Citizens Property Insurance Corp. suffered a data breach when a cyber actor hacked a system earlier in the year. It refused to pay any ransom to the attackers, consistent with recent FBI advisories, the company said in an email to Best's News. It continues to work with law enforcement and cybersecurity partners to "ensure the threat remains contained" and has notified nearly 5,000 potentially impacted people, it added. "Citizens has no evidence that any policyholder data systems have been compromised or misused as a result of the cybersecurity incident," the Florida insurer said. However, names or other personal identifiers were exposed, along with Social Security numbers. The “sophisticated cybersecurity incident” started on Jan. 4 and was discovered two days later, Citizens said in a breach notification letter posted by the Officer of the Maine Attorney General. It said four Maine residents were affected. The unauthorized actor accessed part of Citizens’ computer network, the company said. Citizens determined what information was breached in late March, after conducting a forensic investigation with external cybersecurity professionals.

The fault lines running through California’s spiraling homeowners insurance crisis were on display Tuesday at a state hearing, where consumer advocates clashed with industry firms over a plan to allow insurers to use complex computer models to set premiums — a move state officials say will attract insurers to the market. State Insurance Commissioner Ricardo Lara has proposed allowing insurers to employ so-called catastrophe modeling, which uses algorithms that predict the future risk properties face from wildfires, when setting the price of policies. Currently, rates are based on an insurance company’s past losses, which insurers increasingly dismiss as insufficient in light of the widespread acceptance that climate change has thrust California into a more dangerous future by causing more wildfires. The models, which are in use in other states, are a key element of Lara’s strategy to moderate price increases by allowing more accurate calculation of risks while persuading insurers to do business in neighborhoods prone to wildfires. The move comes amid a recent stream of insurers exiting the California market with announcements they are not renewing policies or have stopped writing new ones. Consumer groups worried at the hearing that the draft regulations would not allow enough scrutiny of the models, while several consulting firms that have developed them expressed concern about protecting their intellectual property. “The algorithms and artificial intelligence that private ‘black box’ catastrophe models use will simply be tools for insurance company price gouging unless California mandates real transparency into how they impact prices and imposes real rules of the road regarding their design and use,” said Carmen Balber, executive director of Consumer Watchdog, an L.A. advocacy group that led the campaign for passage of Proposition 103, the 1988 measure that requires homeowners and auto insurers to get state approval for rate hikes. The group, like other consumer advocates who spoke at the hearing, called on Lara to work with the state’s academic and insurance experts to develop a “public model,” in which all the factors that go into the computer simulations are available for everyone to review. Such a model could be used to set rates or benchmark privately developed models. The draft regulations require those who want to review the models to sign nondisclosure agreements, which Consumer Watchdog has alleged will prevent its staff members from discussing the models among themselves. Julia Borman, a director at Verisk, a company that builds computer models used by insurers, expressed concern that the draft proposal put forth by Lara would allow for a review by “countless participants and create the opportunity for an infinite timeline,” while not safeguarding companies from having their models ripped off by others Michael Soller, the state Department of Insurance’s deputy commissioner for communications, said Lara has publicly stated that the draft rules will allow for the development of public catastrophe models, which the department might then use to evaluate the insurers’ proprietary models. The proposal to allow catastrophe models is part of Lara’s larger Sustainable Insurance Strategy announced last fall. Other elements include righting the finances of the state’s Fair Access to Insurance Requirements plan, an insurer of last resort that has been deluged with new policyholders since insurers started pulling back from the market. He also wants to allow insurers to include in premiums the cost of reinsurance, which they purchase to protect themselves from disasters. Catastrophe models are already allowed in California for pricing policies that cover earthquakes and fires caused by quakes. Along with wildfires, under the proposed regulations, the use of the models would also be permitted for insurance covering terrorism, floods and some other types of coverage. Gerald Zimmerman, senior vice president of government and industry relations at Allstate, which stopped selling new homeowners insurance policies in the state in 2022, said that adopting Lara’s strategy would be a game changer. “Allstate will begin writing new homeowner insurance policies in nearly every corner of California,” he said. Other speakers at the three-hour hearing included insurance agents and local officials, as well as homeowners groups, which want to ensure that catastrophe models take into account steps taken by homeowners and government agencies to reduce fire risks, such as by making homes more fire-resistant and reducing brush in a community. Although the draft regulations call for doing so, several speakers complained that such mitigation efforts had not been reflected in recent premium increases. The Insurance Department plans to review Tuesday’s remarks in preparing for the release of a new set of proposed regulations. Lara has the support of Gov. Gavin Newsom, who issued a letter calling for the commissioner to move quickly to resolve the crisis. The regulations do not require legislative approval or the governor’s signature. “We will review all public comments while staying on track to implement all changes this year, so insurance companies start writing more policies in all areas,” Soller said.

The Biden administration on Thursday issued sweeping new rules that crack down on power-plant pollution and could force many of the country’s coal plants to shutter unless they undertake costly upgrades.

The rules, which will almost certainly be challenged in court, mandate strict controls on carbon-dioxide emissions at existing coal plants and newly built natural-gas plants. They set the stage for a significant infrastructure build-out to capture and dispose of CO2 emitted at such plants in order to comply.

The changes come as the industry juggles the first upswing in power demand in two decades and a shifting generation mix. Solar and wind projects are being added to the grid, and utilities say more gas-fired power plants are needed for reliability and to replace coal. Some utilities say they could need aging coal plants to stay online longer than expected.

Existing gas plants, the backbone of the nation’s power supply, aren’t included in the new rules.

“The electricity industry is central to America’s economic growth and competitiveness. These are the folks who keep the lights on and power our country forward,” said Michael Regan, U.S. Environmental Protection Agency administrator. “At the same time, the power sector is also a major contributor to the pollution that drives climate change and threatens public health.”

The EPA administrator said the new rules will cut 1.4 billion metric tons of carbon-dioxide emissions, roughly equivalent to the power sector’s 2022 emissions, and move the U.S. closer to the Biden administration’s goal of making the electricity sector carbon-free by 2035.

Regan said the new rules will amount to $370 billion in climate and public health net benefits over the next two decades. In 2035, the new rules would prevent approximately 1,200 premature deaths and 870 hospital visits, according to Regan. Carbon emissions from power plants make up around a quarter of U.S. greenhouse-gas emissions. Vehicles account for the largest source, about 28%. Separate EPA rules issued Thursday will limit pollution from power-plant wastewater, regulate coal ash, and limit air emissions of mercury and other toxic compounds.

Plants operating past 2039 would need to install carbon-capture units before 2032 to comply with the new climate rules, according to EPA officials. A nationwide slowdown in permitting and constructing energy projects will test the utilities’ ability to deploy carbon capture and storage, which is mostly untried on a large scale.

While the administration said the timelines for the power-plant rules would give companies time to comply, National Rural Electric Cooperative Association Chief Executive Jim Matheson called the rules unachievable.

“It undermines electric reliability and poses grave consequences for an already-stressed electric grid,” said Matheson, whose organization represents many smaller utilities that operate coal plants. Many power executives say that carbon-capture systems are too experimental, unproven and expensive. Environmentalists say that wider use of the technologies will bring costs down and that the rules would help lower emissions in a major industry that has already been shifting to renewables.

Tax credits for carbon capture in the 2022 climate, health and tax law known as the Inflation Reduction Act, combined with the new EPA rule, will spur both innovation and adoption of the technology, according to David Doniger, senior federal strategist at the Natural Resources Defense Council, an environmental group.

“It’s going to cause coal-plant operators who want to keep the plants around to get serious about carbon capture,” Doniger said.

Doniger said utilities raised similar fears in the 1980s about the cost of installing scrubber technology to remove sulfur pollutants that damaged lakes and waterways in the Northeast. The actual cost was less than either industry or the EPA had projected, he said. The new rules will likely stoke the political debate over regulations designed to fight climate change.

The administration has been pushing through rule changes designed to survive election-year politics. Last month the EPA issued its most stringent rules ever for tailpipe emissions for vehicles, though it handed the auto industry a concession by giving it more time to comply than what had originally been proposed.

Issuing the rules now avoids the threat of a potential congressional change, but they are still likely to end up in court.

Coal plants have struggled financially against natural gas and renewables, and the rules essentially schedule their phaseout, said Daniel Cohan, associate professor of civil and environmental engineering at Rice University. Most were built before 1990 and would be at least 50 years old by 2040. Their owners would face enormous costs for ongoing maintenance, in addition to the expense of installing a carbon-capture system.

“It’s going to be only really special cases where it would make sense to install this technology,” Cohan said.

The industry would need to remove CO2 before it goes out of smokestacks, build pipelines to transport it and drill wells that could permanently store the carbon dioxide deep underground in rock formations. Such a build-out faces myriad challenges. Not all parts of the country, for example, have the geology required for storage.

Generators in competitive markets are considered unlikely to make the capital investments that would be needed for older plants, but some utilities or electric co-ops in coal-heavy states might do so and pass the costs on to consumers.

The sector could also turn to options such as the use of hydrogen fuel or small modular nuclear reactors, which remain under development in the U.S. The EPA said it is also including flexibility regarding grid reliability and operations during emergencies.

There are only a few examples globally of carbon-capture projects tied to power plants. In North Dakota, Minnkota Power Cooperative hopes to build a carbon capture and sequestration project at a coal plant. Chief Executive Mac McLennan said the EPA is overestimating the current and future capabilities of the technology and underestimating the time needed to build.

“I have great optimism and confidence that we can figure out how to make technology work to capture CO2 off of a coal plant,” McLennan said. “I have some fundamental concerns just whether and how we affordably and reliably keep the lights on.”

Meanwhile, the coal-mining industry is finding new customers abroad to replace retiring U.S. coal plants. Consol Energy operates three mines in Pennsylvania and one in West Virginia. Chief Executive Jimmy Brock said new export markets took 60% of the 26 million tons of coal that Consol dug last year.

“I think we need to invest in those technologies,” Brock said, referring to carbon capture. “If they don’t, we’ll continue to send our coal overseas.”

   

McKinsey & Co is under criminal investigation in the United States over allegations that the consulting firm played a key role in fueling the opioid epidemic, with federal prosecutors homing in on its work advising OxyContin maker Purdue Pharma and other drugmakers, three people familiar with the matter said. The consulting firm and the U.S. Justice Department declined to comment. The probe is focused on whether McKinsey engaged in a criminal conspiracy when advising Purdue and other pharmaceutical manufacturers on marketing strategies to boost sales of prescription painkillers that led to widespread addiction and fatal overdoses, two of the people said. The Justice Department is also investigating whether McKinsey conspired to commit healthcare fraud when its consulting work for companies selling opioids allegedly resulted in fraudulent claims being made to government programs such as Medicare, they said. Prosecutors are also looking at whether McKinsey obstructed justice, an inquiry related to McKinsey's disclosure that it had fired two partners who communicated about deleting documents related to their opioids work, the people said. The probe, opened several years ago before the onset of the global pandemic, involves Justice Department officials spanning offices in Washington, Massachusetts and Virginia, they said. Both sides are in discussions to resolve the probe, one of the people said. Investigations are not evidence of wrongdoing and officials conducting the inquiry could ultimately pursue criminal charges, seek civil sanctions or close the probe without taking any action. The Wall Street Journal previously reported the Justice Department investigation. The Justice Department probe underscores how McKinsey's past work advising drugmakers on opioids continues to follow the near-century-old consulting firm. It carries higher stakes than other government investigations McKinsey has resolved because of the potential for criminal charges against the company or executives, and steep financial penalties that the Justice Department often demands in exchange for resolving its white-collar probes. McKinsey earlier reached separate agreements totaling nearly $1 billion to settle widespread opioid lawsuits and other related legal actions brought by all 50 states, Washington, D.C., U.S. territories, various local governments, school districts, Native American tribes and health insurers. McKinsey in 2019 said it would no longer advise clients on any opioid-related businesses. None of the settlements have contained admissions of liability or wrongdoing, McKinsey has said. "We understand and accept the scrutiny around our past client service to opioid manufacturers. This work, while lawful, fell short of the high standards we set for ourselves," McKinsey said in a 2022 statement following the release of a congressional committee report scrutinizing its consulting work. Purdue did not immediately respond to a request for comment. The drugmaker pleaded guilty in 2020 to criminal charges over its handling of opioid painkillers. Purdue filed for bankruptcy in 2019 and later negotiated a settlement valued at about $10 billion to settle thousands of lawsuits alleging it contributed to the opioid epidemic. The Supreme Court halted that settlement and is soon expected to rule on a Biden administration challenge to the deal. Prosecutors are far from making any charging decisions in their criminal investigation of McKinsey, in part because they are sifting through voluminous documents as part of their inquiry and engaging in discussions with the consulting firm's lawyers, one of the people said.      

Net neutrality, a set of policies designed to prevent internet-service providers from playing favorites among the websites they carry, is coming back.

In a vote Thursday, the Federal Communications Commission is poised to classify internet service as a public utility. The definition is part of a new framework the FCC will use to regulate broadband networks.

For years, internet-service providers have sparred with regulators and activists over the rules for offering internet access to consumers and businesses. Net-neutrality provisions introduced during the Obama administration were scrapped during the Trump presidency. The shifting rules haven’t radically changed how the internet is delivered to consumers or how much they pay for it.

With the FCC’s vote, internet-service providers are likely to challenge net-neutrality rules in court, meaning it could be months before they go into effect.

What does net neutrality entail?

Net-neutrality rules typically bar internet-service providers from assigning priority to certain web traffic or creating so-called fast lanes for certain websites. They also restrict providers from throttling, or slowing down, traffic to websites that don’t pay up.

Proponents say that the guardrails are critical to ensuring internet users have equal access to digital content and that deep-pocketed websites aren’t given priority over smaller ones. Without rules, advocates say that companies such as Comcast could charge content owners such as Netflix to pay extra, akin to a toll, to have its videos delivered smoothly to viewers.

Opponents of net neutrality say the rules are unnecessary and allege that the FCC is using the policy to expand its regulatory remit.

The topic crept into pop culture around 2006, when the late Sen. Ted Stevens (R., Alaska) described the internet as “a series of tubes.” His metaphor was mocked as simplistic by “The Daily Show” and other media—but also captured the public imagination.

How could these rules affect consumers and their options for internet service?

That depends on whom you ask. The foundation for the commission’s new internet rules—Title II of the Communications Act—allows the regulator to intervene if it determines a company is charging unreasonable rates. The order being voted on Thursday explicitly avoids rate regulation.

Internet providers aren’t convinced it is the last word. They fear the new order will open the door for future FCC rules that regulate prices. Some states have capped what internet service providers such as Verizon Communications and AT&T could charge low-income households.

The FCC’s rules don’t prohibit providers from throttling internet service for consumers who are enrolled in plans with data allotments. The throttling would be allowed as long as the internet-service provider is transparent about its rules and the action occurs without cherry-picking certain applications or websites.

Internet providers’ practices became a flashpoint in 2018 when Verizon throttled the Santa Clara County Fire Department’s wireless internet service during a wildfire emergency. Verizon has called the throttling “a customer support mistake.” Proponents have used the episode as a reason why net neutrality rules should exist.

Haven’t we heard this before?

Yes. In 2015, the FCC, under Obama-appointed Chairman Tom Wheeler, classified internet service as a utility and imposed net-neutrality rules. Republicans called the rules a regulatory overreach. In 2017, the FCC, then under Trump-appointed Chairman Ajit Pai, rolled them back.

It has been seven years without federal net-neutrality rules, and consumers haven’t seen much change in how they experience the web. Net-neutrality opponents, including the two Republican FCC commissioners, argue that is because the rules weren’t needed in the first place.

California was among the first states to step in and implement its own net-neutrality rules. Some providers treated the state rules as a kind of de facto national standard.

Why bring the rules back?

FCC Chairwoman Jessica Rosenworcel has said that she believes in net neutrality and that stronger regulatory authority over internet infrastructure would allow the agency to safeguard private-sector networks against cybersecurity threats.

The new rules would affect a range of companies that provide internet service, including cable companies, mobile carriers and satellite-internet providers. Those companies say the FCC’s push could bring about more regulation, including at the state level, because the order doesn’t pre-empt states from making their own rules.

Providers must file public disclosures with the FCC if they fast-lane or throttle any type of traffic. Those disclosure requirements discourage internet providers from playing favorites with internet traffic.

 

   

Global commercial insurance rates increased by 1% in the first quarter of 2024 (down from a 2% increase in Q4 2023), according to the Global Insurance Market Index released today by Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan. Rates continued to be relatively consistent, with most regions experiencing small decreases in Q1. This was largely driven by a strengthening of the trend for decreases in financial and professional and cyber lines and increasing competition among insurers in the global property market. On average, rates declined in the UK, Asia, Pacific, Canada and in India, Middle East & Africa regions by 2%. Rates increased in the US and Europe by 3%, and in Latin America and the Caribbean by 5%. Other findings included:

• Global property insurance rates were up 3%, on average, in the first quarter of 2024, compared to a 6% increase in the previous quarter. In the US, companies with concentrations of assets in catastrophe zones such as the Gulf of Mexico, Atlantic coast, and California have begun to see lower increases or even decreases in rates, compared to higher increases in recent years.
• Casualty insurance rates increased on average by 3%, the same as the previous five quarters, largely due to concerns about the size of jury awards in the US.
• For the seventh consecutive quarter, the overall average pricing for financial and professional lines fell. Driven by rate reductions and increased competition for business – particularly in the US, UK, Pacific, and Canada – average rates decreased by 7% in the first quarter, compared to 6% decline in the previous quarter.
• Globally, cyber insurance rates decreased by 6%, compared to a 3% decrease in the prior quarter. Insurers are increasingly focused on the strength of organizations’ cybersecurity controls, typically looking for year-over-year improvements in cyber resilience.

Commenting on the report, Pat Donnelly, President, Marsh Specialty and Global Placement, Marsh, said: “A continued moderation in insurance rates, and an increased appetite among insurers particularly for well-managed risks, will be welcomed by clients that continue to face major global economic and geopolitical uncertainty. “In a rapidly changing risk landscape, organizations will be under pressure to improve their risk management capabilities and make themselves more resilient to global shocks. We are working closely with our clients to ensure they have the right tools to navigate these challenges successfully and benefit from the continued improvement in market conditions.”  

U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court. The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions. The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees. A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements. When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases. By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren’t covered by them because fewer jobs become available as fewer people leave their positions. They can also hurt the economy overall by limiting the ability of other businesses to hire needed employees, the FTC said. The rule, which doesn’t apply to workers at non-profits, is to take effect in four months unless it is blocked by legal challenges. “Noncompete clauses keep wages low, suppress new ideas and rob the American economy of dynamism,” FTC Chair Lina Khan said. “We heard from employees who, because of noncompetes, were stuck in abusive workplaces.” Some doctors, she added, have been prevented from practicing medicine after leaving practices. Business groups have criticized the measure as casting too wide a net by blocking nearly all noncompetes. They argue that highly paid executives are often able to win greater pay in return for accepting a noncompete. “It’ll represent a sea change,” said Amanda Sonneborn, a partner at King & Spalding in Chicago who represents employers that use noncompetes. “They don’t want somebody to go to a competitor and take their customer list or take their information about their business strategy to that competitor.” But Alexander Hertzel-Fernandez, a professor at Columbia University who is a former Biden administration Labor Department official, argued that lower-income workers don’t have the ability to negotiate over such provisions. “When they get their job offer,” he said, “it’s really a take-it-or-leave-it-as-a-whole,” he said. The U.S. Chamber of Commerce said Tuesday that it will file a lawsuit to block the rule. It accused the FTC of overstepping its authority. “Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” said Suzanne Clark, the chamber’s CEO. “Yet today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.” Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal. They asserted that the agency was exceeding its authority by approving such a sweeping rule. Noncompete agreements are banned in three states, including California, and some opponents of noncompetes argue that California’s ban has been a key contributor to that state’s innovative tech economy. John Lettieri, CEO of the Economic Innovation Group, a tech-backed think tank, argues that the ability of early innovators to leave one company and start a competitor was key to the development of the semiconductor industry. “The birth of so many important foundational companies could not have happened, at least not in the same way or on the same timeline and definitely not in the same place, had it not been for the ability of entrepreneurs to spin out, start their own companies, or go to a better company,” Lettieri said. The White House has been stepping up its efforts to protect workers as the presidential campaign heats up. On Tuesday, the Labor Department issued a rule that would guarantee overtime pay for more lower-paid workers. The rule would increase the required minimum salary level to exempt an employee from overtime pay, from about $35,600 currently to nearly $43,900 effective July 1 and $58,700 by Jan. 1, 2025. Companies will be required to pay overtime for workers below those thresholds who work more than 40 hours a week. “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Acting Labor Secretary Julie Su.    

Chubb Ltd. posted higher first-quarter net income on higher income in both the life and property/casualty segments and a double-digit rise in net investment income. First-quarter net income rose to $2.14 billion from $1.89 billion a year ago. Consolidated net premiums written rose to $12.22 billion from $10.71 billion. The property/casualty combined ratio improved to 86.0 from 86.3. "Core operating income was up double-digit, driven by (property/casualty) underwriting income up over 15% with a published combined ratio of 86, investment income up more than 23%, and life insurance income up almost 10%," Evan G. Greenberg, chairman and chief executive officer, said in a statement. "We produced double-digit premium revenue growth from across the globe with strong results in our commercial and consumer P&C and Asia life businesses." Chubb recently said it agreed to acquire Healthy Paws, a U.S.-based managing general agent specializing in pet insurance, from Aon plc. The deal will allow Chubb to expand in a niche market with substantial growth potential, the insurer said at the time. Terms of the transaction were not disclosed, Chubb said. It is expected to close in the second quarter. Underwriting entities of Chubb Ltd. have current Best's Financial Strength Ratings ranging from A++ (Superior) to A- (Excellent).    

Orion180, a leading innovator in the insurance industry, is pleased to announce the expansion of its homeowners insurance services to Arizona. This marks a significant milestone as the company's first venture into the Western United States, reinforcing its mission to establish a comprehensive nationwide presence. Orion180 currently operates in Alabama, Arizona, Georgia, Indiana, Mississippi, North Carolina and South Carolina through its two insurance carriers. The company provides insurance solutions through its admitted carrier, Orion180 Select, in noncoastal areas and its surplus lines insurance carrier, Orion180 Insurance Co., in coastal areas. Coverage varies by state. Through Orion180 Select Insurance Co., an admitted insurance carrier domiciled in Indiana, this company aims to meet the unique insurance needs of homeowners in the state of Arizona. Kenneth Gregg, CEO and founder of Orion180, expressed his enthusiasm about the new market entry: “Our expansion into Arizona signifies a critical step forward in our strategic efforts to serve a national customer base. This is our inaugural entry into the Western U.S., and it accentuates our planned expansion into Florida, Ohio, and several other markets in need. We are committed to providing innovative, reliable insurance solutions in new and diverse markets.” Gregg further emphasized the strategic nature of this expansion: “Arizona is not just a new market for us; it represents a bridge to broader national coverage and a testament to our adaptability and determination to meet the evolving needs of homeowners across America. We are eager to establish a robust presence in Arizona and look forward to building lasting partnerships with homeowners and independent agents within the state.” Independent agents interested in partnering with Orion180 to offer insurance coverages in Indiana or Georgia can find more information by visiting Orion180.com. About Orion180 Orion180 is a people-focused, technology-driven insurance brand that offers proprietary technology, real-time data, and straightforward underwriting practices, enabling independent insurance agents to provide their customers a premier insurance experience. Orion180’s operating companies are:

• Orion180 Insurance Co., a surplus lines (non-admitted) insurance company domiciled in Indiana and doing business in Alabama, Georgia, Mississippi, North Carolina and South Carolina.
• Orion180 Select Insurance Co., an admitted insurance company domiciled in Indiana that is approved to provide coverage in Alabama, Florida, Indiana, Mississippi and Georgia.
• Orion180 Insurance Services LLC, a managing general underwriter that partners with carriers and reinsurers to deliver homeowners insurance and other insurance solutions.

Orion180 has developed its own proprietary mobile application and technology platform, MY180, while also supporting third-party data integrations with insurance industry partners.

Prices for surgery, intensive care and emergency-room visits rise after hospital mergers. The increases come out of your pay.

Hospitals have struck deals in recent years to form local and regional health systems that use their reach to bargain for higher prices from insurers. Employers have often passed the higher rates onto employees.

Such price increases added $204 million to national health spending, on average, in the first year after a merger of nearby hospitals, according to a study to be published Wednesday by American Economic Review: Insights.

Workers cover much of the bill, said Zack Cooper, an associate professor of economics at Yale University who helped conduct the study. Employers cut into wages and trim jobs to offset rising insurance premiums, he said. “The harm from these mergers really falls squarely on main street,” Cooper said.

Premiums are rising at their fastest pace in more than a decade, driven up by persistently high inflation across the economy. Rising costs have fueled contentious negotiations that have led some hospitals and insurers to cancel contracts, leaving patients in the lurch.

Hospital mergers make the price pressures worse.

“When those hospitals have market power, they can use that to extract high prices from insurers and those costs are ultimately passed onto consumers,” said Amanda Starc, an associate professor of strategy at Northwestern University, who wasn’t involved in the new study.

Hospitals say mergers create efficiencies and combine resources to make strategic investments and improve quality. Operating costs drop by 4%-7% on average at acquired hospitals after a deal, research shows. Quality stays the same or declines after mergers, studies have found.

The American Hospital Association’s general counsel, Chad Golder, said the study was incomplete because it didn’t include prices for some big insurers.

For the study, researchers analyzed claims from three of the nation’s largest insurers: CVS Health’s Aetna, UnitedHealth’s UnitedHealthcare and Humana.

They found that mergers raised prices by 1.6% over the two years afterward, on average, and by 5.2% where deals gave hospitals hefty market power under federal guidelines.

Hospital prices have been a longstanding target in Washington. The Trump administration issued rules to force hospitals and insurers to make prices public.

The Biden administration and the Federal Trade Commission have targeted hospital mergers as part of a broader antitrust push, including guidelines for problematic deals completed last year.

Federal officials have moved to stop recent proposed mergers, including a deal scuttled in December in the San Francisco Bay Area. John Muir Health called off plans to buy a third local general hospital after the FTC sued to end the deal.

“The proposed transaction would have provided substantial benefits for patients and the community,” the hospital system said.

The FTC returned to court in January to try to stop Novant Health, one of North Carolina’s largest hospital systems, from buying two more hospitals in the state. The deal would give Novant about two-thirds of a local market known as the Eastern Lake Norman area, the FTC said.

Novant is fighting the lawsuit. Novant has pledged to pour millions of dollars into the hospitals and expand services, including surgery and neonatal intensive care.

The study published Wednesday analyzed price changes before and after 322 mergers between 2010 and 2015. Researchers also compared prices during the same period at similar hospitals not involved in deals.

Researchers looked separately at prices for outpatient services owned by hospitals, such as imaging and ambulatory surgery centers. It is a large and growing share of hospital business, Cooper said.

In sparsely populated areas, outpatient prices climbed more after mergers. Where there are fewer people, the study found fewer outpatient surgery centers to compete for patients’ business.

“The hospital’s the only show in town in those areas,” Cooper said.

   

UnitedHealth Group said on Monday that hackers stole health and personal data of potentially a "substantial proportion" of Americans from its systems in February, as the largest U.S. health insurer scrambles to contain the damage. The intrusion at its Change Healthcare unit, which processes about 50% of U.S. medical claims, was one of the worst hacks to hit American healthcare and caused widespread disruption in payment to doctors and health facilities. The disclosure suggests patients' healthcare information remains vulnerable. An initial review of the compromised data showed files with protected health information or personally identifiable information "which could cover a substantial proportion of people in America," the company said in a statement on its website. That theft on Feb. 21 occurred despite a ransom payment. "A ransom was paid as part of the company's commitment to do all it could to protect patient data from disclosure," UnitedHealth Chief Executive Andrew Witty told CNBC on Monday. "This attack was conducted by malicious threat actors, and we continue to work with the law enforcement and multiple leading cybersecurity firms during our investigation." Hackers usually seek sensitive data such as patient records, medical histories, or treatment plans for use in further criminal acts or ransom demands in such breaches. While a full analysis of the breached data would take "several months," there is no evidence to suggest that doctors' charts or full medical histories of individuals were stolen, UnitedHealth said. It did not say exactly how many people's data was stolen, but that it was monitoring online forums where hackers tend to leak or trade such data packets. The cybercriminal gang behind the breach, known as AlphV or BlackCat, has not responded to multiple requests for comment. Another hacker group posted 22 screenshots on the dark web for about a week, some of which contained UntiedHealth customers' protected healthcare and personal data, the company said, adding it was unaware of any other leaks at this time. That group, which calls itself Ransomhub, told Reuters earlier that a disgruntled affiliate of Blackcat had given it the data. Soon after the hack came to light in February, Blackcat said on its website it had stolen 8 terabytes of sensitive records from Change Healthcare - only to later delete that statement without explanation. "We know this attack has caused concern and been disruptive for consumers and providers and we are committed to doing everything possible to help and provide support to anyone who may need it," UnitedHealth CEO Witty said in the company post.      

Brown & Brown posted a rise in first-quarter profit on Monday as the insurance brokerage earned more in commissions and fees, while investment returns also improved. The insurance industry has cemented its reputation as 'recession-proof' as corporate and government spending for policies is typically steady and does not fluctuate due to cutbacks in budgets or amid an economic slowdown. Insurance brokerages such as Brown & Brown serve as a bridge between an insurer and customers, helping clients find a policy which best suits their needs. The company's core commissions and fees increased to $1.19 billion in the three months ended March. 31, from $1.08 billion, a year earlier. Meanwhile, a higher interest rate environment has also helped investment income at insurers, who invest a chunk of their cash in safe-haven assets. The broader equity capital markets have also rallied this year. The company's investment income climbed to $18 million in the reported quarter from $7 million in the year-ago period. Brown & Brown is one of the largest independent insurance brokerages in the U.S. specializing in risk management. It operates through four business segments - retail, national programs, wholesale brokerage and services. The company's total revenue rose 12.7% to $1.26 billion in the quarter. It posted adjusted earnings of $1.14 per share, up from 96 cents a year earlier.