Individual Surety- Fraud Game Over

Individual Sureties have plagued the surety industry over the past decade because many times the assets purported to back the guarantee were not liquid, or worse, fraudulent.   When an individual surety did not fulfill its guarantee, legitimate corporate sureties and their agents reputations were marred.    The defense bill passed by Congress last week contains a provision to reduce fraud on federal projects by requiring assets backing individual surety bonds to be real and deposited with the federal government.

http://www.enr.com/articles/37986-individual-surety-fraud-game-over

Maryland Individual Surety Regulation Sunsets!!

The Maryland statute was allowed to expire, or “sunset” on September 30, 2014 after a bill to resuscitate the law was defeated. The NASBP (National Association of Surety Bond Producers) deserves great credit for its steadfast opposition to the Maryland law. The NASBP’s message was consistent:  Consumers are entitled to meaningful regulatory oversight.  No insurer should be exempt from having to obtain a certificate of authority as a prerequisite to conducting the business of suretyship in Maryland or any other state.

The Impact of the Affordable Care Act on Insurance Prices and Enrollment Beyond 2014

The results of this study by professors of health finance from the University of Minnesota are rather startling and project that health insurance cost could continue to escalate despite the fact that the ACA was passed as a law that would bend the cost curve down. Two drivers for these increases appear to be the scheduled termination of the temporary reinsurance and risk corridor programs, which likely has been artificially depressing premiums.

Take a look at the below link which includes the national study as well as a 10 state impact analysis.  Using the 2014 enrollment report data and micro-simulation model funded by the U.S. Department of Health and Human Services, the professors estimate the national and state impact of the ACA on insurance prices and enrollment from 2015-2024.

Click to access ParenteAnalysis.pdf

Patrick Duke, Vice President-Employee Benefits

Why Would You Place Your Insurance Through a Captive?

written by Michael Fragola, VP Business Development

Reason # 1 – Claim professionals that work for you!

If you currently write checks to an insurance company for Workers’ Compensation, Auto Liability or General Liability, you are supporting their claims unit.  In the event of a claim, the insurance company’s claim unit has some responsibility to protect your interests, but mostly the claims unit exists to protect the insurance company’s welfare.  This is not a slam on them – they’re in the business to make money and retaining the premiums you paid to them results in profit to them.

The captive model is a different world from your insurance carrier based claims experience.  Claims are reported to and managed by a Third Party Administrator (TPA).  The TPA is hired by (and can be fired by) the Captive and they are responsible to settle claims quickly, effectively and, whenever possible, in your favor.  This approach applies to closing out claim reserves (dollar amounts expected to be paid to the claimant in the future) as quickly as possible.  Often, clients of insurance companies have experienced unnecessary delays in closing claims just because of poor communications within the company.   Another reason they may not exhibit a sense of urgency is that the carrier benefits from the tax deduction on the claim reserve until it is paid or closed.  Keep in mind that a delay in closing out a reserve will have an adverse effect on your experience rating – something that occurs on all casualty business – not just Workers’ Compensation.

The “bottom line” is that retaining your own adjuster rather than relying on the insurance carrier’s means you have an advocate in your corner which results in a positive impact for controlling your claim expenses.

HR & Finance Panel Discussion for Non Profits

Where Your Systems Intersect: Benefits, Payroll and HR

I’ve recently been talking with several of my non-profit clients about the day to day operation of their HR and Finance Departments.  We’ve discussed how they work together, how they are one in the same sometimes, and how they are often using and doing the same things but in little different ways.  This got me and my team thinking, why isn’t anybody talking about how these departments and systems intersect?

I’ve reached out to Paycom, a payroll group, I have come to know well over the last two years and Non-Profit HR Solutions, an HR Outsourcing and Resource group, that many of my clients have consulted with over the years.  Together we have put together a panel discussion covering how HR, Payroll and Benefits are coming together in this new environment of PPACA, increased DOL Enforcement and the desire to more greatly involve employees in their day to day interaction with the payroll and benefits systems.

Please join us on 5/14 at the offices of Cresa in DC for what I hope will be a very informative and interactive session. 

Regards,

Paul J. Phelan, CFP

• Date: Wednesday, May 14, 2014
• Time: 8:00 a.m.- Reception, 8:30 a.m. – 10 a.m.- Panel Discussion
• Location: 1800 M Street, NW, Suite # 3505, Washington, DC 20036
• RSVP: Marlene Stringer at stringermg@ecsinsure.com