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Page 18 Page 20 Page 22 Page 26 International Travel Insurance Journal ISSUE 36 • JANUARY 2004 ESSENTIAL READING FOR TRAVEL INSURANCE INDUSTRY PROFESSIONALS Aviva moves Court in the act International travel health used debt collection practices that violated the state 2,350 jobs to insurers, fed up with paying of Illinois’ Consumer Fraud and Deceptive ‘inflated’ charges in American Business Practices Act. One plaintiff, a mother of hospitals, can watch with some three, claimed that she filed for bankruptcy after anticipation – and satisfaction Advocate sued to collect $3,338 for the birth of India – as the Illinois courts probe her daughter. She said she was charged more than the thorny issue of how and twice what she would have been charged if she had At the beginning of December, Aviva – which is the why hospitals charge different had insurance. UK’s largest insurance group and the world’s rates for different customers. Though it is common seventh largest – announced that it was joining the Milan Korcok reports on what practice for hospitals in likes of HSBC and Lloyds TSB in shifting thousands is proving to be an interesting the United States to offer of jobs to India. Norwich Union has told staff that it case major discounts to insurers will cut 2,350 jobs in the UK and export the work who refer patients to to India. In a class action launched them, most also provide This is the latest in a long line of UK companies to against Chicago area Advocate substantial amounts of move its call centre operations some 5,000 miles Health Care System, seven uncompensated care to away. People are predicting that offshore outsourcing former uninsured patients have patients who are unable to will more than double in the next five years. sued for damages, claiming that pay. Medicare and Aviva, formed in 2000 in a merger of Norwich they were overcharged for Medicaid (which cover the Union with CGU, already has offices in Delhi and services and hounded into elderly, the disabled and Bangalore, where about 1,200 staff process general bankruptcy when they couldn’t the poor) also pay only a insurance claims. Worldwide, Aviva now employs pay their debts. The suit, which portion of retail hospital about 59,000 people, and by the end of 2004 the could have national ‘prices’. firm expects to have at least 3,700 of them working implications for hospitals’ Advocate spokesman, Ed in India. differential billing practices, was Domansky, noted that the Of the new posts created in India, approximately The union Amicus, on the other hand, has said that filed in November in Cook County Circuit Court, hospital system had budgeted $220 million for 350 of them will be call centre roles, servicing UK it expects a possible 500 compulsory redundancies, on behalf of uninsured patients who said they were uncompensated care in 2003, $51 million of which customers. In addition, another 2,000 staff will and is part of a strong resistance to these moves by charged more than insured patients. The plaintiffs was for charity care. He also said Advocate offers work in back offices, doing administrative work and the unions, who are fighting to keep jobs in the UK. are seeking recovery of fees they allegedly overpaid, discounts of 50 to 100 per cent to many uninsured processing claims. Amicus voiced its disappointment at the insurer’s charges related to their debt refinancing and or poor patients and virtually all who apply for Aviva has said that a good 80 per cent of the jobs decision. ‘This deplorable announcement by Aviva defaulted payments, and requirements that charity care are granted discounts. going to India will be absorbed by current is based purely on greed,’ said David Fleming, Advocate inform all uninsured patients of Prior to the filing of the class action suit against vacancies, staff turnover and voluntary treatment fees up front. redundancies. continued on p.5 The suit also alleges that the 10-hospital system continued on p.2 International standards on accounting Europe and the US can’t even agree on how to consumer/investor confidence took a knock. This is the first time that counterparts to fall in line with US standards. measure their ingredients in the kitchen, so what The differences will probably take years to resolve – the rule makers in the US This has to be seen as significant. hope for harmonising international standards on if it is ever possible. But in the meantime, the rule have expressly changed The FASB’s proposal is part of a concerted accounting? This is what the accounting rule makers changes are in process, with officials of the US’s their ways to take into effort by it and the IASB not only to change are trying to do, but they have their work cut out. Financial Accounting Standards Board (FASB) account the international existing rules, but to draft new ones jointly. The efforts for a convergence of US and planning to propose a number of new rules in line approach to doing things, This will make cross-border investment and international standards took on an urgency after the with its overseas counterpart, the International rather than just expecting international stock listings a lot simpler, and Enron Corporation scandal, when Accounting Standards Board (IASB). their overseas continued on p.5 2 NEWS Twelve charged in Terrorism a fact of Backpackers Turkey life expensive to insure As 16 people were detained in connection with the Hiscox is to offer commercial terrorism insurance in ITIJITIJ blasts in Istanbul in November, officials underlined Canada, following the launch of its broker extranet Insurance hikes are threatening the backpacker International Travel Insurance Journal Turkey’s determination to eradicate terrorism. system. The online system, known as INScribe, will market down under, Miles Clarke reports from Twelve of the men have been charged with aiding offer terrorism cover of up to $25 million per Sydney and abetting the attackers, who drove ‘cars of building on risks across Canada and the US. WHAT’S IN death’ into the British consulate and the HSBC The extranet gives brokers instant access to bank, causing 30 deaths and 459 people to be capacity and quotes for cover. Key elements of the THIS ISSUE? injured. cover include up to $25 million limit per building Counter-terrorism experts have stepped up their on a full value basis; both Canadian and US assets investigations, and the Islamic-leaning government insured on one policy; acts of domestic terrorism REGULARS has ordered mosques across Turkey to deliver a by special interest groups; zero physical damage sermon on combating terrorism, focusing on the deductible; seven-day business interruption News 1 incompatibility of violence and Islam. It is thought deductible; and physical damage and business Company brief 6 that al-Qaida sympathisers may have been interruption insurance offered as a separate or combined policy. Insurance matters 8 Robert Childs, director of underwriting at Travel matters 14 Hiscox, said: ‘Today, terrorism is a fact of life and Grapevine 15 businesses of all sizes and types are recognising The time when Australian tourism perceived Health matters 16 that they don’t have to be the actual target of an backpackers as visitors who arrived with a $10 note News analysis: Indian take-away 18 attack to suffer damage, loss and interruption to in hand, a single shirt and changed neither has long their ongoing business, regardless of their gone. Backpackers make up a valuable segment of Profile: Mike Ramsay 25 location. Hiscox has seen an increasing demand the inbound market mix, provide useful itinerant World markets: UK 26 for cover against terrorism risks across Canada labour, stay a long time and spend up big. Dick’s hotline 32 and we have launched our online system to According to tourism minister Joe Hockey, all of this Smile corner 32 meet that demand. We have experience of is under threat. He says Australia is risking being Message from the editor 32 terrorism insurance stretching back more than a dismissed as an ideal tourist destination by foreign quarter of a century, and this has enabled us to backpackers because of the rising costs of public Claim and counterclaim 32 look at the needs of the Canadian market and liability insurance. Diary dates 34 provide a cost-effective and workable solution He told the Adventure and Backpacker Industry Hot spots 34 indoctrinated in the shanty towns around Istanbul, for both brokers and clients. Our system is unique Conference that Australia's reputation as an Service directory 35 where religious feeling is strong. in that it gives instant access to capacity and then ‘adventure’ destination was at risk because of rising On the move 43 Istanbul’s police chief tried to fend off criticism of allows the broker to offer the client a very clear insurance claims. ‘One of the most significant intelligence shortcomings, blaming the Turkish and straightforward policy wording. We believe the impediments to the growth of backpacking media for its role in the bombings. He lashed out at clarity of cover and ease of use will be welcomed tourism... is the higher cost of public liability FEATURES the local press for disclosing the details of the two by Canadian brokers. insurance,’ said Mr Hockey. earlier suicide bombers, who were He continued, ‘The states of Rich pickings 20 targeting synagogues in an earlier round Australia have the highest insurance A look at kidnap insurance of attacks. He said that this indiscretion taxes in the world and it's having a had panicked other members of the profound impact on the cost of Repatriation – at any cost? 32 In the sixth part in our series on healthcare, we terrorist network into moving ahead with adventure activities.

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