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November 28, 2022

Texas Lawsuit Challenges ACA’s Preventive Health Services Requirement

A key component of the Affordable Care Act is in jeopardy, as a federal lawsuit in Texas challenges the law's requirement that most insurers cover a variety of preventive health services ranging from depression screenings to mammograms. In September, a federal district court judge ruled that the method by which a federal task force determines which services are covered is unconstitutional, and that the health-insurance requirement for HIV-prevention medications violated a company's religious freedom. Both sides of the case are waiting to see if the court will issue a nationwide injunction to overturn the requirement that most commercial insurers fully cover dozens of preventive-care services and screenings, with the timing of the judge's next move unknown and the case likely to end up before the Supreme Court. If the Texas ruling is upheld, more than 150 million people could lose access to many of the free health screenings that have become a staple of the American healthcare system since the Obama-era law was passed in 2010. Health officials and advocates say the task force's decision to stop covering preventive services would be a blow to public health. They claim that having access to free preventive care has saved lives and reduced healthcare spending because patients are more likely to detect medical problems early, before they become more expensive to treat. "This would have pretty significant implications for healthcare coverage and significant implications for patients," said Mark Polston, a partner in King & Spalding LLP's healthcare practice. Donna Marie, a semiretired writer in Charlotte, N.C., believes she is alive today because she had a colonoscopy seven years ago, which was covered by her new ACA plan. Ms. Marie was later diagnosed with late-stage cancer and underwent treatment. "I'm a seven-year survivor," Ms. Marie, 67, says. "I wouldn't have gotten them done if I hadn't had those screenings covered." I would not have survived cancer." If the government is no longer able to mandate it, there will be no requirement for insurers or employers to drop that coverage, according to Michael Cannon, health policy studies director at the Cato Institute. He predicted that many, if not most, employers would continue to provide such coverage. Employers frequently support preventive-care services because they believe it reduces absenteeism, assists in recruiting and retaining workers in tight labor markets, and helps reduce healthcare spending costs. According to an October survey of 25 employers representing 600,000 employees conducted by the Employee Benefit Research Institute, 80% of human-resource decision makers said they would continue to cover preventive services in full if the court decision is upheld. Prior to the ACA, insurers, employers, and states made major decisions about which preventive services to cover based on the type of plan. Over the objections of Republican critics and some insurers concerned about premium cost increases, the health law changed that by requiring private health plans to fully cover preventive care with no cost sharing. The United States Preventive Services Task Force is an independent volunteer panel of health experts that recommends which preventive services should be covered by health plans and Medicaid expansion. The task force's recommendations resulted in free mammograms and screenings for colon cancer, HIV, cervical cancer, and gestational diabetes. Six individuals and two businesses objected to the ACA mandate that they provide insurance or purchase plans that cover certain preventive services. Their lawsuit claimed that the services were unnecessary and violated their religious beliefs. According to the lawsuit, the plaintiffs objected to coverage of contraception, screenings for sexually transmitted diseases and drug use, and vaccination against human papillomavirus, also known as HPV. They also objected to the inclusion of pre-exposure prophylaxis, or PrEP, a medication that aids in the prevention of HIV infection. In September, Judge Reed O'Connor of the United States District Court for the Northern District of Texas ruled that the requirement that the Preventive Services Task Force's recommendations be covered by most health plans violates the Constitution because the task force must be appointed as officers by the Senate or the president, rather than chosen as volunteers. He denied claims that the two other entities' preventive-care recommendations were improper. The plaintiffs are asking Judge O'Connor to overturn all preventive-coverage requirements recommended by the task force since 2010. Both parties have prepared comments for the judge to consider before deciding how broadly the ruling will apply. Judge O'Connor could limit any relief to just the plaintiffs in the case, or he could issue a nationwide injunction to overturn the task force's recommendation that insurers cover preventive services. The federal government will almost certainly file an appeal with the United States Court of Appeals for the Fifth Circuit, requesting that the coverage requirements remain in effect during the appeal process. Benefits lawyers advise insurers to monitor the case closely but to make no changes to coverage at this time. Following the appeals court's decision, a number of legal experts predict that both parties will petition the United States Supreme Court to hear the case. In 2018, Judge O'Connor, who was nominated by George W. Bush, ruled that the ACA was unconstitutional because Congress removed a penalty for people who do not have health insurance. The case was heard by the Supreme Court, which upheld the law in 2021. Critics of the law claim that the preventive-care mandate has raised premiums by requiring people to purchase health plans that may cover services they do not require, such as contraception. They argue that by eliminating the requirement for no-cost coverage, insurers will be able to offer more affordable plans and people will be able to shop for the preventive care they require. "People have a right to choose whether and what kind of health insurance they need and want," said Mr. Cannon, who also served as a paid expert witness in the Texas lawsuit challenging preventive-care coverage. "The government should not require people to purchase any service, preventive or otherwise," he said. Others warn that, while the Texas lawsuit would not abolish the ACA, it would weaken a key component of it. "This case does not jeopardize the ACA's very existence," said Larry Levitt, vice president of health policy at the Kaiser Family Foundation. "However, it would erode coverage under the ACA, which affects tens of millions of people."
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November 28, 2022

Walmart Shooting Highlights Need for Workplace Violence Prevention

The mass shooting at a Walmart in Virginia last Wednesday was just the latest example of an employee-initiated workplace shooting. While many companies offer active shooter training, experts say there is far less emphasis on how to prevent workplace violence, particularly how to identify and address concerning behavior among employees. According to workplace safety and human resources experts, workers far too often do not recognize warning signs and, more importantly, do not know how to report suspicious behavior or feel empowered to do so. "We've built an industry around keeping bad guys out. We have invested heavily in physical security measures such as metal detectors, cameras, and armed security guards "said James Densley, a criminal justice professor at Metropolitan State University in DePaul, Minnesota, and co-founder of the nonpartisan research organization The Violence Project. However, in too many workplace shootings, "this is someone who already has access to the building," he said. Because the shooting was carried out by a team leader, the Walmart shooting raised concerns about whether employees felt empowered to speak up. According to Walmart, the gunman was 31-year-old Andre Bing, who had been with the company since 2010 and whose most recent position at the Chesapeake, Virginia, store was "overnight team lead." According to police, he opened fire on coworkers in the break room, killing six and injuring six others before apparently killing himself. Employee Briana Tyler, who survived the shooting, stated that the gunman did not appear to be targeting anyone in particular. Tyler, who started working at Walmart two months ago, said she had never had a bad experience with him, but others warned her that he was "the manager to watch out for." She claimed Bing had a history of falsely accusing people. Family members identified two of the deceased victims as Tyneka Johnson, 22, and Brian Pendleton, 39. The remaining adult victims were identified as Lorenzo Gamble, Kellie Pyle, and Randall Blevins by the city of Chesapeake on Wednesday evening. According to the city, the identity of the sixth victim, a 16-year-old boy, was withheld because he was a minor. After the 2019 shooting season, the policy will be changed. In 2015, Walmart launched a computer-based active shooter training program that emphasized three pillars: avoid the danger, keep your distance, and defend. Then, in 2019, following a mass shooting at a Walmart in El Paso, Texas, in which an outside gunman killed 22 people, Walmart addressed the public threat by discontinuing sales of certain types of ammunition and asking customers not to openly carry firearms in its stores. It now only sells hunting rifles and ammunition. Walmart did not respond specifically on Wednesday to questions about its training and protocols for protecting its own employees. The company only stated that it reviews its training policies on a regular basis and will continue to do so. Densley believes that employers should establish open channels for employees to express concerns about their coworkers' behavior, such as confidential hotlines. He noted that too often, workers focus on "red flags," when they should be looking for "yellow flags" — subtle changes in behavior, such as increased anger or not showing up for work. Managers, according to Densley, must work with those individuals to get them counseling and conduct regular check-ins. Indeed, the Department of Homeland Security's active shooter manual states that human resource officials must "create a system for reporting signs of potential violence behavior." It also encourages employees to report any suspicious behavior, such as increased absenteeism or repeated violations of company policies. According to Liz Peterson, Quality Manager at the Society for Human Resource Management, an organization of over 300,000 human resource professionals, many employers may not have such prevention policies in place. She cited a 2019 SHRM survey of its members, which found that 55% of HR professionals didn't know if their organizations had policies in place to prevent workplace violence, and another 9% said they didn't. In contrast, 57% of HR managers said they had received training on how to respond to violence. A recent federal government report examining workplace violence over three decades discovered that workplace homicides have increased in recent years, despite remaining significantly lower than a peak in the mid-1990s. Fewer Workplace Homicides The latest Walmart shooting was the second major mass shooting in the United States in as many days. A suspect opened fire in an LGBTQ nightclub in Colorado Springs, Colorado, in the early morning hours of Sunday, killing five people and injuring 17 others. Between 2014 and 2019, the number of workplace homicides in the United States increased by 11%, from 409 to 454. According to the report, which was released in July by the Departments of Labor, Justice, and Health and Human Services, that was still down 58% from a peak of 1,080 in 1994. The report discovered that workplace homicide trends largely mirrored national homicide trends. However, the country's recent spike in mass public shootings is raising awareness among employers about the importance of addressing mental health in the workplace and preventing violence — as well as the liabilities employers may face if they ignore warning signs, according to Peterson. In one high-profile case, the family of a victim filed a wrongful death lawsuit against the Northern California Transportation Agency earlier this year, alleging that the agency failed to address an employee's history of threatening behavior before he shot and killed nine coworkers at a light railyard in San Jose in 2021. The transportation agency released more than 200 pages of emails and other documents revealing that the shooter, Samuel James Cassidy, had been the subject of four workplace investigations, and one worker was concerned that Cassidy might "go postal." That phrase comes from one of the deadliest workplace shootings in American history, when a postal worker shot and killed 14 workers in Edmond, Oklahoma, in 1986. "Workplace violence is something you never expect to happen to your organization until it does, and unfortunately,
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November 28, 2022

Life Insurers Paid a Record $100 Billion in Death Benefits in 2021

U.S. life insurers paid a record $100 billion in death benefits in 2021, fueled by another year of Covid-19 deaths. According to the American Council of Life Insurers (ACLI), payouts will increase 11% in 2021 to $100.19 billion, owing primarily to the pandemic. The increase followed a 15% year-on-year increase in 2020, when death-benefit payments totaled $90.43 billion. The ACLI compiles data from insurers' annual filings with state insurance departments. The group cannot break down causes of death due to limitations in the filings, but it is reasonable to attribute the majority of the increases to the pandemic, according to Andrew Melnyk, ACLI vice president of research and chief economist. The year-over-year increases are among the highest seen since the 1918 flu pandemic, when payments increased by 41%. According to the ACLI, they are significantly higher than the 4.9% average from 2011 to 2021. According to data from the Centers for Disease Control and Prevention, Covid-19 deaths in the United States will increase by 20% in 2021 to around 460,000. Deaths tended to be younger as the Delta variant spread across the country, though older Americans remained the majority of victims. According to ACLI data, the Delta deaths significantly increased payouts under employers' benefit programs, though the majority of the $100 billion came from individually owned policies. Last year, Myrna Guerrero, a national sales director for Primerica Inc., one of the nation's largest sellers of term-life insurance policies, said it was tragic to see young families affected by Covid-19 deaths. Policyholders in two of her Phoenix-area office's term-life policies left behind three or more children. "Obviously, we can't take away the pain of losing someone, but they'll be fine financially," Ms. Guerrero said of the families. In 2021, approximately 25 of the office's clients died, with approximately half of those having Covid-19. According to Primerica, company-wide death claims increased by approximately 34% in 2021 to $2.25 billion, up from $1.69 billion. Deaths that appear to be indirectly related to Covid-19 are also being reported by life insurers. Some companies reported increases in death claims in their quarterly earnings, which they believe are due to delays in medical care as a result of the 2020 lockdowns, and then, later, people's fear of seeking treatment, as well as difficulty scheduling appointments. The industry faced a seemingly crippling financial burden in the early days of Covid-19's rapid spread. However, the cost has been manageable in part because so many victims were in their 80s and 90s and had small policies, if any at all. According to Carmi Margalit, who leads the life-insurance sector at S&P Global Ratings, in a recent webinar, most insurers entered the pandemic with strong capital buffers. In a November analysis, ratings firm AM Best maintained the industry's stable outlook by citing strong sales across multiple product lines and diversified earnings streams. However, an unusually large surge in life insurance sales has subsided this year. Vickie Ford, a New York Life Insurance Co. agent in Tulsa, Oklahoma, said that in 2020 and 2021, she assisted about five families with claim paperwork for Covid-19-related deaths. That accounted for roughly half of all deaths in her office. Beneficiaries received payments ranging from $92,000 to $206,000.
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November 28, 2022

RPS Launches New Digital Cargo Product with The Hartford for Importers/Exporters

E&S wholesale broker and managing general agency Risk Placement Services (RPS) today announced the launch of a new all-risk cargo product with carrier partner The Hartford. Available to quote-bind-issue online in just two minutes through RPS’ Small Business Platform, the global cargo policy from The Hartford covers tangible damages to goods while in transit from the origin warehouse to the destination warehouse by sea, air and overland transit. This distinct coverage protects against theft, loss or damage to the cargo whether it is due to sacrificed containers, piracy or inclement weather resulting in goods going overboard. “Through The Hartford’s dedicated underwriting and claims management, and backed by RPS’ deep expertise in this specialty market, the online platform allows agents and brokers to simply and efficiently secure end-to-end cargo coverage for their small business clients,” said Brendan Neligan, RPS marine broker. “Offering our cargo product through the RPS platform helps address a complex transportation risk without the challenge of invasive underwriting requirements,” said The Hartford’s National Cargo Practice Leader Paul Boulos. “The Hartford’s competitive policy form covers a wide array of exposures throughout the supply chain and aims to keep businesses moving and uninterrupted. We are excited and fortunate to go to market with a dynamic partner in RPS and expect continued expansion in this offering as it grows.” The new all-risk cargo product through RPS with The Hartford is designed for importers, exporters, manufacturers and distributors with less than $15 million in annual sales or shipped values and available for U.S. domestic risks and worldwide (except those countries and territories under sanction). Highlights include:
  • Up to $1 million limit for any one conveyance/named storage location
  • Domestic and foreign inland transit covers land conveyances
  • Salesman samples, installation, exhibition/trade show, and unnamed location features ensure goods are covered in a wide variety of scenarios.
The Hartford holds an A+ (Superior) rating from A.M. Best.
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November 28, 2022

Parents of Former Stanford University Soccer Goalie File Wrongful Death Lawsuit

According to ESPN, the parents of former Stanford University soccer goaltender Katie Meyer have filed a wrongful death lawsuit against the university. The Santa Clara County Sheriff's Office ruled the 22-year-death old's a suicide on March 4, CBS 17 previously reported. However, new information emerged Thursday after her parents filed a lawsuit against the university. Meyer led the Cardinal to the 2019 NCAA College Cup championship game, which they won on penalty kicks, 5-4. Meyer's parents previously discussed how "potential disciplinary action by the school may have triggered something for their daughter" on the Today Show. "The lawsuit claims that Stanford 'negligently and recklessly' sent her the formal disciplinary notice on the night of her death, which 'contained threatening language regarding sanctions and potential removal from the university," ESPN reported Thursday. Meyer, according to ESPN, was "facing disciplinary action for allegedly spilling coffee on a Stanford football player who was accused of sexually assaulting a female soccer player." Meyer's parents claimed that Stanford's disciplinary action against their daughter was the cause of her death. According to the lawsuit, "Stanford's after-hours disciplinary charge, as well as the reckless nature and manner of submission to Katie, caused Katie to suffer an acute stress reaction that impulsively led to her suicide." "Katie committed suicide without any planning and solely in response to the shocking and deeply distressing information she received from Stanford while alone in her room with no support or resources." Meyer was discovered dead in her dorm room, and an autopsy later confirmed that she had committed suicide. According to ESPN, a Stanford spokesperson has issued a statement in response to the Meyer family lawsuit: "The Stanford community mourns Katie's tragic death and sympathizes with her family for the unimaginable pain Katie's death has caused them." However, we strongly oppose any claim that the university is to blame for her death. While we have not yet seen the formal complaint filed by the Meyer family, we are aware of some of the allegations contained in the filing that are false and misleading," Dee Mostofi stated.
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November 28, 2022

Investors Increasingly Impatient with Slow Pace of Autonomous Vehicles

Investors are growing impatient with the pace of driverless-car development after years of ambitious targets and bold promises, putting pressure on an industry that had grown accustomed to latitude and piles of cash from investors. In recent weeks, automakers have scaled back plans for the technology in response to increased pressure to cut costs during an economic slowdown. An influential hedge fund has also questioned Alphabet Inc.'s Google's years-long effort to advance self-driving technology, an endeavor that has proven more difficult than many experts predicted just a few years ago. TCI Fund Management, an activist investor, wrote to Alphabet this month, questioning the company's continued investment in Waymo, its self-driving unit. "Waymo has not justified its excessive investments, and its losses should be dramatically reduced," TCI managing director Christopher Hohn wrote in the letter. Waymo has refused to comment. Waymo has benefited from Alphabet's patience, as the company began working on driverless cars more than a decade ago. In 2020, the unit began raising funds from outside investors, sparking speculation that Waymo was planning a spinoff as a standalone company. Waymo operates driverless cars in the Phoenix metro area as a ride-hailing service for paying customers, and is expanding into San Francisco and Los Angeles. Waymo Co-CEO Tekedra Mawakana discussed the challenges of safely deploying the new technology last month. "This is really about being patient in our learning while also being precise in our execution," Ms. Mawakana explained. "This is a significant long-term opportunity." Intel Corp took its Mobileye car-tech unit public last month in an IPO that valued the company at $23 billion on the first day of trading—far less than the $50 billion its leaders had initially targeted. Ford Motor Company and Volkswagen AG have also recently scaled back their autonomous-vehicle efforts, terminating their joint investment in driverless-car startup Argo in late October. The two rival automakers invested billions of dollars in the startup late last decade, when both had fully robotic cars at the heart of their future service and revenue plans. Each company stated that it intends to reallocate resources to technology deemed more viable in the short term, such as driver-assistance systems and automated approaches that allow vehicles to pilot themselves in limited situations while a human driver is present. "It's become clear that profitable, fully autonomous vehicles at scale are still a long way off," said Ford's chief financial officer, John Lawler. Meanwhile, Nuro Inc., a driverless-delivery startup, announced this month that it would reduce its workforce by about 20% due to difficulties in raising new funds. The shift in sentiment contrasts with a few years ago, when a diverse range of companies from Detroit to Silicon Valley were betting on self-driving technology to disrupt the auto industry and generate billions of dollars in new revenue. General Motors Co.'s $1 billion acquisition of Cruise, an autonomous-vehicle startup, was one of many such deals, as companies competed to lock in talent and assure investors that they were prepared for the future. Tesla Inc. CEO Elon Musk promised in 2016 that he would demonstrate a fully autonomous vehicle traveling from Los Angeles to New York by the end of 2017—a date that never came and went. His vision and promises for self-driving cars have helped Tesla's stock rise to become the world's most valuable automaker. The industry's enthusiasm began to wane in 2018, after an Uber Technologies Inc. test vehicle struck and killed a pedestrian. The incident prompted increased scrutiny of the technology and highlighted the safety risks associated with entrusting a vehicle to a robot. As some companies progress from demonstration to deployment, it is clear that for the time being, a complex and costly back end of maintenance and operations is required to run these vehicle networks. In October, Morgan Stanley analyst Adam Jonas stated that he no longer assigns any value to GM's Cruise driverless-car business in his valuation of the automaker's enterprise value. He told investors that GM's losses on the unit, which he currently estimates at $2 billion per year, could more than double in the coming years. "We believe GM may recognize that their investment in Cruise is a'sunk cost,' and that they should move on," he wrote. Despite the pessimism, many analysts believe that autonomous technology has great potential, posing difficult decisions for automakers weighing future needs, particularly in the development of electric vehicles.
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November 23, 2022

Happy Thanksgiving from All of Us

Have a safe and happy holiday with family and friends. We’ll be off for the holiday as well, and back on Monday, November 28, with the news.
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November 23, 2022

FTX’s Celebrity Promoters May Be Liable for Damages

The viral Super Bowl ad for FTX featured multiple versions of a skeptical Larry David. Given the collapse of the cryptocurrency exchange, his fellow celebrities would have done well to take his advice. The creator of Seinfeld and Curb Your Enthusiasm is one of several celebrities who have been sued for promoting FTX's services and products. According to the lawsuits, they enticed inexperienced investors into the shambles. According to legal experts, the celebrities' celebrity and wealth make them a tempting target for investors looking to recoup some of their losses, as the company and co-founder Sam Bankman-Fried are essentially bankrupt. This month, FTX and more than 100 affiliates declared bankruptcy, shielding them from legal action. The promoters, who are not in bankruptcy court, are not protected in this way. "A lawsuit against celebrities will generate a lot of money because they'll all settle," said John Reed Stark, former director of the Securities and Exchange Commission's Office of Internet Enforcement. "It's one thing to make your fans buy your face-printed T-shirt. It's another thing entirely to promote something that causes them to lose their life savings." Since FTX's demise, at least three lawsuits have been filed, one of which seeks to represent "thousands, if not millions, of consumers nationwide." Among the defendants are Tom Brady, Gisele Bundchen, Stephen Curry, Shaquille O'Neal, and businessman and TV personality Kevin O'Leary. If the investors can prove that the celebrities were paid to promote the crypto exchange, had invested in the company, or were selling unregistered securities, the celebrities may be held liable. The lawsuits are currently pending in federal court in Miami and San Francisco. The stars’ representatives didn’t respond to requests for comment on the lawsuits. FTX’s sudden collapse cost US investors more than $11 billion, according to the Miami lawsuit filed Nov. 15. The platform, with 5 million users worldwide, traded more than $700 billion of crypto last year. “The celebrities’ liability hinges mainly on whether the products they promoted are securities,” said Shane Seppinni, who represents people suing over alleged corporate abuse and who isn’t involved in the FTX cases. If FTX’s yield-bearing accounts, which pay interest on crypto holdings, are found to be securities, “then the celebrities who promoted them could be on the hook for big damages,” he said. To determine whether a given item constitutes a security, courts tend to fall back on the Howey Test. It gets its name from a 1946 Supreme Court decision defining a security as “an investment of money in a common enterprise with profits to come solely from the efforts of others.” If the item in question meets that definition, the court held, then it doesn’t matter “whether the enterprise is speculative or nonspeculative, or whether there is a sale of property with or without intrinsic value.” The Texas State Securities Board’s director of enforcement, Joseph Rotunda, filed a declaration last month that the yield-bearing accounts are an offering of unregistered securities. And promoting securities without disclosing the source, nature or amount of compensation would violate securities law. On Monday, Rotunda said his office was scrutinizing the payments the celebrities received and any disclosures made. “We are taking a close look at them” as part of the regulator’s broader probe into FTX’s failure, he said. Brady and Bundchen joined the company’s $20 million ad campaign in 2021 and made a commercial -- “FTX. You In?” -- showing them urging acquaintances to join up. They also took equity stakes in FTX Trading Ltd., according to the Miami complaint. O’Leary, of ABC’s Shark Tank and CNBC’s Money Court, was both an investor in and a paid spokesman for FTX. He and tennis star Naomi Osaka, who has also been sued, both promoted FTX’s interest-bearing accounts, in which Elliott Lam, a Canadian living in Hong Kong, invested and lost $750,000, according to his proposed class action lawsuit in San Francisco. David’s comic persona and quirky role in the Super Bowl ad may prove oblique enough to beat the litigation, legal experts said. The commercial featured him as a skeptic of other inventions, such as the Sony Walkman and, earlier, the wheel. “Don’t be like Larry,” the ad cautioned. It made FTX one of the most retweeted brands during the game, lawyers for the investor in the Miami complaint said. But the only allegation about the comedian “is that Larry David appeared in a commercial,” said attorney Brian Levin. “I don’t see how that, in and of itself, would give rise to liability.” Stark, the former SEC internet enforcement chief, finds “the irony” that David played characters in the ad who keep saying no -- including to FTX -- “glaring.” “There’s enough celebrities to choose from,” he said. “I’d probably leave him off, so as not to muddy the waters.” As the impact of FTX’s fall unfolds, more lawsuits are expected to roll in against Bankman-Fried and celebrity endorsers from the US and elsewhere, including South Korea, Singapore and Japan, where many of the investors are based, said attorney Demetri Bezaintes. The law firm that filed the Miami complaint filed another proposed class action suit in South Florida a week later. This isn’t the first time celebrities have found themselves in hot water over crypto promotions. Kim Kardashian and Floyd Mayweather Jr. were sued in Los Angeles over their promotion of the EthereumMax token. In a tentative ruling on Nov. 7, the judge dismissed the lawsuit, saying the defendants hadn’t promoted the tokens as a security. Kardashian agreed last month to pay $1.3 million, and not to tout digital assets for three years, to settle SEC claims that she broke the rules by promoting the token without disclosing that she was being paid. Mayweather and music producer DJ Khaled were accused of violating securities laws by failing to disclose payments they received to promote initial coin offerings on social media in 2018. Both settled with the SEC, with Mayweather paying more than $600,000 and Khaled dropping more than $150,000.
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November 23, 2022

Swiss Re: Insurance Can Help Bolster Cyber Resilience As Risks Evolve

According to a new report from Swiss Re Institute, there has been a significant increase in cyber attacks in recent years, which has made organizations and businesses aware that they could become a target and face serious consequences. They have also realized that investing in pre-emptive mitigation efforts and cyber hygiene is preferable to facing the cost of an attack, which could be much higher, according to the reinsurer. However, John Coletti, Head of Cyber Reinsurance at Swiss Re, believes that efforts to combat cyber threats are never enough, and he outlines a number of steps insurers can take to strengthen cyber defense. “As digitalization proliferates and technology advances, so does exposure to cyber threats, he said. Adding: “A new expertise paper from the Swiss Re Institute (SRI) ‘Cyber: Extending insurability for a rapidly evolving risk’ gets to the heart of the problem: ‘The pace of technological change, the rising awareness of cyber risk and the adoption of cyber hygiene practices to keep data and networks secure, are not synchronised.’” “Rather, we have a legacy of outdated security protocols and IT systems, and regulatory frameworks are only slowly catching up with technological realities. This lag in cyber defence opens the door to malicious actors seeking to exploit digital vulnerabilities for financial, reputational or geopolitical gain.” SRI researcher’s have emphasised that the insurance industry in particular has great leverage to increase cyber resilience. It plays a key role providing not only risk transfer but incentivising cyber risk mitigation. The latest is achieved thanks to its conditions for companies to obtain cyber coverage as they must prove that they have a quality cyber risk program in place that supports monitoring and aiding responses to cyber attacks. Coletti said: “The SRI researchers highlight three areas of improvement where the insurance industry can help manage cyber risks more efficiently and increase insurability. “To address these limitations the SRI researchers recommend stakeholders improve cyber resilience by: standardising data and improving modelling; addressing the cyber talent gap by investing in education; and investing in new sources of capital and private-public collaboration.” According to the SRI this will help mitigate overall exposures, improve understanding of the risk and help make society more resilient to attacks with devastating and potentially systemic consequences. Coletti added that the SRI recommendations emphasises that the human and networked nature of cyber means the risk will continually evolve and require a coordinated response. Enhancing resilience will require collaboration between corporations, insurers and governments. “While the uncertainty of future events is an intrinsic feature of the insurance business, aggregations risks add another layer of complexity,” Coletti noted. “It may leave insurers unwilling to cover these extreme tail risks with large loss potential. One solution to fill the protection gap is to design a type of public-private partnership (PPP) insurance scheme where the coverage of systemic risks is split between insurers and a government-backed fund.” According to Coletti, even though the fear of cyber attacks is almost impossible to avoid, there is no need to be afraid, but “we must maintain the appropriate respect for a threat that is growing in magnitude”, he highlighted. Coletti concluded: “Given that, it is vital for every industry and every stakeholder to contribute its specific expertise and capabilities. A key focus of re/insurers should be data gathering and standardisation, alongside modelling efforts. And frankly, I am quite excited that, by investing in cyber talent, the re/insurance industry can help shape the cyber capabilities of tomorrow.”  
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November 23, 2022

National Personal Auto and Personal Property Premium Rates Decreased in All Canadian Provinces YOY

Applied Systems® today announced the third quarter of 2022 results of the Applied Rating Index™, the Canadian insurance industry’s premium rate index. In Q3 2022, quoted premiums for both Personal Auto lines and Personal Property lines decreased year over year. Quarter over quarter, premium rate change increased for Personal Auto and decreased for Personal Property compared to Q2 2022. Additional key findings for Q3 2022 include:
  • Personal Auto: In Q3 2022, Personal Auto quoted premium rate change decreased 4.1% versus 9.4% Q3 2021. Personal Auto quoted premium rate change increased 4.1% versus 0.9% in Q2 2022.
  • Personal Property: In Q3 2022, Personal Property quoted premium rate change decreased 5.1% versus 4.9% in Q3 2021. Personal Property decreased 0.1% versus 1.8% in Q3 2022.
  • Provinces: Across Personal Auto, all provinces except Alberta experienced a decreased rate change year over year with Ontario, Quebec and the Atlantic Provinces seeing changes of 1.3%, 9.1% and 7.8% respectively; Alberta experienced an increased rate change year over year of 6.4%. Across Personal Property, British Columbia, Ontario, and Quebec all experienced decreased rate change year over year to 7.0%, 4.6%, and -5.0% respectively; Alberta, the Atlantic Provinces, Saskatchewan and Manitoba all experienced increased rate change year over year to 11.7%, 7.4%, and 6.9% respectively.
“While we have seen rate reductions in the Personal Auto market in the last quarter, personal property rates have increased both quarter-over-quarter and year-over-year,” said Steve Whitelaw, senior vice president and general manager, Applied Systems. “We will continue to follow rate trends to provide brokers with the information needed to educate their customers in their purchasing decisions.” The Applied Rating Index is a data-driven report of current conditions and trends for Personal Auto and Personal Property (Homeowners) insurance premium rates. Analyzing more than 1.3 billion quotes completed, the Applied Rating Index measures the increase or decrease in quoted average premium rate trends across Canada. Representing more than 80% of the brokerage market and 675 insurer rating plans written by brokers, the Applied Rating Index is the most complete depiction of the premium rate trends being experienced by consumers, brokerages, and their insurers across the Canadian market. Access the complete quarterly report.
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November 23, 2022

WTW and The Nature Conservancy Launch First-Ever Coral Reef Insurance Policy in US

WTW, a leading global advisory, broking, and solutions company, and The Nature Conservancy (TNC) today announced the United States’ first-ever coral reef insurance policy. The policy will provide money for rapid coral reef repair and restoration across Hawai‘i immediately following hurricane or tropical storm damage. “With climate change-related natural hazards increasing in scale and frequency, this type of ground-breaking solution can enable rapid deployment of resources to help repair critical ecosystems,” said Simon Young, Senior Director, Climate and Resilience Hub, at WTW. In 2019, TNC and partners implemented the world’s first reef insurance policy to protect against hurricane damage, a major risk to coral reefs, in Quintana Roo, Mexico. A cash pay-out from that policy was used to repair damage from Hurricane Delta. Since then, the Mesoamerican Reef (MAR) Fund, working in collaboration with WTW’s Climate and Resilience Hub, has designed a ground-breaking, bespoke parametric insurance programme across the full extent of the Mesoamerican Reef, from southern Mexico through Belize, Guatemala and Honduras. Parametric insurance is unique in that it offers pre-specified pay-outs based on the intensity of defined trigger events. Working with WTW, TNC chose an insurer of Munich Re to provide the policy after a competitive placement process. It is triggered at windspeeds of 50 knots (57 mph) if sufficiently close to reefs and provides pay-outs up to US$2 million within days to allow rapid reef repair and restoration after storm damage, and to facilitate emergency care. The Hawai’i policy, supported by funders including the Bank of America Foundation and Howden Group Foundation, covered the latter part of the 2022 hurricane season and will be in place during the entire 2023 season. “The Nature Conservancy is thrilled to pilot the first coral reef insurance policy in the United States,” says Ulalia Woodside Lee, Executive Director, The Nature Conservancy, Hawai‘i and Palmyra. “In Hawai‘i, we are rooted in the environment; the health of our coastlines and communities is directly tied to the health of the coral reefs surrounding our islands. By investing in nature, our insurance and finance partners are demonstrating its value as a critical natural, cultural and economic resource.” “Helping to design the first pre-arranged, trigger-based insurance policy for coral reefs in the U.S. has been very exciting,” said Simon Young, Senior Director, Climate and Resilience Hub, WTW. “With climate change-related natural hazards increasing in scale and frequency, this type of ground-breaking solution enables the rapid deployment of resources to help repair critical ecosystems and restore services following a major event like a hurricane.” Coral reefs are a vital natural asset for Hawai‘i’s people, culture and economy, but under increasing threat due to climate change and other human impacts. The reefs provide coastal flood protection to thousands of people and properties, and contribute more than $1.2 billion to the state’s economy through tourism. Hawai‘i’s reefs are also home to the endangered Green Sea Turtle and Hawaii’s official state fish, the Humuhumunukunukuapua’a. Tropical storms and hurricanes, which are increasing in intensity due to climate change, are a major short-term threat to coral reefs. Research shows that severe hurricanes can cause a 50% or more loss of live coral cover, and the loss of just one meter of reef height could result in a doubling of the cost of damage to coastal communities. Healthy, intact reefs can reduce up to 97% of wave energy and are the islands’ first line of defence during storms; protecting them is vital. “Managing natural resources is a costly endeavour, and more investment is always needed,” says Brian Nielson, Administrator, Division of Aquatic Resources (DAR), State of Hawaiʻi Division of Land and Natural Resources. “TNC has been an excellent partner in restoring the reefs and fisheries of Hawai’i, and we are grateful for their leadership in securing this insurance. It is a step forward in coral reef conservation and will provide vital funding to repair reefs when it is urgently needed.” When a hurricane or tropical storm triggers a cash pay-out, TNC will activate an advisory committee in coordination with the Division of Aquatic Resources and other local partners to guide the use and distribution of the funds for reef repair and restoration. TNC, DAR and other partners will convene in early 2023 to develop a response plan to guide first responders and reef managers to rapidly and effectively address impacts from storms, including re-attaching broken corals and debris clean-up. “Coral reefs are vital to our people, culture, lifestyle and economy; reef insurance will help us care for them,” says Ekolu Lindsey of local community partner Kīpuka Olowalu. “In Hawaiian culture, the coral polyp is the origin of all life. We have a kuleana (responsibility) to maintain the integrity and rejuvenation of our coral reef systems. We look forward to working with TNC and other partners to develop response plans to mālama (care for) our ko‘a (corals) and to ensure that reef insurance funds are applied fairly.”
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November 22, 2022

All PEOs Aren’t Created Equally

Professional Employer Organizations (PEOs) are Human Resources (HR) service providers that help businesses with HR services, like processing payroll and ensuring compliance. PEOs typically assist small and medium-sized companies with their human resource needs by providing full-service employment administration and other related benefits such as health insurance, Workers' Compensation insurance, and retirement plans. In addition, some large corporations outsource their human resources functions to a PEO to free up time and energy for core business functions. Types of PEO Specialties include:  PEO services are often misunderstood because there are so many types of service providers out there. For example, various PEO firms specialize in HR outsourcing, payroll processing, benefits administration, Workers' Compensation insurance, employee benefits consulting, and tax compliance. The critical difference between these PEO services is how much control the provider takes over the business operations. Some PEO firms provide full-service management, while others focus on providing administrative support for the company. PEO firms also specialize in particular industries such as healthcare, manufacturing, retail, construction, transportation, hospitality, education, financial services, technology, and more. How Do PEOs Differ from Each Other? PEOs have sought a definition for the past two decades to make them easily identifiable to the general public. Terms they use include:
  • Professional Employer Organization - PEO
  • Employee Leasing Company
  • Staff Leasing Company
  • Human Resources Outsourcing Organization - HRO
  • Administrative Services Organization - ASO
PEOs differ because some have a limited geographic footprint, while other companies use different pricing or benefits. And so, since PEOs help businesses of all sizes with their HR needs, their variations allow companies to select a PEO that suits their needs. PEOs often differ by specializing in payroll, human resources, employee benefits, and Workers' Compensation. Understanding the distinctions between PEOs helps business owners find the services they need. Whether you're looking for an employer-of-record PEO or are just researching the concept of using one, it's essential to make sure that you're comparing apples with apples when it comes to the key features and benefits of each company offering this type of service. How Can a PEO Help Your Business? A professional employer organization (PEO) can help your business in many ways. By outsourcing the administrative duties of human resources and payroll to a PEO, you can reduce costs and paperwork while gaining access to valuable HR support and services that would otherwise be unavailable. Employers using PEOs can expect to: Save money on wages owed by reducing mistakes in keeping track of time and making calculations. Payroll is a significant concern for small businesses with few employees. Use their PEO's expertise to ensure labor law compliance, avoid costly noncompliance fines, or have their business shut down due to safety violations. Increase employee satisfaction through perks such as flexible scheduling, paid holidays off from work, and more vacation time than is required by law. PEOs allow you to focus on running your business rather than worrying about payroll. Instead of spending time on payroll taxes and benefits administration tasks like calculating FICA taxes or paying into workers' compensation funds, PEOs do it for you. How PEOs Help Employees PEOs help employees in many ways, such as by providing a predictable payroll. For example, you and your employees don't have to worry about ensuring your payroll is accurate and your employees are paid on time because PEOs take care of that for you. With fewer complicated processes in place, managers can spend more time focusing on what matters most: managing their team members' performance so that they achieve their goals at work. Employees have more time each month because PEOs perform many internal tasks, allowing them to spend more time with their families, pursue outside interests, exercise regularly, or volunteer. Choose a PEO That Best Meets Your Needs Choosing a PEO that best meets your needs is essential because the right PEO will help you grow and get more done than if you did everything alone. If you're looking for a new way to grow your business that won't break the bank, PEOs may be worth considering. PEOs can offer countless benefits for businesses of all sizes and types—as long as they have the right ones.  
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