Tuesday, June 30, 2009

EASTERN NEWS ZONE......

The New York State Insurance Department has approved the sale of two AIG insurance companies to Farmers Group, a subsidiary of Zurich Financial Services, Superintendent Eric Dinallo announced.

The companies, American International Insurance Company and AIG National Insurance Company, are members of AIG’s Personal Auto Group, which consists of a total of 18 insurance companies. Farmers will pay $1.9 billion for the Personal Auto Group, which wrote more than $3.5 billion in premiums nationwide in 2008.

“This sale is a win for everyone, including taxpayers, policyholders and the companies’ employees,” Dinallo said. “These two companies will remain domesticated in New York. It furthers the restructuring of AIG while placing AIG’s personal lines policyholders with one of the nation’s largest insurers. The unprecedented speed with which numerous state regulators worked to approve this transaction shows the responsiveness of the same state regulation that preserved the value of these companies.”

The transaction was submitted to the Department on April 29 and is scheduled to close on July 1, subject to the approval of various other states.

WESTERN NEWS ZONE......

Supervision of insurers’ foreign investments must be uniform and only administered at the federal level, according to the American Insurance Association (AIA), responding to requests by California Insurance Commissioner Steve Poizner that California domestic insurers divest any direct investment in Iranian government holdings and require all insurers doing business in California to report all investments in companies that do business with the defense, nuclear, petroleum, natural gas or banking sectors of the Iranian economy.


“For matters, such as Iran, involving national security and extremely complex foreign relations, it is absolutely critical that the U.S. speak with one voice and act exclusively at the federal level,” said David Snyder, AIA vice president and associate general counsel, public policy. “We are concerned with any action, however well-intentioned, that complicates or dilutes the efforts of the United States to effectively respond to international challenges – especially on matters of national security. The issue of Iranian assets is under the national jurisdiction of the Office of Foreign Assets Control (OFAC) within the U.S. Treasury Department.


“OFAC has responsibility for administering and enforcing economic and trade sanctions, based on U.S foreign policy and national security goals, against targeted foreign countries and regimes which represent threats to the national security, foreign policy or economy of the United States. Insurers, and all American companies, are already subject to the oversight of OFAC.”


“Any actions taken by the commissioner must be consistent and in concurrence with OFAC,” added Ken Gibson, AIA vice president, state affairs. “Though the commissioner is reminding domestic insurers of a California statute that took effect in January, we encourage the commissioner to work with OFAC to ensure that his actions are consistent with federal policy.


“As always, we are available to work with Commissioner Poizner and we hope he will appreciate the magnitude and complexity of his directive,” said Gibson.

NATIONAL NEWS ZONE......

Abacus Insurance Brokers Inc., a Los Angeles-based program manager that distributes specialty insurance products online through www.abacus.net, has enhanced its portfolio of production programs by expanding the range of eligible stunts.


Coverage for pyrotechnics, demolitions, explosions, wild animals, car chases and motorcycles has been added to programs already covering such stunts as fight scenes, falls, non-wild animal, precision driving, aerial shots, water scenes and weapon use. Coverage is available for domestic productions in all 50 states and Washington, D.C. and for certain overseas productions.


“We continue to deliver solutions to our nationwide network of brokers,” said Darren Lewin, Abacus vice president of program development. “With these additional stunt offerings, brokers have even more reason to utilize abacus.net for solutions for their clients. Abacus will answer the needs of our brokers by continuing to introduce complex specialty products to our proprietary online delivery system.”


For more information about entertainment insurance products, visit the company online or contact Darren Lewin at (310) 500-2302, darren.lewin@abacus.net.

SOUTHWESTERN NEWS ZONE......

Secretary of Labor Hilda Solis addressed the annual gathering of the American Society of Safety Engineers on Monday in San Antonio, applauding the efforts of the nation's safety and health professionals.


Solis also announced that the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) will launch a major construction safety initiative in Texas to prevent workplace injuries and fatalities.


"Beginning in July, OSHA will increase the number of inspectors in Texas for a concentrated effort to prevent injuries and fatalities at construction sites,” Solis said. “When these inspectors observe unsafe scaffolds, fall risks, trenches or other hazards, they are empowered to launch an immediate investigation. As I have said since my first day on the job — the U.S. Department of Labor is back in the enforcement business."


More workers die in Texas than in any other state. In 2008, there were 67 construction industry fatalities, and in 2009 there already have been 33. The rate of Hispanic fatalities in construction is especially alarming, having increased by 125 percent between 1992 and 2005. In 2007 and 2008, more than 3,000 inspections were conducted by OSHA in southeastern states. The agency cited a total of 4,390 violations.

INTERNATIONAL NEWS ZONE......

Officials report that one child is alive following the crash of a passenger jet from Yemen with 153 (11 crew members) people aboard.


The Airbus A310 went down in the Indian Ocean early Tuesday during an attempted landing in heavy wind on the island locale of Comoros.


Bodies were seen floating in the ocean and a police spokesperson indicated three had been recovered so far.

The plane had set off from the Yemeni capital of San'a and crashed before landing in Moroni, on the main island of Grand Comore.

Most of the passengers were from the Comoros islands, returning home from Paris.

Monday, June 29, 2009

WESTERN NEWS ZONE......

California Insurance Commissioner Steve Poizner has approved the purchase of 21st Century Insurance Group.


On April 16, Zurich Financial Services and Farmers Insurance Group announced the planned acquisition of AIG's Personal Auto Group, which includes 21st Century Insurance Group. Following an extensive review process by the Department of Insurance, Poizner approved the purchase of 21st Century Insurance Group.

The Department anticipates this transaction to become effective July 1. As part of the approval process, Farmers Insurance Group will be required to submit a written report to the Department of Insurance providing an update on the integration process on or before Oct. 30.

EASTERN NEWS ZONE......

The former chief underwriting officer of a Monticello, New York insurance company was sentenced to 10 years and one month in federal prison for selling $535 million in fraudulent surety bonds and stealing $22.5 million in premiums instead of turning the money over to insurers.


Judge Marcia Morales Howard handed down the sentence in U.S. District Court in Florida against William Raymond Miller, 37, who pleaded guilty to mail and wire fraud in December. The court also ordered a personal money judgment of $22 million against him.

Miller, of Clarksville, MD, has already forfeited $22.5 million to the government, along with real estate in Maryland and Florida.

The sentencing climaxed a case begun when investigators in New York and other states looked into surety bonds Miller sold between 2005 and April 2008. Miller was accused of forging documents and pocketing premiums instead of turning the money over to insurers to issue the bonds for construction projects throughout the United States.

Under a plea agreement with federal authorities, Miller admitted using the names of several corporations to sell the worthless bonds. He made it appear that he was issuing the bonds in the names of legitimate insurers.

The New York State Insurance Department’s Frauds Bureau began investigating Miller in early 2008 after he was fired by the Upper Hudson National Insurance Company in Monticello, where he was the company’s chief underwriting officer.


The insurer fired Miller and contacted authorities after learning that he had sold a worthless $38 million performance bond purportedly authorized by Upper Hudson. He was accused of keeping the $1.9 million in premiums paid for the bond by a construction company engaged in a project in Nebraska.

Besides the New York investigation, Miller was also investigated by state authorities in Maryland and Florida and the FBI. The New York portion of the investigation also involved the U.S. Postal Service’s Inspection Service in Albany.

NATIONAL NEWS ZONE......

Beginning June 30, the State Auto Insurance Companies will add flood insurance to the list of State Auto coverages available for home, business and farm offered through more than 3,400 independent agencies.

Every property in America is in a flood zone, with some simply at greater risk than others. As the number one natural disaster in the United States, floods can be devastating for property owners and entire communities, causing more than $2 billion in property damage in our country every year. Just an inch of water can cause thousands of dollars in damage to a property and its contents, which is not covered by a typical property insurance policy.

The affordability of flood insurance may be surprising. For example, a homeowner in a low-to-moderate risk area eligible for a Preferred Risk Policy could see a flood insurance policy premium as low as $119 a year, including coverage for the property’s contents.

The flood insurance policies offered by State Auto are underwritten by the National Flood Insurance Program (NFIP) of the Federal Emergency Management Agency and administered by National Flood Services (NFS). NFS been serving as a third-party administrator for carriers like State Auto since 1985.

To locate a State Auto independent agent, use the “Find an Agent” feature on StateAuto.com.


  • eGistics, Inc. has signed a multi-year contract with national claims and risk management provider Avizent to deliver a hosted platform for the archive and retrieval of workers’ compensation claims documents.

  • Avizent expects the platform to further streamline its claims management process by utilizing this document storage and retrieval process, resulting in improved productivity, and increased customer satisfaction.

  • Avizent delivers claims management services to thousands of self-insured, insured and state-funded employers nationwide. Avizent provides an integrated model for claims and risk management that includes services from intake to settlement. The eGistics hosted platform will reportecdly help Avizent optimize its claims document collection processes by allowing for the electronic routing and management of documents throughout the organization.


  • eGistics will provide Avizent multi-channel document capture capabilities, including batch upload, scan-to-web, fax and e-mail input. Using the eGistics platform, Avizent will set up data-entry queues for primary indexing, escalation, and re-indexing; a “Key From Image” component will allow for the entry of document type specific data fields. Productivity reporting also will be provided. All documents will be stored long term and within statutory guidelines in the eGistics hosted archive, which leverages a mirrored architecture with failover.

Friday, June 26, 2009

NATIONAL NEWS ZONE......

Rain and Hail L.L.C. and Farm Bureau Mutual Insurance Company announced that Rain and Hail will service FBMIC crop insurance business beginning with the 2010 crop season.

Under the agreement between the parties Rain and Hail will be the Managing General Agent for Farm Bureau Mutual Insurance Company policies written on Western Agricultural Insurance Company paper, and will perform all aspects of servicing the Multiple Peril Crop Insurance, Livestock, Crop Hail and specialty crop insurance products written by the FBMIC captive and independent agency forces.


Plans are in place for agents and policyholders to move to the Rain and Hail system and support structure.

INTERNATIONAL NEWS ZONE......

The ongoing recession is taking a toll on the U.S. workers’ compensation industry, but that bane is not without a boon as well. Job cuts, particularly in construction and manufacturing, are putting downward pressure on revenue from written premiums.


“It’s certainly clear that the premium base will be declining,” Harry Shuford, chief economist for the National Council on Compensation Insurance, said in this week’s issue of BestWeek U.S./Canada. With fewer jobs, some companies are seeing upward pressure on rates. “We have the same exposure, but we lost 10-15% of premium,” said Joe Treacy, assistant vice president, workers’ compensation products and development for Hartford Insurance Group.

In BestWeek Europe, London-based private equity firm Pamplona Capital Management, which has been building a stake in Lloyd’s insurer Chaucer Holdings plc, has restated its intention to buy 29.9% of Chaucer. Under London Stock Exchange rules, the acquisition of 30% or more of a company would trigger a compulsory full offer. The announcement came after the ending of talks between Chaucer and fellow Lloyd’s insurer Brit Insurance Holdings, which had made an offer for Chaucer. Brit withdrew its offer after it had been rejected by Chaucer’s board. The failure of the Brit approach sparked the exit of Ewen Gilmour, Chaucer’s chief executive.

Also, in BestWeek U.S./Canada, after 15 drafts since early 2005 the National Association of Insurance Commissioners adopted Natural Disaster White Paper at its Summer Meeting in Minneapolis this month. But some confusion could still surround the document. The paper, entitled, “Natural Catastrophe Risk: Creating a Comprehensive National Plan,” even came with a disclaimer: This paper contains various perspectives on preparing the United State of America and the various states for natural catastrophes. The various perspectives are presented to demonstrate the diversity of views on this important topic. Even that was the subject of last-minute clarification.

EASTERN NEWS ZONE......

The New Hampshire General Court (the state’s legislative body) adjourned its 2009 regular legislative session this past week, concluding a successful session for the property/casualty industry, according to the American Insurance Association (AIA).


“We are pleased with the results of this legislative session” said Laura Kersey, AIA Northeast Region assistant vice president. “The property/casualty industry worked hard to protect the health of the insurance climate for New Hampshire’s policyholders, and we commend the General Court for not advancing onerous bills that would have driven up costs for consumers and hampered the marketplace.”


In addition to the defeat of various plaintiffs’ bar bills, AIA helped prevent provisions designed to postpone the scheduled reduction in premium taxes from being incorporated into the budget. The original legislation, House Bill 627, sought to freeze the insurance premium tax at its current rate of 1.5% until 2012. According to New Hampshire's current law, the premium tax would be reduced to 1.25% in 2010 and 1% in 2011.


“The budget agreement does not include the provisions that would have postponed the scheduled reduction in premium taxes for the next two years,” explained Kersey. “This was a positive outcome for the industry.”

Thursday, June 25, 2009

NATIONAL NEWS ZONE......

Capitol Insurance Companies (Capitol) announced the launch of their new commercial automobile insurance product. The product is available for appointed insurance agents and brokers through a newly designed online processing system that will allow them to rate and quote their automobile insurance in an easy and convenient manner.

With the release of this new online system, agents and brokers will have the ability to speed up the process of obtaining automobile insurance quotes online, anytime. The initial system release is for agents and brokers located in the states of AZ, IA, IL, IN, MN, NV, ND, OH, SD, UT and WI with additional states scheduled for release throughout 2009.

Capitol has already written the first automobile insurance policy in the company's 50-year history. The coverage was placed by Westland Insurance Services in Tomah, Wis.

Although Capitol's automobile product can be written on a standalone basis, the primary focus will be on enabling agents and brokers to place the automobile coverage for many of their existing Capitol accounts. There are no minimum or maximum fleet sizes for consideration, but the company expects most of the business to be comprised of smaller fleets (e.g., 10 units or less) that consist of private passenger, service and light-to-medium commercial vehicles.

WESTERN NEWS ZONE......

Home Emergency Insurance Solutions, a provider of home emergency repair programs, will be offering their protection program directly to select area homeowners in Southern California.

The water service line is the pipe that brings freshwater into a home and is the homeowner's responsibility to maintain it. On most properties, this line starts from the curb or well casing of the property and goes all the way into the home connecting to the water heater, sinks, showers and more. Temperature changes, shifting soil or the age of the line can all be causes of damage. Many times this will result in a loss of water pressure or a loss of water altogether for cooking, bathing and other household needs. In other instances, effects will not be noticed until there is a spike in the water bill due to leakage under the yard.

Accredited by the Better Business Bureau, Home Emergency Insurance Solutions is able to offer emergency solutions that protect homeowners from the hassle and expense of unexpected repairs.

Home Emergency Insurance Solutions will be offering Water Service Line Protection Insurance via a direct mail campaign offering consumers thousands of dollars in coverage for a low monthly fee. When enrolled in the program, customers have access to a 24-hour emergency hotline that will dispatch a Home Emergency Insurance Solutions contractor to make any necessary repairs at the home.

Home Emergency Insurance Solutions, has established a locally based network of licensed and qualified contractors to serve the area. Every contractor is fully screened, assessed and trained before joining the Home Emergency Insurance Solutions network and making repairs at the policy holder's home.

For more information about Home Emergency Insurance Solutions, go to http://www.home-emergency-ca.com/.


  • Lawson-Hawks Insurance Associates Inc., a regional independent broker based in Mountain View, California, announced the acquisition of the Truckee, California Insurance Agency.


    Additionally, Lawson-Hawks will open a Reno, Nevada office so that it can bring its services into the Nevada marketplace.


  • Founded in 1937, Lawson-Hawks is a national independent insurance brokerage representing a vast array of insurance carriers and providing risk management, commercial and personal lines insurance, association programs, retirement planning and employee benefits to over seventy-five-thousand global customers. Lawson-Hawks (http://www.lawson-hawks.com) currently maintains other regional offices in Sacramento, Monterey, Modesto, San Francisco, Irvine and San Rafael. For more information, contact Jon Hilgers at (650) 237-3023 or via email at jhilgers@lawson-hawks.com

Wednesday, June 24, 2009

PEOPLE IN THE NEWS ZONE......

Theodore (Ted) Magley, a nearly 45-year employee of the State Auto Insurance Companies and former chairman of the board, died at home on Monday, June 22, after a brief battle with cancer. He was 81.

In 1949, shortly after receiving a degree from The Ohio State University, Magley joined State Auto as an auto underwriter. Over the next five decades, he would play a key role in State Auto’s growth from premiums of $14.5 million to nearly $450 million.

After joining the company, Magley served for several years as Ohio automobile underwriting manager and later director of product research and development. In 1968, he was elected assistant vice president, advancing to vice president in 1972. In 1975, he joined the State Auto board of directors and was named director of underwriting. In 1983, he was named vice chairman of the board, then chairman in 1989. Magley retired from State Auto in 1993.

He held the Chartered Property Casualty Underwriter (CPCU) designation and served as a local instructor for the Insurance Institute of America. He was a member of the Speakers Bureau of the Ohio Insurance Information Service and chairman of the Ohio Automobile Insurance Plan Governing Committee.

Magley is survived by his wife, Dorothy, four sons and eight grandchildren.


Family will receive friends on Thursday, June 25 from 6-8 p.m. at Schoedinger Worthington (Ohio) Chapel, 6699 N. High St. A funeral service will be held on Friday at 10 a.m. at Church of the Messiah United Methodist, 51 N. State St., Westerville, Ohio. Memorial contributions may be made to the American Cancer Society, Central Region Office, 870 Michigan Ave., Columbus, Ohio 43215.

NATIONAL NEWS ZONE......

Towers Perrin, a global professional services firm, announced RiskAgility P&C Version 1.2, a financial modeling solution for both property & casualty insurers and reinsurers is available.


The software solution, utilizing the most up-to-date technology from Microsoft, is aimed at helping companies manage risk and capital better – while satisfying increased scrutiny from rating agencies, regulators and investors – for improved enterprise risk management (ERM).


RiskAgility P&C helps insurers to measure risks across their enterprise better, determine capital requirements and allocate capital to business units. It also enables them to develop reserve ranges, optimize reinsurance programs and measure economic performance and value creation.

The application provides graphical analytics, giving managers a clearer understanding of the financial risks borne by their companies. The intuitive user interface reportedly makes RiskAgility P&C easy to set up and use, helping insurers achieve the benefits of enhanced financial modeling more quickly.

Version 1.2 helps insurers compare the impact of multiple reinsurance programs in a single run using individual portfolio reporting and side-by-side graphical portfolio analysis.

SOUTHEAST NEWS ZONE......

A.M. Best Co. has released the latest installment of the Insurance Law Podcast, a series that examines timely insurance issues from an attorney’s point of view.

The latest episode features attorneys Fred Karlinsky and Katie Webb from the law firm Colodny, Fass, Talenfeld, Karlinsky & Abate in Florida. Karlinsky and Webb discuss the 2009 session of the Florida Legislature and its impact on property insurance law and State Farm’s decision to withdraw from the state insurance market.

Listen or subscribe to the Insurance Law Podcast at http://feeds.feedburner.com/InsuranceLaw.


  • Cecil Pearce, AIA Southeast region vice president, issued the following statement today on Gov. Charlie Crist’s veto of HB 1171, legislation that would have allowed certain well-capitalized insurers to offer residential property insurance policies unregulated as to rates.


  • “AIA believes the governor’s veto is an opportunity lost for Florida – an opportunity to provide a modest, market-based alternative to Florida’s over-regulated property insurance market that has been in short supply in recent years.


  • “We appreciate the support given this bill by Rep. Bill Proctor and Sen. Mike Bennett and their legislative colleagues, who approved the bill overwhelmingly in both the House and Senate, and by consumers who are asking for more choices in the marketplace.


  • “Florida needs to attract billions of dollars in private capital from outside its borders if it's to have a competitive property insurance market that can provide the choices consumers need; capital that will be critical to creating the environment for Florida’s future economic growth once the recession ends. This type of legislation -- although vetoed this year -- is a positive sign that many of Florida’s policymakers understand that imperative; AIA hopes that Florida's governor will ultimately join their ranks.”

Tuesday, June 23, 2009

NATIONAL NEWS ZONE......

Chubb Custom Market Inc. and Metro Insurance Services Inc. have created a new commercial insurance program for apartments and condominiums throughout the contiguous United States.

The program, which combines the capabilities and financial strength of the Chubb Group of Insurance Companies with the real estate expertise of a full-service underwriting manager, provides a package of property, casualty, workers' compensation, automobile and umbrella liability coverages. It is available through agents or brokers appointed by Metro.

For more information on the program or to locate an agent, contact Norma Dickson, Metro's director of business development, at (973) 467-4467, extension 120, or ndickson@metroins.com.

SOUTHEAST NEWS ZONE......

A Broward County, Florida jury, after a week long trial, has awarded a driver, paralyzed when his 18-Wheeler overturned, $14.6 million after two days of deliberations.

Derry Brown, Jr., 64, of Pakohee, Florida was paralyzed in the May 31st, 2007 accident on State Road 80 just east of Lion Country Safari.


The initial accident occurred two years ago when the driver of a vehicle that never stopped, ran a stop sign and cut off Brown, who was hauling a load of sugar in his 1998 Freightliner truck.

Initially his own insurance company, National Casualty Company, refused to pay, forcing Brown to file suit against the company for uninsured motorist benefits to help find a way to cover the costs of the mounting medical bills. The huge verdict against National Casualty could have reportedly been avoided if the company had promptly stepped-up to the plate and paid the benefits when due, according to Brown's legal counsel.


Brown's legal counsel said the insurance company denied coverage to Brown forcing him to file suit and go to trial. Shortly before the trial began, Circuit Judge Cheryl Aleman, ruled that Brown was entitled to the Uninsured Motorist benefits under the National Casualty Policy. The company is expected to appeal.

Because of his medical condition, Brown who is currently undergoing rehabilitation at the Florida Institute for Neurological Rehabilitation in Wachula was unable to attend the majority of the trial. He was however air-lifted to the Broward County courthouse, along with his medical team, for his one day of trial testimony, and was represented in court by his wife and granddaughter

Monday, June 22, 2009

INTERNATIONAL NEWS ZONE......

Financial uncertainty is obscuring the strategic outlook for reinsurers worldwide as they prepare for negotiations leading up to the Jan. 1 renewal season. Two articles in BestWeek Asia/Pacific explore the region’s delicate reinsurance markets, with a focus on the rapidly growing sectors in India and China.

A.M. Best Co.’s BestWeek Asia/Pacific is a multimedia online digital newsletter for insurance professionals. The 23 June edition is available at www.bestweek.com/bwap062309.html or by visiting www.bestweek.com.

This week’s edition also examines U.S.-based MassMutual’s plan to acquire a 19.9% stake in China’s Yingda Taihe Life Insurance Co.

The edition includes audio interviews with Ashvin Parekh, national leader of financial services with Ernst & Young India, and James Vickers, chairman of Willis Re International.

Video reports include a review of the A.M. Best Stock Indexes for Asia/Pacific, Global Brokers and Global Reinsurers and video news updates.

For a complimentary subscription, visit www.bestweek.asia.

NATIONAL NEWS ZONE......

Representatives of the National Association of Professional Surplus Lines Offices (NAPSLO) said they are encouraged that the initial draft of the financial services reform package outlined by the Treasury Department proposes the continued use of state regulation of the insurance industry.

The Treasury Department proposal is consistent with the outline of regulatory reform NAPSLO presented to the administration after it, along with other national groups, met with representatives of the White House and Treasury Department officials earlier this month.

"During our discussions, the Treasury asked for additional information on surplus lines and how it is regulated and NAPSLO’s views toward financial services regulation reform. We submitted the information and we are delighted that the report is in line with the views we presented, particularly in regard to insurance regulation,” said Maria Berthoud, NAPSLO's Washington Representative with B & D Consulting.

"We believe state regulation offers consumers better protections and stronger regulation and are encouraged that the Treasury Department proposal incorporates the continuation of state insurance regulation,” stated NAPSLO President John Wood. “We agree that adding enhancements to state regulation is the best approach and are pleased that the Treasury took into consideration our recent comments," Wood remarked.

"While the structure of the regulation of the financial services industry will be altered under the Treasury proposal, insurance regulation will remain the responsibility of the states, as it is now," Richard Bouhan executive director of NAPSLO added. "We are further encouraged that with the report’s emphasis on regulatory reform, the passage of HR 2571 ---- the Nonadmitted and Reinsurance Reform Act (NRRA) ---- is even more critical. When enacted, the NRRA will facilitate the efficient placement and taxation of surplus lines insurance and would work well with the Treasury Department’s proposals."


WESTERN NEWS ZONE......

Aetna announced that California residents looking for individual health plans will now be able to use Aetna’s “Consumer Portal” – a simple, easy to use online quoting and application system available at www.aetnaindividual.com.

Consumers using this new system can click “Get a Quote” to receive a quote on benefits plans in their area within seconds, just by entering their zip code, gender and date of birth. They can then compare different plan features side-by-side, choose the plan that best fits their needs and instantly apply online.

Additional benefits

While consumers will reportedly notice an improved, simplified experience through www.aetnaindividual.com, the Consumer Portal will also help Aetna brokers and agents that work with consumers. Through a secure, password-protected website, brokers will be able to run quotes, create applications on behalf of their client, and review the status of their various applicants.

Finally, this new system will allow Aetna to more efficiently process applications that are submitted online, either from consumers or brokers.

Friday, June 19, 2009

EASTERN NEWS ZONE......

A North Tonawanda, New York man injured 15 years ago while working for a Niagara Falls landscaping firm has been charged with four felonies for lying about his work status.

Robert Kennerknecht, 51, was hurt in 1994 when a pole fell on his back while raising a fence for Alcliff Landscaping and Nursery of Niagara Falls.

NYSIF fraud investigators from the Division of Confidential Investigations report that Kennerknecht returned signed statements to NYSIF attesting that he had not returned to any form of work. The defendant also applied for a lump-sum settlement of his claim. An investigation revealed that he was employed working beyond the limits of his alleged disability while receiving wage replacement benefits of $11,530 to which he was not entitled.

The investigation revealed that in October 2008, and January 2009, Kennerknecht was working for Anthony Barone General Contracting of Niagara Falls as a carpenter/construction worker and was observed using a circular saw and pneumatic nail gun to secure roofing shingles on the second story roof of a newly-built home in North Tonawanda.

Last month, the Workers’ Compensation Board ordered Kennerknecht to forfeit all future wage replacement benefits as the result of the fraud, an amount totaling just under $250,000. In all, potential future savings on this case could total approximately $400,000.

Criminal action followed as Kennerknecht was arrested by New York State Police on charges of offering a false instrument for filing, insurance fraud, grand larceny and workers’ compensation fraud, all felonies.

Following his arrest, Kennerknecht was issued an appearance ticket and will return to Buffalo City Court on June 22 for arraignment.

NATIONAL NEWS ZONE......

Five Star Specialty Programs, a division of Crump Insurance Services Inc. and part of Crump Group, has reached an agreement with United National Group to underwrite its insurance program for the towing industry.


United National Group, a division of United America Indemnity Ltd., is rated A "Excellent" IX by A.M. Best Company and distributes its program products through program administrators who have specific binding authority.

The Five Star Towing and Recovery Program is tailored to meet the insurance coverage needs of towing operators and related exposures. Coverage includes auto liability, physical damage, general liability, garage keepers legal, on hook cargo, and property.

Retail insurance agents and brokers wishing to access this program should call (877) 247-9772 or email towing@5starsp.com. More information is available at www.5starsp.com.

Thursday, June 18, 2009

WESTERN NEWS ZONE......

Intense storms over the Pacific Ocean bring heavy rains to Washington each winter and spring. Weather conditions indicate that the risk of damage from surface water and flood is becoming more prevalent in even low to moderate flood zones.

Fireman’s Fund Insurance Co. is now offering the Surface Water and Flood endorsement to its Prestige® Home Premier policyholders in Washington. This is one of the few surface water and flood coverages available to homeowners in Washington from a private insurer.


The Federal Emergency Management Agency (FEMA) calls flood the No. 1 natural hazard occurring in all 50 states. And according to the National Flood Insurance Program (NFIP), a home is at greater risk for flood than fire. A typical home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared to a nine percent chance of fire. Washington residents may face an even greater risk of flooding this year due to wildfires. The charred ground where vegetation has burned away cannot easily absorb rainwater.

Flood insurance is rarely available anywhere in Washington except through the NFIP, which has limits of $250,000 on dwellings and $100,000 for personal property. And although most homeowners’ policies provide some coverage for backup of sewers and drains, surface water and flood is specifically excluded. The Fireman's Fund coverage option contains no such limits and can go as high as the dwelling and contents limits of the Prestige Home Premier policy.

Fireman’s Fund coverage also includes $100,000 for flood damage to any combination of the following:

  • Underground structures and equipment, such as wells and septic tanks
  • Walkways, decks, driveways and patios
  • Fences, retaining walls, seawalls, piers, bridges and docks
  • Hot tubs, spas and swimming pools

Finished basements can easily cost well over $30,000 and the contents in that basement can also run into the tens of thousands of dollars. This is well beyond the sublimits other carriers use to restrict coverage where the loss is most likely to occur. Fireman’s Fund’s Surface Water/Flood endorsement has no sublimits for real or personal property in a basement and addresses a critical customer need.

Surface water losses can happen anywhere, and are likely with the significant rain in Washington. The surface water coverage is significant since a flood has to involve two acres being inundated with water to trigger coverage on most other flood policies.

  • Ventura County (Calif.) District Attorney Gregory Totten announced that Jose Herrera (DOB 6/13/79), of Canoga Park, was sentenced to three years felony probation and 90 days in the Ventura County jail after pleading guilty to felony auto insurance fraud. He was also ordered to pay $2,322 in restitution to Alliance United Insurance Company.

  • On May 15, 2009, Herrera contacted his Ventura-based insurance carrier, Alliance United, and reported that his Jeep Cherokee was “stolen” in Los Angeles County . It was subsequently discovered that his Jeep was involved in a hit-and-run collision in Los Angeles where the driver fled the scene.

  • A private investigator, retained by Alliance United, located a witness who identified Herrera as the person who fled the scene after the hit-and-run collision. When confronted, Herrera denied being the driver and said he had two alibi witnesses who would corroborate the fact that he was somewhere else the night of the collision.

  • This suspected fraudulent insurance claim was referred to the Ventura County District Attorney's Office Auto Insurance Fraud Unit.

  • A district attorney investigator tracked down one of Herrera's alibi witnesses and when questioned by the district attorney investigator, the witness refused to lie for Herrera and told the truth about how she was asked to pick up Herrera after he crashed his Jeep and fled the scene of the accident.

  • This information led to Herrera's arrest and subsequent conviction.

  • California Insurance Commissioner Steve Poizner announced nearly $30 million in grants to local county district attorneys to help combat workers' compensation fraud, an increase of almost $1 million over last year.


    Funding for the grants is the result of an assessment on employers as determined by the Fraud Assessment Commission. Counties apply annually for these grants. The applications are reviewed by the Workers' Compensation Grant Review Panel based on a number of criteria, including the previous year's performance. The panel makes a recommendation to the Insurance Commissioner who can accept or amend the panel's recommendation. At that point, the Insurance Commissioner's final decision must be ratified by the Fraud Assessment Commission.

NATIONAL NEWS ZONE......

Even as advertising and marketing budgets shrink across the board, auto insurers continue sending out a steady stream of marketing direct mail offers.

Mintel Comperemedia, a service that provides direct marketing competitive intelligence, says nearly 3 billion auto insurance direct mail offers were delivered to American mailboxes from Q2 2008 to Q1 2009. This is nearly the same number sent one year prior, despite drastic changes in the economy. To top it off, the past two years’ mail volume represents a high for the industry: five years ago, auto insurers sent less than half as many offers.

Mintel points out that rate increases are necessary for auto insurers to remain profitable. Annual direct written premium (DWP) for private passenger auto insurance—which grew around 8% annually in the early 2000s—has fallen flat in recent years. In 2007, for the first time since 1993, annual DWP actually fell by 0.4%. Add to that people cutting collision coverage and increasing deductibles to save money, and there’s a definite need for insurers to boost revenue.

Mintel Comperemedia reports that from Q2 2008 to Q1 2009, Geico was the top mailer of auto insurance offers, sending nearly one-third of those tracked. State Farm followed with 16% of total mailings, while Liberty Mutual, The Hartford and Allstate took the third, fourth and fifth top spots, respectively. Together, these top five mailers accounted for 70% of auto insurance direct mail tracked by Mintel Comperemedia.

  • According to a special report issued by Fitch Ratings, the workers' compensation insurance market faces considerable near-term challenges as the industry recorded an underwriting loss in 2008. Underwriting performance is expected to worsen in 2009 as rate reductions persist and loss costs trend higher.

  • The report highlights issues currently facing workers' comp insurers and their potential impact on current ratings, as well as Fitch' near-term forecast for the industry.


  • The Special Report, 'Workers' Compensation Insurance Outlook', is available on the Fitch web site at www.fitchratings.com under the following headers:


  • Financial Institutions >> Insurance >> Special Reports

Wednesday, June 17, 2009

NATIONAL NEWS ZONE......

A.M. Best Co. will host a Webcast entitled, “Cutting Edge Claims Management” on Wednesday, July 15, from 2 p.m. to 3 p.m. EDT. Registration is free online at http://us.lrd.yahoo.com/_ylt=Ai5Oorc.MzhoAfQjaz6W2j2vMncA/SIG=15m03jrv0/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.ambest.com%252Fclaims09%26esheet=5989249%26lan=en_US%26anchor=www.ambest.com%252Fclaims09%26index=1.


As overall underwriting results for the U.S. property/casualty industry trend negative, insurers are focusing on how to manage claims more effectively. During the Webcast, the editors of Best’s Review and a panel of experts will discuss how insurers are using new information, technology, strategies and tools to control claims costs, speed claims resolution, reduce fraudulent claims and remain compliant with claims regulations.

Speakers include:

  • Michael Costonis, executive director, North American Insurance Practice at Accenture
  • Dorothy Muir, senior vice president of Claims, Maiden Re.
  • Peter Crosa, of Peter J. Crosa & Co., an insurance adjusting firm and active claims writer.

Additional speakers will be named shortly.

Attendees can submit questions or comments for the discussion by e-mailing mailto:news@ambest.com;_ylt=AluJUTtCoT3MvAR4XiZJ8cCvMncA. Questions and comments will be discussed before and during the live event.

To learn about Webcast sponsorship opportunities, call (908) 439-2200, ext. 5399, or e-mail mailto:advertising_sales@ambest.com;_ylt=AplZa4UKOUUEwn.OjBZHfhuvMncA.

For more information about the Webcast, call (908) 439-2200, ext. 5561, or e-mail mailto:lee.mcdonald@ambest.com;_ylt=AkoAysj_up17WearkRZfi0WvMncA.

  • Ken Crerar, president of The Council of Insurance Agents & Brokers, sent a letter Tuesday to the Senate HELP committee regarding this week’s health care legislation markup, citing concerns about key provisions that could result in inexperienced decision-making and discourage participation in employer-provided preventative care and wellness programs. Crerar’s statement regarding these provisions of the bill follows:

  • “As the Senate HELP committee considers creating state and regional gateways for individuals and small businesses to purchase health insurance, it would be a disservice to deny experienced insurance professionals from serving as a navigator in the exchange. Every day thousands of insurance brokers advise companies on options to mitigate rising costs, manage programs to improve the health of employees and their dependents, and advise on complex insurance regulations. Moreover, to completely abandon the depth of knowledge and resources brokers provide the insurance marketplace as a distribution system and replace with one that is untested and inexperienced is potentially disastrous. It would be unfair to individuals or employers securing insurance through the gateway to entrust their insurance decisions to an entity with little or no experience in the insurance market.

  • “Furthermore, there is nearly uniform consensus on the successes of preventative care and wellness programs. We believe that instituting community rating policies for groups larger than 50 would be a disincentive for employers to develop and implement wellness programs. To allow premium variances on behavior like smoking encourages companies and individuals to focus on increasing their health as a means to lowering costs. We urge the committee to cap community rating at 50 lives to ensure medium and large companies continue to strengthen the health of their workforce. “Finally, we remain opposed to a government insurance plan. We can achieve the goals of lower costs, expanding coverage and increasing quality without a government plan that would be detrimental to the employer-provided system.”

EASTERN NEWS ZONE......

An Essex County, Massachusetts Grand Jury has returned indictments against a Seabrook, New Hampshire, woman in connection with embellishing several insurance claims and fraudulently collecting lost wages.

Ana Keegan, 39, formerly of Haverhill, is charged with Motor Vehicle Insurance Fraud (3 counts), Larceny over $250 (2 counts), and Attempted Larceny (2 counts).

The Attorney General’s Office began an investigation into Keegan’s alleged activities after a referral was made by the Massachusetts Insurance Fraud Bureau (IFB). Authorities allege that in August 2002, Keegan suffered legitimate injuries from a dog biting incident and received a settlement from her insurer, State Farm Fire & Casualty Co. (State Farm). Investigators further discovered that Keegan sustained additional injuries as the result of an auto accident in February 2003, at which time she reported her injuries to MetLife Auto & Home Insurance Co. (MetLife). Authorities allege that in an effort to embellish her claim with MetLife, Keegan also cited the injuries she sustained from her previously settled August 2002 claim.

In response to her claim, MetLife paid Keegan $20,000 in compensation for her total injuries and purported loss of wages as result of the accident. According to authorities, at the time of the accident Keegan claimed to be employed at John D’s Deli, a restaurant/bar that closed in July 2002, before any of the alleged injuries occurred.

In addition, authorities allege that on three separate instances occurring on diverse dates in April 2003, September 2004, and January 2005, Keegan made embellished insurance claims as the result of minor motor vehicle accidents citing the injuries, medical reports, and loss of wage claims from the August 2002 and February 2003 settlements.

An Essex County Grand Jury returned indictments against Keegan late on Friday, June 12. Keegan is scheduled to be arraigned on July 7, 2009, in Essex Superior Court in Salem.


  • The Independent Insurance Agents & Brokers of New York today commended the New York Insurance Department for a proposed rule change that will make doing business easier for New York insurance brokers.

  • The change, published in the June 17 edition of New York State Register, amends the so-called “export list,” the list of insurance classes and coverages which an excess line broker may place with an unlicensed insurance company without first having them rejected by licensed insurers. New York law and regulations prohibit excess line brokers from placing coverage for most types of accounts with an unlicensed company unless they can show that at least three companies licensed in New York have rejected them. However, the law allows the Insurance Department to exempt coverages from this requirement “upon findings and conclusions” based on “relevant market conditions.” Working closely with the Excess Line Association of New York and other trade groups, IIABNY has urged an expansion of the export list to include several coverages and classifications for which licensed insurers have little appetite.

  • Former chairs of the board Neal Sullivan and Sharon Emek and Director of Research and External Communications Tim Dodge testified at a June 2008 Insurance Department public hearing in support of the expansion. The proposed rule would exempt brokers from having to show prior rejections for a number of coverages, including liability coverage for most types of construction contractors, property coverage for very high-value buildings, professional liability coverage for institutions such as alcohol and drug rehabilitation centers and hospices, and liability coverage for special events such as trade shows, fairs and concerts.

  • “The Insurance Department’s action will make doing business easier for New York insurance brokers while still protecting insurance buyers,” said IIABNY Chair of the Board Lane Rubin. “The accounts that will go to the excess line market after expansion of the export list are the same ones that go there now. Expansion will free the broker from an administrative exercise that does not produce value for the client, and it will give the broker the time to do a better job for the client.”

  • Rubin, managing member of Excel Coverage Group LLC in Westbury, encouraged the department to make the change permanent. Under state rules, the public has until Aug. 1 to comment on the proposal. Based on public comment, the department may adopt, modify or reject the proposal after that date.


WESTERN NEWS ZONE......

As AIG continues its restructuring, California Insurance Commissioner Steve Poizner has appointed a Special Examiner to assist in the monitoring of AIG's insurance operations.

Generally, insurance companies are regulated by the state in which they are domiciled. The majority of AIG's insurance companies are headquartered in New York, Massachusetts, Texas and Delaware. There are also more than two dozen AIG-owned insurance companies that conduct business in California. California's AIG Special Examiner will work in concert with the insurance regulators of New York, Massachusetts, Texas, Delaware and other states where the primary regulatory responsibility lies.

The Special Examiner will report directly to Ramon Calderon, Deputy Insurance Commissioner for Financial Surveillance.

Since AIG fell into financial peril, Poizner has opposed federal efforts to usurp regulatory control of AIG from state regulators. In addition, he is expediting a review of the sale of AIG's Personal Auto Group of Companies to Zurich Financial Services and the Farmers Insurance.

Tuesday, June 16, 2009

EASTERN NEWS ZONE......

The Bostonian Group, which offers solutions for employee benefits, HR services, executive compensation, retirement and financial planning, announced the introduction of a new practice, Bostonian Solutions Property & Casualty LLC. The firm’s new risk management practice specializes in protecting companies and their employees against a wide variety of financial, operational and strategic risks.

Bostonian Solutions Property & Casualty provides all forms of commercial products and professional liability services including employment practices, errors & omissions (E&O), directors & officers (D&O), fiduciary and umbrella coverage. The practice also offers automobile, property, inland marine, crime/fidelity and workers' compensation services. As part of a relationship-focused advisory and brokerage firm, experienced business insurance professionals provide consulting in the areas of executive protection, risk management and loss control.

For more information about Bostonian Solutions Property & Casualty, contact Dominic Sestito at( 617) 587-2340 or dsestito@bostoniansolutions.com.

NATIONAL NEWS ZONE......

While the property/casualty industry still appears to have sufficient reserves, the overall position deteriorated in 2008, continuing a trend that began in 2007, according to a new study by Conning Research and Consulting.


"Significant releases occurred in most lines of business, with an average benefit of almost three points in calendar-year loss ratio, compared with what would have been reported had no releases taken place," said Stephan Christiansen, director of research at Conning Research & Consulting. "The most significant releases, in terms of dollars, were in the most recent accident years of liability lines, and in workers' compensation. These lines are the most difficult to assess, and future rates of settlement and claim emergence must be watched closely."

The Conning Research study, "Property-Casualty Loss Reserves: Once More to the Well," analyzes statutory data from Schedule P as part of Conning's ongoing annual industry review of the property-casualty industry's balance sheet position.

"Overall, the industry appears to continue to have sufficient reserves under reasonable assumptions of claims settlement patterns," said Christiansen. "Older years (for accident years prior to 1999) continue to develop adversely, but the pace of development has slowed considerably. The older-year reserves have been massively strengthened over the past several years and it is possible that the industry has now caught up to the need in this 'tail' portion of the reserves. However, the remaining reserves specifically set aside for latent claims such as asbestos and environmental liabilities appear thinner than in previous years, relative to recent settlement levels."

"Property-Casualty Loss Reserves: Once More to the Well" is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company's Web site at http://www.conningresearch.com/.

  • NERA Economic Consulting, a provider of economic advice and analysis in business, legal, and regulatory matters, has released Snapshot of Recent Trends in Asbestos Litigation, a report analyzing trends in asbestos filings and settlements, in light of legislative and judicial tort reform over the past several years.


The report reviews asbestos-related claims over the period of 2001 to 2008 for 150 solvent defendants who report claims in their public filings.


Snapshot of Recent Trends in Asbestos Litigation found that aggregate trends are generally favorable to asbestos defendants.

In particular the authors found that:


* Asbestos claim filings are down—average claim filings peaked in 2003 and have since fallen 84% through 2008. This drop in filings corresponds to the enactment of legislative and judicial tort reforms in multiple jurisdictions.

* Dismissal rates are up—dismissal rates of asbestos cases have steadily increased since 2001 and were three times higher in 2008 than in 2001.

* Total indemnity payments are down—the total indemnity payments, the aggregated amount a company pays to resolve claims each year, increased approximately 33% each year from 2001 through 2004. In 2005, indemnity payments began to decline, on average, and have now dropped back to 2002 levels.


Snapshot of Recent Trends in Asbestos Litigation may be viewed on the NERA Web site: http://www.nera.com/publication.asp?p_ID=3845

SOUTHWESTERN NEWS ZONE......

Fifty-two percent of surveyed Texas teens say they've driven a car after drinking alcohol or have been a passenger with a teen driver who had been drinking, according to a new Allstate Insurance Company study of Texas teen driving habits.

Allstate agents asked teens in and around eleven Texas cities about their highway habits and found:

* 88% say they text message or talk on their cell phones while driving.
* 48% say they were stopped by police during their first year of driving.
* 33% got in an accident during their first year of driving.
* 30% say they have driven so fast they've lost control of their car or have been a passenger in a car with a teen driver who lost control.

"These numbers are disturbing and show there is a critical need for parents and teens to talk about safe driving," said David Christopher, an agent in the Dallas-Fort Worth area. "Car crashes are the number one killer of teens and summer is the deadliest time of the year for teen drivers. The time to act is now."

The time between Memorial Day and Labor Day is known as the "100 Deadliest Days" for teen drivers.

According to Allstate, on average, 15 teens die in traffic accidents every day during the summer.

Monday, June 15, 2009

EASTERN NEWS ZONE......

A Suffolk County, New York contractor has paid $20,000 in premium owed on a workers’ compensation insurance policy after attempting to commit fraud against the New York State Insurance Fund.


Michael Dibella
, 42, of Commack, NY, pleaded guilty to attempted fraudulent practices, a misdemeanor, and was ordered to pay restitution on a policy canceled by NYSIF for non-payment in 2004.


Dibella was arrested by the Suffolk County District Attorney Thomas Spota’s Insurance Crime Bureau on Oct. 2, 2006 and charged with fraudulent practices, a felony, for participating with his wife in an alleged scheme to defraud NYSIF, the state’s largest workers’ comp insurance carrier.


After Dibella’s policy was canceled in 2004 for non-payment, a new workers’ comp policy was issued by NYSIF to Tina Muscarella, doing business as MDB Construction Corp.


Investigators said Ms. Muscarella was married to Dibella, and the application intentionally concealed the fact that Dibella was the real owner of MDB construction, or that he owed NYSIF money on the prior canceled policy.


The subsequent policy issued to Muscarella was canceled for non-payment in July 2006.

MIDWEST NEWS ZONE......

The number of paid workers' compensation claims fell 36 percent relative to the number of employees from 1997 to 2007, according to a newly released annual report from the Minnesota Department of Labor and Industry (DLI).

According to DLI Commissioner Steve Sviggum, “While we have a very good workers' compensation system in Minnesota, we can improve efficiency and effectiveness by working together with labor and industry. The data in this report is a basis for discussion about the changes that are needed to curb rising costs."


Minnesota's workers' comp system parallels nationwide trends. The claim rates are on the decline, the system costs remain stable, but the costs per claim are on the rise.


Total benefits increased relative to payroll from the mid-1990s to the early 2000s, but have decreased somewhat in more recent years. This has reflected the combined effects of a consistently decreasing claim rate and increasing benefits per claim, particularly medical benefits. Total system cost has been stable relative to payroll in the mid-2000s with minor fluctuation.


Major findings

* The claim rate fell continually from 1997 through 2007.
* Workers' comp system cost has fluctuated mildly relative to payroll since 1997, with a somewhat lower value for 2007 than for 1997.
* Adjusted for average wage growth, average medical and indemnity benefits per insured claim rose substantially between 1997 and 2006.
* Relative to payroll, medical benefits have risen since 1997 while indemnity benefits have fallen, reflecting the net effect of the falling claim rate and higher benefits per claim.
* The increase in indemnity benefits per claim is due primarily to increasing benefit duration and increases in the frequency and amounts of stipulated benefits.
* The vocational rehabilitation participation rate increased steadily between 1997 and 2003, but has changed relatively little since 2003.
* The dispute rate rose substantially from 1997 to 2007.


The Workers' Compensation System Report is available online at www.dli.mn.gov/RS/WcSystemReport.asp.

WESTERN NEWS ZONE......

Drunken drivers in Arizona who get the urge for some late-night food may soon be getting more than fast food at drive-through windows.


The Pima County Sheriff's Department has begun a new campaign focusing on drunken driving.


Operation Would U Like Fries, or Operation WULF, will place undercover deputies inside 24-hour fast-food restaurants to spot impaired drivers placing their orders. If deputies notice someone with classic symptoms of impairment — slurred speech, red or watery eyes or beer breath — they will have a uniformed deputy stationed outside pull the driver over.

Money for the intermittent program is courtesy of a $128,000 grant from the Governor's Office of Highway Safety.


  • California Insurance Commissioner Steve Poizner announced that Parmjit Kaur, 41, and her husband, Amarjit Singh, 52, both from Fresno, were arrested on June 5 and charged with felony insurance fraud.

On Dec. 23, 2008, Singh and Kaur reported their big rig stolen to the Fresno Police Department. After receiving a tip from the police department, the Auto Insurance Fraud Task Force opened an investigation and discovered that the vehicle was never parked at the location where Kaur and Singh allege it was stolen. Kaur allegedly provided false statements to police about the "theft" of the vehicle and its location.

The couple filed a claim with their insurance company, which paid out approximately $40,000.

  • The Nevada Division of Insurance reported that a Las Vegas insurance agent collected premiums from unsuspecting victims then failed to remit the funds to insurers.


At a Division of Insurance hearing, Anna Velasquez, president of ABC Auto & Home Insurance in Las Vegas, was found to have committed 120 violations of NRS 683A.451 and 120 violations of NRS 686A.230(1) when she misappropriated money received in the course of the business of insurance, intentionally misrepresented the terms of a contract or application of insurance and used fraudulent, coercive and dishonest practices in the conduct of business. Her licenses have been revoked, and she has been fined $90,000 for her violations. Authorities believe Velasquez is no longer in the country.


Upon receiving complaints about ABC Auto & Home Insurance - from both consumers and insurers - the Division assigned one of its enforcement officials to investigate. The investigator found a total of 120 documented instances of Velasquez failing to remit premiums from June 2007 to August 2008.


Velasquez's reported actions resulted in the non-remittance of roughly $43,000, in addition to other monetary and non-monetary losses to insurers and consumers (including cancellations, claims, and DMV fines).

  • In California, a former Cedars-Sinai Medical Center employee pleaded guilty Monday to stealing patient information to fraudulently bill insurance companies and collect more than $354,000.

James Allen Wilson, 45, entered the plea before Los Angeles Superior Court Judge Samuel Mayerson just as the second day of Wilson’s preliminary hearing was scheduled to resume, said Deputy District Attorney Wendy Derzaph of the Healthcare Fraud Division.

Wilson pleaded guilty to one count each of identity theft, insurance fraud and grand theft and two counts of failure to file income taxes in 2005 and 2007. He was immediately sentenced to four years, eight months in prison. Mayerson also ordered him to pay $354,000 in restitution to LAUSD and $62,000 in back taxes and penalties to the state Franchise Tax Board.

When Wilson worked in the hospital’s billing department between 2003 and 2007, he allegedly stole the personal information of more than 1,000 patients. Of those, he used the personal information of 12 Los Angeles Unified School District employees. All 12 employees had filed workers’ compensation claims through the school district and all had been treated at the hospital.

Wilson was charged with using the personal information of 12 victims and fraudulently billing more than $1.3 million to third party insurance companies for medical treatment that was never provided. Derzaph said he collected $354,000 in the scam.

As part of today’s plea, Wilson agreed to repay all victims in all 52 counts for purposes of restitution, along with penalties and interest to the school district, which paid for treatment that employees never received. The remaining counts were dismissed.

NATIONAL NEWS ZONE......

The smallest decline in commercial property & casualty (P&C) insurance prices in four years – less than 1% – provides increasing evidence that the soft market is reaching its end, according to Towers Perrin’s most recent commercial lines insurance pricing and profitability trends survey (CLIPS).

Prices for property and directors and officers (D&O) liability actually rose – albeit slightly – in the first quarter of 2009. Prices for large accounts – those with annual premiums in excess of $50,000 – also increased during the first quarter. This upturn in prices is not surprising, as large account prices eroded substantially more than middle-market and small accounts in 2007 and 2008. In contrast, small-account commercial prices continued their pattern of steady, but smaller, decreases.


None of the surveyed lines saw a deepening of price reductions from the fourth quarter of 2008 and, for lines where prices fell, all first quarter decreases were in the low single digits.


“Premiums in many lines may be falling faster than prices in some segments of the market – because lower payrolls, receipts, miles driven and other measures of exposures are declining due to the current economic climate,” said Stephen Lowe, managing director of Towers Perrin’s global property & casualty insurance consulting practice. “This reduced exposure from economic conditions may account for some of the disparity between the CLIPS survey results and the surveys published by the insurance brokers.


“More qualitatively, anecdotal evidence indicates that property insurance prices are continuing to rise in catastrophe-prone areas and declining slightly in non-catastrophe areas,” added Lowe. “This trend reflects the continuing high cost of property catastrophe reinsurance.”
Year to date through the first quarter, CLIPS data indicate that accident-year 2009 loss ratios deteriorated 11% relative to 2008. This deterioration comes on top of an estimated deterioration for accident-year 2008 of 9% over 2007. Increases in claim costs and the "earning" of the price decreases taken in the last four quarters both contributed to loss ratio deterioration for 2009.

Friday, June 12, 2009

TOP STORIES' NEWS ZONE......

Whether or not Florida’s insurance system gets on the road to recovery is now a question only Gov. Charlie Crist can answer, according to FreedomWorks.org.

HB 1171, legislation that would take positive steps towards addressing the state’s current insurance nightmare by allowing more private companies to compete with the state-run Citizens Property Insurance Corporation and giving Florida consumers greater choice in the insurance marketplace, has passed out of the Florida Legislature and now awaits action by the governor.


If Crist signs or does nothing in the next 15 days HB 1171 will become law automatically. Only if he proactively vetoes it will this important reform be scrapped.


Hurricane season is getting into full-swing and Citizens Insurance, the holder of 1 in every 5 homeowner policies in Florida, is badly overexposed and teeters on the brink of disaster. In addition, the Florida Hurricane Catastrophe Fund faces shortfalls of more than $18 billion should a major storm hit.


To address this desperate situation Florida FreedomWorks has been engrossed in a campaign to promote pro-growth insurance reform – including passage of HB 1171 – since March. Activists have called, emailed, and even visited their lawmakers in Tallahassee to show their support for the legislation, and FreedomWorks Chairman Dick Armey even traveled to Florida to rally the grassroots on behalf of this important reform. Now, as this critical reform nears the finish line, FreedomWorks will focus its more than 52,000 members in the state to contact Governor Crist and urge him to enact HB 1171, which would expand customer choice and encourage more insurers to do business in Florida, providing much needed capital for the state.


FreedomWorks Chairman Dick Armey commented, “Florida’s insurance system is in dire straits, but Governor Crist has an opportunity to get it back on track and functioning properly. Before him is legislation that will tear down regulatory barriers, inject competition into the system, and empower consumers with choice in providers. By enacting this law, the governor can demonstrate to Floridians that he is a believer in market-based solutions that encourage competition and promote consumer choice.”