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Dr. Jack Nordhaus – News of the Day

Latest insurance industry news, with commentary.

NEWS OF THE DAY March 21, 2014

Jack Nordhaus Jack Nordhaus , 3/21/2014
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“If we had no winter, the spring would not seem so pleasant.”

Ann Bradstreet



Insurance Journal

By Laird Rixford 

 March 10, 2014

The end of the world is coming. The world of Windows XP that is.
A significant event is happening in the technology industry that will affect insurance agents. On April 8, 2014, Microsoft will no longer support Windows XP.
Yes, that Windows XP, the operating system that was launched more than 12 years ago – the same operating system that still commands more than 40% of all business computers – will come to an end.

Why is Microsoft cutting support for Windows XP?

It’s so old that it predates 9/11. Though it’s clearly still popular, the operating system is consuming a large amount of Microsoft’s resources that they would rather use on their newer operating systems Windows 7 and 8.
If you feel surprised by this news, you should know Microsoft announced in 2007 they were planning to end support of Windows XP. They also pushed back the date after originally planning to end it in 2010.
The end of support for Windows XP means that Microsoft will no longer provide technical support to vendors, integrators and end users.
In other words if you use Windows XP, you will no longer receive security updates or product fixes. Essentially, the operating system will be taken off life support.

The Death of Windows XP in Agencies

Why is this end of Windows XP’s life important to insurance agents?
First, with a lack of updates and fixes, your agency’s computers will no longer be secure. This puts your clients’ data at risk because cyber attackers can target Windows XP vulnerabilities without worry of security updates or patches.
If you’ve been following the recent stories of the data breaches at Target and other companies, you know data security is extremely important to consumers. Many E&O policies and compliance departments require agents to run up-to-date supported software for this reason.
Second, as the technology in modern operating systems advances, so do the programs that use this technology For example, many agency automation systems use the latest technologies available through modern operating systems – like newer browsers, updated API libraries and more – to provide agents the best experience and features.. These systems might require you to upgrade from Windows XP so they can start using the newer abilities available in the latest operating systems.
On April 8, your computer should still work fine, but it will be at risk of becoming infected with viruses, spyware or other malware that might result in crashes or, even worse, the theft of your clients’ personal information.
The size of the risk has not been calculated. However, when it comes to protecting your clients’ data from hackers and yourself from potential E&O claims, the size of the risk doesn;t matter. Because your system will be vulnerable, you need to protect it.

What Can You Do?

Upgrade! You can install an updated operating system or upgrade the computer completely.
You might choose to switch to web-based programs for rating and management systems so you can access data from anywhere with an Internet connection and a web browser. By migrating to all web-based systems, you can even move past the desktop altogether aa to use tablets and smartphones, thus avoiding the next operating system apocalypse.
You can upgrade to the Windows 7 or Windows 8 operating systems. Windows 7 has the familiar interface and is more budget-friendly than Windows 8; however, it’s the older of the two operating systems. Windows 8 might require some getting used to because the interface has significantly changed from the Windows look you’re used to.
Don’t wait until April, and potentially expose your clients to hackers. The end of Windows XP is inevitable. Upgrade now!


By Andrew Taylor |

Insurance Journal

 March 16, 2014

President Barack Obama is set to sign a bipartisan bill relieving homeowners living in flood-prone neighborhoods from big increases in their insurance bills.
The legislation, which cleared Congress on Thursday, reverses much of a 2012 overhaul of the government’s much-criticized Flood Insurance program after protests from angry homeowners facing sharp premium hikes. 
The Senate’s 72-22 vote sent the House-drafted measure to Obama. White House officials said he’ll sign it.
The bill would scale back big Flood insurance premium increases faced by hundreds of thousands of homeowners. The measure also would allow below-market insurance rates to be passed on to people buying homes in flood zones with taxpayer-subsidized policies.
Critics say Washington is caving to political pressure by undoing one of the few recent overhauls it has managed to pass.
“While politically expedient today, this abdication of responsibility by Congress is going to come back and bite them and taxpayers when the next disaster strikes,” said Steve Ellis, vice president of Taxpayers for Common Sense, a Washington-based watchdog group. “Everyone knows this program is not fiscally sound or even viable in the near term.”
The hard-fought 2012 rewrite of the Federal Flood Insurance Program was aimed at weaning hundreds of thousands of homeowners off subsidized rates, and required extensive updating of the flood maps used to set premiums.  However, its implementation stirred anxiety among many homeowners along the Atlantic and Gulf coasts and in flood plains, many of whom are threatened with unaffordable rate increases.
The legislation offers its greatest relief to owners of properties that were originally built to code but subsequently were found to be at greater flood risk. Such “grandfathered” homeowners currently benefit from below-market rates subsidized by other policyholders; the new legislation would preserve this status and cap premium increases at 18% a year. The 2012 overhaul required premiums to increase to actuarially sound rates over five years and required extensive remapping.
Many homeowners faulted the Federal Emergency Management Agency’s implementation of the 2012 law. In some instances, homeowners from areas that had never been flooded were shocked and frightened by warnings of huge, unaffordable premium increases. The resulting uproar quickly got the attention of lawmakers and peppered them with complaints.
“In many cases, these are people with $100,000 homes that are getting (Flood Insurance) bills that are more than their mortgage payments,” said Rep. John Fleming, R-LA. “You had certainly a significant number of people who were really going to be hurt seriously through no fault of their own.”
The top leaders of both parties came on board, overcoming resistance from defenders of the 2012 overhaul like House Financial Services Committee Chairman Jeb Hensarling, R-Texas, whose turf was trampled along the way.
“Members on both sides of the aisle and a broad geographic distribution got involved. When you get enough members involved, it’s going to get the attention of the leadership, and that was a major factor,” said Rep. Charles Boustany, R-La.
Another provision, eagerly sought by the real estate industry, would allow sellers of older homes built before original Flood insurance risk maps were drafted to pass taxpayer-subsidized policies on to the people buying their homes instead of requiring purchasers to pay actuarially sound rates immediately, as required by the 2012 law. The new rates are especially  high in older coastal communities in states such as Florida, Massachusetts, and New Jersey, and have put a damper on home sales as prospective buyers recoil at the higher, multifold premium increases.
The measure also would give relief to people who bought homes after the changes were enacted in July 2012, and thus faced sharp, immediate jumps in their premiums; they would see those increases rolled back and receive rebates. Separate legislation by Sen. Mike Lee, R-Utah, would make sure that rebates would not go to recent buyers of beach houses and other second homes. It passed the Senate Thursday and is likely to get a vote in the House.
“While it’s important to put this program on sound financial footing, middle-class families should be able to afford the insurance they need to stay in their homes,” White House spokesman Bobby Whithorne said.
Thursday’s bill was written by House Majority Leader Eric Cantor, R-Va., and Rep. Michael Grimm, R-N.Y., with input from Democrats like Rep. Maxine Waters of California, whose votes were critical to House passage last week.
“We’ve solved a very short-term problem and made it a long-term problem,” said Sen. Tom Coburn, R-Okla. “We didn’t really do our work because we were in such a hurry to take the political pressure off of the increases in the flood insurance rates.”
People whose second home is in a flood zone and those whose properties have flooded repeatedly would continue to see their premiums go up by 25% a year until reaching a level consistent with their real risk of flooding.



By Staff Writer

March 19, 2014  

Esurance added a new video feature to its Esurance Mobile app that enables policyholders to talk to appraisers in real time to get a damage estimate on the spot, says the Chicago Tribune.
Using the app, consumers with eligible Auto insurance claims can video-chat with an Esurance appraiser using their iPhone or Android smartphones. During the video appointment, the appraiser shows the policyholder how and where to video the damage, and gives an estimate. The app even allows the appraiser to send an electronic payment to settle the claim on the spot, says the Tribune.
The new feature is similar to QuickFoto Claim from Esurance parent Allstate, which allows people to send smartphone pictures of their damaged vehicle to the insurer


By Reuters

March 19, 2014 

Frankfurt (Reuters) - Allianz has started to make payment on claims linked to the disappearance of a Malaysian airliner earlier this month, the German insurer said Tuesday.
Allianz confirmed last week it is the lead insurer covering the Malaysia Airlines jet that disappeared over the Pacific Ocean on March 8, while Willis has emerged as broker.
Flight MH370, a Boeing 777-200ER, vanished from civilian air traffic control screens off Malaysia's east coast less than an hour after take-off.
An international land and sea search for the jetliner and the 239 people aboard is now covering an area the size of Australia but police and intelligence agencies have yet to establish a clear motive to explain its disappearance.
"Allianz Global Corporate & Specialty and other co-reinsurers of the Malaysia Airlines aviation hull and liability policy have made initial payments," the insurer said in a statement.
"This is in agreement with the insurance broker, Willis, and is in line with normal market practice and our contractual obligations where an aircraft is reported as missing."
German business daily Handelsblatt earlier reported payment in the case would amount to around 100 million euros ($139.13 million) for the aircraft and the people aboard.
It’s unclear how much of the claim will be passed on to other insurers in the consortium.
Allianz declined to comment on the financial details.