Winter 2013 News - Analysis
Massachusetts' Health Payment Reform Act
Beginning in November of 2012, Massachusetts physicians and patients are subject to a new disclosure , apology and offer law, directed towards improving communications regarding unanticipated adverse medical outcomes. The new law requires disclosure of outcomes with significant medical complications that could not have been anticipated by the treating health care provider. Providers are protected when they deliver apologies to patients. Hospitals and doctors are required to respond to patient requests for information during a cooling off period between the apology and the patient's ability to sue. Doctors and institutions that investigate, explain, implement appropriate remedial actions to improve safety and prevent recurrences, and where appropriate, offer fair compensation, receive new legal protections when sued. Apologies are not admissible in subsequent litigation except under very limited circumstances. Charitable immunity protection for institutional providers has been increased from $25,000 to $100,000 and a lower interest rate established for dollar awards. The reform initiative is directed towards reducing the overall cost of medical malpractice claims by addressing patient expectations while minimizing the time and expense of litigation. The Massachusetts law goes far beyond Michigan's PA 21 of 2011, which protects admissions of sympathy (but not culpability, fault or negligence) regarding a patient's pain and suffering or death from use as evidence of an admission of liability in civil actions for medical malpractice filed after April 20, 2011.
World's Most Expensive Shipwreck
On January 13, 2012, the Carnival Lines Corporation's Costa Concordia ran aground off the coast of Italy. The accident killed eleven passengers and crew and injured many others. To date, the ship lies half submerged as salvage companies attempt a unique operation to roll the hull onto a platform that can be towed to port to salvage one of the world's largest passenger ships. Criminal investigations are pending as are several personal injury class action lawsuits. Carnival carried hull insurance for damage to the ship itself; liability insurance for injuries and death claims, the cost of the environmental cleanup and cargo loss. Claims against these two policies exceed one billion dollars. Carnival did not carry insurance for direct or indirect loss of the use of the ship. It lost between $85-95,000,000 in forfeited and refunded bookings for future passage and further sustained a reputational business loss to the Carnival brand that impacted earnings and its stock price.
AIG Repays its Debt to America
American International Group, Inc. (AIG), at one time the world's largest insurer, received a $182.3 billion bailout from the U.S. government as part of 2008 legislation directed towards the stabilization of American financial markets. Through AIG asset sales, actions of the Federal Reserve and the U.S. Department of Treasury, the U.S. government recovered not only the $182.3 billion, but also a $22,7 billion return on its investment.
NFL Players Concussion Injury Litigation already a Brawl
Alterra American Insurance Company is challenging its role as an excess insurance carrier to the NFL in relation to the 100+ lawsuits filed by former NFL players for concussion related injuries. Alterra issued an excess casualty follow form policy for the period August 11, 2011 through August 11, 2012, insuring the NFL under an excess policy with a $25,000,000 per occurrence limit. The Alterra policy is excess to a Chartis umbrella policy that references a $50,000,000 per occurrence coverage limit. The Chartis policy is excess to an ACE American Ins Co CGL policy that is capped at $1,000,000 per occurrence. Alterra is arguing that its follow form policy incorporated all of the terms and conditions of the Chartis policy EXCEPT with regard to any contrary provisions like the significantly higher liability limit. Clearly, the NFL could use the extra coverage in its defense of the consolidated case" NFL Players Concussion Injury Litigation", pending before the Federal Court in the Eastern District of Pennsylvania.
Do You Need Political Violence Insurance in 2013?
Global civil unrest has significantly increased the demand for political risk insurance. This form of property insurance protects insureds against damage to property and business interruption caused by riots, strikes, insurrections and coup d'état. Typical purchasers include property developers, utilities, banks, heavy industry, and retail and hotel groups that invest and operate properties in Africa, Asia, Latin America, as well as current hotspots like Lebanon, Syria, Iraq and many of their neighbors. Lloyds of London cites "discontent over corruption, lack of economic opportunities, as well as rising fuel and food prices, and a scarcity of natural resources " as causative factors increasing business risk for national and multi- national companies with interests in these areas.