ReportWire

Tag: Insurance industry

  • California wildfires are spreading and intensifying faster, putting more people in danger

    California wildfires are spreading and intensifying faster, putting more people in danger

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    Just from what they’ve experienced over the years, California residents may suspect that wildfires have gotten more extreme amid a warmer and more drought-prone climate.

    A new paper in the journal Science puts that sentiment to the test, with startling findings: California fires spread almost four times faster in 2020 than they had in 2001.

    The study, authored by scientists from the University of Colorado, UC Merced and UCLA, also found that across the West, fires grew 250% more quickly in 2020 than they did in 2001.

    “People are pretty good at putting out all fires,” said Park Williams, a UCLA professor and co-author of the study, but “the faster the fire, the more easily it can escape control.”

    Although intuitive, the relationship between the speed at which a fire spreads and the damage it causes to structures and land was difficult to quantify until recent developments in satellite technology, he said.

    Now, scientists can plot “trends in the daily growth rates,” he said. Using daily fire spread imagery for some 60,000 fires from 2001 to 2020, they were able to determine a relationship between damage and speed, Williams said.

    “During this 20-year study period, fires in the U.S. did indeed on average begin moving faster,” he said. The 3% of fires with the fastest daily growth rates made up around 90 percent of property loss in the two decades studied.

    “In California more than most places in the U.S., people are being confronted with the changes in fire behavior,” Williams said.

    Many Californians live in close proximity to flammable vegetation and are put increasingly in harm’s way.

    The study gave several possible explanations for the increase in fire speed.

    “Fires may be growing faster due to warming trends, vegetation transitions to more flammable fuels, or the co-occurrence of high winds with increasing human-related ignitions,” the study posited.

    Recent wildfires in California have caused death and destruction and brought the home insurance industry to the brink of crisis. With the 2024 fire season ending, all eyes will be on next year.

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    Terry Castleman

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  • Few prepared to cover long-term care costs

    Few prepared to cover long-term care costs

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    Editor’s note: The share of the U.S. population older than 65 keeps rising – and will for decades to come. Since nearly half of Americans over 65 will pay for some version of long-term health care, CNHI News and The Associated Press examined the state of long-term care in the series High Cost of Long-Term Care, which began Friday and continues this week.

    While many Americans will need long-term care as they get older, few are prepared to pay for it.

    Medicare, which provides Americans over the age 65 with health insurance, doesn’t cover most long-term care services. And Medicaid — the primary safety net for long-term care coverage — only covers those who are indigent.

    Federal estimates suggest 70% of people ages 65 and older will need long-term care before they die, but only 3% to 4% of Americans age 50 and older are paying for long-term care policies, according to insurance industry figures.

    The high cost of premiums for those private long-term care policies puts it out of reach for most people.

    Even some who have this kind of insurance find it doesn’t provide enough to cover the costs of home health aides, assisted-living facilities or nursing homes.

    “People think that long-term care insurance is for everyone — but it is not,” said Jessie Slone, executive director of the American Association for Long-term Care Insurance, an advocacy group. “It’s for a very small subset of individuals who plan, and have some retirement assets and income they can use to pay for it.”

    To qualify, applicants need to pass a health review. Slone said insurance companies have underwriting policies with “page after page” of conditions that will disqualify people from getting that coverage.”If you live a long life, the chances of you needing care are significant. So then the issue becomes who’s going to provide for that care, and who’s going to pay for it. For some, long-term care insurance is an option.”

    Prices vary, based on the age when people apply, how good their health is at the time, and how much coverage they want. “You have to start looking at this generally in your 50s or 60s,” Slone said. “Because, as you get older, you’re going to have conditions which insurers are going to look at, determine that you’re very likely to need long-term care and not give you a policy.”

    That coverage, if you can get it, doesn’t come cheap: In 2023, the annual average cost for a policy for a couple both age 55, taking out a $165,000 initial pool growing at 3% compounded annually — ranged from a low of $5,018 to $14,695 a year, according to the association.

    But, compared to auto insurance — which most people may never use — long-term care insurance is a good investment for those who can afford it, Slone said. “Car insurance is the most expensive insurance you ever pay because the chances of you getting into a car accident are somewhat remote. But the chances of someone needing long-term care if they make it to 90 are pretty significant.”

    Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care, a national nonprofit advocacy group, views it differently. She said the private long-term care insurance system has become a “bust” amid rising premiums and difficulties accessing benefits.

    Consider the fact that the number of companies offering long-term care insurance is declining, while payouts are steadily increasing as the baby boomer generation ages.”Most people have found it very expensive,” Smetanka said. “But, at the same time, people are finding that it wasn’t covering what they needed.”

    Last year, insurers paid a record of more than $14 billion to cover an estimated 353,000 long-term care claims, according to industry figures. That’s compared to about $11.6 billion just three years ago.

    Currently, there are about 7.5 million people in the U.S. age 65 and older with private long-term care insurance, according to industry data.

    With that incentive, some states, including Washington and California, are looking at creating long-term care social insurance pools funded by payroll taxes and other sources of funding. The effort also is being spurred, in part, by the rising costs borne by states for Medicaid long-term care coverage, which they share with the federal government.

    “More and more states are coming to the conclusion that this is an under-funded system,” said Marc Cohen, a researcher and co-director of the LeadingAge LTSS Center at the University of Massachusetts at Boston. “There are simply not enough dollars going into the system – given the needs and the demands of the growing elderly population.”

    So far, Washington is the only state to try to address the issue. A law approved by the state Legislature in 2019 created a long-term care benefit program, which provides residents with up to $36,500 to pay for costs such as caregiving, wheelchair ramps, meal deliveries and nursing home fees.

    The Cares Funds is covered by a payroll tax that deducts 0.58% out of paychecks but guarantees a $36,500 lifetime benefit for those who have paid into the fund for 10 years.

    Several other states are studying the issue. In California, a task force is looking at how to design a long-term care program, according to the National Conference of State Legislatures. Massachusetts, Illinois and Michigan also are weighing the costs versus benefits of creating a state long-term care benefits program.

    But the issue of imposing new taxes to pay for long-term care insurance is controversial — and politically unpopular — on both a state and federal level.

    Washington’s long-term care insurance law is facing a repeal effort from a group backed by hedge fund executive Brian Heywood that argues the system should be voluntary. Voters in November will decide whether to allow people to opt out, which supporters say would essentially gut the program.

    “There are a lot of states that are looking to see what happens in Washington,” Cohen said. “If this billionaire who is funding this repeal effort wins, it will be a real blow.”

    Cohen said efforts on a federal level to create a publicly funded insurance pool haven’t gained much traction. A long-term care program created by Congress through the CLASS Plan, which was tied to the Affordable Care Act, was voluntary. That law was repealed in early 2013.

    “It never got off the ground before it was repealed,” he said. “With the dysfunction in Congress, we’re likely to see more action on a state level than the federal.”

    Recent polls suggest there may be some public support for the move. A survey by the National Council on Aging found more than 90% of the 1,000 female respondents across party lines support the idea of creating a government program to pay for the cost of long-term care.

    “The level of support was significant, and very bipartisan,” said Howard Bedlin, a long-term care expert with the council. “People keep talking about how Congress can’t find bipartisan support. Well, the voters clearly support it.

    “The politicians just aren’t giving these issues the attention they deserve.”

    Christian M. Wade is a reporter for North of Boston Media Group.

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    By Christian M. Wade | CNHI News

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  • Safety net hospital fund shortfall widening

    Safety net hospital fund shortfall widening

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    BOSTON — Lawmakers are seeking more support for the state’s safety net hospitals amid rising concerns about the fiscal health of a fund that helps cover medical costs for large numbers of uninsured and low-income patients.

    Hospitals and health insurers pay into the so-called safety net fund – a pool of money that helps fund care for hundreds of thousands of low-income residents who are uninsured or underinsured – with the state chipping in additional funding. But if the fund runs low, hospitals are on the hook for the shortfall.

    The fund is projected to have a shortfall of more than $220 million in the upcoming fiscal year, hospitals say, rising to the highest level in nearly two decades.

    Without additional funding, financially challenged hospitals will be forced to cover the deficit, leaving less money to provide medical care for low-income and uninsured patients, they say.

    An amendment to the Senate’s version of the $57.9 billion state budget filed by Sen. Barry Finegold, D-Andover, would require commercial health insurance companies to cover 50% of any revenue shortfalls in the safety net fund.

    “We need to do something to help our local hospitals,” Finegold said. “This is part of a long-term problem with funding for hospitals that serve the state’s most vulnerable residents. We need to fix it.”

    Many earmarks

    Finegold’s proposal is one of more than 1,000 amendments to the Senate’s budget, many of them local earmarks seeking to divert more state money to local governments, schools, cash-strapped community groups and nonprofits. Only a handful will likely make it into the Senate’s final spending package.

    The plan faces pushback from the Massachusetts Association of Health Plans, which represents commercial insurers who would be impacted by the proposed changes to the hospital safety net program.

    Lora Pellegrini, the group’s president and CEO, said requiring insurers to cover the fund’s shortfalls would jeopardize negotiations between the state Department of Health and Human Services and the U.S. Centers for Medicare and Medicaid Services that seek to reduce assessments paid by medical insurance carriers.

    “This really came out of nowhere, and would be counterproductive to those efforts,” she said. “We have a committee process for a reason and that’s where these kinds of special interest issues should be vetted, not in the budget.”

    But the move is backed by the Massachusetts Health and Hospital Association, which says requiring insurers to cover the shortfall would help alleviate an “unmanageable financial burden” on the health care system “by broadening funding support for the program.”

    “The Health Safety Net is a vital component of Massachusetts’ healthcare infrastructure and its ability to cover the costs of care for low-income and uninsured patients,” Daniel McHale, MHP’s vice president for Healthcare Finance & Policy, said in a statement.

    “At this increasingly fragile time for the entire health care system, it is imperative that we take the steps needed to stabilize the safety net for the people and providers who rely on it each day.”

    Local hospitals affected

    The state’s safety net hospitals and community health centers – which include Lawrence Hospital, Salem Hospital, Holy Family Hospital in Methuen and Anna Jaques Hospital in Newburyport – serve a disproportionate percentage of low-income patients.

    Many are heavily dependent on Medicaid reimbursements, which are typically less than commercial insurance payouts.

    Nearly 30% of Lawrence General’s gross revenue is for care provided to Medicaid, or MassHealth, patients. The state average is 18%.

    Many community hospitals are collecting from low-paying government insurance programs, and getting below-average reimbursements from commercial insurers, advocates say.

    Lawmakers also swept money from the hospital safety net fund to help cover the costs of new Medicare savings programs that pay some or all of eligible senior citizen’s premiums and other health care costs, including prescriptions.

    Hospitals are also seeing increased demand from uninsured patients as hundreds of thousands of Medicaid recipients see their state-sponsored health care coverage dropped following the end of federal pandemic-related programs, which is driving up costs. Claims processing problems are another factor adding to hospital costs, they say.

    Those and other factors have widened the fund’s shortfall from $68 million in fiscal 2022 to more than $210 million in the previous fiscal year, according to the hospital association. Combined, the shortfall could reach $600 million for the three fiscal years, the association said.

    Biggest expense

    The House, which approved its $58.2 billion version of the state budget two weeks ago, proposed $17.3 million in state funding for the hospital safety net fund. The Senate, which begins debate on its version of the budget next week, has proposed a similar amount.

    In the current budget, the state allocated $91.4 million for the safety net fund.

    But the House budget didn’t include an amendment requiring insurers to help hospitals pay the shortfall. That means even if the Senate approves Finegold’s amendment, it would still need to be negotiated as part of the final budget before landing on Gov. Maura Healey’s desk for consideration.

    Health care coverage, in the meantime, is one of the state’s biggest expenses. Medicaid costs have doubled in the past decade and now account for nearly 40% of state spending.

    MassHealth serves more than 2 million people – roughly one-third of the state’s population – despite federal Medicaid redeterminations that have reduced its rolls over the past year.

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    By Christian M. Wade | Statehouse Reporter

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  • Keller Williams to pay $70M to settle real estate agent lawsuits nationally

    Keller Williams to pay $70M to settle real estate agent lawsuits nationally

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    LOS ANGELES — One of the nation’s largest real estate brokerages has agreed to pay $70 million as part of a proposed settlement to resolve more than a dozen lawsuits across the country over agent commissions.

    The agreement was filed Feb. 1 with federal courts overseeing lawsuits in Illinois and Missouri. It also calls on Keller Williams Realty Inc. to take several steps aimed at providing homebuyers and sellers with more transparency over the commissions paid to real estate agents.

    ”We think it’s a tremendous victory for homeowners and homebuyers across the country,” said Michael Ketchmark, one of the attorneys representing the plaintiffs in the lawsuits.

    The central claim put forth in the lawsuits is that the country’s biggest real estate brokerages engage in practices that unfairly force homeowners to pay artificially inflated agent commissions when they sell their home.

    In October, a federal jury in Missouri found that the National Association of Realtors and several large real estate brokerages, including Keller Williams, conspired to require that home sellers pay homebuyers’ agent commission in violation of federal antitrust law.

    The jury ordered the defendants to pay almost $1.8 billion in damages. If treble damages — which allows plaintiffs to potentially receive up to three times actual or compensatory damages — are awarded, then the defendants may have to pay more than $5 billion.

    More than a dozen similar lawsuits are pending against the real estate brokerage industry.

    Moving Keller Williams out from under that cloud of litigation and uncertainty motivated the company to pursue the proposed settlement, which would release the company, its franchisees and agents from similar agent commission lawsuits nationwide. The company based in Austin, Texas, operates more than 1,100 offices with some 180,000 agents.

    ”We came to the decision to settle with careful consideration for the immediate and long-term well-being of our agents, our franchisees and the business models they depend on,” Gary Keller, the company’s executive chairman, wrote in a companywide email Thursday. “It was a decision to bring stability, relief and the freedom for us all to focus on our mission without distractions.”

    Among the terms of its proposed settlement, Keller Williams agreed to make clear that its agents let clients know that commissions are negotiable, and that there isn’t a set minimum that clients are required to pay, nor one set by law.

    The company also agreed to make certain that agents who work with prospective homebuyers disclose their compensation structure, including any “cooperative compensation,” which is when a seller’s agent offers to compensate the agent that represents a buyer for their services.

    As part of the settlement, which must be approved by the court, Keller Williams agents will no longer be required to be members of the National Association of Realtors or follow the trade association’s guidelines.

    Two other large real estate brokerages agreed to similar settlement terms last year. In their respective pacts, Anywhere Real Estate Inc. agreed to pay $83.5 million, while Re/Max agreed to pay $55 million.



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    By Alex Veiga | Associated Press

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  • Big bank executives will assure lawmakers the industry's crisis is over, KBW CEO Thomas Michaud predicts

    Big bank executives will assure lawmakers the industry's crisis is over, KBW CEO Thomas Michaud predicts

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  • Pennsylvania appeals court rules medical marijuana covered under workers’ compensation | News – Medical Marijuana Program Connection

    Pennsylvania appeals court rules medical marijuana covered under workers’ compensation | News – Medical Marijuana Program Connection

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    Workers’ compensation carriers must reimburse injured employees for the cost of medical marijuana if a physician determines the drug is medically necessary, a state appellate court said.

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    MMP News Author

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  • Florida lawmakers set to meet on ailing insurance market

    Florida lawmakers set to meet on ailing insurance market

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    TALLAHASSEE, Fla. — The Florida Legislature will meet next week for a special session on property insurance and property tax relief in the wake of damage caused by Hurricane Ian, officials announced Tuesday.

    The leaders of the Florida House and Senate issued the proclamation convening the Legislature from Dec. 12 to 16.

    Lawmakers will be tasked with reforming elements of the state’s troubled property insurance market, providing tax or other financial relief related to damage from Hurricanes Ian and Nicole, and creating a toll credit program for frequent Florida commuters.

    The session comes as Florida’s property insurance market has dealt with billions of dollars in losses, rising prices for consumers and insurer insolvencies, even before the powerful Hurricane Ian slammed into the state in September and caused widespread damage.

    Next week’s special session will be the second time the Florida Legislature met this year to address issues in the property insurance market.

    Lawmakers in May passed legislation creating a $2 billion reinsurance program, offering grants to homeowners who retrofit properties to be less vulnerable to hurricane damage and limiting various attorney fees in some insurance-related lawsuits.

    The legislative package was seen by many in the statehouse as a meaningful first step in repairing the market, though some said it did not do enough to immediately lower rates for homeowners.

    The insurance industry blames overzealous litigation for problems in the market. Florida law allows attorneys to collect high fees in property insurance cases. State insurance regulators say the state accounts for almost 80% percent of the nation’s homeowners’ insurance lawsuits but just 9% of all homeowners insurance claims.

    Attorneys’ groups have argued insurers are also to blame for refusing to pay out claims, saying homeowners file suit as a last resort.

    The turmoil has caused the industry to see two straight years of net underwriting losses exceeding $1 billion each year. A string of property insurers have become insolvent, while others are leaving the state entirely.

    Homeowners unable to get coverage or priced out of plans have flocked to the state’s public insurer of last resort, Citizens Property Insurance, which this summer topped 1 million policies for the first time in almost a decade.

    Citizens Property Insurance was created by the state in 2002 for Floridians unable to find coverage from private insurers.

    Republican Gov. Ron DeSantis in October signed an executive order extending the deadline for property taxes for homes and businesses destroyed or left uninhabitable after Ian and said lawmakers would meet this year to address additional issues related to the storm.

    The governor’s office in a statement Tuesday said DeSantis “expects the legislature to rein in the costs of excessive litigation and ensure the property insurance market in Florida is both attractive to insurers and more competitive for consumers.”

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

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    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

    [ad_1]

    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

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  • Munich Re to stop its backing for new oil, gas fields

    Munich Re to stop its backing for new oil, gas fields

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    Munich Re, one of the world’s biggest insurance companies, says it will stop backing new oil and gas fields beginning next April

    BERLIN — Munich Re, one of the world’s biggest insurance companies, said Thursday that it will stop backing new oil and gas fields beginning next April.

    The company said it will also no longer invest in or insure new oil pipelines and power plants that weren’t already under construction by Dec. 31, 2022.

    Munich Re said the moves were part of its effort to reduce the harmful impact its business has on the environment. The burning of oil and gas is one of the main sources of greenhouses gases fueling climate change.

    Munich Re provides so-called reinsurance contracts that help other insurers spread risks. It also invests the insurance premiums it receives from customers and third-party assets, making it a major institutional investor.

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    Follow all AP stories on climate change issues at https://apnews.com/hub/climate-and-environment.

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  • Ian deals blow to Florida’s teetering insurance sector

    Ian deals blow to Florida’s teetering insurance sector

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    Daniel Kelly and his wife bought a 1977 doublewide mobile home in May for about $83,000 at Tropicana Sands, a community for people 55 and older in Fort Myers, Florida. But he ran into roadblocks when he tried to insure it.

    Managers at Tropicana Sands told him he likely wouldn’t be able to find a carrier who would offer a policy because the home was too old. He said he checked with a Florida-based insurance agent who searched and couldn’t find anything.

    “I can insure a 1940s car, why can’t I insure this?” Kelly said.

    Kelly was lucky that his trailer was largely spared by Hurricane Ian aside from some flood damage. But for many Floridians whose homes were destroyed, they now face the arduous task of rebuilding without insurance or paying even steeper prices in an insurance market that was already struggling. Wind and storm-surge losses from the hurricane could reach between $28 billion and $47 billion, making it Florida’s costliest storm since Hurricane Andrew made landfall in 1992, according to the property analytics firm CoreLogic.

    Even before Ian, Florida’s home insurance market was dealing with billions of dollars in losses from a string of natural disasters, rampant litigation and increasing fraud. The difficult environment has put many insurers out of business and caused others to raise their prices or tighten their restrictions, making it harder for Floridians to obtain insurance.

    Those who do manage to insure their homes are seeing costs increase exponentially. Even before Hurricane Ian, the annual cost of an average Florida homeowners insurance policy was expected to reach $4,231 in 2022, nearly three times the U.S. average of $1,544.

    “They are paying more for less coverage,” said Florida’s Insurance Consumer Advocate Tasha Carter. “It puts consumers in dire circumstances.”

    The costs have gotten so high that some homeowners have forgone coverage altogether. About 12% of Florida homeowners don’t have property insurance — or more than double the U.S. average of 5% — according to the Insurance Information Institute, a research organization funded by the insurance industry.

    Florida’s insurance industry has seen two straight years of net underwriting losses exceeding $1 billion each year. A string of property insurers, including six so far this year, have become insolvent, while others are leaving the state.

    As of July, 27 Florida insurers were on a state watchlist for their precarious financial situation; Mark Friedlander, the head of communications for the Insurance Information Institute, expects Hurricane Ian will cause at least some of those to tip into insolvency.

    The insurance industry says overzealous litigation is partly to blame. Loopholes in Florida law, including fee multipliers that allow attorneys to collect higher fees for property insurance cases, have made Florida an excessively litigious state, Friedlander said.

    Florida currently averages about 100,000 lawsuits over homeowners’ insurance claims per year, he said. That compares to just 3,600 in California, which has almost double Florida’s population.

    The Florida Office of Insurance Regulation said the state accounts for 76% of the nation’s homeowners’ insurance claims lawsuits but just 9% of all homeowners insurance claims.

    “Plaintiff attorneys in Florida have historically found ways of circumventing any efforts at reining in legal system abuses, making it likely that ongoing reforms will be needed to further stabilize the insurance marketplace,” said Logan McFaddin of the American Property Casualty Insurance Association.

    But Amy Boggs, the property section chair for the Florida Justice Association — a group that represents attorneys — said the insurance industry is also at fault for refusing to pay out claims. Boggs said homeowners are driven to attorneys “as a last resort.”

    “No policyholder wants to be embroiled in years of litigation just to get their homes rebuilt,” she said. “They come to attorneys when their insurance company underpays their claim and they can’t rebuild.”

    Rampant fraud — particularly among roofing contractors — has also added to costs. Regulators say it’s common for contractors to go door-to-door offering to cover homeowners’ insurance deductible in exchange for submitting a full roof replacement claim to their property insurance company, claiming damage from storms.

    Things have gotten so bad with insurance that Florida Gov. Ron DeSantis called a special session in May to address the issues. New laws limit the rates attorneys can charge for some property insurance claims and require insurers to insure homes with older roofs — something they had stopped doing because of rising fraud claims.

    The legislation also includes a $150 million fund that will offer grants to homeowners to make improvements to protect against hurricanes. But that program has yet to be launched, and experts say it will take years to reverse the damage to Florida’s insurance market.

    In the meantime, the crisis has pushed more homeowners to Citizens Property Insurance Corp., the state-backed insurer that sells home insurance for those who can’t get coverage through private insurers.

    Citizens had more than 1 million active policies as of Sept. 23, before Ian hit, according to Michael Peltier, a spokesman at Citizens. In 2019, that number was roughly 420,000. He said the company had been writing 8,000 to 9,000 new policies per week, double compared with a few years ago. Citizens has $13.4 billion in reserves and predicts it will pay 225,000 claims from Ian worth a total of $3.7 billion.

    Even if they have homeowners’ insurance, many Floridians could still be facing financial ruin because of flooding. Flood damage isn’t typically covered by homeowners’ insurance but can be costly; Florida’s Division of Emergency Management says 1 inch of floodwater can do $25,000 in damage.

    Friedlander said just 18% of Florida homeowners carry flood insurance, either through the federal government’s National Flood Insurance Program or private insurers. In some coastal areas, more than half of homeowners have flood insurance, but in inland areas — where flood waters continued to rise even after the storm had passed — it’s closer to 5%.

    Kelly, whose trailer in Fort Myers was saturated in 4 feet of salt water and sewage after Hurricane Ian, could have benefitted from flood insurance. He thought he might not be able to get it because he didn’t have homeowners insurance, but that’s not the case — flood insurance is completely separate and can even be purchased by renters, experts say.

    “I kinda let it lie when I originally couldn’t find someone to insure it,” he said. “It’s a costly oversight on my part.”

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    Associated Press writer Steve LeBlanc in Boston contributed to this report.

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    For more coverage of Hurricane Ian, go to: https://apnews.com/hub/hurricanes

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  • The Zebra Named Best Place to Work by Austin Business Journal for Third Consecutive Year

    The Zebra Named Best Place to Work by Austin Business Journal for Third Consecutive Year

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    New Penthouse Suite, Growing Teams, Perks Including Maid Service Among Keys to Employee Happiness

    Press Release
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    updated: Jun 26, 2017


    Austin, TX, June 26, 2017 (Newswire.com)
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     The Zebra, the nation’s most visited car insurance comparison marketplace, announced its recognition today as an Austin Business Journal Best Place to Work for the third consecutive year. Celebrating from its downtown headquarters, the company credits their employees with maintaining a unique, collaborative, and innovative culture rooted in core values such as expressing gratitude and creating amazing experiences for colleagues and customers alike.

    “The Zebra has always been a place where good vibes reign,” says The Zebra CEO Adam Lyons. “We want our employees to feel comfortable, ask questions, move fast, and break things. We want them to enjoy the place they devote so much time to every week and the people they share it with.”

    “The Zebra has always been a place where good vibes reign. We want our employees to feel comfortable, ask questions, move fast, and break things. We want them to enjoy the place they devote so much time to every week and the people they share it with.”

    Adam Lyons, Founder & CEO, The Zebra

    The Zebra recently marked the one-year anniversary of their move to a tricked-out penthouse suite in one of Austin’s most desirable downtown office buildings, complete with expansive patios. The space is an addition to the long list of employee perks, including an in-house barista, daily smoothies, ergonomic desks, unlimited paid time off policy, monthly personal maid service and a “Treat Yo’Self” allowance for employees to pursue their interests or unwind — be it with a Netflix subscription, rock climbing, or even calligraphy lessons. The company espouses values that make the office a space of collaboration, respect and innovation.

    The Austin Business Journal unveiled the list of 2017 Best Places to Work at its annual awards luncheon on June 23. The event brought together the 75 companies who received the highest employee-reported assessments in Austin. The winning companies embody positive values, offer competitive benefits and perks, and have high levels of employee satisfaction. At the ceremony, The Zebra won the coveted Spirit Award again for the third consecutive year, demonstrating company pride with the most energy and enthusiasm among all honorees.

    Source: The Zebra

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