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IN THIS ISSUE NOVEMBER 2019 VOL 15 ISSUE 11

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How To Stop Robocalls With Free Solutions From Major Carriers

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Claims: Fraudd Is Fraud, Not Soft Fraud or Hard Fraud

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Florida Announces Arrest In $500K Kissimmee Accident Clinic Fraud Scheme

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Florida Announces Arrest of Unlicensed Doctor In Osceola County Insurance Fraud Bust

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Are You Ready For Retirement? Financial Analysis

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Washington State Seeks To Fine, Revoke Bail Bond Company License

Special Report: Number Of Licenses Teen Drivers On The Rise - AAA

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California Insurance Agent Arrested Allegedly Stealing $148,000 Leaving Client Uninsured

Page 5 Florida Announces Arrest Of Insurance Agent In $99,000 Senior Annuity Scam

Which Insurance Line Is Priced “Dangerously Low?” • CA Insurers Agree To Extend Additional Living Expense • Florida Announces New OIR Communications Director

Mortgage Companies Can Mitigate The Ripple Effect Of A Consumer Consent & Privacy Request

Florida Orders 7.5% Workers’ Comp Rate Decrease For 2020

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Climate Change: Real or Hoax? - The Advisor Applies Some Common Sense

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Trump Impeachment Inquiry Falling Apart? • Michelle: All About Race • Pelosi Gets Real

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California Agent Arrested For Identity Theft & Forgery

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How & Why To Write A Press Release

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2019 FAIA & LAAIA Trade Fair Booth Images

A Single Cyber Attack On Asia-PAC Ports Could Cost $110 Billion

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


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PAGE 8 - MATT TRESKOVICH ARE YOU READY FOR RETIREMENT?

Special Report Page 12 Number Of Teen Drivers On The Rise

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

PG 36 FEATURES

INSURANCE AND THE LAW PAGE SIX

2019 FAIA & LAAIA TRADE FAIR BOOTH IMAGES NOW ONLINE! PG 38

5 6 8 19

Kim Komando

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Breaking News

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Insider Advisor

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Back Issues

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

Cover Image: © R Manera

Barry Zalma Matt Treskovitch Advertise

Say What?


NOVEMBER 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

© Entire Contents 2019 AdMax Corp

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NOVEMBER 2019


TECHNOLOGY

HOW TO STOP ROBOCALLS WITH FREE SOLUTIONS FROM AT&T, VERIZON, T-MOBILE AND SPRINT

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Really Cool Tech Info - From Kim Komando Censoring phone calls is a tricky business, but now that the FCC is starting to tackle robocalls, the biggest phone companies are following suit. Each carrier is using unique tactics to fight back. Depending on your carrier, you will have different steps to follow.

obocalls have t o r m e n t e d us for years. They’ve interrupted our conversations, dominated our work lines and spread erroneous information across the country. The nation’s Do Not Call registry is pretty worthless at stopping them.

Once you start putting your carrier’s tools to good use, you can expect a significant reduction in pre-recorded calls with unlisted or misl leading caller IDs. Yes, it’s true.

You can spend money on robocall blocking apps that might provide some relief. Tap or click here if you want to give some of the best robocall blocking apps a shot. Apple’s new iOS 13 includes a robocall blocking feature. In theory, it sends all unknown callers straight to voicemail, but there’s a huge problem the engineers didn’t take into consideration. Tap or click here to enable robocall blocking on your iPhone and know the disadvantages when doing so. NOVEMBER 2019

AT&T

Then, there’s call screening by Google Assistant through the Phone app, which only works on Pixel phones and select Android phones. It screens your calls and gives you a transcript, but it doesn’t always correctly understand the caller. Tap or click here for more info about this. Table of Contents

To fight robocalls, AT&T offers a free service for customers called Call Protect that includes features like automatic call blocking and spam alerts. AT&T Call Protect consists of the following:

See Kim Komando Pg 34 www/underwritersinsider.com

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CLAIMS & THE LAW

FRAUD IS FRAUD, NOT SOFT FRAUD OR HARD FRAUD Expert Analysis & Commentary by Barry Zalma, Esq., CFE Soft Fraud

some call “soft fraud” are found in every type of claim presented his article is adapted to an insurer. from my book, “Insurance Fraud and Weapons to Defeat Fraud” available HERE. Join Barry Zalma’s Blog:

T

For reasons known only to governmental entities some insist on categorizing fraud into both “hard” and “soft” fraud. By so doing the governmental entities that so categorize fraud make one type of fraud less heinous and less criminal than the other. Fraud, whether categorized “soft” or “hard,” are criminal and if a person is tried and convicted of fraud both can be sent to jail for the same amount of time. The types of insurance fraud

http://www.zalma.com/blog

Soft fraud, which is sometimes called opportunity fraud, occurs when a policyholder or claimant exaggerates a legitimate claim…. According to the Insurance Research Council, soft fraud “Is far more frequent than hard fraud… Because of the frequency of soft fraud, it adds more to overall claims cost than hard fraud does.” Soft fraud occurs when a policyholder exaggerates an

otherwise legitimate claim or when an individual applies for an insurance policy and lies about certain conditions or circumstances to lower the policy’s premium. The reality is that Soft Fraud is a criminal violation and a breach of a material condition of the policy. It contributes to increased insurance costs. As a result of increased insurance costs, millions of Americans cannot afford sufficient insurance coverage. One cannot commit an innocent or partial fraud any more than one can be partially dead. Once fraud is committed the contract of insurance is violated and voidable and the crime has been committed.

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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Soft fraud, in contrast, usually involves legitimate losses that are exaggerated by the policyholder. For example, if a person is in a car accident and files a claim with her auto insurance company but overstates the severity of the damage to her car. The insured did not fabricate the accident or the underlying claim, but nevertheless committed soft fraud by not being completely truthful with the insurance company.

Padding can come in a variety of forms. In first party claims, an insured is generally considered to be in the best position to know the value of property for which he or she is making a claim. An insurer depends upon the insured to provide an honest description and estimate of the value of the property, and most courts hold an insured to a high level of honesty when reporting a loss to an insurer.

In New Jersey, regardless of whether or not the fraudulent act is soft or hard, insurance fraud is a third-degree felony under New Jersey law. And if a person is charged with five or more acts of fraud, the charge can be elevated to a second-degree felony. This means that even if convicted of the lesser, third-degree charge, the person perpetrating fraud may be facing up to 18 months in jail and a $10,000 fine.

An insured who presents, with the intent to defraud, $1,000 in false invoices is as culpable as an insured who presents, with the intent to defraud, $1,000,000 in false claims. In both cases, if proved, the policy of insurance, by its terms and conditions, is void and the claim is forfeited.”

The discussion that follows describes the most insidious and prevalent types of soft fraud.

PADDING Padding is found when injuries or damages are exaggerated to increase a claim’s value. It is what has been called “an insidious type of fraud difficult to detect and often considered harmless by insureds, claimants, police, and prosecutors.” NOVEMBER 2019

Padding is found in property insurance when insureds inflate the number of items lost or destroyed or exaggerate the value of the items claimed damaged, destroyed, or stolen. This can be as simple as increasing the size of a stolen television from 32 inches to 42 Table of Contents

inches; from a cathode ray tube to flat screen; from $100 cash to $500 cash; or from two pairs of jeans to five pair. According to an Insurance Research Council (IRC) study, approximately 90 percent of the costs of insurance fraud are the result of claims padding. Claimants add damage, injuries, and fictitious passengers to their insurance claims. The other 10 percent are the result of organized accident staging rings. Because of the sheer number of offenders, and the light sentences received by the few that are convicted, pursuing these crimes has not a priority for law-enforcement or insurers. On third party claims the padding can be as simple as adding a week of lost earnings that, in fact, was not lost; allowing the doctor to bill for three visits not made; or going to a chiropractor who charges for x-rays not taken. Standard fire insurance, all-risk property insurance, package first party property policies and most third party liability policies state that the policy is void if the insured intentionally conceals or misrepresents any material fact or circumstance about the insurance or a claim, whether See ZALMA Page 33 www/underwritersinsider.com

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ANALYSIS - FINANCIAL

“InvestmentZen”Credit: www.investmentzen.com

ARE YOU READY FOR RETIREMENT?

By Matthew Treskovich, CPA/PFS, MBA, CFP®, CMA

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e all know that planning for retirement is important, but it can also be daunting. One of the most common questions I’m asked is “when can I retire”? The two key pieces of a financially successful retirement are understanding where you plan to spend money and making sure you’ll have enough income to cover 8

The Underwriter’s Insider

that spending without risking running out of money. Plan your spending in retirement Many would-be retirees make the mistake of thinking they will spend less in retirement. It’s true that some expenses, like the cost of commuting, will go away in retirement. However, new expenses often appear in retirement. It’s important to budget for things like travel and leisure activities. It’s not Table of Contents

uncommon to spend more in the first few years of retirement compared to your final working years. If you would like to retire before age 65, budgeting for health insurance is particularly important. Individual health insurance can be expensive, especially in your late 50’s or early 60’s before Medicare is available. Over the longer term, healthcare spending in retirement tends NOVEMBER 2019


to increase as the years go by. Travel and leisure spending often decline in the later years of retirement, which can help offset increased healthcare expenses. The safest way to plan retirement spending is to assume that you’ll spend at least as much in retirement as you did while you were working. It’s also a good idea to factor in annual increases in your spending to keep up with inflation. Historically, inflation has been about 3% per year, although lately it’s been slightly lower.

You can get a copy of your Social Security statement online at www.ssa.gov. This statement will provide an estimate of how much you’ll receive if you file for benefits. Waiting until full retirement age to collect Social Security is usually the best thing to do. Taking benefits There isn’t a single “right” number early usually doesn’t make sense to use when thinking about unless you need the income inflation. The important thing is and have no other options. If to recognize that maintaining you have significant retirement your lifestyle requires an income savings, it might make sense to stream that grows over time to wait beyond full retirement age. keep up with inflation. Some workers are fortunate enough to be covered by How much savings traditional pension plans. is enough? Traditional pensions provide a For many Americans, Social lifetime income stream. Features Security provides a foundation of and benefits vary, but the retirement income. For most of us, Social Security alone won’t be enough to have the lifestyle we See Ready For Retirement Page 20 want in retirement.

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.

NOVEMBER 2019

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NEWS

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FLORIDA ANNOUNCES ARREST IN $500,000 KISSIMMEE ACCIDENT CLINIC FRAUD SCHEME

ISSIMMEE, Fla. – Chief Financial Officer (CFO) Jimmy Patronis today announced the arrest of Dr. Celestino Santi of Accident Care Center of Boggy Creek for allegedly defrauding nine auto insurance companies out of more than $500,000 in unlicensed medical billing.

motor vehicle accident medical treatment center, to avoid the licensing requirements of the Health Care Clinic Act.

Dr. Celestino Santi was booked into Lake County Jail on charges of Scheme to Defraud of more than $50,000, False and Fraudulent Insurance Claims of more than Investigations revealed that $100,000, Grand Theft of more for approximately five years, than $100,000, and operating an Dr. Santi was allegedly acting Unlicensed Health Care Clinic. as a “straw owner” to disguise the identity of the true owner, If convicted on all charges, he an unlicensed individual. faces up to 30 years in prison. An investigation by CFO Patronis’ Unlicensed medical treatments Additional arrests are expected. fraud detectives revealed that were then billed to various Individuals charged with a crime Dr. Santi allegedly concealed insurance companies under are presumed innocent until the ownership of Accident patients’ Personal Injury proven guilty. Care Center of Boggy Creek, a Protection (PIP) coverage.

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FLORIDA ANNOUNCES ARREST OF UNLICENSED DOCTOR IN OSCEOLA COUNTY INSURANCE FRAUD BUST

ISSIMMEE, Fla. – Chief Financial Officer (CFO) Jimmy Patronis today announced the arrest of Ozioma Maduka of Osceola Injury Center, LLC for allegedly practicing as a doctor without a license and fraudulent billing for unlicensed medical treatments.

allegedly practiced as a medical doctor at Osceola Injury Center, LLC in Kissimmee without an active, valid Florida Medical Doctor’s license., allegedly performing examinations, diagnosed patients, gave prognosis and created treatment plans for patients who sought treatment for auto accident injuries. Maduka An investigation conducted fraudulently billed two insurance by Insurance Fraud detectives companies more than $4,400 for revealed that Ozioma Maduka the unlicensed treatment.

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Maduka was arrested on October 25, 2019 by Portsmouth Sheriff’s Office and booked into Portsmouth City Jail in Virginia before being extradited to Florida. He was charged with Practicing as a Healthcare Professional without a License, a third-degree felony. If convicted, he faces up to 5 years in prison. Individuals charged with a crime are presumed innocent until proven guilty.

NOVEMBER 2019


NEWS

WASHINGTON STATE SEEKS TO FINE, REVOKE LICENSES OF VANCOUVER BAIL BOND COMPANY AND OWNER David Regan demands hearing; both actions are stayed pending outcome

been stayed pending the outcome of the hearing.

If the orders are upheld at hearing, Regan and his company will be barred from selling bail bonds in LYMPIA, Wash. – Washington state. Insurance Commissioner Mike Kreidler issued a revocation order against David An insurer A. Regan and his insurance acts as agency, Regan Bail Bonds, Inc. a surety when of Vancouver, Wash. Kreidler also issued an order imposing it guarantees a $100,000 fine and $7,072 in performance of a unpaid premium tax, penalties and interest. bail bond contract.

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Kreidler’s orders state that Regan Bail Bonds acted as an insurer starting in January 2018 by posting at least 325 bail bonds in Washington courts that named Regan Bail Bonds as the surety. The bonds represent $3.7 million in liabilities, including almost $2 million of open liabilities at the conclusion of Kreidler’s investigation. Regan Bail Bonds collected $294,570 in premiums for the bonds.

Surety insurance includes bail bond insurance and insurers that sell it must have a certificate of authority from the insurance commissioner.”

Kreidler ordered Regan and Regan and Regan Bail Bonds, Inc. Regan Bail Bonds on July 31 to demanded hearings regarding cease and desist from acting as a these orders, as allowed by state surety insurer without a certificate law. The revocation and fine have NOVEMBER 2019

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of authority and from allowing unlicensed insurance producers to conduct business on its behalf. Regan Bail Bonds allowed one unlicensed insurance producer to issue at least 37 of the 325 bail bonds in Washington. Additionally, 142 of the 325 bail bonds were posted in Clark County Superior Court and Regan Bail Bonds failed to follow court procedures. Regan also demanded a hearing on that case, scheduled for Jan. 30, 2020. A bail bond is a contract between the defendant, the surety and the court to insure the defendant’s appearance at court proceedings. An insurer acts as a surety when it guarantees performance of a bail bond contract. Surety insurance includes bail bond insurance and insurers that sell it must have a certificate of authority from the insurance commissioner. Kreidler’s investigation started after receiving a complaint about Regan Bail Bonds acting as a surety. www/underwritersinsider.com

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SPECIAL REPORT - AAA

New AAA Foundation study shows more teens are obtaining their license before the age of 18

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ASHINGTON (Oct 21, 2019) – More than 60% of teens got their driver’s license before the age of 18, according to new research from the AAA Foundation for Traffic Safety. An 11% increase since 2012. The new report reveals a changing trend in teen licensure from when the

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Foundation first evaluated the issue in 2012. At the time, the country was just emerging from a recession and many young people cited their family’s inability to afford the high cost of driving as a reason why they did not obtain their license sooner.

Z is learning to drive under the protection of state graduated driver licensing programs and parental supervision.”

The new AAA Foundation study surveyed young adults ages 18-24 to determine when they obtained their license and found “The trend for teens to acquire that nationally, 40.8% got their their driver’s license has changed license at or before age 16 and over the past 10 years,” said Dr. 60.3% got their license before the David Yang, executive director age of 18. Other findings show: of the AAA Foundation for Traffic Safety. “Many are getting Only half (49.8%) of teens in large licensed before the age of 18, cities obtain their license before which means more of Generation the age of 18, compared with Table of Contents

NOVEMBER 2019

Attribution 2.0 Generic (CC BY 2.0) https://www.flickr.com/photos/statefarm/9734368152

NUMBER OF LICENSED TEEN DRIVERS ON THE RISE


nearly two-thirds of those in less urbanized areas. Teens living in the Midwest tend to be licensed at younger ages — 55% at or before age 16 and 70% before age 18. While only one-third (32.2%) of teens living in the West and fewer than a quarter (22.3%) of teens in the Northeast reported getting their license at or before age 16, only 56% (Northeast) and 48% (West) did so before age 18. Past AAA Foundation research found that for every mile driven, new teen drivers ages 16-17 years old are three times as likely as adults to be involved in a deadly crash. All states have in place graduated driver licensing (GDL) systems for teen drivers ages 16 and 17 to help them gradually learn the rules of the road under less risky conditions. The programs require minimum holding periods and practice requirements for teens with learner’s permits, followed by restricted licenses that limit driving at night or with peer passengers. “The fact that more teens are starting to drive at an age when they can gradually learn the necessary skills to be safe behind the wheel is great news for all drivers,” said Jennifer Ryan, AAA director of state relations. “Past trends of waiting until you turn 18 to be licensed was a cause for concern. Many of these young drivers were getting behind the

By setting parameters, new drivers can greatly minimize their risk of a crash. AAA recommends that regardless of their age when A previous AAA Foundation first learning to drive, new drivers study found that drivers first should remember to “R.E.A.D the licensed at age 18 are more road”: likely to be involved in a crash • R = Right speed, for right resulting in injuries during now: Always mind the speed their first year of solo driving limit and reduce your speed than new drivers licensed at when traveling in adverse any other age. Nearly 28% of weather conditions. the young adults in the AAA • E = Eyes up, brain on: Always Foundation survey reported scan the road to anticipate waiting until they were 18 dangers ahead. Eliminate or older to get their license. distractions and keep your Reasons young adults cited for mind focused on the task of delaying licensure included: driving. wheel with minimal knowledge or support, putting themselves and others at risk.”

• A = Anticipate their next • Nervous about driving move: Be aware of other (68.4%) drivers on the road. Anticipate • They could do everything their next move and always they needed without have a plan to respond. driving (52.6%) • D = Huge DONUT of space • Driving was too expensive around your vehicle: Keep large amounts of space to (33.3%) the front and sides of your • Too busy to get a license vehicle. (28.9%) • Family members did not have time to help them get TeenDriving.AAA.com has a variety of tools to help prepare their license (20.5%) parents and teach new drivers the “It is imperative that all new rules of the road. The online AAA drivers practice driving with a StartSmart program also offers skilled coach through a variety great resources for parents on of routes and in different how to become effective in-car weather conditions before coaches as well as advice on how to manage their teen’s overall heading out on their own,” said driving privileges. Novice drivers Dr. Bill Van Tassel, AAA manager preparing for the responsibility of driver training programs. of driving alone should enroll “Novice drivers shouldn’t let the first time that they drive in the rain or on the freeway be at a See Teen Drivers Page 25 time when they’re alone.”


NEWS

CALIFORNIA INSURANCE AGENT ARRESTED AFTER ALLEGEDLY STEALING $148,000 AND LEAVING A CLIENT UNINSURED

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OS ANGELES, Calif. — Insurance agent Stephen Mark Gomez, 64, of Lake View Terrace, was arraigned this week on eight felony counts of grand theft and embezzlement after allegedly collecting over $148,000 in insurance premium payments from a client but failing to place insurance coverage on the client’s properties. The alleged crime was discovered after the victim’s property suffered a fire and the victim subsequently discovered he was uninsured. “Gomez allegedly violated his fiduciary responsibility as a licensed agent and left his victim uninsured when he needed insurance the most,” said Insurance Commissioner Ricardo Lara. “We will continue to use every resource available to stop unscrupulous agents from preying on customers. Criminal acts of those looking to degrade the trust of professional agents will not be tolerated.”

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The California Department of Insurance found that Gomez, acting as the victim’s insurance agent, collected $148,749 in premium for Fire and General Liability Insurance for the victim’s properties between April 2012 and May 2018. Gomez collected the premium payments, issued invoices for fraudulent insurance policies,

and issued bogus Declaration Pages to the victim as proof of insurance. The victim became aware of the fraud when one of his properties suffered a structure fire on September 20, 2018. At the time of the fire, the victim thought See Agent Arrested PG 45

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

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NOVEMBER 2019


NEWS

FLORIDA ANNOUNCES ARREST OF INSURANCE AGENT IN $99,000 SENIOR ANNUITY SCAM

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ESTON, Fla. – Chief Financial Officer (CFO) Jimmy Patronis today announced the arrest of insurance agent Alberto Soulier for allegedly defrauding a Florida senior of approximately $99,000 in an annuity investment scam. Investigators allege that for several years Soulier created fake investment companies and pocketed the annuity premiums of a South Florida senior citizen.

the warning signs of fraud and remember that if an offer sounds too good to be true, it usually is. If you feel you have been a victim of fraud, report it immediately at FraudFreeFlorida.com.”

licensed insurance agent Alberto Soulier allegedly sold fictitious annuity policies to a senior victim with the promise of a better rate of return on the investment. Over roughly four years, Soulier allegedly presented bogus annuity documents to the victim bearing the names of fictitious companies “MBA Capital Group” and “Trust Preferred Capital Network” and then pocketed the victim’s premiums totaling approximately $99,000.

Soulier was booked into Broward County Jail on October 15, 2019, on charges of Misappropriated Insurance Funds, Organized CFO Jimmy Patronis said, Scheme to Defraud, and “Defrauding any Floridian Grand Theft. If convicted, he is unacceptable but it faces up to 75 years in prison. is especially despicable Immediately upon filing of when scam artists target formal charges, Soulier’s seniors who have worked Suspended Florida Iinsurance agent Alberto Soulier, 55 license will be suspended. their entire lives to build This case is being prosecuted by a nest egg. My dedicated fraud investigators are working every An investigation by CFO Patronis’ the 17th Judicial Circuit of Florida. day to root out fraud and hold Bureau of Insurance Fraud and Individuals charged with a crime bad actors accountable. It’s vital Division of Insurance Agent & are presumed innocent until that Florida’s seniors understand Agency Services uncovered that proven guilty. NOVEMBER 2019

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THE INSIDE TRACK - BREAKING NEWS Which Insurance Line Is Priced “Dangerously Low?”

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ccording to Jeremy Barnett, SVP of marketing and business development in Tokio Marine HCC’s cyber and professional lines group, “We’re in the phase of market expansion where there’s a rush in our suppliers, so while demand is at its highest level, supply is also at its highest level. There’s so many carriers offering the cyber solution that the pressure on pricing is downward, and so the rates for cyber insurance are very low – dangerously low.”

agreed to extend the time limits for 2017 wildfire survivors to access additional living expense benefits after Commissioner Ricardo Lara appealed to them to stand by their customers who are still in the process of rebuilding their homes. These companies represent a majority of the total losses from the devastating 2017 wildfires that struck Santa Rosa and other parts of

Northern California. With only approximately 20 percent of homes rebuilt today, many survivors have faced unavoidable delays due to the scale of destruction and construction labor shortages. Commissioner Lara approached insurance companies to honor the spirit of a new state law passed in the wake of the deadly 2017 fires by extending additional living expense, or

Caifornia Insurers Extend Access To Additional Living Expense Beyond 2-Year Period

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s many as 26 insurers have

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THE INSIDE TRACK - BREAKING NEWS ALE benefits, from 24 to 36 months.

First Images From New X-Ray Telescope

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s reported by Space. com: On Oct. 22, 2019, the inaugural images from the German X-ray telescope eROSITA were presented to the public at the Max Planck Institute for Extraterrestrial Physics (MPE) in Bavaria, Germany. These “first light” images are a combination of pictures from all seven of the telescope’s Wolter-1 mirror modules, which have been scanning the sky with custom CCD cameras. “These first images from our telescope show the true beauty of the hidden universe,” Peter Predehl, principal investigator of eROSITA, said in a statement. “To meet our science goals, we needed enough sensitivity to detect the most-distant clusters of galaxies in the universe over the whole sky and resolve them spatially. These first light images show that we can do exactly that, but we can go a lot further.” NOVEMBER 2019

(Image: © F. Haberl, M. Freyberg and C. Maitra; MPE/IKI)

Florida Announces OIR Communications Director

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lorida Insurance Commissioner David Altmaier is pleased to announce the appointment of Alexis Bakofsky as Communications Director for the Office of Insurance Regulation (OIR) effective Monday, October 21, 2019. Alexis most recently served as Deputy Communications Director for the Florida Department of Highway Safety and Motor Vehicles, Table of Contents

where she was responsible for media relations and oversight of all department safety and consumer education campaigns. Alexis has a Bachelor’s degree in Health Science from the University of Florida and a Master’s degree from Gonzaga University. “Alexis brings a wealth of experience to the communications team and we look forward to working with her to enhance OIR’s communications efforts,” said Insurance Commissioner David Altmaier.

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NEWS

HOW MORTGAGE ORGANIZATION’S CAN MITIGATE THE RIPPLE EFFECT OF A CONSUMER CONSENT AND PRIVACY COMPLIANCE REQUEST

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based on the potential risk and ooted in increased associated cost to the organization regulation such as GDPR for a complaint. and CCPA and general customer backlash, a growing By defining a consent and emphasis on collecting consent compliance project so discretely, and ensuring privacy of customer organizations overlook an data exists. In this environment, expensive and impactful aspect the “cost” of compliance is a top of addressing the requirement of mind factor for companies, but which starts with a simple request how “cost” is considered varies – a customer asks to be removed from organization to organization. from a communication. Irrespective of an organization’s approach, the cost and complexity Without approaching compliance of solving the consent and privacy holistically, a request to be problem remains high. removed, be forgotten or for an understanding of what is being Some companies focus on the collected on a customer becomes cost of setting up technology to a grain of sand in the gears of collect, track, store and report the company. This grain of sand customer consent and privacy negatively impacts and slows across their enterprise systems. down the overall organization as They focus on making a solution- it works to address the request. based cost benefit decision, seeing the compliance problem As the request moves through the simply as a project to complete organization from department to and an item to check off their to department, the cost to address do list. a compliance inquiry grows exponentially - and this expense Others focus on quantifying the grows as the number of requests cost of potential fines associated grow. with non-compliance. Their focus is risk-reward and decisions are See Mortgage Organizations Page 24 By Eric V. Holtzclaw

A

bout the Author:

Eric

V. Holtzclaw is Chief

Strategist

of

PossibleNOW.

He’s a researcher, writer, serial entrepreneur and challengerof-conventional

wisdom.

Check out his book with Wiley Publishing

on

behavior

consumer Laddering:

Unlocking the Potential of Consumer Behavior. Eric helps strategically guide companies with the implementation of enterprise-wide consent and preference

management

solutions.

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NOVEMBER 2019


NOVEMBER 2019

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ANALYSIS - FINANCIAL Continued From Page 9

ARE YOU READY FOR RETIREMENT? pension plan sponsor should provide statements showing your projected benefits. Many decisions related to how you collect a traditional pension can’t be undone. Don’t hesitate to seek expert advice if you don’t understand your pension benefits. For most of us there will be a significant gap between what Social Security provides and what we need to spend to have the retirement we want. Savings in individual retirement accounts and employer-sponsored plans

like 401(k) and 403(b) plans will as means to live the life you want when you retire. Know have to fill that gap. who’s going to take care of you The general rule of thumb is to when you can no longer care plan to spend between 4% and of yourself, what will happen to the things you leave behind. 5% of the starting balance of Planning your retirement means your retirement savings per year. thinking through these kinds If you stick with this spending of things and having the right rule, and make annual increases estate planning documents in for inflation, running out of place. Being ready for retirement money in retirement is very is about more than just dollars and cents - it’s about making unlikely. sure your life will work when If you want to spend $40,000 per you’re done working. year beyond what Social Security Matthew Treskovich is the Chief provides, then you’ll need to Investment Officer for CPS start with about $1,000,000 in Investment Advisors. retirement savings. Your retirement income plan needs to include income taxes. The “4% to 5% rule” has some specific assumptions about how you invest your retirement savings. If you want to invest more conservatively, you may need to adjust your spending downward.

Don’t forget the bigger picture Income and expenses are just two pieces of the retirement puzzle. Look at your retirement savings and investments 20

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NOVEMBER 2019


FLORIDA OIR ORDERS 7.5% WORKERS’ COMPENSATION INSURANCE RATE DECREASE FOR 2020

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ALLAHASSEE, Fla. – Florida Insurance Commissioner David Altmaier issued an Order​on Rate Filing today to the National Council on Compensation Insurance (NCCI) requesting an amended filing to reduce workers’ compensation rates by 7.5 percent for 2020.

and, if amended by November 4, 2019, will be approved with the larger workers’ compensation rate decrease. Approval of a revised 7.5 rate decrease is contingent on the amended filing being submitted with changes as stipulated within the Order. If approved by the OIR, the revised rate decrease would become effective on January The Order notifies NCCI that the 1, 2020, for new and renewal rate filing submitted for a 5.4% rate business. decrease has been disapproved NOVEMBER 2019

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About the Florida Office of Insurance Regulation The Florida Office of Insurance Regulation has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about OIR, please visit our website or follow us on Twitter @FLOIR_comm. www/underwritersinsider.com

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REPORT - LLOYD’S OF LONDON

SINGLE CYBER ATTACK ON ASIA-PAC PORTS COULD COST $110BN, EQUAL TO HALF OF ALL 2018 NATURAL DISASTERS

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hese losses could occur in an extreme scenario in which a computer virus infects 15 ports across Japan, Malaysia, Singapore, South Korea and China, according to the report – ‘Shen attack: Cyber risk in Asia Pacific ports’ – produced by the University of Cambridge Centre for Risk Studies, on behalf of the Cyber Risk Management (CyRiM) project, in partnership with Lloyd’s. Despite the high costs to business and international trade, the report showed that the global economy is underprepared for such an attack with 92% of the total economic costs uninsured, leaving an insurance gap of $101bn.

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The report estimated that :

A single cyber attack on major ports across Asia-Pacific could cost $110 billion, which is roughly equivalent to half of all losses from natural catastrophes globally in 2018*. This is according to new research released today by Lloyd’s, the world’s (re) insurance market.”

An attack via a computer virus carried by ships could scramble the cargo database records at major ports and lead to severe disruption, according to the plausible scenario depicted in the report. Although the virus only directly affects ports in AsiaPacific, economic losses would be felt around the world due to the global interconnectivity of the maritime supply chain. 22

An attack of this scale targeted at ports would cause substantial economic damage to a wide range of businesses through reduced productivity and consumption, incident response costs, and supply chain disruption.

transportation, aviation and aerospace sectors would be the most affected ($28.2bn of economic losses in total), followed by manufacturing ($23.6bn) and retail ($18.5bn). Productivity losses would affect each country that Table of Contents

has bilateral trade with the attacked ports. Asia would be the worst affected region, set to lose up to $27bn in indirect economic losses, followed by $623m in Europe and $266m in North America.

Other key findings from the report included: • The transportation sector in Singapore would take the biggest economic hit, followed by the same sector in South Korea. • ‘Business interruption’ and ‘contingent business interruption’ insurance coverages would be the main drivers of the insured losses (60% of the loss in the most extreme version of the scenario). • Non-affirmative cyber, meaning cyber risk that is not explicitly mentioned in an insurance policy, would account for up to 57% of the total insured losses. • Insurance claims would arise from port operators (50% of insured losses), companies along the supply chain (21% of insured losses), and logistics and cargo handling companies NOVEMBER 2019


Alan J. Wilson, CEO of MSIG Asia said, “MSIG is proud to partner • with CyRiM in producing this second report on potential cyber events, which we believe is extremely relevant in the context of today’s digital economy. This report highlights how cyberattacks in the maritime industry can result in significant security and financial threats for shipping companies, with a wider impact on Dr Andrew Coburn, Chief Scientist other interrelated sectors around at the Cambridge Centre for the region and the globe. Through Read the report here. Risk Studies, said, “This report collaboration with academia, highlights the vulnerability of the technology companies, financial Angela Kelly, Singapore Country interconnectivity of the global services and governments, we Manager, Lloyd’s, said, “We are economy, and how disruption aim to bring value to societies and pleased to once again collaborate of marine cargo shipments help companies and individuals to with the University of Cambridge causes widespread loss in supply be prepared to meet ongoing and and CyRiM founding members on chains and business operations. emerging cyber threats.” this ground-breaking Elizabeth Geary, Global research. Cyber risk Head of Cyber at TransRe, is one of the most said, “This second piece critical and complex of important research challenges facing the reinforces that we all need Asia Pacific maritime to pay close attention to industry today. As this systemic cyber risk within risk grows with the the different, interlinked increasing application components of the global economy. It highlights of technology and the need for effective automation in the risk management, industry, collaboration which includes a clear and future planning and comprehensive by insurers and risk The Port of Singapore is among the world’s busiest and ranks second managers is critical. globally as a containerized cargo transhipment center. U.S. Coast Guard understanding of the risks and mitigating factors With nine out of ten photo by Petty Officer 2nd Class Patrick Kelley. in the global supply of the world’s busiest chain. Together with its container ports predecessor, the report shines a based in Asia, and high levels of Modelling this complexity has light on the large insurance gap underinsurance in the region, this been a research challenge but and how insurers can enable exposure must be addressed.” we hope the report highlights effective risk transfer.” opportunities for the cyber Dr Shaun Wang, Director of insurance market to assist Insurance Risk and Finance with protection against these Research at Nanyang vulnerabilities.” See ASIA-PAC CYBER ATTACK PG 32 (16% of insured losses). There are opportunities for insurers and policyholders to expand their view of cyber risks ahead of the next event and the report helps to inform in a way to support new products, services and mitigation strategies that make businesses and communities more resilient.

Technological University, said, “This research sheds light on the interplay of cyber risk and physical world of complex logistics and supply chains of major ports in Asia. It deepens our understanding of potential cyber-risk liability and aggregation and helps strengthen risk management of critical infrastructure.”


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MORTGAGE ORGANIZATION’S CAN MITIGATE THE RIPPLE EFFECT OF A CONSUMER CONSENT AND PRIVACY COMPLIANCE REQUEST

Cost to Customer Service In most cases, the information needed to answer common customer requests such as – tracking whether their product shipped, their order was placed or learning the status on their account –is relatively easy. That’s because they’ve spent years and lots of money building out their core CRM systems. This is not true for consent and privacy data. This data stored across many different systems and tools within the enterprise. Additionally, accomplishing a consolidated view requires a proper data map to what information is stored where. By allowing customers to complete consent and privacy requests via 24

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self-service or providing customer service representatives easy access to customer data across the enterprise, customer inquiries can be handled effectively before they become a larger problem. Without an overall understanding of where data is stored, how to access it and more importantly make a change, no request for consent or privacy data can be easily addressed. This results in significant time and effort by the customer service representative and others across the organization as well as multiple communications with the customer regarding the status of their request.

opt-out versus opt-down or the decision to not send outbound communications at all. The loss of customer communication, either because of overly stringent adherence to compliance laws and regulations or due to confusing compliance language impacts the effectiveness of marketing and decreases ROI on marketing efforts.

Cost to Marketing Good marketing presents a well thought out brand promise and makes the customer take notice. However, in order to fulfill compliance requirements, many companies deploy tactics that result in less than ideal messaging to customers regarding the use of their data. These messages only confuse, frustrate and certainly don’t convert customers. In other cases, an attempt to quickly address consent and privacy risks, organizations turn to band-aid fixes such as the implementation of complete Table of Contents

Well thought out consent collection and data privacy access at key moments in the customer journey is key to converting compliance from a cost to marketing to a marketing advantage.

Cost to Compliance Without a proper governance approach, the compliance department finds itself stuck in a cycle of one-off responses NOVEMBER 2019


to complaints and addressing compliance requests that arise. To address the problem “of the moment”, the department tasked with compliance works in a constant triage.

the organization as a steward of their data, their experience of receiving communications across many channels, as well as their experience when they interact with digital properties.

Consent and privacy management Collection of consent and is not a technology and it is not a responding to data privacy requests must be thought through project. as strategically as any marketing To address these correctly, it campaign to drive traffic, shopping requires an overarching practice, cart experience to increase a general shift conversion or supply chain in the way the assessment to drive down costs o r g a n i z a t i o n and increase customer satisfaction. views the It can’t simply be bolted on as an customer and afterthought. works internally. Fully addressing As regulations and requirements consent and increase as a result of increased privacy requests scrutiny through laws such as GDPR r e q u i r e s and CCPA, the cost of complying input from all with customer requests eats away departments to at top and bottom line profits. stand up a well thought out Topline because the customer approach and continually update can exercise the choice to work it as the technology, business with companies that honor their and compliance environment consent and privacy wishes changes. The compliance strategically and proactively, department must be strategic bottom line because of the about its approach in order to be internal impact to ill-prepared organizations as they react to successful. inquiries from customers. To be successful, organizations must Cost to the think through the ramifications Customer Experience beyond the implementation Finally, the most impacted of a singular technology or in aspect of an organization is preparation for potential fines. the customer experience. This includes how the customer views NOVEMBER 2019

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NUMBER OF LICENSED TEEN DRIVERS ON THE RISE in a driver education program that teaches how to avoid driver distraction and other safety skills. About AAA Foundation for Traffic Safety: Established in 1947 by AAA, the AAA Foundation for Traffic Safety is a not-forprofit, publicly funded, 501(c) (3) charitable research and 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. About AAA: AAA provides more than 60 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 taxpaying AAA has been a leader and advocate for safe mobility. www/underwritersinsider.com

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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.

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Climate Change: Real or Hoax?

’m sure you are aware of the wildfires in California and the crazy hurricane activity in the Atlantic. There are record temps being recorded all around the world including here in Arizona. Will you now concede “climate change?” T.S. Phoenix, AZ

ADVISOR

years ago - and lasted to about 11,500 years ago. One thing we know about the ice ages is they were periods of great climate change where glaciers extended as far south as current Chicago and then ending in periods of dramatic warming. (Much more so than anything we are experiencing today). We also know that those periods of dramatic cooling and warming had nothing to do with human activity, although it is certain that we would have been blamed had the current climate hysterics been around

to fret about it. The cold periods are called glacials (ice covering) and the warm periods are called interglacials. We live in a warming interglacial that began about 11,000 years ago, slowly taking us out of the last ice age. From the Utah Geological Survey: “As Earth was emerging out of the last glacial cycle, the warming trend was interrupted 12,800 years ago when temperatures dropped dramatically in only several decades. A mere 1,300 years later, temperatures locally spiked as much

First, T.S., I’ve never denied “climate change.” The Earth’s climate has been changing, non-stop, for about 4.5 billion years. In fact it’s the current climate hysterics that seem to think the climate of the last 100 years must remain static forever or we all die! Look, I’m not a climate scientist. But let’s just use a little common sense here and consider the ice ages, which began 2.4 billion 26

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located in frozen Prudhoe Bay, North Slope, Alaska. Another big reserve exists under the deep sands of Saudi Arabia. How did the oil get there? Because both of these regions were once tropical seas. What happened? Climate Change! And humans had nothing to do with it. Now consider this: as 20°F (11°C) within just several years. Sudden changes like this occurred at least 24 times during the past 100,000 years. In a relative sense, we are in a time of unusually stable temperatures today.” HERE. Remember, today’s climate hysterics are going crazy over a 1 or 2 degree NOVEMBER 2019

warming over a century! So is the Earth warming? Probably we are coming out of an ice age. But there have always been wildfires, there have always been hurricanes and it’s always been hot in Arizona! One thing more, T.S. I want you to think about: One of the largest oil reserves on Planet Earth is Table of Contents

It’s not just a coincidence that every climate change “solution” advances an anti-corporate, anticapitalist, anti-American, anti-free market, prowealth transference, big government liberal agenda. Think about that! www/underwritersinsider.com

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NOTABLE QUOTABLES IN THE NEWS - WITH COMMENTARY

SAY WHAT? Pathetic Trump Impeachment Inquiry Is Falling Apart

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hen it turned out there were a number of factual falsehoods in the letter. Then it turned out the whistleblower was a Democrat who disliked Trump. Then it turned out he had worked with then-Vice President Joe Biden in the White House. Now there are reports that after five different disclosures undermining t h e whistleblower’s credibility, the House Democrats may not even call him to testify. This means that the person who was the excuse for the whole investigation Rep Adam Schiff D-Calif is now so discredited that House Democrats know he would be an embarrassment and would make even more of a mockery of their phony impeachment effort. In some ways, the collapse of the whistleblower is reminiscent of the collapse of the attacks on nowSupreme Court Justice Brett Kavanaugh. Big opening smear, wildly hostile headlines,

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excited anti-Trump talking heads, and then the balloon loses air, the case collapses and it is on to the next dishonest smear. The secret nature of the Schiff kangaroo court really means we know nothing for certain about any of the witnesses or their testimony. House Intelligence Committee Chairman Adam Schiff, D-Calif. – who was consistently dishonest and wrong for two years of Russian collusion stories – suddenly had a whistleblower who was anti-Trump. The Democrats were ecstatic. They now had an excuse to make their hardcore, left-wing, anti-Trump partisans happy.” (More) Former Speaker of the House Newt Gingrich in a recent OP/ED removing cover from antiTrump Democrats who have begun a pseudoimpeachment process in secret.

It’s All About Race?

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want to remind white folks that y’all were running from us. And you’re still running. I can’t make people not afraid of black people. I don’t know what’s going on. I can’t explain what’s happening in your head.”

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ichele Obama, still using the race-baiting mantra, speaking at the Obama Foundation Summit held at the Illinois Institute of Technology

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in Chicago describing when she first became Pelosi Gets Real aware of what’s called “White Flight.” While the former first lady appears to believe the s a left-wing San Francisco phenomena is simply a result of White aversion liberal I can say to these people: to Black skin color, many in the “comments” “What are you section of the online reportage felt differently. thinking?” “You can ask Here’s a sample: the left — they’re unhappy with me for not being • Hylo: “No white person ever moved because an a socialist. Remember Oriental or Jewish or Native American or Indian or November. You must win Eskimo or Polynesian family moved next door. The the electoral college.” reality is that decent people move away from cultures

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that tend to produce criminal elements. It’s not a race issue. It’s a culture/criminal producing issue.” Vshrade: “Hmm...property values plummet, stray bullets, drug sales on street, assault and violence.... etc etc....so does anyone still think a town in rural America on average is no more dangerous than say inner city Detroit? Which city would you rather walk through at night, Boise or Atlanta? White people don’t flee from fear they flee from risk and loss. We don’t want houses worth nothing, kids threatened, cars stolen on nightly basis.” Dotgone: It’s not race so much as safety and peace. NO one wants to live where the elected people are soft on crime and hard on police like DEMS. They tell us it’s racism hoping we don’t notice that Dem policies are a FAIL. I wonder if elites like her know any regular Americans. … I don’t care about color, but I can’t stand virtue signaling elites!. Does she (or any elites) actually know any regular Americans? I don’t think so. We’re too busy working, commuting, taking care of family, taking care of business to spend time with all that. I live and work in a diverse community. We all are just trying to get stuff done. So, Michelle and all elites....Don’t sit on your throne and trash us. Y’all just don’t have enough real life experience.” Person007: “It’s disappointing that with all her education and privilege, the only topic she appears to be able to address is her victimization by the great white masses. Other than being Obama’s wife what has she contributed to this country...or any other? Stop taking and start giving. Perhaps you’ll discover you’re not a victim after all.”

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Rep. Nancy Pelosi, Speaker of The House, said of the 2020 candidates in an interview with Bloomberg reacting to the leftward lurch of her party. Above all, Pelosi is a realist and understands that those candidates promising ridiculously expensive socialist “freebies” are not in touch with American voters.

UFO’s “Always Been There?”

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here had been a top-secret upgrade of our system that had gotten underway. They upgraded our cooperative engagement capability and did some tweaking on our spy radar and the way that it all works. I think because of these upgrades we were suddenly able to see things that had always been there.” Kevin Day, a U.S. Navy Topgun air intercept controller with more than 20 years experience in strike group air defence including war-time operations commenting on frequent Navy UFO sightings.

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BACK ISSUES

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BACK ISSUES

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NEWS Continued From Page 23

ASIA-PAC CYBER ATTACK Andrew Mahony, Head of Cyber Solutions, Risk, Asia at Aon added, “The Shen Cyber Attack Scenario highlights the complicated impact of supply chain disruption in the cyber context. For organisations, it presents a chance to review both direct exposure to the financial impact of a complex cyber-attack and the indirect financial impact of such an attack in an interconnected economy. For insurers, the Shen Cyber Attack provides a useful model through which to view accumulation risk and is a good reminder of the need to carefully manage contingent business interruption coverage.” Sébastien Heon, Deputy Chief Underwriter Officer, Cyber Solutions at SCOR said “The Shen report has brought together a diverse panel of experts to analyse what can happen if port and maritime infrastructures, which play a vital role in the global economy, are disrupted by a cyber event. We are delighted to have contributed to this far-reaching report, which furthers our collective understanding of the cascading effects of such attacks”. 32

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CALIFORNIA INSURANCE AGENT ARRESTED FOR IDENTITY THEFT AND FORGERY had not requested renewal. Without his clients’ knowledge or consent, Valdriz renewed his clients’ cancelled policies by electronically forging their signatures in order to submit and obtain a renewal of the insurance ONG BEACH, Calif. — policy. Valdriz then submitted Insurance agent Richard bogus premium payment Valdriz, 52, has been receipts to the insurance carrier charged with in order to collect thirteen felony commissions. counts including identity theft, An arrest warrant forgery, and was issued on grand theft after October 17, 2019 an investigation and yesterday by the California Valdriz turned Department himself into the of Insurance found that he had Los Angeles County Superior allegedly used the identity of Court. policyholders to renew their auto insurance policies without their The department will be taking knowledge or consent to receive action against Valdriz’s license. $4,555 in commissions. This case is being prosecuted by

Long Beach insurance agent arrested for identity theft and forgery

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the Los Angeles County District Valdriz’s clients’ insurance Attorney’s Office. policies had lapsed and they Table of Contents

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CLAIMS & THE LAW Continued From Page 7

ZALMA before or after the loss. When an insured submits fraudulent invoices to inflate a claim the insurer has the right, under the policy wording, to void the entire policy. The insured’s argument that he was entitled to recover that part of his claim not supported by fraudulent documents should be dismissed out of hand. One cannot commit a small fraud any more than a person can be just a little dead. An insurer that finds facts indicating fraud by exaggeration must prove the following to deny a claim: 1. The insured intended to overestimate the value of the property. 2. The overestimate is material. 3. The insured intended to deceive the insurer. 4. The insured actually deceived the insurer. A commentator stated that fraud “and false swearing consists in knowingly and intentionally stating upon oath that which is not true, or the statement of a fact which the party does not know NOVEMBER 2019

to be true and which he has no 4. The US Supreme Court has reasonable ground for believing long held that false statements to be true. (Footnote omitted) about the acquisition of … And an evasion intended to insured property are material mislead, (Footnote omitted) or as a matter of law, when the a concealment may constitute a existence of an insurable breach just as much as a direct interest or ownership is falsehood.” at issue. In Claflin v. Commonwealth Ins. Co., 110 Some evidence is convincing on U.S. 81 (1884), the Supreme its face. For example: Court affirmed the trial court’s instruction to the jury that the 1. An insured’s willful insured’s answer concerning overestimate of value in a the manner in which he paid proof of loss is sufficient to for the insured goods was prove intent to defraud. material as a matter of law. 2. An overestimate made with “reckless disregard” for the The materiality of a truth can also prove intent to misrepresentation or defraud. “Reckless disregard” concealment of a material fact is defined “as stating as a is usually a mixed question fact something about which of law and fact that under the insured has no reliable most circumstances should be knowledge. If, on the other determined by the trier of fact. hand, the insured makes an However, materiality “can be innocent overestimate, the decided as a matter of law if policy will not be void.”[5] reasonable minds could not differ (Emphasis added.) on the question.” 3. As the courts in Illinois have held for more than 30 years, A misrepresentation will usually “fraud and false swearing be considered material if a is a question of fact for reasonable insurance company, the jury, but it becomes a in determining its course of question of law when the action, would attach importance insured’s misrepresentations to the fact misrepresented or cannot in any way be seen concealed. as innocent.”[6] In Lykos, the evidence presented at trial Most courts have construed was overwhelming that the materiality broadly, emphasizing insured had committed arson and had sworn falsely in the See ZALMA Page 43 presentation of the claim. Table of Contents

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TECHNOLOGY Continued From Page 5

KIM KOMANDO •

Automatic Fraud Blocking: Scans and blocks suspected scam calls, whether they’re automated or not. Spam Risk Blocking: Blocks calls or sends them to voicemail if they’re identified as “Spam Risk.” Unknown callers: Anyone not in your contact list can be sent straight to voicemail. Personal Block List: Build a custom block list for unwanted callers. Siri Shortcuts: Allows you to block and report unwanted calls using Siri. Custom Call Controls: Lets you set up your calls into categories to accept, block,

or send straight to voicemail.

spam detection, blocking, and reporting. For $3.99 a month, you If you’re a can sign up for Call current Verizon Protect Plus. It also customer on includes Automatic an eligible Fraud Blocking and plan with a the Personal Block compatible List, as well as a few A n d r o i d other features: device, you’re automatically enrolled in the free • Enhanced Caller ID: Gives version of Call Filter. To get these details about “unknown” features on an iPhone, download callers. Call Filter from the app store. • Reverse Number Lookup: Look up a number you don’t Verizon offers a beefed-up version recognize. called Call Filter Plus, which is $2.99 per month for one line or $7.99 per month for accounts with three or more eligible lines. Here are a few extra features you get with Call Filter Plus:

Try the free version before signing up for anything else. Call • Protect is available by going into your account settings on myAT&T and turning it on. • More information is available here.

Verizon Verizon offers a free service called Call Filter. It provides 34

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• Real-time alerts: Get alerts on your incoming call screen to help avoid spam calls. Spam Look Up: Get access to a database of over 100 million spam callers. Personal Block List: Block an unknown number once and never receive calls from them again. Spam Risk Meter: This feature ranks a caller based on robocall likelihood.

You can also subscribe to an NOVEMBER 2019


TECHNOLOGY individual line to either the free version of Call Filter or the premium version accessing your My Verizon account or enrolling in the Call Filter app. The free version works well enough for me and probably will for you, too.

T-Mobile The free robocall blocking features T-Mobile offers are turned on by default. These features include: •

Scam ID: Customers are automatically alerted when an incoming call is likely a scam. No app required and no need to opt-in or turn it on, as it operates at the network level and works through a T-Mobile phone with Caller ID.

Scam Block: When enabled, T-Mobile will stop scam calls before they ever reach your phone. Customers can turn it on by dialing #662# in their My T-Mobile account or the Name ID app. Caller Verified: Users can see if incoming calls are authentic.

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For an additional fee of $4 per month per line, subscribers get access to the company’s Name ID app, where you can build custom block lists based on categories and frequent callers. If you want to upgrade with its Name ID feature on your iPhone, add the Name ID service to your account via myt-mobile.com or call 611 from your phone. Then download the Name ID app from the App store.

You have to contact Sprint to subscribe. Click or tap here to download it for iPhone, or click or tap here to download for Android. If you have a Sprint phone, try one of the free robocall blocking apps I mentioned at the top of this article.

As of right now, it’s unknown how the upcoming T-MobileSprint merger will affect the companies’ robocall features, but analysts speculate T-Mobile’s features will become available to Sprint users, rather than the Sprint other way around. To learn more Sorry to about how this merger will affect disappoint, but your phone bill, click or tap here. Sprint doesn’t offer a free robocall blocker. What digital lifestyle questions Its Premium Caller ID feature is do you have? Call Kim’s national available for $2.99 per month, radio show and tap or click here per line and displays the names to find it on your local radio of callers, even if they’re not in station. You can listen to or your address book. On select watch the Kim Komando Show devices, it will automatically on your phone, tablet, television screen and block unwanted or computer. Or tap or click here robocalls. for Kim’s free podcasts. Table of Contents

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SPECIAL REPORT

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

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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

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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. NOVEMBER 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!

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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!

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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!

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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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NOVEMBER 2019


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

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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!

NOVEMBER 2019

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NOVEMBER 2019


CLAIMS & THE LAW Continued From Page 33

ZALMA in their holdings that the subject of the misrepresentation need not ultimately prove to be significant to the final result of the claim. All that is needed is that it should be reasonably relevant to the insurer’s investigation at the time. For instance, in Fine v. Bellefonte[8] the court held that materiality should not be judged by what facts later turn out to be, but whether a false statement “concerns a subject relevant and germane to the insurer’s investigation as it was then proceeding.” The court also held that a falsely sworn answer is material if it “may be said to have been calculated to either discourage, mislead or deflect the company’s investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate.” A slight misstatement of value normally will not be sufficient to allow an insurer to void an insurance policy for fraud unless the insured knew at the time the misstatement was made that the statement was false and NOVEMBER 2019

the insurer can prove that the In liability claims, padding is misstatement was made with the difficult to detect. According intent to deceive it. to new findings from an online Insurance Research Council Misrepresentation, concealment, (IRC) public opinion study, 24 and fraud are not limited by the percent of Americans believe amount of the fraud but by the it is acceptable to increase an intent of the person making the insurance claim by a small amount claim. An insured who presents, to make up for deductible they with the intent to defraud, $1,000 are required to pay, lower than in false invoices is as culpable as the 33 percent found in a 2002 an insured who presents, with telephone survey. the intent to defraud, $1,000,000 in false claims. In both cases, if Additionally, 18 percent believe it proved, the policy of insurance, is acceptable to increase a claim by its terms and conditions, is to make up for premiums paid void and the claim is forfeited. in previous years when they had no claims, the lowest percentage If the differences in numbers since the question was first asked between those presented by the in a 1981 in a home survey. insured and those presented by Younger respondents, especially the insurer are honest differences young men, were much more of opinion or calculation errors likely to view claim padding as a policy cannot, and should not, acceptable. For example, among be declared void. The insured males age 18 – 34, 23 percent must intend to deceive and the agree it is all right to increase insurer must be in a position to claim amounts to make up for prove that intent and that it was premiums, compared with just deceived before it can void the 5 percent of their older male policy. counterparts and just 8 percent of females aged 18 – 34. For example, if an insured values her computer at the price she Even more people feel it is paid for it, not knowing that a reasonable to distort policy replacement could be bought for information to reduce their $2,000 less, there is probably no premiums. Other studies willful misstatement. However, discovered that one-third of if an insured claims his $50 all bodily injury claims for auto Timex watch is a Rolex valued at accidents contain some amount $26,000, the misrepresentation is clearly material and willful. See ZALMA Page 44 Table of Contents

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CLAIMS & THE LAW Continued From Page 43

The IRC says that these claims highlight the opportunistic attempts of doctors, attorneys, and claimants themselves to cheat the system. The consulting firm Accenture reported in 2003 that nearly one in four respondents to a survey indicated that they thought it of fraud, but only 3% are totally was acceptable to overstate the fraudulent claims resulting from value of an insurance claim. deliberate scams such as “staged Honest people deceive their accidents.” These findings, from a insurers. They think the deception 1996 study by Insurance Research is just harmless fudging. “Soft Council (IRC), showed that most fraud” wrongfully takes money of the 33 out of 100 bodily injury from an insurer and is also a claims identified as fraudulent crime. Soft fraud, like hard fraud, raises everyone’s insurance costs. included padding.

ZALMA

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The greatest amount of money lost to fraud is lost to schemes designated as “soft fraud.” Since most soft fraud succeeds the amount it costs the insurance industry is difficult, if not impossible, to determine. Prosecuting some “soft fraud” perpetrators can put the fear of prison in the minds of the general public and save more money, in the long run, than prosecuting and convicting a single major fraud perpetrator. Unfortunately police and prosecutors are often unwilling to prosecute cases of so-called “soft fraud” even when the evidence is damning.

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Years ago the author took the Examination Under Oath of an insurance broker who inflated a claim for damage to personal property by creating, with the use of white out paint and a photocopy machine, fake invoices for the replacement of property never replaced to collect the difference between actual cash value and replacement cost value. At Examination Under Oath the insured admitted to faking the receipts and was eventually convicted of insurance fraud and served a few months in jail for her crime.

“GOOD CAUSE” FRAUD Morally and criminally, insurance fraud is always wrongful. Many people, within the insurance industry and outside it, believe that because insurers are so well funded that there are good causes for committing insurance fraud. A frightening trend is emerging where judges, jurors and administrative law courts are refusing to convict or hold responsible perpetrators of fraud if the court is convinced that the fraud is for a good cause. “Good cause” fraud is believed to be “benign.” As a version of “soft” fraud it is justified in the minds of jurors who should NOVEMBER 2019

recognize it is no less a crime than fraud for the sole reason of gaining profit. The same people would never justify the robbing of a bank or a convenience store for good cause. It is, however, no less a tort or a crime. The trier of fact, the judge or jury, convinced of the good cause will simply refuse to punish the perpetrators. Fraud for a good cause is just as wrong in the eyes of the law as fraud for an evil cause. Justice will fail if the subjective intent of the criminal becomes a defense. This is supremely true in the case of a “good cause insurance fraud.” Everyone who cheats an insurance company, except the most dedicated and professional fraudsters, believe that they are doing so for a good cause and that no one is being harmed. It is a fact, however, that soft fraud costs insurers more every year than major fraud rings. If the usually honest can be made to fear fraud prosecution, more money will be saved than by imprisoning a few hardened insurance criminals.

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CALIFORNIA AGENT ARRESTED FOR STEALING $148,000 AND FAILING TO PROVIDE INSURANCE

thought he was insured as he was in possession of a Fire and General Liability Declaration Page as well as a renewal invoice for the same policy given to him by Gomez. The victim filed a claim with the insurance company only to find the insurance policy did not exist. The department’s investigation revealed that the insurance company never issued any policies for the victim nor was Gomez an appointed agent with the insurance company. The Department of Insurance has initiated action against Gomez’s insurance license. An early disposition hearing is set for November 25, 2019. This case is being prosecuted by the Los Angeles County District Attorney’s Office. www/underwritersinsider.com

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NOVEMBER 2019

Profile for The Underwriter's Insider

The Underwriter's Insider November 2019  

America's largest exclusively online insurance magazine, The Underwriter's Insider combines insurance news, politically incorrect politics,...

The Underwriter's Insider November 2019  

America's largest exclusively online insurance magazine, The Underwriter's Insider combines insurance news, politically incorrect politics,...

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