May 25, 2015 by C Acunto

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VOLUME 126, NUMBER 10 / May 25, 2015

Serving: New York, New Jersey, Connecticut, Pennsylvania and Washington D.C.

A CINN Group, Inc. Publication

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Contents [COVER STORY ] 18

Courtside: Motorcycle Passenger is Still "Occupying" it After Being Thrown Off; Gets no Pip Beneﬁts for Being Struck While on Pavement Lawrence N. Rogak

On My Radar: What Happens When State Formed Insurer Acts in Bad Faith Barry Zalma

Looking Back: 1990

Classiﬁeds

NAIC Cybersecurity Task Force Sets Regs Dan Bonnet

[FEATURES] 4

May 25, 2015 | volume 126 number 10

Foreword: Statewide Doctor Shortage Looms Steve Acunto, Publisher

Insight: End of the Trail Peter H. Bickford

In the Associations: IIABNY Elects Todd Rockefeller Chair of the Board

In the Associations: Stewart to be Honored at 2015 IIS Global Forum IMUA Elects 2015 Ofﬁcers & Directors

The Social Notebook: Your Personal Brand Chris Paradiso

NewsNotes: McNeil & Co. Celebrates 25th Anniversary

Wrynn to Guy Carpenter 22

Guest Article: Insurance Brokers, PEOs and Clients; A Win-Win-Win Partnership Jay Starkman

In Focus: A Woman’s Place is Not in the Kitchen Any Longer Kelly Donahue

Guest Opinion: An American Response to Loss of ObamaCare Subsidies Jane M. Orient, MD

Like us on Facebook… The Insurance Advocate Magazine INSURANCE ADVOCATE / May 25, 2015 3

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[ FORE WORD ]

Steve Acunto

Statewide Doctor Shortage Looms

s our healthcare system is “transformed,” fixing greater focus on primary care, care coordination, and population health, residents across the state need more primary care providers, according to an eye-opening report from the Healthcare Association of New York State (HANYS). Doctor Shortage Imperils Primary Care Expansion confirms that New York’s physician shortage continues and is expected to worsen as reform efforts—such as the Delivery System Reform Incentive Payment (DSRIP) program—rely on increased primary care. The report, which summarizes the results of HANYS’ annual Physician Advocacy Survey, found 20% of the 942 doctors needed are primary care physicians. “At a time when healthcare providers are working to keep their communities healthier and out of the emergency room, primary care must be accessible in all corners of New York State,” said HANYS President Dennis Whalen. “From expanding successful programs such as Doctors “AT A TIME WHEN HEALTHCARE Across New York to optimizing telehealth services, the state must PROVIDERS ARE WORKING TO KEEP explore ways to meet the current THEIR COMMUNITIES HEALTHIER AND and future needs for primary care.” OUT OF THE EMERGENCY ROOM, PRISeventy-seven percent of respondents indicated that their MARY CARE MUST BE ACCESSIBLE IN primary care capacity is not suf- ALL CORNERS OF NEW YORK STATE” ficient to meet current needs, with 75% concerned about the ability to meet future demand. The survey also found 86% of hospitals found primary care physicians very difficult to recruit. Those surveyed provide primary care at a total of 542 clinics. HANYS has advocated for additional slots for the successful Doctors Across New York program, the continuation of Primary Care Services Corps, and for funding through DSRIP to help providers recruit physicians and other healthcare professionals to communities in need. HANYS’ 2014 Physician Advocacy Survey was developed in collaboration with Iroquois Healthcare Alliance, Suburban Hospital Alliance of New York State, Rochester Regional Healthcare Association, and Western New York Healthcare Association. A total of 94 member hospitals outside New York City participated in the survey. With a large number of respondents located in rural underserved areas in northeastern, central, Rochester, and western New York, the report includes a separate section for upstate findings. Reports like these urge lawmakers implicitly to act to gain medical students and to recruit them into critical sectors. That means incentives.[IA] 4 May 25, 2015 / INSURANCE ADVOCATE

VOLUME 126, NUMBER 10 MAY 25, 2015

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com

PROOF READER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x117 circulation@cinn.com PUBLISHED BY CINN Group P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto

CINN G R O U P, I N C .

INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in July, August, September and December by CINN ESR, Inc., 131 Alta Avenue, Yonkers, NY 10705. Periodical postage paid at Yonkers, NY and additional mailing ofﬁces. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $110.00. TO ORDER Call 914-966-3180, fax 914-966-3264, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2015. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Ofﬁce.

For high-quality article reprints (minimum of 100), including e-prints, contact Gina Balog at g@cinn.com or call 914-966-3180, x113

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[ INSIGHT ]

By Peter H. Bickford

End of the Trail “My work here is done!” (The Lone Ranger) Many of us smiled - perhaps cynically - at the New York Times headline on May 20th: “Benjamin Lawsky, Sheriff of Wall Street, Is Taking Off His Badge.” The article included the semi-iconic rendering of “Johnny Lawsky” in old-west sheriff ’s garb

be a simple, matter-of-fact announcement. But when it comes to DFS announcements, nothing is simple or matter-of-fact. The DFS press release directs readers to a link for “A summary of NYDFS initiatives and enforcement actions” from the

Isn’t it curious that the DFS Annual Report, including the self-serving list of accomplishments, was miraculously posted ahead of schedule and in time to be used as a personal résumé for the departing superintendent?

Peter H. Bickford

from The Village Voice cover in 2013. Place a black mask on that graphic and he would look very much like the Lone Ranger back in the 1950s. And like the Lone Ranger, he is now riding off into the sunset having vanquished all the bad guys in sight. Of course, the main takeaway from the many media headlines and articles on the superintendent’s announced resignation was the emphasis on his banking industry exploits and round up of financial services villains. One had to go to the insurance press to find anything other than a passing mention of insurance. Even in the insurance press, however, the overriding theme of banking and enforcement was not far from the surface. The NAIC Newswire, compiling articles on insurance regulatory matters, actually used the NY Times headline and article as its selected piece on the Superintendent’s resignation. An interesting choice to say the least! At first, the announcement of the resignation by New York’s own Department of Financial Services seemed low key in comparison. The press release issued by the DFS does not refer to either “insurance” or “banking,” using instead “financial services” as all-inclusive, and appears to 6 May 25, 2015 / INSURANCE ADVOCATE

DFS 2014 Annual Report. The introductory paragraph to this summary states that: “In the four years since its creation, by employing a number of innovative enforcement strategies, NYDFS has sought to strengthen efforts to (1) police Wall Street, (2) protect consumers, and (3) regulate financial markets.” Following this introductory statement are lists of “accomplishments” under each of the three categories. Anyone seeking to understand the climate for conducting an insurance business in the State should closely review these laundry lists of what DFS considers its major achievement over the past four years. The Wall Street section emphasizes the $6 billion in penalties and actions against individual executives; and the consumer section emphasizes actions to protect consumers “against abusive lenders and insurance companies.” Even in the last category, “new financial products and risks,” the focus is on aggressive adoption and enforcement of rules that stifle rather than encourage development of new products. Of all the bullet points in the DFS list of accomplishments over its first four years, you will not find a single industryfriendly initiative. But these lists are not the only curious

and interesting aspect of the DFS press package on the resignation. Take, for instance, the coincidence of timing. In 2012 - the first full year of existence of the DFS - the due date for the statutory annual report of the DFS was extended a month from May 15 to June 15. Both the 2012 and 2013 annual reports were filed, as allowed by the revised law, on the last day possible – June 15, 2013 and 2014 respectively. The 2014 report, however, was dated and posted on May 5, 2015, 40 days earlier than required and 10 days earlier than required even under the old law. Who ever heard of a statutorily required government report being filed early let alone 40 days early? (FIO take note!) Isn’t it curious that the DFS Annual Report, including the self-serving list of accomplishments, was miraculously posted ahead of schedule and in time to be used as a personal résumé for the departing superintendent? The annual report is also interesting in two other respects. First, the law (Section 207 of the Financial Services Law) requires that the superintendent’s annual report “contain the following items, with respect to the preceding calendar year: (1) a general review of the insurance business, banking business, and financial product or service business . . .” The report as submitted is neither focused on the “preceding calendar year” nor does it include “a general review of the insurance business.” Rather it is a fouryear review of the DFS’s “achievements” since its inception. The DFS Annual Report may be an excellent self-serving promotional brochure for the DFS and its departing leader prepared under the guise of the law, but it is certainly not the report called for by statute. Second, the heading “Insurance Statistics” has disappeared from the annual report’s table of contents! The table of contents includes no separate section on insurance and all the statistics, schedules and charts are found listed under the heading continued on page 8

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[ INSIGHT ] continued from page 6

“Banking Statistics.” In all likelihood (except in the minds of some diehard conspiracy theorists I know), this omission probably comes under the category of a classic Freudian slip. Given the already diminished importance of insurance in the eyes of the DFS, it is an interesting “slip” nonetheless. And lest anyone thinks that the departure of our current superintendent provides hope for a shift in emphasis by the

DFS towards at least some support for industry growth and development and a reduced obsession with enforcement, the identified group of potential replacements should probably dash that thought. By the time this column is published we may know who the replacement will be, but as of this writing the names bandied about in the media are either former prosecutors or banking industry personae with no insurance background or expertise. “Hi Ho Silver, Away!” “Who was that masked man?”[IA]

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The DFS Annual Report may be an excellent selfserving promotional brochure for the DFS and its departing leader prepared under the guise of the law, but it is certainly not the report called for by statute.

Epilogue: Mr. Lawsky, I must take this last opportunity while you are still our superintendent to once again ask: Why, with all your emphasis on pursuing the wrongdoers in the name of protecting the consumer, did you not pursue the wrongdoers under your own roof in connection with the failed stewardship by the Liquidation Bureau of Executive Life Insurance Company? Why did you fail to protect the most seriously injured Executive Life annuitants whose interests you professed to represent? And when you failed to protect them, why did you go to extreme measures to prevent those same consumers from doing so themselves? Why don’t your rules of conduct for the industry, so exquisitely spelled out in your annual report, apply to your own house? Peter Bickford has over four decades of experience in the insurance and reinsurance business, with particular focus on regulatory, solvency, agency, alternative market and dispute resolution issues. In addition to his experience as a practicing attorney, he has been an executive officer of both a life insurance company and of a property/casualty insurance and reinsurance facility. A complete biography for Mr. Bickford may be accessed at www.pbnylaw.com.

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[ IN THE ASSOCIATIONS ]

IIABNY Elects Todd Rockefeller Chair of the Board Westchester County insurance agent is trade group’s top elected officer

ooperstown, N.Y.—The Independent Insurance Agents & Brokers of New York (IIABNY) today elected R. Todd Rockefeller as its chair of the board for the 2015-16 term. Rockefeller took the oath of office during a ceremony following IIABNY’s Annual Business Meeting, held at The Otesaga Resort Hotel in Cooperstown. Members also TODD ROCKEFELLER elected and installed new officers and regional members of the board of directors. ket of solutions, affording consumers the Rockefeller is a partner with DeRosa, best possible insurance coverage at a reaRockefeller, Sohigian & Werdal, Inc. sonable price.” He promised that IIABNY (DRSW) in Harrison, New York. A member will defend independent agents against of the IIABNY board of directors since competition from insurers who use constant 2009, he has chaired the group’s audit and advertising to sell coverage directly to confinance committees, chaired the public pol- sumers. icy legislative review and policy working He also called for the merger of IIABNY group, and served on the association’s tran- with the Professional Insurance Agents of sition working group. He is past-president New York. of the Independent Insurance Agents of Jack Smith, CPCU, ARM, CIC, execuWestchester. tive vice president for the William A. Smith Rockefeller is active in charities such as & Son agency in Newburgh, was elected to the Boys & Girls Club of Northern a one-year term as vice-chair and secretaryWestchester, the Westchester-Putnam Boy treasurer. Scouts of America, and the Mount Arab IIABNY members also elected and rePreserve Association. A graduate of elected the following regional directors: Gettysburg College, he worked in under• Louis Atti, CPCU, vice-president of writing and sales capacities with Aetna Life The Evans Agency in Angola, New & Casualty, Hanover Insurance and York, to a two-year term representing ManagedComp. He joined DRSW in 1998. the central and western areas of the In his remarks, Rockefeller emphasized state; the need to make insurance careers acces• John Cofini, executive vice-president sible and attractive to the next generation of BNC Insurance Agency, Inc. in Rye of workers. He also said independent insurRidge, New York, to a one-year term ance agents need to better spread their mesrepresenting the New York City sage. “We are the best insurance delivery metro-suburban areas. system for the American public,” he Lane S. Rubin of The Excelsior Group declared. “We are advisors and a supermar- in Valley Stream, New York, won a two-year

“We are the best insurance delivery system for the American public. We are advisors and a supermarket of solutions, affording consumers the best possible insurance coverage at a reasonable price.”

term as member representative on the Nominating Committee. This committee evaluates candidates for leadership positions and makes recommendations to the membership. Earlier in the day, the IIABNY board of directors re-elected Lawrence Pistell, ARM of St. Johns University in New York City to a two-year term; and Jeanne Salvatore of the Insurance Information Institute, also in New York City, to a one-year term. Both will serve as a director-at-large. [IA] The Independent Insurance Agents & Brokers of New York, Inc. has represented the common business interests of independent insurance professionals since 1882. More than 1,750 agencies and their 13,000-plus employees currently rely on the DeWitt, New Yorkbased not-for-proﬁt trade association for legislative advocacy, continuing education and other means of industry support. In addition, most IIABNY members proudly identify themselves as Trusted Choice® agents and brokers, a national consumer brand uniting more than 21,000 independent agencies across the United States. For more information, go to www.trustedchoice.com or www.iiabny.org.

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[ IN THE ASSOCIATIONS ]

Stewart to be Honored at 2015 IIS Global Forum

he International Insurance Society (IIS) has announced that the late Gordon C. Stewart, former IIS Vice Chair and retired CEO of Insurance Information Institute, has been selected as the recipient of the Distinguished Service Award for his dedication and leadership in forwarding the mission of the IIS. Mr. Stewart will be honored before an audience of 500+ insurance executives at the June 15th awards gala dinner in conjunction with the Global Insurance Forum, June 14th-17th at the Waldorf Astoria in New York. As Vice Chairman, Mr. Stewart had great impact on the IIS, playing a critical role in the strategic leadership over the past many years. His belief in the evolution of the IIS and our role in serving the industry was a driving passion, and he dedicated much of his time and energy towards IIS even in his last days. The impact of his work on the IIS will be long-lasting and we are grateful for his visionary leadership, dedicated service and loyal friendship. Mr. Stewart was a modern-day renaissance man, with an extraordinary background and roster of accomplishments. Prior to joining the insurance industry, Mr. Stewart held positions as Deputy Chief Speechwriter to President Jimmy Carter, Executive for Policy and Programs to New York Mayor John Lindsay, Head of Public Affairs for Arthur Levitt at the American Stock Exchange, Member of the Defense Science Board, and as a Stage Director and Orchestra Conductor. Gordon joined the Insurance Information Institute in 1986, serving as President from 1991 until his retirement in 2006, and is generally credited with turning the Institute from a small public relations organization into the premier insurance reference point for journalists, academics, and policymakers about insurance in the United States. After retiring from the III, Mr. Stewart remained active in the insurance industry and in other pursuits, including launching and publishing online and print newspapers, Philipstown.info and ‘The Paper’ and was an active contributor to such publications as CNN, the Geneva Papers on Risk 12 May 25, 2015 / INSURANCE ADVOCATE

and Insurance, the New York Times, and US News & World Report on political and economic topics. Mr. Stewart was Principal of The Next Deal, Inc. and Secretary of the Judson Welliver Society of Senior Presidential Speechwriters and also held positions as North American Liaison for The Geneva Association and Chairman of The Geneva Association Communications Council, served as Chairman of the Named Fiduciaries of the Pension Plan for Insurance Organizations, Life Member of the Council on Foreign Relations and CoFounder with Martin Feldstein of the Insurance Working Group at the National Bureau of Economic Research. “We are truly indebted to Gordon for his crucial role in establishing the IIS as the leading global forum for our industry,” said Michael J. Morrissey, IIS President and CEO. “His extraordinary intellect, drive and vision were remarkable and his legacy will have lasting impact on not only the IIS, but our industry as a whole,” added Mr. Morrissey. [IA]

“…As part of my agenda for the remainder of my term of office, I not only intend to stay the course, but build upon our successes to create an even stronger entity.…” of this group of dedicated professionals and thank you, the membership, for this unique opportunity. It is extremely gratifying to witness first-hand the incredible progress the association has made over the past few years in developing the talents of so many young members of this association. As part of my agenda for the remainder of my term of office, I not only intend to stay the course, but build upon our successes to create an even stronger entity. We will pursue all avenues as they relate to professional development of those of you who serve this industry. Together we will build an even stronger IMUA.” Also elected during the IMUA Business Meeting were the members of the Board of Directors. The Class of 2016 includes: • Diane Shelton – Catlin U.S.

IMUA Elects 2015 Officers & Board

he Inland Marine Underwriters Association (IMUA) Annual Meeting held in Charlotte drew 250 underwriters, brokers, claims personnel and key industry suppliers who converged to learn of some of the most pressing issues affecting the inland marine for 2015 and beyond. The first order of business was the election of the 2015 slate of officers. Michelle Hoehn, The Travelers Group, was re-elected as IMUA Chairperson. Also re-elected were Deputy Chairperson William Rosa, XL Reinsurance, and L. Pat Stoik, Chubb Group as Vice Chairperson. In her acceptance remarks Ms. Hoehn once again praised the work of the IMUA and its continuing commitment to the betterment of the inland marine industry. She said, “I am extremely honored to serve a second year as the Chairperson of such a prestigious organization as the IMUA. But more importantly, I am proud to be a part

• James Cordrey – Hanover Insurance Group • Grace Thomas – Great American The Class of 2017 includes • Tom Brochett – Munich Re America • Donald Keahon – Aspen Specialty • Michael Miller – Markel Corp. • David Higley – The Hartford The Class of 2015 includes: • Bruce S. Jer vis – ACE North America Property • Sheila O’Keeffe – Gen Re • Rich Pye — Zurich • Joseph Rich — Liberty Mutual Kevin O’Brien and Lillian Colson, the Association’s President and CEO and Vice President and Secretary respectively, were also unanimously re-elected at the 85th Annual Meeting.[IA]

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[ THE SOCI AL NOTEBOOK ]

By Chris Paradiso

Your Personal Brand

n essential part of networking today is to be “memorable” for the right reasons. OK, what does this mean? It means recognizing and developing your personal brand. Without the cre-

But how do you recognize what your personal brand is? How can you shape it so that you influence other people positively? That’s the million-dollar question.

A personal brand is as important as your agency’s brand. Whether you own your own agency or work for one, your personal brand will play a huge role in your networking success. Chris Paradiso

ation of your personal brand, it will be very difficult to network effectively. A brand is often described as a “collection of perceptions” people have about a product, service or organization. It is what sticks in their minds and helps them make buying decisions. In the insurance industry it’s all three. But people don’t only have perceptions about products, services and organizations; they also develop a collection of perceptions about the people they meet. A personal brand is as important as your agency’s brand. Whether you own your own agency or work for one, your personal brand will play a huge role in your networking success. I say we all have a personal brand. Each and every one of us has our own unique personal brand that influences other people’s decisions about whether to do business with us and our agency. This personal brand has a powerful impact – not only on the people we meet and do business with, but all of the other people within their networks too. People (customers/prospects) talk about us just as they talk about products, services and organizations. When you consider that research suggests word-of-mouth recommendation has a far greater influence (more than 85%) over how a person makes a purchase than other forms of marketing, you can start to appreciate the potential impact of your own brand. 14 May 25, 2015 / INSURANCE ADVOCATE

a personal brand and he has mastered it. How to apply this personal brand lesson to your life — can you describe your core brand? In David’s life he has a: 1. Private Brand: entertainer, Londoner, endorphin junkie. 2. Professional Brand: networking expert, speaker, coach and trainer. 3. I wouldn’t stop there; I would add additional qualities and characteristics such as ethics, morals, ambitions, motivations, personality etc…. I wanted to share a brand lesson on someone like David Beckham because everyone knows who he is and he makes a great example of someone who has mastered his Personal Brand. You can learn a lot more from Andy Milligan’s book.

How do I know what my personal brand is?

Why should I care about my personal brand?

First of all I would recommend to you to read Andy Milligan’s book called “Brand it Like Beckham.” In his book he outlines the key factors of David Beckham’s brand (which we all know is amazing). The two factors are that it’s split into his public and private “self ” and what he is very well known for in each area. His “private” brand, which is anything but private (and it’s done on purpose), are his roles as son, father and husband while his public brand includes being a celebrity, soccer player, and fashion icon. These are the two core elements of what has become a successful brand combining the “ordinary” London boy (which we all know he is far from ordinary) with the more exceptional professional soccer player and celebrity. But it doesn’t stop there. There are other characteristics, including Beckham’s ethics, values, motivations, ambitions, personality, interests and his numerous connections, as well as more visible qualities such as his appearance and communication style. In my eyes he is one of the best communicators through his fashion in today’s era. The most important part of Beckham’s personal brand is how it is broader than his professional reputation alone. His brand recognizes that the whole person needs to be considered when identifying

There are three major components where our own and other people’s awareness of our brand can help or hinder you in your networking: Component Number One – Creating a powerful “impact” Your “impact” on others happens in three stages: 1. Your immediate impact: When they first see you, what do they think even before you’ve opened your mouth? Your first seven seconds may help you or hinder you. This is the most powerful part of the impact. 2. The initial conversation: What you say and how you say it, how you build rapport. The tone of how you talk to others matters along with your facial expressions and body language. 3. After the conversation is over: How you follow through with that person or group and develop the relationship. I personally feel a hand-written card is a critical part of this final process. Yes, call me old school but I feel it’s a major ingredient to your “after the conversation” success. continued on page 16

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[ THE SOCIA L NOTEBOOK ] continued from page 14

Component Number Two – Raising your personal profile Whatever you or your agency put out there (not only in the internet world) in terms of your personal brand will dictate how you are remembered, recognized and ultimately recommended or not to other people. Component Number Three – Allowing your contacts/connections to inform and connect you Only if your contacts or connections are clear about who you are (personal brand) and what you are trying to achieve, and they TRUST you enough, will they be able and willing to pass you the information you are looking for and connect you with the right people. In our industry, it isn’t all about meeting the right people. This will only happen if we can get into their Trust Tree. With all this being said you need to be able to identify and communicate. Your personal brand is an essential ingredient of successful networking. If you are working with others, such as your agency’s marketing team or a personal brand consultant, then the personal brands of all these individuals will determine how your company or team brand is formed.

How do I promote my personal brand? You can only get to this step after you’ve identified your personal brand and you are very comfortable with it. Then you need to market it. It’s best to do this in a way that emphasizes your personal brand qualities. Let me give you an example. A networking expert, Carlos Vargas of Vargas and Vargas in Massachusetts, demonstrates to his community he is a networking expert. It’s not enough to simply say “this is what I am and I’m an expert.” If you follow him on Facebook you will see he is out in his community every day, promoting his community and his clients. All of his posts say he’s an expert, without actually saying it. Here are some of the things you need to do to have success: • Become that expert: Gather as much knowledge as possible about networking events in your area, including 16 May 25, 2015 / INSURANCE ADVOCATE

Every brand needs to be kept fresh and relevant, especially in today’s fast moving society. Your brand needs to reflect changes in your community and market as well as changes in your own personal goals and/or ambitions.

events and groups on networking skills, new ways of networking, the benefits of networking, etc. A great way to become that networking expert is to go onto Facebook and follow great networkers in our industry such as Carlos Vargas, Dave Jackson, Tom Larson, Mike Stromsoe, Linda Rey or Claudia McClain. You can and will learn a lot just by following these industry leaders. • Be willing to share your expertise: This may mean offering free advice or information, offering mentoring or coaching, being a motivational leader, or pointing people in the right direction for their own networking. The best networkers, like Mike Stromsoe or Claudia McClain, are always looking to help and they are not looking for anything in return. They are two great examples of people willing to share their expertise. Sharing their expertise is what makes them so successful! • Be well-connected and share your connections with other people: Be the connector. You really need to be walking the walk and talking the talk. What does this mean? It means being seen at events, moving around with ease and being able to connect people, like Carlos Vargas who is supporting causes in his community every single day and promoting it on Facebook and other social avenues. What NOT to do: • Don’t become a networking bore: With all the social noise today you do not want to become that bore because people will shut you off or tune you out very quickly.

Become more than just a networking expert. You don’t want people to think “Oh no, he’s going to talk about networking again.” You need to be prepared to have conversations about more than networking. You will need to be able to talk about a wide range of topics such as local sports, politics, etc., which will get others to see you as a great networker.

Keeping your personal brand fresh! Every brand needs to be kept fresh and relevant, especially in today’s fast moving society. Your brand needs to reflect changes in your community and market as well as changes in your own personal goals and/or ambitions. Remember one key fact — it is YOUR personal brand and YES you can change it. It’s your brand after all so you need to grasp it and own it. Make sure it’s what you want it to be and then get it out there, working for you and your insurance business.[IA] Christopher Paradiso, CPIA, is President of Paradiso Financial & Insurance Service. He has been acknowledged by several insurance publications as a leader in the industry for his use of digital marketing and social media to help brand his agency and promote other small businesses within his community. Chris has also been recognized for his charity work with The Connecticut Children’s Medical Center. In 2011, Chris introduced “Paradiso Presents LLC,” a social media program aimed at teaching small agencies to not only survive, but compete in today’s complex online marketing world. Chris resides in Stafford Springs, CT with his wife and two children, Mia and Gianni.

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[ COVER ]

By Dan Bonnet, Director, Small & Medium Business â&#x20AC;&#x201C; North America

18 May 25, 2015 / INSURANCE ADVOCATE

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[ COVER ]

Guiding Insurance Professionals on the New Insurance Regulatory Guidance

Dan Bonnet

PRODUCERS, AGENCIES AND INSURANCE COMPANIES COULD ALL BE HELD LIABLE FOR THE LOSS OF PROTECTED HEALTH INFORMATION (PHI) AND PERSONALLY IDENTIFIABLE INFORMATION (PII) OF PROSPECTS AND CLIENTS…

NIST Five Functions

n the wake of some of the largest data breaches to hit health insurance companies, the National Association of Insurance Commissioners has followed on the heels of the Securities and Exchange Commission and has issued “Guidance” on cyber security. In April, the Cybersecurity (EX) Task Force of the National Association of Insurance Commissioners (NAIC) adopted the Principles for Effective Cybersecurity Insurance Regulatory Guidance. The Principles for Effective Cybersecurity: Insurance Regulatory Guidance looks to state insurance regulators “to ensure that personally identifiable consumer information held by insurers, producers and other regulated entities is protected from cybersecurity risks.” The guidance encourages insurers, agencies and producers to secure data and maintain security with nationally recognized efforts such as those embodied in the National Institute of Standards and Technology (NIST) framework. The NIST framework provides guidance on managing and reducing cybersecurity risk for organizations of all sizes, putting them in a much better position to identify and detect attacks, as well as to respond to them, minimizing damage and impact. Producers, agencies and insurance companies could all be held liable for the loss of Protected Health Information (PHI) and personally identifiable information (PII) of prospects and clients, such as a person’s full name, date of birth, address, and Social Security number. The basic function of the NIST Framework consists of five functions, each divided into subcategories, as well as standards, guidelines and best practices. A security consultant who specializes in threats and cybersecurity can assess your network and help you secure your network using the NIST Framework and other standards. Whomever you work with should be familiar with common threats targeting the insurance industry, as well as the tactics, techniques and procedures attackers are using around the globe.

Function 1: Identify Identify your assets and risk so you can prioritize your security efforts. The first thing you’ll need to do is conduct a risk assessment to identify all your information assets, such as client lists, business strategies, marketing information, and client data. Then rank each of them according to their values, from very low to very high, to help you focus on protecting the high-value data. You’ll also need to do a vulnerability assessment to see what systems and company Web-facing applications are weak. Your assessor can help you rank the likelihood and probability of a threat exploiting certain vulnerabilities, and can assess your internal and external network controls, policies and procedures, gaps compared to regulations, and best practices. Function 2: Protect Once you know your information assets and their values, you can gauge your resources accordingly and decide what measures to take to protect them. Not only might you need security devices and software, you’ll need people to continually operate the devices. Many organizations erroneously believe that they can buy a security solution to protect their networks from intruders. However, all cybersecurity protective devices (firewalls, instruction protection/detection systems, unified threat management appliances and others) need to be consistently configured, managed and updated with the latest patches—as long as the update won’t harm the network. Once you buy a protective device, you need a human being for it to operate to its best ability. No matter what any security vendor says, all protective devices need consistent human interaction. There is no device that works automatically after plugging it into your network. Numerous breaches have occurred because people were not properly operating protective devices. When devices are not properly and consistently configured, hundreds of alerts go off and are ignored. Then the story becomes “The Boy Who Cried Wolf.” continued on page 20

INSURANCE ADVOCATE / May 25, 2015 19

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[ COVER ] continued from page 19

Function 3: Detect Although you could have hundreds of preventive controls to prevent security incidents, some will still occur. That’s why it is important to be able to detect any anomalous activity as quickly as possible to get any attackers out as quickly as possible to prevent or lessen any damage. To spot attacks quickly, you need to monitor your network traffic and your endpoints (servers, workstations and laptops) 24 hours a day. It takes about 48 days for most organizations to recognize they’ve been breached, according to the 2013 survey report “Post Breach Boom” by the data security research center, Ponemon. However, when your network is continuously monitored, you can spot anomalous activity as soon as it occurs. In addition to monitoring your network, you also need to have detection systems on your endpoints (servers, laptops and workstations) that are also continuously being monitored. That allows you to see any anomalous activity on them so you can stop the attackers before they traverse the network. Function 4: Respond The sooner you recognize you’ve been breached, the sooner you can get the attackers so as to minimize the damage. The longer attackers are in your network, not only do you lose more and more data, it becomes more difficult and costly to get the attackers out. Getting attackers out of your network takes a lot of expertise that most organizations don’t have. Less than half of respondents to the Ponemon Post Breach survey said their organizations have the tools, personnel and funding to prevent, quickly detect and contain data breaches. While your organization can try to respond to a breach on its own, unless it has a full-time security team that works with threats day in and day out conducting incident response engagements, has a global view of the threat landscape, and is familiar with certain patterns attackers make in networks, it may not be able to remove the entire threat. If it removes all but one trace of the threat, the attackers could still be hiding inside the network. To fully remove the threat, it often takes the expertise of a team that has handled hundreds of engagements and is familiar with the tools, techniques and procedures attackers use. The average time to resolve a cyberattack is 45 days, with an average cost to participating organizations of $1,593,627 during this 45-day period, according to the 2014 Cost of Cybercrime Study: U.S. by Ponemon. That long time span and high cost can be greatly reduced if you understand the attackers and the ways they work. Professional incident response (IR) teams that conduct IR engagements full time could get attackers out in hours or days compared to weeks. Security companies offer IR retainer contracts that guarantee experts can be onsite within 24 hours to begin remediating a breach when necessary, and that you get discounted rates, usually saving you about $100 an hour. Without a retainer, it could take an organization a few days to select an IR team and for one to become available. The sooner you get the attackers out, the less cost overall. Results from the Ponemon 2013 Cost of Cybercrime Study: U.S. show a positive relationship between the time to contain an attack and organizational costs incurred from business disruption, data loss, recovery costs and legal costs. The total annualized cost of cyber crime in 2014 ranges from a low of $1.6 million to a high of $60.5 million. 20 May 25, 2015 / INSURANCE ADVOCATE

RECOVERING FROM AN ATTACK TAKES PLANNING LONG BEFORE YOUR NETWORK IS BREACHED. YOU SHOULD HAVE A BUSINESS CONTINUITY PLAN IN PLACE, AS WELL AS POLICIES AND PLANS IN PLACE TO RUN YOUR WEBSITE AND NETWORK FROM ANOTHER OFFSITE LOCATION.

Function 5: Recover Recovering from an attack takes planning long before your network is breached. You should have a Business Continuity Plan in place, as well as policies and plans in place to run your website and network from another offsite location. You should always keep hardware backups of your data each day. A security consultant can work with you to help you decide how much and what data needs to be backed up, as well as what critical systems and components are essential to your organization’s success. The recovery function helps you restore capabilities and services that were impaired. All these decisions need to be made before a crisis. Although independent agents probably won’t have a network to protect, at the very least they should take applicable steps to secure their computers. They need to ensure privacy of their prospects’ and clients’ personally identifiable information (PII), including addresses, dates of birth, Social Security numbers, health data, and insurance policy information. They should ensure their computers are password protected so an intruder would be unable to access data on it. They should also use a private network at home and a virtual private network (VPN) whenever connecting to a public network. Using a public network at a coffee shop or restaurant makes you easy prey for attackers to snoop and see everything you are doing on the network. They can see all the sites you visit and everything you type on an online site, such as your login credentials. The right VPN will encrypt all traffic so even if attackers manage to snoop on your online activity, all they would see would be unintelligible gibberish.[IA] Dell SecureWorks, a global information services security company, helps organizations of all sizes reduce risk, improve regulatory compliance and lower their IT security costs. Dan Bonnet is Director of Sales for North America Medium Business. He previously served as Sales Director for Dell SecureWorks’ Global Expansion efforts into new markets in Asia. Having worked at the company since 2002 and with other technology organizations prior to that, he used his security and technology knowledge to build the sales and support infrastructure from scratch, executing the go-to-market strategy, ensuring quality delivery and customer satisfaction, and quickly growing the APJ business into a multi-million dollar operation. Dan has held several roles in technology consulting and business process optimization. He holds a Bachelor of Science degree from Georgia Tech University and an MBA from Georgia State University.

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McNeil & Co. Celebrates 25th Anniversary Specialized Insurance facility announces ‘We Are Who We Insure’ campaign

top resource in specialized insurance, McNeil & Co. is celebrating its 25th anniversary by launching a national marketing and communications campaign, including a new logo, refreshed marketing tools for brokers nationwide, and a national advertising campaign that elevates the company’s corporate identity and supports its unique portfolio of programs. Inspired by the company’s 25-year history, the campaign’s theme, “We Are Who We Insure,” reflects McNeil & Co.’s unparalleled knowledge of the industries it serves - such as emergency services, ambulatory services, car wash, outdoor recreation - and the company’s dedication to comprehensive customer service. The result of an intensive design and creative process, the “We Are Who We Insure” campaign comes to life through a refreshed website, videos, social media, email marketing, public relations, collateral materials and a national advertising campaign across print, digital and social media. “We are excited to unveil our new look and launch the ‘We Are Who We Insure’ campaign, which reflects our unique approach to business and our dedication to our customers,” said Dan McNeil, founder of McNeil & Co. “We’re continuing to move in the opposite direction of the insurance industry. For 25 years, while the rest of the insurance industry has become increasingly commoditized, pricedriven and impersonal, McNeil & Co. has pursued a very different path. We believe in offering real value, committing to our clients’ long-term business success and providing a thorough understanding of our specialty categories.” Over the next year, as part of the campaign McNeil & Co. will release a series of videos, “McNeil Minutes,” with tips for managing risk, as well as interviews with Dan McNeil discussing relevant business topics and his leadership vision. “Our 25th anniversary campaign

speaks to our legacy of offering world-class industry specialists who are true experts in their fields, and I believe it will help tell the story that McNeil & Co. has the best offerings in the industries we serve,” McNeil added. “As we look forward to the next 25 years, we will continue to provide the best service and the best value possible, and we will pursue new areas that align with this philosophy.” For more information about McNeil & Co., visit mcneilandcompany.com.[IA]

Guy Carpenter and we are thrilled to have him lead our regulatory practice within US Strategic Advisory,” Mr. Marcell said. “The regulatory landscape continues to evolve and the regulatory issues facing (re)insurers today require highly specialized expertise not often available in-house.” “Guy Carpenter Strategic Advisory has a team of professionals whose deep experience and knowledge can help clients successfully navigate the regulatory realm, whether they are expanding geographically, entering a new line of business, making an acquisition or launching a new product,” Mr. Marcell concluded. “I am excited to be joining Guy Carpenter,” Mr. Wrynn said. “I have worked closely with the firm for almost a year and look forward to assisting Guy Carpenter’s clients manage the changing regulatory environment,” he commented.

Wrynn to Guy Carpenter

uy Carpenter & Company, LLC, the global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: JAMES J. WRYNN MMC), has announced the appointment of former New York State Superintendent of Insurance James J. Wr ynn as Vice Chairman of US Strategic Advisory and a Managing Director. Mr. Wrynn reports to Andrew Marcell, CEO of US Operations, Guy Carpenter. Mr. Wrynn joins Guy Carpenter from the New York law firm, Goldberg Segalla, LLP, where he was a partner in the global insurance services practice group. Before joining Goldberg Segalla in March 2012, Mr. Wrynn served as the 40th Superintendent of Insurance in the State of New York. His expertise will expand the regulatory advisory services that are available to clients and prospects. “We continue to increase our offerings as we anticipate the changing needs of our clients and prospects,” commented Mr. Marcell, CEO of US Operations for Guy Carpenter. “Jim brings extensive legislative and legal experience to

“I am excited to be joining Guy Carpenter. I have worked closely with the firm for almost a year and look forward to assisting Guy Carpenter’s clients manage the changing regulatory environment.” While New York Superintendent, Mr. Wrynn was instrumental in leading the National Association of Insurance Commissioners (NAIC) in establishing the enterprise risk management (ERM) and ORSA initiatives. He also served as the NAIC representative on the International Association of Insurance Supervisors (IAIS), and has first-hand knowledge of Solvency II. Prior to serving as Superintendent, he was the Executive Director of the New York State Insurance Fund, New York’s largest workers’ compensation and disability benefits carrier. Mr. Wrynn was a founding partner of MacKay, Wrynn & Brady and practiced there until he was appointed Executive Director of the New York State Insurance Fund in 2009.[IA] INSURANCE ADVOCATE / May 25, 2015 21

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[ GUEST ARTICLE ]

By Jay Starkman, CEO, Engage PEO

Insurance Brokers, PEOs and Clients: A Win-Win-Win Partnership

ver a decade ago, insurance brokers and Professional Employment Organizations (PEOs) were nothing more than competitors. PEOs brought workers’ compensation and health insurance options to clients, and these offerings threatened to displace that which insurance brokers had in place. Times have changed. In today’s legislative landscape, especially with the enactment of the Affordable Care Act (ACA), partnerships between insurance brokers and the right PEO make sense for all concerned: the insurance broker, the client and the PEO. PEOs come in many different forms. Full-service PEOs provide solutions in four core areas: 1) payroll, technology and tax administration; 2) employee benefits and benefits administration; 3) workers’ compensation, safety and risk management; and 4) human resources and compliance. The PEO becomes a “co-employer” (expressly recognized by the laws of most states) or administrative employer of the employees and, by doing so, can bring best practices, efficiencies and savings through aggregation. PEOs provide guidance that keeps clients in compliance with the labyrinth of employment laws and regulations. Due in part to today’s legislative environment, the PEO industry is growing rapidly. By most estimates, there are roughly 900 PEOs operating in the country today. The National Association of Professional Employer Organizations (NAPEO) estimates that between two and three million American workers are currently covered by a PEO relationship. This number is growing annually by over 15%. The value provided by these organizations is real and being embraced by more and more companies. In fact, on December 16, 2014, Congress passed the Small Business Efficiency Act, which for the first time provided federal statutory recognition of PEOs and the value they bring to small businesses. The challenges small and mid-sized 22 May 25, 2015 / INSURANCE ADVOCATE

By most estimates, there are roughly 900 PEOs operating in the country today. The National Association of Professional Employer Organizations (NAPEO) estimates that between two and three million American workers are currently covered by a PEO relationship. businesses face as a result of the ACA have contributed to the PEO industry’s growth. Companies are consistently confused by the ever-changing provisions of this law. To operate within the law’s mandates, companies must be able to comply with ACA’s pay-or-play provisions, notice requirements, reporting requirements, minimum plan requirements, and minimum company contribution requirements, just to name a few. As the plan sponsor and plan administrator, the company bears all of the risk of the potentially onerous penalties associated with failing to comply. At the same time, ACA also has created challenges for life and health agents. Clients are seeking guidance, requiring brokers to build internal expertise and oftentimes have ACA experts on staff. Commissions and operating profits are being compressed. Client attrition at many life and health insurance agencies has spiked and net revenues are down as a result. Meanwhile, some PEOs are able to offer a distinct advantage to businesses. Not only does the PEO bring ACA expertise and systems for compliance, but some PEOs offer a Master Health Plan, where the PEO becomes the plan sponsor and plan administrator, bearing some if not all of the compliance responsibility and risk. Some PEOs are leveraging this to improve their competitive positioning against insurance brokers across the country.

However, there are a number of PEOs that partner with insurance brokers, paying commissions to brokers that are equal to if not greater than the commissions available in the open medical insurance market. A few PEOs even go so far as to be completely dedicated to partnering with insurance brokers, protecting the broker with non-trespassing and broker-friendly “BOR” policies. The right partnership between an insurance broker and the right PEO creates a win-win-win solution: • For the insurance broker: The partnership enables the broker to bring a solution that helps its clients. At the same time, the partnership with the right PEO enables a strong defense for the broker against other PEOs (and even other insurance brokers) that target the broker’s clients. Once in a PEO relationship, the broker’s client retention increases. Moreover, commissions are at least maintained and, in some cases, increase. • For the client: The client receives the benefits PEOs bring. In a post-ACA environment, there are a plethora of burdens faced by employers who provide and administer employee benefits. Clients that engage with a PEO are provided affordable solutions to many compliance challenges today’s businesses face, from regulatory duties to time consuming employment and tax-related reporting. Furthermore, business owners have access to additional resources to help with legal challenges, risk management, compliance and more. • For the PEO: While the PEO gives up revenue in the form of commissions paid to both the insurance agency and the PEO’s sales force, what used to be a competition between insurance agent and PEO can be a collaboration, with resulting increased growth potential for both. Not all PEOs are equal, even those that continued on page 25

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[ IN FOCUS ]

By Kelly Donahue-Piro, President of Agency Performance Partners

A Woman’s Place is Not in the Kitchen Any Longer

f you have attended an insurance networking event, you will probably see only a handful of women on the roster and at the networking bar. Women not only enjoy lower auto insurance rates, we also make up 83% of the insurance pro-

ing over family agencies and carriers promoting more women to the C-level suites. However, is the industry really doing enough to empower and mentor these women? When women make up such a large percentage of the insurance work-

Today’s working woman makes up the vast majority of positions in the insurance industry. However, that being said, women are often fewand-far-between at industry events, boardroom tables and executive positions.

Kelly Donahue-Piro

cessing and claims jobs, according to the Bureau of Labor statistics in 2011. Today’s working woman makes up the vast majority of positions in the insurance industry. However, that being said, women are often few-and-far-between at industry events, boardroom tables and executive positions. As the insurance industry continues to evolve, we are seeing more daughters tak-

force, why is it that they hold only six percent (6%) of executive roles at the largest insurers and reinsurers?1 So, how can we all help empower our daughters, sisters and other female associates to climb the corporate ladder within the industry? A problem easily solved with everyone’s help. Here are a few keys to success for women looking to take the next

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step in their insurance careers: • Find a Mentor: Everyone needs a mentor and a mentee. For women looking to take the next leap in their careers, they need to proactively seek out a mentor. Women tend to stick together and when you find a mentor who is actively investing in you, new opportunities will present themselves. • Attend Networking Events: Get active in the industry. Volunteer on boards and association events. This may require an investment of your personal time, however the more networking you can do, the more opportunities become available to you. This also allows young women to step out of their comfort zone which helps develop critical leadership skills. • Think Like An Owner: Whether you are working for a small local agency or at a large carrier you need to think like an owner to get ahead. Little things matter such as being on time, keeping a positive attitude and going the extra mile. All these will get you noticed. Avoid the trap of negative co-workers; always think, “What would I want as an owner?” • Look For More Responsibility: Where possible, step up to the plate for extra projects and leadership roles. This will help you not only develop critical skills but also show your work ethic to leaders within your company. If leadership roles don’t exist where you currently are, keep an eye out for opportunities outside of your current organization. • Love Insurance: Loving the business that you are in shows. When you love insurance you will find new opportunities around you. One challenge for women across America, both in and out of the insurance space, is work-life balance. We all want to be awesome moms; great wives with a sparkling house; and dinner on the table. Work-life balance doesn’t exist in 2015. We all have smart phones, laptops and remote connections. Today’s modern woman has to learn how to spend quality time with the family when it counts and outsource

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[ GUEST ARTICLE ] Everyone needs a mentor and a mentee. For women looking to take the next leap in their careers, they need to proactively seek out a mentor. Women tend to stick together and when you find a mentor who is actively investing in you, new opportunities will present themselves. some basic household duties. It may not be politically correct to say, however I see too many women spread way too thin and they always feel guilty because they are missing the church bake sale or a kid’s soccer practice. Most children would take mom fully focused on the soccer game (iPhone in the car) rather than sort of watching a practice. As working women, it’s important to spend quality time with the family which may be a few times per week rather than each and every day. Each family needs to do what is best for them. Many young women starting out as processors, producers or CSRs may not see a clear path to success. Women, who have created careers within insurance, need to do a better job finding top female talent, proactively mentor and empower them and invest in their future. We can expose them to new challenges, share with them our stories and coach them to success. This may include having difficult conversations on professionalism, discussing areas for improvement and mentoring them on life choices. When we see something special in a young woman coming into the industry, we all should work hard to develop their strengths, as they too are our future. [IA] Kelly Donahue-Piro, founder and president of Agency Performance Partners, is a no-nonsense effectiveness expert who has helped hundreds of insurance agencies identify and capitalize on sustainable improvement opportunities. Her specialties include agency culture assessment and change; management and supervisory coaching and benchmarking; customer retention strategy

development; digital marketing strategy, planning and implementation; and sales planning, management and skillbuilding. In 2014, she created Agency Performance Partners with a mission to “partner with insurance entrepreneurs who dream to take their business to the next level and beyond, by relentlessly pursuing excellence in world-class service and sales strategies.” The centerpiece of the organization’s transformational work is its Agency Performance AssessmentTM, a comprehensive survey tool Kelly created to zero in on organization-wide improvement opportunities and provide the foundation for a customized agency action plan. Mrs. Donahue-Piro is an engaging speaker who is available to conduct inperson and online agency success presentations that complement her firm’s one-on-one on-site and virtual consulting practice. Connect with her on social platforms, via email at kelly@agencyperformancepartners, or by phone at 401-415-6205.

1 http://www.propertycasualty360.com /2013/08/01/women-in-insurance

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In the increasingly complex legislative landscape that small and mid-sized businesses must operate today, partnerships between insurance agencies and PEOs have tremendous potential for success, bringing value to the broker, PEO and, most importantly, the client.

partner with brokers. Insurance brokers should beware of the PEO that, on one hand, seeks to partner with the insurance agency, while on the other, has a direct sales force whose job it is to directly sell against that very same broker. In addition, the Employers Service Assurance Corporation (ESAC) serves as an industry watchdog, similar to the FDIC for the banking industry. PEOs that are ESAC-accredited are audited on a quarterly basis. Accredited PEOs are each backed by assurance bonds in excess of $15 million protecting the PEO’s clients. When an insurance agent is deciding on a PEO with which to partner, the PEO’s entire distribution model and ESAC accreditation are important considerations. In the increasingly complex legislative landscape that small and mid-sized businesses must operate today, partnerships between insurance agencies and PEOs have tremendous potential for success, bringing value to the broker, PEO and, most importantly, the client. [IA] Jay Starkman is the founder and CEO of Engage PEO. Engage provides HR services and counsel to help clients minimize costs and maximize efficiency through a full range of health and worker’s compensation insurance products, payroll technology and tax administration, risk management services and best-of-breed technology as part of an extensive suite of HR services. Starkman has a law degree from the University of Miami. INSURANCE ADVOCATE / May 25, 2015 25

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[ GUEST OPINION ]

By Jane M. Orient, M.D.

An American Response to Loss of ObamaCare Subsidies

his summer, the U.S. Supreme Court could, in King v. Burwell, uninsure eight million Americans by finding that subsidies are illegal outside State Exchanges.

So should taxpayers throw fistfuls of money out the window for other people’s insurance premiums? Insurance, after all, is a gamble. You gamble that you’ll have a disaster that the

Health-sharing ministries are a vastly underutilized option—and they work in States with Exchanges too. Some require attendance at a Christian church, but Liberty Health Shares only requires sharing a set of common ethical principles—such as individual responsibility. Jane M. Orient, MD

Some Republicans are saying “Let it burn.” For Democrats, it’s “ObamaCare or nothing.” Can you detect a difference? How about an American, rather than a partisan response? One that is voluntary and constitutional. Amid the wreckage left by ObamaCare, one arrangement remains standing, exempt from the individual mandate: the healthcare sharing ministry. This offers the prospect of a solution to the real problems: • Medical care costs too much, and so does medical insurance. • The reason medical care costs so much is third-party payment (“comprehensive insurance”). • ObamaCare drives costs up still more with its expensive mandates. Instead of forcing taxpayers, present and unborn, to pay most of the unaffordable premiums, the sharing ministries can drastically reduce costs, while restoring patient control. The fact is that Americans throw fistfuls of money out the window every month for insurance premiums for care they do not need or want. That money is gone forever. If they develop a problem, the insurer might deny them the care that is best—or, if their policy has lapsed, they might as well have been uninsured the whole time. If they had instead put the money in the bank, they would have it to spend when the need arose. 26 May 25, 2015 / INSURANCE ADVOCATE

insurer will pay for. The insurance company gambles that you’ll pay premiums month after month and never collect. Like in casinos everywhere, the house always wins in the long run. It makes sense to risk $1,000 to protect against the very tiny chance of a $1 million loss. It makes no sense to throw away $10,000 per year to prepay for $248 worth of care, the average payout for 50% of healthy Americans. For 95%, insurance pays out less than $10,000 in a year. And family premiums are heading for more than $17,500 in 2015. The only reason for buying such an expensive product voluntarily is fear of an outrageously high hospital bill. The selfpay patient is routinely billed at the Chargemaster rate, a multiple of what is paid by Medicare, Medicaid, or commercial insurers. Another reason for buying it, not exactly voluntarily, is to avoid ObamaCare penalties. What if hospitals could not discriminate based on the source of payment? What if self-pay patients were not the equivalent of Untouchables? People in States without State Exchanges will have a tremendous opportunity if the Supreme Court nixes the subsidies. These are the potential benefits: • Many more will be exempt from the individual mandate because of unaffordable unsubsidized premiums. • Employers will be relieved of huge

penalties that can be incurred if a single worker collects a subsidy. • People could exercise a choice for better, more personal care, at a much lower cost. Health-sharing ministries are a vastly underutilized option—and they work in States with Exchanges too. Some require attendance at a Christian church, but Liberty Health Shares only requires sharing a set of common ethical principles—such as individual responsibility. For example, one plan now under development would have a monthly family share amount, paid on behalf of a patient or family with a need, of $150 per month. This is lower than the 2016 minimum family penalty for opting out ($2,085/year), and members of such plans are exempted by law from the mandate. The individual share amount of $50 per month is half the $107 per month average cost of subsidized ObamaCare. The nonshared amount is 50 percent of the Bronze ObamaCare deductible. The plan depends on the members negotiating Medicare rates at the hospital. Many hospitals will gladly accept that amount if promptly paid. Instead of bowing to ObamaCare, States could ensure that health-sharing ministries are not misconstrued to be insurance. They could also expedite the approval of Obama noncompliant low-cost catastrophic insurance. Without the subsidies, their State, including its low-income citizens, would be far better off.[IA] Jane M. Orient obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine residency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and continued on page 34

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By Lawrence N. Rogak

[ COURTS I D E ]

Motorcycle Passenger is Still “Occupying” it After Being Thrown Off; Gets no PIP Benefits for Being Struck While on Pavement Boyson v Kwasowsky

ppeal from a judgment (denominated order and judgment) of the Supreme Court, Oneida County (Bernadette T. Clark, J.), dated October 3, 2013. The judgment granted the motion and cross motion of defendants Kemper Independence Insurance Company and Farm and Family Casualty Insurance Co., respectively, for summary judgment dismissing the complaint against those defendants. It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by denying the motion and cross motion, and reinstating the complaint to that extent, and judgment is granted in favor of defendants Kemper Independence Insurance Company and Farm and Family Casualty Insurance Co. as follows: It is ADJUDGED and DECLARED that plaintiff is not entitled to first-party benefits, additional personal injury protection, or optional basic economic loss under the terms of the policy issued by Kemper Independence Insurance Company to plaintiff and Carl Boyson; and It is further ADJUDGED and DECLARED that plaintiff is not entitled to first-party benefits under the terms of the automobile insurance policy issued by Farm and Family Casualty Insurance Co. to Irene Kwasowsky; and as modified the judgment is affirmed without costs. Opinion by Sconiers , J.: At issue on this appeal is whether plaintiff, who was seriously injured in an accident involving a motorcycle and a pickup truck, is entitled to first-party benefits under nofault automobile insurance policies issued by defendants Kemper Independence Insurance Company (Kemper) and Farm and Family Casualty Insurance Co. (Farm and Family). Resolving that issue requires that we determine whether plaintiff was

In the unique circumstances of this case, we conclude that plaintiff, at the time of her injuries, was “occupying” the motorcycle and is therefore not entitled to first-party benefits under the Kemper and Farm and Family insurance policies.

“occupying” the motorcycle, within the meaning of that term under the insurance policies at issue, when she was injured. In the unique circumstances of this case, we conclude that plaintiff, at the time of her injuries, was “occupying” the motorcycle and is therefore not entitled to first-party benefits under the Kemper and Farm and Family insurance policies. I. On April 22, 2011, plaintiff was a passenger on a motorcycle owned and operated by her husband, defendant Carl Boyson (Boyson). They were traveling west on Route 49 in the Town of Vienna when Boyson pulled into the eastbound lane to pass a recreational vehicle. A pickup truck owned by defendant Irene Kwasowsky and operated by defendant Bohdan Kwasowsky was then traveling in the eastbound lane of Route 49 approaching the motorcycle. To avoid a collision with the Kwasowsky pick-

up truck, Boyson veered to the left and dropped the motorcycle on its side, causing him and plaintiff to come off the motorcycle. The motorcycle collided with the front of the pickup truck, became airborne, and landed on plaintiff. At the time of the accident, plaintiff and Boyson had two vehicles insured under an automobile insurance policy issued by Kemper, and the Kwasowsky pickup truck was insured under an automobile insurance policy issued by Farm and Family. Plaintiff sought, inter alia, first-party no-fault benefits under each policy. Kemper and Farm and Family denied coverage based upon, inter alia, an identical provision in each policy excluding personal injury protection (no-fault) coverage for “personal injury sustained by . . . [a]ny person while occupying a motorcycle.” Both insurance policies define “occupying” to mean “in or upon or entering into or alighting from.” Plaintiff commenced this action against Boyson, the Kwasowskys, Kemper, and Farm and Family. In the second cause of action, plaintiff alleged that she is entitled to first-party benefits under the Kemper policy because she was injured as a pedestrian and is thus an “eligible injured person” pursuant to that policy. In the third cause of action, plaintiff similarly alleged that Farm and Family is obligated to provide her with first-party benefits under its policy because she was injured as a pedestrian. Plaintiff therefore sought, inter alia, judgment declaring that Kemper and Farm and Family must pay first-party benefits to her according to the terms and conditions of the insurance policies at issue, and pursuant to Insurance Law § 5102. Kemper moved, and Farm and Family cross-moved, for summary judgment, continued on page 32

INSURANCE ADVOCATE / May 25, 2015 27

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[ ON M Y RADAR ]

By Barry Zalma

What Happens When State Formed Insurer Acts in Bad Faith? First Party Bad Faith Creature of Statute in Florida

itizens Property Insurance Corp. (Citizens) was created by the state of Florida to deal with wind damage claims from the annual damage caused by hurricanes passing through the state

627.351(6)(S), Florida Statutes, Shields the Corporation from Suit under the Cause of Action Created by Section 624.155(1)(B), Florida Statutes[,] for Not Attempting in Good Faith to Settle Claims?”

Unlike common law causes of action for thirdparty bad faith, first-party bad faith actions are purely a creature of statute that did not previously exist at common law.

Barry Zalma

that standard, for-profit, insurers were unwilling to risk. To limit the liability of the state funded insurer the Florida Legislature granted Citizens immunity from most suits with certain exceptions. In Citizens Property Ins. Corp. v. Perdido Sun Condominium Ass’n, Inc., — So.3d —-, 2015 WL 2236719 (Fla., 5/14/15) the issue raised was whether the Florida Legislature intended Citizens to be liable for statutory first-party bad faith claims as an exception to its statutory immunity from suit. The First District Court of Appeal in Perdido Sun Condominium Ass’n v. Citizens Property Insurance Corp., 129 So.3d 1210 (Fla. 1st DCA 2014), determined that the “willful tort” statutory exception to Citizens’ immunity applied to statutory first-party bad faith claims and certified conflict with the Fifth District Court of Appeal’s decision in Citizens Property Insurance Corp. v. Garﬁnkel, 25 So.3d 62 (Fla. 5th DCA 2009), disapproved on other grounds by Citizens Property Insurance Corp. v. San Perdido Ass’n, 104 So.3d 344 (Fla.2012), which held to the contrary that Citizens is statutorily immune. The issue before the Florida Supreme Court was stated as: “Whether the Immunity of Citizens Property Insurance Corporation, as Provided in Section 28 May 25, 2015 / INSURANCE ADVOCATE

BACKGROUND After prevailing in a breach of contract action against its insurance company, Citizens, Perdido Sun Condominium Association sued Citizens a second time. In the second lawsuit, Perdido Sun alleged a statutory first-party bad faith claim, pursuant to section 624.155(1), Florida Statutes (2009). Specifically, Perdido Sun claimed that Citizens (1) refused to pay the full amount owed to Perdido Sun under the insurance policy; (2) refused to take part in the required appraisal process and instead used that process in an attempt to forestall litigation; (3) delayed payment of the appraisal award and improperly attempted to condition payment of the award upon the execution of a universal release; and (4) engaged in a pattern and practice of seeking to avoid or delay full settlement of claims. Citizens moved to dismiss the complaint, citing its immunity from suit under section 627.351(6)(s)1., Florida Statutes (2009), which provides: “There shall be no

liability on the part of, and no cause of action of any nature shall arise against, any assessable insurer or its agents or employees, the corporation or its agents or employees, members of the board of governors or their respective designees at a board meeting, corporation committee members, or the office or its representatives, for any action taken by them in the performance of their duties or responsibilities under this subsection. Such immunity does not apply to: a. Any of the foregoing persons or entities for any willful tort; b. The corporation or its producing agents for breach of any contract or agreement pertaining to insurance coverage; c. The corporation with respect to issuance or payment of debt; d. Any assessable insurer with respect to any action to enforce an assessable insurer’s obligations to the corporation under this subsection; e. The corporation in any pending or future action for breach of contract or for benefits under a policy issued by the corporation; in any such action, the corporation shall be liable to the policyholders and beneficiaries for attorney’s fees under s. 627.428.” (Emphasis added.)

ANALYSIS Examining the relevant statutory provisions at issue the Supreme Court found no support that the Legislature intended for Citizens to be liable for a breach of the duty to act in good faith by allowing its policyholders to bring a statutory first-party bad faith cause of action. Although the Legislature codified Citizens’ duty to handle claims in good faith, the Legislature never listed statutory first-party bad faith claims as one of the exceptions to Citizens’ immunity. To the contrary, the Legislature chose to immunize Citizens for “any action taken by [it] in the performance of [its] duties or responsibilities” which necessarily includes

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[ ON M Y RADAR ] a breach of the duty of good faith. As this Court has recognized, where the Legislature made one exception clearly, if it had intended to establish other exceptions it would have done so clearly and unequivocally. The Legislature has not included statutory first-party bad faith claims among the limited exceptions to Citizens’ immunity when it could have easily chosen to do so. Besides the failure to include a specific exception for statutory causes of action the statutory cause of action for first-party bad faith is a tort or specifically a “willful tort” — a principle that becomes clear after considering the history of first-party bad faith causes of action. Unlike common law causes of action for third-party bad faith, first-party bad faith actions are purely a creature of statute that did not previously exist at common law. The Legislature addressed this issue in 1982 by the adoption of section 624.155, Florida Statutes. Citizens also argues that subjecting it to statutory first-party bad faith claims would reduce the funds available to pay insureds’ claims for property damage so that further amounts that might be awarded would be borne by the taxpayers. In this case, Perdido Sun’s complaint does not allege that Citizens committed a “willful tort.” As Florida Courts have previously recognized, where a plaintiff claims a defendant engaged in egregious and outrageous actions, bad faith can be elevated to a willful tort, an issue that could turn on the facts of the case. Perdido Sun’s complaint is based solely on the statutorily created first-party bad faith cause of action under section 624.155. No additional allegations of willful misconduct outside of the statutory bad

Because the first-party bad faith tort in Florida exists only as a result of statute and is not a common law (i.e., created by court decision) tort, the tort cannot fall within the exception to the immunity.

faith claim are alleged. Because specific allegations of willful misconduct are not contained in the complaint, the trial court properly dismissed the complaint.

ZALMA OPINION Because the first-party bad faith tort in Florida exists only as a result of statute and is not a common law (i.e., created by court decision) tort, the tort cannot fall within the exception to the immunity. If Perdido Sun wishes to get tort damages from Citizens its only avenue available is the common law tort of fraud which has a much more difficult proof requirement and proof of willfulness. If they thought they could prove fraud I would expect that Perdido Sun would have alleged the tort of fraud in the first place rather than try to change the law.[IA] Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness special-

izing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter. com/ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide. The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/Store /ProductDetails.aspx?productId=21462 4, or 800-285-2221 which is presently available. Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this article. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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asserting that there is no coverage for plaintiff under their respective insurance policies. Supreme Court granted the motion and cross motion. The court rejected plaintiff ’s argument, advanced in opposition to the motion and cross motion, that her status as an occupant of the motorcycle was transformed into that of a pedestrian when she came off the motorcycle as the accident unfolded. Rather, the court concluded that plaintiff remained an occupant of the motorcycle throughout the continuous and nearly instantaneous chain of events that produced her injures. Consequently, the court determined that her injuries were excluded from no-fault coverage under both the Kemper and Farm and Family insurance. II. Previously, motorcycle operators and passengers injured in motor vehicle acci-

A person may be vehicle oriented with respect to a particular vehicle when not in physical contact with that vehicle, as long as the separation from the vehicle is temporary and brief, and “provided there has been no severance of connection with it”

dents were generally entitled to first-party benefits under the no-fault law. Former section 672 (1) (a) of the Insurance Law pro-

vided that those entitled to first-party benefits under the no-fault scheme encompassed “persons, other than occupants of another motor vehicle.” That category included motorcyclists on a par with pedestrians (see Perkins v Merchants Mut. Ins. Co., 41 NY2d 394, 396-397). The statute was amended in 1977 to exclude occupants of motorcycles from such benefits (see L 1977, ch 892, § 9), thereby terminating the treatment of motorcycle occupants “as pedestrians rather than motorists [who] enjoy the benefits of no-fault at no cost” (Mem of Legislature, 1977 McKinney’s Session Laws of NY at 2448). The successor of the amended statute, Insurance Law § 5103 (a) (1), currently provides that, under a policy of insurance issued on an automobile, first-party benefits are available to “[p]ersons, other than occupants of another motor vehicle or a motorcycle” (id. [emphasis added]; see Carbone v Visco, 115 AD2d 948, 948; Innes

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[ COURTS I D E ] v Public Serv. Mut. Ins. Co., 106 AD2d 899, 899). The exclusions in the Kemper and Farm and Family insurance policies of “any person while occupying a motorcycle” are consistent with Insurance Law § 5103 (a) (1) and the regulations promulgated thereunder (see 11 NYCRR 65-1.1 [d]). Plaintiff acknowledges that, at the inception of the events that produced her injuries, she was “occupying” the motorcycle within the meaning of those exclusions. She therefore does not seek first-party benefits for all of the injuries she sustained during the incident. In particular, she does not seek such benefits with respect to the injuries she sustained when Boyson veered off the road and dropped the motorcycle, causing her to strike the ground. Instead, plaintiff seeks first-party benefits only for the injuries she sustained after the pickup truck collided with the motorcycle, propelling the latter into the air and causing it to land on her. Plaintiff postulates that there were two distinct accidents, the first occurring when she struck the ground and the second when the motorcycle landed on her. She contends that she was an occupant of the motorcycle only during the first accident and became a pedestrian during the second. Kemper and Farm and Family counter that plaintiff remained an occupant of the motorcycle throughout an unbroken chain of events that constituted a single accident. III. Interpretation of the terms “occupant” and “occupying” for purposes of no-fault coverage begins with Colon v Aetna Cas. & Sur. Co. (48 NY2d 570). The injured plaintiff in Colon had exited his disabled vehicle and was standing on the highway attempting to divert oncoming traffic away from his vehicle when he was struck by a vehicle operated by the defendant’s insured. When the accident occurred, the plaintiff was walking six or seven feet behind his vehicle and had been flagging oncoming traffic for approximately 20 minutes (id. at 572-573). The Court of Appeals determined that the plaintiff was not an “occupant” of his own vehicle when he was injured, and thus he was not excluded from no-fault coverage under the defendant’s policy on the ground that he was “an occupant of another motor vehicle” within the meaning of Insurance Law

former § 672 (1) (a) (now § 5103 [a] [1]) (Colon, 48 NY2d at 572). In making that determination, the Court rejected the defendant’s contention that, for purposes of the no-fault scheme, the term “occupant” should be interpreted in accordance with the expanded meaning given to the term “occupying” under the Motor Vehicle Accident Indemnification Corporation (MVAIC) Law. Former Insurance Law § 617 (now § 5217) defined “occupying” to mean “in or upon or entering into or alighting from.” That expansive definition of “occupying” had been held to encompass situations in which a person is “vehicle oriented.” A person may be vehicle oriented with respect to a particular vehicle when not in physical contact with that vehicle, as long as the separation from the vehicle is temporary and brief, and “provided there has been no severance of connection with it” (Matter of Rice v Allstate Ins. Co., 32 NY2d 6, 11; see State-Wide Ins. Co. v Murdock, 31 AD2d 978, 979, affd 25 NY2d 674; see also Gallaher v Republic Franklin Ins. Co., 70 AD3d 1359, 1360, lv denied 14 NY3d 711; Matter of Travelers Ins. Co. [Youdas], 13 AD3d 1044, 1045; Estate of Cepeda v United States Fid. & Guar. Co., 37 AD2d 454, 455). The Court in Colon rejected the more expansive MVAIC definition of “occupying” as meaning vehicle oriented when it interpreted “occupant” for no-fault insurance purposes. The Court concluded that for no-fault insurance purposes, “the word occupant’ . . . should be ascribed its normal, dictionary meaning” (id., 48 NY2d at 575; see Matter of General Acc., Fire & Life Ins. Co. v Viruet, 169 AD2d 608, 609). When he was injured, the plaintiff in Colon “was not an occupant’ of his own car within the ordinary and customary meaning of the term,” and thus he was not excluded from first-party no-fault insurance benefits under the defendant’s policy (id. at 573; see Matter of General Acc. Fire & Life Assur. Corp. [Avery], 88 AD2d 739, 740; Matter of 20th Century Ins. Co. [Lumbermen’s Mut. Cas. Co.], 80 AD2d 288, 291). Notably, the statute currently defines the class of persons entitled to the payment of first-party no-fault insurance benefits

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using “the unembellished word occupant’ “ (Colon, 48 NY2d at 574), but the exclusions at issue in the Kemper and Farm and Family insurance policies incorporate an expansive definition of “occupying” identical to that of the MVAIC Law: “in or upon or entering into or alighting from” (§ 5217). Arguably, plaintiff was not an “occupant” of the motorcycle within the ordinary and customary meaning of that term when she was lying on the ground and the motorcycle landed on her. The question remains, however, whether plaintiff was “occupying” the motorcycle in the broader sense of being “vehicle oriented” when she was injured. IV. Case law in New York does not address the question whether a person in plaintiff ’s position, who sustains injury after being thrown from a motorcycle, nevertheless continues “occupying” the motorcycle, and authority from other jurisdictions on that question is divided. Courts in other jurisdictions have held that the injured person continued to occupy the motorcycle for nofault insurance purposes after being thrown from it (see Dunlap v U.S. Auto. Assn., 470 So 2d 98, 100 [Fla Dist Ct App, 1st Dist]; Farmers Ins. Co. of Washington v Clure, 41 Wash App 212, 215-217, 702 P2d 1247, 1249-1250; see also Partridge v Southeastern Fid. Ins. Co., 172 Ga App 466, 467, 323 SE2d 676, 677; 9 Couch on Insurance § 125:38 [2014]). Other courts have held that the injured motorcycle operator or passenger ceased occupying the motorcycle after being thrown from it (see Swarner v Mutual Beneﬁt Group, 72 A3d 641, 650-651 [Pa Super Ct], appeal denied 85 A3d 484; Miller v Amica Mut. Ins. Co., 156 NH 117, 122, 931 A2d 1180, 1184; Mid-Century Ins. Co. v Henault, 128 Wash 2d 207, 218, 905 P2d 379, 384; Professional Affiliates Co., Inc. v Farmers Ins. Group, 849 P2d 819, 820-821 [Colo Ct App, Div III]; see also State Farm Mut. Auto. Ins. Co. v Berg, 70 Or App 410, 416, 689 P2d 959, 963, appeal denied 298 Or 553, 695 P2d 49), or that issues of fact existed with respect to the status of the injured person (see Schmidt v State Farm Mut. Ins. Co., 750 34 May 25, 2015 / INSURANCE ADVOCATE

Although plaintiff was briefly separated from the motorcycle during the incident, she remained “vehicle oriented.” So 2d 695, 697 [Fla Dist Ct App, 2d Dist]; Collins v International Indem. Co., 256 Ga. 493, 494, 349 SE2d 697, 698). In those cases holding that the occupancy of the motorcycle by the injured person had ceased, the facts supported a conclusion that there were two accidents, i.e., the first when the injured person was thrown to the pavement, and the second when that person was struck by another vehicle unconnected to the first accident (see Swarner, 72 A3d at 650-651; Miller, 156 NH at 122, 931 A2d at 1184; MidCentury Ins. Co., 128 Wash 2d at 218, 905 P2d at 384; but see Professional Affiliates Co., Inc., 849 P2d at 820-821). Here, however, plaintiff was injured by an impact with the motorcycle she was occupying, immediately following her accidental ejection from it. Her ejection, moreover, was the result of Boyson’s attempt to avoid a collision with the very pickup truck that propelled the motorcycle in plaintiff ’s direction. Given those circumstances, we conclude that there was a single accident and that plaintiff was continuously “occupying” the motorcycle within the meaning of the exclusions of the Kemper and Farm and Family insurance policies. Although plaintiff was briefly separated from the motorcycle during the incident, she remained “vehicle oriented.” Her separation from the motorcycle did not transform her status from an occupant of the motorcycle to a pedestrian during the brief interval between striking the ground and being struck by the motorcycle. We therefore agree with the court that plaintiff is not entitled to first-party nofault insurance benefits under the Kemper and Farm and Family insurance policies. We conclude, however, that the court erred in granting Kemper’s motion insofar as it

sought dismissal of the complaint and Farm and Family’s cross motion seeking dismissal of the third cause of action rather than declaring the rights of the parties (see Pless v Town of Royalton, 185 AD2d 659, 660, affd 81 NY2d 1047). Accordingly, we conclude that the judgment should be modified by denying the motion and cross motion, and reinstating the complaint to that extent, and that judgment should be granted to Kemper and Farm and Family declaring that plaintiff is not entitled to first-party nofault insurance benefits under either of the insurance policies at issue.

[ GUEST OPINION ] continued from page 26

has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira's Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins. She authored books for schoolchildren, and Professor Klugimkopf’s Spelling Method, published by Robinson Books, and coauthored two novels published as Kindle Professor Klugimkopf’s Old-Fashioned English Grammar books, Neomorts and Moonshine, More than 100 of her papers have been published in the scientific and popular literature on a variety of subjects including risk assessment, natural and technological hazards and nonhazards, and medical economics and ethics. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.

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