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Prescribed Marijuana a Human Right in Employee Benefits, Public Confusion about Residential Flood

Posted By Thom Young, March 7, 2017

February comes with a short week for many as we pass the first civic holiday in 2017. While many business owners try to run every long weekend into a mini holiday, the demands differ for small business owners. Being the first one into work each day and the last one to leave is the norm for most small business owners, and getting a break from it isn’t always easy. When you’re the one who gets the payroll done and the remittances sent in on time all while building and servicing what is usually the largest client base in your shop, you don’t have much spare time to enjoy on rest and relaxation. Managing your cash flow often sees you paying yourself after everyone else. When there’s more month than money, you become a skillful juggler of all your cash obligations. When we first started up our own business, long weekends were always very important to our business success, not because we could eke out a little holiday but because that whole day of uninterrupted desk time allowed us to catch up on paperwork with a little time extra for planning. We sure knew how to get some stress relief in when needed, but no laws govern how many hours the owners are allowed to work when they’re building their businesses, nor do they get paid any overtime. Still, if it is done right, right the rewards in the end can be unbelievable. The toughest boss you’ll ever have will be the person in charge of the business you are running.

My computer has a little box in the top right hand corner that keeps me in tune with the weather, both where I’m at in my travels and at my Alberta home. Sometimes, particularly in the spring months when those Chinooks blow in, I’m amused by how close the morning temperatures can be. But, sorry, as I find myself in the middle of the Pacific Ocean now, the temperatures are not close to equal at any time of the day, Chinooks blowing or not! Work in this connected world carries on no matter where you are. Some are always surprised by my answer when they ask how my holiday is going. While some of the places I work are much nicer than the square room in Calgary called an office, I’ve got reports to review, decisions to make, people to talk to, meetings to attend, and staff in need of my support. My “holiday” some days is more of a chore than others. I must confess though, my view is much more relaxing.

ocean view

Prescribed Marijuana Defined as a Human Right in Employee Benefits Plans

While the law does not require employers to offer an employee benefit plan, companies commonly offer some form of group insurance as an employee benefit. In large established companies, these employment benefits are expected and for many form an important part of the decision process when entertaining an offer of employment. These group benefit plans usually contain some mandatory provision for participation in the basic coverage such as Life, disability, dental, and extended medical coverage for extra things not covered by provincial healthcare, such as travel insurance, private rooms, and prescription drugs. While these group benefit plans all have similarities, the form of coverage and what is covered often varies.

Recently, an employee covered by the Canadian Elevator Industry Welfare Trust Plan was declined coverage for the cost of a plan member’s prescription for marijuana. CBC News Nova Scotia, The Globe and Mail, and the Financial Post, among others, have covered this case. The member filed a complaint against the Trust with the Nova Scotia Human Rights Board. They set down a ruling that failing to cover a doctor’s prescription for marijuana was not only in contravention of the definitions of what was covered and not covered within the plan but that, in doing so the Trust had violated the man’s rights. The insurer was ordered to pay the individual’s current and past prescription marijuana expenses. The ruling is precedent setting, so it would seem that the issue of whether or not marijuana is a prescription drug or not is now defined.

I haven’t heard of any such issues in Alberta but, from my perspective as a licensed accident and sickness insurance agent, I would be very proactive in advocating for any client that was denied coverage for any prescription medicine that falls within the authority of a provincial doctor to prescribe. Plans managed by Trusts can be less inclusive in what they cover, but they are subject to the same insurance rules if they’re set up as a group benefits provider. Trying to understand the legalities of what and why such differences have occurred is strange to me. Does anyone have some insight?

Regardless of the interesting asides about the processes, it is heartening to note that the very real and effective benefits of this drug are now being acknowledged, not only by the medical community but also in the legal precedent set down about its prescribed use.

According to the Financial Post, the returns on investment for the legal operations are also clearly catching up with the new reality. I’ve often written and opined that the social costs incurred in fighting against this naturally growing weed that has been scientifically shown to be far less harmful in its use than other legal mind-altering substances has been a huge drain on our social networks. Every dollar legally earned in these enterprises reduces by a hundredfold the criminal distribution networks activities. Investment capital seems to be getting on board with this new reality.

Public Confusion about Residential Flood Coverage

Apparently, the general public is totally and completely confused as to what is covered and what isn’t when it comes to any form of catastrophic loss, especially flood damage. A recent survey by Public Safety Canada has concluded that over 40% of homeowners believe that the federal government will initiate relief programs in the event of catastrophic overland flooding.

As we all know, the government’s perspective on flood relief has changed substantially now that “flood” coverage is generally available through private insurers. The initiative to cover flood by private insurers began after the severe flooding issues that occurred right across the country throughout 2013, but the private insurers’ response has been less than 100% inclusive in making this available to the people most likely to be affected by overland water. Since 2013, we haven’t seen any really intense overland water incidents in Western Canada, although some limited damages have occurred in the East. Given this relative lull, our industry should steel itself for the response that’s going to come about the next time major losses occur, like in 2013. People in those areas with catastrophic losses are going to look first to their insurers. When they see the limitations and lack of coverage in the private forms, the pressure will immediately come to bear upon the various governments to deal with uninsured losses. The overall result will be that everyone will be unhappy and looking for someone to blame. Insurance brokers will as usual get the worst of it.

The federal and provincial Disaster Financial Relief Programs all require verification that the losses incurred could not have been covered under the homeowners insurance policy. Some of us can remember when the government required a letter from the insurers (not the broker) verifying that the losses a client had were not covered under the insurance form. While claims service is an adjusting function, the task fell to the broker to facilitate the insured’s need for that letter. Can you imagine assessing coverage availability for each of the thousands of people affected by the July 2013 Alberta floods with the kind of coverage options available today? Is the home within 300 meters of running water? Was the damage a sewer backup or an overland flood event? Did you offer the insured coverage and explain the limitations sufficiently? All I can say is that it’s going to be ugly when (not if) this situation presents itself again.

The public is not going to be aware of the limitations that will present themselves long after the reports of financial ruin and uninsured losses occur following the events to come. A few news articles such as one in The Star have presented the issue as a caution that the public should read the fine print in their policies. While many of us would read this perspective as a win for the industry, most of the public would see this fine print exclusion as “just another example of the insurance professional’s questionable reputation.” In this article, the writer who is a lawyer calls his insurance broker and is “surprised” to find out that seepage isn’t covered and that an insurance policy isn’t a maintenance contract.

As a broker, you’d best make certain that your E&O coverage is in good standing and hope for the best when dealing with water damage claims. You can also mitigate the possible problem by being very clear about the coverage limitations for these perils and collect the best evidence you can that you’ve explained them to the insureds before they leave your office. That best practice is one we should be using for all coverage, isn’t it?

If the government wants to get out of having to pay claims for uninsured catastrophic losses, I believe it should set up a facility to cover them: a risk sharing pool for mandatory property damage from overland flood and earthquake. The coverage should come with every policy and include a statute limitation for these perils as a percentage of the policy limits (say 10%). The premium generated should be estimated and pooled like other facility association premiums, and the insurer should adjust every claim for the peril accordingly. Extra coverage to policy limits should be available at the discretion of the insurers and at the premium they decide to charge. In this manner, every insured would be aware of the minor and insufficient limits of coverage and of the option to purchase appropriate limits. That way, we cover our assets when consumers are upset that they don’t have enough coverage in place. The added benefit of the adjudication process would be that the government wouldn’t have to administrate the claims process for insureds who are in a zone where additional coverage can’t be obtained. Such claims would simply be an extension of the adjusting done for the risk sharing pool. Unfortunately, the probability of such a program happening anytime soon is dubious at best.

Prairie flood forecasts are “moderate to severe” and qualified by the speed of the spring thaw and the likelihood of precipitation. In other words, no one has any idea as to what might happen, just what could.

In Closing

Some things you can change and others you can’t. One of my father’s frequent rejoinders when I was complaining about the inevitability of certain things was that “Ducks quack. There’s no point in getting angry at them because they do!” That thought is frustrating and calming at the same time!

Anatidaephobia is the fear that somewhere, somehow, a duck is watching you!

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.


Tags:  employee benefits  medical marijuana  overland flood  residential flood  sewer backup 

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Ride-Sharing Policy, Brexit, Storms and Systems

Posted By Thom Young, July 5, 2016

SPF 9 for Ride-Sharing Companies

The Alberta headline for the week is all about the SPF 9. George Hodgson sent a memo on June 28th to all IBAA members outlining this new automobile form, how it works, and where it applies. I can’t add anything of substance beyond the very excellent explanation given, so I’ve simply reproduced it below:

Superintendent Approves SPF 9 for Ride-Sharing Companies & Their Drivers

Uber and other ride-sharing drivers experience a unique mixture of personal and commercial exposures. The new SPF 9, if purchased by the Transportation Network Company (TNC), is designed to function with the owner's personal policy and to kick in when commercial coverage is required. How does this coverage work and what does it mean to you as a broker?

The driver's risk is broken into 4 categories that reflect the personal/commercial exposure:

The personal owner's policy covers exposures until the driver logs into a TNC. Upon login, some coverage from the SPF 9 could be available if the owner's policy does not provide coverage and the SPF 9 will provide coverage when the driver has accepted a ride and is en route to pick up. The policy does not cover street-hailed passengers.

What the SPF 9 Means for Brokers

  • Transportation Network Companies would purchase this commercial policy. The standard application form SAF 9 for this policy is attached to the Superintendent's bulletin.
  • The following endorsements are approved for use with the SPF 9: SEF 44 (Family Protection), SEF 23 (Mortgage), SEF 21A and 21B (Blanket Basis Fleet), SEF 13D (Limited Glass), SEF 13H (Hail Deletion), SEF 20 (Loss of Use), and SEF 43 R&L (Limited Waiver of Depreciation).
  • Fleet rating programs may be used with the SPF 9.
  • Drivers for a TNC should disclose that they are a driver to their broker as this is a material change in risk. Brokers should record and rate the risk appropriately on the SPF 1 owner's policy. In some cases, this may mean re-rating the risk as a class 07.
  • Brokers should be able to explain to their clients when their owner's policy (SPF 1) will provide coverage and when the TNC's policy (SPF 9) would provide coverage.

For full information please read the attached Superintendent of Insurance Bulletin.

For further information, please contact Rikki McBride, Chief Operations Officer, IBAA, at / 1-800-318-0197 ext 101 / 1-780-702-3715.

The industry has taken up the opportunity offered for this coverage in the Alberta marketplace. I’m told that ING has effective coverage through a national brokerage firm for the Uber ride-sharing operations. The coverage works much like an umbrella policy by picking up the commercial exposure where it exists and leaving the personal exposure and rating in place. As IBAA later clarified, the all-comers rule will not apply to TNC driver’s personal insurance applications due to the partial commercial exposure. It will be interesting to see if the personal-lines underwriters will accept this policy as mitigating the extra exposures incurred, look to limit their participation somehow, or apply a limited-experience rating to the equation. All of us are closely following the industry response. As this new set of circumstances is only a week old as I write, I look forward to seeing how it may evolve in the marketplace. If anyone has any insights on this change in our marketplace and how smooth its implementation will be, I’d be very happy to hear from you!

Everyone Is Talking about England These Days

Headline story 1: The English have been beaten at their sport (football/soccer) by the Icelandic national team made up of mostly part-time players with few professional prospects (until now) and coached by a dentist who volunteers his time to help the boys out.

Headline story 2: The English have passed a referendum to withdraw from one of the largest and most successful trade packages ever put together.

Imagine. Over the past three hundred years, successive conquering armies have expended men and resources for the authority to control and govern the European continent, and none have been able to make a go of it. Tired of the waste from competition within the virtually identical genetic haplogroup, the people came together in the name of trade and commerce and formed an economic union that allowed each other to share in the strengths of their markets without interfering with their local traditions and rulers. Wow, was that an achievement, and without a drop of blood shed anywhere! Under the heading that you can’t make everyone happy, many argued the worth of the deal, but the benefits couldn’t be denied. Like the North American Free Trade Agreement, national interests were respected while the free flow of goods between the signatories was promoted to the advantage of everyone. Further, the European Union enabled the citizens of each country to move freely over each other’s borders to pursue education, residency, and employment on a level playing field. What a concept! The union seemed to be a win for everyone by every measurement, and particularly for the United Kingdom. With UK dominance in the financial services sector, its competitive advantage as the main player in these European Union markets brought it huge gains from its participation. Well, along comes political discussion and the economic considerations seem to become unimportant. To placate the body politic in England, the political leaders agreed to hold a referendum on remaining in the European Union and began campaigning vigorously for the “remain” side of the question. For all intents and purposes, winning the vote to "remain" seemed to have slam-dunk certainty but, as we are seeing in many political contests at the moment, the expected logic of the electorate doesn’t seem to apply anymore.

With seeming illogic, the “leave” side carried the day by a margin of less than 2%, and financial markets worldwide are still reeling in shock.  All the positive economic factors in play can’t seem to win an argument against a xenophobic rant that is rooted in the myth of ancient prejudices and promotes the fear of nationalistic failure. Sadly, the process of becoming something bigger and better—of adding the best of your own worth into the mix and of benefiting yourself and everyone else—is too often overtaken by promoting fear of change and fear of those who are different.

The real loser here will be the UK people. Their “United” Kingdom is showing further cracks in solidarity at the prospects of leaving the European Union, and their currency devaluation will hamper their ability to import raw materials for the competitive production and sale of their goods ("U.K. Businesses in Limbo Due to Brexit"). Their education will now be limited by political geography and increased costs. Getting a visa isn’t always easy. Their ability to draw on an elite work force through unfettered access to competitively priced labour markets will further interfere with their current market advantages ("U.K. Businesses in Limbo Due to Brexit"). While some will be happy to proclaim control of their own destiny, that control decreases when people and companies become uncompetitive and difficult to deal with in today’s global marketplace.

What will the future bring for the relationship between the UK and the EU? I believe the UK will soon see the error in its ways. In the process of disentangling themselves from this trade pact, the people will see that they’ve been sold a bill of goods by the “leave” side of this contest. While they were convinced of the positives, they will soon be willing to trade those for the benefits they had by staying. None of this process will be quick. The political turmoil will continue for several months, and the demand to revisit the discussion will dominate the next political contest. History is written from the perspective of those who win in the end, and I believe that those who promoted Brexit will not later be held in high esteem. We shall have to wait and see though. In today’s political environment, I’m increasingly less certain of how things will eventually turn out. Am I getting older and more confused, or has anyone else noticed this unpredictability?

Still, one thing seems certain: with the dominance our industry has in the European marketplace through the stepping stone of England, our industry will suffer if the UK leaves! As Autonomous Research reports, the insurance business is already struggling and will likely slow further with Brexit.

Summertime and the Living Is … Easy (?)

Watching the wild and wacky weather shaking itself out over our part of the prairies these days brings to mind many concerns about the continued discussions about overland water and sewer backup. When a whole community such as Woodlands in South Calgary is completely surrounded and cut off by water from a local storm, I question once again the engineering of our storm runoff systems. On the other hand, when nearly 200 centimeters of hail shut down the main north-south highway in the province for a whole afternoon, I find myself once again in awe of what Mother Nature can toss into the mix whenever she feels like it.

In Closing

I’m presently enjoying my grandchildren while camping out in front of the Ponoka Legion—our 10th year at the same location for the rodeo and chuck-wagon races, boondoggling on the grass. It’s fun to see the teenagers just as excited about the show now as they were 10 years ago. While we’re roughing it out here, the inevitable summer storms are rolling through and pounding us off and on with rain and wind. It’s tornado season. Thankfully the damage has been relatively minimal. Let’s hope it remains so. The prediction is for Canada to be sunny and warm. The flag is proudly flying off the back of our motor home! I hope all of you enjoyed the Canada Day weekend. I know we did.

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.


Tags:  all-comers rule  Brexit  flood  hail  ride sharing coverage  sewer backup  SPF 9  TNC  Transportation Network Company  Uber  wind 

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Stampede Breakfast, Normal Prairie Weather, Will Rogers' Common Sense

Posted By Thom Young, July 28, 2015
Updated: July 23, 2015
I love summer!

Well, for those of you working out of Calgary and area, the end of this month will likely be much more productive than the beginning. The greatest outdoor show on earth annually bites into business productivity for the first two weeks of each July. Once the Stampede is over, work catch up begins. While efficiency experts debate the value of invested time and effort in this kind of frivolity, in my opinion the positive gains in business promotion and employee morale far outweigh any losses perceived by the brainy bunch! And the work always seems to get done.

This tradition of ten or more days celebrating part of our Western culture is well received by the insurance industry in the Calgary area. In 1993, we felt a customer-appreciation day was in order and sent out invitations to all our clients and brochures to all our neighbours announcing that we’d be having a stampede breakfast on the Wednesday morning of stampede week. I think about 300 people showed up that first year, and we determined the promotion to be a smashing success. The next year, when Southland Registrations opened, we partnered with this sister firm to expand the event. We hired a band and invited underwriters. On average, some 1000 people began to show up for breakfast. As our efforts continued to evolve, we hired a better band and chuck wagons with drivers who signed autographs and posed for pictures. Even our competitors began to drop by and wish us well. About five years ago, we declared this an all-industry event and began promoting it with everyone associated with the insurance business.

The usual turn out is between 1500 and 2000 people browsing through our head-office parking area. Some people wait as long as half an hour for a pancake and a couple of sausages. 50/50 tickets are sold to raise money for the food bank and, on the whole, a great social gathering occurs.

Lundgren and Young Stampede Breakfast This year our stampede breakfast was again a great success. The numbers attending were toward the higher end of the scale and a terrific time was had by all. Those who had their picture taken on the chuck wagon with Kurt Bensmiller will be glad to know that he took it all at the Stampede this year. We’re proud to be associated with the Bensmiller wagon racing team, and it was really nice to see my friend Buddy Bensmiller hop up on his son’s wagon as he took his bows after winning the Rangeland Derby on the last day of Stampede. Buddy retired from racing two years ago and his son has carried on the family tradition of winning chuck wagon races and championships. You can’t beat that kind of succession planning success!

Sewer Backup, Overland Flooding, and “Normal” Prairie Weather

Just west of Calgary, two summer storms blew through the bedroom community of Chestermere Lake. The first storm resulted in a quick downpour of hail followed by a torrent of rain, which resulted in storm sewer systems backing up and the water finding its way to the lake by whatever route was available. Overland flooding occurred in a number of homes. Storm sewers and regular sewers backed up for a number of residences in the community. Two days later, another storm complicated the cleanup efforts of the residents with an almost identical set of circumstances. Some people just can’t catch a break.

These events drew a lot of media attention, many referencing the previous flooding issues a couple of years ago in Alberta, even though that event had no similarity whatsoever to this relatively normal weather event. In this case, the community in question is relatively new, the area affected by the infrastructure’s failure to deal with a normal weather event was minor, and the number of residents impacted was limited to some 300 homes. These details do not limit the impact on the individuals in question, but the media seemed overly focused on the tribulations of those affected. This slant was tempered somewhat when one of the people mentioned in an interview that this event wasn’t as bad as the last one they had.

I had some personal discussions with an affected insured who questioned why his policy didn’t cover sewer backup, a question that was somewhat surreal as the coverage was through a limited form provided by a nonstandard market for problem risks. The insured in question had three prior claims for sewer backup in the past four years—all for amounts in excess of $100,000. The incumbent insurer had refused to renew, and finding this insured coverage even on a limited form was not an easy thing. Still, the insured seemed to feel that the fact that he was not covered for this repeated and unmitigated event was the fault of our industry and not the failure of the municipal engineers or the home builder who plunked his home foundation in the middle of the reservoir draw without providing a non-obtrusive path for the water to take—never mind the wisdom of the insured in refinishing and refurbishing a part the home that has now been under water four times in the past five years without taking into account the reasons for the problem. No doubt, the provincial disaster relief fund will find a way to push some more good money after bad on this risk as well.

This weather event has brought a number of reflections and interpretations on the new wordings in use by some insurers, particularly the limiting of time in the process of adjudicating a claim. What defines the results of an overland flooding event in which our insured was not affected but his neighbours experienced a sewer backup within the 72 hours following the overland flooding event, even if the sewer backup was not consequential to the overland flooding event? I’m getting a headache thinking about this one. The claims adjusters are following the old axiom: when in doubt, deny!

These issues still call for much work.

As I finish this column, severe weather is tracking through the centre of our province. Communities to the south of Edmonton are being pummeled by intense hail and rain storms, and tornado watches are in effect. The normal midsummer Prairie weather continues.

Common Sense Ain’t So Common

Way back in the ’70s when I was working on a diploma in business management, I remember a rather lengthy discussion about common sense. Many may concede truth to such simple aphorisms as “never judge a book by its cover” or “too many cooks spoil the broth.” Others like these come in the life-instruction manual passed down to us by the sages of wisdom in our families and communities. Rarely are any of them questioned, but every once in a while someone will point out that many of them can be seen as contradictory and confusing. The axiom that “many hands make light work” overtakes the point about the cooks, doesn’t it—well, at least when it comes to something other than making soup?

One of the most well-known purveyors of good old folksy wisdom is the often-quoted Will Rogers. While he spent a short time on the planet, his meanderings continue to inspire and amuse. Here’s a piece about him and some of his sayings for your midsummer amusement:

Will Rogers"Never squat while wearing your spurs."

Will Rogers, who died in a 1935 plane crash, was one of the greatest political sages this country has ever known.

Enjoy the following:
  1. Never slap a man who's chewing tobacco.
  2. Never kick a cow chip on a hot day.
  3. There are two theories to arguing with a woman.
  4. Never miss a good chance to shut up.
  5. Always drink upstream from the herd.
  6. If you find yourself in a hole, stop digging.
  7. The quickest way to double your money is to fold it
    And put it back into your pocket.
  8. There are three kinds of men:
    The ones that learn by reading.
    The few who learn by observation.
    The rest of them have to pee on the electric fence
    And find out for themselves.
  9. Good judgment comes from experience, and a lot of that comes from bad judgment.
  10. If you're riding' ahead of the herd, take a look back every now and then
    To make sure it's still there.
  11. Lettin' the cat outta the bag is a whole lot easier'n puttin' it back.
  12. After eating an entire bull, a mountain lion felt so good he started roaring.
    He kept it up until a hunter came along and shot him.
    The moral : When you're full of bull, keep your mouth shut.
About Growing Older ...

First ~ Eventually you will reach a point when you stop lying
About your age and start bragging about it.

Second ~ The older we get, the fewer things seem worth waiting in line for.

Third ~ Some people try to turn back their odometers.
Not me; I want people to know 'why' I look this way.
I've traveled a long way, and some of the roads weren't paved.

Fourth ~ When you are dissatisfied and would like to go back to youth,
Think of Algebra.

Fifth ~ You know you are getting old when everything either dries up or leaks.

Sixth ~ I don't know how I got over the hill without getting to the top.

Seventh ~ One of the many things no one tells you about aging
Is that it's such a nice change from being young.

Eighth ~ One must wait until evening to see how splendid the day has been.

Ninth ~ Being young is beautiful, but being old is comfortable.

Tenth ~ Long ago, when men cursed and beat the ground with sticks,
It was called witchcraft.
Today it's called golf.

And, finally ~ If you don't learn to laugh at trouble,
You won't have anything to laugh at when you're old

In Closing

Well, that’s enough for this run. Those keeping track will note that I took a little break on the last deadline. It was sort of planned and some might say deserved. I’ve had a very busy summer so far and, believe it or not, much of it revolves around work for our industry. That’s not much of an excuse though, and, yes, I do know where to look for sympathy so you can keep your dictionary references to yourself. I hope all of you are enjoying our all-too-brief Alberta summer. Before the next issue, I will have traversed through four of our Canadian provinces and no doubt will be feeding a healthy crop of mosquitoes in each of them.

The opinions expressed in this blog are not necessarily those of IBAA.
Comment on this post below or email Thom Young privately. Thom also encourages suggestions for topics.

Tags:  Chestermere flood 2015  overland flood insurance  sewer backup  Stampede 

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