We hope you find the information provided in our quarterly Insurance & Risk News to be relevant and helpful. Our transition into a “new year, new look” will continue with a redesign of this newsletter. We look forward to bringing you the same great content with an exciting new look in the next issue!
State of the Market: National Flood Insurance Program
The National Flood Insurance Program (NFIP) is a program created by Congress in 1968 through the National Flood Insurance Act of 1968 and administered by the government. The program enables property owners in participating communities to purchase insurance protection against losses from flooding. The NFIP also requires flood insurance for all loans or lines of credit that are secured by existing buildings, manufactured homes, or buildings under construction located in a participating community.
Before 1950, flood insurance was part of the standard insurance policy. During the 1950s, increasingly high flood losses caused many insurance companies to begin excluding flood coverage from standard insurance policies, selling flood insurance separately. Over time, the premiums collected were insufficient to cover losses caused by major flooding events causing carriers to inflate premiums significantly or pull out of the flood insurance market altogether.
The NFIP rates are not set by the market risk valuation, making them less expensive than private insurance company rates. Congress originally intended that NFIP operating expenses and flood claims be paid through the premiums collected from flood insurance policies. However, when losses are heavy, the NFIP borrows from the U.S. Treasury and these loans are paid back with interest.
Participation in the NFIP is based on an agreement between local communities and the federal government. The agreement states that if the community will adopt and enforce a floodplain management ordinance to reduce future flood risks in Special Flood Hazard Areas (SFHA), the government will make flood insurance available within that community as a financial protection against flood losses. Between 1978 and year-end 2014, the U.S. federal government has paid more than $51 billion in claims under the National Flood Insurance Program.
The NFIP is not set in perpetuity. Congress must periodically renew the NFIP’s statutory authority to operate and has made several amendments since its inception. Congress most recently re-authorized the NFIP through May 31, 2019. This renewal was the tenth no-change extension since September 2017. NFIP reauthorization is an opportunity for Congress to take bold steps to reduce the complexity of the program and strengthen the NFIP’s financial framework so that the program can continue helping individuals and communities take the critical step of securing flood insurance.
6 HR Trends to Monitor in 2019
A new year brings new issues for HR professionals to contend with. Some challenges are similar to previous years (overtime uncertainty), while others are more unique and complicated (legal marijuana and employment). Despite inherent difficulties, staying tuned in to the following trends can keep you ahead of the game in 2019. Ignoring them will only put you behind.
1. Opioids, Marijuana and the Workplace
Opioids have been concerning employers for the last few years, and quietly ravaging the country for even longer. In 2017, the opioid crisis was declared a national emergency due to tens of thousands dying each year from prescription painkillers. Many of these tragedies started with a legal prescription after a common medical procedure.
2. Leave-related Issues
Did you know that 47 percent of employers were very challenged by cross-state leave laws and 43 percent found it extremely difficult administrating leaves in general, according to a recent XpertHR survey? With ever-expanding legislation, it’s not too surprising.
3. Soaring Health Care Costs
Paying over $15,000 annually for each employee’s health care in 2019 sounds like a bad dream, but it’s the real cost trend. With rates surpassing $6,800 and $20,000 for single and family coverage, respectively, employers are scrambling to cut costs wherever they can. Yet, that can be easier said than done.
4. Wage and Hour Concerns
Hire more workers or pay overtime? That’s the question growing businesses must ask themselves. With overtime changes looming in the first quarter of 2019, you may think it’s easier to hire more workers at lower salaries. But, depending on your situation, that may not be true.
5. New Technologies
HR is always looking for new ways to streamline and improve its processes. In 2019, it appears that people analytics and recruiting technologies will be at the forefront of the trend, according to professional HR organization Toolbox.
6. Upskilling Employees
If you have a new task that requires new skills, do you hire a new employee for the job? The current trend says no—you upskill current workers. Upskilling is the process of training current employees in new skills and responsibilities. According to a McKinsey study, 62 percent of executives think automation will require them to retrain or replace over a quarter of their workforce.
This article is an abbreviated version of HR Insights by Zywave. To view the full article, please click here
Changes to OSHA’s Online Reporting Requirements
Effective February 25th there are two new changes to OSHA’s online reporting requirements which are as follows:
1. Establishments required to submit, now only have to submit their 300A and no longer the 300 and 301.
2. Establishments are now required to include your Employer Identification Number with the Injury and Illness data submitted electronically to OSHA.
March 2nd is still the deadline for electronically reporting your 300A log.
OSHA published a Final Rule to amend its recordkeeping regulation to remove the requirement to electronically submit to OSHA information from the OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) for establishments with 250 or more employees that are required to routinely keep injury and illness records. Covered establishments are only required to electronically submit information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). The requirement to keep and maintain OSHA Forms 300, 300A, and 301 for five years is not changed by this Final Rule.
Only a small fraction of establishments are required to electronically submit their Form 300A data to OSHA. Establishments that meet any of the following criteria DO NOT have to submit their information. Remember, these criteria apply at the establishment level, not to the firm as a whole.
• The establishment’s peak employment during the previous calendar year was 19 or fewer, regardless of the establishment’s industry.
• The establishment’s industry is on this list, regardless of the size of the establishment.
• The establishment had a peak employment between 20 and 249 employees during the previous calendar year AND the establishment’s industry is not on this list.
April is Distracted Driver Awareness Month
Even the most experienced drivers can become distracted from time to time. In order to maintain safe driving practices, organizations must take a top-down approach to combating distracted driving. Only through effective policies and training can commercial fleets identify and respond to potentially harmful driving behaviors. The following are some ways organizations and their fleet managers can help reduce the risk of distracted driving:
• Create a driver safety program and a distracted driving policy. Regularly communicate your policies using things like emails, blogs and posters.
• Use applications to detect when your drivers are on the road. Many of these applications prevent individuals from contacting a driver while their vehicle is in motion.
• Instruct drivers to pull off the road and park if they need to use their phone or an electronic device.
• Equip vehicles with lockboxes that drivers can use to store potential distractions, like smartphones and tablets.
• Educate your drivers on the risks of driving while distracted. Use real-life examples and stories to explain how dangerous distracted driving can be.
• Update your organization’s handbook, noting any disciplinary actions you will take if you identify unsafe driving behavior.
• Ask your employees to sign a pledge form indicating their willingness to drive in a safe and courteous manner.
• Work with drivers to plan trips. This ensures that drivers have a clear understanding of their routes, which can reduce the need for GPS and other potentially distracting navigation devices.
• Manage driver schedules to ensure employees are well-rested between trips.
• Use telematics, driver monitoring programs and in-cabin camera systems to evaluate individual drivers. Whenever possible, reward positive driver behavior to encourage a culture of safety.
• Perform a safety audit, which will give you a high-level overview of distracted driving risks and other concerns.
Private Client Services
High-net-worth individuals often accumulate a wide range of valuable possessions and property – and with them substantial exposure to financial loss. Too often, not enough thought is given to the value, protection, and possible replacement of upscale homes, luxury vehicles, rare and fine art and jewelry collections, aircrafts, and watercrafts. We specialize in personal insurance for high-net-worth individuals with complex insurance needs and our Private Client team can help you understand your personal exposures to loss in order to customize your insurance portfolio and risk management plan.
Our individualized approach includes:
• Personalized “invest the time to understand a client’s needs and lifestyle” philosophy
• Comprehensive personal risk review and exposure analysis performed annually
• Identifying uncovered exposures and recommending practical solutions
• A strong focus on loss prevention and eliminating, reducing, and transferring risk
• Design and delivery of a customized insurance portfolio
• Oversight and management of all aspects of a client’s ongoing personal insurance needs