The economic and strategic advantages of tiered network health plans

The Boston Globe ran an article this week on “Tiered health plans cutting costs, restricting options”. Tiered health plans, now offered by all of the local Managed Care Organizations (MCOs), are plans that stratify member cost-share by the providers used. The member generally pays a lower co-payment or deductible if they use a low-moderate cost healthcare facility that also meets a high quality benchmark. Conversely, a member would pay a higher co-payments and deductible for a high cost and/or lower quality healthcare facility. Based on a set of certain criteria – a controversial topic in and of itself – the insurance carrier determines which tier hospitals fall into. As you can imagine, it’s the teaching hospitals like Dana-Farber, Brigham and Women’s and Children’s Hospital that are in the higher price/quality category, while other area hospitals such as Faulkner and Winchester that are in the lower priced/quality category. Some plans vary all plan copayments

Securities Litigation and publicly-traded Chinese firms: lacking checks and balances

Reports continue to be made of accounting and corporate governance irregularities for publicly traded companies based in China.  These companies, which may be listed on stock markets in the U.S., Hong Kong, mainland China or some combination of the three have greatly increased in number over the past five years.

Reports in today’s Wall Street Journal outline continued shortcomings in the accuracy of reporting from these companies.  The article specifically mentions Sino-Forest in regard to allegations that it misrepresented the actual timber holdings of this firm.  The article goes on to discuss the sentiment, strong until recently, that these shortcomings could be ignored given the great growth of the Chinese market and GDP.

What you should know about flood insurance

Rain Drops Keep Fallin’ on My Head is not just hit song from 1969, but a reality that many across the nation have had to come to grips with in a year full of extreme weather events. A number of the more notable weather patterns that we have seen thus far in 2011 have brought about strong winds and heavy rains. Of particular concern following any harsh storm is the potential for an ensuing flood loss.

Flooding can be expensive and can wreak havoc in a number of different ways including that of extensive remediation and restoration costs, the potential for mold growth and the disruption of business operations leading to lost revenues. According to FloodSmart.gov, the average commercial flood claim over the past five years has totaled over $85,000.

A few things to consider when buying Excess/Umbrella

The Umbrella policy, and its counterpart the Personal Excess Liability, act as protective and additional coverage limits over all other liability personal liability coverage’s such as auto, homes, boats and ATV’s. Both offer an added layer of protection, but there are some significant differences to consider when purchasing these products.

An Umbrella is often a better than an Excess policy as it is broader in the personal injury coverage than the underlying policies. Some good examples of items that are covered under an Umbrella policy are shock and mental anguish, and not included on an Excess policy. And Umbrella’s coverage is frequently offered worldwide, where an Excess follows your home and auto coverage which are usually limited in their policy territory.

Perhaps the biggest difference with an Umbrella policy is when it comes to young adults.

October snowstorm leaves many without insurance coverage

The unprecedented October 2011 snow storm that hit Connecticut, Massachusetts and other eastern states caused significant destruction to trees as well as sensitive outdoor infrastructure such as radio towers and power lines. As a result, many commercial businesses were left in the dark without any insurance recoverable. Many area businesses sustained a loss of revenue due to extended power outages without having sustained physical loss or damage at their insured premises, therefore the loss will likely not be covered by Commercial Insurance. Business Interruption coverage is normally triggered by direct physical damage to covered property, such as a tree falling on a business’ building and puncturing the roof.

There is, however, some coverage available in the marketplace for losses resulting from a power outage, but is it is not commonly purchased.

Law firms show concern about cyber risks

A recent article in National Underwriter points out that a tough economy tends to lead to more claims against law firms. It stands to reason that Employment Practices Liability and Malpractice claims are on the rise, however, the abundance of capacity in the insurance marketplace for these lines of cover remains strong. The new addition of claims seems to be many insurers developing new coverages to address issues brought about by the ever-changing use of technology by law firms in the servicing of their clients.

Insurers are now crafting network security coverages on a stand-alone basis to respond to cyber-related claims. These policies include coverage for third-party claims arising out of breaches, the impact of an adverse effects on the reputation

Insurers will face hefty flood of claims from Thailand

Business Insurance has reported an estimated $5 billion in economic damage and has prompted $3.3 billion in insurance claims making it the worst flooding in Thailand in more than 50 years. Some are saying the payouts will even surpass those from tsunami in Japan, and the damage figures are still rising.

The widespread flooding has taken over much of the country and it is now causing production disruptions on a global scale. To further complicate the situation, we are seeing many companies suffer who manage a tight supply chain in order to minimize holding expensive inventories. Also feeling the impact are those tech companies who rely primarily on outsourced labor, since Thailand often serves as a partner.

A slightly different take on the SEC cybersecurity disclosure guidance

The recent rash of cyber breaches at public companies and an outcry from federal lawmakers has prompted U.S. securities regulators to issue guidance for when companies must disclose cyber attacks to investors. The guidelines issued by the U.S. Securities and Exchange Commission are to help reporting companies determine whether they need to disclose the risks they face in protecting their electronic data, as well as the costs they have incurred or could incur because of cybersecurity breaches.

The increase in corporate reliance on computer networks and electronic data has brought a corresponding increase in risks associated with breaches of their security. Breaches are now more frequent and severe. Public companies and their advisors should focus greater attention on how disclosure obligations under the