Thursday, July 31, 2008
Garamendi, a Democrat, ran unsuccessfully for the governor's post in 1982 and 1994. He also lost the 1986 primary for controller to future governor Gray Davis.
Garamendi became the state's first elected insurance commissioner in 1990, a post he held for one term.
This is the first mobile homeowners rate case in 26 years.
The North Carolina Rate Bureau, which represents all property and casualty insurance companies in the state, made the filing in May, when they asked for a combined 23.9 percent increase for mobile homeowners policies. The filing refers to two types of policies used by insurers - form MH(F) and form MH(C). Insurance companies typically pick one form or the other and write all of their business using just that one form.
For form MH(C), the Rate Bureau asked for a 228 percent increase in the 18 coastal counties and a 10.7 percent increase for the rest of the state. Commissioner Long granted a 24.4 percent increase on the coast and a 2.9 percent increase elsewhere.
The Bureau reported $77 million in premiums collected for form MH(C) in 2006.
For form MH(F), the Rate Bureau asked for a 260 percent increase in the 18 coastal counties and a 2.9 percent increase for the rest of the state. Commissioner Long granted a 25 percent increase on the coast and no change in rates elsewhere.
The Bureau reported $44 million in premiums collected for form MH(F) in 2006.
These rates will go into Dec. 1. The Department estimates mobile homeowners will save a potential $25 million in premiums over the high rates originally requested.
In the podcast, Carol Zacharias, senior vice president and chief counsel, ACE Professional Risk, discusses her white paper, “The Return of D&O Litigation: Trends Driving Increasing Costs and Frequency of Litigation Against Corporate Directors and Officers,” and provides an informative overview of the trends and factors behind the escalation of case filings against directors and officers and the rising severity of settlements and judgments.
“Declining securities class action filings in recent years have raised the question of whether the strictures of the Sarbanes-Oxley Act of 2002 have worked, heralding a new era of greater transparency, less fraud, and hence fewer cases—particularly those against directors and officers,” said Zacharias. “On the contrary, we’re seeing a marked increase in securities class action litigation and a significant increase in case values. For instance, 2007 securities class action settlements exceeded those in previous years by 15 percent to 46 percent, depending upon the measurement.” She explains that median settlements increased by 30 percent, from $6.9 million to $9 million and average settlements increased by 15 percent, from $54.7 million in the years prior to 2007 to $62.7 million in 2007.
Zacharias commented further on her findings, “There are some common characteristics and elements in these cases, but certainly the most important driver is increasing investor losses, and a significant driver of those losses today are the credit and subprime problems.” She explained that median investor losses for cases settled in 2007 were $310 million, whereas median investor losses for cases filed in 2007 were $355 million, a 15 percent increase and the highest in the past three years. “It appears that recently filed cases seek greater damages than those filed in prior years, which may translate into even more expensive settlements and judgments in the future.”
Zacharias commented on the typical plaintiff in a securities case, noting, “Years ago, the shareholder was the typical plaintiff in a securities case. Today, the adversaries are much more varied and resourceful, making the cases more complex to litigate and settle.”To access the ACE Professional Risk audio podcast program (approximately 26 minutes in length), visit www.aceusa.com/News/Pages/Podcasts.aspx. To access the white paper, visit www.aceusa.com/News/Pages/ArticlesSpeeches.aspx.
The new law also calls for the creation of a fund to give independent contractor livery drivers and their families workers’ compensation benefits in cases of severe injury or death.
Lack of a clear designation for livery drivers has reportedly jeopardized compensation for injured workers, led to extensive and costly litigation, and even affected compensation for other non-driver employees of livery cab companies.
To protect both the drivers and businesses in one of New York City’s most crucial transportation industries, the legislation (S. 8715 /A. 11759) is significant for two reasons. First, it will establish a clear set of rules to define when drivers are either employees or independent contractors of livery cab bases. Such a designation will be made up front for each livery cab base, so that policies can immediately be put in place for drivers and workers there to claim benefits and compensation.
Second, the bill will create a new fund that, for the independent contractors, establishes full workers’ comp coverage for many serious injuries—death, paralysis, loss of limb and those resulting from a crime. In these cases, drivers will no longer be forced to rely on the no-fault insurance system. The fund will provide greater benefits to the drivers than if they were completely independent contractors, while the bases would pay less than if they were full employees.
Currently, there is no system in place to clarify when livery cab bases should classify their drivers as employees or independent contractors. As a result, an injured driver could reportedly go years without receiving compensation because this lack of designation bounces drivers between the no-fault insurance and workers’ comp systems.
Furthermore, the livery cab bases can be hit with substantial judgments and even felony charges for not adequately providing benefits to their workers. On top of this, other non-driver employees of livery cab companies also see their benefits threatened because insurers often require livery bases to purchase workers' comp insurance for their drivers -- even if they may be independent contractors -- before they will provide coverage for other workers.
Authorities say Connie Sellers Redmond reported that she was injured while working at Quest Community Services. When filing for workers’ comp benefits, Redmond allegedly lied about the severity of her injuries. The workers’ comp insurance carrier, Kentucky Employers’ Mutual Insurance, paid more than $2,000 in temporary total disability benefits to which she was not entitled.
She has been charged with one felony count of insurance fraud. If found guilty, Redmond faces a prison term of one to five years, a fine of up to $10,000, or both imprisonment and a fine.
IIABNY responded to recent soft market practices where companies, after unsuccessfully quoting an account with one agent, have given information about that account to a competing agent who may have better luck.
The authors of the e-mail—IIABNY Chair Neal Sullivan, and the association's President and CEO Richard Poppa, —reminded insurers that this information-sharing procedure is "not a proper business practice.” The duo’s message asserted that the state’s oldest insurance producer trade association “stands firm in its defense of agents' and brokers' ownership of client and policyholder information.”
IIABNY’s officers and directors adopted the policy statement during its Annual Business Meeting in May.
To view the association’s Sharing of Agent/Broker Created Prospect Files policy statement online, visit http://ny.iiaa.org/Legislation/ProspectFilesPolicy_0508.pdf .
According to a new "Twin Cities Driving Behavior" Survey commissioned by AAA Minneapolis, 77 percent of drivers ages 18-34 in the Minneapolis-St. Paul area snack while they drive, 70 percent talk on cell phones and one in three young adults actually text message while behind the wheel.
The habits of these Twin Cities drivers -- their attention torn between driving and eating fast food or communicating on their iPhones or PDAs -- causes 60 percent of Twin Cities drivers ages 18-54 to feel stressed while on the road with these distracted drivers. In fact, AAA Minneapolis survey respondents say distracted drivers in general cause them more behind-the-wheel anxiety and stress than poor road conditions and construction delays, or from drivers who merge or change lanes improperly, tailgate, or drive slowly or over-aggressively.
AAA Minneapolis' "Twin Cities Driving Behavior" Survey results echo national driving trends.
In 2007, more than 1 million drivers at any given daylight moment across the nation were using hand-held phones, according to the National Center for Statistics and Analysis of the National Highway Traffic Safety Administration. A recent insurance survey found that nationally 80 percent of drivers drank non-alcoholic beverages, 73 percent talked on cell phones, 68 percent ate snacks, 41 percent ate meals, 19 percent fixed their hair, 12 percent put on or adjusted their make-up, 5 percent read a magazine or newspaper, and 31 percent admitted to daydreaming while driving.The AAA Minneapolis' study also found that more (10 percentage points) Twin Cities men than women admit to text message while driving.
One piece of good news revealed from the AAA Minneapolis survey is that an encouraging 91 percent of Twin Cities drivers claim they "always" wear their seat belts when driving or riding in a vehicle. This figure is 10 percentage points higher than the 2007 national seat belt use average of 81 percent cited by the National Center for Statistics and Analysis of the National Highway Traffic Safety Administration (NHTSA).
Eric Odom, 41, Katrina Norvell, 30, and Carmen Bryant-Cunningham, 24, were arrested by Thomas Hurley of the Department’s Frauds Bureau, assisted by Syracuse police.
According to Hurley, Odom and Bryant-Cunningham purposefully caused a two-car accident with cars they were driving on Dec. 26, 2006, so that Odom could file a claim with Esurance Insurance Company. It is alleged that Odom, Bryant-Cunningham and Norvell planned to share the insurance payment for damages to Odom’s car.
The three were released pending future appearances in Syracuse City Court.
If convicted, Bryant-Cunningham could be sentenced to up to four years in prison for insurance fraud, while Norvell and Odom face up to one year in prison for conspiracy.
Thomas Guhl of Monmouth County has been awarded a $725,000 settlement after a golf ball struck a window on his car while driving two years ago. Guhl suffered a cut cornea when glass hit him in the face.
Guhl claimed in his lawsuit that the ball reportedly landed on a home's lawn from the Eagle Oaks Golf and Country Club and was projected onto his car by a lawn mower being used by a local landscaper.
He claimed that the golf facility did not have proper netting to prevent balls from leaving the course, and that the landscaping crew working on a nearby home's lawn should have made sure the lawn was free of any hazards before mowing.
Defendants in the lawsuit offered no admission of liability as it relates to terms of the settlement.
Wednesday, July 30, 2008
Poizner advised all local homeowners to proactively prepare for fires and other potential disasters by conducting a home inventory and updating their insurance policies.
Out of control wildfires swept through Southern California last October, ravaging nearly 2,000 homes and causing $2 billion in damages, including $130 million in damages and nearly 100 destroyed homes in Los Angeles alone.
This year's wildfire season is already under way, months ahead of schedule. Wildfires have charred nearly one million acres and destroyed 158 homes throughout the state this year, and the worst may still be ahead. Poizner urges all homeowners to prepare themselves, and conduct a home inventory to maintain detailed records of their belongings.
Poizner also announced today that the Department of Insurance has recovered more than $9 million for 2007 wildfire survivors who notified CDI of a problem obtaining claims payments from their insurance companies. The Department of Insurance has received 359 complaints from consumers relating to the 2007 wildfires. Of those complaints, 83 involved underinsurance. The Department of Insurance has recovered $3.4 million for underinsurance complaints. Insurers have paid out $1.8 billion in claims for the 2007 wildfires, which caused more than $2 billion in damages.
"Insurance companies have done a great job overall in paying claims to wildfire survivors on time, and in full," said Poizner. "And when a small portion of claims were not paid out fully or on time, the Department of Insurance continues to make sure that homeowners receive every penny they deserve. If any fire survivors have questions or would like to file a complaint, I urge them to contact the Department of Insurance."
PHLY's new Performing Arts product offers comprehensive coverage for General Liability, Property, Inland Marine, Automobile, Crime and Directors & Officers Liability.
Eligible classes include both non-profit and for profit theaters, facilities, schools, camps and troupes.
To locate your nearest office or for more information, visit www.phly.com or contact Paula Negro at 800-873-4552 ext. 3227.
Sammy's California Woodfired Pizza in Carlsbad burned extensively, but no injuries were reported. The two-alarm blaze, which involved some four dozen firefighters, reportedly began before 8 a.m. in the back of the kitchen.
CHP issued a traffic alert when flames spread to brush near the southbound I-5 offramp to Palomar Airport Road.
According to authorities, Patricia Hernandez allegedly struck her husband last Sunday with her car, got out to see if he was injured or not, then drove off and left him as he died.
The woman reportedly went to her husband's place of employment to pick him up. She then reportedly struck him outside his job site, where he was found dead approximately six hours later.
Authorities have not said whether or not they believe Hernandez intentionally ran over her husband.
“Historically, the longer California goes between major quakes, the more homeowners drop their earthquake coverage,” said Candysse Miller, executive director of the Insurance Information Network of California. “Without a financial recovery plan, homeowners should expect to be hit by financial aftershocks in the event of a major quake.”
Though Tuesday’s Chino Hills temblor caused only minor damage, it was the first sizable quake to strike a Southern California metropolitan area since the 1994 Northridge earthquake. At the time of the Northridge quake, nearly 30 percent of California homeowners purchased earthquake coverage.
IINC research has indicated that Californians may errantly believe that their homeowner and renters’ insurance cover earthquake damage. Past surveys by IINC revealed that far more Californians believed they had insurance for earthquake and flood damages than actually purchased the policies. Like flood insurance, however, earthquake coverage is purchased separately from standard homeowner and renters’ policies.
In 2006, an IINC poll found that 31 percent of Californians believed they had earthquake insurance, when sales trends indicated that fewer than 13 percent of California homeowners had earthquake coverage. Today, roughly 88 percent of California homeowners reject earthquake coverage.
The 2006 IINC poll also found that less than half of Californians considered themselves prepared for an earthquake.
“Financial preparedness is a key and often overlooked part of disaster readiness,” Miller said. “It may sound like a chore, but understanding your insurance coverage is a critical step in protecting your home and assets.”
IINC offers a number of free Web-based tools to help consumers track and evaluate their insurance and finances, including software to create a home inventory, track financial goals and create a wallet-sized insurance information card.
Puckett, Scheetz & Hogan, a coastal property insurance specialist, provides a full range of risk management services for businesses and families from its Myrtle Beach headquarters and a branch office in nearby Pawleys Island.
The merger would give BB&T the largest insurance market share in greater Myrtle Beach, a little more than a year after gaining the No. 1 banking market share in the same area.
The transaction is expected to be completed in early August.
Puckett, Scheetz & Hogan President Mike Hogan founded the agency in 1989. It began as a coastal branch of the former Puckett, Scheetz & Hagler agency based in Greenville, S.C.
Puckett, Scheetz & Hogan now has 50 employees, all of whom will remain with "BB&T-Puckett, Scheetz & Hogan" following the acquisition.Hogan and his management team will remain as managers with BB&T-Puckett, Scheetz & Hogan.
Dr. Peter Sousounis, senior research scientist at AIR Worldwide stated, “Fung-Wong first made landfall Sunday at about 8:00 pm EDT in Hualien County in central Taiwan. It was the second typhoon in less than two weeks to hit the island and then cross over to the mainland. It struck with sustained winds of 100 mph and dropped as much as 28 inches of rain, cutting off power to more than 150,000 households across the island.”
Rescue personnel struggled through waist-deep waters to evacuate people in Hualien County, where Fung-Wong came ashore. Nantou County also experienced flooding, and authorities there advised 1,000 people to evacuate. Hundreds of people are reported to have fled to shelters in the counties of Kaohsiung, Hsinchu, Taipei, and Taoyuan, as well as in Nantou and Hualien. Residents of the northern outskirts of Taipei, the capital, also were seriously impacted by Fung-Wong.
Authorities listed 425 rivers as being in danger of having flash floods. Typhoon Fung-Wong made its second landfall in China's Fujian Province late Monday local time as a weak Category 1 typhoon, according to the provincial meteorological observatory. Its maximum sustained winds were recorded at 74 mph, the lowest wind speed to qualify for typhoon status. Fung-Wong, which means “Phoenix” in Chinese, is the eighth tropical cyclone to form in the Northwest Pacific Basin this year.
“The eye of Fung-Wong passed over Donghan, a small town near Fuqing in Fujian Province, at about 10:00 pm local time (10:00am EDT),” continued Dr. Sousounis. “Chinese officials say the typhoon could be the strongest storm to hit the country so far this year, even though it weakened as it passed over Taiwan. It is expected to move inland across eastern China and bring heavy rain and winds after pummeling Taiwan on Sunday.”
Disaster relief workers fear that Fung-Wong will bring flash floods and landslides to the two provinces, which were drenched by heavy rain from Typhoon Kalmaegi just two weeks ago. People in the provinces of Guangdong and Jiangxi also have been warned to prepare for strong winds and heavy rain.
Lopez, a key player in the motorcycle theft ring, was reportedly responsible for multiple thefts along Florida’s west coast from Sarasota to Collier counties. The investigation into the thefts began when a LoJack signal was received from a motorcycle that had been reported stolen from Sarasota. Detectives with the Grand Theft Auto Unit of the Lee County Sheriff’s Office received a tip from the man found in possession of that stolen motorcycle and began to follow Lopez.
Investigators eventually reportedly observed Lopez in possession of multiple suspected stolen motorcycles. Law enforcement officers served a search warrant at his home and recovered a recently stolen motorcycle as well as evidence of Lopez’s participation in the theft of other motorcycles. The search of Lopez’s house provided details as to how the individual motorcycles were selected to be stolen, who they would be stolen for, and other credible information leading to the arrest of several other targeted individuals.
In addition to the prison sentence, Lopez and his co-defendants must pay back more than $62,500 in restitution to the 12 victims.
In fact, according to Trend Micro, an Internet content security firm, there has been a dramatic increase in web threat activity during the first half of 2008, with web threats peaking in March at 50 million, from approximately 15 million in December 2007.
To address the growing concern around threats now associated with the functionalities of Web 2.0, Hartford Financial Products, an underwriting unit of The Hartford Financial Services Group Inc. has developed a new liability product, CyberChoice 2.0 that provides businesses with a robust, technology-related insurance policy that goes beyond traditional business insurance.
CyberChoice 2.0 includes both errors and omissions and first-party coverage designed to help meet the needs of today’s traditional companies that recognize their technology exposure and information risks. Companies and/or organizations with personally identifiable information (PII) include:
Key features of The Hartford’s new CyberChoice 2.0 product include:
CyberChoice 2.0 is available via The Hartford Financial Products unit. To learn more about CyberChoice 2.0 visit www.hfpinsurance.com or contact Patricia Fitzgerald at (212) 277-0457.
Tuesday, July 29, 2008
“We will be working closely with our participating insurance companies to promptly process any claims under CEA policies,” said CEA CEO Glenn Pomeroy. “We are fully prepared and funded to cover all eligible claims.”
CEA policyholders who experienced or suspect damage should contact their residential or renters insurance agents or companies to file claims. A list of toll-free telephone numbers for insurance companies that sell and service CEA insurance is available at www.EarthquakeAuthority.com.
Of the approximately 12 percent of households statewide that have earthquake insurance, CEA provides about 70 percent of those policies. About 250,000 CEA policyholders – nearly one-third of CEA’s total 770,000 policyholders – live in the greater Los Angeles area and may have been affected by today’s earthquake.
There were no reports of injuries or immediate damages, although several buildings in Los Angeles reportedly swayed for a few seconds.
Preliminary reports from the U.S. Geological Survey said the quake, which hit at 11:42 a.m., was centered 29 miles east-southeast of downtown Los Angeles near Chino Hills in San Bernardino County.
“Licensed to do business in 44 states and the District of Columbia, GNY expanded its operations into the Midwest early in 2007, with Illinois,” Heck said. “Due to our growth in this region we are dedicating staff to Michigan business, which will allow us to offer better service to our client-base.” According to Heck, “GNY has begun working with commercial insurance brokers in Michigan, and will subsequently expand into all of the Midwestern states.
Colleen Frahm will manage that operation, and has been active in the Michigan insurance arena for over 25 years, working in the underwriting and marketing fields for major carriers in the state.
Heck notes that GNY “looks forward to forming deep partnerships with commercial lines producers, particularly those with habitational business in Michigan similar to the way it has in the state of Illinois, adding that no matter how large we get, GNY remains a hands-on company, dedicated to offering our brokers and insured’s the highest level of service and integrity, as well as growing our market in this area.”
The overnight blaze destroyed several businesses and residences. Fire officials say the fire started shortly before 3 a.m. on Main Street.
There were no reports of injuries, although officials said there were several propane tank explosions in one of the businesses.
An Increased Cost of Compliance (ICC) provision is written into all NFIP policies purchased or renewed since June 1, 1997. The program allows up to $30,000 to offset the costs of mitigation or of relocating a home or business. The damaged structure must be in a High Risk Flood Zone "A" and the total claim, including the ICC funds, cannot exceed the policy maximum.
"The ICC provision will make it more likely policy holders are financially able to take steps to reduce flood losses in the future," said Federal Coordinating Officer Willie Nunn of the Federal Emergency Management Agency (FEMA)-the agency that manages NFIP. "The funds may not cover all the costs of repairing or moving a structure but the person who takes advantage of the provision, insures their home or business and its surroundings are more secure."
ICC claims are adjusted separately from flood damage claims. Homeowners and businesses can file an ICC claim if there is "substantial flood damage" or "repetitive damage" as determined by the appropriate local government agency. This assessment is made when the owner applies for a permit to make repairs. Once the local government has confirmed damage is substantial or repetitive, the policyholder should call his or her insurance agent to file an ICC claim.
Substantial damage is defined as a structure so destroyed by flooding, repairs will cost 50 percent or more of the building's pre-flood market value. Repetitive damage means the property had flood damage at least twice in the past 10 years and repair costs were 25 percent or more of its market value at the time of flooding.ICC funds can be used to elevate a building to, or above the flood level adopted by the community, to relocate a building out of the floodplain, to flood proof non-residential buildings, or to demolish a damaged building. Repairs and mitigation done under this program must be in accordance with local building codes and comply with local floodplain ordinances.
The Employer STEP Advantage helps employers analyze their injury management process, establish benchmarks and create and implement process improvement plans. According to Injury Management Partners’ President Susan Toussaint, the number of workplace injuries has decreased during the past decade, but the severity of workers’ compensation claims have increased.
“This suggests that safety programs are helping to prevent injuries, but when injuries do occur, they are not being managed as well as they could be,” Toussaint said. “Employers need comprehensive programs to ensure that patients receive the right care at the right time and can remain on the job or return to work as soon as possible.”
By consolidating her 20 years of experience in sales, health care and injury management, Toussaint has developed turnkey consulting programs to be marketed and managed by Certified Partners. Partners include occupational medical centers, workers’ comp insurance agents, and safety and risk-management consultants.
The Employer STEP Advantage enables partners to work with employers to reduce the number of employee injuries and cost of workers’ comp claims. The proprietary system equips partners with training, marketing plans and tools, a fine-tuned assessment methodology, and step-by-step plan to implement the system in the workplace.
Innovation Auto (www.us.innovation-group.com) is offering a series of additional forums to be held throughout the country. The next event will be held Aug. 21, at the Embassy Suites in Dublin, Ohio.
At the Dublin forum, auto physical damage experts will discuss the issues facing industry executives as they determine how to best address their respective Direct Repair Program needs. Planned topics include:
Scheduled speakers include:
For additional information on the forum, visit http://www.us.innovation-group.com/news_forum.aspx, and to register, visit www.us.innovation-group.com/columbus.aspx.
“AIA is a long-time advocate of an optional federal charter in order to create a stronger and more resilient insurance system," Racicot said. "We live in a new world of integrated and interconnected financial markets. Our current, disjointed state-based regulatory structure cannot keep pace with rapidly changing needs for risk protection, and the inefficiencies of the current system undermine competition and distort the market, to the detriment of all U.S. consumers, including drivers, homeowners, and businesses.
“As the rest of the world moves forward with regulatory standards suited for the 21st century, U.S. insurers and consumers are captive to an increasingly outmoded state-based regulatory system, as U.S. insurers are handicapped in their efforts to meet the needs of clients both nationally and internationally.
“Even if state insurance regulators agree with standards set by their international counterparts, they cannot bind the states to these standards. As the European Union, for example, moves to a regulatory initiative (Solvency II) that is intended to increase solvency protection, U.S. insurers may find themselves operating at a competitive disadvantage when doing business in the EU.
“We applaud the Senate Banking Committee for this needed look at insurance regulation, and trust that as the best course of action is deliberated, an optional federal charter will be at the heart of the debate.”
In testimony before the Senate Banking Committee during a broad hearing on insurance regulatory reform, Steadman told lawmakers that adopting surplus lines reform legislation would be a “practical solution to real marketplace problems” that could cure a fundamental flaw in state insurance regulation while Congress considers other regulatory changes.
Steadman, who is president and COO of Rutherfoord Inc., of Roanoke, Va., noted that there is rare consensus on the need to have a less complicated and conflicting regulatory approach to surplus lines reform. Presently, more than 25 percent of commercial insurance in the United States is placed in surplus lines market, which is also known as the non-admitted insurance marketplace.
“All of the major stakeholders are supportive of this legislation – large and small insurers and reinsurers, large and small intermediary firms, and the only organization whose explicit purpose is to represent commercial insurance consumers – the Risk Insurance Management Society,” Steadman said. “I should also note that despite our disagreements on broader federal reforms, the National Association of Insurance Commissioners has taken a progressive stance on the surplus lines title of this legislation.”
The Council is a strong supporter of an optional federal charter for the insurance industry as well as a federal Office of Insurance Information that has been proposed by the Bush administration’s Treasury Department and is currently gaining some traction in the House. However, Steadman said nothing in the surplus lines reform legislation should be seen as either advancing the optional federal charter movement or threatening it.
The OFC debate is likely to be long and complicated and most certainly will not be resolved in the near future, Steadman said. However, surplus lines reform has already passed the House by unanimous vote during this Congress as well as the previous Congress and could easily receive final legislative approval in the Senate before lawmakers adjourn for the year and end the 110th
“Surplus lines regulatory reform will not detract at all from the debate over the OFC, nor is it a substitute for that legislation,” he said. “But in the meantime, it is an achievable reform of the state-based regulatory system; it is a somewhat uncontroversial reform that even the state insurance regulators support; and its resolution will save millions of dollars for brokers and consumers and, we believe, ultimately increase compliance with state premium tax requirements by resolving the conflicts that make compliance difficult, if not impossible, today.”
The Senate surplus lines legislation is sponsored by Florida Sens. Bill Nelson, a Democrat, and Mel Martinez, a Republican. It proposes to replace the current crazy quilt of state regulations with a uniform approach that makes the rules of the insureds’ home state apply in the case of multistate placements.
The current system works if there is only one state involved, since regulatory compliance involves only a single set of rules. However, if multiple states are involved, which is the norm in the surplus lines market, “full regulatory compliance is difficult if not impossible because the laws of every state in which an exposure being insured is located may technically apply to the transaction,” Steadman said. “Simply keeping track of all the requirements can be a Herculean task.”
For example, he said, it is nearly impossible to determine the correct allocation for surplus lines premium taxes because of the differences among the states with respect to tax rates, the tax exemptions, taxing authorities and timing of tax payments. In one state, surplus lines taxes are levied not by the state at all but by municipalities. He said to comply in that jurisdiction, one Council member firm actually uses electronic maps to determine the city and county in which a risk is located.
The rules are equally divergent when it comes to other issues such as declinations, insurer eligibility, regulatory filings and producer licensing.
“We believe this bill offers the committee a political and substantive trifecta – lowering costs to insurance consumers, providing greater access to affordable products and doing so with little to none of the political controversy that surrounds other federally preemptive insurance legislation,” Steadman told members of the banking panel. “We hope that you will seize this opportunity this year.”
Monday, July 28, 2008
As the Aug. 1 anniversary of the Minneapolis I-35W Bridge tragedy approaches, Pennsylvania Transportation Department Secretary Allen Biehler announced the release of Bridging the Gap: Restoring and Rebuilding the Nation's Bridges, a new report by the American Association of State Highway and Transportation Officials (AASHTO) that outlines the critical challenges ahead.
Among the report's key findings:
- Age – Usually built to last 50 years, the average bridge in this country today is 43; almost 20 percent of these "Baby Boomer" bridges are over 50 years old. As age and traffic increase, so does the need for repair.
- The Price Tag – According to new data from the Federal Highway Administration, the cost to repair or modernize the country's bridges is $140 billion-assuming all the bridges were fixed immediately.
- Traffic Congestion – Many of the nation's large-scale bridges have become chokepoints on the country's freeway system and a drain on the nation's economy. The top 10 highway interchange bottlenecks cause an average of 1.5 million truck hours of delay each year.
- Soaring Construction Costs – The costs of steel, asphalt, concrete, and earthwork have risen by at least 50 percent in the past five years, forcing delays of bridge improvements and replacements. Nearly every state faces funding shortages that prevent them from the kind of on-going preventive maintenance, repair, and replacement needed to keep their bridges sound indefinitely.
"Our point today is about putting the country on a solid foundation and not about gaining political advantage or using statistics as scare tactics," Gov. Rendell said. "The release of this report and our ongoing campaign on behalf of realistic transportation investment is all about ensuring public safety and rebuilding our economy. We simply can't wait. We need solutions, not rhetoric."
Biehler reminded reporters of the March 17, 2008 discovery of a widening crack in the pier support of a bridge carrying Interstate 95 through Philadelphia, a short distance from today's press conference. Biehler said "During the two day closure, 368,000 vehicles were forced to detour around this section of the interstate. This was just a small example of how vital the nation's transportation infrastructure is to our economy and quality of life," Biehler said.
The AASHTO report also points to several solutions. Among them:
- Increased investment in transportation at all levels of government-federal, state, and local.
- Support for a wide range of revenue options such as tolls, tax increases, annual road user fees, bonds, or private investment;
- Continued commitment to research and innovation;
- Systematic maintenance to extend the life of bridges; and
- Increased public awareness that bridges are vital links to business and communities.
AASHTO president and director of the Missouri Department of Transportation Pete Rahn said, "The current generation of baby boomer bridges are showing their age and they're going to require significant investment. We must act now."
The National Weather Service issued flash flood watches for much of the eastern part of the state on Monday.
Some 300 to 500 people were evacuated from homes, a campground and a recreational vehicle park after the Rio Ruidoso flooded its banks early Sunday.
According to state officials, more than 60 homes had been damaged.
HM Risk Group LLC will be a full-service independent insurance firm providing dedicated brokerage, risk management and consulting services to commercial clients on a global basis, with executive offices in Austin, Texas. HM Risk Group, LLC intends to be licensed in all 50 states.
Hunter stated that, “In recent years, many risk managers and corporate clients have taken a more active approach to insurance and understanding their company’s risk management needs. Also they are no longer interested in taking a back seat approach to insurance or risk management and desire to work with a firm that can provide a one-stop shop.”
HM Risk Group LLC will focus exclusively on the business of assessing risk and securing competitive insurance programs for commercial clients who have large and/or complex risks with specialized insurance needs.
"We think the world of insurance brokering is done best, when the client is not looked upon as only an account, but part of the business family. We want to treat every client as we would our own family - with honesty," Hunter added.
For more information on the company, visit www.hmriskgroup.com or call (214) 801-3166.
BWC has successfully recouped slightly more than the $50 million in original principal investments. Funds were recovered through collections from asset sales, including the sale of rare coins and collectibles purchased with BWC funds. The agency recovered other funds through negotiated settlements. The final large-scale transaction occurred recently with the recovery of $7.6 million from the liquidation of stocks by Numismatic Guaranty Corporation of America (NGC), a coin company in which Thomas W. Noe has an ownership interest.
“The efforts to recover these assets on behalf of Ohio’s employers and injured workers should be recognized as an important accomplishment on the road to recovery for BWC,” said Ryan. “BWC’s investment team, the investigators, lawyers, and liquidators deserve recognition for their diligence and hard work in recouping these funds. Today, we are building upon these recovery efforts and moving forward in our comprehensive, customer-focused reform to fundamentally improve Ohio’s workers’ compensation system.”
BWC expects to reinvest the NGC proceeds in its S&P 500 equity index fund. An additional $2 - $3 million in future settlements is still pending. The estimated cost involved in recovering BWC assets is more than $6 million.
OSHA initiated the inspections following an explosion and fire on Feb. 7, 2008, at the Port Wentworth refinery that claimed the lives of 13 employees and hospitalized 40 others. Three employees still remain hospitalized. The proposed penalties against Imperial Sugar represent the third largest fine in the history of OSHA.
OSHA's inspections of both facilities found that there were large accumulations of combustible sugar dust in workrooms, on electrical motors and on other equipment. The investigation also determined that officials at the company were well aware of these conditions, but they took no action reasonably directed at reducing the obvious hazards.
OSHA proposed $5,062,000 in penalties for safety violations at the Port Wentworth refinery and $3,715,500 for safety violations found at the Gramercy refinery. The citations include 108 instances of willful violations related to the combustible dust hazard, including the failure to clean up dust and not using appropriate equipment or safeguards where combustible dust is present. OSHA also has issued 10 citations for other willful violations, 100 citations for serious violations and four citations for other-than-serious safety and health violations.
The company has 15 business days to contest the citations and proposed penalties before the independent Occupational Safety and Health Review Commission.
Issues & Answers: Captive Domiciles and Services covers topics such as reinsurance, captive insurance regulation, legal and more. A captive insurance organization insures some or all of the risks of its parent organization. Captives are a significant part of the growing Alternative Risk Transfer (ART) insurance sector in many nations and in the United States.
The edition can be read and listened to at no charge at http://www.bestreview.com/captives08.html.
Articles and interviews in the special section include:
The next edition of Issues & Answers: Insurance Technology will appear in the October 2008 edition of Best’s Review. Those interested in being included should contact Best’s Review’s advertising sales department at (908) 439-2200, ext. 5399. For a video explaining this section, visit http://publishing.yudu.com/Ab308/IA-Tech-Oct-2007/resources/30.htm.
The incident happened earlier this month and the home's owner who was inside at the time was not injured.
The workers on site said they left the scene because the company they work for, Gator Tree Experts, reportedly did not have insurance.
The behavior-based insurance program, called MyRate, gives drivers a customized rate based on how, how much, and when their car is driven. It will be available starting Aug. 8 to New Jersey drivers who purchase polices online, by phone, or through independent agents.
Drivers who choose to sign up for MyRate receive a small wireless device that plugs into a port in their car. The MyRate device allows Progressive to see how, how much, and when the car is being driven. Cars driven less often, in less risky ways and at less risky times of day can receive a lower premium.
Drivers with more than one car can select which, if any, of their vehicles to enroll in MyRate. For example, a person with a second car that isn’t driven that often may enroll that car in MyRate but may decline to enroll their other vehicle if it is driven much more frequently or during higher risk times of day.
New Garden State customers can earn a first-term discount of up to 10 percent just for signing up. Then, when they renew their policy, their rate could decrease by up to 60 percent or increase by up to 9 percent based on their driving habits.
Progressive's initial foray into usage-based insurance started in 1999 with a program in Texas called Autograph. Its next generation of usage-based insurance, TripSense®, became available in Minnesota, Michigan and Oregon beginning in 2004. MyRate is now being rolled out countrywide, pending state regulatory approval.
Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies. Progressive has service marks pending on the terms Pay As You DriveSM and Pay How You DriveSM.
Friday, July 25, 2008
Poizner applauded Fireman's Fund for being the first company to offer a green homeowners policy in California, and encouraged other insurers to explore environmentally-friendly options for consumers.
This landmark coverage approved by Poizner will be available Aug. 1, and will enable California homeowners with conventional homes to rebuild to the latest environmental standards after a loss. The newly-approved policy will provide coverage for costs typically not covered in traditional homeowners policies, like green recertification fees and other additional expenses environmentally-conscious homeowners may incur when rebuilding.
Under the type of coverage approved by Poizner, California homeowners can for the first time rebuild covered homes, under Leadership in Environmental and Energy Design (LEED) standards set by the U.S. Green Building Council. The first-of-its-kind policy provides up to $25,000 for a LEED-certified architect to oversee the rebuilding of the home, and the LEED application process.
This newly-approved policy will allow a policyholder whose home has been partially damaged or completely destroyed to repair it with environmentally preferable materials such as:
· Energy Star-rated appliances, lighting, electronic equipment and roofing / insulation
· An Energy Starupgrade of heating, ventilation and air-conditioning systems
· Forest Stewardship Council (www.fcsus.org) certified wood for millwork, ceilings,
siding and framing, including bamboo flooring
· Non-toxic, low odor paints and carpeting
· Water-saving plumbing fixtures
· Elimination of ozone-depleting refrigerants and fire extinguishing agents, replaced
with environmentally friendly alternatives
· Debris removed after damage to a home will be recycled and diverted from landfill
Currently, Poizner is sponsoring SB 1279 (Sen. Maldonado), which will allow insurance companies to submit paperless filings to the Department of Insurance, significantly reducing the amount of trees cut down by the numerous paper filings the Department receives annually. Poizner is also working to develop regulations that will create a green auto insurance option for California drivers. "Pay as you drive" auto insurance will be a voluntary way for consumers to pay rates that most accurately reflect their coverage, and encourage Californians to drive less, reducing the environmental strain of vehicle emissions.
"Carl's distinguished leadership has left an indelible mark on our company,” said Jay Fishman, Travelers chairman and chief executive officer. “All who knew Carl remember him for his integrity, courage, strong convictions and for his many business and community achievements. Carl was a good friend of the company and a good friend of the community.”
Drake began his career with The St. Paul by working summers while in college. In 1941, he started full time with the automobile underwriting department. After serving in World War II, Drake held various field and underwriting leadership positions with the company before being elected secretary in 1960. He became president of St. Paul Fire and Marine in 1969 and then was elected president and chief executive officer of The St. Paul Companies in 1973. Four years later, Drake was elected chairman. In 1978, he relinquished the presidency but continued as chairman and chief executive officer.
In 1984, Drake retired from the position of chairman and CEO but remained on the board of directors as vice chairman. As vice chairman, Drake was an active member on the boards of several research, educational, charitable and corporate institutions. He retired from The St. Paul’s board in 1987 but maintained a close association with the company and periodically visited our headquarters.
The St. Paul Companies Inc. merged with Travelers Property Casualty Corp. in 2004 and the combined company is now known as The Travelers Companies Inc.
The Independent Insurance Agents & Brokers of New York Inc. worked closely with legislators, regulators and the governor's office for passage of the bill. In a letter to Paterson’s acting legal counsel dated July 16, IIABNY expressed its strong support for amending the current law and urged Paterson to sign the reforms into law.
The so-called “no prejudice” law (S.8610) that goes into effect March 1, 2009, prohibits insurers from denying a claim based on the failure to provide timely notice of a claim unless the delay compromises their ability to process the claim or caused “material prejudice.”
The legislation corrects a serious problem for insurance producers and their customers by enacting a statutory definition of late notice claims. IIABNY contended the widespread use of late notice denial of claims had escalated, with procedures varying from company to company and sometimes within one carrier. The situation created uncertainty for producers and their clients when submitting claims.
A 2007 version of this late notice bill—opposed by IIABNY—was vetoed last August by former Gov. Eliot Spitzer. Last year’s legislation included a trial lawyer-crafted portion that would allow attorneys to “shop around” for the most lucrative lawsuits by allowing them to sue policyholders to find out what coverages and limits are available before liability against the policyholder was established.
The association has since worked with the Governor’s office to help craft acceptable bill language.
In September 2007, the association contacted top executives of property and casualty insurance companies in New York, asking that they “not invoke late notice unless there is material prejudice.”
The 2008 version includes the following highlights:
* This bill prohibits insurers from denying coverage for claims based on the failure to provide timely notice unless the insurer has suffered “prejudice” as a result of the delay. The insurer’s rights would not be considered prejudiced unless the failure to provide timely notice materially impairs the ability of the insurer to investigate or defend a claim;
* If notice is given within two years of the time required by the policy, the burden of proving prejudice rests on the insurer and if later, the insured. If notice is provided to the insurer after the insured’s liability is determined, then there would be an irrefutable presumption of prejudice;
* Permits a party suing an insured in a personal injury or wrongful death case to commence a simultaneously declaratory judgment action against the defendant’s insurer, in limited circumstances, to challenge the insurer’s denial of coverage based on the insurer’s denial of coverage based on the failure to provide timely notice;
* Establishes a process for a claimant to receive confirmation from an insurer that the insured had an insurance policy in effect on the alleged occurrence date and the limits of the policy.
Introduced at the request of the Governor, this legislation received sponsorship in the Assembly by Helene Weinstein (D-Brooklyn) and Joseph Morelle (D-Rochester) and in the Senate by John DeFransisco (R-Syracuse).
Wednesday night's blaze at the school in Gilroy is being reported as arson, according to investigators. Early in the evening, a fire started in the Gateway Special Education School's main complex, resulting in damage to the building.
Another fire struck the same complex earlier this year. Authorities have not said if they believe the same person is responsible for both fires.
"At Aon, we believe in the fundamental principle that a client deserves to know whether its producer is working for the client or as an agent of an insurer, what insurers the producer approaches, how much the client will pay, and how the producer will be compensated," said McGill. "This is essential to enable the client to make informed choices, to avoid an actual or potential conflict of interest by the producer, and to produce the best and most competitive outcomes for clients.
"We strongly believe that it is in the best interests of all clients that the Department uses its authority to require mandatory, clear and consistent disclosure of producer compensation and to apply the same rules to all producers. In such an environment, producers that add value to their clients will flourish, and producers that do not add value will not. And this competitive environment will ultimately work to the benefit of clients.
"Aon therefore recommends reinforcing the spirit of consumer advocacy and a free market by having every producer compete on the same terms and in the same manner, with required transparency in a simple and effective form. All producers should disclose whom they work for, what they do, how they do it, and what they are paid. This will enable clients to make more informed choices, and will also reinforce the competitiveness of the marketplace and the standards of excellence and professionalism in the industry."
Thursday, July 24, 2008
* Joseph Morris has been named president and CEO of James River Insurance Company and its affiliate James River Management Company Inc., effective Aug. 25. Morris has over 28 years of insurance industry experience and most recently served as president and CEO of The Philadelphia Contributionship, the oldest insurance company in the United States.
* Robert Parr has been named senior vice president of sales and marketing of Fringe Benefits Management Company (FBMC), one of the nation’s leading Employee Benefits Solutions. Parr has more than 30 years of experience in the employee benefits business including six years as an independent insurance agent.
* Narragansett Bay Insurance Company reported the addition of Mark Talerico as chief risk officer. Overseeing Narragansett Insurance's distribution of risk in homeowners insurance, Talerico will guide the company's exposure management, applying his insights developed over 25 years of insurance and financial experience.
* ACE noted the appointment of Phil Sharpe as director of casualty and major risks for the UK & Ireland. In his role, Sharpe will manage ACE UK’s casualty portfolio across all 11 of its offices in the UK and Ireland, as well as co-ordinating the major risk activity.
* Lester Knight, an independent director since 1999, has been elected non-executive chairman of the Board of Aon Corporation. Knight, 50, succeeds Patrick Ryan, Aon's executive chairman and founder, who previously announced his intention to retire on Aug. 1, 2008. Knight is a founding and managing partner of RoundTable Healthcare Partners, a healthcare-focused private equity investment firm.
The U.S. government noted the fine today, citing insufficient pillar support and mining in areas that should not have been mined. Six miners died initially in the collapse last August at the Crandall Canyon mine.
Genwal Resources, the mine operator, was fined $1.34 million "for violations that directly contributed to the deaths of six miners last year," plus nearly $300,000 for other violations. Mining consultant Agapito Associates was hit with a $220,000 fine "for faulty analysis of the mine's design."
The mine's owner, Bob Murray, repeatedly denied in the days after the tragedy that his company practiced retreat mining at the site. Murray later said that the practice had been used at the mine but not at the time of the disaster.
In addition to the six miners killed in the initial cave-in, three rescuers were killed 10 days later during a subsequent collapse. The bodies of the six miners killed in the initial collapse remain in the mine.