The Place Where All Regulations Meet
Nov 1, 2018

That's only a slight overstatement. OSHA, NIOSH, EEOC, ADA, the Civil Right Act of 1964, plus any number of state laws and regs all converge on the matter of pregnant women in the workplace. Why worry? Well, Millennials are now the largest cohort in the US workplace and they are smack dab in the middle of their prime child-bearing years (late 20s to mid-30s for Millennials). Further, 47% of all workers in the US are female.

Fortunately, a crack team of lawyers at the Seyfarth Shaw law firm have put together an overview, profiled in the most recent issue of EHS Today, of the primary legal issues involved in providing for the safety of pregnant women in the workplace. This summary provides an excellent primer for this dauntingly complex topic.

Now don't go thinking that this is an HR issue. It is a safety and risk management issue in multiple dimensions. For example: "Ionizing radiation and lead... are known hazards to pregnant women and reproductive health. In addition, a fetus might be more vulnerable to certain chemicals, particularly in early stages of pregnancy when the baby's organs are developing." So what does HR know about how that plays in your operations?

Another example: safety equipment and various wearables may not be designed to fit a woman in the later stages of pregnancy. Remember, you are now thinking about safety and hazard mitigation for two. See the NIOSH website for a guide to pregnancy and workplace safety.

Where HR gets involved is in determining when a job-related intervention may be necessary and what form it might take. Job reassignments for expectant mothers, for example, are regulated under ADA and other state and federal statutes. This is a complex area and it calls for risk management and safety to work closely with HR and employee health resources.

The good folks at Seyfarth Shaw put it very well in their review: "Pregnancy is a blessed miracle and a beautiful event - not to mention that it helps produce future taxpayers and contributors to the Social Security system. Know the law and make sure to take all the necessary steps for protecting your pregnant employees, to protect them and those future little taxpayers."

That sounds simple enough, but check out a different view from a recent New York Times story which highlights events in a state which does not require accommodations for pregnant women. If you think that babies are blessed events, you may find this story hard to read. Some states, like Tennessee, provide very large loopholes for employers who are so inclined, while other states, notably California and New Jersey, provide a serious safety net for expectant mothers. It's all about location and corporate priorities. Oh, lest we forget, it's also about our fellow human beings, including the brand new ones.

 

NCCI Polishes Its Crystal Ball

The National Council on Compensation Insurance (NCCI) has published its economic projections for workers' compensation for 2019. These projections are a joint effort of NCCI and Moody's Analytics and they are designed to give risk managers as well as carriers and TPAs an idea of what to expect in the near future. The good news is that NCCI and Moody's see fairly smooth sailing with only mild changes in current trends.

The highlights (from the report):

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Employment growth in 2018 is forecast to be slightly above 2017 and growth is expected to decline in 2019. The unemployment rate is holding steady below 4%.

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Wage growth is expected to increase to 3.6% in 2018 and accelerate in 2019 to 4.5%.

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Medical inflation is projected to rise above 2% in 2018 and continue rising in 2019.

Nothing in that list should shiver your timbers, but a few points are worth a closer look. For example, what about employment declining in 2019? Well, the "forecasted decline in 2019 corresponds to projected slowing of real GDP growth in 2019 and 2020 and reduced slack in labor markets." Wage growth of 4.5% also harkens back to the tightness of the current labor market. Note that even 4.5% will not get most US workers back to where they were 30 years ago in terms of inflation-adjusted real dollars.

Perhaps the biggest "hmmm factor" in the projections is the rise in medical inflation. Rest assured, the return of galloping medical inflation is not on the horizon. Moody's sees the Personal Health Care index going from 2.2% this year to 2.4% next year (a reduction from the 3.1% predicted last year). Comp carriers and TPAs have, for example, had notable success in containing and reducing the use of opioids in the last year or so. Medical cost creep will remain but at a low level and in-line with other projected inflation factors.

What about the cost of reserves, you ask? Moody's Analytics forecasts the 2-year and 10-year Treasury rates to rise to 3.1% and 3.4% by June 2019, driven by burgeoning federal borrowing and more tough love from the Federal Reserve. We are already seeing this in today's bond auctions, so no big surprise there either.

These projections are as solid as current knowledge and modeling techniques permit, but we are always just one black swan event (the collapse of the Chinese economy, a mega natural disaster, a huge political upset) from all predictions going POOF! As always, plan with the best numbers but prepare contingent moves for the worst possibilities.



Is this swan smiling?

 

Cyber Law Decisions You Should Know About

The questions hovering over the whole battalion of brand new cyber liabilities are beginning to be answered in various court decisions. We normally leave important legal developments to our colleagues over at The Way, but this new decision follows so closely after our warnings about cyber risk and policy language that we decided to make an exception.

Brian Lawrence at Lowndes, Drosdick, Doster, Kantor & Reed, P.A. provides an attention-catching summary of recent court actions concerning the collision of traditional commercial general liability (CGL) policies with recent cyber events. Two different cases in two different courts have provided the same result - not covered. The essence of the matter is that conventional CGL language evolved before cyber-crimes, accidents, data breeches, and the like even existed in their current form. The judges cited seemed to be reluctant to stretch old language to cover new events (our non-lawyerly characterization).

Our author points out that "depending on the facts and the lawyering, there may, at times, be some coverage under a CGL for some cyber events; however, this should be considered as a last hope option [emphasis added]." Yes, real cyber coverages that will cover real cyber-breach events will cost you more. However, a recent study by the Ponemon Institute put the cost of the average cyber breach event globally at $3.62 million. The Target breach event of 2014 cost about $162 million. Not petty cash.

More court decisions will continue to illuminate the questions regarding cyber-breach liability and insurance coverages. We've been here before. Insuring an automobile in 1901 was a pretty tricky proposition as well. The important thing in this period of parallel innovation paths for both legitimate industry and criminal enterprise is to pay close attention and adjust your covers accordingly. Feel a chill? Pull your covers up.

 

Quick Take 1: Two Factor Authentication Meets Reality

Two factor authentication (2FA) - user name, password, and something more - is becoming more widely used as a guard against certain types of hack attacks. You may have recently been "invited" by your corporate IT folks to upgrade your various access routines to add another layer of secure access. Or you soon will be.

Then along comes Roger A. Grimes, KnowBe4's Data-Driven Defense Evangelist (what a gorgeous job title), with a new webinar on 12 ways hackers can and do get around your favorite 2FA solution plus ideas on how to make 2FA more hack-resistant. Yeah - you got it: 12 ways. Our point here is that 2FA is just one of many tools needed for defense in depth. Indeed, it's rapidly becoming just another ticket to the dance, one more part of the total strategy that risk management and IT keep evolving.

This is one more example of why there's a special technical term for companies that fail to constantly upgrade cyber security. They're called targets.

 

Quick Take 2: No Humans Needed - Anywhere

In our last issue we noted that the Feds are opening the regulatory door to self-driving vehicles in the US. Now comes a brand new survey from the International Underwriting Association (IUA) on developing technologies and their probable impact worldwide in the coming decade. The survey returns suggest that Homo sapiens V 1.0 (that's us) may be redundant sooner than we expect. Some 80% of the IUA members surveyed by IUA's Developing Technology Monitoring Group expect widespread deployment of not just driverless cars but autonomous aircraft and ocean-going ships as well. In fact, drone aircraft and ships may be the first to jettison their human crews. Various air forces around the world are pouring resources into military drones right now.

IUA's survey population draws heavily on the London insurance market, but these folks are among the savviest professionals in the business. Recent industry conferences have focused on these new "autonomous" risks (along with new cyber covers) and several carriers are now offering or are developing new insurance products for the human-less planes, trucks, and ships now coming on-line. For example, Bell Helicopter and Yamato have just announced a joint project to build a completely autonomous "flying truck" to make local deliveries (see below). If autonomous transport operations are not on your radar now, they soon will be, either as part of your business process or as part of your supply chain.

Back in 1968, the sci-fi author, Phillip K. Dick, asked, Do Androids Dream of Electric Sheep? We may find out sooner than we think.



Prototype of the Bell-Yamato flying truck, courtesy of Japan Times.
How soon before one lands in your parking lot?

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