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Home > Blog > Progressive Management Associates, LLC Blog Page 8
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Progressive Management Associates, LLC Blog Page 8

View the latest blog posts from Progressive Management Associates, LLC.

TUESDAY, NOVEMBER 13, 2012

PMA Insurance Services welcomes Utica National and GMAC

I'm happy to announce that we have added 2 more carriers to our portfolio of top companies to our P&C division. Utica National and GMAC are our newest markets. Utica will provide both personal lines and Commercial lines markets. GMAC will provide auto insurance, home insurance and RV insurance. Do not hesitate to contact us at (703) 449-1327.
Posted 2:12 PM  View Comments


WEDNESDAY, NOVEMBER 7, 2012

DC Exchange will make it difficult on health insurance agents!

Elections are over and now we move forward. As for me and my agency, the landscape of employee benfits, in particular health insurance, will be completely changed in the coming year(s).

The D.C. Health Benefits Exchange Board voted to exclude brokers from the health insurance equation, forcing all small employers with 50 or fewer workers to buy health insurance for their workers online through the D.C. health insurance exchange. Individuals who call the District home would also be denied the right to purchase insurance through a broker. Larger employers would eventually be moved over to the exchange as laws are further implemented.

In addition, Maryland and Virginia residents who happen to work in the District would also be required to carry health insurance purchased by their employer through the government-run online insurance marketplace.


I have a large client base in DC and it looks like I'll be evntually shut out of being their insurance representative with no indication that this might change. This is what Obamacare has done to my small business!
Posted 12:42 PM  View Comments


WEDNESDAY, NOVEMBER 7, 2012

Insured losses from Sandy could hit $20B, deductibles won’t apply

Insured losses from Sandy could hit $20B, deductibles won’t apply

By Kelley L. Allen

Posted: November 1, 2012

Primary insurers could have to pay more than expected as homeowner deductibles in most affected states won’t apply and loss estimates climb to $15 billion.

Sandy came ashore on the New Jersey coast as a tropical cyclone that caused disastrous coastal flooding, left 8 million without power and caused at least 47 deaths in the U.S. Overall, the storm could become the second-costliest for the country, second to Hurricane Katrina.

Initial damage estimates forecast losses similar to Hurricane Irene in 2011, at between $4 and 5 billion, with primary writers expected to assume the brunt of those losses. In the ensuing week, however, loss estimates have risen as high as $20 billion.

As losses mount, storm semantics have prompted news that deductibles will not apply for homeowners in several states affected by Sandy. The Maryland Insurance Administration has said homeowner deductibles will not apply in that state since the National Weather Service did not issue a hurricane warning. So far, deductibles also will not apply in New Jersey, New York and Connecticut, since NWS downgraded Sandy from hurricane status before the storm came ashore.

Hurricane deductibles typically require a payment between 1 and 5% of a property’s value, and go into effect when a storm has sustained winds of 74 mph or more. The lack of deductibles means insurers will have to pay out greater amounts.

While the U.S. property-casualty sector is considered flush with cash, its stocks have seen a 5% decline since news of Sandy’s potential destruction hit. And according to one Morgan Stanley analyst, the industry could see its earnings fall by 26%.

Disaster modeler Eqecat is forecasting losses for private insurers of up to $15 billion. Some estimates put that number at $20 billion. Those estimates do not include payouts from the National Flood Insurance Program (NFIP), which is administered by FEMA.

State Farm Insurance, the largest homeowner policyholder along the eastern seaboard, has seen about 24,500 claims since the storm. Most of those claims are in New York, with 7,500, followed with 5,000 in New Jersey and another 1,500 in Virginia.

Writers of federal flood premiums last year had $342.8 million written in the tri-state area, while the property-casualty industry as a whole in 2011 wrote $2.8 billion in federal flood direct premiums, according to SNL. Of the coastal areas hardest hit by Sandy, about 90% of the coastal housing properties in Ocean City, Md. are insured, while 1% of the coastal housing properties in New York are.

Commercial properties, meanwhile, are only insured through the federal program for up to $500,000 in losses. And auto losses are not covered through the NFIP.

FEMA’s flood program, meanwhile, has at least $45 billion in policies in the tri-state area. But the agency may not have enough to cover claims made through the NFIP, as it still owes the U.S. Treasury about $18 billion from Hurricane Katrina losses.

A look at the numbers

New York City has about $2.7 trillion in coastal properties insured through the federal flood program. Neighboring New Jersey, meanwhile, had 230,708 flood policies written as of September 2011 with an insured value of $706.5 billion in 2012.

Farther south in Delaware, the national flood program has about 25,000 policies insuring $60.6 billion, as of 2007. Washington, D.C., has 2,128 policies, while Maryland has 70,200 insuring $17.1 billion in coastal properties.
Posted 12:31 PM  View Comments


TUESDAY, NOVEMBER 6, 2012

Need a local Progressive Agent? Give Jon Bramlett a call.

Need a local Progressive Agent? Give Jon Bramlett a call.

Nov 2, 2012

Are you looking for a Progressive Insurance agent for Virginia, Maryland, or DC? Give us a call, PMA Insurance Services is here to help you. Please give us a call at 703-449-1327 or email us at info@pmabenefits.com and we can help you set up your Progressive Insurance.
Ask for Jon!

Posted 5:51 PM  View Comments


TUESDAY, NOVEMBER 6, 2012

With More Americans Opting for Penalty, Adverse Selection Is Issue

Featured Health Business Daily Story, Nov. 6, 2012

With More Americans Opting for Penalty, Adverse Selection Is Issue

Reprinted from AIS's HEALTH REFORM WEEK, the nation’s leading publication on the business implications of the massive changes for the health industry mandated by reform.

By Jonathan Block, Editor
October 29, 2012Volume 3Issue 21

With the Congressional Budget Office (CBO) projecting last month that 6 million Americans will pay a penalty rather than purchase insurance coverage as part of the health reform law, there is growing concern about the potential impact on risk pools. Such a large number of individuals out of the insurance market — most of them likely young and healthy — could lead to adverse selection in the market. Although industry experts contacted by HRW agree that the penalty likely was set too low in the first few years to persuade some individuals to purchase coverage, they disagree on whether a large number of people out of the insurance market will have a profound effect.

On Sept. 19, CBO boosted by 50% an earlier estimate, made in April 2010, that only 4 million Americans would pay the penalty.

“When the actuaries have taken a look at this, there really isn’t a solid basis for concluding that risk pools are going to be massively skewed,” says Dan Mendelson, CEO of Washington, D.C., consulting firm Avalere Health LLC. “It’s possible, but a lot of things have to line up.”

Some See Sizable Potential Problem

However, others disagree. Peter Kongstvedt, M.D., principal of Virginia-based consulting firm P.R. Kongstvedt Co., tells HRW that having millions of people, many of whom are likely healthy, out of the insurance pools certainly will have a negative impact. He says that “if someone has the option of not purchasing now and pay the penalty, save the money and enroll” only when they need it, they may take that risk. He adds that the market will become more stable when the penalties increase to a level at which they are equivalent to the annual cost of a bronze-level (i.e., the lowest allowable) plan on the exchange.

As constructed, the penalty is too weak given that it is relatively small in proportion to the amount someone would have to pay for insurance through the exchanges, adds David Tuomala, director of actuarial consulting at OptumInsight, a unit of UnitedHealth Group. “The end result is that the insured risk pool is likely to be negatively impacted.”

Tuomala explains the under his baseline assumptions, the uninsured population will shrink by 31 million to 21.4 million after further reform-law provisions take effect. “The average cost of those remaining uninsured is about 32% lower than the average cost of the currently uninsured,” he adds. “This would increase average individual market costs by over 40%.”

Under the Affordable Care Act (ACA), the penalty for not getting coverage is the greater of a flat dollar amount per individual or a percentage of an individual’s taxable income. In the first scenario, the penalty is $95 in 2014, $325 in 2015 and $695 in 2016. After 2016, the amount is indexed to inflation. The second method is computed through a portion of taxable income that is equal to a percentage of a household’s income in excess of the tax filing threshold. That percentage will be phased in starting at 1% in 2014, 2% in 2015 and finally 2.5% in 2016.

However, there are several provisions already contained in the ACA that take into account the possibility of adverse risk selection and aim to prevent that from happening. Kongstvedt says that a provision requiring insurers and self-funded employers to contribute to a premium stabilization fund, known as a transitional reinsurance program (HRW 3/26/12, p. 3), was created under the premise that adverse risk was something that might have to be dealt with in the early years of exchanges. He adds that to encourage more young people to get coverage, the reform law includes a requirement for a lower-cost “young invincible” coverage option for individuals under 30 years old. Although this option has low monthly premiums, it will have a $5,950 deductible and will be offered on exchanges only to those who don’t qualify for Medicaid and don’t receive health benefits through their job.

But if issues such as adverse selection do crop up in the exchanges at the outset, there are ways to address this situation, says Rich Stover, a principal in Buck Consultants’ Secaucus, N.J., office. He tells HRW that tweaks to the law such as limiting when people can enroll in health plans or penalizing enrollees if they switch from a lower to higher level of coverage plan within a certain period of time could be used to guard against adverse selection. However, he adds that early on, some insurers may hesitate to offer plans on the exchange until the market becomes more stabilized.

Mendelson also concedes that during the first couple of years of the exchange, insurers are likely to pad their premiums to leave themselves a cushion in case risk issues crop up.

The CBO report is available at www.cbo.gov/publication/43628.

© 2012 by Atlantic Information Services, Inc. All Rights Reserved.

Posted 1:42 PM  View Comments


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