Friday, May 30, 2008

Brown & Brown Acquires Central California Agency

Michael Paschke, regional executive vice president of Brown & Brown Inc., and James Muth, president of Debock & Muth Insurance Agency Inc., of Stockton, California, announce the asset acquisition of Debock & Muth Insurance Agency Inc. by a subsidiary of Brown & Brown Inc.

Debock & Muth Insurance Agency Inc., with annualized revenues of approximately $1.7 million, focuses on property & casualty insurance for individuals and businesses in central California and throughout the United States. James Muth and his associates will continue to operate from their existing location in Stockton, California as a freestanding Brown & Brown profit center.

Paschke stated, "We are extremely pleased to add Jim and his staff to our growing presence in central California. This team of talented insurance professionals will provide us with new resources and services capabilities for our clients throughout the Golden State."

California Tagger Charged; $70,000 in Property Damage

A suspected tagger who allegedly posted his work on YouTube was charged Thursday in Los Angeles with 32 felony counts of vandalism totaling nearly $70,000 in damage, the District Attorney’s office announced.

Cyrus Yazdani, 24 (dob 7-17-83), who allegedly used the moniker “Buket,” was arrested after investigators recently spotted a YouTube video allegedly showing him tagging MTA buses and property belonging to the Army Corps of Engineers along the L.A. River Bed. The alleged incidents occurred between September 2005 and January 2007. Damage is estimated at more than $70,000.

He is charged in case BA341250, said Deputy District Attorney Joseph Shidler. Prosecutors are asking that bail be set at $234,000. If convicted, he faces up to 20 years in state prison. He is currently on probation after pleading no contest in July 2007 to three counts of felony vandalism.

ACE USA Podcast Offers Insight on West Virginia Comp

ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, launched a new audio podcast (or Internet-distributed program), which provides information in preparation for the transition of the West Virginia Workers Compensation marketplace from a monopolistic to a competitive marketplace. This change will take place beginning July 1, 2008.

The podcast, titled "Insight into Changes in How Brokers Can Place Workers Compensation Risk in West Virginia," is presented by Brian Powers, senior vice president and chief regulatory compliance officer for ACE Risk Management, part of ACE USA.

Powers discusses the background of the appointment of the National Council on Compensation Insurance (NCCI) as the states rating organization as an alternative to the existing monopolistic fund managed by Brick Streetthe states insurance company. He explains the state workers' comp transition, how ACE USA is preparing for this changeover, and offers some considerations for which options are available and how to best approach the submission process when considering the changeover effective date.

According to Powers, insureds with exposure in West Virginia will now have three options to choose from: 1) the insured can elect to immediately move their existing Brick Street coverage to a voluntary market and cancel their policy (no cancellation will automatically be imposed); 2) the insured may elect to let their current policy with Brick Street continue up until the time of its natural expiration and then place in the commercial market; or, 3) the insured can elect to keep their insurance coverage with Brick Street on a going-forward basiswith no interruption.

Powers commented on the new offerings, Both insureds and brokers can benefit from this change. Brokers will be able to provide more options for their clients, and insureds will now have the option of electing to have their workers' compensation insurance for West Virginia provided by the same commercial carrier that supports its other workers' compensation exposures throughout the U.S. This is a significant change and weve been preparing for this transition for many months. As a result, we stand ready to support the West Virginia business when it becomes available to the commercial marketplace.

To access the ACE Risk Management audio podcast program (approximately 14 minutes in length), visit www.aceusa.com/News/Pages/Podcasts.aspx. The material presented in the podcast is not intended to provide legal or other expert advice. It is presented for general information only. Listeners of this podcast should consult legal counsel or other experts, as applicable, with any questions.

Companies Gain Approval in Texas to Self-Insure

Commissioner of Workers’ Compensation Albert Betts approved 10 companies, employing approximately 31,400 employees in Texas, to self-insure for workers’ compensation claims for a one-year period under the Texas Department of Insurance, Division of Workers’ Compensation Self Insurance Program.

Under Texas law, certain large, private companies can self-insure for workers’ comp claims, while retaining the protection of the Texas Workers’ Compensation Act for the company and for its employees. To qualify, a company must have a minimum workers’ comp insurance unmodified manual premium of $500,000 and meet other requirements subject to annual review.

The following 10 companies received renewals of existing self-insurance certificates:

  • ABF Freight System, Inc., Fort Smith, AR
  • Baptist Hospitals of Southeast Texas, Beaumont, TX
  • Countrywide Home Loans, Inc., Fort Worth, TX
  • Driver Pipeline Company, Inc., Irving, TX
  • General Motors Corporation, Detroit, MI
  • Johns Manville, Denver, CO
  • Leonard Family Corporation, San Antonio, TX
  • PPG Industries, Inc., Allison Park, PA
  • Starbucks Corporation, Seattle, WA
  • Trinity Mother Frances Health System, Tyler, TX.

Consolidations Mean Less Small Agencies

A decades long trend toward insurance distribution consolidation is accelerating, with the heaviest impact being felt at the level of the smallest agents and brokers, as they struggle to find a way to grow, are bought or are forced out of business, according to a story in BestWeek

Consolidation on the distribution side is continuing to happen, and its happening very, very aggressively, said Ken Crerar, president of the Council of Insurance Agents and Brokers. This industry has long been ready for consolidation. Its driven by the need to be more efficient, by the need for stronger balance sheets.
U.S./Canada.

Crerar cites an analysis by industry consultant Marsh-Berry that says of a total of 38,000 agencies in 2000, 22,754 agencies earned under $500,000 in commercial property/casualty revenue. More than 19,000 of those will be out of business by 2015a decline of approximately 75%.

The number of agencies doing $10 million or more in revenue will have more than tripled, to more than 600, during the same time period.

The study said that market share is following the same trend line.

Also, in BestWeek Europe:

London based independent specialist insurance and reinsurance broker Cooper Gay (Holdings) Ltd.s acquisition of almost all of the wholesale and reinsurance business of Heath Lambert Group reflects forces that are pushing the brokering sector toward consolidation, according to Toby Esser, Cooper Gays group chief executive officer.

Also, in BestWeek U.S./Canada:

The equine insurance industry has rebounded from a severe capacity problem, as the impact of the soft insurance market has trickled down to the paddocks and new capital has entered the market.

And in both editions of BestWeek:

The Bests Global Insurance Composite Index finished the week of May 29 down 15.28% from a year ago. The composite index reflects the performance of 168 insurance stocks. The weeks top stocks were National Interstate Corp., NYMagic, Berkshire Hathaway, Kansas City Life Insurance Co., and Delphi Financial Group.

The bottom five stocks were Atlantic American Corp., American International Group, QBE Insurance Group, Paris Re Holdings, and American National Insurance Co.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, call A.M. Bests customer service department at (908) 439-2200, ext. 5742, or e-mail your request to customer_service@ambest.com.

New York Crane Collapse Kills 2

At least two people are dead following a construction crane collapse early Friday in New York.

The accident, which also critically injured one, took place on Manhattan's Upper East Side as the crane crashed into a high-rise apartment building, then hit at least a dozen stories and crashed to the ground.

Firefighters and rescue workers continue to look for more victims as the morning goes along.

The site of the accident is the future Azure condominiums. According to authorities, the crane had just passed an inspection less than two weeks ago.

Back in March, seven people were killed in the city when a crane hit a four-story townhome. That accident also did damage to several other buildings in the area.

Oxford Health to Reimburse N.Y. Small Businesses

New York Gov. David Paterson and New York State Insurance Department Superintendent Eric Dinallo announced that Oxford Health Insurance Inc. has agreed to refund $50 million to approximately 37,000 small businesses in New York City, Long Island and the northern suburbs for overcharging on health insurance policies in 2006.

The refund highlights the need for legislation to reinstate the Insurance Department’s authority to approve rate increases before they go into effect, something the Insurance Department is pursuing this legislative session.

Prior to 1996, the New York State Insurance Department had the authority to pre-approve rate increases for health insurance, a process that helped keep rates relatively stable for decades. Since the law was changed to eliminate the Insurance Department’s prior approval authority, the Department has only been able to look at the rate increases a year after they take effect. For more than a decade the only consequence for excessive rate charges has been repayment in subsequent years.

“We must make New York a good place to do business by keeping costs competitive. We know that small businesses are the engine of growth in this State and the rising cost of health insurance is one of their major complaints,” said Gov. Paterson. “If it can help protect business and keep premium rates down for New Yorkers, we should update the laws to give the Insurance Department more oversight.”

Superintendent Dinallo said: “I am pleased that the Department was able to get these refunds for small businesses. But an after-the-fact settlement in 2008 does nothing for those businesses that may have had to drop coverage in 2006 because they could not afford a larger than necessary premium increase. These refunds would be unnecessary if the NYS Insurance Department had the authority to pre-approve rate increases for health insurance premiums. Requiring health plans to get approval from the Department before increasing rates would help keep New Yorkers insured. Lawmakers should restore to the Department the tools to better monitor and manage the marketplace for health insurance rates.”

The $50 million settlement will be paid to 36,746 small business policyholders with approximately 300,000 employees and family members. The refund will vary depending on the number of covered individuals. It amounts to an average of $1,360 per business, which is about 5.5 percent of the total average annual premium in 2006.

The Insurance Department initiated a review after Oxford reported to the Department that Oxford’s loss ratio for small group policies in 2006 was below the 75 percent minimum. Oxford paid benefits equal to 70.58 percent of its overall premiums in 2006.

The vast majority of health insurers, like Oxford in this case, raise premium rates without first getting approval from the Insurance Department by utilizing a “file and use” procedure. If a health insurer using this method does not pay benefits equal to at least 75 percent of overall premiums in a calendar year, the insurer must refund the excess premium to policyholders in the form of cash payments or credits against future premiums.

Dinallo also said: “Oxford did the right thing in working with the Insurance Department to make sure consumers got their money back. But it is unfortunate the Department lacks the legal authority to pre-approve health insurance premium rate increases and prevent premiums that turn out to be larger than the law allows.”

The settlement affects policyholders of Oxford’s small group Freedom Plan Direct, Freedom Plan Metro and Freedom Plan EPO products. It does not affect Oxford’s small group and direct pay HMO and “point of service” (HMO/POS) policyholders.

California Commissioner Hosts Fraud Summit

Following a meeting with his Advisory Task Force on Insurance Fraud, Blue Ribbon Review Committee, California Insurance Commissioner Steve Poizner announced that he will immediately implement five actions to help reduce fraudulent claims, including the creation of a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.

"Insurance fraud is not a victimless crime," said Poizner. "The costs are passed onto consumers to the tune of $500 a year for every man, woman and child and that's why I have made fighting insurance fraud one of my highest priorities."

The Task Force also released "Reducing Insurance Fraud in California," a report today that detailed a number of recommendations to reduce fraudulent claims in California. While many of the recommendations require regulatory changes, legislative action, or additional funding, the Commissioner was able to adopt a number of recommendations immediately, including:

  • Create a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.
  • Better training for the Special Investigation units (SIU) on the recognition, documentation, and reporting of suspected insurance fraud claims.
  • Recognize insurance companies that go beyond compliance for their greater commitment to fighting fraud.
  • Increase the outreach efforts of CDI about the consequences of fraud, how the public can recognize it and report it.
  • Adopt more aggressive recruiting and retention practices, including pay upgrades, so that CDI can recruit and retain qualified investigators.

The Task Force was created by Poizner to bring together public and private sector experts to develop innovative methods to combat insurance fraud. The inaugural Task Force meeting was held in May 2007.

"I also want to thank the Blue Ribbon Review committee, other Task Force members and my staff for all their hard work in putting together such a phenomenal report," said Poizner. "I can and will immediately enact five of these recommendations and have directed my staff to examine the remaining proposals to determine what steps need to be taken next."

Blue Ribbon Review committee members included Mike Brown, California Business, Transportation & Housing Agency chief deputy secretary for public safety; Frank Scafidi, National Insurance Crime Bureau president & CEO; Steve Cooley, Los Angeles County district attorney; Bonnie Dumanis, San Diego County district attorney; Richard Holober, Consumer Federation of California executive director; The Honorable Harry Low, Justice (Ret.), California Appellate Court and former California Insurance Commissioner; John McGinness, Sacramento County sheriff; Tom Rankin, California Labor Federation, AFL-CIO, president emeritus; Jan Scully, Sacramento County district attorney; David Snowden, City of Beverly Hills chief of police; and Allan Zaremberg California Chamber of Commerce president & CEO.

A copy of the report can be found at www.insurance.ca.gov

Aon Using IBM Cognos 8 BI for Salesforce

Cognos, an IBM company and provider in business intelligence and performance management, has announced that Aon, a provider of global risk management and consulting services, has chosen to implement IBM Cognos 8 BI for Salesforce.

Aon is using the IBM Cognos solution to gain greater visibility of its sales and marketing pipeline. The technologys unique ability to allow brokers, account managers, and customer service representatives to access both current and historical in-house data, as well as data held in Salesforce Software-as-a-Service (SaaS) CRM, is critical to providing the insight Aon needs to manage overall sales performance, globally.

The company needed to be able to report on sales campaign and opportunity data, and communicate this better throughout the business to all decision makers. As a result, it introduced a single sales and marketing platform across the company to provide consistent and standardized processes. Through the IBM Cognos reporting function, staff has access to up-to-date reports, so they can ensure the sales process is delivered in the most efficient manner possible, and can make effective business decisions. This also allows them to rank the customer-facing sales staff, helping them increase their selling potential and better service Aon customers.

Aon now uses a Revenue Engine, which combines data from IBM Cognos 8 BI, Salesforce and other in-house systems. This will build customer relationships and drive revenue through continuous improvements to the sales and marketing process in response to customer needs.

By implementing IBM Cognos 8 Business Intelligence with our global Salesforce environment, Aon is driving performance at every stage of the sales and marketing process, said Joseph Demmler, managing director, Sales and Marketing at Aon. For Aon, this is a cultural change and the ability to report globally based on standard metrics is driving organic growth and our return on marketing investment, as well as user adoption of Salesforce.

Thursday, May 29, 2008

San Diego Fire Report Offers Ominous Signs

A report released on Thursday details the challenges San Diego has faced when it comes to recent wildfires, along with the threats it faces in the future.

The San Diego County grand jury released the report, which calls for immediate funding to make sure the city and county are prepared for wildfires.

It was just last October that wildfires took a heavy toll on local property. The Witch Creek blaze alone last fall burned more than 197,000 acres, destroyed 1,125 homes and more than 200 vehicles, and killed two people in Poway.

Titled "The Fire: Next Time, Will We Be Ready?," the report looks at how two major fires in the last five years have impacted San Diego, and calls for a response much greater than what local authorities can currently muster.

In the grand jury report, which requires elected officials to respond to within 90 days, the call for fire and public safety to garner more budgetary importance is made loud and clear. San Diego County generally spends about 9 million a year for firefighting protection.

The report also says that researchers believe the area's fire season has increased by two months and that nearly 7 times more land is destroyed than in the 1970s.

The 2003 fires that hit San Diego killed 22 people and leveled 3,640 homes.

Lawsuits Mount Against SDG&E Following Fires

The number of lawsuits against San Diego Gas & Electric Co. continue to grow following last October's deadly wildfires in San Diego.

More than 100 families have to date sued SDG&E, saying the utility was negligent for permitting its power lines to spark the fires that consumed more than 200,000 acres. The Witch Creek blaze alone scorched more than 197,000 acres, destroyed 1,125 homes and killed two people in Poway.

Not to be left out, SDG&E has filed a claim itself against the city, charging the utility is looking at a number of lawsuits and the city should share in the potential liability.

America First Insurance Urges Hurricane Preparation

With a potential above-normal hurricane season predicted and a record number of tornadoes across the country through May, America First Insurance is urging policyholders in its six-state south-central region to take important precautions to prepare for, and recover from, severe weather.

America First Insurance offers a free Disaster Planning Guide available to consumers at www.americafirst-ins.com, under the Insurance Resources tab. The guide helps homeowners develop an action plan for evacuation, details what necessities should go into an emergency kit, and explains the importance of undertaking a household inventory, among other important safety tips.

Being prepared for severe weather also means policyholders’ understanding whether or not they have adequate or enough insurance coverage. A recent survey by the National Association of Insurance Commissioners found that 28 percent of those questioned were not sure whether they purchased replacement cost or actual cash value coverage. Further, a majority responded that they do not have coverage to protect them from losses that aren’t reimbursable under standard homeowner policies, such as earthquakes, floods, or water and sewer line breaks.

“We encourage our customers to review their policies and coverages with their agents every year, just like changing batteries in a smoke detector,” said J.B. Fox, vice president, Personal Lines. “It is particularly important for policyholders in disaster-prone areas to understand the extent of their coverage and their options to protect themselves financially from certain hazards.”

Commercial customers and America First Insurance appointed agencies also have free access to Open for Business, an online tool developed by the Institute for Business and Home Safety (IBHS) that allows businesses to plan for, and recover from natural disasters. According to IBHS, at least one-fourth of all businesses never reopen following a disaster.

“We want our customers and agents to be prepared to the greatest extent they can be,” said Dave Andrezejewski, vice president, Field Claims Operations. “These resources provide guidance on what they should do before, during, and after a disaster to help protect themselves, their assets, and be in a position to recover quickly.”

Commercial Lines policyholders can contact their America First appointed agent for an access code and then log into the Open for Business program at www.ibhs.org/policyholder/register.asp. Once there, business owners answer questions about human resources, physical resources, and business operations, in order to build individualized property protection and recovery plans.

Property protection plans are matched to the potential catastrophic risks that exist for a particular zip code, including hurricanes, high winds, floods, earthquakes, tornados, and wildfires. Recovery plans are based on each company’s critical business functions and the role that employees, suppliers, and vendors play in daily operations. The plans also outline how vital records, equipment, vehicles, computers, and voice/data communications can be integrated from a chosen recovery location to help a business stay open following a natural disaster.

Simsol Unveils Product for Flood Claims Adjusters

Simsol has completed the interface between its flood claim damage estimating product, Simsol for Adjusters and the claims processing software of the EDS Write-Your-Own Flood Services unit, a provider of flood insurance services to insurance carriers participating in the National Flood Insurance Program's (NFIP) Write-Your-Own (WYO) program.

The interface now enables Simsol-equipped adjusters to electronically upload all of the NFIP required flood forms, reports and XML data directly into the web services of EDS.

John Postava, president of Simsol, stated, "We are very excited about the new connection between our estimating and loss documentation solution and the EDS flood claim Web site. This connection allows adjusters to directly upload vital flood claim data to EDS. The connection will reduce the turnaround time in the handling of flood claims as well as expediting payments to flood claim victims.''

For further information, visit www.simsol.com.

Delaware Commissioner Proposes VA Bill

New legislation proposed by Insurance Commissioner Matt Denn is designed to allow Delaware veterans to stay in Delaware’s VA hospital for some surgeries rather than being sent to VA facilities out of state.

Senate Bill 269, sponsored by Sen. George Howard Bunting, Sen. Patricia Blevins, Rep. Terry Spence and Rep. John Kowalko, would address a shortage of surgeons that currently exists at the Veterans Affairs Medical Center in Elsmere, which is resulting in Delaware veterans being referred to Maryland and Pennsylvania VA facilities for some surgical procedures.

“There are a number of retired surgeons that have offered to do work at the VA hospital, but there is a clause in the medical malpractice insurance contracts of retired doctors that causes them to lose their coverage for past acts of medical malpractice if they come out of retirement to work as surgeons at the VA hospital,” Denn said. “This bill would eliminate that insurance barrier and allowed retired surgeons to provide critically needed surgical services to Delaware veterans.”

The insurance barrier addressed by the legislation is a clause in the medical malpractice insurance contracts of retired doctors that causes them to lose their “tail coverage” for past acts of medical malpractice if they come out of retirement to work as surgeons at the VA hospital. The bill only addresses doctors working at the VA hospital.

“This legislation is going to help us a lot – help us to recruit the doctors we need to treat veterans, help us reduce waiting time for critical procedures, and help us reduce the number of referrals we have to make outside of Delaware,” said Dr. Dennis Witmer, who is head of surgery at the Elsmere VA hospital and initially alerted Commissioner Denn to the issue. “Currently, we even have some veterans who will choose not to get a procedure because of the travel time to another hospital and that’s not a good thing.”

According to Witmer, more than 1,200 major surgeries a year are performed at the Elsmere VA hospital, a number he said that could increase “significantly” with the passage of SB 269 and the recruitment of more surgeons.

OSHA Cites Rhode Island Contractor After Collapse

The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited Ajax Construction Co. Inc. for 15 alleged violations of steel erection safety standards in connection with a Dec. 4, 2007, building collapse at a Taunton, Mass., worksite that injured eight employees. The Harrisville, R.I.-based steel erection contractor faces a total of $239,600 in proposed fines.

OSHA's inspection found that a powered industrial truck was improperly used to plumb, or straighten, a steel column that was disconnected from an overhead girder. Once the column was pulled out from under the now unsupported girder, the girder and the overhead decking on which employees were working collapsed. Afterward, a company official repeatedly entered the damaged structure even though entry was prohibited because the structure had not yet been stabilized and determined to be safe for entry.

For these conditions, plus failure to maintain structural stability during steel erection and other steel erection deficiencies, OSHA has issued Ajax Construction four willful citations, carrying $212,000 in proposed fines. OSHA defines a willful violation as one committed with plain indifference to or intentional disregard for employee safety and health.

OSHA also has issued the company nine serious citations, with $21,000 in proposed fines, for exposing employees to struck-by hazards while the powered industrial truck was used to plumb steel columns; improper lifting slings; commencing steel erection without written notification as to the strength of concrete used for the base; improper modification of anchor bolts; and several steel erection deficiencies within an adjacent structure also under construction. A serious citation is issued when death or serious physical harm is likely to result from a hazard about which the employer knew or should have known.

In addition, OSHA has issued Ajax one repeat citation, with a $6,000 proposed fine, for an inadequate fall protection lifeline, a condition similar to one at a Wallingford, Conn., worksite for which OSHA had cited Ajax in July 2006. Finally, OSHA has issued one other-than-serious citation, with a $600 proposed fine, for not completing the OSHA 300 illness and injury log in a timely manner.

Officials Warn of Potential Fraud Following Disaster

State and federal officials caution those who were affected by the May 10-13 disaster in Craig, Latimer, Ottawa and Pittsburg counties in Oklahoma to be wary of callers and visitors who ask for personal and financial information, as well as access and money. Scam artists often come into areas following disasters.

One common ploy is for scammers to call those affected by disaster and express a need to collect or verify bank account information. Others include coming to homes and misrepresenting themselves in order to gain entrance. Still another is asking for pay to aid applicants in getting their assistance. And yet another is posing as a contractor, asking for full or partial pay upfront and taking the money without doing the work or without doing the work correctly.

In general, officials say residents should guard their personal information. If residents suspect somebody is not on the up and up, they should hang up the phone or close the door and then call the police. More specific guidelines are below.

  • Never give personal or financial information over the phone unless you are certain that the person requesting it is qualified to ask for it and that providing the information is in your best interest. In general, it is best to provide such information only on calls that you place and not on calls you receive.
  • State and federal assistance is provided at no charge to the applicant. Any request for money in order to receive such assistance should be turned down and reported to authorities.
  • If you suspect callers of misrepresentation, asking for their number so you can call them back may help. An uncooperative caller, who refuses to give a number or doesn't answer, may be a fraud. But, in an elaborate scheme, a cooperative caller could also be a fraud, so you should always verify that a caller is genuine before giving information.
  • Always ask to see the identification of people visiting your home. After a disaster, residents are likely to be visited by inspectors from the Federal Emergency Management Agency (FEMA), loss verifiers from the U.S. Small Business Administration and, in some cases, insurance adjusters. All wear or carry photo identification.
  • Do not cooperate with anyone who offers to increase the amount of your disaster-damage assessment.
  • Contact local law enforcement officials if you have any doubt about the authenticity of identification.
  • Ask contractors for references. Do not pay in full in advance. Be sure the contract spells out who will pay for any necessary permits.
  • For architects and those in the electrical, mechanical and plumbing trades, ask to see their licenses. Contact the state licensing board to verify the licenses and check for complaints. Information is available at www.contractors-license.org/ok/ok.htm.
  • Do not do business with contractors who claim to be state or FEMA certified when, in fact, neither the state nor FEMA certifies or endorses contractors.
  • Always pay for repair work by check or credit card in order to keep a record and avoid double charges.
  • The Department of Emergency Management (OEM) and FEMA encourage anyone who believes he or she may have witnessed fraudulent activity to report it immediately. In addition to the local better business bureau, reports may be made to the Oklahoma Attorney General Consumer Protection Unit at 405-521-2029 or online at www.oag.state.ok.us. Residents may also report fraud to the U.S. Department of Homeland Security Office of Inspector General's hotline: 1-800-323-8603.

According to OEM and FEMA officials, special procedures are used whenever they obtain personal or financial information from applicants. Applicants who call the toll-free registration number at 1-800-621-FEMA (3362) or TTY 1-800-462-7585, or who register at www.fema.gov can be certain that their information is secure. A bank account number will be discussed only if an applicant asks the government agency to make a direct deposit.

Wednesday, May 28, 2008

AIG Risk Management Enhances Several Programs

AIG Risk Management (AIGRM), a unit of AIG Commercial Insurance, announced several enhancements in support of its Higher Education, Real Estate, Healthcare and Temporary Staffing industry initiatives in the United States.

In support of AIG Higher Education Risk Solutions, AIGRMs Commercial Risk Division has refined its commercial auto product to now offer borrowed car coverage. The coverage addresses the needs of colleges and universities that may have liability arising out of borrowed vehicles, especially under athletic programs or booster clubs, where local dealerships donate vehicles for school use and the standard auto liability form does not otherwise cover the liability under these arrangements. Industry-focused claims teams, with in-depth knowledge of the complex and unique risks facing colleges and universities, will be dedicated to support policyholders in effectively managing these liabilities.

AIGRMs Commercial Risk Division has also enhanced its general liability policy to include care, custody and control coverage for storage facility companies. Offered through AIG Real Estate Solutions, the coverage, which is typically excluded from general liability policies, covers damage to the personal property of storage unit renters. AIG Real Estate Solutions will also begin offering specialized general liability coverage for security guard firms. This coverage provides bodily injury and property damage coverage for loss arising out of the failure to render professional services or when the use of reasonable force to protect a person or property is necessary. The enhancement also provides an additional occurrence limit for damage to property in the care, custody and control of the security firm.

As part of AIG Healthcare Solutions, AIGRMs Commercial Risk Division will provide a new, comprehensive suite of loss control services for its workers compensation customers. The services will include: best practice needs assessment using industry performance data; procedural training in patient handling, blood borne pathogens, control of sharps and hostile patients; on-site safety assessments and evaluations; a toll-free resource helpline; on-line training, continuing education and DVD or CD-ROM safety training programs. Each of these services will be supported by qualified healthcare professionals, including RNs, acute care and long term care nursing professionals, facility administrators, therapists and rehab specialists and case managers.

AIGRM Commercial Risk Divisions AIG Temporary Staffing Solutions is also enhancing its loss control services by offering access to an independent firm that will perform applicant background checks at preferred rates to its workers compensation clients. Pre-employment background checks can often assist a company in selecting the right employee.

AIGRM Commercial Risk is dedicated to bringing to its customers innovative and specialized services and coverages to help them best manage their insurance exposures said, Christopher McKeon, executive vice president, AIG Risk Management. AIGRM Commercial Risk will continue to review the unique aspects of various industries and develop products with our customers in mind so as to continually stay current with their insurance needs.

For more information, contact McKeon at 212-458-3016 or Chris.McKeon@aig.com.

AIA to Challenge NAIC on Misuse of Information

The American Insurance Association (AIA) will continue voicing strong opposition to efforts by the National Association of Insurance Commissioners (NAIC) to collect confidential and proprietary insurer information, during the NAIC’s national meeting May 31 to June 2 in San Francisco.

"The NAIC is a non-profit, non-governmental entity. As such, it should not collect proprietary market data for which no guarantee of confidentiality can be provided. This information is extremely sensitive and if it were to be compromised, there would be needlessly harmful ramifications for both consumers and insurance companies. In the states where insurers file market conduct annual statements, there are clear statutory requirements governing their confidentiality, and regulators must take appropriate steps to ensure this information remains confidential," said Marc Racicot, AIA President.

"Insurers already operate in a highly-regulated environment. The annual financial statement filed every year by insurers – which contains financial, and not proprietary market information – is a key tool for regulators, consumers and investors to monitor the financial health and solvency of an insurance company," concluded Racicot.

Another NAIC project of great interest to AIA is the work on climate change. “We continue to advocate for a ‘White Paper’ that supports cooperative actions between insurers and regulators, emphasizes the need to send critical signals on risk, facilitates insurers offering new products and recognizes the need for public advocacy for building codes and land use controls. However, we are concerned about the lack of recognition that the science of climate change as it relates to insured risks is still in its infancy,” said David Snyder, AIA Vice President and Assistant General Counsel. “We still have serious concerns about proposed climate change disclosures that would potentially harm policyholders, investors and insurers, and that would not be appropriate in connection with the financial annual statement,” Snyder stated.

AIA will continue to protect against another threat to insurer solvency during the meeting in San Francisco – the latest efforts by the NAIC’s Reinsurance Task Force to change to the requirement that unlicensed reinsurers post 100% collateral for reinsurance contracts they write in the U.S.

“The new proposal will allow unlicensed reinsurers to assume insurance in the U.S. with either no collateral or significantly reduced collateral if the unlicensed reinsurer is ‘certified’ by a Port of Entry state. This proposal not only unnecessarily jeopardizes the solvency of a U.S. insurer by requiring substantially less collateral from an unlicensed reinsurer, but the regulator in the port of entry state is given final authority over how much collateral is adequate in another state, and that authority should always remain with the domiciliary regulator of the U.S. primary insurer” said Steven Bennett, AIA Assistant General Counsel.

Illinois AG Looks to Assist Uninsured Patients

In light of inflated hospital prices charged to the uninsured, which have lead to crushing financial hardships for many uninsured families, Illinois Attorney General Lisa Madigan has drafted new legislation to provide deep discounts off of hospital charges and to cap hospital bills for eligible uninsured patients.

The Hospital Uninsured Patient Discount Act (House Amendment No. 2 to Senate Bill 2380), sponsored by State Rep. Karen May (D-Highland Park), this week unanimously passed the Illinois House and now moves to the Senate for concurrence. The amendment signifies one of the most aggressive efforts by any state in the country to address health care accessibility and affordability for the uninsured.

“Uninsured patients are charged much higher rates for hospital services than insured patients whose rates are negotiated by insurance companies,” Madigan said. “On average, Illinois hospitals charge the uninsured 200 percent above cost, leading families to terrible financial hardship and even bankruptcy. This bill will help ease that burden and make hospital care more accessible and affordable to more than 83 percent of Illinois families who do not have health insurance.”

The Act has the support of the Illinois Hospital Association (IHA), which recently reached an agreement with the Attorney General’s office on the terms set forth in the legislation.

The Act would:

  • Provide substantial relief by dramatically cutting hospital charges for the uninsured by 35 to 65 percent; and
  • Place an annual cap on the amount that hospitals can collect from eligible uninsured patients, limiting this total amount to 25 percent of the patient's family income during a 12 month period.

Those eligible must fall within 600 percent of the Federal Poverty Level ($127,200 for a family of four in 2008) at non-rural hospitals and 300 percent of the Federal Poverty Level ($63,600 for a family of four in 2008) at rural hospitals.

The Attorney General’s office would be responsible for administering and ensuring compliance with the Act, including the development of any rules necessary for implementation and enforcement.

Insurance Technologies Garners ACORD Award

Insurance Technologies received a distinguished ACORD Accomplishment Award for Web Services at the recent 2008 ACORD LOMA Insurance Systems Forum in Las Vegas, Nevada.

The ACORD Accomplishment Award recognizes leadership in how insurance business is processed utilizing ACORD standards. Insurance Technologies new multi-carrier annuity sales platform, VisibleChoice™, has been acknowledged for its creative use of standard web services to automate the consolidation of product quotes among multiple insurance companies. VisibleChoice™ simplifies the sales process for the advisor and dramatically reduces the steps required to produce a proposal where an advisor may be affiliated with multiple insurance companies.

VisibleChoice™ provides improved compliance analysis coupled with on-demand illustrations, resulting in more rapid and suitable contract issuance for the selling organization. In leveraging ACORD standards, Insurance Technologies continues a long tradition of advocating standards-based technology and solutions. Product profile, producer detail and new business submission information is standardized to maximize efficiencies within VisibleChoice™.

“Insurance Technologies is proud of the recognition for our continued participation and thought leadership through industry standards,” says David Fenimore, executive vice president, Engineering & CIO for Insurance Technologies. “ACORD will remain an important aspect of providing software solutions for our customers.”

“Insurance Technologies has long been recognized as a leader in their commitment to the implementation of ACORD standards, and on behalf of ACORD, I congratulate Insurance Technologies on receiving the Web Services Award this year" said Lloyd Chumbley, AVP, Standards Technology.

Mississippi Approves State Farm Rate Filing

In less than 30 days, a number of automobile insurance policyholders in Mississippi could see a premium rate reduction of up to an average of 2.9 percent as the result of a rate filing approved by Commissioner of Insurance Mike Chaney.

The premium reductions for renewals and new business were filed by State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company and will take place effective June 23, 2008.

“Improvements in accident frequency were a factor in setting these rate reductions. However, I want to caution policyholders that, while some will be receiving premium reductions with the approval of this filing, there will be those who could actually see increases in their premiums,” said Chaney.

The Commissioner also stressed that this automobile rate filing is not related to other policies written by State Farm.

According to the filing, auto premium changes for individual customers will vary depending on factors such as the coverages they carry; the discounts for which they qualify; where they live; the kind and age of the car insured; who drives it and how much it is driven.

So that policyholders may check and see how premiums in their area are affected by the filing, the Mississippi Insurance Department has posted a map and chart of rate changes associated with this filing on its Web site at www.mid.state.ms.us.

Advocate, MD Purchases Mississippi Plan

Advocate, MD Insurance of the Southwest Inc. (Advocate, MD) has taken advantage of Mississippis tort reform success by becoming a fully admitted insurance carrier and acquiring Mississippis Medical Malpractice Availability Plan (MMAP) with $25 million in assets.

The Mississippi Insurance Department recently expedited the application process and licensed Advocate, MD as a fully admitted medical liability insurance carrier. This move is seen as a step toward alleviating the critical shortage of experienced doctors and specialists within the state of Mississippi, said Dr. Randy Easterling, chairman of the Mississippi Medical Association.

Prior to tort reform, many physicians had reportedly ceased practicing in the state or discontinued high-risk procedures due to a largely unregulated legal climate in which multimillion-dollar lawsuit rewards had driven malpractice insurance rates up to unaffordable levels. A fully admitted and state-regulated insurance provider, such as Advocate, MD, will reportedly offer physicians another choice of insurance carriers, services, and premiums.

As a result of tort reform, the Mississippi Legislature created the Mississippi Medical Malpractice Availability Plan (MMAP) in 2003, which is available to most Mississippi-licensed healthcare providers and facilities. When the Legislature passed the bill creating MMAP, it was intentionally designed to be a five-year temporary plan. The benefits of tort reform have allowed the state of Mississippi to successfully exit the medical liability business.

Advocate, MD acquired MMAP as a launch pad for entering the Mississippi standard market. The company gained $25 million in assets by succeeding in a state-orchestrated competitive bidding process against two other national carriers, and became one of the largest medical liability insurance providers in Mississippi with the MMAP acquisition.

Advocate, MD intends to grow its market share in Mississippi by offering competitive rates and quality service to all physicians. That is reportedly an important step toward enticing more talented physicians to practice in Mississippi, and will enhance patients access to healthcare and their choice of medical specialists.

We are excited about expanding our business into Mississippi as it is a natural fit for us and is another step toward our national expansion goals, said Advocate, MD President and Chief Executive Officer Mark Adams. We are the doctors advocate and we take pride in protecting and serving our physicians. We have a reputation of offering competitive rates, outstanding service, creative risk management programs and aggressive claims management services. We feel confident that we can draw more doctors and specialists back to Mississippi.

Best Ratings Report

Editor's note: This information is courtesy of A.M. Best Co.
For further information, visit www.ambest.com/ratings.



A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the Hartford Insurance Pool (The Pool) and its property/casualty members. Concurrently, A.M. Best has affirmed the ICR of “a”, debt ratings and shelf registration of The Hartford Financial Services Group, Inc. (The Hartford) (Hartford, CT) [NYSE: HIG]. The outlook for all ratings is stable.

The Pool’s ratings reflect its superior risk-adjusted capitalization, strong core operating results, disciplined risk management culture and excellent business position in the property/casualty insurance sector. These positive rating factors are derived from The Pool’s adherence to conservative operating fundamentals and commitment to diversified underwriting and marketing strategies that provide balanced growth opportunities. A.M. Best believes The Pool is well positioned to manage changing market dynamics such as reduced pricing and increased competition due to its significant depth and breadth of operations, well balanced risk selection, effective utilization of multiple distribution channels and superior capitalization, which is further bolstered by The Hartford’s strong financial flexibility and proven access to capital markets.

These favorable considerations are somewhat tempered by expected margin compression driven by softening market conditions throughout the property/casualty industry. Moreover, The Pool maintains exposure, albeit substantially reduced, to emerging asbestos and environmental claims and adverse loss reserve development on older accident years. However, management conducts annual ground-up loss reserve reviews for asbestos (second quarter) and environmental (third quarter) reserves, as well as an annual evaluation of reinsurance recoverables. Additional offsetting attributes are The Pool’s exposure to catastrophe events (natural and man-made), although it has a comprehensive reinsurance and catastrophe management program to limit its exposure to a single event.

The ratings for The Hartford represent the use of extraordinary notching as the overall enterprise benefits from the diversification of its equally important and diverse property/casualty and life operations, which
provide strong, sustainable earnings and cash flows. This has been evidenced by the even distribution of revenues and contributions to earnings from both operations in recent years, which tend to be largely uncorrelated. Also, the property/casualty and life operations maintain strong, market leading positions in their respective markets.

The ratings also recognize the improvement in The Hartford’s financial leverage and coverage measures through 2007, with an adjusted debt-to-total capital measure of 19% (including accumulated other
comprehensive income) and interest coverage of approximately 16.2 times.

However, leverage and coverage measures did deteriorate in first quarter 2008, primarily due to the negative impact of unrealized capital losses on stockholders’ equity and realized capital losses on earnings largely within the life business segments. Unrealized capital losses during first quarter 2008 primarily were due to the negative impact of credit spread widening on fixed income securities. Realized capital losses during the quarter were caused by the transition to a new accounting standard (SFAS 157), impairments and credit derivative losses. Despite this, A.M. Best believes The Hartford's earnings power remains strong, in the absence of unusual items, and should lead to improvement in financial leverage and interest coverage measures through the remainder of 2008.

****

A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of
“bbb-” of Inter-Industry Insurance Company Limited (III) (Isle of Man) and its wholly owned subsidiary, Insurco Ltd (Insurco) (Isle of Man). The outlook on both ratings has been revised to negative from stable.

The negative outlook reflects the company’s current and prospective deterioration in operating performance driven by weakening underwriting results, combined with a gradual reduction in premiums written over the
past five years. Offsetting factors are its solid capital position and niche business profile.

In A.M. Best’s view, the continued reduction in premium volumes, with an increase in claims frequency and higher expense ratio is anticipated to keep the combined ratio above 100% in the short to medium term. The
company’s operating performance is expected to be pressured going forward with profits being reliant on investment income, which is expected to provide lower investment returns. A.M. Best views that the company faces significant challenges improving its performance given the current competitive market environment. III’s risk-adjusted capitalisation is expected to remain strong in 2007 and 2008, despite the losses experienced during the past year.

III operates in specialty chemical and manufactured buildings markets, where it provides commercial general liability and umbrella cover through Insurco. The company has a niche business profile, which is
comprised of a small number of insureds written through Insurco. In A.M. Best’s opinion, the high level of exposure per risk relative to capital and surplus and a lack of a retrocession programme results both in potential earnings volatility and exposes risk-adjusted capitalisation to deterioration in the event of large losses.

****

A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of Western Isles Insurance Company Limited (WIICL) (Isle of Man). The outlook for both ratings is negative.

The ratings reflect WIICL’s solid projected risk-adjusted capitalisation, good operating performance and improving business profile. An offsetting factor is the weak capital position of the parent company, Soglassye Insurance Company LLC, a general Russian insurer.

WIICL’s capital position is prospectively expected to remain strong, despite growth in net written premiums of 75%. The company has developed its profile through increasing third party business volumes from Russia, for which WIICL is expected to have low retentions levels. It is essential for the company to have controlled growth, supported by sufficient retained earnings to ensure its capital position is strengthened going forward.

Furthermore, the negative outlook reflects the weak, though gradually improving capital position of its parent.

Conning: Non-U.S. Insurers Lead Acquisitions

U.S. insurers concentrated their M&A activities domestically in 2007, especially in the property/casualty and health insurance and managed care sectors, and were much less active on the global stage, according to a new study by Conning Research and Consulting.

"Global insurance industry acquisitions in 2007 were driven by non-U.S. insurers-primarily Western European firms-who clearly see value in this market," said Sherry Manetta, director at Conning Research & Consulting. "In fact, only 20 percent of primary and reinsurer transactions involved a U.S. entity at all. Those few U.S. insurers who were active internationally made acquisitions to build share in existing markets rather than entering new countries."

The Conning Research study, "Global Insurance Mergers & Acquisitions: U.S. Insurers on the Sidelines" analyzes Conning's proprietary database of transactions and presents trends across industry segments and regions. Coverage includes property-casualty, life-annuity, health insurance and managed care, and distribution and service firm transactions.

"We expect that U.S. firms will continue to be domestically focused in their acquisitions, and will be attractive acquisition targets in 2008, due in part to the soft dollar and, in the property-casualty sector, to the softening underwriting market," said Stephan Christiansen, director of research at Conning. "In addition to these factors, U.S. insurance company stock prices are substantially off their highs of a year ago, which makes it economical for an acquirer to pay a premium over a stock's market price."

"Global Insurance Mergers & Acquisitions: U.S. Insurers on the Sidelines" is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company's Web site at www.conningresearch.com.

Commissioner Tells San Luis Obispo Drivers to be Alert

SAN LUIS OBISPO - With summer vacation looming and many Californians traditionally driving more frequently or longer distances, Insurance Commissioner Steve Poizner warned area drivers to be alert for staged auto collisions.

In 2006-2007, 14,565 out of 24,011 insurance fraud referrals received by the California Department of Insurance, Fraud Division (CDI) - 61 percent - were for suspected automobile insurance fraud. In San Luis Obispo there were 29 suspected fraudulent claims in 2006-2007.

"Insurance fraud is like a $500 tax on every man, woman and child in California, and auto insurance fraud is a major part of this problem," stated Poizner. "Staged collisions can be nightmares for consumers, creating huge hassles or worse, causing bodily injury, and insurance fraud gets passed on to consumers through higher rates."

Nearly $164 million could have been lost by insurance companies in 2006-2007 if the fraud wasn't discovered. While that potential fraud was avoided by the collaborative work of CDI and its local partners, actual loses are subsequently built into the insurance companies' pricing structures.

There are primarily three schemes typically used in staged collisions:

  • Panic stop
  • Start-and-stop
  • Swoop-and-squat

People who create these pre-planned accidents, also known as stagers, look for high value targets, such as commercial vehicles, expensive luxury vehicles, and vehicles owned by cities or counties. They are considered "high value" because of the virtual guarantee of insurance coverage.

The following signs may tip-off a driver of fraudulent activity:

  • The other car is packed with passengers;
  • The other driver has a relatively new insurance policy;
  • The other car is in poor condition or has a "salvage" title;
  • Traffic was flowing smoothly and the other driver stopped suddenly;
  • The other driver and/or the passengers make extra effort to avoid conversation about the other vehicles in the area;
  • There is a witness that substantiates everything the other driver says; and
  • The other driver and his passengers all claim injury despite relatively minor collision damage to the vehicles.

If someone suspects he is the victim of a staged collision insist on a police report; document as much information from the collision scene as possible, using a cell phone to take photographs or video; ask the peace officer to positively identify everyone involved, report it to CDI at 800-927-HELP (4357) or go to: www.insurance.ca.gov.

Registration Extended for Missouri Flooding Aid

The registration period for those in Missouri impacted by the severe storms and flooding beginning in mid-March has been extended 30 days through June 26, according to the Federal Emergency Management Agency (FEMA) and the State Emergency Management Agency (SEMA). This deadline is only for the flood disaster originally declared March 19 for the period March 17-May 9.

To register, call the FEMA Helpline and registration number,1-800-621-3362 (FEMA). The TTY number for the speech- or hearing-impaired is 1-800-462-7585. Online, register at www.fema.gov. The registration line is open 8 a.m. to 6 p.m. seven days a week.

The FEMA/State Disaster Recovery Center at Bethany Presbyterian Church, 1930 Virginia Ave., Joplin, MO 64804 remains open to help any disaster registrants, Monday through Friday from 8 a.m. to 7 p.m.

The deadline to submit loan applications to the U.S. Small Business Administration has also been extended through June 26. While no one is required to take out an SBA loan, applications are a key part of the FEMA registration process. A loan denial may open up other assistance to eligible applicants.

The disaster declaration for the flooding authorized FEMA's Individual Assistance in the following counties: Bollinger, Butler, Callaway, Cape Girardeau, Carter, Christian, Franklin, Gasconade, Greene, Howard, Iron, Jasper, Jefferson, Laclede, Madison, Maries, McDonald, Newton, Oregon, Osage, Phelps, Pulaski, Reynolds, Ripley, Scott, Shannon, St. Francois, St. Louis, Stoddard, Stone, Taney, Texas, Washington, Wayne, and Webster.

The standard flood insurance policies from FEMA's National Flood Insurance Program have a 60-day period to file proof of loss. That deadline would have been May 16. Policyholders in Missouri have been given an extension to July 15 to file claims with their carriers.

To date, FEMA has approved more than $12.12 million in aid to disaster households, while the SBA has approved more than $5.57 million in low-interest disaster loans to homeowners, renters, businesses of all sizes, and nonprofit organizations.

Texas Risk Pool Chooses NavRisk Policy

DAVID Corporation, a provider of Insurance and Risk Management software, announced that the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) has awarded DAVID a contract for NavRisk Policy to automate policy administration and underwriting processes for their Property Coverage Program.

NavRisk Policy combines expertise and understanding of public entity risk pools with both smart client, and web based technologies to deliver a solution on the market that automates labor-intensive processes, streamlines access to information, and integrates and automates delivery of information for underwriters, administrators and brokers. NavRisk Policy automates the complete policy lifecycle including renewal processing, rating, certificates, quoting, invoicing and reporting.

NavRisk Policy is part of the NavRisk Suite, the comprehensive risk management solution from DAVID Corporation which facilitates underwriting and policy processing, automates administration and management of claims, provides online collaboration between internal and external stakeholders and offers sophisticated loss control and prevention capabilities. The complete suite consists of NavRisk Policy, NavRisk Claims, NavRisk Central and NavRisk Catalyst.

DAVID has focused on providing innovative software solutions to the alternative risk market throughout our 25 years in the industry, said Alex Aminian, president and CEO of DAVID Corporation. NavRisk Policy has a tremendous deployment rate in risk pools. Public entity risk pools, such as TMLIRP, are an important segment of our customer profile. We are committed to making them even more successful by providing solutions that help achieve their long-term strategy of providing risk financing and loss prevention programs at the lowest cost to their members."

Navigators Unveils NAV PAC

The Navigators Group Inc. announced that the Middle Markets division of its principal underwriting subsidiary, Navigators Management Company, has been rebranded and will now be known as NAV PAC.

The NAV PAC division focuses on commercial multi-peril accounts produced by a select group of retail independent insurance agents and delivers specialized multi-line products to retail agents in various pockets of the United States.

Jim Caragher, who recently joined Navigators as president of the NAV PAC division, commented, "The term Middle Markets causes some confusion among retail agents about the types and sizes of accounts Navigators underwrites. As we expand the division beyond the upper Midwest, we needed a name that conveys our unique, specialist orientation. NAV PAC will enable us to create a distinctive, memorable brand with retail agents for admitted business."

Navigators launched the Middle Markets operation in 2002. Under the leadership of Paul Navarro, the Schaumburg, Illinois-based team has built agency relationships and become recognized as a leading underwriter of commercial package insurance for a select group of midwest retail insurance agents. The company will expand its geographic footprint with the addition of its NAV PAC eastern regional office recently opened in Parisppany, New Jersey. Business is underwritten by Navigators Insurance Company, which is rated "A" (Excellent) by A.M. Best.

Tuesday, May 27, 2008

FEMA Katrina Trailer Sites Closed Before June 1 Date

Nearly three years after the devastation of Hurricane Katrina, a portion of the federal temporary housing mission has come to an end. Thirty-four of the 42 temporary housing sites in Mississippi built by the Federal Emergency Management Agency (FEMA) at the height of disaster recovery operations were closed as of May 16, 2008.

FEMA continues to relocate families to safer and more secure housing. The deadline for federal housing assistance remains until March 1, 2009, said Sid Melton, director of FEMA's Mississippi Transitional Recovery Office.

Through a concerted effort by volunteer agencies, the Mississippi Emergency Management Agency (MEMA), the Department of Housing and Urban Development (HUD), and FEMA Individual Assistance, approximately 1,063 families have moved from temporary housing units in the closed FEMA sites.

Eight mobile home FEMA-built sites remain open and FEMA expects them to be closed by year's end. More than 6,400 families still occupy temporary housing units. More than 75 percent of those units are located on the private property of families rebuilding their homes.

"The June 1st date was our deadline to relocate families living in FEMA travel trailers in the temporary housing sites. With the help of various organizations, we've done that but we will not stop here. We still have a lot of work to do," said Melton.

"Our mission remains helping families leave temporary housing and achieve permanency in a safer, more secure living environment. We're using several different avenues of assistance including our Voluntary Agency Liaisons (VAL)."

FEMA VAL provides a key link between FEMA applicants and local voluntary agencies or Long Term Recovery Committees, often easing the transition from FEMA assistance to voluntary agency aid. FEMA recently granted additional funding for Long Term Recovery Committees through its Cora Brown Fund. The funds will allow much-need case management services to continue.

VAL also has held 15 Helping Hands Workshops along the Mississippi Gulf Coast. The workshops assemble a panel of participants who offer resources to assist occupants in their recovery. The next workshop will be held in June; more details to follow.

"We understand different counties face different housing challenges; every county differs," said Melton. "That's why we continue to use every resource available to us to address those various challenges."

FEMA has additional programs available to assist occupants in their transition from temporary housing to permanent housing. Occupants who have questions about available assistance should speak with their FEMA Housing Advisor or contact the Mississippi Maintenance Applicant Support Call Center at 866-877-6075.

The Disaster Housing Assistance Program (DHAP) is a pilot federal housing assistance grant program recently implemented by HUD and FEMA. DHAP will extend rental coverage for families displaced by Katrina by providing temporary rent subsidies for non-HUD assisted individuals and families. The DHAP is administered by Public Housing Agencies (PHA) that are currently administering a housing choice voucher program.

The DHAP Disaster Rent Subsidy Contract, an agreement between the PHA and the owner of a unit, ensures that families receiving assistance under the DHAP comply with family obligations during their participation in the program. The program, which operates until March 1, 2009, will give displaced families more time to rebuild their lives. The DHAP, established through an interagency agreement between HUD and FEMA, will be vital for helping families in their personal recovery and achieve self-sufficiency.

HUD has established a call center for DHAP applicants and landlords interested in participating in DHAP. Interested parties can contact the DHAP Call Center at 866-373-9509.

At this point in the federal housing assistance effort, occupants may transition directly into DHAP. FEMA Individual Assistance teams will refer occupants to DHAP and assist families in creating a transition packet. A FEMA-HUD liaison will review the packet and close the transitional process.

"We're making every effort to find alternative solutions. But we need help from the occupants; help us help you," said Melton.

The Mississippi Alternative Housing Program has helped more than 2,500 families transition from FEMA temporary housing into a Mississippi Cottage. The Mississippi Alternative Housing Program is the result of a $280 million federal grant awarded to Mississippi. The goals of the program are to develop and evaluate safer and more comfortable alternatives to current disaster housing units for future disasters. MEMA is administering the 24-month long program.

In February, FEMA officials reiterated FEMA's commitment to assisting families in their personal recovery and ramped up efforts to relocate temporary housing occupants into more permanent housing.

"Nearly all of the families that have requested relocation due to health, safety or special needs concerns have been relocated," said Melton. "If occupants have health-related concerns about their occupied unit, they can still request a formaldehyde test. Testing is ongoing; we're still relocating families."

California State Fund Files 3.5% Premium Decrease

State Compensation Insurance Fund on Tuesday announced it filed a July 1, 2008 revision to its rating plan, which it anticipates will result in a 3.5% reduction in collectible premium.

While base rates will remain unchanged, State Fund has expanded its merit rating and claims-free discount plans to lower rates for policies with superior safety records. The new rate filing will affect new and renewal workers’ compensation policies with an effective date on or after July 1, 2008.

As State Fund expands its “claims-free” credit, some small employers with superior safety records will see their claims-free discount increase from 10% to 13% or 15%. Additionally, for the first time new business accounts to State Fund may also qualify for a claims-free credit based on experience with their prior carrier. "Promoting safe workplaces is a vital part of State Fund’s mission and small business is the backbone of California’s economy. We feel it is critical to pass on savings that recognize employers for maintaining safe workplaces," said State Fund President and CEO Janet Frank.

In addition State Fund is enlarging the range of accounts that qualify for its expanded merit rating plan allowing its underwriters greater discretion in pricing accounts generating more than $100,000 in premium. State Fund’s underwriters will be able to base more of the pricing decision on each individual account’s experience, providing the opportunity for deeper discounts on accounts with excellent safety records.

“Since 2003 State Fund’s rates have fallen steadily and this latest filing brings our cumulative decrease to 57% percent below pre-2004 reform levels” Frank added. "We have seen significant decreases in cost that are directly attributable to the 2004 passage of SB 899, the Governor's reform legislation, as well as AB 227 and SB 228 in 2003. State Fund has been committed to passing those savings back to employers in the form of lower rates to help California’s economy continue to grow," Frank said.

Insurance Company Employee Dead; Ex Arrested

The former husband of a San Diego area woman found dead in her driveway last week was arrested in Meridian, Idaho on Monday.

Frank Weaver, 60, was arrested without incident and booked on suspicion of murder, according to Idaho authorities.

Police in Santee, California had wanted to speak with Weaver since the discovery of his ex-wife's body. Maureen Weaver, 50, who worked for an insurance company in Kearny Mesa, was found last Thursday morning. Authorities have not said how Weaver died, other than it was a homicide.

There is no word yet on whether or not Frank Weaver will fight possible extradition back to California.

Editor's note: To see more California news and features, visit gocalifornia.blogspot.com .

Wisconsin OCI Releases Consumer Complaint Info

According to the 2007 Insurance Complaints and Administrative Actions report issued by the Wisconsin Office of the Commissioner of Insurance (OCI), more than 8,000 consumers contacted OCI last year to file a complaint. OCI also assisted consumers in recovering more than $8 million from insurers.

A complaint is defined as any written communication that expresses dissatisfaction with an insurance company or agent. The report lists those insurance companies who have had at least five complaints and a complaint ratio that exceeds the statewide average for a specific type of insurance.

The report, which is available in English and Spanish, categorizes complaints by the type of coverage - auto, property and casualty, accident and health, life, and annuities, and also by the reason for the complaint - underwriting, marketing and sales, claim handling, policyholder service or "other."

Also available from OCI is the annual Independent Review Requests for 2007. Each year Independent Review Organizations (IROs) certified to do reviews in Wisconsin are required to submit to the OCI a report for the prior calendar year's experience. The independent review process allows a consumer to appeal some health insurance claims denials to an independent third party. According to the report, in a third of the cases reviewed in 2007, the IRO ruled in favor of the consumer - fully or partially reversing the insurer's denial of coverage. Full versions of both reports can be viewed on the OCI Web site.

Consumers interested in obtaining a copy of the 2007 Insurance Complaints and Administrative Actions report or other free publications from OCI can visit the OCI Web site at oci.wi.gov, write to OCI Publications, P.O. Box 7873, Madison, WI 53707-7873, or call 800-236-8517.

Iowa Tornado Death Toll Hits 7

Another person has died in Iowa, bringing to seven the death toll from the twister, which reportedly had wins of 165 mph when it hit.

Reports say at least 50 people were injured, while new damage estimates show more than 400 homes have been destroyed in Parkersburg, New Hartford, Hazelton and Black Hawk County. Officials estimate that more than one-third of Parkersburg, a town of some 1,900 residents, has been destroyed. In Buchanan County, more than 240 homes were hit with flood damage from the storm.

President George W. Bush has declared a major disaster for Iowa, which will allow for federal money to flow in to help victims of Sunday's storms.

Gov. Chet Culver said the Federal Emergency Management Agency is working with local and state officials to assess damage in Black Hawk, Buchanan, and Delaware Counties. “Assessment teams have gone out this morning and we will have a better handle on the extent of the damage in terms of dollar amounts,” said the Governor.

Additional counties may be added to the federal disaster declaration based on the results of the damage assessments.

California, Nevada Go Forward on Tahoe Basin Plan

California Gov. Arnold Schwarzenegger joined U.S. Senator Dianne Feinstein and Nevada Gov. Jim Gibbons on Tuesday in South Lake Tahoe to receive the California-Nevada Tahoe Basin Fire Commission's final report.

To begin implementing many of the commission's recommendations, both Governors issued state-specific proclamations outlining actions each state will take. As part of California's Proclamation, the Governor will also declare a State of Emergency in Placer and El Dorado counties, so the state can immediately take action to make the Tahoe Basin safer and better prepared for future wildfires.

The California-Nevada Tahoe Basin Fire Commission was established by both Governors following the June 2007 Angora Fire to review all regional, state and federal fire rules and regulations and to study user-friendly wildfire prevention approaches with the goal of reducing the region's fire vulnerability.

The advisory panel was comprised of 17 voting members representing each state's stake in the management of lands and fire fuels within the Tahoe Basin, including representatives from state agencies, fire officials, public members from the Lake Tahoe community and a representative of the U.S. Forest Service.

With the Commission's work and today's action, the Tahoe Basin will reportedly be better prepared and better protected for the next wildfire. In addition to declaring a State Of Emergency in Placer and El Dorado counties, Gov. Schwarzenegger's Proclamation:
  • Directs the California Department of Forestry and Fire Protection (CAL FIRE) to conduct vigorous defensible space inspections, provide public education about defensible space and impose fines or liens if appropriate.
  • Directs CAL FIRE to staff additional fire engines and other firefighting resources in the area as conditions dictate.
  • Directs state agencies involved with fire fuels management activities in the Lake Tahoe Basin to develop plans for biomass utilization.
  • Urges the Tahoe Regional Planning Agency, the California Air Resources Board and the Lahontan Regional Water Quality Control Board to adopt the Commission's recommendations.