When it comes to coverage, Jackson says businesses need to look to property, products and general liability risks coverage. (Photographer: Trevor Hagan/Bloomberg)
Nearly 22 years ago, California voters enacted a ballot measure legalizing the medical use of cannabis. Today, cannabis is now legal in 47 states (adult-use, cannabinoid only, hemp, and medicinal).
For years, California has been depicted laxly when it comes to marijuana. But when it comes to marijuana and the insurance coverage needed to protect citizens and businesses, it is anything but.
“Whenever anyone shops in, sells products to, or invests in a cannabis business, I want there to be insurance coverage available,” said Insurance Commissioner Dave Jones in a statement.
Commissioner Jones has launched initiatives to encourage commercial insurance companies to write insurance to fill coverage gaps for the cannabis industry. Most recently, the first coverage for commercial landlords for the industry was announced earlier this month.
To better understand this budding industry’s need, Commissioner Jones, in conjunction with the National Association of Insurance Commissioners (NAIC) Center for Insurance Policy and Research, hosted a national webinar titled Weeding through the Unique Insurance Needs of the Cannabis Industry. Here are some key insights from the webinar.
Related: New opportunities for Calif. insurers as Trump abandons Sessions’ policy on cannabis
Who’s insuring the cannabis?
There are a limited number of approved admitted insurers in California today: Golden Bear Insurance Company, which offers multi-line coverage; California Mutual Insurance, which offers lessor’s risk; Continental Heritage Insurance Company, which offers a surety bond; and AAIS (which has forms pending department approval).
“The pros of placing coverage with an admitted insurer often comes that benefit of joint review with the department and the insurer before the product hits the market. Another benefit is that admitted markets strive to adopt standardized forms that brokers and insurers are familiar with,” says Stacey Jackson, general counsel for Golden Bear Insurance Company, during the webinar.
While there are currently 24 surplus lines carriers writing cannabis on a non-admitted basis, Jackson predicts carriers will join the admitted market but concedes the pros of the surplus lines market exist because they have the advantage of flexibility over an admitted carrier.
Related: When marijuana collides with the claims industry
New business, similar risks
Like any business, the cannabis industry has a unique set of risks and exposures to account for. When it comes to coverage, Jackson says businesses need to look to property, products and general liability risks coverage.
“Those three coverages are coverages that every cannabis insurer is going to need,” says Jackson.
The property coverage is necessary for risks associated with any loss or damage to the product or the physical structures at the location. Property coverage is also going to likely include business interruption coverage so that the insured can be reimbursed for any income loss during that downtime. Products liability is essential for liability protection in the event that a product is defective. General liability is separate and covers bodily injury and property damage arising from any accident that happens on the premises.
The marijuana supply chain — cultivators, processors, manufacturers, retail dispensaries, testing labs and transportation — has first- and third-party cannabis risks which the insurance industry should look to capitalize on as the market emerges.
For example, many cultivators grow their crop either indoors or outdoors. Like any other farmer, they face risks of fires or pesticides. For those that grow indoors, those risks exist plus others such as a power outage and mold. Additionally, there could also be product liability if an unapproved pesticide is used on the plant and someone claims they’ve become ill from it.
As the cannabis industry continues to bloom, it cannot go forward without proper insurance coverage — for the sake of all the consumers and businesses involved in the process.
In California, at least, there are signs of life — and insurance — amongst the weeds.
WNS (Holdings) Limited (WNS), a leading provider of global Business Process Management (BPM) services, today announced that it has been named a ‘Leader’ in the 2018 Everest Group PEAK Matrix™ Assessment Report in the Property & Casualty (P&C) Insurance BPO Service Provider Landscape. ‘Leaders’ were assessed highly for both their impact on the market, and for having the vision and capability to deliver services successfully.
“We are delighted to be recognized as a ‘Leader’ in the P&C Insurance BPM space for the fourth year in a row,” said Keshav R. Murugesh, Group CEO, WNS. “WNS’ differentiated positioning in the insurance space stems from having the right combination of deep domain expertise, technology-enabled offerings, advanced analytics, and client-centric focus. Today, WNS has several end-to-end BPM relationships with global leaders in P&C insurance, and the largest actuarial practice in the BPM industry. These capabilities uniquely position us to transform our clients core business processes and help them to better compete.”
“WNS continues in its position as one of the key service providers in the P&C Insurance BPO domain, fortified through domain expertise, depth and breadth of services, and a consistent delivery record. Further, its global delivery model, leverage of analytics and automation, and capabilities spanning across the judgment-intensive processes, such as actuarial and underwriting, beyond the transactional ones, allow it to cater to the evolving needs of the insurers,” said Skand Bhargava, Practice Director, Everest Group.
The Everest Group report highlights WNS’ comprehensive coverage of the P&C Insurance value chain. The company was also cited for its capabilities across P&C insurance service lines, global scope of operations covering all major markets, and for its dedicated analytics, actuarial, and automation delivery teams. Buyers identified domain expertise, depth and breadth of services and a consistent delivery record as key strengths for WNS.
WNS delivers end-to-end solutions to the P&C insurance industry including claims management, policy administration, actuarial, risk management, fraud and compliance. Today, WNS serves over 30 global clients with a dedicated team of over 2,500 insurance professionals and solutions leveraging embedded analytics and state-of-the-art technologies including proprietary platforms, RPA, machine learning, and artificial intelligence.
About WNS
WNS (Holdings) Limited (WNS), is a leading global business process management company. WNS offers business value to 350+ global clients by combining operational excellence with deep domain expertise in key industry verticals including Travel, Insurance, Banking and Financial Services, Manufacturing, Retail and Consumer Packaged Goods, Shipping and Logistics, Healthcare and Utilities. WNS delivers an entire spectrum of business process management services such as finance and accounting, customer interaction services, technology solutions, research and analytics and industry specific back office and front office processes. As of March 31, 2018, WNS had 36,540 professionals across 54 delivery centers worldwide including China, Costa Rica, India, Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, United Kingdom and the United States. For more information, visit www.wns.com.
Safe Harbor Provision
This document includes information which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events. Factors that could cause actual results to differ materially from those expressed or implied are discussed in our most recent Form 20-F and other filings with the Securities and Exchange Commission. WNS undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
This was how I learned all about the Great Divide between medicine and dentistry -- especially in how treatment is paid for, or mostly not paid for, by insurers. Many Americans with serious dental illness find out the same way: sticker shock.
For millions of Americans -- blessed in some measure with good genes and good luck -- dental insurance works pretty well, and they don't think much about it. But people like me learn the hard way that dental insurance isn't insurance at all -- not in the sense of providing significant protection against unexpected or unaffordable costs. My dental coverage from UC-Berkeley, where I have been on the public health and journalism faculties, tops out at $1,500 a year -- and that's considered a decent plan.
Dental policies are more like prepayment plans for a basic level of care. They generally provide full coverage for routine preventive services and charge a small copay for fillings. But coverage is reduced as treatment intensifies. Major work like a crown or a bridge is often covered only at 50 percent; implants generally aren't covered at all.
In many other countries, medical and dental care likewise are segregated systems. The difference is that prices for major procedures in the U.S. are so high they can be out of reach even for middle-class patients. Some people resort to so-called dental tourism, seeking care in countries like Mexico and Spain. Others obtain reduced-cost care in the U.S. from dental schools or line up for free care at occasional pop-up clinics.
Underlying this "insurance" system in the U.S. is a broader, unstated premise that dental treatment is somehow optional, even a luxury. From a coverage standpoint, it's as though the mouth is walled off from the rest of the body.
My diagnosis was followed by extractions, titanium implants in my jaw, installation of porcelain teeth on the implants, bone grafts, a series of gum surgeries -- and that was just the beginning. I've since had five more implants, more gum and bone grafts and many, many new crowns installed.
At least I've been able to get care. The situation is much worse for people with lower incomes and no family support. Although Medicaid, the state-federal insurer for poor and disabled people, covers children's dental services, states decide themselves on whether to offer benefits for adults. And many dentists won't accept patients on Medicaid, child or adult, because they consider the reimbursement rates too low.
The program typically pays as little as half of what they get from patients with private insurance. For example, as Kaiser Health News reported in 2016, Medicaid in Colorado pays $87 for a filling on a back tooth and $435 for a crown, compared with the $150 and $800 that private patients typically pay.
"It's really a labor of love to do it," said Dana Lubet, a recently retired dentist in Madison, Wis., who estimated Medicaid paid only a third of his costs. Accepting too many, he said, "could easily kill your practice."
A few years ago, while in his mid-50s, Nick DiGeronimo, a facility maintenance worker at a New Jersey sports center, obtained private insurance coverage through the Affordable Care Act, hoping to get treatment for progressive tooth decay.
He needed two implants but, to his dismay, the plan did not cover them. To pay the $10,500 bill, he had to take out loans. "Dental insurance is basically useless," said DiGeronimo. "It's a sham, a waste of money, and another case of the haves versus the have-nots."
As for older Americans, many lose employer-based dental coverage when they retire even as they suffer from increasing dental problems. Among those 65 and older, 70 percent have some form of periodontal disease, according to the Centers for Disease Control and Prevention. Yet basic Medicare plans do not include dental coverage, although options exist for seniors to purchase it.
Overall, in 2015, almost 35 percent of American adults of working age did not have dental insurance. By contrast, only about 12 percent of American adults under 65 did not have medical insurance in 2016. That lack of coverage and treatment can diminish economic and social opportunities -- for instance, it can be costly at work or in a job interview not to smile because of unsightly or missing teeth.
Eventually, poor prevention and treatment can become a medical problem -- leading to serious, and occasionally deadly, health consequences. In an infamous 2007 case -- described by Mary Otto in her book "Teeth: The Story of Beauty, Inequality and the Struggle for Oral Health in America" -- Deamonte Driver, a 12-year-old boy in Maryland, died after a tooth infection spread to his brain. The family's Medicaid coverage had lapsed.
Research has demonstrated links between periodontal infections and chronic conditions like diabetes and cardiovascular disease. Studies have found associations between periodontitis and adverse pregnancy outcomes, such as premature labor and low birth weight. Tooth problems also hinder chewing and eating, affecting nutritional status.
In the U.S., the long-standing rift between doctors and dentists was institutionalized in 1840, when the University of Maryland refused to add training in dentistry and oral surgery to its medical school curriculum -- leading to the creation of the world's first dental school.
Dentists have in some ways benefited from the separation -- largely escaping the corporate consolidation of American medicine, with many making good livings in smaller practices. Patients often willingly pay out-of-pocket, at least to a point.
Some people deliberately forgo dental coverage, considering it less urgent than having insurance against medical catastrophes. "You might not get a job as hostess at the restaurant, but by the same token people that have a lot of missing teeth live to tell the tales," Lubet said.
With fluoridation and advances in treatment, many Americans have come to take the health of their teeth for granted and shifted their attention to more cosmetic concerns. And the dental field has profited from the business.
In my experience, which includes extensive travel in other countries, Americans often seem disoriented or even horrified when confronted with imperfect dentition. During my period of intense dental care here, I hated wearing temporaries and often braved the public with missing front teeth. I found myself routinely reassuring people that, yes, I knew about the gap, and yes, I was having it dealt with.
Meanwhile, the bold line between what is covered or what is not often strikes patients as nonsensical.
Last fall, Lewis Nightingale, 68, a retired art director in San Francisco, needed surgery to deal with a benign tumor in the bone near his upper right teeth. The oral surgeon and the ear, nose and throat doctor consulted and agreed the former was best suited to handle the operation, although either one was qualified to do it.
Nightingale's Medicare plan would have covered a procedure performed by the ear, nose and throat doctor, he said. But it did not cover the surgery in this case because it was done by an oral surgeon -- a dental specialist. Nightingale had no dental insurance, so he was stuck with the $3,000 bill.
If only his tumor had placed itself just a few inches away, he thought.
"I said, what if I had nose cancer, or throat cancer?" Nightingale said. "To separate out dental problems from anything else seems arbitrary. I have great medical insurance, so why isn't my medical insurance covering it?"
