Monthly Archives: March 2019

Department of Transportation announces $908 million loan for Cotton Belt Corridor Regional Rail Project

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(Washington, WA – Insurance News 360) – On Dec. 21, U.S. Transportation Secretary Elaine L. Chao announced the Build America Bureau has awarded a $908 million Railroad Rehabilitation and Improvement Financing (RRIF) direct loan to Dallas Area Rapid Transit to finance the Cotton Belt Corridor Regional Rail Project.

“This financing demonstrates the Department’s commitment to serving as a trustworthy partner to regional and local agencies, which are at the forefront of developing infrastructure solutions to meet the needs of their communities,” said Secretary Chao.

The Cotton Belt Corridor Regional Rail Project is a 26-mile passenger railroad from Dallas-Fort Worth (DFW) International Airpor to the Plano/Richardson area, covering three counties and seven cities.  The project will be constructed primarily within the existing DART-owned railroad right-of-way. The tracks are currently used for freight rail service provided by short line and regional carriers. The project will upgrade existing track to meet passenger rail standards, convert single-track to double, and build 10 new stations. Funds will also be  used to acquire eight vehicles.

The Cotton Belt Corridor Regional Rail Project is expected to improve mobility, accessibility, and system linkages to major employment, population, and activity centers in the northern part of Dallas, which has long been identified as a heavily congested area in need of additional capacity and mobility solutions.  When operational, the project will provide a cross regional route linking DART’s Red, Green, and Orange lines, as well as the Denton County Transportation Authority (DCTA) A-Train.

The Bureau, which administers the RRIF credit program, was established as a “one-stop shop” to streamline credit opportunities, while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and monitoring.

Source: U.S. Department of Transportation.

Bureau of Economic Analysis releases estimates for gross domestic product, corporate profits

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(Suitland, MD – Insurance News 360) – For the third quarter of 2018, the Bureau of Economic Analysis has released a report that revealed real gross domestic product (GDP) increased by 3.4 percent, according to the third estimate. This is a decline from the second quarter, when real GDP increased by 4.2 percent.

The GDP estimate released on Dec. 21, 2018, shows that personal consumption expenditures and exports were revised down, while private inventory investment went up.

Real domestic income (GDI) rose by 4.3 percent in the third quarter of 2018; the average of real GDP and real GDI increased 3.8 percent in the same quarter. The current-dollar GDP increased 4.9 percent. $246.3 billion in the quarter; during the second quarter, current-dollar GDP increased 7.6 percent.

Corporate profits from current production rose 78.2 billion in the third quarter, $13.2 billion more than the second quarter. Profits from domestic financial corporations fell by $6.1 billion; profits from domestic non-financial corporations increased $83 billion and the rest-of-the-world profits increased $1.3 billion.

Source: Bureau of Economic Analysis, US.

Bureau of Economic Analysis releases estimates for gross domestic product, corporate profits

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(Suitland, MD – Insurance News 360) – For the third quarter of 2018, the Bureau of Economic Analysis has released a report that revealed real gross domestic product (GDP) increased by 3.4 percent, according to the third estimate. This is a decline from the second quarter, when real GDP increased by 4.2 percent.

The GDP estimate released on Dec. 21, 2018, shows that personal consumption expenditures and exports were revised down, while private inventory investment went up.

Real domestic income (GDI) rose by 4.3 percent in the third quarter of 2018; the average of real GDP and real GDI increased 3.8 percent in the same quarter. The current-dollar GDP increased 4.9 percent. $246.3 billion in the quarter; during the second quarter, current-dollar GDP increased 7.6 percent.

Corporate profits from current production rose 78.2 billion in the third quarter, $13.2 billion more than the second quarter. Profits from domestic financial corporations fell by $6.1 billion; profits from domestic non-financial corporations increased $83 billion and the rest-of-the-world profits increased $1.3 billion.

Source: Bureau of Economic Analysis, U.S.

Personal income, outlays analyzed by the Bureau of Economic Analysis

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(Suitland, MD – Insurance News 360) – The Bureau of Economic Analysis released a report on the November 2018 personal income and outlays of individuals in the United States. The report, released on Dec. 18, 2018 revealed that personal income increased by .2 percent ($40.2 billion) during the month of November; disposable personal income increased by $37.8 billion, and personal consumption expenditures increased by $54.4 billion.

The BEA notes that the personal income increase comes mostly from farm proprietors’ income, increases in wages and increases in salaries. These were offset by personal dividend income and social security benefits. Farm proprietors’ income rose by $14.9 billion, including subsidy paymenst from the Department of Agriculture’s Market Facilitation Program.

Personal outlays rose by $56.6 billion, and personal saving was $944.2 billion. The personal saving rate was 6 percent.

Source: Bureau of Economic Analysis, U.S.

Fire deaths in Mississippi rise in 2018

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(Jackson, MS – Insurance News 360) – Seventy nine individuals died from fire-related issues in 2018 across the state of Mississippi; the State Fire Marshal’s Office (SFMO) investigated 74 of those cases and local agencies investigated the others. This is an increase from 56 deaths in 2017 and 53 investigations by the SFMO.

This is a 36 percent increase, but State Chief Deputy Fire Marshal Ricky Davis does not call this a record-breaking number.

“As recently as 2006, the SFMO has investigated upwards of 100 fire deaths,” Davis said. ”In fact, in the last five years, we’ve significantly lowered the number of preventable fire deaths across the state. I can’t say specifically why the numbers are higher this year, but in a majority of these cases, a working smoke alarm could have saved lives.”

Of the 74 deaths investigated by SFMO, nearly 40 cases showed that there was no working smoke alarm.

State Fire Marshal Mike Chaney notes that a dozen cases involved the presence of non-working smoke alarms.  “It’s upsetting because these fires were preventable, and in every one of these cases, a life could have been saved,” Chaney said. “The State Fire Marshal Office doesn’t just investigate after a fire has occurred. Our educators are out working in communities and schools every day.”

The SFMO urges people to install and maintain smoke alarms, make escape plans specific to their homes, and keep lighters away from children’s reach.

Electrical fires top the list, linked with 21 deaths. There were 13 cases where a cause for the fire could not be determined.

Source: Mississippi Insurance Department.

Tennessee residents get millions back through mediation

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(Nashville, TN – Insurance News 360) – The Tennessee Department of Commerce and Insurance returned or located more than $17.9 million in 2019 through mediation and recovery of lost life insurance benefits, the department announced on Jan. 10.

Tennessee residents received more than $5.6 million through mediation, where TDCI insurance investigators worked with insurance companies and policy holders to overturn and pay wrongfully denied claims. In 2017, consumers received more than $6.5 million through those efforts.

Additionally, $11,695,834 in life insurance benefits was located in 2018 through the Life Insurance Policy Locator Service. This free service, which is provided by the National Association of Insurance Commissioners (NAIC) via TDCI’s Insurance Division, assists consumers in finding insurance policies or annuities for deceased loves ones. In 2017, nearly $3 million was returned to consumers through the Life Insurance Policy Locator Service.

“I’m proud of the efforts this year by our Insurance Division to help deserving consumers get the benefits of their insurance coverages,” said TDCI Commissioner and NAIC Past President Julie Mix McPeak. “We encourage Tennesseans to always remember to call our team with questions about their insurance coverages or to learn what resources may be available.”

In addition to the Department’s mediation and recovery efforts, the Insurance Division levied over $600,000 in civil penalties through disciplinary actions taken on behalf of Tennessee consumers against licensees who were found to be in violation of state insurance laws.

TDCI encourages consumers to contact the Department if they feel they have been unjustly denied a claim, if they have experienced unlicensed or unlawful activity, or even if they have a question or concern about their insurance policies.

If you have questions about insurance, visit the department’s website or call 1-800-342-4029 or (615) 741-2218.

Source: Tennessee Department of Commerce & Insurance.

Vermont Department of Financial Regulation and Secretary of State Collaborate on Captive Insurance Blockchain Pilot

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(Montpelier, VT – Insurance News 360) – Vermont Department of Financial Regulation Commissioner Michael Pieciak and Secretary of State Jim Condos on Jan. 9 signed a memorandum of understanding regarding a collaboration to explore blockchain technology and its use in digital record keeping practices of the captive insurance industry.

The next day the two offices issued a request for information to identify vendors who may work with Vermont to create a pilot program allowing new captive insurance companies to register with the Secretary of State’s office using blockchain technology.

The program is meant to test the functionality of blockchain in the state’s regulatory processes. It will include a review and revision of relevant statutes, rules, regulations and bulletins to ease implementation.

“Developments in technology provide opportunities for government to improve efficiency and transparency, cut red tape, and improve services for Vermonters,” said Secretary Condos. “This pilot will allow us to examine whether or not the application of blockchain technology for digital recordkeeping can improve aspects of the state regulatory process.”

Blockchain or similar digital ledger technology is designed to create a transparent and validated record of transactions, while providing increased efficiency, accuracy, and security for users when compared to traditional recordkeeping methods.

“Financial services firms are innovating at lightning speed and regulators have an obligation to keep up,” said Commissioner Pieciak. “This partnership with the Secretary of State provides a great opportunity for our teams to become better acquainted with distributed ledger technology and understand how the state and Vermont businesses might benefit.”

Vermont is the world-wide leader in captive insurance by premium written and third in the world by active licenses.

The pilot program will help the state identify areas where the use of blockchain technology in regulatory and other government business may increase data security and reduce costs for residents and those doing business in Vermont.

The adoption of this emerging technology may yield significant benefits such as more efficient administration of their respective duties while maximizing taxpayer value for Vermont’s citizens.

Questions related to the RFI are due on January 24, 2019 and the RFI is due on February 14, 2019.

Connect with the Vermont Department of Financial Regulation on Twitter, Facebook, and on our website.

Source: Vermont Department of Financial Regulation.

Arch Insurance Company, National Untion Fire Company must provide $8 million in rebates; must pay $2.2. million in fines

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(New York, NY – Insurance News 360) – New York Financial Services Superintendent Maria T. Vullo announced a combined $2.2 million in fines against Arch Insurance Company (Arch) and National Union Fire Insurance Company of Pittsburgh, PA (National Union Fire), and ordered the insurers to issue $8 million in retroactive rebates after violating state insurance law.

Separate DFS investigations through the Department of Financial Services revealed that both insurers did not satisfy required minimum loss ratio standards in blanket accident and health insurance policies issued to hundreds of New York volunteer firefighter districts, departments and companies, and that National Union Fire charged premium rates that were not filed with DFS.  The violations resulted in the New York volunteer firefighter companies being overcharged premiums in the aggregate amount of nearly $8 million.

“Insurers doing business in New York must comply with New York insurance laws and regulations and those who don’t will be held accountable for their actions,” said Superintendent Vullo.  “Today DFS is holding both Arch Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA responsible for their respective compliance failures, which directly resulted in New York volunteer firefighter companies paying insurance premiums for coverage that did not bear a reasonable relationship to the benefits provided under the policies.”

Between 2011 and 2017, Arch issued 3,332 blanket accident and health insurance policies to 628 New York firefighter companies, and failed to comply with the minimum loss ratio standard required by New York insurance regulation which provides that the premiums must be reasonable in relation to the claims paid under a policy. As a result, the volunteer firefighter companies were overcharged premiums in the aggregate amount of $5.3 million during the period.

Under the Jan. 10 consent order, Arch will pay DFS a million dollar fine and provide rebates to every New York firefighter company, reflective of the company’s portion of the $5.3 million minimum loss ratio shortfall. Arch will also give an up-to-date summary of corrective actions they have taken, and will report to DFS by May 1, 2019 information containing experience data for every blanket accident and health policy form issued in the previous calendar year to volunteer firefighter companies in the state, for the next five years

The investigation of National Union Fire showed that National Union Fire, from 2015-2017, failed to comply with minimum loss ratio standards required by the state. Also, between 2015 and 2018, the company charged premium rates on blanket accident and health policies issued to New York firefighter companies but did not file them with DFS.  This failure to maintain minimum loss ratios in compliance with Insurance Law   resulted in certain New York volunteer firefighter companies being overcharged  premiums in the aggregate amount of $1,571,704. The insurer’s failure to use the premium rates on file with DFS resulted in certain firefighter companies being overcharged premiums in the aggregate amount of $1,213,640.

Under the consent order, National Union Fire  will submit blanket accident and health policy forms and premium rates for DFS’s review and approval that will replace all existing coverage issued to New York volunteer firefighter companies; send notice to the impacted companies of their retroactive rebates; and by March 15, 2019, provide proof to DFS that each affected volunteer firefighter company has been provided retroactive rebates reflective of the company’s portion of the $1,571,704 minimum loss ratio shortfall.

In addition, National Union Fire will pay DFS a fine of $1.2 million and provide retroactive rebates to each affected New York firefighter company reflective of the company’s portion of the $1,213,640 for the use of unapproved premium rates.  National Union Fire will also provide to DFS an up-to-date, detailed summary of corrective actions taken, and will report to DFS by May 1, 2019 for the next five years containing experience data for each blanket accident and health policy form issued to New York volunteer firefighter companies during the prior calendar year.

A copy of the Arch Insurance Company consent order can be found here.

A copy of the National Union Fire Insurance Company of Pittsburgh, PA consent order can be found here.

Source: New York Department of Financial Services.

Missouri residents are affected by large bills and aggressive collection tactics after using air ambulance providers

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(Jefferson City, MO – Insurance News 360) – Missouri residents are affected by large bills and aggressive collection tactics after using air ambulance providers, according to a report released on Jan. 8, 2019,  by the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP).

The DIFP initiated a data call for insurers in the state and analyzed fully-insured health coverage under the department’s regulatory purview. The result is that they uncovered an estimated $25.7 million billed for air ambulance services in 2017, a potential for a maximum of $12.4 million in balance-billing for Missouri residents. The report revealed that residents with private insurance have been balanced billed for more than $100,000; and that many air ambulance providers do not participate in many health insurance provider networks.

Some air ambulance providers engage in aggressive collection efforts to collect amounts not paid by private health insurers, including filing lawsuits and placing liens on homes.  A quick search of Missouri’s court records returned over 184 records since 2012 for one of Missouri’s largest air ambulance providers. The four most legally active providers together had 427 actions over the same time period, with recoveries commonly in the tens of thousands of dollars.

“With air ambulance bills, Missourians are subjected to extremely aggressive collection efforts, at a time when they are quite vulnerable as they are already recovering from a medical emergency”, said Director Chlora Lindley-Myers. “We hope this report illustrates to state and federal policymakers the scope and seriousness of this problem and the need for urgent action.”

In investigating complaints regarding air ambulances, the Department’s jurisdiction is limited to fully insured health plans, covering approximately 1.2 million Missourians in 2017.  The Department has no authority to assist consumers who are covered under self-funded group health plans, which cover approximately 1.9 million Missourians.

The investigations ensure that the insurer is in compliance with relevant state insurance laws as well as their own contractual language.  The Department also is, in many instances, unable to assist consumers who have been saddled with unpaid air ambulance bills when the insurers’ actions do not clearly run afoul of insurance regulatory standards. States generally have very limited regulatory authority over air ambulances in general.

Air ambulance services are governed by the federal Aviation Deregulation Act (ADA) of 1978, which carved out broad federal preemptions to state regulation of aviation.  The act specifies that states may not regulate in any way the “price, route or service of an air carrier.”  The National Association of Insurance Commissioners has been engaged on this issue and in working with members of Congress to find ways to protect consumers from the financial devastation of air ambulance balance bills.

Source: Missouri Department of Insurance.

Minnesota Commerce Department investigation reveals Frontier Communications failure to provide adequate, reliable service

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(Saint Paul, MN – Insurance News 360) – On Jan. 4, the Minnesota Commerce Department filed an investigative report with the Minnesota Public Utilities Commission alleging a failure by Frontier Communications to provide adequate, reliable phone and internet service to customers in Minnesota.

The report suggests that the company be made to refund or credit customers for service outages and unauthorized charges; the company should also add customer service staff, and invest in infrastructure and equipment to better the level of services provided.

The investigation focused on the service quality, customer service and billing practices of Frontier Communications of Minnesota, Inc., and its affiliate, Citizens Telecommunications of Minnesota, LLC. Those companies provide landline phone service to almost 100,000 Minnesota homes and businesses, and internet service in northeastern and southern Minnesota, as well as the Twin Cities metro area.

SEven public hearings occurred throughout Frontier’s service area, and the report is based on more than 1,000 consumer complaints and statements, as well as the company’s responses to questions and request from the Commerce Department.

The investigative report details a wide range of concerns about Frontier:

Frequent and lengthy service outages, including loss of customer access to 911 emergency services;

Delays in repairing and restoring service;

Failure to provide expedited responses to service outages affecting vulnerable customers with medical needs;

Failure to maintain and repair equipment, causing service outages and leading to public safety hazards such as lines and damaged equipment on the ground;

Lack of investment in infrastructure to ensure reliable service;

Frequent billing errors, including inaccurate and unauthorized charges;

Failure to provide refunds or bill credits for service outages;

Lack of timely, responsive customer service, including lengthy call wait times, inaccurate information and “lost” repair tickets; and

Discriminatory practices such as prioritizing new service installations over repairs of existing service and providing slower repair services in rural areas compared to more populated areas.

The report is available on the Minnesota Commerce Department website (mn.gov/commerce). It is also available on the Minnesota Public Utilities Commission website (mn.gov/puc). Click on the eDockets link to go to the search page and then type 18-122 for the docket number.

Source: Minnesota Department of Commerce.