Insurance Advocate September 24

Vol. 129 No. 15 | September 24, 2018

PIANY Taps Top Talent for Year

Ferris elected President; Parson receives Community Service Award; Dis nguished Insurance Service award presented to Kubera; and Savino receives Professional Agent of the Year award Cover image: PIANY officers for 2018-19. L to R: John Parsons II, CIC, CPIA, AAI; Tim Dean, CIC, CRM; John Tomassi, CPCU; Fred Holender, CLU, CPCU, ChFC, MSFS; Jamie Ferris, CIC, AAI, CPIA; Anthony Kammas, David Sidle II, CIC, CPIA.

[ FOREWORD ]

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STEVE ACUNTO

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Barry Bares All

S I N C E

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VOLUME 129 NUMBER 15 SEPTEMBER 24, 2018

EDITOR & PUBLISHER

Our popular columnist, Barry Zalma, has just put pen to paper and has produced claims books that are worth the money – really. His premise is that it is the insurance claims person - the adjuster - who works to keep the promises made by the insurance policy. The adjuster cannot, however, help the insurer keep the promises made unless he or she understands insurance, insurance claims, the types of claims presented and the law surrounding insurance and insurance claims. For the minimal cost of a paperback or Kindle book every insurer can place in the hands of their claims people information that will help them become professional, well trained, thoroughly educated claims professionals who are able to read and understand every insurance policy so that he or she is able to keep the promises made by the insurance policy with these tomes. Construction Defects and Insurance: Barry has updated and re-edited his seminal work Construction Defects Coverage Guide into the latest addition to his insurance claims series of books and articles that will form a thorough, up-to-date, expert-authored insurance claims guide. Quite practical, this series of books form the ideal guide for any professional who works in or frequently interacts with the insurance industry. Claims professionals, risk managers, BARRY ZALMA producers, underwriters, attorneys (both plaintiff and defense), and business owners will benefit greatly from the ten volume guide. It is also the perfect resource for insurance educators, trainers, and students whose role requires an understanding of insurance law.

The Eight volumes include: • Volume One: The Structure, The Construction Contract, and Construction Defect Insurance—Kindle book; Paperback • Volume Two: The Defects and Understanding Insurance and Underwriting—Kindle book; Paperback • Volume Three: Construction Defect Policies—Kindle book; Paperback • Volume Four: Liability Insurance—Kindle Book; Paperback • Volume Five: The Tort of Bad Faith and Construction Defects—Kindle book; Paperback • Volume Six: Construction Defect Suits—Kindle book; Paperback • Volume Seven: Tort Defences and the Trial of a Construction Defect Case—Kindle Book; Paperback • Volume Eight: Evaluation and Settlement & Alternative Dispute Resolution— Kindle Book; Paperback.

Zalma on Insurance Claims

Barry has updated, revised, edited and recreated his seminal work “Insurance Claims: A Comprehensive Guide.”

Barry is a semi-retired insurance coverage attorney, consultant, expert witness and blogger, Zalma on Insurance Claims provides in-depth explanations, analysis, examples, and detailed discussion of: Property insurance claims; Third-party liability claims; Casualty claims; and Insurance Fraud. As you read through the various volumes of Zalma on Insurance Claims, you will find comprehensive—yet comprehensible—coverage of key topics from What is Insurance? To Subrogation and Salvage..

He provides checklists, sample procedures, form letters, tables and information and references to model statutes, state statutes, administrative regulations, and requirements of insurance departments nationwide.

Nice work, Barry. SA

4 September 24, 2018 / INSURANCE ADVOCATE

Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Jamie Deapo Alfred T. DeMaria Lawrence N. Rogak N. Stephen Ruchman Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Gina Marie Balog-Sartario 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Global Initiatives P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 613-1595 www.cinn.com | info@cinn.com President and CEO Steve Acunto

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12 PIANY Taps Top Talent for the Year 4

Foreword: Barry Bares All Steve Acunto, Publisher

6

On the Level: When you’re finished changing, you’re finished. - Ben Franklin N. Stephen Ruchman, CPIA

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Guest Article: Expanded and Improved Medicare for All: Beware of Greeks Bearing Broccoli Marilyn M. Singleton, M.D., J.D.

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Legal Update: Legal Analytics: ‘Must-Have’ Tool Assists Carriers in Data-Driven Legal Decisions and Success in Litigation Ronald C. Porter

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MSO: Mobile and Online Banking – Things To Know Sue C. Quimby

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Guest Opinion: The De-sciencing of American Medicine and What it Means to You Jane M. Orient, M.D.

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On My Radar: Failure to Exceed SIR Releases the Excess Insurers Barry Zalma

26

Looking Back: September 28/October 5, 1968

28

Courtside: Because New Jersey Law Applies,

Contents

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Guest Article: Hidden Factors that Could Cost Your Client Money Scott Diamond Guest Article: Hidden Factors that Could Cost Your Client Money Scott Diamond

info@insurance-advocate.com www.insurance-advocate.com

Vol. 129 No. 15 | September 24, 2018

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New York PIP Arb is Dismissed; New Jersey Policy + New Jersey Accident = No New York PIP Arbitration Lawrence Rogak INSURANCE ADVOCATE / September 24, 2018 5

[ ON THE LEVEL ]

N. STEPHEN RUCHMAN, CPIA

When you’re finished changing, you’re finished.

– Ben Franklin u There’s an abundance of quotes about the inevitability of change; against resisting change; and most appropriately about the value of change. The place I’ve heard most of them are at PIA. The organization is always at the forefront of our industry, and the visionaries who have led the organization call repeatedly for agents to be prepared.

Such was the case in Glenmont for the September meetings of the PIA of New York and PIA Management Services boards. (For those unfamiliar with the structure of PIA Glenmont, Management Services is the umbrella corporation that manages the Glenmont, N.Y.-based Professional Insurance Agents state affiliate associations of New York State; New Jersey; Connecticut; New Hampshire; and Vermont. PIANY, PIANJ and PIACT comprise the PIA Management Services partnership, which they formed in 1965.)

I have had the honor of serving as president of PIANY and on the board of PIA Management Services for several years.

Mark LaLonde, CIC, CPIA, is CEO of Management Services. Because of my participation on the board, I know how we searched for the right leader of this organization when we hired Mark in 2011. We are fortunate he stepped up to the plate. When Mark became Management Services president and then CEO, we got one of us: A successful independent agent, who understands PIA members. He knows the challenges independent agents deal with every day.

When he was named Agent of the Year about a decade ago, he demonstrated that understanding with an example: During a round of golf, one of his foursome taunted him about the pressure of trying to sink a putt. “This isn’t pressure,” Mark recounted. “Pressure is sitting at the kitchen table on Thursday night, trying to figure out how you are going to make payroll for you staff on Friday.” (FYI, he made the putt and covered payroll.)

Since Mark took over PIA Glenmont we have seen significant change in the 6 September 24, 2018 / INSURANCE ADVOCATE

FOR THOSE UNFAMILIAR WITH THE STRUCTURE OF PIA GLENMONT, MANAGEMENT SERVICES IS THE UMBRELLA CORPORATION THAT MANAGES THE GLENMONT, N.Y.BASED PROFESSIONAL INSURANCE AGENTS STATE AFFILIATE ASSOCIATIONS OF NEW YORK STATE; NEW JERSEY; CONNECTICUT; NEW HAMPSHIRE; AND VERMONT.

industry and at the association level.

Yet, employee morale at PIA is high.

It’s a fun place to work and staff loyalty is strong. PIA-member agents have responded to every call Mark has made to them. His knowledge of our industry is immense; and he knows how to call the shots. He has led the team during complicated times: I’ve watched him navigate a challenging economy and tough negotiations, always with the interest of the professional, independent agents at the top of his mind.

This week, the PIA Management Services Board announced Mark would pass the baton to Jeffrey Parmenter, CPCU, ARM, who has taken over as president. Jeff, too, is a PIA insider, with decades as a member and service on the PIA of Connecticut Board of Directors.

He’s a smart guy. He, like Mark, stepped up from the position of Chairman of the PIA Management Services Board and he comes from a similar background and personality as Mark, so I am confident we have continuation in this administration. Plus, Mark will stay on as CEO for an appropriate transition period.

PIA of New Jersey past President John D’Agostino, CIC, CPIA, CRM, will lead the PIA Management Services Board.

It’s nice to see the PIA state affiliates New York, New Jersey and Connecticut coalition working as one big family.

While it is a structure that is more than

N. Stephen Ruchman, CPIA, is a retired independent agent and founder of Ruchman Associates Inc., the agency he started in 1961.

A past president of the Professional Insurance Agents of New York State, he is an active supporter of PIANY, and he has sat on or chaired nearly every committee including the Executive Committee and the Long Island Advisory Council and PIANY’s Political Action Committee. He can be reached via email at: nsruchman@ gmail.com.

half a century old, it is an effective and rare partnership that has (and will continue to) benefit members.

In addition to PIA Management Services leadership changes, PIA of New York also announced a changing of the guard this week. Jamie Ferris, CIC, AAI, CPIA, principal of P.W. Wood & Son Inc., of Ithaca is stepping in as President for the 2018-19 term. He follows the big footsteps of immediate past President Fred Holender, CLU, CPCU, CHfC, MSFS. Jamie has a big, happy personality, to which people warm naturally—people line up to follow him.

And he has a fantastic group of officers, including President-elect John R. Tomassi, CPCU; First Vice President Anthony Kammas; Vice President Tim Dean, CIC, CRM; Vice President David L. Sidle, CIC, CPIA; Treasurer Michael Loguercio; and Secretary Gino Orrino, CPIA. This is a group of quality personalities, including first-generation agents; second-generation PIA members CONTINUED ON PAGE 23

[ GUEST ARTICLE ]

MARILYN M. SINGLETON, M.D., J.D.

Expanded and Improved Medicare for All: Beware of Greeks Bearing Broccoli u During the Supreme Court oral arguments in the challenge to the Affordable Care Act’s mandate to purchase health insurance, people laughed when the late Justice Scalia asked whether the government could make you buy broccoli. Never happen? The laughable has become reality. A California bill awaiting the governor’s signature forbids restaurants from serving any beverage other than water or unflavored milk with kiddie meals. As of yet, the meal’s purchasers, unlike the restaurant, won’t be fined for ordering another beverage for their child.

Shrugging off assertions that the ACA was about control, not care, President Obama quipped that his opponents acted like the ACA “was a Bolshevik plot.” That supposedly ludicrous plot is embodied in a too-goodto-be-true congressional bill, H.R. 676, the “Expanded & Improved Medicare For All”. Vote-seeking congresspersons have breathed new life into this 2003 creation. With no dollar amounts in sight, the bill gives the government a blank check to exert total control over our medical care.

H.R. 676 provides that all individuals residing in the United States showing up at the doctor’s office are “presumed to be eligible” for benefits. The federal government will pay for unlimited “medically necessary” health expenses, including pharmaceuticals, mental health, substance abuse, vision, dental, hearing, and long-term care — with no deductibles or other cost-sharing. Unless a patient opts out, all interactions will be memorialized in a “standardized, confidential electronic patient record system.” Yes, those same electronic records that have been hacked and are contributing to physician burnout.

Overseen by regional offices and the Presidentially appointed 15-member National Board of Universal Quality 8 September 24, 2018 / INSURANCE ADVOCATE

The government is neither our parent nor our benefactor. and Access, participating institutions will receive separate monthly fixed sums for capital expenses (e.g., buildings, improvements) and for operating expenses (including physician salaries). Nonsalaried physicians can be paid based on a national fee schedule that is “fair and optimal” as decided by the government.

Finally, each geographic region would receive a single allotment to cover longterm care.

There are some restrictions. Only public or not-for profit institutions may participate. Private physicians and clinics can exist but cannot be investor-owned. And to keep the patients on the reservation, private health insurers are prohibited from selling health insurance coverage that duplicates the government-sponsored benefits.

Ever magnanimous, the government will pay for “reasonable financial losses” resulting from the conversion from forprofit to nonprofit status through the sale of U.S. Treasury bonds, assuming we choose to buy them. Additionally, the government will compensate insurance and other relevant clerical, administrative, and billing personnel up to $200,000 per person for losing their jobs.

Patients would have “free choice of participating physicians and other clinicians, hospitals, and inpatient care facilities.” But under the business restrictions and capped payments, the better institutions and clinicians may choose not to participate, thus decreasing access.

There is a big bad wolf in this fairy tale. In 2016, the feds spent more than $1.2 trillion on Medicare, Medicaid, and Children’s Health Insurance Program (CHIP). Total national health expenditures by all government levels and private entities were $3.3 trillion.

Dr. Singleton is a board-certified anesthesiologist. She is also a Boardof-Directors member and Presidentelect of the Association of American Physicians and Surgeons (AAPS).

She graduated from Stanford and earned her MD at UCSF Medical School. Dr. Singleton completed 2 years of Surgery residency at UCSF, then her Anesthesia residency at Harvard’s Beth Israel Hospital. While still working in the operating room, she attended UC Berkeley Law School, focusing on constitutional law and administrative law. She interned at the National Health Law Project and practiced insurance and health law. She teaches classes in the recognition of elder abuse and constitutional law for non-lawyers.

H.R. 676 provides funding from appropriations for federal public health care programs, including Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP); an unspecified increase on personal income taxes on the top 5 percent of income earners; a “modest and progressive” excise tax on payroll and self-employment income; a “modest” tax on unearned income, and a “small” tax on stock and bond transactions.

Fast forward to 2026, when the government predicts that the Medicare Hospital Insurance Trust fund will be depleted and total national health expenditures will be $5.7 trillion. The federal government collected about $100 billion in Medicare premiums and a total of $3.32 trillion in taxes last year. Given the projected costs, no cost-sharing, and the $2.4 trillion shortfall, the bill’s “modest” tax increases will soon be obscene.

Not only will the benefits decrease as the money runs out, patients will see real world consequences of total control.

For example, Oregon’s Medicaid proCONTINUED ON PAGE 30

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[ LEGAL UPDATE ]

RONALD C. PORTER

Legal Analytics: ‘Must-Have’ Tool Assists Carriers in Data-Driven Legal Decisions and Success in Litigation u The insurance industry relies heavily on analytics to understand and predict risk when writing policies. But what happens when a disputed claim becomes a legal matter? Shouldn’t insurers apply those same kinds of analytics to understand and predict their legal exposure?

Until recently, insurance litigation relied heavily on legal research, anecdotal data shared among practitioners and the expertise of seasoned lawyers in order to prepare for and win cases. But while legal research can tell you what legal principles apply in a particular case, it does not give you the whole picture of how the principles were applied. Legal analytics takes a completely different approach. Using advanced technologies, legal analytics gives you insights into legal cases and trends that were previously unknowable to provide better legal advice, develop better litigation strategies and win more cases.

With legal analytics, insurance lawyers can discover: - what types of cases have actually been litigated; - who represented the opposing parties; - how long the parties litigated; - what findings the court or jury made; - what damages were awarded.

It can also provide a detailed litigation history of an opposing party, allowing counsel to understand the party’s strategies and litigation outcomes. Using that information, both in-house counsel and their law firms will be much better equipped to predict how long a case may take, how much it will cost, what damages might be expected, what strategy their opponent might employ, what 10 September 24, 2018 / INSURANCE ADVOCATE

UNTIL RECENTLY, INSURANCE LITIGATION RELIED HEAVILY ON LEGAL RESEARCH, ANECDOTAL DATA SHARED AMONG PRACTITIONERS AND THE EXPERTISE OF SEASONED

Ron Porter is a Legal Data Expert at Lex Machina, a LexisNexis company.

Prior to joining Lex Machina in 2016, Ron spent 30 years as a member of the General Motors legal staff where he practiced product liability law and represented the company in insurance litigation and arbitrations.

Prior to working at General Motors, Ron practiced law at a midsize firm in Detroit, handling personal injury, commercial and insurance litigation.

He is a graduate of the University of Michigan Law School and a member of the Michigan Bar Association.

LAWYERS IN ORDER TO PREPARE FOR AND WIN CASES.

strategy is likely to be successful, and many other important considerations.

Lex Machina’s new Legal Analytics for Insurance Litigation module brings data-driven insights to insurance cases pending in Federal District Court from 2009 to the present. The module includes over 93,000 cases (including class actions) involving disputes between an insurer and a policyholder, a beneficiary, or another insurer asserting the rights of a policyholder. It covers a broad spectrum of policy types including home, life, auto, commercial and professional liability, health, disability income, and many more, with the exception of Medicare, Social Security, surety bonds, annuities and ERISA claims.

These cases all come from PACER (Public Access to Court Electronic Records), a database of many millions of court documents filed electronically in every District Court case since 2009.

Lex Machina’s machine-learning algorithms analyze and categorize each case while expert legal analysts annotate findings made by the court or jury and record damage awards. This puts a tremendous amount of information at the user’s fingertips: with a few clicks of a mouse, users can gather legal insights that previously could have taken

an army of expensive lawyers weeks or months to do.

Lex Machina’s Legal Analytics includes coding for the most common types of insurance policies, but its word search function can uncover cases involving many other niche policy types including fire, flood, and cybersecurity—which can be analyzed separately.

These policy type codes, combined with 50 other case tags covering findings, damages and remedies, give users the ability to locate and analyze cases involving issues of interest and the relevant type of policy.

For example, let’s assume I am counsel to a beneficiary of a life insurance policy, the insured has died, and the insurer has refused to pay the policy benefit because it asserts that the insured misrepresented his health on the application for insurance. By selecting the appropriate case tags, I can easily identify the cases involving a life insurance policy in Federal District Courts in which the court made a finding on the issue of fraud or misrepresentation by the insured.

The results of my search look like this: CONTINUED ON PAGE 16

ADVERTORIAL

Mobile and Online Banking – Things To Know

By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE - Assistant Vice President/Media Editor TODAY’S ON DEMAND SOCIETY has led to more and more services being offered electronically. One of these services is banking. Deposits can be made, payments submitted or money transferred at the touch of a button, rather than going to the bank and waiting in line. While mobile and online banking can be very convenient, there are some drawbacks, including system outages and most notably fraud. Helping your clients, including financial institutions, understand the potential drawbacks to mobile banking and ways to reduce the exposure is another value-added service of the professional insurance agent.

Electronic financial transactions are not new. Direct deposit has been available in some form since the 1970s. Many people pay their bills online. The advent of mobile technology, especially mobile phones and laptops, greatly increased access to mobile transactions. With mobile banking, deposits can be made simply by taking a picture of the front and back of the check and submitting to the financial institution via the app on the mobile device.

Purchases via mobile devices are convenient and secure. Money is transferred directly to a friend’s bank account via P2P (people-to-people or peer-topeer) applications, eliminating the need for cash when splitting the check for dinner. Wallet apps enable purchases by merely holding the device near the terminal. The seller never sees the actual credit card, and payment information is encrypted.

Mobile banking is extremely popular.

A 2018 CITI Mobile Banking Survey of 2000 Americans found that mobile banking apps were the third most popular of all apps. 31% of respondents said they use mobile banking apps most often, following those who use social media apps most often (55%) and weather apps (33%).The survey revealed that almost half of Americans (46%), as

well as nearly all millennials (86%), have increased their use of mobile banking apps in the past year (www.prnewswire. com). Respondents indicate that they realize time savings averaging 45 minutes per month by using mobile banking apps.

Deposits in financial institutions are usually protected from unlawful withdrawal by Federal Deposit Insurance Corporation (FDIC). However it is up to the individual or business to monitor their statements and notify the bank promptly of any fraudulent transactions, as well as follow security procedures recommended by the bank. Failure to do so can leave the individual or business without recourse for the lost funds, as well as the bank’s legal fees. Cyber crime coverage is one way to protect an individual or business from online banking fraud.

24/7 access is perceived to be the norm. The inability to connect – to check balances, pay bills or other transactions – can be traumatic. However, outages and down times are sometimes unavoidable.

For routine system maintenance, financial institutions can reduce their customers’ stress by providing advance notice of scheduled down times. Providing alternatives, such as the location and hours of local bank branches, can also increase customer satisfaction.

Potential fraud issues with mobile and online banking include double dipping and smishing. With mobile deposit, the paper check remains with the recipient. Double dipping occurs when the check recipient deposits the check

electronically and then attempts to cash it again elsewhere. Insurance companies and agents are examples of entities that can be targets of mobile banking fraud. Checks that have been deposited electronically for claims payments or policy refunds have been returned for reissuance.

Smishing is a form of phishing that is directed at mobile banking customers.

A text message claims to be from a bank representative about a purported security problem. The customer is directed to call a toll free number and provide account numbers and PINs. Once the information is provided, the criminals have access to the customer’s account.

Anyone who receives a suspicious communication, whether by text, e-mail or phone, should contact the customer service phone number on their monthly statement.

There are additional ways to increase mobile and online banking security, such as multiple authentication systems where a text message or code must be entered when logging in. Public unsecured Wi-Fi should be avoided. Set your device so that the screen locks automatically after a certain time. Sign up to receive alerts for transactions, such as purchases above a certain amount.

Check accounts regularly to discover any fraudulent activity.

Technology can greatly streamline transactions. However, electronic access can also increase the susceptibility to fraud. Helping clients understand the risks of mobile and online banking and ways to help reduce them is another sign of the true insurance professional.

R

139 Harristown Road, Suite 100 Glen Rock, NJ 07452 (800) 935-6900 | www.msonet.com INSURANCE ADVOCATE / February 11, 2018 1 INSURANCE ADVOCATE / September 24, 2018 11

PIANY Taps Top Talent for Year Fred Holender, CLU, CPCU, ChFC, MSFS, PIANY immediate past president passes the gavel to Jamie Ferris, CIC, AAI, CPIA, PIANY’s newly elected president for 2018-19.

uGLENMONT, N.Y.—Jamie A. Ferris, AAI, CIC, CPIA, of Lansing, N.Y., was elected president of the Professional Insurance Agents of New York, at a meeting of the association’s board of directors today, at PIANY Headquarters in Glenmont, N.Y. Ferris is president of P.W. Wood & Son Inc., in Ithaca, N.Y. An active member of PIANY, Ferris served as president-elect in 2017-18; vice president in 2014-17 and as secretary in 2013-14. He currently is vice president of the Government Affairs and Nominations Committees and is a member of the

PIANY Elects Ferris President Executive/Budget & Finance and Member, Benefits & Services Committees. Ferris also is a member of the Glenmont National Alliance Committee and is vice chairperson of the associations Southern Tier Advisory Council.

Active in his community, Ferris is a member of the Tompkins County Chamber of Commerce. He also is the chairman of the New York State J. David Ferris Memorial 4H Foundation Memorial Golf Open. This tournament, named in memory of the late J. David Ferris, raises money for 4H programs throughout the state. The P.W. Wood Agency is a signature sponsor for this event.

12 September 24, 2018 / INSURANCE ADVOCATE

PIANY ELECTS OFFICERS FOR 2018-19

GLENMONT, N.Y.—Officers of the Professional Insurance Agents of New York State were elected for the 2018-19 administrative year at the association’s annual business meeting today.

• Jamie Ferris, AAI, CIC, CPIA, of Lansing, N.Y., was elected president. Ferris is president of P.W. Wood & Son Inc., in Ithaca, N.Y. • John R. Tomassi, CPCU, of Clifton Park, N.Y., was elected president-elect. Tomassi is president of the Winfield Group in Clifton Park, N.Y. • Anthony Kammas of Flushing, N.Y., was elected first vice president. Kammas is president of Skyline Risk Management Inc., in Flushing.

• Tim Dean, CIC, CRM, of Hopewell Junction, N.Y., was re-elected vice president. Dean is president of Marshall & Sterling Inc., in Poughkeepsie, N.Y • David Sidle II, CIC, CPIA, of Trumansburg, N.Y.. was elected vice president. Sidle is president and CEO of David L. Sidle Agency Inc., in Montour Falls, N.Y. • Michael Loguercio of Ridge, N.Y., was elected treasurer.

Loguercio has been an independent broker since 1978 and is a producer for Atlantic Agency. He also services the insurance industry for Belfor Restoration.

• Gino Orrino, CPIA, of Babylon, N.Y., was elected secretary. Orrino is principal of Orrino Capital Services LLC with offices in Babylon and New York, N.Y. • Fred Holender, CLU, CPCU, ChFC, MSFS, of Williamsville, N.Y., will serve as immediate past president. He is director of administration for Lawley Services Inc. in Buffalo, N.Y.

PIANY ELECTS 10 TO BOARD OF DIRECTORS

uGLENMONT, N.Y.—Professional Insurance Agents of New York State, elected 10 New York professional, independent insurance agents to serve on the board of directors at the association’s annual business meeting today in Glenmont, N.Y. The following individuals were re-elected to serve for a three-year term, ending in 2021: • Richard Andrews, LUTCF, of Andrews Agency Inc., in Ithaca N.Y. Active in PIANY, Andrews is chairperson of the Company/Industry Relations Committee and is a member of the Education/Conference Committee. He also is an ex-officio member of the associations Southern Tier Advisory Council.

• Tim Dean of Marshall & Sterling Inc., in Poughkeepsie, N.Y. An active member of PIANY, Dean is vice president of the association and serves as vice president of the Company/Industry Relations Committee. He also is a member of the Education/Conference and Executive/ Budget & Finance Committees.

• Fred Holender, CLU, CPCU, ChFC, MSFS, of Lawley Services Inc. in Buffalo, N.Y. Holender will serve as immediate past president of PIANY in 2018-19. He is executive chairperson of the Executive/Budget & Finance

Committee and is an ex officio member of the Company/ Industry Relations, Education/Conference, Government Affairs, Member, Benefits & Services, Nominations and PIANY Political Action Executive Committees. He also is a member of the PIANYPAC Governing Committee.

• Anthony Kammas of Skyline Risk Management Inc., in Flushing, N.Y. Kammas will serve as vice president of PIANY for 2018-19. An active member of PIANY, Kammas serves as budget & finance chair of PIANY’s Executive/ Budget & Finance Committee. He also is chair of the Company/Industry Relations Committee and he is a member of the Government Affairs Committee. Kammas is a member of the PIANY National Flood Insurance Program subcommittee and he is an ex-officio member of the association’s New York City Advisory Council.

• Frances Scott of F.A. Scott Insurance Agency in Goshen, N.Y. Active in PIANY, Scott is education vice chairperson of the Education/Conference Committee. She also is a member of the Company/Industry Relations Committee and the Hudson Valley Regional Awareness Program Committee. Scott also is an ex-officio member of the Lower Hudson Valley Advisory Council.

• Gary Slavin, CLTC, CIC, of Mass Mutual in Greenvale, N.Y. As an active member of PIANY, Slavin is chairperson of the Member, Benefits & Services Committee and is a member of the Government Affairs Committee.

• Leslie Rogoff of Madison Avenue Brokerage Corp. in New York, N.Y. Active in the association, Rogoff is a conference chairperson of PIANY’s Education/conference Committee. She also is a member of the Member, Benefits & Services Committee and is chairperson of PIANY’s New York City Advisory Council.

Elected to serve a three-year term expiring in 2021: • Jon Lipton, CIC, of Castle Rock Capacity LLC in New York, N.Y., part of EPIC Brokers. Active in PIANY, Lipton is a member of the Company/Industry Relations and Education/Conference Committees. He also is a member of the association’s New York City Advisory Council.

Elected to serve a two-year term expiring in 2020: • Jorge Hernandez of North Franklin Brokerage in Hempstead, N.Y. As an active member of PIANY, Hernandez is a member of the Government Affairs and Member, Benefits & Services Committees. He also is a member of PIANY’s Long Island Advisory Council.

Elected to serve a one-year term expiring in 2019: • Jason Bartow, AAI, CPIA, of Eugene A. Bartow Insurance Agency in Deer Park, N.Y. Active in PIANY, Bartow served as president of the New York Young Insurance Professionals, an affiliate of PIANY, from 2015-18. He also is the NY-YIP Liaison for the Government Affairs and the PIANYPAC Governing Committees.

CONTINUED ON PAGE 14 INSURANCE ADVOCATE / September 24, 2018 13

CONTINUED FROM PAGE 13

PIANY PRESENTS DISTINGUISHED INSURANCE SERVICE AWARD TO KUBERA

u GLENMONT, N.Y.—The Professional Insurance Agents of New York State, named Anthony Kubera, CIC, its Distinguished Insurance Service award winner at the PIANY annual board dinner on Sept. 13, 2018 “Tony is admired and respected by his peers and colleagues in the industry. This award recognizes his long-standing commitment to the insurance industry,” said Fred Holender, CLU, CPCU, ChFC, MSFS, president of PIANY. Kubera has been in the insurance industry for 45 years, beginning as a casualty underwriter for Aetna C&S. He recently retired as director of business development from Russell Bond & Co. Inc., in Buffalo, N.Y. An active member of PIANY, Kubera served as president of the association in 2014-15 and currently is a member of the Government Affairs, Member, Benefits & Services and Nominations Committees. He also is a member of the PIANY Political Action Committee and is an ex-officio member of the associations Buffalo Advisory Council.

Active in the industry, Kubera is a director and past president of the Insurance Club of Buffalo and the Western New York Insurance Association. He also is on the Steering Committee of Hilbert College, working on developing a Risk Management Program.

SAVINO RECEIVES PROFESSIONAL AGENT OF THE YEAR FROM PIANY

GLENMONT, N.Y.— Richard A. Savino, CPIA, CIC, managing partner and CEO of Warwick Resource Group in New York, N.Y. received the Professional Insurance Agents of New York’s Professional Agent of the Year award during the association’s annual board of directors dinner, Sept. 13, 2018.

dent of PIANY. “His service to our profession is unique and extensive. Throughout his career, he has demonstrated a deep level of dedication and has earned the respect and trust of his colleagues and clients. PIANY is honored to give him this award.”

Currently, Savino is PIANY’s National Director. Active in the association, Savino served as president in 2011-12 and is chairperson of PIANY’s Political Action: Executive; and Governing Committees. He also is a member of the Company/ Industry Relations, Government Affairs and Nominations Committees. He is vice chairperson of PIA Management Services Inc., the umbrella corporation that manages the Glenmont-based Professional Insurance Associations of New York, New Jersey, Connecticut, New Hampshire and Vermont.

Active in the industry, Savino has been involved in the insurance industry for nearly 40 years and is an expert in the construction industry and related trades. He is past vice president and served on the board of directors for the Rockland County Builders and Remodelers Association and is on the board of directors for the Builders Association of the Hudson Valley. He is a member of the American Insurance and Marketing Society Board and also is a speaker for PIA and the International Risk Management Institute. He is one of the founders of InsureHelp.com, a “virtual” firm for MGA & Brokers aggregating specialty products offered through independent agencies. In 2005, Savino received the National Producer of the Year award from the AIMS. Active in his community, Savino served on the Strategic Planning Board of the Greater Hudson Bank and is past president of the Congers Valley Cottage Rotary Club, serving on their board of directors. He received the Paul Harris Fellowship Award, honoring his many contributions to the Rotary. He also is a member of the Warwick Rotary Club and is active in the Central Orange Italian American Association.

Savino also is a member of the County of Rockland Board of Consumer Protection for Contractor Licensing.

PIANY HONORS PARSONS WITH COMMUNITY SERVICE AWARD

uGLENMONT, N.Y.—John C. Parsons II, CIC, CPIA, AAI, received the Community Service award at the annual board of directors dinner being held Sept. 13, 2018. He is executive vice

Rich Savino, CIC, CPIA, PIANY National Director (PIANY Agent of the Year award) with Fred Holender, CLU, CPCU, ChFC, MSFS

The Professional Agent of the Year award is given to a professional, independent agent who has demonstrated excellence and achievement in insurance marketing and service; has shown a personal commitment to professionalism; and has contributed to PIA and the community.

“Rich is an effective and respected leader in the insurance industry,” said Fred Holender, CLU, CPCU, ChFC, MSFS, presi14 September 24, 2018 / INSURANCE ADVOCATE

John Parsons II, CIC,CPIA, AAI, PIANY immediate past president (PIANY Community Service award) with Fred Holender, CLU, CPCU, ChFC, MSFS CONTINUED ON PAGE 23

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This screen shows there are 174 cases in Federal District Courts across the U.S. in which a court or jury made a finding on the issue of Fraud/ Misrepresentation by the Insured in a case involving a Life Insurance Policy. In this instance, the Case Resolution data shows that claimants prevail in just 9% of the cases -- important data that can guide both business and legal decisions.

Lex Machina gives users easy access to the docket and actual court filings for each case simply by clicking on the case name. Access to the pleadings and rulings allows users to determine what strategies the parties employed in each of these cases, whether those strategies were successful, and how the facts compare to their own case. Learning what actually has resulted in successful case outcomes enables lawyers to formulate better litigation strategy.

Another great advantage that Legal Analytics brings to the table is its ability to conduct detailed research about a particular court or judge. For example, suppose I am counsel in a newly-filed case in the Southern District of New York (S.D.N.Y.) involving a Commercial General Liability Policy, but my practice is centered in Chicago. When my client asks me for information about the jurisdiction, I can use Legal Analytics to locate data for this Court and, spe-

cifically, cases involving this particular type of insurance policy. A search in Lex Machina and finds 704 closed cases involving Business Liability Policies in S.D.N.Y. that were filed after January 1, 2009. Lex Machina provides detailed information about the timing of important events in these 704 cases. Here, the

duration of a case based on actual data, not guesses based on anecdotes about a court or judge. This information also provides a basis for more accurate budgeting and a more accurate prediction of when a claimant might obtain recovery; crucial information for clients, whether you represent the insured or the insurer.

data show that the median time to case termination is 283 days and the median time to a summary judgment ruling is much longer, 488 days. Cases with a contested dismissal terminated sooner; the median time for this type of resolution is 204 days. Median time to trial is 826 days, about 27 months. Case timing analytics allows counsel to predict the

Looking at the resolutions of these cases, one learns that over 80% of the cases were resolved procedurally or by settlement. The data that stands out in the graphic below, however, is that claim defendants win two-thirds of cases resolved on the merits; claimants prevail CONTINUED ON PAGE 18

16 September 24, 2018 / INSURANCE ADVOCATE

IA_A

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[ LEGAL UPDATE ]

CONTINUED FROM PAGE 16

only 6% of the time while claim defendants prevail in 12% of the cases.

Summary judgments are 13% of resolutions, by far the most frequent type of judgment on the merits. Trial of this type of case occurs rarely, only 1% of our case set involves a trial. The data show that the odds are against claimants in cases involving Business Liability policies in this Court. But by analyzing past claimant wins, counsel can identify successful strategies and develop her case to have the best chance for success.

To give insurance carriers and their counsel even greater insights, Lex Machina also provides detailed information about the law firms and attorneys representing all parties, how often they’re retained, their track record and more. In the S.D.N.Y., the firms of Jaffe & Asher and Mound, Cotton, Wollan & Greengrass make the top 5 list for both plaintiffs and defendants in this type of case, so it is likely that lawyers from these firms will be very well acquainted with the Court. This is helpful information if my case requires co-counsel or if the opposing party has hired lawyers from one of these firms.

Lex Machina’s analytics also provide detailed information about the damages that have been awarded in these cases.

Here, over $64 million in damages have 18 September 24, 2018 / INSURANCE ADVOCATE

TO GIVE INSURANCE CARRIERS AND THEIR COUNSEL EVEN GREATER INSIGHTS, LEX MACHINA ALSO PROVIDES DETAILED INFORMATION ABOUT THE LAW FIRMS AND ATTORNEYS REPRESENTING ALL PARTIES, HOW OFTEN THEY’RE RETAINED, THEIR TRACK RECORD AND MORE.

been awarded in our case set. The analytics break down the damages by type allowing detailed analysis of the awards.

Whether you’re the carrier that issued the disputed policy or you are representing the insured, you will want to know the types and amount of damages that have been awarded in the jurisdiction as you evaluate whether to litigate or settle your case.

Clearly, having instant access to cases, resolutions, case timing, damages, and the track records of opposing counsel, parties and judges, is a gamechanger for the insurance industry.

Using analytics, attorneys for the insured or the insurer can get a clear picture of what it looks like to litigate a particular case and formulate business and legal decisions from a position of knowledge. And if the opposing parties do not use legal analytics, you will have a tremendous advantage in pre-trial negotiations and in court. But the benefits of using legal analytics do not stop at litigation.

Legal analytics can also be used to identify broad trends in insurance litigation in the Federal Courts. For example, carriers and their counsel are vitally interested in knowing whether Federal Court insurance case filings are increasing or decreasing over time. For carriers, having accurate claim and case filing data is vital to project and assess future risks and to make sure they are equipped to handle claims and cases effectively. Law firms can use the technology to better predict and support their clients’ legal needs.

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For example, the chart below shows the total number of insurance cases filed each year in the Federal District Courts, the number of cases that are hurricane-related, and the number of non-hurricane related cases.

Looking at only the overall filing data in the left hand column, it would be hard for anyone to conclude that there is any meaningful trend in the number of filings between 2009 and 2018. There is variation year to year but the projected number of filings in 2018 is about the same as 2017 and is slightly lower than 2009 filings. The picture changes when

LEGAL ANALYTICS IS RAPIDLY BECOMING A MUST-HAVE TOOL TO HELP COMPANIES AND THEIR COUNSEL MAKE SMARTER, FASTER, DATA-DRIVEN BUSINESS AND LEGAL DECISIONS.

hurricane-related cases are filtered out.

As one can see from the middle column, these filings vary widely from year to year depending on the number and severity of storms that strike the United States. The third column, showing filings of insurance cases not related to hurricanes, shows a noticeable upward

Year

Total Insurance Cases

Hurricane Damage Cases

Non-Hurricane Related Cases

2009

9773

3393

6380

2010

8525

1850

6675

2011

7187

574

6613

2012

7444

277

7167

2013

10145

2841

7304

2014

10015

1908

8107

2015

8146

596

7550

2016

7732

178

7554

2017

9230

970

8260

2018

9200*

900*

8300*

*Projected based on filings to date.

20 September 24, 2018 / INSURANCE ADVOCATE

trend. Compared to 2009, non-hurricane-related filings are projected to be up about 30% in 2018. With the ability to analyze these macro litigation trends, predicting risk and budgeting for legal spend becomes much easier and more accurate.

Finally, carriers can use legal analytics to help with hiring in-house attorneys and law firms by reviewing their track records and past cases. Having selected a firm, carriers can then use this data to hand-pick attorneys for their legal team, if desired, based on experience and expertise. Law firms may use analytics data to identify potential new clients and position themselves more competitively in the RFP process.

Legal analytics is rapidly becoming a must-have tool to help companies and their counsel make smarter, faster, data-driven business and legal decisions. Without a doubt, the technology is having a profound impact on the way that corporations and their law firms approach the practice of law. All parties in the insurance industry stand to benefit greatly from the use of legal analytics given the scope and complexity of insurance cases and the breadth of the types of policies available in the market today.

Insurance law firms also will make increasing use of legal analytics in order to become better lawyers and new applications for legal analytics in the insurance industry likely will emerge. In the meantime, in an industry that already relies heavily on data and predictive analytics models to assess risk, legal analytics should be a welcome addition to the existing tool sets of insurers, insureds, and their counsel.[IA]

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JANE M. ORIENT, M.D.

The De-sciencing of American Medicine and What it Means to You u With all the talk about “evidence-based medicine,” you might think that doctors were becoming much more focused on rigorous science. But like the names attached to bills in Congress— such as the Affordable Care Act, which outlaws affordable insurance, the language used in the movement to fundamentally transform America and American medicine usually means the opposite of what it suggests.

Are older doctors uneducated in science, and do they base their treatments on opinion, intuition, or outdated dogma, while younger doctors use objective observations and analysis?

Consider the kind of medical student our prestigious medical schools are now seeking. In former years, premeds were notorious nerds, usually science majors, constantly studying to make grades in hard subjects. High scores on the Medical College Admissions Test (MCAT) required ability for quantitative

ARE OLDER DOCTORS UNEDUCATED IN SCIENCE, AND DO THEY BASE THEIR TREATMENTS ON OPINION, INTUITION, OR OUTDATED DOGMA, WHILE YOUNGER DOCTORS USE OBJECTIVE OBSERVATIONS AND ANALYSIS?

thinking and a foundation of factual scientific knowledge.

Since 2015, the new MCAT includes “situational judgment tests.” The president of the entity that makes the test, Darrell Kirch of the Association of American Medical Colleges (AAMC), intends to redefine what makes a good doctor. “I believe it is critical to our future to transform health care. I am not talking about tweaking it. I am talking about true transformation.”

Ezekiel Emanuel asks in the Journal of the American Medical Association

Jane M. Orient, M.D. obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine residency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira’s Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.

(JAMA, Feb 20, 2018), “Does Medicine Overemphasize IQ?” A high IQ is no guarantee that a physician can “lead a multidisciplinary health team or effectively help patients change their behavior in ways that tangibly improve their health outcomes.” Instead, reformers advocate eliminating “the irrelevant premed requirements of organic chemistry, physics, and calculus, while requiring training in psychology and leadership.” A model negotiating session might be included in CONTINUED ON PAGE 30 22 September 24, 2018 / INSURANCE ADVOCATE

ON THE LEVEL

COVER

CONTINUED FROM PAGE 6

CONTINUED FROM PAGE 14

and some of finest insurance men I’ve known in a long time. They are from all over New York State and I know our PIANY members are well represented.

Richard Savino, CIC, CPIA, a past President of PIANY, will continue as the state association’s National Director, and Rich’s brother, Keith, who was president of PIA of New Jersey at the same time Rich was president of PIA of New York, will become PIA National president.

The Savino brothers, know leaders and forerunners in industry technology, are a force that benefits all of our members.

And so, I am optimistic. These leaders respect PIA’s traditions and long, successful history, but we all have an eye to the future. While we can be sure they won’t be “business as usual,” our meetings in Glenmont will be spirited and as enjoyable as always. There’s a lot to be learned in Glenmont. PIA Glenmont is a family, with a common goal for agents.

My years of loyalty reflects this, and I know it’s the same for the great leaders I’ve noted.

Change is good.

Rich Andrews, LUTCF, (PIANY Committee Chair of the Year award).

Not pictured: Tony Kubera, CIC, active past president (PIANY Distinguished Service Award)

president of Parsons & Associates Inc., in Syracuse, N.Y. The PIANY Community Service Award recognizes individuals who demonstrate a significant commitment to the improvement of his or her community.

An active member of his community, Parsons is a member of the organizing committee for the Central New York Tour de Cure, which works to raise awareness of diabetes, funds for camps

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: • “Insurance Fraud & Weapons to Defeat Insurance Fraud” In Two Volumes • “The Compact Book on Adjusting Liability Claims: A Handbook for the Liability Claims Adjuster” • “The Compact Book on Adjusting Property Claims” • “Ethics for the Insurance Professional” • “Rescission of Insurance” • “The Insurance Examination Under Oath”

• “Random Thoughts on Insurance Volumes IV and V: Digests from Barry Zalma’s Blog: ‘Zalma on Insurance’” Fiction: • “HEADS I WIN, TAILS YOU LOSE” • “Candy and Abel: Murder for Insurance Money” • “Murder And Insurance Fraud Don’t Mix” • “Murder & Old Lace”

for children with diabetes and research for a diabetes cure and he is also a longtime blood donor, having donated over 10 gallons of blood over the years.

Parsons is a past Flotilla Commander and boating safety educator in the US Coast Guard Auxiliary. An Auxiliarist since 1982, he currently is a member of Flotilla 2-1 based in Phoenix, N.Y. He is a Certified Safe Boating Instructor by the N.Y. Parks, Recreation & Historic Preservation Department.

Active in PIANY, Parsons is an active past president, serving as president in 2016-17. Currently, he is a member of the Company/Industry Relations and Government Affairs Committees. He also is chairperson of the Nominations Committee and the associations Syracuse Advisory Council. Parsons is a member of PIA Management Services Inc., the umbrella corporation that manages the Glenmont-based Professional Insurance Agents associations of New York, New Jersey, Connecticut, New Hampshire and Vermont.

“John has demonstrated a deep level of dedication to his community. He has earned the respect and trust of his neighbors, colleagues and clients,” said Fred Holender, CLU, CPCU, ChFC, MSFS, president of PIANY. “PIANY is proud to present him with this award.” [IA] INSURANCE ADVOCATE / September 24, 2018 23

[ ON MY RADAR ]

BARRY Z ALMA

Failure to Exceed SIR Releases the Excess Insurers No Cover Available from Excess and Umbrella Policies uInsurers use a self-insured-retention (SIR) to avoid the expense of dealing with small claims and avoid the expense of defending or indemnifying an insured until the SIR or underlying insurance is exhausted. As a result the excess insurer can charge a small premium because its exposure is limited.

In City Of Phoenix v. First State Insurance Company, a foreign insurer; No. 16-16767, United States Court of Appeals For The Ninth Circuit (April 4, 2018) the City of Phoenix (“the City”) appealed an adverse summary judgment in favor of First State Insurance Company, Twin City Fire Insurance Company, New England Reinsurance Corporation, and Nutmeg Insurance Company (collectively, “Hartford”) on the City’s declaratory judgment, breach of contract, and bad faith claims, and from the denial of the City’s motion for partial summary judgment.

FACTS

The City’s insurance coverage action against Hartford arose from an underlying personal injury and wrongful death lawsuit brought by Carlos Tarazon and his wife. Mr. Tarazon was exposed to asbestos through his work as an underground pipe layer in the City from 1968 to 1993 and died of mesothelioma in 2014. The City settled the Tarazon family’s claims against it for $500,000. The City’s legal defense expenses amounted to over $1,400,000.

From July 1, 1981 to July 1, 1985, the City was covered by four successive excess liability policies (“Excess Policies”) issued by Hartford, each of which provided $500,000 in liability coverage in excess of a $500,000 self-insured retention (“SIR”). The City also purchased three successive umbrella policies (“Umbrella Policies”) from 24 September 24, 2018 / INSURANCE ADVOCATE

The Excess Policies’ basic insuring agreement states that Hartford “will indemnify the [City] for ultimate net loss in excess of the retained limit [of $500,000.]” “Ultimate net loss” is defined in the Excess Policies to “exclude[] all loss adjustment expenses . . . .”

Hartford, covering periods from July 1, 1981 to July 1, 1984.

THE POLICY WORDING

The Excess Policies’ basic insuring agreement states that Hartford “will indemnify the [City] for ultimate net loss in excess of the retained limit [of $500,000.]” “Ultimate net loss” is defined in the Excess Policies to “exclude[] all loss adjustment expenses . . . .” The parties agree that defense costs are “loss adjustment expenses.” The plain language of this provision is unambiguous.

Hartford only has to indemnify the City if the City’s ultimate net loss (i.e., not including defense costs) exceeds $500,000.

The City settled its claim for $500,000 and is not entitled to indemnity.

The Excess Policies also contain a “No Costs” provision, which states: “Should any claim arising from such occurrence be adjusted prior to trial court judgment for a total amount not more than the retained limit, then no loss expenses or legal expenses shall be payable by the Company(s).”

ANALYSIS

The City attempts to inject ambiguity into the No Costs provision by arguing

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 ] that use of the term “adjusted” includes both liability and defense costs, and defense costs therefore erode the SIR. However, this reading would contradict the language from the basic insuring agreement, which clearly provides that Hartford’s duty to indemnify applies when the retained limit is exhausted by liability costs. We are also persuaded

by City of Oxnard v. Twin City Fire Insurance Co., which examined an insurance policy with similar policy language, and likewise concluded that the insured “was responsible for defense costs for claims it settled within its SIR amount.” 44 Cal. Rptr. 2d 177, 180 (Cal. Ct. App. 1995).

The City argues in the alternative that if Hartford is not obligated to pay the City under the Excess Policies, Hartford must pay under the Umbrella Policies.

The Umbrella Policies provide that Hartford will indemnify the City “for ultimate net loss in excess of the underlying limit or the [SIR], whichever is the greater . . . .” The Umbrella Policies define “underlying limit” as the “limits of liability of the underlying insurance . . . .” Each Umbrella Policy’s Schedule of Underlying

Because the City’s asbestos liability fell within the scope of the Excess Policies, the City is only entitled to “ultimate net loss in excess of the underlying limit . . . .”

ZALMA OPINION

Excess means what it says. The insurer doesn’t pay unless the underlying limit or SIR are exhausted. Since they were not exhausted the excess and umbrella insurers owed nothing. For once the Ninth Circuit has a clear, simple and appropriate decision.[IA]

Policies lists an Excess Policy and states that the Excess Policy’s limit of liability is $500,000 in excess of the $500,000 SIR. Where no underlying insurance applies, the Umbrella Policies have a separate SIR of $10,000 or $25,000, depending on the policy year.

Because the City’s asbestos liability fell within the scope of the Excess Policies, the City is only entitled to “ultimate net loss in excess of the underlying limit . . . .” As the City did not exhaust the underlying limit of the Excess Policies, it is not entitled to indemnity under the Umbrella Policies.

The City conceded below that it could not show bad faith if Hartford’s refusal to pay out on the policies was justified.

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[ COURTSIDE ]

LAWRENCE RO GAK

Because New Jersey Law Applies, New York PIP Arb is Dismissed In the Matter of the Arbitration between: Kazu Acupucture, PC and Metropolitan Property and Casualty Insurance Company Edited by Lawrence N. Rogak This New York PIP arbitration was dismissed without prejudice because the arbitrator found that the claimant was a New Jersey resident with a New Jersey insurance policy, and therefore the claim was governed by New Jersey law. —LNR

u The claim for services rendered November 23, 2015 through January 13, 2016, arises out of a motor vehicle accident that occurred on November 19, 2015.

The injured person/assignor was a 28-year-old female involved in the subject motor vehicle accident.

The within applicant seeks to obtain benefits from a New Jersey policy of insurance issued to a vehicle registered to a New Jersey address. The policy of insurance references that the husband and wife resided at an address in New Brunswick, New Jersey. They also acquired a renter’s insurance policy bundled with the policy of insurance. The policy was renewed in June, 2015. Since the insurance policy was written in New Jersey, the insureds reside in New Jersey and the contract of insurance was signed in New Jersey, respondent argues that the “center of gravity” is New Jersey and thus the claim must be dismissed as New Jersey law governs.

The use of “center of gravity” or “grouping of contracts” is the appropriate analytical approach to choice of law questions in contract cases. See, Zurich Ins. Co. v. Shearson Lehman Hutton, Inc. 84 NY2d 309 (1994). The court applies a center of gravity or grouping of contracts analysis in order to determine which state has the most significant

28 September 24, 2018 / INSURANCE ADVOCATE

relationship to the transaction and the parties. In Allstate Ins. Co. v. Stolarz, 81 NY2d 219 (1993), the court found that there was no conflict between New York and New Jersey law in that case, but even if there was a conflict, New Jersey law governs because of the significant contacts to New Jersey. New Jersey was the place where the contract was negotiated and made, the parties to the contract were both in New Jersey and the vehicle was registered in New Jersey.

See, also, Careplus Med. Supply Inc. v.

Selective Ins. Co. of Am., 25 Misc.3d 48 (N.Y. App. Term 2d Dept. 2009).

Based on the foregoing, this arbitrator finds that New Jersey law governs because of the significant contacts to New Jersey. The case is dismissed without prejudice.

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.

DECISION: THE CL AIM IS DISMISSED WITHOUT PREJUDICE AS NEW JERSEY LAW APPLIES.[IA] AAA Case No. 17-17-1057-1830 Pamela Hirschhorn, arbitrator Award date: 7/26/2018

New Jersey Policy + New Jersey Accident = No New York PIP Arbitration In the Matter of the Arbitration between: Spike Medical PC and New Jersey Manufacturers Insurance Co. Edited by Lawrence N. Rogak In this N.Y. PIP arbitration against a New Jersey insurer, the arbitrator holds that because the claim is against a New Jersey policy issued to a New Jersey resident and arises out of a New Jersey accident, New York arbitration is not the proper forum for this claim and it is dismissed.—LNR uThe Assignor, NH, now a 34-yearold male, as a pedestrian, was involved in a motor vehicle accident in New Jersey on January 20, 2015. Following the ac-

cident, the Assignor sought medical attention for the injuries sustained in the accident. At issue in this case is a claim totaling $ 3,418.70, representing an office visit and EMG/NCV testing performed on the Assignor on March 31, 2015.

Respondent maintains that this Forum lacks jurisdiction over the Respondent. The issue is whether this Arbitrator may hear this case.

CONTINUED ON PAGE 30

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www.newyorkpfl.com Copyright © 2018. ShelterPoint Life Insurance Company | Mktg#18-11 | G1 01/18 INSURANCE ADVOCATE / September 24, 2018 29

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GUEST OPINION CONTINUED FROM PAGE 22

the interview process. Of course, the physician must be able to “sensitively discuss end-of-life care preferences.” Emanuel has promoted the view that people have lived long enough at age 75.

The curriculum must now have social justice as a “core tenet of medical ethics,” teach about “unconscious racism,” and include 30 core competencies for caring for LGBT patients.

Certain propositions are assumed to be true, and evidence that contradicts them is flushed down the memory hole, while supporting data is accepted without question. For example, if a “suspect group” earns less, it must be because of discrimination.

Some can’t wait for dissenters in the older generation to retire or die.

Physicians who reveal an improper attitude are being purged now. Recently, a respected physician was kicked out of leadership positions for an opinion he wrote in a “Big and Bright Ideas” feature published by the Dallas County Medical Society about the alleged “gender gap” in physician pay. He suggested there might be an explanation for differences in earnings other than bigotry, sexism, misogyny, and exploitation. Within days, he was pilloried in the Washington Post, The Hill, CNN, Fox News, and social media, and even by the American Council on Science and Health.

A scientific approach to the question of why Group A makes more money than Group B would compare the two groups for years of experience, level of responsibility, hours worked, desirability of work environment, ability to enjoy flexibility in scheduling, etc.

Psychologist Jordan Peterson suggested that women might be more agreeable than men and less aggressive about demanding pay raises. But social justice demands outrage about presumed unfairness, and identification of oppressors and victims. (Of course, if men earned less, it would be fine.)

So where does this leave patients?

They might lose their trusted, highly skilled physician, who was dedicated to making them well but who revealed a politically incorrect belief that is irrelevant to their care.

Their new physician will be chosen for being a social justice warrior.

30 September 24, 2018 / INSURANCE ADVOCATE

The doctor might not be able to understand human metabolism or drug effects (that’s biochemistry, a branch of organic chemistry), but who needs that? Doctors will be following “best practices” downloaded from their smart phones. Doctors may not have skills in independent or quantitative thinking, developed by problem-solving in disciplines like calculus, but they will be accustomed to working in groups.

There will be numerical goals to meet, related to eliminating “disparities,” but that involves simple counting, and paying attention to classification by identity politics.

Your doctor might not be dedicated to (or skilled at) finding the correct diagnosis or best treatment for you. That might even be contrary to her duty to improve population health or cosmic justice.

But the world will be fairer—in the view of our self-appointed guardians.[IA]

COURTSIDE CONTINUED FROM PAGE 28

Herein, Respondent submits the Insurance Policy [a New Jersey policy issued to a New Jersey resident], a New Jersey Application for Benefits and a New Jersey Police Report. In addition, Respondent submits the Affidavit of Daniel A. Toadvine, an Assistant Vice President of Respondent, attesting to the New Jersey policy of insurance.

Respondent argues that it did not consent to arbitrate New Jersey NoFault disputes within New York AAA. In addition, Respondent argues that New Jersey law is different from New York law in terms of coverage and liabilities and therefore, New Jersey has a stronger interest in this case and must apply.

Applicant proffers no evidence refuting Respondent’s assertions or documentary evidence.

I agree with Respondent. I find guidance in Careplus Medical Supply, Inc. v.

Selective Ins. Co. of America, 25 Misc.3d 48 890 N.Y.S.2d 258 (App. Term 9th and 10th Jud. Dists. 2009), where the Court determined that New Jersey law applied, holding that: “A conflict of law relating to an insurance policy must be resolved by applying the conflict of law rules relevant to contracts. The Court of

GUEST ARTICLE CONTINUED FROM PAGE 8

gram wants to limit coverage for opiates for some chronic pain conditions and taper off patients who have been taking opioids long-term — even if they have no signs of addiction. Long-term care will be an easy target; the ACA’s longterm care program was scuttled due to cost concerns. With current nursing home costs averaging $7,500 per month, inevitably when the monthly allotment is depleted, hospice care becomes the medically necessary treatment.

Tell the sponsors of H.R. 676 that it’s your money, your health, your privacy, your life. The government is neither our parent nor our benefactor. The government is not the middleman you want between you and your doctor. At a time when the movement toward innovative and personalized care is moving forward, care via government control is taking us backwards.[IA]

Appeals has adopted a “center of gravity” or “grouping of contacts” approach which gives controlling effect to the law of the state that has “the most significant relationship to the transaction and the parties.” In addition to the traditional determinative factor of the place of contracting, which should be given “heavy weight” in a grouping of contacts analysis the places of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties are also to be considered.”

Further, in Flatlands Medical, P.C. v.

AAA Ins., 43 Misc. 3d 49, 984 N.Y.S.2d 793 (App. Term 2d, 11th and 13th Jud. Dists. 2014)(out-of-state automobile insurer was not subject to personal jurisdiction, under Insurance Law, where it did not provide, write, or sell insurance in State of New York, did not transact business in New York, and did not have any offices or agents in New York).

Based on the foregoing, I dismiss this matter without prejudice so that Applicant is free, if it chooses, to file in the appropriate forum.[IA] AAA Case No. 17-17-1070-6479 Award dated 08/07/2018 Giovanna Tuttolomondo, arbitrator

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