Wouldn’t It Be Nice….

Wouldn’t it be nice to close a claim in 48 hours?  Or, how about 24 hours?  What about 3 seconds?  Start-up, Lemonade Insurance Company recently accomplished this task of closing a claim in uber lightening speed…with no paperwork. This is the future of claims management or so we hope.

Below is an snippet from the Lemonade article published in the Claims Journal on January 13, 2017.

“According to the insurer, a policyholder submitted a theft claim for a $979 Canada Goose Langford Parka on Dec 23, 2016. Within seconds, AI Jim, Lemonade’s artificial intelligence claims bot, reviewed the claim, cross referenced it with the policy, ran 18 anti-fraud algorithms on it, approved it and sent wiring instructions to the bank, informing the policyholder the claim was paid at replacement cost and closed.

In an effort to learn more about the claims process at Lemonade, Claims Journal set out to interview AI Jim. Here’s what we found out:

  • AI Jim can handle an infinite number of claims and is the first contact the customer has when submitting a claim.
  • He does work as a team, forwarding claims that require physical repair or additional investigation to fellow team members.
  • He can’t divulge details on the 18 algorithms he uses to detect fraud.
  • He’s interested in continuous learning.”

The link to the rest of the article is below.

http://www.claimsjournal.com/news/east/2017/01/13/276202.htm

What Drives Client Satisfaction in the Large Commercial Market?

According to the recent J.D. Power 2016 Large Commercial Insurance Study, done in conjunction with RIMS, the following items drive client satisfaction.   I found this to be refreshing for those of us who are specialty brokers in the industry that they serve:

The single most critical touch point between a customer and an insurance broker is the quality of advice/guidance provided, the study found. Industry-wide, brokers receive an average rating of 8.34 on a 10-point scale for this metric. Lockton customers rated the firm 8.89, driving its overall 40-point lead over the second-ranked broker in the study.

J.D. Power found a 0.67 correlation between insurer profitability and customer satisfaction, suggesting that the more profitable the book of business an insurer has, the more likely the insurer will also have high levels of satisfaction.

Providing flexible program design and implementation was the most impactful key performance indicator (KPI) for commercial insurers. However, the study found that is not a standard practice — the rate at which insurers deliver on this KPI is only 47 percent.

What Drives Satisfaction in Large Commercial Insurance Market

While the the impact of program design flexibility does not surprise me, it will hopefully motivate insurers to start listening to their client’s needs versus the promotion of “off the shelf/one size fits all” program designs that are easier to internally fulfill.  The ability of the broker to make the client and insurer comfortable in creating customized program design seems paramount in driving satisfaction for the client, stickiness for the broker and profitability for the insurer.

  •  Paul R Hughes

Court Rules Florida Workers’ Comp Rate Hike to Remain, For Now

Today’s article out of Insurance Journal provides us with a timetable to the hopeful conclusion of the 12.1.2016 Florida workers’ compensation rate increase saga.  The approved 14.5% rate increase that was challenged based on Sunshine Law infractions and then temporarily upheld upon OIR and NCCI appeal of the decision.

http://www.insurancejournal.com/news/southeast/2016/12/19/435670.htm

“NCCI and OIR filed motions on Dec. 5 and Dec. 8, respectively, seeking to stay the order on appeal and also granted their request to expedite the appeal process. In the Dec. 12 ruling, the appeals court ordered that the record on appeal must be filed on or before Dec. 30, 2016, and the initial briefs are due on or before Jan. 11, 2017. The answer brief must be filed no later than Jan. 23, 2017 and the reply brief will be due no later than Feb. 2, 2017.”

There can be no firm expectation outside of all briefs are due to the courts by February 2, 2017 and a ruling assumed to be made thereafter.  Either the courts rule in favor of the NCCI and OIR and the 12/1/2016 proposed rate sets of +14.5% stay in place… or deny the appeal and all carrier rate sets go back to those in-force and approved for 1/1/2016.  Undoing this rate change at minimum 60+ days after taking effect will be messy at best for those of us administering policies and providing pricing consultation.  We shall see —

  • Paul R. Hughes

Correction to Florida 12.1 Workers’ Compensation Rates Now in Effect

In my zeal in getting the Florida 2016.17 workers’ compensation rate “soap opera” to end, I suggested that the FL OIR appeal dealt with the conclusion for Florida workers’ compensation rates from 12.1.06 and beyond.  It has not.

Impact is the same, but outcome in flux in terms of if the 12.1.16 rates will be upheld or not upon the OIR appeal.  No current understanding of when this appeal happens or process thereof.

Thankfully, I have friends who are lawyers and lobbyists that do this for a living and understand the legal system whom have corrected me and thus wanted to pass on to you.

http://www.insurancejournal.com/news/southeast/2016/11/27/433200.htm

This is a detailed link that provides what I would consider some of the most salient points to consider as this journey towards finality continues:

“On the day before Thanksgiving, Leon County Circuit Court Judge Karen Gievers ruled that the rate increase negotiated between the National Council on Compensation Insurance (NCCI), which represents insurers, and the state regulators within the Office of Insurance Regulation (OIR), cannot go into effect and that NCCI must turn over documents requested by the plaintiff in the case.”

“The Sunshine Law challenge was brought by James Fee, a Miami attorney who represents injured workers. Fee claimed, and the judge agreed, that NCCI was in violation of the Sunshine Laws in holding “multiple, non-public, secret meetings” internally and with the OIR over the rates.”

…and then this story from Pensacola Business Journal that brings some clarity to the OIR appeal, but not much more then that…

http://www.pnj.com/story/money/business/2016/11/29/workers-comp-increase-back-effect/94629334/

“A 14.5 percent increase to state workers’ compensation rates will take effect Dec. 1 after the Florida Office of Insurance Regulation filed an appeal to a ruling that would have voided the rate hike.”

– Key words here are “would have voided” or I may have used may void if appeal is not won by OIR.  

“The increase occurs after the OIR filed a notice of appeal with the First District Court of Appeal Monday. It came in response to a court order from Circuit Judge Karen Gievers of Leon County Nov. 23 that voided the increase.”

–  So as I understand it then, the carriers are rolling out the 12/1 rate sets based on the OIR appeal holding the Gievers judgement in check.  The appeal itself allows this, but it has not been heard yet.  Not sure the length of this appeal process, whether NCCI will file a secondary 1/1 rate filing just in case, or most importantly, what this means over the next twelve months to the Florida workers compensation cost basis for PEO and overall business. 

I jumped the gun in yesterday’s post.  The impact of the appeal being filed is that, as of now, the rate increase scheduled for 12/1 is going into effect.  However, the matter is not finally determined, as the appeal is still pending.  Such an important fiscal event where the outcome is unknown for an unknown period of time.  As they say, NEWS at 11… And more as we understand where this goes next.

  • Paul R. Hughes

December 1 Florida Workers’ Compensation Rate Hike Back in Effect

A 14.5 percent increase to state workers’ compensation rates will take effect Dec. 1 after the Florida Office of Insurance Regulation (“OIR”) filed and won an appeal to a ruling that would have voided the rate hike.

The increase occurs after the OIR filed a notice of appeal with the First District Court of Appeal Monday. It came in response to a court order from Circuit Judge Karen Gievers of Leon County Nov. 23 that voided the increase.

The OIR originally disapproved a requested increase from the National Council on Compensation Insurance for 19.5%, but then approved a Florida rate set of a 14.5% increase.

What a ride!  A final rate approval 24 hours prior to the day the rates are to be implemented. Unless something crazier happens, we go back to the approved 12/1/16 rates for new and renewal business (not in force).  For those that are experience rated, regardless of policy expiration, the new rates will take effect at the policyholder NCCI Anniversary Rating Date.

  • Paul R. Hughes

Judge Halts Florida’s 14.5% Workers’ Compensation Hike Set For December 1st

Please see below from Insurance Journal.


A Florida circuit judge has blocked a 14.5 percent workers’ compensation rate increase due to go into effect Dec. 1 after finding that the insurers’ rating organization and state officials did not comply with the state’s Sunshine Laws and open meeting requirements in setting the new rate.

On the day before Thanksgiving, Leon County Circuit Court Judge Karen Gievers ruled that the rate increase negotiated between the National Council on Compensation Insurance (NCCI), which represents insurers, and the state regulators within the Office of Insurance Regulation (OIR), cannot go into effect and that NCCI must turn over documents requested by the plaintiff in the case.

The Sunshine Law challenge was brought by James Fee, a Miami attorney who represents injured workers. Fee claimed, and the judge agreed, that NCCI was in violation of the Sunshine Laws in holding “multiple, non-public, secret meetings” internally and with the OIR over the rates.

NCCI claims it has complied with applicable open meeting and other Sunshine Laws on transparency and says it will appeal the ruling.

“NCCI is very disappointed in the decision of the Leon County Circuit Court.  We continue to believe that NCCI and the Florida OIR have fully complied with the law.  NCCI plans to appeal the trial court’s decision,” NCCI said in a statement.

Amy Bogner, spokesperson for the OIR, said the agency is still reviewing the ruling to determine the next steps.

Rate History

OIR conducted a public hearing on Aug. 6 on a 19.6 percent rate filing by NCCI.

On September 27, OIR and new Insurance Commissioner David Altmaier disapproved the proposed 19.6 percent rate hike sought by NCCI. At the time, OIR told NCCI it would approve a 14.5 percent increase if NCCI refiled by Oct. 4. NCCI did and the official OIR approval came on Oct. 5.

However Judge Gievers found that prior to that Aug. 6 public hearing and then after it until refiling in October, NCCI conducted internal meetings and held discussions with OIR staff that were not open to the public and for which no minutes were kept. The judge said NCCI also withheld documents from the plaintiff, denying him the opportunity to fully participate in the Aug. 6 public meeting.

Gievers said NCCI “tried to delegate its way out of the Sunshine” by claiming to have assigned one actuary to handle the filing rather than a committee as cited in the Sunshine Laws but the judge said NCCI’s approach “clearly involves” committees.

NCCI’s rate filing was originally submitted in May of this year and then amended in June to address the impact of two Florida Supreme court case decisions (Castellanos v. Next Door Company and Westphal v. City of St. Petersburg) and legislatively-mandated updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual. The Castellanos ruling invalidated the state’s mandatory attorney fee schedule, while Westphal ruling found the 104-week statutory limitation on temporary total disability benefits unconstitutional.

The rate increase was slated to become effective on Dec. 1 for new and renewal business, with no change in rates for current in-force policies.

Happy Thanksgiving

I am very thankful to have been a part of the PEO community for over twenty years.  Helping to create a way to better the experience of the American worker while creating efficiencies for the American employer… alongside with some of the best people I have ever met.  The passion behind our industry is unmatched.

Our PEO community interprets and aligns interests between workers and employers like no other.  I am very thankful that the rest of the world is finally catching on!  I am thankful for my friends in the industry as well as my internal “Libertatians” who help to execute on our vision every day.

I can’t wait to see our industry in twenty years.  It is the right model for American employment.

Until then, the Happiest of Thanksgivings and wishing you the very best over the holiday season!

Paul R. Hughes