Friday, May 29, 2009

WESTERN NEWS ZONE......

California's State Compensation Insurance Fund reported Friday that it has filed a mid-year rate plan that reflects a 15 percent increase in collectible premium. The revised rates will apply to new and renewal workers' compensation policies effective on or after July 1, 2009.

State Fund said its premium levels have fallen significantly since 2003, when Gov. Schwarzenegger implemented policy reforms that lowered premiums, and even after this increase, will still be 46 percent below pre-reform levels.

NATIONAL NEWS ZONE......

Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), reminded insurers and residents on Friday about the start of the 2009 hurricane season that begins Monday, June 1.

“Monday’s start to the 2009 hurricane season reminds us once again of the value of preparedness on the part of everyone. As Federal Emergency Management Agency (FEMA) Administrator Craig Fugate said recently in discussing disaster preparedness, ‘It's not just government, it's all of us.’ Adequate preparation is a shared responsibility -- citizens, government agencies and insurers must take the steps necessary and apply lessons learned from previous hurricanes. Insurers prepare year-round for the potential hurricanes that could be impacting policyholders over the next six months, by building both the financial and human claims response resources that are at the heart of our industry. Communities and individuals that invest time and resources in preparing for hurricanes suffer less damage and recover more quickly after a hurricane strikes. Government at all levels, from the local EMS team to FEMA, participate in year-round training for hurricane response.

“Although the official prediction is for a "normal" hurricane season this year with up to 14 tropical storms, including four to seven hurricanes, forming in the waters off the Atlantic, Caribbean and Gulf of Mexico, it will be far from normal if one of those hurricanes strikes your community. That’s why there is no time like the present to remind coastal residents to be prepared. Coastal residents should develop and implement a family disaster plan, take steps to protect their home from damaging wind and rain, and check their insurance coverage. In the event that disaster does strike this hurricane season, property and casualty insurers are fully committed to helping policyholders recover their property and rebuild their lives.”

INTERNATIONAL NEWS ZONE......

There are two schools of thought when it comes to hurricanes in the Northeast. Either people are convinced that because nothing has happened in so long, nothing will happen, or, the Northeast is due.


“The Northeast may be the most overlooked of all the risk out there,” Robert Hartwig, president of the Insurance Information Institute, said in this week’s BestWeek U.S./Canada. “Insurers are well aware of the potential here. There are those that say hurricanes in the Northeast are so unlikely, insurers should not be permitted to charge for that probability. Nothing can be further from the truth.”

Modeler AIR Worldwide paints a grim picture if a Category 3 or 4 storm hits the metropolitan area, according to BestWeek. A presentation given in New York by the institute outlined the findings. Insured losses could reach $110 billion from Rhode Island to New Hampshire. It happened once. In 1938 a hurricane known as the “Long Island Express” barreled into New England, causing $308 million in damages and more than 600 deaths.

In BestWeek Europe, European reinsurers continued to feel the sting of volatile financial markets in their investment portfolios over the first quarter, while pointing to signs of better underwriting conditions in the January and April renewal periods. First-quarter net income was up for some reinsurers but down for others. All are expressing confidence that the market will improve over the rest of 2009, as primary insurers seek more reinsurance protection to cover their own strained balance sheets.

Also in BestWeek U.S./Canada, it is no surprise that states like Texas, Florida and other coastal states had the highest average homeowners insurance premiums in the United States in 2006, according to the latest data available from state regulators. However, it is possible rates could rise in other areas as insurers look for rates to match increasing wind and hail risks in the Midwest, for instance. In addition, insurers recognize losses are going to escalate with increases in development over the recent past.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit http://us.lrd.yahoo.com/_ylt=Aj3GqPnLK7DsrGIOdK_lC0.vMncA/SIG=16au0tfps/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.ambest.com%252Fsales%252FBestWeek%26esheet=5976001%26lan=en_US%26anchor=www.ambest.com%252Fsales%252FBestWeek%26index=1, or e-mail your request to mailto:customer_service@ambest.com;_ylt=Ar5UsPVk3FbmVrQMQW.rr..vMncA.

  • The Co-operative Insurance has launched a new range of specially designed sector-specific, flexible packaged business insurance products.

The range of tailored insurance products have been developed to meet the protection needs of the self employed, shop and salon owners, publicans, restaurateurs, hoteliers, office and surgery owners and residential property owners. The products are focused primarily on smaller business, which now make up the majority of businesses in the UK, and sole traders which account for a massive 74 per cent of all UK businesses. The products allows shop, salon, office, surgery, pub, restaurant and hotel owners to benefit from a range of insurance products as standard whilst offering them the chance to pick and choose a range of market leading optional add-ons. These include; employee dishonesty cover and 24-hour personal accident cover (Shop and Salon, Office and Surgery, Pub, Restaurant and Hotel), engineering protection (Residential Property) and contract works cover (Self Employed), to name a few.

Anyone interested in taking out a packaged business insurance policy should call 0800 046 6342 for a quotation or make an appointment with one of The Co-operative's Financial Advisers.

Thursday, May 28, 2009

MIDWESTERN NEWS ZONE......

Aggressive driving kills, according to new information released by AAA Minnesota/Iowa.

More than half of fatal crashes involve some form of aggressive driving—speeding, running another driver off the road, tailgating or yelling obscenities.

A 2008 survey by the AAA Foundation for Traffic Safety found that 80 percent of respondents consider aggressive drivers to be a serious traffic safety problem. However, many of those same people said they drive aggressively.

Relatively minor driving infractions — changing lanes without signaling, following too closely, driving too slowly, honking at other drivers — can easily escalate into potentially deadly altercations.

Not every incident turns violent, but 60 percent of motorists admit losing their temper while driving — also known as road rage.

PEOPLE IN THE NEWS ZONE......

The Dentists Insurance Company (TDIC) and TDIC Insurance Solutions have announced the hire of Jim Richardson as their new president and CEO.

Since January of 2007, Richardson served as Chief Deputy Commissioner for the California Department of Insurance. In this role, he oversaw the day-to-day operations of a staff of 1,200 and a $200 million budget. He also provided policy advice to Commissioner Steve Poizner on a wide variety of regulatory, legislative and political issues.

TDIC Insurance Solutions is an authorized independent agent for more than 30 major carriers throughout the state of California. For more information, visit tdicsolutions.com.

TOP STORIES' NEWS ZONE......

New York Insurance Superintendent Eric Dinallo will resign effective July 3, 2009, and become a visiting finance professor at New York University's Stern School of Business, Gov. David Paterson announced today.

The Democratic governor saluted Dinallo for overseeing New York's response to the global credit crisis and the near-capsizing of bond insurers and insurance giant American International Group (AIG).

"Under Superintendent Dinallo's leadership, the Department effectuated the largest regulatory settlement in the U.S., played an integral part in the reform of the workers' compensation system and facilitated more than $15 billion in new capital for the bond insurance industry," Paterson said in a prepared statement.

NATIONAL NEWS ZONE......

The Navigators Group Inc. announced that its principal underwriting agency subsidiary, Navigators Management Company Inc., has expanded its Professional Liability Division.

This Division focuses on providing professional liability insurance to a variety of professional firms including attorneys, accountants, management consultants, insurance agents and brokers, architects and engineers, and other non-medical service providers.

First, Navigators Management Company Inc. has entered into an agreement with Brown & Brown Inc., to become the new underwriter for the Lawyer’s Protector Plan (LPP) insurance program, effective Nov. 1, 2009, for law firms with one to 19 attorneys.

Second, Navigators Management Company Inc. has hired Jerry O’Dwyer to manage its book of professional liability insurance for accountants and law firms with 20+ attorneys.

O’Dwyer was most recently responsible for Professional Liability at Catlin where he established their U.S. underwriting operation for lawyers and accountants.

  • C.V. Starr & Co., a subsidiary of C. V. Starr & Co. Inc., will begin offering its Resolute Portfolio products, designed specifically for Private and Public Companies as well as Not For Profit Organizations, through Starr Indemnity & Liability Company (Starr Indemnity) for business effective June 1, 2009 and going forward.

The Resolute Portfolio products include coverage for Directors and Officers Liability, Employment Practices Liability, Outside Directorship Liability, Fiduciary Liability, and Crime and Fidelity Insurance. The company will target all private companies and not for profit organizations as well as public companies outside of the Fortune 1000. The capacity is $15,000,000 per Coverage Section and coverage can be underwritten on a primary or excess basis.

For further information regarding Resolute Portfolio or C.V. Starr & Company’s other capabilities, contact Laurie Banez at (646) 227-6335 or access http://www.cvstarr.com/.

Wednesday, May 27, 2009

FRAUD NEWS ZONE......

California Insurance Commissioner Steve Poizner announced the arrests of three individuals charged with 48 counts of workers' compensation insurance fraud, labor code violations and tax fraud.

Monica Mui Ung, 49, of Alamo; Joey Ruan, 31, of San Leandro; and Tin Wai Wu, 28, of Millbrae were arrested, with bail was set at $535,000 for each suspect.

CDI led the investigation, with assistance from the Employment Development Department. The investigation revealed that Ung owned and operated NBC General Contractors Inc., a general building contracting company. The company focused primarily on public works projects such as El Cerrito City Hall and Piedmont Elementary School. From May 2003 to May 2007, NBC was awarded at least 27 public works projects in Alameda, Contra Costa, San Francisco, San Mateo and Marin Counties.

The cost for NBC's workers' comp was determined by employee wages, total amount of payroll and job classifications of the employees. Ung, Ruan and Wu allegedly made intentional and material misrepresentations to their workers' comp carrier to misclassify the type of work their employees were performing, as well as falsely reporting the hourly wage of more than 70 employees, saving them a significant amount in workers' comp premiums.

By allegedly falsely reporting the type of work performed by employees and wages paid, NBC exposed the workers' comp insurer to additional risk and allowed the company to engage in unfair business practices by giving an advantage over employers who correctly reported their payroll and risk. Because public works projects are typically awarded to the lowest bidder, the alleged fraud gave NBC a significant advantage over competitors. This alleged false reporting resulted in a total loss of premiums of more than $1.45 million.

Additionally, investigators allege that NBC did not pay overtime or sick leave to employees, as required under labor laws. These losses are estimated at $3.6 million in unpaid wages to 19 employees.

SOUTHEAST NEWS ZONE......

EagleEye Analytics, a provider of predictive analytics solutions to the property and casualty industry, announced that Georgia Farm Bureau Insurance has selected EagleEye Analytics to be its provider of predictive analytics solutions under a long term services agreement.

Georgia Farm Bureau Insurance will use EagleEye Analytics' Insight, a web-based predictive analytics solution. Insight uses advanced technologies to identify risk characteristics that impact profitability in a fraction of the time required by traditional market offerings. Insight enables insurers to rapidly implement superior underwriting, pricing, and marketing strategies that result in lower loss ratios and higher profitability.

Georgia Farm Bureau is a preferred risk writer of farm, home, auto and light commercial insurance. http://us.lrd.yahoo.com/_ylt=Ah1fGEAvpGgx6SyWPo_oo1.uMncA/SIG=10oc0j1nh/**http%3A//www.gfb.org/

EagleEye Analytics is an insurance solutions company that provides predictive analytics and information services. EagleEye Analytics can be found at http://www.eeanalytics.com/

WESTERN NEWS ZONE......

California was the only state in the nation to receive consistently top marks across the board on a recent ranking of traffic safety laws conducted by the Insurance Institute for Highway Safety (IIHS).

The study examined the strength of traffic safety laws in six key areas, including: DUI/DWI, young driver licensing, safety belt use, child restraint use, motorcycle helmet use and red light cameras.

The State's 2008 adult seat belt use rate was 95.7 percent, with teens buckling up at a rate of 89.6 percent and child safety seat use at 94.4 percent. Total traffic fatalities are projected to be down over 13 percent from 2007, translating into well over 500 lives saved in just one year. Although 2008 figures for alcohol impaired fatalities are not yet available, the 2007 fatality total was down 9.5 percent from the previous year.

California was the only state to receive 'good' ratings in all six categories, the highest rating possible. Only Delaware, the District of Columbia, Oregon and Washington received five out of six 'good' scores.

After a nearly two year process, California instituted a Strategic Highway Safety Plan in September of 2006 to significantly reduce deaths and injuries. Hundreds of state and local agencies, advocacy groups and private industries helped develop the plan, which has been integrated into the on-going efforts of agencies and organizations throughout the state.

Note: The IIHS comparisons of state laws is available at http://www.iihs.org/laws/measureup.aspx

NATIONAL NEWS ZONE......

A.M. Best Co. has introduced Best’s Directory of Insurance Actuaries.

Users may access this new online reference on a complimentary basis to locate actuaries experienced in working with the insurance industry. The Directory can be accessed at www.ambest.com/directories.

Best’s Directory of Insurance Actuaries offers both General listings, with basic company information, and Full listings, which include details on a company’s qualifications, biographical information, descriptions of expertise, expanded contact information and more.

A.M. Best is offering an introductory opportunity for actuaries to have a Full listing in the Directory at no charge for six months if applied for by Dec. 31, 2009.

For more information about Best’s Directory of Insurance Actuaries, visit www.ambest.com/sales/actuarydirectory.

For listing information, call Directories at (908) 439-2200, ext. 5673 or visit www.ambest.com/directories/signup.

  • As the health care reform debates rage in Washington, employers are continuing to see steady increases in rates for group medical coverage, according to a recent survey by The Council of Insurance Agents & Brokers.

The Council’s semiannual Employee Benefits Market Survey shows employers of all sizes continuing to experience group medical coverage rate increases and choosing to shift more of those costs along to their employees through higher deductibles and co-pays, but few employers looking to discontinue group medical coverage as an employee benefit.

Of the benefits consultants responding to the survey, 87 percent said rates had increased for small accounts, those with 50 or fewer employees. Eighty-nine percent said rates increased for medium accounts (51-500 employees) and 67 percent saw increases in large accounts (501+ employees).

Fifty-three percent of small and 68 percent of medium accounts saw rate increases 6-15 percent, while only 50 percent of large accounts saw rate increases in the 6-15 percent range. “Carriers appear to be much more aggressive in pricing,” commented one consultant. “Trend is escalating,” said another.

Employers continue to look at options to cut their costs in the face of continuing rate increases. One consultant said, “Deductibles, coinsurance and co-pays have increased drastically – plans are becoming more cost sharing.” Another commented, “Carriers in our region are developing higher deductible plans in response to the need for low cost options in this economy.”

Employers are also looking to employees to shoulder a higher percentage of premiums costs, with more than 50 percent of respondents saying that over half of their clients have chosen this option. “A majority of plan sponsors have elected to increase deductibles and make other design changes for the purpose of reducing cost increases,” said one respondent. However, employers are not looking to drop health coverage completely, with 85 percent of respondents saying that only 1-10 percent of their clients are considering this option.

High Deductible Health Plans/Health Savings Accounts remain of great interest to employers, but not as the sole health care offering. Fifty-seven percent of consultants said clients see HDHPs/HSAs as a plan option rather than for replacement of an existing plan. Small, medium and large accounts continue to implement the HSA option at around the same pace, and employer contributions to HSAs generally fall within the $250-$749 range.

The benefits consultants also said that group life insurance renewal rates remained stable or dipped slightly for all size accounts.

Tuesday, May 26, 2009

PEOPLE IN THE NEWS ZONE......

Ernesta Procope, chairman and founder of E.G. Bowman Company, a minority owned insurance broker, received the Lifetime Achievement Award from the National African American Insurance Association.

NAAIA Lifetime Achievement Award is bestowed upon individuals who have distinguished themselves in the insurance industry by maintaining a high level of performance for more than 25 years. The award was presented during a luncheon ceremony in Washington, D.C.

The National African American Insurance Association (NAAIA) was organized to create a network among minorities who are employed by insurance companies or self-employed in the insurance industry. Pooling this wealth of talent contributes to the growth of the association and its members through sharing of professional experience, knowledge, and information. Web: http://www.naaia.org/.

Procope’s previous honors, include the Turner Broadcasting System’s Trumpet Award, induction into the African American Business Hall of Fame & Museum, The National Alliance for Insurance Education & Research’s 25 Most Innovative Agents in America award, Essence magazine’s Power Award, induction into the Minority Business Hall of Fame and Museum, and the Excellence Award from the New York Chapter of the Chartered Property Casualty Underwriter Society.

E.G. Bowman is a full-service brokerage and loss-control firm whose clients include FORTUNE 500 companies, major nonprofits, government agencies, individuals and small businesses. Web: http://www.egbowman.com/.

WESTERN NEWS ZONE......

California Insurance Commissioner Steve Poizner recently joined Assemblymember Joel Anderson (R - El Cajon) to support AB 157, and to offer disaster preparation tips for all San Diego residents.

AB 157 would allow Cedar Fire survivors two additional years to rebuild their homes without their property taxes being reset. Under current law, fire survivors are allowed 5 years to rebuild before higher property taxes are set.

Poizner also advised all local homeowners to proactively prepare for fires and other potential disasters by conducting a home inventory and updating their insurance policies.

This year's wildfire season is already under way. The May 5 Jesusita Fire in Santa Barbara destroyed 8,700 acres and burned 80 homes to the ground.

INTERNATIONAL NEWS ZONE......

In 2008, seven life/health insurers became financially impaired, and three impaired companies have been identified so far in 2009, according to a new A.M. Best special report highlighted in BestWeek U.S./Canada.

This affects approximately half a million insureds. A.M. Best anticipates a rising trend in financially impaired insurers over the near term, as the life/health insurance industry absorbs its investment losses. Exposure to concentrations of certain investment classes, particularly structured and mortgage-related investments, is the emerging trend in life/health companies’ financial impairments.

* In BestWeek Europe, high-profile sports events such as next year’s Football World Cup in South Africa can draw hundreds of millions of television viewers while leaving underwriters and insurers on the edge of their seats, worried that something might go wrong. Event cancellation coverage for something as big as the World Cup, the 2011 Rugby World Cup in New Zealand or 2012 London Summer Olympics requires plenty of advance planning, according to underwriters at Hiscox, Beazley and Munich Re UK.

Also in BestWeek U.S./Canada, consumer confidence in many financial institutions has fallen, yet insurer support for the industry’s ethical watchdog has waned. The Insurance Marketplace Standards Association, a self-policing compliance group established by life insurers, says its membership has fallen to 88 companies, down nearly two-thirds from a high of 241 in January 2000 and 197 in June 2003.

SOUTHWESTERN NEWS ZONE......

Combined Agents of America LLC (CAA) announced its newly elected 2009 management committee at its recent annual meeting, including CAA's new chairman of the board Bill Bridges, executive vice president of Duncan, Fraser & Bridges, Pampa, Texas and CAA's new executive vice president, Don Hudson, vice-president of JHC Insurance Agency Inc. Victoria, Texas.

CAA also welcomed its 41st member Mr. Insurance Agency Inc., San Angelo, Texas, and its fourth new member in 2009. With recent expansion into Oklahoma and Kansas, Texas-based CAA is a managing general agency (MGA) committed to further expansion across the country to strengthen the independent agency system through profitable growth and exceptional service for its member agencies.

Each CAA management committee member is elected to serve a staggered two-year term and is selected by its board of members based on their leadership abilities and contributions to the organization. The new 2009 management committee includes:

Chairman of the Board - Bill Bridges, executive vice president of Duncan, Fraser & Bridges, Pampa, Texas . Bridges serves on the board of directors of The Independent Insurance Agents of Texas (IIAT), and the Texas Mutual Agents' Council and the Travelers' Regional Agents Council.

President - Don Jones, president of Crockett Insurance Service, president of Houston-Walker Counties Insurance Service & Crockett Financial Service, Crockett, Texas.

Executive Vice President - Don Hudson, vice-president of JHC Insurance Agency Inc., Victoria, Texas.

Second Vice President - Michael Siegeler, president of the Siegeler Insurance Agency Inc., Giddings, Texas.

Secretary - Lloyd Eisenrich, president of The Weatherby-Eisenrich Inc., headquartered in Andrews, Texas with two other locations in Odessa, Texas as Edgmon-Eisenrich Insurance and in Granbury, Texas as Insco Insurance. Eisenrich serves on the national advisory board NorthStar, the agency advisory board for Allstate Corp./Encompass Insurance.

Treasurer - Jim Norris, CEO of Henry Norris Insurance Agency Inc., Lamesa, Texas. Norris is a graduate of Southern Methodist University with a BBA in Insurance.

Past Chairman - Brent Borgstedte, president of GBS Insurance Agency Inc., Bellaire, Texas. Borgstedte is also a member of the Independent Insurance Agents of Houston's board of directors.

Friday, May 22, 2009

NATIONAL NEWS ZONE......

Leigh Ann Pusey, president of the American Insurance Association (AIA) this week expressed support for legislation introduced that would grant additional pre-disaster mitigation funding to local and state authorities to provide resources for enactment and enforcement of state-wide building codes.

“Every year following a natural disaster, the federal government and the private sector invest billions of dollars in disaster relief to rebuild communities,” said Pusey. “By taking action before the catastrophe, homeowners, federal and state governments can mitigate losses with the adoption and enforcement of building codes.”

Introduced by Rep. Lincoln Diaz-Balart (R-FL) and Rep. Michael Arcuri (D-NY), H.R. 2592 improves upon the current mitigation programs in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). First, in the Hazard Mitigation Grant Program (HMGP), states that adopt and enforce state wide building codes would be eligible to receive additional funding from the HMGP after a disaster occurs. Secondly, it amends the Pre-Disaster Mitigation Grant Program (PDM) to allow states to use PDM funds to building code enforcement programs prior to a disaster.

Pusey voiced concerns, however, over different legislation that was introduced by Rep. Ron Klein (D-FL), entitled the Homeowners' Defense Act of 2009. The legislation would establish a National Catastrophe Risk Consortium and create federal bailout for inadequate state catastrophe funds.

“While well intentioned, the bill falls short in trying to address the problems in coastal insurance markets. It will not generate new capacity, reduce the cost or improve the availability of homeowners’ insurance,” said Pusey. “In fact, it is likely to encourage states to create thinly financed, state-run reinsurance facilities that will displace the private market and require a federal government bail-out in the event of a catastrophe.”

“The private insurance system continues to be well-positioned to manage natural catastrophe risk, and the best course is to improve, not displace, the private sector’s ability to serve homeowners and businesses that could face losses from natural catastrophes,” concluded Pusey.

WESTERN NEWS ZONE......

* Policyholders of American International Group (AIG) in California filed a complaint Thursday asking the Los Angeles Superior Court to order the nation’s largest insurance and financial conglomerate to stop engaging in reported further unlawful, fraudulent and unfair business practices under a California law that was adopted to protect consumers. The court action was filed by an insurance broker who purchased and sold over $15 million of AIG life insurance.

AIG reportedly channeled funds from its California companies into a lending program that put over $75 billion of AIG insurance assets at risk, using the companies’ bonds and investments to speculate in high risk real estate mortgage securities. According to the suit, AIG lost the gamble and taxpayers have paid over $180 billion. The suit charges that AIG is draining funds from its California insurance companies in a futile effort to keep the financial side of the firm afloat.

Also named in the suit is AIG's decade-long auditor PricewaterhouseCoopers. The accounting firm is charged with reportedly systematically providing AIG with phony audit opinions that were filed with the State Insurance Commission.

  • Ventura County (Calif.) District Attorney Gregory Totten announced that the Ventura County District Attorney's Office Auto Insurance Fraud Unit arrested and charged Jose Herrera, 29, of Canoga Park, with one count of felony auto insurance fraud.

    It is alleged that on Dec. 15, 2008, Herrera committed auto insurance fraud when he contacted his Ventura-based insurance carrier, Alliance United, and falsely reported that someone had stolen his 1997 Jeep.

    Herrera could be sent to state prison for up to five years if convicted of felony auto insurance fraud.

Thursday, May 21, 2009

EVENTS NEWS ZONE......

* Industry leaders will review the state of the market for specialty insurance in light of a new survey conducted by the National Association of Professional Surplus Lines Offices (NAPSLO). The special online live presentation is set for Thursday, June 11, at 11 a.m. EDT. The event is free. Visit: http://us.lrd.yahoo.com/_ylt=Apkeb.pTBdlNLJNtpmYog42vMncA/SIG=15mum5i5m/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.ambest.com%252Fexcess09%26esheet=5970768%26lan=en_US%26anchor=www.ambest.com%252Fexcess09%26index=1 to register.

Participants in the one-hour discussion include:


* Paul Springman, president and chief operating officer, Markel Corp.
* Marla Donovan, vice president, Burns & Wilcox
* Kevin Westrope, president and CEO, Westrope
* Richard Kerr, chairman and CEO, MarketScout Corporation ,A member of the A.M. Best Co.’s specialty lines rating group.


The panel will examine today’s market, including pricing and availability, for specialty insurance, known in various forms as surplus lines, excess & surplus or non-admitted coverage. They will also survey changes in the financial strength of the specialty insurance sector of the property/casualty industry. Specialty insurance includes coverages typically not available through standard commercial or personal insurance products. Best’s Review®, A.M. Best Co.’s monthly news magazine, will cover this topic in the September issue and will include content from the Webcast.


Topics to be covered in the panel discussion include:


* The state of insurance capacity and the availability of various lines of coverage;
* How terms and limitations may be changing for various lines of specialty coverage;
* How pricing, availability and retention experience have been affected for these lines of insurance coverage: property, catastrophe-exposed property, casualty, professional liability, directors and officers (both public and private), healthcare and medical liability, excess and umbrella, and environmental and transportation;
* Financial strength of insurers serving the specialty lines industry


Registration for this event is free. Participants are encouraged to send in comments and questions for the discussion portion of the presentation. The Webcast will be available worldwide via a link provided upon registration.

NATIONAL NEWS ZONE......

* The Foundation for Agency Management Excellence (FAME), the charitable foundation of The Council of Insurance Agents & Brokers, announced a new scholarship gift from Assurex Global in memory of Robert Ashlock, a former president of 20 years and longtime industry leader.

An exclusive partnership of the top independent insurance and risk management brokers worldwide, Assurex pledged a $125,000 gift over the next five years to fund the “Robert P. Ashlock” memorial scholarship, which will be granted annually at $5,000 to a risk management student at one of the nine current FAME scholarship universities, including Howard University; University of Wisconsin at Madison; University of Georgia; California State University at Sacramento; the Katie School of Insurance and Financial Services at Illinois State University; the University of Mississippi; Appalachian State University, Boone, N.C.; Temple University, Philadelphia; and California State University, Fullerton. The addition of the Assurex/Ashlock scholarship brings the total number of $5,000 FAME scholarships to 15 per school, per year.

The FAME scholarship program is aimed at helping promising business students who are considering the field of risk management and insurance as a career. To be eligible for a FAME scholarship, students must be juniors or seniors with a 3.0 or better grade point average, have a declared major or concentration in risk management and insurance and demonstrate financial need.

“We are pleased to contribute to the success and outreach of FAME for our industry’s youngest aspirants,” said Albert Counselman, chairman & CEO of RCMD, FAME vice chairman and Assurex member. “Robert Ashlock was an innovative, entrepreneurial industry leader who always recognized the importance of developing the next generation of talent. He would be so proud to know that this legacy would continue through this scholarship fund,” Counselman added.

Assurex President and CEO Jim Hackbarth added, “We are pleased to be partnering with FAME and The Council to develop a new generation of talent for our industry. We look forward to helping young people who want to join us in this great business.”

FRAUD NEWS ZONE......

* A Brookline, Massachusetts couple has pled guilty in Suffolk Superior Court to charges they schemed to obtain public health insurance to which they were not entitled.

Joseph Youshaei, 46, and Jila Youshaei, 41, each pled guilty to charges of Procurement Fraud (2 counts), and Larceny Over $250 by Continuous Scheme. Following the change of plea, Suffolk Superior Court Judge Carol Ball sentenced Joseph Youshaei to one year in the House of Corrections; 30 days to serve, balance suspended for one year. Jila Youshaei was sentenced to one year probation. Ball ordered Joseph and Jila Youshaei to jointly pay restitution in the amount of $53,114 and fined each $17,500.

From 1999 through 2005, the Youshaeis reportedly applied for and received MassHealth benefits by providing false information regarding their income. Joseph and Jila Youshaei reported in submissions to MassHealth that their only source of income was $475 a week earned by Joseph as an employee of the Boston Discount Jewelry Exchange. Based on their submissions, the Youshaeis, including their three children, qualified for and received the most comprehensive health coverage available at the time under the Commonwealth’s public health assistance program.

An investigation conducted by State Auditor Joe DeNucci’s Bureau of Special Investigations and an independent investigation conducted by the Attorney General’s Office revealed that during the relevant time period, from 1999 through 2005, the Youshaeis owned a principle residence in Brookline assessed at approximately $650,000 as well as various businesses and downtown commercial real estate assessed in the millions including the Boston Discount Jewelry Exchange building located at 365 Washington Street and commercial buildings at 48 and 52 Temple Place in Boston. In addition, the Youshaeis owned and operated three separate Honey Dew Donut franchises, a convenience store, and a fruit vendor stand located on Downtown Crossing. The investigation also revealed that during the relevant time period, all three of the Youshaei children attended an exclusive private school in Brookline. Neither these assets nor the purported income derived from the businesses and real estate ventures were reported to MassHealth.

In total, MassHealth paid over $53,000 in medical benefits on behalf of the Youshaei family.

SOUTHEAST NEWS ZONE......

* Memorial Day weekend marks the beginning of swim season, but this year there's been a change to local pools in North Carolina.

All public pools and spas must have anti-entrapment drains or safety vacuum release systems in place before opening for the season. The federal Virginia Graeme Baker Pool and Spa Safety Act of 2007 gave all public pools until December of 2008 and seasonal pools until they opened this year to comply with the new law.

The law came about after 7-year-old Virginia Graeme Baker, the granddaughter of former U.S. Secretary of State James Baker, III died in a backyard spa after the powerful suction of a drain entrapped her underwater. The powerful suction created by the pump can cause a swimmer to get stuck to a drain or suction outlet, and then they can't free themselves, no matter how strong a swimmer they may be. It is extremely difficult for onlookers to break this suction by lifting the person off the drain - to do so, you would have to be able to lift more than 500 pounds. Even several people working together probably won't be able to free the victim - the vacuum must be broken.

According to the Consumer Product Safety Commission, more people were killed or injured in residential pools and spas than in public swimming facilities.

While this is a federal law, the North Carolina Building Code Council adopted language in March to change the state building code, mirroring the federal law for public and new residential pools and spas.

This building code change will take effect in June. Public pools include all hotel, apartment, community, club or any pool or spa that is not considered a "backyard pool." All new residential pools must comply with the new building requirements from this point forward.

Injury is the leading cause of death for children in North Carolina. Each year more than 200 children under the age of 15 die, about 3,000 are admitted to hospitals, and more than 45,000 receive other medical care as a result of injuries. In a typical year one out of every 34 children in North Carolina experiences an injury that results in death or medical care.

  • Scott Richardson, South Carolina Insurance Director, announced that American Strategic Insurance Corporation (ASI) has entered the South Carolina marketplace and is offering homeowners' insurance coverage for coastal property owners. ASI, domiciled in Florida, is offering homeowners' coverage to South Carolinians through its network of independent agents.

    Richardson and the SC Department of Insurance will host a Public Meeting to discuss South Carolina's coastal insurance marketplace, May 28, from 6-7:30 p.m. at Buyer Auditorium at The Citadel. For further information contact the SC Department of Insurance, (803) 737-6207 or visit http://www.doi.sc.gov/.

ASI, a $500M insurance company with over 400,000 policyholders across Florida, Texas, Louisiana, Colorado and Arizona specializes in personal lines property insurance and also offers flood coverages as a Write Your Own (WYO) Flood Service Provider. ASI will add additional insurance products for renters and those owning second homes. For more information, visit http://www.americanstrategic.com/.

Wednesday, May 20, 2009

FRAUD NEWS ZONE......

* New Jersey Attorney General Anne Milgram announced that a Newark man was sentenced for falsely claiming he was injured in a bus accident, when, in fact, he was not involved in the accident.


According to prosecutors, Princeton Smith, 32, of Newark, was ordered to serve two years probation and 100 hours of community service. The defendant previously served 35 days in Essex County Jail. The sentence was based on Smith’s guilty plea to attempted theft by deception, a charge contained in a June 10, 2008 Essex County grand jury indictment.

In pleading guilty on March 18, Smith admitted that he fraudulently claimed that on Jan. 11, 2005, he was a passenger on a bus and was injured when the bus collided with a passenger car. Smith was not a passenger on the bus at the time of the accident. Smith further admitted that between Jan. 11 and July 20, 2005, he filed a false claim with U.S Fidelity and Guaranty Co. in an attempt to obtain money for a bus accident he in which he was not involved.

  • California Insurance Commissioner Steve Poizner announced that three Southern California fraud suspects were arraigned in San Diego County this week.

San Diego residents Adam Duvanich, 25; his wife, Lindsey Duvanich, 24; and John Fuller, Jr., 37, were charged on May 5 with felony insurance fraud and conspiracy. Joseph Malcuit, 26, of Lakeside, was also charged with felony fraud and conspiracy. Adam and Lindsay Duvanich and Malcuit were arraigned Tuesday.

In the summer of 2008, Lindsey and Adam Duvanich allegedly decided to get rid of their 2004 Honda Accord in order to collect on the potential insurance payout. In July 2008, John Fuller allegedly agreed to help Lindsey Duvanich abandon the Accord. Fuller introduced Lindsey to Malcuit, who would allegedly help her abandon the vehicle. Lindsey Duvanich gave her car key to Malcuit, who allegedly hid the vehicle. On July 8, 2008, Lindsey reported her 2004 Honda Accord stolen to San Diego Police. She also filed a vehicle theft claim with her insurance company, providing a recorded statement regarding the circumstances surrounding the theft. Lindsey and Adam Duvanich signed the Affidavit of Vehicle Theft, attesting to the circumstances surrounding the supposed theft. The affidavit was notarized and returned to the insurer.

In October 2008, CDI was notified of a suspected fraudulent claim referral in regards to this case. During the course of the investigation, Adam Duvanich admitted that he and his wife discussed getting rid of the vehicle in order to collect a payout from their insurance company. Fuller and Malcuit admitted to having involvement in the scheme. Lindsey Duvanich confessed to filing a false claim with her insurance company.

TOP STORIES' NEWS ZONE......

* The state-based insurance regulatory system has remained a constant in an otherwise erratic economic climate. That was the key message conveyed this week when state insurance regulators visited members of Congress to highlight the part of the regulatory system that has consistently worked.

More than 35 state insurance commissioners joined National Association of Insurance Commissioners (NAIC) Chief Executive Officer Dr. Therese Vaughan for meetings with members of Congress to discuss insurance regulatory reform. Commissioners also heard from Congressman Barney Frank (D-MA), chairman of the House Committee on Financial Services on his views for financial regulatory reform; from Health and Human Services Secretary Kathleen Sebelius on health insurance reform; and from Congressman Earl Pomeroy (D-ND) on his perspective as a former NAIC President and North Dakota Insurance Commissioner.

During the meetings, Vaughan and state regulators stressed that any reforms must provide consumers with the time-tested protections of the current national system of state insurance oversight.

NAIC President and New Hampshire Insurance Commissioner Roger Sevigny said the visits were designed to ensure careful consideration of reforms to the nation’s financial services regulatory structure.

State insurance regulators also shared with members of Congress the NAIC principles for health insurance reform, which stress substantial experience and expertise of the states in the crafting of federal legislation.

To see the full text from the meetings, visit http://www.naic.org/Releases/2009_docs/state_strengths.htm

SOUTHWESTERN NEWS ZONE......

* The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) recently approved the renewal of the Certificates of Authority for 10 companies to self-insure for workers’ compensation claims for a one-year period under the TDI-DWC Self-Insurance Regulation program. These 10 companies collectively employ approximately 23,520 persons in Texas.

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

* Louisiana Pacific Corporation, Portland, OR
* Textron Inc., Providence, RI
* The Procter & Gamble Company, Cincinnati, OH
* Weyerhauser Company, Federal Way, WA
* Ameron International Corporation, Pasadena, CA
* Jacobs Engineering Group Inc., Houston, TX
* Mount Vernon Mills, Mauldin, SC
* PACCAR, Bellevue, WA
* Ascension Health, St. Louis, MO
* ABF Freight System, Fort Smith, AR

MIDWESTERN NEWS ZONE......

* The Board of Directors of the Minnesota Workers' Compensation Reinsurance Association (WCRA), a state-authorized independent nonprofit organization, voted Tuesday to assess its members and Minnesota employers a total of $268 million to help reduce a $423.7 million 2008 year-end deficit.

Next, the assessment must be approved by the Minnesota Commissioner of Labor and Industry Steve Sviggum and reviewed by the Minnesota Commissioner of Commerce Glenn Wilson.

From 1979-2008, the WCRA earned $1.36 billion in premiums paid by its member insurers and self-insured employers. During the robust financial markets of the early 1990s, the WCRA accumulated large surpluses. At that time, the Minnesota Commissioner of Labor and Industry recommended that, because the WCRA is a nonprofit organization and can assess its members if needed, it shouldn't maintain large surpluses and should distribute those surpluses to its members and policyholders. Since 1992, the WCRA has distributed more than $1.2 billion in surplus funds to its insurers and Minnesota employers.

EASTERN NEWS ZONE......

* Insurance companies refunded or credited more than $217 million to New Yorkers over the past two years and paid $18 in million in fines during that period, Insurance Superintendent Eric Dinallo said Tuesday as he submitted the 2008 Annual Report of the Superintendent to the Legislature. The fines and refunds were among the consumer protection measures Dinallo highlighted as he presented the historic report.

That amount does not include $2 billion recovered for policyholders affected by the destruction of the World Trade Center in the largest regulatory settlement ever reached in New York State. Also not included is $2 billion negotiated for SCA/XL policyholders by the Department.

Enforcement actions for consumer protection resulted in fines, refunds, license revocations and other disciplinary activity, including:

* Life insurers refunded or credited policyholders more than $60 million for various violations; * Life insurers paid more than $9 million in fines and penalties for these violations;
* Health insurers were ordered to refund more than $58 million to consumers in the individual and small business markets after failing to pay out in claims the percentage of premiums required by law;
* Twenty-nine health insurers were fined a total of $1.65 million for violations of state laws requiring prompt payment to consumers and providers;
* Health insurers paid another $1.8 million in fines for various violations;
* $36.5 million resulted from Frauds investigations including almost $22.9 million in court-ordered restitution, $2.2 million in penalties, $10 million in refunds to New York State and an estimated industry savings of $1.5 million;

* Property and casualty insurers were fined more than $1.3 million and ordered to refund more than $1 million to policyholders;
* Complaint investigations by the Consumer Services Bureau led to almost 250 licenses being revoked or surrendered by agents or brokers, and 1,330 companies, agents or brokers being fined a total of $1.8 million; and
* Recoveries for consumers after complaints to the Consumer Services Bureau averaged more than $2.3 million per month, for an estimated total of $65 million over 28 months.

NATIONAL NEWS ZONE......

* Results from the 2009 GMAC Insurance National Drivers Test found that 20.1 percent of licensed Americans - amounting to roughly 41 million drivers on the road - would not pass a written drivers test exam if taken today. When probed on driving behavior, 30 percent of those surveyed say financial strains have triggered a desire to drive less and seek out new ways to save money.

Overall, findings from the fifth annual survey indicate the number of drivers with knowledge of basic road rules is decreasing, with this year's test scores lower than last year's (76.6 percent vs. 78.1 percent). Idaho and Wisconsin drivers tied for first in the nation, with an average test score of 80.6 percent; New York drivers ranked last, with an average score of 70.5 percent. This is the second time Idaho ranked first and the third time New York has ranked last in the survey's five-year history.

In general, geographical regions ranked similarly to previous years, with the lowest average test scores in the Northeast, while the states in the Midwest held the highest averages. When comparing genders, men are still more likely to pass the test than women, but the gap is considerably smaller in 2009 (81 percent of males versus 79 percent of females) than in 2008 (87 percent of males versus 80 percent of females).

Respondents continued to have difficulty on questions about yellow lights and safe following distances, while almost all drivers answered correctly what a solid line meant.


  • As property vacancies continue to rise across the U.S. due to a weakening economy, Fireman’s Fund Insurance Company (http://www.firemansfund.com/) is providing commercial property owners with important tips to help reduce their liability and risk.

Outlined below is a checklist for vacant buildings to help mitigate potential liability exposures:

• Keep sprinkler systems in operation. Conduct weekly recorded inspections of sprinkler control valves, fire extinguishers, and other fire protection equipment. Test all fire protection system alarms quarterly to ensure they are still operative.

• Strengthen security to prevent arson and vandalism. Notify both the police and fire departments that the building will be idle, and retain a central station to monitor water-flow and security alarms. Increase watch service, increase exterior lighting, and provide additional locks for gates, doors and windows. Make frequent and unscheduled rounds.

• Avoid freeze-ups. Operate boilers to provide heat and/or steam to prevent freezing of fire protection equipment (water supply tanks, sprinklers, sprinkler piping, etc). Convert sprinkler systems to dry-pipe systems if building heat is not provided or convert to nonfreeze systems for small unheated areas

• A minimum of one recorded visit per week to inspect all areas of the building should be made. The visit should include checks of general conditions, to ensure that important buildings are secured, and to ensure that all fire protection and detection systems are maintained in working order.

• Remove unnecessary combustibles. Eliminate fire hazards within buildings by removing as many combustibles as possible. Remove any debris or other combustible items within 25 feet of any building. Keep grass cut short, ideally three inches or less.

• Mitigate exposures from hazardous operations, in particular those involving flammable liquids, and turn off electrical equipment. Secure any utilities that aren’t going to be kept in service. Make sure flammable liquid tanks are drained and secured (by removing them or filling them with sand or concrete).

• Review insurance policy. It’s important to notify your insurance company and review the policy to ensure compliance with a vacant property.

  • The Navigators Group Inc. reports its principal underwriting agency subsidiary, Navigators Management Company Inc., has partnered with American Bar Insurance Plan Consultants (ABI) to offer personal umbrella coverage for the over 400,000 members of the American Bar Association (ABA).

The Navigators ABA-tailored umbrella policy is currently admitted in 33 states. American Bar Association members interested in purchasing this coverage can visit www.abiexcess.com for more information.

Tuesday, May 19, 2009

TOP STORIES' NEWS ZONE

*A small but much felt aftershock jolted the Los Angeles region Tuesday, only two days after a magnitude-4.7 earthquake struck late in the weekend. There were no immediate reports of damage or injuries.

The magnitude-4.1 temblor hit at 3:49 p.m. and was located 10 miles southwest of downtown Los Angeles near the Los Angeles International Airport, according to the U.S. Geological Survey.

No damage was reported with Tuesday's aftershock, though it was reportedly felt in the high desert city of Palmdale about 50 miles to the north and in San Diego, some 120 miles to the south.

SOUTHERN NEWS ZONE......

*The North Carolina House of Representatives has passed legislation that would replace the state’s contributory negligence law with a modified comparative fault system, a change that could result in greater litigation, according to the American Insurance Association (AIA).

North Carolina, in addition to Virginia, Maryland, Alabama, and the District of Columbia, has retained the common law defense of contributory negligence, which bars recovery in a tort action if the plaintiff also contributed to the harm he or she suffered as a result of the defendant’s negligence. The state’s trial bar has made numerous attempts to change the law, over the objections of the business community.

“Insurers believe this is the wrong time to change to a comparative fault system,” said Raymond Farmer, AIA assistant vice president. “We are in the midst of a recession. The last state to change from contributory negligence to comparative was South Carolina; currently the liability rates in South Carolina are on average 38 percent higher than in North Carolina. AIA and other interested parties have been able to limit the bill’s immediate impact by delaying the effective date and making it applicable only to events occurring after that date. Also, recovery would be barred if the negligence of the plaintiff is equal to or greater than the negligence of the other party. On the positive side, HB 813 does make improvements to the joint and several liability law, although these improvements do not go far enough."

Debate on the legislation now moves to the Senate.

MIDWESTERN NEWS ZONE......

* The 2009 Minnesota legislative session ended late yesterday and insurance consumers throughout the state will benefit from the legislature’s handling of two key issues which were poised to unnecessarily inject extra costs into the Minnesota insurance system, according to the American Insurance Association (AIA).

The two key property/casualty industry related bills include:

House File 417 was originally a highly objectionable bill that would have permitted the awarding of damages, attorneys’ fees and costs, and substantial prejudgment interest to commercial policyholders who won coverage dispute lawsuits with their insurers. The legislation was somewhat improved in the closing days of session to only allow for 10 percent interest on awards and no additional damages or attorneys’ fees. AIA worked closely in concert with others in the industry and the broader business community to help improve this bill.

Senate File 263 was a bill to ban insurers’ use of credit information for rating and underwriting. AIA opposed this onerous bill and testified at its committee hearing that the legislation would eliminate an objective, proven risk factor that currently benefits a majority of Minnesotans in the form of lower premiums for their home and car insurance.

WESTERN NEWS ZONE......

Golden Eagle Insurance, a Liberty Mutual Agency Markets regional company, is offering California commercial fleets Onboard Advisor, a first-of-its-kind fleet management solution that helps companies increase fleet safety and productivity, save on commercial auto insurance premiums, and much more.


Onboard Advisor’s Insurance Advisor component rewards safe fleet management with an average discount of 15% in the first year with a Golden Eagle Insurance commercial auto policy, and a maximum discount of up to 40% based on fleet performance in renewal years. Companies can start saving immediately with Onboard Advisor because there are no upfront fees for the hardware and installation, and only a low monthly per-unit service fee for the fully integrated fleet management solution. Advisor uses onboard sensors to identify unsafe driving and inefficient fuel economy and scores each vehicle. Color-coded icons show exactly what driving behaviors contributed to high, medium, or low risks during all vehicle trips. This allows managers to pinpoint driving behavior and improve safety and fuel efficiency.

To learn more, go to http://www.onboardadvisor.com/ or call (877) 803-5338.

  • Zenith National Insurance Corp. announced that its wholly owned subsidiary, Zenith Insurance Company, filed new workers’ comp rates today with the California Department of Insurance. The new rates will go into effect in California starting July 1, 2009 and represent an average increase of 4.0% when compared to rates in effect since Jan. 1, 2009. Rates charged to employers are also affected by changes in experience modification factors and net credits and debits applied to individual accounts.

PEOPLE IN THE NEWS ZONE......

* The Chubb Group of Insurance Companies has named Stuart Spencer to the position of chief operating officer of Worldwide Accident & Health, effective June 1.

Spencer joins Chubb (http://www.chubb.com/) from American International Group, where he served as president of the Worldwide Accident and Health Division of AIG's Life Companies. Prior to joining AIG in 1996, Spencer was a partner and chief operating officer of The Golden Rule LLC and director of corporate card marketing at American Express.


  • Selective Insurance Group Inc. (www.selective.com) announced the following appointments by its subsidiary, Selective Insurance Company of America :

Thomas Clark (Sparta, N.J.) to senior vice president, claims general counsel. Clark joined Selective in March 2009. Prior to joining Selective, he was vice president of regional counsel operations at USAA.

Stephen Coward (Matthews, N.C.) to assistant vice president, regional claims manager for Selective's Southern region office. Previously, he served as manager of the southern region's workers compensation and litigation operations. Coward joined Selective in August 1996. Prior to joining Selective, he was the liability manager for Aetna Life and Casualty Company's Charlotte, N.C. service center.

Darryl Holmes (Bridgewater, N.J.) to assistant vice president, commercial lines underwriting. Holmes joined Selective in February 2009. Prior to that, he was a branch manager at Zurich North America.


EASTERN NEWS ZONE......

* Failing to pay rental charges for a storage unit that he used to hide his car led to the arrest of a California man who fraudulently collected $19,000 on an insurance claim, the New York State Insurance Department reported.


Adam Rotger, 33, of San Francisco, was arrested as the result of an investigation begun in January after the owner of an Orange County, New York storage facility found a 2002 Acura Integra inside a unit Rotger rented. The storage unit was opened after Rotger failed to continue making payments for the facility he rented for more than four years. The storage facility owner contacted Town of Woodbury police who traced the vehicle to Rotger. Police found that Rotger had reported the car stolen in July 2004 and was paid $19,000 for the loss by the Progressive Insurance Company. Investigator David Towne said investigators believe Rotger tried to burn the car before putting it into storage because they found charring near the gas cap. Rotger lived and worked in Orange County before moving to California.



Rotger was charged with arson, grand larceny, criminal possession of stolen property, insurance fraud, falsifying business records and offering a false instrument for filing. If convicted, Rotger could be sentenced to up to seven years in prison.

  • Raymond Douville, 54, who is also known as Raye Ellen Douville, was sentenced to two years in federal prison for committing wire fraud in connection with defrauding clients of her former insurance agency in New Hampshire. Douville, who was previously a man before a sex change, was also ordered to pay a total of $164,491.08 in restitution to the victims she defrauded.


From about October, 2001, through about September, 2003, Douville operated an agency that catered to the insurance needs of small, independently owned trucking companies. Many of Douville’s clients borrowed funds from a finance company to meet the costs of most of their annual premiums. The finance company wired loan proceeds to Douville’s business bank accounts to be placed in trust for Douville’s clients. Douville was required to use those funds to pay the annual premiums due on her client’s insurance policies. Instead of paying the annual premiums, however, Douville reportedly used her client’s funds for her personal benefit, which left her clients uninsured but still obligated to repay their loans to the finance company. Douville defrauded 12 businesses and embezzled more than $100,000. In August, 2008, a federal grand jury indicted Douville for wire fraud. Douville pled guilty to that charge in January of this year.

NATIONAL NEWS ZONE......

* Cover-All Technologies Inc., a provider of comprehensive business solutions for the property and casualty industry, announced the release of a new workers’ comp product as part of their My Insurance Center (MIC) NexGen suite.

Cover-All partnered with one of its customers in the development of this complex coverage. The product is capable of rating and issuance, supporting full policy lifecycle in all 50 states (and the District of Columbia) and was designed with business needs in mind. Key objectives included functionality to enhance productivity, facilitate greater compliance, improve underwriting and risk selection, provide configurable views and collaborative tools linking agents and underwriters, ensure ease of use, provides real-time integrated document generation and management capabilities, and the flexibility to quickly customize to meet ever-changing market demands.

For further information, contact Miguel Edwards at medwards@cover-all.com


  • Fitch Ratings has published its annual hurricane season reference guide for insurance investors, providing analysis on the potential effects of a major storm season on large insurance companies and the industry as a whole.

The consensus among the forecasting organizations is for the hurricane season to be slightly above historical averages with around 13-15 named storms in 2009. The 2009 season, however, is expected to be less active relative to 2008. The state of the economy and the financial market make it unclear as to whether the insurance industry would be able to 'reload' capital losses should 2009 be a major loss year. If new capital does not flow into the market should a major loss occurs, the result would be a much harder market than usually follows a loss. Fitch's report also provides an extended analysis of the Florida insurance market, which remains strained following significant losses in 2004-05 and the deteriorated regional economy. There remains uncertainty as to whether the Florida Hurricane Catastrophe Fund (FHCF) could meet all of its obligations in a severe storm season.

Fitch's 'Hurricane Season 2009: A Desk Reference for Insurance Investors' is available on the Fitch Web site at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.fitchratings.com&esheet=5968746&lan=en_US&anchor=www.fitchratings.com&index=1.

Monday, May 18, 2009

EVENTS NEWS ZONE......

* Philadelphia Insurance Companies will be hosting a product fair at the Hollywood Casino, located at the Penn National Race Track in Harrisburg, Pa., Tuesday, May 19, from 2 p.m. - 5 p.m.

The product fair, open to all agents, is an open-house-style event that will highlight PHLY's products, including their newest Pest Control, Environmental, and Security Services (The Guardian). Agents are encouraged to attend to learn more about products and coverages and meet with PHLY representatives. Additionally, agents can participate in a raffle which will benefit the Susquehanna Service Dogs program, a subsidiary of Keystone Children & Family Services. To locate the office nearest you or for more information, visit Philadelphia Insurance Companies on the web at http://www.phly.com/ or contact Elizabeth Bell at (610) 617-7734.

  • The 112th Annual Independent Insurance Agents of Texas (IIAT) conference will be held June 4-5 in San Antonio at the Grand Hyatt San Antonio & Henry B. Gonzalez Convention Center. For further information, call Linda Timmons at 800-880-7428 or visit http://www.iiat.org/.

Editor's note: If your company is having an upcoming event and/or conference, simply email the details to: eastcoastdt@aol.com.

WESTERN NEWS ZONE......

Arthur J. Gallagher & Co. has purchased California-based Nourse Insurance Brokers.

Founded in 1935, Nourse Insurance Brokers Inc. is a retail insurance broker offering personal and commercial property/casualty insurance products and services to their clients throughout the Western United States. They have expertise with personal lines, especially high net worth clients, and offer insurance programs that meet the needs for small to medium sized businesses.

Dina Campana Smith, James Salisbury and their associates will continue to operate in their Walnut Creek location under the direction of James McFarlane, West Coast regional manager of Gallagher's retail property/casualty brokerage operations.

  • California Commissioner Steve Poizner announced that three Fresno individuals were charged with felony insurance fraud in two separate criminal cases. Harjinder Singh, 46, was arrested May 6. Singh was additionally charged with felony arson and perjury.
    In a separate case, Karmjit Mann, 33, was arrested on May 11; and Nirmaljeet Singh, Karmjit's husband, self-surrendered to authorities on May 7. Nirmaljeet Singh was additionally charged with falsely reporting a crime.

On March 24, 2007, Harjinder Singh reported that his big rig caught fire while he was driving along I-40. Singh then filed a claim with his insurance carrier, reporting the loss. The Urban Organized Auto Insurance Fraud Task Force later discovered that the fires which burned the vehicle were intentionally set. Investigators allege that Singh purposely set fire to his vehicle in an attempt to receive a $35,000 payout from his insurance company. On Sept. 9, 2008, Nirmaljeet Singh reported the theft of his big rig to the Fresno Police Department. Task force detectives discovered that the big rig was never parked at the reported theft location. Singh's wife, Karmjit Mann, allegedly provided false supporting statements indicating that she had picked up her husband from the reported theft location. The two allegedly attempted to defraud their insurance company of approximately $40,000.

SOUTHERN NEWS ZONE......

* A.M. Best Co. has downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit ratings to “bbb+” from “a-” of Georgia Farm Bureau Group (Macon, Ga.) and its members, Georgia Farm Bureau Mutual Insurance Company and Georgia Farm Bureau Casualty Insurance Company. The outlook for all ratings has been revised to stable from negative.


The rating downgrades reflect Georgia Farm Bureau Group’s continuing unfavorable underwriting performance, which has negatively impacted the group’s capitalization. The group posted a nearly $80 million underwriting loss in 2008, which was the primary driver behind a drop in surplus of approximately $70 million or 19%. Though the group had bolstered its capital position at year-end 2007 through the issuance of $45 million in surplus notes, this capital cushion has been depleted due to the poor operating results of 2008 and first quarter 2009.

The personal auto liability and homeowners’ segment, which is part of the group’s core book of business, continues to significantly underperform relative to its industry peers.

  • Two Whitesburg, Kentucky area agents were sentenced on felony charges after pleading guilty to helping a client defraud a workers’ comp insurance carrier.

Thomas J. Childers, 60, of Hazard, and Karen Lynetta Fox-Burns, 56, of Whitesburg, originally were indicted in May 2008 on charges of mail fraud. Childers is the owner of CS&W Insurance Services Inc. in Whitesburg and Fox-Burns is a licensed agent. Childers, Fox-Burns and a CS&W customer services representative, Shannon Ranee Hogg, a resident of Whitesburg and the daughter of Fox-Burns, each pleaded guilty to a count of misprision of a felony (includes the act of concealing a felony) in United States District Court in Lexington. According to court documents, Childers, Fox-Burns and Hogg helped CS&W clients John and Tena Pennington defraud workers’ comp insurance carrier Kentucky Employers’ Mutual Insurance. The group misrepresented the number of employees and the amount of payroll in John Pennington’s company, ZAG Resources Inc., and its connection to another Pennington company, JZ Trucking Inc. This resulted in lower workers’ comp premiums for Pennington’s company.

NATIONAL NEWS ZONE......

FirstBest® Systems Inc., developer of advanced Underwriting Management Systems that enable property and casualty insurance carriers to profit from better underwriting, announced that ICW Group Insurance Companies (ICW Group) has realized significant results after implementing FirstBest UMS, which ICW Group has branded Snap, for its workers' comp line of business.


ICW Group's roll out of Snap, a rich agent portal with a next-generation underwriting workstation, has already reportedly resulted in increased submissions, increased quote production, underwriting productivity, and real-time collaboration with their agents.

The FirstBest UMS was deployed within 9 months. Results from Q1 2009, as compared to the same period in 2008, during a highly competitive market, include a:

-- 50.8 % increase in quality submissions
-- 70.8 % increase in quote production
-- 34.3% increase in bound policies
-- 47% decrease in policy processing time

For more information, visit http://www.firstbest.com/or call 1-888-863-6095.

  • SeaBright Insurance Holdings Inc. reports it will reduce the base salary of the company's chief executive officer by 20 percent and the base salaries of executive officers and certain management employees by either 10 percent or 5 percent depending upon salary level, effective immediately. Also, the non-employee directors of the company's board have agreed to decrease certain of their fees by 20 percent.

    Seattle-based SeaBright Insurance Holdings is an insurance holding company whose SeaBright Insurance Co. unit operates as a specialty underwriter of multi-jurisdictional workers' compensation insurance. SeaBright Insurance distributes its maritime, alternative dispute resolution and state act products through selected independent insurance brokers and through an in-house wholesale broker affiliate. The company provides workers' comp coverage to employers in various regions nationwide.

EASTERN NEWS ZONE......

A Saratoga County, New York man who claimed he hurt his arm lifting sheet rock was taken into custody by New York State Police for allegedly returning to working while he collected workers’ comp benefits from the New York State Insurance Fund.

Michael Waldron, 28, of Ballston Spa, N.Y., faces felony fraud charges of violating the Workers’ Compensation Law following his arrest. Waldron had been receiving workers’ comp payments for an injury to his upper right arm that he said he suffered while working as a drywall installer on Nov. 15, 2007.

It is alleged that Waldron performed a variety of jobs including drywall, painting and carpentry while receiving $2,450 in workers’ comp benefits following the injury.




  • New York Gov. David Paterson announced legislation that will introduce several new initiatives to make health insurance more affordable and improve access to health care for more New Yorkers. The four bills submitted to the Legislature will: (1) extend the period of time for the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage from 18 to 36 months; (2) permit families to cover their young adult dependents through age 29 under their job-based insurance; (3) require health insurers to get approval from the Superintendent of Insurance before increasing premium rates; and (4) enact a series of managed care reforms to protect the ability of consumers who have health insurance to timely access necessary health services.

  • Massachusetts Attorney General Martha Coakley’s Office has entered into a settlement with Ohio-based insurer Great American Insurance Company resolving allegations that Great American submitted a fake and intentionally uncompetitive insurance quote to Norwood-based Analog Devices Inc. as part of a scheme to ensure American International Group Inc. won Analog Devices’ 2004 insurance renewal. Under the terms of the settlement, which was filed in Suffolk Superior Court, Great American is required to pay $60,000 to Analog Devices and $116,000 to the Commonwealth. The agreement also requires Great American to undertake conduct reforms aimed at preventing insurance bid rigging in excess casualty insurance. Among other things, Great American is specifically prohibited from colluding with brokers or other insurance companies to unlawfully fix insurance prices and is required to retain certain records concerning its bidding practices.

  • Allstate Insurance Company has filed rates and policy forms with the Massachusetts Division of Insurance to re-enter the Massachusetts auto insurance market. The move marks Allstate’s return to the Bay State after a long hiatus. Allstate has targeted Nov. 2, 2009 as its “open-for-business” date. Massachusetts consumers will have the option of contacting one of Allstate’s participating exclusive agencies in Connecticut, New Hampshire and Rhode Island, calling 1-800-ALLSTATE or visiting Allstate.com to purchase Allstate auto insurance. Additional information about Allstate’s auto insurance products can be found at www.allstate.com.

PEOPLE IN THE NEWS ZONE......

Jeffrey Cavignac, president and principal of San Diego-based risk management and insurance brokerage firm Cavignac & Associates (http://www.cavignac.com/), was recognized recently as "Agent of the Year" by the Insurance Brokers & Agents (IBA) of San Diego.

Cavignac was bestowed the organization's top honor during a lunch reception held May 12 at the Town & County Hotel Convention Center.

First presented in 1995, the "Agent of the Year" award is given to agent members of IBA of San Diego for their years of service, dedication and commitment to the Association, the insurance industry, and their fellow insurance brokers and agents in San Diego.

A 28-year veteran of the brokerage industry, Cavignac founded Cavignac & Associates in 1992.


  • Charles Whittaker, has joined Lockton in San Francisco as a senior vice president.
    He will be based in Lockton's San Francisco office and will have a lead role in expanding Lockton's presence in the San Francisco Bay Area and throughout the western region.
    Immediately prior to joining Lockton, he was a senior vice president at Willis. Whittaker can be reached at (415) 568-4100 (W), (312) 485-9875 (M) or cwhittaker@lockton.com.

Sunday, May 17, 2009

TOP STORIES' ZONE NEWS......

* A moderate earthquake shook the Los Angeles region late Sunday evening, reaching residents as far south as San Diego. There were no immediate reports of any major injuries or damage.

The magnitude 4.7 quake struck at 8:39 p.m. (0339 GMT), some 10 miles southwest of downtown Los Angeles, near Inglewood, according to a preliminary report by the U.S. Geological Survey. At least two aftershocks shook the area minutes later, including a magnitude 3.1.

Minor damage that involved broken glass windows in the North Long Beach area and falling dishes and books from shelves in other surrounding areas were reported.

It was the largest quake in the greater Los Angeles area since a magnitude 5.4 quake hit Chino Hills.


  • Auto, home, business and life insurance companies contributed $35,743,017 million to members of Congress during the last two election cycles, according to an analysis released by the nonprofit, nonpartisan Consumer Watchdog. About $5 million went to members of the House subcommittee holding a hearing last week entitled "How Should the Federal Government Oversee Insurance?"

The top recipients of insurer contributions in the U.S. Senate and House of Representatives were Sen. McCain (R-AZ) $2,287,345, Sen. Dodd (D-CT) $1,102,056 and Rep. Kanjorski (D-PA) $491,545. Senator Chris Dodd heads the Senate Banking, Housing and Urban Affairs Committee, which has jurisdiction over insurance matters, and Representative Paul Kanjorski chairs the House Financial Services Subcommittee holding last week's hearing. Other top recipients include Rep. Bean (D-IL) $358,603 and Rep. Royce (R-CA) $297,574 who are co-sponsoring industry legislation to allow large insurers to opt out of state regulation in favor of a federal regulator. House Financial Services Committee Chair Rep. Frank (D-MA) and Vice Chair Rep. Bachus (R-AL) have received $342,796 and $312,550, respectively from industry sources.