Personal Auto Rate

Hikes Not Keeping Up

with Losses Source: Fitch

U.S. personal auto underwriters increased premium rates “significantly” in 2016. But here’s the thing: it wasn’t enough.

Loss trends are still outpacing rate changes. Also, the U.S. P/C industry statutory combined ratio will likely hit 108 in the coming months, a 3.5 percentage point rise and the weakest result in 15 years, Fitch Ratings noted in a new report. “Results are likely to improve moderately in 2017, but competitive forces and market fundamentals will inhibit a shift back to an underwriting profit in personal auto for some time,” the Fitch report asserted.

A number of factors are at play that mean the market is still weakening, Fitch said. GAAP auto segment results show higher combined ratios for nearly all of a group of 10 publicly traded insurers in 2016, Fitch said, with an average combined ratio increase of 3.3 points from 2014 to 2016.

As Fitch pointed out, carriers including Progressive and Infinity Property & Casualty Corp. continued to generate major underwriting profit for personal auto despite industry weakness. But the overall market continues to weaken in terms of annual underwriting performance because of higher catastrophe related losses and unfavorable claims experience. State Farm Mutual Insurance Group is a major example of this, Fitch said, due to its reported $7 billion underwriting loss (18 percent of earned premium).

Also, personal auto underwriters continue to face adverse loss trends that drove higher claims costs over the last two years. They include claims frequency jumps from more miles driven, more distracted driving, higher physical damage losses because of more complex and sophisticated automobile parts, and higher bodily injury costs from more severe accidents.

As well, the Consumer Price Index data for auto insurance costs grew by 7.6 percent in February 2017. Fitch said that that points to continuing rate increases in the short term, which should lead to some modest underwriting improvements through the year.

Underscoring the challenges ahead, Fitch said that risk modeling for the sector, among the most sophisticated efforts in the industry, has not done its job the way it should.

“Personal auto insurance is technologically the most advanced P/C market segment with tremendous progress over time in data analytics that enhance risk selection, price segmentation and predictive claims models,” Fitch said. “Recent poorer results in auto insurance reveal that the most sophisticated models may not fully anticipate changes in loss cost trends.”

For the complete article, please click here.

Your Clients Don’t

Care About InsurTech

Startups Source: Jacquelyn Connelly, Independent Agent

Over the past three years, global investors have pumped about $6 billion into the InsurTech industry, according to data from CB Insights.

April 5, 2017

But only 23% of consumers would be comfortable sharing their personal data with an InsurTech startup in exchange for a cheaper rate, according to a new survey from Vertafore—and 78% would prefer to work with a real person when reporting an insurance claim, rather than submitting one online. Surprised? You shouldn’t be. “You can never underestimate the value of having a human being when something goes wrong,” said BJ Schaknowski, chief sales and marketing officer at Vertafore, during a press event yesterday at the NetVU conference in Nashville, Tennessee. “You may use WebMD to diagnose symptoms, but if your ankle’s twisted 90 degrees to the right, you go see a doctor,” Schaknowski continued. “There is a psychology associated with insurance. It’s inherently complicated, and that means you want the confidence of someone telling you what’s the right protection for your family and for your business.” The Trust Factor Vertafore’s data backs it up: Nearly 60% of consumers worry that artificial intelligence technologies may automatically deny them coverage that would otherwise be offered by a human agent, and 72% would be uncomfortable purchasing insurance through a chatbot. And despite all the hype surrounding peer-to-peer insurance startups like Lemonade, Vertafore found that more than half of consumers would be uncomfortable purchasing insurance that way—and three out of four don’t even understand what “peer-to-peer” means. Why aren’t your prospects and clients clamoring for the types of purchasing models that industry disruptors are so certain consumers need? Schaknowski believes an independent agent will always fulfill a crucial psychological element in the insurance-buying process. “It’s referred to a lot as being about ‘relationships,’ but I think that word is overplayed. I think the right word is ‘confidence,’” Schaknowski said. “The reason I call my agent is because I don’t know what I’m talking about. This isn’t selling diapers. It really comes down to a level of commoditization, and this isn’t a commoditized space.”

“Everything is fine when you buy—it’s not until you have a claim that you reconsider your relationship with who provides you insurance,” agreed Theo Beack, chief technology officer at Vertafore. “It’s a natural cycle where people initially say, ‘I go for price and I go for convenience.’ But when you become more informed as a buyer, you’re going to go to someone who can advise you in an intelligent way.” It’s apparently true even for millennials—just because they feel empowered to do their own research doesn’t mean they’re too arrogant to recognize when it’s time to ask for help. Vertafore found that almost half of young adults ages 18-25 indicated a preference to purchase all forms of insurance through a human. “By the nature of the technology that’s available now, consumers are more informed,” For the complete article, please click here.

Trump Pushes New

Healthcare Plan as

GOP Leaders Seek

Details Source: Bloomberg

House lawmakers hope Tuesday to release a new Trump administration-backed version of the health-care bill they had to abandon last month in an embarrassing setback to their pledge to repeal Obamacare. But GOP leaders sought to downplay expectations for a quick vote. “We’re at that conceptual stage right now,” House Speaker Paul Ryan told reporters Tuesday morning. “We don’t have bill text or an agreement yet.” GOP leaders barely mentioned health care in the private conference meeting Tuesday morning and offered few details of the plan being devised by the White House. Representative Mark Walker, chairman of the

conservative Republican Study Committee, said Tuesday that the Energy and Commerce Committee is "putting it together and language should be ready this evening." Late Monday, Vice President Mike Pence and White House chief of staff Reince Priebus met with House conservatives to lay out the details of the plan. One lawmaker said it could allow states to charge higher rates to sick people. President Donald Trump’s budget director, Mick Mulvaney, was also in the meeting. Several lawmakers, including a close ally of Trump’s, said they think a vote could still occur this week, though Ryan said he didn’t know whether that would happen. "The administration is saying it would like it this week," Republican Representative Chris Collins of New York said Tuesday morning. Collins and several Republican moderates went to the White House Monday to discuss the plan. Republicans have little space on the calendar to hold a new vote this month. They are scheduled to begin a two-week recess on Friday, and when they return they will have five days to pass a spending measure to keep the government funded after April 28. Mark Meadows, chairman of the hardline House Freedom Caucus, which helped block the last health-care bill, said Monday that he hadn’t seen the administration’s new proposal in writing. “We’re hopeful that we’ll get the legislative text within the next 24 hours,” said North Carolina’s Meadows. “There’s no deal in principle.” The White House and Republicans are discussing a plan that would allow states to apply for waivers on some of Obamacare’s requirements, while still preserving its ban on excluding coverage of those with pre-existing conditions. States would have to show that their waiver “would improve coverage and reduce costs,” Collins said.

For the complete article please click here.

Who is Liable if a

Self-Driving Car

Crashes? Source: USA Today By collision standards, last week's incident involving a Tesla Model X and a Phoenix police motorcycle officer barely qualified for a police report. The officer, who was in front of the Tesla, stopped for a traffic signal, police said. After also stopping briefly, the Tesla began creeping forward, prompting the officer to jump off his motorcycle and move away. The officer later estimated the car was moving at about three miles per hour, police said. There were no injuries or no damage. But the driver's allegation that his Tesla was in self-driving Autopilot mode when it tapped the motorcycle opens the door to questions in the emerging and still-murky legal realm of automated and driver-assisted vehicles. Here are some of them. If cars with partial self-driving tech crash, who is responsible? The National Highway Traffic Safety Administration and Society of Automotive Engineers say there are six levels of driving automation. Zero denotes full human control and five is a fully autonomous vehicle. With the level of automation today at level two or below, it's the driver who is responsible if the car crashes, said Bryant Walker Smith, an assistant law professor at the University of South Carolina. "Anything that's below level three, it's clearly a human that's supposed to be doing part of the driving," Smith said. Smith, who recently authored a report on automated driving and product liability, said that liability can involve multiple parties at fault in any given collision, and they can sue each other. But it should be noted, he said, that the vast majority of crashes are caused by human error. And many crashes involving driver-assisted cars are caused by the other vehicle. Automated cars are forecast to reduce the likelihood of human error, making driving much safer than it is today. But as cars become more

and more autonomous, Smith said, it is believed that liability will shift from driver to car. "Which means that, in the future, if automated driving is, in fact, safer, then manufacturers will bear a greater share," he said. "Manufacturers will have hopefully a bigger slice of a smaller pie of the total crashes." If an autonomous or driver-assisted car breaks the law, does the driver get a citation? In the future, automated cars likely will be programmed not to speed, run lights or commit other common traffic offenses. Kevin Biesty, deputy director for policy for the Arizona Department of Transportation, said in cars with dual modes, it's going to be a matter for law enforcement to investigate whether car or human is in control of the vehicle. But if it's in autonomous mode, where would the citation go? What does it mean to be in control? Can you still be cited for a DUI? These are questions that Biesty said are ripe for court consideration. "These are things that, in my opinion, are going to be decided by case law," he said. Will autonomous car drivers get special licenses? Not necessarily, Biesty said. To date, there are no special drivers' licenses for driver-assisted vehicles. Rather, there could be some instructions given by the dealership, just like they would offer for any advanced feature on a new car. Biesty said more of the driving regulations, however, could shift to from driver to car, and therefore from state to federal government. It's the National Highway Traffic Safety Administration that currently approves new technologies in vehicles, and Biesty said this protocol shift likely could continue as technology advances. Eventually, Biesty said, this could strip state motor vehicle departments of one of their core functions - licensing drivers. "There are numerous conversations going on, about, ‘At what point does the MVD become a registration of vehicles and an identification agency?'" Biesty said.

Will autonomous cars be specially marked, or get special license plates? "At this point we don't really see a need for it, specifically for our department," Biesty said. However, there's a possibility that other agencies may want to distinguish these vehicles from others. Biesty noted that this was the case when alternative fuel vehicles emerged. It was the first responders who asked for these designations since there would be differences in how to deal with an electric vehicle versus gasoline. "But for right now," Biesty said, "nobody has asked."

Insurers Need to

Understand Their

Future Consumers in

the IoT Age Source: Sam Boyer, Insurance Business America As the Internet of Things (IoT) grows and shapes the digital smart home, it has the potential to create winners and losers in the insurance industry. Carriers must try to adapt to position themselves to face the impending digital challenges and a new survey has unveiled where the industry needs to head to avoid losing out. Normand Lepine, NTT DATA’s senior practice lead on insurance data and analytics, says carriers need to act – and act immediately – if they want to avoid getting left behind by the IoT revolution. “We know that insurers are very interested in IoT and how it is going to impact them,” he explained. “We thought it would be interesting to know: are consumers … and carriers ready for smart homes? And what are the threats and opportunities that smart homes have for P&C carriers? “We think that there a lot if things they [carriers]

need to do before they’re able to really effectively take advantage of this, which means they can’t wait,” Lepine said. “We’re not sure they understand the consumer goals. “They need to really understand the goals and objective of [younger, tech-savvy consumers], then they need to start planning their initiatives in order to try to converge the consumer desires with what they’re trying to do with IoT from a business perspective.” NTT DATA’s survey of 1,000 consumers and 100 insurance executives found consumers want personalized policies based around their smart homes, but are squeamish when it comes to sharing data that could jeopardize their security and privacy. “The IoT is disrupting the whole insurance ecosystem, inviting new competitors and potential partners, and changing how products and services can be delivered,” the report on the survey states. “It ultimately has the power to change the insurance business model from a reactive/claims processing one to a proactive/loss avoidance one … We believe now is the time for carriers to pursue their place in the IoT ecosystem.” The industry needs to adjust its thinking if it wants to align itself with consumer needs, according to the report. The main recommendations of the study included: carriers needing to develop early ethics policies for IoT and provide consumers with transparency on data security and privacy; focusing, at least initially, on offering “advice and assistance with smart home adoption”; and leveraging partnerships with data companies “to manage the parts of the ecosystem they cannot control.” This final recommendation, NTT DATA suggests, is the most important. Access to data will be crucial to understanding, and thus accurately underwriting, what goes on in a smart home. “Most carriers recognize that they are not well-positioned to drive the evolution of the smart home ecosystem on their own,” Lepine said. “Consequently, finding the right partners and their best fit in the ecosystem greatly reduces

the effort and cost to participate.” Lepine said partnerships with data-accumulation companies like Google and Apple could be the key to thriving in the smart home market. The survey found many consumers – particularly younger homeowners – were the set most prepared to have their homes digitized and monitored, but those consumers were also most willing to jump carrier for the best deal. “They are less loyal to their current carrier, saying they would change insurance companies to get homeowners policy discounts for using smart home devices, including smart thermostats, smoke/carbon monoxide detectors and garage door openers,” the study found. “How carriers prepare for and respond to this shift in customer expectations and behaviors — and affiliated threats of industry disruption — could well determine the insurance industry landscape of the future.” However, if carriers can get their policies and communication right, they could be in line to reap the rewards. The report found a huge majority – 87% – of carriers believed IoT will improve relationships with customers. “We think the number one priority for carriers is … developing a full ethics policy around IoT, because it’s going to change the way they interact with their customers,” Lepine outlined. “It needs to go all the way up to the risk committee. Carriers need to be very transparent if they want consumers to trust them with their data.”

How is Insurance’s

Relationship with the

Consumer Changing? Source: Lucy Hook, Insurance Business The so-called digital revolution means that the world is now less pen and paper, and more Wi-Fi and smartphone. But how have these developments changed the way insurers and brokers interact with clients and provide services?

“Consumers expect personalization in their communication,” George Wright, CEO of Smart Communications, told Insurance Business. What that means is that communication needs to be relevant, timely, and convenient, and that increasingly means using new methods such as email, mobile and even Facebook Messenger. “Those channels have changed so much, really in the last couple of years,” Wright explained, pointing to the difference between how millennials want to communicate versus how baby boomers want to interact. Smart Communications, which helps many insurers manage their customer communications, focuses on the use of multiple channels, but Wright explained that mobile and interactive solutions are leading the way. And it’s not just consumers that are pushing for mobile – Applied Mobile, a purpose-built app for brokers, recently revealed that its usage has soared by 162% year-over-year, suggesting that brokers themselves are going digital. Telematics and connected devices are also changing the relationship between insurance and the consumer. “I think when you look at the space, especially in P&C and auto, we’ve seen a real kick up in that greater telematics use,” Wright commented, with schemes such as pay-to-drive or pay-how-you-drive being prime examples. The telematics space will “greatly affect” the P&C automotive industry, according to Wright, and while some of the smaller players are moving quickly, larger players are starting to pay attention too. As the ‘sharing-economy’ leads to changes in consumer behavior, such as people opting for car-shares rather than owning their own vehicle, new insurance models mean the industry can adapt to customer demands. “You either disrupt yourself or you will be disrupted,” Wright added. “Insurers are looking at technology to basically disrupt themselves, and bring these new use cases, like pay-as-you-drive, etc., as an option.”

Insurers Shouldn’t

Neglect Good Business

Writing Skills Source: Denise Johnson, Claims Journal Insurers focused on improving customer service through new technology shouldn’t forget that good writing skills can also impact a company’s bottom line. Offering business writing education to new hires and continuing education to current employees are just two ways that insurers can make sure claims letters are up to snuff. Gary Blake, owner of The Communication Workshop, has been in the business of writing for 25 years. He said insurance executives need to understand that the entire company is driven by the claims letters that are sent out to customers, claimants and vendors. This is sometimes the only time a customer will ever hear or know about your insurance firm. If they’re seeing letters that are riddled with punctuation errors or are stylistically bad, what do they think of the company? They don’t think very much of it,” said Blake. “I think those letters have to be looked at.” Top executives need to be aware that it’s not about one type of letter or one type of template, he added. A variety of letters are generated by claims and other departments, such as reservation of rights letters, coverage letters, denial letters and letters to opposing counsel, vendors and physicians. Blake said he’s seeing a lot of issues specific in the way claims writers churn out letters and gender doesn’t appear to make a difference. “I think that when people get on the job, they go to the filing cabinet and they look at how people in the past have written…letters and they tend to copy that style. They don’t want to stand out. I think that’s true of both men and women,” Blake said. Any differences in letter writing that he has observed is generally the result of the writer’s educational background. As the emphasis on writing skills has waned in schools, Blake said

claims personnel tend to be less interested in honing their letter writing skills. “I think that it’s become a national joke and cliché that writing isn’t taught much anymore. Very few people are willing to really help people clean up all of the various issues that they may have,” Blake said. “That’s true in our schools and I think that insurance companies, some of them at least, have their minds on the very big issues – analytics and market share and customer service – and are forgetting that every letter that goes out represents the company. If that letter is filled with inappropriate tone or poor organization or punctuation and grammar mistakes, all of the analytics in the world are not going to help.” Letters may be the only in-depth contact customers have with an insurer, he said. “I think that we sometimes overlook things that are right in front of us and claims people are writing, let’s say they write only 10 letters a week. That’s 500 letters a year and over 10 years, 5,000 letters. The insurers do not seem to be investing the time early on with new hires, with Millennials, to make sure the writing is really good before all those thousands of hours are put in,” Blake added. For the complete article, please click here.

Element of Insurance

Marketing You May

Have Forgotten Source: Dan Lafferty, PHMG Audio is too often viewed as an afterthought when it comes to marketing and branding. When developing a brand identity, insurers inevitably tend to focus on visual assets – such as stationary, brochures or event stands – and digital presence. The ‘look’ of the brand is seen as paramount and although that is understandable, it is worth considering that our hearing is actually a more powerful emotional sense than our sight.

This means the sounds we hear have greater potential for sparking the recall of feelings and memories. In fact, humans are hard-wired to trust their sense of hearing more than their sense of sight. A study conducted as part of the Hearing Body project at the University College London found participants could have their perceptions of their own body image distorted by changes in sound. It was revealed that, by changing the sound of someone’s footsteps, it is possible to trick them into believing they are heavier than they are. This idea can be translated to business. If an insurer uses the appropriate sounds through its marketing, particularly over the telephone, it is possible to instill positive emotions in the listener, such as trust or satisfaction. The real face of audio branding Often, audio branding is confused with just being ‘sonic logos’, those short jingles created by companies to feature in television or radio advertising, such as the famous Intel jingle. The other misconception is that audio branding is restricted to huge, multinational organizations with sizeable marketing budgets when, in reality, it has practical applications for firms of all sizes. Easily the largest application of audio branding is on the telephone. When a customer or prospect calls to make an enquiry, they rely on their hearing to create an opinion of the organization. If the sounds they hear are inappropriate or unprofessional, this can create a lasting negative perception that is hard to shake. Caller experience is vital to the industry, particularly considering research conducted by PHMG has found insurance firms in North America put callers on hold for an average of 27.5 seconds per call. This is around the same length of time as a typical TV advert, so represents an important window for communication. Careful thought should be given to what callers hear during this time. Research conducted by global research consultancy TNS found 65% of Americans feel more valued if they hear customized voice and music while waiting on

hold and 66% said it made a company sound more professional. For the complete article, please click here.

Proposed Wisconsin

Bill Targets Adults

Who Host Underage

Drinkers Source: Cara Lombardo, Insurance Journal

Adults who let teenagers drink in their homes would be breaking the law under a proposal two Republican Wisconsin lawmakers are circulating. The bill would address what Rep. Andre Jacque and Sen. Van Wanggaard call the “social host” loophole in current state law, which prohibits people who are old enough to drink from allowing people who aren’t 21 to drink alcohol in “premises” owned or controlled by the person who is of legal drinking age. An appeals court last year narrowly interpreted “premises” to refer only to licensed establishments such as liquor stores or bars. Jacque and Wanggaard want to extend the law to include adults who allow underage drinking in their own homes. Jacque said a cultural acceptance of underage drinking in the state is partly to blame for Wisconsin’s above-average drunken driving and binge drinking rates and should be addressed. “There’s a legal drinking age for a reason,” Jacque said. “This whole idea that underage drinking is OK or safe in certain settings sends the wrong message.” Under the proposal, adults could be held responsible both if they give teens express permission to drink or if they fail to intervene in underage drinking they know is happening on property they own or occupy. People who break the law could be fined $500 for a first offense and face increasing penalties for subsequent offenses, including fines of up to $10,000 and up to nine months in prison.

About a third of Wisconsin youth ages 12 to 20 drink alcohol and almost 20 percent drink five or more drinks at once, according to a 2016 report from the state Department of Health Services. Both figures slightly exceed national averages. The department’s campaign called “Parents Who Host Lose the Most” specifically targets adults who allow underage drinking in their homes. In October, the 2nd District Court of Appeals ruled in favor of a Wisconsin father who threw a graduation party for his son where underage drinking occurred. The father was cited with violating a Fond du Lac County ordinance prohibiting adults from hosting underage drinkers in their homes and assessed a $1,000 fee. But the appeals court said the ordinance was invalid because of a state law that bars underage drinkers on their premises, which the court interpreted as establishments with licenses or permits to distribute alcohol. The court said local penalties cannot exceed state penalties. Jacque and Wanggaard said in a memo seeking co-sponsors that their bill would clarify the intent of state law and restore the ability of law enforcement to cite people who host underage drinking parties on their property. Groups backing the measure include the Wisconsin Medical Society, the League of Wisconsin Municipalities, the Wisconsin Professional Police Association, the Badger State Sheriffs Association and the Wisconsin Association of Sheriffs and Deputy Sheriffs, according to the memo. An identical bill passed an Assembly committee with bipartisan support in 2013 — including that of current Assembly Speaker Robin Vos — but never made it to the floor after counties and municipalities voiced concerns about maintaining local control, Jacque said. That changed after the appeals court decision and a similar lower court ruling. “Folks are on board now who before were saying ‘What’s the need?’” Jacque said. “For the first time, we have a united front.” A spokeswoman for Vos, a spokeswoman for Assembly Minority Leader Peter Barca did not immediately respond to questions about whether

they plan to support this session’s proposal. Tony Palese, a spokesman for Senate Minority Leader Jennifer Shilling, declined to comment.

NHL Pulls Out of

Winter Olympics Over

Insurance Source: The Canadian Press

For the first time since 1994, NHL players will not attend the Winter Olympics. The league released a statement Monday saying it “considers the matter officially closed” and that it won’t participate in the 2018 Games in Pyeongchang, South Korea. Negotiations between the league, the NHL Players’ Association and the International Olympic Committee have stalled in recent months. In the statement, the NHL said it was open to hearing from the parties involved but that “no meaningful dialogue has materialized.” “Instead, the IOC has now expressed the position that the NHL’s participation in Beijing in 2022 is conditioned on our participation in South Korea in 2018,” the league said. “And the NHLPA has now publicly confirmed that it has no interest or intention of engaging in any discussion that might make Olympic participation more attractive to the clubs.” The league said it will now proceed with finalizing the schedule for next season. The NHL Players’ Association didn’t immediately respond to the league’s announcement. The NHL had been at every Winter Olympics since 1998 and players have expressed their desire to continue participating. It was just over a year ago at the Stanley Cup final in Pittsburgh that NHL commissioner Gary Bettman began pouring cold water on the idea of NHLers participating in 2018. In particular, Bettman was miffed that the International Olympic Committee was resisting payment on out-of-pocket costs for NHL players to attend _ a subsidy that had been covered over the previous five Games.

Bettman said the cost was “many, many, many millions of dollars” and doubted that owners would pay for the “privilege of disrupting our season”. Little had changed by early winter. Bettman continued to fume about money as well as the IOC’s unwillingness to let the NHL be associated with the Olympics in any fashion. The league couldn’t air highlights or promote their presence at the Games. “It doesn’t give you the warm and fuzzies,” Bettman said at the PrimeTime Sports Management Conference. A decision, he added, would likely be required by early January at the latest. The NHL league then proposed an idea to the NHLPA that would extend the current collective bargaining agreement as a part of package for players to attend in 2018. The union turned down the deal. For the complete article please click here.

Illinois Lawmakers

Propose Legalizing

Recreational Pot Source: Robert McCoppin, Chicago Tribune

It’s the Midwest’s first foray into legalizing recreational pot.

***** Lawmakers are proposing to legalize recreational marijuana in Illinois but say the legislation probably won't come up for a vote until next year. Sponsors on Wednesday introduced bills that would make it legal for adults 21 and older to possess, grow and buy limited amounts of marijuana. The state would license and regulate businesses to grow, process and sell the plant, and it would

establish safety regulations such as testing and labeling requirements, sponsors said. The measure would also allow residents to possess up to 28 grams of pot, or about an ounce, and to grow five plants. The bills propose taxing marijuana at a rate of $50 per ounce wholesale, plus the state's standard 6.25 percent sales tax. Based on sales of recreational marijuana in Colorado, the Marijuana Policy Project, a national advocacy group, estimates sales in Illinois could generate about $350 million to $700 million per year. Gov. Bruce Rauner and House Speaker Michael Madigan reserved judgment, as they typically do with new bills. But the Illinois Association of Chiefs of Police opposes legalization, saying marijuana poses a threat to public health and safety, and causes potential enforcement problems because it conflicts with the federal prohibition on marijuana. The co-sponsors, Sen. Heather Steans and Rep. Kelly Cassidy, both Democrats from Chicago's North Side, said they don't plan to call the bill for a vote this session but will hold hearings to get feedback and see whether some version of a legalization bill can get support next year. "If we bring this out in the open, we can generate revenue legally rather than for the black market," Steans said. Cassidy said marijuana prohibition creates far more problems than it prevents. "Regulating marijuana and removing the criminal element from marijuana production and sales will make our communities safer," she said. Eight states have allowed the sale of the drug, generally by referendum. But in Illinois, it's very difficult to get a binding vote on the statewide ballot, so it probably would take legislative action to change the law. If approved, the plan would make Illinois the first state in the Midwest to allow the general public, including out-of-state visitors, to buy marijuana, though it would remain illegal to transport it across state lines. The proposal also calls for

dividing the tax revenue, with half going to the state's general fund and the rest to schools and drug abuse treatment and prevention. Legal marijuana sales can generate windfall tax revenues, but the social and health costs are largely unknown, cautioned Rosalie Pacula, a senior economist at the Rand Corp., a nonprofit, nonpartisan public policy organization. "The tax revenue comes right away," Pacula said. "The data on emergency room visits, car crashes, graduation rates and absenteeism takes a lot longer." As with any new industry, marijuana can be regulated, but there are many variables, such as what pesticides should be allowed, Pacula said, so there should be provisions for new laws to expire or be changed along the way. For more than a year, Illinois has had a pilot program allowing the sale of marijuana to patients with any of about 40 debilitating diseases, such as cancer or AIDS. But without a broad qualifying condition like chronic pain, as some other states have, the number of patients has been limited to about 17,000, with current retail sales of about $5 million a month. The proposed new law would allow medical marijuana dispensaries to sell recreational pot for one year before newly licensed businesses would be allowed to enter the market. Last year, a new state law also decriminalized the possession of less than 10 grams of marijuana, punishing it instead with fines. Police have not noticed any significant problems with either law, according to Oak Brook Police Chief James Kruger Jr., who is first vice president of the Illinois Chiefs of Police Association, which opposes legalization. But he said the medical marijuana law is limited, and a lot of municipalities had previously decriminalized cannabis, so the effects were muted. Kruger cited a rise in emergency room visits for medical marijuana ingestion among children in Colorado and studies showing the drug's harmful effects on developing brains.

Advocates for legalization say kids are already getting marijuana illegally, but legalization would allow it to be more closely regulated. "I think this does a good job of being very reasonable," Illinois NORML Executive Director Dan Linn said. "It's a realistic approach."

The Higher Cost of

Insuring Extra-Safe

Cars Source: Christina Rogers and Leslie Scism, Wall Street Journal

New cars loaded with high-tech crash-prevention gear are having a perverse effect on car-insurance costs: They are soaring. Safety features such as autonomous braking and systems to prevent drivers from drifting out of their lanes are increasingly available on vehicles rolling off assembly lines. Auto companies and third-party researchers say these features help prevent crashes and are building blocks to self-driving cars. But progress comes with a price. Enabling the safety tech are cameras, sensors, microprocessors and other hardware whose repair costs can be more than five times that of conventional parts. And the equipment is often located in bumpers, fenders and external mirrors-the very spots that tend to get hit in a crash. Insurance companies, unwilling to shoulder all the pain, are passing some of the cost off to buyers. Jeff Woods, a professor in Illinois, recently bought a 2017 Volkswagen Passat to replace a two-year-old model. It was loaded with so-called active safety equipment. So, he wasn't expecting his State Farm insurance policy to spike 20% to $1,200 a year. "I was told by the car dealership all the technology would improve the cost of insurance," Mr. Woods said. "Instead, it went up." Volkswagen AG declined to comment on Mr. Woods' experience but said it is "proud to

offer advanced-safety technology systems on our vehicles." Mr. Woods ended up negotiating a price reduction with State Farm. Insurance sticker shock is a blow to auto makers looking to increase adoption of high-tech safety packages, which can add thousands of dollars to the price of a new car and deliver significantly higher margins than other options. At present, though, only a fraction of buyers opt for the technology, often known as "advanced driver assistance systems," or ADAS. As a result, replacement parts are disproportionately expensive. About 14% of vehicles sold in the 2016 model-year were equipped with collision-mitigation technology, according to WardsAuto.com. Some insurers estimate 25% to 50% of all vehicles on the road will have to have forward-collision prevention systems before accident rates decline enough to offset higher repair costs. At present, it costs $166 to fix a conventional left mirror on a 2015 Mercedes-Benz ML350, according to Allstate Corp., but the repair bill balloons to $925 for that mirror with collision-avoidance technology. A tech-equipped mirror on a Lexus RX 350 is $840, more than double the $390 for a mirror without the tech. An industry alliance representing a dozen auto manufacturers declined to comment on repair costs. Several auto makers said safety is a top priority, and while new parts are expensive at first, they tend to fall over time. For the complete article, please click here.

Trump Signs

Resolution to Strike

Down 'Volks' Rule Source: Safety & Health President Donald Trump has signed a Congressional Review Act resolution to repeal OSHA's so-called "Volks" rule, which addressed

employers' ongoing obligation to make and maintain accurate records of work-related injury and illness data. Trump signed the measure (H.J. Res 83) into law April 4 following its passage in the House and Senate. Trump's signature nullifies the rule that gave OSHA the ability to enforce recordkeeping requirements for five-and-a-half years instead of six months. Employers still will be required to maintain injury and illness records, but OSHA's enforcement capabilities will be weakened. OSHA published the rule Dec. 19 - one month and one day before the Trump administration replaced the Obama administration. The rule stemmed from a legal case involving Volks Constructors. "The role of the executive branch is to enforce the laws - not rewrite them," Rep. Bradley Byrne (R-AL), chairman of the House Workforce Protections Subcommittee, said in a press release. "This OSHA power grab was completely unlawful. It would have done nothing to improve workplace safety while creating significant regulatory confusion for small businesses...This is just one step in our efforts to uphold the rule of law and advance responsible, proactive policies that keep America's workers safe." Former OSHA official Jordan Barab blasted Trump's decision via his Twitter account. "Trump signs repeal of OSHA Volks Rule," Barab tweeted. "More workers hurt, sickened and killed in the workplace."