Brokers List Legislative Priorities
You don’t have to spend your days watching C-SPAN to know that insurance issues are taking a prominent role on Capitol Hill lately.
“I don’t think I’ve ever seen the parochial interest [the insurance industry] holds having risen to the national priority that is the current environment,” said Joel Wood, senior vice president of government affairs for The Council of Insurance Agents & Brokers. “Agents have a lot of skin in the game.”
With the passage of the flood insurance bill, many agents are breathing a sigh of relief that the specter of massive rate increases won’t become a reality. However, several other pending issues could have weighty consequences for the insurance industry at large, and agents in particular.
The Affordable Care Act
“The independent agents are small business owners that are being impacted greatly by the implementation of health care reform,” said Mike Becker, executive vice president and CEO of the National Association of Professional Insurance Agents (PIA).
“We’ve been incredibly loud advocates for the agent, ensuring that they’re able to participate, should they desire to do so, and they’re fairly and justly compensated for doing so, whether they’re participating in the traditional market or through an exchange,” he said.
PIA is currently asking members to find cosponsors for H.R. 2328, the Access to Professional Health Insurance Advisors Act, introduced by U.S. Reps. Mike Rogers (R-MI) and John Barrow (D-GA), to ensure that agent compensation is not disadvantaged by implementation of the ACA.
Wood pointed out that the current political climate during mid-year elections may make it difficult to achieve much change on the legislative end, so the CIAB is focusing more on regulatory issues related to health care.
“The pieces we’ve been engaged on are with respect to issues that impact ERISA [Employee Retirement Income Security Act] with the Department of Labor, to testifying on the wellness provisions, to working with the various agencies on trying to develop the right kind of nondiscrimination rule that has yet to come forward and the auto-enrollment rules that have yet to come forward.
“There are a million moving parts on the Affordable Care Act, and we try to engage on all of that impact our clients,” Wood said.
Another issue that is top of mind for agents is renewal of the Terrorism Risk Insurance Act (TRIA), which is set to expire at the end of the year.
“Almost every major commercial policy today has a rider on it that says that post-Dec. 31st 2014, terrorism coverage will not be in place depending upon the outcome of this debate,” Wood stated.
“It’s a product that’s not easily accessible in the private market without the terrorism risk and insurance program,” said Becker. “We support those programs and we’re going to be advocating for its passage.”
The CIAB is also focusing on the Foreign Account Tax Compliance Act, which is designed to prevent tax evasion in transactions with offshore companies.
“We have unsuccessfully argued to the IRS that we should be exempted from implementation and reporting requirements on commercial insurance transactions,” Wood said. “Now, we’re moving to the implementation side and it’s going to be a burden both on the brokers and on their clients.
“Theoretically this sounds pretty simple, but there are unanswered questions. What is Lloyd’s of London, for example? Is that one insurance company or is it 200 companies, or is it 20,000 syndicates?”
To that end, CIAB is seeking clarification within the rules so that it can become a clearinghouse to help international insurers to comply with FATCA.
One of PIA’s biggest concerns involves federal regulation of insurance.
“We don’t think that there’s any further reason for federal regulation in this sphere,” said Jon Gentile, PIA national director of federal affairs.
“The insurance industry historically has been regulated at the state level. One of the things that came out of the financial crisis was that state regulation did, in fact, work and it worked well. We just want to make sure that our members are up on the Hill letting members of Congress know that state-based regulation does work well and has been for some time.”
However, the CIAB views this issue through a different lens.
“We think that it’s almost an embarrassment that our industry’s regulation is so fragmented when it comes to international trade,” said Wood. “We’re surprised at the degree to which some state insurance regulators have taken umbrage at the obvious role, as asserted in Dodd Frank for the Federal Insurance Office, to participate in reflecting U.S. goals in global talks.
“It’s a national business,” he said. “There has been a huge amount of consolidation. All the trend lines are going further in that direction.”
Wood also said that CIAB is advocating for passage of the National Association of Registered Agents and Brokers Reform Act that is designed to streamline interstate insurance licensing.
“It was big disappointment on not getting it [added as a rider to] the flood legislation. Shame on us, if we can’t get that to the finish line this year,” he said.
6 Emerging Supply Chain Risks You Should Know
Your Workers’ Safety May Be at Risk, But Can You See the Threat?
Deadly violence at work is covered extensively by the media. We all know the stories.
Last year, ex-reporter Bryce Williams shot and killed two former colleagues while they conducted a live interview at a mall in Virginia. In February of this year, Cedric Larry Ford opened fire, killing three and injuring 12 at a Kansas lawn mower manufacturing company where he worked. Also in 2015, 14 people died and 22 were wounded by Syed Farook, a San Bernardino, California county health worker, and his wife, who had terroristic motives.
Active shooter scenarios, however, are just the tip of the iceberg when it comes to violence at work.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees,” said Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA. “We just don’t hear about them.”
According to statistics compiled by the FBI, the chance that any business will experience an active shooter scenario is about 1 in 457,000, and the chance of death or injury by an active shooter at work is about 1 in 1.6 million.
The fact that deadly attacks — which are relatively rare — get the most media attention may lead employers to underestimate the risk and dismiss the issue of workplace violence as media hype. But any act that threatens the physical or psychological safety of an employee or that causes damage to business property or operations is serious and should not be taken lightly.
“One of the core responsibilities that any organization must fulfill is keeping employees safe, and honoring that duty is becoming more challenging than ever,” Spunberg said.
“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees. We just don’t hear about them.”
— Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA
Desk Rage and Bullying: The Many Forms of Workplace Violence
Bullying, intimidation, and verbal abuse all have the potential to escalate into confrontations and a physical assault or damage to personal property. These violent acts don’t necessarily have to be perpetrated by a fellow employee; they could come from a friend, family member or even a complete stranger who wants to target a business or any of its workers.
Take for example the man who killed three workers at a Colorado Spring Planned Parenthood in April. He had no affiliation with the organization or any of its employees, but targeted the clinic out of his own sense of religious duty.
Companies are not required to report incidents of violence and many employees shy away from reporting warning signs or suspicious behavior because they don’t want to worsen a situation by inviting retaliation. It’s easy, after all, to attribute the occasional surly attitude to typical work-related stress, or an office argument to simple personality differences that are bound to emerge occasionally.
Sometimes, however, these are symptoms of “desk rage.”
According to a study by the Yale School of Management, nearly one quarter of the population feels at least somewhat angry at work most of the time; a condition they termed “chronic anger syndrome.” That anger can result from clashes with fellow coworkers, from the stress of heavy workloads, or it can overflow from family or financial problems at home.
Failure to recognize this anger as a harbinger of violence is one key reason organizations fail to prevent its escalation into full-blown attacks. Bryce Williams, for example, had a well-documented track record of volatile and aggressive behavior and had already been terminated for making coworkers uncomfortable. As he was escorted from the news station from which he was terminated, he reportedly threatened the station with retaliation.
Solving Inertia, Spurring Action
Many organizations lack the comprehensive training to teach employees and supervisors to recognize these warning signs and act on them.
“The most critical gap in any kind of workplace violence preparedness program is supervisory inertia, when people in positions of authority fail to act because they are scared of being wrong, don’t want to invade someone’s privacy, or fear for their own safety,” Spunberg said.
Failing to act can have serious consequences. Loss of life, injury, psychological harm, property damage, loss of productivity and business interruption can all result from acts of violence. The financial consequences can be significant. In the case of the San Bernardino shootings, for example, at least two claims were made against the county that employed the shooter seeking $58 million and $200 million.
Although all business owners have a workplace violence exposure, 70 percent of organizations have no plans in place to avoid or mitigate workplace violence incidents and no insurance coverage, according to the National Institute for Occupational Safety & Health.
“Most companies are vastly underprepared,” Spunberg said. “They don’t know what to do about it.”
Small- to medium-sized organizations in particular lack the resources to develop risk mitigation plans.
“They typically lack a risk management department or a security department,” Spunberg said. “They don’t have the internal structure that dictates who supervisors should report a problem to.”
With its workplace violence insurance solution, Hiscox aims to educate companies about the risk and provide a solution to help bridge the gap.
“The goal of this insurance product is not so much to make the organization whole again after an incident — which is the usual function of insurance — but to prevent the incident in the first place,” Spunberg said.
Hiscox’s partnership with Control Risks – a global leader in security risk management – provides clients with a 24/7 resource. The consultants can provide advice, come on-site to do their own assessment, and assist in defusing a situation before it escalates. Spunberg said that any carrier providing a workplace violence policy should be able to help mitigate the risk, not just provide coverage in response to the resultant damage.
“We urge our clients to call them at any time to report anything that seems out of ordinary, no matter how small. If they don’t know how to handle a situation, expertise is only a phone call away,” Spunberg said.
The Hiscox Workplace Violence coverage pays for the services of Control Risks and includes some indemnity for bodily injury as well as some supplemental coverage for business interruption, medical assistance and counseling. Subvention funds are also available to assist organizations in the proactive management of their workplace violence prevention program.
“Coverage matters, but more importantly we need employees and supervisors to act,” Spunberg said. “The consequences of doing nothing are too severe.”
To learn more about Hiscox’s coverage for small-to-medium sized businesses, visit http://www.hiscoxbroker.com/.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Hiscox USA. The editorial staff of Risk & Insurance had no role in its preparation.