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  Daily Insurance ReportMonday, 09/25/17

McCain torpedoes Republican Obamacare repeal plan again
Senator John McCain has said he cannot support his fellow Republicans' latest effort to repeal Obamacare, dealing it a potentially fatal blow.
The Arizona senator, who is battling brain cancer, said he "cannot in good conscience" vote for the new plan, which President Donald Trump backs.
Mr McCain said it was wrong to pass such far-reaching legislation without input from the Democrats.
It is the second time he has thwarted his party leadership on the issue.

Life / Health / Employee Benefits

How single payer helps Republicans change the subject
Drew Altman, Kaiser Family Foundation
Since the collapse of the GOP effort to repeal and replace the Affordable Care Act, single payer has gained new life on the left. Sen. Bernie Sanders released his “Medicare for all" plan yesterday, and a majority of House Democrats have signed on to another version proposed by Rep. John Conyers.
The big picture: Politically, single payer — the idea of having the government pay for health care rather than private insurers — can help rally the left much like the prospect of repealing the ACA rallied the right. But it could also help Republicans, who own the problems in health care now, switch the target to the Democrats and their sweeping new health reform plan

The Republican healthcare bill would bring 'close to unprecedented' chaos in the health system
Bob Bryan
Republicans are taking one last stab at repealing and replacing the Affordable Care Act, but experts say their latest attempt runs the risk of bringing chaos to the US healthcare system.
Experts say the so-called Graham-Cassidy healthcare bill, whose legislative fate became more uncertain Friday, would set up a deadline for states that could cause massive upheaval and sow uncertainty in insurance markets.
The legislation would keep intact several provisions of the law known as Obamacare for 2018 and 2019. But it would force states to set up an entirely new individual insurance market — for people who don't get coverage through an employer — and Medicaid by 2020.
The bill's authors have presented the two-year window as a cushion to ensure no disruption for people in those insurance markets. But Larry Levitt, a senior vice president at the Kaiser Family Foundation, said the transition isn't nearly long enough.

Zenefits opens up to third-party developers and launches a suite of new HR tools
by Matthew Lynley, John Mannes
David Sacks has a big job ahead of him.
Formerly the CEO of Yammer, which sold to Microsoft for $1 billion, he’s doing it this time around as the head of Zenefits, trying to right the ship of a company that has halved its valuation and fired its founder for violating insurance regulations. Today he is rolling out Zenefits’ second incarnation, and in Sacks’ new future, it’s something that looks more like the promise of the Facebook platform than it does Yammer circa 2010. Today, Zenefits said it was launching its second full version, Z2.
The “second” incarnation of Zenefits isn’t just designed to be a home base for company data, but also a service that other companies can tap into in order to use that data for their own tools. Zenefits today is opening itself up to third-party developers, which can treat Zenefits as a permanent record for employee data — like some services treat Facebook for user data — and build their services around that.
“We think this idea of suites vs. best of breed is a false choice, this has been the choice of marketplace,” Zenefits CEO David Sacks said. “You could use an antiquated suite or best of breed that’s limited. We’re building an app store for [human resources] for the first time, that’s the way to resolve this conundrum. You build an app store and you release some core apps yourself, but you allow third parties to provide best of breed apps.”

2018 Open Enrollment: Using Social Media and Decision-Support Tools
Technology is helping employees make wiser benefit decisions
By Stephen Miller, CEBS
This is the fourth article in a series about meeting open enrollment challenges. Below, we look at the growing use of social media in benefits communications and providing automated guidance for selecting benefits.
Benefit managers are turning to social media to get the open enrollment message out and are providing access to decision-support tools to help employees select appropriate health plans and other benefits.
"Some companies use Twitter and Facebook to promote enrollment participation and to send information about benefit changes"—including Facebook's Workplace platform—"and see good results from it," said Andy Edeburn, director of customer insight at Jellyvision, an employee communication software provider based in Chicago. Others are turning to "internal social media platforms with a workforce bent, such as Yammer, that feel like social media but are definitely a work tool," he noted.

The AI Healthcare Revolution: Will AI Soon Replace Your GP?
The AI healthcare revolution will impact both patients and providers and AI will become a reputable ally in the war against diseases and chronic illness
There is an alarming situation in the medical world: an unparalleled increase of available information, compounded by an unprecedented shortage of medical specialists. According to a report by the World Health Organisation (WHO), there will be a shortage of12.9 million workers in the health-care industry by 2035. For comparison, in 2013, the shortage stood at 7.2 million. This gap will probably not be closed by humans alone, therefore, technology seems like a viable alternative. It’s not about replacing doctors and nurses with computers, it’s more about helping them make sense of the data oceans available and freeing up their time from repetitive tasks that are time-consuming and have no added value.

DOLA Argues It Didn’t Overstep Congressional Mandate
The Department of Labor has filed a brief in the D.C. Circuit Court challenging an earlier claim from the National Association for Fixed Annuities that the agency had over-defined the term “fiduciary” when rolling out its best-interest retirement advice rule, Law360 writes.
The DOL’s fiduciary rule, which purports to force retirement account advisors to put clients’ interests first, went into partial effect in June. The agency’s statement comes in response to a brief NAFA filed in August, which claimed Congress hadn’t intended the term “fiduciary” to be as broad when it enacted the Employee Retirement Income Security Act in 1974, according to the legal news website. According to the DOL’s response, Congress had noted at the time that ERISA should extend to all professionals with authority over retirement accounts, and intended ERISA to protect retirees beyond then-existing laws, Law360.com writes.
“If anything, this history only emphasizes the reasonableness of DOL’s interpretation,” the brief said, according to the legal news website.
The DOL also disputed NAFA’s claim that the rule’s best interest contract exemption provision was a “backdoor” regulation, Law360 writes. The provision lets brokers sell some commission-based products in retirement accounts after signing a contract with their clients.

Other Insurance Related News

DOJ Investigating Offshore Life Insurance Companies For Selling Abusive PPLI Policies
Jay Adkisson , CONTRIBUTOR, Forbes
According to a September 14, 2017, report in Reuters found here, the U.S. Department of Justice is investigating whether one of the biggest purveyors of offshore private placement life insurance policies, Swiss Life, has assisted the U.S. purchasers of those products avoid U.S. tax.
So what is an offshore private placement life insurance policy? And how can it be used avoid taxes?
Investments within life insurance policies are typically not subject to tax, which of course creates the potential for abuse. With standard life insurance policies, such as typical variable universal life (VUL) policies, the investments are typically stock and bond portfolios of publicly traded companies. The capital gains and dividend income are absorbed by the tax-free wrapper of the VUL policy itself. This is completely legal, and it makes VUL policies more tax-efficient than many other investments (there being no free lunch, the downside, of course, is the cost of the death benefit which dramatically increases as one grows older).
Offshore private placement life insurance (PPLI) policies work similarly to VUL, but they are often used to shelter the income from privately-held businesses. What happens is that either an existing business is "purchased" by the PPLI policy, often through some allegedly tax-free sale such as through a private annuity transaction, or new stock is issued to the PPLI policy as in the case of a start-up company. Then, the income from the business or appreciation from the stock that would normally be picked up by the taxpayer is instead absorbed into the tax-free wrapper of the PPLI policy.

Clearcover, a more strategic car insurance startup, lands big Lightbank investment
Robert Holly, Blue Sky Innovation
Clearcover, a Chicago-based company that says it can save customers up to 50 percent on car insurance by streamlining the way it’s marketed and sold, announced Tuesday that it has landed initial funding of $11.5 million.
Launched in November 2016 by insurance veterans Kyle Nakatsuji, who helped start the venture capital team at American Family Insurance, and Derek Brigham, who has more than 25 years of industry experience, Clearcover uses a data-driven platform and a minimalist approach to offer drastically reduced premiums. Unlike Geico, Progressive and other leading auto insurance companies, Clearcover plans to avoid costly advertising campaigns and only market to potential customers during targeted windows.

'Insurtech' should help lower premiums: AIG chief
NEW YORK -- Big data and artificial intelligence should help insurers assess risk more efficiently, and that should help reduce costs and drive down premiums for clients, the new CEO of American International Group told The Nikkei recently.
Underwriters will need to adapt to the rise of insurance technology, or insurtech, said Brian Duperreault, who was appointed chief executive of the U.S. insurer in May. Edited excerpts from the interview follow.

ABA Endorses CyberScout’s Data Breach Services
Bank solutions for pre- and post-data breach
​WASHINGTON — As high-profile data breaches continue to pose a challenge to private and public sector organizations, the American Bankers Association is endorsing a new tool to help banks stay a step ahead of the growing threat. CyberScout’s DataRiskStages earned the ABA endorsement for its comprehensive pre- and post-data breach services after an extensive review. According to a recent Morning Consult survey, Americans trust banks the most to keep their personal information safe. CyberScout’s new product can further bolster customer confidence in banks.

S.E.C. Says It Was a Victim of Computer Hacking Last Year
The Securities and Exchange Commission said a digital attack last year may have exposed information that could have been exploited for trading purposes. Credit Andrew Harnik/Associated Press
HONG KONG — The top securities regulator in the United States said Wednesday night that its computer system had been hacked last year, giving the attackers private information that could have been exploited for trading.
The disclosure, coming on the heels of a data breach at Equifax, the major consumer credit reporting firm, is likely to intensify concerns over potential computer vulnerabilities lurking among pillars of the American financial system.
The Securities and Exchange Commission said in a statement that it was still investigating the breach of its corporate filing system. The system, called Edgar, is used by companies to make legally required filings to the agency.

Other News

The shorter your sleep, the shorter your life: the new sleep science
Leading neuroscientist Matthew Walker on why sleep deprivation is increasing our risk of cancer, heart attack and Alzheimer’s – and what you can do about it
Walker has spent the last four and a half years writing Why We Sleep, a complex but urgent book that examines the effects of this epidemic close up, the idea being that once people know of the powerful links between sleep loss and, among other things, Alzheimer’s disease, cancer, diabetes, obesity and poor mental health, they will try harder to get the recommended eight hours a night (sleep deprivation, amazing as this may sound to Donald Trump types, constitutes anything less than seven hours). But, in the end, the individual can achieve only so much. Walker wants major institutions and law-makers to take up his ideas, too. “No aspect of our biology is left unscathed by sleep deprivation,” he says. “It sinks down into every possible nook and cranny. And yet no one is doing anything about it. Things have to change: in the workplace and our communities, our homes and families. But when did you ever see an NHS poster urging sleep on people? When did a doctor prescribe, not sleeping pills, but sleep itself? It needs to be prioritised, even incentivised.