AIR Worldwide Sponsors GEM Project

Catastrophe risk modeling firm AIR Worldwide Corporation (AIR) announced that it is sponsoring the Global Earthquake Model (GEM) project, a five-year project led by the Organization for Economic Co-operation and Development (OECD) to produce the world’s first global, open source model for seismic risk assessment.

As a key contributor to the GEM project, AIR scientists and engineers will collaborate with leading earthquake researchers in many aspects of earthquake risk quantification and will have access to new global data sets.

“The Global Earthquake Model project generates information of the highest standard through cooperation between many of the world’s top earthquake experts,” said Dr. Ross Stein, geophysicist with the U.S. Geological Survey & GEM co-founder. “AIR’s expertise and support will help ensure that GEM will be the critical instrument to support decisions and actions that reduce earthquake losses worldwide. We are proud to have AIR Worldwide standing with us in providing open, accessible information that enables people to understand and cope with the seismic threat.”

All who face risk, from homeowners to governments, need accurate and transparent risk information before they will take action. GEM creates an independent standard to estimate earthquake risk, raise awareness, promote mitigation, and stimulate insurance and risk sharing.

The GEM initiative brings together leading scientists from around the world to create open source models based on data sets and model components that are assembled using a systematic and uniform approach for all regions. Such data sets may include: clean historical catalogs and fault databases; data on ground motion observations for historical events; vulnerability of structures in different countries; and damage and loss information for historical events.

“In developing countries there often is little or no insurance and the financial burden is borne largely by the government,” said Dr. Jayanta Guin, senior vice president of research and modeling at AIR Worldwide. “AIR’s scientific and financial contributions to GEM are consistent with AIR’s support for the private-public partnerships that are needed to help developing countries better plan, react and recover from natural catastrophes.”

COMMENTARY: Beware of Bank of America

Editor's note: This is a commentary piece from the site's editor, Dave Thomas. If you would like to respond, feel free to send us a comment.

For those of us who had parents live through The Great Depression, we have often heard the difficult times they went through. In 2009, many of us are living through our own tough times.

After giving five solid years to an insurance magazine, Insurance Journal, I received a layoff via email one day a few years back. The company apparently wanted to cut costs and I was the one to go, yet they had to do it via an email and not to my face.

Having put in 17 years in the corporate world, I thought maybe it was time to venture out and try to start a business on my own. I guess like many people, I felt starting my own business at that time proved more risks than benefits, so I looked for another job while I did freelance writing on the side to pay bills.

To make a long story short, I took another job out of state, but decided it wasn't for me and moved back to my original locale. In need of work, I continued to send resumes out while I did as much freelance writing as I could get my hands on. Then one day I decided to go for it....yes, try and make a go of it on my own.

I started an insurance blog, then grew into two more blogs, with California (www.gocalifornia.blogspot.com) and Atlanta (www.goatlanta-ga.blogspot.com) being my focus. As in any business venture, you need money to sustain yourself.

I'm the first to admit I've made some bad financial choices over the years with my limited stocks, which jobs to take and so on. So the story goes, I had to put a number of items on my credit cards. While I wasn't happy with increased balances, I knew that I would pay them off as soon as possible.

Three of my cards are with one parent company, Bank of America. While the balances are high, I was not only meeting my minimum requirements, but oftentimes paying more to get the balances down. For example, one card last month had a minimum of just over $200. Instead of paying the minimum, I sent in $1,100.

I received a letter from Bank of America on Feb. 26 (written and authorized by them Feb. 19) that they were dropping the available credit line on one of my cards because of high revolving balances. So, I called and spoke to a customer service rep about this. Yes, I understand you were dropping my available credit, but nearly $5,000!

The woman then asked me my income and I provided a ballpark figure. With freelance writing, the pay scales are all over the place. Anyhow, she then informs me that I didn't make enough money to meet my balances (yet I sent in $1,100 just the other week for one of their cards) and they were closing down all three accounts until I paid them off in full.

As of this morning, I've spoken to five different customer service reps, analysts, supervisors, etc. at Bank of America.

All five of the people I've spoken with would not answer one question I had.

In the letter I received on Feb. 26, it said that as long as I at least met my minimums, my accounts would remain open. I asked the last person I spoke with if Bank of America honors their words in their letters. Apparently the answer is no. I asked the last person I spoke with if he wanted me to fax a copy of the letter the company sent to me about keeping my accounts open if I met the minimum....he said no. I guess he wasn't interested in what his company was putting on its letterhead and sending out to customers.

The last person to speak with me also said they (B of A) can changes the rules whenever and wherever they want. So one week (when you know what my balances are) you tell me that you will honor my account as long as I meet the minimums. Then the next week they close out the accounts. It doesn't exactly give me a warm and fuzzy feeling to do business with them in the future.

In all business deals, people should stand by their word. As I have learned with this incident, Bank of America does not stand by its word.

Needless to say, I have no plans to do business with Bank of America in the future. As far as I'm concerned, they have no desire to work with their customers, they do not stand by their word in their letters and they don't care if you end up on the streets.

When you think about it, kind of a sad commentary on our current times and the fact that many people no longer give a damn about their fellow man.

Do you have a bad credit card story you want to share? If so, drop us a line.

Teen Driver Crashes Killing Other People

The majority of people killed in teen driver crashes continue to be people other than teen drivers themselves, according to an updated analysis of 10 years of crash data by the AAA Foundation for Traffic Safety.

The analysis shows that about one-third of people killed in crashes involving drivers ages 15 to 17 are teen drivers themselves. Nearly two-thirds are passengers, occupants of other vehicles, pedestrians, cyclists, and other road users.

“For every teen driver killed in a crash, almost twice as many other people die, which underscores the link between teen driver safety and the safety of everyone on the road,” said AAA Chicago Regional President Brad Roeber.

Nationally, between 1998 and 2007, crashes involving 15-, 16- and 17-year-old drivers killed 28,138 people, of whom 10,388 (36.9%) were teen drivers themselves.

The remaining 17,750 (63.1%) deaths included 8,829 passengers of the teen drivers, 6,858 occupants of other vehicles operated by adult drivers, and 2,063 non-motorists and others. A previous analysis in 2006 found that between 1995 and 2004, crashes involving 15-, 16- and 17-year-old drivers claimed the lives of 30,917 people, of whom 36.2 percent were teen drivers themselves and 63.6 percent were others.

In Illinois, between 1998 and 2007, crashes involving 15-, 16- and 17-year-old drivers killed 1,078 people, of whom 379 (35%) were teen drivers themselves. The remaining 699 (65%) included 350 passengers of the 15- to 17-year-old drivers, 260 occupants of other vehicles operated by adult drivers, 89 non-motorists and others.

In Indiana, between 1998 and 2007, crashes involving 15-, 16- and 17-year-old drivers killed 783 people, of whom 319 (41%) were teen drivers themselves. The remaining 464 (59%) included 232 passengers of the 15- to 17-year-old drivers, 188 occupants of other vehicles operated by adult drivers, 44 non-motorists and others.

State Farm Sees Net Worth Fall by 16%

State Farm reported that its net worth for the company's group decreased in 2008 by $10.4 billion to end the year at $53.3 billion.

The primary reason for the decrease was the $9.2 billion decline in the value of the property/casualty companies' unaffiliated stock portfolio (net of deferred tax). Although this decline was driven by general market conditions, State Farm's P/C portfolio had a smaller percentage decline than the broader equity market.

The $10.4 billion decrease in net worth comes after five consecutive years of net worth increases. In spite of the 2008 decline, the State Farm group's net worth is 68 percent higher than it was at the end of 2002, after two years of significant decline.

State Farm reported an after-tax net loss of $542 million in 2008, compared with $5.46 billion of net income in 2007. The after-tax net loss in 2008 was driven by the P/C companies' pretax operating loss, which was partially offset by income tax recoveries. Extraordinary levels of catastrophe losses adversely impacted operating results in 2008.

The operating loss for State Farm follows five consecutive years of net income. The average annual amount of net income for State Farm through the first nine years of this decade is $1.6 billion.

Study Looks at Insurer Compensation, Benefits

A study of employee compensation and benefit plans at insurance companies is being conducted by Ward Group and sponsored by The Jacobson Group.

The study will provide participants comparative data about the design of employee benefit plans, including medical, dental and vision plans, life insurance, disability coverage, long term and short term care, and incentive plans. Participation in the study is required to receive complete results. Clients of Ward Group and The Jacobson Group may participate at no cost.

Companies interested in this study should contact Leah Hollstegge at lhollstegge@wardinc.com for more information and inquire if they are eligible for discounted participation.

This study will be conducted from Feb. 26 - April 15 and results will be distributed in June 2009. Participants will be invited to attend a webinar presentation on the study’s findings and key trends.

AIA Reacts to 'New Dems' Plan for Regulation

Leigh Ann Pusey, president of the American Insurance Association, issued a statement today following the release of the “New Democrats’ Plan for Creating a 21st Century Financial Regulatory Structure.”

The New Democrat Coalition was founded in 1997 and is comprised of current Democratic Members of Congress who are committed to enacting policies that encourage economic growth, maintain U.S. competitiveness, meet the challenges posed by globalization in the 21st century, and strengthen the country's standing in the world.

“We’re encouraged by the proactive stance the New Dems have taken to protect U.S. consumers by advancing principles to modernize our nation’s financial regulatory structure," Pusey remarked. "There is an urgent need to develop insurance expertise at the federal level to both understand the critical role insurance plays in our financial markets and economy, and to deal on equal terms with other financial institution regulators at the federal level and abroad.

“We must also have smarter, more effective regulation that overcomes inherent limitations of the state-based insurance regulatory system. The best way to achieve these goals is by establishing a federal insurance regulator.”

Scene Genesis Unveils Newest Podcast

Collision-repair shops depend on attracting and keeping top talent.

Julie Watkin, senior VP of human resources with ABRA Auto Body & Glass, offers employee-relations tips and tactics in the latest podcast from Scene Genesis.

To listen, go to www.sceneexchange.com and click on About US/Press Room/Podcasts.

This is the latest of “Topics in Ten,” Scene Genesis’ monthly podcast that brings opinions and ideas to the collision-repair industry.

Zurich Accepting Business in 11 More States

Zurich North America Commercial announced that it will begin accepting new business in 11 South Central and Southeastern states through its new Zurich Integrated Products unit, which services commercial customers in between the small-to-middle market segments.

Effective immediately, agents and brokers can submit new business from Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

Zurich launched the Zurich Integrated Products unit in fall 2008 to fill commercial insurance needs for businesses generating between $5 million and $25 million in annual revenues.

The new unit offers wide-ranging products including: auto, general liability, property, workers’ compensation and umbrella, with the ability to integrate specialty lines such as directors & officers, employment practices liability insurance, crime and fiduciary, accident & health, site-specific pollution liability and contractor's pollution liability.

In addition to the expansion into the 11 Southern states, Zurich Integrated Products has also redesigned its Web site to better reflect its full complement of product offerings.

The Web site is located at http://zip.zurichna.com

Van Gilder Deploys ProspX Solution

ProspX Inc., a provider in sales collaboration and automation solutions for the commercial insurance industry, announced that Van Gilder, one of the largest independent insurance brokers in the United States, has selected the ProspX platform to help automate sales processes and increase overall sales productivity. Van Gilder (www.vgic.com) plans to deploy the ProspX solution, beginning with Van Gilder’s headquarters in Denver.

“Because software alone cannot improve sales productivity, we needed a solution that would take customer relationship management and sales force automation capabilities to the next level said,” said John Casper, president and COO, of Van Gilder. “We selected the ProspX platform because it will give us, for the first time, the ability to integrate a formal sales process into an easy-to-use automation technology. ProspX will allow us to effectively capture and duplicate the best practices and methodologies of our top sales professionals, changing the way we drive new revenue.”

As a $500 billion a year market, the commercial insurance industry provides services for hundreds of thousands of customers worldwide. To improve the flow of business for these customers, ProspX (www.prospx.com) has developed a collaborative online Software-as-a-Service (SaaS) application platform designed to help commercial insurance agents, brokers and carriers accelerate the selling process.

“In order to replicate success, it’s important to give brokers the tools they need to foster collaboration and the sharing of knowledge tied to the commercial insurance selling process,” said Todd Young, president and CEO of ProspX. “ProspX was designed with this principal in mind and we’re excited to have an industry leader like Van Gilder embrace our technology.”

Group Forms to Address Florida Residential Market

A group of concerned Floridians announced the formation of a new coalition to address Florida's hurricane-plagued residential insurance market.

The "Shield Our State" Coalition is promoting a new public-private partnership that will increase financial security for Floridians in the wake of a catastrophic hurricane, stabilize residential insurance rates, and restore the private residential insurance market in the state.

The coalition is spearheaded by Dan Montgomery, a veteran financial and insurance professional, and other citizens aware that the state faces a potential financial disaster in the wake of another major hurricane. Montgomery unveiled the Shield Our State Coalition at the Florida Chamber of Commerce Property Insurance Summit in Orlando on Wednesday.

The coalition is already raising statewide awareness and support for its proposal and will ask the Florida Legislature to consider it during the 2009 annual legislative session, which begins in March. As part of its effort, the coalition is seeking partnerships with a wide range of statewide business and community groups, public officials and citizens, and encouraging Floridians to join its effort through a Web site (www.shieldourstate.org).

According to the group, under the current problem-plagued system, state-created Citizens Property Insurance Corporation (CPIC) has grown to become Florida's largest homeowners' insurer and is charging artificially low rates. In addition, the Florida Hurricane Catastrophe Fund (FHCF) charges artificially low rates for re-insurance, the insurance sold to insurance companies to reduce their hurricane risk. Unlike private insurers, both CPIC and FHCF are not required to be appropriately funded, instead imposing post-event assessments to pay their claims.

Recent testimony indicates that neither CPIC nor FHCF could meet their financial obligations after the next major hurricane. Florida families are still paying special assessments because some insurers went bankrupt from the 2004-2005 storms. Floridians don't realize they face the potential of having to pay huge assessments - a hidden hurricane tax - that could cost thousands of dollars per family to cover losses if CPIC and FHCF can't pay. These assessments are issued on the homeowners, auto, boat and business policies of all Floridians.

Meanwhile, major brand name private insurers have been leaving or reducing their presence in Florida because state regulators have rejected increases in residential insurance rates - increases they claim are needed to cover future hurricane losses. Most of the new private insurers entering Florida are small, start-up "take-out" companies that respected rating agencies say could be at financial risk if a hurricane hits.

Shield Our State's proposal would establish a new way to manage hurricane risk in the state by creating a "Hurricane Insurance Pool." The proposal calls for the State of Florida to set the premium rates that Florida residential property owners pay for hurricane coverage. Those hurricane premiums would be set aside in a new state-run tax-exempt fund, where they would build up over time and be used only to pay residential hurricane losses.

The role of private insurers' will be to write the residential policies, collect the entire premium and then pass through the hurricane portion of the premium to the state fund. Private insurers will cover all the other risks associated with our residential policies - such as fire, theft, and personal liability protection - while also handling policy administration and claims processing, areas they are much better equipped to handle than the state.

Law Firm Wins Suit Against Insurer QBE

Katzman Garfinkel Rosenbaum has won a $20 million verdict against QBE Insurance Company in Miami.

Two weeks of testimony in Federal court resulted in the largest verdict ever against QBE for hurricane damage. The residents of Buckley Towers condominium association were reportedly ecstatic with the outcome after having their claims denied since 2005.

"Taking a closer look at repairs needed that were caused by the 2004 devastating hurricanes may help condominium associations on Central Florida, who are struggling to meet financial obligations in this economy," stressed Alan Garfinkel.

Florida law allows policy owners up to five years from the date of loss to file or re-open hurricane insurance claims. According to Garfinkel, It is critical that associations, homeowners and businesses impacted by the storms of 2004 get a second opinion on their insurance claim.

"You may have walked away from insurance proceeds that are rightfully owed to you, Insurance companies are hoping you forget that you still have rights to assert a claim, or believe that your claim did not exceed the deductible," Garfinkel went on to say.

DEADLINE FOR ANYONE QUESTIONING WHETHER THEIR CLAIMS WERE PROPERLY ADJUSTED OR THOSE WHO NEVER FILED CLAIMS ARE:

HURRICANE CHARLIE: STATUE OF LIMITATIONS - AUG. 12, 2009

HURRICANE FRANCES: STATUE OF LIMITATIONS - SEPT. 3, 2009

HURRICANE JEANNE: STATUE OF LIMITATIONS - SEPT. 25, 2009

The statutory deadlines for damages caused by these hurricanes is quickly approaching. Boards, particularly new ones not seated at the time of the hurricanes, would be well advised to have their property inspected as soon as possible, according to Garfinkel. This will ensure they were paid in full by their insurance company or provide ammunition needed to recover amounts still owed.

For more information regarding the statutory deadlines for hurricanes Charlie, Frances and Jeanne, visit: www.kgrlawfirm.com or call 1-800-393-1529.

Study: D&O Underwriters Need to Adapt to Changes

Rapidly unfolding legal, economic and regulatory events are transforming securities litigation, forcing directors and officers liability (D&O) underwriters to react quickly to a changing environment, according to a new report from Advisen Ltd.

Traditional securities class action suits still are the most significant type of securities litigation for public companies, but a growing number of suits, filed in state courts, allege common law torts and breach of fiduciary duty. Combined with likely regulatory changes under the Obama administration, D&O insurers are faced with a broad array of new challenges. Players in the D&O market must “adapt or die off,” in the words of one leading attorney.

Advisen’s Securities Litigation in 2008: It’s Impact on the D&O Market in 2009 and Beyond examines all forms of securities litigation that might trigger D&O coverage, not only securities class action suits. Drawing from Advisen’s MSCAd™ large loss database, the report profiles the full array of 2008 securities lawsuits, including shareholder derivative suits, securities fraud suits filed by regulators and law enforcement agencies, and so-called “Section 11” securities class action suits filed in state courts.

The report also examines suits triggered by the alleged $50 billion Ponzi scheme perpetrated by Bernard Madoff and the alleged $8 billion investor fraud scheme linked to R. Allen Stanford. These schemes have already spawned more than 120 lawsuits in 2008 and 2009.

The report also explores the legal, economic, political and regulatory forces shaping the D&O insurance market, and examines shortcomings in D&O claims management that are contributing to higher defense costs. Additionally, it looks into the impact of skyrocketing bankruptcies on securities suits, and assesses further changes in the litigation landscape likely to come about under the Obama administration. Experts in securities litigation and D&O insurance offer their insights into recent developments and their implications for the future.

To help readers track potential exposure by company, Advisen's report includes a list of companies facing securities lawsuits in 2008 and a list of companies facing multiple lawsuits over the past 13 years.

Interested parties purchase the complete report for $249 at http://corner.advisen.com/reports_topical_Securities_Litigation_2008_DO_Market.html.

European Insurer Asset Management Survey Out

Insurance Finance & Investment, published by WorldTrade Executive Inc., in partnership with Patpatia Associates announced the publication of a new survey of asset management practices of European insurance companies and money management firms entitled IFI European Insurance Asset Manager Annual Survey.

IFI European Insurance Asset Manager Annual Survey provides comprehensive, hard-to-find details on asset managers specializing in managing European insurance company investments. The report highlights each manager's expertise in the insurance marketplace and details qualitative aspects of the manager's business model and core competency.

Some of the details provided include:

• Organization Overview ... including ownership, and client profile
• Total Assets under Management ... with detailed breakdowns on asset class and region
• Global Business Operations ... including asset distribution and international client base
• Investment Capabilities ... including strategies, products, as well as total assets under management
• Insurance Practice Overview ... with specifics on how long each firm has been managing insurance assets, total insurance assets under management, number of third party clients, and client distribution by size and geography
• Full Contact Information ... with corporate information and insurance-specific contacts

The Survey is designed to be a tool for insurance companies when selecting a third party manager.

Also available is a U.S. report, which provides a detailed profiling of nearly 50 insurance asset managers, and the practices of over 350 insurance companies are evaluated.

More information about the IFI European Insurance Asset Manager Annual Survey is available at http://www.wtexec.com/europesurvey.html

Auto Subrogation Study in Progress in 2 States

A comprehensive benchmarking study dedicated to evaluating New York & New Jersey Automobile PIP/Med Pay Subrogation is now in progress. The study will analyze state specific subrogation recovery ratios, expenses, staffing, productivity measures and operating best practices for 2007 and 2008.

Indiana-based Praxis Consulting commissioned the study to help insurance companies better understand and manage their subrogation performance.

“This will mark the first time that anyone has undertaken a benchmarking study of New York and New Jersey PIP subrogation results. The study will allow participating companies to compare their subrogation recovery results with those of other carriers operating in those states,” said Robert Ford, president and founder of Praxis.

A diverse group of insurance companies of various sizes and mix of business are participating in the study. Participants will receive a complimentary report of their individual company results compared to benchmark peers.

Companies should contact Ward Group by March 16 to enroll in the program. Contact Betty Cornelius at bcornelius@wardinc.com or call (513) 746-2404.

N.J. Man Pleads Guilty; Stole PIP Benefits

New Jersey Attorney General Anne Milgram and Criminal Justice Director Deborah Gramiccioni announced that a Camden County man has pleaded guilty to insurance fraud for attempting to steal more than $68,000 in Personal Injury Protection (PIP) benefits.

According to Insurance Fraud Prosecutor Greta Gooden Brown, Vito Manzella, 24, whose last known address was in Lindenwold, pleaded guilty before Superior Court Judge Christine Allen-Jackson in Gloucester County to third-degree insurance fraud, a charge contained in a February 2008 indictment. Under the plea agreement, the state will recommend a sentence of 180 days in the county jail as a condition of two years probation. Manzella also must pay restitution in the amount of $3,241 to New Jersey Manufacturers Insurance Company for the cost of investigating the fraudulent claims. Judge Allen-Jackson scheduled sentencing for April 24.

In pleading guilty, Manzella admitted that between March 28 and May 2, 2005, he committed insurance fraud by fraudulently submitting claims for $68,819 in PIP benefits to New Jersey Indemnity Insurance Company.

Manzella admitted that following an automobile accident in Berlin Borough, he falsified an affidavit stating that he lived in Mullica Hill at the time of the accident with a family member who had automobile insurance. Manzella admitted that, in fact, he did not live in Mullica Hill at the time. He lived in Camden County with a family member who did not have automobile insurance.

N.C. to Receive $5 Million for Sea Level Rise Study

The state of North Carolina will receive $5 million for a statewide risk assessment and mitigation strategy demonstration of the potential impacts of climate change-induced sea level rise.

The U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) will use the results of this study to assess the long-term fiscal implications of climate change as it affects the frequency and effects of natural disasters. Information from the study will be shared with other states to inform their climate change mitigation efforts.

According to FEMA Regional Administrator Phil May, the information and results from this study may help formulate strategies to deal with potential effects of sea level rise on the nation's coast. "North Carolina has been very proactive in implementing and improving upon coastal zone management activities and policies," May said. "Although the study is focused on just the state of North Carolina, the results of the study should be applicable to other coastal states as well. In addition, the study will compliment an existing study currently being performed by FEMA which focuses on the effect of climate change on the National Flood Insurance Program."

North Carolina's Office of Geospatial and Technology Management (GTM), part of the North Carolina Division of Emergency Management, will be managing the study. GTM oversees the state's floodplain mapping and management programs. The study will last approximately three years.

California Agent Pleads Guilty in Fraud Scheme

California Insurance Commissioner Steve Poizner announced that Mark Brashear, 48, of San Marcos, pled guilty to two felony counts of grand theft against an elder.

Upon receiving complaints from seniors alleging Brashear misrepresented their investments, CDI's Enforcement Branch launched an investigation. The investigation revealed that Brashear initially invested senior clients' money into legitimate annuity accounts, as requested by the clients.

After a period of time, Brashear allegedly persuaded his clients to invest in American First Fidelity, or AFF, promising higher returns on their investments. He purportedly failed to disclose that he was the owner of AFF, and that their investment would not be in an annuity. Investigators further discovered that Brashear allegedly used the victims' money for personal expenses. According to investigators, the victims' funds were not placed into any legitimate investment.

Brashear's alleged schemes took place between February 2004 and August 2005. There were a total of five senior victims who incurred losses of more than $300,000 as a result of his purported scamming.

A sentencing hearing has been set for April 7.

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Renting Out Rooms Comes with Risks

As the economy slumps, many homeowners are renting out rooms to help pay their mortgage. But before accepting that first rent check, they should check for legal and insurance repercussions.

Under some homeowner policies, the rental of rooms may be considered a business, and limits may be placed on their insurance, including coverage for contents, personal liability, medical payments and identity fraud. Policy add-ons or endorsements similar to those offered for home-based businesses may help bridge these gaps.

“The last thing struggling homeowners need are more ways to lose money,” said Candysse Miller, executive director of the Insurance Information Network of California. “To safeguard finances, homeowners should carefully review their insurance policies with their agent or company before seeking rental applications.”

Renters should also be aware that the landlord’s policy may not cover their possessions or provide liability protection in case they are sued. In California, renters policies average about $250 a year for $15,000 property coverage and up to $200,000 in liability protection.

According to a 2006 poll by Trusted Choice, a unit of the Insurance Brokers and Agents Association, about 81 million Americans rent homes and of those, nearly 65 percent have no insurance coverage.

For first-time landlords, IINC recommends researching city and state landlord/tenant laws. A detailed background check on the prospective tenant can help identify any potential problems that may arise during the tenancy. Many cities and municipalities also offer landlord/tenant services departments to help with questions and to avert disputes.

Ohio BWC Offering New Deductible Program

Ohio employers will soon have another option for controlling costs while protecting their workforce following the approval by the Ohio Bureau of Workers’ Compensation (BWC) Board of Directors to create a new deductible program.

The deductible program, the first-ever for BWC, will reportedly give employers better control of their workers’ compensation insurance spending and provide an incentive to promote workplace safety programs and services.

Under the deductible program, an employer agrees to pay the portion of a claim that falls below the deductible level. For taking on this degree of risk, the employer will receive a premium discount. The program will offer five deductible levels from $500 up to $10,000 per claim, and additional deductible levels and structures will be considered in future years. The deductible program will be available to employers beginning July 1, 2009.

The Board also approved rule changes that will give BWC more authority to ensure sponsoring associations comply with the statutes and rules governing the group rating program.

The changes include: requiring greater disclosure from group sponsors; mandating that all sponsors reapply for certification before becoming eligible to sponsor groups for group retrospective rating beginning July 1, 2009 and/or group rating beginning July 1, 2010; and instituting a re-certification process to ensure all group sponsors are evaluated by BWC on a regular basis.

In other business, the Board asked BWC staff to continue its efforts toward ensuring an actuarially sound rate system that will provide greater equity between the amount group-rated and non group-rated employers pay in workers’ comp premiums.

Staff was also asked to continue to solicit input from these employer groups and present a modified plan in the future that does not include elimination of programs including Drug Free Workplace and Safety Council discounts.

Wipro Unveils Claims Analytics Solution

Wipro Technologies, the Global IT Services business of Wipro Limited, announced the launch of Insurance Claims Analytics (ICA) - an integrated business intelligence (BI) offering targeted at property and casualty (P&C) insurance carriers.

Built on the SAP® BusinessObjects™ XI 3.1 intelligence platform, this solution leverages SAP BusinessObjects BI solutions. The offering combines Wipro’s knowledge of global insurance markets and experience in BI with the BI capabilities of the SAP BusinessObjects portfolio and SAP’s insurance experience.

According to Wipro, research shows that the opportunity cost of ineffective claims management is extremely high; for instance over 50 percent of the insolvencies that happened between 1994 and 2004 in the U.S. P&C industry is attributed to poor reserves management. Given the global inflationary trends contributing up to 12 percent rise in loss adjustment expenses, the efficiency gains in the Claims units directly contribute to the bottom line.

Wipro’s ICA solution features integrated dashboards and predictive analytics to analyze and report the performance of Claims units. Wipro has created a large library of 500+ key performance indicators that covers all aspects of claims handling operations classified under approximately 70 CXO-level strategic priorities to allow the clients to choose the right set of metrics to effectively track and improve the performance of their claims units.

It also provides interactive what-if analysis capabilities supported by Xcelsius® software. An integrated predictive analytics workbench from SAP BusinessObjects helps in performance improvement in critical areas such as fraud prediction, subrogation handling and litigation management.

Demos of the ICA solution integrated with SAP BusinessObjects XI will be built and made available in the SAP Co-Innovation Lab.

Survey: Executive Liability Costs on the Rise

Financial services companies now pay the highest average premiums for directors and officers (D&O) liability insurance, surpassing rates paid by life sciences and technology firms, according to a forthcoming report from Carpenter Moore, a NASDAQ OMX company. This shift in D&O pricing trends accelerated in the fourth quarter of 2008 as the financial and economic crisis deepened.

Carpenter Moore's 2008 Directors & Officers Liability Insurance Peer Benchmarking Report, which allows senior executives to compare executive liability insurance pricing against their peers, identified another notable pricing shift brought on by the credit crisis and increased financial market volatility.

In the 2008 fourth quarter, only 64 percent of companies saw a decrease in their pricing, down from an average of 77 percent in the first three quarters of 2008. This marks a departure from the dominant pricing trend -- steady decreases in premiums across all industries -- that has characterized the D&O market.

The Carpenter Moore report compiles and assesses vital data for D&O policy renewals. In 2008, more than 500 publicly traded companies representing diverse industry groups participated in the study, up nearly 30 percent from 2007.

Carpenter Moore studies the cost for the first $5 million of D&O coverage, as the vast majority of public companies buy at least that level of insurance. In 2008, financial services companies paid an average premium of $147,187 for the first $5M, up 24 percent from 2007. Technology companies, which were the highest of the six broad industry sector groups surveyed in 2007, saw average premiums fall nearly 13 percent to $128,175 in 2008. The average price for the first $5 million of coverage for life sciences declined 21 percent over the past year.

Other industries tracked by Carpenter Moore are energy, commercial/manufacturing, and services, all of which saw average premiums decline in 2008.

Georgia Storm Damages Top $35 Million

Struck last week by deadly tornadoes, officials in Georgia announced today that the damage estimate from the storms is now more than $35 million.

Georgia Insurance Commissioner John Oxendine toured the southwest part of the state by helicopter on Monday. According to Oxendine, at least $10 million in damage occurred in Thomas County and neighboring Grady County.

Oxendine pointed out that more than 100 homes, a private school, Southwestern State Hospital and commercial agricultural buildings were damaged or destroyed by the storms.

Last week, the commissioner estimated insured damage in the state at $25 million.

Mod Factor Plays Key Role in Work Comp Prices

Given today's tough economic conditions, Baltimore insurance agent Tom Carroll of Diversified Insurance Industries says, too few employers understand that their workers' compensation modification factor - a number that directly affects premium costs - has a "perfect score" they should working to reach.

The mod factor, calculated using a company's payroll and loss experience, is used to weight the premiums a company pays for workers' comp insurance. An average mod is 1.0, but "what's really important is for a company to know its minimum mod." The minimum mod varies based on a company's industry and payroll, but any company can eventually reach its minimum mod by adopting excellent practices in loss control and prevention.

Diversified is helping companies identify their minimum mod and analyze their mod to gain insight into loss trends. The agency helps clients understand how issues such as diligent hiring practices will decrease claim frequency, how an injury management coordinator will improve outcomes of injuries that occur, how to prepare for a premium audit, and much more. Clients receive a custom plan that incorporates these elements and enables them to gain control over their experience modification.

Diversified provides these services through WorkCompEdge, a web-based service dedicated to helping employers reduce workers comp costs and improve productivity.

As a Member Agency of WorkCompEdge, Diversified "goes the extra mile to provide clients with resources and value beyond standard workers compensation insurance policies," said WorkCompEdge CEO Tim Coomer.

Carroll invites interested companies to contact him for a complimentary mod analysis at (410) 319-0600 or WCE@DII-ins.com. Employers are also encouraged to read the company's blog at WorkCompEdge.com.

Marsh Has New Program for Gulf of Mexico Area

Marsh announced the creation of a property insurance program that can provide up to $500 million of annual capacity, in the aggregate, for windstorm losses incurred by all participating oil and gas companies operating in the Gulf of Mexico in a given policy year.

Marsh’s Cost and Coverage Certainty Program, known as the Triple C Facility, was developed in conjunction with the Berkshire Hathaway Group. The Triple C Facility is designed to provide oil and gas companies operating in the Gulf of Mexico with insurance protection, on a pooled basis, with pricing stability, and for a period of five years. Underwritten by members of the Berkshire Hathaway Group, the program is currently available exclusively through Marsh.

The Triple C Facility will offer participating businesses flexibility in coverage design and structure, including a choice of limits of $100 million per occurrence or $50 million per occurrence and a variety of attachment points, ranging from $20 million to $250 million per occurrence.

Additional information regarding the Triple C Facility is available by contacting Bertil Olsson, managing director, Marsh’s Energy Practice-Houston, at (713) 276-8711.

Man Sentenced for Role in Malibu Fire

One of five men accused of starting the Corral Canyon fire in Malibu which injured three people and destroyed more than 50 homes was sentenced, the District Attorney’s Office announced.

Deputy District Attorney Ann Ambrose said Brian David Franks, 28, was sentenced to five years of formal felony probation, 51 days of time already served in county jail and 300 hours of fire abatement community service. Van Nuys Superior Court Judge Leslie Dunn additionally ordered the defendant to pay restitution and ordered him to stay away from the Corral Canyon area unless he is there doing court-supervised community service.

A restitution hearing will be scheduled for a later date. As a condition of his probation, Franks must testify at any future proceeding if he is called either by the defense or the prosecution.

The prosecutor said 20 people gave victim impact statements at sentencing and “talked about the loss of their homes and their pets and that many people escaped death by moments.”

In December 2007, Franks was among a group of young people who started a fire in a cave at the top of a hillside in Malibu. Ultimately, the fire raged out of control and resulted in injuries to three firefighters and destroyed 53 homes. loss of their homes and their pets and that many people escaped death by moments.” Franks pleaded no contest Oct. 1, 2008 to a felony count of recklessly causing a fire of a structure or forest.

Charges are pending against Brian Alan Anderson, William Thomas Coppock, Eric Matthew Ullman and Dean Allen Lavorante who are accused of recklessly causing a fire with great bodily injury and recklessly causing a fire to multiple inhabited structures.

The complaint further alleges that the crime was committed during a time when the governor had declared a state of fire emergency.

Disaster Recovery Aid Available in Washington

Since the Presidential disaster declaration was issued on Jan. 30 for 15 Washington counties, nearly $5.5 million in federal disaster assistance has been paid to residents of those counties to help them recover from January's severe winter storms, landslides, mudslides and flooding, announced officials from the Federal Emergency Management Agency (FEMA) and the Washington Emergency Management Division (WEMD).

As of the close of business last Thursday, 2,639 homeowners and renters have applied for disaster assistance. Inspectors have visited 2,117 homes. Grants awarded to date total $5,165,948, which includes:

• $4,807,003 in housing assistance to cover temporary rental assistance, home repairs and replacement
• $358,945 in other needs assistance to cover essential personal property losses, medical, dental, funeral, transportation or other serious disaster-related expenses not covered by insurance

In addition, $330,900 in Small Business Administration Home Loans has been awarded to pay for the repair or replacement of homes or personal property not fully covered by insurance or other compensation, bringing the total of disaster assistance so far to $5,496,848.

Applicants can register for FEMA assistance by calling, toll-free, 1-800-621-3362 (FEMA), TTY 1-800-462-7585, from 8 a.m. to 8 p.m. seven days a week, or registering online at www.disasterassistance.gov.

Residents of the following counties are eligible to receive disaster assistance: Benton, Cowlitz, Clallam, Grays Harbor, King, Kittitas, Lewis, Mason, Pacific, Pierce, Skagit, Snohomish, Thurston, Wahkiakum and Whatcom.

Disaster Recovery Centers (DRCs) have been set up across the state as a resource for Washington residents. DRCs are established to help people without telephone or Internet service register and to answer specific questions about disaster assistance programs, registration and eligibility. It is not necessary to visit a Recovery Center to register for assistance.

Pair of Louisville Men Sentenced in Insurance Scam

Ronald E. Jarboe, 54, of Louisville, and Dana R. Reinhart, 55, of Louisville, have been sentenced after previously pleading guilty to conspiracy to commit health care fraud, and making false statements in relation to health care matters.

Jarobe had also previously pleaded guilty to additional charges of making of false official statements, wire fraud, and destruction of subpoenaed records.

Jarboe is the part owner and operator of Freedom Express, a Louisville-based trucking company. Reinhart owned and operated an insurance brokerage company called Corporate Financial Associates.

Jarboe was sentenced to 1 year and 9 months imprisonment and 3 years supervised release. Reinhart was sentenced to 3 years probation with 6 months home confinement. Both defendants paid full restitution prior to sentencing. Jarboe paid $7,000 in restitution to Cendant Corporation, which owns Budget Rental, and $47,297.89 to Anthem Blue Cross/Blue Shield. Reinhart paid $47,297.89 in restitution to Anthem Blue Cross/Blue Shield prior to sentencing. In addition, defendant Reinhart agreed to surrender his insurance broker's license as part of the Plea Agreement.

The Indictment to which Jarboe and Reinhart pleaded guilty charged that from April 2003 and continuing until February 2004, they conspired to and made false statements to Anthem Blue Cross and Blue Shield in order to obtain healthcare insurance for Jarboe’s company, Freedom Express. Jarboe obtained healthcare insurance for his employees through Reinhart, who was a Louisville-based insurance agent. Reinhart and Jarboe reportedly misrepresented to Anthem the number of employees working for Freedom Express and were able to pay a lower premium to Anthem.

They also misrepresented to Anthem the “hire date” of Freedom Express’s employees in order to make it look as if these employees were hired after the policy went into effect. In addition, Reinhart and Jarboe misrepresented the health condition of Freedom Express’s employees so that Anthem would charge Freedom Express a lower premium rate.

Jarboe also pleaded guilty to lying to federal investigators during the course of the investigation. More particularly, on Nov. 22, 2005, Jarboe falsely told investigators that he had provided all documents related to a Dec. 2, 2004, federal subpoena and that no records related to the subpoena were destroyed.

Finally, Jarboe pleaded guilty to wire fraud in relation to an insurance claim he made to Avis Rental, a division of Cendant Corporation, in September 2004 relating to a trailer of Freedom Express that was involved in an Aug. 18, 2004, accident.

Jarboe fraudulently told the insurance company that he suffered approximately $12,000 in damages. The actual damages were less than $1,000.

RIMS Notes Online Accounting Training Program

The Risk and Insurance Management Society (RIMS) has announced a partnership with Accounting In An Hour LLC to add a new course online titled “Accounting In An Hour.”

“Accounting In An Hour” is a 60-minute online course that explains financial statements and shows participants how organizations make and lose money. The course teaches participants how to interpret accounting terminology, read reports and take part in financial discussions within the organization. Participants can measure their progress with pre- and post-course quizzes, and earn a certificate upon completing the course. The course costs $35.95 and RIMS members receive a 10 percent discount.

“To have a successful career in risk management, practitioners must have a solid understanding of accounting procedures,” says W. Michael McDonald, member of RIMS board of directors and vice president of risk management at Quality Distribution Inc. “The comprehensive training in the “Accounting In An Hour” course offers risk professionals a better understanding of how and why key financial decisions are made.”

In addition to this online course, in 2009 RIMS has planned 65 courses and workshops that are estimated to attract more than 700 risk professionals. More than half of RIMS professional development workshops offer credit towards the RIMS Fellow designation, a certification program for risk practitioners.

For more information and a complete list of RIMS online courses, visit www.RIMS.org/onlinecourses.

Court Backs Dismissal for 2 Insurers in Katrina Case

Both Allstate Corp. and State Farm Fire and Casualty Co. received good news this week as a federal appeals court upheld the dismissal of the two insurers from a lawsuit charging them with overbilling the U.S. government for flood damage in Louisiana related to the 2005 storm Hurricane Katrina.

The ruling, however, by the U.S. Fifth Circuit Court of Appeals in New Orleans, brings back the lawsuit against several other insurance companies and adjusting firms. Those companies include Fidelity National Insurance Co, Fidelity National Property and Casualty Insurance Co and Liberty Mutual Fire Insurance Co, among others.

Claims adjuster Branch Consultants LLC had targeted eight insurers and six adjusters in an August 2006 "whistleblower" lawsuit in Louisiana of violating the federal False Claims Act by treating Katrina wind damage as flood damage. According to Branch Consultants, this action resulted in overcharging the federal government's National Flood Insurance Program.

However, a three-judge appellate panel supported a 2007 ruling by U.S. District Judge Peter Beer that Allstate and State Farm were properly dismissed as a result of being defendants in a similar case filed a year earlier in Mississippi.

Wash. Commissioner Warns Renters on Coverage

As the economic downturn continues, more and more people are losing their homes to either foreclosure or financially-motivated downsizing. In fact, 2.3 million properties received foreclosure filings in 2008 – up 81 percent from 2007 and 225 percent from 2006.

Washington Insurance Commissioner Mike Kreidler warns homeowners who go back to renting to protect themselves by purchasing renter’s insurance.

“Many people are struggling to make ends meet and it can be tempting to save the money, but now is not the time to scrimp on insurance,” said Kreidler. “If you’re renting, make sure you’re covered – trying to cover losses out-of-pocket is even tougher in today’s economy. In the long run, renter’s insurance could save you a lot of money.”

Following are myths and facts about common misperceptions related to renter’s insurance.

Myth: Renter’s insurance is too expensive, and I already have enough bills to pay.

Fact: The average policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your premises will cost much more.

Myth: I don’t have that many valuables, so renter’s insurance isn’t worth the cost.

Fact: Renter’s insurance can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.

Myth: I’m covered by my landlord’s insurance.

Fact: Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage rarely extends to your personal property.

Kreidler also offers these tips for renters, and for all insurance consumers:

• Buy the right coverage, and the right amount. Talk to your agent about the property you want to protect. Also ask if you need to purchase additional coverage to protect you in the case of a flood or earthquake.
• Highlight safety features. You may pay a lower premium if you have fire or burglar alarms, fire extinguishers, sprinkler systems and/or deadbolts on exterior doors.
• Stick with a single insurer. Many companies offer discounts if you have more than one policy with them, so buying auto and renter’s insurance through the same company could save you money.
• Take an inventory. A home inventory – along with photos and proof of ownership – make it easier to file an accurate, detailed claim in case of losses. An inventory also can help determine how much coverage you need.

Northern Capital Looks to Write for State Farm

Northern Capital Insurance Group, a Florida-based carrier providing Floridians with homeowners, commercial and auto insurance, announced they are prepared to insure 50,000 State Farm customers as the insurer withdraws from Florida.

Northern Capital Insurance Group was the first Florida-based insurance company to issue a public statement of commitment to the Florida insurance market following State Farm's announcement to withdraw from Florida. Northern Capital Insurance Group currently provides over $20 billion dollars of insurance coverage for Florida homeowners.

State Farm's own timetable calls for a non-renewal of approximately 470,000 property policies over the next year as it pursues its two-year withdrawal plan from Florida.

FirstBest Systems, RiskMeter Partner on Program

FirstBest Systems announced a new alliance with RiskMeter Online to integrate its real-time natural hazard risk reports into the FirstBest Underwriting Management System. This partnership will enable insurers to streamline the underwriting process by eliminating duplicate data entry, as well as reduce the back and forth cycles between underwriter and agent.

"In the Property & Casualty insurance industry, many risk factors are related to geography. For example, distance to shore, distance to earthquake faults, and street addresses are all used to determine pricing. Through the use of internet mapping software, RiskMeter helps an underwriter determine the proximity to natural hazards for any property in the United States," explained Dan Munson, founder of RiskMeter.

UMS 2.0, released in November 2008, offers underwriters full, rules-driven straight-through processing (STP), including flexible online quotes for agents. The system provides online functionality to agents (including online quotes and binders) reportedly making it as easy as possible for them to do business with carriers. As part of its commitment to ease of use, FirstBest's UMS 2.0 integration with the RiskMeter Online and its reports will reportedly help speed the underwriting process with automated property lookups.

"The addition of automated property lookups provides underwriters and agents with accurate, efficient and defendable positions faster than any other method, saving underwriters considerable time and money," said Julian Pelenur, CTO, FirstBest Systems Inc. "The agent or underwriter just needs to type in an address, and the natural hazard information will automatically download the information into our forms -- it's that simple. This new addition to UMS 2.0 will help insurers thrive in today's competitive insurance marketplace, by helping insurers to quote and bind new and existing business even more quickly and accurately."

Ohioan Agrees to Plea Deal in Fraud Case

Ohio Department of Insurance Director Mary Jo Hudson announced that Darla Balka of Licking County has pled guilty to money laundering as the result of her involvement in a 2006 fraud case.

As part of the plea agreement, Balka will spend an additional year in jail. In 2008, Balka was convicted of tampering with evidence and received a two-year jail sentence and three years of post-release community control.

A joint investigation involving members of the Ohio Department of Insurance, Ohio Attorney General Richard Cordray's Office and the Licking County Sheriff and Prosecutors offices found Balka helped her then-boyfriend, Timothy Snyder, defraud elderly individuals of more than $89,000.

As part his scheme, Snyder solicited checks from the victims under the guise that he would perform home repairs. While Snyder failed to complete the work as promised, he cashed the victims’ checks and gave portions of money collected to Balka to deposit into her bank account.

In May of 2008, Snyder was ordered to serve 12 years in jail.

AIR Worldwide Updates Winter Storm Klaus Losses

Catastrophe risk modeling firm AIR Worldwide has updated its insured loss estimates for winter storm Klaus based on additional wind speed data analyzed from more than 700 weather stations across France, combined with the detailed data collected by AIR’s post-disaster survey teams, which were dispatched to affected areas of southern France immediately after the storm.

The new findings have resulted in an updated estimate of insured property losses in France of between 500 million and 1 billion Euros. These losses represent damage to buildings and contents of onshore residential, commercial and agricultural properties. (Note that the agricultural line of business in the AIR model does not include losses to commercial forestry, but rather damage to agricultural buildings and their contents.)

“Klaus was the most intense storm to affect France since Martin in December of 1999, which caused an estimated 2.5 billion Euros in insured losses in France at the time,” said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide. “Klaus’ wind speeds broke several records across southern France. However, while the maximum wind speeds form Klaus were in some cases higher than for Martin, Klaus’ footprint of damaging winds was more narrow.”

Residential properties, dominated by unreinforced masonry construction with low-pitched roofs, suffered a fairly high incidence of minor roof tile damage (as much as 10% of properties in some areas visited). Clay roof tiles, common in southern France, are often not mechanically attached to the roof and thus can be blown off by high wind. Tiles at the corners and ridges experience the highest wind load, and indeed this was the most common type of damage observed. The teams also observed damage to the undersides of roofs with large overhangs, where wind can be trapped to create localized loads of upward pressure.

For commercial properties, the most common type of damage observed was to light metal construction in which sheet metal roofs and siding had been peeled away during the storm. Long span structures are particularly vulnerable, even at low to moderate wind speeds.

The survey team saw widespread damage to power and telephone lines caused by downed trees. Nevertheless, losses to utility companies may be significant. At the height of the storm, more than 1.7 million households in France were without power and the AIR survey teams saw utility repair crews on virtually every road they traveled. While the AIR survey teams did not observe significant damage to large numbers of commercial properties, Business Interruption (BI) losses remain an unknown—and relate, at least in part, to the power outages.