The Underwriter's Insider August 2019 by The Underwriter's Insider

IN THIS ISSUE AUGUST 2019 VOL 15 ISSUE 8

3 Ways To Search The Web Without Google Tracking You

An Assignment Of A Claim Against An Insurer That Denied Coverage Is Often Worthless

Special Tax Benefits For Employee Stock Ownership Plan Particpants

Treating Wireless Customer Care As A Product Instead Of A Service Pays Off

The Future At Lloyd’s Receives Overwhelming Support As Blueprint Build Begins

New Study Ranks The Worst (And Best) States For Post-Accident Claim Premium Increases

IBM Study Shows Data Breach Costs On The Rise - Impact Will Be Felt For Years

In-Vehicle Infotainment Systems Especially Distracting To Seniors

U.S. Risk Announces Acquisition Of U.S. E&O Brokers

Tasha Carter Appointed Florida’s Insurance Comsumer Advocate

India: More Than Call Centers • Tampa Brokerage Partners With Clearwater Firm • Armstrong Heirs Split $6 Million Lawsuit

Financial Advisor Sentenced After Embezzling Almost $1 Million

Mastermind of Ponzi Scheme Largest Ever Charged In S. Florida Pleads Guilty

Washington Seeks $1.1 Million From Sham “Ministry” Health Insurance

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Florida Announces Arrest Of Agent In $1.7 Million Premium Finance Fraud

NY: Applied Underwriters Fined $3 Million After Unlicensed Workers’ Comp Business

Lloyd’s Launches New Tool To Improve Insurance Contracts For Customers

Win Any Debate: Just Yell “Racist” At Your Opponent!

Minico Insurance Intros Cyber Insurance Program For Small Business

PREFER TO READ OFFLINE? DOWNLOAD & VIEW PDF: HERE!

Say What? Congressional “Squad” Member Caught In Another Lie • John King To Replace Indicted GA Commissioner Beck • Study Shows Zero Benefit To Supplements • Lunatic Ramblings Of Dayton Shooter • Trump’s Message Of Unity Mocked By The Left

INSURANCE AND THE LAW PAGE SIX

Want Your Message Delivered To Industry Mailboxes 190,000+ Times Per Month? For As Little As $89? (Here) 2019 FAIA & LAAIA TRADE FAIR BOOTH IMAGES NOW ONLINE! PG 42

HOW (AND WHY) TO WRITE A PRESS RELEASE THAT ACTUALLY GETS PUBLISHED

PG 40 FEATURES 5 6 8 21

Kim Komando

Breaking News

28 32

Insider Advisor

Back Issues

Page 6 New Zalma Claims Books Now Available! Story...

Cover Image: © R Manera

Barry Zalma Matt Treskovitch Advertise

Say What?

AUGUST 2019 INSURANCE - POLITICS - TECHNOLOGY - PEOPLE A Publication of AdMax Corp., Inc. Corporate Offices P.O. Box 31551 Palm Beach Gardens, Florida 33420 Ron Manera, Publisher/Senior Editor Join Me On Linkedin: HERE Follow Me On Instagram: @rj.0521 561.718.0745 • ron@insurmedia.com

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AUGUST 2019

TECHNOLOGY

3 WAYS TO SEARCH THE WEB WITHOUT GOOGLE TRACKING YOU

Really Cool Tech Info (and opinion) - From Kim Komando

he word “Google” has become synonymous with “finding information.” But even the mighty Google has its drawbacks, especially if you value your privacy.

many ways. First, it wasn’t developed in California, but in suburban Pennsylvania. Second, DuckDuckGo has a mission to keep users’ information private and to prevent personalized search results.

The world’s most famous search site is also known for saving your search history, reading your email in Gmail, and tracking what you click online.

So what’s wrong with personalized search results? Don’t you want your phone or computer to cater to your interests? The creators of DuckDuckGo assert that this kind of technology creates a “filter bubble.” Google specializes in sending you only the content that the company thinks you want, not everything available.

Before you break out the torches and pitchforks, remember that Google is trying to make its services as useful as possible. The company’s goal is to find Maybe you want a break from out what you want before you the well-meaning surveillance. want it. What are your alternatives these days? Which search engines Tip within a Tip: Did you know don’t step on your virtual heels? that Google also tracks your physical location and dates Here are three ways to search you were there? They sure do! the internet that you may find Wonder what they know about refreshing. your travels? Click here to see a map showing your detailed Give DuckDuckGo a try location history. This search engine is unusual in AUGUST 2019

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There’s more to DuckDuckGo than just not being Google. The search engine includes nifty calculators and other tricks you’ve come to expect, and you can customize its interface with search shortcuts and an Instant Answers feature.

See Kim Komando Pg 38 www/underwritersinsider.com

CLAIMS & THE LAW

AN ASSIGNMENT OF A CLAIM AGAINST AN INSURER THAT DENIED COVERAGE IS OFTEN WORTHLESS Expert Analysis & Commentary by Barry Zalma, Esq., CFE Need for Money from Insurer (“Schnabel”) appealed from the Construction Company (“Turner”) district court’s order granting as the general contractor for the Does Not Create Coverage

summary judgment to National nsurance does not, as I have Union Fire Insurance Company said until I was blue in the face, (“NU”). does not cover every possible problem. When an insurer denies coverage the policyholder Join Barry Zalma’s Blog: without coverage will try to save http://www.zalma.com/blog money by convincing the plaintiff to let the policyholder go free in exchange for an assignment of a claim against an insurer where punitive damages might allow it FACTS to become rich. This case came about after the delay of a building construction In Schnabel Foundation project in Bethesda, Maryland. Company v. National Union Fire Bainbridge St. Elmo Bethesda Insurance Company of Pittsburgh, Apartments, LLC (“Bainbridge”) Pennsylvania, No. 18-1782, owned the land at issue (“the United States Court of Appeals for Site”) and built a 17-story mixedthe Fourth Circuit (July 10, 2019) use building on it called “the Schnabel Foundation Company Monty.” Bainbridge hired Turner

project and Turner subcontracted with Schnabel, a building foundation company, to provide the “support of excavation” system (“SOE”). An SOE retains the earth immediately surrounding a building site and provides lateral support to neighboring properties during construction. The SOE at issue consisted of steel beams called “soldier piles” and wooden slats called “lagging.” This SOE framework holds back earth on adjoining properties as excavation and construction occur on the Site. An SOE is crucial until the foundation slab and walls are installed, at

Barry Zalma, Esq., CFE, practiced law in California for more than 43 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. 6

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AUGUST 2019

which time the construction work on the SOE delayed the provides support. When the built contracted completion date for structure is complete, the SOE is approximately one year. “abandoned in place.”

Before accepting Schnabel began constructing the Monty’s SOE by boring an assignment holes and installing soldier piles of a claim against an along the Site’s property line. Several buildings abutted the insurance company property line, including one that who has denied White Flint Express Realty Group Limited Partnership (“White coverage to the Flint”) owned and leased to defendant, it should business tenants. Schnabel, in an attempt to construct the SOE be obvious that the as close to the property line as offer be reviewed possible, drilled larger holes by a professional for the soldier piles than it had planned. Because the holes were insurance coverage oversized, the earth around them lawyer to advise shifted and sloughed into the holes. Schnabel then had to use whether there is high a vibrating air hammer to install probability that a suit the remaining soldier piles, which exacerbated the soil movement. against the insurer Because of the SOE excavation will succeed.“ at the Site the earth under neighboring properties shifted causing damage to those THE INSURANCE buildings. It is undisputed that Schnabel’s deficient SOE Turner purchased two insurance installation caused the soil to policies for the Monty project, which together comprised a shift. Contractor Controlled Insurance Montgomery County issued a Plan (“CCIP”). The policy at Stop Work Order for the Monty issue here is only the umbrella project. Regular construction Commercial General Liability resumed and Schnabel (“CGL”) policy Turner obtained eventually completed a proper from NU (“the Policy”). SOE about seven months late. The Monty project continued to THE COVERAGE completion, but Schnabel’s faulty LITIGATION AUGUST 2019

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Multiple lawsuits followed from everyone involved in the construction and the neighboring properties. Turner accepted $5 million in settlement from Schnabel and assigned its remaining rights to Schnabel. Schnabel then sued NU. NU denied coverage based on its interpretation of several Policy terms, which are central to the decision of the Fourth Circuit. NU denied coverage because it contends that even if an “Occurrence” caused Schnabel’s damages, they fall under Exclusion D of the Policy: “Damage to Impaired Property or Property Not Physically Injured.” Under Exclusion D, Policy coverage does not apply to Property Damage to Impaired Property or property that has not been physically injured, arising out of: “1. a defect, deficiency, inadequacy or dangerous condition in Your Product or Your Work; or 2. a delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms.” To fall under Exclusion D, the property at issue must satisfy two conditions: 1) it must be a certain type of property— ”Impaired Property or property that has not been physically

See ZALMA Page 37 www/underwritersinsider.com

ANALYSIS - FINANCIAL

“InvestmentZen”Credit: www.investmentzen.com

SPECIAL TAX BENEFITS FOR EMPLOYEE STOCK OWNERSHIP PLAN PARTICIPANTS By Matthew Treskovich, CPA/PFS, MBA, CFP®, CMA

ost of the tax rules for common retirement plans are somewhat straightforward. Qualified retirement plans that let you invest in your employer’s stock can provide a unique tax benefit. This special tax benefit can substantially reduce your tax bill, if you understand the rules and plan properly. This tax benefit, called Net Unrealized 8

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Appreciation or “NUA”, is one of the best-kept secrets of employer-sponsored retirement plans. Because the rules are complex, very few financial advisors have the tax expertise to give good advice on using the NUA strategy. When you receive a distribution from an employer-sponsored retirement plan, the amount you receive is generally taxed at ordinary income tax rates. Table of Contents

These distributions are (with a few exceptions) subject to a penalty tax if you take them before age 59 1/2. You can avoid paying taxes immediately by rolling your balance into an Individual Retirement Account. Distributions from individual retirement accounts are taxed at ordinary income tax rates when the funds are withdrawn.

Ordinary Income vs Long Term Capital Gains AUGUST 2019

stock will be taxed at capital gains rates instead. Also, the capital gains tax isn’t’ triggered until you sell the stock, providing an additional opportunity to spread out the tax bill. The rules for Net Unrealized Appreciation are complicated. Ordinary income tax rates are start at zero (0%), and only go up Whether it’s right for you depends the “default” tax rates that apply to 20% for the highest-income on many factors, including your to most types of income. Some taxpayers. financial situation and age, the special kinds of income are taxed cost and value of the employer at different rates. A “capital gain” How Net Unrealized stock, and your planning goals. is the difference between what Appreciation Works you paid for an asset (called your The Net Unrealized Appreciation NUA isn’t right for everyone, but it “basis”), and the amount you (NUA) tax rules are one of the rare can potentially save a significant receive when you sell the asset. instances where the IRS allows amount on taxes. Because the Long term capital gains are a special category of income taxed at lower rates. For 2019, ordinary income tax rates start at 10% and go as high as 37%. Long-term capital gains tax rates

you to choose between paying ordinary income tax rates, or long-term capital gains tax rates. If you choose the NUA strategy, you will pay some ordinary income tax immediately, but all the appreciation in the employer

rules are complex, and penalties can be significant, you should seek the advice of a competent financial planner with tax expertise before deciding what to do with employer stock in a retirement plan.

About the author:

Matt is the Chief Investment Officer of the firm of CPS Investment Advisors with 18 years of experience in financial services also serving as the CFO of an insurance brokerage. With a Master’s degree in Business Administration, with an emphasis on accounting from the University of Phoenix, Matt is a CPA licensed in Florida and holds the AICPA’s Personal Financial Specialist (PFS) designation. Matt is a CERTIFIED FINANCIAL PLANNER ™ and a Certified Management Accountant (CMA). and received a Certificate of Distinguished Performance from the IMA for achieving a CMA exam score in the top ten worldwide. In 2017, he was awarded an AICPA Standing Ovation for exemplary professional achievement in personal financial planning services. Treskovich also is certified as an Accredited Estate Planner® (AEP®) designee by the National Association of Estate Planners & Councils (NAEPC). He is a member of the Institute of Management Accountants, former President of the Mid Florida Chapter and former Treasurer of the IMA Florida Council.

AUGUST 2019

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ANALYSIS - J.D. POWER

TREATING WIRELESS CUSTOMER CARE AS A PRODUCT INSTEAD OF SERVICE PAYS OFF T-Mobile, Cricket and Consumer Cellular Rank Highest in Respective Segments

OSTA MESA, Calif.: 1 Aug 2019 — Wireless customers are more satisfied with carriers that position customer care as a product instead of an obligatory service, according to the J.D. Power 2019 U.S. Wireless Customer Care Full-Service Performance StudySM—Volume 2 and the J.D. Power 2019 U.S. Wireless Customer Care NonContract Performance StudySM— Volume 2, released today. “Simply resolving a problem does not cut it anymore in terms of customer satisfaction,” said Ian Greenblatt, Managing Director at J.D. Power. “Wireless carriers with higher satisfaction ratings not only resolve problems the first time but delight their customers during their interaction.By treating customer service like a ‘capital-P’ product, the interaction goes beyond obligatory problem resolution, becoming a pleasant, personalized resolution experience with impressive gains in customer satisfaction.”

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STUDY RESULTS

The studies evaluate customer care experiences across 12 different customer care For full-service carriers, T-Mobile ranks highest with a channels: phone customer score of 847. Verizon Wireless service reps; in-store contact; (824) ranks second and AT&T online chat; email; social media (788) ranks third. The full-service post; carrier app question post; automated telephone systems; segment average is 806. website search; social media For non-contract full-service search; user forum; video from carriers, Cricket ranks highest carrier; and carrier app search. with a score of 829. Metro by T-Mobile (822) ranks second The studies were fielded from and Boost Mobile (815) ranks January through June 2019. third. The non-contract fullservice segment average is 815. For more information about the U.S. Wireless Customer For non-contract value carriers, Care Full-Service Performance Consumer Cellular ranks Study and the U.S. Wireless highest with a score of 861. Customer Care Non-Contract Straight Talk (784) ranks second Performance Study, visit https:// and TracFone (744) ranks third. www.jdpower.com/business/ The non-contract value carrier resource/us-wireless-customercare-performance-study segment average is 789. The 2019 U.S. Wireless Customer Care Full-Service Performance Study—Volume 2 and the 2019 U.S. Wireless Customer Care Non-Contract Performance Study—Volume 2 is based on responses from 12,467 customers who contacted their carrier’s customer care department within the past three months. Table of Contents

J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power has offices serving North America, South America, Asia Pacific and Europe. AUGUST 2019

NEWS - LLOYD’S OF LONDON

THE FUTURE AT LLOYD’S RECEIVES OVERWHELMING SUPPORT AS BLUEPRINT BUILD BEGINS Lloyd’s confirmed that the proposals set out in the Future at Lloyd’s prospectus have received widespread backing from Lloyd’s market participants, customers and other stakeholders, as the consultation on the global insurance market’s bold new strategy, launched on 1 May this year, draws to a close and the blueprint build begins.

he consultation on the six transformational initiatives proposed* generated more than 4,000 insights over a 10-week period, including almost 500 online survey respondents and 300 interviews involving more than 600 people. This extensive engagement has captured feedback from the broadest range of the market’s unique ecosystem of participants, customers and stakeholders in the UK, and across Lloyd’s Global Network, with the majority reporting that they are confident the proposals will deliver the aims of the Future at Lloyd’s**. John Neal, Lloyd’s CEO, said: “The reimagining of the Lloyd’s platform, through a set of plug-and-play ideas that could revolutionise the way we do things, offers our market an incredible chance to create the most customer-centric digital AUGUST 2019

insurance platform in the world. our stakeholders to refine and The outstanding level of support develop the proposals, ensuring we have received so that they are far through our representative of open and extensive the feedback and consultation help us plan and demonstrates prioritise.” that the Future at Lloyd’s goals and The Future proposals offer a at Lloyd’s compelling and blueprint will relevant foundation be published on John Neal, Lloyd’s CEO on which we can begin 30 September. In building a blueprint.” parallel, the work now begins in earnest to build and deliver Jon Hancock, Lloyd’s Performance prototypes, with some solutions Management Director, added: operational in early 2020. The “The feedback we have received recently announced Global and over the past 10 weeks has London advisory committees been instrumental in helping us have also had their initial shape the ideas and next steps meetings, with both committees for the Future at Lloyd’s, and playing an important role in demonstrates the value of the providing guidance and advice bottom-up approach we have as the blueprint for the Future at taken from the outset. As we Lloyd’s begins development and begin creating the blueprint, we implementation. will continue to work with all of Table of Contents

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NEWS

NEW INSURANCE.COM STUDY RANKS THE WORST (AND BEST) STATES FOR POSTACCIDENT CLAIM PREMIUM INCREASES Michigan, Louisiana among worst states for car insurance claims, while across the country rates spike 31%, on average, after just one at-fault accident with more than $2,000 in damage

OSTER CITY, Calif., Aug. 06, 2019- Insurance.com, selfbilled as the leading online resource for auto, home, health and life insurance expertise based on 20 years of helping consumers, released today a new study examining the worst states for auto accidents claims. In compiling the rankings, Insurance. com’s experts researched how much drivers in each state pay, on average, after a car accident claim. Based on the data, Michigan is the worst state for car insurance claims. Drivers there see insurance premiums climb to an average of $3,502 after an at-fault accident. Already experiencing the highest insurance rates in the nation at an average of $2,368, it amounts to a 48% jump for Wolverine State drivers.

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Along with Michigan, the list of worst states for accident claims includes the following states and district (with the average annual insurance premiums following an accident claim in parentheses): 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Michigan ($3,502) Louisiana ($3,348) California ($3,081) Florida ($3,045) Delaware ($2,592) Rhode Island ($2,591) Connecticut ($2,589) Georgia ($2,552) Minnesota ($2,503) Washington DC ($2,438)

The state where drivers pay the least after an at-fault accident, Maine, also has the lowest overall average insurance rates in the nation at $884. Ohio, Virginia, Indiana and Idaho all have insurance rates that come in below $1,300, on average, after a collision. The best states for auto accident claims include: 1. 2. 3. 4. 5. 6. 7.

Maine ($1,058) Ohio ($1,170) Virginia ($1,250) Indiana ($1,259) Idaho ($1,294) North Dakota ($1,338) New York ($1,360) Table of Contents

8. 9. 10.

Vermont ($1,405) Hawaii ($1,414) Alaska ($1,458)

According to the research, repair costs are a contributing factor to expensive insurance premiums after an accident. The Bureau of Labor Statistics shows that the price for motor vehicle repairs was 66% higher in June 2019 than they were in June 2000. One of the reasons for the jump is the increasingly high-priced components in vehicles, making sufficient liability insurance limits a must for coverage plans. “Purchasing more liability coverage is a smart and fairly affordable option to protect against all sorts of unforeseen expenses after a collision,” says Penny Gusner, Insurance.com consumer analyst. “We all know medical expenses are never cheap. But beyond that, even minor accidents without injuries can produce skyrocketing bills. The latest car models being rolled out cost more than ever to repair due to the expensive technology inside, such as sensors, cameras and electronic safety features that are pricey and difficult to replace.”

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NEWS Insurance.com data also shows that drivers can save an average of $600 by comparing rates after an accident claim. For a full list of where each state ranks, you can read the complete report on Insurance.com: https://www. insurance.com/how-much-carinsurance-goes-up-for-accidentby-state

About Insurance.com Insurance.com is owned and operated by QuinStreet, Inc. (Nasdaq: QNST), a pioneer in delivering online marketplace solutions to match searchers with brands in digital media. QuinStreet is committed to providing consumers and businesses with the information and tools they need to research, find and select the products and brands that meet their needs. Insurance.com is a member of the company’s expert research and publishing division. Insurance.com is a trusted online resource dedicated to educating consumers on auto, home, health and life insurance, developing relationships directly with carriers to offer consumers comparison rates from multiple companies. Since 2001, Insurance.com’s industry-first online tools, databased reporting and experienced experts have helped consumers make informed insurance-related decisions, so they can choose the right insurance for their individual needs. AUGUST 2019

IBM STUDY SHOWS DATA BREACH COSTS ON THE RISE; FINANCIAL IMPACT FELT FOR YEARS

AMBRIDGE, Mass., July 23, 2019 /PRNewswire/ -IBM (NYSE: IBM) Security today announced the results of its annual study examining the financial impact of data breaches on organizations. According to the report, the cost of a data breach has risen 12% over the past 5 years1 and now costs $3.92 million on average. These rising expenses are representative of the multiyear financial impact of breaches, increased regulation and the complex process of resolving criminal attacks.2

realized within the first year after a breach, 22% accrued in the second year and another 11% accumulated more than two years after a breach. The longtail costs were higher in the second and third years for organizations in highly-regulated environments, such as healthcare, financial services, energy and pharmaceuticals.

“Cybercrime represents big money for cybercriminals, and unfortunately that equates to significant losses for businesses,” said Wendi Whitmore, Global Lead for IBM X-Force Incident Response The financial consequences of a data and Intelligence Services. “With breach can be particularly acute for organizations facing the loss or small and midsize businesses. In theft of over 11.7 billion records in the study, companies with less than the past 3 years alone, companies 500 employees suffered losses of need to be aware of the full financial more than $2.5 million on average impact that a data breach can have – a potentially crippling amount for on their bottom line –and focus on small businesses, which typically how they can reduce these costs.” earn $50 million or less in annual revenue. Sponsored by IBM Security and conducted by the Ponemon For the first time this year, the report Institute, the annual Cost of a Data also examined the longtail financial Breach Report is based on in-depth impact of a data breach, finding interviews with more than 500 that the effects of a data breach companies around the world that are felt for years. While an average suffered a breach over the past year. of 67% of data breach costs were Table of Contents

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SPECIAL REPORT - AAA

IN-VEHICLE INFOTAINMENT SYSTEMS ESPECIALLY DISTRACTING TO OLDER DRIVERS New AAA Foundation research suggests focusing on older drivers could hold the key to safer in-vehicle technology for everyone

ASHINGTON, D.C. (July 25, 2019) – New in-vehicle infotainment technology has the potential to increase comfort and extend mobility for older drivers,

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but first it has to stop distracting them. On average, older drivers (ages 55-75) removed their eyes and attention from the road for more than eight seconds longer than younger drivers (ages 21-36) when performing simple tasks like programming navigation or tuning the radio using invehicle infotainment technology, according to new research from the AAA Foundation for Traffic Safety. Taking your eyes off the road for just two seconds doubles a driver’s risk of a crash. Table of Contents

“Voice-command functions found in new in-vehicle technology are intended to help drivers by keeping their eyes and attention on the road,” said Dr. David Yang, Executive Director of the AAA Foundation for Traffic Safety. “Unfortunately, the complexity and poor design of some of these systems could cause more harm for older drivers, in particular, instead of helping them.” By 2030, more than one in five drivers on the road will be over AUGUST 2019

the age of 65. With seniors becoming the fastest growing demographic in the U.S., finding ways to design technology to improve their comfort and safety is critical and may hold the key to enhancing the safe use of this technology for all drivers. The AAA Foundation for Traffic Safety partnered with researchers from the University

of Utah to test the visual and cognitive demand created by the infotainment systems in six 2018 vehicles. Study participants in two age groups (21-36 and 5575) were required to use voice commands, touch screens and other interactive technologies to make a call, send a text message, tune the radio, or program navigation, all while driving.

Researchers found that the technology created potentially unsafe distractions for all drivers, though this safety risk is more pronounced for older adults, who took longer (4.78.6 seconds) to complete tasks, experienced slower response times, and increased visual distractions. The complex design of the technology created increased visual and cognitive demand for older drivers. For example, some systems included multiple menus and cumbersome voice command functions that significantly reduced older driversâ&#x20AC;&#x2122; ability to easily complete seemingly simple tasks. Specific design changes to invehicle infotainment systems, like improving voice-command technology, simplifying software menus, removing complex center console controls, and positioning system controls to allow drivers to keep their eyes on the road, would better meet the needs of older adults and

See Infotainment Distracting Page 36

NEWS

U.S. RISK ANNOUNCES ACQUISITION OF U.S. E&O BROKERS

ALLAS, Aug. 01, 2019 U.S. Risk, LLC, a top ten property and casualty wholesaler and MGA announced today that it has acquired U.S. E&O Brokers (“U.S. E&O”), a wholesale broker and MGA focused on delivering professional lines coverage for insurance agents. U.S. E&O is headquartered in Houston, Texas, with additional locations in Connecticut, Colorado and New Mexico. The U.S. E&O team will join U.S. Risk Underwriters, the specialty programs division of U.S. Risk. Terms of the transaction were not disclosed.

our specialty professional liability capabilities. Angela and her team have a well-deserved reputation for providing excellent service levels and bringing years of expertise to all of their customers.”

Dallas, Texas. Operating 17 domestic and international branches, it offers a broad range of products and services through its affiliate companies, which include U.S. Risk Underwriters, U.S. Risk Brokers, U.S. Risk Solutions, Oxford Insurance Brokers Ltd. (UK), James Hampden About U.S. Risk, LLC International Insurance Brokers Ltd., U.S. Risk, LLC, is a leading (UK), MGB Insurance Brokers Ltd, international specialty lines (UK), Antarah FZE (UAE), and UNIS underwriting manager and A.G. (Zurich). For more information, wholesale broker headquartered in visit www.usrisk.com.

Commenting on the transaction, Angela T. Schroder, president of U.S. E&O, shared: “We are delighted to join the U.S. Risk family of companies. We believe their entrepreneurial culture aligns very well with ours, and we look forward to strengthening our offerings to current clients while expanding our client base through the U.S. Risk network of agents.” Randall G. Goss, chief executive officer for U.S. Risk, added: “We are pleased to welcome U.S. E&O to the U.S. Risk team and look forward to strengthening 16

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Mr. Zalma recently published on Amazon.com with links at the Zalma Books site with the following volumes:

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AUGUST 2019

NEWS

TASHA CARTER APPOINTED AS FLORIDA’S INSURANCE CONSUMER ADVOCATE

ALLAHASSEE, Fla. – Chief Financial Officer (CFO) Jimmy Patronis announced in July the appointment of Tasha Carter, long-time Director of the Florida Department of Financial Services’ (DFS) Division of Consumer Services, as the state’s Insurance Consumer Advocate effective August 1. The Insurance Consumer Advocate (ICA) works independently from DFS and serves Floridians by actively engaging with consumers and working with stakeholders to find consumer focused solutions on insurance matters. CFO Jimmy Patronis said, “As Director of the Division of Consumer Services for nearly a decade, Tasha Carter has tirelessly advocated for Florida’s insurance consumers while fighting to hold insurance companies accountable. Her extensive knowledge of the insurance industry and the important issues facing everyday

AUGUST 2019

consumers make her a perfect fit spent much of my career fighting for the role of Florida’s Insurance for Florida’s insurance consumers and advocating on their behalf. I Consumer Advocate.” look forward to working on consumer-focused policy solutions and ensuring consumers’ interests are always represented when insurance decisions are made.” Tasha Carter joined the Department of Financial Services in 2003 and recently served as the Director of the Division of Consumer Services for more than 8 years, leading a team of more than 100 professionals who advocate and assist more than 300,000 insurance consumers annually. In this role, Carter worked closely with CFO Patronis to educate and advocate on behalf of all Floridians who have purchased an Tasha Carter, Insurance Consumer Advocate insurance or financial product. Carter’s professional Insurance Consumer Advocate experience includes more than 19 Tasha Carter said, “I am honored years of leadership, professional and broad and excited to be appointed by responsibility CFO Patronis to serve as Florida’s experience in regulation, consumer Insurance Consumer Advocate. I’ve advocacy and outreach. Table of Contents

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THE INSIDE TRACK - BREAKING NEWS partnership with the AF Group, a premier provider of insurance solutions. The partnership will provide a software enablement exclusively for ndia launched it’s second solution moon rocket on July 22. The independent insurance agents “fully indigenous” spacecraft appointed within the AF Group successfully accomplished network. Talage’s software will be some complex manoeuvres to available on agency web portals establish an orbit that would across the country, equipping send it to a rendezvous with the agencies with online check-outs Earth’s natural satellite via a lunar to allow them to better serve transfer orbit. The spacecraft is the small businesses within their scheduled to make it to the moon communities. Talage and AF by September 7th with a landing Group will also provide additional near the moon’s south pole planned. After a successful landing, a 6-wheeled lunar rover will explore the landing area for about 2 weeks collecting scientific data on lunar topography, elemental abundance, the lunar exosphere and the signatures of hydroxyl and water-ice.

India: More Than Call Centers...

tools to support the growth of these independent insurance agents.

Tampa Brokerage Partners With Clearwater Firm

aldwin Krystyn Sherman Partners (BKS-Partners), an insurance brokerage and risk management firm headquartered in Tampa,

Talage Announces Partnership With AF Group

alage, an i n s u r a n c e s o f t w a r e company that allows small business owners to buy essential commercial insurance coverage online, has announced a

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AUGUST 2019

THE INSIDE TRACK - BREAKING NEWS FL, is pleased to announce their partnership with local Clearwater firm, Fiduciary Partners Retirement Group. BKS-Partners currently operates throughout the Southeast with a team of over 300 colleagues. Their partnership with Fiduciary Partners finalized on Monday, July 1, 2019. Cofounded and operated by retirement plan consultant, Ken Jewell and former employee benefits attorney, Roger Rovell, Fiduciary Partners specializes in retirement consulting and planning. Their team members individually average over 25 years’ experience of providing consultative services to clients in a broad assortment of industries, including taxexempt entities.

Risk Strategies Acquires Reiff & Associates

isk Strategies, a privately held, rapidly growing national insurance brokerage and risk management firm, today announced it has acquired Reiff & Associates, AUGUST 2019

a full service brokerage firm focused on risk and insurance for companies in the entertainment industry. Terms of the deal were not disclosed. Founded in 1983 and based in New York City, Reiff & Associates provides customized risk management and insurance solutions for theater, television, film and media production, staging and rigging, live music, and special events. Notable recent client productions include musicals Hamilton and Hello Dolly, as well as the film productions of “Black Swan,” “Precious,” “The Wrestler,” and “Lost in Translation.”

Neil Armstrong Heirs Reportedly Split $6M From Hospital Captive Insuror

n August 2012, Neil Armstrong, the first man to walk on the moon, checked into Mercy Health Hospital in Fairfield, OH after experiencing severe chest pains. He

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was scheduled for and underwent a routine heart bypass but complications after removing the wiring from a temporary pacemaker caused profuse bleeding around the heart membrane and eventual death - an extremely rare occurrence. The lawsuit claimed improper and insufficient care and the plaintiffs were awarded $6 million - divided among the heirs.

Eat More Chicken?

new study based on 100 healthy men and women aged 21-65 over a 4-year timespan published in the July issue of the American Journal of Clinical Nutrition compared increased levels of LDL (bad cholesterol) between redmeat and chicken diets and found no difference. Researchers urge caution in assessing the preliminary results since other studies have shown a red-meat diet had a 16% increase in the risk of dying of heart disease over a white-meat diet.

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NEWS

LONG BEACH FINANCIAL ADVISOR SENTENCED TO OVER 10 YEARS IN STATE PRISON AFTER EMBEZZLING NEARLY $1 MILLION

ONG BEACH, Calif. — Tom Fallon, 65, was sentenced today in the Long Beach Superior Court after being convicted in an open plea of 25 criminal counts of money laundering and grand theft. Fallon was sentenced to 10 years and four months in state prison. Restitution was ordered in the amount of $995,118.

“Fallon abused his clients’ trust in order to access their money and then stole it to stuff his own pockets,” said Insurance Commissioner Ricardo Lara. “Fallon’s callous actions ruined lives. Thanks to the hard work of investigators at the Department of Insurance and the Los Angeles County District Attorney’s office, his victims have justice.”

June 4, 2019, most of the victims had the opportunity to address Judge Daniel Lowenthal in an open court hearing. Victim after victim appealed for justice to be carried out. Many of the victims took the court through each detail of their excruciating journeys such as losing their homes, their way of lives, their retirement nest eggs, and in one case a victim took her own life because she was unable to cope with the impact of her loss.

A year-long investigation by Fallon worked in the California the same office Department of as the victims’ Tom Fallon, 65 Insurance found attorney and urged that Fallon convinced his victims to deposit their funds in victims to deposit their workers’ a WCMSA with his companies, compensation settlement checks Fortis Financial Insurance into Workers’ Compensation Services, Inc., and Legacy Group Medicare Set Aside Accounts Financial. Evidence obtained (WCMSA), as required by law. by investigators revealed that However, Fallon convinced his victims’ funds were deposited victims to deposit their settlement into Fortis Financial & Legacy funds with companies he owns in Group Financial -- and no WCMSA order to embezzle $995,118 for his accounts were ever established. personal gain and to fund various other businesses. During the victim impact statements that were held on

Judge Lowenthal stated in open court that in all his years on the bench, he had never been so moved by the victim impact statements presented before him that day.

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Fallon’s is a financial agreement that allocates a portion of workers’ compensation settlements to pay for future medical services related to the worker’ compensation injury, illness, or disease. These funds must be depleted before Medicare will pay for treatment related to the workers’ compensation injury, illness, or disease. AUGUST 2019

AUGUST 2019

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NEWS

MASTERMIND OF $1.3 BILLION INVESTMENT FRAUD (PONZI) SCHEME – ONE OF THE LARGEST EVER CHARGED IN SOUTH FLORIDA – PLEADS GUILTY TO CONSPIRACY AND TAX EVASION CHARGES

n August 7, 2019, Sherman made the announcement. California; Colorado; Tennessee; and Oaks, California native, Connecticut. The scheme ran from Robert Shapiro, 61, pled According to the indictment at least July 2012 to December 2017, guilty to orchestrating and leading and court documents, Shapiro when Woodbridge filed for Chapter a massive investment fraud 11 bankruptcy and defaulted scheme, in which more on its obligations to investors. Woodbridge’s main business than 7,000 victims suffered financial losses, as well as model was to solicit money Throughout the conspiracy, tax evasion, in violation Woodbridge’s main from investors and, in exchange, issue of 18 U.S.C. § 1349 and 26 business model was to investors promissory notes reflecting solicit money from investors U.S.C. § 7201. Shapiro is the former owner, president, purported loans to Woodbridge that paid and, in exchange, issue and CEO of Woodbridge investors promissory notes high monthly interest rates. Woodbridge Group of Companies LLC reflecting purported loans (“Woodbridge”). Shapiro is falsely claimed that these investments to Woodbridge that paid scheduled for sentencing on high monthly interest rates. were tied to real property owned by Woodbridge falsely claimed October 15, 2019, at 8:30 a.m. before United States District third parties and that the third parties that these investments were Judge Cecilia M. Altonaga. tied to real property owned would be making the interest payments He faces a possible maximum by third parties and that the sentence of 25 years in prison. to Woodbridge and its investors; it was third parties would be making the interest payments to portrayed as an investment in a hardAriana Fajardo Orshan, U.S. Woodbridge and its investors; money lending business.” Attorney for the Southern it was portrayed as an District of Florida, George investment in a hard-money L. Piro, Special Agent in Charge, spearheaded and concealed an lending business. Federal Bureau of Investigation enormous Ponzi scheme through his Using high pressure sales tactics, (FBI), Miami Field Office, Michael J. business, Woodbridge. Woodbridge Shapiro and his co-conspirators De Palma, Special Agent in Charge, employed approximately 130 people marketed and promoted these Internal Revenue Service, Criminal and had offices located throughout investments as low-risk, safe, simple, Investigation (IRS-CI), and the Florida the United States, including in and conservative. And at minimum, Office of Financial Regulation (OFR), Boca Raton, Florida; Sherman Oaks, investors were made to believe that

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AUGUST 2019

Woodbridge’s real estate dealings Shapiro’s real estate portfolio failed would generate the funds used to to generate sufficient cash flow pay the return on their investments. to satisfy the loan obligations and interest payments owed to investors. Despite Woodbridge’s claims that To make up for the cash deficiency, these investments would be backed Shapiro and his co-conspirators by properties owned by third- resorted to making Ponzi payments, parties, in fact, to the extent that the i.e., hundreds of millions of dollars properties existed, they were secretly invested by new investors were used owned by Shapiro. Unbeknownst to pay “returns” to older, existing to investors, Shapiro created and Woodbridge investors. In some controlled a network of more than instances, Shapiro made these 270 limited liability companies, fraudulent “interest” payments even which he used to acquire and sell the when the advertised investment properties pitched to investors. properties were never acquired. Shapiro and his co-conspirators falsely claimed that Woodbridge was profitable and advertised high rates of return to investors. However, AUGUST 2019

The Woodbridge sales operation functioned as a “boiler room” and featured high-pressure sales tactics, deception, and manipulation. Table of Contents

Woodbridge promoted investments through telephone and in-person conversations, emails and website displays. The scheme also involved misrepresentations to financial planners who helped Woodbridge to sell investments to potential investors. At least five states issued cease and desist orders against one or more of the Woodbridge entities based on their unregistered sale of securities. Shapiro and his coconspirators nonetheless continued to sell Woodbridge investments to residents of those states, and engaged in deceptive conduct with See Ponzi Schemer Pleads Guilty Pg 31 www/underwritersinsider.com

NEWS

FLORIDA ANNOUNCES ARREST OF FORMER MIAMI INSURANCE AGENT IN $1.7 MILLION PREMIUM FINANCE FRAUD SCHEME

IAMI – Chief Financial Officer (CFO) Jimmy Patronis announces the arrest of former Miami insurance agent Antonio Jesus Zoghbi, owner of Florida Insurance Agency of Miami, for allegedly stealing more than $1.7 million in insurance premiums from two insurance premium finance companies. Zoghbi allegedly used fraudulent and stolen identities to submit fake premium finance contracts and divert policy funds into his business account.

in Florida in the form of higher insurance rates and premiums. Florida currently ranks first in fraud nationwide, so my office is committed to cracking down on these con artists and bringing them to justice.”

and Agency Services Division revealed that between 2016 and 2018 former insurance agent Antonio Jesus Zoghbi allegedly created 91 fictitious insurance policies and premium finance contracts using stolen individuals and corporation names as alleged State Attorney Katherine new policyholders. Fernandez Rundle said, “I thank CFO Patronis and his dedicated Zoghbi wrote over $1.7 million fraud detectives for their great in drafts payable to his company, investigative work on this case. My deposited the money into his office is committed to prosecuting agency business account and any individual who commits fraud used it for personal gain. He then to the full extent of the law. Scam allegedly submitted the fraudulent CFO Jimmy Patronis said, “Stealing artists and fraudsters who prey on insurance premium finance money from the pockets of hard- Floridians and businesses will not contracts and policy information working Floridians to use for be tolerated.” to the finance companies as new your own personal gain is truly despicable. Millions of dollars in An investigation referred to CFO insurance fraud, just like this, gets Patronis’Investigative and Forensic See Premium Finance Fraud Page 24 passed onto every policyholder Services Division by his Agent

Instagram! Follow Me: @rj.0521

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Own Your Own Insurance Agency If You Think It Is Not Possible - Think Again!

strella Insurance would like you to join the Estrella Insurance family by becoming a franchise owner today. Estrella Insurance has been in the business of proudly serving customers with exceptional service and a professional atmosphere for over 40 years.

management evaluations, a strong relationship with many major insurance companies, and most importantly brand strength.

Having the ability to harness the brand strength of Estrella Insurance will give you an advantage over unaffiliated businesses as most consumers This proven track record is a major asset for any believe that buying at a brand name store means franchise owner as Estrella Insurance’s proven they are receiving higher quality products and system allows franchisees to follow a successful services. This branding will make it easier for plan with a high success rate. The thought of a franchisee to compete with well-established, opening and operating an insurance agency may independent operators and other franchise be daunting, but Estrella Insurance provides all chains. This brand power is what has allowed the tools to ensure that franchisees will have a Estrella Insurance to open over 100 insurance business that thrives. This is accomplished with agencies all across Florida, Arizona, California, low startup costs, support from our superior and coming soon in Nevada and Texas. marketing campaign in both English and Spanish across all forms of media, a turnkey training With this level of experience and success backing program as well as continuing support and you, there is no telling how far you can go!

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NEWS

NEW YORK FINES APPLIED UNDERWRITERS $3 MILLION FOR UNLICENSED WORKERS’ COMP INSURANCE BUSINESS Applied Underwriters Overcharged Many Small and Medium-Sized Employers for Unapproved Workers’ Compensation Products that Violated New York Law

inancial Services Superintendent Linda A. Lacewell today announced the Department of Financial Services (DFS) has fined Applied Underwriters $3 million for offering workers’ compensation insurance bundled with side agreements called “Reinsurance Participation Agreements,” which were not filed with or approved by the Department. Under these side agreements many employers, including small businesses, paid substantially more than what would have been paid under similar workers’ compensation plans. “Small businesses are the

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issued by Applied subsidiary Continental Indemnity Company, on forms and rates approved by DFS along with a side agreement titled a “Reinsurance Participation Agreement” that employers were also required to enter into as part “DFS is committed to protecting of the bundle. However, the side all consumers, including our small agreement, or RPA, was not filed business owners and today we with DFS, and as a result the RPA are holding Applied Underwriters and the Program as a whole were responsible for illegally operating not reviewed or approved by the outside of the Department’s Department. oversight to sell a complex product to hundreds of New York small DFS’s investigation found that and medium-sized businesses. the formula by which the RPAs New York will continue to enforce calculated costs was complex and the insurance law’s licensing and the way in which it was presented filing requirements to protect to employers was misleading. employers and other consumers Under the formula, policy fees could rise rapidly with the first from surprise bills.” few claims to levels substantially Applied offered workers higher than what would have compensation insurance been paid under a typical linear Many products from as early as retrospective model. January 2010, to late 2016, in New York employers paid more New York under multiple names, for coverage than they would including “SolutionOne” and have paid under the workers’ “EquityComp.” The products compensation policies alone, with included guaranteed-cost many paying significantly more. workers’ compensation policies backbone of New York’s economy, making up 98% of businesses in the State and employing more than half of our private-sector workforce,” said Superintendent Lacewell.

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The DFS investigation found that Applied’s offering:

LLOYD'S LAUNCHES NEW TOOL TO IMPROVE INSURANCE CONTRACTS FOR CUSTOMERS

• Was misleading in how it represented potential costs; • Required employers to wait three years, or in some cases up to seven years, for advertised “profit distributions”; and • Often resulted in fees that loyd’s has launched a new were higher than the rates software tool to improve the in the filed and approved quality of insurance contract insurance policy. review across the world.

DFS’s Consent Order states that Applied has ceased offering the bundle in New York, will not offer any equivalent side agreements going forward, and will file any future products with the Department for approval. Additionally, Applied will not enforce any arbitration provisions under contracts agreed to in New York or with New York employers. A copy of the consent order can be found here. The case was handled by Associate Counsel Bruce Wells and Senior Counsel Paul Geoghan under the supervision of Deputy Superintendent Christopher B. Mulvihill of the Consumer Protection and Financial Enforcement Division’s Enforcement Unit. The Consumer Protection and Financial Enforcement Division is supervised by Executive Deputy Superintendent Katherine A. Lemire. AUGUST 2019

The tool, Contract Confidence, uses advanced search techniques to scan contracts and check for errors and discrepancies. For example, the tool runs checks against 1,400 open market rules (regulatory, tax and Lloyd’s advisory) and highlights where the contract has failed or may have failed a check.

The tool was developed by Lloyd’s in partnership with the Lloyd’s Market Association and four Lloyd’s managing agents, including Brit, Liberty Specialty Markets and Sirius International. Contract Confidence is scalable and has been developed to accommodate the changing risk appetites of the Lloyd’s market.

The tool is available for subscription from today. Please visit our contract confidence webpage for further It also offers the functionality for details. underwriters to set their own rules, so that risks with exposures outside Jon Hancock, Lloyd’s Director of of appetite can be identified quickly Performance Management and and comes pre-populated with the executive sponsor of Contract the full set of clauses from the new Confidence, said: Lloyd’s Wordings Repository. “We wanted to build a tool that The tool benefits customers by delivered precisely to the unique creating more right-first time requirements of the Lloyd’s market. contracts, which means fewer That’s why we’ve worked with disputes, faster claims resolution four Lloyd’s managing agents and lower policy costs throughout the build process of Contract Confidence. What we have It benefits insurers in the Lloyd’s ended up with is a solution that market by reducing administration will greatly improve the contract and claims costs, thereby improving certainty for customers and reduce profitability. costs for underwriters. “ Table of Contents

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“The Final Authority on Everything!” WARNING!

The Advisor has been known to be politically incorrect and may send certain Millennials scurrying to their safe space. Please read at your own risk.

Stop The Debate: Just Yell “Racist!”

istening to Democrat candidates and Congressfolk challenge Republicans and even each other, it would seem that everybody in the country is a damn racist or that the definition of the word has so changed that everything from exceeding the speed limit to littering is “racist!” Isn’t it getting a little ridiculous? G.G. Winterpark, FL

ADVISOR

a negative - always an impossibility. The argument, probably going badly for the Democrat, was over. Yet, the strategy of weaponizing a flash-point word to win or influence a political debate may be a loser in the long-run. So often and so uniformly has the word “racist” been used by liberals that it is rapidly losing it’s once powerful effect. President Trump, for example, has been called a racist so many times that, any longer, it is rarely even noted.

And what does the word even mean any longer? Here are a few definitions: • Meriam-Webster: A belief that race is the primary determinant of human traits and capacities and that racial differences produce an inherent superiority of a particular race... • Wikipedia: Racism is the belief in the superiority of one race over another. It may also include prejudice, discrimination,

Democrats learned long ago, G.G., that charging someone with the abhorrent crime of racism was a show-stopper, facts be damned. The person so charged was obligated to immediately attempt to defend him/herself by attempting to prove 28

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or antagonism directed against other people because they are of a different race or ethnicity, or the belief that members of different races or ethnicities should be treated differently • Google: Prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one’s own race is superior.

President Trump you need to obvious implication is ask yourself: that one race is superior to another. Every person • If protecting our borders of color that ever worked means he’s a racist. for Trump - as a builder/ • If accurately pointing developer or as the out that Baltimore president, have all insisted is “rat infested and the man is no racist. uninhabitable” is racist. • If asking that those that don’t appear to love our Yet his opponents don’t country (Rep. Ilhan Omar, really care. They simply for example) return to wish to smear the man out “where they came from” of an unhinged, vitriolic hatred they ginned up after means he’s a racist. • If disagreeing with a losing the 2016 election. It political opponent of began as “Russia, Russia, The core commonality of these color makes him a racist. Russia.” definitions is that a “racist” believes in the superiority The obvious truth is this: That attempt didn’t work Trump has never made a very well. of one race over another. So now it’s Applying that concept to statement for which the “Racist, racist, racist!” AUGUST 2019

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NEWS

MINICO INSURANCE AGENCY INTRODUCES CYBER INSURANCE PROGRAM FOR SMALL AND MEDIUM-SIZED BUSINESSES MiniCo’s cyber insurance program offers monoline coverage for costs resulting from a data breach by the insured and any subsequent expenses that may be incurred from the loss of data.

iniCo Insurance Agency has introduced a cyber insurance program to provide monoline coverage for small and mediumsized businesses for costs resulting from a data breach by the insured and any subsequent expenses that may be incurred from the loss of data. The program is underwritten by Barbican Insurance Group, which has been rated “A” (Excellent) by A.M. Best, through MiniCo’s status as a Lloyd’s of London coverholder. The company is now offering coverage nationwide. Agents may obtain a premium quotation by visiting http://www.minico. com/cyber. No appointment or supporting MiniCo accounts are required to get a quote.

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Small and mediumsized businesses are squarely in the crosshairs of cybercriminals. Recent data indicates a steep rise in the number and frequency of cyberattacks on these companies, which increases the need for an insurance solution. MiniCo’s cyber insurance program provides coverage for a wide range of eligible small and medium-sized commercial risks. Coverages include security and privacy liability, data recovery and loss of business income, privacy regulatory defense and penalties, crisis management costs, and data extortion. MiniCo President and CEO Mike Schofield commented, “Small Table of Contents

and medium-sized businesses are squarely in the crosshairs of cybercriminals. Recent data indicates a steep rise in the number and frequency of cyberattacks on these companies, which increases the need for an insurance solution. MiniCo has developed our cyber insurance program with this need in mind, and we are excited to offer this product to agents to help their clients protect their valuable business investments.”

About MiniCo Insurance Agency, LLC MiniCo Insurance Agency, LLC, was founded in 1974 as a provider of specialty insurance products and publications for the self-storage industry. Today the company is a managing general agency offering multiple specialty property and casualty insurance products for a variety of unique industries and exposures. MiniCo Insurance Agency, LLC, the parent company of MiniCo Insurance Agency of Canada, Inc., is a member of the Aran Insurance Services Group. For more information, please visit http://www.minico.com. AUGUST 2019

NEWS these investor victims invested their retirement savings, totaling approximately $400 million. Of that, Shapiro misappropriated approximately $25 million to $95 million in investor money for himself and for the benefit of his immediate family members. Shapiro spent millions on personal expenditures, such as $3.1 million for chartering private planes and travel, $6.7 million on a personal home, $2.6 million on home improvements, $1.8 million on personal income respect to pending state regulatory taxes, and over $672,000 on luxury Shapiro further actions against Woodbridge, in automobiles. violation of the cease and desist admitted that he used bank accounts and credit cards opened orders. in the name of his wife, J.S., to divert At some point in 2017, Shapiro millions of dollars to his family. made the decision that Woodbridge would file for bankruptcy. Without Shapiro also pled guilty to tax disclosing to investors that evasion based upon his failure Woodbridge was insolvent and on to pay more than $6 million in the verge of bankruptcy, Shapiro taxes due and owing to the IRS for caused Woodbridge to collect calendar years 2000 through 2005. additional money from investors As part of his plea, Shapiro and his through the filing of Woodbridge’s wife agreed to forfeit certain assets, bankruptcy in December 2017. many of which were seized during a Shapiro also admitted that, search executed by federal agents immediately prior to Woodbridge’s at his home in Sherman Oaks, bankruptcy filing, he diverted California. They include, but are millions of dollars in investor funds not limited to: artworks by Pablo to several bank accounts opened in Picasso, Alberto Giacometti, Marc the name of his wife, J.S., which he Chagall, and Pierre-August Renoir; a collection of 603 bottles of wine; used for new ventures. a 1969 Mercury convertible; luxury In total, Shapiro and his co- jewelry, including a pair of 14-karat, conspirators convinced more than white gold earrings with two black approximately 9,000 investors diamonds (61.81 carats), two grey to invest more than $1.29 billion diamonds (23.92 carats), two roseto Woodbridge. According to cut diamonds, and 266 round the Indictment, at least 2,600 of diamonds; a platinum ring with an Continued From Page 23

MASTERMIND OF $1.3 BILLION INVESTMENT FRAUD (PONZI) SCHEME PLEADS GUILTY

AUGUST 2019

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oval-cut ruby (10.91 carats), two trapezoid diamonds and 70 roundcut diamonds; a platinum ring with certified Colombia emerald-cut emerald (9.54 carats), trapezoidcut diamonds, and 166 round-cut diamonds; and other items detailed in court documents. The indictment also charged two co-defendants, Dane Roseman, a/k/a “Dayne Roseman,” and Ivan Acevedo, who are scheduled for trial in February 2020. The U.S. Securities and Exchange Commission (SEC) filed parallel civil enforcement actions against Woodbridge, Shapiro, his wife, and co-defendants Acevedo and Roseman related to the Ponzi scheme. U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI and OFR in this matter. She thanked the SEC Miami Regional Office and the U.S. Attorney’s Office for the Central District of California for their assistance. This case is being prosecuted by Assistant U.S. Attorneys Roger Cruz and Lisa H. Miller. Assistant U.S. Attorneys Nalina Sombuntham and Alison Lehr are responsible for the asset forfeiture component of the case. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www. flsd.uscourts.gov or on http://pacer. flsd.uscourts.gov. www/underwritersinsider.com

NOTABLE QUOTABLES IN THE NEWS - WITH COMMENTARY

SAY WHAT?

then you probably won’t get any additional benefit from vitamin supplements. For most people, all these costly vitamin and mineral supplements result in is expensive urine. The panacea or magic bullet that people keep Another Member of Congressional searching for in dietary supplements isn’t “Squad” Caught In Significant Lie there,” says Michos. “People should focus on getting their nutrients from a heart-healthy he lied big-time to get elected. I diet, because the data increasingly show never teach her that way. I teach that the majority of healthy adults don’t her the right way. It’s my house. need to take supplements.” She didn’t live there. She lived in Dearborn From a recent John Hopkins Medicine megain her house with her husband and boy.” study which reported the effects (or lack The father of Michigan thereof) of vitamins and supplements on Democrat Rep. cardiovascular health and longevity: Not Rashida Tlaib speaking exactly good news for the US $30 billion to reporter Charlie industry nor for the millions of folks taking LeDuff of The Detroit vitamins and supplements with the hope they News reporting on are receiving a health benefit while doing so.

an election deception Doraville Hispanic Police Chief Tlaib employed to become the sitting John King To Replace Former Georgia Congresswoman for her district. Candidate Tom Norton: “Democrat Rashida Tlaib Commissioner Beck Under Indictment violated both state election law and federal o. 1, we have to have a law when she lied about her address to run for person of very high integrity office in Michigan. Rashida’s own father even in the current situation we are said that Tlaib ‘lied’—his word. The rule of law in, and we need somebody that can lead a is eroding quickly in our United States.” large organization, that is organized, who can restore trust. I think John King has an impeccable record of service in the military, Massive Study Shows Zero Benefit To Vitamins Or Supplements as a police chief, of doing that.”

he main takeaway from this growing body of convincing research is that if you exercise, eat well, and are living an otherwise healthy life, 32

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Georgia Gov. Kemp speaking to reporters at a Capitol press conference on the replacement of Jim Beck, former GA insurance commissioner, under 38-count Federal indictment accused of

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AUGUST 2019

stealing $2 million from his former employer much to the chagrin of leftists everywhere so prior to winning the November election for desperate to blame every evil act committed in the USA on the rhetoric of President Donald Georgia insurance commissioner. Trump. Betts fired 41 rounds before he was killed by police who were in the area on patrol. Lunatic Ramblings

Of The Daytona Shooter

heir screams music, their pain my pleasure. Hail Lucifer. I need drugs for now and later. How can we get moolah for speed? Seek and destroy. Still haven’t eaten enough so…very ADHD, paranoid, schizophrenic, strong, bipolar. I am Azrael and this is my human Connor. This human body has so many stupid limits lol. Why? Makes me look less than “average”. Antisocial personality disorder. Don’t listen to romantic advice, sociopath. Beasts of darkness called upon from fiery pits. Armies massing, soon to shed blood. The struggle eternal vying for souls to fuel their war machines, order versus chaos, good versus evil (a matter of perspective). The chosen, champions of their house, some are chosen, some choose, champions clash. I am the servant of the serpent evil incarnate, flesh consumer, light destroyer, fueled by hate, rage my strength, distrust my shield. The light forever eclipsed. A champion of wrath, predatory state, to hunt and to kill my greatest escape.’” From the evil, lunatic ramblings of Connor Betts, 24, the infamous Dayton, OH shooter who on August 4th, 2019 gunned down dozens and killed 9, including his sister. Betts was reportedly a Bernie Sanders supporter,

AUGUST 2019

Trump’s Message Of Unity Mocked By The Left

he shooter in El Paso posted a manifesto online consumed by racist hate. In one voice, our nation must condemn racism, bigotry, and white supremacy. These sinister ideologies must be defeated. Hate has no place in America. Hatred warps the mind, ravages the heart, and devours the soul. We have asked the FBI to identify all further resources they need to investigate and disrupt hate crimes and domestic terrorism — whatever they need.” From a speech by President Donald Trump after the El Paso mass shooting. It was no surprise to anyone that the left would immediately blame President Donald Trump’s rhetoric for the mass shootings on the weekend of August 3-4 in both El Paso, TX and Dayton, OH, claiming he inspired “hate and disunity.” The political left has twisted a call for border security (the same message given by Barack Obama and just about every president in the past 50 years) into a message of hatred and racism - for whatever political points they feel they can score by doing so. It is the constant crescendo, the cries of racism, fascism and hatred from the left against a president simply attempting to implement common-sense policy that is more likely the cause for the current disunity, unrest and anger in this country than anything coming out of the mouth of Donald Trump.

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BACK ISSUES

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SPECIAL REPORT - AAA Continued From Page 15

IN-VEHICLE INFOTAINMENT SYSTEMS ESPECIALLY DISTRACTING TO OLDER DRIVERS

make the systems safer for all drivers. “This is a design problem, not an age problem,” said Jake Nelson, AAA director of traffic safety advocacy and research. “Designing systems to meet the safety and comfort needs of aging drivers would benefit all of us today, and for years to come.”

Whether you purchase a new vehicle, or rent one while traveling, AAA recommends that all drivers, especially older drivers, keep the following tips in mind: • Avoid interacting with in-vehicle infotainment technology while driving except for legitimate emergencies. • Practice using the voice command and touch screen functions when not driving to build comfort in case emergency use is required. • Avoid vehicles that require use of a center console controller when using the infotainment system. These kinds of systems are especially distracting, and potentially dangerous.

A total of 128 drivers ages 2136 and 55-75 participated in the study of six 2018 model-year vehicles. The latest report is the seventh phase of distraction Personal assessments about research from the AAA distraction caused by in- Foundation for Traffic Safety. Visit vehicle technologies are not AAA.com/distraction to learn always accurate. For example, more. in some cases drivers reported the use of the systems as less About AAA Foundation for demanding even though Traffic Safety: Established researchers measured higher in 1947 by AAA, the AAA levels of demand or longer task Foundation for Traffic Safety is completion times. a nonprofit, publicly funded, 501(c)(3) charitable research and 36

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educational organization. The AAA Foundation’s mission is to prevent traffic deaths and injuries by conducting research into their causes and by educating the public about strategies to prevent crashes and reduce injuries when they do occur. This research is used to develop educational materials for drivers, pedestrians, bicyclists and other road users. Visit www.AAAFoundation.org.

This is a design problem, not an age problem. Designing systems to meet the safety and comfort needs of aging drivers would benefit all of us today, and for years to come.” About AAA: AAA provides more than 59 million members with automotive, travel, insurance and financial services through its federation of 34 motor clubs and nearly 1,100 branch offices across North America. Since 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for safe mobility. Drivers can request roadside assistance, identify nearby gas prices, locate discounts, book a hotel or map a route via the AAA Mobile app. To join, visit AAA.com. AUGUST 2019

CLAIMS & THE LAW Continued From Page 7

ZALMA

only the neighboring properties, while the Site “was in its excavating infancy and itself was not physically injured.” Alternatively, the court found the Site is also “Impaired Property” because Schnabel’s deficient work made it “less useful” while it was “shut down” for months of safety and remedial measures.

injured”—and 2) it must suffer an enumerated “Property Damage”— ”a defect, deficiency, inadequacy or dangerous condition in . . . Your Work; or . . . a delay or failure by you or anyone acting on your behalf to perform a contract.”

The Fourth Circuit agreed with the district court that the Policy does not cover Schnabel’s repair damages as a matter of law. The Supreme Court of New Jersey has made clear that CGL policies cover damages to third-party property, The district court held that not costs to replace a contractor’s Schnabel’s claimed repair damages own faulty work. are not covered under the Policy as a matter of law because the And, as contemplated in the faulty SOE work is a business risk, definition of “Impaired Property,” which a CGL policy does not cover. the Site was “restored to use” It then held that Schnabel’s delay through Schnabel’s reinforcement damages do come under the Policy of the SOE and eventual fulfillment and resulted from an “Occurrence” of its contract with Turner. Even because Schnabel’s faulty SOE if the Site was not “Impaired work caused an accidental “loss Property,” it satisfies the first of use” of the Site. Nonetheless, condition of Exclusion D because the court concluded Schnabel is it is “property that has not been not entitled to coverage because physically injured.” The Site was Exclusion D bars the claim for temporarily unable to provide lateral support to its neighbors, Schnabel’s delay damages. but that caused no injury to the Site itself. ANALYSIS In analyzing Exclusion D, the district court first explained that the Site could be either type of property noted in the Exclusion. The Site is “property that has not been physically injured” because Schnabel’s SOE work damaged AUGUST 2019

failure by you or anyone acting on your behalf to perform a contract, either of which could produce Property Damage. Schnabel’s work satisfies either type of enumerated “Property Damage” in Exclusion D. Schnabel’s SOE work was clearly defective, and its failure to timely construct an adequate SOE “on [Turner’s] behalf” caused “a delay or failure . . . to perform a contract” — both Schnabel’s contract with Turner and Turner’s contract with Bainbridge. The second condition of Exclusion D is, therefore, satisfied. The Fourth Circuit agreed with the district court that Exclusion D’s exception does not apply because the SOE never endured “sudden and accidental physical injury.” Exclusion D therefore barred coverage for Schnabel’s claimed damages.

ZALMA OPINION

Before accepting an assignment of a claim against an insurance company who has denied coverage to the defendant, it should be obvious that the offer be reviewed by a professional insurance coverage lawyer to advise whether there is high probability that a suit against the insurer will succeed. For Exclusion D to apply, the Here, the trial court and the Fourth Site must also have suffered an Circuit made clear that Schnabel enumerated damage. Schnabel’s did not get appropriate advice damaging work qualifies as a when it accepted the assignment defect, deficiency, inadequacy and wasted time and attorneys or dangerous condition in Your fees litigating against National Product or Your Work and a delay or Table of Contents

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TECHNOLOGY Continued From Page 5

KIM KOMANDO

down your searches, but that will be a small price to pay for people who give their privacy top priority.

Here’s an example: Suppose you use Ixquick to search for a term like “Komando.” Your search results will look similar to Google’s with a list of websites it has found that You might be surprised by the match your search. But each quality of Instant Answers, result has three options: Just which easily rivals Google’s click the regular link, and you’ll Knowledge Graph. You can visit the page as you normally also make DuckDuckGo an would, meaning the website extension of your browser and can see you. activate more privacy settings to keep your search history as Or you can choose “Highlight” to see the site’s most basic protected as possible. information. This way, you’re Click here to check out not visiting the site, just seeing what it’s about. Finally, you can DuckDuckGo. pick “Proxy,” which means you will remain anonymous. Those Ixquick truly delivers sites will only see Ixquick’s IP Ixquick calls itself the world’s address, not yours. most private search site. That may sound a little grand, but Click here to use Ixquick. they’ve earned their stripes. Ixquick doesn’t record your IP Use the Tor Browser address, browser information If you’re looking for something or search history. a little more sophisticated, you The real magic of Ixquick is its might consider Tor. This name “search by proxy” feature. This started as an acronym for “The means that websites have no Onion Router,” and it’s very idea what IP address you’re popular among computerusing. As a customer browsing savvy circles. their pages, you are basically invisible. This feature does have the potential to slow 38

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Rent This Space! Want Your 1/3 Page Message To Hit Over 120,000 Industry E-Mails Per Month For As Little As $129.00? View Rate Card Here! Request More Info Here!

See Komando Page 39

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AUGUST 2019

TECHNOLOGY Continued From Page 38

KIM KOMANDO

Continued From Page 39 Before you rush to the Tor website and download the free software, keep in mind that Tor may slow down your searches, and it may also change your web browser’s settings. Click here to install and use the Tor Browser.

The Tor Project describes itself as an “anonymity network,” which means that privacy is its primary goal. The company’s logo has an onion, which is more than just a cute cartoon. Tor uses sophisticated encryption software that behaves like the layers of an onion, making it virtually impossible for someone to track your movements online. Tor bounces your communications through a global network, a real headache for anyone trying to find your physical location. You may have heard of Tor because this same technology is used to access the Dark Web. Click here to learn more about the Dark Web. That may sound creepy, and it’s true that Tor has been used for illegal activity online, but the software itself is perfectly legal and shouldn’t pose any problems. Remember, it’s not the tool that causes problems, but how you use it. AUGUST 2019

How else can you maintain your privacy in this era of rampant data breaches? Be sure to listen to or download my podcasts, or click here to find it on your local radio station. You can listen to the Kim Komando Show on your phone, tablet or computer. From buying advice to digital life issues, click here for my free podcasts.

Copyright 2019, WestStar Multimedia Entertainment. All rights reserved. Learn about all the latest technology on the Kim Komando Show, the nation’s largest weekend radio talk show. Kim takes calls and dispenses advice on today’s digital lifestyle, from smartphones and tablets to online privacy and data hacks. For her daily tips, free newsletters and more, visit her website at Komando.com Table of Contents

FORMER MIAMI INSURANCE AGENT IN $1.7 MILLION PREMIUM FINANCE FRAUD SCHEME insurance customers to justify the draft payments to his agency. Zoghbi was booked into the Turner Guilford Knight Correctional Center (TGK) on June 26 on one count of Organized Scheme to Defraud, one count of Grand Theft, 91 counts of Uttering Forged Instruments, and 38 counts of Fraudulent ID theft. Zoghbi’s insurance license was revoked on November 15, 2018. If convicted on all charges, he faces up to 25 years in prison. This case is being prosecuted by Miami-Dade State Attorney Katherine Fernandez Rundle’s Office. Individuals charged with a crime are presumed innocent until proven guilty.

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SPECIAL REPORT

HOW (AND WHY) TO WRITE A PRESS RELEASE By Ron Manera, Senior Editor

he most overlooked source of free promotion for small to medium-sized companies? Press Releases. Those little info blurbs that strengthen your brand and inform your market can be powerful tools if employed effectively. With a press release, your company can inform the world of a new hire, promotions, a key person retiring, a new product, a merger or acquisition, a new office or a thousand other events positive and timely. But even more important: Getting your company name out in front of tens of thousands of your prospects and customers, (even competitors) often, and at little or no cost. As an editor of a couple of insurance industry specific journals, I am on the receiving end of dozens of press releases daily - all wishing a free ride in one of my next issues. I welcome press releases because they often provide valuable content to my readers. Because of space and relevancy limitations, I can’t run them all. As a matter of fact, only a small percentage of the PRs I review

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make it into the magazines. How do I decide what to run? I look first for relevancy. Is the information in the press release something likely to be interesting or valuable to my subscribers? I can discard 80% of the PRs I review simply because the content is not focused on my audience. Next, I look for length, style and format. Will the original PR take up two pages requiring radical editing for size? Can I easily move the content into my publication without extensive reformatting? Are there bulleted paragraphs or multiple hyperlinks to contend with? I look for a news-style press release. When I receive a PR that is 80% promotional and 20% news, I’m likely to pass it up. I don’t charge for news - I do charge for advertising.

Up The Odds Your Press Release Will Be Printed And Effective

suspect most editors rely on criteria much like mine when reviewing incoming press releases for publication. Table of Contents

Here are eight tips to increase your odds of actually making it to the show: 1. Give me a compelling headline! Hint: Write your headline last after you review your entire PR. A good headline will not only get my attention, but that of my readers. 2. Don’t open with “ABC Company announced today...” because the PR may not appear for another 30 days. Include the actual date. 3. Keep your copy succinct! 375-450 words max. That’s an entire page, so you have plenty of room to cover your subject. I’m not going to give you more space - so if you run long, you are asking me to trim your copy and you may not like what I remove. 4. Learn to write like a journalist: Who, What, When, Why & Where. List those 5 categories out on a worksheet and work from it as you script your PR. To the ultimate reader, it should not read as if it were written by your marketing department but as if we sent a reporter out to cover your news story. AUGUST 2019

Image Credit: Creative Commons

While larger operations use paid services like Businesswire, PRweb, PRNewsire and others to distribute their press releases, smaller companies can maintain a list of media outlets that make more sense for their target market. I review PRs from the big distribution houses all the time - but I am more likely to notice one emailed directly to me.

from a company officer. I 5. Important! Don’t often include company make your PR into an logos when they are made advertisement. First, it will available. lesson the chance I include 8. About (Your Company) your piece, (remember, I It’s good to include a short charge for advertising) but “About ABC Company” at just as important, it will lack the end of your PR. Keep it credibility to the readers if it short and within the word just looks like a puff piece. limit for the entire piece. It’s okay to sound enthused Include contact info for about the topic and your “further information.” company, but the ideal PR 9. Make certain to place a will look as if your company copy of each PR on your made the news because of company website under some newsworthy event. your NEWS tab. The practice 6. Give me at least one quote, will make your site more e.g. “Frank’s extensive relevant to search engines experience in restaurant and more valuable to risks will bring a new depth visitors. to our commercial insurance department,” said John ow that you’ve created Smith, CEO... the perfect press 7. If appropriate, include release, where should an image, especially if you send it? the PR involves personnel or a mention or quote

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In the insurance business, include every trade journal that covers your region. If you are introducing a new restaurant program, for example, you may wish to include some of the trade journals in that industry. If you are a local retail agent, by all means include local print media, especially neighborhood newsletters or city-wide newspapers. Build your list in a spreadsheet database so you can one-click mail-merge a personalized copy to each media outlet. Make it a habit! Find the best copywriter in your office and assign them the task of churning out one press release each month. You’ll be building your brand and status within your industry. Where to send at TUI? Send directly to me, Ron Manera at ron@insurmedia.com.

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2019 FAIA CONVENTION TRADE FAIR BOOTH IMAGES NOW ONLINE!

ne of the biggest insurance events held each year in Florida is the Florida Association of Independent Agents (FAIA) Convention. This year was the 116th annual convention, making it not only one of the largest, but one of the longest running events in US insurance history.

Click On The Image Below To View Booth Images

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2019 LAAIA CONVENTION TRADE FAIR BOOTH IMAGES NOW ONLINE!

he largest insurance trade fair in S. Florida, the Latin American Association of Insurance Agents pulled off another incredible event with their 48th annual convention and trade fair this August. This time no camera equipment issues and had time to shoot every booth.

Click On The Image Below To View Booth Images

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BECOME A CERTIFIED EXPERT IN CORPORATE PROPERTY INSURANCE AND A CERTIFIED EXPERT IN CORPORATE LIABILITY INSURANCE Now available from Illumeo and Barry Zalma!

veryone involved in insurance – either as an insurer or as an insured – requires excellence in claims handling. Businesses need to deal with insurers who have an excellence in claimshandling mandate. Insurers who wish to profit need an excellence in property and/or liability claims-handling program. Everyone in business needs an insurer who has an excellence in property or liability claims-handling program in effect. Two comprehensive programs enabling insurance professionals to become Certified Expert in Corporate Property Insurance and/ or Certified Experts in Corporate Liability Insurance are available from Illumeo.com and https://www.illumeo.com/curriculum/certifiedexpert-corporate-property-insurance and https://www.illumeo.com/ curriculum/certified-expert-corporate-liability-insurance. The programs are complete courses of study providing education and training to allow insurance professionals, after completing the individual classes, to become a Certified Expert. The programs cover everything an employee, an officer, or a director of a corporation needs to know about the need to acquire proper insurance and to resolve any claim presented by the corporation to the insurer. Major topics of study include, but are not limited to: the importance of insurance; how to acquire insurance and understand an insurance policy; the methods used by insurers to investigate claims; the various types of insurance that corporations need; the duties and obligations of a public adjuster; and how The full curriculum of the courses and other courses from Barry Zalma are available at http:// www.ilumeo.com by entering in the search bar the word “zalma.”

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AUGUST 2019

NEW INSURANCE CLAIMS BOOKS BY BARRY ZALMA The Making of an Insurance Claims Professional

t is the insurance claims person - the adjuster - who meets with the person insured and 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. Read about these and many more insurance books by Barry Zalma at http://zalma.com/zalma-books/

• Construction Defects and Insurance • Zalma on Insurance Claims • Zalma on Insurance Claims Volume 101 • Zalma on Insurance Claims Part 102 • Zalma on Insurance Claims Part 103 • Zalma on Insurance Claims Part 104

• Zalma on Insurance Claims Part 105 • Zalma on Insurance Claims Part 106 • Zalma on Insurance Claims Part 107 • Zalma on Insurance Claims Part 108 • Zalma on Insurance Claims Part 109 • Zalma on Insurance Claims Part 110

VISIT ZALMA BOOKS NOW!

AUGUST 2019

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AUGUST 2019

NEWS - HEALTH INSURANCE

WASHINGTON SEEKS $1.1 MILLION FROM SHAM HEALTH CARE SHARING “MINISTRY” FOR RIPPING OFF CONSUMERS Aliera and Trinity deceived thousands about coverage, operated illegally in Washington

producer in Washington, administered and marketed health coverage on behalf of Trinity HealthShare. Trinity represents itself as a health care sharing ministry. Such ministries are exempt from state insurance regulation and do not have to meet the same consumer protections guaranteed under the Affordable Care Act. This includes providing coverage for anyone with a pre-existing medical condition.

LYMPIA, Wash. – Insurance Commissioner Mike Kreidler is seeking a $1 million fine from Aliera Healthcare, Inc. (Aliera) (PDF, 439KB) and $100,000 from its partner, Trinity HealthShare, Inc. (Trinity) (PDF, 364KB) for selling A legal health care sharing ministry sham health care sharing ministry is a nonprofit organization whose members share a common set of memberships. ethical or religious beliefs and share Since August 2018, Aliera and Trinity medical expenses consistent with sold 3,058 policies to Washington those beliefs.

• • •

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Kreidler’s investigation into Trinity found that it fails to meet key federal and state requirements: •

consumers and collected $3.8 million in premium.

Some believed they were buying health insurance without knowing “Aliera and Trinity promised to they had joined a health care sharing provide people with coverage ministry. Many discovered this when when they needed it only to leave the company denied their claims consumers with huge medical bills,” because their medical conditions were considered pre-existing under said Kreidler. the plan. “These companies are hiding behind a federal and state exemption that Kreidler’s investigation into Aliera exists for legitimate health care found: sharing ministries and using it to rake in profit across the country on • It provides misleading training to sales agents about the nature the backs of vulnerable consumers.” of its products. Aliera, an unlicensed insurance AUGUST 2019

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It promotes misleading advertisements to consumers. It inaccurately represents Trinity’s statement of faith. It is operating both as an unregistered health care service contractor and an unlicensed discount plan organization. It is selling insurance without a Washington insurance producer license.

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Trinity was formed on June 27, 2018, without any members. Federal and state laws require that health care sharing ministries be formed before Dec. 31, 1999, and their members to have been actively sharing medical costs. Trinity's bylaws require members to adhere to a Protestant expression of Christian faith. However, its website markets memberships to people of all faiths, and its training materials for producers note that Trinity simply requires a belief in a higher power and a healthy lifestyle.

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AUGUST 2019