The CHART Exchange March 2019 by The CHART Exchange

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6 Glenn W. Clark, CPCU, Publisher CHART Exchange Earliest Adopter

CHART’S 2019 Inaugural Event Held In Dallas

Improve Your Agency In 4...3...2...1... Cost Financial

The Largest, Safest Surplus Lines Market In The U.S.? Lloyd’s Of London

No Damages Required To Sue Under Illinois Biometric Information Privacy Act

Cover Photo - Attribution 2.0 Generic (CC BY 2.0) William Warby

2021: An Insurance Odyssey - A Look At The Future Of Insurance

Why You Should Outsource Your Premium Financing

Using Social Media To Help Disrupt A CyberAttack

New York City Bans CBD From Bars And Restaurants

HHS Releases New Cybersecurity Guidance For The Health Care Industry

Thinking About Becoming Blockchain Certified?

Why Human Interaction Is Still Important In Retail

Auto Trends: E-Cars Are Powering Up

Lloyd’s Appoints Non Executive Chairman of Global Network

Great Progress In 2018 Reports SIAA

Burkhard Keese Appointed Lloyd’s Chief Financial Officer

Special Report: Employment Practices Audits: A Loss Control Tool

FBI Investigating Nationwide Workers’ Compensation Fraud

MARCH 2019 VOLUME 4 - ISSUE 3 Publisher: CHART Exchange Glenn W. Clark, CPCU

R M Media Ltd Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

Membership Services Kate Boyle

SPECIAL REPORT: EMPLOYMENT PRACTICES AUDITS: A LOSS CONTROL

Advertising: Kate Boyle Managing Editor: Kate Boyle Contributing Editor: Frank Huver Layout, Design & Circulation: Ron Manera AdMax Corp., Inc.

CHART Exchange

info@chart-exchange.com 3001 Philadelphia Pike Claymont, Delaware 19703 www.chart-exchange.com 302-765-6001 Last Issue:

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ADVERTISING IN THE CHART EXCHANGE MAKES SENSE: CALL KATE: 302.765.6056

EVERYBODY KNOWS ONE Meet Mr. Inappropriate. He is the King of unfiltered commentary. There is no remark too crass or topic too sensitive for this guy. Worse still, he may be working for one of your clients. The recent Hollywood scandals and resulting rise of the “#MeToo” Movement has made people more sensitive to the prevalence of harassment and other wrongful acts in the workplace. There was a time when otherwise harmless comments from someone like Mr. Inappropriate would have either been brushed off or ignored. Now they may be interpreted to have a more nefarious meaning. This perception can quickly turn into legal action. The cost of defending against such a lawsuit – even a groundless one – could be financially devastating. Let Rockwood Programs help protect your clients. Our Employment Practices Liability Insurance (EPLI) product protects companies from allegations of discrimination, wrongful termination, harassment, and workplace bullying. Coverage can be further enhanced to protect your client against alleged violations of the Immigration Reform Control Act, Wage & Hour disputes, and Third Party Wrongful Acts.

Visit us at www.rockwoodinsurance.com to learn more

Rockwood Programs, Inc., 3001 Philadelphia Pike, Claymont, DE 19703 p: 800-558-8808 • f: 302-764-5477 • e: sales@rockwoodinsurance.com

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MESSAGE FROM THE EARLIEST ADOPTER

CHART’S 2019 INAUGURAL EVENT HELD IN DALLAS

The Dallas event agenda included ample time for networking and private discussions relating to new business opportunities. We are pleased to report that the Dallas meeting surfaced no less than five potential programs for London.”

MARCH 2019

revious issues of our magazine have talked about a total re-imagining of the CHART Exchange concept. One of the features talked about for “CHART 2.0” was the idea of hosting several meetings in different parts of the country over the course of 2019. Our inaugural event was held in Dallas TX on February 25. This recent meeting represented a rather significant departure compared to the way we used to operate. The event itself was limited to one full day. A number of the peripheral features traditionally included in insurance industry functions – keynote addresses, organized vendor activities, etc – were eliminated. The London-centric agenda covered a number of relevant topics, while also allotting ample time for networking and private meetings to discuss new business opportunities. There was no charge assessed to participate.

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Glenn W. Clark, CPCU Publisher & Earliest Adopter

The session was held in the Dallas office of Wilson Elser – CHART’s first Vendor Partner and most committed supporter. This prestigious law firm has over 800 attorneys located in 37 strategically located offices across the United States, with another in London. Their reputation, expertise, and international footprint make them uniquely positioned to assist agencies looking to operate within our unique market niche. Our agenda included a presentation from Enya He (Regional Director, South Central U.S. Lloyd’s). The topic of her talk was “Lloyd’s Navigating Forward”. Attendees received some background on the market, including business structure, global premium production, financial ratings, and portfolio diversity. Ms.

www.chart-exchange.com

He also provided the audience with a frank assessment of the challenges facing Lloyd’s today – as well as the strategies that will be employed to address them. Wilson Elser provided insights into two separate issues. The first one dealt with cyber liability. The discussion was led by Amanda Harvey, (Partner, Wilson Elser). Ms. Harvey’s presentation underscored both the obvious (systems inaccessibility) and subtle (lost revenue, decreased productivity, reputational damage, etc) consequences that a data breach can have on a firm. Compliance matters and the notification procedures that should be followed in the event of a data breach were also reviewed. Another of the law firm’s partners (Valeri Williams) tackled the topic of Employment Practices in the “#MeToo” era. The presentation reviewed issues related to sexual harassment and retaliation claims, bookended by two seminal events – the Anita Hill testimony and the media focus on Harvey Weinstein. Statistics cited during these discussions underscored the potentially devastating impact an Employment Practices claim can have on a firm. Ms. Williams also touched on current and pending legislation trends.

www.chart-exchange.com

OTHER TOPICS ADDRESSED DURING THE MEETING INCLUDED: • •

Program Incubation. Achieving coverholder status takes time. Several options were discussed to help agencies bring their new programs to market in a more expeditious fashion.

•

Securing Delegated Underwriting Authorities. Stephen Ahern (Iris Insurance Brokers) provided the attendees with an overview of the steps that a specialist agency in the U.S. must follow in order to secure Delegated Underwriting Authorities from London.

•

Use of Fronting. Mark Rattner (Chief Underwriter, Fortegra) provided insights into distributing a Lloyd’s-underwritten product using admitted paper. This can be accomplished using a hybrid fronting model available through his firm

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Distribution Support. Attendees were given a demonstration of CHART Markets – the virtual online shopping mall exclusively featuring London-underwritten insurance products. Discussions were also held about the benefits of advertising in the organization’s e-magazine.

The event agenda included ample time for networking and private discussions relating to new business opportunities. We are pleased to report that the Dallas meeting surfaced no less than five potential programs for London.

Glenn W. Clark , CPCU CHART’S Earliest Adopter

MARCH 2019

NOW HERE’S A REAL SHOCK… The first firearm liability product that can be sold by independent insurance agents!

It is estimated that nearly 80 million Americans own at least one firearm. But what happens if a law-abiding citizen is actually forced to use that weapon to protect themselves, a loved one, or their personal property? Many homeowner policies specifically exclude firearm use — even in self defense — as a covered exposure, deeming it to be an intentional act. That leaves the gun owner personally liable for legal expenses, bail bond costs, and any judgments awarded through a civil action. As an insurance agent, you are in the best position to explain the significant personal liability exposure faced by your gun-owning clients. Unfortunately, you haven’t been able to help your clients by offering a product to address this need — until now. Rockwood Programs now offers a firearm liability policy designed to protect insureds against civil or criminal actions resulting from the use of a gun in self-defense. It is the only one available in the industry that can be sold through insurance agents. A wide variety of limit options are available, ranging from $50,000 to $5 million. Annual premiums start at just $135. Best of all, we make it easy for you to present the firearm liability product to your clients. An inventory of customizable sales aids is available, including marketing brochures, simplified self-rating applications, and more. Our team can even help provide product-specific content for your website!

Visit us at www.rockwoodinsurance.com to learn more We can also accommodate group accounts (police, security, gun clubs, etc.). E-mail: president@rockwoodinsurance.com

Rockwood Programs, Inc., 3001 Philadelphia Pike, Claymont, DE 19703 p: 800-558-8808 • f: 302-764-5477 • e: sales@rockwoodinsurance.com

MARCH 2019

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ANALYSIS - COST FINANCIAL

YOUR AGENCY IN 4…3…2…1…

here’s been a rapid change in the insurance industry over the last few years and it’s been said that we’ll see more change in the next five years than we’ve seen in the last 25. In order for your agency to grow and remain competitive, improvements will need to be made. As we kick off 2019, here are four questions every agent should be asking themselves: 1. HOW CAN I PLAN FOR THE FUTURE OF MY AGENCY IN 2019? Whether you’re planning to continue to compete in the marketplace for the next 10 years or transition your company to a successor, perpetuation planning is key for setting yourself up for success. It’s never too early to begin the process, and 2019 is a great year to do it. 2. HOW CAN I ADOPT DIGITAL INNOVATIONS? Technology can help your agency with recruitment and can also help you attract and keep clients. In today’s increasingly digital world, consumers require helpful websites and accessible online customer service. Now is the perfect time to audit your website and see if you can add features like chat or mobile communications to your strategy.

www.chart-exchange.com

3. HOW CAN I DEEPEN AND EXPAND MY CLIENT RELATIONSHIPS? We all know clients are our bread and butter; our businesses rely on our clients. According to Agent for the Future, agencies who authentically communicate on a regular basis with their clients see a 1.5 point retention lift over a 12-month period. Putting together a comprehensive marketing strategy and hiring someone to help you—whether inside or outside of your organization—can help you not only retain your current clients but generate new leads as well.

4. HOW WILL YOU SHAKE THINGS UP THIS YEAR? Innovation is happening around us every day and there’s no avoiding it. Our homes and offices now have smart technology and we’re going to be seeing more and more innovations in the coming years. As the owner of an insurance business who also needs to adapt, staying on top of these trends are a must. Continuing to be agile in the coming years will give you a leg up on the competition. Get started today!

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MARCH 2019

ANALYSIS - CHART EXCHANGE

THE LARGEST, SAFEST SURPLUS LINES MARKET IN THE U.S.? LLOYD’S OF LONDON

So why the worry about the security of non-admitted paper? There is a misconception that surplus lines writers are not regulated. In fact, every insurance company must receive the approval of the individual state insurance departments before they can write business in that jurisdiction.”

MARCH 2019

By Glenn W. Clark, CPCU, Publisher & Earliest Adopter

loyd’s of London has been a major force in the American insurance industry for over a century. During that time, it has become the largest surplus lines insurer in the United States and largest non-domestic reinsurer in

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the country. We account for more than 40% of Lloyd’s global business. Despite this pedigree, some within the retail agent community are still reluctant to place risks with the market. Ask these producers why, and the vast majority of responses will touch on two common themes – use of non-admitted paper and concerns over financial stability. www.chart-exchange.com

The protections provided through a Guaranty Fund can be extremely limited. Recompense may not be available to insureds that exceed certain revenue thresholds. Further, the coverage afforded is usually a fraction of the limits provided on the insured’s actual policy.

SURPLUS LINES PAPER It is true that the vast majority of U.S. business generated through Lloyd’s of London is written on a surplus lines basis (Lloyd’s is a licensed insurer in Illinois, Kentucky, and the U.S. Virgin Islands). There is a definite benefit to using this type of “paper”; it affords the flexibility to react quickly to the dynamic nature of the marketplace. Instituting changes on an admitted form – with the requirement of individual state filings/approvals – often proves to be a much more timeconsuming process. So why the worry about the security of non-admitted paper? There is a misconception that surplus lines writers are not regulated. In fact, every insurance company must receive the approval of the individual state insurance departments before they can write business in that jurisdiction. Admitted carriers are licensed by the states; non-admitted insurers are “white-listed”. In order to be included on the “white list”, carriers must meet certain financial and regulatory criteria mandated by each jurisdiction. These requirements usually include the establishment of substantial premium reserves and/or demonstration of adequate reinsurance.

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CAPITAL STRUCTURE Now consider the capital structure established by Lloyd’s of London. This unique multi-layered approach – often referred to as the Chain of Security – provides excellent financial security to policyholders. There are three “links” within the Chain:

FINANCIAL STABILITY There are several nationallyrecognized organizations that assign grades based on the financial strength and claims-paying ability of insurance entities. Syndicates operating within Lloyd’s enjoy the benefit of a single market rating given by these independent agencies. Lloyd’s is rated A (Excellent) by A.M. Best, A+ (Strong) by Standard & Poor’s, and AA(Very Strong) by Fitch Ratings. Some agents are wary of Lloyd’s and the non-admitted market because their policies are not protected by the various state Guaranty Funds. This is technically true. With that said, remember that these funds were established to serve as a “safety net” in the event of carrier insolvency.

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• • •

Syndicate level assets Member funds at Lloyd’s Central Assets

The first and second links are held in trust, primarily for the benefit of policyholders whose contracts are underwritten by the relevant member. Members underwrite their own account and are not liable for other members’ losses. The third link contains mutual assets held by the Corporation which serves as an additional safety net to meet any member’s insurance liabilities. Have any questions about the London market and how it can benefit your agency? We can help! Direct your inquiries to info@chart-exchange.com for response.

MARCH 2019

Photo: “Loco Steve” CC BY-SA 2.0

Let’s try and assuage these apprehensions.

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MORE THAN 100 TRANSACTIONS IN 10 YEARS and has earned continuous placement within the "Top 5 Financial Advisors in Insurance Underwriting" according to SNL Financial. Investment banking services and securities transactions are provided through and completed by Merger & Acquisition Capital Services, LLC., a broker-dealer registered with the U.S. Securities and Exchange Commission and member of FINRA and SIPC.

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within the insurance industry by assisting firms with their corporate development and acquisition/divestiture objectives. M&A Services is

ANALYSIS - WILSON ELSER

NO DAMAGES REQUIRED TO SUE UNDER ILLINOIS BIOMETRIC INFORMATION PRIVACY ACT By: Anjali C. Das, Brian Dollar, Stefanie L. Ferrari, David H. Potter

ingerprint scans and facial recognition technology have become commonplace thanks to smartphones, yet this type of biometric information is being used in other places as well. Fingerprints have become a replacement for passwords, allowing a user to log into their social media

app to post a photograph, or their bank account to transfer money, all from their phone and all with a fingerprint. Biometric information also is being used as a replacement for time cards, allowing employees to clock in and out of work with ease, or even as a form of admission to enter an entertainment venue. Following the rise of the use of biometric information, the Illinois

njali Das is co-chair of Wilson Elser’s national Cybersecurity & Data Privacy practice and a member of the Information Governance Leadership Committee and Insurance Coverage practice team.

rian Dollar practices in the areas of cybersecurity and privacy breach response, pre- and post-event. He analyzes client compliance with GLBA, COPPA, HIPAA/ HITECH, and related state, federal, and international laws.

tefanie Ferrari focuses her practice primarily in the areas of cybersecurity and privacy breach response, complex tort and general casualty, and toxic tort litigation.

avid Potter practices in the areas of cybersecurity and privacy breach response, pre- and post-event. He provides analysis of compliance with the GLBA, COPPA, HIPAA/HITECH, and other related state, federal and international laws and regulations.

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Legislature passed the Biometric Information Privacy Act (BIPA) in 2008 to provide standards of conduct to help regulate how biometric information is collected, stored and used. Examples of a biometric identifier include a retina or iris scan, fingerprint scan, voiceprint, or hand/ face-geometry scan. What makes BIPA all the more powerful is that it allows for a private right of action, permitting an individual who has been “aggrieved” to pursue damages or injunctive relief. The Illinois Supreme Court gave BIPA even more “punch” in its decision in Stacy Rosenbach, et al. v. Six Flags Entertainment Corporation, released on January 25, 2019, holding that an individual does not need to prove harm to recover; rather, a technical violation of the Act alone is sufficient to constitute standing. Prior to the decision, the Illinois appellate courts had been split on whether an individual had to suffer an actual injury in addition to a BIPA violation to recover under the Act. This new See Illinois Biometric Act Page 26 MARCH 2019

ANALYSIS - NETRATE

2021: AN INSURANCE ODYSSEY — A LOOK AT THE FUTURE OF INSURANCE

ll the new, exciting technologies — artificial intelligence (AI), natural language processing (NLP), robotics, blockchain, internetof-things (IoT) and so forth — that loom on the horizon are going to disrupt global industries by redefining labor and human connectivity. The way that we think about people and data is changing. The future of insurance is intrinsically interwoven with advancing technologies. Are you ready? WHERE WE ARE (THE CURRENT) To say that technology will disrupt insurance is a bit of a misnomer. SaaS, AI, and deep learning have already completely reshaped the way that financial intermediaries, insurers, suppliers, and brokers perform their day-to-day jobs. Insurtech startups and cloud-based solutions have lifted the curtain on insurance processing and removed redundancies while streamlining specific functions. On the consumer side, auto insurers provide telemetry-based packages that assess granular driver data to determine risk analytics. Offering insurance packages based on behavior analytics lets insurers remain competitive long-term and

MARCH 2019

profitable across channels, and this methodology will continue and expand over the next few years. Of course, this digital shift hasn’t only restructured insurance models from a data and delivery perspective; it’s also shifted the ways that customers demand and consume insurance. According to a McKinsey & Company report, customers expect more transparency, 24 by 7 access to insurance support, one-click shopping, and clear and relevant information regarding insurance. This shift in customer expectations in the digital age isn’t specific to insurers; it’s apparent across industries and consumer channels. The current insurance ecosystem is leveraging technology to improve service and profitability, but this digital disruption is evolving. The future of insurance will be synonymous with hefty tech stacks, big data, and deep learning mechanisms. WHERE WE’RE GOING (THE FUTURE OF INSURANCE) The future of insurance is going to change across channels to be more consumer-friendly, automated, and connected. TABLE OF CONTENTS

BLOCKCHAIN TECHNOLOGY Blockchain is reshaping data exchange and storage. We’ve seen blockchain use cases in underwriting when underwriters are using blockchain as a source of true data. Another use case for blockchain is claims processing. Since blockchain is a peer-to-peer solution that can take multiple inputs from a variety of users without tampering with the source data, it’s a great way to improve outputs and reduce redundancies during claims processing procedures. A future where blockchain disrupts insurance by reducing touchpoints and increasing speed isn’t as far away as you may think. Global players like Zhong An are already using blockchain to simplify their smart contracts, and the future of insurance data exchange is hinged to blockchain technologies. ARTIFICIAL INTELLIGENCE (AI) The future of insurance looks to be a faster, more automated, and lessactive process. Most of this is due to AI advancements. AI can leverage automation and deep learning insights to change distribution methods for both customers and

See 2021: Insurance Odyssey Page 45 www.chart-exchange.com

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ANALYSIS - COST FINANCIAL

WHY YOU SHOULD OUTSOURCE YOUR PREMIUM FINANCING

D By outsourcing premium financing, you are in effect creating a new company that specializes in this one activity, giving you a new revenue stream that complements your core competencies.”

iversify. Focus. Offer more services and products. Concentrate on your core business value. When it comes to premium financing, the business advice seems conflicting. But there’s a third option: outsource your premium financing. While outsourcing offers a lot for insurance providers and customers, you need to choose your premium financing provider carefully. Let’s take a closer look at the reasons to outsource in the first place, and how to balance a new product offering with your existing core competencies. WHY CONSIDER OUTSOURCING In turbulent economic times, businesses look to diversification as a hedge against downturns and unforeseen events. While it offers protection from a change in market direction or an economic disruption from new technology, diversification also brings new types of risk. The costs can be high, in economic terms as well as in the time and attention of management and business owners. Diversifying even into something closely related to your core business can also confuse customers and investors. Starting up a new line will naturally demand attention from the

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proven line of products and services, and can reduce overall business performance. Business history is littered with failed attempts at business diversification. Virgin, whose brand can be found on airliners, mobile phones, compact discs, financial services and more, tried to move into the cola market in the mid-90s, and failed to capture market share from Coca-Cola and Pepsi. Quaker Oats spent $1.7 billion to acquire the Snapple line of bottled fruit juices, and sold it for only $300 million three years later. One solution to this dilemma: outsource the new product offering. In other words, let someone else take care of the headaches of the new product offering, for a fee. It means less revenue from the new item, but on the other hand, this strategy frees up management to concentrate on what made the business successful in the first place. HOW TO OUTSOURCE PREMIUM FINANCING Premium financing allows businesses and customers to pay their insurance premiums in easy-to-manage monthly installments. In this kind of plan, a

See Premium Finance Page 27

MARCH 2019

ANALYSIS - KROLL

USING SOCIAL MEDIA TO HELP DISRUPT A CYBER–ATTACK Credit: U.S. Dept. Of Defense

By James Barker

bout the author: James joined Kroll in 2011 in their London office and works as part of Kroll’s Investigations and Disputes Team; he has just completed a six-month secondment to Kroll’s New York office. Since joining Kroll James has worked on numerous assignments, including complex international fraud investigations and asset recovery exercises, internal investigations, leak of information inquiries, Foreign Corrupt Practices Act breaches, FCA investigations, bank monitorships and due diligence investigations.

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roll, a division of Duff & Phelps, recently worked for a listed company that suffered a serious data breach. Large amounts of data had been stolen and they were being held to ransom. The client received emails from the attacker requesting millions of pounds in bitcoin not to release the data. Kroll was engaged to assist the company in their investigation of how the breach occurred, but also to see if we could identify the attacker and locate the stolen data. The attacker had placed all the stolen data on a server and given our client the password to log in – to show they were serious. Our client was given two weeks to pull the bitcoin TABLE OF CONTENTS

together. If they failed to do so, the attacker would release the stolen data onto the internet – potentially compromising the personal data of thousands of employees and clients. We worked around the clock and identified the internal weakness that had allowed the attacker into the network. The client, to their credit – and somewhat to the surprise of the insurer – decided against paying the ransom. So, we devised a new strategy of “cluttering” to mitigate the attacker’s threats. In this cluttering strategy, should the attacker fulfill their promise to release the stolen data we would counter punch with our servers and Twitter bot army to spread a fake data set See Social Media Page 42 www.chart-exchange.com

Be Cyber Resilient From cyber risk assessments and penetration testing to incident response and investigations, Kroll's global cyber experts are ready to help you and your insureds along the path to cyber resilience.

kroll.com/cyber

Bringing U.S. Entrepreneurship to the London Market The CHART/Wilson Elser strategic partnership combines the innovative underwriting philosophy of the worldâ&#x20AC;&#x2122;s oldest insurance brand with the entrepreneurial mindset of U.S. agencies. For close to 40 years, Wilson Elser has helped organizations to better navigate challenging markets and realize improved combined ratios. We provide London- and Europe-based insurers with ready access to more than 60 discrete legal services delivered by nearly 800 attorneys in 34 strategic locations throughout the United States. Guided by a proprietary, systematic legal project management program, we help clients define strategies and achieve outcomes that align with agreed business requirements. We also implement dedicated Program Claim/Litigation Management services, creating value and driving efficiencies with respect to legal spend and indemnity. Wilson Elser is especially proud of its strategic partnership with CHART Exchange and our shared commitment to strengthening relationships between cover holders and risk takers on either side of the Atlantic.

No machine-readable author provided. Cacycle assumed (based on copyright claims)., Cannabidiol, CC BY-SA 3.0

ANALYSIS - WILSON ELSER

NEW YORK CITY BANS CBD FROM BARS AND RESTAURANTS Authors: Ian A. Stewart and Neil M. Willner

to stop using CBD in their food and beverage products.

n Tuesday, February 5, 2019, the New York City Department of Health and Mental Hygiene (NYCDOH) announced that “restaurants in New York City are not permitted to add anything to food or drink that is not approved as safe to eat … Until cannabidiol (CBD) is deemed safe as a food additive, the Department is ordering

restaurants not to offer products containing CBD.” Coinciding with the announcement, the NYCDOH revealed that it began quietly enforcing its new policy in January, ordering five restaurants

The NYCDOH appears to be following the FDA’s lead. Over the past few years and as recently as December 2018, the FDA has publicly stated that it is unlawful under the Federal Food Drug & Cosmetics Act (FDCA) to “introduce food containing added CBD or THC [tetrahydrocannabinol, the main

See CBD Banned In NY Bars Page 44

an Stewart has defended complex litigation in state and federal courts for more than 20 years with a focus on product liability, complex general casualty, cannabis law, transportation and marine claims, data privacy and security, and intellectual property litigation. Ian is co-chair of the firm’s Cannabis Law practice and a member of the Information Governance Leadership Committee. Ian is committed to client communication and cost-effective litigation management. He is a proponent of efficient claim resolution and Legal Project Management. Ian goes out of his way to ensure that he understands his clients’ business and goals so that an agreed strategy can be identified and implemented at the outset of any litigated matter.

eil Willner focuses his legal practice on medical malpractice, dental malpractice, nursing home liability and general liability centered on complex litigation. His clients include hospitals, medical practices, physicians, eleemosynary institutions, commercial businesses and summer camps. Neil has handled appeals in the New York Appellate Division, First and Second Departments. Neil also is a member of Wilson Elser’s Cannabis Law practice, advising medical professionals, growers, processors, insurers, distributors and vendors within the legalized cannabis industry as well as organizations outside the industry impacted by the rapidly evolving state and federal regulatory landscape.

www.chart-exchange.com

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MARCH 2019

NEWS - WILSON ELSER

HHS RELEASES NEW CYBERSECURITY GUIDANCE FOR THE HEALTH CARE INDUSTRY By Jeremy Merkel

A About the author: Jeremy Merkel focuses his practice in the areas of cyber security and information governance in the context of the significant challenges presented by the management of data across the information life cycle. He helps client address regulatory requirements, privacy laws and litigation obligations, while leveraging their data in support of operational requirements. He also served as a legal intern on the executive leadership team in the Office of the Attorney General of New Jersey. Prior to joining Wilson Elser, he was an associate at a boutique civil litigation firm in New York City.

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s health care practitioners and organizations settle into the New Year, there is new guidance for cybersecurity best practices. On December 28, 2018, a task force of public- and private-sector leaders under the U.S. Department of Health and Human Services (HHS) released Health Industry Cybersecurity Practices: Managing Threats and Protecting Patients. The four-part guidance, which is targeted toward HIPAAcovered entities of all sizes, including physicians, hospitals, payors, thirdparty processors and medical device manufacturers, is aimed at addressing the most common cyber threats facing the health care industry. While the publication is the most comprehensive and expansive health care cybersecurity framework to date, the recommendations offered are strictly voluntary and do not impose new legal obligations. Nevertheless, the guidance could prove to be critical should an organization face regulatory scrutiny or civil litigation arising from a data security incident. TABLE OF CONTENTS

BACKGROUND Health care organizations are among the highest targets for cyber criminals, resulting in significant financial implications and threats to public health. In 2018, the cost per record of a health care data breach was $408, nearly twice the amount of a breach in the financial sector, and in 2016, the U.S. health care system lost $6.2 billion due to security incidents. Given this landscape, HHSâ&#x20AC;&#x2122;s Office for Civil Rights (OCR) has been increasingly active in investigating and pursuing civil monetary penalties against covered entities that have demonstrated a failure to adequately secure patient information resulting in a data breach. Prior to the publication, organizationsâ&#x20AC;&#x2122; legal, compliance, IT and information security professionals were afforded only a patchwork of cybersecurity best practices drawing from the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH). Through a legislative mandate imposed by section 405(d) of the Cybersecurity Act of 2015 (the Act), HHS convened a www.chart-exchange.com

task force of more than 150 health care and cybersecurity experts from the public and private sectors to develop and draft the “voluntary, consensusbased, and industry-led guidelines, best practices, methodologies, procedures, and processes,” aimed at achieving three core goals: •

•

Reducing cybersecurity risks for a range of health care organizations in a cost-effective manner Supporting the voluntary adoption and implementation of HHS recommendations Ensuring that content is actionable, practical and relevant to health care stakeholders of every size and resource level on an ongoing basis.

Pervasive Cybersecurity Threats The task force focused on the five most prevalent cybersecurity threats facing health care organizations of all sizes: • • • • •

E-mail phishing attack Ransomware attack Loss or theft of equipment or data Insider, accidental or intentional data loss Attacks against connected medical devices that may affect patient safety.

For each category, the guidance describes the nature of the threat, vulnerabilities and the potential organizational impact, and best practices to consider in minimizing those threats. The recommended practices are organized into 10 categories: • •

E-mail Protection Systems Endpoint Protection Systems www.chart-exchange.com

• • • • • • • •

Access Management Data Protection & Loss Prevention Asset Management Network Management Vulnerability Management Incident Response Medical Device Security Cybersecurity Policies.

The 10 best practices are divided into two technical volumes, with 88 sub-practices to address the needs of small organizations and medium-size to large organizations. There also is a toolkit for helping organizations to prioritize the cybersecurity practices that would be most effective for them and to conduct a risk assessment. PRACTICAL IMPLICATIONS While the guidance is an invaluable resource for health care organizations seeking to implement a cybersecurity program or enhance an existing framework, industry members must be aware that the “best practices” are strictly voluntary. In contrast to when the National Institute of Standards and Technology (NIST) 2014 Cybersecurity Framework became the benchmark TABLE OF CONTENTS

for regulators in evaluating whether a company’s security measures are “reasonable,” section 405(d) of the Act clearly states that the practices are voluntary and intended to serve as a guiding resource. CONCLUSION With the guidance signaling HHS’s renewed commitment to prioritizing the privacy and security of patient information, the aggressive landscape of regulatory enforcement actions and lawsuits arising from data breaches is poised to continue its momentum. As health care organizations review their policies and procedures for 2019, we encourage all stakeholders to heed the report’s “Call to Action” by addressing gaps and pitfalls in their cybersecurity programs and gauging their preparedness for a security incident. If you require assistance with HIPAA compliance or have questions about how the new guidance applies to your organization, please contact a member of Wilson Elser’s Cybersecurity & Data Privacy practice. MARCH 2019

ANALYSIS - VANTAGE AGORA

THINKING ABOUT BECOMING BLOCKCHAIN CERTIFIED? By Mehul Kenia

he hot topic instilling a sense of urgency in everyone this year is Blockchain technology, because 2019 is predicted to be the year we see this hype become a reality.

ehul is the Product Architect for Vantage Agora. He is responsible for technology & software architecture including development of the patentpending Business Operating System, OX Zion. Mehul has more than 20 years of experience in the industry with a wide range of platforms and tools, as well as experience deploying enterprise-wide solutions at several companies across the globe. His work has allowed organizations to implement strategies to achieve success. Mehul has a Masters in Computer Information Systems from Cleveland State University and a Bachelor of Science in Physics. Despite the pressure of managing and running teams spread across two continents, Mehul still finds extra time to do handson software coding.

MARCH 2019

What better time than now to get accustomed to the technology and understand the power it enables to revolutionize the world we live in? Two of Vantage Agora’s own employees, Mike Fieseler and Arvind Gopalakrishnan recently took part in the movement and became Blockchain certified. How did they do this you might say? Well, we’re here to spill the details on how you too can become certified in Blockchain. You might be thinking to yourself, ‘Aren’t certifications costly and time consuming?’ Think again! At Vantage Agora, we’ve found an option that won’t break the bank or waste your time! Take it from our own employees, who completed the course within hours. Here’s exactly how you can be on your way to becoming a certified Blockchain Techy: IBM offers a free, Cognitive Class course where you can get certified in

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a matter of hours. Throughout the 3-hr course, you will grasp a deeper understanding of the concepts behind the technology, demonstrated through modules, watching demos and completing labs. At the end of the course, receive praise and recognition for your understanding and ability to apply the concepts learned, with a “Blockchain Essentials” badge. If you wish to further your understanding beyond the basics, IBM also offers two additional intermediate courses. And of course, these can also be completed in a short amount of time. With the tech industry moving at rapid speed and new innovations constantly emerging, it can be difficult to keep up… take it from us, Blockchain is something you don’t want to miss out on. The demand for the knowledge and skillset is prevalent in not only the tech industry, but so many others as well. This new year, expand your knowledge and join us in becoming Blockchain certified. All you need is a few hours, a passion to learn and the desire to succeed! www.chart-exchange.com

vantage agora

LOWER COSTS www.vantageagora.com

IMPROVE PRODUCTIVITY Vantage Agora delivers solutions that accelerate your company’s growth. We’re your support staff that takes care of all the routine and time-consuming work, so your in-house staff can focus on sales and improving customer experience for your clients. We provide flexible staffing to address seasonal peak periods during the year. With OX Zion, Vantage Agora’s software solution, our team uses Automation and Robotics to drive down processing time and costs. OX Zion gives you the real-time visibility you need to analyze your daily production.

industry solutions

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Actionable Dashboards Customized Solutions Data Analytics Operational Intelligence Visibility and Control

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Technology Helps Brokers Visualize a Bright Future in the London Market Click to Download Informational PDF

MARCH 2019

ANALYSIS - WILSON ELSER

NO DAMAGES REQUIRED TO SUE UNDER ILLINOIS BIOMETRIC INFORMATION PRIVACY ACT decision will likely pave the way for future lawsuits and allow more individuals to recover for technical violations under BIPA.

violation shall have a right of action against the offending party and may recover, for each violation: •

•

redress, alleging Six Flags violated the Act because it retained biometric information without obtaining

Liquidated damages of $1,000 or actual damages, whichever is greater, against a private entity that negligently violates a provision of the Act Liquidated damages of $5,000 or actual damages, whichever is greater, against a private entity that intentionally or recklessly violates a provision of the Act

BACKGROUND The Rosenbach decision can be traced back to 2014, when14-year-old Alexander visited the amusement park Six Flags on a school field trip. Prior to his visit, Alexander’s mother (Rosenbach) purchased his season pass online. Upon Alexander’s arrival at Six Flags, he had to scan his thumbprint alongside his season pass to serve as his admission into the park. The use of biometric information such as thumbprints makes it easier for individuals to enter the park and provides the park with greater security by preventing patrons from entering the park with someone else’s pass. According to the complaint, Rosenbach was unaware when she purchased the season pass that Alexander’s fingerprint would need to be scanned and stored. She filed suit on behalf of her son seeking

MARCH 2019

written consent, did not disclose what was done with Alexander’s biometric information and failed to disclose how long the information would be stored. Despite the allegations that Six Flags violated BIPA, Alexander did not suffer an actual injury – causing Six Flags to challenge whether Rosenbach had standing to sue. Section 20 of the Act provides that any person “aggrieved” by a BIPA

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•

Reasonable attorneys’ fees and costs, expert witness fees and other litigation expenses Other relief, including an injunction.

THE SEMANTICS OF “AGGRIEVED” The issue central to this case and many other BIPA lawsuits is whether Alexander was “aggrieved” within

See Continued Page 51

www.chart-exchange.com

Photo: Attribution 2.0 Generic (CC BY 2.0) NEC Corp. of America

Continued From Page 13

ANALYSIS - COST FINANCIAL Continued From Page 17

WHY YOU SHOULD OUTSOURCE YOUR PREMIUM FINANCING qualified person or business borrows the premiums from a third party. The policy is issued by the insurance carrier and service is provided by the agency. The benefit is that the client can manage the cost of insurance premiums — whichever type of insurance policy it may be — so that the payments conform with their other fiscal plans and commitments. For the insurance agent, this type of financing allows them to offer more products and services to a wider market, and to enhance the current value proposition to their existing clients. HOW IT WORKS With premium financing, the agent can offer the total range of insurance products and services that are right for the client. The client, whether an individual or a business, can then choose a financing plan that works for them. www.chart-exchange.com

The insurance policy is issued by the insurance carrier, as normal. To finance the cost of the plan, the agent can turn the whole thing over to a premium financing specialist. Benefits for the customer: The insurance products they need, when they need them, at a cost that fits their fiscal priorities and plans; reduced out of pocket costs, and in some cases, tax savings. Benefits to the insurance agent: The ability to offer financing without having to manage it; a new revenue stream. Benefits to the insurance carrier: Greater sales to existing customers. CHOOSE THE RIGHT PROVIDER When you’re looking for a third-party premium financing provider, make sure they offer: • • • •

•

WOULD YOU LIKE TO HAVE YOUR MESSAGE DELIVERED TO 100,000+ FOCUSED INSURANCE INDUSTRY EMAIL ADDRESSES EVERY MONTH?

total turn-key set-up of all financing plans assistance with securing lines of credit, if necessary advice on managing and minimizing risk all the necessary forms, financing agreements, disclosure statements, monthly billing statements, late notices, cancellation notices and reinstatement notices, and premium E&O coverage for premiums.

By outsourcing premium financing, you are in effect creating a new company that specializes in this one activity, giving you a new revenue stream that complements your core competencies.

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I’m Kate Boyle Managing Editor. I handle CHART Exchange Advertising. Call me at 302 765-6056 and let’s have a conversation.

MARCH 2019

ANALYSIS - FORTEGRA

WHY HUMAN INTERACTION IS STILL IMPORTANT IN RETAIL By Steve Davidson

https://catalog.archives.gov/

IN AN EVER-CHANGING WORLD, HOW CAN RETAILERS ADAPT FOR DIGITAL WHILE PRESERVING HUMAN CONNECTION WITH CUSTOMERS?

echnology has evolved to become a critical part of our everyday lives as the world continues its march toward continuous connectivity. This digital transformation is affecting every aspect of society—including retail. Since its inception, the retail industry has been constantly transforming, but one aspect has remained a consistent component throughout its history: human interaction. Unsurprisingly, consumers still crave connection despite connectivity, as recent studies show that 70 percent prefer the former. As retailers make efforts to keep pace with the digital transformation, it’s important they remain sensitive to customers looking for human interaction. Here’s how: CREATE A HUMAN-CENTRIC

MARCH 2019

CULTURE A strong company culture can create a competitive advantage in a number of areas—including customer retention. However, in today’s digital landscape, many retailers struggle to maintain human interaction as part of their brand culture. The key to pulling it off lies in proper staff training. For example, to maintain a customer-centric culture, employees must first understand how to communicate certain emotions and behaviors effectively—like empathy, patience, TABLE OF CONTENTS

adaptability, and consistency. This can be accomplished through the use of training modules like role-playing scenarios, as well as continued employee education. When employees have a grasp of a brand culture that cultivates these ideas, they’re more likely to relay these same values to customers. KEEP THE PERSONAL TOUCH IN CUSTOMER SERVICE Despite access to tools like live chat

See Human Interaction in Retail Page 35 www.chart-exchange.com

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MARCH 2019

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ANALYSIS - FORTEGRA

AUTO TRENDS: E-CARS ARE POWERING UP By Scott McLaren - Fortegra CMO

bout the author: Scott McLaren is Executive Vice President and Chief Marketing Officer at Fortegra where he leads the company’s marketing and customer relationship management initiatives. A graduate of the University of Michigan with an MBA from the University of Phoenix, Scott is largely responsible for advancing the revitalization of the Fortegra brand, helping clients and consumers Experience More.

www.chart-exchange.com

shortcoming: the lack of on-thego charging availability. While ELECTRIC VEHICLE USE IS ON THE gas stations remained ubiquitous, RISE. HOW’D WE GET HERE AND charging stations were hard to come WHERE ARE E-CARS TAKING US IN by, forcing drivers to carefully map out THE FUTURE? where they could juice up their Even with ride. Thankfully, efined the attraction the increase as a of charging of saving both the vehicle that planet and some extra locations and the introduction uses energy stored cash, in the past, of advances in rechargeable like near-field e-cars were out of batteries, today’s e-cars weren’t the question for many charging technology welcomed into the consumers because has alleviated mainstream until they didn’t fit their that concern. quite recently. And Additionally, lifestyle.” while many still electric cars have believe the auto made significant industry is moving strides in their ability to travel farther in a diesel-powered direction with on a single charge. the increasing popularity of SUVs and

trucks, consumers are also starting to take notice of the benefits e-cars present. Here are a few of the reasons why e-cars are trending up. THE JUICE IS LOOSE In the past, many consumers who might be interested in e-cars were often turned off by a critical

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Not only is electric power now more available and longer-lasting—it’s cheap. A fraction of the cost of a tank of gas at around 10 cents per kilowatt, per hour of energy—or a total of about $2.75 for a full charge—e-cars offer superior fueling affordability.

See E-Cars Page 32 MARCH 2019

ANALYSIS - KROLL Continued From Page 31

AUTO TRENDS: E-CARS ARE POWERING UP IT’S TIME TO GO GREEN When was the last time you saw some jalopy dragging down the road, belching out clouds of black exhaust? Been a minute? While they’re still out there, with the help of manufacturers’ move toward green, beat up gas guzzlers are becoming far less common. And consumers have gotten the memo, with now 71 percent thinking ‘green’ when making a purchase. Reducing the strain on our world with the potential to cut harmful emissions 45 percent by 2025, e-cars have become especially attractive to environmentally-conscious users. MORE OPTIONS THAN EVER Even with the attraction of saving both the planet and some extra cash, in the past, e-cars were out of the question for many consumers because they didn’t fit their lifestyle. It wasn’t long ago that most e-cars were smaller sedans with little to no space

MARCH 2019

and very short charging ranges—but the industry has begun addressing those issues. Now, manufacturers like Tesla and Fisker are focusing on bringing luxury and comfort to the e-vehicle market, while other companies such as Rivian have introduced electric pickup trucks and SUVs built with the outdoors in mind. Chevy has also rolled out more electric options, including the Bolt EV with an impressive 238-mile range. And consumers have responded with electric vehicles on the road surpassing 3 million in 2018—a 50 percent increase over 2016. As e-cars become more affordable and more common, what does this mean for insurance rates? Well, currently, a few key factors could influence coverage costs—namely a lack of relevant data and fewer available parts. Without existing data, electric vehicle risks are difficult to determine; and, without easily accessible parts, e-car repairs will be costlier. Both of these factors can lead to higher rates. That said, some insurers believe the absence of gasoline and the presence of speed restrictions, make e-cars a reduced risk compared to standard vehicles. At the end of the day, while electric cars may cost more than a standard vehicle up front, they can likely save drivers money in the long run. For more current automotive trends, check out our blog on auto tech milestones that have changed the insurance industry! TABLE OF CONTENTS

WOULD YOU LIKE TO HAVE YOUR MESSAGE DELIVERED TO 100,000+ FOCUSED INSURANCE INDUSTRY EMAIL ADDRESSES EVERY MONTH?

I’m Kate Boyle Managing Editor. I handle CHART Exchange Advertising. Call me at 302 765-6056 and let’s have a conversation.

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OUR TEAM IS THERE FROM THE START TO THE FINISH NSM Insurance Group Comprehensive Insurance Coverage for: Social Services I Addiction Treatment I Professional Liability Staffing Firms I Workers' Compensation I Collectible Vehicles Coastal Condo Associations I Breweries and Wineries Sports and Wellness I Specialty Aviation

888-235-3525 www.nsminc.com

ANALYSIS - FORTEGRA Continued From Page 28

HUMAN INTERACTION IS STILL IMPORTANT IN RETAIL

Anthony92931, PetSmart, Yorba Linda, CC BY-SA 3.0

and email, 86 percent of consumers still prefer face-to-face or real-time vocal communication. Retailers should take note by providing customers with a live representative on their service lines. To make interactions even more personal, train customer service reps to go off-book rather than reading a script word-for-word to keep customer conversations fresh and personal.

user and the online experience. Allowing customers to control their experience while still being available with a helping hand when needed is a good place to start. Take PetSmart, for example. The pet supply retail chain recently implemented a delivery window option, allowing customers to choose when they want items delivered to their door. This utilizes digital via online shopping but lets the customer control part of their experience allowing them to choose when items are dropped off. Plus, PetSmart has ensured representatives are available anytime to assist in-store or by phone. Despite the fact that digital transformation is changing retail, human interaction remains as important as ever. By maintaining

FIND THE MIDDLE GROUND While it’s vital for retailers to offer the human touch, it’s also important that they don’t completely ignore advantages provided by PetSmart the pet supply retail chain recently implemented digital and a delivery window option, allowing customers to choose bridge the gap when they want items delivered to their door. between the

a customer-centric culture and finding the sweet spot between human and digital connection, retailers can foster long-lasting customer relationships. For more information on how retailers can adjust to the evolving landscape, check out our blog on prioritizing customer service for the digital age.

bout the author: Steve Davidson is Vice President of Warranty for Fortegra Financial Corporation (a Tiptree Inc. company). Fortegra® and its subsidiaries comprise a singlesource insurance services provider that offers a range of consumer protection options including warranty solutions, credit insurance, and specialty underwriting programs. Delivering multifaceted coverage with an unmatched service experience for domestic and international partners and their customers, Fortegra solves immediate, everyday needs, empowering consumers to worry less and experience more.

4215 E. McDowell Road, Suite 115 | Mesa, Arizona 85215 Phone 602.904.7687 | Fax 602.734.5759 | eriskstrategies.com

Consultation Services •

Performs a coverage audit

•

Provides risk management consultation

•

Assists in determining if a captive is the right solution for you (traditional or small)

If a captive is the right solution for you,

WE DO NOT REPLACE RELATIONSHIPS We will work with you and your advisors to find the right solution for you.

•

ERS provides insurance coverage policy design

•

ERS provides full underwriting services; including policy issuance, premium invoicing and collection (premium financing is available)

•

ERS aids in domicile selection

•

ERS provides captive formation and captive management services.

WE ARE HERE TO HELP YOU We are experienced, creative, responsive, and responsible. Providing customized solutions rather than off the shelf products.

And, that solution might not require one of our products.

Turn-key captive management includes • Regulatory compliance and oversight • Corporate compliance and oversight • Bookkeeping and recordkeeping services • Coordination with tax professionals for timely filing of all tax returns and tax payments

The staff of Enterprise Risk Strategies (ERS) has over 100 years of insurance and risk management experience. Our staff includes accountants, CPAs (certified public accountants), CAs (chartered accountants), attorneys, business and insurance professionals.

Keeping you on the right path. Solving today’s problems with an eye towards tomorrow’s challenges.

MARCH 2019

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NEWS - LLOYD’S

LLOYD’S APPOINTS NON EXECUTIVE CHAIRMAN OF LLOYD’S GLOBAL NETWORK

oday Lloyd’s confirmed the appointment of David Duclos as Non-Executive Chairman of Lloyd’s Global Network, where he will play a key advisory role in the development of

Lloyd’s international network. David will take up the position at Lloyd’s immediately. With extensive international industry experience spanning four decades across a number of executive roles, including CEO of QBE North America (2013-2016) and Chief Executive of XL Group’s global insurance operations (2008-2011), David’s non-executive director appointment further bolsters Lloyd’s leadership team following the appointment of CFO Burkhard Keese. John Neal, Chief Executive Officer of Lloyd’s, said: “Dave

David Duclos as Non-Executive Chairman of Lloyd’s Global Network

is a fantastic asset to Lloyd’s and I’m delighted he has agreed to join us. He brings with him an incredible

expertise will ensure that Lloyd’s is better positioned to

wealth of knowledge and insight which will be of huge

maximise these opportunities.”

value in the months ahead as we put in place a new geographical focus, concentrating on the developed

Commenting on the appointment, David said: “I am

markets that have the greatest potential for future

pleased to be joining Lloyd’s in this advisory capacity

growth.”

at a period of great opportunity for the market, and to work closely with the Lloyd’s leadership team. Lloyd’s

“We’ll be looking at new opportunities in the US, in

international network is a strong and much-admired

Europe through Lloyd’s Brussels, together with those

asset for the market and I will bring my experiences in

emerging markets where we are likely to see the

global insurance to further strengthen Lloyd’s position

best return on our investment. Dave’s leadership and

in the US and across the world.”

www.chart-exchange.com

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MARCH 2019

2018 IN REVIEW $8.1 billion

$ $

total in-force premium

$690 million

9.3%

total in-force premium growth

growth in total in-force premium

465

independent strategic members signed

1 983

13%

4,487

signed of independent agents in U.S.

national strategic partner companies

2 0 19

new agencies created

strategic master agencies

The Total Solution for the Independent Agent The Proven Distribution System for Strategic Partner Companies

MARCH 2019

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www.chart-exchange.com

NEWS - SIAA

GREAT PROGRESS IN 2018 REPORTS SIAA SIAA signs 465 new independent member agencies in 2018

ebruary 1, 2019 – Hampton, NH: Jim Masiello, Chairman of SIAA (Strategic Insurance Agency Alliance) - the largest alliance of independent insurance agencies in the U.S. announced today,

“We are pleased with the strong 2018 results which reflect an unparalleled run of success in the independent agency channel. Our strategies and partnerships have benefited all involved, and we are looking forward to a great 2019.” $8.1 Billion total in-force premium ($8 Billion was projected), an increase of $690 Million or 8.5% over 2017. 465 Member Agencies signed. PLEASE SEE THE INFOGRAPHIC OPPOSITE PAGE! ABOUT SIAA SIAA (Strategic Insurance Agency Alliance) is a national alliance of independent insurance agency members generating hundreds of millions in new premium business annually. SIAA is dedicated to the creation, retention and growth of the independent insurance agency distribution system. To learn more about SIAA, visit siaa.net. www.chart-exchange.com

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MARCH 2019

FORESTRY WORLDWIDE FORESTRY (RE)INSURANCE FACILITY Pardus was established in 2013 by Keith Thompson, formally CEO of Advent capital Holdings Ltd and Darren Stockman Active Underwriter of Syndicate 780 and Director of Advent Underwriting Ltd. Pardus are an independent Managing General Underwriter, a Lloyd’s approved Coverholder, and an appointed representative of Capita Commercial Insurances Limited.

Cover

Maximum line of USD 8.5M any one risk, any one location. Capacity provided by Lloyd’s of London and “A-” rated company paper. Perils covered mainly Fire and Windstorm, but we can offer additional coverage for hail, ice, snow, frost. We cannot cover Pest and Disease, although we can offer cover under a small sublimit for Pest and Disease treatment costs. Sublimits available for fire-fighting costs, aerial photography, debris removal, claims preparation costs etc.

Frost

Hail

Snow & Ice Storm

Flood

PERILS COVERED Rainfall Deficiency

Fire

Malicious Damage

Windstorm

Business Interruption is offered when fruiting trees are destroyed by covered physical damage perils, leading to a loss of yield while the new trees develop •

We have specialist Pardus facilities in place to cover Public Liability (in Europe) and associated forestry Plant and Machinery risks

OUR TAILORED PRODUCTS

Full Value and Value at Risk

Full Value works in the traditional way with insurer retaining any salvageable value from the insured property. Value at Risk leaves an agreed salvage (based on salvage scales developed by Pardus using age and species data) in the ownership of the client. Pardus then only insure the non-salvage element meaning the final rate will be applied to a fraction of the TSI generating a lower overall cost to the client.

Target business: •

We are keen to see any enquiry for standing timber commercial planation forestry

• •

Information requirements for quote: •

Perils to be insured against

•

Schedule of forest locations by values, age, species

Forestry risks with accreditation from the Forestry Stewardship

Locational information needs to be provided in either

Council (or similar)

shape file format (.kmz) or the latitude/longitude

Forest Owners comprise:

coordinates of the centre point of each location

Individual investors

•

5-10-year ground-up loss experience by peril

Commercial Plantation Companies

•

Desired policy structure:

Individual Forest Owners

Timberland and Investment Management Organisations

(TIMO’s)

•

Additional features: -

Forest Management Organisations (FMO’s)

Real Estate Investment Trusts (REIT’s)

Banks loans made to forest owners or fruit tree owners

Forest Owner Associations

Deductibles, limit etc Firefighting costs, claims preparation, aerial photography, plantation infrastructure

To download our full forestry questionnaire, please visit our website https://pardusunderwriting.com/products/forestry/

Exclusions

Property

Buildings

Terrorism

Pest and Disease

Drought

Crop

Fruits, Nuts etc

Phil Cottle - Senior Agricultural Underwriter Direct +44 (0)203 735 1608 Mobile +44 (0)7769 895048 phil.cottle@pardusunderwriting.com Dan Longden Cert CII - Underwriting Assistant

Direct +44 (0)203 735 1610 Mobile +44 (0)7756 961500 daniel.longden@pardusunderwriting.com

Pardus Underwriting Ltd. 1st Floor, 3 Lloyd’s Avenue, London, EC3N 3DS www.pardusunderwriting.com

“We have access to a worldwide forestry binding authority covering the physical damage to commercial forestry. There is a maximum line of USD 8,500,000 any one risk, any one location and the covered perils can be found on this flyer. This is written 100% Lloyd’s/company market and Prospect are the Insurance broker”

ANALYSIS - KROLL Continued From Page 18

USING SOCIAL MEDIA TO HELP DISRUPT A CYBER– ATTACK

The deadline set by the attacker came and went without incident. Our client informed their local regulator of the issue – and then silence. For a week we monitored the internet for any sign of the attacker fulfilling their promise. Behind the scenes, Kroll had found the physical location of the attacker’s server and was working to have it taken down. Then the attacker struck, dumping links to their server and the real stolen data across Reddit, Twitter, Facebook, various blogs, and pastebins. However, we were ready with a takedown team who worked with outside counsel to remove the links from the internet within hours.

Simultaneously, we also launched our “cluttering” response and within a day if anyone looked for our client’s stolen data, they would only find the fake data. By this point, Kroll had managed For a week we to get the attacker’s server taken down, monitored the and we recovered our internet for any client’s data – with no sign of the attacker sign that it had been fulfilling their promise. replicated elsewhere.

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

far more effectively than the attacker could. We would essentially “clutter out” the attacker by emulating them.

Additionally, embedded in the clutter data were digital traps to alert us to any sign of third-parties looking at our fake data – from this, we would Behind the scenes, then be able to Kroll had found the Kroll was nominated approach third parties physical location of for a 2018 FT Intelligent and -- through the attacker’s server Business award in the client’s legal recognition of our and was working to counsel -- tell them innovative approach to have it taken down.” this incident. to stop looking for our client’s data. We also placed warning Social media during a cyber-incident messages in the fake data, warning can be one of your most significant any curious third parties that they risks, but through creativity, should not be seeking to view our it can also become part of an client’s stolen data. antidote.

MARCH 2019

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Mark Lann Phone:

305-248-9495 Email: chart.eo@rockwoodinsurance.com

www.chart-exchange.com

NEWS - LLOYD’S OF LONDO9N

BURKHARD KEESE APPOINTED LLOYD’S CHIEF FINANCIAL OFFICER

urkhard Keese has been confirmed as the Chief Financial Officer (CFO) of Lloyd’s following the unanimous approval of his appointment as successor to John Parry by the Council of Lloyd’s.

models for Solvency II, introduced a value generating growth strategy and initiated several large transformation programmes. As the CFO of Allianz Germany, Burkhard has also been responsible for the firm’s €300bn investment portfolio.

John Neal, Burkhard will Chief Executive take up his Officer of position at Lloyd’s, said: “I Lloyd’s on 1 am delighted April 2019, to welcome following Burkhard to 14 years at Lloyd’s. He is an Allianz Group. accomplished Since 2012 he Chief Financial has been the Officer with Chief Financial leadership Officer experience of Allianz across financial, Deutschland Burkhard Keese appointed capital and AG, Germany´s Lloyd’s Chief Financial Officer investment largest insurer management as well as proven with over €34bn in premiums. Prior expertise in business transformation. to this Burkhard was Executive Vice President and Chief Operating Officer Burkhard joins Lloyd’s at an exciting of the global finance function of time. We are working with all our Allianz. stakeholders to significantly improve near term profitability and to ensure During his time as CFO of Allianz Lloyd’s can remain at the forefront of Deutschland AG, Burkhard successfully implemented the internal commercial, corporate and specialty

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insurance and reinsurance for years to come.” Commenting on his appointment, Burkhard added: “It has been a tough decision to leave Allianz Deutschland, but I’m excited to join Lloyd’s in 2019 as its Chief Financial Officer. For me, it is an incredible opportunity to play a part in Lloyd’s success. For 330 years Lloyd’s has been taking on the world’s risks and that longevity demonstrates its enduring relevance. As one of the oldest and most respected insurance brands in the world, there is nothing else like it, and I’m thrilled to be given this opportunity.” Burkhard’s responsibilities as Lloyd’s CFO will include financial reporting for the Corporation and the market, capital setting and capital adequacy, tax, treasury and investment management. The Prudential Regulation Authority and the Financial Conduct Authority are minded to approve the appointment, subject to the completion of outstanding checks.

MARCH 2019

ANALYSIS - WILSON ELSER Continued From Page 21

NEW YORK CITY BANS CBD FROM BARS AND RESTAURANTS active ingredient of cann abis] into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”

The FDA reasons that CBD and THC are both “active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements.” It is therefore illegal under the FDCA to introduce drug ingredients into the food supply or market them as dietary supplements. Additional concerns for New York City regulators most likely revolve around the recent proliferation of CBD menu options in restaurants and bars across the city, despite the scant regulatory framework ensuring consumer safety. The NYCDOH appears to be putting the industry on hold until a

MARCH 2019

regulatory framework is hashed out. Like New York City, California similarly took the hemp-CBD industry by surprise last July when it released a FAQ document adopting FDA guidance and banning all hemp-based CBD products intended for human consumption. UPTICK IN ENFORCEMENT & REGULATION Although the NYCDOH announcement was a jolt, officials have hinted at ramped up enforcement over the past several months. Last December, and in the midst of announcing a new licensing category for New York’s industrial hemp program, the state Department of Agriculture and Markets released a FAQ document informing licensees that the manufacture and sale of readyto-eat food with CBD infusions or CBD extracts are impermissible. Rather, any CBD product intended for human consumption must (1) be produced under accepted dietary-supplement standards and (2) be properly labeled and packaged for sale under FDA regulations for dietary supplements. The Department of Agriculture and Markets made clear its intent to promulgate additional regulations for CBD products derived from hemp.

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Any CBD product intended for human consumption must (1) be produced under accepted dietarysupplement standards and (2) be properly labeled and packaged for sale under FDA regulations for dietary supplements. The Department of Agriculture and Markets made clear its intent to promulgate additional regulations for CBD products.”

Likewise, in late December, New York City Mayor Bill de Blasio released a lengthy report with suggestions on how best to approach adult-use cannabis legalization. One of the recommendations outlined in the report included permitting only “sole-purpose cannabis business.” www.chart-exchange.com

Acknowledging that CBD poses far less of a public health concern than THC, and that many city establishments already sell CBD products, the restrictions would not apply to businesses selling CBDonly products. The report notes, however, that there must be at least “basic regulations of CBD-only products in keeping with any food or drug.” This may have been the impetus for recent enforcement actions by the NYCDOH. State and local governments across the country are taking similar enforcement action. Beginning in January 2019, there have been several reports of inspections of manufacturing and retail facilities with resulting CBD product embargos ordered by the California Department of Public Health. Last week, the Maine Department of Health and Human Services ordered the removal of CBD edible products from store shelves “because hempderived products are not a federally approved food additive.” Ohio officials also are cracking down on CBD retailers. According to various news reports, the Ohio Department of Agriculture is working with local health departments and police agencies to embargo CBD products. Similar actions should be expected in more states over the coming weeks and months. Wilson Elser’s Cannabis Law practice is keeping a close eye on developments across the country. www.chart-exchange.com

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2021: AN INSURANCE ODYSSEY insurers. AI will create highly-accurate risk profiles by leveraging analytics and sophisticated algorithms that give you an instant snapshot of customer risk threats. This means that the instant quote process truly becomes instant. Customers are delivered hyper-personalized, accurate insurance quotes based on risk analytics and psychometric, biometric, and behavioral data. INTERNET-OF-THINGS (IOT) The rise in internet-connected-devices is going to drastically change the data and risk assessment space for insurers. The IoT will give insurers an in-depth snapshot of consumer behaviors and actions, which will ultimately determine their premiums and risk factors. Wearable devices can snowball user data by gathering advanced analytics (such as exercise, eating habits, and home security). This will ultimately help insurers (especially life insurance companies) remain competitive while delivering real-time solutions that are smartly priced and granular. IoT is going to result in a wave of rich data that can be fed to AI-based algorithms. This will mature the insurance space, shooting it headfirst to the next age of insurance and delivering critical customer needs in the process. TABLE OF CONTENTS

ROBOTICS So far, we’ve only considered the rise of non-physical insurance components (data, AI, deep learning, SaaS, and so forth) But, physical robotics will certainly cause a major disruption for insurers. In the not-sodistant future, physical robotics will be woven in the insurance equation. As self-driving cars slowly increase in adoption (27% of people currently think that they will be using selfdriving cars by 2020), insurers have a new equation. Obviously, new channels of insurance are necessary to meet the rise of robotics, which is apparent across insurance channels (robotic medical equipment, robotic farming equipment, and so forth) The future of insurance must meet robotics head-on. BIG DATA Finally, let’s touch on big data and data aggregation. The future of insurance relies heavily on open source data ecosystems, which will exist as a dual effort between private data aggregators and open-source data protocols. Data from IoT, AI, and robotics will be collected, stored, and distributed in cloud-based opensource systems (like blockchain.) This gives insurers equal access to critical data. And we aren’t talking a small amount of data. By 2023, IDC predicts a total of 163 zettabytes of data will be aggregated — or 163 trillion gigabytes. This data won’t just be used to determine; it will let

See 2021: Insurance Odyssey Page 50 MARCH 2019

SPECIAL REPORT - LAURDAN ASSOCIATES

EMPLOYMENT PRACTICES AUDITS: A LOSS CONTROL TOOL

organizations frequently fail to see emember the story Employment-Labor Law Audit™ the picture of employment practices (ELLA®,), the most frequently used about the Emperor’s new vulnerability — at least until a claim employment practices auditing tool, clothes? The Emperor convinced himself are discussed below. and his loyal subjects that One note of warning: he was wearing the finest GENERAL COMMENTS Information obtained from clothes, when in fact he was There has been a significant audits, assessments, and growth in the use of HR exposed to the elements. surveys can be a “smoking gun” audits in recent years. Some It was only a little boy’s honest — if undiplomatic and may be discoverable. You of these audits evaluate — observation that finally should investigate immediately, the effectiveness of human brought reality to the and take corrective action where resource management, empire. Like the emperor, while others benchmark required, particularly of reported best practices. Employment many organizations incidents or perceptions of convince themselves practices audits are designed that they are protected discrimination, harassment, or to assess an organization’s (clothed), when in reality compliance with the myriad other inappropriate conduct. they are exposed to of federal, state, and local General auditing rule #1: You employment-related laws and regulations. should never collect information liabilities. Only when there you cannot use in making is a charge of an unlawful Unfortunately, many employment practice does employment decisions.” organizations limit the the organization begin to benefits they derive from recognize it is vulnerable. these audits. Some use is filed. audits only as a tool to identify To help organizations recognize Remember connect-the-dots what someone is doing wrong. and define their exposure to puzzles? Without a numbered Once they identify a wrongdoer, employment practices issues and path to define the picture, punishment is meted out. Other help reduce losses, employers the answer typically remains organizations use audits solely and insurers are increasingly a mystery. In solving the as a tool to collect information using human resource (HR) puzzle of effective human about employing units’ activities auditing and employment resource and risk management, and performance. Once collected, practices liability risk management organizations similarly need a this information is then sorted, assessment techniques. Some of structured approach (a numbered dissected, analyzed, compared, these techniques, including the path). Without this approach,

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bout the author: Ronald Adler is the president-CEO of Laurdan Associates, Inc., a veteran owned, human resources management consulting. Ronald Adler is the president-CEO of Laurdan Associates, Inc., a veteran owned, human resources management consulting firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR, and unemployment insurance cost management. Mr. Adler has more than 45 years of HR consulting experience working with U.S. and international firms, small businesses and nonprofits, insurance companies and brokers, and employer organizations. Mr. Adler is the developer the Employment-Labor Law Audit™ (ELLA®), the nation’s leading HR auditing and employment practices liability risk assessment tool — now in the tenth edition. g firm specializing in HR audits, employment practices liability risk management, HR metrics and benchmarking, strategic HR, and unemployment insurance cost management. Mr. Adler has more than 45 years of HR consulting experience working with U.S. and international firms, small businesses and non-profits, insurance companies and brokers, and employer organizations.

and stored for future use, which often never occurs. While this information is useful in reports to top management, it has few other uses. Considering the potential benefit from HR audits and the cost to conduct them, they should be more than purveyors of punishment and collectors of data. The primary purpose of HR audits is to cause action to occur: either to strengthen positive employment practices or to correct negative or unlawful activities. Experience shows that when audits are used to accentuate the positive and correct the negative, they increase the active participation and cooperation of managers and supervisors; they reduce tendencies to react defensively; and they increase the stake employees have www.chart-exchange.com

in achieving the desired outcomes. The net effect is a reduced exposure to employment-related claims and greater loss control. One note of warning: Information obtained from audits, assessments, and surveys can be a “smoking gun” and may be discoverable. You should investigate immediately, and take corrective action where required, particularly of reported incidents or perceptions of discrimination, harassment, or other inappropriate conduct. General auditing rule #1: You should never collect information you cannot use in making employment decisions. General auditing rule #2: You should not conduct an audit if you do not intent to act on your findings. EMPLOYMENT PRACTICES ASSESSMENTS TOOLS

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1) The Facilities Inspection. The Americans With Disabilities Act requires employers to create equal employment opportunities for workers with disabilities. The starting point in the employeremployee relationship is the recruitment, selection, and hiring process. Since most employers often require an applicant to visit their offices to complete an application form or to be interviewed, the employment application intake area and interviewing facilities must be able to accommodate individuals with a variety of disabilities. In inspecting facilities, consider the facility from the individual-with-adisability perspective. Examples: Can an individual with a mobility impairment gain access to the

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SPECIAL REPORT - LAURDAN ASSOCIATES Continued From Page 47

EMPLOYMENT PRACTICES AUDITS: A LOSS CONTROL TOOL building and get to the human resources office? Will an individual with a visual impairment be able to complete the job application form? Is there someone assigned and trained to help individuals needing assistance? 2) Posters and Notices Inspection. Federal, state, and local employment laws require that employers post in a “conspicuous” place posters and notices concerning employers’ obligations and employees’ rights under these laws. A visual inspection should be made to ensure that these posters are up-to-date and are properly displayed. 3) An Image Audit. The 1991 Amendments to the Civil Rights Act allow plaintiffs to seek compensatory and punitive damages and provide for jury trials. Jury trials are usually problematic

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for employers. While the facts of each case are important, juries will typically consider such subjective factors as an employer’s reputation for fair treatment and due process. An employer’s reputation can be enhanced or destroyed by the explicit and implicit messages it communicates in its annual report, advertising media, press coverage, internal documents, and social media. A regular review of this material from a jury’s perspective will help reduce negative impressions. 4) Employee Attitude Surveys. Employers are held accountable for the unlawful practices they knew about or should have known about. In the future, employers are likely to be held to a new and higher standard: Why didn’t the employer know about the unlawful practice? Ideally, an employer should never be surprised — usually when a charge is filed — that its employees feel that they are mistreated, discriminated against, or are harassed. NOTE: A study of EEOC data shows that most discrimination claims occur after employees have been terminated. That obviously is the wrong time to learn that there is a problem. An important way for most employers to effectively determine employees’ workplace experiences and perceptions is through employee attitude surveys. Experience shows that when TABLE OF CONTENTS

conducted on a periodic basis, and when the findings from these surveys are acted upon, employees feel more positive about their organization and more willing to use internal complaint mechanisms. This improved feedback mechanism allows employers to take corrective action before it is too late. 5) Employment Practices Audits. While a number of internallydesigned audit programs exist, the Employment-Labor Law Audit™ (ELLA®) is the most widely used and effective employment practices — loss control auditing tool. Endorsed by the insurance industry and by a number of employer associations, peer reviewed by the Society for Human Resource Management, the American Institute for Certified Public Accountants, and number of the nation’s leading employment law experts, and used as course material for continuing professional education credit, ELLA® helps employers ask the “right” questions about their employment practices, assesses their organizations’ strength and weaknesses, identifies problem areas, and prioritizes corrective measures. The tenth edition of ELLA® allows employers, insurers, brokers, and risk managers to audit key employment practices issues, including:

• Strategic and Organization Description Profile™ www.chart-exchange.com

• Recruitment, Selection, and Hiring Profile™ • Application Process Profile™ • Reference Checking and Responding Profile™. • Immigration Issues Profile™ • Americans with Disabilities Act Profile™ • Employee Handbook Profile™ • Positive Employee Relations Profile™ • Diversity Management Profile™ • Workplace Discrimination Profile™ • Affirmative Action Profile™ • Workplace Sexual Harassment Profile™ • Drug-Free Workplace Profile™ • Job Performance Management Profile™ • Retention Issues Profile™ • Conflict Resolution Profile™ • Termination Process Profile™ • Downsizing, Layoffs, and Plant Closing Profile™ • Unemployment Insurance Management Profile™ • Employee Benefits Plan Compliance Profile™ • Leaves of Absence Profile™ • COBRA and HIPAA Profile™ • Wage and Hour Profile™ • Workplace Safety Management Profile™ • Records, Notices, and Information Management Profile™ • Governance and Ethics Profile™ • Benchmarking Profile™ • HR Audit Assistance and www.chart-exchange.com

Tools: ELLA Assistance™ Employment Practices Liability Risk Exposure Tool™ HR Audit Action Plan™ ELLA Pre-HR Audit Worksheet™ Employment Retaliation Vulnerability Assessment™ Human Capital Management Effectiveness Tool™ ELLA HR Audit Maps™ ELLA Organization Risk Exposure MAP™ ELLA Employee Engagement Map™ As the incident and severity of employment related claims increase, employers are being forced to pay greater attention to their employment practices and to take corrective action where needed. Additionally, as third-party intervention by stockholders and investors, the SEC, financial institutions, civil rights and consumer groups, and others increases, companies are more frequently being asked to explain and defend publicly their employment practices.

CHART DEFENDER COVERHOLDER E&O AVAILABLE NOW!

Mark Lann Phone:

305-248-9495 Email: chart.eo@rockwoodinsurance.com

For many, there is a new internal question now being asked: Do we want to be known as a company or a case? In this environment, HR audits have become more important element in loss control.

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ANALYSIS - NETRATE Continued From Page 45

2021: AN INSURANCE ODYSSEY insurers predict exact risk scenarios. In fact, 66% of analytic processes will be able to predict behavior instead of determine behavior by 2021. CONCLUSION The digital age of insurance is already here. SaaS, social media, big data,

and AI analytics are disrupting the insurance industry across verticals. But the future holds an incredible amount of growth for predictive insurance. By leveraging powerful open-source data streams, mature algorithms, advanced AI, and blockchain protocols, insurers will be able to deliver granular packages to consumers based on advanced risk analytics, as well as IoT-sourced behavioral and biometric data.

who figure out the answers to these questions will be the winners of the new age of insurance. The future of insurance is right around the corner, and savvy insurers are ready to adopt new technologies that help them deliver more customer-centric and reliable solutions.

Of course, the future also carries uncertainties. How will insurers address physical robotics and IoT adaptations? What is the site map of the new age? The brokers, insurers, suppliers, and financial intermediaries

NetRate can revolutionize your underwriting, rating, quoting, binding and issuing by using technology to make all of your processes smarter, more efficient, and more cost effective.

Being prepared for the future is great, but, if you’re wondering what you can do TODAY, contact us.

FBI INVESTIGATING NATIONWIDE WORKERS’ COMPENSATION FRAUD

merican Labor Alliance (ALA) and its affiliates are being investigated by the Federal Bureau of Investigation over a suspected nationwide workers’ compensation fraud scheme.

want people to check and see if their policies are valid.”

According to court documents, ALA sold workers’ comp policies that may not have provided any actual coverage.

The court documents from charges brought in January of 2019 also allege ALA offered a suite of financial products under a variety of names including “ALA Trust,” ALA Retirement Plan Trust,” and “ALA Retirement Plan and Trust” that may have been fraudulently sold to the public.

FBI Sacramento field office public affairs specialist Gina Swankie told Sacramento Business Journal, “We

The company, already the subject of controversy since the beginning of 2019, allegedly used a special ploy,

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marketing itself as a special type of labor organization defined under federal law, according to the FBI. Insurance departments in a number of states have warned businesses that may have purchased financial products from ALA or any of its subsidiaries should contact the regulators to verify their policies. A 14-count federal grand jury charged ALA and two of its executives with mail fraud, conspiracy to commit mail fraud, and money laundering. www.chart-exchange.com

ANALYSIS - WILSON ELSER Continued From Page 26

NO DAMAGES REQUIRED TO SUE UNDER ILLINOIS BIOMETRIC INFORMATION PRIVACY ACT the meaning of the Act, despite lacking an actual injury. Rosenbach argued that a violation of the Act alone was sufficient to render a party “aggrieved.” Whereas, Six Flags argued that the meaning of “aggrieved” most consistent with the Act requires actual harm or adverse consequences. The Illinois Supreme Court rejected the Six Flags argument and instead found that a technical violation of the Act alone does in fact meet the definition of “aggrieved.” In doing so, the court reversed the appellate court’s decision, which had held the exact opposite: that actual harm or an adverse effect must be alleged in order for an individual to have standing under BIPA. In analyzing the word “aggrieved,” the court looked to the AIDS Confidentiality Act, another Illinois statute that, like BIPA, has a private right of action for an “aggrieved” person. Similar to BIPA, the AIDS Confidentiality Act does not contain its own definition of the word “aggrieved.” However, in 2002 it www.chart-exchange.com

was decided that proof of harm was not required for a person to be “aggrieved’ under the AIDS Confidentiality Act. Additionally, in Rosenbach, the court focused on the plain meaning of the word “aggrieved” and found that it meant “having legal rights that are adversely affected.” Therefore, the court reasoned that to require an actual injury in addition to a BIPA violation would depart from the ordinary meaning of the word “aggrieved” and read into the Act conditions that the Illinois legislature did not intend. ANALYSIS Additionally, the court’s reasoning behind the Rosenbach decision focused heavily on the nature of biometric information, which unlike a social security number or password can’t be changed. Specifically, the court explained that the protections afforded by BIPA “are particularly crucial in our digital world because technology now permits the wholesale collection and storage TABLE OF CONTENTS

of an individual’s unique biometric identifiers – identifiers that can’t be changed if compromised or misused.” The court further explained that when a BIPA violation occurs, an individual’s injury is already real and significant because that person immediately loses their right to maintain their biometric information. Further, to require that person to wait until he or she sustained an actual injury “would be completely antithetical to the Act’s preventative and deterrent purposes.” This decision serves as an important reminder that it is imperative for private entities such as Six Flags to develop written policies that will establish a retention schedule and notify individuals how his or her biometric information will be used and stored. Given how technology evolves at a rapid rate and how quickly biometric information technology has entered everyday use, private entities that employ biometric information technology need to be cognizant of how they are handling individuals’ biometric information to ensure compliance with BIPA. Now that Rosenbach gives an individual the right to pursue damages or injunctive relief on a technical violation alone, businesses must be prepared for the new wave of BIPA litigation.

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