Medical worker sentenced to year in jail, $472k in insurance fraud case

Here's a press release we issued a few minutes ago:

A medical worker who pretended to be a doctor and submitted millions of dollars in bogus bills to insurance companies has been sentenced to a year in jail and $472,458 in restitution.


Kenneth R. Welling, 45, of Lake Forest Park, was sentenced Aug. 24 in King County Superior Court. He pleaded guilty to seven felony counts of theft in June.

“We found numerous cases in which Welling billed for surgeries that never happened,” said state Insurance Commissioner Mike Kreidler. Kreidler’s office was tipped off to the scam when a patient complained, saying that Welling had tried to bill her insurer $89,000 for six surgeries that never took place.

Welling is a registered surgical technologist and sole proprietor of Shoreline, Wash.-based Alpine Surgical Services. His license allows him to perform tasks like preparing supplies and instruments, passing them to the surgeon and preparing basic sterile packs and trays. But after patients had procedures done, he would often submit large bills with codes listing himself as a doctor or physician’s assistant. He is neither. Sometimes he would include post-operative reports, listing himself as the surgeon.

No evidence was found to indicate that Welling was playing an improper role in actual medical care. The fraud involved billing.

“As far as we could tell, the only time he pretended to be a doctor was when he submitted bills,” said Kreidler.

In one woman’s case, Welling billed $140,323 as assisting surgeon for nine surgeries that never took place. Over a five-year period, he billed another woman’s insurer 107 times for 51 different surgeries, listing himself as the primary doctor. Hospital records show she’d only had surgery twice.

From 2004 through 2011, according to medical records obtained by Kreidler’s Special Investigations Unit, Welling billed five insurance companies at least $4.1 million for services he did not provide. He was paid $461,000.

“Part of the reason he got away with this for so long is that he’d rarely challenge an insurer who paid little or nothing,” said Kreidler. “He’d just send them the bills and hope they’d pay.”

Interesting story about how the Apollo 11 astronauts got life insurance

NPR has posted an interesting story about how the Apollo 11 astronauts sort of self-insured their lives when they headed for the moon.

Rather than try to get conventional life insurance, the three astronauts spent their spare moments during their month of pre-launch quarantine signing autographed envelopes, according to NPR's Chana Joffe-Walt. That way, if they died on their lunar adventure, their families could sell the autographs, which today command up to $30,000 at auction.

To make the autographs more valuable, each was on an envelope that a friend would have postmarked on key days, like the launch date and the date they landed on the moon. Writes Joffe-Walt:
It was life insurance in the form of autographs.
"If they did not return from the moon, their families could sell them — to not just fund their day-to-day lives, but also fund their kids' college education and other life needs," (space historian Robert) Pearlman said.
The life insurance autographs were not needed. Armstrong and Aldrin walked on the moon and came home safely. They signed probably tens of thousands more autographs for free.

A Basic Principle

A basic principle of politics is that the rules don’t matter if they inhibit your progress or agenda, but the rules are sacrosanct if they inhibit your opponents’ agenda or progress.

The Republicans have installed a Debt Clock at their convention in Tampa as a way to visually highlight their disdain for fiscal irresponsibility. The Republicans, with a Democrat in the White House and Harry Reid leading the Senate, are now deficit hawks. Even Condoleezza Rice, in her speech last night to the delegates, stressed the importance of getting our financial house in order. But it has only been a few years since Paul Ryan was voting for Medicare Part D and bailouts and Vice-President Dick Cheney famously declared that “Deficits don’t matter”.

Hypocrisy and the total absence of intellectual honesty are just as common on the other side. Up is down and down is up when it is politically expedient. The current Medicare debate is a perfect example.

Let’s take a two second detour to the “Bush Tax Cuts”. Congress, especially Republicans, like to pretend that revenues will increase if the tax rates decrease. But knowing that that is all BS, the cuts of 2001 and 2003 were made temporary and designed to end within ten years. This allowed Congress to ignore the fact that the legislation was not revenue neutral. They didn’t have to acknowledge the debt they were creating. Congress has been fighting about retaining those cuts for the last few years.

The Patient Protection and Affordable Care Act (PPACA) was billed as revenue neutral, too. It never was. Part of the funding for the PPACA came from the CLASS program, the ill-fated long term care policy that has already been eliminated. Part of the funding was to come from the new 1099 rules, which have also been repealed. There are still numerous fees and taxes sprinkled like fairy dust throughout the law. And 716 million dollars comes from future Medicare spending.

Ah Ha! The Republicans are right. He is gutting Medicare.

No, not really. As David Wessel notes in today’s Wall Street Journal, both Obama and Ryan remove a similar amount of future funding from Medicare. Mr. Romney has now backed himself into a corner and pledged to restore the money. That too will change.

The problem is that none of these men are at all credible when discussing this issue. The numbers never add up. The details never include the HOW something will work.

Where are we now?

1. Medicare was designed to pay about 75% of a senior’s health care expense

2. Our current system incentivizes care

3. Our current system creates an environment where fraud and abuse are almost inevitable

4. We have no way to cap expenses currently

5. About 30% of Medicare dollars are spent on a person’s last year of life

How do you control costs? The obvious answer is to reverse as much of the above as possible. How do you lose an election? The obvious answer is to attempt to reverse any of the above.

The President has proposed the creation of the Independent Payment Advisory Board (IPAB). By setting standards in both care and pricing, the government would begin to get a handle on unnecessary procedures and costs. The IPAB will classify certain questionable treatments as elective or self-pay. If you want it and can pay for it – go ahead.

Mr. Ryan would have you buy a private insurance policy. He would give you just enough to purchase a basic policy, the second worst in the marketplace. If you want more coverage, a plan that might pay for certain physicians or medications, you will make up the difference. The insurer will classify certain questionable treatments as elective or self-pay. If you want it and can pay for it – go ahead.

The results are about the same. The wealthy will always have access to care. The rest of us should be OK. If all of this looks vaguely familiar, think about the number of prescription medications that are now available over the counter. OTC doesn’t require a prescription, so the government (Medicare, Medicaid, and government employee coverage) and the insurers save money. No doctors’ visits. No coverage for the cost of the drug. If you want Prilosec, pay for it.

Albert Brooks, in his dystopian novel 2030, offered a vision of the U.S. where the Right To Life movement shifts its focus from abortion to preserving, at any cost, the lives of the elderly. Is it that far fetched to envision warehouses of comatose elderly connected to expensive hardware, alive in name only? Would a Republican Party ready to extend the protections of the 14th Amendment to the unborn require unlimited care for the brain dead? And if that care is mandated by the government, will it also be unfunded?

The answer – Perhaps. See all of those rules about small government vs. large government; regulations vs. the free market are only as strong as the special interests pushing our politicians. The good news is that our politicians occasionally surprise us.   DAVE   www.bcandb.com

Sept. 13 hearing set re: Sagicor Life's acquisition of PEMCO Life

Insurance Commissioner Mike Kreidler has scheduled a hearing for Sept. 13 at 10 a.m. at his Tumwater, Wash. office to consider approval of Sagicor Life Insurance Company's request to acquire Washington-based PEMCO Life Insurance Company.

Sagicor Life is proposing to acquire all outstanding stock of PEMCO Life Insurance Company, and is also proposing to merge PEMCO Life with and into Sagicor Life at a later date after receiving approval of the acquisition.

PEMCO Life Insurance Company, which has been a Washington-based insurer since 1963, provides life and disability products to approximately 15 thousand Washington individual and group policyholders, and is wholly owned by its parent company, PEMCO Mutual Insurance Company. PEMCO Mutual Insurance Company is a mutual property and casualty insurer located in Seattle, WA and is licensed in Idaho, Oregon, and Washington.

Sagicor Life is a Texas-based insurer licensed in Texas to offer accident, health and life insurance and has been authorized to conduct life and disability insurance in Washington since 1961. Sagicor Life operates primarily in the US and is wholly-owned by Sagicor Financial Corporation. Sagicor Financial Corp. is a Barbados corporation which operates internationally in various European and Caribbean countries, and is publicly traded on the Barbados, Trinidad and Tobago, and London Stock Exchanges. Sagicor Financial Corp. had $142.6 million in US revenue in 2011, $1.35 billion in total revenue (both US and international) and 632,123 individual life policies in-force overall. As of December 31, 2011, Sagicor Financial Corp.’s consolidated stockholders’ equity was $797.5 million.

For more information, including how to submit letters of support or objection, please see the hearing notice.



Insurance tips: What to know before renting your home/boat/etc.

We get a number of calls from folks who rent out their homes, vacation cabins, vacant lakefront sites, boats, RVs, motorcycles, etc. to others every once in a while. They want to know if that affects their insurance.

It very well could. Here's why: When property is rented, that's considered a business activity. And that can affect any existing coverage for property damage and liability protection.

There may also be coverage limitations or exclusions built into the policy that activated by your renting the property.

We recommend that you talk to your agent or the insurer before you rent, so you're not left personally responsible for property damage costs or legal costs in a lawsuit stemming from renting the property.

Are career motivations changing?

The German news magazine Der Spiegel published a series of articles [1, 2] around career developments. The stories suggest that career aspirations of young professionals today are somewhat different to those of previous generations in Germany.

Apparently money and people management responsibility are less desirable for new starters compared to being able to participate in interesting projects and to maintain a healthy work life balance. Hierarchies are seen as a mean to an end, and should be more flexible, depending on requirements and skills sets. Similar to how they evolve in online communities and projects.

Read more »

Do I have "minimal essential" insurance coverage?

As part of health care reform, starting in January 2014 most Americans will need to have “minimum essential” health insurance coverage or face a tax penalty.

We've gotten a number of calls from consumers wondering if their current health coverage qualifies. (In particular, a number of people who get their medical care through the Veterans Administration have called to check.)

In many cases, the answer is yes. Many existing plans qualify as minimal essential health insurance coverage. Here are some examples:
• Medicare Part A

• Health programs administered by Washington state (such as Medicaid or the Children’s Health Insurance Program)

• TriCare

• Coverage through the Veteran’s Administration

• Coverage from an employer, regardless of whether the employer is a government agency, a private-sector employer, or an Indian tribe.

• A individual plan (i.e. a plan that you buy on your own directly from a health insurance company).

“Hole-in-Won” Golf tournament insurer charged with felonies after not paying up

OLYMPIA, Wash. _ A Connecticut businessman who specializes in insurance for golf tournament hole-in-one prizes has been charged with multiple felonies after repeatedly failing to pay up.

Kevin Kolenda, of Norwalk, Conn., was charged Wednesday in King County Superior Court with five counts of transacting insurance without a license, a class B felony. His arraignment is slated for Sept. 5.

Kolenda, 54, ignored a previous cease-and-desist order and a $125,000 fine from state Insurance Commissioner Mike Kreidler.

“We’ve been warning the public about Mr. Kolenda’s scam for years,” said Kreidler, whose Special Investigations Unit did the investigation that led to the charges. “He has a long history of selling illegal insurance, refusing to pay prize winners, and thumbing his nose at regulators.”

In some cases, charities have had to come up with the prize money. In others, the prize winners agreed to forego 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.

"Auto accidents have decreased. Why did my insurance rates go up?"

Q: I read that auto accidents in Washington state have decreased, as have accident-related deaths. But my insurance premium just went up 15 percent. What's going on?

A: As Washington state's insurance regulator, we do our best to hold down insurance costs. But there are things other than accident rates that can affect your auto insurance premiums. Theft rates, auto glass costs, health care costs (for injuries in a crash) can all play a role. So can the fact that modern vehicles, with more airbags, high-strength steel and sophisticated safety features can be more expensive to repair.

Rates are driven by insurers' actual claim payments, administration costs and the company's cost and loss projections for the near future.

Sigma motion visual illusion in R

Michael Bach, who is a professor and vision scientist at the University of Freiburg, maintains a fascinating site about visual illusions. One visual illusion really surprised me: the sigma motion.

The sigma motion displays a flickering figure of black and white columns. Actually it is just a chart, as displayed below, with the columns changing backwards and forwards from black to white at a rate of about 30 transitions per second.

Read more »

Why it's important to read "whole life" policy annual statements

Q: I just got the annual statement for my "whole life" insurance policy. Should I just toss this, or do I really need to read this thing?

A: You should read it. Here's why: With whole life insurance, the monthly cost of insurance increases as you get older. If you have a loan against your policy, or if you chose a low premium option, then at some point the current level of premiums won't be enough to keep the policy in effect, and it will end.

By reading your policy's annual statement on a regular basis, you'll be able to increase the amount you're paying in premiums so that you can prevent this from happening.

Former state insurance commissioner Dick Marquardt has died



Dick Marquardt Sr., who served as the state's insurance commissioner from 1977 to 1993, died Aug. 9th in Seattle.

Idaho-born Marquardt was the 6th of the eight people who've served as insurance commissioner since 1909. He was a University of Washington graduate, served in the Army during World War II, and worked as a longtime fuel-oil company executive.

He was appointed by then-Gov. Dan Evans to head the state's selective service system, and he also served a term as state senator representing District 45 in King County.

He served four terms as insurance commissioner, and continued to work as a consultant well into his 80s. He was an avid golfer, and loved baseball.

There's a long and touching obituary in the Seattle Times. From it:
Dick was the beloved patriarch of his large family. He was a devoted and proud husband, father, grandfather, great grandfather, and great-great grandfather.
A private service is planned at a later date.

Also from the obituary:
He leaves behind a legacy of integrity, hard work, humor, unconditional love, and pure enjoyment of the good things in life. He will be greatly missed by all who were lucky enough to know him. Dad, you were unforgettable.

Insurance claims help, donations, and other resources re: the Taylor Bridge wildfire

As fire crews work to rein in the Taylor Bridge fire, some families are being allowed back in to check on their homes, dozens of which have been lost in the first this week. Here are some tips and resources for those who lost property in the blaze.


  • Kittitas County Emergency Services is collecting information on the amount of losses in order to determine if federal disaster assistance will be available. Whether insured or not, it's important that the losses be documented. (Note: The website seems to be offline or overwhelmed; we've had a lot of difficulty opening the page this morning.)

  • According to the DOT, the contractor on the bridge project has set up a process for claims that potentially would be addressed by the contractor's insurer. The phone number provided by the contractor is 1-800-238-6225 for Travelers Insurance.


  • Insurance claims: For those with insurance, we have these tips about how homeowners and others can expedite their insurance claims. It's important to know that many standard homeowners' policies include some coverage for living expenses -- like a motel -- for folks who lose their homes. That's definitely something to check with your insurer or agent right away. And save receipts for everything, including meals and laundry, that might be relevant. If you need help or run into problems with your insurer, call us at 1-800-562-6900 or email us at AskMike@oic.wa.gov and we'll do our best to help.

  • For those seeking updates or emergency shelter information, the state Emergency Management Division has information. Governor Gregoire has proclaimed a state of emergency in both Kittitas and Yakima counties to free up additional firefighting resources. 

  • If you want to make donations to the many fire victims -- including livestock that had to be evacuated -- please see this donation information from the state Emergency Management Division. It sounds like donation sites have been overwhelmed with stuff; they're now asking that people consider donating money instead. The link above includes numerous local and state organizations trying to help the fire victims.

Lie To Me

So, which is better? Would you prefer a politician who tells you whatever he thinks you want to hear, whose only core commitment is to his own election? Or would you rather have someone who is clear-voiced and unashamedly direct in his pursuit of an agenda that even his followers consider unyielding?


My friend Bill (name changed) has a problem. Four years of President Obama are more than enough for Bill. Health Care. Foreign Policy. The Economy. There have been few bright spots for Bill, a moderate Republican. And moderation is the issue. He could vote for Mitt Romney, he told me and anyone else that would listen, because once in office Romney was the candidate most likely to rein in the whack jobs in the House.

In other words, he was hoping that the guy running for President was a pendulum. He has been left of Kennedy and right of Gingrich. Once elected, he should just flop into the middle.

This past Saturday morning, Mitt Romney chose Paul Ryan to be his running mate. On Saturday afternoon, Bill threw up his hands in disgust.

Since this is Health Insurance Issues With Dave, we should take a look at what will be the key issue of the campaign and the subject of millions of dollars of TV ads – Medicare.

Does Paul Ryan want to end Medicare as we know it?


Yes and No. The 2011 budget Mr. Ryan prepared and packaged as The Path to Prosperity: A Blueprint for American Renewal originally replaced the current Medicare program for all seniors in the year 2022. The Democrats beat that proposal like it was a piƱata at a ten year old’s birthday party. The 2012 version, crafted in part with Ron Wyden (D-Ore), retains traditional Medicare as an option, thus killing it more slowly over time.

This blog has covered Medicare numerous times. It is important to note that Medicare was never designed to cover 100% of a senior citizen’s hospital or doctors’ bills. The first anniversary post of this blog included a complete breakdown of what Medicare does and doesn’t cover.

We should also note that the only time Either Side is telling the truth is when they are deriding the other guy’s plans for Medicare. The President does cut (mostly in future growth) over 700 billion from Medicare. But Mr. Ryan’s plan does not restore the cuts. Mr. Romney initially endorsed the Ryan budget while offering a vague statement of ideals designed to give the impression that he has a different plan.

The current Medicare spending for a typical 66 year old is currently around $5,700 per year. Both the President's plan and Mr. Ryan's assume a significant rise in cost to the government over the next 18 years.

The cuts aren’t the only detail the two plans share. Insurance Exchanges, the expensive new marketplace to purchase insurance, may be a sore spot for Republican governors, but Mr. Ryan is a big fan. The Patient Protection and Affordable Care Act (PPACA) utilizes exchanges for all ages. Mr. Ryan wants to set up exchanges, too, but only for senior citizens.

So what are the differences between the President’s plan and Mr. Ryan’s? According to The Path to Prosperity website, the most important element is that the PPACA creates the Independent Payment Advisory Board (IPAB) to orchestrate Medicare cuts. Mr. Ryan’s site raises the possibility of faceless bureaucrats rationing access and randomly denying needed health care. It is very scary.

The Ryan solution? Premium Supports / Vouchers. Starting in 2023, new Medicare beneficiaries will be guaranteed a ticket to the next to the cheapest (not the cheapest, the next one up!) insurance option in the marketplace. There will be more comprehensive plans available to those willing and able to pay the difference. Mr. Ryan envisions doctors, hospitals and insurers fighting for your partial payment.

You won’t be denied the opportunity to have access to any cure, any doctor, any hospital – which you can pay for.

But the 2012 plan keeps Traditional Medicare as an option.


If you like your current insurance, you will keep it”, President Obama said during the health care debate. Those of us in the business knew that that was impossible. The grandfather rules were confusing and contradictory. The insurers could only maintain policies operating under separate regulations for so long. Medicare Part D, the underfunded Republican Rx program introduced in 2003, eliminated Medicare Supplement Plan F which was saving my clients a lot of money. It is hard to pretend that traditional Medicare, Medicare as we know it, would survive the Ryan plan.

Under the Ryan program, people who turn 65 prior to 2023 (such as Dave Cunix, class of 2020) will be allowed to stay on the current system. New beneficiaries will be offered the new system or an updated version of what we now have. How will funding for these different options be maintained? What will actually be the mandated minimum coverages? How much more will it cost for the government to regulate two systems? With no new healthy retirees coming into traditional (pre-2023) Medicare, how long will it be before we have a death spiral?

The possibility of capping our current Medicare system with no access to new, healthier members is why this debate is not limited to Americans under the age of 54. We, anyone who has the hope of seeing 2030, would be impacted by the Ryan plan.

Where does that leave us? We have out-of-control costs, no idea what we should and shouldn’t cover, and little willingness to pay what it would really take to get the job done. It doesn’t solve any problems, but sometimes, I guess, it does feel better when they just lie to me.

DAVE

www.bcandb.com

Is it possible to OVER-insure my home?

Yes. If you think your home is over-insured, ask your agent or insurer when they last made a replacement cost calculation specific to your home. These are done by insurers to figure out what it would cost if they had to rebuild your home after a major covered loss. (Like your home burning down.) If the information used in the calculation is wrong, you can end up with an insured value that's too low or too high.

Your tax assessment value, by the way, is not the value used for insurance purposes. The insurer needs to use a value that reflects an actual and realistic rebuild cost.

Also, your home insurance policy should not have the value of the land included as part of the dwelling coverage. Land is not considered to be insurable property on a home policy.

Wildfire near Cle Elum has reportedly burned 60 homes

A wildfire near Cle Elum, Wash. has reportedly burned 60 homes and 26,000 acres, with summer dryness and high winds making firefighters' jobs difficult.

The Seattle Times has posted some pretty scary photos of local homeowners and ranchers watching the wildfire approach. And the North Kittitas County Tribune is posting a running log of fire news, including a phone number for local evacuation information. The state has also activated its emergency operations center.

Our hearts go out to the victims, and we're monitoring the situation closely. Fire victims should contact their insurer or agent as soon as possible to start the claims process. Many policies include some coverage for emergency shelter, such as motels, if a home is uninhabitable. Our consumer advocacy staff (1-800-562-6900) will be available to help fire victims if they have trouble filing insurance claims.

Here are some more tips:
  • Cooperate fully with the insurer. Ask what documents forms and data you'll need to file a claim. Keep a journal of all conversations, including who you talked with and when.
  • Ask your insurer about additional living expenses if your home is destroyed. Save all relevant receipts.
  • Take photos or video of the damage.
  • If there's a disagreement about a claim, talk to the insurer. Ask the company to cite specific language in the policy. If you need help, call our office at 1-800-562-6900.
  • If the insurer's offer seems too low, be prepared to negotiate to get a fair settlement.
If you're not affected by the blaze but live in a wildfire-prone area -- and much of the eastern part of the state is very dry right now -- here's a list of tips to prepare and protect your home.

And here's a handy pdf document that will help you get started on a home inventory, which can be a big help in filing an insurance claim after a disaster. You can also use a video camera or one of several smartphone apps to do the same thing.

You bought a new car? How soon do you need to tell your insurance company?

Q: I bought a new car a week ago, but I didn't want to call my insurance company yet, since I know my premium will go up. How long can I wait?

A: Do not wait. We're not kidding about this. Some auto insurance policies limit automatic coverage for a new or replacement vehicle to 14 days after purchase. Some others allow up to 30 days.

Here's why it's not worth the risk: If you wreck your new car and your claim is denied, you'll be out a lot more money than you saved on the premium.

The upshot: immediately contact your agent or insurer to add the vehicle and update your coverage.

googleVis 0.2.17 is released: Displaying earth quake data

The next version of the googleVis package has been released on the project site and CRAN.

This version provides updates to the package vignette and a new example for the gvisMerge function. The new sections of the vignette have been featured on this blog in more detail earlier:

Read more »

Woman charged with insurance fraud after pawning ring and claiming it was lost

A Snohomish County Woman has been charged for claiming that she'd lost a diamond ring that she had actually pawned.

The Attorney General's Office has chaged Laura Anne Dunn with attempted first-degree theft and insurance fraud. Arraignment is scheduled for Aug. 23 in Snohomish County Superior Court.

In January, Dunn told her insurer, Liberty Mutual Insurance, that she'd lost her ring during a New Year's Eve stay at a casino. The ring was valued at more than $9,000.

Investigators for Liberty Mutual checked with the casino's security staff, which had no record of Dunn reporting her ring missing. They asked Dunn to provide a number of records, including all photographs taken during her stay at the casino.

The investigators also checked pawnshop records. They discovered that Dunn had actually pawned the ring back in September 2011. In fact, the ring was still at the pawnshop until she picked it up in mid-March 2012.

Two weeks after she filed the claim, Dunn sent a note to Liberty Mutual.

"I have been extremely lucky," she wrote, saying that she'd found the ring snagged in a glove. "...Thanks for your time and effort on my behalf."

The following day, the insurer's investigators visited a local pawnshop, where they found and photographed the ring that Dunn had reported missing. They closed the claim and reported the case to Insurance Commissioner Mike Kreidler's Special Investigations Unit, which specializes in insurance fraud cases.

Update: On Dec. 19, 2012, Dunn pleaded guilty to attempted first degree theft. She was sentenced to 80 hours of community service and $600 in costs.

"Hobo Prince Economic Project" founder fined $1 million by Oregon regulators

Back in April, we issued a cease and desist order against Shelby H. Bell, a man who runs the "Hobo Prince Economic Project."

The Clark County, Wash. man was promising people seven years' worth of weekly $900 payouts in exchange for a $25 signup fee. He maintained that each person’s contract would be financed through a complex series of transactions, including issuance of a $500,000 “reverse” insurance policy purchased with a $25,000 payment from an unnamed bank.

Since he wasn't licensed to transact insurance at all in Washington, Insurance Commissioner Mike Kreidler ordered Bell to stop trying to sign people up for this highly dubious offer. (We subsequently received numerous calls from people across the country who'd signed up for the plan and blamed us for dashing their hopes of a big payout.)

Yesterday, the Oregon Department of Consumer and Business Services fined Bell $1 million, saying that none of Bell's investors have apparently made any money.

"Bell in less than a year attracted more than $187,000 from at least 7,480 people in multiple states and U.S. territories," the department said in a press release, accusing Bell of "offering false hope to thousands of people."

"Bell claimed to be worth billions with backing from the U.S. Treasury through an International Bill of Exchange, which actually has no value," Oregon regulators continued. "Also, investigators determined that Bell used investors’ money to pay for food, movie tickets, a vehicle, and other personal expenses."

Here's a link to Oregon's order.

What's the "Washington Fair Plan?"

Q: My home (or business) insurance has been canceled, and the cancellation notice refers to the Washington Fair Plan. What is that?

A: The Washington Fair Plan was established in 1968 to provide basic property insurance to consumers who could not obtain property insurance in the voluntary, or standard insurance market. Although many years have passed and the home insurance market of today offers many options for home insurance, the Fair Plan still exists and functions under the rules and regulations of our office.

Participation in this program is mandatory for all property insurers in Washington. All companies writing property insurance are members of the Fair Plan. Every insurance agent or broker who is licensed to write property insurance in Washington is required to know about and help consumers if they want the services of the Fair Plan.

The Fair Plan application may only be completed by a licensed insurance agent, and must be signed by the agent and the applicant. Basic fire insurance coverage may be provided for dwelling and commercial risks.

Although you will need to have a licensed insurance agent file an application on your behalf, you may still get coverage information directly from the FAIR Plan.

How long can an insurance company take to investigate an auto claim?

Q: Another driver hit my car last weekend, and I haven't been paid yet. How long does an insurer have to investigate and pay my claim?

A: Generally, when a claim is uncompliated (no injuries, not a large number of witnesses, no specialized reports needed), 30 days is considered to be a reasonable time frame to investigate and make coverage decisions.

This is true whether you've made the claim against your own insurer or someone else's. Many claims are investigated and paid within 30 days.

Sometimes -- particularly in complex property damage or injury claims -- it can take longer to agree on a settlement. But you should expect reasonable promptness getting answers to your questions during the process.

You can help expedite things by providing requested information, giving statements and answering questions promptly. And if things drag on too long and you live in Washington state, you can file a complaint with our office. (We're the state agency that regulates the insurance industry in Washington.)

London Olympics 100m men's sprint results

The 100m mean's sprint finals of the 2012 London Olympics are over and Usain Bolt won the gold medal again with a winning time of 9.63s. Time to compare the result with my forecast of 9.68s, posted on 22 July.


My simple log-linear model predicted a winning time of 9.68s with a prediction interval from 9.39s to 9.97s. Well, that is of course a big interval of more than half a second, or ±3%. Yet, the winning time was only 0.05s away from my prediction. That is less than 1% difference. Not bad for such a simple model.
Read more »

Auto insurance and diminished value

Scenario: Your car is struck by another driver, who is at fault. His insurer pays for the repairs, but you believe that your vehicle -- since it has been in a wreck -- is worth less than it was before the crash.

Can you demand that the insurer compensates you for that diminished value?

Yes, but it can be difficult to prove. Diminished value can be part of a claim, but it is up to the claimant -- that's you, in the scenario above -- to prove that the value of the vehicle is diminished after the repairs have been completed.

Doing that may mean getting dealer testimony or an appraisal showing the value of the vehicle before the accident and after the repairs.

Our office, unfortunately, cannot force insurers to pay diminished value claims. You may need to seek legal advice to negotiate a settlement.

What does personal injury protection cover?

Here in Washington state, auto insurance policies commonly offer personal injury protection, widely known as PIP. You can opt to add it your auto coverage. If you're in an auto accident, it will help pay for certain costs, up to certain limits.

Like what? It helps pay for:
  • Medical expenses
  • Lost wages
  • Lost services
  • and funeral expenses.

But there are some things that it won't cover. For example, PIP coverage doesn't cover injuries caused when using:
  • Farm equipment
  • Off-road vehicles
  • Mopeds
  • Injuries sustained while racing
  • Or injuries sustained while committing a felony.

Also -- and this is important -- PIP coverage does not cover services that your insurer decides:
  • Are not reasonable
  • Are not necessary
  • Are not related to the accident
  • or are not incurred within three years of the accident.