April 30, 2018

Vol. 129 No. 6 | April 30, 2018

Worrisome: Eight in Ten Worry About Financial Safeguards

[ FOREWORD ]

STEVE ACUNTO

Distracted from Distraction by Distraction uIf National Distracted Driving Awareness Month­—April—wasn’t already enough to get the attention of drivers who habitually text, mess with the radio, or eat while driving, maybe some stats will get the message across. Just this morning on the East Side in heavy traffic a woman was getting made up, talking to some one on a hands free and sipping coffee rather to my amazement. She smiled at me when she realized I was staring, the went back to her conversation. She was wide awake, for sure, a good risk. A recent survey’s takers would not have been surprised. A host of global insurers interviewed by insurance telematics company, The Floow, told the telematics pros more than one-third of U.S.-based insurers believe that distracted driving will be one of the greatest factors leading to increased insurance premiums over the next two years, not to mention danger, death and bad mascara placement.

But not everyone will feel the effects. Over the past year, a study by consulting group Ptolemus shows that there has been a 26 percent increase in the number of drivers choosing usage-based insurance policies and taking advantage of telematics technology, like the newly released FloowDrive platform. Accessible through a mobile app, FloowDrive tracks a wide variety of driver behavior including distraction, offers a driver score, and promotes coaching to help create safer driving habits. As a result, many people are seeing decreases in their insurance premiums.“Telematics technology like the FloowDrive platform was developed with safety in mind,” said John Kramer, VP of North American Operations for The Floow. “If we can help people become safer drivers, they will be less likely to get into crashes and file claims. The added benefit is often lower insurance rates for the driver.” An increasing number of insurance companies are also offering usage-based policies, and using data collected from driver behavior to better assess risk. In the recent Floow survey with insurers, the in-car behaviors they will be most interested in having data on include texting and other distracted activities (57 percent), average speed (45 percent), level of smooth or erratic braking (42 percent), and levels of tiredness (41 percent). “Insurance companies also benefit from the rich data captured by telematics technology,” said Kramer. “The data allows insurers to more accurately price policies, learn how to enhance segmentation and ultimately improve a policyholder’s overall insurance experience.” Maybe…Pass the sugar, please.… New York is the 41st state to approve Trov’s On-Demand Insurance format. As the first and one of the few global InsurTech based companies, they tell us, Trov’s New York office, led by our COO Sean O’Donoghue, as home base for more than a dozen employees and growing, including a majority of their Insurance Operations team working globally with a network of partners. Trov appears closer to sharing what it terms the ease and accessibility of its On-Demand Insurance with the US. Worth a look, agents.…Avoiding controversy, Former FBI Director James Comey has been selected to keynote LIMRA 2018 Annual Conference to be held Oct. 28-30, 2018, in New York City. The news was leaked—well, OK announced—

by LIMRA’s PR team just as we went to press. “Throughout his decorated career, James Comey has exhibited attributes that would make his knowledge useful on any platform,” said Robert A. Kerzner, president and CEO, LIMRA, LOMA and CONTINUED ON PAGE 21 4 April 30, 2018 / INSURANCE ADVOCATE

S I N C E

1 8 8 9

VOLUME 129 NUMBER 7 APRIL 30, 2018

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Jamie Deapo Kelly Donahue-Piro Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Stephen M. Soble Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Director of Operations and Creative Services Gina Marie Balog-Sartario 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Media, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 613-1595 www.cinn.com | info@cinn.com President and CEO Steve Acunto

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April 30, 2018 | Volume 129 Number 7

12 Worrisome

Eight in Ten Worry About Financial Safeguards

Contents

4 Foreword: Distracted from Distraction by Distraction

Steve Acunto, Publisher 6

8

In the Associations: PIANY’s 2018 Long Island RAP Guest Article: Are You Ready to Take on the NAIC’s New Rules?

Sam Abadir∆

16 Professionals: MetLife’s Esther Lee to be Inducted into American Marketing Association NY’s Marketing Hall of Fame® 20 On My Radar: Sham Affidavit Fails to Defeat Summary Judgment

Barry Zalma 22

Looking Back: May, 1995

24 Courtside: Insurance Contract Interpreted as Written

Lawrence Rogak 25 People: SterlingRisk Insurance CEO David Sterling Named to Long Island Press Power List 26 Guest Opinion: Patients and Physicians Unite: You Have Nothing to Lose but Your Chains

Marilyn M. Singleton, M.D. info@insurance-advocate.com www.insurance-advocate.com

[ IN THE ASSOCIATIONS ]

PIANY’s 2018 Long Island RAP uHundreds of industry pros flocked to Long Island for PIANY’s 43rd annual Long Island RAP, April 25, 2018, at Crest Hollow Country Club in Woodbury, Long Island. The event has built a reputation as the highest caliber event in the area for networking; recognizing the industry’s best professionals; and for unparalleled continuing education.

An expansive trade show featured nearly 60 exhibitors, giving local producers the opportunity to meet faceto-face with vendors and carriers featuring the industry’s newest markets and products.

EXCELLING THROUGH EDUCATION

The brightest and most successful professionals in the industry earn their CE from PIA, known for the highest quality education programs. Long Island RAP provided more than the opportunity to rub elbows; participants could partake in two courses for a total of five CE credits with Cyber Liability & Data Breach: The Growing Threat Every Business Faces in the morning and Errors & Omissions Online: The Same, Only Different in the afternoon, both taught by popular instructor John Fear, CPIA, CISR.

The brightest and most successful professionals in the industry earn their CE from PIA, known for the highest quality education programs.

The Late Late Show on CBS; Comics Unleashed; Gotham Comedy Live on AXS TV; Comedy Central; a semi-finalist turn on NBC’s Last Comic Standing and regular panelist on FOX News Channel; with other appearances including The Artie & Anthony Show; CNN; Animal Planet; Discovery Channel; and truTV’s The Smoking Gun Presents.

The afternoon was perfected with an ice cream social, hosted by the New York Young Insurance Professionals, complete with door prizes and a cherry on top!

Comedian, Joe DeVito

AWARDS RECOGNIZING CONTRIBUTIONS TO THE INDUSTRY AND PIA

John Fear (Education)

LAUGHTER AND A TWIST OF ICE CREAM

With a new twist, LIRAP attendees enjoyed an afternoon of wit and laughter with comedian Joe DeVito. DeVito is well-recognized from appearances on 6 April 30, 2018 / INSURANCE ADVOCATE

Coryn Thalmann, CIC, CIW, CEO, COO, Jimcor Agencies, accepted the “Executive of the Year Award.”

A 25-year veteran of the surplus linei, Thalman served as president of the PIANJ Young Insurance Professionals and as a board member of PIANJ, as well as senior vice president of the American Association of Managing General Agents’ Under Forty

Organization. She currently sits on the board of the Derek Hughes NAPSLO Education Foundation and the WSIA Foundation Merger Committee.

She won the Young Insurance Professional of the Year award in 2002 and the Tri-State Alliance Award in 2007. She was recognized as one of the Elite Women in Insurance in 2014 by Insurance Business America and featured in Moving America Forward in 2015.

LI RAP Committee Chair David Lande presents Coryn Thalmann, with its Executive of the Year award.

PIANY Conference Manager Kim Zielinski, accepted an award recognizing her decades of hard work and commitment to successful events, including PIANY’s Long Island RAP. A graduate of Tompkins Cortland Community College, Zielinski took on the position of PIA conference manager in 2001, after 14 years with the association as an education meeting coordinator. She is responsible for oversight and coordination of the conferences and events hosted by PIA of Connecticut, New Hampshire, New Jersey, New York and Vermont.

In 2014, she was recognized by PIA of New Jersey and PIA of New York at their joint Annual Conference in Atlantic City for her dedication and service to the association and its members. In 2017, she was featured in Meetings And Conventions magazine about that event.[IA]

PIANY Conference Manager Kim Zielinski, flanked by PIANY Director Michael LoGuercio (left) and LIRAP Committee Chair David Lande (right)

[ GUEST ARTICLE ]

SAM ABADIR

Are You Ready to Take on the NAIC’s New Rules? uFor security and compliance professionals, the announcement of new regulatory standards can be a stark reminder that the to-do list is long and the day is short. But organizations that employ careful preparation and concerted, coordinated efforts through mature governance, risk management, and compliance (GRC) processes face new rules and standards with confidence and ease. To that point, did you feel composed or panicked when you heard about the new cybersecurity rules for the insurance industry?

After many iterations and comment periods, the National Association of Insurance Commissioners (NAIC) announced the adoption of the Insurance Data Security Model Law in October 2017. The model law, which encompasses rules for licensed entities about data security and data breach investigations and notifications, establishes more rigorous guidelines for the insurance industry. It shares many similarities with the New York State Department of Financial Services (NYDFS) Cybersecurity Requirements for Financial Services Companies, currently considered to be the highest bar, and a best practice, so the NAIC’s model law likely to be adopted by many states as the governing standard.

In fact, the NAIC largely used the NYDFS law as the basis for the creation of its new model law. The NAIC even indicated in a drafting note that compliance with the NYDFS law should mean compliance with the NAIC Model Law. So, companies that are already compliant with the New York law are sitting pretty if they have mature processes in place that allow them to perform a gap analysis to identify any small differences in the laws that would affect their compliance.

The NAIC’s adopted rules specify that information security programs should be based on “an ongoing risk assessment, overseeing third-party service providers, 8 April 30, 2018 / INSURANCE ADVOCATE

The NAIC’s adopted rules specify that information security programs should be

Sam Abadir is the Vice President of Industry Solutions at Lockpath, a provider of compliance and risk management software.

based on “an ongoing risk assessment, overseeing third-party service providers, investigating data breaches, and notifying regulators of a cybersecurity event.”

investigating data breaches, and notifying regulators of a cybersecurity event.” In particular, take a close look at “Section 4. Information Security Program,” which makes up the bulk of the law. This section details implementing a program and requirements for assessments, reporting, audits, policies, and procedures. It sounds straightforward on the surface, but grows in complexity the more you read. Licensed entities need to not only identify internal and external threats, but also assess the potential damage and take proactive, concrete steps to manage the threats.

Another noteworthy challenge can be found in “Section 6. Notification of a Cybersecurity Event,” which outlines the model law’s breach notification rule. The notification window is 72 hours from the determination of a cyber event. In other words, if a policyholder is harmed and you just learned about it, the clock is already ticking.

Why We Are Here The insurance industry has unique challenges around internal risk, third parties, and intricately collaborative processes. Many entities and individuals are involved in a single claim—brokers, dealers, agents, actuaries, adjustors, and claims processors. This creates more

room for error, more potential gaps in security coverage, and more difficulty managing contributors. Comprehensive procedures supported by GRC and integrated risk management technology solutions will help weave a tighter web.

The NAIC’s Model Law applies to licenses and their efforts to protect nonpublic information. The law calls for more accountability when it comes to protecting data, as each insurer must submit an annual statement by February 15 certifying compliance with Section 4: Information Security Program, or identifying areas that need improvement, as well as remediation plans.

With this model law, the NAIC is following a larger trend of laws that seek to better protect consumer data. New York, Connecticut, Colorado, Vermont, and, of course, the European Union with GDPR, have all been on the forefront of this trend. The NAIC is the latest to join the trend.

Achieving compliance with the NAIC’s law through mature GRC processes will likely make insurers’ lives easier in the future, as more cybersecurity compliance requirements are sure to arise.

Define Business Processes When faced with a new set of regulations, and in turn, the need for a new or revised set of information security and GRC-related processes, it helps to take a step back and assess the business context. Where does nonpublic inforCONTINUED ON PAGE 10

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[ GUEST ARTICLE ] CONTINUED FROM PAGE 8

mation reside in your organization? In which systems? Data and technology assets should be inventoried; you can’t protect the information if you don’t know where it is. Map your business processes: identify interactions, deliverables, and parties involved. Define roles and responsibilities, as well as mechanisms to ensure they are adhered to.

Integrated risk management and GRC platforms go a long way towards enabling greater visibility and interdepartmental efforts. Security programs are always stronger when stakeholders from across the enterprise are held accountable and accurate data is available to all relevant parties. Nearly every enterprise effort, from marketing to billing, carries security implications. Make sure you understand how each will impact data security obligations.

Focus on Third Parties As is the case with many of the major cyber security and data privacy rules (e.g., HIPAA, NYDFS, GDPR), NAIC’s model law gives special attention to required oversight of third-party providers. Licensed entities are responsible for ensuring that third parties implement administrative, technical, and physical measures to protect and secure information systems and nonpublic information they hold or have access to.

Meeting these requirements requires licensed entities to conduct assessments to ensure third parties are following security, privacy, and notification guidelines. In “Section 4. C. Risk Assessment”, it stipulates identifying threats by means of an ongoing assessment and an annual review of systems, controls, processes, and procedures.

Developing a comprehensive and streamlined system for vendor risk management is an increasingly critical component of both security and compliance programs, especially for large enterprises and those with complex partnership and outsourcing structures.

Incident Response The NAIC’s model law also specifies requirements for incident investigations and mandates that breaches are reported to the commissioner within 72 hours.

In this notification, insurers will have to 10 April 30, 2018 / INSURANCE ADVOCATE

By implementing a centralized integrated risk management platform, insurance organizations can move away from fragmented manual processes (spreadsheets and email) and towards higher .degrees of automation and analytics. provide as much information as possible, including the date of the breach, how the information was exposed, the types of information exposed, the period during which the system was compromised, planned remediation efforts, a copy of the company’s privacy policy, and more.

Additionally, licensees must notify consumers of the breach as their state’s data breach notification law requires.

It will be nearly impossible to meet these demands if your security information is outdated, incomplete, or difficult to pull together. Expedient incident response can have a significant effect on outcomes. If you can quickly coordinate clear, accurate communications to regulators, third parties, and customers about a breach or cyber attack, you can contain reputational damage, protect end-users, and prove negligence was not a factor.

A Proactive Security Culture Pays Dividends Virtually every company will be hit by a breach or cyber attack at some point.

Those organizations that have done their due diligence — meeting standards, hardening their systems and applications, training employees, closely managing vendors, keeping tabs on cyber risks — will be better prepared to prevent or at least minimize the damage of a cyberattack. In this way, those that have prioritized, integrated, and systematized GRC processes across the enterprise can gain a competitive edge.

All parts of your business will benefit from the powerful combination of integrated risk management technology and a corporate culture that values data secu-

rity. Not only will your organization be prepared to contain breach damage and adapt quickly to new regulations — key strengths like resilience, agility, and IT maturity will take root. Through a deliberate, centralized approach to security and risk management, your organization can reduce compliance costs, return focus to strategic planning, maintain trust in key relationships, and be ready to act quickly when opportunity knocks.

Be Prepared, Stay Prepared While some of the specific requirements of the NAIC’s new model law might cause alarm, most insurance businesses already have well-defined processes and controls. The need to keep sensitive customer data secure and private isn’t new, and high profile data breaches (e.g., Equifax, Anthem, Aetna) keep a spotlight on the consequences of failing to do so.

Licensed entities are most likely to be challenged by the outer ends of the integrated risk management spectrum: the granular details of controls, policies, and procedures on one end, and the development of a sustainable security culture on the other. Both can be enhanced and reinforced through an enterprise-wide, technology-driven approach to GRC efforts.

By implementing a centralized integrated risk management platform, insurance organizations can move away from fragmented manual processes (spreadsheets and email) and towards higher degrees of automation and analytics.

The difficulty of meeting NAIC’s requirements depends on the maturity of the organization’s security and compliance program. Companies that are already using an integrated risk management platform will easily be able to identify the gaps in compliance and efficiently make needed changes to achieve compliance. Those who do not have mature programs in place will have a longer path ahead, from reviewing the requirements and identifying compliance gaps to the challenging goal of creating a culture of security.

No matter where they are on this journey, all companies will benefit from responding to this wake-up call by working to achieve higher levels of efficiency, visibility, and control.[IA]

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“

Having a good credit score and access to favorable interest rates is something that benefits people of all income brackets, but it is particularly important for those who are in a financial situation where a few percentage points in interest would make a big impact on their financial wellbeing.

”

12 April 30, 2018 / INSURANCE ADVOCATE

Another day, another data breach.

Recent news about cybercriminals obtaining more than 5 million credit card numbers from high-end U.S. retailers joined a series of major hacks and online data breaches. In 2017 alone, roughly 143 million U.S. adults, were hit by some form of malware, virus, spyware or phishing scam. Unfortunately, the frequency of attacks on Americans’ personal information has fostered a feeling of inevitability. In fact, according to results released today from a telephone survey conducted by The Harris Poll for the American Institute of CPAs (AICPA) of 1,006 Americans adults in the fall of 2017, nearly half of U.S. adults (48 percent) think it is at least somewhat likely identity theft will cause them financial loss in the next year.

“Protecting your information is an ongoing process that requires you to be vigilant, identify where you can improve and

Worrisome: Eight in Ten Worry About Financial Safeguards

take action to firm up your safeguards,” said Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission. “This means regularly monitoring your credit card and bank statement and periodically checking your credit report for anything that looks out of the ordinary.”

While the survey finds that three out of five Americans (61 percent) have at least looked at their credit report, more than a third (35 percent) have never once checked. This is particularly alarming, as a majority of those who have checked their credit (66 percent) had to take steps with a credit reporting agency to correct inaccuracies, with the average being 13 specific corrections among those who have taken steps at least once. More distressing, those with a household income of less than $35K were found to be more likely to never have looked at their credit report than those with a household income of $100K+ (44 percent vs. 30 percent).

“Having a good credit score and access to favorable interest rates is something that benefits people of all income brackets, but it is particularly important for those who are in a financial situation where a few percentage points in interest would make a big impact on their financial wellbeing,” added Anton.

“Everyone should check their credit score for free with one of the three major credit reporting agencies at least once a year and not wait until suspicious activity occurs.”

The frequency and scope of these cyber-attacks has many Americans questioning the effectiveness of cybersecurity practices businesses currently have in place. In fact, eight in ten Americans (81 percent) said they are at least somewhat concerned about the ability of businesses to safeguard their financial and personal information, with two in five (40 percent) reporting that they are extremely or very concerned.

INSURANCE ADVOCATE / April 30, 2018 13

With security breaches costing U.S. consumers $19.4 billion of their own money, this may be a cause for action. The survey found four in five Americans (81 percent) said they’ve changed their behavior based on the threat of cyber breaches affecting credit card and debit card processing systems. Those changes include a majority increasing self-monitoring of credit and debit card accounts for fraudulent activity (56 percent), while about 4 in 10 are either using cash and/or checks more often (43 percent) or choosing to shop at locally owned stores more often instead of national retailers (40 percent).

“While it’s positive that American are taking steps to mitigate the risk from cyber breaches, each time there is a new breach in the headlines there is the risk that the public becomes numb,” added Anton. “Identity theft may seem like it’s inevitable, but our message is that it doesn’t have to be.”

A quarter of Americans (26 percent) said they have reduced their online presence, either turning off social media or visiting fewer websites because of concerns about data security. One in five (20 percent) have signed up for additional fraud detection or credit monitoring. Roughly 1 in 10 report they are switching their shopping to different national stores because of concern about data breaches (11 percent), placing a freeze on their credit (11 percent), or shopping online more often, because they feel like it is safer (11 percent). Five percent said they use alternative forms of currency.

Additional Findings – Victims of Scams: The survey found that three in five U.S. adults (60 percent) report that they or an immediate family member have ever been the victim of a scheme to defraud them, including: • 34 percent — A letter, email or phone call from someone impersonating the IRS • 28 percent — Theft of an existing credit card number • 26 percent — A fraudulent email phishing scam • 18 percent — Solicited for donations for a fraudulent disaster relief charity • 11 percent — Opening a new line of credit in your or their name • 10 percent — A ponzi or pyramid scheme • 6 percent — Someone obtaining a tax refund in your or their name Agents may wish to share the advice of AICPA’s National CPA Financial Literacy Commission to help customers prevent and mitigate the effects of identity theft.

Here is advice to share with clients: • Monitor your credit report & set protections. You can request a free credit report from all three major credit reporting agencies once a year, including TransUnion, Equifax and Experian. Additionally, some monitoring services allow you unlimited access to your credit information year-round. These services are there to help you spot inaccuracies, potential fraud and more on your credit report. This should also be done for children. Theft of a child’s ID may go undetected for many years such that by the time they are adults, the damage has already been done.

Don’t provide your Social Security number unless it’s necessary. A space for it on a form doesn’t necessarily mean 14 April 30, 2018 / INSURANCE ADVOCATE

Nearly half of Americans say ID theft is likely to cause them financial loss in the next year. that it is required. For example, your doctor’s office may use a unique number issued by your insurance company to enter your claim but their form may have a space for SSN anyway. Don’t be afraid to ask if they really need it.

• Make sure your WIFI network at home is secured with a password. A skilled data thief can access information on an unsecured network. Additionally, when away from home, avoid providing credit card or other personal information on unsecured Wi-Fi networks like those in airports or coffee shops • Don’t provide personal information in response to any unsolicited communication. Even if the caller, text or email claims to be from a bank or credit card company needing to “verify” your account to “prevent fraud.” If in doubt, call the number on your bank statement or the back of your credit card.

• What to do if it happens? Act quickly to limit the damage. Call your credit card company and report it to them.

They will close your card and issue a new one. File a police report to ensure that you are covered for any damages that you may incur. If your Federal return is affected, call the IRS 800-908-4490 and file Form 14039 Identity Theft Affidavit.

Survey Methodology This survey was conducted by The Harris Poll by telephone within the United States between October 12 and 15, 2017, among 1,006 adults (503 men and 503 women aged 18 and over) including 506 interviews from the landline sample and 500 interviews from the cell phone sample. Figures for age, sex, race/ethnicity, education, region and household income were weighted (using data from the Current Population Survey) where necessary to bring them into line with their actual proportions in the population.

About the American Institute of CPAs The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession. [IA]

518.583.0300 | www.mountainmedia.com

[ PROFESSIONALS ]

MetLife’s Esther Lee to be Inducted into American Marketing Association NY’s Marketing Hall of Fame® “Future of Marketing” to be the subject of inductee presentations at May 17, 2018 induction ceremony at offices of R/GA in New York. u T he Ameri c an Marketing Association New York announced that Esther Lee, executive vice president, global chief marketing officer, MetLife, Inc., is one of three business leaders responsible for outstanding contributions to the field of marketing who will be 2018 inductees to the Marketing Hall of Fame®.

Other inductees are creative legend Lee Clow, chairman, TBWA\Media Arts Lab and director of Media Arts, TBWA\ Worldwide, and best-selling business author and speaker Seth Godin.

The three luminaries will be celebrated at the 2018 Marketing Hall of Fame induction ceremony on the evening of Thursday, May 17, 2018 at the offices of R/GA in New York. Each inductee will give brief presentations, reflecting on their careers and offering their views on the future of marketing.

The Marketing Hall of Fame (www. marketinghalloffame.org) was established by the AMA New York to celebrate brilliance in marketing across all disciplines and industries. Each year, the program recognizes industry leaders with a minimum of 10 years experience who are making outstanding contributions to marketing and inspiring a new generation of marketers. Criteria for selection is individuals responsible for marketing that have dramatically impacted business results, raised marketing’s profile or moved the profession forward by developing innovative marketing solutions.

Past inductees include leaders who have transformed the role of marketing 16 April 30, 2018 / INSURANCE ADVOCATE

The Marketing Hall of Fame Judging Panel, made up of the leaders of the marketing industry’s top organizations and past inductees, made the final selection of inductees from the finalists list.

including academic and author David Aaker, Facebook CMO Gary Briggs, Patagonia founder Yvon Chouinard, GE vice chair Beth Comstock, R/ GA founder Bob Greenberg, former American Express CMO John Hayes, former IBM SVP Jon Iwata, author and professor Philip Kotler, Ogilvy & Mather chairman emeritus Shelly Lazarus, strategist and author Al Ries, former P&G global marketing officer Jim Stengel, Subway global CMO Joseph V. Tripodi and Wharton professor and author Jerry Wind.

“We established the Marketing Hall of Fame to recognize our most admired colleagues for the many brilliant ways they have advanced our profession,” said Robert Kahn, Marketing Hall of Fame committee co-chair, AMA New York president, and SVP business develop-

ment at Elateral. “It’s an honor for us to celebrate the extraordinary contributions of Esther Lee, Lee Clow and Seth Godin, all of whom truly represent the pinnacle of leadership and innovation in our field.”

The selection process began last September with an open call for nominations, drawing more than 200 nominations. AMA New York’s Marketing Hall of Fame Committee evaluated the nominations against the inductee criteria and developed a shortlist of the 50 highest-qualified nominees. This shortlist was reviewed by the Marketing Hall of Fame Academy, an exclusive, invitation-only body of 200 senior marketers, agency executives, researchers and academics hand-selected by the AMA New York Board of Directors, who cast ballots to determine a dozen finalists.

The Marketing Hall of Fame Judging Panel, made up of the leaders of the marketing industry’s top organizations and past inductees, made the final selection of inductees from the finalists list. Panel members were David Almy, CEO, Insights Association; Marla Kaplowitz, president/CEO, 4As (American Association of Advertising Agencies); Russ Klein, CEO, American Marketing Association; Bob Liodice, CEO, Association of National Advertisers; Scott McDonald, CEO, Advertising Research Foundation; Tony Pace, president/CEO, Marketing Accounting Standards Board; Manny Schrager, president, Qualitative Research Consultants Association and Earl Taylor, CMO, Marketing Science Institute, as well as 2017 Marketing Hall of Fame inductees Gary Briggs, Jon Iwata, Jim Stengel and Jerry Wind.

This year’s Marketing Hall of Fame induction ceremony will take place on Thursday, May 17, 2018, 6:00-9:00 pm at R/GA headquarters in Hudson Yards, 450 West 33rd St. in New York. Cocktails and food will be served, followed by the induction ceremony and presentations from each inductee. From the perspective of their careers, the inductees will offer rare insights and ideas about how marketing will evolve in the future.

“We are very proud that the Marketing Hall of Fame has become one of the premier events in the marketing community, CONTINUED ON PAGE 18

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www.empiresafetycouncil.com INSURANCE ADVOCATE / April 30, 2018 17

[ PROFESSIONALS ] CONTINUED FROM PAGE 16

and once again we have a star-studded list of extraordinary talents to celebrate,” said Joanna Seddon, Marketing Hall of Fame committee co-chair, AMA New York past-president and president, Global Brand Consulting, OgilvyRED. “It will be inspiring to have these three legendary marketing luminaries all on one stage for one special evening.”

Past sponsors of the Marketing Hall of Fame include Facebook, P&G, GE, Samsung, IBM, PricewaterhouseCoopers, American Express, Blackstone Group, Twitter, AOL, R/ GA, The Wall Street Journal, J. Walter Thompson, BBDO, Ogilvy, McCann Worldgroup, Wieden+Kennedy, OMD | the grid, Columbia Business School, GreenBook, Insight Innovation Exchange, Verse Group LLC and others. For information about sponsorship opportunities, please contact AMA NEW YORK board member Lee Hornick at leehornick@hotmail.com.

AT&T’s commitment to innovation to allow people to do more, explore more, and live more expansively.

Before joining AT&T, Lee served as Chief Executive Officer of North America and President of Global Brands for Euro RSCG Worldwide, where her work focused on transforming the company’s creativity and vision for longterm growth. Prior to that, she served for five years as Global Chief Creative Officer for The Coca-Cola Company, where she drove creative strategy, the development of integrated campaigns for the company’s global brands, and the operating models to support these efforts. Most notably, she drove the creation, development and launch of the “Coke Side of Life” global campaign— the foundation for today’s “Open Happiness” campaign.

Lee Clow, Chairman, TBWA\Media Arts Lab & Director of Media Arts, TBWA\Worldwide For the past 40 years, Lee Clow has told stories through advertising for 2017 Marketing Hall of Fame some of the most well-known brands inductee bios: in the world. His creative career beEsther Lee, Executive Vice President, gan with Chiat\Day and its humble Global Chief Marketing Officer, beginnings at a hotel in downtown MetLife, Inc. Los Angeles. Today, Esther Lee is MetLife’s he is the Director of Global Chief Marketing Media Arts for TBWA\ Officer and is a member Worldwide and the of the company’s execFounder and Chairman utive team. Lee joined of TBWA\Media Arts MetLife in 2015 and is Lab, which celebrated responsible for managits 10-year annivering all aspects of global sary in 2016. He bemarketing, the global lieves advertising is an brand and the customer art, a media art, that journey. Lee and her evokes emotion in conteam lead a strategic, sumers to make them customer-focused marlaugh, cry, surprise or keting practice across the inform and his work ESTER LEE globe that drives business does exactly that. His growth. p or t f o l i o i n c lu d e s Prior to joining memorable campaigns MetLife, Lee was Senior Vice President for brands like Gatorade, Pepsi, adidas for Brand, Marketing, Advertising and and Energizer.

Sponsorships at AT&T. In that role, she But Lee’s impact on the industry oversaw global brand marketing, adver- can best be summarized by his parttising, media and sponsorship, as well nership with Steve Jobs for more than as the integration of brand leadership 30 years producing work for Apple. into the company’s business strategies. 1984 Macintosh, “Think Different” that Through the ongoing rollout of the com- evolved into the introduction of the iMac. pany’s “Rethink Possible” brand platform, iPod, iTunes, iPhone, iPad and Apple Lee led the strategy to create awareness of Watch. Today, Media Arts Lab works ex18 April 30, 2018 / INSURANCE ADVOCATE

clusively on Apple, breaking barriers and challenging the industry with what Lee calls the «New Storytelling.”

Seth Godin, Author and Speaker Seth Godin is the author of 18 books that have been bestsellers around the world and have been translated into more than 35 languages. He is also the founder of the altMBA and The Marketing Seminar, online workshops that have transformed the work of thousands of people.

He writes about the post-industrial revolution, the way ideas spread, marketing, quitting, leadership and most of all, changing everything. You might be familiar with his books “Linchpin”, “Tribes” and “The Dip”. “Permission Marketing” changed direct marketing forever, and “Purple Cow” is considered one of the most influential marketing books of its time. His latest book “What To Do When It’s Your Turn” is now in its fifth printing.

Godin has given thousands of speeches to millions of people around the world, and his five TED talks continue to spread. In addition to his writing and speaking, he founded several companies, including Yoyodyne and Squidoo, and his Seth’s Blog (which you can find by typing “seth” into Google) is one of the most popular in the world. [IA] The mission of the American Marketing Association New York (http:// www.amanewyork.org) is to inspire, support and celebrate brilliance in marketing. Founded in 1931, the AMA New York is the principal community for marketing professionals across all industries and disciplines in the New York area.

Offering programs, monthly events, and interaction with the chapter through volunteer activities, we provide marketers with an opportunity to increase their knowledge and reach in the marketing community.

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[ ON MY RADAR ]

BARRY Z ALMA

Sham Affidavit Fails to Defeat Summary Judgment Insured May Not Lie to Avoid Summary Judgment No one likes to have an insurance claim denied even if the insurer has a good reason for denying the claim.

In litigation, as in every aspect of insurance, both parties to the insurance contract owe an obligation to deal fairly and in good faith with each other and do nothing to deprive the other of the rights available under the policy.

Mr. Jugan suffers from a brain tumor that requires him to take prescription narcotics.

The tumor and the medications have led to forgetfulness, including a failure to recall events.

FACTS

In Joseph Jugan; Robin Jugan v.

Economy Premier Assurance Company, No. 17-2410, United States Court of Appeals For The Third Circuit (March 22, 2018) the insureds, Joseph and Robin Jugan own a home in Fleetwood, Pennsylvania, which they insured under a homeowners insurance policy (the “Policy”) issued by MetLife. Their homeowers policy excluded from any coverage losses or damage resulting directly or indirectly from “freezing of a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, or of a domestic appliance, or by discharge, leakage or overflow from within the system or appliance caused by freezing.” That “Absolute Freezing Exclusion” stated that it did “not apply if you have used reasonable care to maintain heat in the building or if you shut off the water supply and drained the plumbing and appliance of water.”

Sometime between February 1, 2015, and March 13, 2015, while the Jugans were away, water leaked from their dishwasher, causing damage to their home and its contents. MetLife hired an expert, a certified engineer, to investigate the loss.

He did so and issued a report stating that the water damage was due to a frozen dishwasher solenoid valve that fractured due to freezing in the water supply line to the dishwasher. He further concluded that the water froze because of insufficient heat 20 April 30, 2018 / INSURANCE ADVOCATE

within the home, which he “attributed to the thermostat for the hot water baseboard heat [having been] set too low[.]”

Since 2009, the Jugans had frequently left the home empty, sometimes for weeks at a time.

Mr. Jugan suffers from a brain tumor that requires him to take prescription narcotics. The tumor and the medications have led to forgetfulness, including a failure to recall events. He did not remember adjusting the digital thermostat on the main floor, and he could not definitively state whether the thermostat was set at 62°F before he left. He also did not remember adjusting the analog thermostat in the basement, and he could not remember the temperature it was set at when he left that day. But Mr. Jugan testified that he kept a thermometer on an interior wall of the basement, and that it generally read 54°F year round.

The Jugans sued MetLife for breaching the Policy after MetLife denied coverage.

MetLife moved for summary judgment on that claim. When it did so, Mr. Jugan filed an affidavit containing averments that he said raised genuine issues of material fact barring summary judgment. The District Court applied the sham affidavit doctrine, striking certain averments that contradicted Mr. Jugan’s earlier testimony without sufficient explanation, while crediting other averments that did not contradict other evidence in the record.

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 specializing 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/ZalmaLi brary. 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?produc tId=214624, 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 blog. 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.

[ ON MY RADAR ] The District Court granted summary judgment in favor of MetLife with respect to the Jugans’ claim under Coverage A of the Policy, after deciding that no reasonable jury could find that the Jugans had used reasonable care to maintain heat in their home. The Jugans timely appealed.

DISCUSSION

Pennsylvania law provides that “[t]he interpretation of an insurance policy is a question of law.” Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins., 908 A.2d 888, 897 (Pa. 2006). The primary goal in interpreting a policy is to determine the parties’ intentions as manifested by the policy’s terms.

Pennsylvania law places the initial burden of establishing the existence of insurance coverage on the insured.

After the insured has met that burden, the burden shifts to the insurer to prove the applicability of an exclusion in the insurance policy. If the insurer demonstrates that an exclusion applies, the burden shifts back to the insured to prove an exception to the exclusion, such that the damages claimed are covered notwithstanding the exclusion.

It is undisputed that the Jugans met their burden of establishing that the loss they suffered falls within the Policy’s affirmative grant of coverage – specifically, Coverage A. Furthermore, the District Court’s conclusion was also correct that MetLife met its burden of proving the applicability of the Policy’s Absolute Freezing Exclusion. The Jugans did not provide any evidence to rebut that expert’s determination that the water leakage was due to freezing.

The Jugans pointed to no evidence showing that they used reasonable care to maintain heat in their home. They argue that, because Mr. Jugan testified that he only asked his neighbors to check on the home if he thought he had forgotten to do something, the District Court erred by relying on Mr. Jugan’s testimony that his neighbors had access to the home, had previously been asked to check on the home at other times, and were never asked to check on the home before the loss that occurred here. But establishing a reason for failing to ask a neighbor to check on the home is not in itself evidence of reasonable care.

Pennsylvania law provides that “[t]he interpretation of an insurance policy is a question of law.”

exercised reasonable care to maintain heat in their home, given the unrebutted expert testimony and Mr. Jugan’s admissions during discovery.

A reasonable homeowner would have wanted to check to make sure that the radiators worked before he went away in the winter, even if that homeowner, like Mr. Jugan, had never experienced any problems in past. It does not matter that the Jugans had a thermometer in the basement generally observed over two decades to stay at 54°F and that the basement heat was almost always set at its low setting of 40°F, because other evidence suggests Mr. Jugan never tested the basement radiators after they were shut off for repairs the previous summer. That was a material change that rendered reliance on past experience unreasonable. In fact, Mr. Jugan testified that there was no way to know whether the radiators worked at all while he was absent from the home in early 2015.

The Third Circuit concluded that the District Court did not misapply the sham affidavit doctrine when it struck several averments from Mr. Jugan’s affidavit. The sham affidavit doctrine provides that “[w]hen a nonmovant’s affidavit contradicts earlier deposition testimony without a satisfactory or plausible explanation, a district court may disregard it at summary judgment in deciding if a genuine, material factual dispute exists.” Daubert v. NRA Grp., LLC, 861 F.3d 382, 391 (3d Cir. 2017).

Averments that are “entirely unsupported by the record and directly contrary to … testimony,” or that are “offered ‘solely’ to defeat summary judgment,” may properly be disregarded. Mr. Jugan’s earlier deposition testimony that he could not say whether the main level thermostat was set to 62°F and that he does not remember the temperature at which the basement thermostat was set at the time of the loss. The Jugans were not free to defeat summary judgment by making last-ditch averments directly contrary to the established record.

The District Court properly decided the question of reasonable care at summary judgment because there was insufficient evidence upon which a reasonable jury could find that the Jugans

It is not nice to lie to a judge. In many ways it can be criminal conduct.

When an affidavit is submitted in opposition to a motion for summary judgment that is directly contradictory to earlier testimony at deposition without a reasonable excuse for the changed or different testimony, the court must ignore it and, in my opinion, punish the person for the false testimony. In this case the case was dismissed as an appropriate punishment.[IA]

ZALMA OPINION

FOREWORD CONTINUED FROM PAGE 4

LL Global. “His leadership qualities, in particular, have been recognized by some of the highest level officials in the United States. We are thrilled to have him as our keynote speaker.” Appointed

by President Barack Obama, Comey led the FBI from 2013 to 2017. During his tenure, he oversaw the federal response to several mass shootings, including at the Pulse nightclub in Orlando, which was the deadliest shooting in American history. He is also known for his work on border control. A native of New York, Comey previously was a federal prosecutor in both his home state and Virginia. He also served as the U.S. deputy attorney general for the George W. Bush administration. Comey is also known to the Trump and Clinton administrations’ leaders. The LIMRA Annual Conference is one of the largest gatherings of senior executives representing diverse sectors of the financial services industry. Members and partners come together to share strategic industry insights and participate in high-level networking. The Annual Conference agenda is designed to offer attendees insights into the latest industry trends. LIMRA’s premier conference will be exceptionally special as it will be the final one for CEO Robert Kerzner, who will retire at the end of 2018 after 14 years with the company. Not to miss, for sure. [IA] INSURANCE ADVOCATE / April 30, 2018 21

[ LOOKING BACK ]

INSURANCE ADVO CATE - 23 YEARS AGO

22 April 30, 2018 / INSURANCE ADVOCATE

INSURANCE ADVO CATE - 23 YEARS AGO

[ LOOKING BACK ]

INSURANCE ADVOCATE / April 30, 2018 23

[ COURTSIDE ]

LAWRENCE RO GAK

Interest Will Not Be Tolled for Delay Without Proof That Plaintiff Caused the Delay

Eagle Surgical Supply, Inc. v Country-Wide Ins. Co. Edited by Lawrence N. Rogak At the conclusion of trial in 2015 in this PIP suit filed in 2007, Defendant requested that interest be tolled because of the long delay in bringing the case to trial. The Appellate Term held that interest does not get tolled in the absence of proof that plaintiff unreasonably delayed the progress of the lawsuit. -- LNR Appeal from a judgment of the Civil Court of the City of New York, Kings County (Pamela L. Fisher, J.), entered May 21, 2015. The judgment, insofar as appealed from as limited by the brief,

The Civil Court denied defendant’s requests, and a judgment was entered on May 21, 2015 awarding plaintiff the principal sum of $1,131.68 and, among other things, no-fault statutory prejudgment interest from January 8, 2007.

Lawrence N. (“Larry”) Rogak has been practicing insurance law since 1981.

He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations.

Lawrence N. Rogak LLC is listed in Best’s Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers.

A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

after a nonjury trial, awarded plaintiff no-fault statutory prejudgment interest from January 8, 2007. ORDERED that the judgment, insofar as appealed from, is affirmed, with $25 costs.

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[ COURTSIDE ]

[ PEOPLE ]

Plaintiff commenced this action to recover assigned first-party no-fault benefits on January 8, 2007. After a nonjury trial held on November 3, 2014, the Civil Court found in favor of plaintiff and awarded it the principal sum of $1,131.68. Defendant made an oral application to the court to toll the accrual of no-fault statutory prejudgment interest based upon plaintiff ’s delay in the prosecution of the action. In the alternative, defendant sought to submit a posttrial brief on the tolling issue. The Civil Court denied defendant’s requests, and a judgment was entered on May 21, 2015 awarding plaintiff the principal sum of $1,131.68 and, among other things, no-fault statutory prejudgment interest from January 8, 2007. As limited by its brief, defendant appeals from so much of the judgment as awarded plaintiff no-fault statutory prejudgment interest from January 8, 2007.

No-fault statutory prejudgment interest (see Insurance Law § 5106 [a]) begins to accrue when the action is commenced (see 11 NYCRR 65-3.9 [c]), «unless the applicant unreasonably delays the . . . court proceeding» (11 NYCRR 65-3.9 [d]). While a significant amount of time elapsed between the commencement of this action and the trial, defendant did not adequately demonstrate to the Civil Court, and there was nothing in the record to indicate, the reason for the protracted delay or that it was plaintiff which had «unreasonably delay[ed]” the action (cf. Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 52 Misc 3d 143[A], 2016 NY Slip Op 51240[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; V.S. Med. Servs., P.C. v Travelers Ins. Co., 49 Misc 3d 152[A], 2015 NY Slip Op 51760[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Aminov v Country Wide Ins. Co., 43 Misc 3d 87 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).

Accordingly, as there was no basis for the Civil Court to toll the accrual of no-fault statutory prejudgment interest, the judgment, insofar as appealed from, is affirmed.[IA]

SterlingRisk Insurance CEO David Sterling Named to Long Island Press Power List

2018 NY Slip Op 50157(U) Decided on February 2, 2018 Appellate Term, Second Department

Annual recognition celebrates the 50 most influential Long Islanders; Sterling was Insurance Advocate’s Agency of the Year 2014 regional offices across u Woodbury, N.Y.— the United States, inDavid Sterling, CEO of cluding its headquarters SterlingRisk Insurance, in Woodbury, NY. He is one of the nation’s leading highly regarded within independently owned inthe insurance industry surance brokerage firms, and equally respected for has been named to the his philanthropic supLong Island Press Power port of numerous worList. An annual recognithy causes. A published tion of the “50 most inauthor and frequently fluential Long Islanders” quoted source on inas determined by the surance topics in such publication’s writers and editors, the 2018 Long “I am honored to join leading publications as Island Press Power List such a distinguished The New York Times and highlights a wide range representation of col- Time magazine, Sterling also lectures on insurof leaders within busileagues and peers…” ance and taught at the ness, the arts, politics, acAmerican Management ademia, entertainment, Association. and the Long Island community. More than 400 guests attended the recent Power List About SterlingRisk Founded in 1932, SterlingRisk induction ceremony. has offices in New York, New Jersey, “I am honored to join such a distinConnecticut, Florida, California and guished representation of colleagues and Indiana.

Ranked in the nation’s top 40 peers,” observed Sterling. “Many of my privately owned insurance brokerages, fellow inductees are friends I have known SterlingRisk services regional, national for years while others are men and and international clients. The company women I admire greatly through their has significant experience and depth of accomplishments. On behalf of the entire knowledge in multiple areas, including SterlingRisk family, I thank Long Island property and casualty, aviation, environPress for this important recognition and mental, construction, employee benefits the opportunity to strengthen valued reconsulting, personal lines, risk managelationships and create new ones.” ment, loss control and claims advocacy.

In addition to Sterling, this year’s For more information, visit www.sterPower List included the CEOs of top lingrisk.com or call 516-487-0300.[IA] companies, elected officials, renowned academics and scientists, activists and advocates, as well as community leaders and those of several nonprofits.

As CEO of SterlingRisk, Sterling leads an organization comprised of more than 220 professionals in eight INSURANCE ADVOCATE / April 30, 2018 25

[ GUEST OPINION ]

MARILYN M. SINGLETON, M.D., J.D.

Patients and Physicians Unite: You Have Nothing to Lose but Your Chains uIn an entertainment venue called the “Escape Room,” participants are locked inside a themed adventure room, and they must figure out how to escape.

Themes include prisons, KGB interrogation, and hostage situations. Perhaps a new theme could be ObamaCare.

Despite a large majority of Americans reporting healthcare as their number one concern, Congress does not have the political appetite for a serious assessment of the Affordable Care Act. It’s time for Congress to say, “ACA and its ‘fixes’ are not working; cut our losses and move in a different direction.” New proposals should focus on reducing the cost of pharmaceuticals and medical services rather than shifting costs from one entity to another via mandated insurance benefits and government subsidies.

Dear Congress, please act on a few simple reforms that will help everyone and hurt no one—except the drug lobbies and middlemen.

First, seniors must demand to be treated like thinking adults—and save the federal government money in the process. Under current law, anyone age 65 and over who is entitled to Social Security benefits is automatically entitled to “free” Medicare Part A (hospital coverage). But if a senior wants to decline Part A and seek or keep other medical care options he must forfeit his Social Security benefits. As Judge Rosemary Collyer noted in a legal challenge to this rule, “plaintiffs are trapped in a government program intended for their benefit. . . They disagree and wish to escape.”

Alas, the 1993 regulation was interpreted to confirm the draconian punishment for wanting to break free of the government control. To right this wrong, will one brave congressperson or senator revive the Retirement Freedom Act and support the Medicare Patient Empowerment Act that makes it easier for patients and physicians to opt out of Medicare?

Second, seven of ten Americans use 26 April 30, 2018 / INSURANCE ADVOCATE

prescription drugs, and they overpay for these 23 percent of the time. Patients often aren’t told they could pay less by not using insurance. If the insurance copay is higher than the actual cost of the drug, the middlemen (pharmacy benefit managers) keep the difference.

Legislative remedies exist. The bipartisan Patient Right to Know Drug Prices Act prohibits health insurance issuers and group health plans from restricting or penalizing pharmacies who tell enrollees the differential between a drug’s cash price and the insurance plan’s cost. The bipartisan Know the Lowest Price Act of 2018 prohibits health plans and pharmacy benefit managers in the Medicare Advantage program from restricting pharmacies from informing individuals regarding the prices for certain drugs. The bipartisan Transparent Health Pricing Act requires entities that furnish health-related products or services to the public to disclose the wholesale, retail, and discounted prices for those products and services at the point of purchase and on the Internet.

And when the price of brand name drugs has increased 10 times more than inflation, dear Congresspersons, consider supporting the Competitive DRUGS Act prohibiting name brand drug companies from compensating generic drug companies to delay a generic drug’s entry into the market.

With regard to medical services, the Direct Primary Care (DPC) model is burgeoning as patients yearn for quality time with their doctor at an affordable price. Here, all primary care services and access to basic commonly used drugs at wholesale prices are included in a fixed transparent price. Congress should support the Primary Care Enhancement Act, a one-page bill that allows Health Savings Accounts (HSAs) to be used to pay enrollment fees for DPC practices. Many Medicare beneficiaries prefer this model as they remember the era when patients actually knew their doctors.

Dr. Singleton is a board-certified anesthesiologist. She is also a Boardof-Directors member and Presidentelect of the Association of American Physicians and Surgeons (AAPS). She graduated from Stanford and earned her MD at UCSF Medical School. Dr. Singleton completed 2 years of Surgery residency at UCSF, then her Anesthesia residency at Harvard’s Beth Israel Hospital. While still working in the operating room, she attended UC Berkeley Law School, focusing on constitutional law and administrative law. She interned at the National Health Law Project and practiced insurance and health law. She teaches classes in the recognition of elder abuse and constitutional law for non-lawyers.

Moreover, the DPC model saves federal dollars. Prescription drugs accounted for $110 billion in Medicare spending in 2015, 17% of all Medicare spending. With DPC dispensing, the cost of pharmaceuticals can be as much as 15 times lower than pharmacy prices. And Medicare spent $17 billion on potentially avoidable hospital readmissions. DPC’s better coordination of chronic care decreases hospital admissions.

Numerous bills designed to give patients more control over their medical care include provisions that: increase the maximum HSA contribution; allow Medicare eligible individuals to contribute to HSAs; allow members of healthcare sharing ministries to participate in HSAs; and allow individuals who participate in DPC practice, or who receive care from an employer’s onsite medical clinic to participate in HSAs. Physicians want freedom to do the best for their patients and patients want good care at affordable prices. Will Congress act or continue to let such liberating legislative opportunities wither away?[IA]

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