Месечни архиви: August 2015

198M in Property at High Risk from Chelan Wildfire in Washington


198M in Property at High Risk from Chelan Wildfire in Washington

The massive Chelan wildfire in Washington poses a significant risk to roughly 634 homes with a total reconstruction cost of more than $198 million, an analysis of the ongoing fire issued Wednesday shows.

The analysis by property information and data provider CoreLogic shows a total of 13,121 homes with a combined reconstruction cost of more than $3 billion are at some level of risk from the wildfire. Although most of those properties are in the “minimal risk” range.

The Chelan fire has been burning since Aug. 14, it has grown to 88,142 acres and is 47 percent contained, according to the latest official update on the blaze.

Expected weather conditions in the next few days could make the fire worse.

“Cloud cover is expected to increase today, with a disturbance passing to the south of the area this afternoon,” states a report from the Interagency Information System, a fire tracking website. “This disturbance could result in gusty and erratic winds. There is also a slight possibility of dry lightning.”

The latest U.S. Drought Monitor shows most of the West under drought conditions.

The latest U.S. Drought Monitor shows most of the West under drought conditions.

 

Drought conditions across the Western U.S. have created severe wildfire conditions in several states. In fact, the Chelan fire isn’t even Washington’s biggest. The Okanogan Complex wildfire, believed to have been caused by lightning strikes, has consumed more than 280,267 acres and is only 17 percent contained.

Washington Gov. Jay Inlsee is seeking a Federal Emergency Declaration for additional wildfire resources. State government reports show that 450,000 acres have burned in Washington this year.

No cause for the Chelan fire has been listed. While it’s a smaller fire, CoreLogic had a good reason for picking that blaze from the myriad fires in the West for analysis, said Tom Jeffery, a senior hazard risk scientist for the Irvine, Calif.-based firm.

“There are so many to choose from, we actually just could have thrown a dart to pick one,” Jeffery said.

He said the Chelan fire was chosen because it’s in a denser area, and it therefore poses a threat to the largest number of properties.

Roughly 260 homes valued at $81 million are rated at “moderately high risk,” and 374 homes valued at $81.5 million are at “maximum risk,” the report shows.

The fire has already damaged or destroyed a reported 50 properties.

The area in which the blaze is burning is near where last year’s massive Carlton Complex fire destroyed roughly 300 homes and cost the state in excess of $50 million to fight.

The Chelan fire, other than its threat to such a large number of properties, is otherwise not unique for its size, energy or characteristics, Jeffery said.

“Five years ago we could have said this is probably out of the ordinary and looked for reasons for why it occurred with such intensity and ferocity,” he said.

Such fires are now the norm, he added.

Persistent drought has made states like Washington, Oregon and California hotbeds of high wildfire danger.

The U.S. Drought Monitor shows all three states are gripped in “severe drought” conditions, with “extreme” and “exceptional drought” conditions – the worst ratings given – prevalent throughout significant portions of the states.

Add in high winds, high daily temperatures and “it’s almost the perfect storm for these type of events,” Jeffery said.

Despite the summer months waning, the worst of the wildfire conditions may be far from over.

“Until we get a change in the weather patterns, I think we’re going to get a wild ride for the next few weeks,” Jeffery said. “Or months. It could extend into October.”

It’s typically in October when wind conditions known as “Santa Anas” make Southern California a virtual tender box, while Northern California, Washington and Oregon also have their own higher risk months.

That’s no longer true thanks to the gross lack of rainfall in the West for four years running.

“Wildfire seasons in these states is a year-round thing nowadays,” Jeffery said.

Underwriting responses to massive blazes like the Chelan wildfire will likely be mixed, he said.

Jeffery believes some carriers will look at it these fires as an opportunity to go in and write more policies, because the amount of burnable fuel has been drastically cut and the fire threat is now reduced. Others will see the potential impact such a fire has on their portfolios, and they will remain hesitant to write policies in the area, he added.

He sees wisdom in both approaches, but the analytics tell him the former approach may be a better bet. Jeffery estimates that after the Chelan fire it will take decades for fuel to grow back to present conditions.

“Certainly, as a scientist, I know that if the fuel is reduced significantly, it’s going to take a lot of regrowth of the fuel base to be established for the next fires,” he said.

Related:

At Least 36 Homes Destroyed by Oregon Wildfire
Evacuations Ordered in Southern California Wildfire
California Wildfire That Erupted Near Massive Blaze Expands
Cost Of Fighting Washington Wildfires So Far: $50 Million

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Insurers Paid 129M in Claims Stemming From Baltimore Riot


Insurers Paid 129M in Claims Stemming From Baltimore Riot

The Maryland Insurance Administration says insurance companies have paid $12.9 million in claims stemming from civil unrest in Baltimore linked to the death in April of Freddie Gray.

The agency said Tuesday that the payments include $11.6 million for commercial property damage. Rioters damaged or looted hundreds of business, and set several on fire, after Gray’s funeral April 27.

The insurance administration says property, casualty and automobile insurers received 445 commercial claims related to the disturbance as of July 27, the deadline for submitting data to the state.

Payments on noncommercial claims totaled $1.3 million.

Gray was a 25-year-old black man who died from injuries he suffered in police custody after he was arrested on a charge of carrying an illegal switchblade knife.

Related:

Industry Examines Potential Claims Issues Following Riots
Baltimore Riot Damage Adds Burden to Small Businesses
Orioles to Play Game in Empty Baltimore Ballpark Wednesday

 

Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Citizens Water Losses the Reason for Rate Increases in South Florida


Citizens Water Losses the Reason for Rate Increases in South Florida

In a nearly three-hour rate hearing on August 25, representatives from Florida’s Citizens Property Insurance Corp. delved into and defended their recent rate filing, which included significant increases in many Florida regions, before the Florida Office of Insurance Regulation (FLOIR).

Insurance Commissioner Kevin McCarty, who led the FLOIR panel, opened up the hearing by emphasizing that Citizens is not under fire for its submitted rate proposal.

“This is a fact finding hearing – it is not an adversarial hearing,” he said. “The office has not made a decision relating to the filing… the office is not advocating a position for or against Citizens in this rate request hearing. We are trying to get at the facts for the citizens of Florida.”

While the focus of the hearing was the reason behind the overall rate increases in the state, Citizens emphasized during its testimony that water damage losses in South Florida have been a driving factor for a rise in claims and rates.

Citizens’ CEO Barry Gilway said water damage claims, which the company described as not flood-related but instead a water loss as a result of a sudden or accidental discharge of water by a pipe or water-system issues, have increased by 50 percent in severity and frequency.

“I want to be crystal clear on this issue: water losses are the major reason Citizens is seeking rate hikes for the coming year, especially in South Florida. Were it not for water loss… 99 percent of South Floridians –Miami-Dade South Florida policyholders would be seeing rate decreases,” Gilway said.

Gilway described the rise in water damage in South Florida as “very disturbing.” He said two years ago the frequency of water loss damage was 8 percent and has since risen to 13 percent, with the company now seeing an average of about 1,000 water damage claims a month. The average water damage loss 2.5 years ago was $9,000 and today is closing in $15,000, he said.

Water losses are accounting for 33 percent of every premium dollar of Citizens’ policyholders, according to the company.

“We have to respond and have to respond aggressively,” Gilway said.

Citizens’ Requested Rate Changes

Citizens’ policies with proposed rate changes effective Feb. 1, 2016 include:

FLOIR Citizens Rate Hearing

There were no rate changes proposed for sinkhole policies.

McCarty said FLOIR and Citizens have been in correspondence over the rates that were filed and Citizens has supplied FLOIR with all the necessary data to back up its rate filing. As a result, FLOIR’s questions were in regards to three primary areas:

The necessity of Citizens’ purchase of more reinsurance since 2014 while it has at the same time reduced its policy count and corresponding exposure.
The necessity of Citizens purchase of more pre-event funding given the significant surplus it has accumulated over the years.
The increase of certain loss trends – Citizens alleged in filings that water losses in certain Florida counties have contributed to increased losses in these areas. FLOIR wanted to know what was behind such an increase and what other steps Citizens is taking to control these costs.

Citizens’ Depopulation Program

McCarty started the hearing by applauding Citizens’ policy count reduction by almost a million policies over the last several years, calling it a “Herculean effort” on the part of Floridians to remove billions of dollars of assessments that could be levied on all policyholders. The clearinghouse and takeout efforts have been successful in returning policyholders to private sector, he said.

“I commend you and your team for the work you have done and the leadership and strides you have made to make that depopulation effort a success in our state,” McCarty said.

Gilway said this year there has been a 37 percent reduction in policy count with more expected as the remaining months of the year have historically seen the most reductions in policy count for the company.

However, while Citizens rate proposal lowers rates overall for 60 percent of its personal lines policyholders, Gilway said, the company is seeking an average 3.2 percent increase in statewide rates for personal lines customers, which reflects both longstanding disparities in wind-only rates and recent challenges relating to water losses, he said.

In the wind and coastal areas, Gilway said Citizens has become more of a residual market.

“The remaining policies are the more difficult policies. The good policies as perceived by the insurance companies and private carriers are gone so what we are left with is a ‘residual’ book of business and frankly that’s our charge – to act as a residual mechanism.”

Gilway said the company is doing everything in its power to not let operational costs affect policyholders and embarked on an effort to streamline its operations and improve how Citizens does business.

Gilway highlighted the ways Citizens has tried to improve its efficiencies and cut overhead costs, including consolidating offices, updating legacy systems, and improving its investment portfolio.

“Taken together, the efforts have eliminated the assessment on Floridians in the event of a 1 in 100 year storm,” he said.

He added, however, that though their policy count is the fewest it ever has been, the policies that remain with Citizens are those in high-risk areas.

John Rollins, chief risk officer for Citizens, said they are recommending rate decreases for a majority of its personal lines account policyholders, who tend to be in the inland regions of the state, but increases for the majority of its coastal account policyholders.

“We will follow the glide path for every individual policyholder,” Rollins said. “No matter how scary some of these cost drivers might be in pockets or regions no one will get more than a 10 percent increase in premium with a very small exception of passing through any rapid cash buildup demanded by the Florida CAT Fund.”

McCarty questioned why Citizens purchased so much reinsurance, which it cited as one of the reasons for the rate increases for wind exposures, when the company’s business and exposure have decreased by 35 percent.

Rollins responded that Citizens has to be able to reinsure a 100 year event to avoid an assessment risk and, questioned if Citizens should reinsure itself like a private company which has to have its portfolio protected up to about 25 to 30 percent. If the answer is “yes,” Rollins said, then the company should have actually purchased more reinsurance than it did. Rollins also added that with reinsurance rates being so low at the moment it made sense for the company to take advantage and have a more secure risk transfer solution.

Water Damage Claims

Gilway said Citizens is focused on combating the water damage loss problem, Gilway said. The company recently had a “water summit” where it brought together legal, underwriting and policy experts to develop strategies to counter the problem.

The company is also working with insureds to let them know to call Citizens first before contacting an attorney or public adjuster, as well as putting an enhanced focus on fraud awareness and working in conjunction with DFS. Rollins said 90 percent of all the representative water claims come from Miami-Dade and 30 percent of those claims the company never gets to look at as they come from a public adjuster.

Citizens is also launching an emergency services and contract to repair program, which will initially be on a volunteer basis. The company stated it would like to work with FLOIR to have the right policy language to respond to those claims.

“This is an out of control situation similar to sinkhole [and it] may take policy and legislative changes to address this,” Gilway said. “We need to focus on solutions for this issue. Every time an attorney or public adjuster gets involved in these claims the costs sky rocket – that’s the bottom line.”

Rollins said the company is putting great effort into what is causing these water issues, but actuarially they have not been able to find a trend or cause for the increase. But the bottom line is that the trend is costly for everyone, Rollins said. “This trajectory is not good for consumers.”

McCarty concluded the testimony by saying FLOIR will carefully review the information that has been provided in the filing and encouraged members of the public to contact the office with any questions or concerns they may have about the proposed rate changes.

A representative for FLOIR would not comment on how the hearing will impact the office’s decision, saying FLOIR cannot comment on a pending rate filing. It has 45 days to review each of the filings and a rate decision on the homeowners, mobile homeowners and dwelling fire filings is expected on September 8 or 9. The other filing decisions will occur at a later date.

Public comments were received at the hearing and the general public is allowed to provide feedback on these filings via the
This email address is being protected from spambots. You need JavaScript enabled to view it.
email address until September 1, 2015.

 

The full hearing can be viewed here.

Related:

Florida to Conduct Public Hearing on Citizens’ Proposed Rate Changes
Florida Approves Removal of Up to 280,857 Policies From Citizens
Citizens to Hold Off on 2016 Sinkhole Rate Increases, For Now
Citizens Approves Rate Changes for Florida Insureds
Citizens Board Approves 2015 Reinsurance Package, Ends 1-100 Assessment Risk About Amy O’ Connor O’Connor is associate editor of MyNewMarkets.com. More from Amy O’ Connor

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Aon Risk Solutions Hires Surette as Resident Managing Director in Boston


Aon Risk Solutions Hires Surette as Resident Managing Director in Boston

Aon Risk Solutions, the global risk management business of Aon plc, hired Joe Surette as resident managing director of Boston operations.

Surette succeeds Peter Caine, who left Aon in May to become chief operating officer of Lockton’s St. Louis operations.

Surette joins Aon Risk Solutions from Zurich Financial Services, where he served as senior vice president and area executive for New England. At Zurich, Surette was responsible for market-facing operations for New England as well as managing the region’s distribution channels and strategy. Previously, he also served as assistant vice president at the American International Group.

 

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Maine Issues Bulletin Prohibiting Use of Price Optimization


Maine Issues Bulletin Prohibiting Use of Price Optimization

Maine Insurance Superintendent Eric A. Cioppa stated in a bulletin published Monday that in Maine, personal lines property/casualty insurers that use price optimization should submit revised rate filings removing such factors within 60 days after the date of the bulletin.

“The Superintendent of Insurance directs this bulletin to insurers required to file rates for personal lines property and casualty insurance in Maine,” Cioppa said in “Bulletin 405: Price Optimization and Elasticity of Demand.”

The bulletin noted that “it has come to the Superintendent’s attention that some insurers’ rates include factors, unrelated to underwriting, that consider the point at which a policyholder will look for coverage elsewhere because of increases in the premium charged.”

Cioppa said these ratemaking methodologies make use of data analysis techniques that have been developed to test the willingness of individual customers to pay higher rates for coverage than other customers with similar underwriting characteristics. “Common terms used in describing this practice are ‘price optimization’ and ‘elasticity of demand,’” he said.

The bulletin reminded insurers that their rates must comply with several important provisions of Maine law:

First, rates “shall not be excessive, inadequate or unfairly discriminatory.” 24-A M.R.S. § 2303(1)(B) Second, in making rates, insurers must give “due consideration” to, among other factors, past and prospective loss experience; fire and catastrophe hazards; reasonable margins for underwriting profit and contingencies; dividends, savings or unabsorbed premium deposits allowed for returned by insurers to policyholders, members or subscribers; past and prospective expenses; and other relevant factors. 24-A M.R.S. § 2303(1)(C) Third, each “insurer shall file with the superintendent … every manual rate, minimum premium, class rate, rating schedule or rating plan and every other rating rule, and every modification of any of the foregoing that it proposes to use.” 24-A M.R.S. § 2304-A(1) Fourth, no property or casualty insurer “shall make or permit any unfair discrimination between insureds or property having like insuring or risk characteristics in the premium or rates charged for insurance, or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of the insurance.” 24-A M.R.S. § 2162(2)

“These statutes evidence a clear purpose in Maine that insurers classify risks according to actuarially supported considerations grounded in insurance loss and expense and disclose those considerations fully in their rate filings,” said Cioppa. “Failure to do so puts insurers at high risk of violating Maine rating law.”

The superintendent also explained that he “does not intend this bulletin to prohibit or restrict such practices as capping or transitional pricing if applied on a group basis.”

“Insurers should group individual policyholders into credible risk-based classifications and treat similarly situated policyholders the same with respect to insurance pricing,” said Cioppa.

Likewise, he noted, “the use of sophisticated data analysis to develop finely tuned methodologies with a multiplicity of possible rating cells is not, in and of itself, necessarily a violation of Maine’s rating laws as long as the classifications are based strictly on risk of loss and not on willingness to pay or ‘elasticity of demand.’”

Cioppa said any insurer that uses price optimization to rate policies delivered or issued for delivery in Maine should submit revised filings that remove such factors within 60 days after the date of the bulletin.

Insurers must also disclose on the SERFF (System for Electronic Rate and Form Filing) general information page whether the company uses non-risk-related factors such as price optimization or elasticity of demand to help determine personal insurance premiums.

Cioppa said insurers with currently pending rate filings should amend them to disclose this information. He warned that companies that fail to do so and are later determined to have used price optimization or elasticity of demand or failed to disclose such use to the insurance superintendent may be subject to disciplinary action.

The Maine Bureau of Insurance notes that the bulletin is intended solely for informational purposes, and that it is not intended to set forth legal rights, duties, or privileges, nor is it intended to provide legal advice.

So far, a number of states, including Maryland, Ohio, California, Florida, Indiana and Pennsylvania, have issued a formal prohibition on the use of price optimization in P/C insurance rates.

Related:

Pennsylvania Says Insurers Are Prohibited From Using Price Optimization
Vermont Regulators Issue Bulletin on Price Optimization
Florida Bans Price Optimization; Insurers Question Definition
California Commissioner Tells Insurers to Cease Price Optimization
Ohio Insurance Director Warns Insurers Against Use of Price Optimization
Maryland Insurers Using ‘Price Optimization’ Ordered to File Corrective Action Plan

 

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King Insurance in California Names Fondarella Vice President


King Insurance in California Names Fondarella Vice President

King Insurance in California has named Laura Fondarella vice president of marketing and product development.

Fondarella has been involved in the development and merchandising of various personal lines and commercial niche products serving the homeowners, mobilehome park and professional liability specialties.

She was previously a field representative and marketing manager. Fondarella has been with the firm for 18 years.

King Insurance is a specialty program manager headquartered in San Juan Capistrano.

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California WCIRB Report Shows Medical Bill Transactions Fell in 2014


California WCIRB Report Shows Medical Bill Transactions Fell in 2014

The California Workers’ Compensation Insurance Rating Bureau on Tuesday issued its California Workers’ Compensation Aggregate Medical Payment Trends report showing medical bill transactions fell by $100 million in 2014.

The WCIRB report compares medical payment transaction data from calendar year 2014 with calendar year 2013.

WCIRB researchers used reported medical payment data representing more than 90 percent of the California workers’ comp insurance market.

workers_compAmong the report’s findings are:

Industry-wide medical payments based on WCIRB individual medical bill transactions fell by $100 million (3.7 percent) in 2014 compared with 2013. This decrease occurred despite a minimal change in the number of claims in 2014. As a result the medical paid based on individual medical bill transactions per claim declined by 5 percent.
The adoption of the resource based relative value scale-based provider fee schedule in January 2014 was one factor in these savings. This schedule covered roughly 40 percent of all costs, or $1 billion per year. This new schedule shifted payment shares from specialists to primary care providers. The impact of RBRVS was reflected in 2014 changes in payment shares for types of provider, places of service, mix of paid procedures and the fastest growing procedures.
Several services not affected by RBRVS also experienced declines in 2014 compared with 2013. Inpatient and outpatient payments as well as payments for medical supplies showed declines, both in share of payments and paid per transaction. Total pharmacy payments, including spending on opiates, dropped slightly in 2014. However, the cost per drug transaction rose, due largely to the frequent use of brand rather than generic drugs.
Exceptions to the overall payment declines were medical legal and lien costs. Both categories increased in payment shares and costs per transaction in 2014 compared with 2013. The rise in medical legal costs is largely due to the continued increase in higher complexity reports. The increase in lien costs is likely attributable to improved reporting of those costs in the WCIRB’s individual medical bill transaction data set.

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The Hilb Group Acquires JWB Insurance in North Carolina


The Hilb Group Acquires JWB Insurance in North Carolina

The Hilb Group LLC announced today that it acquired JWB Insurance Group, an independent agency in Wilmington, North Carolina. The transaction became effective Aug. 1, 2015. The terms of the deal were not disclosed.

Established in 1995, JWB Insurance Group provides specialty services in employee benefits and commercial insurance, with expanded offerings in individual and personal lines.

JWB Insurance Group is The Hilb Group’s seventh acquisition in 2015 and will continue operating under its current leadership. The addition of JWB Insurance Group continues The Hilb Group’s national expansion plan and strengthens its East Coast presence, the announcement said.

The Hilb Group is a middle market insurance agency headquartered in Richmond, Virginia, and is a portfolio company of Boston-based private equity firm, ABRY Partners. The Hilb Group seeks to grow through targeted acquisitions in the middle market insurance brokerage space. It now has 35 offices in Florida, Georgia, Kentucky, Maryland, New York, North Carolina, Tennessee, Texas, Virginia, and West Virginia.

 

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Brokers Call for Implementation of National Licensing Reform Law


Brokers Call for Implementation of National Licensing Reform Law

Insurance producers are calling upon the Obama Administration to begin implementation of a licensing reform measure signed into law eight months ago.

When President Obama signed the renewal of the Terrorism Risk Insurance Act (TRIA) in January, he also signed into law an attached measure to streamline insurance producer licensing known as the National Association of Registered Agents and Brokers (NARAB).

Now some producers are frustrated because implementation of the licensing reform they fought years to achieve has not progressed and the board that is supposed to oversee the new program has not been named.

The American Association of Managing General Agents (AAMGA) this week urged the appointment of the 13-member NARAB board as soon as possible. Until the board is named, implementation will be stalled, AAMGA said.

“It is vitally important that the law be implemented as intended as soon as possible. Industry has worked diligently for eight years, and now that the provisions of the legislation have been signed into law eight months ago, we respectfully request your immediate selection and appointment of the NARAB board members,” AAMGA Executive Director Bernie Heinze wrote in a letter to the Federal Insurance Office (FIO) within the Treasury that is charged with recommending board members to the president and implementing the law. Michael McRaith, former Illinois insurance commissioner, heads the FIO.

The new law creates a system for producers who are licensed in their home states to become a member of a national nonprofit registry to more easily become approved to do business in other states.

The NARAB registry is to be governed by a 13-member governing board comprised of eight current or former state insurance commissioners and five insurance industry representatives. The presidential appointments are subject to Senate confirmation.

The board will establish membership criteria, through which producers can obtain non-resident licensing.

According to AAMGA and other agent and broker groups that have sought the licensing change for years, implementation of NARAB’s provisions will reduce operational and compliance costs and maintain agent and broker licensing standards, without undermining state regulation.

FIO had not replied to a request for information or reaction by press deadline.

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Connecticut’s Medical Marijuana Lower Cost More Choice


Connecticut’s Medical Marijuana Lower Cost More Choice

Nearly a year after Connecticut’s six medical marijuana dispensaries opened, patients are changing their habits.

For quick relief, they are smoking marijuana less and inhaling its vapors and therapeutic oils more, those in the industry say. Others are eating cookies or placing strips with the various active ingredients into their mouths to alleviate pain, nausea and seizures associated with the growing list of ailments.

And prices that a year ago were markedly more expensive than the underground market have dropped sharply and are now competitive, according to dispensaries, state officials and market analysts.

“When I started having success, I took the oil,” said William McDonald, 42, of Monroe, referring to CBD extract, which does not induce a high.

McDonald has had cancer as well as complications from a 2008 bite of a brown recluse spider that included a staph infection and heart failure.

His daily regimen starts with a strip of marijuana oil under his tongue first thing in the morning. He will inhale the vapors of a Cannabis Sativa strain during the day to elevate his mood, then the Cannabis Indica strain to relax and help bring on sleep in the evening.

“I was giving up because none of the medicine was working,” McDonald said, noting marijuana has helped him. “My depression stopped,” he said. “My anxiety about death has stopped.”

Angela D’Amico, owner of the Compassionate Care of Connecticut dispensary in Bethel, says the shift away from smoking is the result of a widening array of treatment options.

“The absorption is that much greater when you vaporize rather than burn with a match, with the puff of a joint or smoking a pipe,” D’Amico said.

A pharmacist at the dispensary recommends treatment depending on the patient’s condition.

Cancer patients vaporize marijuana with high percentages of THC — the psychoactive ingredient in the plant — for quick relief of the nausea that accompanies chemotherapy.

“It’s a very designated dose,” D’Amico says, adding that her company obtains products from all four of the state’s licensed growers. “But with an edible, the onset varies per person. At a minimum, it takes an hour.”

Those with neurological and inflammatory conditions, however, are given marijuana with lower amounts of THC and higher percentages of CBD, D’Amico said.

Medical marijuana is not covered by insurance.

When the first marijuana was delivered to the dispensaries last year, it cost up to $450 an ounce. But supply has increased, even as the number of patients in the program has grown to 4,914, according to the state Department of Consumer Protection, which runs the program.

Now the price per ounce is $320, competitive with the underground recreational market. High Times, the magazine of marijuana culture, reported last month that average prices in Hartford were $350 per ounce. Leafly, a marijuana website that chronicles the medical and underground markets but does not follow Connecticut, indicated that in Boston, indoor-grown marijuana was selling last month for $300 an ounce.

“We’re now the same price as the black market,” D’Amico said. “Medicinal grade on the black market, I think, is even higher than what we’re selling it for, by the ounce.”

About 100 of Compassionate Care’s patients get either free or reduced-price marijuana products under a program funded by the business.

Bonnie Miller, 53, of New Milford, was diagnosed with multiple sclerosis when she was 30. She swallows a syringe full of marijuana oil with higher concentrations of CBD twice a day for inflammation.

When she first became a patient at Compassionate Care, Miller needed a wheelchair or power scooter to get from the handicapped parking spot to the front door. But now, she navigates a walker.

“This has resulted in a decrease in the doses of my other drugs, including anti-spasticity medication,” Miller said, recalling that while her neurologist did not favor her joining the medical marijuana program, her general practitioner did. A former buyer of marijuana from the underground economy, she says the quality of the state’s medicinal drugs is important.

“Every step for me is a challenge,” she said. “Moving about the house makes me tired. Edibles help relax my muscles, so I can get six hours or so of peace. It seems to work well.”

Each patient’s monthly legal allotment of 2.5 ounces — or 70.87 grams — is tracked by computer, which tabulates the number of grams purchased in each 30-day period, whether it’s flowers, edibles or oils.

Growers and dispensaries across the state are seeing the shift away from smoking marijuana. The medical marijuana program recently approved for New York state includes no flowers at all.

“Initially when we put together our business plan, we thought that 90 percent of our product would be flowers and 10 percent would be other forms,” said David Lipton, managing partner of the West Haven-based Advanced Grow Labs. “I would say it’s 50-50 at this point. It’s a much-larger percentage of our sales than we ever envisioned, but I think that bodes very well for the pharmaceutical side of the program.”

 

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