National Universal Health Care: Could It Work In The USA?

The United States is the only nation in the industrialized world without a universal health care system. The oldest universal health care system is in Germany, which had its inception in 1883 under Chancellor Otto von Bismarck.

Let’s lay an important ground rule before we begin. Traditional insurance policies cover unexpected but predictable occurrences. For example, an auto policy covers an unexpected collision. But that policy does not cover maintenance costs which are a normal part of owning a vehicle. Health insurance has become maintenance insurance over the years, paying for everything from regular checkups and tooth cleaning to heart transplants. And, with some group insurance copays at $5 to $20, the concept of deductibles is becoming archaic.

So, in considering a single-payer cradle-to-grave government healthcare system, the old concepts of insurance and risk must be put aside. Single-payer healthcare is NOT INSURANCE in the strictest sense. It is a massive Social Security-type program, into which tax revenues flow and from which health care payments flow out to health care providers.

This article does not advocate a single-payer government-run healthcare system. But it does look at what a single-payer system might look like, and reasons why it will not work.

In December 2008 The McKinsey Global Institute issued an exhaustive 122-page report on health care costs in America, entitled “Accounting for the costs of US healthcare: A new look at why Americans spend more.” The best estimate of American healthcare costs is about $2.1 trillion annually.

Here is a summary list of its findings:

1. Administration costs in the US are much higher than in most countries around the world. This partly due to the privatization of some health care, resulting in profits for shareholders.
2. Pharmaceutical costs: Direct-To-Consumer Advertising encourages use of newer, more expensive drugs, a practice only allowed in the USA. Also, pharmaceutical lobbyists were successful in getting Congress to ban collective bargaining for Medicare Part D, resulting in the highest drug prices in the world. Also, the patent system for new drugs allows drug manufacturers to patent and charge more for non-novel medications.
3. The absence of a universal system that prevents risk-pooling, and the selective underwriting done by insurers. This leaves millions uninsured, and the uninsured avoid treatment until problems are more critical and more expensive.
4. Huge fees of specialist physicians for their procedural skills, rather than primary care that emphasizes preventive health care, early diagnosis and disease management.
5. Defensive medicine: Excess costs and duplication of health procedures in order to protect medical providers from malpractice lawsuits. Lawsuits and jury awards themselves don’t cause a large amount of monetary damage, but the tort system creates a culture in which physicians are paranoid and make health care decisions with lawsuits in mind, rather than patient interests first.
6. ICU Care: The costs of care at the end of life are wildly inflated, many times eclipsing the health care costs incurred in an entire lifetime. This is partly due to heroic efforts of lifesaving, pain management, and poor records.
7. Electronic Medical Records (EMR) systems would be of great benefit in managing living wills, advanced care directives and previous treatment records. Without EMRs, doctors regularly order redundant tests and procedures because medical information management is so inefficient.

The McKinsey report doesn’t recommend a universal healthcare single-payer system. It simply tries to provide accurate information to those who will be making policy regarding healthcare in the USA.

Here is what a universal healthcare system might look like. This takes the best characteristics from healthcare systems around the world.

1. Funding through individual taxation for wage earners and self employed persons. Low income persons subsidized. Should tax be based upon age? Should the tax be calculated as a percentage of income, like in the IRS Tax Tables and FICA payments?

2. Medicare, Medicaid, the VA healthcare system and all other Federal healthcare systems would be rolled into the universal system. That would include the healthcare benefits for Federal workers and members of Congress.

3. No individual underwriting. All living persons of US citizenship are covered. Non-citizens with taxable earnings could be taxed and covered.

4. No deductibles. Copay for any doctor visit of $5-$20.

5. Prevention-based health care at the General Practitioner level. Compensation based upon health of the patients. Healthier patients, doctor makes more money.

6. Medical school 100% paid by government in exchange for 10 years service as a Federal employee. This would include additional training in medical specialties. Compensation levels could be set lower since there would be no school debt.

7. FedGov sets minimum standards for care. Insured persons are free to choose their own doctors. Patients can choose specialists without first seeing Primary Care Physician.

8. No insurance company precertifications necessary.

9. System includes mental health, nursing home and hospice care.

10. FedGov sets prices for pharmaceuticals, medical procedures and medical supplies. FedGov sets wages for all medical employees, including administrators, nurses, med techs and doctors.

11. Tort reform. If health care was universal from cradle to grave, torts would be limited since the patient would automatically be eligible for additional medical care required by malpractice, an unintended consequence of treatment or a medical complication. Doctors would still be liable for negligence, but awards would not need to compensate the individual plaintiff/patient for anticipated medical care into the future.

12. Electronic Medical Records, a database of all medical records for each patient, accessible by all medical providers. Would eliminate all duplication. Living wills and advance care directives would be part of every patient file. This has the potential to drastically reduce end-of life invasive care and duplication of procedures.

13. Individual health insurance policies would still be available for those that wanted a higher level of care, and would be excess insurance, like a Personal Umbrella policy.

14. Private medical providers, including doctors and hospitals, would still exist, offering custom care for those willing to pay extra for it.

I know this is a cursory look at universal healthcare. I know I’ve left out important features and benefits. But I’m trying to wrap my mind…and yours…around a concept that I fear is in our immediate future.

The big insurance companies have completely screwed up the health insurance marketplace in the United States. So, if they get left at the dock when this new ship sails, I won’t shed any tears. They get what they deserve.

Now, here is why I don’t think that the system outlined above will work.

1. The Federal Government is broke. They are already running trillion dollar annual deficits. In order to stave off governmental collapse, the Federal Reserve is printing paper money as fast as it can. Eventually, inflation will sink the ship of state. To absorb the healthcare system into the Federal Government which represents about one-seventh of the economy, is a bridge too far.

2. Funding this new healthcare system would require increasing taxes significantly. Insurance premiums would be turned into tax payments. There is presently an IRS business deduction for insurance premiums for corporations. The business lobbyists won’t want to give up this deduction and will fight it.

3. Pharmaceutical companies lobby Congress. They will fight any system that controls drug prices and threatens their profits.

4. Trial Lawyers have a powerful lobby in Congress. They will fight medical malpractice tort reform.

5. Medical providers, the American Medical Association and other medicine-related groups have powerful Congressional lobbyists. They will fight reforms, just like they do now.

6. Insurance companies will be forced out of business if the Federal Government takes over the healthcare system. Insurance companies hold trillions of dollars in US bonds and other municipal securities. They will threaten Congress with the collapse of the bond market if Congress passed a new system that leaves them out. All the insurance companies would have to do to crash the bond market and cause the collapse of the Federal Government is to sell off a small percentage of their bond holdings all at once.

In conclusion, I recommend looking at any Obama Administration proposal for universal healthcare in light of the competing groups in the medical field. Each group must be bought off for their cooperation, and in turn each one will buy off Congress to get what they want. Some things never change.

The single payer healthcare system that emerges from Capitol Hill, the system that will affect the healthcare of each American, should adopt as its logo the duckbilled platypus.

That’s the animal that looks like it was designed by a committee.

Bread And Circuses: America’s Insatiable Desire for Socialism

The term “Bread and Circuses” is credited to Juvenal, a Roman writer and satirist (AD 55-127). He was describing the Roman citizens’ enthusiasm for free food handouts and gladiatorial games at Circus Maximus and the Colosseum. He felt that Romans had lost the capacity to govern themselves through their mindless self-gratification.

“Bread and Circuses” is a phrase that can accurately be used to describe the American population. Americans are so addicted to entertainment and personal pleasure that they ignore civic responsibility and gladly accept government authority with unflinching obedience.

Well, maybe some of us flinch a little. Reminds me of a bawdy story.

Three friends dared each other to go skydiving. They found a skydiving club and paid their money. After a short lesson, the instructor took them up to 8,000 feet and opened the door of the plane. Two friends jumped, but the third friend was too scared.

The instructor yelled, “If you don’t jump right now, I’m going to rip off your pants, bend you over and have sex with you.”

“Did you jump?” his friends asked him later.

“Well yes…a little at first,” was his reply.

Americans jumped “a little at first” after the Revolutionary War and up into the early 1800s. But by 1860, they were willing to allow Lincoln to make war upon the Southern States and completely ignore the Constitution. It was all downhill from then until now.

Thankfully, there are still some American patriots that jump when someone tries to attack them from behind, so to speak.

Just as Juvenal observed in his day, so I believe that Americans have lost the capacity to govern themselves.

Actions speak louder than words. Stated another way, if you want to learn what people truly value, don’t listen to what they say, only watch what they do.

The majority of American citizens want socialism. They may say that they are against socialism but they continue to elect and re-elect politicians that enact socialistic laws and regulations. They do not storm Washington when those politicians violate the Constitution and commit treasonous, criminal acts. They do not impeach and prosecute the criminals in Washington.

Naw…“Trueblood” is on TV. “Transformers” is in the theaters. Football season is just around the corner. Michael Jackson and Farah Fawcett just died and we must mourn them.

America is on the auction block, and the Executive and Legislative branches of the Federal Government are the auctioneers. The American citizens expect their elected officials to “bring home the bacon,” which means get more Federal dollars coming back home than they are sending to Washington. American citizens want more than their share.

America wants socialism.

Over the past 100 years, American citizens have become addicted to the money that comes to them from Washington. Because most Americans have their taxes automatically withheld from their paychecks, they don’t feel the weight of their tax burden. So, it FEELS like benefits are flowing from Washington back to home.

America wants socialism.

In 2008 and 2009, the Federal Government nationalized the banking industry, the investment industry, a giant insurance company and part of the automobile industry. America barely made a peep.

America wants socialism.

Social Security, Medicare and Medicaid, the biggest entitlement programs in the history of the planet, have become as familiar as the air we breathe. Conservatives in Washington accepted the big social welfare programs long ago, and don’t lift a finger any more to fight against them…or even try to control their budgets. In fact, some of the biggest spending legislation ever enacted came from Washington while Conservatives controlled the House and Senate, and Republicans lived in the White House.

America wants socialism.

America totally forgave George Bush for lying the USA into a Middle East war. American has completely accepted an ever-expanding worldwide military, and embraced the wars in Kuwait, Iraq and Afghanistan. They festoon everything with yellow ribbons, and “support the troops”…even when the troops are murdering foreign civilians and violating the Constitution with their actions abroad. (by the way, a tenet of communism was to spread communism by military action. Americans think we’re trying to spread democracy)

America wants socialism.

Washington politicians have gutted what was left of the Constitution since 2001. Individual liberties have been destroyed. The Patriot Act was enacted, the Transportation Safety Administration made airports into “no-rights zones,” and the Department of Homeland Security has vastly expanded its power over American citizens. All done with only a few whimpers and few objections.

America wants socialism.

The Obama Administration is taking this window of opportunity to take over health care and health insurance in the USA. American citizens have watched the nation’s insurance companies destroy the health insurance industry. There are over 40 million Americans today without any health insurance at all. So, it’s a perfect moment to do a government takeover. American citizens are exhausted from fighting to get health insurance. They want health insurance at any cost, and are willing to trust Uncle Sam to run the healthcare and health insurance system.

Americans want socialism. And Americans are getting socialism as quickly as Washington can deliver it.

I always used to think that America was being misused and abused by Washington. I have changed my thinking about that. I believe that Washington is simply giving America what it wants.

Perhaps the Washington politicos are the most astute observers of human behavior. They are certainly the best at survival.

Curious, though…that last paragraph also aptly describes the relationship between a leech and its host.

“It is hard NOT to write satire.” ~Juvenal , Roman satirist, writing about the Rome of his day)

Automobile Accidents: Four Tips To Avoid Car Versus 18-Wheeler Accidents

Automobile Accidents between cars and big trucks favor the trucks. It’s just a matter of physics, really. Cars weigh 2-3 tons. Tractor-trailers have a weight limit of 80,000 pounds, which is 40 tons. An 80,000 pound truck, traveling at 55 miles per hour, generates 1 million foot-pounds of forward energy. Getting hit by a moving object that weighs 20 times as much as your vehicle is a recipe for death and destruction.

Here are four tips on avoiding accidents involving your vehicle and “Big Rigs:”

1. When you’re driving near a big rig, make sure that you can see his mirrors. If you can see his mirrors, then you know that he can also see you. Big rigs have enormous blind zones. If your car is in his blind zone, the trucker doesn’t know you are there.

2. Don’t stay next to a big rig while you drive. Either get behind him or move forward of him. Give him the chance to see you, and you’ll lower your chance of getting hit by his vehicle.

3. Trucks need long distances to stop. If you are in traffic, do not merge into the lane directly in front of a big rig unless you are going faster than the trucker. I’ve handled many accidents…some which were fatalities…in which a small car darted into the lane in front of a big rig and then slowed down suddenly. The trucker didn’t have any chance to slow down and avoid striking the vehicle directly in front of him.

4. Turn on your headlights while driving. “Running Lights,” as they are called, increase your visibility. Tests done on cars with running lights by the Society of Automotive Engineers showed a 38% reduction in collisions. Test results by Avis Rent-a-Car showed a 64% reduction in car damages, and a 69% decrease in repair costs for cars using running lights.

If you’ll follow these four tips, you’ll drastically lower the chance that you will have a traffic accident involving a big rig.

Drive Defensively! Watch out for the other guy!

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Slip And Fall Accidents: What Should You Do When You Slip And Fall?

Slip and fall accidents happen much more often that you might think. Today’s article will deal with what happens to individuals when they slip and fall, and what you should do if you are a victim.

Slip and fall accidents usually involve premises liability. A person can slip and fall anywhere…home, business, church, playground, sports facility…anywhere. What happens AFTER the fall is where the problems come up.

The injuries that come from falling can range from a sore backside to severe lacerations, broken bones, internal injuries and even death.

In a slip and fall insurance claim, the burden is on the injured party to prove that the premises owner knew there was a hazard and did not remedy that hazard, which contributed in some way to the injury. Simply the act of slipping and falling does not automatically constitute negligence on the part of the property owner.

Accident Avoidance

The first and most obvious statement is to make sure you are aware of your surroundings. Be sure of where you are stepping, and the condition of that surface. If the surface is wet, you must move with caution. If the surface has other debris on it, move with caution.

Watch what you are doing while you’re walking. If you are distracted by some other activity, you are not looking where your feet are going.

If you see an obvious hazard in your path, attempt to go around it.

Do not wear shoes that have slippery or smooth soles.

Slip and Fall Injuries

One of the businesses that can actually be dangerous to visit is the grocery store.

Grocery stores invite the public to walk around in their stores. However, because of the thousands of products they stock, there are hazards everywhere. Bottles and jars get dropped and contents spill onto the floor. Produce gets dropped onto the floors. Refrigeration units leak water onto the floors. Roofs leak and make puddles. And there can be hazards lying around on the parking lots. So, they have high incidences of premises liability claims.

I have investigated hundreds of slip and fall claims in my career as a claims adjuster. So, based on that experience, here are my recommendations for proving a slip and fall claim:

1. After you fall, examine yourself to see if you are injured. If you already know you’re injured, notify the owner or manager of the property where you fell. You may not be able to complete and submit an injury report at that time, but you will have placed the property owner on notice that an injury occurred.

2. Try to determine what caused your slip and fall.

3. If there is a witness to your fall, get that person’s contact information right away.

4. If you need to, seek medical treatment. Don’t be in a hurry to reject medical treatment. I’ve seen many incidents in which a person fell one day, and did not begin feeling pain until 1-3 days later.

5. Seek the advice of a personal injury attorney. If you do not, you may inadvertently give away your rights of financial recovery through your cooperation with the property owner’s insurance company.

6. Notify the property owner IN WRITING, CERTIFED MAIL, of your intention to file a claim. Note that I placed this action AFTER seeking legal counsel.

7. Notify your own insurance company, such as your homeowners or business owner’s carrier, about your loss. Failure to notify them might violate your policy terms, and make you ineligible for legal defense.

8. Don’t sign ANYTHING that the property owner’s insurance company gives you without having an attorney review it first.

9. Don’t give the adjuster a recorded statement unless your attorney is present, or at least involved on a three-way phone conversation.

10. Then, work with your medical provider, your personal injury attorney or a claims consultant to settle your claim.

All premises injury claims are not due to the negligence of the property owner. But, if you’ll follow these ten tips, you have a better chance of proving your claim.

Now, I’d like to offer you two special reports at no cost. One is “5 Things To Do When Shopping For Car Insurance,” and the other is “5 Things To Avoid When Shopping For Car Insurance.” Each one is a $9.95 value, but free to you when you sign up for my newsletter at the website address below.

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Swimming Pool Safety: Have a Fun and Safe Back Yard Pool

Swimming pools are wonderful to own, but danger is built in.

The Consumer Product Safety Commission states that each year, over 300 American children under age 5 drown in swimming pools and spas. 2,000 more have near-drowning incidents. Additionally, hundreds more over age 5 drown each year.

Medical care costs for near-drowning victims are very high. Dealing with brain damage issues can cost hundreds of thousands of dollars. Then, if that person lives, there are brain damage issues and/or disability for the rest of their lives.

If you are found liable for the injuries or death, you’d better be sure your liability limits are as high as possible. A million-dollar jury verdict against you could ruin your financial life forever.

Don’t allow your home to be the location of a drowning. Take the following precautions to prevent a tragedy.

• Most building codes require a pool to be fenced in. Make sure yours has a fence around it that is at least four feet tall. If your house forms one side of the barrier for the pool, doors leading from the house to the pool should be protected with alarms that sound when the doors are unexpectedly opened.

• Make sure that all your gates are self-closing and self-latching. Latches should be high enough that small children cannot reach them.

• For above-ground pools, steps and ladders to the pool should be secured or removed when the pool is not in use.

• Consider installing a power safety cover, a motor-powered pool cover placed over the water area, to prevent access to the water.

• Have a professional regularly inspect your pool or spa for entrapment or
entanglement hazards. Plainly mark the location of the electrical
cut-off switch for the pool or spa pump.

• Instruct babysitters about potential pool hazards to young children and about the use of protective devices, such as door alarms and latches. Emphasize the need for constant supervision.

• Never leave a child unsupervised near a pool. During social gatherings at or near a pool, appoint a “designated watcher” to protect young children from pool accidents. Adults may take turns being the “watcher.” When adults become preoccupied, children are at risk.

• NEVER, EVER, EVER, EVER SWIM ALONE.

• Learn Cardio-Pulmonary Resuscitation (CPR). Keep rescue equipment and a phone near the pool.

• If a child is missing, look in the pool FIRST! Seconds count when saving a life. 75% of drowning victims are missing for five minutes or less.

• Knowing how to swim doesn’t drown-proof anyone. Accidents can happen, and a small amount of water in the lungs can cause death.

Be safe FIRST, and then you can really enjoy your pool!

Insurance Quotes: Save Hundreds Of Dollars, Prevent Financial Disaster

Insurance quotes are a terrific way to help lower your monthly expenditures. I used a quote service earlier this year and saved $590 on my homeowners and car insurance package.

In today’s economy millions of people have lost their jobs. Millions more will lose jobs as the economy worsens. Millions of unemployed persons have stopped looking for new jobs, which skews the national unemployment figures, and makes the unemployment rate appear smaller than it actually is.

Some people have had to accept pay cuts just to keep their jobs. Add to that the number of unemployed people who just closed an economy-sensitive business.

I have a good friend who is a home designer. She has been in business for over 25 years, and was a nationally-renowned designer. In 2008, her business stopped like turning off a water faucet. She has just gone out of business. Will her business ever come back? No one knows.

Colleges and universities across America just finished commencement ceremonies, where tens of thousands of young graduates got their degree and a handshake. However, job prospects look bleak for this graduating class. According to an ABC News story, last year over 51% of graduates had a job when they left school. This year, the number is only 20%. But they still live in homes and drive cars every day.

An increasing number of people are allowing their insurance policies to lapse, or they are cancelling them outright. They simply made a decision that they cannot pay the premiums anymore.

What a horrible and tragic decision! Cancel your cell phone…your cable TV…your internet connection…your gym membership…your electrical service. But don’t go without insurance!

“Cancel my home’s electrical service??” I hear you sputter. “Have you lost your mind?”

Listen to me. You could temporarily live without electrical service in your home and your life would not be destroyed. But just have ONE insurance loss without coverage, and your financial life could easily be destroyed for the rest of your life.

A fire, windstorm or flood could wipe out your home or business. An auto accident could destroy your vehicle. If the accident is your fault, the claimant could sue you for damages, which could run into the hundreds of thousands of dollars.

In every example shown above, those people have homes, cars and businesses. In the area of auto ownership, every state in the USA and every Canadian province requires auto insurance by law. So, if you cancel your auto insurance, not only are you without coverage, but you are also committing a misdemeanor in most jurisdictions.

In addition, if your home, business or vehicle is financed, your lender requires you keep Property coverage on the property at all times. If the lender finds out that you have cancelled your coverage, they likely have the right to declare you in default on your loan, and require payment of the balance. They could repossess your car, home or business. At the very least, they could purchase coverage on your car, home or business property for the loan balance and charge you for it. This is called “forced-placed coverage,” and is very expensive, inferior coverage.

Before you make a choice to cancel your insurance policy, stop and consider getting insurance quotes that could lower your insurance premiums.

The process of getting insurance quotes is simple and IT COSTS YOU NOTHING! All you have to do is go online and use the search term “Insurance Quotes.” You’ll find hundreds of quote websites, all eager to get that quote for you.

Simply fill out an easy information form, giving the quote services details about what you want to insure and submit the form. Within minutes, you’ll begin receiving contacts from agents and insurance companies who want to compete for your business. Make sure that the coverage quoted are the same, and choose which vendor offers the best deal. Most times, the agent will do all the paperwork for you if you are switching from one company to another. Then, choose your new insurance company and breath easier with YOUR SAVINGS!!

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State Secession: The Redress of Grievances

Secession is much in the thoughts and on the lips of many Americans today. We all witnessed “tea parties” on April 15th across the nation as people expressed their disgust with government and confiscatory taxation. On that day, Texas Governor Rick Perry actually made comments in favor of Texas secession. He was widely derided by the national media.

Look back at the plight of the American colonies in the 18th century. They experienced heavy taxation and ever-increasing regulation from King George. Their individual rights as English citizens were trampled or ignored. In individual colonies, small minorities of colonial citizens banded together to seek independence from England. Only after repeated abuses from the King, and repeated entreaties to the King went unheard, did the colonies band together and secede, each colony declaring that it was a sovereign nation.

All through the first 60 years of the 19th century, state secession was a recurring topic. During the Andrew Jackson presidency in 1832, South Carolina advanced the concept of nullification, stating that it had the right to nullify high Federal tariffs, and that it also had the right to secede from the Union. Jackson fought and won this battle over nullification and secession.

But secession reared its head again in the late 1861 when the eleven Southern states did secede and form the Confederate States of America, a sovereign nation.

In each instance, patriots sought peaceful and legal means to resolve their differences.

When Thomas Jefferson wrote the Declaration of Independence, he wrote that “they should declare the causes which impel them to the separation.” He wrote that “Governments long established should not be changed for light or transient causes,” but that they had a “duty to throw off such government.” Much of the remainder of the document was the listing of the tyrannical acts of the King, and the actions of the colonies to gain a remedy. Then he says that “Our repeated petitions have been answered only by repeated injury.” Finally, Jefferson summarizes by asserting that each state is, and by right ought to be, free and independent states.

In the coming days, some American state may actually give secession some serious thought. Along that line, I make the following observations.

State legislatures that intend to give serious debate and credence to the idea of secession from the United States of America must not do so lightly. Rick Perry of Texas was not serious about a new Republic of Texas. He was simply delighting a crowd with rhetoric and applause lines. His words simply kept his name in the headlines for a few days of free publicity.

A State that is serious about secession had better begin creating a “paper trail” showing all of the “petitions” they have made to Washington that were answered by repeated injury. They should make additional petitions with the expectation that additional injuries will ensue. This should not be a difficult task, but merely a time-consuming one.

Then, when the citizens of that State can bear no more Federal tyranny, secession and state sovereignty may appear to be the logical choice.

But I believe that the weight of the potential negative consequences of a state secession will prevent any state from actually seceding from the Union. I do not believe that there is any one American state that will ever secede from the Union. I do not believe that that brand of courage exists anywhere in America.

I do believe that the Federal government could collapse, and then from that collapse could emerge sovereign states. But that eventuality is radically different than the 1776 or 1861 secessions.

Directors and Officers Liability: Bleak Days For Directors and Officers

In a June 18th webinar sponsored by Zurich Financial Services in London, a forum was held to discuss director and officer liability exposures.

These are bleak days for corporate directors and officers.

In 2008 there were over 150,000 insolvencies in Western Europe alone. In the first quarter of 2009, the United States had over 5,000 corporate insolvencies. Mario Vitale, CEO of Zurich’s Global Corporate Division, predicts over 62,000 American corporate insolvencies for 2009, an increase of over 56% from the previous year. And the bankruptcies are not limited to the financial sector. They are widely spread over every type of business.

Vitale asserts that there is a direct relationship between corporate insolvencies and lawsuits filed against corporate directors and officers. In one American court jurisdiction alone, considering all the public company bankruptcies filed in 2008, 77% had a class action lawsuit filed against them.

One of the other daunting challenges to today’s corporate officer or director are the massive changes that have occurred in securities law. The Securities and Exchange Commission is holding officers criminally responsible for what they say regarding the financial health of their companies, including the information in their annual reports and financial statements.

Today’s economic uncertainties are dangerous for corporations. They must consider:

-Whether their line of credit is secure
-whether their bank, who issues the line of credit, is financially healthy
-the financial health of the companies in their supply chain
-the financial health of their customers. Can they pay their invoices?

So, for public corporations seeking investors, what can they tell prospective investors about the financial health of their company when the future cannot be accurately forecasted in any substantive way?

What you can be absolutely certain about is when there is a corporate insolvency, the shareholders, hedge funds and the “vulture funds” will be picking the bones of the company’s financial documents to find the slightest half-truth for their basis for lawsuits.

Francis Kean, attorney at partner at the UK firm Barlow Lyde & Gilbert, boldly stated that the worst event “by a country mile” that could happen to a director or officer is the insolvency of the company upon whose board they serve. A director’s responsibility is to the company he serves and helps to control. However, in a bankruptcy, the Court takes control. It must not only settle financial claims against the company, but analyze the reasons for the insolvency, including whether or not directors can be found liable.

The other wild card is that the potential claim can be “sold” to the highest bidder because the claim can be perceived as an asset against the directors.

German corporate securities law stipulates that once a company’s directors decide that the company should be liquidated, the directors only have 21 calendar days to place the company into insolvency. Failure to meet this deadline can result in criminal charges against the directors with a maximum jail term of three years.

Anything like that here in the United States? Are you sure?

Why would anyone choose to be a corporate director in this sort of business and regulatory climate?

So, how do directors and officers of corporations protect their own assets in this hostile business environment? The corporate director or officer cannot be certain that the company they serve will be there to defend and indemnify them in case of insolvency and subsequent legal challenges.

Can the director simply resign from the board? Not really. The director must eventually prove that he did everything humanly possible to minimize the losses for the creditors. Anything short of that effort could be considered a claim against the director.

The director must plan ahead, and prepare for the worst.

First, know your liabilities. Know who might be a plaintiff and the reasons they might file a lawsuit against you.

Second, buy a Directors and Officers (D&O) Liability insurance policy at the time you are either a director or officer. But buy the coverage while your company is still solvent. Buy from an insurance company that also has a strong balance sheet, and is going to be there when you need the protection.

Here is a new complication for directors, though. Some insurers are coming out with Insolvency Exclusions. Some are broadly worded, some narrowly worded. Be very careful of the wording of your policy.

Also be aware that most of these policies are “Claims Made” policies, which means that the trigger event must have happened within the policy period. But, is the bankruptcy the triggering event, or is the claim date the trigger? The claim may be made months after the bankruptcy filing and by that time, the policy may have expired. This question will be determined in the courts.

I recommend carrying your D&O policy for a couple years after you leave the Board of any company. I also recommend high policy limits.

Protect your assets with Directors and Officers Liability insurance.

Department of Insurance Complaints: How To File A DOI Complaint

State Departments of Insurance report that dissatisfaction with claim settlements is the top reason consumers file complaints with them. Sometimes it is the fault of the insurer, and sometimes it is the policyholders’ fault for not having the right coverage.

Today, I’m going to walk you through the process of filing an insurance claim complaint. I’m going to use the process here in the state of Georgia, where I live. The process in your home state will be very similar, and can be found at the website of any state’s Department of Insurance. Or, you can phone your Department of Insurance and they will likely either tell you how, or send you printed information on the complaint process.

You may file a complaint with the Department of Insurance if you cannot resolve your dispute directly with your company. You can even file your complaint if you haven’t been through the appraisal process (found in your policy).

The Consumer Services Division of the Department of Insurance provides consumer information and investigates complaints about companies and producers. They handle most insurance problems involving home, business, auto, health, HMO, life, credit, dental, etc. Those problems may include coverage issues, claim disputes, premium problems, sales misrepresentations, policy cancellations, and refunds, just to name a few. They will also investigate a complaint against a Public Adjuster.

The Consumer Services Division will not:

• Give you legal advice or act as your attorney;
• Recommend an insurance company, agent or policy;
• Resolve a dispute when the only evidence is your word against the word of the adjuster, producer or company;
• Make determinations related to the facts of a case. For example, they will not conclude who is at fault in an accident or determine the disputed value of damaged or stolen property;
• Resolve complaints against service providers, like body shops and restoration contractors unless the complaints involve the action of the insurance company. For example, they could resolve complaints against a restoration contractor that the insurance company required you to use;
• Make medical judgments.

The Department of Insurance recommends:

• Read your policy carefully. It is important to know what your policy covers prior to having a loss. If you have questions on the coverages you have purchased have your Agent provide you an explanation.

• Keep copies of all correspondence between you and the insurance company. When communicating with your insurance carrier keep track of the phone numbers you called, the date and time of the call and the name and title of the individual you spoke with. After the call keep notes on what was discussed.

• Ask the company for the specific language in the policy related to your claim. Determine whether the disagreement is because you and the insurance company interpret your policy differently. If there is a disagreement on the language in the policy you can seek assistance through the Consumer Services Division by filing a complaint and providing the documentation which will include the policy language in dispute.

• If at all possible take pictures or videos of your contents in your home and do this periodically which will help in the event of a loss. Keep the pictures or video in a safe deposit box or somewhere other than the home.

AVOIDING AUTO AND HOMEOWNER CLAIMS

• Keep all receipts for repairs you make to your property after damage. Auto and homeowners policies may require you to make reasonable and necessary repairs to protect your property from further damage. Your policy covers the cost of these repairs. Keep the damaged property for the claims adjuster to inspect. If possible, take photos or videos of the damage before making temporary repairs.
• Don’t make permanent repairs until the adjuster has inspected the damage.
• Ask the adjuster for an itemized explanation of the claim settlement offer. For homeowners claims, this should include sales tax, depreciation, and holdback depreciation for policies with replacement cost coverage. Holdback depreciation is an amount of money withheld from your claim settlement until repairs are finished or the items are replaced. Ask how the adjuster determined the estimate amount.
• Be prepared to discuss your claim if there is a disagreement on the settlement offer. The more documentation you have on items owned will make the process easier.

If you do have a claim dispute, contact your insurance company first.

When contacting your insurance company have your policy number ready. Ask where your written dispute needs to be sent. State your complaint and how you expect the company to resolve it. Sending the dispute in writing encourages a written response.

Document your phone calls by noting the phone number you called, the name of the person with whom you spoke, the date of the call and a brief summary of the conversation. Keep copies of all written communications.

In addition to the written complaint, send copies (not originals) of letters, notes, invoices, canceled checks, advertising materials, or other documents that support your complaint.

The DOI Complaint Form

The DOI Complaint Form is a document that can be completed, printed and submitted with copies of documents that support your complaint. Obtain this form at the DOI website or phone them and request a copy be sent to you by mail. This will enable them to set up a case and eliminate the need for them to request documents, and reduce the delay in providing a response. Always keep your original documents for your records.

To help ensure that the Department of Insurance receives all necessary information to investigate your complaint, include the following information with your complaint:

* your name, address, daytime telephone number and email address
* the exact name of the insurance company
* the full name of any agent or adjuster who may be involved
* your policy number
* your claim number and the date of your loss, if applicable
* a copy of both sides of your insurance card
* a concise description of your problem
* copies of all supporting documentation, including invoices, canceled checks, advertising materials, and any letters between you and the company or agent.

What will the Department of Insurance do to resolve your complaint?

* Send a copy of your complaint to the entity you complained against and request a detailed written response.
* Determine if your issue was handled appropriately under the terms of the policy or certificate of coverage.
* Review your file to determine if the insurance company, insurance agent, or adjuster violated state insurance laws.
* Take enforcement action when laws are violated.

Even though they may not always be able to help you resolve your complaint, your complaints and inquiries help the DOI to assist other policyholders by identifying issues of concern and may help identify potential problems with insurance companies, agents, or adjusters. Their involvement can also cause insurance entities to look more closely at your concerns.

What happens after you file a complaint with the Department of Insurance?

* You will receive an acknowledgment letter, advising who the investigator is and their contact information. Your Case Number shown on the letter is for the issue submitted to the Department. The case number should be used to send additional information to the Department on your case.
* If you have future complaints you will get a new case number, acknowledgement letter and the new investigators name and contact information.
* The DOI will notify the company of your complaint and ask for a detailed response. They will send you a copy of the company’s response, with their formal letter regarding the completion of our investigation. The review will result in one of the following actions:

o If the complaint has been resolved, they will send you a letter explaining the resolution.
o If an insurance law has been violated, they will request corrective action by the company.
o If the company is not abiding by the policy, they will request corrective action.
o If the insurer or producer has not responded to all questions or has not investigated the complaint thoroughly, they will require them to do so.

What happens if you are not satisfied with Department of Insurance results?

If you disagree with the Department’s response to your complaint, contact the Consumer Services Division and ask to speak with a Supervisor.

You may wish to consult an attorney to discuss your concerns. You may also request alternative dispute resolution (ADR) to settle disputes with your insurance company on property claims. ADR uses techniques such as mediation with a neutral third party to help settle a dispute outside a formal court of law. Please consult your telephone book for listings for attorneys and mediation services.

Now you have a basic knowledge of the complaint process. Remember, the Departments of Insurance exist to regulate insurance companies and protect consumers. Don’t be shy about enlisting their help. That’s why they exist.

Claims Adjusters: How to Interview and Evaluate a Claims Adjuster

Claims adjusters are no different than any other group of people. Some are trainees, some have limited experience and training, and some have lots of experience and training.

But how will you know what kind of adjuster you will be assigned when you have an insurance claim? Adjusters don’t show up and hand you a copy of their resume. Sometimes, you will be lucky to get their business card.

Usually, the qualifications of an adjuster are never mentioned. Yet, it is those very qualifications…or the lack thereof…that can make or break your claim.

People are way too trusting and compliant. They have a loss, call the insurance company and report the claim. But when the adjuster arrives to begin the adjusting process, it seldom seems to occur to policyholders that they have a right to question the qualifications of the adjuster. They just stand there like sheep waiting to be shorn. And then the shearing begins.

So today, I’m going to walk you through the process of determining the qualifications of any insurance adjuster. Once you’ve gathered this information, you’ll be able to make a decision whether or not to accept this adjuster to handle your claim.

This process only works for first party claims, in which you are the policyholder. You cannot use this process when you are the claimant against someone else’s insurance policy.

1. After you have submitted your Notice of Loss to the insurance company, they will assign an adjuster to handle your claim.
2. Know that there is nothing in your policy that requires you to accept any particular adjuster who is representing the insurance company.
3. The adjuster will contact you to make an appointment to meet with you. Make the appointment and keep it.
4. When the adjuster arrives, take control of the situation. Before the adjuster begins his inspection or investigation, ask him:
a. Is he a licensed adjuster in your state? Get his license number. Adjusters in my state are required by law to carry their license card with them.
b. Is he a temporary adjuster?
c. How many years has he been an adjuster?
d. How many years has he worked for this company?
e. What specialized claims training classes has he taken?
f. Has there ever been a complaint filed against him with the Department of Insurance of your state?
g. What is the name and telephone number of his supervisor?

Once you have obtained this information you can make the decision whether or not to accept this adjuster.

My recommendations:

1. Do not accept a temporary adjuster. Commonly known as “Storm Troopers,” temporary adjusters have had very little training. Do you want an ill-trained adjuster handling your loss?
2. Do not accept an adjuster with less than two years of experience handling your particular type of loss. With less than two years experience, he’s still a rookie.
3. Do not accept a non-licensed adjuster. However, if your state does not license adjusters, you have no choice.
4. Do not accept an adjuster than has not had specific training in your type of loss. For example, in disasters, sometimes the insurance company will have auto adjusters helping out with the high volume of property claims. But why should you accept an adjuster that is not a specialist in your type of claim?
5. Check with your state’s Department of Insurance to verify if the adjuster has had complaints filed against him. If he has had a complaint, find out why. What’s most important is the cause of the complaint, like violating a law, unethical acts or fraud.
6. If you get any unsatisfactory answers to your questions, and you want a more qualified adjuster, send your request by letter, US Post Office Certified Mail, to the adjuster’s supervisor.
7. If the insurance company rejects your request, file a complaint with your state’s Department of Insurance.

Adjusters are not accustomed to getting this type of challenge from policyholders. Don’t be surprised if some adjusters resist your questions. Adjusters are taught to control you, the policyholder, in the claims process. If you are in control, they can feel very threatened. But their insecurity or lack of control should not deter you from getting these questions answered.

Remember that your job as claimant is to submit a very accurate claim that maximizes your recovery. Dealing with an unqualified adjuster would only serve to complicate your claim submission.