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March 2010

Earthquakes in New York City far from Unusual, so Should Consumers Consider Buying Earthquake Insurance? Earthquake Peril Isn’t Covered By Standard Insurance

The earthquake in Haiti showed that one of the world’s poorest nations was ill prepared for the disastrous consequences that can occur after a sudden, violent shaking of the earth’s surface. So, would a place like New York City be better prepared?

If preparedness includes having a home or business property insured against an earthquake, the answer is that New York is probably not prepared. Earthquake insurance accounted for only $15 million of the total $3.9 billion in premiums written by property/casualty homeowners’ insurers in the state in 2007. In 2008, the amount of earthquake policy premiums remained essentially the same.

“Many people are probably unaware that standard homeowners’, renters and business insurance policies specifically exclude covering damage caused by earthquakes. Coverage can be obtained, but it usually needs to be purchased as a separate policy or as an endorsement to an existing homeowners’ policy,” Insurance Superintendent James Wrynn said.

While New York City has significantly less frequent damaging earthquakes compared to a place like California, it is considered a region at high risk because of the city’s dense population and its concentration of buildings and infrastructure. Some scientists believe there is a greater risk than previously believed because of a series of subtle but active faults in the region.

Dozens of small quakes have been felt in the city. A magnitude 2.4 earthquake, believed to have been caused by a fault under 125th Street, occurred in 2001. Magnitude 5.0 earthquakes occur in New York about every century. (The earthquake in Haiti was 7.0.) In 1884, an earthquake centered off Rockaway toppled chimneys and its shock was felt from Virginia to Maine. New Yorkers have also felt shocks from earthquakes centered as far away as Canada.

The Federal Emergency Management Agency ranks the New York City among the top 40 high-loss potential urban areas in the country. The New York City Area Consortium for Earthquake Loss Mitigation, a group of public and private stakeholders including scientific and emergency management organizations, said in 2003 that even a moderate earthquake here could cause deaths and significantly impact the economy.

Unlike California, where residential property insurers must offer their customers the opportunity to buy earthquake coverage, property insurers in New York are not required to do so.

“People need to make informed decisions about buying any kind of insurance. They need to understand potential risks and their potential for financial loss should a disaster occur and then decide how best to protect themselves,” Wrynn said.

Earthquake insurance provides financial protection against the cost of damage to a structure caused when there is a sudden and rapid shaking of the earth’s surface. Policies carry a deductible, usually in the form of a percentage of the structure’s replacement value.

Premiums are based on the type and age of the structure being insured, as well as other characteristics, such as a structure’s proximity to known fault lines. The Insurance Information Institute says earthquake insurance for a brick home would likely cost between 60 to 90 cents per $1,000 of coverage in New York, compared to the Pacific Northwest where it would cost from $3 to $15 per $1,000 for a similar home.

While homes are not covered by standard insurance, cars and other vehicles are covered for damage caused by earthquakes under the optional comprehensive coverage part of an auto insurance policy.

Additional information about earthquake risks can be found on the websites of the Federal Emergency Management Agency, www.fema.gov, and the U.S. Geological Survey (USGS), usgs.gov .

Consumers with questions about insurance coverage should always first contact their insurance company, broker or agent

Source: www.ins.state.ny.us

Insurance Commissioner Poizner Announces $20 Million in Restitution in Staffing Services Inc. Fraud Case

California Insurance Commissioner Steve Poizner today announced that Bellflower-based Staffing Services Inc. has been ordered by the Los Angeles County Superior Court to pay $20 million in restitution after a plea bargain was reached Jan. 15 in a workers' compensation insurance fraud case.

"Business owners have to realize that they have a moral and legal obligation to report the correct number and types of employees and then make sure they have adequate workers' compensation insurance for those employees," Commissioner Poizner said. "This is not a victimless crime. We all pay when a company chooses not to play by the rules as the rest of us."

Staffing Services Inc. is a temporary employment agency holding contracts for thousands of employees. The California Department of Insurance (CDI) launched an investigation into Staffing Services after the State Compensation Insurance Fund (State Fund) notified CDI of the suspected fraud. Following a two-and-a-half year CDI investigation, charges against Staffing Services were filed Nov. 26, 2008 alleging an attempt to defraud State Fund of more than $18 million in workers' compensation insurance premiums owed from 2002 to 2005. With penalties, the amount negotiated during the plea bargaining amounted to $20 million.

It was alleged that Staffing Services purposely misrepresented the types and number of employees in order to pay a smaller amount in premiums.

Source www.insurance.ca.gov

Four Arrested on Health Care Fraud Charges

COLUMBUS — Ohio Department of Insurance Director Mary Jo Hudson announced the arrest of four Ohioans Thursday, January 28, 2010 as the result of a joint healthcare fraud investigation conducted by the Ohio Department of Insurance, the Ohio Attorney General’s Office, the US Department of Health & Human Services and the FBI.

 Barbara Elise Miller of Coshocton and owner of Three Rivers Infusion and Pharmacy Specialists, was arrested and charged with two counts of witness tampering, two counts of obstruction of an official proceeding, and one count of concealment of records. Ms. Miller’s husband Dana Campbell, also of Coshocton and Vice President of finance for Three Rivers, was also arrested in and charged with one count of concealment of records.

 In December 2008, Three Rivers was served with a subpoena and ordered to produce 118 patient files, as the company is suspected of overbilling insurance companies for services never rendered. Ms. Miller only provided the government with 21 of the 118 files. In December of 2009, government agents found many

Two former employees of Three Rivers, James Ireland, 39, of Coshocton, and Douglas Bolden, 55, of Zanesville were also arrested. The two individuals were each charged with one count of obstruction of an official proceeding as they accepted “severance” payments from Miller in return for their silence about Miller’s activities.

 The defendants appeared Thursday before Judge Leslie Wells in the U.S. District Court in Columbus, and were released on a personal recognizance bond. Ms. Miller and Mr. Campbell were required to surrender their passports.

Source: www.ohioinsurance.gov

OSHA releases workplace injury and illness information
Data represents administration's "Open Government" policy

WASHINGTON -- Every year since 1996 the Occupational Safety and Health Administration (OSHA) has collected work-related injury and illness data from more than 80,000 employers. For the first time, the Agency has made the data from 1996 to 2007 available in a searchable online database, allowing the public to look at establishment or industry-specific injury and illness data. The workplace injury and illness data is available at http://www.osha.gov/pls/odi/establishment_search.htm as well as data.gov.

OSHA uses the data to calculate injury and illness incidence rates to guide its strategic management plan and to focus its Site Specific Targeting (SST) Program, which the agency uses to target its inspections.

"Making injury and illness information available to the public is part of OSHA's response to the administration's commitment to make government more transparent to the American people," said David Michaels, Assistant Secretary of Labor for OSHA. "This effort will improve the public's accessibility to workplace safety and health data and ensure the Agency can function more effectively for American workers."

Information available at the Data.gov and www.osha.gov Websites includes an establishment's name, address, industry, associated Total Case Rate (TCR), Days Away, Restricted, Transfer (DART) case rate, and the Days Away From Work (DAFWII) case rate. The data is specific to the establishments that provided OSHA with valid data through the 2008 data collection (collection of CY 2007 data). This database does not contain rates calculated by OSHA for establishments that submitted suspect or unreliable data.

Data.gov provides expanded public access to valuable workforce-related data generated by the Executive Branch of the federal government. Although the initial launch of data.gov provides a limited portion of the rich variety of Federal datasets presently available, the public is invited to participate in shaping the future of Data.gov by suggesting additional datasets and site enhancements to provide seamless public access and use of federal data.

Source: www.osha.gov

US Department of Labor's OSHA cites C.A. Franc $539,000 for willful fall hazard violations following worker's death at Washington, Pa., worksite. Owner pleads guilty to related criminal charge

WASHINGTON, Pa. - The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has fined the C.A. Franc construction company $539,000 following the investigation of a roofing worker who fell 40 feet to his death at a Washington worksite. The Valencia, Pa.-based roof installer - whose owner is Christopher A. Franc - was cited for 10 per instance willful citations for failing to protect workers from falls.

"Mr. Franc knowingly and willfully failed to protect his workers from falling to their death," said Assistant Secretary of Labor for OSHA Dr. David Michaels. "We will not tolerate this type of blatant and egregious disregard for the health and safety of workers."

OSHA began its investigation immediately following the worker's death on Aug. 15, 2009, and found the C.A. Franc company had failed to provide any fall protection to its employees working on a pitched roof 40 feet off the ground. In addition, Mr. Franc failed to train a newly hired college student in hazards and the necessary safety measures for roofing work. As a result of the investigation, the company has been cited for 10 alleged per-instance willful violations, one for each employee working unprotected on the roof, with a proposed penalty of $490,000, and one additional alleged willful violation for failing to train the new employee, with a penalty of $49,000.

General contractor Hospitality Builders Inc. also has been cited with one willful violation and a proposed penalty of $70,000 for failing to ensure that C.A. Franc workers had fall protection.

"This fall fatality was one of five that occurred during a 15-day span in the Pittsburgh area," said John M. Hermanson, OSHA's regional administrator in Philadelphia, Pa. "Falls are the leading cause of fatalities in the construction industry. Failure to provide employees with fall protection is unconscionable. We urge construction companies to take the necessary action to ensure their workers are protected."

Source: www.osha.gov

In an Accident? Make Sure You Get Enough Info! Insurance Department reminds Ohioans to get as much information as they can to assist in the claims process

COLUMBUS — The recent winter storms over the past month have caused hundreds of accidents across the state. Ohio Department of Insurance Director Mary Jo Hudson is offering tips on what to do in the event of an accident and information drivers should get if they are in a fender bender.

“Getting the proper information is important as it will make the claim filing process go that much smoother,” said Director Hudson.

Director Hudson suggests that Ohioans:

Be safe! Make sure you stay away from moving traffic after an accident. Do not put yourself in a dangerous situation. Move your vehicle out of harm’s way if you are able.

Assist others if necessary – Check on passengers in your car and in the other vehicle(s) and see if they need help, but only if it doesn’t put you in a dangerous situation. Call emergency personnel if necessary

Take photos – Try to take as many pictures as possible of the damage.Also, sketch a diagram of the accident, making sure to label your car, any other vehicles involved, streets, highways and other points of interest.

Exchange information – Get the name, address, phone number, date of birth from the other drivers involved in the accident.  Also, get the driver’s insurance information, including policy. If the driver of the car is not the owner of the vehicle, get the insurance information of the vehicle as well.

Get witness information – Get the contact information of those who may have seen the accident. Your insurance company and/or police may want to speak to them later.

File a police report – If the accident is not serious, you do not need to call the police to have them do a report at the scene.  Police may also be too busy to respond to a minor accident. If this is the case, you can move your vehicles to the side of the road, exchange information and then file a report later. If an officer does come to the scene, make sure to get his information as well (name, badge number, etc.)

Source: www.ohioinsurance.gov

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