Vol. 129 No. 19 | November 26, 2018
IFNY Honors Beale, Lanning Photo L-R: IFNY President Nick Pearson; Mary Lanning, 2018 IFNY Public Service Award Recipient and President of Yes!Solutions, Inc.; Dame Inga Beale, 2018 IFNY Free Enterprise Award Recipient and former CEO, Lloyd’s of London; and IFNY Chairman Lance Albright, QBE North America
Big Gains & Big Bets in the Independent Insurance Channel PAGE 14
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Contents
16 IFNY Honors Beale, Lanning 4 Foreword: IFNY Awardees’ New “Club” and a Look at Corporate Citizenship Steve Acunto, Publisher 6
HR Update: What is Your Distracted Driving Policy? Alfred T. DeMarie
8 Guest Article: Trends in the Marketing and Distribution of Life Insurance Jeff Root 12 Guest Article: Insurance Agents Can Weather Radical
Change by Becoming ‘Discussion Partners’ to Their Clients Troy Korsgaden
14 Trends: Big Gains & Big Bets in the Independent Insurance Channel 24 On My Radar: Agent Who Kept Premium Owed to Zurich,
Loses at Ninth Circuit
Barry Zalma
26
Looking Back: November 20, 1993
28 Courtside: If Named Insured Dies, Coverage is Limited
to Spouse and Estate Representative info@insurance-advocate.com www.insurance-advocate.com
Lawrence Rogak
30 In the News: Arthur J. Gallagher & Co. Recognized as a
“World’s Best Employer”
[ FOREWORD ]
STEVE ACUNTO
IFNY Awardees’ New “Club” and a Look at Corporate Citizenship uThe recent IFNY Luncheon was a 10-rounder for the “Old Boys Club,” as the industry used to be called, as women won all of IFNY’s awards for 2018. Now, how to compliment the winners and not run amok of accepted politically correct guidelines – most of which I do find properly correct. Inga Beale, former CEO of Lloyd’s of London, who is disarmingly elegant, but, more important, an amazing force for social awareness and progress at the institution has a fresh and upbeat presence. To be sure, I have referred to men as elegant and disarming, so it’s OK. She is both, and a lot more. Inga deservedly received the Free Enterprise Award, the first woman ever in IFNY’s 104 years. Mary Lanning, a most devoted, compassionate and disarmingly gracious advocate for faith, hope and charity – one who puts these tenets into action every day in concrete ways – received IFNY’s Public Service Award and brought the 2018 IFNY Interns with her to be introduced to the insurance leaders their – prospective employers? – and to applaud their menMary Lanning tor. Most deserved, as well! The keynote speaker was Maria T. Vullo, Superintendent of the New York State Department of Financial Services, who pleasantly and brightly went off script and showed off her Mt. St. Vincent graduate’s rhetorical ease and focus. The College’s President, Chuck Flynn, was present, by the way. She extemp’ed about her progress as a professional woman and about the workplace itself. It was far more compelling and satisfying than a dry regulatory rundown. My compliments to these women and to the good corporate citizens who selected them on their merits.… Speaking of good Supt. Vullo corporate citizens, Applied Underwriters Chairman Steve Menzies just introduced an amazing new plan for the giant WC insurer’s operational center in Omaha, that includes a totally environmentally responsible campus. The A+ rated national workers’ compensation insurer unveiled plans for Heartwood Preserve, one of the largest urban developments in the United States. The development is located near the center of Omaha on 500 acres of long unused farmland near Boys Town. The property will house the Company’s 800 employees and will have top retail, commercial, varied residential and recreational facilities on a re-imagined landscape that includes miles of trails, large open spaces and thousands of newly planted trees. The facility will feature vistas and pathways that demonstrate great care for the quality of life on the property. Menzies described the project as an investment by Applied in the daily experience of its staff. Menzies told us: “To all of us at Applied Underwriters, Heartwood Preserve is a way of saying ‘thank you’ to our neighbors, our friends, our staff and our fellow businesses that advance the economy of Omaha. This city has been good to us, from the exceptional talent and devotion of our staff here – reflecting a strong work ethic - to the cooperation of the community’s leaders, the regulators, and friends like Warren Buffet, who invested in Applied seven years after we moved here. Heartwood Preserve’s very name”, he emphasizes, “expresses the great importance the designers place upon the environment and the preservation of natural characteristics. Proper, circumspect development is at the crux of respect for this good earth and, by extension, respect for those with whom we share it. That’s why our first working name for the project, Heartwood Park, became Heartwood Preserve, with all that the word ‘Preserve’ implies: reverence for nature, proper stewardship of its bounty, and conservation of its beauty as an expression of the divine,” Menzies stated. Powerful words, powerfully articulated on a vacant, windswept prairie plain, by a solid corporate citizen. SA 4 November 26, 2018 / INSURANCE ADVOCATE
S I N C E
1 8 8 9
VOLUME 129 NUMBER 19 NOVEMBER 26, 2018
EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Jamie Deapo Alfred T. DeMaria Sari Gabay Lawrence N. Rogak N. Stephen Ruchman Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Gina Marie Balog 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x113 circulation@cinn.com PUBLISHED BY CINN Global Initiatives P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | info@cinn.com www.cinn.com President and CEO Steve Acunto
CINN GROUP
INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in January, July, August, and December by CINN ESR, Inc., P.O. Box 9001, Mt. Vernon, NY 10552. Periodical postage pending at Greenwich, CT and additional mailing offices. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $135.00. TO ORDER Call 914-966-3180, email: circulation@cinn.com or write: Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2018. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Office.
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[ HR UPDATE ]
ALFRED T. D E MARIA
What Is Your Distracted Driving Policy? uWith the pervasiveness of cell phones, distracted driving now clearly includes entering phone numbers or talking on a cell phone (even hands-free), texting, e-mailing, etc. Yet, most insurance industry employers do not have a “distracted driving” policy, but rather, have just a hands-free mobile device use policy, if they have a policy at all. As more and more insurance industry jobs require outofoffice jobs including cars, it is imperative to pay attention to liabilityreducing policies. Cell Phone Distractions Are Different Cell phone usage and texting are verifiable. When an accident occurs, records exist that show whether a driver was using a cell phone or not. This can mean trouble for the user’s employer if the employee was conducting work on the cell phone, or driving for work, regardless of who owns the car or the phone. Advice For Cell Phone Use With the advent of the plaintiffs’ bar taking cases against employers, most
…most insurance industry employers do not have a “distracted driving” policy, but rather, have just a hands-free mobile device use policy, if they have a policy at all.
companies recognize that they should have a complete distracted driving policy. It should be broad enough to cover all forms of distracted driving. Enforceability Most importantly, the policy should be practical and enforceable. What is “practical and enforceable” may vary by type of workplace. At a minimum, you should: • Require employees to comply with applicable state law. • Encourage employees not to engage in any form of distracted driving. • Offer basic alternatives like “pull over” or “wait until you get back to the office.”
BARRY ZALMA, INC. 4441 Sepulveda Blvd., Culver City, CA 90230-4847 www.zalma.com | zalma@zalma.com 310-390-4455 | fax: 310-391-5614 | http://zalma.com/blog
Mr. Zalma recently published on Amazon.com with links at the Zalma Books site, with the following: Non Fiction books: • “Random Thoughts on Insurance • “Insurance Fraud & Weapons to Defeat Volumes IV and V: Digests from Barry Insurance Fraud” In Two Volumes Zalma’s Blog: ‘Zalma on Insurance’” • “The Compact Book on Adjusting Fiction: Liability Claims: A Handbook for the • “HEADS I WIN, TAILS YOU LOSE” Liability Claims Adjuster” • “Candy and Abel: Murder for • “The Compact Book on Adjusting Insurance Money” Property Claims” • “Ethics for the Insurance Professional” • “Murder And Insurance Fraud Don’t Mix” • “Rescission of Insurance” • “Murder & Old Lace” • “The Insurance Examination Under Oath” 6 November 26, 2018 / INSURANCE ADVOCATE
Alfred T. DeMaria is a Senior Partner at Clifton Budd & DeMaria, LLP and is recognized as one of the preeminent management labor attorneys in the field. He has extensive experience in all areas of employment law, including advice on avoiding liability under disability, race, gender, age and related anti bias laws. Mr. DeMaria advises on compliance with all federal, state and local laws governing the employment relationship, including the defense of lawsuits brought by employees against the companies that employ them. Prior to his work at Clifton Budd & DeMaria, LLP, he served as a trial attorney with the National Labor Relations Board.
The worst possible scenario is an employer who sets a very high bar, but fails to enforce it and then has an employee who injures someone. In that case, the employer’s policy may hurt more than it helps.
• Tell employees that you do not expect the employee to engage in work while operating a vehicle. Also, decide what level of compliance you are ready to enforce. The worst policy is one that says “never ever engage in any form of distracted driving or you will be terminated immediately.” As a practical matter, some form of distracted driving is inevitable and immediate termination may not be the answer. The worst possible scenario is an employer who sets a very high bar, but fails to enforce it and then has an employee who injures someone. In that case, the employer’s policy may hurt more than it helps. The solution is to develop a policy that works for your industry, your company and your drivers and that you can enforce as a practical matter.[IA]
A fresh take on insurance. Follow TGFI on social media and become a part of this growing industry effort to help our customers consider the role insurance plays in their lives and make more informed decisions about their finanical security. Visit www.thankgoodnessforinsurance.org for more information.
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[ GUEST ARTICLE ]
JEFF RO OT
Trends in the Marketing and Distribution of Life Insurance uInsureTech has been around for years with 100’s of millions of dollars being pumped into these technology companies and there hasn’t been a dent in life insurance distribution. Life insurance companies are so focused on short term sales targets, that it’s stunting long term innovation. They’re are not adopting technology as fast as vendors are building it and they’re certainly not building products as fast as markets are being developed. As a BGA on the front lines of the digital life insurance agent movement, we believe it’s going to be a while before there’s any big changes to life insurance distribution.
When carriers initially do integrate, they have to work on tightening/loosening up their LexisNexis underwriting and it takes some time to get it right. This leaves the agents in the field getting inconsistent declines/approvals.
Jeff is the founder of Guaranteed Issue Life where they help individuals secure the best life insurance rates possible. Representing over 30 companies, they are licenced in every state. Jeff is also the author of The Digital Life Insurance Agent and host of the Modern Life Insurance Selling Podcast.
WHAT’S HAPPENING NOW
Innovation is happening through APIs. In other words, connecting systems together. It’s not the life insurance companies innovating, they’re simply connecting with other technologies. Even with these connections, there hasn’t been any big innovations to life insurance distribution because of new technologies. Life insurance companies are slowly adopting tech. When they do adopt tech, it takes them some time to get it right. Take LexisNexis for example - an integration being adopted by many life insurance companies. We thought this would speed up the underwriting process, but it really just added another layer to underwriting and didn’t really cut any underwriting time out. When carriers initially do integrate, they have to work on tightening/loosening up their LexisNexis underwriting and it takes some time to get it right. This leaves the agents in the field getting inconsistent declines/approvals. All this to say, even with carriers adopting new technology - they’re still learning how to use it. 8 November 26, 2018 / INSURANCE ADVOCATE
On the distribution side of things, we’re seeing a consolidation industry-wide. There are a declining number of life insurance companies, a declining number of BGA’s and a declining number of agents. To many that are on the distribution side of the life insurance industry, it appears that some disruption in life insurance is happening based on these facts, but correlation does not imply causation.
IS LIFE INSURANCE DISTRIBUTION FEELING ANY DISRUPTION?
No. Beyond more consumers researching online and buying over the phone, there really hasn’t been any life insurance disruption when it comes to distribution. We hear about all this funding for direct to consumer life insurance startups CONTINUED ON PAGE 10
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[ GUEST ARTICLE ] CONTINUED FROM PAGE 8
that are going to simplify the way life insurance is purchased. For the most part, these companies are: (1) Partnering with a life insurance company who is allowing them to API into their system for decisions. 2 examples: LadderLife ($54 million in funding) and GetEthos ($11 million in funding). LadderLife is writing their policies through Fidelity Security Life and Ethos is writing theirs through Assurity Life. What we know is there’s a very small percentage that actually start the process and then get approved (low single digit percentage). A big portion of the sales are happening on those that abandon the process and have communication with an agent, which I think is very telling that consumers still need the help of an agent. (2) An agency selling life insurance products that are already openly available. 2 examples: PolicyGenius ($51 million in funding) and HealthIQ ($81 million in funding). With both of these well funded agencies, licensed life insurance agents are helping the consumers after they complete their online requests. What all of these direct to consumer startups have are a beautiful user experience and application process. Combined, they’re only actually helping a very small segment of the market. With that said, ALL of these companies are advertising in the same channels as everyone else. None of these well-funded startups in the industry are getting NEW market share and the funding rounds are mostly going to marketing. Very relevant to this is data we’ve collected internally regarding the amount of consumers that will complete an entire application online, AFTER speaking with a life insurance agent. One of the biggest boosts to DigitalBGA happened after we developed a piece of software that let the consumer self-complete the application online. We’ve had over a 40% completion rate on the links generated within our software turn into complete applications - including social security number, driver’s license number and even scheduling the exam. This tells us that consumers 10 November 26, 2018 / INSURANCE ADVOCATE
Add to that, the products that are being built are being advised by those in the business without any “in the trenches” life insurance direct sales experiences and certainly not any digital marketing experience and data to back it up.
are willing to engage with “buy online” products, they just don’t trust them yet. The key control for this statistic is that an agent spoke with the consumer first. Trust will never leave the sales process of life insurance. All the InsureTech startups marketing life insurance products direct to consumer are having low completion rates because of trust and the lack of a disruptive process.
HOW CAN LIFE INSURANCE DISTRIBUTION BE IMPROVED?
That brings us to a bottleneck in distribution. The lack of disruptive products being designed. All of the simplified issue, no exam, and guaranteed issue products can and will be done much better in the future. The current process for life insurance is too long and cumbersome. Back in 2010, HSBC had it right with their simplified issue term to $500,000 with 14 health questions and consumers could apply online or with an agent and get an instant decision. There hasn’t been that HSBC moment since 2010. One of the reasons is life insurance companies won’t build these products without committed production - which is a catch 22 not knowing how the market will respond. Add to that, the products that are being built are being advised by those in the business without any “in the trenches” life insurance direct sales experiences and certainly not any digital marketing experience and data to back it up. We’ve seen several direct to consumer life insurance products come to market that agents can distribute and each of them had a short shelf life because they weren’t designed properly. There hasn’t been a disruptive nonmed life insurance product because everyone is doing the same thing - using
iPipeline’s iGo or even FireLight - both of those processes won’t facilitate nonmed life insurance disruption. A life insurance company needs to build the technology OR a tech startup needs to take the reins so they can be nimble with making changes and optimizing the process as they receive data. Using a 3rd party won’t allow for innovation. To make a dent in distribution, the industry should develop products that are more convenient. This means no exam, a simple application process and even let consumers apply online. And let every contracted life insurance agent have access to walk their clients through it. Our data has shown that consumers want convenience and are willing to pay for it. The #1 misconception is that price is the determinant factor for consumers who purchase life insurance. Price does not sell more life insurance. Convenience does. According to data collected from NinjaQuoter - a life insurance quoting software where consumers view instant life insurance quotes from multiple carriers with the first results being the cheapest and gradually getting more expensive - consumers chose on average the carrier in the 3rd-5th position, not the cheapest. Those results that consumers are choosing have product names that say “no exam” or “express”. This is very telling that price isn’t the most important factor. On top of that, consumers are quoting themselves much higher premiums online than agents are actually selling them. When we combine the average annual premium that NinjaQuoter shows us from various sites and compare them to DigitalBGA’s number of what actually went in force from that CONTINUED ON PAGE 25
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[ GUEST OPINION ]
TROY KORSGADEN
Insurance Agents Can Weather Radical Change by Becoming ‘Discussion Partners’ to Their Clients uToday the insurance industry is going through a revolution and too many carriers, brokers, agents and team members are failing to keep up with the rapid pace of change. Customers have grown accustomed to convenience, a plethora of information and unending choices in whatever they buy, and this applies to the purchase of insurance products and services, too. People expect it to be easy, efficient and understandable. The insurance industry as a whole is miles behind in the race to deliver unrivaled service to customers. To keep up with the radical transformation, insurance professionals must earn the trust of existing clients and new prospects and become their gateway to everything related to insurance and financial services. The path to this transformation is for the insurance agent or representative to become a “discussion partner” — a trusted advisor who guides customers toward optimum financial decisions by offering them every possible insurance and financial services product while disclosing exactly how his or her superior advice works. The goal is to convert everyone into discussion partner clients who do not want to be sold or told; rather, they want a consultant who will advise them on the best products, protection and asset-accumulation guidance they need for their families. Looking closely at the not-too-distant future, here are just a few ways the insurance industry will evolve: • There will be total transparency about coverages and pricing. Customers will know all the details when they purchase property and casualty products, financial services products, life insurance products and more, in much the same way financial services and securities are sold today. 12 November 26, 2018 / INSURANCE ADVOCATE
The insurance industry as a whole is miles behind in the race to deliver unrivaled service to customers. • There will be a convergence of distribution models. Local storefronts will welcome the use of the omnichannel experience, such as digital, after-hours 800-number call centers; claims service; and 24-hour customer self-service through technology or telephony. • Technology will streamline processes. The local storefront housing brokers/agents and their teams will still provide service and sales at the point of personal interaction, but they will also leverage the power of digital technology and call centers. • C ollaboration will become commonplace. Open architecture — a financial institution’s ability to offer clients both proprietary and external products and services — in both technology and service will force the insurance industry not only to adapt, but also to move quickly toward radical transformation. The key to agents’ survival is they must provide unrivaled service at the highest level. Nothing else will be acceptable if the local insurance provider is going to be a part of the consumer’s purchasing and reliance on service in the new world. So how can carriers, brokers, agents and team members evolve to the “discussion partner” model of unrivaled service? Here are eight strategies for making the transition: 1. Focus everything you do on the customer. The customer is at the apex and the center of every deci-
Troy Korsgaden is an international consultant to leading insurance carriers and agencies, speaker, trainer and author of six books, including the recently released: Discussion Partner: A Radical Transformation to Unrivaled Service for Insurance Customers (Baxter Press, Friendswood, Texas, August, 2018.) Korsgaden is president of Korsgaden International in Visalia, CA. As a consultant, he works with large carriers, in property and casualty and financial services. Korsgaden also serves as a subject-matter expert in area of technology and how it applies in the backroom for carriers as well as their distribution. He can be reached at troy@korsgaden.com.
sion, every system and/or process. Agents must be hyper-focused on meeting our customers’ needs — everything they desire and have every right to expect. This begins with providing unrivaled service as a discussion partner. 2. Create a team of experts. This is usually referred to as specialization, teaming or collaboration of experts. Agents must build a larger and stronger local team through hiring, mergers and acquisitions and strategic relationships. 3. Collaborate with expertise partners. Not every broker or exclusive agent is going to have access to every market today. In the future, with open architecture, everyone will have a view into the competition’s coverages and rates. Until then, creating collaborative arrangements is important. If clients do need and want specialized products and services, referring them to someone else will not be prudent anymore. Agents must have relationships with experts in many areas. CONTINUED ON PAGE 30
WE BELIEVE
independent insurance agents serve customers best with trusted advice and the right coverage options to protect what matters most.
DO YOU BELIEVE THIS TOO? JOIN US. Contact Jamie Deapo jdeapo@biginy.org 800.962.7950 ext. 232 BigINY.org/join INSURANCE ADVOCATE / November 26, 2018 13
[ TRENDS ]
Big Gains & Big Bets in the Independent Insurance Channel Sustained Growth Pushes Acquisitions & Insuretech Investments uIndependent insurance agents and brokers can celebrate a four-year growth trend. So reports Reagan Consulting upon releasing its third-quarter Organic Growth and Profitability (OGP) study. The industry organic growth rate in Q3 was 6.1% -- tied for the highest growth rate in the last 15 quarters. “This strong Q3 performance is another confidence builder for the industry,” says Harrison Brooks, vice president of the firm. All lines of business contributed to the strongest nine-month growth performance since September 2013. Commercial lines led industry growth at 6.8%, surpassing group benefits growth for the first time since 2014. Group benefits continued strong growth at 6.3% and personal lines - at 3.8% growth posted its highest Q3 growth rate since Reagan began the OGP survey in 2008. Brokers expect strong growth throughout 2018, estimating a full-year
Source: Reagan Consulting OGP (ReaganConsulting.com)
“...Q3 reporting brokers and agents did experience an encouraging uptick in Q3 operating margins, sparking hope that the recent dip in EBITDA margins “can be tempered by agencies continuing to improve their operating margins, which is the best indicator of structural profitability.” growth rate of 6.0% versus just 4.5% in 2017. “If history is any indication of future performance,” says Brooks, “strong GDP tailwinds are likely to continue to drive strong organic growth for agents and brokers.”
The strong growth performance in the last quarter has been accompanied by significant investment activity in the insurance distribution space. “Sustained organic growth and healthy industry fundamentals,” notes Brooks, “have led to some big bets being placed on both the acquisition and insuretech fronts.” Three recent acquisitions were announced at record valuations: the $6.3 billion acquisition of JLT by Marsh & McLennan; the $700-plus million acquisition of Hays Companies by Brown & Brown; and the minority investment in HUB by Altas Partners of Toronto, Ontario. Big bets have also been placed on the insurance technology front. CapitalG, Google’s investment arm, purchased a large minority stake in Applied Systems. Meanwhile, Salesforce, no longer satisfied to just be a customer relationship management tool, is aggressively pursuing new agency partnerships and is aspiring to become the industry’s next major agency management system. Despite the bullish outlook for the industry evidenced by these investments and the strong growth performance, Reagan leadership did express one note of caution around agency profitability. “It will be important to monitor EBITDA [earnings before interest, taxes, depreciation and amortization] margins, especially in larger agencies,” says Brooks. EBITDA margins declined slightly in Q3 2018 from last year, and it appears that contingent income, which dropped from 8.6% of revenue in 2017 to 8.0% of revenue in 2018, was the primary driver. The reduced spread b etween EBITDA margins and operating margins supports that conclusion. Operating margins exclude contingent income and can be managed by the agency through operating efficiencies and expense controls. Q3 reporting brokers and agents did experience an encouraging uptick in Q3 operating margins, sparking hope that the recent dip in EBITDA margins “can be tempered by agencies continuing to improve their operating margins, which is the best indicator of structural profitability,” says Brooks. Reagan Consulting has conducted its quarterly survey of agency growth CONTINUED ON PAGE 30
14 November 26, 2018 / INSURANCE ADVOCATE
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IFNY Honors Beale, Lanning 300 Gather at New York’s Historic Union League Club to Honor Inga Beale, former CEO of Lloyd’s and Mary Lanning, Public Service Leader; Supt.Vullo address audience; IFNY interns present accomplishments.
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uNearly 300 insurance leaders joined in the Insurance Federation of New York’s (IFNY) 104th Annual Award Luncheon honoring Dame Inga Beale, former CEO of Lloyd’s of London, as she received the Federation’s 2018 Free Enterprise Award. Mary Lanning, President of Yes!Solutions, Inc., ML&G Associate and Co-Vice Chair of Boys Hope Girls Hope was presented with IFNY’s 2018 Public Service Award. Superintendent of the New York State Department of Financial Services, the Hon. Maria T. Vullo, addressed the insurance, reinsurance and financial services leaders present for the event, long considered one of New York’s premier industry gatherings. During the ceremonies, held at the Union League Club in Manhattan, the Federation renewed its support for the IFNY Summer Intern Program. Working with Boys Hope Girls Hope New York and Mary Lanning, IFNY arranges for inner city high school students to visit top corporate offices where they learn the business of insurance and its many segments. Over fourty high-achieving students have already “graduated” from the program. The Free Enterprise Award’s distinguished recipients are business leaders who have advanced business, often those in the business of insuring, espousing the highest ethical principles of free enterprise for which IFNY has stood for since 1913. Recent past recipients of this prestigious award include Gregory Case, Chairman of Aon, Steve Kandarian, Chairman, President and CEO, Metlife, Inc.; Evan Greenberg, Chairman and CEO of Chubb Group; Robert Benmosche,
former President and CEO of AIG; J. Hyatt Brown, Chairman and CEO of Brown & Brown Insurance; and Donald Kramer, Chairman of ILS Capital LLC. In presenting the award to Dame Inga Beale, IFNY President Nick Pearson cited both her stewardship of Lloyd’s, a worldwide force in insurance. Plus her contributions to social justice and the public interest. Prior to Lloyd’s, Dame Beale was the Group Chief Executive Officer at Canopius, a prominent Lloyd’s managing agent, from 2012 – 2013. Dame Beale joined Zurich Insurance Group in 2008 as a member of the Group Management Board in Zurich with responsibility for Mergers & Acquisitions, Organizational Transformation and Internal Consulting, before becoming Global Chief Underwriting Officer in 2009. In 2006, she was appointed Group Chief Executive Officer of Converium in Switzerland (now part of the SCOR Group) after 14 years at GE Insurance Solutions. Dame Beale held various underwriting management roles at GE and gained experience across London, the US, and France, before becoming President of GE Frankona and Head of Continental Europe, Middle East and Africa for GE Insurance Solutions based in Germany. She began her career at the Prudential Assurance Company in London in 1982 and trained as an international treaty reinsurance underwriter. Dame Beale is also an external Board member to the CONTINUED ON PAGE 22
Opposite page photos, L-R: 1. Inga Beale, Mary Lanning; 2. Supt Vullo; 3. Lance Albright, IFNY Chairman, QBE North America; 4. Martin Schwartzman; Kashyap Saraiya; Kermitt Brooks, IFNY Director, Axa, and Michael Sheiowitz, Axa; 5. Jeffrey Silver, IFNY Director, Applied Underwriters; Inga Beale; and Steve Acunto, IFNY VP and Managing Director, CINN Group 16 November 26, 2018 / INSURANCE ADVOCATE
INSURANCE ADVOCATE / November 26, 2018 17
Photos L-R: 1. Raul Rivera, IFNY Director; Mary Griffin, President, LICONY; 2. Steve Boon, IFNY Director; Harold Lee and Sons, Inc. and Eva Chan of Harold Lee and Sons, Inc.; 3. Brian Persaud, Eugene Nunziata, Dan Maher, Jim Davis, all from ELANY; 4. Honoree Mary Lanning; Amy Feller, IFNY Director, CHUBB; 5. Honoree Mary Lanning with BHGHNY CEO, Mike McManus and the 2018 IFNY Interns, mentors and BHGHNY staff 18 November 26, 2018 / INSURANCE ADVOCATE
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Government’s Financial Services Trade and Investment Board. IFNY’s Public Service award honors an individual who has contributed meaningfully to the public good, either in the public or private sectors. IFNY, whose members distinguish themselves through community service, determined it is only fitting to honor outstanding leaders who have served New Yorkers selflessly and extraordinarily, in keeping with the ethos of the insurance industry in serving societal needs and offering security to families and businesses. In his introduction of Mary Lanning, Nick Pearson expressed the gratitude that so many felt for her exemplary service, stating, “For more than four decades, Mary has tread the halls of government and the towers of world financial institutions as a regulatory consultant and compliance advisor in the U.S. commercial insurance and financial sectors. She has done this as president of ML&G Associates, Inc., a registered lobbying and government relations firm that supports attorneys, investors, business expansion strategists, and financial product innovators that do business in the regulated global risk, insurance, and financial products marketplace. She is known for her unique personal brand of intervention and advocacy. Public and private sector clients rely on her to facilitate best outcomes in public policy development and potentially competing commercial ventures.” Mary is Co-Vice Chair at Boys Hope Girls Hope New York, an international youth development organization which leads young urban teens past their limiting Pasts through a rigorous residential college preparatory education. BHGHNY teaches them lifetime learning skills, re-shapes their expectations of themselves and the world, redirects their hopes, and builds habits and tools for a wholesome, self-directed life in and after college. Mary is the founding President of YES!Solutions, Inc., a grassroots community-building charity based in Harlem, NYC. YES!Solutions connects the needy and the broken with those who want to make a difference to the forgotten homeless and elderly, to the dying and those who care for them, to “un-owned” immigrant families, to under-nourished / under-nurtured children, to impoverished recovering ex-cons and addicts struggling to rebuild their lives, and to others who fall between the cracks of public and private services, unnoticed in their isolation. Mary’s street life is tightly intertwined with her corporate professional life. Most of her hundreds of volunteers are her business colleagues from the commercial insurance and investment industries and their families who share her simple process of bringing a little kindness to the streets. Mary, a nun and businesswoman, is a regulatory compliance advisor and a community builder. “That woman, Mary”, is her most common name on the street and in the halls of government. Superintendent Vullo set aside her remarks and used the occasion to talk about her own progress as a professional woman and as a leader in the Financial sector, thanking her parents for their values and her Alma mater, The College of Mount St. Vincent, whose President, Dr. Charles Flynn, was 22 November 26, 2018 / INSURANCE ADVOCATE
Photos: 1. Nick Pearson, IFNY President; 2. Steve Acunto, IFNY Managing Director and Vice President; 3. Cecilia Norat, Past Chairwoman and Director Emeriti
present. Her recounting of the work ethic she adopted and the fearlessness need for women to progress were warmly received.
Photos: 1. KJ Singh of Maya Insurance speaks to the IFNY Interns as Mary Lanning looks on; 2. Mary Lanning speaks to the audience about the IFNY Intern program; 3. Nick Pearson presents the 2018 IFNY Public Service Award to Mary Lanning
The Insurance Federation of New York Since 1913, the Insurance Federation of New York has been a force for communicating ideas among all sectors of the insurance industry, bringing public and private interests together for the benefit of all. The Insurance Federation of New York’s prestigious Free Enterprise Award—presented to some of history’s legendary entrepreneurs—continues to salute risk takers and leaders whose creativity and initiative has enabled the expansion of business throughout New York, across the country and around the world. In the insurance industry, it is the commitment and vision of these leaders that has created and refined the risk transfer mechanism to spur economic growth and contribute to personal financial security for countless millions. Today, the Insurance Federation of New York’s annual calendar of events brings together the “best and brightest” to ensure that industry intelligence is shared and that support for best practices in insurance business, law and regulation earns the understanding of leaders across the spectrum. This shared goal draws business executives, legislators and regulators to our Annual Luncheon, our “Breakfast with...” programs, professional seminars, and other events. We also note the establishment of the IFNY Intern Summer Program. Federation members have given most generously of their time and finances to support this program that reaches out into the community and gives highly motivated teens, from challenging backgrounds, an in-depth opportunity to learn about the insurance industry in all its facets and to consider a career in insurance. The Insurance Federation of New York is a not-for-profit New York corporation that does not engage in lobbying activities and is open to all. The IFNY Board of Directors includes the following distinguished professionals: President Nick Pearson, Insurance Consultant and Attorney; Chairman Lance J. Albright, QBE North America; Financial Vice President, Stephen Boon, Jr., Harold L. Lee & Sons, Inc.; Vice President Michael Fusco, Consultant; Vice President Douglas Hayden, Wright Public Entity; Vice President Manfred Ruskin Moscou Faltischek, P.C.; Vice President David J. Walsh, Former CEO, Amalgamated Life Insurance Company; and Vice President, Managing Director Steve Acunto, CINN. DIRECTORS: Kermitt Brooks, AXA U.S.; Michael Catina, Zurich North America; Huhnsik Chung, Stroock; Maura T. Clancy, Clancy & Clancy Brokerage, Ltd.; James Corcoran, Continental General Insurance Company; Regina Degnan, Aon; Rudy Dimmling, Alvarez Marsal; Eric R. Dinallo, The Guardian Insurance Co.; Amy L. Feller, CHUBB; Donald D. Gabay; Jason Jacobs, Baker Tilly; Howard Mills, Deloitte Services LP; Roger M. Moak, Arbitrator; Kevin Rampe, CHUBB; Raul Rivera, Former CEO, National Benefit Life Insurance Company; William M. Savino, Esq., Rivkin Radler, LLP; Francine L. Semaya, Esq., Legal and Insurance Regulatory Consultant; Wendy R. Shapss, FTI Consulting; Jeffrey A. Silver, Applied Underwriters; and Richard White, ShelterPoint Insurance Company.[IA] INSURANCE ADVOCATE / November 26, 2018 23
[ ON MY RADAR ]
BARRY Z ALMA
Agent Who Kept Premium Owed to Zurich, Loses at Ninth Circuit Agent Defrauds Insurer by Not Remitting Premium Collected uInsurance agents, by contract with insurers they represent, must place all premium collected on behalf of the insurer and place the funds in a separate trust account. Depending on the terms of the contract the agent then deducts the agreed commission and remits the remainder to the insurer. Failure to remit the premium, less the commission, is a theft or conversion of funds to which the agent had no entitlement. In Zurich American Insurance Company v. Sealink Insurance Service Corp. And Yan Sara Zhang, And Phann Gelinda Keo, Et Al., No. 17-55776, United States Court of Appeals for the Ninth Circuit (October 15, 2018) Defendants Yan Sara Zhang and Sealink Insurance Service Corporation appealed from the district court’s denial of their motion to set aside the entry of default and default judgment against them. In evaluating such a motion, an appellate court must consider three factors: 1. whether the party seeking to set aside the default engaged in culpable conduct that led to the default; 2. whether it had no meritorious defense; or 3 . whether reopening the default judgment would prejudice the other party. A finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default. The Ninth Circuit did not reach the issue of defendants’ culpable conduct because defendants’ lack of a meritorious defense was sufficient to justify the district court’s refusal to set aside the default and default judgment. Defendants have no meritorious defense to Zurich American Insurance Company’s breach of contract claim. 24 November 26, 2018 / INSURANCE ADVOCATE
The district court determined that the declaration of Zurich’s legal collection specialist and the billing statement generated by Zurich constituted proof sufficient to support Zurich’s requested damages. The defendants point to the lack of a written agreement and argue that the contract at issue does not exist. However, they do not dispute that Sealink sold insurance policies issued by Zurich in exchange for Sealink’s remittance of premiums, and there is ample evidence of an agreement governing that arrangement. Defendants offer no facts to dispute the existence of an agreement, and general objections to the existence of a contract are insufficient to satisfy the meritorious defense requirement. Defendants also lack a meritorious defense to Zurich’s breach of fiduciary duty claim. Defendants do not dispute that Sealink failed to maintain the premiums it owed Zurich in a segregated trust account as required by California Insurance Code sections 1733 and 1734. Defendants’ argument that those provisions do not provide Zurich with a cause of action is mistaken. The Ninth Circuit concluded that a civil action will lie for damages proximately resulting from a licensee’s breach of the fiduciary obligations imposed by sections 1733 and 1734. Finally, defendants fail to assert a meritorious defense to the size of the default judgment award. The district court determined that the declaration of Zurich’s legal collection specialist and the billing statement generated by Zurich constituted proof sufficient to support
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/ZalmaLi brary. 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/ProductDetails.aspx?produc tId=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.
[ ON MY RADAR ] Zurich’s requested damages. Defendants’ challenge to the sufficiency and reliability of that evidence does not amount to a meritorious defense.A mere general denial regarding the extent of the deficiency owed is not enough to justify vacating a default or default judgment. Defendants fail to offer specific facts disputing the damages amount despite being in the best position to have the accurate records required to refute Zurich’s evidence. Defendants’ assertion that they lack records substantiating the claimed amount does not amount to an allegation of “sufficient facts that, if true, would constitute a defense. The district court did not err in failing to set aside the default judgment pursuant to Federal Rules of Civil Procedure that provides for relief when a judgment is void. In contrast to the other grounds for relief a default judgment may be vacated on this ground even if the defendant lacks a meritorious defense. The defendants argued that the judgment is void due to inadequate service of process. But Zurich’s service of process satisfied the statutory requirements. Zurich’s substituted service of the summons and complaint on Zhang was proper. Zurich’s service of the summons and complaint on Sealink complied with Federal Rules of Civil Procedure. Finally, Zurich served both Zhang and Sealink with its motion to enter default judgment in accordance with the Central District of California’s Local Rules.
ZALMA OPINION
This case establishes that insurance fraud is not limited to people who are insured defrauding an insurer. In this case the insurer trusted the agents and allowed them to bind insurance with Zurich in exchange for a promise to remit premiums. Zurich was the victim of fraud by the agent and, rather than attempt a criminal prosecution for conversion, sued the agent and obtained a judgment which was upheld by the Ninth Circuit Court of Appeal. Zurich should execute on the judgment and obtain the full amount of the judgment. If not, it should seek prosecution of those who unlawfully converted Zurich’s funds to their own use. Hopefully this case will teach Zurich and other insurers to trust but verify the honesty of their agents.[IA]
GUEST ARTICLE CONTINUED FROM PAGE 10
website and there’s a big disparity. For example, there’s one very successful website in terms of the amount of consumers placing coverage inforce (over 80 inforce policies per month). NinjaQuoter shows the consumer quotes themselves $2100 of annual premium online. The average inforce policy from that website is $1300. This disparity happens with every website we track. Both of these examples are reasons why developing a low cost product isn’t necessary - yet is seems to be a race to the bottom for life insurance companies trying to get more market share. Lastly, the industry should revisit rebating laws. Everything today has a referral link. Amazon, web hosts etc. all offer their customers options to refer them other customers to generate a commission. Why is life insurance so distant from this very scalable marketing practice to pay someone for a sale? Rebating laws were made to protect competition within the industry over 100 years ago. A lot has changed since then and regulators should be focused on protecting the consumer and doing away with anti-rebating laws. This would open the door for new distribution ideas that are actually consumer focused and could encourage more people to own life insurance.
THE FUTURE
No one knows for sure what will happen to life insurance distribution in the future. There are so many x-factors like blockchain technology adoption and anti-rebating laws that could change everything. We don’t think much will change for a long time. That’s because the life insurance industry is extremely bureaucratic. Getting any sort of innovation from life insurance companies or even their distribution arms is a monumental task. Everyone has a linear way of thinking and it’s hard to get anyone to think outside the box. We’re stuck working in an industry with so many bottlenecks that we love so much. As an agency on the front lines with a
If life insurance companies stopped favoring the wellfunded or tenured life insurance executives and really partnered with those agencies experiencing a tremendous amount of growth, we believe life insurance distribution can change sooner and for the better of everyone involved. lot of real world data, there is no voice. I know the carriers have all their data and statistics, but nothing on what’s actually happening from a consumers point of view, pre-sale. If we want to help make something better it goes through a bureaucratic process and typically gets lost somewhere. One of the reasons we started our BGA is to actually be able to speak with the carriers directly and influence them. We’ve had several ideas that we’ve brought to carriers who love them, but keep pushing to hit their short term goals leaving our exciting discussions that can really make a dent in improving distribution on the backburner. I hear this from other fast growing agencies as well. If life insurance companies stopped favoring the well-funded or tenured life insurance executives and really partnered with those agencies experiencing a tremendous amount of growth, we believe life insurance distribution can change sooner and for the better of everyone involved.[IA]
Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889 www.insurance-advocate.com INSURANCE ADVOCATE / November 26, 2018 25
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[ COURTSIDE ]
LAWRENCE RO GAK
If Named Insured Dies, Coverage is Limited to Spouse and Estate Representative Sunrise Acupuncture, P.C. a/a/o Sharise Davis v Kemper Independence Ins. Co. Edited by Lawrence N. Rogak Both named insureds under an auto policy died in June 2007. Raquel Davis was named as executor of the estate. In May 2008, Raquel’s daughter, Sharise, got into an accident while driving the insured vehicle and applied for no fault benefits, which were denied by the insurer. The Court ruled for the insurer, holding that under the terms of the policy, once the insureds (husband and wife) died, only their estate representative (Raquel Davis) continued to be insured, not Raquel’s daughter.—LNR uUpon the testimony and evidence proffered at trial, the Court hereby finds in favor of defendant and dismisses the complaint. The instant action is for the payment of no-fault insurance benefits for medical treatment. The complaint alleges, in relevant part, the following: On May 16, 2008, assignor SHARISE DAVIS (Davis) was involved in an automobile accident. At the time of the instant accident, Davis was covered under an automobile insurance policy issued by defendant, which provided benefits under the New York State No-Fault Law. Davis sought treatment from plaintiff SUNRISE ACUPUNCTURE, PC. the assignee of Davis’ no-fault benefits under defendant’s policy. Plaintiff submitted claims for medical treatment provided to Davis and defendant denied them. Based on the foregoing, pursuant to the New York State No-Fault Law and the policy, plaintiff seeks judgment in the amount of $425 plus interest. On July 28, 2013 this Court (Taylor, J.) denied defendant’s motion for summary judgment and dismissal of the complaint. The Court held that defen28 November 26, 2018 / INSURANCE ADVOCATE
The parties submitted a Notice of Intention to Make Claim, which indicates that Davis made a claim to defendant for no-fault benefits arising from an accident on May 16, 2008 in which she was involved while operating the 1998 Mercury.
dant failed to submit admissible evidence in support of its claim that Davis was not an insured under the policy issued to the Albanos. Defendant appealed and the Appellate Term affirmed (Sunrise Acupuncture P.C. v Kemper Indep. Ins. Co., 50 Misc 3d 133(A) [App Term 2016] [“We sustain the denial of defendant-insurer’s motion for summary judgment. Although defendant asserted that the underlying no-fault claim is precluded by a provision of the subject insurance policy limiting coverage, upon the death of the insured, to the ‘legal representative of the deceased,’ defendant failed to tender evidentiary proof in admissible form establishing that the policy contained such a provision.”]). At trial, the parties stipulated to the admission of several documents in evidence, some of which will be discussed hereinafter. More importantly, the parties limited the Court’s inquiry to one issue, namely, whether under the instant facts defendant’s insurance policy afforded coverage to Davis. The parties submitted the insurance policy at issue (Exhibit B). Said policy was issued to Ronald and America Albano (the Albanos). According to the
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.
policy, the term began on July 24, 2007 and ended a year later. Per the declarations, the policy covered a 1998 Mercury and a 1980 Plymouth automobile. Section III of the policy governed coverage with respect to the foregoing vehicles. Specifically, the policy defined a “your covered auto,” as “any vehicle shown in the Declaration,” and “[a] ny of the following types of vehicles on the date you become the owner. . . [including] [a] private passenger auto.” The policy further defined a “family member” as “a person related to you by blood, marriage or adoption who is a resident of your household.” Per the policy, “’bodily injury,’ means bodily harm, sickness or disease, including death that result.” “’Occupying’ means in, upon, getting in, on out or off.” Part B or the Medical Payments Coverage portion of the policy defined “insured” as “[y] ou or any ‘family member’ . . . .[w]hile ‘occupying’ . . . a motor vehicle designed for use mainly on public roads.” Part B of the policy further stated that defendant “will pay reasonable expenses incurred for necessary medical . . . services because of ‘bodily injury’ . . . [c] aused by accident and . . . [s]ustained by an ‘injured.’” Section IV of the policy,
[ COURTSIDE ] titled General Policy Conditions stated that [y]our rights and duties under this policy may not be assigned without our written consent. However, if a named insured shown in the Declarations dies, coverage will be provided for . . . [t]the surviving spouse if a resident in the same household at the time of death . . . [and] [t]he legal representative of the deceased person as if a named insured shown in the Declarations . . . only with respect to . . . [t]he representative’s responsibility to maintain or use ‘your covered auto.’ The parties submitted two death certificates (Exhibit D), which indicate that the Albanos died in June 2007 and Letters Testamentary (Exhibit C), which establish that on January 7, 2008, Raquel Davis (Raquel) was appointed as the executor of Ronald Albano’s Will. The parties submitted a Notice of Intention to Make Claim, which indicates that Davis made a claim to defendant for no-fault benefits arising from an accident on May 16, 2008 in which she was involved while operating the 1998 Mercury. Lastly, the parties submitted a letter dated July 14, 2008 sent by defendant to Davis, wherein defendant denies coverage to Davis under the policy because the accident occurred after the Albanos died and the policy issued to the Albanos contains a provision that limits coverage upon the death of the named insured to the surviving spouse or legal representative of the deceased person, but only with respect to the representative’s legal responsibility to maintain or use the vehicle scheduled on the policy. The letter further stated that “since you are neither the legal representative nor surviving spouse of Ronald Albano, the policy will not provide you with coverage as an insured.” Principles of contract interpretation apply equally to insurance policies. Thus, in interpreting an insurance policy, the court must determine the rights and obligations of the parties, using the specific language of the policy itself. When the language in an insurance policy is clear and unambiguous, the interpretation of said document and the determination of the rights an obligations of the parties is a question of law to be adjudicated by the court
. However, if the language in the policy is ambiguous, the court can use extrinsic evidence to determine the intent of the parties to the policy and resolution of the rights and obligations of the parties is a question of fact, to be determined by the trier of fact. If the extrinsic evidence is conclusory, failing to equivocally resolve the ambiguity in a policy, interpretation of the policy remains a question of law for the court to decide; deciding any ambiguities against the insurer. In interpreting an insurance policy, the language of the policy, when clear and unambiguous, must be given its plain and ordinary meaning. In such a case, the policy should be construed in a way “that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.” Based on the foregoing, the Court finds that at the time of the accident, Davis was not an insured as defined by the policy issued by defendant to the Albanos. As such, Davis was never entitled to no-fault benefits under the instant policy. As noted above, when interpreting coverage pursuant to an insurance policy, we do so using contract law. Thus, when the language in an insurance policy is clear and unambiguous, the interpretation of said document and the determination of the rights an obligations of the parties thereunder is a question of law for the court. In interpreting an insurance policy, the language of the policy, when clear and unambiguous, must be given its plain and ordinary meaning, and the policy must be construed in a way that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect. Here, because it is undisputed that Davis’ accident occurred nine months after the death of the Albanos, it is clear that the demise of the Albanos triggered Section IV of the policy, rendering Section III of the policy inapplicable and limiting coverage to those persons listed under Section IV of the policy. Specifically, upon the Albanos’ death, per the policy the only insureds were a surviving spouse and generally, the Albanos’ legal representative. Given that
Raquel was appointed as Executor of Ronald Albano’s will, Raquel was the only insured under the instant policy and the only person entitled to coverage. Thus, Davis, which as per Kemper’s letter was Raquel’s daughter was neither a surviving spouse as defined by the policy or a legal representative of the Albanos. Thus, Davis was not an insured under the instant policy. Accordingly, defendant had no obligation to provide bo-fault benefits to Davis and properly denied those claims. Plaintiff ’s reliance on Section III of the instant policy to extend coverage to Davis is unavailing. While it is true that Part III of the policy defines “family member” as “a person related to you by blood, marriage or adoption who is a resident of your household,” and Part B of the policy states that defendant “will pay reasonable expenses incurred for necessary medical . . . services because of ‘bodily injury’ . . . caused by accident and . . . sustained by an ‘insured,’” Part III is simply inapplicable here since it clearly only applies while the Albanos were alive. Any other interpretation would render the limiting language in Part IV of the policy meaningless, which would violate a central tenet of contract law - that a policy must be construed in a way “that affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect.” Moreover, even if Part III were dispositive, here, the record is bereft of any evidence that Davis was an insured thereunder. To be sure, Section B of the policy provided coverage for “’bodily injury’ . . . caused by accident and . . . sustained by an ‘insured.’” However, as noted above, an insured is, inter alia, a “family member,” meaning “a person related to you by blood, marriage or adoption who is a resident of your household.” Here, the record is bereft of any evidence establishing that Davis was related to the Albanos and that if so, she resided in their household. It is hereby ORDERED that the complaint be dismissed, with prejudice.[IA] 2018 NY Slip Op 28344 Decided on October 31, 2018 Civil Court Of The City Of New York, Bronx County Gomez, J. INSURANCE ADVOCATE / November 26, 2018 29
IN THE NEWS CONTINUED FROM PAGE 14
and profitability since 2008, using confidential submissions from nearly 200 midsize and large agencies and brokerage firms. Over half of the industry’s 100 largest firms participated in this quarter’s survey. The OGP study is the
industry’s preeminent survey of midsize and large privately held brokers. Each participating agency receives a customized, confidential report of its performance compared with the overall survey results, along with Reagan’s quarterly commentary of industry trends affecting agents and brokers.
Source: Reagan Consulting OGP (ReaganConsulting.com)
Arthur J. Gallagher & Co. Recognized as a “World’s Best Employer” u Arthur J. Gallagher & Co. is pleased to be the only insurance brokerage firm recognized by Forbes Magazine as a “World’s Best Employer” for 2018. “We are very proud to be recognized by Forbes for what we think has been in our DNA since my grandfather started the business in 1927 - the best environment to attract top talent. The fact that we are the only insurance brokerage company to be recognized makes us even prouder. No matter which geography our employees work from, we want each individual to be themselves, grow with us, and drive a positive impact—that’s The Gallagher Way,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. This second annual Forbes ranking is based on the independent collection and analysis of anonymous employee reviews conducted by Statista, a leading statistical 30 November 26, 2018 / INSURANCE ADVOCATE
agency in the U.S. From 360,000 global employee recommendations, Statista assembled the list of the 500 best employers in the world. One of the questions that Statista asked randomly selected employees was to evaluate their employer, asking among other things, whether they would recommend a friend to apply for a job. Susan E. Pietrucha, Gallagher’s Chief Human Resources Officer emphasized, “This recognition is particularly meaningful because it signifies that our unique culture resonates with our nearly 30,000 employees around the globe. Employees, merger partners and clients choose Gallagher not just for our expertise but because we treat people with respect and work hard to help them grow and succeed. When you get down to what makes us excellent at what we do – it comes down to people who have always been at the center of the Gallagher Way.”[IA]
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4. Agents must be quarterback, sitting in on the coverage presentation and purchase. This means getting to know experts in various fields and working with them, although agents might not always make a commission. Build partnerships before one needs them. Embrace and retool all technology. Agents need to assess current capabilities in the area of technology. Everything is moving at light speed due to artificial intelligence. The things once innovative are now commonplace. Agents need to embrace new technologies and use them to create a seamless experience for customers in the front room. Open architecture will introduce new technologies that discussion partner agencies must embrace as they move forward. Control every step of customer service and the purchasing process. This is the foundation for a successful business model in the future. Insurance professionals need to assume the role of the gateway to everything related to insurance and financial services and guide clients through every step of the process. Agents need to remind clients what they do for them and assure them that they are worrying about the details so they don’t have to. Help clients declutter. Insurance agents must be the only financial advisor their clients will ever need. Professionals don’t just refer clients over to other experts anymore; they make everything easier. An agents’ job is to declutter clients’ paperwork, declutter how many people they are working with and make their lives easier. Life is complicated enough. Be open to change. The tsunami of change happening in the insurance industry is affecting everyone, from the carrier to the broker/agent to the local team member providing service to clients who have never needed it more. Agents should embrace change, not fear it. Yes, they will lose some clients to technology, such as robo-advisors. But we didn’t lose the entire banking industry because of the ATM. The typical client still wants someone to hold his or her hand through the maze of madness in this world.[IA]
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