June 27, 2016 Insurance Advocate

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Serving New York, New Jersey, Connec cut, Eastern Pennsylvania and Washington, DC

The Workman Years 1999-2016

Vol. 127 No. 12 | June 27, 2016

PIA Annual Conference Shatters Records

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Contents

June 27, 2016 | Volume 127 Number 12

[COVER STORY ] 32

Courtside: Plaintiff ’s Failure to File Note of Issue After 90-Day Notice Sinks Personal Injury Suit Lawrence N. Rogak

34

Guest Article: WC: No Reforms from Albany Martin Koles

[AD FEATURES]

14

THE WORKMAN YEARS: LICONY’s Tom Workman Hailed as Life Insurers’ Effective Voice from 1999-2016

[FEATURES] 4

Foreword: Vullo Confirmed Superintendent of NYDFS Steve Acunto, Publisher

6

In Focus: How Good of An Agency Leader Are You? Kelly Donahue-Piro

10

Guest Article: Death Care

22

In the Associations: PIA Annual Event Shatters Records

28

On My Radar: Marine Insurance Requires Insured to Exercise Uberrimae Fidei Barry Zalma

30

Looking Back: March, 1991

33

Classifieds

9

NYIA: Congratulates Award Recipient William Melchionni

13

LICONY: Leaders Throughout Life Insurance Industry

19

LICONY: Congratulates Tom Workman

20

Amalgamated Life: Congratulates Tom Workman

21

NBL: Congratulates Tom Workman

27

IIABSC: Annual Scholarship Golf Outing

New York and New Jersey’s Leading Insurance Magazine Since 1889.

FOR ADVERTISING OR SUBSCRIPTION INFORMATION Call 914-966-3180 | g@cinn.com info@insurance-advocate.com www.insurance-advocate.com

INSURANCE ADVOCATE / June 27, 2016 3

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[ FOREWORD ]

STEVE ACUNTO

Vullo Confirmed Superintendant of NYDFS uWhen the New York State Senate confirmed Governor Andrew M. Cuomo’s nomination of Maria T. Vullo (pictured) as Superintendent of the New York State Department of Financial Services (DFS), she gained responsibility for regulating more than 1,500 insurance companies and nearly 1,600 banking and other financial institutions.

“I am honored to be confirmed to serve as Superintendent of the Department of Financial Services,” Superintendent Vullo said.

“I thank Governor Cuomo and the members of the New York State Senate for the privilege to once again serve the people of New York State. As Superintendent, I am committed to strengthening New York’s status as the financial capital of the world, protecting consumers, and ensuring that everyone follows the law. As a lifelong New Yorker, I look forward to leading initiatives that provide all communities throughout the state with fair and effective financial services.”

Prior to coming to DFS, Superintendent Vullo was a litigation partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, where she led civil, criminal, and regulatory investigations before courts and governmental authorities across the country. She also served as Executive Deputy Attorney General for the Economic Justice Division in the Office of the New York State Attorney General, under then-Attorney General Andrew Cuomo. While working in the Attorney General’s Office, Superintendent Vullo oversaw the Bureaus of Investor Protection, Antitrust, Real Estate Finance, Consumer Fraud and Internet, and led numerous investigations to protect investors and consumers from fraud and unfair practices.

An accomplished trial lawyer, Superintendent Vullo’s legal experience has included litigations and investigations involving fraud, real estate, health care, insurance, tax, consumer protection, 4 June 27, 2016 / INSURANCE ADVOCATE

bankruptcy, antitrust, and constitutional law. She also has argued appeals before the U.S. Supreme Court, the U.S. Courts of Appeals for the Second, Ninth, and Tenth Circuits, and the New York State Appellate Division.

Superintendent Vullo is a recognized leader in protecting women’s rights in a variety of cases, including representing women raped by soldiers during the 1992-1995 Bosnian War – a case in which she secured a $745 million jury verdict for the plaintiffs. Her pro bono work included representing abortion providers whose lives had been threatened via an online “hit list”; in that case she secured a $100 million jury verdict for the plaintiffs.

Superintendent Vullo was twice nominated by the New York State Commission on Judicial Nomination as a candidate for Associate Judge of the Court of Appeals. She recently received the New York Women Making a Difference Award from Eleanor’s Legacy, the Humanitarian of the Year Award from the Interfaith Nutrition Network, and the Distinguished Corporate Citizen Award from A Better Balance, among many other awards and professional recognitions. Superintendent Vullo repeatedly has been named a “New York Super Lawyer” by Super Lawyers Magazine and has been included in numerous leading lawyer lists published by the National Law Journal and other leading publications.

Superintendent Vullo earned her J.D. from New York University School of Law, an M.P.A. from the New York University Wagner Graduate School of Public Service, and a B.A. from the College of Mount Saint Vincent. She clerked for the Hon. John A. MacKenzie, U.S. District Court, Eastern District of Virginia prior to entering private practice.

Insurance Advocate congratulates Supt.

Vullo and extends use of our archives and resources in the service of New Yorkers.[IA]

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VOLUME 127, NUMBER 12 JUNE 27, 2016

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Kelly Donahue-Piro Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com COPYEDITOR & PROOFREADER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Media, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto

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[ IN FOCUS ]

K E L LY D O N A H U E - P I R O

How Good of An Agency Leader Are You? uLeadership is a big challenge in the independent insurance space. For many agency owners, you may have never worked anywhere but your family’s agency or maybe you have really only been led by a parent. The journey to go from agent to CEO can often be uncharted waters for many agencies.

In most agencies, we work with owners who have a passion for either the operations or the sales side of the business. In order to survive and thrive, you need to have a plan of attack for both sides. True growth comes when you're operating efficiently and effectively on both service and sales, and it's when and if you can add in a real marketing strategy that you will see record growth.

So if leadership and really running an agency and maximizing your people is a struggle, we understand. We work with agencies across the country that need help driving a leadership model in an agency that really works. One of our long-term clients, Chris Paradiso of Paradiso Insurance puts it best, “Your agency’s biggest expense will always be the people—if you can’t figure out how to maximize, encourage

and motivate them you are not optimizing your agency’s biggest asset.”

Agency Performance Partners has created a few items your agency should be focused on in order to lead your team to success.

• Having an accurate organizational chart: You may not think it but where people go and who they report to is a big deal. As the agency owner, you may often feel burned out because everyone is going to you. You need to set up a clear infrastructure that allows people to know clearly to whom they report and why.

• Creating team leaders: We have never been a fan of the word “manager.” It sounds unmotivating, authoritative and, well, not fun. Great agencies have team leaders who are helping coach the team on the field and calling plays as they see necessary, kind of like a quarterback!

• Updated job descriptions: These are an unused tool in the insurance space.

CONTINUED ON PAGE 8

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Kelly Donahue-Piro, founder and president of Agency Performance Partners, is a no-nonsense effectiveness expert who has helped hundreds of insurance agencies identify and capitalize on sustainable improvement opportunities. Her specialties include agency culture assessment and change; management and supervisory coaching and benchmarking; customer retention strategy development; digital marketing strategy, planning and implementation; and sales planning, management and skillbuilding.

In 2014, she created Agency Performance Partners with a mission to “partner with insurance entrepreneurs who dream to take their business to the next level and beyond, by relentlessly pursuing excellence in worldclass service and sales strategies.”

The centerpiece of the organization’s transformational work is its Agency Performance AssessmentTM, a comprehensive survey tool Kelly created to zero in on organization-wide improvement opportunities and provide the foundation for a customized agency action plan.

Mrs. Donahue-Piro is an engaging speaker who is available to conduct in-person and online agency success presentations that complement her firm’s one-on-one on-site and virtual consulting practice. Connect with her on social platforms, via email at kelly@agencyperformancepartners, or by phone at 401-415-6205.

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[ IN FOCUS ] • Set goals and have an incentive for them: Goals help people work together. Don’t be surprised if the first time people aren’t psyched about the goals. Make the rewards fun and exciting. The bottom line is to give your goals 90 days of your attention—don’t say it and then run for the hills!

• Track your goals: Goals need to be tracked and shared and shown. In order to set great goals, you need to first establish a baseline metric. ”Where are we now? Now we need to update them daily, weekly and monthly.”

• Believe in forever recruiting: Yes, you need to be forever recruiting. If you have a bad apple or someone leaves, two weeks is not enough time.

Plus you should be recruiting because you should be growing. Get job postings up to forever recruit!

• Address internal conflicts: Don’t bury your head in the sand on internal conflicts. When you see a conflict brewing, address it right away between the team members. It will fester if you don’t.

CONTINUED FROM PAGE 6

Maybe there is an old job description you dust off for a new hire. Instead, you should commit to updating job descriptions each and every year and your team should review them with their team leader quarterly.

• Mission Statement: Question, do you even know your mission statement? If not, how can the rest of the team live it? Your mission statement needs to be front and center and talked about.

• Team meetings: You need to have routine team and agency-wide meetings. Yes, meetings are good.

Department meetings can happen more routinely but you need to pull all the troops together monthly to get their feedback and provide good clear communication.

• 90-day check-in meetings: If your team is your largest expense, meeting with them every 90 days is critical.

You will find so many details that as the owner you may not be privy to.

Maybe it's technology that is not working or processes that need help.

Spend the time—it will pay you back!

“

• Select one area at a time on which to focus: That’s right, don’t overwhelm the team. Pick one thing at a time and focus and finish!

• Launch new items with parties, not meetings: Who wants to go to a meeting to learn about change or more work? No one. Instead, hold launch parties that make it exciting and fun!

• Provide compliments: Yes, your team loves compliments. Challenge yourself to provide one per day and watch how your team blossoms in two weeks.

• Track your progress publically: You should clearly track your progress in a big way. Make it public where your entire team can see things. Be repetitive—keep the focus on the goals.

This may seem like a lot of steps, but it pays off. Remember, as the CEO your job is to lead the troops! If you need help, you can download our Leadership Checklist (agencyperformancepartners.com/leader shipchecklist) to help you on your way![IA]

www.insurance-advocate.com

It has ha been our sincere pleasure to work with some of the most talented insurance professionals in the business for the past 30 years. We are proud of our comprehensive coverage offerings and superior customer service as we strive to offer only the best to our insureds. On behalf of Clermont,

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8 June 27, 2016 / INSURANCE ADVOCATE

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The New The New Yor YYork oorrk Insurance AAssociation ssociation congratulates cong gratulates gra tulates th this is year yyear’s ear ’s CChai Chair’s hair ’s DDistinguis Distinguished istinguished SService Ser errrvice vice award award rrecipient ecipient Willi W William illiiam Melchion Melchionni nni of Americ American an Int Internationa International ernationaal Group, Group, Inc Inc..

Billl volunteers Bill volu countless hours urs to to NYIA as well as man manyy ot other overarching insuranc insurance insur anc industry efforts.

Hee is al H always w looking for ways w aay to ays to improve the image of our industry in industr and strives ttoo mak m make ke the insurance ccommunity ommun a better place. om oommun

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[ GUEST ARTICLE ] Reprinted from AAPS News, Volume 72, no. 4, April 2016

Death Care uIn the post-Hippocratic, postChristian, post-modern era, facilitating or even causing death is becoming a form of treatment, often called “end-of-life” care.

This is now supposed to be voluntary, although the decision might be made decades prior to the event. There is a continuum, and it is “evolving.”

The leading edge is in Canada, which is the first jurisdiction in the world to require physicians to perform assisted suicide or euthanasia or make an “effective referral.”

This is considered “an appropriate balancing of the rights of patients and the conscience rights of physicians” (http://tinyurl.com/ zguwa7s). A government panel also recommends forcing all publicly funded institutions, including Christian hospitals and nursing homes, to kill patients on demand (http://tinyurl.com/ztpc35h).

Mental illness, even treatable depression, can make one eligible for death.

Quebec doctors are reportedly withholding life-saving treatment after a suicide attempt, interpreting the attempt as a refusal of treatment (http://tinyurl.com/jp7m2nb).

The Canadian parliament worries about disparities—the indigenous populations might not have equal access to death.

Statistician William Briggs worries that intransigent Christians might be diagnosed as having a mental illness, Christianity being perceived as the major stumbling block to acceptance of the utilitarian view (a religion not called religion) that life is not worth living unless useful to society (http://wmbriggs.com/post/18172/).

Euthanasia has been legal in Belgium since 2002. A new draft law would require all physicians to accede to a euthanasia request within seven days, or refer the patient to a physician who will. It would also eliminate the five-year “sunset clause” to living wills, making them valid indefinitely (http://tinyurl.com/z3rget2).

In the U.S., the debate over physicianassisted dying (PAD) is at a “turning point,” writes Zosia Chustecka. A 2015 poll in the United States found that more than half of physicians surveyed favored medical assistance in dying. During 2015, 23 states sought to codify PAD, and eight of these states have done so. This unprecedented leg10 June 27, 2016 / INSURANCE ADVOCATE

islative wave represents six times more such bills than in 2014 (MedScape 1/21/16, http://tinyurl.com/zgmpx9j).

While public opinion is also shifting in favor of assisted death, the percentage of people who think everything possible should be done to save a patient’s life increased from 15% in 1990 to 31% in 2013.

Families often disagree with physicians about whether care is “futile,” and families may prove to be correct. There is good reason to fear that a “do not resuscitate” order will lead to poorer care. A 2015 study showed that when cardiac patients with the best prognosis had a DNR, their survival rate was poorer than that of similar patients without one (Leigh Page, MedScape 3/16/16, http://tinyurl.com/zm83cex).

The Third Path to Death Death can be hastened without active physician help by simply withdrawing “treatment,” now defined to include food and water, perhaps aided by “terminal sedation.”

The Robert Wood Johnson Foundation and George Soros’s Open Society Foundation are among the advocates of this path, having between them pumped at least $40 million into transforming “healthcare” into “managed death care,” writes Mary Ann Kreitzer of the Fitzgerald Griffin Foundation (http://tinyurl.com/jaog92t).

Medicare’s paying for “conversations” about end of life is “Just the First Step,” according to a Health Affairs headline.

Doctors need to be trained in how to deliver the message (Kaiser Health News 3/16/16, http://tinyurl.com/jtkmzyw).

Better interoperability of electronic health records is needed to assure that doctors know the patient’s end-of-life wishes “in a split second” (KHN 3/23/16, http://tinyurl.com/z9s2khf).

AAPS president Melinda Woofter, M.D., points out that another means of endof-life planning is being developed or implemented in all but five states: Physician Orders for Life-Sustaining Treatment (POLST) or a variant (J Am Phys Surg, spring 2016).

The ObamaCare mandate to keep medical spending below a predetermined level could spell premature end of life to patients

who have a good chance of recovery and want to live. Starting as early as this year, federal standards on “quality and efficiency” could limit care that hospitals or doctors could offer even to patients willing and able to pay. Violating standards could mean ineligibility to contract with any qualified health plan, according to a March 6, 2014, report prepared for the National Right to Life Committee (http://tinyurl.com/jglpxfd).

Redefining Death The legal definition of death has been revised to include “brain death,” which is also assumed to be final and irreversible.

There are supposedly rigorous standards, but hospital policies are inconsistent and may omit procedures intended to prevent errors (NPR 12/28/15, http://tinyurl.com/ p4uduvw).

Many errors have occurred. One was in the case of George Pickering III, whose father held off medics at gunpoint for some hours when they tried to turn off his life support. While his dad served an eightmonth prison term, his young son recovered fully from the mistaken diagnosis of brain death.

Since her diagnosis of brain death two years ago, when her family was pressured to donate her organs, Jahi McMath has gone through puberty. She responds to commands from her mother and has brain wave activity. Her family is still fighting in court to void her death certificate (http://tiny url.com/h5gkmys).

Psychiatrist’s Response to “Want to Die” Consults Samuel Nigro, M.D., writes of his experience doing ICU consults at St. Vincent’s Hospital. When the patient said the equivalent of “I want to be put out of my misery,” he replied, “We do not do that here. We can arrange hospice in due time if indicated.”

This generally seemed to lead to a clear sense of relief and no more talk of deathcausing acts. To engage may be to promote.

Doctors should not become entrapped in self-fulfilling dialogue.

Dr. Nigro would confirm that the patient was very sick and might not make it, but he had seen some walk out after a similar illness. He said, “I know we’re doing something wrong that was upsetting; please tell me what that is and what we could do to make matters better.” Most said it was torCONTINUED ON PAGE 12

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[ GUEST ARTICLE ] CONTINUED FROM PAGE 10

ture to be confused and bewildered about who people were and what they were doing.

“Despair and other affects are contagious. Medical care must be immune to patients’ affects.” He instructed staff, even housekeeping, to respond brightly and positively, and to engage and explain, every time, who they are and what they are doing.

They should find out the patient’s interests and provide distractions from despair—say a virtual tour of Rome or Las Vegas.

Unless medically contraindicated, he prescribed low-dose lithium, “the only medication documented to reduce suicide and death ideation” (also see http://tinyurl.com/ gqf7olx).

The results: “Some got their wish and died naturally. Most were transferred glad to be alive still.”

The right to life means the right to a natural death, Dr. Nigro writes. “To violate the right to natural death is to violate thousands of years of medical tradition and the Oath of Hippocrates.”

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The Death Bed An anesthesiology resident describes meeting her first organ donor in a dimly lit ICU room (JAMA 3/15/16). The electronic medical record warns her she is about to enter the record of a deceased person—but he looks very much alive, young and handsome, his hand warm and soft. Later in the OR, the team reads aloud farewells from the family [to him, as if he could hear, or just to themselves?]. She reminds herself that there is no need for pain medicine, and vital signs do not change while surgeons open the chest.

Then, the vital signs are gone, as is the glow of life. The skin is gray and cold. Dead.

Futile Care in Texas While 46-year-old Chris Dunn prayed for his life, Houston Methodist Hospital went to court to try to wrest custody from his mother so it could remove his ventilator.

Under the Texas Advance Directive Law, patient consent is not required for discontinuing support, only 10 days’ notice so family could seek alternate care (http://tinyurl.com/z75dd5g). Dunn died a natural death about a month after the hospital declared treatment to be futile. **** “[A] systematic training in objectivity must be given to you. Its purpose is to eliminate from your mind one by one the things that you have hitherto regarded as grounds for action. It is like killing a nerve. That whole system of instinctive preferences, whatever ethical, aesthetic, or logical disguise they wear, is to be simply destroyed.”

C.S. Lewis, That Hideous Strength, 1945

The Trouble with VSED Compassion and Choices (formerly the Hemlock Society) is an advocate for suicide by voluntarily stopping eating and drinking.

But most demented patients continue to eat willingly, despite wishes formerly expressed in an Advance Directive: hence the idea of VSED-by-proxy, whereby a proxy can ensure that no one offers a patient spoonfeeding (http://tinyurl.com/j4m9vh7).

Profiting from Death Soon after California proposed its aidin-dying law, Valeant Pharmaceuticals hiked the price of a lethal dose of Seconal to $3,000 (in 2009 it cost less than $200).

Medicaid and most private insurers will cover it, though coverage (and physicians’ prescriptions) remain voluntary (http://tiny url.com/jabyxme).[IA]

LIC

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LICONY

ADVERTO R IAL

LICONY

Leaders Throughout Life Insurance Industry Guardian’s COO Reflects on the Importance of the Life Insurance Industry and the Products it Provides

By Mary A. Griffin, President & CEO, Life Insurance Council of New York, Inc. The life insurance industry is filled with highly skilled professionals who care about New Yorkers, and I am happy to introduce some of our key members this year through my column. This month, the questions are being posed to D. Scott Dolfi, who is the Chief Operating Officer of The Guardian Life Insurance Company of America® (Guardian).

Scott oversees all aspects of Guardian's two core business lines – Individual Markets, and Group and Worksite Markets.

This includes individual life insurance, disability income insurance, annuity, and wealth management businesses as well as worksite benefits such as group life, disability, dental, and vision insurance, 401(k) plans, and absence management and stop loss insurance for employers. Scott knows well how critical it is for families to have insurance protection in place, and for employers to be able to offer life insurance and non-medical health benefits.

He joined Guardian in 2008, continuing a distinguished career in the insurance and financial services industry. We are honored that Scott devotes time to serve as a board member of the Life Insurance Council of New York, Inc (LICONY).

Scott, why is it important for you to be an active participant in LICONY? The life insurance industry is an economic pillar in the state of New York.

There are approximately 80 life insurers domiciled in New York that directly employ over 30,000 people in the state – the largest number of insurance carrier em-

tected. Insurance companies provide financial security for individuals, families, and businesses. The estimated $5.1 billion paid out each year to New York beneficiaries by life insurers has a huge impact on people's lives in their time of need. It also reduces pressure on the state to provide public assistance when death or disability strikes.

D. SCOTT DOLFI

ployees of any state. The industry also contributes over $13 billion in gross domestic product, and represents $1.75 billion in state and local tax payments. Over eight million New York residents are covered by individual life insurance policies totaling over $2.2 trillion in protection. I feel it is important to support the work that LICONY does to create and maintain a legislative, regulatory, and judicial environment that supports the continued growth of our industry. LICONY is the voice of the life insurance industry in New York.

When you meet with government officials, what is the one thing you want them to walk away knowing about the life insurance industry?

We are here to help. And, when a life insurance company is growing, it means more people are being helped and pro-

What do you want for the life insurance industry and the people it serves?

I would like to see life and disability insurance become more accessible to consumers. As in many industries, we are looking for ways to make the purchase of our products easier, and to provide service options that best meet our customers' needs. Because the industry is highly regulated, it can be difficult to do this.

Through LICONY, we can work with government officials to achieve our mutual interest: the protection of New Yorkers.

Mary A. Griffin is the President and Chief Executive Officer of the Life Insurance Council of New York, Inc. LICONY is the principal voice of the life insurance industry in New York. LICONY works to create and maintain a legislative, regulatory, and judicial environment that encourages its members to conduct and grow their life insurance businesses here in New York State. For stories about New Yorkers who have benefitted greatly from purchasing the products of life insurers, go to www.licony.org, and click on “Published Articles” in the NEWSROOM box on the homepage.

O: (212) 986-6181 F: (212) 986-6549 551 Fifth Ave., 29th Floor, New York, NY 10176 website: www.licony.org INSURANCE ADVOCATE / June 27, 2016 13

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The Workman Years:

LICONY’s Tom Workman Hailed as Life Insurers’ Effective Voice from 1999­2016

TOM WORKMAN RECEIVING A FRAMED RESOLUTION FROM CURRENT LICONY BOARD CHAIR,TIMOTHY A. WALSH, PRESIDENT & CEO OF FARM FAMILY 14 June 27, 2016 / INSURANCE ADVOCATE

uFor the life insurance industry in New York, the years 1999 to 2016 are being remembered as “the Workman years,” during which time Thomas E. Workman served as president of the powerful state association of life insurers, generally represented by the insurers’ CEOs and very top brass, and became the leading voice of the industry sector–one of the most powerful segments of the financial services economy in one of the most important marketplaces in the world. Known for his strong work ethic, consistent and sharp focus, careful relations with all sectors involved in the insurance universe, for his successes in Albany and elsewhere protecting the trillion dollar insurance sector and the best interests of the millions of people affected by it, Tom enjoyed a 17-year run at the helm of LICONY. He has worked with sixteen LICONY presidents, several Governors, Superintendents, changing legislative leadership among members of both houses, new staffers, and a host of industry protagonists.

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During those years, Workman assembled an outstanding LICONY team with little or no turnover and set the staff in position to make LICONY a “member-driven organization” in the classical sense of service and responsiveness, with new programs expanding upon the highly intense, highly focused lobbying and communications work that the group’s members require to sustain a viable ambience for insuring. Years filled with meetings with key executive officers, legislators and regulators resulted most often in their embrace of the LICONY approach to problems, no small feat of diplomacy in an often contentious legislative environment.

The tributes have poured in since Workman announced his retirement and word of our intention to feature the Workman Years as a retrospective in the Insurance Advocate. New York State Senator James L. Seward, chairman of the senate insurance committee said, “Insurance may not seem like the most riveting or emotionally inspiring topic of conversation; however, when Thomas Workman is leading the discussion, the subject matter reaches an entirely different stratosphere. His knowledge, enthusiasm, and intellect shine through almost immediately and, before you know it, you are mesmerized by his engaging thoughts. He also understands that the life insurance industry is a key financial sector comprising thousands of jobs and his advocacy has led to continued economic growth. LICONY has benefited greatly from Tom’s leadership, and I consider myself extremely fortunate to have worked with him and to call him a friend.”

Former NYS Superintendent of Insurance, Greg Serio, added his voice saying that Workman played a critical role in articulating the entire industry’s best interests consistently, cogently, and reliably. Other former regulators weighed in as well and were universal in praising the even, yet aggressive approach Workman was known for in Albany “on every floor of every building.”

“Tom Workman was selected as president and CEO of LICONY in 1999 and has had a profound impact on the life insurance industry, both within New York State and nationally. Tom’s integrity and astute leadership have been hallmarks of his entire career and he has consistently been dedicated, committed and focused on always doing the right things for the industry and for this great country. As an example, his leadership during the crisis of September 11 inspired all of us to be our best. Tom has clearly made a significant difference for our industry and LICONY has been dramatically strengthened due to his leadership,” said Bruce W. Boyea, Chairman and CEO of Security Mutual.

Howard Mills, Global Insurance Regulatory Leader, Deloitte, and former Superintendent, New York Insurance Department, said: “I had the pleasure of working with Tom as a legislator on the Assembly Insurance Committee, as Superintendent of the New York Insurance Department and as a leader of a LICONY-affiliated member firm. Tom is a passionate and highly effective advoCONTINUED ON PAGE 16

TOM AND HIS WIFE, PAMELA WORKMAN

TOM’S SON AND DAUGHTER-IN-LAW, CHRIS AND CATHERINE WORKMAN

TOM WORKMAN AND CURRENT LICONY PRESIDENT & CEO, MARY A. GRIFFIN INSURANCE ADVOCATE / June 27, 2016 15

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CONTINUED FROM PAGE 15

SEATED L–R: PAM WORKMAN, TOM WORKMAN, TIM WALSH, MARY GRIFFIN; STANDING L–R: SHEILA DAVIDSON OF NEW YORK LIFE, CHRIS WORKMAN, CATHERINE WORKMAN, MIKE ZARCONE OF METLIFE, AND DAVE WALSH OF AMALGAMATED LIFE

CAROL SPRINGSTEEN OF FORESTERS LIFE, TOM WORKMAN AND STEVE RADKE OF NORTHWESTERN MUTUAL

GROUP AT LUNCH HONORING TOM WORKMAN WITH MARY GRIFFIN AT PODIUM 16 June 27, 2016 / INSURANCE ADVOCATE

cate for the life insurance industry in New York, tirelessly working to keep legislators, regulators and the industry itself mindful of the critical role life insurance plays in protecting New York families and as an investor in our national economy. Perhaps most importantly, Tom understood what was and is needed to keep New York a hospitable environment for life insurance companies to succeed and thus better serve the people of New York and our nation in this highly competitive industry. As the face of LICONY for so many years, Tom Workman was the embodiment of the nobility of the life insurance industry and a gracious and intelligent leader. I am grateful for having had the opportunity to work so closely with this wonderful gentleman.”

Timothy A. Walsh, Chairman of the Board, Life Insurance Council of New York, and president and CEO of the Farm Family Life Insurance Company, told the Insurance Advocate: “I have had the good fortune to know and serve with Tom Workman for the past decade. It has been both a pleasure and my honor to do so. His leadership as president and CEO of the Life Insurance Council of New York has been steady, persistent, and effective.

Perhaps the two greatest gifts we can share with one another are the gifts of our time and our love. In many respects, life insurance is a gift of love when we are no longer able to give the gift of our time. Tom’s passion, professionalism, and commitment to the wonderful life insurance industry we have in New York has helped make a meaningful difference in the lives of many. Tom, thank you for living a life of significance through your service.”

Raul Rivera, president and CEO, National Benefit Life Insurance Company and past chairman of LICONY, said this of Workman: “Great friend, great leader, who over 17 years strengthened and changed the face of LICONY. Tom’s high energy and tireless efforts carried out the mission of LICONY ‘as the principal voice of the life insurance industry in New York.’ His exemplary leadership will certainly be missed by the industry, the NYDFS, as well as our legislators. We all wish Tom much happiness and success as he enters a new chapter in his life.”

As an Association manager, Workman has a long list of organizational accomplishments, points out David Walsh, past LICONY chairman and president of Amalgamated Life: “Tom was instrumental in establishing in 2000 the Associate Members class of membership for non-domestic member companies and the Allied Professional Members for the accounting, actuarial, and law firm members—later adding fraternal benefit societies as eligible for membership in LICONY. Under his aegis, LICONY membership grew from 84 in 1999 to 95 in 2016,” Walsh noted.

In addition to the LICONY staff and his supportive family, Workman himself took the time during a farewell luncheon in his honor to cite some of the people who have made his years at LICONY what he termed “a great experience.” They include: Peter Flanagan, Bill Flynn, Tom Moran, Pat Burns, Scott Rothstein, Jim McCutcheon, Stu

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“His leadership as president and CEO of the Life Insurance Council of New York has been steady, persistent, and effective. Perhaps the two greatest gifts we can share with one another are the gifts of our time and our love.”

Nagler, Mike Zarcone, Jim Donnellan, Nancy Davenport, Sy Sternberg, Sheila Davidson, Tom English, Doug Wheeler, Joanne Jenkings, Joe Sargent, Dennis Manning, Scott Dolfi, Tracy Rich, Ellie Nieves, Mike Hegarty, Richard Dziadzio, Wendy Cooper, Lee Smith, Charlie Stamm, Karen Elinski, Susan Donnellan, Bruce Boyea, David Sloane, Tom Rattmann, Pat Mannion, Jack Mannion, Raul Rivera, Tim Walsh, Dave Walsh, Jack Friou, Mitch Politzer, Bridget Healy, Beth Byrne, Maureen Adolf, Mike McCann, John Friedman, Diana Marchesi, Steve Radke, and Joe Reali.

On the government side, Workman cited: Jim Seward, Neil Breslin, Joe Morrelle, Kevin Cahill, Denny Farrell, Will Barclay, Gary Finch, Bill Larkin, Bill Mulrow, Joe Bruno, John Dunne, Neil Levin, Greg Serio, Kevin Rampe, Howard Mills, Eric Dinallo, and Jim Wrynn. In his remarks, he sent thanks out to other Association leaders like Frank Keating, Dirk Kempthorne, Gary Hughes, Bruce Ferguson, Kate Kiernan, and many others at ACLI, as well as to the NAIFANYS’s leaders such as Ben Brewster, Mark Yavornitzki, Al Brodbeck and Robert Miller.

Workman recounted his experience with a look back: “I came to New York knowing only a handful of life company executives and my predecessor—Peter Flanagan, the great and good man who put LICONY on the map. The early days of my work at LICONY included important meetings and advice from Peter, Tom Moran at Mutual of America, Stu Nagler and Mike Zarcone at MetLife, Sy Sternberg and Fred Sievert at New York Life, Bruce Boyea at Security Mutual, Joe Sargent and John Hurley at The Guardian, Jack and Pat Mannion at Unity Mutual, Marty Steadman, Charlie Stamm at TIAA, Mike Hegerty at AXA Equitable, Maureen Adolf and Dick Saxe at Prudential, Ben Brewster and Mark Yavornitzki of NAIFA-NYS, Governor Pataki and Brad Race, Senator Joe Bruno, Speaker Shelly Silver, Neil Levin, Greg Serio, and Kevin Rampe at the Department, and Senator Jim Seward, and many more. I was easily and graciously welcomed into the LICONY fold and the Albany fold, and I am grateful for that. For me the journey here was not simple, but in retrospect it did add up in a particular way. Believe it or not, I was named after the New York Governor who was running for President the year I was born—1944—and many years later I was hired by the Ohio Governor who was on the same ticket and running for Vice President in 1944. The first time that New York Governor Thomas E. CONTINUED ON PAGE 18

INSURANCE ADVOCATE / June 27, 2016 17

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TOM ADDRESSES THE CROWD

18 June 27, 2016 / INSURANCE ADVOCATE

Dewey ran for President was in 1944. My parents being good Republicans gave me the same name—Thomas E. My family may have been Buckeyes, but Tom Dewey was the Republican candidate for President that year, and that’s all that mattered. Governor Tom Dewey picked Ohio Governor John W. Bricker to run for Vice President on the Republican ticket that year. After they were defeated, Governor Bricker came home to Columbus and established a law firm in his name. The first client of the Bricker firm was the Ohio life insurance industry. Fastforward to November 1, 1973—six days after I was discharged from the Army after serving four years as a captain in the Judge Advocate General’s Corps. That day I reported for work at the Bricker firm. The first question they asked me was whether I would be willing to do some insurance law work. I said I would be happy to do whatever it took to get a paycheck at the end of the month. I then represented the life insurance industry before the Ohio Legislature and the Ohio Department of Insurance for the next 26 years. In 1999 I came here. Actually, if Governor Dewey had not chosen Bricker as his running mate in ’44, Bricker would have been reelected Governor.

He would not have set up the law firm until much later, if at all, and the Ohio life industry would have hired some other firm. So, I have New York’s Governor Dewey to thank for my job at LICONY!” Tom’s successor, Mary Griffin, toasted him at that same event. Ms. Griffin comes to LICONY after 16 years at Citigroup. She has also served at the American Insurance Association (AIA), at the Department of Insurance during Governor Mario Cuomo’s administration, and as staff in the New York State Assembly. Of her predecessor, she had this to say: “Looking back over Tom’s career, there comes to mind some comments the great Roman philosopher, Marcus Aurelius, said about a patron and it struck me how similar it was to Tom as a boss: ‘Courtesy and unswerving loyalty to decisions taken after hard thought, industry and steadfastness.’ In all things great and small he exercised foresight and prepared down to the last detail for every eventuality. These things I learned from him: strength, moderation on all occasions, a spirit perfectly balanced and indomitable.” But perhaps more poignant are comments I received from Chris Workman when I asked him to give me some thoughts about Tom as a father: “For our whole lives, he has always been and always will be the rock of a foundation in our lives—loving, optimistic, honest, brilliant, ingenious, resourceful, successful, positive, gentle-yet-firm, principled, profoundly supportive, devoted, and loyal to the ends of the earth. He is resolutely proud and thankful to be an American. He is a constant force for what is good and right and has always been there for us in every way, without fail. He loves to work hard, loves to sacrifice for those whom he loves, loves to help other people, and always does everything that he can to do the right thing and to take care of his family, while also doing his level best to contribute to the good of our community and great nation, all three of which he loves dearly.”

Apparently, the feeling is mutual. SA

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LICONY

The LICONY Board of Directors and its members extend their sincere appreciation and gratitude to Tom Workman for his dedicated and distinguished service for over 16 years, and for the unwavering commitment to excellence he brought to his responsibilities as President & Chief Executive Officer. We wish Tom all the best in his retirement!

MEMBER COMPANIES Aflac New York Allianz Life Insurance Company of New York Allstate Life Insurance Company of New York Amalgamated Life Insurance Company American Equity Investment Life Insurance Co. of NY American National Life Insurance Co. of New York Ameritas Life Insurance Corp. of New York Assurity Life Insurance Company of New York Athene Annuity & Life Assurance Company of NY Athene Life Insurance Company of New York AXA Equitable Life Insurance Company Bankers Conseco Life Insurance Company Church Life Insurance Corporation Columbian Mutual Life Insurance Company Combined Life Insurance Company of New York Companion Life Insurance Company Delaware Life Insurance Company of New York Empire Fidelity Investments Life Insurance Company Farm Family Life Insurance Company First Security Benefit Life Insurance & Annuity Co. of NY First Symetra National Life Insurance Company of NY First Unum Life Insurance Company Foresters Life Insurance and Annuity Company Genworth Life Insurance Company of New York Gerber Life Insurance Company The Guardian Life Insurance Company of America The Independent Order of Foresters John Hancock Life Insurance Company of NY Life Insurance Company of Boston & New York Lincoln Life and Annuity Company of New York MetLife Monitor Life Insurance Company of New York Mutual of America Life Insurance Company National Benefit Life Insurance Company National Security Life and Annuity Company New York Life Insurance Company NTA Life Insurance Company of New York The Phoenix Companies, Inc. RiverSource Life Insurance Company of New York SBLI USA Life Insurance Company, Inc. Security Mutual Life Insurance Company of NY Sentry Life Insurance Company of New York The Standard Life Insurance Company of NY TIAA-CREF Transamerica Financial Life Insurance Company Union Security Life Insurance Company of NY The United States Life Insurance Company in the City of NY USAA Life Insurance Company of New York Vantis Life Insurance Company of New York Voya Financial, Inc. William Penn Life Insurance Company of New York Zurich American Life Insurance Company of NY

ASSOCIATE MEMBERS CMFG Life Insurance Company First Allmerica Financial Life Insurance Company Hartford Life and Accident Insurance Company Knights of Columbus Liberty Life Assurance Company of Boston MassMutual Life Insurance Company Munich American Reassurance Company National Life Insurance Company Nationwide Financial Services Northwestern Mutual Pacific Life and Annuity Company Penn Mutual Life Insurance Company Principal Financial Group Protective Life & Annuity Insurance Company The Prudential Insurance Company of America SCOR Global Life Reinsurance Company of Delaware Securian Life Insurance Company State Farm Life and Accident Assurance Company Sun Life and Health Insurance Company (U.S.) Thrivent Financial for Lutherans Woodmen of the World Life Insurance Society ALLIED PROFESSIONAL MEMBERS Alverez & Marsal Insurance & Risk Advisory Services Baker Tilly Virchow Krause, LLP Clifford Chance US LLP Davis & Harman LLP Debevoise & Plimpton LLP Deloitte Dentons US LLP DLI North America Inc. Ernst & Young LLP Goldberg Segalla Greenberg Traurig, LLP Hinman Straub P.C. KPMG LLP Mayer Brown LLP MIB Group, Inc. Milliman, Inc. Park Strategies, LLC PricewaterhouseCoopers LLP Sidley Austin LLP Sutherland Asbill & Brennan LLP Willis Towers Watson PLC Willkie Farr & Gallagher LLP

Life Insurance Council of New York Office: (212) 986-6181 Fax: (212) 986-6549 551 Fifth Ave., 29th Floor, New York, NY 10176 www.licony.org LICONY – The Voice of Life Insurers in New York State

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Family of Companies

Thanks to Tom Workman for 16 great years.

JackLife Marco The Vitality of the Insurance Industry in New York equals the Vitality of a Chairman of Jack Marco Consulting Big Part of our Economy and Well Being.

Thanks, Tom, for protecting this key sector in such a dedicated and effective manner.

Paul E. Mallen Executive Vice President & CFO

David J. Walsh President & Chief Executive Officer (LICONY Chairman 2015)

Amalgamated Life Insurance Company 333 Westchester Avenue, White Plains, NY 10604 www.amalgamatedlife.com

Amalgamated Family of Companies Amalgamated Life Amalgamated Agency AliCare AliCare Medical Management AliComp AliGraphics

20 June 27, 2016 / INSURANCE ADVOCATE

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L-R: RAUL RIVERA, PRESIDENT & CEO, NBL; THOMAS WORKMAN; AND JAMES K. McCUTCHEON, SVP & ASSOCIATE GENERAL COUNSEL, MUTUAL OF AMERICA

Tom Workman is a great friend and leader who strength­ ened and changed the face of LICONY over the past 16 years. Tom’s high energy level and reless efforts enabled LICONY to fulfill its mission of being “the principal voice of the life insurance industry in New York.” His exemplary leadership will certainly be missed by the industry, the NYDFS, and the state’s legislators.

NBL wishes Tom much happiness and success as he enters a new chapter in his life.

In NY, NBL is the exclusive Term Life Underwriter for Primerica Financial Services Agency of New York, Inc.

O n e C o u r t S q u a r e | L o n g I s l a n d C i t y, N Y 1 1 1 2 0 ­ 0 0 0 1 | ( 7 1 8 ) 3 6 1 ­ 3 6 3 6

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[ IN THE ASSOCIATIONS ]

Record Shattering Event at Harrah’s Makes PIA Annual Conference Biggest Ever

PIANJ Elects LaPenna President ATLANTIC CITY, N.J.—Donald F. LaPenna, Jr., of Cranford, N.J., president of Donald F. LaPenna Associates Inc., was elected president of the Professional Insurance Agents of New Jersey today at the association’s annual business meeting at Harrah’s in Atlantic City.

uMore than 2,000 agents and insurance industry professionals made history at the PIANJ/PIANY Annual Conference at Harrah’s Casino Resort in Atlantic City, N.J., June 5-7. The record-breaking event brought a flood of insurance professionals to the shore, to network and be seen at exciting and fun events; packing an expansive trade show; and attending cutting-edge educational seminars with a host of topics important to agents for CE credit.

Trade Show and Exhibition The conference kicked off with a networking lounge at the center of the biggest insurance exhibition in the Northeast, featuring hors d’oeuvres and drinks.

Insurance professionals joined colleagues for two days of making valuable contacts and getting up-to-date with events to help them grow their business. Hundreds of vendors were eager to meet with agents from some of the biggest PIA affiliate states, who came to check out the latest innovations, products and markets.

22 June 27, 2016 / INSURANCE ADVOCATE

YIP Nitecap Harrah’s Eden Lounge pulsated with energy as PIA’s Young Insurance Professionals hosted an evening event Sunday night for everyone to party the night away … members and industry

L-R: IMMEDIATE PAST PRESIDENT CHARLES J. CARUSO, CIC, CPIA, PASSES THE CEREMONIAL GAVEL TO NEWLY ELECTED PRESIDENT DONALD F. LAPENNA, JR., DURING THE PIANJ ANNUAL BUSINESS MEETING SUNDAY MORNING.

An active member of PIANJ, LaPenna has served as first vice president (201516), vice president (2013-15), and treasurer (2012-13). He is also vice president of the Government Affairs Committee and the Political Action subcommittee, and a member of the Executive/Budget & Finance Committee.

In his community, LaPenna served on the board of directors of the Central New Jersey Juvenile Diabetes Research Foundation and as a committee chair for the Center of Great Expectations. He is also a former director of the Union County Red Cross and a past head coach and treasurer of the Clark Pop Warner program.

PIANJ is a trade association representing professional, independent insurance agencies, brokerages and their employees throughout the state.

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[ IN THE ASSOCIATIONS ]

PIANJ Elects Officers for 2016-17 ATLANTIC CITY, N.J.—Officers of the Professional Insurance Agents of New Jersey for 2016-17 were elected today during the association’s annual business meeting at the PIANJ/PIANY Annual Conference at Harrah’s, Atlantic City, N.J. • Donald F. LaPenna Jr., of Cranford, N.J., was elected president. LaPenna is president of Donald F. LaPenna Associates Inc., in Clark, N.J. • Kacy Campion Renna, CIC, of Wall Township, N.J., was re-elected vice president . Renna is CEO of Connelly, Campion, Wright in Belmar, N.J. • Lloyd H. “Rip” Bush Jr., of Fair Haven, N.J., was re-elected vice president.

Bush is a producer for Keer & Heyer in Point Pleasant Beach, N.J. • Bruce Blum of Somerset, N.J., was elected vice president. Blum is vice president of Blum & Walsh Group Inc., a division of T.E. Freuler Agency in Somerset.

• Steven C. Radespiel of Hillsdale, N.J., was elected treasurer. Radespiel is president of Insurance Center of North Jersey in Hackensack, N.J.

YIP NITECAP

contacts let loose, danced and were sure to be seen—Even the young at heart had fun and enjoyed the music of To the Max!

PIA’s Poolside Paradise Reception Jimmy and the Parrots led the festivities at Harrah’s pool Monday evening. Everyone had a great opportunity to meet up with old friends and make new connections while enjoying appetizing dinner stations and dancing in Harrah’s tropical pool club— wearing floral leis and PIA parrot tattoos!

PIANY PRESIDENT GENE SANDY

IMMEDIATE PAST PRESIDENT CHARLES J. CARUSO

PIANJ OFFICERS

• Michael DeStasio of Iselin, N.J., was elected secretary. DeStasio is an account executive for Travelers Insurance Co., in Edison, N.J. • Charles Caruso, CIC, CPIA, of Beachwood, N.J., will serve as immediate past president. Caruso is SVP of Herbert L. Jamison & Co. LLC/Jamison Insurance Group in Cranford, N.J.

Networking lunch; New PIANJ Administration recognized PIANY President Gene Sandy, CIC, opened the buffet networking lunch as master of ceremonies. PIANJ immediate past President Charles J. Caruso, CIC, CPIA, introduced the new PIANJ officers and newly inducted PIANJ President Donald F. LaPenna welcomed the new generation of professionals, including the new NJYIP

NEWLY ELECTED PRESIDENT DONALD F. LAPENNA, JR.

administration before inviting everyone to enjoy the extravagant buffet lunch.

CONTINUED ON PAGE 24

INSURANCE ADVOCATE / June 27, 2016 23

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[ IN THE ASSOCIATIONS ] CONTINUED FROM PAGE 23

PIANJ-YIP officers • Immediate past president Casey Yarger, CIC • Secretary Brianna Gonzalez • Treasurer Logan True • President Natalie Bruno, CPIA

Honors and Recognitions A brilliant show was made even more radiant with three awards to stars in the industry.

PIANJ Director Thomas Wilkens of McGowan Risk Specialist in Eatontown was awarded PIANJ Director of the Year.

NJYIP PRESIDENT NATALIE BRUNO PRESENTS PAST PRESIDENT CASEY YARGER WITH THE 2016 YIP OF THE YEAR AWARD

Education THE PIANJ-YIP OFFICERS

Meeting with the DOBI Two top officials from the New Jersey Department of Banking and Insurance, Assistant Commissioner Bill Rader and Peter Hartt, came to Atlantic City to meet with PIANJ leaders during the Conference to discuss PIANJ regulatory concerns, including certificates of insurance; ride hailing; private flood insurance; cyberliability; the PIP coverage selection form; charging fees on health policies; and homeowners issues.

PIANJ-YIP Casey Yarger, CIC, of Robert Petri and Daughter in Milltown received Young Insurance Professional of the Year.

PIANJ recognized Teresa Caro, senior vice president, New Jersey regional manager, of Selective Insurance Co., with its Company Person of the Year award.

Registrants could choose from more than half a dozen CE classes that captivated and offered valuable information for agents seeking to grow their businesses and profits. “You hear so much about online CE nowadays, but these classes are the kind that agents want to attend,” one member was heard saying. “We are ‘people people,’ and these instructors know their stuff and make the information exciting.”

A brilliant show was made even more radiant with three awards to stars in the industry.

LARRY MORRISON, PRESIDENT, BUSINESS TRANSITION NETWORK, TAUGHT THE BIG PICTURE: WHAT OWNERS (AND FUTURE OWNERS) NEED TO KNOW FOR THREE CONTINUING EDUCATION CREDITS. MEETING WITH DOBI

24 June 27, 2016 / INSURANCE ADVOCATE

CONTINUED ON PAGE 26

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[ IN THE ASSOCIATIONS ] CONTINUED FROM PAGE 24

FMI’s Victoria Thaler took first place in the female category and FMI was honored for raising the most money for SONJ. In all, the Fun Run raised $110,000 this year for the cause.

Fun Run Race Results Individuals, men Noah Dellas (Special Olympics athlete) 18:34.8 Kyle Price (FMI) 18:35.4 Dustin McKenzie (FMI) 20:08.02

CATHY TRISCHAN, CPCU, CIC, CRM, AU, ARM, AAI, CRIS, MLIS, OPENED THE CONFERENCE WITH THERE’S NO PLACE LIKE HOME, UNLESS YOU ARE WORKING FROM HOME AND DON’T HAVE COVERAGE! AND CLOSED THE CONVENTION WITH THE FINAL CLASS, ETHICAL ISSUES IN E&O , ON TUESDAY

Fun Run The annual Fun Run for Special Olympics New Jersey, a 32-year tradition on the Boardwalk continued on Tuesday morning at 6 a.m. To date, PIANJ and NJYIP have raised more than $3.6 million for SONJ. Participants ran, jogged and walked, and celebrated the fundraising and race accomplishments with Special Olympics athletes and officials during the celebratory breakfast that followed. Special Olympics triathlete Noah Dellas won the race by a nose, as long-time Fun Run champion Kyle Price of FMI congratulated him as they crossed the finish line together.

Individuals, women Victoria Thaler (FMI) 22:09.41 Lisa Rumer (Special Olympics coach) 22:28.4 Brianna Springstead (FMI) 24:29.38 Top company fundraisers FMI $59,855 Maiden Re $11,305 Team Selective $5,280

Top agency fundraiser Jimcor $11,000 Top company fundraisers Jordan Macsyn (Maiden Re) $3,045 Debbie Bulik (Maiden Re) $1,375 Stacey Brown (Team Selective) $1,235

Save the Date!

PIA extends a tremendous thank you to everyone who attended—you made history this year! We are already making plans for an even bigger and better event next year, and we’ll be back at Harrah’s, so save the date: June 11-13, 2017!

26 June 27, 2016 / INSURANCE ADVOCATE

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Independent Insurance Agents & Brokers Brokers of Suffolk County Invite Y You oou T Too Their Annual Scholarship Golf Outing Benefiting The IIABSC Scholarship Endowment Fund at Stony Br Brook roook University College of Business

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[ ON MY RADAR ]

BA R RY Z A L M A

Marine Insurance Requires Insured to Exercise Uberrimae Fidei Insured May Not Hide Material Information From a Marine Insurer uMarine insurance, because of the risks taken, applies the doctrine of uberrimae fidei (utmost good faith) strictly. In Fireman’s Fund Ins. Co. v. Great American Ins. Co. of New York, United States Court of Appeals, Second Circuit, — F.3d —2016 WL 2943139 (May 20, 2016), an insurer sought contribution from a marine insurer who claimed its policy was void because of the insured’s failure to fulfill its obligation to treat its insurer with utmost good faith. The Second Circuit was called upon to resolve the dispute.

Fireman’s Fund Insurance Company (“Fireman’s Fund”) and Signal International, LLC (“Signal”) appealed from judgments of the United States District Court for the Southern District of New York granting summary judgment to Great American Insurance Company of New York (“Great American”) and Max Specialty Insurance Company (“MSI”). Fireman’s Fund, Great American, and MSI underwrote insurance policies that included coverage for a dry dock that Signal owned. After the dry dock sank, Signal and Fireman’s Fund sought contribution for losses and cleanup costs from Great American and MSI. Fireman’s Fund initiated this action to resolve disputes regarding coverage.

The district court held that the Great American and MSI policies were void because (1) Great American’s pollution insurance policy was a marine insurance contract subject to the doctrine of uberrimae fidei, and Signal’s failure to disclose that the dry dock had deteriorated and that repairs recommended over several years had not been made violated its duty of utmost good faith under that doctrine, and (2) Signal materially misrepresented the dry dock’s condition when it applied for coverage from MSI.

Background Signal is a marine construction firm involved principally in building and repairing ocean-going structures such as offshore 28 June 27, 2016 / INSURANCE ADVOCATE

drilling rigs, platforms, and barges. In 2003, Signal purchased six facilities—two in Mississippi and four in Texas—for use in its business of repairing, upgrading, and converting offshore drilling rigs. One of the Texas facilities was a dockyard in Port Arthur, Texas. In acquiring that facility, Signal assumed an existing lease of a dry dock (“the dry dock”) located along the Sabine– Neches Waterway near the Gulf of Mexico. The dry dock was built in 1944 at the direction of the United States Navy to repair Navy ships. In early 2005, Signal accepted an offer from the lessor to purchase the dry dock, which Signal had been using in its operations since it assumed the lease.

Throughout its lease and ownership of the dry dock, Signal received a number of reports on the dry dock’s deteriorated condition. Signal never replaced the dry dock’s pontoons or pontoon decks. Instead, Signal continued to use inserts and doublers to patch holes in the decks. In 2009, Signal decided to implement the seven-pontoon configuration by removing Pontoon H. On August 20, 2009, it attempted to remove that pontoon, but during that procedure the entire dry dock sank.

Shortly after the sinking, Signal notified the Texas General Land Office (“GLO”), which regulates pollution affecting Texas shoreline waters, about what had occurred.

In September 2009, the GLO advised Signal to “initiate immediate action to recover the…dry dock from Texas coastal waters.”

Removal and cleanup efforts were not completed until March 2012 and resulted in $12,395,026 in costs.

The Insurance Policies Covering the Dry Dock Signal had obtained five insurance policies that insured against risks related to the dry dock at the time of its sinking: (1) a marine general liability policy issued

by Fireman’s Fund; (2) a marine excess liability policy issued by Fireman’s Fund; (3)

Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant.

Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide.

The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http:// shop.americanbar.org/eBus/Store/Pro ductDetails.aspx?productId=214624, or 800-285-2221 which is presently available.

Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

a pollution policy issued by Great American (the “Pollution Policy”); (4) a primary property insurance policy (the “PPI Policy”) issued by Westchester Surplus Lines Insurance Company

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[ ON MY RADAR ] (“Westchester”); and (5) an excess property insurance policy issued by MSI, which provided coverage in excess of the PPI Policy (the “EPI Policy”). Only the Great American Pollution Policy and the MSI EPI Policy are at issue here.

Great American first underwrote the Pollution Policy in 2004 and renewed it annually through 2009. To obtain the renewal of the policy for 2009, Signal completed and submitted Great American’s standard “Vessel Pollution Liability Application” along with a “Schedule of Vessels,” which included the dry dock. To apply for the policy, Signal submitted its “2009–2010 Property Insurance Submission.” This document included a “Statement of Values” that described the dry dock’s value as $13.6 million and the 2009 Heller Report, but it did not include other information from experts suggesting that the dry dock was in need of repair and was valueless.

Discussion Admiralty Jurisdiction and the Doctrine of Uberrimae Fidei Great American argues—and the district court concluded—that the Pollution Policy is void under the maritime doctrine of uberrimae fidei. For the doctrine to apply, Fireman’s Fund’s suit against Great American must be sustainable under the court’s admiralty jurisdiction.

Under federal law, a marine insurance contract is subject to the federal maritime doctrine of uberrimae fidei, or utmost good faith. Under the doctrine, the party seeking insurance is required to disclose all circumstances known to it which materially affect the risk. Thus, the insured is bound, although no inquiry be made, to disclose every fact within his knowledge that is material to the risk. The standard for disclosure is an objective one; that is, whether a reasonable person in the insured’s position would know that the particular fact is material.

With respect to the duty of disclosing all material facts, the obligation is one of uberrimae fidei. The duty of communication, indeed, is independent of the intention, and is violated by the fact of concealment even where there is no design to deceive.

Therefore, the primary object of the Pollution Policy’s coverage of the dry dock was to insure against the risk of liability for pollutants emitted during Signal’s ship repair and maintenance operations there. Insurance policies protecting against such risks have long been considered marine in nature.

Signal Violated its Duty of Utmost Good Faith by Failing to Disclose the Dry Dock’s Condition Signal breached its duty to Great American and no genuine disputes of fact exist as to either the materiality of Signal’s nondisclosures or Great American’s reliance.

Signal’s insurance broker submitted only Great American’s standard “Vessel Pollution Liability Application” along with a “Schedule of Vessels,” which listed the dry dock. It appears that the only information in those materials related to the dry dock’s condition was that it was built in 1945, that it was constructed from steel, and that its gross tonnage was less than 27,000 tons; neither Signal nor Fireman’s Fund has argued otherwise. Signal did not provide any surveys to Great American when it applied for coverage for the dry dock.

Notwithstanding the paucity of relevant information furnished by Signal to Great American, it is undisputed that by 2009 Signal had in its possession numerous surveys and reports concluding that the dry dock had substantially deteriorated and that necessary long-term repairs were not being made. At least one survey estimated that the dry dock’s value was “below zero.” Nevertheless, Signal did not disclose this information to Great American.

This undisclosed information was clearly material—that is, it “would have influenced the judgment of a reasonable and prudent underwriter.” If disclosed, this information would have raised significant concerns about the likelihood of pollutant emissions from the dry dock.

The underwriter’s testimony established that, in agreeing to underwrite the policy, she was acting on the understanding that Signal was complying with its duty of utmost good faith. She testified as follows: “If the insured had information that could materially affect our policy, it would be their obligation to furnish us with that information…. [F]or example, if you were to read a survey that said that you had a vessel that was about ready to collapse or something like that, that would be something that you should bring to the attention of your broker, who would then bring it to our attention.”

The appellate court concluded that Signal breached its duty of utmost good faith by failing to disclose information about the dry dock’s condition to Great American.

Because this information was both material

and relied upon, Great American is entitled to void the Pollution Policy.

Material Misrepresentation Under Mississippi Common Law If the applicant for insurance undertakes to make a positive statement of a fact, if it be material to the risk, such fact must be true. It is not sufficient that he believes it true, but it must be so in fact, or the policy will be avoided, provided, always, that the misstatement be about a material matter.

Because there is no genuine dispute that Signal induced MSI to underwrite the EPI Policy by materially misrepresenting the dry dock’s condition when it applied for coverage, the district court correctly held that MSI was entitled to void the EPI Policy under Mississippi law. Consequently, Fireman’s Fund may not succeed on its claim for equitable contribution against MSI that it was granted on summary judgment below, as the validity of the EPI policy is a prerequisite to such a claim.

Great American’s Pollution Policy is a marine insurance contract and [that] Great American was entitled to void the policy under the doctrine of uberrimae fidei due to Signal’s failure to disclose material information indicating that the dry dock was in a deteriorated condition and that recommended long-term repairs were not being made. MSI was entitled to void the EPI Policy under Mississippi law because Signal materially misrepresented the dry dock’s condition when it disclosed to MSI only reports reflecting positively on the dry dock, while failing to disclose numerous other reports indicating that the dry dock was in a dilapidated state and nearing the end of its useful life.

Zalma Opinion Although people applying for insurance believe they are only obligated to answer questions posed to them on an application, if they are applying for a marine insurance policy subject to the Admiralty jurisdiction of a federal court, the potential insured is obligated to advise the insurer of material facts even if not asked. Signal knew the dry dock was valueless and at a risk of sinking and did not disclose material facts to the insurer that deceived the insurer and allowed it to cause the policy to be void.[IA]

www.insurance-advocate.com INSURANCE ADVOCATE / June 27, 2016 29

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I N S U R A N C E A D V O C AT E - 2 5 Y E A R S A G O

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[ COURTSIDE ]

L AW R E N C E R O G A K

Plaintiff’s Failure to File Note of Issue After 90-Day Notice Sinks Personal Injury Suit

Lawrence N. ("Larry") Rogak has been practicing insurance law since 1981.

He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations.

Lawrence N. Rogak LLC is listed in Best's Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers.

A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

Bender v Autism Speaks, Inc. Plaintiff tripped and fell on a public boardwalk during a charity walk for autism. She sued the autism charity for failing to provide a safe boardwalk. The suit was dismissed for failing to file a Note of Issue after defendant served a 90-day notice. Plaintiff moved to restore the suit which was granted by Supreme Court. But the Appellate Division reversed, and dismissed the suit for failure to provide an acceptable excuse for not filing the Note of Issue.—LNR uIn an action to recover damages for personal injuries, etc., the defendant appeals from an order of the Supreme

J U S T

On October 4, 2009, the plaintiff Margaret Bender allegedly was injured when she fell on the boardwalk at Jones Beach State Park during a charity walk organized by the defendant, Autism Speaks, Inc. The injured plaintiff commenced this action against the defendant in February 2011.

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[ COURTSIDE ] Court, Nassau County (Janowitz, J.) which granted the plaintiffs’ motion to vacate the dismissal of the action pursuant to CPLR 3216 and to restore the action to the active calendar. ORDERED that the order is reversed, on the facts and in the exercise of discretion, with costs, and the plaintiffs’ motion to vacate the dismissal of the action pursuant to CPLR 3216 and to restore the action to the active calendar is denied.

On October 4, 2009, the plaintiff Margaret Bender allegedly was injured when she fell on the boardwalk at Jones Beach State Park during a charity walk organized by the defendant, Autism Speaks, Inc. The injured plaintiff commenced this action against the defendant in February 2011. In their bill of particulars, the plaintiffs alleged that there was a piece of wood missing from the boardwalk, which created a tripping hazard, and that the defendant was negligent in failing to properly observe and approve the area of the boardwalk where the event took place.

In a certification order dated March 15, 2013, the Supreme Court directed the plaintiffs to file a note of issue within 90 days, and warned that the action would be deemed dismissed without further order of the court if the plaintiffs failed to comply with that directive. This order had the same effect as a valid 90-day notice pursuant to CPLR 3216 (see Dai Mang Kim v Hwak Yung Kim, 118 AD3d 661; Bhatti v Empire Realty Assoc., Inc., 101 AD3d 1066, 1067; Stallone v Richard, 95 AD3d 875, 876). Counsel for the plaintiffs signed the order, acknowledging receipt thereof.

Having received a 90-day notice, the plaintiffs were required either to serve and file a timely note of issue or to move pursuant to CPLR 2004, prior to the default date, to extend the time within which to serve and file a note of issue (see Fenner v County of Nassau, 80 AD3d 555). The plaintiffs did neither, and the action was dismissed pursuant to CPLR 3216 (see Bhatti v Empire Realty Assoc., Inc., 101 AD3d at 1067).

By notice of motion dated December 31, 2014, the plaintiffs moved, in effect, to vacate the dismissal of the action pursuant to CPLR 3216 and to restore the action to the active calendar. To vacate the dismissal of the action pursuant to CPLR 3216, the plaintiffs were required to demonstrate a justifiable excuse for their failure to comply with the certification

Furthermore, the plaintiffs failed to submit proof of a potentially meritorious cause of action.

order and the existence of a potentially meritorious cause of action (see CPLR 3216[e]; Baczkowski v Collins Constr.

Co., 89 NY2d 499, 503; Dai Mang Kim v Hwak Yung Kim, 118 AD3d 661).

In an attorney affirmation submitted in support of the motion, the plaintiffs’ counsel cited law office failure, in that the plaintiffs’ counsel gave the certification order to an employee of his firm, whose employment was later terminated, and the certification order could not be found in the file or on the desk of the former employee. The plaintiffs’ counsel also noted that his former law firm ceased operation, and he formed a new law firm.

The claim of law office failure was conclusory and unsubstantiated and, under the circumstances presented, did not constitute a reasonable excuse for the default and the delay in moving, in effect, to vacate the dismissal of the action pursuant to CPLR 3216 and to restore the action to the active calendar (see Vitolo v Suarez, 130 AD3d 610; Eastern Sav. Bank, FSB v Charles, 103 AD3d 683, 684; Star Indus., Inc. v Innovative Beverages, Inc., 55 AD3d 903, 904).

Furthermore, the plaintiffs failed to submit proof of a potentially meritorious cause of action. The injured plaintiff, in her deposition testimony, acknowledged that she did not know what caused her to fall and relied on hearsay to surmise as to what caused her to fall (see Viviano v KeyCorp, 128 AD3d 811).

Accordingly, the Supreme Court improvidently exercised its discretion in granting the plaintiffs’ motion, in effect, to vacate the dismissal of the action pursuant to CPLR 3216 and to restore the action to the active calendar.

Comment: I suspect that the lack of merit of the suit was the primary factor in dismissing this suit, because the lawyer’s excuse here is actually one of the better ones I have encountered.–LNR [IA] 2016 NY Slip Op 04010 Decided on May 25, 2016 Appellate Division, Second Department

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[ GUEST EDITORIAL ]

MARTIN KOLES

WC: No Reforms from Albany uOnce again, New York State’s Legislative session ended without reform of the coercive and anti-competitive practices of the New York State Insurance Fund (NYSIF). As a director and former president of PIA and executive board member of CIBGNY, I can attest that the associations and their member agents and brokers across the state have long fought to level the playing field, originating and supporting the following measures this session: • We supported a bill that would eliminate a 30-day notice requirement imposed on employers with policies in the New York State Insurance Fund when they want to cancel or move their policy from the NYSIF, a penalty that does not apply to policyholders of private insurers.

• We supported the elimination of the NYSIF’s aggressive short-rate penalty when a business cancels coverage or moves a policy mid-term out of the Fund to a standard insurance company.

NYSIF’s 30-day Notice Requirement The 30-day notice requirement restricts the ability of New York State businesses to move their workers’ compensation policies to more affordable and less restrictive insurance carriers. Most businesses prefer to place their coverage with private insurers as opposed to the NYSIF.

NYSIF cancellation rules NYSIF rules provide that a policyholder may request cancellation of a policy if he or she is no longer required by law to secure coverage, or if one wishes to secure coverage with another carrier. In either instance, the policyholder must submit a written request signed by the owner, or corporate officer, or authorized representative, and must include the reason for cancellation.

In practice, when NYSIF receives notice of intent to cancel, it will cancel the policy 30 days from the postmark or requested cancellation date, whichever is later. NYSIF quickly notifies all certificate holders of the 34 June 27, 2016 / INSURANCE ADVOCATE

No wonder the public has lost faith that its New York government will act in its interest. If our representatives won’t pass these reasonable, common-sense measures, what will they get done?

pending cancellation even though you only advised them of your intent to look for a new insurance company.

NYSIF applies a front-loaded, shortrate premium penalty when a policyholder requests cancellation on the anniversary date with fewer than 30 days’ notice, when the policyholder requests cancellation on a date that is different from the anniversary date, or when the policy is canceled for nonpayment.

Further, the NYSIF is not required to write a policy for any business that is owned, or controlled by, any person who, directly or indirectly, owned or controlled a business that owed NYSIF premium at the time of cancellation. Nor is the Fund required to write a policy for any person who is, or who was at the time of cancellation, the president, vice president, secretary or treasurer of an employer that owes NYSIF premium until the billed premium on the canceled policy is paid in full. This applies even if applying for insurance for a completely different business entity that happens to have any common ownership or executive management.

There seems to be general agreement among the insurance industry agent and brokers and New York’s business owners that these inequities and practices are unfair.

So, why does common-sense legislation to address this not move forward?

Because the NYSIF makes a substantial profit year after year. The state budget takes these funds from the reserves of the

Martin Koles is an active advocate in the agent and broker trade associations. He is a past president of the Professional Insurance Agents of New York and a current executive board member of the Council of Insurance Brokers of Greater New York. He is a principal at, M. Koles & Associates LLC, Forest Hills, NY specializing in coverage for diplomats, the entertainment industry, affordable housing, and the transportation dispatch industries.

NYSIF to cover the state operating expenses. It has been reported that the NYSIF has transferred $2.3 billion from its surplus to the State Treasury. Even if the NYSIF wasn’t constantly generating loads of excess cash, all liabilities of the Workers’ Compensation Fund are guaranteed by the state, should the Workers’ Compensation Fund become insolvent. The law guarantees that claims will never go unpaid.

No wonder the public has lost faith that its New York government will act in its interest. If our representatives won’t pass these reasonable, common-sense measures, what will they get done?[IA]

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