Page 1

Features 5



Kim Komando


Inside Track




Insider Advisor

24 26 28


Classifieds Say What? Back Issues

News 7

Ray Farmer Confirmed As Head Of S. Carolina Insurance Department


Beyond Insurance Rolls Out New Network Name And Logo


Cooking Grease Can Be A Pollutant - Legal Analysis by Barry Zalma, Esq.


21 States Considering Electronic Proof Of Insurance Legislation


Property Casualty Insurance Association Testifies In Support of Credit-Rating


American Collectors Insurance Becomes First Specialty Collector


Project Cap Launches Agency 2020 - To Help Independent Agents Plan For The Future

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News 15 16 16

A Majority of Drivers Would Trade Personal Privacy for Lower Auto Insurance Rates Bill O’Reilly’s Interviewer Tracks Down Obama’s Illegal Immigrant Uncle - Funny! Florida Reports on the “Freedom to Travel Act” Law Restricting Life Companies


Massive Sinkhole Swallows Tampa Man Along With Entire Bedroom


U.S. Auto Insurance Policyholders Benefit from Highly Competitive Markets


Florida Announces Arrest in “Operation Dirty Money” Worker’s Comp Scheme


Identity Fraud Incidents Continue Upward Trend


What To Tell Your Clients To Maximize Their Insurance Dollars And Avoid 5 Mistakes


Applied Systems Announces Agreement To Acquire P&C Business of IVANS

Sponsors 4

Premium Finance Brokerage

6 7 12 15 16 17

Modern Insurance Consultants


NASA - Eclipse Agency Mgt.

22 23


25 31

Orrin R. Beilly, Esq.


Florida Insuance School FYI Georgia View & News St. James Insurance CompaAggressive Insurance United Automobile Ins Com-

Encore HR Personnel Solu-

Barry Zalma, Esq.

The Towing & Rental Group

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ASHINGTON, D.C., February 15, 2013—Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), issued the following statement on Ray Farmer’s confirmation to serve as director of South Carolina’s Insurance Department. Prior to Farmer’s appointment, he had worked in AIA’s Southeast Region office, most recently serving as vice president for state affairs until his retirement from AIA in the fall of 2012. Farmer has more

than 40 years of insurance experience. Ms. Pusey’s statement follows: “AIA congratulates Ray Farmer on his confirmation to serve as director of the South Carolina Department of Insurance. Ray brings a wealth of insurance, regulatory and legislative knowledge that will help South Carolina promote an effective and efficient insurance marketplace to the benefit of consumers and insurers alike.”

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Position Wanted: Premium Finance, Carrier or MGA Marketing in Florida

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CONTENTS 2013 • Issue 3

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RLANDO, FL, March 7, 2013 —The Organic Growth Network rolled out a new network name and logo during today’s Organic Growth Exchange ,



its semi-annual member symposium: Beyond Insurance Global Network. “We have a world-class member network that offers world-class risk management solutions to clients, and now we have a world-class look as well,” said Scott Addis, Beyond Insurance president and CEO. "Our new name and logo reflect the success of our network members in transforming themselves into trusted risk advisors for their clients." The new name represents the culture and resolve of the network to create a “risk revolution” while symbolizing its evolving focus and standards.

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Members wanted the new identity to convey that they have moved “beyond” the transactional sales process and embraced a more consultative, diagnostic approach with clients. “Constant

improvement and innovation have always been part of our culture,” said Christin Myers, director of training and coaching for the network. “Our new name better captures who we are and what unique value our members offer to clients. After all,

See BEYOND Page 39 The Underwriter’s Insider



ost people are pretty smart when it comes to buying computers and other tech gear. They use the Internet to research products and compare prices. And when they’re ready to buy, they take advantage of coupon codes and free shipping offers. But the tech retail jungle is filled with booby traps that can snare even savvy consumers. Steer clear of these bad deals and save more of your hard-earned cash.

1. Extended warranties/ phone insurance Extended warranties for computers and electronics can add hundreds of dollars to the price of your

purchase. And they’re usually bad investments. The basic manufacturer warranty on most gadgets typically covers a year of use, which is when repairs are most often needed. Extended warranties will bring that out to two or three years, but by then most gadgets are outdated and not worth repairing. The exception would be an expensive computer that you carry around, like a MacBook. Click here for more pros and cons of Apple’s AppleCare. If nightmares of dropping your smartphone keep you up at night, you can buy yourself peace of mind by self-insuring. Put what you would have spent on protection into a savings account. If something goes wrong, pay for the repair out of that fund. If nothing happens, take a

vacation! Check with your credit card company, too. Buying a gadget with certain cards can double the length of the manufacturer’s warranty at no cost to you.

2. Expensive cables When you’re shelling out big bucks for a high-end LED HDTV and a new Blu-ray player, spending an extra $100 or more on HDMI cables doesn’t seem like a big deal. However, it’s money you don’t need to spend. Unless you’re running digital cable through an entire house, there isn’t any difference between the $10 or less 6-foot digital cable and the pricey gold-plated versions. Back in the days of analog A/V, it’s true that more-expensive cables did a better job of shielding the signal from interference. Digital cables, like HDMI, carry a stream of 1s and 0s. It either works perfectly or not at all. Some companies recommend you purchase their expensive branded adapters when you buy their products. You can get generic adapters online for less that work just as well.

3. RAM and hard drive upgrades from computer makers Most computer manufacturers allow you to customize your computer a bit before ordering. You might add RAM or switch from a conventional

See Kim Komando Pg 33

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hristopher Roinestad and Gerald Fitz-Gerald, and Tim Kirkpatrick, D/B/A Hog’s Breath Saloon & Restaurant (“respondents”) were overcome by poisonous hydrogen sulfide gas while cleaning a large grease clog in a sewer near the Hog’s Breath Saloon & Restaurant. The district court concluded that Hog’s Breath caused respondents’ injuries by dumping substantial amounts of cooking grease into the sewer. On summary judgment, the district court found Hog’s Breath liable under theories of negligence and off-premises liability, and entered a damage award in respondents’ favor.

FACTS The Hog’s Breath Saloon discharged enough cooking grease into the sewer system to create a five- to eight-foot clog that led to a dangerous buildup

creates an obstruction to the sewer flow. The trial court found that under the circumstances of this case the discharge of cooking grease amounted to a discharge of pollutant. Hog’s Breath caused respondents’ injuries by dumping substantial amounts of cooking grease into the sewer, thereby creating a five- to eightfoot grease clog and consequent build-up of hydrogen sulfide gas.

Mountain States Mutual Casualty Company (“Mountain States”) insured Hog’s Breath. It sought a ruling that it had no obligation to indemnify Hog’s Breath arguing that Hog’s Breath’s conduct fell within the policy’s pollution Mountain States Mutual Casualty exclusion clause, which excluded Company (“MSM”) sought a coverage for bodily injury arising ruling that it had no obligation to out of the discharge of pollutants indemnify Hog’s Breath and the from the premises of an insured. district court agreed holding that The policy defined pollutants Barry Zalma, Esq., CFE is a California attorney dumping substantial amounts as any solid, liquid, gaseous, or specializing in insurance coverage, insurance claims handling and fraud who serves as of cooking grease constituted a thermal irritant or contaminant, a consultant and expert for insurers and discharge of a pollutant under the or waste. The district court agreed policyholders. He founded Zalma Insurance policy’s pollution exclusion clause. with Mountain States, concluding Consultants in 2001 and serves as its senior The court of appeals reversed. It that the pollution exclusion consultant. He recently published an e-book, held that the terms of the pollution clause was unambiguous and “Insurance Fraud,” which is available at his Web exclusion clause were ambiguous that the dumping of substantial site, Go to Zalma Books at and that its application to cooking amounts of cooking grease into grease could lead to absurd results the sewer constituted a discharge and negate essential coverage. The of a pollutant under the policy’s parties took the case to the Colorado of toxic gas. The conduct violated a city pollution exclusion clause. Supreme Court who, in Mountain ordinance prohibiting the discharge States Mutual Casualty Company v. of a pollutant in an amount that The court of appeals reversed. It Christopher Roinestad and Gerald held that the terms of the pollution Fitz-Gerald, and Tim Kirkpatrick, D/B/A exclusion clause were ambiguous and Join Barry Zalma’s new Blog: Hog’s Breath Saloon & Restaurant., 2013 that its application to cooking grease CO 14 (Colo. 02/25/2013) resolved the See Zalma Pg 31 dispute. 10

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HICAGO, IL – With almost half of state legislatures in the country likely to consider changing their laws to allow drivers to use their cell phones to show their insurance identification card in order to prove they are insured, electronic proof of coverage is one of the hottest insurancerelated legislative trends for 2013, according to the Property Casualty Insurers Association of America (PCI). “States are taking another step into the Electronic Age by changing their laws to allow drivers to show their insurance ID cards on their smartphone,” said Alex Hageli, PCI director, personal lines policy. “Pretty much every motorist has been there at one time or another, digging around in the glove compartment box desperately trying to find your insurance card after being pulled over by the police. No longer will motorists be ticketed and have to take time off of work to go to court for driving without insurance just because they couldn’t find a current ID card in their car. This is such a common sense switch that will save everybody time and effort.” PCI anticipates over 20 states will consider electronic proof of coverage bills or regulations in 2013. The states discussing e-Card proposals include: Arkansas, Colorado, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Maine, Michigan, Missouri, Mississippi, Ohio, Oregon, Rhode Island, South Carolina,

Texas, Utah, Washington, Wisconsin and Wyoming. Wyoming’s measure, SF 87 has already cleared the Wyoming State Senate.

“Every year, thousands upon thousands of tickets are issued to drivers just because they forgot to put their new ID card in their vehicle,” said Hageli. “It’s a big waste of everybody’s time and effort, especially the courts. Now is the time to make a small change in the law so insurers and consumers can take advantage of technology and avoid those annoying fix-it tickets.”

“Electronic proof of coverage, or e-Card, is a win-win-win for consumers, insurers and state officials. Consumers are using their cell phones for more and more things. They want less paper and more online account features,” said Hageli.“Like any other business, insurers want to meet their policyholders’ needs and are developing apps and expanding online services to satisfy

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customer expectations. Without changing the law, though, insurers are still required to send paper ID cards to each customer. These proposed laws will enable insurers to adapt to changing consumer behavior. Finally, the courts win because the docket will be cleared up of individuals who had insurance but just didn’t have a current ID card. ” In 2012 five states made the change to e-Card including: Arizona, California, Idaho, Louisiana and Minnesota. Alabama approved regulations allowing electronically displayed proof of insurance at both registration and during traffic stops. Colorado already has a regulation allowing electronic proof of coverage when vehicles are registered, and will consider legislation to expand it to traffic stops this year. PCI supports flexible proposals that are not mandatory and give both the policyholder and the insurance company a choice to offer electronic proof of coverage options. “Every year, thousands upon thousands of tickets are issued to drivers just because they forgot to put their new ID card in their vehicle,” said Hageli. “It’s a big waste of everybody’s time and effort, especially the courts. Now is the time to make a small change in the law so insurers and consumers can take advantage of technology and avoid those annoying fix-it tickets.” 11



USTIN, Texas—Joe Woods, vice president, state government relations for the Property Casualty Insurers Association of America (PCI), testified Tuesday, Feb. 19th, in opposition to SB 72, which would prohibit insurers from using creditbased insurance scores. In his testimony before the Texas Senate Committee on Business and Commerce, Woods explained why the usage of credit information helped consumers, and also noted that far more drivers would be likely to see rate increases than decreases if the use of such information was banned. “Let’s begin with a clear understanding of what this rating and underwriting tool really is,” Woods said. “Credit-based insurance scores measure the insurance risk, not the credit risk, of consumers; they are generated from credit histories and insurance claims data, and are distinct from scores based solely on credit histories intended for other business purposes such as making decisions on loans. Several studies have found that credit based insurance scores are among the three most predictive


tools available for automobile insurance. The predictive value of credit based insurance scores has been hotly debated and vigorously studied over the last decade, and every credible study that has been done has found that they are highly predictive of insurance losses.” Woods testified that hundreds of pages of studies have been done on this issue. The most exhaustive studies have been done by the Michigan Office of Financial and Insurance Services (2002), the University of Texas (2003), the Texas Department of Insurance (2005), and the Federal Trade Commission (2007). All of those studies confirmed that credit based insurance scores are highly predictive of insurance losses.

decreased,” Woods said. “The losses would still occur, and the other 87% of consumers would have to pay more premium than their predicted losses call for in order to subsidize the higher risk insureds. Even if you factor out the consumers with neutral results, more consumers would be hurt by a ban on the use of credit based insurance scores by a 3.35 to 1 ratio; 43% would lose credits while 13% would be subsidized.”

Woods also referenced a 2012 study by the Arkansas Department of Insurance that usage of this tool results in positive or neutral premium effects for 87 percent of insurance consumers, while only 13 percent see a negative effect. “If credit based insurance scores were banned, the 13% who are currently paying more for their insurance based on their predicted losses would see their premium

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AMERICAN COLLECTORS INSURANCE BECOMES FIRST SPECIALTY COLLECTOR Vehicle/Collectibles Firm to Join Trusted Choice Collector Provider Supports Agent Brand


LEXANDRIA, Va. (March 5, 2013) -- American Collectors Insurance joined the Trusted Choice® consumer branding program for independent insurance agents and brokers, becoming the first specialty collector-auto and collectibles provider to support the agent brand. American Collectors, a national provider of insurance for collector vehicles and collectibles, joined as a Trusted Choice® company partner. "Our firm was born as a family insurance agency and remains so today," says Jill Bookman, CEO of American Collectors Insurance, which was founded in 1976. "When we look at the positive attributes of the Trusted Choice Pledge of Performance, we think of the agents with whom we have the privilege to work. American Collectors proudly supports the independent agency system, and especially the agents who have made the commitment to be part of Trusted Choice®." "Collector vehicles and collectibles are a passion in every state, and agents who give attention to this market are rewarded with strong client relationships," says Dave

Evans, Trusted Choice® executive director. "The support of American Collectors for Trusted Choice® can spur greater awareness among agents of the importance of the proper coverages for collector vehicles and collectibles, which present a distinct set of risks as compared with the standard auto market." American Collectors programs offer agreed-value coverage, choice of deductibles, broad underwriting guidelines, a choice of mileage plans, flexible usage, expense reimbursement plan, and other features designed specifically for collectors. Trusted Choice® is the consumer marketing identity for more than 24,000 independent insurance agencies and brokerage firms and 68 leading insurance providers. Trusted Choice® was launched by the Independent Insurance Agents & Brokers of America (IIABA) to highlight the key distinctions that independent agencies and brokerage firms offer consumers: Choice of coverages, customization of policies, and advocacy support. It is the premier consumer brand for independent insurance agents and provides national advertising and other strategic tools to reach consumers.

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DO YOU KNOW A KEY PERSON IN THE CIGAR MFG. BUSINESS? National brokerage seeks individual with connections in cigar manufacturing and distribution. Exclusive business opportunity! Call John or Matt 1-800-359-5102




PROJECT CAP LAUNCHES ‘AGENCY 2020’ TO HELP INDEPENDENT AGENCIES PREP FOR FUTURE Year-Long Program Provides Insights, Resources from Service Providers


INNEAPOLIS (March 7, 2013) -- Project CAP has launched Agency 2020, a comprehensive new program to provide independent agencies with insights and resources to help them create and implement a broad vision for building an agency for success for years to come. Each month during 2013, the Agency 2020 program will spotlight a key element of a successful independent agency while also providing resources free of charge to selected agencies from renowned industry service providers. One grand-prize winner will get multiple complimentary services, and additional agencies will be selected to receive single services. All independent agencies will benefit by following the progress of the spotlight agencies over the course of 2013, learning how optimizing that featured key strategic element can benefit their own businesses. All member agencies of the Independent Insurance Agents & Brokers of America (IIABA) are eligible to participate in winning the services. Agencies can enter by completing a brief application form at agency2020. The winning agencies


will be selected during March by a panel of industry experts from the industry service providers. The Agency 2020 program and service delivery starts in April with a complimentary agency valuation and appraisal provided by Reagan Consulting, co-author of the IIABA Best Practices Study. Each month, Agency 2020 will update all independent agencies about that month's insights and service via Independent Agent magazine and ProjectCAPMarketing. com.

Service areas and providers include: * InVEST: Guidance on establishing school programs, and teaching materials and tools. * Caliper: Testing and skill evaluation for employees and prospective employees, including agents and sales consultants. * Big 'I' Young Agents Committee: Complimentary registration for Leadership Institute. * TrustedChoice®: Co-branding review and update. * Oak & Associates: Business planning including producer compensation model and sales and marketing plan. * Project CAP: Marketing program. * WAHVE: Consulting on optimal staffing for the future and waiver of set-up fee for employee hire process. * MarshBerry: Perpetuation

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planning strategy session and comprehensive plan. * InsurBanc: Financing consultation. * Aartrijk: Brand image assessment. Each service delivery will feature an informed, authoritative narrative on why and how that component can be integrated to create a more successful agency. "While many independent agency owners across the country are preparing for the future with energy and vision, Agency 2020 will provide the most updated, relevant insights on how to do so, including use of the products and services highlighted by our sponsoring experts," said Tony Gonsalves, senior vice president of Project CAP. "The Agency 2020 program is designed to show all IIABA member agencies the vision and tools they'll need to compete and succeed in the next decade. "The scope and format of the Agency 2020 program emphasize the entire lifecycle of the independent agency -- from hiring young talent to the firm's perpetuation process. This is a holistic, complete look at a broad range of elements that will combine to make an independent agency successful in the year 2020 and beyond. It aims to help all agencies improve by focusing on their strengths and challenges," said Gonsalves. About Project CAP: through an alliance

Created of the

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Independent Insurance Agents & Brokers of America (IIABA), Trusted Choice®, state associations and key insurance carriers, Project CAP is a powerful industry initiative with the vision and resources to recapture and expand the independent agent's share of the personal lines insurance market. Project CAP received operating investment from IIABA and six key carriers, including The Central Insurance Companies, Safeco Insurance, State Auto Insurance Companies, Selective Insurance, The Main Street America Group and Westfield Insurance. Project CAP is a trademark of Consumer Agent Portal, LLC, a Delaware limited liability company formed in 2011. For more information, visit www.


C recently commissioned a survey of 500 licensed drivers over 18 years old regarding trade-offs they would be willing to make to reduce their cost of car insurance. Surprisingly, almost two-thirds of those surveyed would allow an insuror to install a breathalyzer in their car in exchange for a discount. About half that number would make the trade for a cell-phone disabling device. While no auto insurance companies currently offer either of these

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discounts, the trend of direct monitoring of specific vehicles is already moving forward - as in Progressive’s Snapshot or Allstate’s Drive Wise. These “pay as you drive” programs monitor both mileage as well as braking and acceleration. While some discounts were more popular than others, even an onboard observation camera would be acceptable to 20% of drivers.

See “Goodbye Privacy” Page 15 15



ramingham, MA - Jesse Waters Onyango became agitated and recently located President claimed to have called the police. Obama’s uncle, an illegal Click on the video below to watch. immigrant with a DWI working in a liquor store. “Do you think you should be allowed to stay in this country?” Waters asked Onyango Obama repeatedly while chasing him around the liquor store.



ALLAHASSEE, Fla. –Florida Insurance Commissioner Kevin McCarty today submitted the “2013 Report on Life Insurance Limitations Based on Foreign Travel Experiences” to the Florida Legislature. The report details implementation of the “Freedom to Travel Act,” which was passed in 2006 and codified into law at Section 626.9541(1)(dd), Florida Statutes. The legislation placed limitations on insurance companies’ ability to deny coverage or increase premiums for life insurance based on past or future foreign lawful travel. “This is the seventh year of this report and it highlights the success of legislative and regulatory actions taken to prevent unfair discrimination for life insurance and annuities policyholders and applicants,” said Commissioner McCarty. “We appreciate the insurance industry’s cooperation with this important legislation preserving Floridians’ rights to travel freely outside of the United States.” There were two administrative action fines/penalties of $21,000 in 2012 for two companies who self-reported the violations for travel to Mexico and Venezuela prior to the 2012 report. The Office is currently reviewing three potential violations which were self-reported from three companies involving denial of coverage for travel to Israel, Colombia, and to the Bahamas.


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.S. Chamber Institute for Legal Reform (ILR) recently reported: Florida’s lawsuit climate remains among the worst in the country, according to Lawsuit Climate 2012: Ranking the States, a recent study released by the Participants in the survey were comprised of a national sample of 1,125 in-house general counsel, senior litigators or attorneys, and other senior executives who indicated that they are knowledgeable about litigation matters at companies with at least $100 million in annual revenues.


ccording to a recent report by WebMD, “Ground roast coffee has about 115 mg per 5-ounce cup if it’s made in a drip brew pot. The same size cup made in an older percolator would have 80 mg. Instant coffee doesn’t brew as long. That’s partly why it has only about 65 mg of caffeine per cup.” The report went on to say, “We get more antioxidants (which help protect cells) from coffee than any other source. That’s partly because we drink so much coffee. But also the drink itself is rich with them. Dates, for example, are packed with antioxidants, too. But coffee is a lot more popular than dates.”

from 4,469 in 2009. According to the latest data available from the Federal Highway Administration, there were 8.2 million private and commercial motorcycles on U.S. roads in 2010, compared with 8.0 million in 2009. Fatalities among motorcyclists age 50 and older increased by 119 in 2010, compared with 2009, whereas fatalities among motorcyclists under age 55 decreased by 1,391. Some 106,000 motorcycles were involved in crashes in 2009, including property damage-only crashes, according to latest data from the NHTSA. Motorcyclists were about 30 times more likely than passenger car occupants to die in a crash per

vehicle mile traveled in 2010 and five times more likely to be injured, according to NHTSA. The fatality rate per registered vehicle for motorcyclists in 2010 was six times the fatality rate for passenger car occupants, according to NHTSA. The National Insurance Crime Bureau (NICB) said that motorcycle thefts fell 6 percent in 2011 from a year earlier, based on data from the National Crime Information Center of the Federal Bureau of Investigation. The NICB noted that motorcycle thefts fell in 2011 while motorcycle sales increased. According to the Motorcycle Industry Council, motorcycles sales increased in 2011 to 440,899 units, up 0.3 percent from 439,678 in 2010. - Source: Insurance Information Institute.


niversal Insurance Holdings, Inc. (“Company”) (NYSE MKT: UVE) announced today that, as expected, the Board of Directors appointed Sean P. Downes to


ey facts on motorcycle crashes: 2010 Crash Data: According to the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA), in 2010, 4,502 people died in motorcycle crashes, up 0.7 percent


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succeed Bradley I. Meier as President and Chief Executive Officer of the Company, effective as of the close of business today. Mr. Downes will remain a director of the Company.


ewsmax recently released a report stating: “Britain suffered its first ever sovereign ratings downgrade from a major agency on Friday when Moody’s stripped the country of its coveted top-notch triple-A rating, dealing a major blow to finance minister George Osborne. Moody’s said weak prospects for British economic growth, which have thrown the government’s deficit reduction strategy off course, lay behind its decision to cut the rating by one notch to AA1 from AAAA.”


toneRiver, Inc., the trusted insurance technology partner with solutions across multiple business lines, announced the introduction and immediate availability of CompSuite, StoneRiver’s new generation Software as a Service (SaaS) solution for workers’ compensation. The company claims CompSuite is uniquely positioned to address the Workers’ Compensation business needs of the mid-market insurance carrier and Third Party Administrator and Managing General Agency initiatives.


ccording to a recent report in Newsmax Health, “Pour on the olive oil, preferably over fish and vegetables: One of the longest and most scientific tests of a Mediterranean diet suggests this style of eating can cut the chance of suffering heartrelated problems, especially strokes, in older people at high risk of them. The study lasted five years and involved about 7,500 people in Spain. Those who ate Mediterranean-style with lots of olive oil or nuts had a 30 percent lower risk of major cardiovascular problems compared to others who were told to follow a low-fat diet.

Mediterranean meant lots of fruit, fish, chicken, beans, tomato sauce, salads, and wine and little baked goods and pastries.”


ary Henning, Northeast region vice president for the American Insurance Association (AIA), testified about the industry’s response to Super Storm Sandy and the lessons learned at a hearing yesterday before the New York Assembly Standing Committee on Insurance. AIA’s testimony emphasized the insurance industry’s remarkable performance in handling a record number of claims following the storm. AIA also noted that many consumers remain unaware of the differences between homeowners insurance and flood coverage. Finally, Henning cautioned the legislature against mandating unrealistic and counterproductive claims adjusting requirements.


tta Mae Credi, called the “backbone” of the Illinois Department of Insurance and former deputy director, died in February at age 80.


eynote Competitive Research, the industry analysis group of Keynote Systems, once again recognized as number one among online car insurance websites. Progressive has sat atop the list for 20 of the last 21 scorecards dating back to 2000, demonstrating consistent excellence in the insurance space. The Keynote Insurance Carrier Scorecard praises the site for offering so many features to the customer in real-time, while providing excellent customer support options that make the insurance shopping experience easy.


eaPass Solutions, Inc. (hub., a leading independent provider of web-based insurance distribution solutions to

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the property and casualty (P&C) insurance industry, today announced that the SeaPass Hub’s registered number of users now exceeds 6,000, representing an annual growth of more than 1000%. The SeaPass Hub was developed to provide independent agents, wholesalers and aggregators a way to shop for and quote insurance online. With access to multiple product lines, from multiple carriers, agents are able to quickly obtain and compare premiums, and quote the majority of popular risks for their customers, including business owners policy (BOP), general liability (GL), package, commercial auto, workers compensation, and now surplus lines. This unique platform helps insurance industry partners serve all of the insurance needs of their customers, while driving market share, retention and increasing revenue per customer. The addition of the Hub offering for wholesalers, aggregators, and MGAs has added significantly to this year’s growth.


he publication Business Insurance reported last month that a former UPS driver was awarded $600,000 in a gender bias case: “A former United Parcel Service driver, whose case was revived by a federal appellate court last year after being dismissed, has secured a $600,000 verdict in her gender discrimination case. A jury in federal court in Midland, Texas, last week awarded Amber Ibarra $150,000 in economic losses, $150,000 in mental anguish and emotional distress, and $300,000 in punitive damages. The verdict was announced this week by her attorneys.”

A former New Smyrna Beach, Fla., firefighter on Tuesday was awarded a $444,000 verdict in her gender discrimination and retaliation case against the city.” Source: Business Insurance 19

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viation Products & Liability Insurance from Arlington/Roe & Company - MGA - representing mulitple markets. Contact: 800.878.9891 X 2401. Cfrench@ [11-6]


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merican Collectors announces updated specialty coverage for valued collections. The company claims coverage available for almost any type of collection with multiple coverage options. (800) 620-5052 12-7


Commercial Auto

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Condo Assoc Program

rident is offering tailored coverage designed for condominium town home and single-family community associations claiming competitive rates and terms. Coverages available include property, including flood, earthquake and coastal windstorm, general liability, D&O, umbrella, worker’s comp, auto, crime and property mgrs E&O. Trident Community Association Program - 5100 N. O’Connor Blvd, #200, Irving, Texas 75039 or email to 877590-0775 [11-6]



eavy construction risks including steel erection contractors, concrete contractors, roofing contractors, bridge, street & road contractors, etc. Norman Spencer - Contact Brian Harrold p: 937.432.1469 [11-7]


Contractor’s Pollution

ost contractors - including those with mold exposures and cleanup contractors. Program includes CPL - Occurrence or Claims Made form - mold coverage available - Annual & Per Project policies. Highly competitive rates claimed. All Risks, Ltd - Lou Ann Cook - 800-3665810 X 3030 email: [12-4]


Convenience Store

rgo Insurance announces expanded program and competitive rates for convenience store accounts. Company is looking for stores open until 11PM, fuel sales up to 90%, alcohol sales up to 30% with no fuel hauling exposure. Not available in Florida at this time. Email 877590-0775 [11-6]


Design & Construction Industry


rchitects, engineers & surveyors, construction managers, contractors, environmental consultants, landscape architects, specialty construction consultants. Contact Jeff Grigsby 877.453.2071 - [116]


Energy & Utility Risks

il & Gas Companies, pipeline operations, utilities, HVAC contractors and water & sewer contractors. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ [12-1]


ropane Dealers - PowerWrap is an endorsed insurance program offering specialized, full spectrum coverage. Contact Alteris: 877-590-0775 [12-1]


Entertainment & Sports

&K Insurance claims “over 75 programs available on admitted paper with no prior approval or appointment needed to submit applications for quotation. “ The MGA can be reached at 800-637-4757 or www. [11-6]


Group Homes

roup Homes Programs for such risks as Hospice, Agencies for Aging, Homeless Shelters, Rehab Facilities, Adult Day-Care Facilities, etc. Comprehensive packages available - limits up to $1M/$3M - customize with many optional coverages. AFC Insurance - Toll Free: 877-456-5323


Hair & Beauty Insurance Program

ASS - Salon & Spa Specialty Insurance administered by Brownyard Group open to agents seeking access to program. 888-823-9380 or Email: sassi@brownyard. com [11-7]

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Health & Human Services

FC Insurance - Package programs or ala carte. Contact: 877-4565323 submissions@ [12-2]




Kidnap & Ransom

ational Ins Underwriting -Webbased quick quotes, most protection classes & zip-codes OK - $40K - $750K dwelling values with replacement cost available. No credit scoring. Renters policies available. Contact: Craig Calver - 800-338-2680 X 508.

cademic institutions, energy companies, engineering firms, hospitals and healthcare, houses of worship, manufacturing firms, etc. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ [12-1]


Life Agent E&O

ife agent E&O from Rockwood Programs. Coverage limits from $250K to $1 Million. Base rates from $400 to $550. Individual policies. Indentity theft included. No shared aggregates. Includes mutual fund placement. Call 877-242-2487 or email [12-4]

Marine Risks Worker’s Comp & Longshore & Harbor Workers’ Comp


eaBright Insurance Company offers high quality workers’ compensation coverage for your clients who are small maritime employers and other marine-related businesses. SeaBright provides seamless cov All Risks, LTD 410-828-5810 rlang@allrisks. com or Appalachian Underwriters, Inc. – Oak Ridge, TN 865-425-1051 warren. or Peachtree Special Risk Brokers – Metairie, LA 504830-7347 [11-7]


Marine, Recreational

orman Spencer announces availability of a market for multiple and vaious recreational marine risks including marinas, docks, boat rentals, boat mfgs, charters and more. Contact Corky Breeden at 937432-1631. 12-7

Have a P&C Product Announcement? Send your press release or one-paragraph announcement to


Martial Arts

&K Insurance announces expanded coverage & lower minimum premiums on martial arts coverage. General Aggregate Limit increased to $5M - Participants Med Pay to $150K. The MGA can be reached at 800-637-4757 or www. [11-6]


Ocean & Inland Marine

prdwode Facilties, Inc. Contractors doing: piers, docks, wharfs, bridges, breakwaters, cranes, dredging, etc. 6455 East Johns Crossing, Suite 115 Johns Creek, GA 30097 (678) 736-6720 • Facsimile: (678) 736-6726 - Carter, Kimberly - 678 736-6720, Ext. 1000 - kcarter@ [11-7]


Professional Liability

echnology & Cyber, Architects & Engineers, RE Agents, Insurance Agents E&O, Misc. Pro Liability - and more: Contact Atlantic Specialty Lines 877545-9100 [12-1]


ictor O. Schinnerer - A-rated carriers -Real Estate Agents, Healthcare Consultants, General & Artisan Contractors, Architects, engineers & consultants, public entities such as school leaders and public officiials. Contact: 877-4532071 jeffg@


Real Estate E&O

overage for open houses, mold, network risks and privacy claims are now part of Victor O. Schinnerer & Company’s Real Estate E&O policy. Schinnerer includes the three new coverages at no additional premium. Call to ck on your state: Starr Crusenberry - 301-951-6904 [11-6]



rgo Insurance announces l o we r rates filed on restaurant c o ve r a g e including fo o d s p o i l a g e c o ve r a g e. Fu l l commission and no agency a p p o i n t m e n t n e c e s s a r y. Co m p a ny i s l o o k i n g fo r f a m i l y s t y l e, f a m i l y g r i l l s, c a s u a l s t y l e, f i n e d i n i n g a n d limited cooking restaurants such a s p i z z a a n d s u b s h o p s. Email csmktgprograms@argogroupus. com 877-590-0775 [11-6]


o r m a n S p e n c e r ’s R e a l E s t a t e Pr o g r a m - “o n e o f t h e m o s t c o m p r e h e n s i ve p o l i c i e s i n t h e m a r k e t w i t h h i g h l y c o m p e t i t i ve p r i c i n g” Co ve r a g e i s av a i l a b l e to risks whose ser vices include R e s i d e n t i a l a n d Co m m e r c i a l S a l e s, Le a s i n g, Pr o p e r t y M a n a g e m e n t , Real Estate Co n s u l t i n g, Au c t i o n e e r i n g, Mortgage B r o k e r i n g, B P O ’s a n d A p p r a i s a l, and Escrow Ser vices - Michael R yd e r m i c h a e l r yd e r @ n o r m a n s p e n c e r. c o m 800.477.9192 x204 [11-7]


Security Guard

r o w ny a r d Pr o g r a m s announces c o ve r a g e fo r security g u a r d s, claiming to insure 15 of the top 40 security g u a r d c o m p a n i e s i n t h e U. S . B r o w ny a r d Pr o g r a m s w w w. b r o w ny a r d p r o g r a m s. c o m or pvancott@brownyardprograms. com [12-4]

Tech Consultants E&O


odern Insurance Co n s u l t a n t s we b s i t e d e s i g n , s o f t w a r e d e ve l o p m e n t , d a t a b a s e a d m i n , we b h o s t i n g, software/hardware sales - and m o r e. I T c o n s u l t a n t s u p t o $ 1 5 M i n a n n u a l s a l e s. Co n t a c t A n d r e w Lawrie - 305-248-9495 X 9108 a l a w r i e @ m o d e r n i n s. c o m [ 1 2 - 2 ]


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Brother attempted to rescue doomed man but was almost sucked in as well - only pulled out by deputy.

effner, FL - In a scene right out of a late-night horror movie, around 11PM one evening in March, 37 year-old Jeff Bush was relaxing and preparing for bed when his entire bedroom was sucked into a giant and growing sink hole. He screamed for help, but it was too late. By the time his brother, Jeremy Bush arrived from across the home, only the top of his mattress was visible. Jeremy jumped into the deepening hole and tried to dig his brother out, but to no avail. Jeff had been


swallowed completely - not even his screams could be heard. Now Jeremy himself was trapped and unable to claw his way out of the growing sinkhole without the help of a deputy.

surrounding area for stability. Within a few days, the search for Jeff was abandoned as futile and dangerous and the home was demolished. Click on the image below for more news coverage:

Five others in the home, including Jeff’s brother Jeremy, escaped unharmed. The home was immediately condemned and adjoining homes were evacuated in an abundance of caution as geologists tested the

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The Underwriter’s Insider


“The Final Authority on Everything!” First, Kill All The Lawyers...


y agency just lost a small claims court case because of a sleazy lawyer and an incompetent judge. We had written a policy on a young lady’s VW in August. In November we received a call from her boyfriend reporting a claim where his furniture delivery vehicle was involved in an accident causing $4,200 in property damage. He claims he added the vehicle to her policy in October via phone although neither our agency nor the insured had any record of having done so, nor would the carrier have accepted or added a commercial use vehicle in any event - and we had expert testimony on that point. There was no record in our agency of any payment of additional premium or contact by the boyfriend. This should have been a nobrainer win for our agency yet the judge found for the plaintiff because, he said, “I think my State Farm agent would have paid this claim...” The lawyer for the other side knew darn well that the claim was contrived and even admitted as much to my lawyer. Just venting here I guess. - H.L. Ocala, FL


of very rare and expensive cigars, then insured them against, among other things, fire. Within a month, having smoked his entire stockpile of these great cigars, the lawyer filed a claim against the insurance company. In his claim, the lawyer stated the cigars were lost ‘in a series of small fires.’

The insurance company refused to pay, citing the obvious reason, that the man had consumed the cigars in the normal fashion. The lawyer sued and WON! Delivering the ruling, the judge agreed with the insurance company that the claim was frivolous. The judge stated nevertheless, that the lawyer held a policy from the company, in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what

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is considered to be unacceptable ‘fire’ and was obligated to pay the claim. Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000 to the lawyer for his loss of the cigars that perished in the ‘fires’. NOW FOR THE BEST PART... After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON! With his own insurance claim and testimony from the previous case being used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000 fine. This true story won First Place in last year’s Criminal Lawyers Award contest.

Your emotions regarding certain lawyers is well taken by the Advisor - and most professionals in the insurance industry. Lawyers come in all sizes and shapes and degrees of integrity - and thank God for insurance defense lawyers. Here’s an interesting story circulating on the Internet that may make you feel a little better. This took place in Charlotte North Carolina. A lawyer purchased a box

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FREE CLASSIFIED RULES: Submit all ads online at: www.underwritersinsider. com/classifieds. Ads must be less than 501 characters plus a title line. Eligible free classifieds include help wanted, position wanted, personal ads, agency for sale/purchase, or the one-time sale of an item or items. REGULAR CLASSIFIED RULES: Submit all ads online at: www. Only $1.00 per word, including title line and response info. Payment must be received prior to print date.

Position Wanted in Premium Finance, Carrier or MGA Marketing in Florida Experienced Relationship Manager with established agency base seeking salaried position with premium finance company, MGA, carrier or vendor. Licensed Fla. 2-20 Agent, years of experience calling on personal lines and commercial lines agencies in south and central Florida. Able to travel - proven performer. Contact for resume. 9-12

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CSR and Licensed Producers for Norcross GA office GA based agency going for expansion needs CSR ( two) and licensed producers (two), attractive salary OR commission offered to a right candidate with a minimum of two years experience & honest, hard working candidates are welcome, Please e-mail your resume ASAP. Contact: 10-3

Dir of P&C Claims, LV, NV Claims Director or Manager position wanted. 20 years experience in non-standard P&C Ins Claims for NV, NM, & AZ. 60+ employees supervised; including Claims, SIU, & Legal. Corporate budget & goal planning. Contract negotiations for all states. Resume & References available upon request. Available immediately for hire. Home is LV, NV. However, would consider southern California opportunity as well. Please contact @ 702-292-4215 or 10-1

CSR 440 or 220 Agent N Miami area Looking for a 2-20 agent or CSR Bilingual ( English-Spanish ), Excelent on Customer service Email resume to jamie@ 10-1

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HERE 2-20 Producers Wanted: Miami Westchester Area

Looking for Personal & Commercial Lines producers. Salary plus commission!!! Rapidly expanding ageny. Please contact us via email or call Yudanis or Luis @ 305-225-9550 or:


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FREE CLASSIFIEDS HERE Foreign Insurance Organization Wanted Part-time position wanted to represent, administrate or manage London or other foreign insurance organization in any U.S. states. I have all state insurance licenses required. 9-6

Franchised Insurance Agency For Sale Well Est. Florida 2-20 Licensed and Franchised General Insurance Agency. Owner consolidated 2 locations into one in 2012 reducing expenses & increasing profits as a result. Pre-qualified for SBA Lender Financing w/ $81,250 Down. Terms are approximate. Asking $325K. Contact Corporate Investment Business Brokers | (239) 936-1718 | 9-5

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9-7 25

“Obama also proved again that negative advertising

promptly responded to what was an unprecedented weather-related insurance event in New York’s history. Insurers have rightfully been expected to play a major role in the recovery effort and AIA is proud that our industry as a whole has fulfilled its obligations with distinction.” - Gary Henning, Northeast region vice president for the American Insurance Association (AIA), testifing about the industry’s response to Super Storm Sandy and the lessons learned at a hearing in February before the New York Assembly Standing Committee on Insurance.

works, invective sells, and harsh personal attacks succeed. That Romney never engaged in such diatribes points to his essential goodness as a person; his “negative ads” were simple facts, never personal abuse - facts about high unemployment, lower take-home pay, a loss of American power and prestige abroad, a lack of leadership, etc. As a politician, though, Romney failed because he did not embrace the devil’s bargain of making unsustainable promises. It turned out that it was not possible for Romney and Ryan - people of substance, depth and ideas - to compete with the shallow populism and platitudes of their opponents. Obama mastered the politics of envy - of class warfare - never reaching out to Americans as such but to individual groups, and cobbling together a winning majority from these minority groups. If an Obama could not be defeated with his record and his vision of America, in which free stuff seduces voters - it is hard to envision any change in the future. If this election prove[d] one thing, it is that the Old America is gone. And, sad for the world, it is not coming back.” - Provocative article by Rabbi Steven Pruzansky, the spiritual leader of Congregation Bnai Yeshurun in Teaneck, New Jersey. It may be away the most succinct and thoughtful explanation of how our nation is changing and appeared in The Israel National News - directed to Jewish readership. 70% of American Jews vote as Democrats for reason that are entirely unfathomable to the Insider.

up the jails. Hundreds of illegal alien criminals have been released from illegal alien jails. Now, I know Obama thinks that he’s harming Republican - this is exacting harm on the country — and it’s entirely unnecessary. None of these so-called budget cuts are necessary. None of this panic is necessary. Apparently, Obama never gets tired of sticking it to Arizona. The purely cynical view is that Obama has just let loose 30,000 new Democrat voters. So this is how far Obama’s willing to go to try to punish this country and anybody who stands in the way of him doing and getting what he wants. He’s not even in charge of his own Department of Homeland Security. He’s not even in charge of his own Immigration and Customs Enforcement agency. All of this stuff happens; he doesn’t know anything about it.” - Conservative talk-show host Rush Limbaugh lambasting the Obama administration for releasing thousands of illegal alien criminals from Arizon jails in the wake of impending “sequester” budget cuts - and after Jay Carney, the White House spokesman deflected any responsibility by claiming a “career official at ICE” made the decision without any input from the White House.

now armed with lighter, smaller and diversified nuclear warheads and are placed on a standby status. When we shell (the missiles), Washington, which is the stronghold of evils, .... will be engulfed in a sea of fire.” - North Korean Army Gen. Kang Pyo Yong at a mass rally in Pyongyang in early March told the assembled crowd that his rogue nation is ready and willing to fire long-range nuclear-armed missiles N. Korea’s Glorious Supreme at Washington. Pyo Leader Kim Jong-Un Yong and the paranoid delusionals who run the dysfunctional North Korean government were enraged at the prospect of new, harsh U.N. sanctions resulting from North Korea’s recent rocket launch and underground nuclear testing. Such fanatical outbursts seem to be typical of isolated, paranoid communist regimes.

“Tonight we have a stark reminder of the debt

problems facing our country and the clearest possible warning to anyone who thinks we can run away from dealing with those problems. Far from weakening our resolve to deliver our economic recovery plan, this decision redoubles it.” - Bristish Finance Minister George Osborne reacting to a credit rating downgrading by Moody’s.


Intercontinental ballistic missiles and various other “The president of the United States has opened “missiles, which have already set their striking targets, are


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U.S. AUTO INSURANCE POLICYHOLDERS BENEFIT FROM HIGHLY COMPETITIVE MARKETS Auto Coverage Widely Available; Commissioners Found Expenditures Dropped from 2006 - 2010


EW YORK, January 28, 2013 — Highly competitive auto insurance marketplaces are the key to making coverage available and affordable for all drivers, according to the Insurance Information Institute (I.I.I.). “Auto insurance provides important, cost-effective financial protection to millions of Americans, and most drivers have dozens of auto insurers constantly competing for their business,” said Dr. Steven Weisbart, a senior vice president and the I.I.I.’s chief economist. “The price is riskbased, and always will be.” The I.I.I. pointed out that the National Association of Insurance Commissioners (NAIC) found that the typical U.S. motorist had seen his or her annual auto insurance expenditures drop to $791.22 in 2010, more than 3 percent less than they were paying in 2006 ($817.99), according to the NAIC’s 2009/2010 Auto Insurance Database Report. Auto insurance policyholders also have a degree of control over the price they pay for coverage because the premium is determined in part by their driving record, the type of

car they drive and the miles they drive each year. These rate-setting variables were downplayed in an analysis released today by the Consumer Federation of America (CFA). In addition, the I.I.I. noted that many consumers are volunteering to have telematic devices, which monitor miles driven, placed in their vehicles. These usage-based programs, also known as Pay-As-YouDrive (PAYD) policies, give drivers a financial incentive to drive less and, depending on the information that is monitored, to drive more carefully. State insurance regulators already review and approve the various rating criteria (e.g., a driver’s age, gender and, in some instances, credit-based insurance scores, and education and occupation) auto insurers are allowed to employ when pricing a prospective or current policyholder’s policy. The mandatory minimum liability coverages a driver must purchase varies from state to state. “As anyone who watches television commercials knows, auto insurance coverage is widely available in every U.S. state,” said Dr. Weisbart. “And competitive marketplaces drive down prices. Drivers should shop around if they feel as though their current auto insurer is not meeting their needs, or is charging too high a price.”

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2005 Issue 5 29



ALLAHASSEE – Florida Chief Financial Officer Jeff Atwater today announced the arrest of Domenick Pucillo, one of the ringleaders in the fraud schemes targeted as part of continuing enforcement efforts under “Operation Dirty Money.” Pucillo filed false documentation with the Florida Office of Financial Regulation seeking to become a principal of I&T Financial Services, LLC, a business that allegedly was set up to execute a large-scale check-cashing scheme for the purposes of evading the cost of workers’ compensation coverage.

compensation fraud and grand theft. The individual listed as the straw owner is cooperating with the investigation. Pucillo was arrested yesterday by agents from the New Jersey Attorney General’s Office and will be prosecuted by the office of Miami-Dade County State Attorney Katherine Fernandez-Rundle. Pucillo is charged with filing a false

Division of Insurance Fraud and the Broward Sheriff’s Office in August 2011. The Palm Beach County Sheriff’s Office is now a partner in the Task Force as well. Through joint efforts, the task force has been able to successfully shut down 27 shell companies and identify $300 million in fraudulent transactions associated with these companies.

“Pucillo is charged with filing a false and fraudulent document, forgery, uttering a forged instrument and operating an unlicensed money service business.”

During this investigation, approximately $1 million was seized by the Workers’ Compensation Fraud Task Force. The Workers’ Compensation Fraud Task Force investigation revealed that Pucillo became business partners with Evelio Suarez in January 2012 to form I&T Financial Services, LLC. Suarez, a convicted felon, could not legally obtain a license to run a money service business, and therefore, Pucillo allegedly knowingly concealed the true identity of his business partner and instead listed a straw owner as the licensee of the business in order to obtain a license.

“If convicted on all charges, he faces up to 45 years in prison.”

Anyone with information about these or any other incidents of suspected insurance fraud is asked to call 1-800-378-0445. Citizens who provide tips can remain anonymous. The Department of Financial Services to date has awarded almost $275,000 to more than 40 citizens as part of its AntiFraud Reward Program.

The program rewards individuals up to $25,000 for information that and fraudulent document, forgery, directly leads to an arrest and uttering a forged instrument and conviction in an insurance fraud operating an unlicensed money scheme. Chief Financial Officer service business. If convicted on all Jeff Atwater, a statewide elected charges, he faces up to 45 years in official, oversees the Department prison. of Financial Services. CFO Atwater’s priorities include fighting financial The Office of Financial Regulation fraud, abuse and waste in assisted the task force by providing government, reducing government financial data support and spending and regulatory burdens Suarez was arrested in October licensure information. The Workers’ that chase away businesses, 2012 on multiple charges including Compensation Fraud Task Force was and providing transparency and conspiracy to commit workers’ jointly created by CFO Atwater’s accountability in spending. 30

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Continued from Page 10

ZALMA – a common everyday waste product – could lead to absurd results and negate essential coverage. The negligence per se claims were based on several La Junta city ordinances in effect at the time, including city ordinance 13.12.250(b), entitled “Restricted Discharges to Sewers,” which says, (b) Substances which are prohibited are: (3) Solid or viscous pollutants in amounts which will cause obstruction to the flow in the [Publicly Owned Treatment Works (“POTW”)] or other interference with the operation of the POTW. (5) Pollutants which result in the presence of toxic gases, vapor or fumes within the POTW in a quantity that may cause acute worker health and safety problems.

THE POLICY After respondents filed the lawsuit, Kirkpatrick notified his liability insurer, Mountain States, who had renewed a commercial general liability policy (the “insurance policy” or “policy”) issued to Hog’s Breath in 2003 that contained a



pollution exclusion clause stating, This insurance does not apply to: …. f. Pollution (1) “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

respondents obtained a monetary judgment against Kirkpatrick and were awarded costs. Apparently unable to collect from Kirkpatrick, respondents served a writ of garnishment on Mountain States.

(a) At or from any premises, site or location which is or was at any time

The question here is whether the pollution exclusion clause at issue excludes the conduct that occurred in this case. Respondents do not dispute that cooking grease was “discharged” from the restaurant in quantities large enough to create the sewer clog, nor do they dispute their injuries “arose out” of such a discharge.

owned or occupied by, or rented or loaned to, any insured; . . .Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. Mountain States brought a declaratory judgment action in federal court asserting that it had no duty to defend Kirkpatrick based on the pollution exclusion clause. The federal court found Mountain States had no duty to defend because “under the plain meaning of the words and in the context of the facts and circumstances alleged in the Underlying Lawsuit…. [t]he grease and oil, in the quantities allegedly at issue,” are contaminants and therefore pollutants. Thereafter, Mountain States did not defend Kirkpatrick and Hog’s Breath. After a one-day trial on damages,

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When interpreting an insurance contract, a court must first give effect to the plain meaning of its terms, and only find ambiguity where a term is reasonably susceptible to more than one meaning. While a resident of La Junta who dumps an occasional pan of greasy water into a sewer may not contaminate and therefore not pollute the sewer, a restaurant that repeatedly dumps large amounts of cooking grease or greasy water into a sewer over time, thereby creating a five- to eight-foot clog, is dumping contaminants (and thus pollutants as defined by Mountain States’ insurance policy) into La Junta’s sewers. Respondents seek to avoid this conclusion by invoking the reasonable expectations doctrine. They claim that pollution exclusion clauses were incorporated in commercial See Zalma Pg 35 31

Experts and Consultants for Insurance Disputes 4441 Sepulveda Boulevard Culver City, California 90230 310-390-4455

Consultation from Zalma Insurance Consultants (ZIC) can save you or your client thousands of dollars in the defense or prosecution of an insurance dispute. ZIC provides expert advice and counsel insurers and plaintiffs’ counsel find indispensable. Consultation from ZIC can save you, your counsel or client hundreds of hours of investigative and legal work. ZALMA INSURANCE CONSULTANTS is a service of Barry Zalma, Inc. a California professional corporation. Barry Zalma is an internationally recognized expert on insurance coverage, insurance claims handling, insurance bad faith, insurance fraud detection, the defeat of false and fraudulent claims, Barry Zalma, Esq. insurance claims handling, and the resolution of insurance disputes. As a consultant, expert witness, lawyer, author, mediator or arbitrator he serves all parties who need consultation or expert testimony on matters relating to insurance coverage, insurance claims handling, insurance fraud and the tort of bad faith. Barry Zalma founded Zalma Insurance Consultants to help resolve any insurance claim problem faced by you or your clients that do not need Mr. Zalma’s services as a lawyer. His experience and skill as a consultant and expert witness can make the difference before a jury or other trier of fact. For more than 44 years as a claims person and insurance coverage attorney, Barry Zalma has represented insurers, advised insurers on claims handling, interpreted coverages and testified as an insurance coverage, insurance bad faith, insurance claims handling and insurance fraud expert on behalf of insurers and policyholders in state and federal courts.

Expert Testimony

Zalma Insurance Consultants serves insurers, policyholders, underwriters, brokers, agents, adjusters, public insurance adjusters, lawyers and any person involved in an insurance dispute. Because he is an attorney licensed to practice law in the state of California M r. Zalma may be prohibited by California case law from acting as a consultant or expert witness and, therefore, refuses to serve in any situation where a past client of his law firm, Barry Zalma, Inc. is adverse to anyone seeking his services.

Y ou can obtain M r. Zalma’s C.V . at and his e-book publications and blogs daily at Zalma on Insurance,


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Continued From Page 9

KIM KOMANDO hard drive to a solid-state drive. Click here to learn why you would want a solid-state drive. While convenient, it’s less expensive to buy the base model of the computer and perform your own upgrades. You can find RAM and SSDs for much less at an electronics store or online than computer manufacturers charge.


app available for operating systems.

iPhones are preloaded with Apple Maps - again, it’s free - which may or may not be good depending on where you live. However, you can download Google Maps free from the App Store. Want to try something else? Waze is another very popular free navigation



5. Tablet data plans If you’re on the go quite a bit, a tablet with a cellular connection sounds like a good idea. Click here to see what


For example, if you order a Mac mini from the Apple Store and bump the RAM from 4GB to 8GB, Apple will tack on $100. The RAM itself only costs $60 elsewhere. HP and other PC makers have similar markups. A PC maker will charge $300 or more to put a 256GB SSD in a desktop. A similar drive costs $220 or less elsewhere. Apple charges $400 to put a 256GB SSD in a non-Retina MacBook Pro. Click here for step-by-step instructions to install RAM.

4. Carrier-provided GPS For an extra $5-$10 per month, wireless carriers will turn your smartphone into a GPS navigation device! Isn’t that great? There’s just one catch. Every Android phone comes loaded with Google Maps. It’s the best navigation software you can get, with spoken turn-by-turn directions, millions of points of interest, live traffic information and more. Don’t forget it’s

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ne million more consumers became victims of identity fraud in 2012, and the dollar amount stolen rose to $21 billion – the highest level since 2009. The 2013 Identity Fraud Report by Javelin Strategy & Research found 12.6 million victims of identity fraud in the United States in the past year, which equates to 1 victim every 3 seconds. The report also found that nearly 1 in 4 data breach letter recipients became a victim of identity fraud, which is the highest rate since 2010. This underscores the need for consumers to take all notifications seriously, Javelin said. Breaches involving social security numbers were the most damaging. The study found consumers who had their social security number compromised in a data breach were five times more likely to be a fraud victim than an average consumer. The good news is that companies appear to be responding more quickly to incidence of fraud. The study found a consumer’s information is being misused for an average of 48 days in 2012, down from 55 days in 2011 and 95 days in 2010. Misuse time was down for all types of fraud including fraud on cards, loans, bank accounts, mobile phone bills as well as other types. Small businesses in particular are losing out to fraud as victims become


more selective where they shop after an incident. The study found that 15 percent of all fraud victims decided to change behaviors and avoid smaller online merchants after an incident.



EW YORK — Facing higher tax rates, sluggish job growth and a faltering economy, consumers are reevaluating the way they spend their money. There are many smart ways to save on homeowners and auto insurance, but making the wrong choices can result in being dangerously underinsured, according to the Insurance Information Institute (I.I.I.).

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“There are simple steps you can take to cut the cost of your home and auto insurance while continuing to be financially protected against a catastrophe,” said Loretta Worters, vice president with the I.I.I. Following are five of the biggest insurance mistakes consumers make— not only will we show you how to avoid them, we also have some practical suggestions for better ways to cut your insurance costs: 1. DON’T: Confuse Real Estate and Rebuilding Value Insuring a home for its real estate value instead of for the cost of rebuilding is false logic. With home prices still down in many parts of the country, you might think it makes sense to reduce the amount of insurance on your home, too. But insurance is designed to cover the cost of rebuilding your home Make sure you have enough coverage to completely rebuild your home and replace all your belongings in the event of a disaster. DO: Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your annual premium. 2. DON’T: Judge a Policy Just on Price Competitive pricing is important, but should not be your only criterion for choosing an insurance company. It is a good idea to also make sure the company is financially sound, provides good customer service, and offers the policy that is right for you.

See Help Your Clients Page 37 The Underwriter’s Insider

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ZALMA liability policies to relieve insurers of liability for clean-up and other costs associated with federal environmental protection laws such as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). From this, they argue that a reasonable insured would expect pollution exclusion clauses to exclude coverage only for “traditional” pollution as contemplated by CERCLA, not cooking grease.. The reasonable expectations doctrine may override exclusionary policy language, where an ordinary, objectively reasonable person would be deceived into believing that he or she is entitled to coverage, while the insurer would maintain otherwise. The pollution exclusion clause in the policy says nothing about federal environmental protection laws, or “traditional” pollution. Instead, the policy uses general language to exclude coverage for discharges of waste or substances that irritate or contaminate. The dumping of large quantities of cooking grease into the sewer such that a clog would form would run afoul of at least one city ordinance should not cause an ordinary person to read the pollution exclusion clause to exclude “traditional” pollution but preserve coverage for conduct that violated a city ordinance prohibiting the discharge of “solid or viscous pollutants in amounts which will cause obstruction to the flow.”

a great volume as to clog the sewer. Respondents, in addition, produced no facts in this case to suggest such deception. The court of appeals based its decision on its concern that because cooking grease is a common everyday waste product, considering it to be “pollution” would lead to the negation of essential insurance coverage and absurd results. While the Supreme Court was mindful of the concerns expressed by the court of appeals, it fond them inapplicable because, in this case, the restaurant

The Supreme Court, therefore, agreed with the trial court that, under the circumstances of this case, the discharge of cooking grease amounted to a discharge of a pollutant. Concluding that the pollution exclusion clause bars coverage, and the insurance policy cannot be garnished to compensate respondents for their bodily injuries, the Supreme Court reversed the decision of the court of appeals.


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The Supreme Court reasoned that an ordinary reasonable person would not have been “deceived” into thinking that there would be coverage for the dumping of cooking grease in such

discharged enough cooking grease into the sewer system to create a five- to eight-foot clog that led to a dangerous buildup of toxic gas – conduct that violated a city ordinance prohibiting the discharge of a pollutant in an amount that creates an obstruction to the sewer flow.

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Insurance policies are contracts that require interpretation with reason. Those who write insurance policies, and courts that interpret them, expect insurance contracts to be interpreted reasonably with common sense. Snake venom, for example, is a deadly poison that would seldom be considered medicinal. However, when injected into the facial tissue of an aging person it can tighten the skin and make the person look younger without harm. Used bacon grease is healthful and often used to increase the flavors of other food products. However, when dumped improperly into a sewer where it builds up an eight foot clog and mixed with the sewer water creates toxic gas is clearly a pollutant. The Supreme Court of Colorado, intelligently, interpreted the insurance policy to provide meaning to its clear and unambiguous terms. Insurance covers many risks of loss but can never cover every possible risk of loss. 35

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will rob Americans of a multitude of individual freedoms, would cost twice it’s original estimate ($1.76 trillion over 10 years!). But it’s the loss of personal freedoms that should concern us even more than the cost:

Among the survey results: • 64 percent would let an insurance company install a breathalyzer in their cars. • 39 percent would let an insurance company install a data-monitoring device. • 37 percent would install a cellphone disabling device. • 28 percent would let an insurance company limit how fast their car can go. • 27 percent would severely restrict their driving miles. • 24 percent would severely restrict when they drive. • 20 percent would let an insurance company install an observation camera. Editor’s Note: When one considers how Americans are willingly trading away freedoms and privacy for some perceived benefit, one can’t help but recall that old frog metaphor - where a frog placed in a pot of hot water will instinctively jump out - while a frog sitting in a pot of slowly heating water will happily and complacently sit still - while it is boiled to death. Are we slowing boiling to death - as we accept the intrusion of Big Brother into our daily lives? The Congressional Budget Office announced recently that Obamacare, a program that 36

Dr. Donald Berwick, Obama’s former head of Medicare once noted: “ The primary function of regulation in health care, especially as it affects the quality of medical care, is to constrain decentralized, individualized decision making.” As well as the “individual mandate,” requiring Americans to purchase insurance, there are many more mandates and controls contained in Obamacare, as noted by • Doctors must purchase and use expensive electronic medical record systems. • Doctors must electronically record certain patient data such as ethnicity, BMI (body mass index), blood pressure, and smoking status — and turn over patient data to the government upon request. • Doctors treating Medicare patients must practice according to government “quality” guidelines or face economic penalties. • Insurance companies must offer numerous “free” benefits, including various preventive health services, birth control, and coverage of “children” up to age 26. • Insurers may not raise their rates to cover these new expenses unless the government agrees those rate increases are “reasonable.” • An Independent Payment Advisory Board (IPAB) of unelected bureaucrats will set prices for Medicare services that will lead to de facto rationing. Feel the water warming yet?

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ALEIGH -Insurance Commissioner Wayne Goodwin today announced the arrest of Arkadiusz Waldemar Kyc, 39, who fled from prosecution in Wake County to an address in Poland; he is charged with one count each of insurance fraud and obtaining property by false pretense. Department of Insurance criminal investigators allege that on May 1, 2011, Kyc filed a fraudulent insurance claim with Liberty Mutual Fire Insurance Company, stating that his Raleigh residence had been burglarized of jewelry and other items. After settling the claim with Kyc for $1,900.44, Liberty Mutual’s special investigations unit was informed by Kyc’s estranged wife that on two occasions she had returned to Kyc’s home with Raleigh police officers and retrieved the items he claimed were stolen. Kyc turned himself in to Department of Insurance criminal investigators at Raleigh Durham International Airport on Feb. 26 after disembarking from an Air Canada flight and was held on a $25,000 secured bond. The Underwriter’s Insider

Continued From Page 16

HELP YOUR CLIENTS DO: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations. You should select an insurance company that has a reputation for excellent customer service and will respond to your needs and handle claims fairly and efficiently. Also, ask questions as different insurers companies may offer different services or coverages. 3. DON’T: Neglect to Purchase Flood Insurance Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP) as well as from some private insurance companies. Many homeowners are unaware they are at risk for flooding, but in fact 25 percent of all flood losses occur in low risk areas. DO: Go to to check your flood risk and the cost of an NFIP flood insurance policy. If you are purchasing a new home, make sure that you factor the cost of flood insurance into your housing budget. If you can’t afford the insurance, you can’t afford the home. If you already own a home in a high-risk flood zone then you should get flood insurance. And, remember, even if you live in a low-risk zone it does not mean floods can’t happen. 4. DON’T: Do the Minimum Purchasing only the legally required

amount of liability insurance for your vehicle means you are likely to pay more out-of-pocket if you are sued— and those costs may be steep in today’s litigious society. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. DO: Consider shopping around for best policy, taking a higher deductible and dropping collision and/or comprehensive coverage on older, less expensive cars. It is also smart to consider the cost of insurance when purchasing a new or used vehicle. 5. DON’T: Count on Your Landlord Too many people neglect to buy renters insurance thinking that their landlord is responsible for their belongings. But your landlord is only responsible for the structure of the building not your personal possessions. A renters insurance policy covers your possessions and additional living expenses if you have to move out of your home due to an insured disaster such as a fire. Equally important, it provides liability protection in the event someone is accidently injured in your home. And your injured guest can submit medical bills directly to your insurance company. If someone were to decide to sue you, renters insurance would also include coverage for your legal defense and possible court judgments up to the limits of the policy. DO: Look into all available discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings. You may also receive a discount for installing deadbolt locks, fire extinguishers and alarm systems.

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KIM KOMANDO good tablets on the market have cellular. HERE Before you drop more than $100 dollars for the privilege, however, there’s an alternative. Those with a 4G smartphone and a shared data plan from Verizon or AT&T can share Internet with other gadgets - even a laptop. Enabling Internet sharing on your phone - also known as tethering creates a Wi-Fi hotspot for your other gadgets to connect to. It’s great when you need a minute or two to send or receive a file securely on a laptop or tablet. That’s better than spending $10-$20 every month for a tablet data plan or dedicated mobile hotspot. Be careful, though. Tethering chews up cellular data very quickly and drains your phone battery even quicker. Android users who aren’t on a shared data plan can try third-party tethering apps like FoxFi or Easy Tether. Copyright 2013, WestStar Multimedia Entertainment. All rights reserved. Kim Komando hosts the nation’s largest talk radio show about consumer electronics, computers and the Internet. To get the podcast, watch the show or find the station nearest you, visit: To subscribe to Kim’s free email newsletters, sign-up at: http://www. 37



niversity Park, Ill., Applied Systems, Inc., a leading provider of software that powers the business of insurance, today announced it has entered into a definitive agreement to acquire the Property & Casualty (P&C) business of IVANS, a leading provider of technology solutions that enable data exchange and integration between insurance carriers and agencies. The transaction will combine two complementary technology providers and longtime trusted partners of the P&C insurance industry. The combined company will be better positioned to deliver technical innovation, develop product enhancements and improve carrier-agency integration for the benefit of the entire P&C insurance industry.

Following the closing of the transaction, the IVANS P&C business will operate as a separate business division of Applied Systems led by Jim Ochiltree, president of IVANS P&C, and the entire existing senior management team. The acquisition will return IVANS to its original founding of being solely focused on and addressing the technology needs of the P&C insurance industry. Applied Systems plans to maintain and invest in IVANS P&C’s open platform and integration with all carriers and agency management systems in the marketplace today.

“Applied Systems has been a supportive and key technology partner to us throughout our history. This is an exciting and logical combination that will provide us greater technical expertise and development resources to drive “Applied Systems has a longstanding product efficiencies for the benefit of partnership with IVANS and was our customers and partners,” said Jim the first technology provider to Ochiltree, president of IVANS P&C. assist in the development of IVANS’ “As part of Applied Systems, we will open platform solutions utilized become a stronger organization and throughout the P&C insurance can further our mission of supporting industry today,” said Reid French, the industry through innovation CEO of Applied Systems. “All of us at in our data exchange and carrier Applied Systems are excited about interface technology solutions.” the product innovation and growth The transaction is subject to opportunities that will be created by customary conditions to closing and combining the businesses. We are is expected to be completed in the committed to investing in the IVANS first half of 2013. Simultaneous with P&C solutions to drive additional the Applied Systems acquisition of workflow efficiencies for the benefit the IVANS P&C business, ABILITY of our customers, partners and the Network, a leading healthcare P&C industry as a whole.” technology company, will acquire 38

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the IVANS Healthcare and Retail businesses.

### About Applied Systems Applied Systems is a leading provider of software that powers the business of insurance. The company is recognized as a pioneer in agency management systems and data exchange between agencies, brokers, carriers and their clients. By automating the insurance lifecycle, Applied Systems software enables millions of people around the world to safeguard and protect what matters most. To learn more, please visit

About IVANS For 30 years IVANS, Inc. has been the largest insurance carrier exchange in the United States that is trusted by more than 350 insurance carrier customers and 30,000 independent agents nationwide. Known for being a forerunner of ACORD standards with numerous ACORD awards and ACE Certified Specialists, IVANS focus on agency-company interface solutions includes AL3 based policy and claims download, and XML real-time quote, issue and service transactions. IVANS, which was founded by 21 insurance companies and is headquartered in Stamford, Conn., also has offices in Tampa, Fla. and Cincinnati, Ohio. For more information, visit www.ivans. com/property-casualty. The Underwriter’s Insider



ouston, TX, March 11, 2013—More than 300 risk managers, insurance agents, brokers, attorneys, and underwriters who specialize in managing or insuring the risks associated with the oil and gas industry convened here March 4–6 for the inaugural IRMI Energy Risk and Insurance Conference. Oil and gas operators, drilling contractors, and well servicing contractors large and small sent their risk, insurance, and safety managers. In addition, virtually all the major providers of insurance or surety services were represented. World Risk and Insurance News ( interviewed several attendees to understand the market needs this Conference addresses. Video coverage is available at conferences/energy-risk/video.aspx. The IRMI Energy Risk and Insurance Conference is the only national symposium devoted to managing and insuring the risks of oil and gas exploration and operations. Attendees experienced a preconference workshop, a general session, and 12 workshops presented by more than 30 nationally recognized risk and insurance, economic, and oil and gas

industry experts. Handouts from these sessions are now available at no cost on the IRMI website. Twelve charter sponsors signed on to help provide several networking opportunities. “Many unique risks are inherent in exploring for, extracting, and transporting oil, gas, and other hydrocarbons, and there is a great need in the industry for a forum where best practices for managing and insuring them can be shared,” said IRMI President & CEO Jack Gibson. “The attendees gave the Conference rave reviews on the quality of the educational sessions and the networking opportunities, allowing us to conclude that we are on the right track with this Conference. We will begin planning next year right away with a goal of making it even better.” The next IRMI Energy Risk and Insurance Conference is planned for March 2014. For more information, visit energy-risk/default.aspx or contact International Risk Management Institute, Inc. (IRMI), at 12222 Merit Drive, Suite 1450, Dallas, TX, 75251, or phone (800) 827–4242. About International Risk Management Institute, Inc. (IRMI) International Risk Management Institute, Inc. (IRMI), is a Dallas-based research and publishing organization focusing on insurance and risk management. IRMI reference services, conferences, and webinars give insurance buyers, risk managers, agents, brokers, adjusters, coverage lawyers, and underwriters knowledge to deal effectively with complex and rapidly changing insurance and risk management issues and problems. For more information, visit www.IRMI. com, or write to International Risk Management Institute, Inc., 12222 Merit Drive, Suite 1450, Dallas, TX 75251.

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BEYOND INSURANCE GLOBAL NETWORK our mission is pretty simple – the network goes beyond insurance to total risk management. Our members provide risk solutions that deliver the results their clients are looking for to protect and grow their business.” The Beyond Insurance Global Network consists of best-practice independent insurance agencies in North America that are focused on transforming the customer engagement process. The new name and logo employ a masterbrand approach that brings together the Beyond Insurance process, resources, products, and publications under a single logo. A new website will follow later this year and also carry the new logo and look. About the Beyond Insurance Global Network: The Beyond Insurance Global Network is an exclusive peerto-peer group of best-inclass independent agencies. Network members are dedicated to enhancing the customer experience by applying innovative systems, strategies, and tools to serve as outsourced risk managers. For more information about the Beyond Insurance Global Network, visit 39

The Underwriter's Insider - March 2013  

The Insider is a popular trade magazine (EZine) focused on P&C insurance, politics, technology and people. Reaching an email campaign base o...

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