R in Insurance: Presentations are online

The programme and the presentation files of the first R in Insurance conference have been published on GitHub.

Front slides of the conference presentations

Additionally to the slides many presenters have made their R code available as well:
  • Alexander McNeil shared the examples of the CreditRisk+ model he presented.
  • Lola Miranda made a Windows version of the double chain-ladder package DCL available via the Cass knowledge web site.
  • Alessandro Carrato's 1-year re-reserving code is hosted on the ChainLadder project web site.
  • Giorgio Spedicato's life contingencies package is on CRAN already.
  • Simon Brickman and Adam Rich's HTML presentation and underlying R code for Automated Reporting is included in the GitHub repository.
  • Stefan Eppert pointed out that KatRisk published an illustrative catastrophe model in R.
  • Hugh Shanahan's code to integrate R with Azure for high-throughput analysis is on GitHub.
Thanks again to all the presenters who have helped to make the event a success.

Hopefully, we see you again next year!

Agent charged with theft and forgery; collected commissions for fictitious customers

A former Vancouver insurance agent has been charged with theft and forgery for allegedly collecting about $15,000 in commissions by creating fictitious applicants for insurance policies.
Julie Anne Goss, 43, an independent agent for AFLAC, was arraigned last week in Clark County Superior Court.
The scam came to light after the owner of a restaurant in Battle Ground, Wash. told AFLAC that she’d received premium bills for two “employees” that had never worked there. 
AFLAC investigated, and it turned out that Goss wrote dozens of policies for 15 people that either weren’t employees at the named businesses or apparently didn’t exist. In other cases, she wrote policies for real employees, but they said they hadn't applied for the coverage.
In each case, Goss stood to get a commission for the policy. All told, the investigator found, between August 2010 and January 2011, Goss wrote 91 fraudulent insurance policies and collected more than $15,000 in commissions for them.
The company canceled its contract with Goss in March 2011 and reported the matter to our Special Investigations Unit. After investigating further, we revoked Goss’ insurance license in January 2012. The charges against her were filed in late June.
If you suspect insurance fraud and you live in Washington state, please report it.

How to find an old life insurance policy (and other unclaimed property)

We get a lot of queries from people looking for old life insurance policies that they think might have named them as a beneficiary.

Here are some quick tips. For more specifics and links, please see our brand-new "how to find an old life insurance policy" web page.
  • Try to track down as much information as possible. You'll presumably know the name of the policyholder (any name changes?), and it also helps to know the state or states that the person lived in.

  • Ideally, you'll be able to locate a copy of the policy itself, which will have a number on it. But sometimes there's a wrinkle: the insurance company or its name may have changed, especially for older policies. That can be a challenge, but your state's insurance department can probably help you track down the current company information. If you live in Washington state -- we're the state insurance regulator there -- feel free to call us at 1-800-562-6900 and talk to our consumer advocacy staff.

  • If you can't find the policy, try going through the person's financial records, looking for payments made to an insurer. Also, look through old mail: the company may have sent periodic statements or billing reminders. It's also worth checking with the person's auto- or homeowners insurers, since people sometimes buy life insurance from the same company.

  • You could opt to pay a search company to run a check for the person's name through industry databases or send queries to a large number of insurers.

  • If a policy goes unclaimed for a long time, insurers are supposed to turn the money over to state-run unclaimed property programs. They hold the money, often forever, in case someone files a claim. You can easily run the person's name through these free, state-run online search sites. Washington state's is at http://ucp.dor.wa.gov, and you can easily find other state's unclaimed property programs at www.unclaimed.org.

The Death Spiral

I used to be a hero. At one point we had quite a few nanny placement services in Greater Cleveland and many of the young women were hired to work in New York. Most of these agencies referred their clients, the potential employers, to me for the health insurance needs of the caregivers. The ones who called were very happy. One of my health insurance companies would allow an Ohio policyholder to retain her coverage even if she moved to New York City. Otherwise, she or her employer would have had to purchase a policy there.

The Ohio policy was hundreds of dollars less per month.

Hundreds. Fifteen years ago. The spread is much higher now.

Two important questions:
  1. Why are Ohio policies so much less?
  2. Why are there 2.6 million uninsured in New York?
It has been said that the road to Hell is paved with good intentions. It is hot, really hot, in New York. Years ago it was decided that all adults under age 65 should pay the same premium. Twenty-two or sixty-two, the price is the same. That sounds great if you are in your sixties, but it only works if you can drag the twenty-somethings to the table. In the beginning your average participant age is in the mid-forties. As the young drop out, the average age, and the price, increases.

But age wasn’t the only pricing determinant abandoned in the interest of fairness. New York insurers were forbidden to underwrite the risks. The sicker you are the better that deal. An insulin dependent diabetic with AIDS pays the same premium as someone who is perfectly healthy. The system, in essence, welcomed pre-existing conditions and penalized the young and healthy.

And of course, the cost of living is higher in New York, especially in NYC.

As we have noted previously, Ohioans, on average, pay a lot less for health insurance for all of the reasons that New Yorkers pay more. I have lots of clients, male and female, under the age of 30. Some of these young adults shopped for this coverage and pay for it themselves. The rest of these cases have some degree of parental involvement. It is much easier for a parent to come up with $70 to $120 a month in Ohio than hundreds more in New York.

Why are there millions of uninsured New Yorkers? The 2.6 million number is actually from six years ago. That number hasn’t gone down. New Yorkers weren’t required to purchase insurance. There was no Individual Mandate. Penalized for their health and youth, many New Yorkers simply chose to not participate. Making insurance affordable might get them back into the market. Making insurance mandatory will have more impact.

It has been announced that the New York rates will be plummeting under the Patient Protection and Affordable Care Act (PPACA). Governor Cuomo is ecstatic. The President is pointing to New York as a model for the future. And it is true, at least for the moment, that New York rates are coming down. A lot. But if you consider $1,000 per month normal, your great bargain may still sound awful to consumers in Ohio. This link is to an article that dreams of young people paying only $190 for a basic policy, one that a guy living in Cleveland might buy today for $70!

Will the New York rates stay cheap? There are two major speed bumps ahead. The first is the PPACA. The 2014 New York rates are certainly much less than the current pricing, but are they cheap enough? Will the subsidies be enough to spur sales when the penalty (tax or fee depending on your political persuasion) is only $95 or about 1% of income? With the penalty so low, enforcement challenging, and the entire process confusing, the prediction is that many of the currently healthy uninsured will sit out a year or two. Lose the young and healthy and New York is right back where it was.

The second speed bump facing New York is the U S House of Representatives. The Republicans sensed weakness in the Obama administration’s decision to shelve the employer mandate for a year. (See previous blog) Last week the Republicans attempted to put the individual mandate on hold, too. Of course the bill passed the House. And you might think that the bill will never see the light of day in the Senate, but don’t be so sure. Punting the individual mandate might seem like a good idea to a group of people who are used to putting off important decisions and deflecting responsibility.

Both the Democrats and the Republicans have a reason to kill the individual mandate. As New York already proved, if we create super health policies that do everything but drive you to the doctor, don’t factor in the health conditions of the insureds, and don’t weigh the premiums properly for the ages of the participants, the rates will go through the roof if you can’t corral the young and healthy into the insurance pool. Without an individual mandate forcing participation, you create a death spiral. As the rates increase to reflect the claims, the young and healthy leave. First the twenty somethings jump out. Eventually the average age of the participants will be over 50. Prices will be out of control and there will be only one answer – Single Payer.

Your friends in New York and California are celebrating the health insurance rates they expect to see in 2014. It would be tacky to point out that their new rates will still be significantly more than the rates we pay today. And it is just sad to think that our new rates and their new rates are going to be about the same.



COBRA and Medicare: How to avoid a common (and costly) mistake

If you're continuing your employer health coverage through COBRA and you become eligible for Medicare, it's important for you to sign up for Medicare during your Medicare eligibility period.

Here's why: Health insurers generally include language in their policies that says they can refuse to pay bills if they find out that you stayed on COBRA coverage after you were eligible for Medicare.

A lot of consumers get caught in this trap. Many people who are on COBRA don't know that they should sign up for Medicare when they become eligible. Instead, they assume that COBRA will continue to pay their medical bills, so they delaying signing up for Medicare until their COBRA coverage ends.

Then, months after becoming eligible for Medicare, they find out that their COBRA plan is refusing to pay for medical care that the consumer already received. They can't backdate their Medicare enrollment, so they're stuck with those medical bills. Yikes.

Don't get caught in this trap. If you're on COBRA and become eligible for Medicare, sign up.

Review: Kölner R Meeting 19 July 2013

Despite the hot weather and the beginning of the school holiday season in North Rhine Westphalia the Cologne R user group met yet again for two fascinating talks and beer and schnitzel afterwards.

Analysing Twitter data to evaluate the US Dollar / Euro exchange rates

Dietmar Janetzko presented ideas to forecast US Dollar / Euro exchange rate movements for the following day.

To forecast exchange rate movements, Dietmar distinguishes two school of thoughts. The first one is based on the analysis of fundamental analysis, e.g. figures of GDP, debt, unemployment, etc. and the other one is based on news, e.g. announcements from central banks, e.g. from Ben Bernanke and other industry experts.

While the data for the fundamental analysis is usually updated slowly, e.g. annually or quarterly, news can be of higher frequency and less regular. As a result the forecasting horizon in a very liquid market, as the forex market, can vary from one minute or less to next year or decade.

Dietmar's aim was to forecast the exchange rate for the following day and to outperform the forecast of a random walk. For his experiment he used daily exchange rates from Quandl, which has a nice R interface, and Twitter data from topsy, which gives him access to Twitter's 'firehose'.

For his analysis Dietmar focused on the number of tweets of the terms Euro + Crisis + <concept>, whereby he used a dictionary of nearly 600 different concept words.

His training algorithms used functions of the following packages: forecast, caret and car, looking for predictors that have a smaller error than a random error.

It goes without saying that Dietmar hasn't made millions from his algorithms yet, but the discussion and the end of his presentation will hopefully have given him a few pointers to do just that.

Graphs in R

Afshin Sadeghi, who has a background in Steiner tree methods for Protein-Protein interaction networks, gave an overview of the various graph packages in R. He started his talk with a little overview of the graph terminology of nodes, edges, trees, directed and undirected graphs.

Afshin then gave a brief overview of the various graph packages in R and the different visualisation options. The most popular package seems to be igraph, maintained by Gabor Csardi. Although different packages use sometimes different graph objects, there are often conversation tools available, e.g. igraph.to.graphNEL, allowing users to use the best algorithms from all packages.

You can access Afshin's slides via our Meetup site.

Next Kölner R meeting

The next meeting has been scheduled for 18 October 2013.

Please get in touch if you would like to present and share your experience, or indeed if you have a request for a topic you would like to hear more about. For more details see also our Meetup page.

Thanks again to Bernd Weiß for hosting the event and Revolution Analytics for their sponsorship.

"My doctor says I need a treatment, but my insurer won't cover it. What can I do?"

Q: "My doctor says that I need a particular medical treatment, but my health insurance company won't cover the cost. Is there anything I can do?"

A: Yes, there definitely is. Contact your health insurer, tell them you want to file an appeal, and ask what you need to do to start the process.

Then collect materials to support your argument, such as letters from your doctors describing why this is the best treatment for you, any medical journal articles or studies showing the treatment's effectiveness, etc.

You may also want to point out the health problems that will or can arise if the company doesn't pay for the treatment. Be sure to provide and estimate of the costs of treating those problems, especially if those costs would be significantly higher than paying for the treatment.

After you send in your appeal to your insurer, don't give up. Most people don't win the first round, but the odds of winning increase as you reach higher levels of appeals. The change of winning is highest when your appeal reaches the final level, called an "independent review organization."

For more tips on appeals, including templates, sample letters and detailed pointers, please see the appeals section of our website or call our consumer advocates at 1-800-562-6900. (If you live in a state other than Washington, please contact your own state's insurance department.)

Statement on U.S. House vote re: delaying the individual mandate

Note: The U.S. House of Representatives is scheduled to vote today on a bill that would delay for a year the individual mandate requiring most Americans to have health coverage starting in 2014. The penalty for not having coverage next year would be $95 or 1 percent of income, whichever is greater.

Statement from Washington Insurance Commissioner Mike Kreidler:

“Delaying the mandate would be unwise. This is an issue of personal responsibility. It’s unfair for people who can afford coverage to not have it, and to expect the rest of us to cover the cost of their care if they become seriously sick or injured. ”
“A critical part of the Affordable Care Act was the provision requiring that insurers take all applicants. No more screening out people because they have pre-existing medical conditions. But to make that work, you have to have as many people as possible in the insurance pool.
“Without an individual mandate to have coverage, people would likely just buy insurance when they knew they needed it. That’s like letting people get homeowners insurance only when their house catches fire.”

More states asking insurers if they're ready for climate change

From a press release we just sent out:

Insurance companies are facing growing scrutiny over their preparedness for climate change, an issue that could potentially affect insurance affordability and availability.

“I’m very pleased to see more states joining this effort,” said Washington Gov. Jay Inslee. “Being prepared is clearly in the best interests of both insurers and the families and businesses they insure.”

Last year, insurance regulators in Washington, California and New York surveyed major insurers about what steps they’re taking to address risks to their underwriting and investment portfolios.

This year, regulators in Connecticut and Minnesota have also joined the survey.

“Climate change is a potential game-changer for insurers,” said Washington Insurance Commissioner Mike Kreidler. “We want to make sure that this issue is on their radar.”

Climate change poses a double challenge to insurers. Extreme weather events and droughts, for example, can sharply increase claims. Climate-related issues could also have a significant effect on insurers’ investments, potentially affecting their long-term ability to pay claims.

“Unprepared insurers are much more likely to simply pull out of markets, leaving homeowners and businesses struggling to find alternative coverage,” said Kreidler, who chairs the National Association of Insurance Commissioners’ working group on climate change. “And when insurers abandon a market, government tends to end up as the insurer of last resort.”

Kreidler’s office has been surveying insurers on this issue since 2008.

“I wish some companies were further along,” said Kreidler, “but I’m encouraged to see that a growing number of companies are taking steps to incorporate climate change into their risk modeling and investment considerations.”

For a look at past surveys and responses for Washington, California and New York, please see California’s Climate Risk Disclosure Survey web page.

"I have two health insurance plans. Why do I still have to pay for some things?"

Q: "Why do I have to pay anything out of pocket? I have two health insurance plans. Between them, shouldn't they cover all the costs?"

A: Unfortunately, most insurers changed the rules under which they coordinate benefits within the past 10-15 years. Under the new rules, there's less economic advantage to have two (or more) health insurance plans.

As a general rule, if you have two health plans and you receive both of them on your own (i.e. you don't get either of the plans through your spouse), then generally the plan that you've had for the longest period of time should be the primary policy.

However, there are a lot of variables that can change the result. For example, if one of your plans is Medicare and you get the other plan through your employer, then having a Medicare plan can change the order of benefits, depending on the size of your employer.

Confusing? Yup. If you're having problems with an insurance issue and you live in Washington state, feel free to give us a call. We may be able to help. Our insurance consumer hotline is open from 8 a.m. to 5 p.m., Monday through Friday. The phone number if 1-800-562-6900. You can also reach us at AskMike@oic.wa.gov.

Insurance tips: Are my antiques and collectibles covered?

Q: "I have a number of rare antiques and collectible items of special value. Are they covered by my homeowners policy?"

A: Household goods usually are covered, but only to a limited value. If you have rare, valuable items, it's a good idea to talk to your agent or insurer about that, because you may need to insure them separately. This will likely cost more, but maybe not a lot more. And you'll know you're covered, rather than finding out after a fire, burglary, etc. that your policy was inadequate.

Also, you may need to get professional appraisals to establish the current, accurate value of the items.

For more tips, including inventorying your possessions, resolving claims, etc., please see our "insurance tips for homeowners" page.

Quick review: R in Insurance Conference

Yesterday the first R in Insurance conference took place at Cass Business School in London.

I think the event went really well, but as a member of the organising committee my view is probably skewed. Still, we had a variety of talks, a full house, a great conference dinner and to top it all, the Tower Bridge opened while we had our drinks at the end of the evening.

I will post a more complete review in the future with links to the files of the presentations and R code, once we had a chance to collate all the information.

Many thanks again to all who helped to make this event a success, particularly Andreas Tsanakas at Cass and to our sponsors Mango Solutions and CYBAEA.

Lecture room

Breakout area

Conference dinner at Cantina del Ponte

Tower Bridge

googleVis tutorial at useR!2013

Today Diego and I will give our googleVis tutorial at useR!2013 in Albacete, Spain.

googleVis Tutorial at useR! 2013

We will cover:
  • Introduction and motivation
  • Google Chart Tools
  • R package googleVis
    • Concepts of googleVis
    • Case studies
  • googleVis on shiny

Get Ready. Get Set. STOP!

T.S. Eliot famously wrote that the world would end “not with a bang but a whimper”. The Obama administration must be Mr. Eliot’s biggest fans.

The Patient Protection and Affordable Care Act (PPACA) was signed into law, amid great fanfare, on March 23, 2010. Major rules and edicts are released by Kathleen Sebelius, Secretary of Health and Human Services, almost every Friday. The entire process, if neither practical nor well thought out, has at least been well choreographed. So imagine the universal surprise everyone experienced with last Tuesday’s whispered announcement.

Mark Mazur, Assistant Secretary for Tax Policy at the Treasury Department, posted in an official blog that the enforcement of the employer mandate would be postponed for one year. The provision that medium and large employers (50+ employees) would be required to provide adequate and affordable health insurance to their workers has been put on hold.

In a blog!

Rules and regulations will be released next week. One of the most complicated portions of the PPACA, a series of requirements that have caused businesses and insurers uncounted headaches since the day the law was passed, is kicked back a year and the information is released through a blog, during a holiday week, while the President is on a plane thousands of miles from the U.S.

Now don’t get me wrong, this blog has asserted as recently as last week that the PPACA needed significant revisions and that it was a shame that the Democrats in Congress seemed incapable of fixing even the largest of problems. They still aren’t. The Administration should be commended for doing something, anything, to avert what has been called a “train wreck”.

Style Points – 0

We are waiting for the details to award points on substance.

Before we get to what this means, let’s first hear from the usual suspects. Fans of the PPACA were swift to point out that they never really liked the employer mandate.

Ezra Klein noted in Wonkblog, his excellent online work for the Washington Post, that the employer mandate is a “bad bit of policy” and that it was initially pushed by business groups.

Steve Benen wrote in MaddowBlog, the official blog of MSNBC’s Rachel Maddow, that this wasn’t really that big a deal since “the delay won’t affect the creation of the exchanges, which should help bridge the gap—folks working for businesses that don’t offer coverage will still be eligible for subsidies they can use to buy insurance in their state marketplace.” (Different site, same picture)Striking a conciliatory tone, E. Neil Trautwein, a vice-president of the National Retail Federation, said that is was a ‘wise move” and that it “will provide employers and businesses more time to update their health care coverage without the threat of arbitrary punishment.”

The Republican Leader of the Senate, Mitch McConnell (R-Ky) released a statement that “the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.” Translation – I got nothin’

What does it mean?

According to our friends at Anthem Blue Cross, the immediate results of this decision by the Obama Administration are that certain parts of the PPACA will go into effect on 2015 instead of 2014:
  • Employers will not have to report certain information to the IRS. This has been referred to as “employer reporting requirements”.

  • The rule that says large employers have to offer coverage to full-time workers or pay a penalty. “Large employer” in this case is a business that has 50 or more full-time or full-time equivalent employees (that work an average of 30 hours a week).

  • The rule that says coverage offered by large employers cannot be more than 9.5% of a worker’s pay for self-only coverage.

  • I would add a fourth. If employers aren’t required to offer coverage, then group health policies (employer sponsored) are not required to comply with the PPACA’s laundry list of Essential Health Benefits. Large employers will still be able to determine whether they choose to offer Birth Control, IUD’s, and the Morning After Pill as well as other controversial elements of the President’s plan.

    This last issue has been a huge point of contention. The federal government now has an additional twelve months to resolve these issues. Unfortunately, only Congress can repair the major flaws of the PPACA, and that is unlikely to happen. Even if the Democrats were capable of drafting the legislation necessary to make the PPACA effective, the Republicans are too dug in, too invested in the law’s failure at any cost, to throw it a lifesaver.

    So we have been set adrift. Our only hope will be more regulatory fixes, engineered by the Administration, released by underlings in blogs or buried deep within reports. All the while employers work and rework their business plans to comply with rules that may change at any time.   Dave   www.bcandb.com

    Flood insurance changes run into resistance

    From AP:
    Just a year after Congress imposed significant changes in the government's oft-criticized flood insurance program, howls of protest from homeowners facing higher premiums have coastal lawmakers pressing for delays that would preserve below-cost rates for hundreds of thousands of people in flood-risk areas.

     Here's the full story, in case you missed it. Curious to see if  your community is scheduled for a rate update? Enter your zip code here.

    What you need to know about boating and insurance

    Summer is finally here! And it arrive before the Fourth of July - a rarity in the Northwest. Many of us like to go boating, especially with crab season now open. If you own a boat or rent a boat, you should consider boat insurance. Here's why:

    Boating liability insurance in Washington state is not mandatory, but it's a good idea if you want to protect yourself and your passengers.  You can purchase boat insurance for a fairly reasonable price.  Coverage protects your boat from physical damage as well as your passengers if they're injured.  It also protects your boating equipment.

    Check with the insurance company that covers your home and auto to see if it'll cover your boat, too. You could get a discount for having multiple policies with them.  If you're not sure what type of coverage you need, just ask your agent.  He or she can help make sure you're properly insured. Some small boats, like rowboats or dinghies may be covered under your homeowner policy - check your policy to be sure.

    Here's more information about boating regulations in Washington state.

    There is definitely R in July

    The useR!2013 conference in Albacete, Spain, will commence next Wednesday, 10 July, and on the day before Diego and I will give a googleVis tutorial.

    The following Monday, 15 July, the first R in Insurance event will take place at Cass Business School and I am absolutely delighted with the programme and the fact that we are sold out.

    On Tuesday, 16 July, the LondonR user group meets in the City, awaiting presentations by Andrie de Vries (Revolution Analytics), Rich Pugh (Mango Solutions) and Hadley Wickham (RStudio).

    Finally on Friday, 19 July, the next Cologne R user group meeting is scheduled with two talks: Predicting the Euro/Dollar exchange rates with Twitter (Dietmar Janetzko) and Networks in R using igraph (Afshin Sadeghi).

    Our Insurance 5000 Bldg is closed today due to a malfunctioning cooling system

    Effective immediately, our Insurance 5000 Bldg. in Tumwater is closed today due to a malfunctioning cooling system. All online services are still available and our other offices in Seattle, Olympia and Spokane are open. We expect the building to be back open tomorrow.