Risk Insider: Brady Kelley

Congress: Let E&S Underwrite Unique Flood Risks

By: | May 11, 2015 • 2 min read
Brady R. Kelley has served as NAPSLO’s Executive Director since September 2011. He is responsible for the overall management of the association’s staff activities, services to members and business operations. He can be reached at [email protected]

I strongly support revisions to the current federal definition of private flood insurance contained in the Flood Insurance Modernization and Market Parity Act of 2014 introduced in the 113th Congress. I believe it is necessary for Congress to amend the current definition to ensure that surplus lines insurers are eligible to offer private market solutions and alternatives to consumers with unique and complex flood risks.

The surplus lines market plays an important role in providing insurance for hard-to-place, unique or high capacity risks. Often called the “safety valve” of the insurance industry, surplus lines insurers fill a need for coverage in the marketplace by insuring risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.

Surplus lines insurance is used to cover risks that are difficult to place, where the standard market is unwilling or unable to provide the level of coverage needed, such as flood coverage in coastal areas.

The Biggert-Waters Flood Insurance Reform Act of 2012 sought to expand the ability of private insurers to offer flood insurance solutions as alternatives to the National Flood Insurance Program (NFIP). However, its definition of private flood insurance should be clarified to ensure that surplus lines insurers are part of the solution.

Any misinterpretation of the existing definition could unintentionally limit the surplus lines market’s historical effectiveness as a supplemental market for risks that exceed the capacity of the NFIP.

It is important to note that surplus lines insurers currently underwrite private insurance flood policies primarily in commercial lines and, to a very limited degree, in personal lines.

Well before the Biggert-Waters Act of 2012, surplus lines flood insurance policies were underwritten as a supplemental option for insureds seeking flood insurance coverages in excess of the capacity of the NFIP.

Often called the “safety valve” of the insurance industry, surplus lines insurers fill a need for coverage in the marketplace by insuring risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers.

The Flood Insurance Modernization and Market Parity Act of 2014 intended to preserve the surplus lines market’s ability to provide the supplemental coverage it has historically provided and to provide insureds with coverage options for unique and complex risk that exceeds or differs from the options available through the NFIP or the standard market.

The purpose of the 2014 Act was to clarify that a surplus lines policy is an acceptable private flood insurance option. Its definition of private insurer includes any insurer that is licensed, admitted or otherwise “eligible” to engage in the business of insurance in the state or jurisdiction in which the insured property is located. Its use of the term “eligible” is important because of its consistency with the nationwide surplus lines insurer eligibility standards established by the Nonadmitted and Reinsurance Reform Act (NRRA) of 2010.

The Flood Insurance Modernization and Market Parity Act of 2014 continues to be the right solution. It preserves an effective supplemental market, provides options for insureds with unique and complex risks, and it provides mortgage lenders with more clarity regarding the acceptance of private flood insurance policies.

I therefore encourage Congress to enact legislation in 2015 to accomplish the goals of the 2014 Act.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]