for a number of years or for life no matter what happens to interest rates.

Live Close to Restaurants? Pay More for Auto Insurance

2005-12-06T13:25:00.000-05:00

Why People Who Live Close to Restaurants are More Likely to Have an Accident and Pay More for Auto Insurance

Press Release

Tuesday December 6, 8:00 am ET

Report From Quality Planning Corp. Highlights the Risks of Living Near Restaurants, Medical Buildings and Grocery Stores

SAN FRANCISCO, Dec. 6 /PRNewswire/ -- If you live within a mile of a church, you're far less likely to have a car accident than drivers who live more than a mile from a church. But if you live within one mile of a restaurant, you face a significantly greater risk of an accident than most other drivers. Those are among the key findings of a study released today by a leading predictive analytics company -- Quality Planning Corporation -- a firm that helps insurance companies price insurance more accurately and fairly.

Quality Planning Corporation (QPC) examined the relationship between where a vehicle owner lives and the likelihood that he will be involved in an auto accident, and concluded that the riskiest place to live is within one mile of a restaurant. In fact, if the owner of an automobile lives within one mile of an eating establishment, he is 30 percent more likely to crash his car than if he lived more than one mile from the restaurant.

The study examined more than 15 million policyholders and two million claims, mapping the proximity of vehicle-owners' addresses to various types of businesses, including amusement centers, bars, churches, dentists' and doctors' offices, parking lots, banks, car dealers, car washes, child day-care centers, gas stations, medical buildings, movie theaters, optometrists' offices, schools and shopping centers. The study found that the riskiest places to live near are restaurants, grocery stores, schools and banks. At the other end of the scale, individuals that live within one mile of an airport, park, forest or racetrack are much less likely to suffer vehicle damage.

When it comes to car crashes, churches are the least risky neighbor of all. People who live within one mile of a church are 10 percent less likely to have an accident resulting in a property damage claim than if they lived one more than one mile from the church.

Commenting on the statistics, Dr. Daniel Finnegan, founder and CEO of QPC, noted: "It's well known that auto insurers use a policyholder's ZIP code to calculate the risk he or she represents. New technology enables us to be even more accurate in determining the level of risk associated with a policy by identifying the specific risk factors associated with that policyholder's home address.

"In our research to develop a new predictive loss model for auto insurers, we have identified more than 500 variables that are highly correlated to auto accidents, many of which are specific to a policyholder's home address. Among the more interesting variables we found are hail storms, crime rate, topography, traffic patterns, occupation, street width and chiropractors per capita."

Auto Insurance companies have historically based policyholders' rates on their ZIP code or where their vehicle is kept. While ZIP codes may be convenient and necessary for speedy mail delivery, they are not a particularly good predictor of property/casualty insurance losses. The ability to assess risk at the street-address level is a major breakthrough in private passenger auto underwriting and will eventually lead to more accurate rating and could reduce premiums for some drivers.

TABLE: Increase in physical damage claims by living within one mile of:

Top Tier Bottom Tier
Restaurant 30% Racetrack or amusement park 11%
Grocery store 26% Hotel, motel, resort or spa 5%
Elementary or secondary school 26% National park or forest 4%
Bank 25% Local or community park 3%
Car dealer 23% Airport 2%
Gas station 22% Doctor's office or clinic 1%
Liquor store 18% Religious institution -10%

"It's important to remember that these observations are indicative of the area and we would naturally expect higher accident rates in higher traffic areas," added Bob U'Ren, vice president of marketing at QPC. "Traffic patterns and density are often key considerations when selecting sites for restaurants and grocery stores. There are also comparatively fewer homes and apartments, and generally lower vehicle use, close to parks and forests. But who would have thought it is more dangerous to live by an elementary school than a liquor store? Or a bank versus a hotel?"

QPC periodically releases snapshots and analyses of auto insurance data to raise awareness of the factors that determine what consumers pay for auto insurance. Previous reports have examined the fraudulent use of social security numbers when applying for insurance, the abuse of the 'farm discount,' older drivers and auto accidents versus violations, the relationship between occupations and auto accidents, teenage drunk driving, and the discrepancy between reported and actual mileage.

Rating integrity and competitive advantage

QPC assists auto insurers in their efforts to minimize rating error. QPC takes an auto insurance company's book of policyholders and processes it through a battery of more than 150 proprietary tests, cross-reference checking and pattern-matching algorithms to identify errors and discrepancies that might suggest fraud and misrepresentation on the part of consumers. QPC also provides insurers with additional services such as policyholder phone interviews to discover missing drivers, verify garaging addresses, determine annual mileage and other key rating information. Over time, insurance companies with accurate rating information are better able to compete and are more financially stable.

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Smokers' medical insurance bills may rise

2005-12-06T13:21:00.000-05:00

Gannett News Service

Smokers be warned: Your habit might soon cost you a lot more.

Companies are increasingly tacking surcharges onto insurance premiums in an attempt to manage rising health-care costs, and some refuse to employ smokers.

Smoking-related health-care costs nationwide run $75.5 billion every year, according to the Centers for Disease Control and Prevention. The price tag for lost productivity is an additional $92 billion a year, for a total of more than $167 billion.

Increasingly, smokers are being asked to pay a greater share of the bill. Spokeswoman Mary Thompson of BlueCross BlueShield, Tennessee's largest health insurer, says her company doesn't keep statistics on plans with employee surcharges, but their popularity appears to be on the rise.

"I see employers trying to take advantage of every opportunity that they can to help improve the health status of their employees," she says.

BlueCross BlueShield employees who smoke pay an additional $7 per pay period, but that figure is relatively modest compared with the $40-a-month surcharge Georgia state employees pay. The surcharge is $15 for state employees in West Virginia, $20 in Alabama and $15 to $30 a month in Kentucky, depending on the policy.

Though the practice has yet to be part of the business plans of Guam employers and health insurance companies, smokers already have boosted health insurance costs on Guam.

Although nothing is inherently wrong with making people accept financial responsibility for their choices, surcharges raise troubling issues, says Lewis Maltby, president of the National Workrights Institute, a nonprofit advocacy group in Princeton, N.J.

"Surcharges are the first step down a road that America may not want to travel," Maltby says. "Surcharges sound nice when you talk about smokers because everyone hates smokers. But what about all the other bad habits that people have?"

Treatments for obesity-related and sexually transmitted diseases are costly. Too many beers after work? Not enough time at the gym? Surcharges conceivably could be levied for those behaviors, too.

Many smokers say they understand why they may have to pay more for health insurance. William Tatum, 54, of Huntington, W.Va., works in construction and smokes two packs of cigarettes a day.

"If I was an insurance company and was underwriting a policy, I would want my people clean," Tatum says. "It is just the risk involved."

A handful of companies are putting a more restrictive twist on smoke-free workplaces. This year Weyco, a Michigan health benefits management company, began testing employees for smoking and will fire those who fail a random test. Four of the company's 200 employees quit rather than submit to the policy.

The workers had a year's notice on the policy and could enroll in a company-sponsored smoking cessation class.

The policy is legal in Michigan, which doesn't have a law barring employers from firing employees for legal activities they engage in outside of work hours. Maltby says while surcharges are problematic but not inherently wrong, firing someone for smoking is clearly wrong.

"The only legitimate objection to an employee smoking is that it increases the company's medical costs," he says. "So the most that an employer is ethically entitled to do is have a surcharge."

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Hurricane claims still await action

2005-12-04T17:44:00.000-05:00

BY BEATRICE E. GARCIA,

Staff Writer, The Miami Herald

bgarcia@herald.com

Insurance companies in South Florida are overwhelmed with claims from Hurricane Wilma, leaving thousands of homeowners frustrated because they have yet to see an adjuster and begin repairs.

Wilma could leave major home, condo and auto insurers with more claims than in all the other seven storms that hit Florida in 2004 and 2005. Platoons of adjusters have descended on the region, many from other states, to handle the estimated $6.1 billion in claims.

Citizens Property Insurance, the state-run insurer of last resort and the second largest home insurer in the state, is handling more than 123,000 claims so far. That total, five weeks after Wilma hit, already has surpassed the 120,000 claims it saw after Charley, Frances, Ivan and Jeanne last year.

Of those 123,000 claims, Citizens at the start of this week had settled 11 percent. It has nearly 2,000 people working on adjusting claims, many of them for leaking roofs and blown-out windows, the company said.

State Farm, the state's No. 1 insurer of homes and autos, is fielding 88,333 home property claims, including flood claims that it is adjusting for the National Flood Insurance Program. It also is handling more than 65,000 auto claims. Figures on how many claims State Farm has settled were unavailable Thursday.

Insurers are urging patience, but that's dwindling among their customers. More than 2,000 homeowner complaints have been filed at the state Department of Financial Services' consumer services division.

In Broward, more than 1,200 complaints out of about 1,500 deal with issues regarding adjusters, according to state documents. In Miami-Dade, there are nearly 199 adjuster complaints out of more than 500 complaints filed with the state.

NEW LEAKS

Terry Minda in West Palm Beach has paid about $2,000 to remove a 30-foot pine that fell on her garage and part of her home and to repair the flat roof over the enclosed porch. But now leaks have appeared in the living room, dining room and family room.

''I realize there are lots of people in the same situation, but something has to be done,'' said Minda, who is considering hiring a public adjuster to estimate the repair costs and help her negotiate with her insurer, State Farm.

Ray Breslin, condo association president for Mantell Condominiums in Miami Beach, said he reported the building's damage to his insurance agent right after the storm. But every time he calls the 800 number he was given to make contact with a Citizens adjuster, all he gets is a busy signal.

Breslin is eager to get repairs under way and already ordered the glass to replace the broken lobby windows.

''I just need to know what's covered and what's not,'' he said, noting that the condo association has a $96,000 deductible.

Jeanne Kos in Coral Springs said she was was outraged when an Allstate customer representative told her to climb on her roof and get the measurements for the area damaged when a tree fell on the house.

She, too, has paid to have some repairs done -- about $13,000 -- to prevent further damage while she waits to see the adjuster.

''I'm very frustrated. I've put out more money out of pocket than I should,'' said Kos, who is worried it could still take months before a roofer actually begins work on her house.

For their part, insurers say they're not ignoring policyholders. But as claims pour in, they're practicing a form of ''claims triage,'' tackling claims where they expect the most damage.

WHO COMES FIRST

''We see first the people where the need is greatest,'' said Lynn McChristensen, a spokeswoman for USAA, which provides home and auto insurance for the military and their families. USAA has received 25,530 home claims so far, and another 7,500 auto claims.

Citizens follows the same rule, said Justin Glover, a company spokesman.

So far, Glover said the company is meeting a state rule that requires insurers to acknowledge claims within 14 days after they are reported to the company.

NOVEL APPROACHES

''That doesn't mean that everyone has seen an adjuster,'' he said.

Some insurers are coming up with novel ways to handle claims more quickly.

State Farm set up two drive-through centers in South Florida to handle auto claims. At both, an auto glass installer fixed broken windshields and windows on the spot if possible.

The company is resolving small claims by phone, such as for screen enclosures or minor roof damage, said Jose Soto, a State Farm spokesman in Miami. He said homeowners are also advised to get repair estimates if they're concerned that costs might not be enough to surpass their policy deductible.

The magnitude of damage brought about by Hurricane Katrina in the Gulf Coast is one reason insurers dealing with Wilma in South Florida are so stretched. They're handling the aftermath of two large storms.

Last year, state regulators fined several insurers who were slow to respond and resolve claims. They're monitoring claims-handling operations this year as well. Citizens, which was widely criticized for its inability to deal with last year's storm claims, said it has revamped its catastrophe operations.

Ron Major of Pembroke Pines decided to wait a few days before he contacted his insurer, Atlantic Preferred, thinking he might not be able to reach the company during the initial calling crush.

He reported his broken windows, downed fence and missing roof shingles Nov. 7. He has a claims number but has yet to see an adjuster.

Like other homeowners, Major has had no luck reaching a customer service rep on the 800 number he was given after his initial call.

''I'm working on getting estimates on fixing the windows and roof myself now,'' Major said.

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States Launch Plans to Expand Health Coverage

2005-12-02T13:21:00.000-05:00

AccountingWEB.com - December 01, 2005 - As the healthcare debate in Washington, D.C. fizzles out, the states are taking on ambitious proposals to expand insurance coverage.
"The lack of action in Washington is not because of the lack of a problem,? Alan R. Weil, executive director of the National Academy for State Health Policy, told the Los Angeles Times. ?It's because of a lack of agreement and, frankly, a lack of consequences for failing to address the issue. At the state level, if you have a Medicaid budget problem or a growing number of uninsured, you have to tackle the issue."

Consider some of the proposals. In Maine, for example, lawmakers are considering recouping health costs from large employers, such as Wal-Mart, that don't provide adequate health insurance for their employees, Statehouse News Service reported. Employees often turn to the state's subsidized insurance program. Maine senators are looking at a model, which was vetoed in Maryland, that would require companies with more than 10,000 employees to spend 8 percent of their payroll on healthcare benefits or contribute to the state's health program for the poor.
?There's no easy solution to this, but I think people pick on Wal-Mart because they make this great claim they have all these benefits, but I'm not sure their employees can afford all these benefits,? Maine Senate President Beth Edmonds said. ?They're not paying their people very much, and with the benefit that's being provided, they still end up in the emergency room ? or bankrupting themselves? to pay their health bills.

In Massachusetts, lawmakers want to expand coverage to the state's 500,000 uninsured residents. As part of that effort, lawmakers have proposed charging a payroll tax of 5 to 7 percent on employers that do not provide health insurance for their workers. The plan has sparked opposition from business groups, the Boston Globe reported.

''You've got employers who are facing the highest energy costs, the highest wages, the highest unemployment insurance, the highest real estate costs ? and to now put this on? You're going to be in a position where the job growth isn't there, where people aren't making a decision to grow their business," said Bill Vernon, state director of the National Federation of Independent Business.

Initiatives like these back up information gathered by the Kaiser Commission on Medicaid and the Uninsured, which found that 20 states expanded access to healthcare from July 2004 to July 2005. The October study said that 14 states limited access in some way, mainly by raising premiums for programs covering low-income children.

The problem shows no signs of letting up, as employers continue limiting traditional coverage in the face of increasing costs.

"Washington needs to wake up and smell the coffee," said John E. McDonough, executive director of Health Care for All, a consumer group, the Los Angeles Times reported. "Employer-based coverage is melting away like the Arctic ice cap. It is stunning and alarming. The basic underpinnings of the healthcare system are badly eroding."

For now, it appears the states are taking the lead, with interested parties in Washington closely watching their progress.

"You can't fix the whole healthcare system by putting a Band-Aid on each individual hurt, or each individual state," said Sen. Ron Wyden (D-Ore.). "At the end of the day, you are going to have to integrate this very constructive, locally driven brainstorming into a framework that benefits the country as a whole."

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Four of Five U.S. Part-Timers Lack Employer Health Insurance

2005-12-02T06:24:00.000-05:00

From Bloomberg

Four of every five part-time workers in the U.S. lack employer-sponsored health insurance, a study released today reports.

By comparison, about one of every four full-time employees is without such insurance, according to the study conducted by the Iowa Policy Project, a nonprofit public policy research group in Mt. Vernon, Iowa.

The study analyzed insurance coverage for ``nonstandard'' employees, such as part-time, temporary or contract workers. About 34.3 million Americans, or 25 percent of the nation's workforce, fall into that category, according to the study.

The research ``demonstrates the weakness in our health insurance system'' for a ``vulnerable group of workers,'' said Sara Collins, a senior program officer with the Commonwealth Fund, a New York nonprofit group that financed the research.

The study, based on 2001 census data and telephone surveys by the researchers in 2003 and 2004, found 21 percent of nonstandard employees had health insurance through their jobs, compared with 74 percent of full-time workers.

About 15 percent of the children and 16 percent of the wives of nonstandard employees received health insurance through the worker's employer, the study found.

Rising Costs

``It's a problem if you're a part-time employee who can't get full-time coverage because your paycheck won't cover it,'' said Kate Sullivan Hare, executive director of health care policy for the U.S. Chamber of Commerce in Washington.

``We need to have a private health-care insurance market that can cover these people,'' Sullivan Hare said in an interview.

Because of rising costs, it's becoming ``less and less likely'' that employers will subsidize all workers' health insurance, she said. A study released in October by benefits consulting firm Hewitt Associates predicted U.S. companies will pay an average 9.9 percent more for workers' health insurance next year.

Some companies employ part-time workers to avoid paying for health insurance, Kathleen Stoll, director of health policy for Families USA, a Washington-based group that lobbies for ``affordable'' health care, said in an interview.

The study also found nonstandard workers use government insurance, including Medicare and Medicaid, at five times the rate of regular workers. Nonstandard workers rely on the government because they have ``less options,'' the Commonwealth Fund's Collins said.

`Growing Trend'

Less employer-based coverage ``has been a growing trend'' since the 1970s, said Peter Fisher, research director for the Iowa Policy Project and one of the study's authors. Employment- based health insurance today covers 60 percent of the U.S. population, down from 70 percent in the mid-1970s, according to research cited by the study.

Fisher and the two other authors of the study, Elaine Ditsler and Colin Gordon, encourage labor law changes that would give nonstandard workers the same status as full-time employees. Still, policy makers must be ``wary of mandating coverage for very low-wage workers'' when employees can't bear the cost, the study says.

Fisher said he doesn't anticipate increased employer-based coverage in the near future. ``I don't see policies coming out of the national level to deal with health-care costs,'' he said in an interview.

The Iowa Policy Project's telephone survey of nonstandard workers consisted of 20-minute telephone interviews among a random sample of workers over 18 years old.

The survey has a margin of error of 1.5 percentage points, while the analysis based on Census Bureau data has a margin of error of less than one percent.

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How Fair Is Your Car Insurance Rate?

2005-11-29T16:15:00.000-05:00

What comes between you and a better car insurance rate? It may not have much to do with your driving record and everything to do with your ZIP code.

Sally Russell of Lutherville wants the best auto insurance coverage at an affordable price.

Russell: "I'm a pretty good driver, knock on wood."

But that doesn't necessarily mean she'll get a good rate. We had Russell go online to search for quotes. The first question she's asked is her ZIP code. After answering additional questions, she gets a quote.

Russell: "$470."

She tries it again using the same exact information but changes the ZIP code to a Baltimore City address.

Russell: "Quite a difference for the same coverage."

Her premium jumps from $470 to $780 -- an increase of more than 60 percent.

Russell: "I don't know what to think. I'm kind of blown away by it. I'm glad I live in Baltimore County."

But we discovered car insurance rates can vary dramatically from block to block.

We checked one insurance company and found if you live in Roland Park -- the 21210 ZIP code --the rate is cheaper than if you live just a few steps away in Hampden -- the 21211 ZIP code. The difference you'd pay is $57 more a year.

The difference can be a lot more depending on your insurance company.

Bob McCarthy moved just a few blocks.

McCarthy: "We carried our stuff. We didn't bother renting a truck. It wasn't very far."

His premium almost doubled. If anything, he thought the rate would drop because he moved from this apartment with on-street parking to a home with a driveway.

McCarthy: "They kept saying you moved into a high risk area."

According to the insurance information institute, that's because accidents, theft and fraud drive rates up and most claims come from urban areas.

Carolyn Gorman, Insurance Information Institute: "We think the territorial rating is the best you can get. Admittedly it's not perfect, but it's difficult to get anything better than that."

In one scenario outlined by the Maryland Insurance Administration, a 45-year-old, married woman living in Anne Arundel County ZIP code 21401 would pay $2,900 for a family rate. In Carroll County's 21157 ZIP code, she would pay about $3,300. In Baltimore County's 21030 ZIP code, her rate would be $3,600; and in Baltimore City's 21218 ZIP code, the rate would be $5,900.

Consumers Union attorney Mark Savage said the problem is a built-in bias that makes where you live more important than how you drive.

Savage: "This is unfair. It's irrational, it's unjust, and it's a matter of economic justice."

In fact, a study published by the Abell Foundation found territorial ratings discriminatory. Low-income families and minorities are impacted the most.

Researcher Tom Waldron: "Maryland's insurance system is broken in my opinion. It's out of date and hasn't been changed in many years."

It is the state insurance commission's job to make sure insurance rates aren't excessive or discriminatory.

Waldron: "I think Maryland needs to wake up and realize there's a problem."

The state is starting to look into the issue and has set up an auto insurance task force. Maryland state Sen. Lisa Gladden is on the panel. She's also a Baltimore City resident.

Gladden: "It is unfair especially when you live on one side of the street, you get one rate and on the other you get a different rate. No justification for that at all."

But changing the way insurance companies set rates won't be easy. It's been tried before and failed. A 1988 California law required the insurance industry to depend less on ZIP codes and more on other factors like driving records.

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InsureMe Draws on Search Technology to Advance Company

2005-11-29T16:07:00.000-05:00

Press Release

Source: InsureMe

Tuesday November 29, 3:28 pm ET

Online Referral Service Explicates Search Engine Technology

DENVER--(BUSINESS WIRE)--Nov. 29, 2005--InsureMe, a leading consumer-agent link for finding insurance online, is using the power of the Internet to drive visitors to their Web site and boost visibility.

InsureMe, which pioneered online insurance shopping, is using search technology to achieve higher page rankings in search engine results -- amplifying their presence among online insurance shoppers nationwide.

Popular crawler-based search engines like Google and Yahoo! create automatic search results by crawling, or "spidering" through the Web in search of pages that are relevant to the user's query. Relevant results are determined by the "spider," which visits a Web page, reads it and follows links to other pages within the site.

Every page the spider finds is then filed in the search engine's index. Similar to a library card catalogue, the index holds a copy of every page a spider reads and is updated accordingly when pages change. The search engine software then sifts through its index and selects the pages that match the user's search, which are ranked chiefly by a complex algorithm that attempts to retrieve the most relevant Web sites in relation to the user's search terms.

With more than 80% of Web traffic stemming from search engines, many companies are looking to increase their presence on the Web by integrating certain techniques into their pages in efforts to appeal to search engines.

While the algorithms used by search engines to determine a page's rank remains a closely guarded secret, providing quality content and incorporating text that can be easily scanned and categorized by spiders is a common practice among Web-savvy companies looking to ascend the ranks of search engine results.

Another key factor in achieving a high page rank in search results is the presence of inbound links. When a spider scans a Web page, it also follows any links on to the site. Essentially, inbound links attest to the page's value, thus propelling the page higher in the search engine's results page.

While the ranking processes of crawler-based search engines present certain challenges for companies looking to increase their presence online, it's great news for consumers who benefit from the constant enrichment of sites on the Web.

"While it's our goal to present visitors with the best insurance content on the Web, we also have to be sensitive to the indexing needs of the search engines," says James Omdahl, InsureMe Affiliate Manager.

"It encourages us to examine the variables affecting search results and build our sites to meet the needs of the search engines. And, as the search engines refine their ranking algorithms, we've found that higher-quality content rises to the top of the rankings. This is great news for user-focused sites like InsureMe.com."

About InsureMe

This information is brought to you by InsureMe, an Englewood, Colorado-based company that links agents nationwide with consumers shopping for insurance. Specializing in auto, home, life, long-term care and health insurance quotes, the InsureMe network provides thousands of agents with insurance leads every year. For more information, visit http://www.insureme.com/.

InsureMe is a registered trademark of InsureMe corporation. All other trademarks mentioned are the property of their respective owners.

Contact:

InsureMe Lori Reed, 720-548-6178 lreed@insureme.com

Doctors worried about health insurance merger

2005-11-22T15:33:00.000-05:00

Associated Press

DENVER - Doctors warned the state insurance commissioner on Monday that the proposed merger of Colorado- and California-based health insurance companies could threaten physicians' bargaining power and their ability to control patient care.

UnitedHealth Group Inc. has proposed merging with Cypress, Calif.-based PacifiCare Health Systems Inc., creating the second largest health insurance company in the nation.

The $8.1 billion merger, which is expected to close by the end of the year, would affect people in 10 states and has been approved by regulators in six of them.

Dr. Richard May, president of the Colorado Medical Society, said that state would be most affected by the merger because UnitedHealth and PacifiCare make up 23 percent of the health insurance business here.

"When an HMO owns enough of your practice to control it, they can dictate the terms," said May, an orthopedic surgeon.

He said Colorado should force UnitedHealth to guarantee that it won't raise premiums and cut payments to doctors to pay for the merger.

Doctors and consumer groups in California have expressed similar concerns.

Dr. Reed Tuckson, a senior vice president for Minnetonka, Minn.-based UnitedHealth, said the company has invested in technology, including electronic patient records and physician progress reports, which will help improve service. He said the company is committed to working with doctors to improve care.

State insurance regulators say they expect the merger will decrease competition but that bargaining clout and advances in technology would help keep health care costs down.

Under Colorado law, the four largest health insurers cannot have more than 75 percent of the market. If the merger is approved, 60 percent of the commercial market would be held by two companies - United and Anthem.

City considering trust to manage health insurance

2005-11-22T15:31:00.000-05:00

CNHI News Service
http://www.cnhins.com/

Annual costs have increased in double digits
By Carol Cole
Transcript Staff Writer

The City of Norman OK is considering establishing a health insurance trust to manage the burgeoning expense of employee health benefits.
Municipal employees' health insurance costs have increased in the double digits annually the past several years, with costs going up 18 percent for fiscal year 2005, and 13 percent the year before. The increases have strained the city budget, with salaries and benefits accounting for about 70 percent of the budget.
"At this rate, it's going to be double in five years," said Ward 1 councilmember Bob Thompson at the City Council's budget retreat Saturday morning.
A trust could be formed by the city manager on an administrative basis.
Union and non-union municipal employees would manage the proposed trust, choosing how best to spend trust funds for employee insurance.
"Unions don't trust the city to run it," said Mayor Harold Haralson. "Set up a trust and let them run it."
Ward 8 councilmember Doug Cubberley works with employees on their health insurance committee.
"Everybody recognizes that the train is coming quickly down the track and we are in the middle of the track," Cubberley said. "The benefit plan that we have in today's market is unrealistic."
The city is self-insured and legally obligated to pay all claims. In recent years, employees have begun to pay a portion of the costs of health insurance.
The health committee has proposed a three-tiered plan, with one of the plans being the current one.
Finance Director Anthony Francisco said the city is losing about $100,000 a month on insurance claims over what is budgeted.
"The health insurance is not enough to cover claims right now," he said.
If the trust were created, the city's $5 million reserve for self insurance would go in. Another $1.6 million would be required to further shore up the reserves.
"Just to get it on a firm footing," Francisco said.
Where that additional funding would come from is yet to be determined.
Benefit planners consulting the city have said if health insurance was managed well, increases could be held down to about 9 percent and some cities have brought increases down in the 7 to 8 percent range.
The trust would be set up similar to the Norman Employees Retirement System Board, Francisco said.
The big question is whether the three unions that represent the police, fire and many other municipal employees would agree to participate.
"I don't think we're being unreasonable to ask unions to step up to the plate and help find a solution," said Ward 2 councilmember Richard Stawicki.
The city has lost in arbitration twice in the past few years, including granting a 5.5 percent raise for salaries and related benefits for the firefighter's union, which was matched for all municipal employees.
"I think we have been fiscally responsible and the arbitrator ends up rewriting our budget," said Ward 6 councilmember David Hopper.
The city has a policy of holding 8 percent of its fund balances in reserve for unanticipated operational demands such as overtime needed in case of a natural disaster like a tornado or ice storm or below-target revenues. Reserves are not close to that amount, which keeps eroding as expenditures exceed the budget.
Ward 4 councilmember Cindy Rosenthal said the city has two options.
"We get cooperation from our employees to solve the problem or we cut people," Rosenthal said.
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National Flood Insurance Program Strengthened

2005-11-18T06:05:00.000-05:00

FOR IMMEDIATE RELEASE
Contact: Communications Director Brian Walsh	11/17/05

Phone: 202-225-6265

Ney Manages Legislation to Strengthen National Flood Insurance Program

WASHINGTON, D.C. – Congressman Bob Ney (OH-18) managed legislation on the floor of the U.S. House of Representatives today to strengthen the National Flood Insurance Program. H.R. 4133 which was passed by the House this afternoon provides for an additional $5 billion in borrowing authority for the NFIP.

Congressman Ney has been at the forefront of this issue convening several hearings as Chairman of the House Financial Services Subcommittee on Housing & Community Opportunity, including one in Tuscarawas County on how state and local governments operate under NFIP, and the steps currently being taken by FEMA, local officials and the insurance industry to resolve problems dealing with inconsistencies and delays inherent to the program.

“Floods are one of the most destructive and dangerous natural disasters in Ohio and throughout the country,” Ney said. “The National Flood Insurance Program is a valuable tool in addressing the losses incurred throughout the country due to floods. It assures that businesses and families have access to affordable flood insurance that would not be available on the open market.”

“In addition to the terrible flooding caused by Hurricanes Katrina, Rita and Wilma, my own district has had three major floods this year. It is important Congress does all it can to make sure the victims of these disasters get all the help they need, and this legislation is a good step in that direction,” Ney concluded.

Planning for the future

2005-11-14T13:54:00.000-05:00

Health savings accounts growing in popularity as retirement funds

Jerry Siebenmark, Wichita Business Journal

Gary Allerheiligen says he's switching to a health insurance plan that will require a higher-deductible and a health savings account.

Allerheiligen, the partner in charge of Grant Thornton LLP's Wichita office, isn't switching just because he can reduce his monthly health insurance premiums. He says he's making the move to build up his retirement savings.

"Absolutely I am," he says. "It grows like an IRA (individual retirement account)."

Allerheiligen is among a group of people who see HSAs as a way to supplement their retirement. They may have maximized their contributions to their 401(k)s and IRAs and are looking for a place to grow pretax income. Or, like Allerheiligen, they are looking for a place to put their pre-tax income that they can use to pay for health care and roll over unused balances year to year.

As more insurers and banks come to the table offering high-deductible health insurance plans and HSAs, financial planners expect their popularity as a retirement tool to grow. And they're telling their colleagues to get ready to make HSAs as much a part of the financial planning discussion with clients as mutual funds and 401(k)s.

Rolling balances

HSAs are intended to do two things: lower the premiums that employers pay for their employees' health insurance plans and make employees more accountable for their health care spending.

The Medicare Modernization Act of 2003 permitted the creation of the private, tax-free accounts to be used in conjunction with high-deductible health plans.

The minimum deductible for a high deductible plan in 2006 will be $1,050 for an individual and $2,100 for a family.

HSAs matched to those high deductible plans allow employees and employers to contribute pretax dollars into the tax-deferred accounts. They can be used to pay for doctor's office visits, prescription drugs and other medical expenses.

For 2006, the maximum contributions to an HSA are $5,250 for an individual and $10,500 for a family.

HSAs are attractive to people like Allerheiligen because the balances that remain in an HSA roll over from year to year.

And at age 65, the account can continue to be used for medical expenses or withdrawn for other purposes.

Use the money for something other than medical expenses after 65 and you'll have to pay income tax on that amount. Use that money for non-health related expenses before 65 and you'll pay income tax and a 10 percent penalty.

Financial planner Don Baxter says that money, once withdrawn, could easily be put to use in other short-term investments such as certificates of deposit.