IRS to Continue Accepting Tax Returns Without Indication of Health Insurance

The IRS has announced that it will continue to process tax filings of individuals whose returns do not indicate whether they have maintained health insurance as required under the Affordable Care Act (ACA). The announcement is in direct response to the President’s January executive order to ease the ACA’s economic and regulatory burdens.

In recent years, individuals were instructed to check a box on line 61 of Form 1040 if they had health insurance all year. Those who did not were instructed to attach an exemption form (Form 8965) or make a shared responsibility payment. Some taxpayers did not check the box on line 61 or include an exemption form. These “silent returns” were still processed and individuals could claim any refund to which they were entitled.

Read the full compliance update…

Use of Drones for Commercial Insurance Purposes on the Rise

Interestingly enough, the use of drones is increasing among insurance companies, among other types of businesses. Unmanned aircraft have been found to be very useful for insurers, especially in the adjustment of property claims. In the past, insurance companies were apprehensive to use drones in light of the cumbersome federal regulations against it. The new 2016 FAA rule revisions for drones eased the requirements on using them for commercial purposes, making the aircraft more attractive than ever to insurance companies.

It is projected that, in the future, drone usage will be as commonplace in insurance companies as computers and mobile devices.

Here are some of the uses insurance companies are finding for drones:

Continue reading “Use of Drones for Commercial Insurance Purposes on the Rise”

Online Security Breaches Made Big News in 2016

The year 2016 witnessed some of the biggest online security breaches ever seen. The attacks were staggering in size, demonstrating that cyber hackers have become increasingly more sophisticated and dangerous. And yet, despite the proliferation of security leaks and “distributed denial of service” (DDoS) attacks, many companies are unaware that they can and should mitigate their financial damages should they suffer an attack, by securing cyber liability insurance.

Here are some of the major security breaches that occurred in 2016:

  • February 8, 2016 – University of Central Florida
    • Data breach that affected approximately 63,000 students, faculty, staff and alumni.
  • February 9, 2016 – U.S. Department of Justice
    • Hackers broke in and released data on 10,000 employees of the Department of Homeland Security and 20,000 FBI employees. Information stolen included names, positions, phone numbers and email addresses.

Continue reading “Online Security Breaches Made Big News in 2016”

Vulnerable and Oblivious: Cyber Risk in High Net-Worth Personal Lines

Although some small businesses still need convincing, the commercial community is generally starting to accept cyber insurance as a necessary business practice.

You can’t say the same of cyber insurance in personal lines. Given the potential payoff of hacking a company compared to an individual, that makes complete sense—until you consider the high net-worth market.

“A lot of people today have focused on commercial aspects of cyber, but as a consumer, you face many of these same challenges,” says Eric Cernak, vice president for reinsurer Munich Re America.

From phishing attacks on bank and medical accounts to tax and insurance fraud, “folks with higher income and more assets—whether they’re financial or physical or something else—are more of a target for cybercriminals because they have more to lose,” points out Jessica Groopman, independent industry analyst and IoT adviser. “If you’re talking about a celebrity, for example, they’re going to be more attractive to a hacker than someone who’s renting a studio apartment.”

“For typical people, it might not be worth that level of effort,” Cernak agrees. “But if you’re talking about high net-worth people, criminals get very creative with how they can monetize some of these attacks. You almost have to be a little bit paranoid, because that’s the only way you’re going to even come close to defending yourself.”

According to Julie Conroy, research director at Aite Group, financial institutions are seeing 100% year-over-year increases in application fraud. “That’s because there is so much data in the hands of criminals right now, and they’re using it,” she says.

Even more alarming, the sophistication of cybercrime against individuals is increasing at similar rates. “We used to see that somebody would just steal a credit card,” recalls Christie Alderman, vice president, client product and service manager at Chubb. “Now, we see situations like people stealing your medical identification and your insurance coverage, and going to get medical services under your name. Now their blood type’s on your records. It’s become a lot more complex.”

Or, “you hear about successful attacks on health care providers where criminals get ahold of 80 million records that have full identity information, including social security numbers,” Conroy says. “They then turn around and use that to open new lines of credit in the names of all those people. And it takes a long time for consumers to notice—the way most of them find out is they get that pink collections slip in the mail when the criminals have decided it’s time for them to disappear and move on to greener pastures.”

Read More…

4 Ways To Lessen Winter Insurance Woes

For residents of the East Coast, the winter of 2014–15 served up some of the snowiest and coldest conditions on record.

For insurance companies, this was also one of the costliest seasons on record — more costly in fact than Superstorm Sandy.

The majority of homeowners’ losses were the result of ice dams and frozen pipes, many of which could have been prevented.

Based on these insights, we have compiled advice that you can share with your clients to help them mitigate winter weather-related risks, this year and beyond:

1. Fortify an unoccupied home

Risk: Homeowners who are away from home at the time of a loss are at greater risk of devastating damage due to a delayed response. In fact, PURE saw that members who were away from home when a loss occurred experienced more than four times the amount of damage from burst pipes.

Recommendations: Install a whole-house leak detection system that includes an automatic water shut-off option. These devices, such as Leak Defense System, can detect abnormalities in a pipe’s water flow and automatically shut off the water supply—preventing a major loss from occurring. Smart thermostats, like Nest, can remotely alert homeowners of any temperature changes that could lead to a frozen or burst pipe.

Read More…

Protect Against Car Hacking and Auto Theft

If you own a car that was made by the Volkswagen Group since 1995, you may have heard that the keyless entry system can expose your vehicle to break-ins and theft—or perhaps you’ve already experienced one of these unlucky events. And Volkswagen owners aren’t the only ones at risk.

A team of researchers at the University of Birmingham recently found that a majority of the 100 million Volkswagen vehicles sold in the last decade—most with keyless entry systems—are vulnerable. Car hackers can use cheap, easily available radio hardware to intercept signals from a key fob and then use those signals to “clone” the key. The same research team also found hacking vulnerabilities in a system used by other manufacturers, including Chevrolet, Ford and Renault.

Further, the German automobile club ADAC recently announced results from a study testing a hack that extended the range of wireless key fobs. This means a key fob that would typically only communicate with its car from just a few feet away could, when hacked, activate the unlocking system or ignition from inside the house, allowing a perpetrator to open the vehicle and even drive away before the owner makes it outside. As Wired explained, the researchers pulled off the feat with a pair of radio devices (one held a few feet from the car and the other near the key fob) made with a few cheap chips, batteries, a radio transmitter and an antenna. Despite such lo-fi technology, the study found 24 different cars from 19 manufacturers to be at risk.

So what can you do about car hacking? There’s plenty of advice out there. One AAA spokesperson told USA Today that since heavy metal cages around a key fob can block an amplifier, you could keep your keys in the microwave, refrigerator or freezer (check with your car dealer to be sure this won’t damage the batteries first), or simply wrap them in aluminum foil while at home. Some companies, such as FobGuard, sell protective Faraday fob shields. Among other precautions,, the Canadian automotive website, recommends locking your car with the central door lock button rather than a wireless key fob, using an old-fashioned steering wheel lock, and even considering the purchase of a car from Tesla or General Motors, which hire “white hat” (ethical) hackers to look for bugs. And get to know your car’s OBD, or on-board diagnostic system, the port that gives owners and repair technicians access to the various computer systems that operate in your vehicle. Don’t let insurance programs or anyone else plug a “dongle” into the ODB port, which could open it up to hackers; and consider an OBD lock, which offers extra protection for your car’s precious data. These few simple steps can put drivers back on the road to peace of mind.


6 Wise Insurance Resolutions for 2017

As we begin a new year, it’s a good time to remind your insurance clients of ways they can boost their financial safety net and avoid future property and casualty insurance claims.

Whether it’s taking the time to read and understand insurance policies or creating a home inventory, there are smart ways clients can protect their financial well-being by resolving to follow a few simple recommendations.

Here are six New Year’s resolutions your P&C insurance clients can make to be prepared for or avoid common claims in 2017, as suggested by USA Today and Nerdwallet writer, Lacie Glover:

1. Create a home inventory.

Damaged property after a fire or natural disaster can be devastating, and filing the insurance claim can be overwhelming. But a home inventory that you’ve kept up-to-date can help you justify the items that you’re claiming.

The inventory can be neatly handwritten, on an Excel spreadsheet, on a form downloaded from the internet, in a video of your belongings, in information added to an app or in some other form of record. What’s important is that every item is accounted for, with as much detail as possible.

2. Read your insurance policies.

Most insureds don’t read every word of their policy or its endorsements, which are a key part of any insurance policy. The key to making a claim is understanding your policy.

For auto and home insurance, look for the policy’s declarations page. Make sure you understand the limits and deductibles of each policy.

Read More…

Why Auction Estimates Are Not Insurance Appraisals.

Collectors often have difficulty in deciding what type of appraisal to use for insurance purposes. Aggressive marketing by auction houses (in which valuation services are offered, often for free, in the hope that a collector will decide to sell) has led many to believe that auction estimates can be used for insurance. However, it may not always be prudent to rely on these, as insurance compensation based on auction estimates may prove insufficient to purchase replacements for lost or damaged works.

There are many reasons for this. Auction houses are in the business of valuing goods for regular sale. They deal in large volumes and have business relationships and obligations to both sellers and buyers, not to mention their own interests. This can affect an estimate. Note, however, that the litigation cases discussed in this article relate to situations auction houses may find themselves in when providing estimates in their usual business; it is conceivable that they may encounter similar challenges when giving estimates for insurance purposes.

Is there such a thing as a free lunch? Auction houses may not have time to conduct proper research.

Consider the case of Guido Ravenna of Buenos Aires. In 1999, he received an offer from a South American dealer for a family heirloom known as the “Pieta,” conditional on immediate acceptance. Coincidentally, his wife was in New York and showed photographs of the painting to Christie’s Old Masters expert who thought the “Pieta” was by Nuvolone, a minor 17th-century Italian artist, and worth between $10,000 to $15,000.

Ravenna then accepted an offer of approximately $40,000 for the picture and some items of furniture. Six months later, the Pieta was consigned to the same branch of Christie’s by the dealer who had purchased the painting from Ravenna. After a thorough physical examination, Christie’s determined it to be a “highly important” painting by the Italian Baroque painter Ludovico Carracci and, in 2000, sold it at auction for $5,227,500 to the Metropolitan Museum of Art, where it now hangs as “The Lamentation.”

Read More…

Believe it or not: The ‘Coverage for Dummies’ Hall of Fame

For the past eight Januaries I have published an article called “Coverage for Dummies.” It’s a review of the most notable cases, from the year just concluded involving people who did, well, really dumb stuff, and then turned around and sought insurance coverage for their consequences.

Liability insurance is, by definition, a product that provides financial protection when things don’t turn out as planned. Most of the time when this occurs it’s simply a case of bad luck or because, well, stuff just happens. But there are other times when liability claims are the result of peoples’ actions that were so ill-conceived or foolhardy that a claim was as predictable as day following night.


Eventually the incredulous behavior leads to a lawsuit, which leads to an insurance claim, which leads to a coverage dispute, which leads to a reported decision, which leads to the final stage of this insurance circle of life — an appearance in “Coverage for Dummies.”

Read More…

President Trump Issues Executive Order on the Affordable Care Act

President Trump moved swiftly after taking office on Friday, issuing an Executive Order intended to minimize the economic and regulatory burdens of the Affordable Care Act (“ACA”). The order is somewhat symbolic and has no immediate effect on employers, many of whom are in the process of complying with the ACA’s onerous reporting requirements (Forms 1094 and 1095), which are not rescinded by the order.

The order directs HHS and the heads of other departments and agencies (e.g., U.S. Department of Labor, Treasury Department) to exercise all available authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.  It should be noted that employers are not among those explicitly listed as requiring protection from regulatory burdens.


The order is broadly drafted and does not specify which provisions of the law should be targeted. However, to the extent that following the order would require revision of regulations issued through notice-and-comment rulemaking, the agencies will need to comply with the Administrative Procedures Act (“APA”).

Under the APA, agencies cannot rescind existing regulations until they engage in a new notice-and-comment rulemaking process (including required public comment period and delayed effective dates) and observe other procedural requirements. In practical terms, the APA makes it difficult for an incoming President to overturn final regulations implemented by a predecessor. Regulations that haven’t taken effect can be suspended while they are reviewed to determine if they conform to the new administration’s agenda, or if modification or revocation is necessary.  To that end, the President’s chief of staff has instructed federal agencies to cease issuing new regulations and withdraw rules that have been sent to the Office of the Federal Register until they can be reviewed by the new agency heads.

Read More…