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Archive for February, 2014

Aol’s healthcare firestorm

February 27, 2014 Leave a comment

nestegg2 Smart people say dumb things. That’s the moral of this story.

Tim Armstrong, CEO of AOL came under fire recently for remarks he made at a company “Town Hall Meeting” regarding the company’s employee benefits. Following AOL’s decision to cut retirement benefits to make up for increases in their healthcare expenditures, Mr. Armstrong blamed the spike in healthcare costs on two things: President Obama’s healthcare reforms and two “distressed” babies that were covered by the plan.

First of all, discussing specific claims and situations related to your general population of covered employees is a monumental error and should never be publicized. NEVER. While there was no specific HIPAA violation, the announcement was insensitive. The complexity of the health insurance plan and funding is not fully understood by all, and chalking up a cut in retirement Read more…

New exposure for drug manufacturers

February 24, 2014 Leave a comment

drugTheftLast month, the State Supreme Court in Pennsylvania ruled that drug companies may face exposure from product liability claims in PA for defectively designed drugs. The case Lance v. Wyeth involves the fatal use of a diet drug made by Pfizer subsidiary that was later taken off the market.

This ruling is significant in that it expands the ability of plaintiffs to pursue products liability claims against pharmaceutical companies. Previously, plaintiffs were only able to sustain a product liability claims against a prescription drug manufacturer by proving that

  1. the drug was manufactured improperly or
  2. the manufacturer was negligent in providing an improper warning. Read more…

TRIA: Planning ahead to be prepared for 12/31

February 20, 2014 Leave a comment

riskWith the Terrorism Risk Insurance Act (TRIA) set to expire on December 31, 2014, buyers and carriers of terrorism insurance must be on the lookout for marketplace changes and disruption if Congress opts to let the federal backstop program expire. As speculation continues about the Act’s renewal, the terrorism marketplace is starting to shift from one that has been relatively steady with abundant capacity to a much more aggressive and opportunistic arena. Experts say that the Act’s uncertainty means stand-alone rates could also jump by at least ten percent, while embedded terrorism insurance rates could potentially spike if the U.S. Government halts TRIA coverage.

TRIA (now known as the Terrorism Risk Insurance Program Reauthorization Act, or TRIPRA, of 2007) deals exclusively with losses arising from acts of terrorism that are within the parameters Read more…

Is PPACA putting millions out of work? Not exactly

capitalbuildingThe folks at the Congressional Budget Office (CBO) are at it again. Their latest number crunching, released Tuesday, February 4th, produced a projection that PPACA will will result in a decline of the workforce by 2 million full-time equivalent workers in 2017. This is a significant jump from their last estimate of only 800,000 fewer full-time equivalent workers due to the PPACA. Adding to those alarming estimates, total hours worked is also expected to decline between 1.5 and 2 percent from 2017 to 2024. Depending on which side of the aisle you fall, the ‘spin’ leads to some differing conclusions. Republicans are concerned that fewer people in the workforce could hurt the economy. Obama claims that PPACA is providing a choice to those who previously didn’t have one – these workers, he claims, are simply choosing to work less. Read more…

Halliburton – another catalyst for increased Shareholder Derivative litigation?

February 12, 2014 Leave a comment

supremecourtShareholder derivative lawsuits have become increasingly problematic for both Directors’ & Officers’ Liability carriers and the companies they insure.  Their increased frequency has led to both an increase in losses paid by carriers, and to additional legal/settlement costs paid directly by companies on behalf of their directors and officers. Furthermore, the spike in these lawsuits has also led to higher premiums and self-insured retentions for many companies.

Unlike shareholder class-actions, which are brought against companies and their directors and officers by shareholders on their own behalf, derivative lawsuits are filed by shareholders on behalf of the company itself.  The concept is that any person/entity that has harmed the company’s share price should have to repay the company for their transgression . In practice, plaintiffs often bring derivative lawsuits in parallel Read more…

Litigation Funding – high stakes gambling or a prudent investment strategy?

moneyAmid federal court rulings supporting companies who turn to third-party investors to help pay legal fees, litigation funding has become an appealing (and more accepted) alternative method for cash-strapped litigants looking for help with financing major lawsuits. The practice involves businesses taking money from investors to raise capital for litigation investments, with the ultimate goal of reaping large returns for favorable investments in litigation outcomes. But with the current lack of regulation of this industry segment are investors taking a gamble?

Litigation funding helps litigants finance their lawsuit or other legal costs since third party funding companies provide cash advances in exchange for a percentage share of the judgment or settlement. However, if the litigant loses at trial, the third party funding company receives Read more…

New trial regulations for medical device makers in South Korea

February 6, 2014 Leave a comment

sKoreaThe Ministry of Food and Drug Safety  (MFDS) will implement new clinical trial regulations for certain high risk medical devices looking to obtain trial approval. The agency announced last October that beginning in 2014, 68 devices (those that are either transplanted or absorbed into the human body) must submit trial data as part of technical documentation before receiving approval to conduct trials.

The MFDS, formally known as the Korea Food and Drug Administration, is a South Korean government agency that oversees the safety and efficiency of foods, pharmaceuticals, medical devices and cosmetics and supports the development of the food and pharma industries. Read more…