Cyber Liability: How to Grapple with Continuously Evolving Risk

Businesses battle new threats daily thanks to social media, mobility, the cloud and other technologies, but preparation and risk transfer can help you confront cyber-attacks when—not if—they occur.

New online publishing and social media venues. New applications and business systems. New, and almost always mobile, devices. And with the cloud, new locations for your data and applications, from around the corner to around the world. Technological change maintains its relentless pace—and each new development brings new risk factors that businesses ignore at their peril.

It’s no longer a question of “if,” but rather, “when,” a cyber-related threat confronts your business or your clients’ businesses, warned Laura Toops, editor of American Agent & Broker, as she kicked off a recent PropertyCasualty360 web seminar titled “Cyber Liability: A View from the Trenches.” Citing Ponemon Institute data, Toops noted that 71% of businesses surveyed faced cyber-attacks in 2011. Yet the majority of companies remain unprepared for cyber-attacks that can threaten their data, their customers’ data, their employees, and the operations and reputation of their businesses, Toops said. Only 38 percent say they are increasing their 2012 budgets to address these cyber threats.

 Everyone’s on the Hot Seat
All too often, cyber liability still is viewed as a problem to be addressed by the IT department. That’s a critical mistake, Toops said, because a cyber-attack puts “a lot of people on the hot seat”—among them agents and brokers, risk managers, senior management, outside auditors, and even a company’s board of directors. She cited the recent example of Wynham; in June, the Federal Trade Commission sued the hotelier for alleged data security failures that resulted in three security breaches during the past two years.

Remarkably, only a third of companies today have cyber-related insurance coverage. “The question is, ‘Why not more?’” commented attorney Lori S. Nugent, co-chair of the data security and cyber liability practice at Wilson Elser, as she shared her experiences helping clients cope with real-world cyber losses and the litigation that frequently follows cyber-attacks. “Both individuals and the companies they work for can be sued.”

Nugent delved into a number of risks associated with the rise of e-publishing and social media—in particular, the risks associated with defamatory communication. It can be easy to forget in the effortlessness of online commentary that “if you say something defamatory, you can be sued,” she said. Prior to the Internet age, damages from defamation cases were often linked to the circulation of a publication. “Now, it can go viral and literally go around the world.” Online endorsement or disparagement of products—whether your own company’s products or a competitor’s—also is risky ground, Nugent added—especially “in cases of failure to disclose that you work for the company.”

Tracking for Trouble
Privacy violations are another critical concern for companies—especially with the widespread use of technology to track web site visitors. Tracking of visitors to your company’s web site can be fodder for class action lawsuits, according to Nugent, especially “when individuals visiting your site didn’t authorize the tracking and you’re using technology to track everywhere the user goes even after they leave your web site.” On the other hand, she said, “we’ve had good success in litigation when our clients could prove that either they didn’t track or that the tracking was approved by users.”

Unfortunately, “sometimes companies are not aware of the tracking that is being done on their behalf,” Nugent warned. For example, this can happen when, unbeknownst to the IT or legal departments, a third-party vendor convinces the marketing department to implement tracking to gather more useful data on web site visitors. It is crucial that companies “know what tracking vendors do in your name,” she said. Companies should make a clear decision—either to not track their web site users, or to track very carefully, with clear consent from users.

Preventing and Mitigating Cyber Losses
Data breaches—not just hackers breaking into networks, but especially the loss or theft of devices and paper-based data—remain a company’s most commonplace cyber risk. Nugent prescribed several key steps for protecting businesses:

  1. Moderate your data diet. Take in only the information you need, discard it when you don’t need it, and never share it unless the other party needs it and you are authorized to provide it.
  1. Protect sensitive data. Physical security remains very important—so lock your cabinets and office doors. Implement robust firewalls, encryption, and other forms of network security. Protect mobile devices used by employees with encryption, the ability to remotely “wipe” the device if it’s lost or stolen, and ideally by not allowing sensitive data to be loaded onto the device in the first place.
  1. Have a written security plan. An information security plan should document what sensitive information you handle—what you receive, what you keep, and what you send—how you protect it, and what you do in case of a breach.
  1. Have a breach response plan. Eliminate finger-pointing by knowing who is responsible for what, when must notification be provided, and who must be notified. Take steps to ensure regulator and contractual compliance. Recognize that nothing is “off the record” and that it takes effective response to protect your reputation and your business.

Risk Transfer for Cyber Liability
Cyber insurance represents another key way to prepare for the threat of cyber-attack. But companies must do their homework to figuring out what coverage to pursue—and how their risk management efforts can translate into lower costs for risk transfer solutions.

Going through the application process is an important first step, said Scott Hammesfahr, who specializes in cyber liability underwriting for Zurich North America. Completing an application serves three main goals.  First, it facilitates communication between departments that may not work together regularly such as IT, HR, Legal, and Risk Management. Second, it will set pricing expectations for risk transfer solutions allowing for better budgeting.  Finally, it highlights the sorts of controls that underwriters feel most contribute to effective risk management.  Underwriters and agents often can provide guidance on where the company should improve cyber risk management—including recommending third-party technical consultants to implement better controls that in turn can reduce the cost of transferring cyber risk.

People, processes, and technology are all important factors in the underwriting of cyber risk coverage, Hammesfahr explained. Companies should have qualified employees with clear accountability for data security and privacy, training should be formalized, and efforts must be coordinated across internal departments. Formal processes should encompass security and privacy policies, regulatory compliance, disaster recovery planning, network mapping, password management, physical records, and more. Technology should “establish the front line of defense with the right technology security tools and products such as firewalls, encryption, monitoring tools, and established redundancies,” he said.

Cyber risk transfer solutions vary by carrier, so companies seeking to purchase cyber insurance coverage should pay close attention to what is covered, Hammesfahr said. Key questions to ask include:

  • Does coverage extend to third-party service providers?
  • Is there coverage for the actions of rogue employees?
  • Are there sub-limits built into the coverage form?
  • Does privacy breach coverage apply regardless of applicable notice laws?

By John W. DeWitt, reprinted from PropertyCasualty360

Do you have questions about Cyber Liability and protection for your business?  Call ACBI today to be sure you are properly covered.

Social Media as a Tool Against Insurance Fraud

Social media is changing the nature of insurance fraud investigations, as sleuths uncover connections among criminals by digging through popular websites — and find that scammers are often their own worst enemies.

The scam seemed easy enough. A woman worked in the facilities department at a company that awarded a maintenance contract to a firm secretly run by her husband. Soon after, he started billing for all kinds of services — most of which were not actually rendered. The fraud seemed simple enough to execute — and with insiders at both companies, it could prove hard to detect.

“He pads invoices and she pays them,” said Chris Giovino, partner in charge of forensics at Dempsey Partners. “They were outwardly stealing from the company.”

But in this case, the fraudsters didn’t count on Giovino, who spent 30 years as a special agent with the Drug Enforcement Administration. Giovino had the requisite expertise in mining social media and databases for clues about fraud, and his investigation led him all over the Internet, from Facebook to LinkedIn to the White Pages. He eventually found an address associated with the maintenance vendor that matched an address associated with the couple’s grown children. Giovino had hit the bull’s-eye.

Investigations like Giovino’s are becoming more typical, as insurance companies and third-party investigators say that mining social media sites is an essential part of insurance-related fraud research. No longer is social media a peripheral, cutting-edge tool used in investigations. These days, it’s a pillar of the process.

And with insurance fraud accounting for $30 billion, or 10 percent of losses in the property and casualty insurance industries in the United States each year, according to the Insurance Information Institute, investigators need any effective methods they can get their hands on. Adding to the need is that the fraudsters, especially ones attacking company’s cyber security, are using methods that investigators may not have even heard about yet.

Aaron Soline, a manager at the National Insurance Crime Bureau, said that when he started investigating insurance fraud many years ago, he typically had nothing to go on but a name, maybe an address. With the advent of the connections generated by social media, Soline said he can now find photos, employment information, past education, date of birth and even see who people interact with. It all helps paint a more complete picture of a potential fraudster and the crime for which they are being investigated.

Any discussion of social media starts with Facebook. With more than 950 million users, chances are that site alone is likely to yield information about would-be thieves. In fact, investigators are often helped in their quest by the very subjects they are looking for. Even though Facebook recently upgraded its privacy settings after mounting criticism, “a lot of people don’t care about the privacy settings [on Facebook] or don’t know how to use them,” said Soline. “Twitter has privacy [settings] but most people don’t engage those either.”

Private Web page settings hamper investigations, said Kelly Cory, president and CEO at Keystone Investigative Services Inc., but plenty of people couldn’t be bothered with engaging privacy settings. “If they’re blocked, they’re blocked, but you’d be surprised at how many people don’t think of that,” she said.

Facebook’s newly added location services allow users to “check in” at places to tell friends that they are at a bar, restaurant, park or even a different city, and it turns out that that tool is a big help to investigators. Here’s why: A trucker “checks in” at a bar on his Facebook page at 5:43 p.m. on Friday. He later climbs into his rig and minutes later plows into three cars at a strip mall parking lot. Police reports indicate the accident took place at 7:39 p.m., and the trucker claims he was on his way to deliver his load. Both true, but the Facebook entry reveals there’s more, and investigators have a reason to ask if the trucker was hitting the bottle before the accident.

Similarly, if an injured worker’s Facebook page indicates he or she “checked in” at the gym, it’s also probable they were working out, leading investigators to question an injury claim filed by a worker pumping iron at the gym.

Investigators stop short of “friending” the person they are probing. That’s because contacting claimants who are represented by attorneys violates the law, said Cory, and “friending” could certainly be seen as a form of contact.

“You don’t want to get into an area where it’s entrapment,” she said.

Scouring the Internet for clues about fraudulent activity may sound easy. Investigators could just run searches on Facebook, LinkedIn and Twitter, then get more background research using Google or Bing, and call it a day.

But the process can actually be quite cumbersome, experts said.

Dead ends persist, false positives abound. A search for “John Smith” could yield thousands of people across the country. So investigators painstakingly try to connect information about people to corroborate the information. Doing so efficiently is paramount.

“It’s actually really boring and tedious. You have to know when to stop or else you can spend 20 hours going into a dead end,” said Giovino. “That’s what separates the good investigators from the bad ones.”

Perhaps nowhere has social media made more inroads in rooting out insurance scams than in workers’ compensation.

An “injured” worker posts a photo of himself riding a mechanical bull. A Facebook friend unwittingly shares a photo of a “disabled” worker playing basketball in a recreational league game. A claimant on temporary total disability posts a video to YouTube of herself in a dance competition.

Cory recalled a time when she was investigating a person claiming to have a back injury, then found a photo posted to a social media site of the individual participating in a karate class. It’s that kind of evidence that can crack a case — and get an insurance company’s attention. “When you put that picture in the report, the clients eat that up,” she said.

Social media has become a godsend for investigators, and fraudsters are often so inept that they verge on the amateurish: They share information about their crimes and invite capture. “People like to show friends they’re riding a jet ski or show them that they’re out and about and doing things,” said Soline of the NICB, “so they end up posting it.”

Jim Quiggle, director of communications at the Coalition Against Insurance Fraud in Washington, D.C., said workers’ comp insurers seem the most pleased with how social media is helping them find fraud.

“People love to brag about how they ripped off insurance companies. They can’t keep their mouths shut,” he said. “People post photos of themselves in Aspen on a black diamond slope” when they should be home nursing an injury.

Brian Smidt, vice president of data analytics at the NICB, said swindlers of all types get caught because they share too much on social media sites. A claimant who reports his motorcycle stolen in March, but then posts a photo of himself riding it in May, practically solves his own crime as investigators can use technical clues to figure out when online photos were taken.

Smidt said there have been many times when his team has presented an individual with evidence of claims fraud gathered on social media sites, and the claimant has subsequently retracted his or her claim. Those cases are easy, as they practically solve themselves, he said.

Investigators find social media particularly useful to track the connections between fraudsters, which can tip law enforcement off to larger, more sophisticated crime rings. “It’s unlikely you’d crash into a car full of people you are friends with on Facebook, when you previously admit that you don’t know them,” said Soline.

Tracking down larger, more organized crime rings is much more satisfying, experts said. If a doctor and an attorney have been working together on fraudulent auto accident cases, are they connected through Facebook or LinkedIn? Are they using Twitter to set up dinner plans?

“It helps locate different relationships you might not be aware of,” said Soline.

Al Marrazzo, manager of the special investigations unit at ESIS Inc., agrees. If a person has a slip-and-fall at a store — then a series of searches find that they live in a house with two people who also have pending slip-and-fall cases — that’s a suspicious coincidence. “Nobody slips and falls that many times,” he said. “There is so much more information at our desktops that we didn’t have in the past — who they are, who they associate with and links through the Internet to other names.”

ESIS, the third-party administrator that manages claims for the ACE Group, hires private firms to investigate fraud — and they are required to conduct Internet and social media website searches as part of their investigations.

That can mean big money savings.

An investigation of an injured worker may lead to an adult basketball league website, and provide the date, time and location of a game. Surveillance teams show up at the game — meaning they only need to be paid for that one occurrence, not days and days of surveillance that might turn up nothing.

Brian Wilson, head of the Special Investigations Unit at Zurich North America, said social media has been a great tool in helping its investigators confirm identities of individuals since they are able to find photos, vehicle information, location, manner of dress or interests. That can help Zurich investigators — who are often former law enforcement officials and claims professionals — create a timeline of the fraud.

But Wilson is careful not to take information on the Internet at face value. Instead, he uses it to corroborate or dispute information from traditional investigative methods such as interviews or records checks.

“There is no formula” for investigations at Zurich, he said. Investigators start with what they have and move quickly, especially because information on the Internet has a “shelf life,” and needs to be discovered before it’s taken down. Auctions on eBay eventually come to an end and are removed from the site. Newspaper stories get archived. People take down YouTube videos. Investigators need to work fast to make sure they get all the information before it disappears.

(From Risk & Insurance, October 2012)

Health Care Reform: 2013 Compliance Checklist

In light of the Supreme Court’s June 28, 2012, decision to uphold the health care reform law, or Affordable Care Act (ACA), employers must continue to comply with ACA mandates that are currently in effect. Employers must also prepare to comply with ACA changes that will go into effect in the future. To prepare for upcoming changes, employers need to be aware of the ACA mandates that will go into effect in 2013.  

This Associated Community Brokers, Inc. Legislative Brief provides a compliance checklist for employers for 2013. Please contact our office if you have questions about changes that were required in previous years.

GRANDFATHERED PLAN STATUS

A grandfathered plan is one that was in existence when health care reform was enacted on March 23, 2010. If you make certain changes to your plan that go beyond permitted guidelines, your plan is no longer grandfathered. Contact your Associated Community Brokers, Inc. representative if you have questions about changes you have made, or are considering making, to your plan.

□    If you have a grandfathered plan, determine whether it will maintain its grandfathered status for the 2013 plan year. Grandfathered plans are exempt from some of the health care reform requirements. A grandfathered plan’s status will affect its compliance obligations from year-to-year. 

□    If you move to a non-grandfathered plan, confirm that the plan has all of the additional patient rights and benefits required by ACA. This includes, for example, coverage of preventive care without cost-sharing requirements.

ANNUAL LIMITS

Effective for plan years beginning on or after Jan. 1, 2014, health plans will be prohibited from placing annual limits on essential health benefits. Until then, however, restricted annual limits are permitted.

□    Unless a health plan received an annual limit waiver, its annual limit on essential health benefits for the 2013 plan year cannot be less than $2 million. (This limit applies to plan years beginning on or after Sept. 23, 2012, but before Jan. 1, 2014.)

SUMMARY OF BENEFITS AND COVERAGE

Health plans and health insurance issuers must provide a Summary of Benefits and Coverage (SBC) to participants and beneficiaries. The SBC is a relatively short document that provides simple and consistent information about health plan benefits and coverage in plain language. A template for the SBC is available, along with instructions and examples, and a uniform glossary of terms.

Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period beginning with the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.

□    If your plan has an open enrollment period beginning on or after Sept. 23, 2012, confirm that the SBC is included with the open enrollment package. For participants and beneficiaries who enroll outside of the open enrollment period, confirm that the SBC will be provided to these individuals beginning with the plan year starting on or after Sept. 23, 2012.

  • If you have a self-funded plan, the plan administrator is responsible for providing the SBC.
  • If you have an insured plan, both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. Thus, if you have an insured plan, you should work with your health insurance issuer to determine which entity will assume responsibility for providing the SBC. Please contact Associated Community Brokers, Inc. for assistance or for more information on this important topic. 

5 Things to Discuss with Your Teen Driver

Driving can open up new opportunities for teens but with those opportunities comes responsibility. It’s important for teens to understand those responsibilities and for parents to set appropriate expectations. With school starting shortly it’s a good time to sit down with your teen driver and have a discussion about your rules and expectations on how they use a car, whether they have their own or borrow yours. Here are five subjects you’ll want to cover with your teenager when it comes to driving. 

1) Distracted Driving. According to the FCC, distracted driving accounted for 16% of all fatal crashes in 2008 and 21% of accidents involving injuries. Distractions can include texting, talking on the phone and even scrolling through a playlist on your MP3 player. When you’re in a car, remember that no text or phone call is worth injuring or killing yourself, your passengers and others on the road. If you need to call or text someone for directions or to let them know you’re on your way, pull into a parking lot or a safe area along the road with plenty of room between your vehicle and moving traffic

.2) Driving under the influence. Automobile accidents are the leading cause of death among teens, with one third of those deaths being alcohol related, according to the organization Mothers Against Drunk Driving. Avoiding situations with alcohol and drug use is the best way to avoid driving under the influence or riding with someone who is under the influence. If necessary make arrangements to have a designated driver or call someone else for a ride. There are no consequences that are worse than injuring or killing yourself or others.

3) Passenger Safety. As a driver, you have a responsibility for the passengers in your vehicle. Make sure you and your passengers all have their seatbelts on before leaving and during all trips- whether down the street or outside town. A driver should make sure that passengers don’t lean out of windows, throw things from a moving vehicle or engage in other horseplay.

4) Obeying traffic laws. While this seems obvious, making an effort to follow all the laws as a new driver will help establish good driving habits and avoid bad ones like excessive speeding and rolling through stop signs.

 5) Protecting the vehicle and its contents. Whether going to the mall or driving to school, remember to lock the car doors. Thieves look for easy targets, and if they see a GPS unit, a phone, CD’s etc. in an unlocked car you’ve made their job easy. Remember to do a quick scan for anything that might be tempting to a thief and either take it with you or stow it in the glove box, or under a seat.

If you have a teen driver, talk with ACBI about how you can insure your teen driver and your options for obtaining coverage if they have their own car. We can also help explain how the coverage works and what they should do in the event of an accident.

Insuring Income: The Lifeblood of Your Business

If someone asks you if your firm has a catastrophe plan, how would you respond? Would your answer sound something like this: “There’s nothing in writing, however, if something happened that compromised our ability to earn we have a good idea what we would do.”

Maybe your plan is to contact a competitor to help you set up shop for a while. Maybe it’s to rent space and negotiate new service contracts with vendors. Maybe it’s nothing at all.

Without a defined plan, the continuity of your firm after a serious loss damages your property—such as a fire or windstorm—is questionable. So, a damaging loss brings your operations to a screeching halt, consider business income insurance. If this insurance policy is designed to supplement the resulting lost income as well as provide much needed dollars to pay continuing expenses.

While commercial property insurance protects your real estate and contents, business income insurance protects your firm against loss to your firm’s profit-and-loss statement by covering continuing expenses, helping your firm preserve contractual obligations and retaining personnel.

Excuses, Excuses
There are several reasons often cited by business owners for not purchasing business income insurance—and the most common one is cost. Because this insurance is not typically required to secure and retain a loan for a piece of property, many business owners forgo this important coverage to keep costs down.

Another common reason is the nature of the insurance itself. Quite simply, business income coverage is different from standard property insurance in that it is designed to cover indirect losses. Many owners incorrectly assume all costs resulting from the loss are covered by the commercial property policy, when in fact that policy is only designed to cover direct losses to property such as a damaged roof or broken windows.

Another reason is that many business owners show reluctance when asked to furnish complex and sensitive financial data during the underwriting process.

Some Alternatives
Owners that forgo business income coverage are left with few options to protect the firm’s income after a loss. Examples include:

Cash. Even if the firm is in a position to continue funding necessary costs with cash, wouldn’t you prefer to use the firm’s cash for expansion or growth rather then using up this valuable resource funding a catastrophe plan?

Borrow. Your firm could collateralize the loan with the firm and/or its resources. However, keep in mind that a severe loss has just occurred and therefore lending institutions may be skeptical in handing out funds when it appears the firm’s ability to generate revenue has been compromised.

Determining Adequate Coverage
This can be tricky. The good news is that your Trusted Choice® independnet insurance agent can help guide you through the process. Examples of questions that must be addressed include:

• How long will it take to rebuild? Could you relocate to an alternate location?

• Do you have any reciprocal agreements with competitors that could help your firm stay afloat by sharing resources?

• Does your firm have contracts with vendors or suppliers that could be jeopardized by your indefinite absence from the marketplace?

• What is your firm’s anticipated loss of Business income? Business income includes net income (net profit or loss before income taxes) and continuing normal operating expenses, including payroll. This should include total profits and all expenses that will continue during the interruption.

• How much extra expense coverage is needed? Extra expense insurance typically is sold along with business income insurance. This insurance provides dollars to pay expenses that exceed the normal operating expenses you would have incurred had the loss never happened, such as the cost of leasing a temporary space. It also is designed to cover necessary expenses that reduce the business income loss such as overtime payments to laborers that expedite repairs.

• What is your firm’s projected net income and operating expenses for the next 12 months?

• Would sales continue to suffer for an extended period of time after your firm reopened for business?

The truth is that many businesses go under after a catastrophic loss not because the building can’t be repaired, but because of the firm’s inability to earn. Business income insurance is designed to remedy this situation; this is why it is often referred to as disability insurance for your business. For more information on securing valuable Business income insurance for your firm call ACBI today.

Tax Penalty to Hit 6 Million Who Don’t Buy Health Insurance by 2016

Nearly 6 million Americans — significantly more than first estimated— will face a tax penalty under President Barack Obama’s health overhaul for not getting insurance, congressional analysts said. Most would be in the middle class.

The new estimate amounts to an inconvenient fact for the administration, a reminder of what critics see as broken promises.

The numbers from the nonpartisan Congressional Budget Office are 50 percent higher than a previous projection by the same office in 2010, shortly after the law passed. The earlier estimate found 4 million people would be affected in 2016, when the penalty is fully in effect.

That’s still only a sliver of the population, given that more than 150 million people currently are covered by employer plans. Nonetheless, in his first campaign for the White House, Obama pledged not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.

And the budget office analysis found that nearly 80 percent of those who’ll face the penalty would be making up to or less than five times the federal poverty level. Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four.

Average penalty: about $1,200 in 2016.

“The bad news and broken promises from Obamacare just keep piling up,” said Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, who wants to repeal the law.

Starting in 2014, virtually every legal resident of the U.S. will be required to carry health insurance or face a tax penalty, with exemptions for financial hardship, religious objections and certain other circumstances. Most people will not have to worry about the requirement since they already have coverage through employers, government programs like Medicare or by buying their own policies.

A spokeswoman for the Obama administration said 98 percent of Americans will not be affected by the tax penalty — and suggested that those who will be should face up to their civic responsibilities.

“This (analysis) doesn’t change the basic fact that the individual responsibility policy will only affect people who can afford health care but choose not to buy it,” said Erin Shields Britt of the Health and Human Services Department. “We’re no longer going to subsidize the care of those who can afford to buy insurance but make a choice not to buy it.”

The budget office said most of the increase in its estimate is due to changes in underlying projections about the economy, incorporating the effects of new federal legislation, as well as higher unemployment and lower wages.

The Supreme Court upheld Obama’s law as constitutional in a 5-4 decision this summer, finding that the insurance mandate and the tax penalty enforcing it fall within the power of Congress to impose taxes. The penalty will be collected by the IRS, just like taxes.

The budget office said the penalty will raise $6.9 billion in 2016.

The new law will also provide government aid to help middle-class and low-income households afford coverage, the financial carrot that balances out the penalty.

Nonetheless, some people might still decide to remain uninsured because they object to government mandates or because they feel they would come out ahead financially even if they have to pay the penalty. Health insurance is expensive, with employer-provided family coverage averaging nearly $15,800 a year for a family and $4,300 for a single plan. Indeed, insurance industry experts say the federal penalty may be too low.

The Supreme Court also allowed individual states to opt out of a major Medicaid expansion under the law. The Obama administration says it will exempt low-income people in states that opt out from having to comply with the insurance requirement.

Many Republicans still regard the insurance mandate as unconstitutional and rue the day the Supreme Court upheld it.

However, the idea for an individual insurance requirement comes from Republican health care plans in the 1990s.

It’s also a central element of the 2006 Massachusetts health care law signed by then-GOP Gov. Mitt Romney, now running against Obama and promising to repeal the federal law.

Romney spokeswoman Andrea Saul said the new report is more evidence that Obama’s law is a “costly disaster.”

“Even more of the middle-class families who President Obama promised would see no tax increase will in fact see a massive tax increase thanks to Obamacare,” she said.

Romney says insurance mandates should be up to each state. The approach seems to have worked well in Massachusetts, with virtually all residents covered and dwindling numbers opting to pay the penalty instead.

Reposted, by Ricardo Alonso-Zaldivar, Associated Press.

Insurance Institute Names 4 Car Models Top Safety Picks

The Dodge Dart, the model Chrysler is betting on becoming a top-selling small car, was among four new vehicles on the U.S. market to receive a top crash-test rating by an influential safety group on Wednesday.

The 2013 Dart, the first model jointly engineered and designed by Fiat SpA and Chrysler Group LLC, was named a “Top Safety Pick” by the Insurance Institute for Highway Safety.

Three other 2013 models, each one redesigned from previous model years, also earned the top rating: the Hyundai Motor Co. crossover Santa Fe, the Lexus ES 350 midsize luxury sedan, and the Subaru XV Crosstrek hatchback.

The rating means that each vehicle performed well in test crashes evaluating front, side and rear impacts as well as rollovers.

“We had high expectations for the Dart and our engineers delivered,” said Reid Bigland, chief of Chrysler’s Dodge brand.

Of the 180 vehicles IIHS tested for the 2012 model year, 132 were awarded the Top Safety Pick designation, said Russ Rader, spokesman for IIHS.

The IIHS will issue in December its annual list of the safety report for vehicles sold in the U.S. market. These four models were tested after manufacturers requested the tests ahead of the normal IIHS schedule, Rader said.

Each of the four models were introduced to the U.S. market within the last several months.

Hyundai’s Santa Fe sold the most among the new models in September, at 7,378, an increase of 19 percent over last year, a marked improvement over August sales of 4,524, indicating the attractiveness of the newer model.

Hyundai last month said that it aimed to sell 100,000 of the newly remodeled Santa Fe vehicles in the 2013 model year in the U.S. market.

The Lexus ES, from Toyota Motor Corp , sold 6,553 vehicles in September in the U.S. market, up 81 percent from a year ago. A Lexus spokesman said that 80 percent of the cars sold in September were the new 2013 model.

Dart’s September U.S. sales were 5,235, up from August sales of 3,045.

In its first full month of sales, Subaru’s XV Crosstrek’s September sales were 192.

While 73 percent of the models IIHS tested last year received the top safety rating, next year’s test will be more stringent.

The new front crash tests will evaluate a vehicle’s safety in a crash that impacts the front corners. This will be more demanding because most manufacturers create a structure for vehicles that can better absorb middle-front collisions.

In a recent test of 11 luxury midsize cars by using the new corner-front crash evaluation, only two models earned the top safety ranking, the IIHS said.

Subaru is owned by Fuji Heavy Industries of Japan.

(Reposted from Reuters and Insurance Journal)

New Catastrophe App Helps iPhone Users Prepare For The Worst

The Insurance Information Institute released a free mobile disaster preparedness app that provides safety tips, communication tools and checklists for common disasters. This helps people prepare for severe winter weather, wildfires, earthquakes, hurricanes and other types of disasters.

One of the best ways to make it through a catastrophe is to be prepared beforehand. The Know Your Plan app has several checklists containing preparedness steps and property protection steps. App users are also able to build their own customized checklists from scratch. Every list allows users to set completion dates, record progress and add personal notes to various tasks.

There are also other options. App users are able to share their lists with friends and family members. In addition to this, there are resources available for planning evacuations. This also includes evacuation of pets. The helpful app also provides up-to-the-minute data about disaster details and local evacuation routes. Know Your Plan is available from iTunes, and it can be found by searching for the Insurance Information Institute on the iPhone App Store.

During the past 10 years, insurance companies spent almost $250 billion in settling the claims of disaster victims throughout the United States. The overall cost of catastrophes is rising continuously, so insurance companies are looking for every helpful tool they can find to help speed up the repair process and prevent unnecessary injuries to humans.

The I.I.I. partnered with the Insurance Institute for Business & Home Safety to develop property mitigation information. The IBHS is a respected organization specializing in building science research and communications. This organization tries to reduce the negative effects of disasters through research, maintenance, improved construction and encouraging preparedness.

In 2011, many communities throughout the United States experienced record-breaking catastrophes. The IBHS and the I.I.I. want to lessen the amount of future damage from such strong catastrophic occurrences. With so many people using the iPhone, the two organizations knew it would be possible to reach out to millions of people to help them take control of risks through proper preparedness. Some of the new app’s features include the following editable checklists:

– Earthquake
– Flood
– Hurricane
– Tornado
– Wildfire
– Severe Cold
– Emergency Kit
– Evacuation
– Blank Checklist

There are also note-taking features for individual tasks, and users have the option to select due dates for their checklists. A countdown feature is included for progress tracking. There is a Google Crisis Response feed allowing access to emergency information from local sources.

This app is the second in a series of apps created by the I.I.I. The first app is Know Your Stuff, and it includes home inventory information. Know Your Stuff is available for both Android and iPhone users. For more information about preparing for catastrophes, discuss your concerns with ACBI.

(Reposted from Fidelity Insurance Group)