Insurance statistics in Washington state

Each year, the Insurance Information Institute, an industry-backed research group, compiles data on the insurance industry in each state.

From this year's Washington edition:
  • Number of people working in the insurance industry in Washington state: 49,445.
  • Their payroll: $3.2 billion.
  • Premium taxes paid: $406 million
  • Premiums: About $19 billion.
The report includes a lot of other information, including details about which companies write the most insurance, losses incurred, etc.

Aetna fined $1 million for insurance violations

A Connecticut insurance company has been fined $1 million by Washington State Insurance Commissioner Mike Kreidler for multiple violations over several years.

Aetna Life Insurance Company has agreed to pay the fine. The violations include issuing unapproved insurance policies, failing to file legally-required documents with the state and charging unapproved rates.

“All insurers must comply with state law, and most of them do,” said Kreidler. “I hope that this fine and compliance plan resolves these problems with Aetna.”

Among the violations:

• Starting in 2005, Aetna issued health, disability or life insurance policies to more than 4,400 people that did not comply with state law. Among the violations: The policies had not been filed for approval with Washington state.

• Also starting in 2005, the company issued health policies that did not include all Washington state health care mandates. Nor did they describe Washington’s appeals and grievance process, as required by law.

• For more than three years, Aetna continued to sell a health policy that had been disapproved.

• Starting in 2009, Aetna issued other health, disability and life policies that had not been filed with the state. Some of those health policies that did not include all Washington state mandates. Nor did the company have an approved appeals and grievance process for those plans.

• In 2010 and 2011, Aetna issued medical and dental plans for more than 100 Nordstrom retirees that had not been approved by Kreidler’s office, as required by law.

The company has also agreed to a compliance plan designed to prevent similar problems in the future.

Fines issued by Kreidler’s office do not go to the insurance commissioner’s office. The money collected goes to the state’s general fund.

Yak insurance vs. yakking about insurance

Nepalese herders, tired of losing their livestock to snow leopards, have come up with an insurance plan to compensate them when a leopard kills a yak.

The herders pay about $1.50 a year to cover each yak, and are paid about $50 if the yak is killed by a snow leopard.

(On a side note, we're betting that this story is driving a significant amount of traffic to insuranceyak.com, which is a blog devoted not to yak insurance, but to yakking about insurance.)

Order approving Amerigroup WA acquisition by WellPoint


We've gotten a number of calls from analysts about this: Here's the final order approving acquisition of Amerigroup Washington Inc. by WellPoint, Inc.

For the full history and the rest of the documents, see this page and scroll down to "Amerigroup Washington Inc."

Buried Deep Within The Law

December is my busiest month. The majority of my business clients prefer to renew or change their coverages as of January 1st. New deductibles. New Benefits. New Year. So wasting forty-five minutes of my time by taking a meaningless class and test were not on my agenda. But there I was, staring at the computer screen, plowing through the mindless drivel that the federal government feels every agent needs to review annually. AML training – anti-money laundering for the uninitiated.

Long before then Speaker of the House Nancy Pelosi told her colleagues that they needed to vote for the Patient Protection and Affordable Care Act “we have to pass the bill so that you can find out what is in it, away from the fog of controversy”, we were given Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act of 2001. You know it as the USA Patriot Act. A reaction to 9/11, it was signed into law by President Bush on October 26, 2001. It wasn’t until years later that the American people and the Congressmen who voted for it learned about the government’s new ability to legally spy on US citizens and the provisions concerning torture. And for the financial services industry – AML, the anti-money laundering rules.

Section 352 of the USA Patriot Act includes the requirement that financial institutions establish anti-money laundering internal enforcement. Each company must:
  • Develop internal policies, procedures, and controls


  • Designate an AML compliance officer


  • Institute ongoing training


  • Install an independent audit function to test the program


  • The insurance industry regulations went into effect on December 5, 2005, over four years after the law’s passage. Some of the rules make sense. Some are the result of regulators gone amok. Let’s be serious. Prudential is not worried that I am going to take three non-sequentialed numbered money orders, each for $5,000, and open up a life insurance policy for some drug kingpin. Pru is petrified that a federal regulator would find an agent operating without an up-to-date AML certificate.

    Rome is burning and we are too busy inspecting the fire extinguishers to have time to use them.

    The Patient Protection and Affordable Care Act (PPACA) is a complex law. It has to be. You can’t rework a sixth of our economy with a short paragraph and an emoticon. The new fees (taxes) to give this a chance to succeed are just about to begin. Rules and regulations are being written and promulgated. The exchanges are to be up and running in less than a year. Everyday brings something new.

    One of the new taxes, creatively named the Health Insurance Tax (HIT) is designed to raise $100 billion over the next ten years. This is a tax on health insurance companies levied, in part, on market share. A study conducted by Oliver Wyman for the industry group America’s Health Insurance Plans (AHIP) predicts that this excise style tax will result in significantly higher premiums. This should come as no surprise to anyone who has been paying attention.

    Other new taxes and fees debut next month.

    The major insurers are trying to learn not just what the new rules will be, but when these rules will begin. Does your current policy, purchased under a different set of regulations, end on December 31, 2013? Or, will you be allowed to keep your current policy till its annual renewal or even longer? Do you care? YES!

    If you are young. If you are healthy. If you don’t need any of the new benefits required of all future individual (self-pay) policies such as maternity or habilitative care, you will want to hold on to your current health insurance with both hands. Will you be allowed to retain your current policy? For most of you the logical answer is “Not for long.” These are the issues I’m asked about daily.

    Over the next ten months we will get a clearer picture of the new health insurance market, the policies, the distribution system, and eventually, the pricing. This has always been, first and foremost, about paying for medical services, not about the practice of medicine. But the delivery of health care will change as the money changes.

    Look around you. It would be very crowded here in Greater Cleveland if our population grew at the same rate as our hospitals and clinics expanded. Kaiser Permanente, The Cleveland Clinic, and University Hospital must believe that they know how to make the Patient Protection and Affordable Care Act pay off for them.

    The potential to build health care empires must be buried deep within the law. We, however, are probably just working the mine.

    R in Insurance Conference, London, 15 July 2013



    The first conference on R in Insurance will be held on Monday 15 July 2013 at Cass Business School in London, UK.

    The intended audience of the conference includes both academics and practitioners who are active or interested in the applications of R in insurance.

    This one-day conference will focus on applications in insurance and actuarial science that use R, the lingua franca for statistical computation. Topics covered may include actuarial statistics, capital modelling, pricing, reserving, reinsurance and extreme events, portfolio allocation, advanced risk tools, high-performance computing, econometrics and more. All topics will be discussed within the context of using R as a primary tool for insurance risk management, analysis and modelling.

    The intended audience of the conference includes both academics and practitioners who are active or interested in the applications of R in insurance.

    The 2013 R in Insurance conference builds upon the success of the R in Finance and R/Rmetrics events. We expect invited keynote lectures by:
    We invite you to submit a one-page abstract for consideration. Both academic and practitioner proposals related to R are encouraged.

    Details about the registration and abstract submission are given on the R in Insurance event web site of Cass Business School.

    You can contact us via rinsuranceconference at gmail dot com.

    The organisers, Andreas Tsanakas and Markus Gesmann, gratefully acknowledge the sponsorship of Mango Solutions.

    Now I see it! K-means cluster analysis in R

    Of course, a picture on a computer monitor is a coloured plot of x and y coordinates or pixels. Still, I was smitten by David Sparks' posts on is.r(), where he shows how easy it is to read images into R to analyse them. In two posts [1], [2] he replicates functionality of image manipulation programmes like GIMP.

    I can't resist to write about this here as well. David's first post is about k-means cluster analysis. One of the popular algorithms for k-means is Lloyd's algorithm. So, on that note I will use a picture of the Lloyd's of London building to play around with David's code, despite the fact that the two Lloyds have nothing to do with each other. Lloyd's provides pictures of its building copyright free on its web site. However, I will use a reduced file size version hosted on wikimedia.

    The ReadImages package by Markus Löcher [3] allows me to load a jpeg-file into R. The R object of the images is an array, which has the structure of three layered matrices, representing the value of the colours red, green and blue for each x and y coordinate. I convert the array into a data frame, as this is an accepted structure by k-means and plot the data.
    library("ReadImages")
    url <- "http://upload.wikimedia.org/wikipedia/commons/6/6a/6414A_1_copy.jpg"
    fn <- tempfile()
    download.file(url, destfile=fn)
    readImage <- read.jpeg(fn)

    dm <- dim(readImage)
    rgbImage <- data.frame(
    x=rep(1:dm[2], each=dm[1]),
    y=rep(dm[1]:1, dm[2]),
    r.value=as.vector(readImage[,,1]),
    g.value=as.vector(readImage[,,2]),
    b.value=as.vector(readImage[,,3]))

    plot(y ~ x, data=rgbImage, main="Lloyd's building",
    col = rgb(rgbImage[c("r.value", "g.value", "b.value")]),
    asp = 1, pch = ".")


    Running a k-means analysis on the three colour columns in my data frame allows me to reduce the picture to k colours. The output gives me for each x and y coordinate the colour cluster it belongs to. Thus, I plot my picture again, but replace the original colours with the cluster colours.
    Read more »

    High wind warning in south Puget Sound -- gusts up to 60 mph Sun and Mon

    The National Weather Service has issued a high wind warning for the south Puget Sound area, including south Tacoma, Olympia, the southern part of Hood Canal, Montesano, Chehalis and Centralia.

    A "southerly wind 15 to 30 mph will develop late this evening (Sunday)...then switch to southwest wind 30 to 40 mph with gusts to 60 mph late tonight and Monday morning," the NWS said. "Winds will slowly ease Monday afternoon."

    High winds -- especially when soils are soaked, as they are now -- can topple trees, cut power lines, etc. After winter storms, we often get a flurry of calls from folks wondering what their homeowners and auto insurance covers. Here are some of the most common questions we get, along with the answers.

    Update: (10 a.m. Monday) The winds have died down, although we might get a bit of snow tonight.

    Hole-in-one golf insurer extradited to face felony charges in WA

    From a news release we sent out today:
    OLYMPIA, Wash. – A Connecticut businessman who insures golf tournament hole-in-one prizes but has a history of failing to pay has been extradited to Washington to face charges.

    Kevin Kolenda, 55, of Norwalk, Conn., was flown from Connecticut to Washington under guard Thursday. He has been booked into the King County Jail. He’s expected to be arraigned Monday at King County Superior Court in Seattle.

    “It’s rare that we have to go to these extremes to rein in a scammer,” said Washington Insurance Commissioner Mike Kreidler. “But Mr. Kolenda’s been thumbing his nose at regulators for years. Arresting him seems to be the only way to get his attention.”

    In August, Kolenda was charged in King County Superior Court with five counts of transacting insurance without a license, a class B felony. His arraignment was slated for Sept. 5, but he failed to show up. A judge issued a bench warrant for Kolenda’s arrest.

    In addition to failing to show up in court, Kolenda also ignored a Washington cease-and-desist order in 2004 and a $125,000 fine in 2008.

    On Sept. 26, Kolenda was arrested on the Washington bench warrant by police in Norwalk. He has been held since then in jail in Connecticut, pending extradition. His transfer to Washington was approved in November by Connecticut Gov. Dannel Malloy.

    “I’m very grateful to everyone who’s helped us get Mr. Kolenda here to Washington to face justice,” said Kreidler. “He has a long history of selling illegal insurance and refusing to pay prize winners.”
    In some cases, charities have had to come up with the prize money that Kolenda refused to pay. In others, the prize winners agreed to forgo a prize.

    Kolenda in 1995 started a business called Golf Marketing, working out of a home his parents owned in Norwalk. Since then, the business’ name has changed several times, including: Golf Marketing Worldwide LLC, Golf Marketing Inc., Hole-in-Won.com, and currently Hole-in-Won.com Worldwide. The company also has a regional office in Rye, N.Y.

    Kolenda has repeatedly failed to pay winning golfers in Washington. Among them:

    • In 2003, Kolenda illegally sold insurance for a tournament in Bremerton. But when a golfer got a hole in one and tried to claim the $10,000 prize, Kolenda wouldn’t pay.

    • In 2004, Kolenda sold insurance for a Vancouver tournament. Again, a golfer got a hole in one. Kolenda refused to pay the $50,000 prize. After a hearing at which Kolenda failed to appear, he was ordered in 2008 to pay a $125,000 fine. He never did.

    • In 2010, Kolenda sold coverage to pay $25,000 for a hole in one during a golf tournament in Snohomish. A player got a hole in one. His golf partners signed notarized forms attesting to the hole in one. The prize remains unpaid, despite numerous calls and emails from the partners and tournament officials.

    Similar allegations have been made against Mr. Kolenda and/or his business in numerous other states, including Montana, Ohio, Georgia, California, New York, Hawaii, Alabama, Massachusetts, Florida, Connecticut and North Carolina.

    Job opening: .NET developer


    We're recruiting to fill a position for an information technology specialist 4 (.NET developer) in our operations division in Tumwater, Wash.

    The successful applicant's duties will include software development of mission-critical agency systems, systems analysis, as well as software unit and quality assurance testing.

    For more specifics, duties, salary, timeline, etc., please see the full job listing.

    Guilty plea from man who hit car, then bought insurance


    A Blaine man who rear-ended another driver, rushed to buy insurance, then claimed that the crash happened afterward has pleaded guilty to insurance fraud.

    Mark Traxler, 51, let his auto insurance lapse in January because he didn't pay the premium.

    Two weeks after his coverage ended, he hit a car in Bellingham, causing more than $5,000 in damage.

    He immediately went to his insurance agent and paid for new coverage. By nightfall, the other driver had made a claim against his policy.

    The problem: Traxler said that the accident happened after he'd bought the coverage, when a 9-1-1 call placed by the other driver indicated that it happened before.

    Traxler today pleaded guilty in Whatcom County Superior Court. He was sentenced to 364 days in jail, but 354 were suspended on the conditions that he do 80 hours of community service, pay a $250 crime victim penalty assessment, a $200 filing fee and a $500 fine.

    Job opening: Market analyst

    We're recruiting to fill one permanent position for a market analyst in our Tumwater, Wash. building.

    The person will be responsible for conducting market analysis of regulated entities (e.g. insurance companies) under the direction of our chief market analyst. We provide regulatory oversight of market interactions between consumers and companies, in order to protect consumers and promote a healthy business environment.

    Please see the full job listing for a description of the job duties, salary, benefits, etc.

    Comparing regions: maps, cartograms and tree maps

    Last week I attended a seminar where a talk was given about the economic opportunities in the SAAAME (South-America, Asia, Africa and Middle East) regions. Of course a map was shown with those regions highlighted. The map was not that disimilar to the one below.

    library(RColorBrewer)
    library(rworldmap)
    data(countryExData)
    par(mai=c(0,0,0.2,0),xaxs="i",yaxs="i")
    mapByRegion( countryExData,
    nameDataColumn="GDP_capita.MRYA",
    joinCode="ISO3", nameJoinColumn="ISO3V10",
    regionType="Stern", mapTitle=" ", addLegend=FALSE,
    FUN="mean", colourPalette=brewer.pal(6, "Blues"))
    It is a map that most of us in the Northern hemisphere see often. However, it shows a distorted picture of the world.

    Greenland appears to be of the same size as Brazil or Australia and Africa seems to be only about four times as big as Greenland. Of course this is not true. Africa is about 14 times the size of Greenland, while Brazil and Australia are about four times the size of Greenland, with Brazil slightly larger than Australia and nine times the population. Thus, talking about regional opportunities without a comparable scale can give a misleading picture.

    Of course you can use a different projection and XKCD helps you to find one which fits your personality. On the other hand, Michael Gastner and Mark Newman developed cartograms, which can reshape the world based on data [1]. Doing this in R is a bit tricky. Duncan Temple Lang provides the Rcartogram package on Omegahat based on Mark Newman's code and Mark Ward has some examples using the package on his 2009 fall course page to get you started.

    A simple example of a cartogram is given as part of the maps package. It shows the US population by state:
    Read more »

    Coming soon: Our revamped website

    For more than a year now, we've been working hard behind the scenes developing an easier-to-use website. While insurance industry professionals -- agents, brokers and insurers -- are familiar with navigating our site, testing showed that consumers could only complete site-related tasks about a third of the time. That's a problem, obviously, when a key part of our mission is informing and protecting consumers.

    So we've revised the navigational structure of the site to make it a lot more intuitive. For years, for example, much of the navigational structure on the site simply mirrored the agency's organizational chart, rather than putting things where average users would expect them to be.

    Along the way, we've repeatedly tested the changes on both consumers and industry professionals to make sure that we really are improving things, rather than just changing them.

    The upshot: Successful task completion on the website for consumers, which is about 33 percent on our current website, rises to nearly 80 percent on our new prototype website, pictured below.

    We're also changing the look and feel of the site to update it. The site isn't live yet, but we're expecting to make the change in mid-January.

    There will inevitably be some hiccups and things we'll need to fix, but we think you'll like the new site better. And we know it will be easier to use.

    Still Stuck Inside

    Will you indulge me? Will you return with me to a post I wrote on August 21, 2009? That post, Stuck Inside, was about an insurance agent, me, trying to give a quick, off-the-cuff answer to the question, “So, what would you do?”

    What would you do? That is the real question. It is incredibly easy to shoot down everyone else’s ideas. All ideas, born from the minds of imperfect humans, have flaws. And the more complicated the ideas, the more potential there is for mistakes. All of our plans have big, gaping holes. So designing a solution to any problem opens you up to derision. It is easy to do nothing. It is even easier to do nothing but snipe at those flawed ideas and the people who created them.

    This blog has consistently held that the Patient Protection and Affordable Care Act (PPACA) is a poorly written law that lacks both transparency and logical goals. Either the eventual plan is to have us in a national health plan or our guys in Congress are getting directions from Moses’s map maker. Flaws? We got ’em. But most of the people fighting the PPACA have spent their time picking the low hanging fruit and defending the status quo.

    This blog has contended that the PPACA is not only the law of the land, but that it was never going to be overturned. Deal with it. Kathleen Sebelius, Secretary of Health and Human Services, is busily churning out new rules and regulations. Some of these edicts from on high will help the American people. Some are patently absurd and will, hopefully, be changed. No matter, we need to start to prepare for a future that will soon be upon us whether or not we want it or are prepared.

    My August 2009 post, seven months prior to the passage of the PPACA, laid out a program where health insurance would be guaranteed issue, would cover all preexisting conditions, and would be mandatory. My off-the-cuff solution also included the concept of creating a limited number of uniform plans that would be easier for the consumer to understand, easier to compare, and would include preventive care.

    The President’s plan includes many of these ideas. I may quibble with what is included in the standardized plans and what all was thrown in to the preventive care catch-all, but THEY DIDN’T ASK ME. And you might not be a huge fan of the specifics had I been the author of the plan.

    The Exchanges are currently designed to offer four levels of coverage – Platinum, Gold, Silver, and Bronze. We are still getting information on plan design and specifics. My last post covered the Essential Health Benefits that each plan must include. The difference will simply be the percent of coverage paid by the insurer and you.

    The Cunix option included the idea of Medicaid being opened up to people earning up to 300% of the poverty level, paid on a sliding scale. The PPACA provides premium support and/or tax credits through the exchanges for people who earn up to 400% of the poverty level. That would mean a family of four may receive a tax credit for purchasing a policy through the exchange even though they have a family income of $92,200 (2012). By pushing individuals to the exchanges and making the premium support federal money, Washington has eliminated any potential problems or fights with recalcitrant Republican governors.

    My program included a number of starting places to create cost controls. The PPACA is eerily silent when it comes to controlling costs. But then again, there is a lot of wishful thinking built into the PPACA.

    The HHS has been dropping new rules on an almost daily basis. Last week it was announced that the federal government will be charging user fees to the insurers who market policies through the exchanges. These (premium taxes) fees, approximately 3.5%, will be on top of the new taxes imposed on a national basis to all health insurers as determined by their market share, and any state and local insurance tax. Some of this makes sense. This is how the Obama administration expects to pay for this transition and the ongoing process.

    Here is the fun part as it appeared in the New York Times:

    Erin Shields Britt, a spokeswoman for Ms. Sebelius, predicted that insurers would not raise prices. “Exchanges will provide already profitable insurance companies with access to 30 million new customers while cutting down insurers’ marketing and advertising expenses,” Ms. Shields Britt said. “Exchanges force insurance companies to compete and drive down costs for consumers. The congressional Budget Office has estimated consumers will save up to 20 percent on their premiums.


    And J. R. R. Tolkien wrote non-fiction.

    But sniping on the sidelines isn’t going to help. Jumping up and down and threatening to repeal the PPACA (attn: Republican run House of Representatives) only made things worse. Now is the time to talk to your Congressional Representative. The course can’t be reversed, but it can be modified. The Patient Protection and Affordable Care Act is an open-ended medical spending spree guaranteed to make private insurance untenable. Will our elected officials, Democrats and Republicans, work together to create effective cost controls, common sense limitations, and robust fraud enforcement? Those are just for starters.

    Now, before we’re stuck.

    DAVE

    www.bcandb.com



    20,000 Washingtonians potentially affected by data breach at Nationwide Insurance

    An October data breach in a Nationwide Insurance computer network resulted in personal information for thousands of Washingtonians being stolen, according to company officials.

    "On October 3, 2012, a portion of our computer network that is used by Nationwide Insurance and Allied Insurance was criminally intruded upon by an unidentified perpetrator. We discovered the attack that day, and took immediate steps to contain the intrusion," Nationwide attorney Samuel Lee notified our office recently.

    The company has said that more than 1.1 million people's personal information may have been affected. Some of them are not Nationwide customers. Apparently, some people who might have just gotten quotes, etc. are on the list of those who may have been affected. We've been contacted by some of these people, and since they're not Nationwide customers, they initially think the letter is some kind of scam or sales pitch for ID theft services.

    "Although we are still investigating the incident, our initial analysis has indicated that the compromised information included individuals’ name and some combination of their Social Security number, driver’s license number and/or their date of birth and possibly their marital status, gender, and occupation, and the name and address of their employer," Lee wrote.

    The attack was reported to law enforcement, including the FBI, who are investigating. Nationwide is sending notification letters to 20,916 people whose personal information may have been compromised. The company says it is tightening network security. It is also offering a year of free credit monitoring and identity theft protection services to those 20,916 people.

    In the letter being sent out, the company apologizes for the data breach and says "we are not aware of any misuse of your information at this time."

    Nationwide customers should watch for a letter in the mail, or they can call a special hotline the company has set up: 1-800-760-1125.

    The state attorney general's office also maintains an excellent page with detailed tips on preventing and dealing with identity theft.

    Think you have flood insurance? Make sure.

    Again, we can't say it enough: Homeowners and businesses in flood-prone areas should make sure they have adequate flood coverage.

    “Standard homeowners or business policies do not cover flooding,” said Insurance Commissioner Mike Kreidler. “It’s tragic when people don’t discover that until it’s too late.”

    The federally-run National Flood Insurance Program (www.floodsmart.gov) is the first stop for most people seeking flood coverage. The program was created by Congress in 1968. It offers flood insurance to homeowners, renters and business owners in communities that have taken certain steps to help reduce the risk of flooding. There is a 30-day waiting period for most policies, so it’s important not to delay.

    Many insurance agents offer National Flood Insurance Program policies. The average NFIP policy costs about $600 a year.

    “Renters should also strongly consider flood coverage for their belongings,” Kreidler said. “That coverage, which starts at $49 a year, is inexpensive. Replacing your stuff is not.”

    Mortgage lenders in flood-prone areas typically require flood coverage. But homeowners often later let that coverage lapse.

    The National Flood Insurance Program website has online tools to estimate the flood risk at a particular address, as well as damage estimates from different flood levels.

    Changing colours and legends in lattice plots

    Lattice plots are a great way of displaying multivariate data in R. Deepayan Sarkar, the author of lattice, has written a fantastic book about Multivariate Data Visualization with R [1]. However, I often have to refer back to the help pages to remind myself how to set and change the legend and how to ensure that the legend will use the same colours as my plot. Thus, I thought I write down an example for future reference.

    Eventually I would like to get the following result:


    I start with a simple bar chart, using the Insurance data set of the MASS package.

    Please note that if you use R-2.15.2 or higher you may get a warning message with the current version of lattice (0.20-10), but this is a known issue, and I don't think you need to worry about it.
    library(MASS) 
    library(lattice)
    ## Plot the claims frequency against age group by engine size and district
    barchart(Claims/Holders ~ Age | Group, groups=District,
    data=Insurance, origin=0, auto.key=TRUE)


    To change the legend I specify a list with the various options for auto.key. Here I want to set the legend items next to each other, add a title for the legend and change its font size: Read more »

    Don't forget flood coverage

    We can't stress this enough: many people assume that their homeowners policy includes flood coverage.

    It doesn't. Standard homeowners-, renters- and business policies do not cover flood damage. If your property is in a flood prone area, you should strongly consider buying flood coverage.

    How do you know if you're in a risky flood area? Type your address into the red box on the home page for the federally run National Flood Insurance Program. That's where most people buy their flood coverage. Many local insurance agents sell these policies.

    And if you think a few inches of water wouldn't cause much damage, you might be surprised. The NFIP put together an interesting interactive simulator that details -- item by item -- the costs of different levels of flooding in a typical home. See the link above.



    Data.table rocks! Data manipulation the fast way in R

    I really should make it a habit of using data.table. The speed and simplicity of this R package are astonishing.

    Here is a simple example: I have a data frame showing incremental claims development by line of business and origin year. Now I would like add a column with the cumulative claims position for each line of business and each origin year along the development years.

    It's one line with data.table! Here it is:
    myData[order(dev), cvalue:=cumsum(value), by=list(origin, lob)]
    It is even easy to read! Notice also that I don't have to copy the data. The operator ':=' works by reference and is one of the reasons why data.table is so fast.


    And it is getting even better. Suppose you want to get the latest claims development position for each line of business and origin year. Again, it is only one line: Read more »

    It's Novermber and Everybody's Busy (Too Busy to Talk)

    The days before Thanksgiving are a time of unrelenting activity. Some people are finalizing the big meal for Thursday. Others are preparing for the December holidays. In fact, I’ve been told that there are even elves working overtime somewhere near the North Pole. Thanks to climate change they are wearing Hawaiian shirts, but they are still working hard.

    Speaking of working hard, the folks at the Department of Health and Human Services (HHS) have been very busy this week. On Tuesday, November 20, 2012, our busy elves at HHS released a new set of rules and regulations designed to flesh out the Patient Protection and Affordable Care Act (PPACA).

    Tuesday’s new rules and regs cover a host of areas from defining the benefits to creating the framework for future premiums and options. You can find the public relations version of all of this at healthcare.gov. Don’t worry about going to the government’s website. This will all be coming to you – on TV, on billboards, and door-to-door solicitation, if necessary – thanks to a special campaign.
    The new rules reaffirm the definition of the Essential Health Benefits (EHB). The PPACA demands that all policies offered for individuals and small groups provide coverage for a “core package of items and services known as Essential Health Benefits. EHB must include items and services within at least the following 10 categories”:
      1. Ambulatory patient services
      2. Emergency services
      3. Hospitalization
      4. Maternity and newborn care
      5. Mental health and substance use disorder services, including behavioral health treatment
      6. Prescription Drugs
      7. Rehabilitative and habilitative services and devices
      8. Laboratory services
      9. Preventive and wellness services and chronic disease management
      10. Pediatric services, including oral and vision care
      Most of this looks pretty reasonable. Though you may wonder how much that maternity benefit will add to the cost of a woman’s policy. And if that woman can’t have children, how much is she wasting?

      Employer sponsored group health policies have included maternity “covered as any other illness” for years. We know how to evaluate the risk and how much each policyholder needs to pay. That is, after all, the concept of insurance – evaluate risk and share the cost. What happens when the risk is open-ended? How do we share an unknown cost?
      #7, above, is coverage for rehabilitative and habilitative services and devices. We are all familiar with rehabilitative care such as physical therapy which is designed to restore the patient to his/her former state of health and previous level of skills. The current fight over rehabilitative care is about the number of treatments. Today’s policies cover 15, 20, or maybe 25 visits to the physical therapist. We don’t know if future policies will be allowed to have such limitations. But rehabilitative coverage is much easier to assess than habilitative.

      Habilitative therapies create skills. Teaching an autistic child to interact with his/her peer group is a wonderful thing. In fact, improving social skills and communication is life-changing for the children and adults touched by autism and certain forms of mental illnesses. Those suffering from other illnesses or conditions, such as cerebral palsy, have had their lives improved through habilitative care. Much of this has been open-ended, where patients weren’t actually cured, just made better. So as long as someone was willing to pay for services, another appointment was warranted.

      Both the government, through Medicare and Medicaid, and the insurance industry have fought habilitative care for decades. The insurance industry lives by black and white. Habilitative therapies exist in a grey area. The industry has avoided paying for much of these services by labeling them experimental or educational. That may end soon.

      Do you care? Is this good? As always, the answer is Yes and No.

      Please don’t get distracted by the pictures of your neighbor’s autistic child. This has very little to do with her. It is important to remember that the healthcare debate has very little to do with health. With the possible exception of someone personally touched by a particular condition, this is, and always has been, a discussion of how we compensate doctors and hospitals. Who gets paid from the deep pockets and who doesn’t.

      The insurance industry is still trying to retain the right to offer a stripped down contract that will exclude some of the open-ended coverages. It is far easier to price a policy that has fewer gray areas. A policy that doesn’t cover habilitative services; a policy that doesn’t pay for infertility treatments; a policy that included some limitations for rehab, would be significantly less than the federally mandated coverage. My guess is that we won’t have that option for long, if ever.

      Seeing how much these other benefits add to the cost of coverage would force us to finally have a national discussion about our priorities. What are we willing to pay for? It still appears that no one in Washington, Democrat or Republican, wants to have that discussion.

      And who can blame them? It’s November and everybody’s busy. Way too busy to talk.

      Job opening: Senior market analyst

      We're looking for a senior market analyst in our Tumwater office. Here's the job description, including salary, responsibilities, and timeline. The deadline for applying  is just before 5 p.m. on Monday, Dec. 3.*

      Also, we still have an opening for an Information Technology Specialist 4 (.NET developer).

      *Update: The deadline has now been extended to Dec. 17, 2012.

      One computer, one camera, fake invoices...and four different insurance claims

      A Renton man has been sentenced to jail plus community service after submitting thousands of dollars in bogus claims for a $4,900 laptop, and a $3,200 camera.

      Between December 2010 and September 2011, Michael Tran Lai, 32, filed multiple claims with four different insurance companies claiming the loss of the MacBook Pro laptop and Nikon camera. He claimed they were stolen from a car, or lost in luggage while travelling, or stolen from his hotel room. The invoices turned out to be fake.

      He also filed multiple claims for the same accident damage to his Lexus.

      Laid was sentenced Nov. 16 to 10 days in jail, 160 hours of community service, and $854 in court fees and costs. A restitution hearing is also pending.

      Tips to avoid a turkey-fryer fire...because here's what that looks like

      The turkey-fryer disaster video is a YouTube holiday staple, and it's not surprising. Oil burns really well. Turkeys are big.
      The biggest mistake seems to be this: overfilling the pot and plunging a big turkey in while the flame is lit, causing a lot of oil to splash over the sides and, yup, ignite.
      Bigtime.

        
      And sometimes, this happens on a deck or close to a house.

      So if you must fry your turkey, here are some key tips:
      • Fry outside, away from the house.
      • Do not overfill the pot with oil.
      • Properly thaw the turkey.
      • Turn off the flame before adding the turkey.
      • Use the grappling-hook thing to lower the turkey in carefully (and not splash oil).
      • Be careful of oil splattering on your arms. Splashed boiling oil can cause horrible burns.
      • And -- if in doubt, review video No. 2 above -- keep a grease-approved fire extinguisher handy.
      Bonus round: Actual turkey-fryer-mishap-victim William Shatner reviews these points in his cautionary video "Eat, Fry, Love."

      Claims reserving in R: ChainLadder 0.1.5-4 released

      Last week we released version 0.1.5-4 of the ChainLadder package on CRAN. The R package provides methods which are typically used in insurance claims reserving. If you are new to R or insurance check out my recent talk on Using R in Insurance.

      The chain-ladder method which is a popular method in the insurance industry to forecast future claims payments gave the package its name. However, the ChainLadder package has many other reserving methods and models implemented as well, such as the bootstrap model demonstrated below. It is a great starting point to learn more about stochastic reserving.

      Since we published version 0.1.5-2 in March 2012 additional functionality has been added to the package, see the change log, but in particular the vignette has come a long way.

      Many thanks to my co-authors Dan Murphy and Wayne Zhang.
      Read more »

      Flood warning update

      Flood warnings remain in effect in the following counties: Grays Harbor, Lewis, Mason and Thurston, with some gale warnings and small craft advisories offshore.

      Here's the complete list from the National Weather Service office in Seattle.

      Flood, high wind and storm warnings in WA

      The National Weather Service has issued a long list of flood-, wind- and storm warnings, watches and advisories today. Here's a roundup:

      A flood warning has been issued for the Chehalis River at Centralia (in Lewis County) and the Chehalis River near Grand Mound (in Thurston County). Moderate flooding is expected, and the weather service is warning motorists not to try driving through flooded areas -- the most common cause of flood-related deaths in Washington.

      In Lewis County, the flood warning will be in effect from Tuesday morning to Wednesday evening, with the river expected to hit flood stage around 9 a.m. Tuesday and crest 4 feet over flood stage around 4 p.m. Tuesday.

      What's that mean? At four feet over flood stage, the weather service says, "The Chehalis River in Lewis County will flood some residential and commercial areas with water encroaching upon the first floor of some homes and businesses. Swift flood waters will cover some roads.

      At Grand Mound, the river's expected to hit flood stage around 7 a.m. Tuesday and crest about 2 1/2 feet over flood stage around 4 a.m. Wednesday. Flooding of several roads in Independence Valley is expected, including SR 12 and James-, Independence-, Moon- and Anderson roads. Flood waters are expected to cut off access to and from Chehalis Reservation and inundate nearby farmland.

      Minor to moderate flooding is also predicted the the Chehalis River near Doty (Lewis County), the Newaukum near Chehalis (Lewis), the Satsop River near Satsop (Grays Harbor County) and the Skokomish River near Potlatch (Mason). There's a flood advisory -- meaning minor flooding is possible -- for a dozen western Washington counties, as well as western Kittitas, Klickitat and Yakima counties.

      A high wind warning is in effect for Seattle and the central coast areas, with the strongest winds occurring as we post this, with the warning lasting until 3 p.m. South winds of 25-35 miles an hour have been reported, with gusts near 60 miles an hour.

      A winter storm warning has been issued for the Cascade mountains above 4,500 feet, with periods of heavy snow expected to persist through evening. An additional 1-2 feet of snow is likely, especially over the North Cascades, the weather service says.

      Similarly, a winter weather advisory is in effect for the Olympic mountains above 5,000 feet, with 6-11 inches of snow expected, but tapering off late today.

      Fraud charges for man who hit car, then bought insurance

      A Blaine man who rear-ended another driver, rushed to buy insurance, then claimed that the crash happened afterward has been charged with insurance fraud.

      Mark Traxler, 51, let his auto insurance lapse in January because he didn't pay the premium.

      Two weeks after his coverage ended, he hit a car in Bellingham, causing more than $5,000 in damage.

      He immediately went to his insurance agent and paid for new coverage. By nightfall, the other driver had made a claim against his policy.

      The problem: Traxler said that the accident happened after he'd bought the coverage, when a 9-1-1 call placed by the other driver indicated that it happened before.

      Traxler has been charged in Whatcom County Superior Court with insurance fraud.

      The search for Big Daddy: barbecue case leads to insurance fraud charges

      In the summer of 2011, a Renton man named Cassk Thomas, Jr. filed a claim with his insurer, saying that someone had stolen his his 26-foot, 8,500-pound, two-tank, three-grill barbecue smoker, dubbed "Big Daddy."

      The barbecue had been stored behind a locked fence, he told police. Two screws on a hinge had been removed. The smoker, as well as the double-tandem-axle trailer it was mounted on, was gone. Thomas provided his insurance adjuster with an invoice from a Spokane company, totalling $32,343, for the trailer and smoker.

      Thomas' insurer, American Family Insurance, paid Thomas $30,474 for the lost barbecue, as well as $24,668 for lost income while he sought a replacement barbecue.

      Upon investigation, it turned out that the trailer was actually purchased from a company in Texas for less than a third of what Thomas claimed. A former business partner said it cost $9,470, and she provided paperwork showing that.

      The company Thomas had named as the manufacturer in Spokane apparently does not exist. It's not listed with the state departments of licensing or revenue, not on the Internet, the business address is a residence and, in repeated attempts, no one answered the phone there. A company official named by Thomas turned out to be an old roomate of his.

      Thomas has been charged in King County Superior Court with 1st degree theft and insurance fraud, both of which are felonies.

      Sorry, You're Screwed

      The letter came from The State of Ohio, The Ohio Department of Insurance, and Medical Mutual. Good news never comes with that many names on the top of the letter.


      We are sorry to inform you that your Ohio High Risk Pool coverage will be canceled at the end of the day on November 30, 2012.

      The letter was dated November 12, 2012.

      Some of the unhealthiest residents of the State of Ohio were being tossed off their insurance policy, the Ohio High Risk Pool. In less than three weeks they would no longer be insured. And nobody is standing in line to cover them. How could this happen?

      The Ohio High Risk Pool is part of the Patient Protection and Affordable Care Act (PPACA). A stop gap measure, the states were charged with the duty of offering coverage for the chronically uninsured suffering from significant preexisting conditions. The federal government also provided five billion dollars of which Ohio received $152,000,000 for the four year program.

      To qualify for the Ohio High Risk Pool you must prove:
      1. Citizenship
      2. That you have not been credible insurance coverage for at least six months
      3. That you have been declined by two insurers within the last six months
      4. You may skip #3 if your medical records show that you have a major illness that would have gotten you declined
      You can not have had credible insurance coverage in the six months leading up to your application for coverage under the Ohio High Risk Pool. This is a federal requirement. Neither the State of Ohio nor Medical Mutual of Ohio, the insurer running our plan, has anything to do with this rule. Some people who are not easily insured have purchased supplements, a better than nothing option. If something happened while they were attempting to find real insurance or qualify for an affordable program, these responsible people were trying to do what they could.

      My friend Dave is a conscientious insurance agent. He took a letter from American Medical and Life Insurance Company (AMLI) to the Ohio High Risk Pool. The letter, dated February 11, 2011 was sent to clients to advise them that their policy was no longer HIPAA credible coverage. Dave verified that since the AMLI CoreValue policy was no longer credible coverage, his clients, including family members, could retain this minimum semblance of coverage until they had six months of no real insurance and could enter the Ohio High Risk Pool. NO PROBLEM.

      It is those people, those responsible people who attempted to have some coverage, no matter what, who are being kicked to the curb. The letter from the State specifically notes:

      Our records indicate you were enrolled in an AMLI policy in the six months prior to enrolling in the Ohio High Risk Pool Program. Therefore, CMS directed us to cancel your coverage because you are not eligible for this program.

      The PPACA is a poorly written law. We know that. Worse, the rules and regulations are being written on the fly. What complies one day is non-compliant the next. We went through this with the grandfathering rules. The costs, both human and financial, can’t possibly be calculated.

      The Ohioans being kicked out of the High Risk Pool did nothing wrong. They followed the rules of that moment. We are talking about individuals who are gravely ill. What do they do now? 

      DAVE
      www.bcandb.com

      Simulating neurons or how to solve delay differential equations in R

      I discussed earlier how the action potential of a neuron can be modelled via the Hodgkin-Huxely equations. Here I will present a simple model that describes how action potentials can be generated and propagated across neurons. The tricky bit here is that I use delay differential equations (DDE) to take into account the propagation time of the signal across the network.

      My model is based on the paper: Epileptiform activity in a neocortical network: a mathematical model by F. Giannakopoulos, U. Bihler, C. Hauptmann and H. J. Luhmann. The article presents a flexible and efficient modelling framework for:
      • large populations with arbitrary geometry
      • different synaptic connections with individual dynamic characteristics
      • cell specific axonal dynamics
      Read more »

      A hard lesson for victims with flooded houses: standard homeowners policies don't cover flooding


      The New York Times has a nuts-and-bolts story about insurance concerns in the wake of Hurricane Sandy, and all of the lessons apply here in Washington.

      The biggest one -- and something that we repeat often -- is that a standard homeowners policy does not cover flooding. For that coverage, people typically buy a policy from the federally-run National Flood Insurance Program.

      The problem is that unless required to by their lender, many homeowners simply don't get flood coverage. (And even those whose mortgage requires it often later let it lapse.)

      The article covers things like who pays for tree removal, will you be reimbursed for living costs if your home is uninhabitable, and will an insurer cover the cost of ruined food when the power fails.

      25 free apps


      The U.S. Department of Health and Human Services has compiled a list of free health-related applications, created by the feds, regarding health. They include apps for the iPhone, iPad, Android and iPod Touch.

      The apps include:

      Find a Health Center: Created by the Health Resources and Services Administration, this map-linked app helps you find the nearest federally funded health center, which will care for you even if you have no health insurance. Based on your income, you pay what you can afford.

      The popular BMI calculator, which helps determine your body mass index.

      Brrd Brawl: A mobile game developed to give jittery quitting smokers something to do with their hands.

      52 Weeks of Women's Health: Info on 52 health topics, ranging from eye health to contraception. Also helps track medications, allergies, etc.

      Other apps include help triaging injuries in the field, treating radiation injuries, quitting smoking, tracking the flu in your area, tracking a pregnancy and reuniting after a disaster.

      Job opening: .NET developer

      We're recruiting to fill a position for an information technology specialist 4 (.NET developer) in our operations division in Tumwater, Wash.

      The successful applicant's duties will include software development of mission-critical agency systems, systems analysis, as well as software unit and quality assurance testing.

      For more specifics, duties, salary, timeline, etc., please see the full job listing.

      Three companies fined $605,000

      Insurance Commissioner Mike Kreidler is fining three companies a total of $605,000 for violating Washington insurance laws.

      “Our insurance laws protect consumers and maintain a level playing field in the insurance market,” said Kreidler. “Break the law and you’ll face the consequences.”

      The fines were as follows:

      PacifiCare of Washington (now known as UnitedHealthcare of Washington, Inc.) has agreed to pay a $400,000 fine for what state financial examiners concluded were improper royalties paid to an affiliated company. The company contended that the payments were administrative fees, but acknowledged that it had failed to annually reconcile the payments with actual costs to show that the company wasn’t overpaying.

      In addition to the fine, the company has recovered the $72.9 million it paid between 1999 and late 2006.

      STA Travel Inc., based in Texas, agreed to pay $115,000 for allowing unlicensed staffers to sell insurance policies in Washington. The company is a travel agency specializing in international college student travel. It sells travel insurance as part of its travel services.

      Although the company’s office manager was a licensed insurance agent, under Washington law, all staff selling travel policies needed to be licensed. Policies were sold by unlicensed staffers from 2005 to 2011.

      Lenovo (United States) Inc., incorporated in Delaware, has agreed to pay $90,000 for improperly selling 1,327 service contracts in Washington. The company failed to register as a service contract provider, as required by state law. The service contracts were sold from mid-2008 through mid-2012.

      Fines collected by the insurance commissioner's office do not go to the agency. The money is deposited in the state's general fund to pay for other state services.

      Time for an old classic game: Moon-buggy

      I discovered an old classic game of mine again: Moon-buggy by Jochen Voss, based on the even older Moon Patrol, which celebrates its 30th birthday his year.

      Read more »

      googleVis 0.3.3 is released and on its way to CRAN

      I am very grateful to all who provided feedback over the last two weeks and tested the previous versions 0.3.1 and 0.3.2, which were not released on CRAN.

      So, what changed since version 0.3.2?


      Not much, but plot.gvis didn't open a browser window when options(gvis.plot.tag) were not set to NULL, but the user explicitly called plot.gvis with tag NULL. Thanks to Sebastian Kranz for reporting this bug. Additionally the vignette has been updated and includes an extended section on knitr.

      As usual, you can download the most recent version from our project site. It will take a few days before version 0.3.3 will be available on CRAN for all operating systems.
      Read more »

      License revocation for insurance agent who allegedly faked own death

      Washington Insurance Commissioner Mike Kreidler has issued an order to revoke the license of an Enumclaw insurance agent who allegedly faked his own death as part of a $2 million scam.

      Aaron Travis Beaird, manager of Team Financial Services LLC, "knowingly devised a scheme and artifice to defraud consumers and to obtain money and property by means of false and fraudulent pretenses," according to the order.

      Beaird would recomment to his clients that they liquidate one investment and transfer the money into another investment or insurance policy, making the checks out to his business.

      The problem: Beaird didn't actually invest the money or buy a policy. Instead, according to the license revocation order, he'd take the money for "his own use and benefit." To cover things up, he would provide his clients with fake account statements.

      Beaird was arrested in early July on federal charges of wire fraud and mail fraud. Investigators said he left a fake suicide note in his car, which was found parked near a bridge on June 23rd.

      He pleaded guilty in federal district court Aug. 28th. He admitted to defrauding at least 11 people out of more than $1 million. He is currently incarcerated, awaiting sentencing,  at the SeaTac Federal Detention Center.

      Beaird has the right to demand a hearing to contest the order.

      Update: (Nov. 20) The revocation has taken effect.

      Flood advisory issued for most of western Washington

      The National Weather Service office in Seattle has issued an urban- and small-stream flood advisory for 14 counties throughout western Washington. Nearly 2 inches of rain has fallen across much of the area in the past 24 hours, with another 1-2 inches expected today.

      Affected counties include:

      CLALLAM COUNTY
      ISLAND COUNTY
      JEFFERSON COUNTY
      SAN JUAN COUNTY
      SKAGIT COUNTY
      WHATCOM COUNTY
      KING COUNTY
      KITSAP COUNTY
      LEWIS COUNTY
      MASON COUNTY
      PIERCE COUNTY
      SNOHOMISH COUNTY
      THURSTON COUNTY
      GRAYS HARBOR COUNTY

      Minor flooding is expected in urban areas and small streams into this evening, according to the NWS. The flood advisory has been extended to 6:30 p.m. today.

      Market Conduct Examiner position extended to Nov. 13

      Please help us spread the word - We're currently hiring for a Market Conduct Examiner. Sound interesting? This person will work under our Chief Market Conduct Examiner or Lead Examiner Analyst, analyzing, reviewing and identifying the market conduct practices of health insurance companies and other regulated entities that could harm consumers.

      This job posting is open until Nov. 13, so if you know someone who may be interested and who's up to the challenge, please tell them soon! See the salary, specific duties and other qualifications.

      googleVis 0.3.2 is released: Better integration with knitr

      After last week's kerfuffle I hope the roll out of googleVis version 0.3.2 will be smooth. To test the water I release this version into the wild here and if it doesn't get shot down in the next days, then I shall try to upload it to CRAN. I am mindful of the CRAN policy, so please get in touch or add comments below if you find any show stoppers.

      So what's new in googleVis 0.3.2?

      The default behaviour of the functions print.gvis and plot.gvis can be set via options().

      Now this doesn't sound too exciting but it can be tremendously helpful when you write Markdown files for knitr. Here is why:
      Read more »

      The Sky Is Not Falling

      A Power of Attorney. The elderly couple wanted to give me a Power of Attorney. They were convinced that President Obama is going to win re-election and that their Medicare coverage is in jeopardy. What happens when(!) he changes Medicare and they don’t get into my office fast enough to be protected?

      Can we give you a Power of Attorney to change our policies so that we have the right coverage?

      It was Republican Week at my office. I can normally tell whether my clients are Democrats or Republicans just by the questions they ask. The talking heads on FOX create a climate of fear and misinformation on some parts of the Patient Protection and Affordable Care Act (PPACA). Rachel Maddow and Ed Schultz create a competing sense of dread and foreboding amongst their viewers.

      I watch both channels so that I can anticipate my clients’ concerns.

      My last post, Collateral Damage, noted the unintended consequences of a badly written piece of legislation. But, the PPACA has helped a lot of people. In the interest of fairness, we should spend a moment or two discussing a few of those victories. All of these examples are from last week. And all involved Republicans. Key details have been changed to protect the identities of all involved.

      Bruce has been self-employed for over ten years. He was covered under his spouse’s health policy. When they divorced, he took full advantage of COBRA for the entire thirty-six months. The story then gets murky. Either a bad agent sold him a crappy policy or he cheaped out and purchased something that did not meet his needs. Either way, his health got worse, the mediocre policy didn’t pay for his care, and the premium became unaffordable. Bruce is now an unhealthy 56 year old with no insurance facing possible surgery.

      Bruce will qualify for the Ohio High Risk Pool policy. The premium isn’t cheap, $428 per month. It would be far worse if there wasn’t premium support built into the legislation. The Ohio High Risk Pool is not for everyone. Not everyone qualifies. The rules are complicated. But the PPACA is a lifeline for Bruce and he wasn’t the only winner last week.

      Jane is another Ohio High Risk Pool winner. She is 61. Jane was terminated by a major local employer last November. She could have been covered through COBRA if she could have afforded it. She couldn’t. She has a number of preexisting conditions that would result in an automatic decline if she applied for individual health insurance. Jane qualifies for the Ohio High Risk Pool policy and the $428 premium may be a challenge, but she has had a year without insurance. $428 is a gift.

      The Ohio High Risk Pool plan is not placed through an agent’s office. I have nothing to do with it and I am not compensated for helping people access this insurance. Educating the uninsured is just part of doing the right thing.

      Amanda has four sons, two in college, one in middle school, and her youngest is only 8. They are all healthy except for Billy, age 14. Billy is in remission, thank G-d, but he has had hundreds of thousands of dollars of medical care. He might not require additional expensive care. Who knows? I would have had a very hard time covering Billy three years ago. Today? No big deal. Amanda is healthy. The insurers will readily approve her. Billy and his brothers will go through underwriting to determine price, not insurability. The price will be a little higher, but the cost of insurance won’t even begin to reflect the potential cost of care.

      The PPACA allows Amanda to purchase affordable health insurance for her entire family. To deny this is to deny reality.

      I completely understood why the elderly couple was afraid. All day long they are bombarded with solicitations for different Medicare plans, pleas to support candidates who will fix Medicare, and television reports that the sky is falling. Whatever healthy skepticism they may have once had has been beaten down by the constant repetition of the same facts.

      The elderly couple came to my office to be protected. What they need was to be reassured.  

      DAVE  

      www.bcandb.com

      Arraignment for Spokane man who claimed repo-ed truck was stolen

      Andrew James Petrie, 28, was arraigned today in Spokane County Superior Court for claiming that his truck had been stolen when in reality it had been repossessed.

      He faces one count of first-degree attempted theft and one count of insurance fraud.

      In what state am I most likely to hit a deer?

      Each year, State Farm compiles a list of deer-vehicle collisions and creates a list of states in which you're most likely to hit a deer.

      West Virginia has topped the list for six years in a row, with other particularly dangerous states being virtually all of the northern Midwestern states and the mid-Atlantic states. South Dakota's No. 2, and Iowa's No. 3.

      Washington, it turns out, is one of the lowest-risk states, coming in at No. 43 this year. Your odds of hitting a deer in the Evergreen State are a mere 1 in 477, according to State Farm's estimates.

      The company estimates that there are about 10,700 collisons with deer in Washington state each year. (Compare that with, say, Pennsylvania's 115,000.)

      Oregon is No. 37 on the list, and Idaho's 33.

      Arizona, perhaps not surprisingly, is the stae in which you're least likely to run into a deer. Armadillos, however, were not part of the study.

      Here's the full list.

      Kreidler fines insurer $500,000

      Washington state Insurance Commissioner Mike Kreidler is fining Ohio-based BCS Insurance Company $500,000 for issuing hundreds of thousands of policies using unapproved rates and policy language.


      “A fair insurance market depends on companies playing by the rules,” said Kreidler. “When an insurer files rates and policy language with us, that’s what we expect them to use.”

      BCS Insurance has agreed to pay the fine. An additional $250,000 fine is suspended, provided the company commits no similar violations for two years. The company has also agreed to a two-year plan, including internal audits, to make sure the company is in compliance with Washington state law.

      An investigation by Kreidler’s office found that between 2007 and 2009, BCS issued over 500,000 travel insurance policies that were different from the policy language filed with the state. Rates for identical benefits were inconsistent, depending on who the customer was.

      googleVis 0.3.0/0.3.1 is released: It's faster!

      Version 0.3.0 of the googleVis package for R has been released on CRAN on 20 October 2012. With this version we have been able to speed up the code considerably. The transformation of R data frames into JSON works significantly faster. The execution of the gvisMotionChart function in the World Bank demo is over 35 times faster. Thanks to ideas by Wei Luo and in particular to Sebastian Kranz for providing the code.

      Further, the plot function plot.gvis has gained a new argument 'browser'. This argument is passed on to the function browseURL. The 'browser' argument is by default set to the output of getOption("browser") in an interactive session, otherwise to 'false'. This prevents R CMD CHECK trying to open browser windows during the package checking process. Unfortunately this caused an error message under RStudio and RGui on Windows. The argument has been removed again and plot.gvis handles the check if R is running interactively internally. The bug has been fixed in googleVis-0.3.1, not yet available on CRAN, but on our project download page. Thanks to Henrik Bengtsson and Sebastian Kranz for their comments, suggestions and quick response.

      Read more »

      How much of my driving record can an insurer use?

      We get this question all the time.

      The answer's found in a section of state law called WAC 284-30-500(3). (WAC stands for Washington Administrative Code.) Here's the key section, with some highlighting we added:

      (3) It is an unfair practice for any insurer to consider traffic violations or accidents which occurred more than three years in the past, with respect to the acceptance, rejection, cancellation or nonrenewal of any insured under a private passenger automobile insurance policy, unless, because of the individual's violations, accidents or driving record during the three years immediately past, the earlier violations or accidents are significantly relevant to the individual's qualifications for insurance.

      So insurers generally cannot use the older data as a basis to reject/cancel/non-renew you, but there is no prohibition against using the older data to assess risk and rate -- meaning set the cost of -- your auto policy.

      Even if you have a problem driving record, it's always a good idea to shop around for alternative rates, since insurers don't all charge the same rate for the same level of coverage.

      From guts to data driven decision making

      Source: Wikipedia, License: CC0
      There is a wonderful cartoon by Loriot, a German humorist (1923 - 2011), about a couple sitting at a breakfast table, arguing about how to boil a four-and-a-half minute egg. The answer appears simple, but husband and wife argue about how to measure the time using experience, feelings and expert judgment (wife) or a clock (husband).

      The whole sketch is hilarious and is often regarded as a fine observation of miss-communication.

      Yet, I think it really points out two different approaches in decision making: You can trust your guts or use data/measurements to support your decision.
      Read more »

      Here come the rains

      After an unusually dry early fall, western Washington's long rainy season begins in earnest this weekend, when the first of a series of wet weather systems moves into the Pacific Northwest.

      Weather Underground reports that:
      A front bringing heavier rain will arrive late Saturday... with significant precipitation continuing Sunday and Monday.

      Rainfall amounts during the period from Saturday afternoon through Monday evening will likely be around 3 to 8 inches in the mountains... with the heaviest precipitation over the Olympics and north Cascades. The snow level will be mainly around 10000 feet.

      Rainfall over the western Washington lowlands will probably range from 2 to 4 inches along the coast and 1 to 2 inches over the interior lowlands.
      Because of the long dry spell, forecasters say, flooding is unlikely. But rivers are expected to rise sharply.

      Drivers should also be extra cautious. During dry weather, oil that has dripped off cars and trucks onto roadways doesn't have a chance to be washed away. The rains will spread that oil, making roads extra-slick for the first couple days of rain.




      Guilty plea in insurance fraud case over "stolen" bicycles

      A Pierce County man pleaded guilty today to two counts of forgery after falsely claiming that two bicycles worth $17,000 were stolen from his garage.

      John L. Southerly, of Fox Island, was sentenced in Pierce County Superior Court to 45 days of electronic home monitoring and $800 in fees.

      In May 2011, Southerly told his insurance company that two Specialized Epic bicycles and accessories had been stolen. He filed a police report with a Pierce County sheriff's deputy, saying that he'd left his garage door open and discovered that the two bikes, valued at $17,562, were gone.

      Southerly told his insurer, Travelers Indemnity Co., that he'd bought both bikes from an Arizona company. When Travelers asked for copies of his receipts, Southerly sent an email that was purportedly from the bike company. The bike company email came from a Gmail account. Attached was an invoice for each bike. Southerly later also filed a sworn statement of proof of loss for the bikes.

      Travelers sent an investigator to talk to the bike shop owner and try to verify that the invoices were authentic. No, the owner said, pointing out discrepancies.

      Then, last June, Travelers received an email from a different Gmail address.

      "This is Detective Harris," it began. "I work out of the Tacoma office. I am trying to follow up on a case that involves Mr. Southerly..."

      The email didn't contain contact information for this "Detective Harris," or even specify which law enforcement agency the detective supposedly worked for.

      Travelers denied Southerly's claim and turned the case over to the state insurance commissioner's Special Investigations Unit. It quickly determined that there was no "Detective Harris" working for the Pierce County Sheriff's Office, the Tacoma Police Department or the Lakewood Police Department.

      With search warrants, the Special Investigations Unit determined that both Gmail accounts listed Southerly's real email as a secondary contact and were sent from Southerly's IP address.

      Southerly, who did not show up for a scheduled court appearance earlier this year, was arrested in August while leaving a gym after a workout.

      Got an old Medicare supplement plan? You might save money by switching to a newer plan

      Consumers who are on Medicare Supplement plans may be able to save money – and possibly increase their coverage – by moving to Medicare Supplement plans that insurance companies issued after June 1, 2010.
      As a result of a change in federal law, many Medicare Supplement companies issued new plans that started on that date. Many of the plans issued after that date use the same Medicare Supplement letter as plans issued prior to June 1, 2010. But the coverage often costs less, and is sometimes more comprehensive, than a same-lettered plan issued prior to that date. As a result, in some situations, you might be able to get more for your money by switching plans.
      For example: a Plan G issued after June 1, 2010 may cost less and provide more comprehensive coverage than a pre-June 1, 2010 Plan G.
      So if you’re on a Med Supp plan that you bought before that date, you might want to check the prices of newer Med Supp plans to see if it would be worthwhile to switch.

      Note: Headline -- we'd accidentally typed "Medicaid" rather than "Medicare," has been corrected.

      Review: Kölner R Meeting 5 October 2012

      The third Cologne R user meeting took place last Friday, 5 October 2012, at the Institute of Sociology.

      The evening was sponsored by Revolution Analytics, who provided funding which went towards the Kölner R user group Meetup page. We had a good turn-out with 18 participants showing up and three talks by Dominik Liebl, Jonas Stein and Sarah Westrop.



      Photos: Günter Faes
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      Why did my health insurance go up so much? Often, it's because you had a birthday.

      We often hear from consumers who say that their rate increase was substantially higher than what we approved.

      One of Washington's major health insurers, for example, recently increased its premiums for individual plans an average of 13.5 percent. The highest increase among the plans was 21.5 percent. But we subsequently heard from consumers who are seeing rate hikes of 35 percent or more.

      What's going on? Birthdays.

      If you had a birthday in the past year and your new age ends in a zero or a five (55, 60, etc.), then you can expect a rate increase when your individual health plan renews. This is because you moved into a higher age band. (The insurers group ages together, five years at a time.) Since medical costs tend to increase with age, your premiums tend to jump every time you move to the next five-year band.

      And when an age band increase combines with an across-the-board rate increase for everyone who’s on the health plan, you get a sort of double-whammy: the total rate increase can be substantially higher than what our agency approved.

      Spokane man charged for claiming repossessed truck was stolen

      A Spokane man was charged today with attempted first-degree theft and insurance fraud for claiming that his Toyota Tacoma pickup truck had been stolen, when in reality it had been repossessed. In fact, the man gave the keys to the repo man and was allowed to get his stuff out of the truck before it was towed away.

      Andrew James Petrie, 28, is slated for arraignment Oct. 22 in Spokane County Superior Court.

      On March 1, 2012, Petrie bought a 2000 Toyota Tacoma pickup from a Spokane car dealer. He paid with a personal check for $8,280. But the check was returned; Petrie's bank account had been closed.

      The dealership said it gave Petrie two chances to pay for the truck, then sent a repo man to Petrie's mother's house. Petrie came out of the house, handed over a key to the truck, and was allowed to retrieve his personal items before the truck was towed away.

      About three hours later, Petrie called Safeco Insurance and said the vehicle had been stolen from a different home. He said the thief had first broken the truck's back window, trying to take the sound system out. He later said that a construction company's trailer had been attached to the truck, and was also stolen.

      A Safeco investigator checked with the dealership, and with the construction company. The insurer denied the claim, and notified our Special Investigations Unit that it suspected fraud. After investigating further, our office asked the state attorney general's office to file charges.

      Average annual premiums for health insurance

      Was looking through the latest annual Kaiser Family Foundation report on health insurance premiums this morning and came across this chart. Yikes.

      These are nationwide averages. The report has a number of other interesting charts and data, summarized here.