By Sue Keegan , AIC, MBA, Learning & Development Manager
Coronavirus, locust swarms, murder hornets, wildfires, Kobe. I've had it up to my eyeballs with 2020 and now Ruth Bader Ginsburg. Can I just go to sleep and wake up on January 1, 2021?
Does anything even matter anymore? Well of course it does. Stay hopeful. Stay engaged. Stay present. We all need a reminder sometimes. And thank you, RBG, for that reminder. “Fight for the things that you care about, but do it in a way that will lead others to join you."
Big I NY believes in championing you in all we do and providing the resources you need to do your best. We are here to help you provide your customers with trusted advice. We have so many learning opportunities for you. Have I mentioned our 15inONE CE Program? I think I may have. Check it out, and our many other offerings, and call or email me with any questions you might have.
NYAIP Certification Program
ABEN There's Only Ethics
U.S. Supreme Court Justice Ruth Bader Ginsburg passed away on September 18, 2020, at the age of 87. In 1993, she was nominated by President Clinton and confirmed by the Senate for her seat, having already established herself as a strong advocate, particularly for the rights of women. She has received many eloquent tributes over the last several days.
My purpose here is to look at how Justice Ginsburg ruled on questions impacting the insurance industry. I wrote a similar piece in 2016 after the passing of the late Justice Antonin Scalia. Insurance cases do not frequently come before the high court. I want to look at a handful of insurance cases where Justice Ginsburg wrote either the court's opinion or a concurring or dissenting opinion.
One of the Court's most significant insurance decisions in the last decade was National Federation of Independent Business v. Sebelius. This was the first case in which the court was asked to rule on the Affordable Care Act. The court ruled that the ACA's requirement that individuals either carry health insurance or pay a tax penalty did not violate the U.S. Constitution. It also decided that the federal government could not force the states to expand Medicaid. Justice Ginsburg wrote an opinion concurring with the ruling on the tax penalty but dissenting from the Medicaid ruling:
Until today, this Court's pragmatic approach to judging whether Congress validly exercised its commerce power was guided by two familiar principles. First, Congress has the power to regulate economic activities "that substantially affect interstate commerce." …
Second, we owe a large measure of respect to Congress when it frames and enacts economic and social legislation. … When appraising such legislation, we ask only (1) whether Congress had a "rational basis" for concluding that the regulated activity substantially affects interstate commerce, and (2) whether there is a "reasonable connection between the regulatory means selected and the asserted ends."…
Beyond dispute, Congress had a rational basis for concluding that the uninsured, as a class, substantially affect interstate commerce. Those without insurance consume billions of dollars of health-care products and services each year. … Those goods are produced, sold, and delivered largely by national and regional companies who routinely transact business across state lines. The uninsured also cross state lines to receive care. Some have medical emergencies while away from home. Others, when sick, go to a neighboring State that provides better care for those who have not prepaid for care.
The minimum coverage provision, furthermore, bears a "reasonable connection" to Congress' goal of protecting the health-care market from the disruption caused by individuals who fail to obtain insurance. By requiring those who do not carry insurance to pay a toll, the minimum coverage provision gives individuals a strong incentive to insure. This incentive, Congress had good reason to believe, would reduce the number of uninsured and, correspondingly, mitigate the adverse impact the uninsured have on the national health-care market.
As earlier observed, because every person is at risk of needing care at any moment, all those who lack insurance, regardless of their current health status, adversely affect the price of health care and health insurance. … Moreover, an insurance-purchase requirement limited to those in need of immediate care simply could not work. Insurance companies would either charge these individuals prohibitively expensive premiums, or, if community-rating regulations were in place, close up shop. …
In the 1999 case of Humana v. Forsyth, the Court addressed whether application of the federal anti-racketeering law is compatible with state regulation of insurance. Justice Ginsburg wrote the opinion for the unanimous Court:
When federal law is applied in aid or enhancement of state regulation, and does not frustrate any declared state policy or disturb the State's administrative regime, the McCarran-Ferguson Act does not bar the federal action.
Regulations implementing the Affordable Care Act required employers to provide coverage for contraception in their health insurance plans. In 2014, the Court ruled in Burwell v. Hobby Lobby Stores, Inc. that the requirement violated the employers' rights under the federal Religious Freedom Restoration Act (RFRA.) Justice Ginsburg disagreed with that conclusion:
The (U.S. Constitution) First Amendment's free exercise protections, the Court has indeed recognized, shelter churches and other nonprofit religion-based organizations. … The Court's "special solicitude to the rights of religious organizations," … however, is just that. No such solicitude is traditional for commercial organizations. …
Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations. Workers who sustain the operations of those corporations commonly are not drawn from one religious community. …
… I would conclude that the connection between the families' religious objections and the contraceptive coverage requirement is too attenuated to rank as substantial. The requirement carries no command that Hobby Lobby or Conestoga purchase or provide the contraceptives they find objectionable. Instead, it calls on the companies covered by the requirement to direct money into undifferentiated funds that finance a wide variety of benefits under comprehensive health plans. Those plans, in order to comply with the ACA … must offer contraceptive coverage without cost sharing, just as they must cover an array of other preventive services.
Importantly, the decisions whether to claim benefits under the plans are made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in consultation with their health care providers. Should an employee of Hobby Lobby or Conestoga share the religious beliefs of the Greens and Hahns, she is of course under no compulsion to use the contraceptives in question. But "[n]o individual decision by an employee and her physician — be it to use contraception, treat an infection, or have a hip replaced — is in any meaningful sense [her employer's] decision or action." … It is doubtful that Congress, when it specified that burdens must be "substantia[l]," had in mind a linkage thus interrupted by independent decisionmakers (the woman and her health counselor) standing between the challenged government action and the religious exercise claimed to be infringed. Any decision to use contraceptives made by a woman covered under Hobby Lobby's or Conestoga's plan will not be propelled by the Government, it will be the woman's autonomous choice, informed by the physician she consults.
In 2003, the Court ruled that a $145 million punitive damages award against State Farm violated the company's rights under the Constitution's “Due Process" clause (14th Amendment: “No State shall … deprive any person of life, liberty, or property, without due process of law …"). Justice Ginsburg again dissented:
Not long ago, this Court was hesitant to impose a federal check on state-court judgments awarding punitive damages. …
It was not until 1996, in BMW of North America, Inc. v. Gore … that the Court, for the first time, invalidated a state-court punitive damages assessment as unreasonably large. … If our activity in this domain is now "well established," … it takes place on ground not long held.
The large size of the award upheld by the Utah Supreme Court in this case indicates why damages-capping legislation may be altogether fitting and proper. Neither the amount of the award nor the trial record, however, justifies this Court's substitution of its judgment for that of Utah's competent decisionmakers. …
Lastly, the U.S. Bankruptcy Code gives higher priority to the claims of some unsecured creditors than others against a company filing for protection. Among the claims given priority are unpaid contributions to an employee benefit plan. An insurance company argued that unpaid Workers' Compensation premiums fell into that category and should therefore be given priority. Writing for the Court, Justice Ginsburg disagreed:
Unlike pension provisions or group life, health, and disability insurance plans—negotiated or granted as pay supplements or substitutes—workers' compensation prescriptions have a dominant employer-oriented thrust: They modify, or substitute for, the common-law tort liability to which employers were exposed for work-related accidents. …
Workers' compensation regimes thus provide something for employees—they ensure limited fixed payments for on-the-job injuries—and something for employers—they remove the risk of large judgments and heavy costs generated by tort litigation. … No such tradeoff is involved in fringe benefit plans that augment each covered worker's hourly pay. …
Every claim granted priority status reduces the funds available to general unsecured creditors and may diminish the recovery of other claimants qualifying for equal or lesser priorities. … Opening the (a)(5) priority to workers' compensation carriers could shrink the amount available to cover unpaid contributions to plans paradigmatically qualifying as wage surrogates, prime among them, pension and health benefit plans.
A 27-year career on the nation's highest court cannot be adequately summarized by a handful of decisions. However, these opinions do show a thought process based on logic, a reliance on prior court decisions, and a deference to state and federal lawmakers. Hers was a great legal mind. A new justice will take her seat, but she will not be replaced.
By Steve Anderson
Email continues to be a very effective tool for following up with prospects and engaging with clients. For agencies using the Applied Epic platform it just became easier engage in email marketing using Applied new Marketing Automation platform.
Applied Marketing Automation allows agents and brokers to quickly build and track marketing email campaigns, delivering relevant, timely content to both P&C and Benefits clients and prospects. Leveraging Applied Marketing Automation's industry-specific curated content, agencies and brokerages can market to the right audience with the right message at the right time for more targeted prospecting, higher renewals conversion, and an elevated advisory role.
Directly integrated into Applied Epic, Applied Marketing Automation allows users to immediately launch marketing communications from the management system. These could be one off marketing communications as well as full marketing campaigns that nurture customers and prospects on relevant topics. All activity is tracked back into the management system.
Core capabilities of the application include:
- Content Library: more than 1,000 pieces of P&C- and Benefits specific content branded to an agency or brokerage are included. It includes articles, infographics, deep dives, and checklists. Curated and developed by a dedicated editorial team, content is updated, and new content will be added frequently to keep communications relevant and timely.
- Campaign Management: Enables users to send one-off relevant content to a single client or setup and schedule a more complex, recurring automated marketing campaign to drip/nurture information to a select audience. The application also allows users to develop their own recurring newsletter campaigns, or send campaigns Applied has curated to deliver timely information clients and prospects on specific topics of interest.
- Contact and List Management: Enables users to leverage contact, account and policy/line information from Applied Epic to create hyper-targeted campaigns to prospects and clients. Also, the application ensures compliance with email marketing laws by easily managing subscription preferences.
- Sales Management: Directly integrated with Applied Epic, actions a user takes within Applied Marketing Automation triggers their preferred marketing or sales workflow leveraging Sales Automation capabilities and opportunity management within Applied Epic.
- Reporting and Analytics: Provides embedded reporting to track the messages and content audiences are engaging with the most, allowing users to easily adapt campaigns for maximum effectiveness.
We're incredibly lucky to have Steve's tech insights during our board discussions and directly here for you, our members. See more from Steve at steveanderson.com
The New York State Department of Financial Services (DFS) on Tuesday told insurance carriers that it expects them to begin considering the financial effects of climate change if they are not already. While the department did not call for immediate action by insurance agents and brokers, you should expect to see changes in carrier underwriting guidelines.
DFS described the purpose of its circular letter to carriers as "to outline DFS’s expectations for the industry and begin a dialogue as to how DFS can best support your institutions’ efforts to manage the financial risks from climate change." The letter pointed to the increasing cost of climate-related natural disasters. "These risks," it said, "directly affect property/casualty insurers’ liabilities and the long-term viability of certain business lines." While praising certain insurers for the steps they've already taken to manage these risks, the letter said that the industry needs to do more and that DFS is prepared to help them.
The letter promised that DFS will publish detailed guidance "consistent with international best practices on climate-related financial supervision," and invited industry input. The department will organize a series of webinars to allow the exchange of ideas and lessons learned among industry participants.
In the mean time, the department said that it expects insurers to "start integrating the consideration of the financial risks from climate change into their governance frameworks, risk management processes, and business strategies." The letter acknowledged that every insurer's situation is different. "DFS understands that climate change affects each insurer in different ways and to different degrees depending on the insurer’s size, complexity, geographic distribution, business lines, investment strategies, and other factors," it said. "DFS appreciates that insurers do not have the same level of resources to manage these risks and are at different points in the process of incorporating these risks into their governance, strategy, and risk management."
The New York Automobile Insurance Plan has added a rule that will permit its policyholders to waive subrogation rights and make other concessions to third parties. The rule, which took effect on August 1, calls for a 3 percent premium surcharge.
The new Rule 60, which applies only to Bodily Injury and Property Damage Liability Coverage, states in its entirety:
If the insured requests, in writing, either a waiver(s) of subrogation or a primary and noncontributory—other insurance condition or both to comply with contractual requirements, increase the bodily injury and property damage total policy premium by 3%.
Attach the applicable endorsement(s).
The 3% surcharge applies whether the insured requests one or both; it is not added together to make 6%. The applicable Insurance Services Office (ISO) endorsements are:
- CA 04 44 10 13, Waiver Of Transfer Of Rights Of Recovery Against Others To Us (Waiver Of Subrogation)
- CA 04 49 11 16, Primary and Noncontributory—Other Insurance Condition
Insurers that do not subscribe to ISO forms will use different endorsements. Check with the insurer to determine the appropriate endorsement numbers.
On Our Mind….We Help People
By Jim Lombardo, CPCU, AAI, AIM, MBA, AVP of Learning & Development
Frankly, when I start to think about what to write for this piece, I sometimes say to myself “Jim, don't get too serious- keep it light!" And I try to do just that. After all, we are living in an upside down world where I don't know what topic is off limits or will lead to a knock down drag out fight or be the lyrics of a country song, so…
I decided to focus today on the good things we all have in our life- and I mean besides our loved ones- I am talking about what we do for a living. We help people with their problems!
We offer protection, peace of mind, stability, security and comfort. We allow people to live their life and run their business. What a phenomenal feeling.
A few other professions come to mind, like brain surgeon or school teacher, but other than that what a value add we bring to this world. Don't forget that. Be proud of it. Be an advocate for what we do.
Oh yeah, make sure you can renew your license or you can't do all the above 😊.
So, take a peek at our new 15inONE CE Program as well as some of these upcoming webinars.
ACSR 9 - Commercial Lines Related Coverages Webinar
Welcome the Future Everyone Shares & Your Car Drives Itself
Coverage Problems Your Contractors Hate
By Sue Keegan, AIC, MBA, Learning & Development Coordinator
Well, my husband’s wearing scrubs now and he’s a teacher so welcome to back to school at the Keegan household. When I check pockets before laundry I find face masks and plastic gloves. I end my emails with some variation of stay healthy, stay safe. In some way or another we are all at our breaking point. Don’t let your need for continuing education add to that. We’ve got your back on this one. Check out our new 15inONE Program – it’s good for all licenses (except TLA) and is a quick and easy way to get all the CE you need with no stress. We also have a new class, Pandemic Protection, taught by our own Tim Dodge. Sign up for this class on September 15th, and listen to Tim explain how a variety of different coverages may respond to losses arising out of the COVID-19 pandemic. Below you will find the links for our 15inONE Program, Tim’s Pandemic class and a new Crime in the Workplace class scheduled for September 22. Please reach out with any questions you may have about our 15inONE Program, Tim’s class, the new crime course, or an update on back to school in the Keegan household. In all sincerity, stay healthy, stay safe.
15 in One Program
Pandemic Protection: P&C Insurance and the Covid-19 Pandemic
Crime in the Workplace, It'll Cost You!
By Sue Keegan, AIC, MBA, Learning & Development Coordinator
There are not too many things better than working from home in your shorts and tee-shirt. One that comes to mind, though, is getting 15 CE credits while at home and in your shorts and tee-shirt.
I am so proud and excited to tell you about our new 15inONE CE Program! The creation of this program was my first chance at Big I to see something from start to finish, and it's been amazing. I had no idea how many people, how many ideas, how many hours, and how many meetings it takes to successfully launch a program.
Our 15inONE CE Program consists of three components: download and read our eBook, successfully pass our exam (no test anxiety needed – our aim isn't to trip you up) and lastly, attend a 4 hour webinar. That's all it takes to get 15 CE credits!
If you have found yourself nearing your license expiration date, sign up for this program. If you want to take advantage of a DFS monitoring freeze, sign up for this program. If you aren't even close to your license expiration but are a planner, sign up for this program. If you want to save money on the cost of CE, sign up for this program. Sign. Up. For. This. Program.
And while you're at it, consider these webinars too.
Pandemic Protection: P&C Insurance and the COVID-19 Pandemic
Crime in the Workplace, It'll Cost You!
Dead or Alive: The Many Functions of Life Insurance