Chile quake will be costly
It has been reported that Chile’s recent earthquake could result in up to $8 billion in claims, according to catastrophe modeling company EQECAT Inc. The report released this week says insured losses from the 8.8 quake that struck on Feb. 27 could have insurers paying from $3 billion to $8 billion. The range of potential loss is wide because the estimate is not yet supported by information from the scene of the earthquake, there remains uncertainty as to the extent of infrastructure damage, and business interruption costs depend on the speed at which transportation and utility networks are restored. Read more…
Obama creates his version to keep healthcare reform alive
President Obama has unveiled his own version of healthcare reform, a measure that blends the Senate and House versions into one with the goal of getting both chambers to pass it. The bill is said to extend health insurance coverage to 31 million Americans, raise taxes on the wealthy and hold insurers more accountable.
The price tag is still unclear, but the cost of is said to be slightly higher than the Senate’s $871B plan. For a more detailed analysis of the President’s version, check out our series This Week in Health Care Reform.
SEC focuses on disclosing climate change related issues
Lawyers are reporting that the Securities and Exchange Commission (SEC) is increasing the expectations that publicly-traded companies should outline climate change related issues. As a sample description of this trend, see this Advisory to from Sullivan and Worcester.
Failure to notify shareholders of the impact of operations on climate change may leave management exposed to extensive securities litigation with little ability to offer a strong defense. Directors & Officers ( D & O) Liability Insurers are still studying these SEC developments but it would not be surprising to see more emphasis on these issues at upcoming renewals.
Texas plane crash: an act of domestic terrorism and would it be covered?
Austin, Texas, Police Chief Art Acevedo stopped short of calling the crashing of a small plane into a commercial office building in northwest Austin on Feb. 18 a terrorist act, but U.S. Representative Mike McCaul said he wasn’t so sure it couldn’t be considered one.
The Piper Cherokee PA-28 piloted by Joseph Andrew Stack, 53, crashed into a multi-story office building that housed a U.S. Internal Revenue Services office with 190 employees shortly before 10 a.m. on Feb. 18.
While this may just seem a matter of semantics for journalists, but this is a critical question in insurance.
Read more…
Alarming findings on the cost of healthcare in Massachusetts
Hospital charges in Massachusetts are out of control. I have long argued that the health care reform debate should have been about actual cost of care and not a broad indictment on the insurance industry. Close to 90% of every dollar of medical premiums paid in Massachusetts go towards paying hospitals and doctors and, until now, little attention has been given to how those rates are established. A recently released report by the Massachusetts Attorney Generals office should be raising the ire of every company who purchases health insurance for their employees in Massachusetts. The findings are troubling. And the report is a must read for every employer who purchases healthcare for their employees. Read more…
IPOs are back
WGA client, Ironwood Pharmaceuticals, completed their initial public offering of stock earlier this week. Ironwood sold 16.7 million shares at $11.25 per share. They ended up their first day of trading up by more than 3%. The gross proceeds of over $187 MM were the most raised by a biotechnology R & D company since 2002. Their post-IPO market capitalization is over $1B.
One significant new expense for a company going public is the greatly heightened cost of Directors & Officers Liability Insurance. This is due to the increase in risk exposures arising out of a plethora of new shareholders. Securities litigation, in particular, becomes much more likely for publicly-traded companies. Read more…
Costs are up for lost records
The Ponemon Institute recently released its 2009 data breach figures. The average cost per customer record lost is up to $204, $2 higher than 2008, and the average total cost per company is now $6.75 million. The sample size is relatively small – 45 companies.
It should be noted that many costs associated with a breach (i.e. notification costs, credit monitoring, investigative costs, etc.) are subject to sublimits under most, if not all, Privacy Liability policies. The sublimit is typically equal to 10% to 20% of the limit of liability ($100,000 on a $1MM policy). This is not much Read more…
The new Health Care Reform landscape without a super majority
The election of Scott Brown to the US Senate will have a profound impact on the White House strategy to move health care reform through Congress. But while many in the press and infact the halls of Congress are declaring Health Care Reform DOA, insiders are providing glimpses of how President Obama plans to move forward given the new landscape. The White House and leadership have determined that passing nothing would be a worse political outcome than using a series of complex maneuvers to pass something. Here are the possible options. Read more…
Being compliant under Health Care Reform, it’s complicated
As discussions with my clients shift from “if” to “when” will health reform pass, CFOs and HR managers are expectedly anxious and concerned about protocols and penalties associated with the new rules under Obamacare. For Massachusetts companies, many of the plan design and credible plan requirements were resolved way back in 1996 under small group reform or recently under the 2007 Mass Health reform law. In fact, much of what we are seeing in both the House and Senate versions of reform mirror the Mass reform program in many respects. There is however a potential catch-22 involved with the cost of having a compliant plan; that issue is the Senate pay-for “Cadillac” tax. Read more…
Ask the Experts: Network security & privacy liability
This past Sunday’s Boston Globe reported that one million Massachusetts residents have had credit card numbers, medical records, or other personal information leaked or stolen over the course of the past two years. This startling report, coupled with recent legislation on both the federal and state levels, has many of corporate insurance buyers feeling anxious about security and privacy. This installment of “Ask the Experts” takes a look at the coverages available and questions to ask when analyzing these coverages.
