Kreidler: The insurance industry faces an unprecedented risk from climate change

Commissioner Kreidler has been involved in climate change and insurance issues for years now. Currently, he chairs the National Association of Insurance Commissioner's Climate Change and Global Warming Working Group. Read his take in Climate Action on the unique opportunity the insurance industry has to prepare for the changes to our climate. 

I forgot to pay my auto insurance - is there a grace period?

Sorry to deliver the bad news, but if you forget to pay your auto insurance, you really could be canceled. There is no grace period. Call your company or agent right away to make sure you're covered.

Here's a couple more common questions we get:

I was in an accident and the other insurance company won't pay my ongoing medical bills. What can I do?

Unfortunately, when you're dealing with someone else's insurance company, they usually will not pay your ongoing medical costs. Only when you're done with your treatments will they consider settling your claim. If you have personal injury protection (PIP), you should contact your own insurance company to let them know about the accident and your injuries.

I was in an accident and the other person's insurance company says I have to get my car repaired. Is that true?

The insurance company is obligated to pay you for the loss. You have the right to decide to cash out your claim rather than have your vehicle repaired. But keep in mind that if you cash out your claim, the company may not consider any additional damage that you discover later. Also, the company will only pay the very least it can to repair your vehicle. So, if you have three estimates they'll only pay for the lowest cost one. Most companies will base your settlement on their own inspection and estimate.

Questions about health reform? Check out www.healthcare.gov

For those of you who've followed the Affordable Care Act since it's passage, you've probably spent considerable time at the federal government site: www.healthcare.gov. Well, it just got a whole new look. They've streamlined the information and given it more of a consumer focus. We like it - a lot. Check it out for yourself. There's even specific information for people who already have health insurance. And even a live chat option 24/7 if you want your question answered right away.

Limitation Periods in Claims for Contribution and Indemnity

The Court of Appeal recently commented on limitation periods in claims for contribution and indemnify, clarifying that s. 18 of the Limitations Act imposes a two year limitation regardless if the claim is based in contract or tort.

In Canaccord Capital Corp. v. Roscoe, [2013] ONCA 378 (C.A.), the defendant was an investment advisor employed by the plaintiff, an investment dealer.  The employment agreement provided that the defendant would indemnify the company for any claim arising out of his acts or omissions in the course of his employment.  In 2008, two clients sued Canaccord and Roscoe for losses they sustained in an investment for which Roscoe was their advisor.  Canaccord filed a joint defence and did not crossclaim against Roscoe for indemnity.  The claim was settled in 2009 without Roscoe's involvement.  Canaccord issued a claim for indemnity in 2011, more than three years after the initial claim.  Roscoe brought a summary judgment motion on the basis that the limitation period had expired.  The motions judge held that that s. 18 of the Limitations Act does not apply to indemnity claims arising out of contract.  She held that the claim was not one for contribution and indemnity, but rather one of a breach of the employment contract.  She held the limitation began to run from the settlement date.

Roscoe appealed and the Court of Appeal allowed the appeal.  Section 18 refers to "wrongdoers", not just "tortfeasors" and so is broad enough to include claims arising out of contract.  The limitation began to run when Canaccord was served with the claim, and accordingly, the action was out of time.

Spokane man's own smartphone is a witness against him in insurance-fraud case

Last summer, a Spokane man named Bryan Gilbert Robb filed an insurance claim, saying that his home had been burglarized. The police report listed an $800 loss.

Robb's claim, however, totaled $26,569, most of it from computers, games and DVDs. He included several photographs of the items that he said had been stolen.

Digital cameras and smartphones typically record the date and time that an image is taken, with what device, etc. This information, which is embedded in the photo file, is called metadata.

The problem: The metadata for 7 of the 9 photos submitted by Robb showed that the images were taken after the burglary date.

Robb's company, Assurant, denied the claim and turned it over to our Special Investigations Unit, which found a very similar 2004 burglary claim at Mr. Robb's previous address. That claim reported the loss of almost identical computers, a game console and DVDs.

Robb was charged June 14 in Spokane County Superior Court with one count of felony insurance fraud and one count of second-degree attempted theft. Arraignment is set for July 1.

To report insurance fraud or insurance scams here in Washington state, here's how to reach us.

Allianz Life Insurance fined $150,000

Washington State Insurance Commissioner Mike Kreidler has fined an insurance company $150,000 after its agents sold unapproved annuities.
Allianz Life Insurance Company of North America has agreed to pay the fine.
Several Allianz Life agents have been fined, suspended or have lost their insurance licenses in recent years for selling unapproved annuities to Washingtonians. In some cases, the customers were flown to Idaho; in others, the agents falsely claimed that the forms had been signed in Idaho or Florida. Kreidler’s office had been raising concerns with the company about these problems since at least 2007.
As required by law, Allianz Life reported the agents to Kreidler’s office and offered refunds to the affected customers. In April 2012, the company implemented procedures designed to prevent illegal cross-state insurance sales.
“I’m glad to see that the company’s taking efforts to rein in this ongoing problem,” said Kreidler. “I understand the pressure to make sales, but agents and companies selling to Washingtonians have to use products that are approved here.”

For more, please see the press release.

Threshold Motion Successful

The defendants in a recent jury trial succeeded on a threshold motion.  In Ryckman v. Pottinger, 2013 ONSC 2857 (S.C.J.), the plaintiff had been in two motor vehicle accidents 11 months apart.  The plaintiff entered into a Pierringer Agreement with the first defendant and proceeded to trial against the second defendant.   The jury assessed global damages at $175,000 and the defendant at trial was responsible for 10% of the figure.  General damages would have been $3,500.

In granting the threshold motion, Justice Parayeski noted that an accident by accident analysis is required; just because a plaintiff met threshold in one case does not mean she will in another. Justice Parayeski inferred from the jury awards that they did not accept the submissions of the plaintiff as to her damages. It appeared the jury did not find the plaintiff credible. There was an observable difference between the plaintiff's appearance at court versus on surveillance. Ultimately, the damages awarded were so small as to lead to the conclusion that the plaintiff did not meet the threshold.  The second accident caused no more than a minor exacerbation of the injuries she sustained in the first accident.

Spokane man sentenced for insurance fraud and attempted theft

Four years after filing a bogus insurance insurance claim that tried to turn $4,000 in storm damage into a $200,000 payment, a Spokane man has been sentenced to 240 hours of community service, 15 days of electronic home monitoring and more than $7,000 in fines.

Keith R. Scribner, seen in the surveillance photo above, was sentenced Friday in Spokane County Superior Court on felony charges of insurance fraud and attempted theft.

The case stemmed from a claim filed in late July 2009 by Scribner's mother, Marilyn Warsinske. She said a patio roof at a home she'd purchased had collapsed due to the weight of snow some 6 months earlier. The policy covered "like kind and quality" replacement. Her son, she told the company, would handle the claim.

Scribner told the insurance company that patio cover was an extensive structure, spanning the entire length of the patio and wrapping around the home's chimney. Claims officials, inspecting the site, wondered why was there no flashing or holes in the masonry. Scribner said that house painters must have made repairs.

He sent the insurance company three bids to replace the cover based on his description. The bids ranged from $195,586 to $213,815.

Claims officials asked Scribner for any photos of the roof prior to the damage or after it collapsed. Perhaps some were taken during a home appraisal prior to the purchase, they suggested. Scribner said there were no photos and was no appraisal.

But a claims handler discovered an aerial photo of the home on a real estate website. It showed a much smaller patio cover than Scribner claimed.

The company launched a fraud investigation and notified Insurance Commissioner Mike Kreidler's anti-fraud Special Investigations Unit.

As it turned out, there had been a home appraisal, the investigators discovered. In fact, Keith Scribner met with the appraiser. And the appraisal included photos of the patio cover. A real estate agent interviewed by investigators described the cover as being "small and nothing special or significant."

The home's previous owner also provided photographs of the structure. It was originally canvas. When that because troublesome to remove each year, the homeowner bought a polycarbonate cover. Cost: About $300.

An architect told a state fraud investigator that he'd met with Scribner in 2008 -- months before the snow collapse -- to discuss plans to replace the deck cover with new, larger one.

A local company, provided with measurements and photographs of the original structure, drew up replacement bids at the request of a state fraud investigator. The bids: $3,913 and $4,782.

New report cites increased flood risk in coming decades

FEMA on Wednesday released a report on flood risk and the potential impact of climate change, particularly sea level rises.

The upshot: the report said that areas considered flood-prone could substantially increase, particularly here in the Pacific Northwest, by the end of this century. The impact on federal flood insurance -- the National Flood Insurance Program -- would be profound, with substantial increases in both cost and the number of policies.

Mother Jones magazine summarized the report here.

Wildfires and homeowners insurance: Five things you need to know

As wildfire season approaches, here are five important things to know about fire danger and your homeowners insurance:

1) Homeowners insurance generally covers all fires, including wildfires, unless the policyholder intentionally set the fire. Outbuildings and unattached structures are also generally covered.

2) If possible, review your policy to make sure you have enough coverage. Things like fine art and jewelry may have limited coverage under a standard policy. But you can buy special coverage that gives you more protection. Here's information to help determine how much

3) Prepare a household inventory, which will help a lot if you have to file a claim. You can do it with these easy-to-use paper forms, or you can try free iPhone/iPad or Android apps that do the same thing.

4) You can help protect a rural home and limit the danger by clearing a natural firebreak between your home and surrounding trees, brush and uncut fields. The Federal Emergency Management Agency has much more information on how to protect yourself and your home, before, during and even after a wildfire.

5) Have an emergency kit and a family communication plan. Know where your valuable papers (including insurance policy and contact info), mementos and anything you can't live without are, so that you can evacuate with them if needed. Here's a list of recommended emergency supplies. And if you're advised to evacuate, do so immediately. Don't be the person in the photo above.

Heads up: New travel insurance license rules in WA

New rules are taking effect July 1 for travel insurance licensing in Washington state. Here's a summary, albeit one that's pretty heavy on insurance-ese:

• Under the new rules, any individual or business entity that will sell, solicit, or negotiate travel insurance must have the travel line of authority specifically listed on their Washington state insurance producer license.

• There is one exception to this new requirement. If a licensed business entity (agency) wants to transact travel insurance business, it must a) have a producer license with the travel line of authority and b) have a designated responsible licensed person for the agency who has a producer license with the travel line of authority.

Got questions? We've prepared an FAQ page on this topic, and if that doesn't help, you'll find contact info (email and phone) at the bottom of the FAQ page.

Leave Required for Refusals Motion After Set Down

Does a party need leave to continue a refusals motion after it has set the action down?

In Jetport v. Jones Brown, 2013 ONSC 2740 (S.C.J.), the parties brought motions seeking answers to questions refused on examination for discovery.  Although the motions were commenced in May 2012, they were not completed and were adjourned to November 2012.  They were still not completed and further dates in April 2013 then October 2013 were scheduled.  In February 2013, trial was scheduled for May 2015.  

One of the issues on the motion was whether the plaintiff required leave to bring the motion pursuant to r. 48.04(1) since it had set the action down for trial.  The plaintiff argued that it did not require leave based on rule 48.04(2), which provides that r. 48.04(1) does not relieve a party from any obligation imposed by r. 31.07 (failure to answer on discovery).

Master Graham held that the plaintiff required leave.  There is no obligation on a party to answer questions refused on discovery and therefore a motion to compel answers does not fall within s. 48.04(2) so a party that has set the matter down must seek leave to initiate or continue a motion to compel answers to refusals. 

It appears there are two differing lines of case law on this issue.  Counsel should be cautious about setting an action down if there are outstanding refusals they wish to pursue.

Average health insurance premiums, by state

Premiums for family health insurance rose an average of 62 percent -- $9,249 a year to $15,022 a year -- according to the latest survey of employer-sponsored insurance by The Commonwealth Fund.

Employees' contributions to their premiums rose 74 percent during the same time period, from an average of $2,283 to $3,962. And deductibles more than doubled, to an average of $1,123 a year.

The report covers the years from 2003 through 2011; it will be a while before we get comprehensive data for health care reform, which takes full effect next year. In the meantime, we've posted the proposed rate filings for Washington on our website.

Among states in the West, Washington is a standout for below-average premiums compared to median household income, the study found. In Oregon, Idaho, California, Montana and Nevada, premiums compared to income were higher. (Click on the map above for more on this.) In pure dollar terms, Idaho is the fifth lowest-cost state in the country, although its average deductibles are significantly higher than Washington's.

The lowest average premiums were in Arkansas; the highest in Massachusetts.

Regardless, "Health insurance is expensive no matter where one lives," the report's writers concluded. "...Across the country, insurance premiums have risen far faster than median (middle) income for the under-65 population.)"

Here are the state average premiums in our region:

• Washington: $5,144 single, $14,559 family
• Oregon: $5,055 single, $14,283 family
• Idaho: $4,553 single, $13,211 family
• California: $5,255 single, $15,837 family

Long-term care insurance: Why have the costs been going up so much, and what can I do?

One of the most common complaints we hear -- and one of the most frustrating -- is from people who have been paying for long-term care insurance for years, but are on the verge of losing the coverage because they can't afford the cost of fast-rising premiums.

Unfortunately, this is a national problem.

So what can you do if the increase is more than you can afford? You can choose to reduce your benefits under the policy, such as:

• Reduce your daily benefit
• Reduce the benefit period duration, such as from five years to two
• Reduce the amount of your optional inflation protections

 You can also choose what's called the contingent non-forfeiture option. Under this option, you keep your policy in force and stop paying premiums. Your coverage does not end, and the company provides benefits for qualified long-term care services covered under your policy -- here's the caveat -- equivalent to the premiums you've paid.

You may also want to look at the Washington state Long-Term Care Partnership Program, a new option to help consumers pay for long-term care costs and avoid spending down or transferring assets to qualify for Medicaid.

Why have long-term care prices been going up so much in recent years?

Long term care insurance is a fairly new product, with many companies not offering it until the early 1990s. As a result, they had little experience to base their prices on, and early policies were priced significantly lower than they should have been, based on how the cost of claims and the fact that -- unlike life insurance, for example -- few people cancel the policies. People get the policies, knowing they may well need them when they're older, and they tend to keep them.

 

As a result, most long-term care insurers have bumped up their premiums sharply in the past few years -- in some cases 40 percent or more -- angering customers who signed up for policies at relatively low cost years ago.   This puts insurance regulators in a bind. Consumers are understandably unhappy. But if regulators reject the rate increases, the insurance carriers could run into financial trouble, leaving them unable to pay claims. And nationally, a number of insurers have simply gotten out of the business of issuing new long-term care policies, which leaves consumers with even fewer choices. (In Washington, there are still a large number of companies approved to sell the coverage. Here's a list.)      

Stevens County woman convicted of insurance fraud over fake claims

A Stevens County woman has been convicted insurance fraud for claims she filed after a fire of undetermined origin destroyed her home in 2011.

Jenny Rae Balsz, 44, of Colville, pleaded guilty May 28, 2013 in Stevens County Superior Court. She was sentenced to 30 days in jail, which she'll be allowed to serve as 240 hours of community service, plus fines and fees of $850.

(If you suspect someone of insurance fraud, here's how to reach our investigators.)

On the fifth of July, 2011, a fire at Balsz's home in Evans, Wash. burned the structure to the ground. Fire investigators were unable to determine the origin of the fire. At the time, Balsz was in Montana, visiting family.

Her insurance claim included several receipts for a total of $13,899 in items purportedly purchased from a home furnishings store. An investigator for Safeco, Balsz's insurer, later found that Balsz had not purchased any of the listed items at the store. In fact, the store didn't even carry some of the items listed, including antiques and a grandfather clock.

She also submitted a purported receipt for a $6,240 clarinet. The receipt also turned out to be false.

And she submitted a fraudulent $800-a-month lease agreement, claiming that she was paying rent to her landlord. The "landlord" turned out to be her live-in boyfriend; the insurance checks for living expenses went directly to Balsz.

Safeco, as required by law, reported their findings to our office's anti-fraud unit, known as the Special Investigations Unit. After they investigated further, our office sought charges against Balsz.

The charge on which she was convicted is a felony.

Important notice to insurers re: new online complaint system

As Washington state's insurance regulator, a large part of what we do is try to resolve consumer complaints against insurers: delayed or denied claims, wrongful cancellation of policies, etc.

To speed up the process, we have developed a new online "Complaint Response System," or CRS. This allows us to contact insurers over the internet while still protecting people's private information.

Here's the key part for insurers to know: On June 28, 2013, companies with an active Washington license will be automatically registered for the new system. Any consumer complaints received by our office regarding those companies will be uploaded to the CRS beginning July 1, 2013. After this date, we will no longer be sending complaints to you via US Mail. The CRS will be the only avenue used to forward complaints to you and receive your responses.

We would like to invite those companes to participate in our CRS training. It will only take a couple hours of your time and will assist you in navigating the new system.

We strongly encourage any of your staff who responds to Washington consumer complaints to attend one of the below trainings.

There are two training times available:

• Tuesday, June 18: 9:00 a.m. – 11:00 a.m. (PST)

• Monday, June 24: 1:30 p.m. – 3:30 p.m. (PST)

We will email the WebEx invitations on June 10th to your company's complaint contact.

To learn more about the company Complaint Response System (CRS) project, visit our meetings page.

New report: Washington State Health Insurance Pool

The state's high-risk health insurance pool, known as the Washington State Health Insurance Pool, has issued its annual report. From it:

• The program saw a 5 percent decline in enrollment last year, probably due to the availability of a temporary (and now closing) federal high risk pool here in Washington state.

• And claim costs increased 11 percent, from $93 million to $103 million.

Some 3,675 people are enrolled in WSHIP. These are folks that cannot find coverage at the current time in the individual insurance market or Medicare supplement market, due to pre-existing medical conditions such as kidney failure, cancer and HIV/AIDS. (Under federal health care reform, insurers next year will no longer be able to turn away sick applicants.)

Created in 1987 by the Legislature, WSHIP is overseen by a board of directors. The program is not state-funded: Premiums charged to members cover about a third of claim costs; health insurers pay the remaining costs. Administrative costs are about 3 percent of expenses.

Little-known fact: Many life insurance policies automatically end at a certain age

Did you know that many life insurance policies have a built-in end date? It’s true -- and most people don’t learn about this until their policy ends and they find themselves without life insurance.

Life insurance policies often have language that says the plan automatically ends when you turn a certain age, such as 65 or 90. If you’re lucky enough to live until your policy’s end date, you may find yourself in the uncomfortable position of being without life insurance at a time when your health might not be good enough for you to buy another life insurance policy.

To prevent that kind of unpleasant surprise, read your policy. If the policy has an end date, and if you’re still healthy enough to qualify to buy life insurance, you might want to find a different policy that doesn’t have an end date.

For more information -- including about the 10-day "free-look" period, what documents to save, etc., please see our "Tips for buying life insurance" web page.

Tools to help estimate the costs of medical procedures

Nationally, a number of consumer groups and government agencies have put together tools to try to make it easier to estimate the costs of a medical procedure before you have it. Among them:

Healthcare Blue Book, which describes itself as a "free consumer guide to help you determine fair prices in your area for healthcare services.

Fair Health Consumer Cost Lookup, an "independent, not-for-profit corporation whose mission is to bring transparency to healthcare costs and health insurance information."

If you're comfortable with Excel, the federal Centers for Medicare and Medicaid Services have also pulled together a lot of pricing data on the 100 most common inpatient services and 30 common outpatient services.

So what do you do if you're uninsured and are facing huge bills for a needed procedure? See our "can't afford health coverage" web page, which lists:

• Many assistance programs, including those that cover children, veterans, pregnant women, those needing organ transplants, disabled workers, etc.
• Low-cost help for vision and hearing problems
• Free- and low-cost dental clinics
• Free breast-, cervical-, and colon-cancer screenings, HIV care help and support, etc.

Further Defence Medical Ordered After New Evidence Produced

In Low v. Clarke, [2013] OJ. No. 1703 (S.C.J.), the defendant brought a motion seeking to compel the plaintiff to attend a further defence medical with a neurologist.

The plaintiff was examined by a neurologist, Dr. Upton.  Following the examination, the plaintiff served over 400 photographs of the plaintiff post accident.  According to Justice Glithero, the photographs appeared to show the plaintiff in various physical activities that were inconsistent with what she had previously reported to doctors.  The defendant filed a letter by Dr. Upton stating that a further examination would be important and useful to his opinion at trial.

Justice Glithero cited with approval a number of factors from Bonello v. Taylor, 2010 ONSC 5723:

1.  The request may be legitimate where there is evidence the plaintiff's condition has changed or deteriorated.  Justice Glithero added to this factor: where new evidence is disclosed and is material to the opinion and to any proper assessment of the extent and nature of injuries sustained.
2.  Trial fairness should be the guiding principle.
3.  Ordering further examinations may be just where they are necessary to enable the defendant to fairly investigate and call reasonable responding evidence at trial.

Justice Glithero allowed the motion and ordered a further examination.  Although these types of motion are largely fact specific, it is important to remember the guiding principle of fairness when deciding what evidence to present to the court.

"Am I eligible for a subsidy to help pay for health insurance?"

As a result of the health care reform law, you might qualify for a health premium tax credit -- often referred to as subsidies -- that you could use to reduce your monthly health insurance premiums, reduce the amount of taxes you owe, or both.

Here’s a calculator that will show whether you’ll qualify for the tax credit. (Note: If your employer offers what is deemed affordable coverage -- meaning that the employee's coverage to cover him- or herself costs less than 9.5 percent of income -- you aren't eligible for the Exchange.)

If you are eligible for the tax credit, then you’ll need to decide whether you want to receive it. If yes, then you’ll need to buy your health insurance through the Exchange, also known as the WashingtonHealthplanfinder.

Health insurance plans will be available on the Exchange website starting this fall, and you can enroll in Exchange plans from 10/1/13 through 3/31/14. Plans will start as early as 1/1/14, depending on the date that you enroll.

If you’re eligible for the health premium tax credit, you can receive it by:

• Taking the tax credit in advance, which will reduce your monthly premiums;
• Using the tax credit later, when you file taxes, to reduce the amount you owe in taxes for that year; or
• Taking part of the tax credit in advance to reduce your monthly premiums, and using the rest later to reduce the amount you owe in taxes for that year.

At the time that you sign up for a health plan through the Exchange, you’ll need to tell the Exchange how you want to take your tax credit.

There’s nothing that you need to do right now; just be aware that if you qualify for and want to take the tax credit, you’ll need to sign up for a health plan through the Exchange between October and March.

For more, please see our "Health care reform -- what it means to you" page.

Job opening: Human resources consultant

We're recruiting to fill a Human Resource Consultant 3 (Senior HR Generalist) position with our agency's operations division, based at our Tumwater, Wash. office.

 

The successful candidate, with guidance from the agency's human resources manager, will use a high degree of professional judgment to consult with assigned divisions on a variety of complex human resources issues.

 

For more specifics, duties, salary, timeline, etc., please see the full job listing.

For other current job openings in our office, please see our "job opportunities" web page. At the current time, we have four positions we're recruiting for. The others include:

• Deputy insurance commissioner for company supervision
• Senior market analyst
• Information technology specialist

"My company's wellness program is asking me health questions. Is that legal?"

We often hear from consumers who ask whether it's legal for their employer to ask health questions in conjunction with employee wellness programs.

Last week, the federal government issued a final rule addressing this issue. The answer: Yes, employers can do that, as long as they meet certain non-discrimination criteria. Among them:

• The wellness program must be "reasonably designed to promote health or prevent disease,"
• must not be overly burdensome,
• and may not be "a subterfuge for discriminating based on a health factor."

Here’s a link to the rule where you'll find a lot more details, plus a link to an article that gives a good overview of the rule.