WA insurers and agents fined $2 million in 2012

From a news release we issued minutes ago:

Insurance Commissioner Mike Kreidler issued more than $2 million in fines against insurers, agents and brokers in 2012.


“Ideally, we’d have full compliance and no fines,” said Kreidler. “But the reality is that sometimes it takes a fine to get a company to address problems. And in many cases, these fines were accompanied by compliance plans aimed at making sure the problems don’t recur.”

The fines totaled $2,033,990. Violations included charging customers for coverage they’d never agreed to, charging unapproved rates, allowing unlicensed staffers to sell policies and failing to register with the state.

“Fortunately, these cases are the exception,” said Kreidler. “Most companies, agents and brokers follow the rules.”

The agency posts all disciplinary orders – including those that don’t include fines – at www.insurance.wa.gov/orders/enforcement.asp.

The total for 2012 was higher than the previous year’s $1.4 million.

Fines collected by the insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.

Over the past 12 years, Kreidler has issued more than $15 million in fines for violations of Washington’s insurance laws.

Amendments to the Minimum Maintenance Standards - Part 3

This week we continue our review of the amendments to the Minimum Maintenance Standards, which came into effect on January 25, 2013.

Part 3:  New Patrolling Requirements

The MMS previously required routine road patrols and, during the winter maintenance season, required additional patrols of representative highways, as necessary, to check for snow and ice.  There has been no change to the routine patrolling requirement but the MMS now provide that if the weather monitoring discussed above indicates that there is a substantial probability of snow accumulation, ice formation or icy roadways, then municipalities must patrol representative highways, at intervals deemed necessary by the municipality, to check for snow and ice.  There is no change to the provision describing what patrolling consists of and by whom it can be done. 

Hearing set to consider request to buy Soundpath Health

We've scheduled a hearing on March 1 at 10 a.m. to consider Catholic Health Initiative's request to acquire Washington-based Soundpath Health Inc.

From our public notice about the hearing:

Catholic Health Initiatives (CHI) through its subsidiary, CollabHealth Plan Solutions, is proposing to acquire common shares of Soundpath Health from Soundpath’s current owners, Northwest Physicians Network and Physicians of Southwest Washington. The acquisition would allow CHI and CollabHealth Plan Solutions to own approximately 56 percent of common shares of Soundpath Health and become controlling entity of Soundpath Health.

Catholic Health Initiatives is a national nonprofit health system with headquarters in Englewood, Colo. The faith-based system operates in 19 states and includes 81 hospitals; 40 long-term care, assisted, and residential-living facilities; two community health-services organizations; two accredited nursing colleges; and home health agencies. In fiscal year 2012, CHI provided more than $715 million in charity care and community benefit, including services for the poor, free clinics, education and research. With total annual revenues of more than $10.7 billion and approximately 86,000 employees, CHI ranks as the nation’s second-largest faith-based health system.

If approved, CHI through CollabHealth Plan Solutions, Northwest Physicians Network and Physicians of Southwest Washington would be co-owners of Soundpath Health.

The public is notified that all interested parties may submit letters of support or concerns or objections and/or may participate in the hearing by appearing in person or by telephone at no charge.

To view the Notice of Hearing, which includes advice on how to participate in the hearing process, and to view all documents filed in this matter including the Purchase Agreement between the parties, and all other documents such as organizational charts and finances, current and past states’ regulatory actions and other litigation filed in this proceeding, go to Soundpath Health #13-0039 at
http://www.insurance.wa.gov/laws-rules/administrative-hearings/judicial-proceedings/s-t/.

Insurance tips: "My insurer wants more money due to an 'audit.' What's that?"

Q: I paid my business policy premium, and now, after the policy period is over, the insurer wants more premium because of an "audit." What's going on?

This is a common question.

This issue deals with the audit provision found in the typical commercial policy. Because businesses may experience both decreases or increases due to business cycles, estimated premiums are commonly used in commercial policies when they are first issued, with an annual audit option to identify any premium that needs to be added or subtracted due to the business cycle. Insurers may or may not decide to exercise their right to audit.


The good news is that the audit, while it may increase your premium for the prior business period, could also decrease it.

Job openings: Market analyst and financial analyst

We have three job openings, both in our main office in Tumwater, Wash.

One is for a financial analyst. Duties include examining and analyzing insurance company financial filings and data to discern their financial condition, difficulties, trends and compliance with laws and rules.

Required qualifications include a bachelor's degree with major study in finance, business administration, economics or accounting; a CPA license or Accredited Financial Examiner credential, and three years of professional experience in accounting or auditing.

For a full list of duties, qualifications, and application information, please see the full job listing.

The other job openings -- two of them -- are for market analysts. These people -- this won't be surprising -- conduct market analysis and participate in data surveys, using data from various sources, including other states' insurance departments. They also review company information on Facebook, Twitter, carrier websites, agent sites and blogs.

The market analyst jobs require a bachelor's degree in business administration or a related field, although work experience may also be submitted. They also require two years of experience in life, helath or property and casualty insurance company operations. For details, application info, etc., please see that full job listing.

Thanks for your interest!

Amendments to the Minimum Maintenance Standards - Part 2

This week we continue our review of the amendments to the Minimum Maintenance Standards which came into effect on January 25, 2013.

Part 2: New Requirement to Monitor Weather

The MMS did not previously require weather monitoring, although municipalities generally did so as part of winter maintenance operations.  The MMS now require municipalities to monitor the weather, both current and forecast for the next 24 hours.  From October 1 to April 30, weather must be monitored three or more times per day, at intervals determined by the municipality.  From May 1 to September 30, weather must be monitored once per day.  This amendment is clearly a response to Giuliani, in which the municipality was faulted for failing to monitor the weather and deploy resources in time to avoid the formation of ice on the road. 

The MMS definition of weather as “air temperature, wind and precipitation” tells municipalities what to monitor but the MMS do not state how this is to be done.  In addition, the MMS allow municipalities to determine the intervals at which the weather is monitored.  While these factors will allow monitoring systems to reflect local conditions, including budgetary constraints, we can expect to see claims challenging municipal decisions about the intervals at which weather is monitored and the methods used to do so.

Insurance tips: "My PIP claim is months late. What's going on?"

Q: My auto insurance was supposed to pay for medical expenses under my Personal Injury Protection (PIP) coverage, but my insurer didn't pay all the bills. They waited for two months before making a decision. What's going on?"

Our consumer advocacy hotline gets questions like this fairly frequently. Insurers should be reviewing the bills as they are received. As a general rule, we would expect that an insurer would review the bills and make a coverage decision within 30 days of getting them. If there are delays, we'd expect the insurer to be able to explain why.

If you're having problems getting your insurance -- health, auto, homeowners, etc. -- to pay a claim, feel free to contact us. We accept complaints online 24/7, and have a toll-free consumer hotline (1-800-562-6900) staffed by experts.

Insurance Q&A: "How much is a pet worth?"

We periodically field questions from bereaved pet owners who've had a pet killed by a car, only to be offered what seems like a very low sum -- typically $50 to $100 -- from the driver's insurance company.


The reality is that pet owners usually can't recover much more than their out of pocket expenses when an animal is killed due to someone's negligence. And sometimes they won't even cover medical expenses for the injured animal.

Here's why: under current law, pets are valued as property and valued at what they'd cost to replace. (That's the same way insurers decide the worth of, for example, a totaled car.) You may be able to negotiate a slightly higher payment -- our consumer advocacy staff once helped get more money for a slain goat -- but the sentimental value of a longtime pet is often much, much higher.
In recent years, there have been a growing number of cases in which plaintiffs are arguing that a beloved pet is more than just property, and that insurance payouts should recognize that.

The Wall Street Journal last week reported on a Texas case in which a shelter mistakenly put a dog to death. The owners sued, claiming emotional damage from the loss of their 7-year-old dog, whom they felt was part of their family. An appellate court ruled in the couple's favor in 2011, saying that the special value of "man's best friend" should be recognized.

The case is now in the hands of the Texas Supreme Court.

The good news: your insurance likely covers meteorites & space junk

In light of the passing asteroid and the (unrelated, apparently) meteorite that hit Russia last night, we'd point out that in the extremely unlikely event of a meteorite or old satellite crashing into your home, your insurance would likely cover the damage to you, your car, business or -- hopefully not -- yourself.

The Insurance Information Institute took a look at this issue a couple of years ago, concluding that:

"Damages caused by falling objects are generally covered under standard auto, business, homeowners and life insurance policies."

Our in-house consumer hotline folks add that if a meteor struck near a home, with no direct hit, but that the impact and shock wave caused damage, that damage too would likely be covered in a standard policy.

Again, the odds of getting hit by something like this are very, very low, although not zero. An Alabama woman was struck by a meteorite in 1954, and in 1992, a car in New York state was hit.

Amendments to the Minimum Maintenance Standards - Part 1

The Minimum Maintenance Standards under the Municipal Act, 2001 were amended by Ontario Regulation 47/13, which came into effect on January 25, 2013.  Many of the amendments are a response to the Court of Appeal decision in Giuliani v. Halton (Regional Municipality), [2011] O.J. No. 5845 (C.A.) in which the court’s interpretation of the snow clearing and icy roadways standards limited their use as a defence to civil actions.  The amendments also provide more specific guidance to municipalities whose systems of winter road maintenance are based on the Minimum Maintenance Standards.  

In our next series of posts, we will be reviewing the changes to the MMS.

 

Part 1: New Definitions Added to Section 1

 

Section 1 of the MMS now contains the following definitions:

• “Ice” is defined as “all kinds of ice, however formed”.  Ice was not previously defined.
• “Snow accumulation” is defined as the natural accumulation of newly-fallen snow, wind-blown snow and/or slush that covers more than half a lane width of a roadway.  This definition was previously contained in the snow accumulation standard in section 4 of the MMS, which has been replaced as discussed below.
• “Substantial probability” is defined as “a significant likelihood considerably in excess of 51 per cent”.  This definition relates to patrols and maintenance activities that are done in anticipation of snow accumulation or ice formation, discussed below.  This definition may be the subject of debate in future civil cases, as it does not specify how much more than 51 per cent is “considerably in excess”.
• “Weather” is defined as “air temperature, wind and precipitation”.  Weather was not previously defined.

Insurance tips: "My insurer won't pay my policy limits!"

Q: "I turned in a valid claim and my insurer won't pay me the limits that I have on my policy. What's going on?"

A: We get this type of question a lot. The limits shown on your policy are simply that -- an upper limit that is the maximum available to you for a covered claim.

But being paid the maximum is rarely automatic. Even though it is your policy, and you've paid your premiums faithfully, you still have the responsibility to document the value of your claim. It's not at all unusual for the value of a claim to be below a policy's limits.

Industry professionals: We want your opinion on our new website

Note to agents, brokers, and insurers licensed in Washington state: We're evaluating our newly redesigned website, with the goal of making it as easy as possible for industry professionals to find what they need.

Please take a few minutes to take our online survey. It takes about five minutes to complete.

Your feedback will help us improve the website.

Thanks much.

Buying a used car? Here's a way to check if it's stolen or salvaged.

The National Insurance Crime Bureau, an anti-fraud group made up of hundreds of insurance companies, car rental companies, auto auctions, etc., runs a free online site where you can check to see if the car you're about to buy has been reported as stolen or salvaged.

It's called "VINCheck." You type in the vehicle identification number. On most modern cars, the VIN is usually a long combination of numbers and letters on a plate or tag at the front of the dashboard. It's easily read from outside, through the windshield.

VINCheck will tell you if the vehicle has been reported as stolen and unrecovered, or if it has been reported as a salvage vehicle, by participating NICB members.

A maximum of five searches are allowed from each IP address per 24-hour period.

"My homeowners insurer canceled me because I made two water claims in three years. Is that legal?"

Yes, it often is. Insurers are required to send you a written, advance notice listing the reason why they're canceling your coverage, but they're not prohibited from canceling (or not renewing) coverage due to claims.

What can you do? Well, you can talk to your agent, who may be able to work with the insurer to keep your coverage, albeit possibly with some changes.

The insurer might want you to take on a higher deductible, for example, or might want a home inspection report by an outside consultant.

If it's the latter, they'll likely be paying particular attention to the overall condition and care of the home and condition of the utilities.

If you like your insurer, it's worth at least asking the question.

Also, if you have questons like this and you live in Washington state, we're happy to contact your insurance company on your behalf and ask for an explanation of their decision. You can file a complaint online 24/7 or give our consumer advocacy staff a call at 1-800-562-6900.

Examination for Discovery: Attendance of Parties

When a party has selected an individual to be examined on behalf of a corporation, is another corporate representative entitled to attend to observe discoveries?

In Cody v. Culley 2013 ONSC 199 (S.C.J.), the issue was whether a corporate representative could attend the examination for discovery of the individual chosen to be examined by the opposing party.  The plaintiffs argued that a corporation cannot have a different representative attend discoveries when the adverse party has selected a representative.  Master Glustein permitted the representative to attend.  A corporation has the right to attend examinations for discovery as an independent legal entity.  The corporate representative chosen by the adverse party is not required to have any decision-making power and a corporation may want someone at the discoveries who can decide litigation issues or at least report back to management for such decisions.  The attendance of such an individual could assist in the settlement process or provide more informed instructions to counsel.  The individual would not be attending to be examined, but to be the person who acts on behalf of the corporation to assist in the litigation decision-making process.

This decision could be useful to those representing corporate entities such as municipalities who wish to have a member of the Corporation observe discoveries to get a sense not only what the evidence might be but also how effective the witness may be.