Financial businesses covered by insurance

After the failure of IndyMac Bank, you may be wondering if other financial institutions, such as brokerages and life insurers, are covered by some form of insurance. The answer is yes, but coverage is more complex than federal deposit insurance.

The Federal Deposit Insurance Corp. covers deposits up to $100,000 per person per bank. It also insures retirement account deposits for $250,000. So, you can have $100,000 in a checking account and $250,000 in an IRA certificate at one bank, and all would be insured.

You can obtain additional coverage according to how your accounts are titled. To help you figure out what's covered, FDIC has an online deposit-insurance estimator at fdic.gov/edie/index.html.

When FDIC acts, it usually arranges for a healthy bank to acquire a failing bank. In an acquisition, deposits typically continue to earn interest at the same rate as before.

If your brokerage fails, Securities Investor Protection Corp. covers you if your brokerage can't return all the cash or securities in your account. SIPC action can take a while, up to three months.

SIPC covers cash assets up to $100,000 and replaces up to $500,000 of securities, such as stocks and bonds. To get your SIPC claim covered, you need to prove which securities you owned when the brokerage failed. Be sure to keep copies of statements and confirmation slips.

Let's say your insurance company dies before you do.

Typically, state guaranty associations cover $300,000 in insurance death benefits per insured life.

For whole-life policies, state guaranty funds typically insure up to $100,000 in paid-up cash value per insured life. They cover individual annuity contracts, too, usually up to $100,000.

Intermodal Insurance Company Declares First Dividend

The Intermodal Insurance Company (IIC), RRG, domiciled in Washington, D.C. and with offices in Commerce, California, has distributed a dividend of 10 cents per share at its joint shareholders and Board of Directors meeting held recently at the St. Regis Resort in Dana Point, California.

The Department of Insurance, Securities, and Banking of Washington, D.C. granted permission for the dividend, which was based on the operating results for the period 12-1-03 to 12-31-05 for stockholders of record as of 12-31-07. The dividend was equally based on the individual account's contribution to underwriting profits and the number of shares of stock owned.

This is the first dividend declared by the company, which has been offering truckers' auto liability and related coverages to intermodal drayage firms throughout the United States since its inception in 2003.

IIC's Board of Directors also adopted a new stock purchase and redemption plan and presented awards recognizing the Top Performer on the Risk Analysis Scoring System (RASS) and the Lowest Loss Ratio.

The newly adopted stock purchase and redemption plan makes it easier for qualified firms to become members in the company. Ron Guss, president of IIC, and an insured member, said the intent of the new redemption plan "is to allow those firms that have been faithful members and helped the company grow, to enjoy the fruits of those efforts, when they retire."

The Board of Directors also approved the implementation of a Smith System Driver Rehabilitation Program.

Last year, IIC, which was the first captive in the nation to specialize in service to the intermodal drayage industry, reported an underwriting profit of over $2.5 million in the last two years and a 40% average annual growth rate.

In a unique captive structure, IIC coverage is issued by National Interstate Insurance Company of Richfield, Ohio, which is rated A, VIII by A M Best Rating Service and is admitted in all 50 states. National Interstate is reinsured by IIC, an insured/member-owned captive insurance company. This structure allows owners of the captive company to share in the underwriting profits and investment income while minimizing individual exposure.

Case study

Maurice Surphlis says a business associate nagged him into buying comprehensive private medical cover - and he is glad he did so.

"He actually forced me. I didn't like to say no because he supplied our company," said Mr Surphlis, who runs an animal feed and hardware business in Northern Ireland.

But now he says he has converted dozens of other people, so convinced is he that his associate was right. For shortly after buying cover, Mr Surphlis, 62, got bad news.

He recalled: "After two years, I developed prostate cancer. The good part was that the doctor looked at his list and said 'Prostate - that'll be at least 18 months for an operation.' I said: 'Well, listen I've got medical insurance' and he said 'Ah, that's different.' And I had the operation inside a month.

"The total bill, when you take in the MRI scans, the consultant appointments and the operation was around £10,000 but I can't sing the praises of WPA too highly - they were very good to deal with."

Mr Surphlis had the insurer's Flexible Health Freelance plan. The comprehensive scheme contains a discount for the self-employed, reflecting the below average sickness record of people who work for themselves. He pays £2,000 a year for both policies.

His wife, Mary, 60, followed his example but bought a different scheme, Shared Responsibility, so called because the policyholder pays a proportion of claims. This helps keep down premiums for all policyholders, according to the not-for-profit insurer.

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Our job as a medical insurer is to help our customers fund their healthcare by complementing the NHS. We are trying to redress the balance back in favour of the patient. If the result of a customer's treatment - whether NHS or private - is not as anticipated the only redress has been through 'no win-no fee' lawyers."

Mr Stainton added that the cash plan, called Top-Up, "would be giving legal guidance to customers as to whether they have a case and introducing them to a lawyer that can help. All it is doing is getting the best NHS care to ordinary men and women."

The most recent Healthcare Commission report showed no improvement in hospital hygiene standards over a year ago, with 103 of 391 trusts not meeting minimum requirements imposed by the Department of Health.

Failure to tackle the menace of MRSA and Clostridium difficile is not only associated with more than 8,000 deaths a year in England and Wales. Most victims survive - but only after prolonging their hospital stay two-and-a-half times the scheduled period and gulping antibiotics for weeks afterwards. C.-diff is the biggest, and growing, problem. In the early 1990s, just over 1,000 patients a year fell victim. Today, more than 1,000 are infected each week.

Currently, the chances of infection victims getting legal redress are slim. But this could change.

Peter Walsh, chief executive of Action Against Medical Accidents, said: "It's notoriously difficult to bring a claim because the hospital will always say 'prove to us you didn't have the infection in the first place."

That may change as some NHS hospitals now test patients for infection as soon as they are admitted to hospital. However, that this is not easy with emergency admissions. But routine checking pre-admission is quite feasible with planned admissions, as private hospitals routinely demonstrate with minimal infection cases.

Mr Walsh added: "Despite the problem of proving negligence, there have been some successful cases, but most have been achieved under health and safety rules."

The plaintiff needed a witness who could show that a nurse or medic was re-using a syringe, moved between patients with open wounds without washing and swabbing, or blatantly disregarded hygiene protocols.

Cash plans are low cost insurance schemes that help meet everyday healthcare costs. Anyone buying the new scheme gets the core benefits for £15 a month. These include dental and eyecare cover, and money for hospital stays as well as the legal guidance service.

The policyholder then has the option of buying add-ons. These include a private cosmetic surgery benefit for a £4 a month. The benefit is said to be unmatched anywhere.

For £1 a month, policyholders can get A&E cover abroad, including repatriation. The benefit is described as travel insurance without the baggage.

The plan is designed to complement the NHS. For instance, at least 10 major new cancer drugs are denied NHS patients in England and Wales. For those under age 60, these are covered for £4.20 a month further to the £15 basic premium.

Criticism is widespread that patients, as well as being denied the drug precribed by their oncologist, cannot continue NHS care even if they choose to buy the drug from their own pocket.

Although Health Secretary Alan Johnson has ordered a review of the ban on NHS patients buying private extras, the prohibition will remain until at least October when the review team reports.

Mr Stainton said such resistance would be open to legal challenge. In a highly unusual move, the insurer would fund a legal challenge bought by a policyholder under the right circumstances.

He said: "We would instruct leading counsel, and a firm of solicitors to mount a challenge because it's been made clear there is no basis in law to prevent NHS patients buying betters drugs. In principle we would have no hesitation in supporting one of our policyholders in a legal challenge."

Top ten reasons for buying medical insurance

A new form of insurance helps victims of medical malpractice fund legal redress. Legal experts will advise policyholders as to whether they have a case against health authorities following medical accidents or falling victim to hospital infections.

The service from Western Provident Association (WPA) is one of a wide range of benefits offered in a cash plan costing £15 a month. Its introduction follows the depressing news last month that more than a quarter of health trusts in England fail to meet basic hygiene standards.

Julian Stainton, chief executive of WPA, said: "Patients are worried and are becoming perceived as a mute ingredient of the NHS. Indeed, recent research intimated that 46 pc of NHS staff do not believe patients to be at the centre of what they do. My personal view is 'treat patients with disdain at your peril'.