(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.

(Baltimore, MD – Insurance News 360) – The Centers for Medicare and Medicaid Services (CMS) issued a final rule which creates a new direction for the Medicare Shared Savings Program. The new direction is called Pathways to Success and redesigns participation options to encourage Accountable Care Organizations to move to performance-based risk more quickly, and for those ACOs that are eligible to increase savings for trust funds. They also address additional tools and flexibilities for these organizations, as established in the Bipartisan Budget Act of 2018.

These additional tools include new beneficiary incentives, telehealth services and choice beneficiary assignment methodology. This final rule also finalizes the program’s policy for extreme and uncontrollable circumstances for performance year 2017.

CMS will offer an application cycle for a single new agreement period starting July 1, 2019, to avoid interrupting participation by ACOs  that elected on Dec. 31, 2018 to extend their agreement period for an additional six month performance year.

CMS will resume the usual annual application cycle for agreement periods starting on January 1, 2020, and in subsequent years.

Major changes include the availability of an optional 6-month extension for ACOs whose agreements expired on Dec. 31, 2018, methodology for determining financial and quality performance, ; a reduction in the Shared Savings Program core quality measure set by eight measures and a new Certified EHR Technology (CEHRT) threshold criterion to determine ACOs’ eligibility for program participation in order to promote interoperability among ACO providers/suppliers; refinements to the voluntary alignment process. They also implement policies to address the impact of these changes are expected to allow beneficiaries more flexibility when choosing medical providers.

Shared Savings Program ACOs serve more than 10.5 million Medicare fee-for-service beneficiaries. This program helps CMS payment systems to move from pay for volume to instead look at paying for value and outcomes.  The Shared Savings Program originally had three tracks, and the most popular seems to be a one-sided shared savings-only model in Track 1. ACOs receive a share of savings under their benchmark, but are not required to repay a share of spending over the benchmark.  Tracks two and three give ACOs a larger portion of savings under benchmark, but those ACOs are required to share the losses if they spend above the benchmark.

There are now two options starting July 1, 2019 and in subsequent years:

(1) BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase-in higher levels of risk that, at the highest level, would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program, and

(2) ENHANCED track, based on the program’s existing Track 3, which provides additional tools and flexibility for ACOs that take on the highest level of risk and potential reward. Appendix A summarizes the characteristics of the participation options.

The BASIC track’s glide path offers an incremental approach to transitioning eligible ACOs to higher levels of risk and potential reward. The glide path includes 5 levels:  a one-sided model available only for the first two years to most eligible ACOs (ACOs identified as having previously participated in the program under Track 1 would be restricted to a single year under a one-sided model, but new, low revenue ACOs that are not identified as re-entering ACOs would be allowed up to three years under a one-sided model); and three levels of progressively higher risk in years 3 through 5 of the agreement period.

Under Levels A and B of the glide path, an ACO’s maximum shared savings rate under a one-sided model will be 40 percent based on quality performance, applicable to first dollar shared savings after the ACO meets the minimum savings rate. Under Levels C, D, and E of the glide path, an ACO can earn up to a maximum 50 percent sharing rate under a two-sided model, based on quality performance. The glide path concludes with a maximum level of risk that qualifies as an Advanced APM for purposes of the Quality Payment Program.

ACOs in the BASIC track glide path generally will be automatically advanced at the start of each performance year along the progression of risk/reward levels or could elect to move more quickly to a higher level of risk/reward, over the course of their agreement period. While the typical agreement period will be 5 years in duration, with 12-month performance years based on calendar years, ACOs entering an agreement period beginning on July 1, 2019, would participate in a first performance year of 6 months for the period from July 2019 – December 2019 plus 5 additional years in their first agreement period. For ACOs entering the BASIC track’s glide path for an agreement period beginning on July 1, 2019, the first automatic advancement occur at the start of performance year 2021.  Additionally, a new, low revenue ACO in the glide path that is not identified as a re-entering ACO will be permitted to choose to remain at Level B for an additional year, in exchange for agreeing to progress immediately to Level E at the start of the fourth performance year (or fifth, in the case of an agreement period starting on July 1, 2019).

The eligibility criteria for the BASIC track and ENHANCED track recognize differences in ACO participants’ Medicare FFS revenue and the experience of the ACO and its ACO participants with performance-based risk Medicare ACO initiatives. We will determine whether an ACO is a low revenue ACO versus a high revenue ACO, and whether an ACO is experienced or inexperienced with performance-based risk Medicare ACO initiatives. Based on stakeholder feedback, we have increased the threshold for low revenue ACOs to include ACOs with ACO participants’ total Medicare Parts A and B FFS revenue of less than 35 percent of the total Medicare Parts A and B FFS expenditures for the ACO’s assigned beneficiaries to capture additional ACOs, especially those that include clinics or smaller institutional providers, including rural ACOs. Ultimately, all ACOs are expected to transition to the ENHANCED track under the redesigned program. Low revenue ACOs are allowed additional time under lower-risk options within the BASIC track, while ACOs identified as high revenue are required to transition to the ENHANCED track more quickly.

Source: Centers for Medicare & Medicaid Services.

(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.

(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.

(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.

Source: New York Department of Financial Services.

(Honolulu, HI – Insurance News 360) – Colin M. Hayashida was named Hawaii insurance commissioner, according to an announcement issued on Jan. 3. Department of Commerce and Consumer Affairs Commissioner Catherine P. Awakuni Colon made the appointment, effective Jan. 1, 2019.

“I’m honored to have this opportunity and look forward to undertaking the important role of overseeing and supporting Hawaii’s insurance marketplace,” said Hayashida. “With ongoing federal healthcare reform and the impacts of natural disasters in the state, the insurance industry remains fluid with significant issues that we must monitor and navigate. The Insurance Division and its dedicated staff have consistently risen to the challenges before them, and it is my goal to maintain this level of commitment and service to Hawaii and its residents.”

Starting in 2000, Hayashida worked in various analytical jobs within the Insurance Division. Since 2011, he served as the insurance rate and policy analysis manager.

Source: Hawaii Insurance Department.

(Sacramento, CA – Insurance News 360) – On Jan. 3, California Insurance Commisioner Dave Jones issued regulations that prohibit use of gender to determine private automobile insurance ratings. The Gender Non-Discrimination in Automobile Insurance Rating Regulation went into effect on Jan. 1.

The Gender Non-Discrimination in Automobile Insurance Rating Regulation requires all automobile insurance companies operating in California to file a revised class plan that eliminates the use of gender as a rating factor.

“My priority as Insurance Commissioner is to protect all California consumers, and these regulations ensure that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control,” said Insurance Commissioner Dave Jones.

Source: California Insurance Department.

(Dover, DE – Insurance News 360) – The application from China Oceanwide Holdings Group Co. Ltd., and its affiliates to acquire Genworth Life Insurance Company and certain affiliates has been approved by Delaware Insurance Commissioner Trinidad Navarro. The application was filed more than two years ago, and in the past two years, the two companies have adjusted the transaction to address different questions posed by regulators at the state, federal, and international levels.

Commissioner Navarro approved the application after a  November 28, 2018 public hearing, where the findings of former Vice Chancellor Stephen P. Lamb were explained. Judge Lamb was appointed to preside at the public hearing and present him with findings of facts, conclusions of law, and a recommendation as to whether the proposed transaction meets Delaware’s legal requirements for approval.

The Delaware Department of Insurance used internal expert financial staff, along with outside experts to scrutinize the financial, actuarial and data security aspects of this transaction, agreed to notice the public hearing after the parties recently agreed to deposit $375 million in liquid funds into GLIC.  These additional liquid funds will be invested in GLIC and available to pay policyholders was cited in the testimony of the Department witness, by Judge Lamb in his findings, and today by Commissioner Navarro as being vital to the approval of this transaction.  “I am satisfied that China Oceanwide brings immediate new value to the policyholders, and I look forward to working with them and with GLIC’s management to assure that the safety of benefits to GLICs policyholders is always considered the top priority.”

Commissioner Navarro’s approval includes certain additional conditions to assure the ongoing safety of GLIC’s policyholders. This includes restrictions on the parties to assure that GLIC’s funds are used for policyholders; prohibiting any dividends without the Department’s prior approval and tasking China Oceanwide and GLIC to establish teams to continuously meet and respond to Department requests focused on measures of financial health.

“I know that no one act will fix all the challenges of long term care, but I am satisfied that this approval is a step forward, to be followed by many future steps to protect the policyholders,” Navarro said.

Source: Delaware Insurance Department.

(Sacramento, CA – Insurance News 360) – Commissioner Jones blasts Trump Administration rule interfering access to abortion, creating confusion that leads to loss of insurance

On Jan. 4, California Insurance Commissioner Dave Jones sent a letter to the U.S Department of Health and Human Services opposing the proposed rule “Patient Protection and Affordable Care Act; Exchange Program Integrity.”

This proposed rule pertains to policies through the exchange, and would require insurers to send separate bills each month for consumers who enroll in health insurance policies that include abortion coverage. The bill would cover the portion of the premium charged for abortion services. State law requires that health insurance policies include abortion coverage.

In part, Commissioner Jones’ letter reads:

“Californians have an inalienable right to privacy secured by the California Constitution, and that right includes the right to choose whether to bear a child or choose to obtain an abortion. The State of California is forbidden from denying or interfering with someone exercising that right.”

“I urge you to withdraw the amendments to the Segregation of Funds for Abortion Services federal rule (45 CFR § 156.280) found in the Patient Protection and Affordable Care Act; Exchange Program Integrity proposed rule. The proposed amendments to 45 CFR § 156.280 serve no purpose other than interfering with access to abortion, and have the potential to create substantial consumer confusion, which could result in cancelation of health coverage generally for some individuals. In California alone this ill-conceived proposed regulation would affect more than 1.3 million consumers enrolled in qualified health plans (QHPs) through California’s Exchange, Covered California.”

“The proposed amendment to the Segregation of Funds for Abortion Services rule found in the Exchange Program Integrity proposed rule is unnecessary and extraordinarily burdensome to consumers and health insurers.”

“It is both absurd and punitive to single out this one medical service and require a separate bill and separate payment be made for this coverage. In addition to inappropriately interfering with a woman’s right to abortion coverage, this rule will likely result in the cancellation of the health insurance policies of consumers who fail to understand these burdensome rules.”

“The proposed changes to 45 CFR § 156.280 are entirely arbitrary and capricious, inconsistent with statute, and come with unacceptable costs to both consumers and QHP issuers. California Department of Insurance strongly opposes the proposed changes to the existing language of § 156.280, because these changes will harm consumers, issuers, and health insurance markets. This proposed regulation, a burdensome federal government intrusion, serves no legitimate purpose and should be withdrawn.”

Source: California Insurance Department.