Regulatory Compliance Industry Focus
Although compliance affects all industries, the Company is currently focusing its regulatory compliance liability insurance and consulting services on five industries: Healthcare, Maritime & Transportation, Agriculture & Food Safety, Material Sciences & Technology, and Energy. The five focus industries are critical to the U.S. and the new global economy. Additional industries will be addressed as the need manifests.
Regulations are rarely static; as they evolve and expand, compliance becomes increasingly challenging - approaching impossible. In 2014, the Code of Federal Regulations consisted of over 175,000 pages. In 1950, the CFR contained less than 10,000 pages - 17 times smaller than today's enormous compendium of federal regulations. The magnitude of regulations is mammoth if one considers all state regulations as well. According to a study by the Competitive Enterprise Institute, the economic cost of compliance in the US is $1.88 trillion annually. Thus, compliance has significantly increased the financial and procedural burden on businesses operating in the United States.
Because compliance has become so technical and costly, businesses are well advised to engage independent consultants that specialize in compliance. Professional expertise, labor efficiencies, and independence may be gained in doing so. MGU Specialty Risk Services offers a unique approach to the emerging challenges of compliance.
Healthcare is one of the most important as well as highly regulated industries in the United States. The federal government has formed the "Health Care Fraud Prevention and Enforcement Team" in an effort to more effectively enforce existing and future Medicare regulations. That enforcement team is described at the government's website: Stop Medicare Fraud. Furthermore, recoveries from False Claims Actions in healthcare comprise the vast majority of enforcement revenues for the federal government.
MGU Specialty Risk Services provides a range of products and services to healthcare providers in order to protect against faulty regulatory compliance. Those services include:
- Reporting services to comply with mandates under Medicare Medicaid SCHIP Extension Act of 2007,
- Medicare Reporting and Secondary Payer Act Liability insurance to address the risks of compliance,
- Reporting audits to evaluate and improve compliance programs,
- Historical audits to identify and measure potential legacy liabilities from previous claims, and
- Clinical Outcomes improvement through statistical analysis of medical procedures.
During the past 40 years, energy has evolved into an essential and critical issue of our modern society. The country's dependence on energy has led directly to the creation of many laws that are designed to regulate energy production and transmission, among others. In fact, Energy is one of the most regulated industries in the world. Applicable federal regulations include the Federal Powers Act, Natural Gas Policy Act, False Claims Act, Medicare regulations, etc. The Energy Policy Act of 2005 greatly expanded the government's ability to enforce regulations. As a result, civil fines of $1,000,000 per violation per day may be imposed. Under the law, the Energy Commission will, when possible, negotiate civil penalties as part of a Stipulation and Consent Agreement resolving regulatory violations. The laws also include the potential for criminal charges with resulting fines, penalties, sanctions, and imprisonment.
Violations of federal energy regulations are not limited to the penalties provided by the energy regulations. Violations create the additional risk of enforcement actions brought using the federal and state False Claims Acts which provide treble damages. Such actions may be brought by either the government or third party whistleblowers.
The many diverse federal regulations that mandate compliance require expertise not often available from in-house compliance personnel. MGU Specialty Risk Services provides senior level consulting services as an independent consultant.
Maritime and Transportation
Maritime law, aka "Admiralty" is a collection of laws and regulations that govern the shipping industry. Maritime laws have existed for centuries and have been enacted by governments across the globe as shipping is a world-wide activity. Maritime regulations in the US require strict compliance to a wide array of laws including regulations in the following volumes of the Code of Federal Regulations: Titles 14, 23, 29, 33, 41, 46, and 49. The vast spectrum of regulations make compliance with maritime law extremely challenging. As with other industries, the maritime industry is also governed by Medicare reporting requirements, the federal False Claims Act, the state counterparts to the federal False Claims Act, and other difficult compliance mandates.
MGU Specialty Risk Services provides consulting services to address the compliance mandates for the Maritime industry. We also offer specialty insurance product to address risks of compliance.
Material Science and Technology
The federal government has identified 18 industry sectors that are vital to the health, welfare, and safety of this country. Those specific concerns enable the government to invoke its police powers to protect the country's people and infrastructure - to the point that the government will protect our very existence as a country. Because technology plays such a vital role in the success of the identified sectors, the government has a heightened interest and commitment to regulating technology.
As is common for federal regulations, there is a wide array of complex regulations that regulate Technology and, similarly, Material Sciences. Each regulation contains enforcement mechanisms which include civil monetary penalties and fines, court injunctions, criminal penalties, and administrative actions such as license revocation and suspension. As for all industries, claims brought by the government or third party whistleblowers present a very real and present danger.
MGU Specialty Risk Services can assist companies in the Material Sciences and Technology sector with their compliance programs. Our services include a wide array of consulting services and insurance products that focus on the compliance needs of the industry.
Agriculture and Food Safety
A safe food supply is vital to the welfare of this country. Thus, governments at all levels take great pains to protect the food supply through layers of protective regulations. The plethora of regulations the public and impose stringent compliance mandates include the Federal Meat Inspection Act, the Poultry Products Inspection Act, and the Egg Products Inspection Act. In 2011, the most sweeping revision to food safety laws was signed into law, the Food Safety Modernization Act shifts the focus from reacting to contamination to preventing it. There are many other regulations as well that impose other mandates in order to protect other food catastrophes through other mandatory actions.
Enforcement of the various laws includes:
- Administrative Detention (Food Stoppage)
- Product Recall,
- Facility Shutdown,
- Civil Suits,
- Criminal Sanctions including fines and imprisonment, and
- If claims to government are involved, then actions under the False Claims Act.
Most companies do not have in-house personnel with the technical expertise to appreciate all the complexities of the wide range of applicable regulations. Thus, the regulated companies in the Agriculture and Food Safety industry may benefit from engaging a third party compliance consultant such as MGU Specialty Risk Services.