Category Archives: Insurance News

HHS releases voluntary cybersecurity practices for health industry

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(Washington, DC – Insurance News 360) – On Dec. 28, the Department of Health and Human Services (HHS) released the “Health Industry Cybersecurity Practices (HICP): Managing Threats and Protecting Patients” publication. The four volume publication, aims to provide voluntary cybersecurity practices to healthcare organizations of all types and sizes, ranging from local clinics to large hospital systems.

This was report came from a mandate to develop practical cybersecurity guidelines to reduce risks for the industry, as part of the Cybersecurity Act of 2015 Section 405(d). The publication is an end of a two-year effort bringing together over 150 cybersecurity and healthcare experts from industry and the government under the Healthcare and Public Health (HPH) Sector Critical Infrastructure Security and Resilience Public-Private Partnership. It was the result of a true public-private partnership to better secure the nation’s health systems.

“Cybersecurity is everyone’s responsibility.  It is the responsibility of every organization working in healthcare and public health.  In all of our efforts, we must recognize and leverage the value of partnerships among government and industry stakeholders to tackle the shared problems collaboratively,” said Janet Vogel, HHS Acting Chief Information Security Officer.

Technologies that are vital to the healthcare industry and help provide life-saving treatments and improve patient care are also susceptible to attacks. They can be exploited for personal data or to shut down entire hospital systems.

“The healthcare industry is truly a varied digital ecosystem. We heard loud and clear through this process that providers need actionable and practical advice, tailored to their needs, to manage modern cyber threats. That is exactly what this resource delivers; recommendations stratified by the size of the organization, written for both the clinician as well as the IT subject matter expert.” said Erik Decker, industry co-lead and Chief Information Security and Privacy Officer for the University of Chicago Medicine.

The HICP publication aims to provide cybersecurity practices for this sector to improve the security and safety of patients. It recommends 10 Cybersecurity Practices to help mitigate these threats. It also lays out a call to action for all industry stakeholders, from C-suite executives and healthcare practitioners to IT security professionals, that protective and preventive measures must be taken now.

For more information on this effort and to download a copy of the publication, please visit the 405(d) website at www.phe.gov.

Source: U.S. Department of Health and Human Services (HHS).

U.S. Department of Labor recovers $49,269 for employees after investigating overtime violations by Jacksonville, FL Company

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(Jacksonville, FL – Insurance News 360) – Following an investigation by the U.S. Department of Labor Jacksonville-based Stone World Imports and Manufacturing, Inc. paid $49,269 in back wages to 21 employees. The investigation revealed that the company paid only straight time rates to employees, not overtime when warranted. The failure to pay time-and-a-half for hours worked above 40 in a work week is a violation of the Fair Labor Standards Act.

“The Fair Labor Standards Act requires employers to maintain accurate records of the number of hours employees work, and pay proper overtime when they work more than 40 hours in a workweek,” said Wage and Hour Division District Director Daniel White, in Jacksonville. “The Wage and Hour Division works to ensure that employees receive the wages they rightfully earned, and that employers compete on a level playing field. We encourage all employers to reach out to us and to use the wide variety of tools we offer to help them understand their responsibilities.”

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/whd.

Source: U.S. Department of Labor.

Edgar hacking case ends in charges by SEC

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(Washington, DC – Insurance News 360) – On Jan. 15, the Securities and Exchange Commission charged nine individuals participating in a previously-disclosed scheme to hack the SEC’s EDGAR system to get non-public information for illegal trading.

Those charged are an Ukranian hacker, six individuals in California, Ukraine, Russia and two entities.

According to the SEC complaint, Ukrainian hacker Oleksandr Ieremenko hacked newswires, then turned his attention to EDGAR and, using deceptive hacking techniques, gained access in 2016. He extracted files containing non-public earnings results and passed the information to individuals who used it to trade before companies released info to the public. In total, the traders traded before at least 157 earnings releases from May to October 2016 and generated at least $4.1 million in illegal profits.

“International computer hacking schemes like the one we charged today pose an ever-present risk to organizations that possess valuable information,” said Enforcement Division Co-Director Stephanie Avakian. “Today’s action shows the SEC’s commitment and ability to unravel these schemes and identify the perpetrators even when they operate from outside our borders.”

The SEC’s complaint alleges that the following traders received and traded on the basis of the hacked EDGAR information:

• Sungjin Cho, Los Angeles, California
• David Kwon, Los Angeles, California
• Igor Sabodakha, Ukraine
• Victoria Vorochek, Ukraine
• Ivan Olefir, Ukraine
• Andrey Sarafanov, Russia
• Capyield Systems, Ltd. (owned by Olefir)
• Spirit Trade Ltd.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey also announced related criminal charges.

Source: U.S. Securities and Exchange Commission.

Audit firm, partners charged for deficient audits

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(Washington, DC – Insurance News 360) – On Dec. 21, the Securities and Exchange Commission filed settled charges against national audit firm Crowe LLP, two of its partners, and two partners of a now-defunct audit firm for their significant failures in audits of Corporate Resource Services Inc., which went bankrupt in 2015 after the discovery of approximately $100 million in unpaid federal payroll tax liabilities.

The SEC’s order against Crowe finds that its audit team identified pervasive fraud risks in connection with its 2013 audit of Corporate Resource Services yet failed to:

Include procedures designed to detect the company’s undisclosed payroll tax obligations;

Properly identify and audit the company’s related-party transactions;

Obtain sufficient appropriate audit evidence to respond to these fraud risks, support recognition of revenue, and otherwise support the audit opinion;

Evaluate substantial doubt about the company’s ability to continue as a going concern; and

Conduct a proper engagement quality review.

According to the order, Crowe was not independent, because of an ongoing direct business relationship with Corporate Resource Services. Audit deficiencies occurred despite the involvement of Crowe’s national office, which was aware of the high-risk nature of the engagement and the inability to obtain appropriate evidence. The order also finds that Crowe’s engagement partner, Joseph C. Macina, and engagement quality reviewer, Kevin V. Wydra, caused Crowe’s audit failures.

A related order finds that Mitchell J. Rubin and Michael Bernstein, former partners at Rosen, Seymour, Shapps, Martin & Co., LLP, engaged in fraud and performed a highly deficient audit of Corporate Resource Services’ 2012 financial statements, which amounted to no audit at all, and that Bernstein caused the firm to lack the required independence when he failed to comply with partner rotation requirements.

“The audit standards are designed to ensure that public accounting firms have reasonable procedures to identify and respond to illegality and issues that pose material risks to the integrity of an issuer’s financial statements,” said Anita B. Bandy, Associate Director in the Division of Enforcement. “As set out in our order, the pervasive audit failures of Crowe and these accountants left investors with a misleading picture of Corporate Resource Services’ financial condition.”

Crowe will pay a $1.5 million penalty, be censured, and retain an independent compliance consultant to review its audit policies and procedures. Macina, Rubin, and Bernstein each agreed to pay a $250,000 penalty. Wydra will pay a $15,000 penalty. Macina, Wydra, Rubin, and Bernstein are suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC’s order permits Macina and Wydra to apply for reinstatement after three years and one year, respectively. Crowe, Macina, Wydra, Rubin, and Bernstein, who settled without admitting or denying the findings, also were ordered to cease and desist from future violations.

The SEC’s investigation continues and has been conducted by Sharan K.S. Custer, Ernesto Amparo, Regina Barrett, and Kam Lee, and supervised by Ms. Bandy and Kristen Dieter.

Source: U.S. Securities and Exchange Commission.

U.S. Department of Commerce Finds Dumping and Countervailable Subsidization of Imports of Plastic Decorative Ribbon from China

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(Washington, DC – Insurance News 360) – On Dec. 21, 2018, the U.S. Department of Commerce announced the final determinations in investigations into the antidumping duty and countervailing duty (CVD) of imports of plastic decorative ribbon from China. These investigations revealed that exporters sold plastic decorative ribbon at less than fair value in the United States at rates ranging from 54.21 to 370.04 percent. Exporters also received countervailable subsidies at rates ranging from 14.27 to 94.67 percent.

After publication of the final affirmative antidumping determination, the Department of Commerce is to direct U.S. Customs and Border Protection to take antidumping cash deposits equal to the applicable final weighted-average dumping margins. Regarding the CVD determination, if the International Trade Commission makes an affirmative injury determination, the U.S. Department of Commerce will also tell U.S. Customs and Border Protection to collect CVD cash deposits that equal subsidy rates.

In 2017, imports of certain plastic decorative ribbon from China were valued at an estimated $22.5 million.

The ITC is set to make final determinations on Feb. 4. If there are affirmative injury determinations, Commerce will issue orders to Customs and Border Patrol. If the determinations are negative, the investigations will be dropped.

As a primary focus of the Trump Administration, Commerce has initiated 137 new antidumping and countervailing duty investigations since President Trump took office. This is an increase of more than 300 percent over the same time frame in the previous administration.

Source: U.S. Department of Commerce.

Lloyd’s confirms 2019 targets for electronic placement mandate

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(London, UK – Insurance News 360) – On Dec. 20, the Corporation of Lloyd’s confirmed 2019 targets for electronic placement.

For the first quarter of 2019, syndicates must have written no less than 40 percent of risks with a recognised electronic placement system. The target will increase to 50 percent in the second quarter, when a quote target will be introduced.

Lloyd’s brokers will be required to connect to a recognised electronic placement platform by June 1. Lloyd’s will be working closely with LIIBA to achieve this.

“Since we implemented this mandate across the Lloyd’s market, we’ve seen a marked increase in the adoption of electronic trading, which is fast-tracking our transformation,” said Shirine Khoury-Haq, Lloyd’s Chief Operating Officer. “The latest developments, including quote targets and the Lloyd’s broker requirement, are essential next steps in our journey to digitise our market and to provide the best possible service to our clients. I am thankful to have so much support across the broking community and [the London and International Brokers’ Association in these efforts.”

By the end of the Q3 2018, 29.8% of ‘in scope’ contracts were placed electronically in the Lloyd’s market and almost reaching the Q4 target of 30%. Syndicates meeting and exceeding the targets will receive a rebate on their annual subscriptions.

Source: Lloyd’s.

Pending Home Sales See 0.7 Percent Drop in November

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(Washington, WA – Insurance News 360) – The National Association of Realtors announced that although pending home sales dropped slightly in November, there were increases in certain regions – the northeast and the west.

The Pending Home Sales Index decreased 0.7 percent to 101.4 in November, down from 102.1 in October. However, year-over-year contract signings dropped 7.7 percent, making this the eleventh straight month of annual decreases.The pending home sales index is a forward-looking indicator based on contract signings.

NAR’s Chief Economist, Lawrence Yun cautioned that the current sales numbers don’t fully account for other data.

“The latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates,” he said. “The west crawled back lightly, but is still experiencing the biggest annual decline among the regions because of unaffordable conditions.”
Affordability challenges in the west are partly to blame for the drop in sales. Yun suggests that affordability challenges in the West are part of the blame for the drop in sales.

“Land cost is expensive, and zoning regulations are too stringent. Therefore, local officials should consider ways to boost local supply; if not, they risk seeing population migrating to neighboring states and away from the West Coast.”

Yun indicated the latest government shutdown will harm the housing market. “Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas,” Yun said. “The longer the shutdown means fewer homes sold and slower economic growth.”

November Pending Home Sales Regional Breakdown

The PHSI in the Northeast rose 2.7 percent to 95.1 in November, and is now 3.5 percent below a year ago. In the Midwest, the index fell 2.3 percent to 98.1 in November and is 7.0 percent lower than November 2017.

Pending home sales in the South fell 2.7 percent to an index of 115.7 in November, which is 7.4 percent lower than a year ago. The index in the West increased 2.8 percent in November to 87.2 and fell 12.2 percent below a year ago.

The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Source: Realtors®

Compliance Assistance Resources are available to protect workers from falls

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(Washington, DC – Insurance News 360) – The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has created a collection of compliance assistance resources for falls in the workplace, the most common cause of worker deaths in the construction industry.

Falls can be prevented with planning for safety, provision of the right equipment, and training workers to use that equipment. OSHA’s informative compliance assistance resources include the following:

The sixth annual National Safety Stand-Down to Prevent Falls in Construction will be held May 6-10, 2019. The weeklong outreach event encourages employers and workers to pause during the workday to discuss fall hazards and how to prevent them.

A series of fall safety videos show how to prevent construction-related fall hazards from floor openings, skylights, fixed scaffolds, bridge decking, reroofing, and leading edge work.

OSHA’s Fall Prevention Training Guide provides a lesson plan for employers including several Toolbox Talks.

Fact sheets on ladders and scaffolding provide guidance on the safe use of these types of equipment while performing construction activities.

A brief video, 5 Ways to Prevent Workplace Falls, encourages employers to develop a fall prevention plan, and to provide workers with fall protection and training.

OSHA’s On-Site Consultation Program provides valuable services for job creators that are separate from enforcement. OSHA recently published an analysis demonstrating how the agency’s On-Site Consultation Program contributes $1.3 billion to the national economy each year. Job creators who implement workplace improvements can reduce lost time due to injuries and illnesses, improve employee morale, increase productivity, and lower workers’ compensation insurance premiums.

Source: U.S. Department of Labor.

Oklahoma Oil Service Waste Disposal Company Resolves Overtime, Child Labor Violations Found in U.S. Department of Labor Investigation

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(Oklahoma City, OK – Insurance News 360) – Following an investigation by the U.S. Department of Labor’s Wage and Hour Division, Oklahoma City’s Backyard Energy Services paid $253,399 in back wages and a civil penalty of $2,163 for violations of the Fair labor Standards Act, child labor laws, and record keeping issues.

The Department of Labor notes that Backyard Energy Services violated federal overtime law by misclassifying employees as independent contractors paid a flat daily rate when they worked more than 40 hours in a week. They also misclassified intrastate drivers as exempt from FLSA-overtime rules, paying flat salaries without overtime pay for work over 40 hours in a week. The DOL also says they didn’t keep records of how long employees worked.

In addition, Backyard Energy Services violated child labor laws when it employed a 17-year-old to operate a front-end loader and track hoe.

“Employers have a legal responsibility to pay their employees for all of the hours that they work, including overtime hours,” said Wage and Hour Division District Director Michael Speer, in Oklahoma City, Oklahoma. “By enforcing the FLSA, the U.S. Department of Labor helps to level the playing field for all employers and ensure workers get the wages and employment protections they are due.”

Source: U.S. Department of Labor.

Model, dealer selection affected by word-of-mouth and online research when looking for a new car

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(Singapore – Insurance News 360) – In the United Arab Emirates, nearly 75 percent of buyers ask friends or relatives for car advice, or do online research to choose a model and brand of vehicle to purchase, according to the JD Power 2018 UAE Sales Satisfaction Index study.

Vehicle pricing, features specifications, warranty, sale promotions, and dealer information are the most-cited information searched for by vehicle buyers who look online. But, 18 percent visit the dealer they end up purchasing from

Sixty-eight percent of new vehicle buyers who looked online did contact the purchasing dealership for one reason or another. The study did reveal that individuals who shop online are slightly less satisfied with their purchase than those who buy in person.

“As the path to new vehicle purchases increasingly relies on online sources, it is imperative for manufacturers and dealerships to design websites that feature the required information sought by buyers and are easy to navigate across multiple devices,” said Shantanu Majumdar, Regional Director Automotive Practice at J.D. Power. “Given that word-of-mouth plays a strong role in influencing purchase decisions, dealerships that can actively manage their reputation online stand a better chance to enhance their retail experience, and ultimately, win new customers.”

Study Rankings

In the mass market category, Kia ranks highest in sales satisfaction, followed by Ford and Nissan. In the luxury category, Land Rover has the highest satisfaction ratings, followed by BMW and Infiniti.  859. Ford ranks second with a score of 855, while Nissan ranks third with a score of 854.

The 2018 U.A.E. Sales Satisfaction Index (SSI) Study measures satisfaction with the sales experience among new-vehicle buyers. Buyer satisfaction is based on six measures: dealership facility (25%); delivery process (23%); dealer sales consultant (20%); paperwork completion (17%); working out the deal (10%); and dealership website (5%).

The study is based on responses from 2,083 buyers who purchased or leased their new vehicle between March through November 2018. The study is a comprehensive analysis of the new-vehicle purchase experience and measures customer satisfaction with the selling dealer (satisfaction among buyers). The study occurred  from July through November 2018.

Source: J.D. Power.