Archive for August, 2010

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August Busiest Month for Hurricanes

August 11th, 2010 by Iris | Comments Off | Filed in flood insurance, homeowners insurance, insurance news

While the National Oceanic and Atmospheric Administration (NOAA) has slightly amended the hurricane outlook it released in May, an above-normal season is still expected. With ocean temperatures at record highs, and the climate phenomenon known as “La Nina” beginning to development, government forecasters maintain that this may be the busiest Atlantic hurricane season since 2005.

The original forecast predicted 14-23 named tropical storms during this hurricane season. Those numbers have been revised to a range of 14-20. The Atlantic hurricane season began on June 1st, and runs through November 30th, but the peak period is in high summer and early fall: August through October, during which eight to twelve storms could develop into hurricanes, four-to-six of which could evolve into “major storms” with winds in excess of 111 mph.

Jane Lubchenco said in a statement to the press, “August heralds the start of the most active phase of the Atlantic hurricane season and with the meteorological factors in place, now is the time for everyone living in hurricane prone areas to be prepared.”

Historically during active storm seasons, multiple hurricane strikes are much more likely for both the Gulf Coast and the East Coast in the U.S., but the Caribbean also sees a marked increase in the number and severity of storms during active seasons. This could mean bad news for Haiti, where there are roughly 1.6 million people still living under tarps and in tents, seven months after a disastrous earthquake crumbled its capital.

So far this season, three named storms have developed. Hurricane Alex made landfall in northern Mexico on June 30th, and tropical storm Bonnie caused some trouble for oil company crews working in the Gulf of Mexico in July. Last Thursday, tropical storm Colin regenerated, with winds of 45 mph over the open Atlantic, according to the National Hurricane Center in Miami, FL. A tropical storm warning was issued for Bermuda.

According to Gerry Bell, lead seasonal hurricane forecaster at NOAA’s Climate Prediction Center in Washington, the May outlook, which called for eight to 14 hurricanes, with possibly three to seven major hurricanes, reflected a more active early summer than we actually had. Bell also said that the update is based on indications that a high-activity era which began in 1995 is continuing.

“The atmospheric and oceanic conditions now in place are very conducive to hurricane formation, as we had predicted in May,” he said.

A Pacific Ocean phenomenon called La Nina developed in July, reducing wind shear in the Atlantic and making it easier for storms to take shape. As well, ocean temperatures are exceptionally high, and the warmest since 2005 when Hurricanes Katrina and Rita tore apart the very part of the Gulf of Mexico now dealing with BP’s oil spill. According to Bell, during above-normal seasons it’s typical for three named storms to spin into the Gulf between August and November. A storm’s individual strength and its path across the water would determine whether there would be any impact on remaining oil from the explosion last April.

Tropical storms are named when sustained wind speeds reach 39 mph (62 kph). They become hurricanes when sustained winds reach 74 mph (119 kph). Major hurricanes blow at 111 mph (178 kph) or more. The strongest hurricanes are labeled Category 5, with winds greater than 155 mph (250 kph).

Last week, researchers from Colorado State University researchers said they also expected this year’s season to be more active than average, forecasting 10 hurricanes, five of them major.

Hurricane season ends Nov. 30.

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Georgia to Decide New Insurance Commissioner

August 10th, 2010 by Iris | 1 Comment | Filed in insurance facts, insurance news

Georgia voters head to the polls today to participate in a runoff election in which they must choose between two Republican candidates for state insurance commissioner.

The two candidates, Maria Sheffield and Ralph T. Hudgens, are the two survivors from last months Republican primary, which included nine candidates. In that vote, each of the two received about twenty percent of the vote.

Last week, both Sheffield and Hudgens tried to distance themselves from John Oxendine, the current insurance commissioner, whose term is clouded by questions about his ethics. He has just failed at running for governor, during which campaign he took contributions from insurance companies.

Hudgens said Oxendine has done a good job as commissioner and he was not going to “pass judgment” on Oxendine actions in the gubernatorial campaign, while Sheffield said that ethics in government is “extremely important” to her. She also tried to prove that Oxendine and Hudgens had a relationship that included a $500 donation from Oxendine to Hudgens when the latter was running for re-election to the Georgia General Assembly two years ago.

A major issue in the insurance commissioner race is federal health care reform. Sheffield, an attorney who has worked in Georgia’s Department of Insurance, says she’ll work to mitigate the affect of the new federal laws on her state. Hudgens, who currently chairs the Georgia Senate’s Insurance and Labor Committee, maintains that the insurance commissioner has no authority over the new mandates. He says the position is merely administrative.

The winner of this Republican run-off will face Democrat Mary Squires in the November election.

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Alabama Buys Hurricane Insurance

August 9th, 2010 by Iris | Comments Off | Filed in insurance news

I didn’t know an entire state could purchase hurricane insurance, but according to the Insurance Journal, the state of Alabama has done just that.

Under a deal that took effect last month, Alabama will pay $800,000/year for three years to global insurer Swiss Re, as a hedge against heavy hurricane damage to state-owned coastal property. In the event of a Category 3 or 4 hurricane with winds between 110 and 155 mph, Swiss Re will pay the state $5 million. If a Category 5 hurricane (with winds in excess of 156 mph) hits the Alabama coast, the payout would be $10 million.

Officials from the State Finance Department told the press that the money would be used toward all or part of the deductible that the state pays on it’s traditional coverage of state property, which includes parks, schools, and government buildings. According to Finance Department attorney Richard Cater, Alabama has a $10 million deductible for each named storm.

Swiss Re said that Alabama is the first U.S. state to purchase this sort of coverage, known as “parametric insurance,” but that similar policies have been issued to governments in Mexico and the Caribbean.

Nikhil da Victoria Lobo, a vice president of Swiss Re, told the press, “Swiss Re has provided these solutions across the globe to multiple governments, but has just recently begun this dialogue in the U.S. The state of Alabama initiated discussions with Swiss Re.”

Bill Newton, Alabama’s State Finance Director, said that Swiss Re was not the only insurer offering proposals when his state began looking for this type of coverage, but that their policy was based on an analysis of previous storm damage from hurricanes hitting the Alabama coast.

Swiss Re is the company that former Alabama Insurance Commissioner Walter Bell joined in 2008 when he left his state post to become chairman of the holding company for Swiss Re’s North American business. But da Victoria Lobo and Cater both said Bell was not involved in negotiating the contract.

Swiss Re representatives said that the policy allows the state to get paid quickly and avoid unpredictable expenses.

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Friday Filmstrips: Earthquake Insurance

August 6th, 2010 by Iris | Comments Off | Filed in earthquake insurance, friday filmstrips

If you live in California, earthquakes are inevitable, but did you know only about 10% of homeowners have earthquake insurance? For this week’s Friday Filmstrip, we share a video from You Tube and the Insurance Journal:

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AMA Says 95 out of 100 Physicians Are Hit with Medical Liability Claims

August 5th, 2010 by Iris | Comments Off | Filed in health insurance

The American Medical Insurance (AMA) has released a new report that reveals a scary statistic: an average of 95 medical liability claims are filed for every 100 physicians. That’s almost one claim per doctor.

According to the AMA, its report has data not available anywhere else, and includes information on how medical liability claims are impacted by age, gender, and type of practice for physicians.

According to the Insurance Journal highlights of the report include:

  1. Nearly 61 percent of physicians age 55 and over have been sued.
  2. There is wide variation in the impact of liability claims between specialties. The number of claims per 100 physicians was more than five times greater for general surgeons and obstetricians/gynecologists than it was for pediatricians and psychiatrists.
  3. Before they reach the age of 40, more than 50 percent of obstetricians/gynecologists have already been sued.
  4. Ninety percent of general surgeons age 55 and over have been sued.

The AMA’s immediate past-president J. James Rohack, M.D., talked about the report, saying, “Even though the vast majority of claims are dropped or decided in favor of physicians, the understandable fear of meritless lawsuits can influence what specialty of medicine physicians practice, where they practice and when they retire. This litigious climate hurts patients’ access to physician care at a time when the nation is working to reduce unnecessary health care costs.”

The AMA says that the number of medical liability claims is not an indication of the frequency of medical error, as the physician prevails 90 percent of the time in cases that go to trial, but even though 65% of claims are either dropped or dismissed they’re not without cost. The average defense of a medical liability claims ranges from $22,000 for the dropped or dismissed claims to more than $100,000 for those that go to trial, leading to increased costs for both physicians and patients.

Rohack said the findings “validate the need for national and state medical liability reform.”

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Better Tools, Better Risk Assessment

August 4th, 2010 by Iris | Comments Off | Filed in flood insurance, homeowners insurance

People living in Miami probably won’t be too surprised at the findings of a crew of Florida State University researchers. The city is vulnerable to strong hurricane winds. Yeah, not a news flash. Maybe the fact that Miami is Florida’s most vulnerable city jazzes the story up a bit. The real point, however, is that the team has developed a new tool for estimating the frequency of extreme winds at any given location. That has great significance in terms of emergency preparedness and risk calculation for insurance purposes.

In the press release, Jill C. Malmstadt, one of the authors of “Risk of Strong Hurricane Winds to Florida Cities” (November 2009, Journal of Applied Meteorology and Climatology), said, “Not unexpectedly, we found that the extreme wind risk from hurricanes varies across the state. Areas in the northeast, such as Jacksonville and in the Big Bend between Tampa and Tallahassee, have longer periods between occurrences of a given strong wind speed compared to areas such as Miami and Pensacola. That’s also where we found the highest annual threats of a catastrophic hurricane event.”

The researchers concluded that every 12 years on average Miami will experience winds of 112 mph or stronger, the equivalent of a Category 3 hurricane. The last time winds of that magnitude hit the city was Hurricane Wilma in 2005, so, by this study, the 2017 hurricane season will be a severe one for residents. Folks in Tallahassee, on the other hand, the least vulnerable locale in Florida, get winds of that velocity once every 500 years. Is it difficult to figure out how that’s going to effect insurance rates when plugged into existing risk calculations?

While the knee jerk response of most insurance customers is to react negatively to increased rates based on “perceived” risk, proven risk might make the medicine go down a little more easily. Of course, the model will have to be in use over a period of time before it gains acceptance in either meteorological or insurance circles, but to a large extent the basis of fair rates is better science. Customers have complained for years that risk assessment for insurance is a highly subjective and often influenced by prejudice and stereotype. Bottom line: better tools, better, more verifiable rates — especially in an area as prone to storm damage as Florida.

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Foreign-Trained and Domestically-Trained Physicians Offer Essentially the Same Care, Survey Says

August 3rd, 2010 by Iris | Comments Off | Filed in health insurance, insurance news

According to a recent article in Modern Healthcare, roughly a quarter of all physicians currently practicing medicine in the United States completed their medical studies in some other country. A recent survey of the quality of care shows that patients receive essentially the same care no matter where their doctors trained, but a deeper look at data suggests that doctors who were not U.S. citizens at the time they started medical school have slightly better results.

The Foundation for Advancement of International Medical Education and Research, based in Philadelphia, had a team, including the Foundation’s president and CEO John Norcini, examine records for 244, 253 hospitalizations of patients with either acute heart attacks or congestive heart failure at 184 different Pennsylvania hospitals. These patients were seen between January 1, 2003, and December 31, 2006, by a total of 6,1113 cardiologists, family physicians, and internists. 75.5% (4,616) were trained in American medical schools while the other 1,497 trained at 391 different schools in 79 countries. Of the foreign-educated physicians, 374 of them were U.S. citizens studying abroad, while the other 1,123 (75%) were not U.S. citizens when they began medical school.

According to the patient files, the percentage of in-hospital deaths due to congestive heart failure was 3.1% for internationally trained doctors, and 3.4 percent for those who studied here in the States. Among the foreign trained physicians, the percentage of deaths was 3% for those who were not U.S. citizens during medical school, and 3.5% for those who were. For heart attack patients, the in-hospital death rate was 12.7% for internationally trained doctors and 13.1% for those who trained domestically, and the split in foreign-trained doctors was 12.2% for non-U.S. citizens and 14.4% for citizens.

In noting the statistics for U.S. citizens trained at foreign medical schools, the study concluded that it “suggests the importance of further research to clarify whether their performance is a result of their medical education experiences or their ability.”

In a press release, Norcini said, “Despite a rigorous U.S. certification process for international graduates, the quality of care provided by doctors educated abroad has been an ongoing concern. It is reassuring to know that patients of these doctors receive the same quality of care that they would receive from a physician trained in the United States.” He also said, “These findings bring attention to foreign-trained doctors and the valuable role they have played in responding to the nation’s physician shortage.”

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