Features News 5
N. Carolina Allstate Agent Arrested For Embezzling Premium Funds
How an Insured Should Present A Claim After A Regional Catastrophe
Kingsway Amigo Merges With Mendota Ins Company
Florida Announces MultiState Agreement With Nationwide Insurance
Miami Therapist Sentenced To 108 Months of Prison in Medicare Fraud
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News 16 22 23
A1A Statement on 2012 Presidential Election
PCI Offers Suggestions On Water Damaged Vehicles
Florida Announces Arrests In PIP Clinic Sting
Florida Announces Workers Comp Fraud Arrests
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Florida Chiropractor Pleads Guilty in Staged Accident Scheme
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N CAROLINA ALLSTATE AGENT ARRESTED FOR ALLEGEDLY EMBEZZLING FUNDS
ALEIGH -Insurance Commissioner Wayne Goodwin today announced the arrest of Leilani Arellano, 23, of 1067 Lake Wendell Road, Wendell; she is charged with five counts each of www.underwritersinsider.com
embezzlement by an insurance agent and obtaining property by false pretense, and one count of attempting to obtain property by false pretense.
In some cases, her clients would receive a bill stating that they had not paid their full insurance payment and that their coverage had lapsed. Investigators allege that Arellano charged her clients fees for services that were supposed to be free and embezzled that money, as well.
Department of Insurance c r i m i n a l investigators allege that from January 2012 NC Insurance Commissioner until she was fired Wayne Goodwin as an Allstate Insurance Company agent in July 2012, Arellano was accepting Arellano was arrested on Oct. insurance premium payments 18 with the assistance of the in cash from Spanish-speaking Johnston County Sheriffâ€™s Office clients and embezzling part or and placed under a $20,000 the entirety of those payments. secured bond.
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CONTENTS 2012 • Issue 10
A Publication of AdMax Media Corp Corporate Offices P.O. Box 31551 P. Beach Gardens, FL 33420
Ron Manera Editor/Publisher
© Entire Contents 2012
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CROWDFUNDING For medical bills, inventions and more, regular folks are raising big money online
by Kim Komando
icholas Ivie, a U.S. Border Patrol agent stationed in Arizona, was tragically killed recently while on duty. Billy Sanders, who worked with Ivie at the Naco station, turned to online fundraising to help Ivie’s wife and two daughters. His Web page on GoFundMe raised nearly $30,000 in a few weeks and is well on its way to a $100,000 goal. Raising money online, or crowdfunding, is the new model for everything from music albums to video game consoles. Last year, crowdfunding platforms helped artists, entrepreneurs and companies raise about $1.5 billion. Fundraising sites will probably double that number by the end
of this year. Some crowdfunding campaigns make headlines periodically by raising jawdropping amounts of money. For example, OUYA, an Android-powered gaming console, recently raised more than $2 million its first day on Kickstarter and $8.6 million overall. Thanks to crowdfunding sites like GoFundMe, however, it’s easy for regular folks to ask for help funding mission trips or covering unexpected medical and funeral expenses. You can create a free personal donation website at GoFundMe in just a few minutes. You can raise funds for just about anything - a creative project, a small business startup or a honeymoon trip. It’s a great place to bring in money for sports teams,
schools, charities and volunteers. The site even raised $46,000 to provide shoes for America’s tallest man! Many people use GoFundMe to help friends and family members cover the cost of medical, veterinary and funeral expenses. One woman, for example, raised more than $134,000 for her brother’s cancer treatment. The donation page for a wounded survivor of the Aurora, CO, shooting reached $140,000 in a day and is now approaching $200,000. So how do you get started? First, you create a free donation page. This is an opportunity to tell your story. Put some thought into explaining why you need the money and how much it means to you. You can easily share this page through email and social media to quickly spread the word. GoFundMe has you set a fundraising goal, but unlike other sites you’re under no obligation or time limit to meet the goal. Donations are transferred to you as they come in. Fundraisers aren’t expected to give away freebies to backers. GoFundMe does deduct a 5 percent fee from each donation you receive (4.25 percent for certified charities and nonprofits). Additionally, online credit card processor WePay will deduct 2.9 percent plus 30 cents per transaction. Your donors pay no fees and don’t need to open any kind of account. To guard against fraud, GoFundMe won’t add a donation page to the search directory until it’s reviewed
See Kim Komando Pg 37 www.underwritersinsider.com
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How An Insured Should Present a Claim After a Regional Catastrophe
Expert Advice For Your Insured After A Loss - By Barry Zalma, Esq.
f your house was damaged or destroyed by the fire, windstorm, or flood as a result of state declared catastrophes and you had a fire, homeowners, flood insurance, tenant’s homeowners or condominium policy you will be dealing with an insurance adjuster. You should recognize that dealing with an insurance adjuster in a catastrophe is usually fairly easy because of the number of claims the adjuster is required to deal within a short time.
of the loss. 5. You, as the insured, should readily, and without objection, sign the non-waiver agreement or accept the reservation of rights as an expression of the status quo. 6. The adjuster should remind you, as part of the reservation of rights letter and explanation of the duties of the insured, to preserve and protect the damaged property and to mitigate the loss with due diligence and dispatch.
Barry Zalma, Esq., CFE is a California attorney Insurers will be in a very generous specializing in insurance coverage, insurance mood. They will be seeking good 7. You can request from the claims handling and fraud who serves as publicity by taking care of victims adjuster the identity of respected, a consultant and expert for insurers and of the catastrophe quickly and competent, and professional policyholders. He founded Zalma Insurance fairly. To make the claims process contractors experienced in fire Consultants in 2001 and serves as its senior go easily the insured person consultant. He recently published an e-book, reconstruction or the drying out “Insurance Fraud,” which is available at his Web must understand that both the of buildings and the prevention or site, www.zalma.com. Go to Zalma Books at insured and the adjuster have restriction of further loss including http://www.zalma.com/zalmabooks.htm. duties when damage-caused by mold growth. fire, windstorm, flood or other 8. You should follow up regularly and existence of mold spores in all insured perils are discovered. with the adjuster to ensure that The following list outlines the most building. he or she is meeting contractual important of these duties: obligations since a catastrophe often 3. You may be asked to sign a non- makes communications difficult. 1. You should be sure there is no waiver agreement.
unnecessary delay in reporting the fact of the discovery of damage to your insurer as a claim. 2. You and the adjuster should establish that there is no unnecessary delay in responding to any fire, fire fighting, flood or water-related cause of loss where “mold” may result as a natural result of water, warmth, 10
4. You may receive a reservation of rights letter advising you of your duties under the policy, the conditions that apply or might apply, and the exclusions that may apply to the facts Join Barry Zalma’s new Blog:
9. If you have failed to protect the property from further loss, the adjuster must remind you, in writing, of your failure and how that could effect your claim. 10. The adjuster should consider advance payments to avoid any See Zalma Pg 33
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KINGSWAY AMIGO MERGERS WITH MENDOTA INSURANCE COMPANY
ingsway Financial Services, Inc. (KFS), the parent company of Kinksway Amigo Insurance Company has announced it is restructuring its Insurance Services and Insurance Underwriting segments. The group stated that FKS reminas “strongly committed to writing profitable business in Florida and have decided to merge our existing book of business with our sister company, Mendota Insurance Company.” In a memo released to agents on October 25, 2012, the company went on to say, “In an effort to gain
additional efficiencies, we will implement our former software system/POS (KISS) until we are able to implement our new system platform. These actions will allow us to streamline business operatons, improve customer service and better support you.” Mendota Insurance Company was established in 1989 and is headquartered in Eagan, Minnesota. Mendota is a nationally recognized property and casualty insurance company and is licensed to write business in 42 jurisdictions. (41 states and the District of Columbia).
FLORIDA ANNOUNCES MULTI-AGENCY, MULTI-STATE AGREEMENT WITH NATIONWIDE INSURANCE COMPANIES
$144 Million Already Returned to Consumers
ALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty announced today that agreements have been reached between five Nationwide companies, and the Florida Department of Financial Services (DFS) -- Chief Financial Officer Jeff Atwater, the Florida Office of the Attorney General (AG) -- Attorney General Pam Bondi, and the Florida Office of Insurance Regulation (Office) along with six other lead states. The agreements require Nationwide to implement a process to pay the beneficiaries or the state’s unclaimed
property division when they identify that an insured has died. Since the multistate examination began, the company has identified 4,747 unclaimed death benefits, and has already paid $144.1 million to beneficiaries. The agreement also requires payment of $7.2 million to the states. “The Nationwide agreement is the third national agreement concluded through the NAIC’s Task Force formed to address this very important issue,” remarked Insurance Commissioner Kevin McCarty. “This agreement demonstrates our joint commitment to
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reach national settlement agreements with life insurance companies to pay benefits rightfully owed to policy beneficiaries. This is about returning money to consumers – but more importantly, the industry is changing its practices to create future safeguards to make sure beneficiaries are paid benefits to which they are entitled.” “When Floridians put their family’s needs in another’s hands, they have a right to know their company will deliver on its promises and be transparent in its dealings,”CFO Atwater said.“Companies doing business in our state will be held The Underwriter’s Insider
accountable for promptly fulfilling their contractual obligations and honorably dealing with their customers.” "Life insurers are obligated to do their due diligence in locating beneficiaries and making payments to them in a timely manner,” remarked Attorney General Pam Bondi. “Through this national settlement, we are ensuring that beneficiaries receive the money that has been owed to them, and we are restoring integrity to the life insurance industry." The states have joined together to change the way that life insurance companies handle claims when the companies have evidence that an insured has died, and many of the largest companies in the industry are agreeing to search proactively for beneficiaries. Normally life insurance claims are filed by beneficiaries, but in a small percentage of cases, the insured’s family is unaware of a policy and does not make a claim- in some cases for many years. Insurance companies can find out through the use of the Social Security Death Master file that an insured has died. The insurance companies that have signed these multi-agency, multi-state agreements have committed to build systems to run the Death Master file against their records periodically and when they identify that an insured has died, to conduct a thorough search for beneficiaries. The companies must either pay the beneficiaries or pay the state unclaimed property departments in a timely manner. This agreement is the result of a joint investigation undertaken with the Office, the Department of Financial Services, and the Attorney General, and coordinated with the insurance departments of California, Illinois, New Hampshire, North Dakota, Ohio and www.underwritersinsider.com
Pennsylvania. Often, beneficiaries can be found by the unclaimed property departments. Florida’s unclaimed property is handled by CFO Jeff Atwater’s office. Through outreach and advertising, the Florida Unclaimed Property Division returned over $211 million dollars to Floridians last year. As part of the agreement, Nationwide agreed to: •Begin monthly checks against the Death Master File of its life and annuity insurance files, and develop a procedure for a “thorough search.” •Adopt business reforms to locate policyholders and beneficiaries via a “thorough search” within 120 days of an insured’s death, unless company receives notice of such death. •In the event that Nationwide locates the beneficiary following a “thorough search,” Nationwide is required to provide the appropriate claims forms or instructions to assist the beneficiary in making a claim. •For a period of 36 months, Nationwide shall provide to the lead states quarterly reports about the implementation and execution of the requirements of the agreement. •Thirty-nine (39) months following the conclusion of this agreement, the lead states will conduct a follow-up examination to determine compliance with the agreement. It is too early to determine the exact amount of money that will be received by the state of Florida from this agreement; states have until December 7, 2012 to sign the agreement, and share in the payment allocation. In early 2011, the National Association of Insurance Commissioners (NAIC) formed the Investigation of Life/ Annuities Claim Settlement Practices Task Force chaired by Commissioner McCarty to guide and coordinate the
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multistate examination process, and conducted public hearings in Florida and California in May 2011 on this issue. Both Prudential Insurance Company of America (Prudential) and MetLife Insurance Companies (MetLife) have reached national agreements through this process; John Hancock Life Insurance Company (John Hancock) reached a similar agreement with Florida prior to the formation of the task force. The states of Florida, California, Illinois, North Dakota, New Hampshire and Pennsylvania are serving as lead states for examinations of the largest insurance companies focusing on the largest 40 insurance groups, which comprise more than 92% of the market for life and annuity market nationwide; other investigations of large national insurers are ongoing.
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MIAMI-AREA THERAPIST SENTENCED TO 108 MONTHS IN PRISON FOR PARTICIPATING IN $205 MILLION MEDICARE FRAUD SCHEME
iami-area resident Vanja Abreu and her co-conspirators caused the claims, some of the co-conspirators Abreu (Ph.D), former the submission of false and fraudulent then laundered the Medicare money in program director at the claims to Medicare through ATC, a order to create cash to pay the patient mental health care company American Florida corporation headquartered kickbacks. Therapeutic Corporation (ATC), was in Miami that operated purported sentenced yesterday to 108 months partial hospitalization programs (PHPs), Evidence at trial revealed that Abreu was a program director at ATC’s in prison for participating in a Boca Raton, Fla., center from $205 million Medicare fraud Abreu and her co-conspirators September 2005 to November scheme, announced U.S. 2005. In November 2005, Abreu caused the submission of Attorney Wifredo A. Ferrer of moved to ATC’s Miami center, the Southern District of Florida; false and fraudulent claims where she was the program Assistant Attorney General to Medicare through ATC, director until February 2009, at Lanny A. Breuer of the Justice which point she was promoted a Florida corporation Department’s Criminal Division; to corporate leadership and Acting Special Agent in Charge headquartered in Miami that oversaw operations at all ATC Michael B. Steinbach of the FBI’s operated purported partial centers until April 2010. Miami Field Office; and Special Agent in Charge Christopher Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHSOIG), Office of Investigations Miami office.
hospitalization programs (PHPs), intensive treatments for severe mental illness, in seven different locations throughout South Florida and Orlando.
Abreu, 49, of Pembroke Pines, Fla., was sentenced by U.S. District Judge Patricia A. Seitz in the Southern District of Florida. In addition to her prison term, Judge Seitz sentenced Abreu to serve three years of supervised release following her prison term and pay $72,771,469 in restitution, jointly and severally with co-defendants. On June 1, 2012, after a seven week trial, a federal jury in the Southern District of Florida found Abreu guilty of one count of conspiracy to commit health care fraud. Evidence at trial demonstrated that 14
intensive treatments for severe mental illness, in seven different locations throughout South Florida and Orlando. Evidence at trial revealed that ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC. These patients attended ATC, where they were ineligible for the treatment ATC billed to Medicare and where they did not receive the treatment that was billed to Medicare. After Medicare paid
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Evidence at trial revealed that program directors, including Abreu, helped doctors at ATC sign patient files without reading the files or seeing the patients. Evidence further revealed that Abreu and others would assist the owners of ATC in fabricating doctor notes, therapist notes and other documents to make it falsely appear in ATC’s patient files that patients were qualified for this highly specialized treatment and that the patients were receiving the intensive, individualized treatment PHP is supposed to be. Included in these false and fraudulent submissions to Medicare were claims for patients who were in the late stages of diseases causing permanent cognitive memory loss and patients who had substance abuse issues and were living in halfway houses.
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These patients were ineligible for PHP treatment, and because they were forced by their assisted living facility owners and halfway house owners to attend ATC, they were not receiving treatment for the diseases they actually had. Abreu was charged in an indictment returned on Feb. 8, 2011. ATC, the management company associated with ATC, and 20 individuals, including the ATC owners, have all previously pleaded guilty or have been convicted at trial. ATC executives Lawrence Duran, Marianella Valera, Judith Negron and Margarita Acevedo were sentenced to 50 years, 35 years, 35 years and 91 months in prison, respectively, for their roles in the fraud scheme. The 50 and 35-year sentences represent www.underwritersinsider.com
the longest sentences for health care fraud ordered to date. Acevedo, who was one of the first defendants to plead guilty and has been cooperating with the government since November 2010, testified at the doctors’ trial. ATC and its management company, Medlink Professional Management Group Inc., pleaded guilty in May 2011 to conspiracy to commit health care fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. On Sept. 16, 2011, the two corporations were sentenced to five years of probation per count and ordered to pay restitution of $87 million. Both corporations have been defunct since their owners were arrested in October 2010. The case was prosecuted by Trial
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Attorneys Jennifer L. Saulino, Robert A. Zink and James V. Hayes of the Criminal Division’s Fraud Section. The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers. 15
AIA STATEMENT ON 2012 ELECTION
ASHINGTON, D.C., Leigh Ann Pusey, president and CEO of the American Insurance Association (AIA), issued the following statement regarding the 2012 election and upcoming issues of concern to AIA. Ms. Pusey’s statement follows: “The 2012 election is now behind us, but important issues lie ahead. Congress and the president must work together in a bipartisan manner to address fiscal cliff issues and bring much needed certainty and sustained growth to our nation’s economy. “AIA will continue to work with the Obama Administration on issues concerning Dodd-Frank Act (DFA) implementation. AIA maintains the position that property-casualty insurers engaged in regulated insurance activities do not pose a threat to financial stability and should not be regulated like banks. It is imperative that DFA implementation follows congressional intent by addressing gaps while not obstructing competitiveness. “AIA continues to engage in all phases of the ongoing regulatory modernization debate in the U.S. and abroad. This discussion remains centered on group supervision, capital adequacy and systemic risk. AIA will work with the Federal Insurance Office to promote international regulatory initiatives that foster coordination, cooperation, and communication, and ultimately result in more efficient and effective
regulation that promotes a level competitive playing field and development of private markets. “Insurers are working with local, state and federal authorities to quickly assist those affected by Hurricane Sandy. The National Flood Insurance Program (NFIP) may sustain claims beyond its current claims paying ability of approximately $3.8 billion. Should policyholders’ claims exceed that amount, Congress will need to approve additional borrowing authority in order for the NFIP to continue paying claims. “In addition, a top legislative priority for AIA in 2013 will be the reauthorization of the Terrorism Risk Insurance Act (TRIA). TRIA is a fundamental part
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of this nation’s economic security. The public-private partnership provides necessary market stability by mitigating the potentially devastating loss of capital resulting from an attack on U.S. soil through a federal shared loss program, and promoting accelerated economic recovery. AIA will continue to work with members of Congress to achieve broad bipartisan support for TRIA’s reauthorization prior to its expiration in 2014.”
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niversal Insurance Holdings, Inc. (Company) (NYSE MKT: UVE), a vertically integrated insurance holding company, announced that its subsidiary, Universal Property & Casualty Insurance Company (UPCIC), has written its first homeowners insurance policies in Maryland.
rown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the third quarter of 2012. Net income for the third quarter of 2012 was $49,504,000, or $0.34 per share, compared with $44,173,000, or $0.30 per share for the same quarter of 2011, an increase of 12.1%. Total revenue for the third quarter was $303,800,000, compared with 2011 third-quarter revenue of $260,401,000, an increase of 16.7%. Total revenue for the nine months ended September 30, 2012 was $897,202,000, compared with total revenue for the same period of 2011 of $769,445,000, an increase of 16.6%. Net income for the nine-month period ended September 30, 2012 was $141,408,000, or $0.97 per share, compared with $127,501,000, or $0.88 per share for the same period of 2011, an increase of 10.9%.
collectively address international issues affecting insurers including the systemic risk debate, ComFrame, and market conduct and trade issues. Ms. Pusey has been elected to serve on the Federation’s Executive Committee as its Membership chairperson. In addition, AIA will continue to chair the ComFrame Working Group, part of GFIA. The Federation’s inaugural meeting was held earlier today in Washington, D.C.
inkedIn Launches New Thought Leader Service: Taps Insurance Technology Expert Steve Anderson as One of 150 “Influencers” FRANKLIN, TN – LinkedIn assembled 150 of the biggest names in business, non-profits, and the private sector and gave them a challenge: Share something interesting with 175+ million professionals. LinkedIn’s
Influencer program—announced last week—enables top thought leaders to gain a following among 175+ million professionals worldwide by writing and sharing great content on LinkedIn. LinkedIn launched their new program with both well-known and lesser known diverse thinkers such as Richard Branson of The Virgin Group, Chef Marcus Samuelsson, HootSuite CEO Ryan Holmes, presidential candidate Mitt Romney, and President Obama. Representatives from medicine, law, real estate, financial institutions, journalism, and the non-profit world are all part of the mix of influencers.
ccording to PEW Research, “More than half of Americans watched the first presidential debate between Mitt Romney and Barack Obama live. Most watched on television, but 11% were “dual screeners,” meaning that they followed coverage on a computer or mobile device while also following television coverage. Another 3% say they followed the debate live exclusively online”
eigh Ann Pusey, president and CEO of the American Insurance Association (AIA), issued the following statement on the formation of the Global Federation of Insurance Associations (GFIA). GFIA’s 31 members, including AIA, represent 87 percent of the worldwide insurance industry. The Federation has been established to enable insurance organizations to
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niversal Insurance Holdings, Inc. (UIH) (NYSE MKT: UVE) with its wholly-owned subsidiaries (the Company or Universal), a vertically integrated insurance holding company, reported net income of $8.3 million, or $0.20 per diluted share, an increase of $0.18, for the third quarter of 2012, compared to net income of $1.0 million, or $0.02 per diluted share, for the same period in 2011.
ccording to a recent poll conducted by PEW Reports, “Record shares of young adults are completing high school, going to college and finishing college, according to a Pew Research Center analysis of newly available census data. In 2012, for the first time ever, one-third of the nation’s 25- to 29-year-olds have completed at least a bachelor’s degree.”
EW YORK -- The Insurance Industry Charitable Foundation (IICF) Northeast division has committed to a donation of $50,000 from its reserves to the American Red Cross for relief efforts after Superstorm Sandy. The IICF national board of governors has matched the donation with an additional $50,000 pledge. “The Red Cross is a proven performer in crisis response, and its efforts and leadership have already sustained many lives since the storm hit the East Coast,” said Elizabeth Myatt, executive director of the Northeast Division. “The IICF gift demonstrates the collective concern of the entire industry during this time of need in our community in the New York tri-state area,” said Myatt. IICF Northeast has started a campaign to raise and add funds to the IICF Sandy Relief effort. IICF is accepting contributions via the “Support Us” button on its website at www.IICF. org.The funds will be donated as a grant from the entire industry “The insurance industry for a long time has supported its local communities with www.underwritersinsider.com
charitable efforts,��� Myatt said. “The industry will continue and expand on this tradition, and in speaking with industry leaders I see that is already the case. IICF aims to be a catalyst so that companies and people in the insurance industry can come together to make an even bigger impact with their philanthropic efforts in storm response.”
harlie Lydecker, Retail Division President of Brown & Brown, Inc. (NYSE: BRO), together with Jeff Johnson, Bill Strachan, Charlie Venus and Rick Dygve, the shareholders of Johnson & Strachan, Inc. (“JSI”), today announced the acquisition of certain assets of JSI by a subsidiary of Brown & Brown, Inc. Founded in 1973, JSI has annual revenues of approximately $2.7 million. JSI provides a broad spectrum of property and casualty, employee benefits and personal lines products and services to its clients in Virginia. Following the transaction, the acquired JSI operations will combine with Brown & Brown’s existing office in Manassas, Virginia, under the leadership of Bill Strachan. Charlie Lydecker, who is responsible for Brown & Brown’s retail operations throughout the United States, stated, “Johnson & Strachan has a long history of serving important institutional, business and individual clients in the Northern Virginia market. We believe our existing Manassas, Virginia office will be enhanced with the skill and experience that Johnson & Strachan provides and are very pleased to welcome Bill and his team to Brown & Brown.”
ccording to PEW Research, “Latinos voted for President Barack Obama over Republican Mitt Romney by 71% to 27%. Obama’s national vote share among Hispanic voters is the highest seen by a Democratic candidate since 1996, when President Bill Clinton won 72% of the Hispanic vote.
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rown & Brown, Inc. (NYSE: BRO) today announced that the Board of Directors has named Laurel L. Grammig, Vice President and Corporate Secretary, to the newly-created position of Chief Compliance and Regulatory Officer of the Company effective October 23, 2012. Ms. Grammig served as General Counsel for the Company and its subsidiaries from 1994 until 2009, when she was named Chief Corporate Counsel. In her new role, Ms. Grammig will have increased focus on compliance and regulatory issues, and will continue to have responsibility for corporate governance and securities law matters.
arketScout, in cooperation with insurers ACE, AIG and Fireman’s Fund, today announced it has founded the Council for Insuring Private Clients. CIPC will focus on implementing best practices and risk management techniques for insuring the personal assets of private clients. Any agent or insurer with a focus on insuring high net worth private clients may join the CIPC. “The CIPC’s mission is to provide a venue where agents and insurers may collaborate on how to better serve their private clients. Insuring wealthy individuals is a unique, specialty area of the insurance industry and until now, there wasn’t a forum for sharing ideas and perfecting skills,” said Richard Kerr, CEO of MarketScout. The CIPC will hold its first annual conference in Dallas, Texas on April 9 and 10, 2013. The conference will provide networking and educational opportunities for agents and insurers who specialize in insuring private clients.
merican General Life Companies (American General) has named Victoria Noel Vice President, Senior Strategic Account Manager. She joins American General from National Financial Partners (NFP) where she served as President of NFP Life Brokerage and Senior Vice President for NFP Insurance Services. 19
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uel additives, Industrial gases, paints, varnishes, lacquers, enamels, solvents, adhesives, sealants and a multitude of other chemical manufacturing and distribution risks. Min Prem $20,000 and other underwriting criteria. See Sloan Mason: Contact Grant Kanamori @ 619-814-2488 or email@example.com. [11-7]
merican Collectors announces updated specialty coverage for valued collections. The company claims coverage available for almost any type of collection with multiple coverage options. www.AmericanCollectors.com/Agents (800) 620-5052 12-7
ational Ins Underwriting - Light, medium & heavy up to 66,000 lbs. up to 500 mile radius, Up to $1M CSL or $1/$2M split, Phys Dam up to $100K - Med Pay, Hired and NOL. Contact: Call Craig Calver - 800338-2680 X 508.
ingsway/Amigo Competitve commercial auto program. Any size fleet, - all types of cars, light trucks and vans - specialty services, like landscaping, electrical, plumbing, lunch trucks and other various occupations. info@ kinswayamigo.com
Condo Assoc Program
rident is offering tailored coverage designed for condominium town home and single-family community associations claiming competitive rates and terms. Coverages available include property, including flood, earthquake and coastal windstorm, general liability, D&O, umbrella, worker’s comp, auto, crime and property mgrs E&O. Trident Community Association Program - 5100 N. O’Connor Blvd, #200, Irving, Texas 75039 or email to firstname.lastname@example.org 877590-0775 [11-6]
eavy construction risks including steel erection contractors, concrete contractors, roofing contractors, bridge, street & road contractors, etc. Norman Spencer - Contact Brian Harrold p: 937.432.1469 email@example.com [11-7]
ost contractors - including those with mold exposures and cleanup contractors. Program includes CPL - Occurrence or Claims Made form - mold coverage available - Annual & Per Project policies. Highly competitive rates claimed. All Risks, Ltd - Lou Ann Cook - 800-3665810 X 3030 email: firstname.lastname@example.org [12-4]
rgo Insurance announces expanded program and competitive rates for convenience store accounts. Company is looking for stores open until 11PM, fuel sales up to 90%, alcohol sales up to 30% with no fuel hauling exposure. Not available in Florida at this time. Email email@example.com 877590-0775 [11-6]
Design & Construction Industry
rchitects, engineers & surveyors, construction managers, contractors, environmental consultants, landscape architects, specialty construction consultants. Contact Jeff Grigsby 877.453.2071 - JeffG@schinnerer.com 
Energy & Utility Risks
il & Gas Companies, pipeline operations, utilities, HVAC contractors and water & sewer contractors. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ schinnerer.com [12-1]
ropane Dealers - PowerWrap is an endorsed insurance program offering specialized, full spectrum coverage. Contact Alteris: 877-590-0775 [12-1]
Entertainment & Sports
&K Insurance claims “over 75 programs available on admitted paper with no prior approval or appointment needed to submit applications for quotation. “ The MGA can be reached at 800-637-4757 or www. kandkinsurance.com. [11-6]
roup Homes Programs for such risks as Hospice, Agencies for Aging, Homeless Shelters, Rehab Facilities, Adult Day-Care Facilities, etc. Comprehensive packages available - limits up to $1M/$3M - customize with many optional coverages. AFC Insurance - Toll Free: 877-456-5323
Hair & Beauty Insurance Program
ASS - Salon & Spa Specialty Insurance administered by Brownyard Group open to agents seeking access to program. 888-823-9380 or Email: sassi@brownyard. com [11-7]
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Health & Human Services
FC Insurance - Package programs or ala carte. Contact: 877-4565323 www.afcins.com submissions@ afcins.com [12-2]
Kidnap & Ransom
ational Ins Underwriting -Webbased quick quotes, most protection classes & zip-codes OK - $40K - $750K dwelling values with replacement cost available. No credit scoring. Renters policies available. Contact: Craig Calver - 800-338-2680 X 508.
cademic institutions, energy companies, engineering firms, hospitals and healthcare, houses of worship, manufacturing firms, etc. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ schinnerer.com [12-1]
Life Agent E&O
ife agent E&O from Rockwood Programs. Coverage limits from $250K to $1 Million. Base rates from $400 to $550. Individual policies. Indentity theft included. No shared aggregates. Includes mutual fund placement. Call 877-242-2487 or email firstname.lastname@example.org. [12-4]
Marine Risks Worker’s Comp & Longshore & Harbor Workers’ Comp
eaBright Insurance Company offers high quality workers’ compensation coverage for your clients who are small maritime employers and other marine-related businesses. SeaBright provides seamless cov All Risks, LTD 410-828-5810 rlang@allrisks. com or Appalachian Underwriters, Inc. – Oak Ridge, TN 865-425-1051 warren. email@example.com or Peachtree Special Risk Brokers – Metairie, LA 504830-7347 firstname.lastname@example.org [11-7]
orman Spencer announces availability of a market for multiple and vaious recreational marine risks including marinas, docks, boat rentals, boat mfgs, charters and more. Contact Corky Breeden at 937432-1631. 12-7
Have a P&C Product Announcement? Send your press release or one-paragraph announcement to email@example.com
&K Insurance announces expanded coverage & lower minimum premiums on martial arts coverage. General Aggregate Limit increased to $5M - Participants Med Pay to $150K. The MGA can be reached at 800-637-4757 or www. kandkinsurance.com. [11-6]
Ocean & Inland Marine
prdwode Facilties, Inc. Contractors doing: piers, docks, wharfs, bridges, breakwaters, cranes, dredging, etc. 6455 East Johns Crossing, Suite 115 Johns Creek, GA 30097 (678) 736-6720 • Facsimile: (678) 736-6726 - Carter, Kimberly - 678 736-6720, Ext. 1000 - kcarter@ wwfi.com [11-7]
echnology & Cyber, Architects & Engineers, RE Agents, Insurance Agents E&O, Misc. Pro Liability - and more: Contact Atlantic Specialty Lines firstname.lastname@example.org 877545-9100 [12-1]
ictor O. Schinnerer - A-rated carriers -Real Estate Agents, Healthcare Consultants, General & Artisan Contractors, Architects, engineers & consultants, public entities such as school leaders and public officiials. Contact: 877-4532071 www.schinnerer.com jeffg@ schinnerer.com
Real Estate E&O
overage for open houses, mold, network risks and privacy claims are now part of Victor O. Schinnerer & Company’s Real Estate E&O policy. Schinnerer includes the three new coverages at no additional premium. Call to ck on your state: Starr Crusenberry Starr.N.Crusenberry@Schinnerer.com - 301-951-6904 [11-6]
rgo Insurance announces l o we r rates filed on restaurant c o ve r a g e including fo o d s p o i l a g e c o ve r a g e. Fu l l commission and no agency a p p o i n t m e n t n e c e s s a r y. Co m p a ny i s l o o k i n g fo r f a m i l y s t y l e, f a m i l y g r i l l s, c a s u a l s t y l e, f i n e d i n i n g a n d limited cooking restaurants such a s p i z z a a n d s u b s h o p s. Email csmktgprograms@argogroupus. com 877-590-0775 [11-6]
o r m a n S p e n c e r ’s R e a l E s t a t e Pr o g r a m - “o n e o f t h e m o s t c o m p r e h e n s i ve p o l i c i e s i n t h e m a r k e t w i t h h i g h l y c o m p e t i t i ve p r i c i n g” Co ve r a g e i s av a i l a b l e to risks whose ser vices include R e s i d e n t i a l a n d Co m m e r c i a l S a l e s, Le a s i n g, Pr o p e r t y M a n a g e m e n t , Real Estate Co n s u l t i n g, Au c t i o n e e r i n g, Mortgage B r o k e r i n g, B P O ’s a n d A p p r a i s a l, and Escrow Ser vices - Michael R yd e r m i c h a e l r yd e r @ n o r m a n s p e n c e r. c o m 800.477.9192 x204 [11-7]
r o w ny a r d Pr o g r a m s announces c o ve r a g e fo r security g u a r d s, claiming to insure 15 of the top 40 security g u a r d c o m p a n i e s i n t h e U. S . B r o w ny a r d Pr o g r a m s w w w. b r o w ny a r d p r o g r a m s. c o m or pvancott@brownyardprograms. com [12-4]
Tech Consultants E&O
odern Insurance Co n s u l t a n t s we b s i t e d e s i g n , s o f t w a r e d e ve l o p m e n t , d a t a b a s e a d m i n , we b h o s t i n g, software/hardware sales - and m o r e. I T c o n s u l t a n t s u p t o $ 1 5 M i n a n n u a l s a l e s. Co n t a c t A n d r e w Lawrie - 305-248-9495 X 9108 a l a w r i e @ m o d e r n i n s. c o m [ 1 2 - 2 ]
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PCI OFFERS SUGGESTIONS ABOUT VEHICLES FLOODED BY HURRICANE SANDY
HICAGO — Hurricane Sandy has left a substantial number of flood damaged vehicles in its wake, and the Property Casualty Insurers Association of America (PCI) is offering answers to questions that owners of damaged vehicles may have. First and foremost, it is important to note that water damage to a vehicle is typically covered under an auto policy’s comprehensive insurance coverage. Vehicle owners should be cautious about attempting to start a vehicle that has been exposed to flood waters and report any missing vehicles to the police. “Like any total loss vehicle, the vast majority of insured vehicles will be disposed of via salvage auctions and branded as flood damaged or salvage according to the title laws of the state,” said Bob Passmore, PCI’s senior director, personal lines. “While a properly restored and properly titled and disclosed rebuilt salvage or restored flood vehicle can be a very economical option to purchase a car, consumers should know what they are getting, because there is always a chance that there will be problems down the road with corrosion or of malfunctions in the electrical systems.” A vehicle damaged in a flood should have its title branded, but inconsistencies in state laws sometimes allowed titles to be “washed” or have their brands removed when transferred in another state. But there have been several recent developments that make “title
is typically covered under an auto policy’s comprehensive insurance coverage. Vehicle owners should be cautious about attempting to start a vehicle that has been exposed to flood waters and report any missing vehicles to the police.
states to share information on motor vehicle titles. Insurer reporting has been in place since 2009 and subject to a $1,000 per vehicle fine for noncompliance. There are no penalties for states that haven’t complied, but currently:
“Like any total loss vehicle, the vast majority of insured vehicles will be disposed of via salvage auctions and branded as flood damaged or salvage according to the title laws of the state,” said Bob Passmore, PCI’s senior director, personal lines. “While a properly restored and properly titled and disclosed rebuilt salvage or restored flood vehicle can be a very economical option to purchase a car, consumers should know what they are getting, because there is always a chance that there will be problems down the road with corrosion or of malfunctions in the electrical systems.”
§ 32 states are fully participating in NMVTIS, meaning that they both supply title data and query the data base on every title transaction. § New York, New Jersey, Virginia, Connecticut and Delaware fully participate. § Another eight states provide data only, and 10 states plus the District of Columbia are currently in development. § Low cost public access Vehicle Identification Number (VIN) checks are available from NMVTIS on www. vehiclehistory.gov.
A vehicle damaged in a flood should have its title branded, but inconsistencies in state laws sometimes allowed titles to be “washed” or have their brands removed when transferred in another state. But there have been several recent developments that make “title washing” much more difficult. The National Motor Vehicle Title Information System (NMVTIS), implemented in 2009, requires insurers to report total loss vehicles to a federal data base; it also requires
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There are also other sources of vehicle history information for used car buyers: o Commercial vehicle history services like Car Fax, provide even more detailed vehicle histories. Car Fax is offering free flood damage VIN checks at http://flood.carfax.com/. o A free VIN check is also available from the National Insurance Crime Bureau at www.nicb.org. Vehicle owners whose vehicles have been damaged by flooding should
See Flooded Vehicles Page 35 The Underwriter’s Insider
FLORIDA ANNOUNCES ARRESTS IN SARASOTA PIP CLINIC STING TALLAHASSEE – Florida Chief Financial Officer Jeff Atwater announced today the arrests of Nerber A. Iglesias, 40, and Michael Borkowski, 42, for patient brokering and involvement in an ongoing personal injury protection (PIP) fraud scheme in Manatee County. These arrests were the result of an undercover sting. "This investigation is a prime example of the organized nature of PIP fraud
FLORIDA ANNOUNCES MORE ARRESTS IN WORKER’S COMP FRAUD
ALLAHASSEE – Florida Chief Financial Officer Jeff Atwater and Broward Sheriff Al Lamberti today announced an additional arrest as part of continuing enforcement efforts under “Operation Dirty Money,” Evelio Suarez, 47, husband of current defendant Zairis Cruz, was arrested on multiple charges including conspiracy to commit workers’ compensation fraud and www.underwritersinsider.com
rings in Florida," CFO Atwater said. "Those who cheat the system to make a buck are stealing from every honest Floridian. I applaud the hard work of our fraud investigators and the chiropractor who worked with us from the inside to bring these criminals to justice." Rep. Jim Boyd (R-Bradenton), sponsor of the 2012 PIP legislative reforms, joined law enforcement on the bust. "Every dollar of insurance premiums stolen by criminals is a dollar taken away from honest Floridians," Rep. Boyd said. "I was proud to see Florida’s anti-fraud efforts first hand, and I commend CFO Atwater’s leadership on this issue."
that Iglesias approached a Sarasota chiropractor about becoming the straw owner of Garden Relief Center, LLC. The chiropractor contacted law enforcement and, under the direction of the department, applied for a clinic exemption certificate to begin operating the facility. The chiropractor, working undercover, was also contacted by a local body shop owner named Michael Borkowski, who made arrangements to provide accident patients to the clinic for a fee. During the course of the investigation in 2011, Garden Relief Center submitted almost $40,000 in fraudulent insurance claims to six different insurance companies.
Iglesias and Borkowski were booked into Hillsborough County Jail and An investigation by the Florida charged with eight counts of patient Department of Financial Services’ brokering. If convicted on all charges, Division of Insurance Fraud revealed they each face up to 5 years in prison. Suarez was booked into the MiamiDade County Jail and is being held on $250,000 bond. If convicted on all “Operation Dirty Money continues charges, he faces up to 150 years in to make great strides in cracking prison. The charges against Suarez will down on these illegal check-cashing be prosecuted by the office of Miamischemes, diverting millions of dollars Dade County State Attorney Katherine from honest, hard-working Floridians,” Fernandez-Rundle. CFO Atwater said. “I commend our investigators and Sheriff Lamberti for The Office of Financial Regulation their hard work in making this task assisted the task force by providing financial data support and licensure force such a success.” information. grand theft. During this investigation approximately $1 million was seized.
The Workers’ Compensation Fraud Task Force investigation revealed that Suarez was the actual owner and operator of all of the businesses associated with I & T Financial Services, Inc, and Immigration and Tax Services, Inc. Investigators discovered that the money service business license for these businesses was obtained under fraudulent pretences.
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The Workers’ Compensation Fraud Task Force was jointly created by CFO Atwater’s Division of Insurance Fraud and Sheriff Lamberti’s office in August of 2011. Through joint efforts, the task force has been able to successfully shut down 12 shell companies and identify $140 million in fraudulent transactions associated with these companies. 23
MAKE A REAL DIFFERENCE! by Matthew A. Treskovich, CMA, CFP®, MBA, CLU, ChFC, FLMI by Matthew A. Treskovich, CFP®, CMA, Succession planning looks at the MBA, CLU, ChFC, FLMI current ownership structure of the business, and how present owners he year-end sales push is on, and prospective owners want that and carriers, independent structure to evolve should something marketing organizations, happen to the owners. This is distinct agents, and brokers are gearing up from business continuation planning. for the the traditional year-end dash A continuation plan funded by life to get business placed and paid. Life insurance provides the cash the insurance for business purposes is a company will need to keep running particularly hot topic this year. Business after the loss of a key manager, continuation planning is popular salesperson, executive or owner. because unlike income, gift, and estate tax planning sales, the underlying Some key questions to ask before Matthew A. Treskovich insurance needs are at best loosely tied a business succession planning to the political and tax environment. engagement are
The two primary types of business planning sales are: 24
• Business succession planning • Business continuation planning
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See Treskovich Page 34 The Underwriter’s Insider
“The Final Authority on Everything!” We May Have Reached That Tipping Point...
know the Advisor was a big supporter of Romney. What
happened? S.L. Macon, GA The Advisor was a big supporter of conservative core principals - Romney was what we had to work with. I’m as baffled as any of the analysts - every indicator was positive for Romney - right up to election day. The Republicans seemed to have far more energy and enthusiasm at campaign events with Obama barely able to draw a fraction of the attendance he did in ‘08. And 2010 was a huge conservative victory. What has happened since then to reduce the energy that created that landslide? Nothing! Yet Republicans lost every battleground state and key Senate and House seats...
of jobs, and the companies such as Sports Authority and Dunkin’ Donuts, a man who has had demonstrable success in tackling tough economic issues, who is an acknowledged leader and expert in economic turn-a-rounds - OR - a far-left community organizer who never held a real job, who never made a payroll, who never started a business, who holds a demonstrated animous against the free market and our capitalist system, against business owners - and who holds a proven track-record of anti-business, anti-energy job-killing edicts and legislation. And they chose the later. Backing up to a larger viewpoint, I think we have reached a tipping
Have a question for The Advisor?
Click HERE! point in this country, and there may be no going back. The Takers now outnumber the Makers by a significant margin. Limbaugh said it best yesterday, “It’s hard to vote against Santa Claus...” The simple fact: People are voting for something they want handed to them now - not the long term success of the country. Conservatives are selling opportunity. But, then, you have to work for your success. Liberals are simply offering
See ADVISOR Page 43
Poll results show fewer Republicans voting than in the 2008 election yet it was the Advisor’s personal observation that Republicans were more energized this election than ever before - often referring to the race as “the most important election of our lifetime.” Every poll showed the most important concerns of voters were jobs and the economy. They had the opportunity to choose between an expert free-market capitalist with a resume including the creation of 100’s of thousands www.underwritersinsider.com
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Let’s combine... Agency looking to Merge
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220 Producer Anywhere in Florida Well established commercial agency specializing in the realm of workers’ comp seeks producer. You can be located anywhere in Florida. Excellent commission splits - training and leads. Other commercial markets also available - GL, etc.Contact: email@example.com 9-5
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HERE 2-20 Producers Wanted: Miami Westchester Area
Looking for Personal & Commercial Lines producers. Salary plus commission!!! Rapidly expanding ageny. Please contact us via email or call Yudanis or Luis @ 305-225-955 or: firstname.lastname@example.org
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email@example.com 9-4 The Underwriter’s Insider
Nationwide Agency Owner E.Bay Area, CA We need talented, businessminded individuals interested in our Future Agency Owner opportunity located in San Ramon OR Walnut Creek, CA market. What Nationwide Offers • Base salary, commissions and limited benefits for the first 18-24 months • Up to $95K in financial support upon graduation to offset agency start-up costs • Extensive sales and product training opportunities • Dedicated support •To apply: http://tinyurl.com/bn7w2rx 9-5
"Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy. Its only inherent virtue is the equal sharing of misery." - Winston Churchill
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Franchised Insurance Agency For Sale Well Est. Florida 2-20 Licensed and Franchised General Insurance Agency. Owner consolidated 2 locations into one in 2012 reducing expenses & increasing profits as a result. Pre-qualified for SBA Lender Financing w/ $81,250 Down. Terms are approximate. Asking $325K. Contact Corporate Investment Business Brokers | (239) 936-1718 | www.floridabusinessbrokers.com 9-5
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“I’m afraid of the president. I have no idea what
goofy idea, what crazy, anti-business program this administration will come up with. I have no idea. And I have to tell you, Jon, that every business guy I know in the country is frightened of Barack Obama and the way he thinks. The president is trying to put himself between me and my employees. By class warfare, by deprecating and calling a group that makes money ‘billionaires and millionaires who don’t pay their share.’ I gave 120 percent of my salary and bonus away last year to charities, as I do most years. I can’t stand the idea of being demagogued, that is, put down by a president who has never created any jobs and who doesn’t even understand how the economy works.” - Las Vegas Mega-Developer Steve Wynn during an early October interview with Jon Ralston, host of Ralston Reports on NBC-affiliate KSNV MyNews3 in Nevada. Wynn states frankly, and bravely, what many top executives are feeling about the anti-business climate generated by the Obama administration.
“I think they hate Obama. They want him out of the
White House more than they want to destroy Al Qaeda. Their No. 1 enemy in the world right now, on the right, is their hatred, hatred for Obama. And we can go into that about the white working class in the South and looking at these numbers we’re getting the last couple days about racial hatred in many cases … this isn’t about being a better president, they want to get rid of this president.’ Inane rant after 3rd presidential debate by “thrill up his leg” MSNBC commentator Chris Matthews, who sees every event, every policy debate through the lens of his own personal obsession with racism.
“We all will make mistakes. The key is to recognize them
and admit them, to learn from them, and to take off the rear view mirrors -- drive on and avoid making them again.” - In a Nov. 5 Newsweek article Paula Broadwell, biographer and mistress to Gen. Petraeus, wrote about Petraeus’s Rule No. 5 for living...
“We can win our country back.
Low and middleincome blacks and Latinos are hurt disproportionately
by a sluggish economy that can only be revived by less government spending and regulation, and low taxes. They just need someone to care to focus on their communities and explain these dynamics to them. They need to get their kids out of public schools, a cause which only conservatives champion. And they need to understand that they have everything to gain by getting out of the entitlement programs that the left tells them they need. The last thing low-income earners need is to pay payroll taxes when they could save this money and build wealth. And the last thing they need is government bureaucrats running their health care. When the only message blacks and Latinos get is from left wing politicians and media telling them they need government to take care of them, what can we expect but what we just saw in this election? - Noted Black conservative columnist Star Parker in her 11/12/12 column, “What Went Wrong Last Tuesday.”
“There will be an avalanche of regulations,” - Gretchen Young, senior vice president-health policy with the ERISA Industry Committee in Washington commenting on the implementation of the Affordable Health Care Act - more often referred to as Obamacare.
“There are many regulations that are very far along and
that we expect to see issued soon. Everyone is bracing for an onslaught of regulations.” - Frank McArdle, an independent benefits consultant in Bethesda, Md., also commenting on what we can look forward to as more and more aspects of Obamacare come due. When Nancy Pelosi, (D-CA) said “We have to pass it [Obamacare] to find out what’s in it,” she was correct. Now the real nightmare begins...
“I think Apple has peaked and the story of the next few
years will be one of a slow but real decline. Replacing Google Maps with an obviously inferior experience shows how much Apple has changed. Apple’s success had been all about offering users the best possible experience; suddenly it is willing to give users a clearly worse experience to further its corporate interests – in this case its long-running dispute with Google. We might expect this sort of behavior from Microsoft, but we don’t expect it from Apple.” - Former Apple engineering manager Dan Crow opining that “it’s all downhill from here” for Apple. Actually, Apple has a history of blocking products from companies with which it has disputes. Your online Insider cannot be read on an iPhone or iPad because Steve Jobs didn’t like Java or Flash - although there is word that one can download a cloud application to make it work. Watch for an update here...
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FLORIDA CHIROPRACTOR PLEADS GUILTY TO CONSPIRACY TO COMMIT MAIL FRAUD IN CONNECTION WITH STAGED ACCIDENT SCHEME
ifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), and Jeff Atwater, Florida Chief Financial Officer, announced that defendant Jennifer Adams, 39, of Boca Raton, a chiropractic doctor, pled guilty today to a onecount Information charging her with conspiring with others to commit mail fraud for her role in a staged accident fraud scheme. Sentencing will occur at a later date before U.S. District Judge Daniel T. K. Hurley. At sentencing, Adams faces a maximum term of imprisonment of twenty (20) years, to be followed by a term of supervised release of not more than three (3) years, a fine up to $250,000, and mandatory restitution of $1,920,424.83.
the staged accident and whose car was struck by the “Perro’s” car. Thus, if the recruiter found a Perro with a wife and two children and a Perra with two friends, for a total of seven (7) participants, the maximum PIP benefit was $70,000. Once the recruiters found the participants, they coached the participants on how to perform the staged accident, what to say to the police officer who responded to the scene, and on how to claim that they had been injured. Thereafter, the accident was staged. After impact, a police officer was called, and a police report was filed. After the staged accident, the Perro and Perra filed false claims with their insurance companies, alleging that they and their family members were injured.
Court documents state that the accident participants were then directed by the recruiters to chiropractic clinics that were controlled by co-defendants. The staged accident participants According to court documents, completed paperwork falsely to execute the fraud scheme, the asserting that they suffered injuries recruiters sought out drivers and their during the staged accident. The cofriends/family members to participate conspirators advised the participants in staged accidents. Under Florida’s on how to fill out the paperwork “No Fault” insurance law, insurers are and what to say if an insurance required to provide Personal Injury investigator interviewed them about Protection (PIP) coverage of $10,000 their injuries or treatment. The staged per person. The recruiters referred to accident participants were instructed the individuals whom they recruited to sign numerous blank treatment as the “Perro” and the “Perra.” The forms that would later be submitted “Perro” was the person who “caused” indicating that they had visited the staged accident. The “Perra” was the clinic on a number of separate the person who was the “victim” of occasions for treatment, although 32
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they may have visited the clinic only once or twice. During their visits, some staged accident participants received no treatment at all, or may have received only a short exam or treatment from the chiropractor or LMT but the paperwork completed by the LMTs and chiropractors, including Dr. Adams, indicated that a full and lengthy exam and treatment was given. According to documents filed as part of today's hearing, Adams agreed to place her name on the corporate paperwork for two clinics, thus utilizing her status as a licensed Chiropractic Physician, to allow the clinics to bill insurance companies directly for PIP claims without obtaining additional licensure from the State of Florida. Those clinics were Ovy Rehabilitation Medical Center, Inc. (OVY) in West Palm Beach, Florida and Chiropractic Office of South Florida, LLC (COSF) in Palm Springs, Florida. Although Adams was named as the owner of the clinic on the corporate paperwork, the coconspirators maintained control of the bank account and running the operations of the clinics. Court documents state that Adams initially believed the clinics to be operating legitimately. Sometime thereafter, Adams became aware that her license and status as a Chiropractor was being used to fraudulently submit claims by U.S. Mail to insurance companies. Adams
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ZALMA unnecessary difficulties so that you and your family will have a place to live while your house is being rebuilt. a. You can expect an advance of $10,000 to $20,000 if your house is destroyed to carry you over. b. Even if your house was not damaged you are entitled to additional living expense payments if you were ordered out of your house by the state government, federal government, c. Homeland Security, or the local fire department. d. Remember that additional living expense coverage does not pay all of your post loss expenses, only those over and above your normal expenses.
Once the rights, obligations, and duties of the insured and the insurer have been stated, and the initial investigation is complete, the insurer is obligated to conduct a prompt analysis of the policy wording and the law to determine whether coverage exists for the damage claimed. Once the investigation is complete and the decision made, it is the adjuster’s obligation to advise you, promptly and in detail, of the decision of the insurer. If coverage is available, it is also the obligation of the adjuster to advise you of your duties and obligations to obtain complete indemnity from the insurer and to protect the property from further loss.
The Notice of Loss
If you believe that your property was damaged or destroyed by a peril insured by your policy you should call or write the insurance agent, broker or insurer immediately (or as soon as practical) to report your claim. Follow up the phone call with a fax, an email, and a letter. If the house was not destroyed but a great deal of http://www.zalma.com/zalmabooks.htm fire fighting water or subsequent rain Insurance claims require personal or flood water entered the property attention to detail by the insured. try to get a remediation team into You and the adjuster must meet in the home or business within the first person. If the claim is to be resolved 48 hours to begin drying out the expeditiously and fairly, both you and property. If you do not know one ask the adjuster should work to establish your insurer for a referral. This is crucial a personal relationship and to resolve, to preventing or containing mold if coverage is available, the problems growth and rot. If the agent, insurance caused by the damage to the dwelling company, independent adjuster, or business structure. or restoration company delays the www.underwritersinsider.com
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claim, follow up with a fax, an email, and a letter confirming their delay in responding. It would be helpful to send copies of the follow-up letters to the consumer protection unit of the state’s Department of Insurance.Take detailed notes of every conversation, including the name, company, phone number, address, and job title of every insurance adjuster, representative, consultant, and contractor you deal with. Confirm all agreements in writing and insist that appointments and deadlines be honored. Keep a log of all notes and letters and ask for and keep business cards from everyone involved in your claim. Immediately after the telephone call, write a letter to the broker or agent, with a copy to the insurer, providing the same information. The letter need not be formal. It can be handwritten on any available paper. Make a photocopy. The notice of loss should include the following information: • Your full name. • The location of the property. •The policy number. •The effective dates of the policy. • The date when damage first occurred. •The type of property damage. •The cause or causes of the damage. •How the adjuster can contact you. •That you need immediate contact from the adjuster. By providing the information to the agent, the broker and/or the insurer you have fulfilled the first obligation under the policy: to provide immediate notice of loss to the insurer.
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TRESKOVICH • “Who owns the business?” • “What do the owners want to happen in the event of an untimely death?” • “Has this been formalized in any documents?” • “Where are the documents, and what do they say?” Sometimes clients are reluctant to discuss business succession planning because they do not want to admit or contemplate their own mortality or that of their colleagues. It can often be helpful to ask less analytical, more emotional, questions in that situation:
next month? And the month after that?” If there is no continuation plan, these key people are the ones who will have to take the initiative and keep the company running. As an advisor, you can help them understand why continuation and succession plans are important to their job security, and gain advocates for the planning process. As advisors, we tend to focus on
• “Are you prepared to have your deceased partner’s spouse as your new partner?” • “Are you prepared to have your deceased partner’s children as your new partner?”
Key person and buy/sell planning have a real impact on peoples lives. The effect of poor planning can have a wide impact, not only on owners and employees, but also on families of those stakeholders, and on clients and suppliers. Proper planning can mean the difference between liquidating a formerly successful business and selling a going concern. It can also make the difference between people keeping the jobs they’ve had and loved for years, and those people ending up on the unemployment rolls. Do your clients a favor – don’t let them take this subject lightly!
The business continuation and business succession planning discussion is not limited to owners. Conversations with key employees, especially highranking finance and accounting executives, can lead to business continuation planning sales. If you are talking to someone who is a high-ranking employee, and not an owner, ask them this:
Matt is the CFO at Creekmore Insurance Group, a life insurance BGA specializing in impaired risk and jumbo life cases, serving independent agents and financial advisors nationwide. In addition to his management role, Matt provides field support for advanced case design and underwriting. He can be reached via email Matt@LifeAgents. com or at 800-936-0339. For more information, visit www. LifeAgents.com
• “Are you ready to have your deceased boss’ family running the show?” • “Do you think they can handle it?” • “If something happens to the boss, can you make payroll 34
the technical and analytical aspects of planning. We worry about cross purchase vs. corporate redemption buy-sell agreements. We worry about corporate AMT on life insurance proceeds, and are required to follow all of the intricacies of employer owned life insurance compliance. Too often this attention to detail can lead us to lose sight of the big picture.
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FLOOD DAMAGED AUTOS take the following steps: o If the water got above the floor boards, or the seats are wet, don’t try to start the car. The electrical system is the most sensitive to water damage, and trying the start the car could cause more damage. o Open the hood and check the air filter, which is easy to find under the hood. If Continued from Page 32
CHIROPRACTOR GUILTY IN PIP FRAUD realized these patients did not require the medical treatment they sought. Adams continued to work at both clinics signing prescriptions for plans of treatment that she knew were not medically necessary and that she knew were being submitted for reimbursement to numerous insurance companies. According to court documents, from the time that Adams was told about the fraud until the clinics were closed by law enforcement, the clinics submitted fraudulent claims that resulted in more than ten insurance companies making total payments of $1,920,424.83. Defendant Adams received a salary for her work as a chiropractic physician paid from the COSF and OVY checking accounts. The bulk of the proceeds of the fraud were taken by co-conspirators. www.underwritersinsider.com
it’s wet, do not try to start the car. o Report the loss to the covering insurer, and protect the car from further damage by covering any broken windows, etc. Consumers can also do numerous things to avoid buying a flooded vehicle, particularly in cases of vehicles that have been improperly retitled: o Check the vehicle history at www. vehiclehistory.org, www.nicb.org or via car fax. o Ask the dealer or seller if the vehicle has been damaged before, ask to see the title and check for brands like “flood damaged” or “rebuilt salvage.” o Check the carpets and the seats for signs of moisture, especially the carpet in the trunk. If the carpets and upholstery are dry, do they look newer than the rest of the vehicle? Replacing seat covers and carpet may conceal water damage. o Look for signs of corrosion or rust, particularly on the door hinges, hood springs and in the door opening where the door meets the body. o Is there a moldy smell, or is the smell of cleaning products or air fresheners too pungent? o Check the oil and the air filter for signs of water. o Look at the headlights and tail lights; moisture can be trapped, making them appear foggy. o Check anyplace where debris might settle after the water drains, such as wheel wells, in the seating tracks, under the spare tire, etc. o Get a professional to inspect the car or ask to take the car to a
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mechanic for a thorough inspection. Some consumers may also want to know whether the Federal Emergency Management Agency (FEMA) may help with costs from flooded vehicles. Vehicle owners can apply for assistance for “reasonable needs and expenses” for vehicle damage not covered by insurance. Owners will likely have to prove that liability insurance requirements were met at the time of the loss, and aid is likely to come in the form of a loan that they will have to pay back.
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Experts and Consultants for Insurance Disputes 4441 Sepulveda Boulevard Culver City, California 90230 310-390-4455 firstname.lastname@example.org http://www.zalma.com
Consultation from Zalma Insurance Consultants (ZIC) can save you or your client thousands of dollars in the defense or prosecution of an insurance dispute. ZIC provides expert advice and counsel insurers and plaintiffs’ counsel find indispensable. Consultation from ZIC can save you, your counsel or client hundreds of hours of investigative and legal work. ZALMA INSURANCE CONSULTANTS is a service of Barry Zalma, Inc. a California professional corporation. Barry Zalma is an internationally recognized expert on insurance coverage, insurance claims handling, insurance bad faith, insurance fraud detection, the defeat of false and fraudulent claims, Barry Zalma, Esq. insurance claims handling, and the resolution of insurance disputes. As a consultant, expert witness, lawyer, author, mediator or arbitrator he serves all parties who need consultation or expert testimony on matters relating to insurance coverage, insurance claims handling, insurance fraud and the tort of bad faith. Barry Zalma founded Zalma Insurance Consultants to help resolve any insurance claim problem faced by you or your clients that do not need Mr. Zalma’s services as a lawyer. His experience and skill as a consultant and expert witness can make the difference before a jury or other trier of fact. For more than 44 years as a claims person and insurance coverage attorney, Barry Zalma has represented insurers, advised insurers on claims handling, interpreted coverages and testified as an insurance coverage, insurance bad faith, insurance claims handling and insurance fraud expert on behalf of insurers and policyholders in state and federal courts.
Zalma Insurance Consultants serves insurers, policyholders, underwriters, brokers, agents, adjusters, public insurance adjusters, lawyers and any person involved in an insurance dispute. Because he is an attorney licensed to practice law in the state of California M r. Zalma may be prohibited by California case law from acting as a consultant or expert witness and, therefore, refuses to serve in any situation where a past client of his law firm, Barry Zalma, Inc. is adverse to anyone seeking his services.
Y ou can obtain M r. Zalma’s C.V . at http://www.zalma.com and his e-book publications http://www.zalma.com/zalmabooks.htm and blogs daily at Zalma on Insurance, http://zalma.com/blog.
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KIM KOMANDO and several conditions are met. You must connect an authentic Facebook account to the GoFundMe donation page. Facebook accounts that have a low number of friends and no photos will be rejected.
Donors Choose is a specialty crowdfunding site just for teachers and parents who want to help them. Teachers can request supplies for a specific project or extracurricular activity. Once the goal is met, the site delivers the materials directly to the teacher’s school. Books and tablets are popular requests.
Copyright 2012, WestStar Multimedia Entertainment. All rights reserved. Kim Komando hosts the nation’s largest talk radio show about consumer electronics, computers and the Internet. To get the podcast, watch the show or find the station nearest you, visit: http://www.komando.com/listen. To subscribe to Kim’s free email newsletters, sign-up at: http://www.komando.com/ newsletters.
Donation pages are also required to have a photo or video of you or your group - clip art, logos and other graphics aren’t allowed. Finally, your page must raise $100 in online contributions before it can be publicly listed. If you want to make donations, give money only to individuals you know and trust. Pages from nonprofit groups display a Certified Charity banner. ChipIn is another site that helps you raise money for personal causes. It requires you to have a PayPal account. ChipIn creates widgets that you can plug into your social media pages and, if you’re a blogger, WordPress and TypePad. You specify your fundraising purpose, a funding goal and a deadline. Viewers click the widget to donate. ChipIn does not charge fees, but money is collected through PayPal, which may charge processing fees. Of course, you can create your own PayPal donation link. But a ChipIn widget draws more attention. It also provides details about how you will use donations. www.underwritersinsider.com
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ZALMA If the insurer is working effectively and has a catastrophe team of adjusters in place you should receive contact from an adjuster within 24 hours of the notice. The first call should arrange an appointment to inspect the property. You should arrange for inspection as soon as possible and have the entire property available for the inspection if possible. If emergency efforts are required, you should so advise the adjuster so that he or she can help you take emergency measures to protect against further loss. If possible, you or the adjuster should arrange to have one or more contractors present at the first meeting to determine the extent of the damage. If the damage is extensive, consider retaining the services of a public insurance adjuster [if you determine a public insurance adjuster would be helpful, it is appropriate to seek one who is a member of the National Association of Public Insurance Adjusters (NAPIA), a professional membership organization that seeks to instill professionalism in the trade] or an attorney experienced in representing policyholders in the claims process to represent your interest. The lawyer will usually work on an hourly fee basis while the public insurance adjuster will expect a percentage of the amount paid by the insurer. You must recognize that the public insurance adjuster will ask for a 10 â€“ 15% negotiable fee. Do not hesitate to negotiate with the public insurance adjuster. Never pay the first fee quoted. Considering the volume of work in a catastrophe, you should be able to negotiate a fee between 38
3% and 10%.
Insurance Company Response Your insurer should respond to typical catastrophe claims by written or verbal contact within 24 hours of your notice of the claim. The insurer should share information regarding emergency repairs, additional living expenses, temporary advance payments and prevention of further loss with you. Your insurer should, and in California is obligated to, advise you of your responsibilities under the policy. Many require their representatives to be at your home within 24 to 72 hours of notice of claim. If you explain that your fire loss is severe, the insurer should attempt to have a representative at your house within 24 hours. The insurer is obligated by statute, state administrative regulations, or by the terms of the policy to determine whether your claim is covered and provide an initial estimate of damage within seven to 14 days after the insurerâ€™s first on-site visit. This first estimate is subject to change. Within the same time frame, your insurer should attempt to provide you with a written statement confirming or denying coverage. These time limits are usually waived in catastrophes and may be impossible to meet with regard to Hurricane Katrina event and other massive catastrophes. You should expect your insurer to return all phone calls within 24 hours. Initial contact may be with your insurance agent or broker or a claims office or the toll-free phone number included in the policy. Because of the volume of claims after a catastrophe like those in the 2005 hurricane season and
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the 2008 California wild fire season, this time frame will probably not be feasible.
First Contact with the Adjuster Your first contact with the adjuster is usually an informative meeting where you discuss the cause of the loss, the type of loss, when the loss was discovered, and make an initial effort to agree on a tentative scope of loss. You should expect the adjuster to do the following: 1. Ask for a walk-through inspection of the entire dwelling or building. a. You should make every effort to point out each item of damage or suspected damage during the walkthrough inspection. b. You, or your representative, should assist the adjuster in viewing both the damage and the source of the damage; 2. ask you to submit to a recorded statement; 3. ask you for the identities of each family member or vendor who can give the adjuster information about the loss; 4. ask for the recorded statements of the persons identified; 5. ask permission to allow experts retained by the insurer to inspect the property and do minor destructive testing to establish the appropriate methods of reconstruction and repair; and, 6. ask permission to contact others who know information about the loss and to obtain from those people within your control a detailed recorded statement and documents relating to their knowledge of the loss and the extent of the loss.
The Underwriterâ€™s Insider
First Meeting with the Adjuster
of “openings” (windows and doors) in each room.
An adjuster is a person professionally trained to assess the damage to your property. He or she will probably visit your home or business before you are asked to complete any forms. The more information you have about your damaged home or business and belongings, the sooner your claim will be settled. Your adjuster generally will come prepared to do a thorough and complete evaluation of the damage to your property. If the adjuster is unable to complete a thorough inspection due to time constraints or the extent of damage, he or she should prepare a scope of the loss report. This is a brief listing of the findings of damage determined at the initial inspection of the damage. The adjuster should ask you to agree to the scope of loss. Agreeing to a scope of loss is not presenting a claim. It is understood by the adjuster that the scope is incomplete and will be added to as new damage is discovered. It is usually supplemented with a second visit after the reports of experts are received to complete the inspection.
The scope of loss, usually referred to by claims people as the “scope,” differs from the finished estimate in two ways the scope does not necessarily list any prices, although prices can be used to describe quality. the scope does not list the calculated quantities; it includes just the raw counts and measurements needed to calculate quantities for the estimate.
The “scope of loss” should include the following: • degree of damage; • a description of each location where damage was observed; • a description of the adjuster’s and your own best estimates of the type of damage observed; • a list of all personal property damaged or destroyed; • quality of the materials and workmanship; and • measurements needed to calculate quantities, including length, width, and height of rooms and the number www.underwritersinsider.com
Protect All Property from Further Damage Every policy requires that the insured protect the property from further loss. Therefore, you should turn off any water flow to broken appliances or pipes, arrange to have openings in roofs or walls covered to protect from rain damage, and seek help from the adjuster to further protect your property from losses of all types. Take any necessary emergency measures to protect the building and personal property from any further damage. Do not throw anything away until permission of the insurance company is obtained in writing and you have documented its condition unless the damaged property presents a hazard to the health or safety of your family or others. If the insurer delays or refuses to authorize measures to prevent further loss, confirm the insurer’s delay in a fax, email, and a letter, and take whatever reasonable measures you can afford to protect the property. If your loss is covered, the insurance company should also cover the cost of any reasonable emergency measures you took to protect your property. It
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is not unusual for an insurer to deny coverage for damage resulting after the initial claim on the grounds that an insured failed to comply with the policy condition to protect the property from further damage.
Document the Loss If you were prudent and prepared, before the catastrophe, an inventory of your contents or took pictures of your contents, provide the adjuster with the inventory and photographs or videotape. Photograph, videotape, and inventory all damaged property after the loss. Make sure you record the date of the photos and videotape. It is important to document the source and the extent of damage whether by fire or water intrusion. In most states, a material misrepresentation, concealment, or omission made in connection with the claim will give the insurer a valid reason to reject the entire claim. For example, claiming that an item was destroyed that really wasn’t or substantially overstating the value of a damaged item is fraud. In most states insurance fraud is a felony that can place you in state prison if convicted. No catastrophe is so bad as to cause you to attempt to defraud your insurer to make up for uninsured losses. You should never exaggerate, speculate, or guess about the loss or value of any particular piece of property. Make it clear to your insurer when recollection may not be accurate, when you are estimating value, and the basis for your estimate. For the value of items you are not sure about on a claim presentation, use the phrase “To Be Determined.” If you do not have See Zalma Pg 40 39
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ZALMA receipts to show the price of an item, information can be found in catalogs, statements from retail clerks, bank statements, credit card statements, or statements from family members or friends. If all else fails, a formal appraisal can be obtained from a professional personal property appraiser. Save this as a last resort, since the insurer will usually refuse to reimburse you for the costs of hiring an appraiser, but may hire one at no cost to you if asked courteously.
Cooperate with the Insurance Company’s Investigation and Handling of the Claim You have a contractual obligation to cooperate with the insurer in its investigation and handling of the claim. However, you never have an obligation to allow yourself to be abused. In most states the insured and the insurance company have a mutual obligation to act in good faith and deal fairly with each other to investigate and process the claim. This means that both should avoid taking any unreasonable position or doing or saying anything that would in any way frustrate each other’s rights under the policy. The insurer may require one or more recorded statements from you. Always request a copy of the tape and a transcript of the statement to review. When the recording is complete, ask the adjuster to break out the tab so that nothing can be recorded over the tape and place your signature and date on the tape label. Ask the adjuster to similarly place his or her signature on the tape. You have a right 40
to review and correct the transcript of any recorded statement. You may also be required to appear for an “Examination Under Oath” (EUO). The insurer may, but is not required to, hire an attorney to take the EUO to represent the insured. Since a lawyer is not required, however, the insurer will not pay for the attorney that is representing you. The EUO is a contractual obligation and there is usually no clause in the insurance policy promising to pay a lawyer to help the insured make a claim against an insurer. You should not appear for an EUO until you understand all rights, the insurance coverage, and the full extent of the claim, or until counsel is retained. Do not refuse to appear at an EUO or the insurer may reject the claim because such refusal is a breach of a material condition of the policy. You may reasonably request a delay in appearance at an EUO to obtain the services of counsel or a public insurance adjuster. The insurer may ask you to make available various documents related to the claim, including banking statements, investment reports, receipts, and other personal financial documents. You are required to produce any documentation reasonably related to the insurer’s investigation of the claim that can include tax returns. In some states, tax returns are considered privileged and the insured cannot be compelled to produce them, while in other states the failure to produce tax returns is sufficient cause to deny the claim. [See Barry Zalma, Insurance Claims: A Comprehensive Guide, (Specialty Technical Publishers, 2002): Chapter II-5.] The insurer can require you to produce these kinds of documents as long as they are reasonably related
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to its investigation. You should not provide these documents to the insurer until you understand the rights, duties, and obligations imposed by the insurance coverage and the full extent of the claim. You should never refuse to produce documents unreasonably since the requirement for document production is a condition precedent to the insurer’s obligation to provide a defense and/or indemnity to you.
Proof of Loss Requirement Most first party property policies require that you submit a sworn proof of loss form to the insurer within a certain amount of time, either after the loss or after being provided the proof of loss form. During a catastrophe, especially when total losses are involved, insurers will often waive this requirement. Flood insurance policies require the proof of loss within sixty days of the loss and are applied in a draconian fashion. If you cannot produce a proof of flood loss within 60 days of the loss obtain an extension of time, in writing from the adjuster, or you will lose all rights under the policy to indemnity. The National Flood Insurance Program, on September 21, 2005, announced that it is waiving proof-of-loss requirements for victims of Hurricane Katrina and will instead rely on claims adjuster reports, aerial photography, and information on water depths to help expedite the process of paying claims, the Federal Emergency Management Agency said. According to the NFIP, information from underwriting files will be used in concert with photographic and topographical data to determine where it is readily apparent that a The Underwriter’s Insider
covered property’s flood damage has exceeded the amount of coverage purchased. The process would allow claims to be paid on homes that have been washed off their foundations, have been inundated by standing water for extended periods of time, or where only a slab or the home’s pilings remain, even where no formal site visit has been conducted. In most states you are contractually obligated to submit the sworn proof of loss within the time limit (usually 60 days from the date of request), or at least to substantially comply with the requirement, unless the insurer agrees to dispense with the sworn proof of loss or extend the time. You should not submit the sworn proof of loss to the insurer until you understand all of the rights and obligations imposed by the policy, the insurance coverages, and the full extent of the claim. It is not unusual for an insurer to consider mistakes in the sworn proof of loss (since they are sworn to under oath) as intentional misrepresentations sufficient to allow it to reject coverage for a claim. A statement made under oath cannot, by definition, contain an innocent misrepresentation. Never sign a sworn proof of loss, even if your lawyer or professional public insurance adjuster prepares it, until you have carefully read every word and are certain that the statements made are true. Some insurers believe that, at some point, you will refuse to comply with their requests. If you refuse to comply with reasonable requests for a recorded statement, an EUO, a sworn proof of loss, or documents reasonably related to the insurer’s investigation, you may give the insurer a valid excuse to deny the claim based on your breach of the duty to cooperate. If you believe www.underwritersinsider.com
that any requests made by the insurer are unreasonable, ask the insurer to explain the reason(s) for the requests in writing. Err on the side of caution and provide all documents that have some reasonable connection to the policy or loss. Before giving an insurer a reason to deny a claim because of your failure to cooperate, consult with a policyholder attorney, a public adjuster, or the state Department of Insurance before refusing a request that may, in retrospect, turn out to have been reasonable.
Get a Second Opinion Many insureds believe that insurers make a practice of making inadequate (sometimes called “lowball”) offers of settlement. They are wary of what they think are estimates from insurance-company-friendly contractors. Whether true or not, it is a good practice to get a second, or even a third, written estimate to repair and replace damaged property from reputable, independent professionals that you would hire to do the repairs if there was no insurance. You are entitled to have the damaged property replaced with “like kind and quality.” This means that you should insist that the amount determined to be the amount of loss is sufficient to replace the property with property of like kind and quality to the damaged property. When you cannot match the remaining undamaged tile, wallpaper, carpeting, or other portions of undamaged property, you are usually entitled to have the entire “line of sight” replaced to match. For example, if a broken water pipe destroys the hardwood floor in a kitchen and does no damage to the contiguous hardwood floor in the adjoining family room, the insurer is required to replace both the damaged and undamaged
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floors so that they match as long as they are in a continuous line of sight. Some losses are paid on an actual cash value (ACTUAL CASH VALUE) basis, which in some states means either the fair market value of the property at the time of loss unless the policy defines ACTUAL CASH VALUE differently. Many policies will define ACTUAL CASH VALUE as replacement cost less physical depreciation for age and wear and tear. Some losses are paid out on a replacement cost value (REPLACEMENT COST VALUE), where the insured is paid the difference between actual cash value and replacement cost value after the insured has actual sums necessary to complete the replacement. You may collect the ACTUAL CASH VALUE loss immediately and advise the insurer you intend to make claim for the difference between ACTUAL CASH VALUE and REPLACEMENT COST VALUE when the structure is rebuilt. If your policy has a time-limit for rebuilding be sure to get a written extension of time since, after a catastrophe, the rebuilding process is often severely delayed. When fire and water-damage reconstruction contractors write estimates for insurance companies they always add at the end of their estimate a sum equal to 10% of the basic contract price for “overhead,” and an additional 10% of the basic contract price for “profit.” This technique is a fiction believed only by contractors and adjusters. Knowledgeable construction people know that no contractor could survive on 10% profit and that contractors build overhead and profit into their basic unit costs (paint, plaster, roofing, etc) and add
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ZALMA the “profit and overhead” numbers as a fee for the extra service they provide to insurers. In recent years, some insurers have attempted to withhold 20%, an amount equal to the contractor’s “profit and overhead” numbers to arrive at an ACTUAL CASH VALUE amount. There is no basis in the policy that allows withholding profit and overhead as a means of calculating ACTUAL CASH VALUE. In fact, ACTUAL CASH VALUE is defined either as the difference in the fair market value of the property before the loss and the fair market value of the property after the loss or the full cost of replacement using like kind and quality, less physical depreciation. You should insist that any amounts withheld from payment pending completion of the work, be documented in writing and justified by the adjuster objectively. Policyholder attorneys and some insurance regulators have successfully prevented insurers from withholding these amounts.
Investigate Contractors Thoroughly investigate the qualifications, license, and references of your insurance company’s approved contractor before agreeing to hire them to perform the repairs. The State Contractors Licensing Board will usually provide the consumer, by telephone or over the Internet, with the contractor’s license status and history of discipline. At a minimum, the licensing entity and a reference should be checked before a contract is signed. You do not have to use consultants or contractors recommended or approved by the insurer to perform 42
repairs. Approved contractors are typically contractors who have agreed to discount their labor and costs and follow insurer guidelines in exchange for a volume of business from the insurance company. If your insurer promises to guarantee the approved contractor’s work, the guarantee is generally limited to replacing any defective materials or correcting faulty workmanship. The insurer is not insuring against any contractor delays, negligence, or liability. Accordingly, do not use the approved contractor unless it is a contractor that you would independently hire to do the work after a thorough screening. Check that each contractor’s license is valid and for any complaints against the license. Ensure that the contractor is bonded and insured.
Seek Proper Legal Advice Never sign a release, waiver, indemnity, or “hold harmless” agreement without proper legal advice. If the insurer, adjuster, consultant, or contractor asks you to sign a release, waiver, indemnity, or hold harmless agreement, ask them to explain why in writing. These kinds of agreements can be used to deprive an insured of rights and benefits and may obligate you to pay thousands of extra dollars for issues that arise. Consult a policyholder attorney to determine your rights before signing any such agreement. Seek professional help, if needed. If you reach an impasse with the insurer, document the dispute fully in writing. Explain your position and why the insurance company’s position is unreasonable. If the dispute does not require legal advice, you may be able to resolve it by calling the California Department of Insurance at 1-800387-HELP or by hiring a lawyer or
public adjuster. If the dispute does require legal advice, contact a lawyer who is experienced and specializes in representing policyholders. There are many consultants who claim to be “insurance claims experts” who do not have adequate training, skill, or experience. Before you retain one investigate the person diligently by contacting licensing bodies and references.
Be Aware of Deadlines Make sure you know all the deadlines that may cut off the right to file a lawsuit. California has a four-year statute of limitations for breaches of written contracts but most insurance policies require suit within one or two years of the loss or the denial of a claim. If your claim is denied seek legal advice promptly. In most states the insurance company is required to tell you, in writing, that the claim is denied, and that the limitations clock is running. That is, if you disagree with the insurer’s conclusion to deny your claim you have a limited time to file suit. Make sure you understand all possible deadlines. Consult with a policyholder attorney as soon as possible. The time limitation can be as short as one year from the date the loss occurred and can be put on hold by actions of the insurer. If you wish to sue, it is best to contact counsel as soon as possible before the expiration of the time limit. Report all Unfair Claims Handling to the Department of Insurance or an Insurance Regulator The state Insurance Department tracks policyholder complaints about their insurers and compiles the results. Most states have proactive consumer The Underwriter’s Insider
advocates in their insurance departments who will jump in to help you if they believe the insurer is not treating you fairly.
Conclusion Many insurers involved in Catastrophes provide their adjusters with policy limits authority and instruct the adjuster to be generous. If your house was one of those totally destroyed and coverage is available there is a good probability that you will receive the full policy limits immediately. If you did not carry sufficient insurance to totally rebuild your house and replace your contents consider the acquisition of a factory built home which can be trucked to your site and completed, with all appliances included, for much less than a conventionally constructed home. Almost all claims will be handled promptly and fairly. A person knowledgeable about insurance claims can better deal with an insurance company. Don’t take advantage of your insurer and don’t let an insurer take advantage of you. You are entitled to indemnity. You and your insurer should work together to make you whole.
[Adapted from Barry Zalma’s book, “Insurance Claims: A Comprehensive Guide” and his book “Mold: A Comprehensive Claims Guide” published by Specialty Technical Publishers, Vancouver, BC, Canada; 800-251-0381; http://www.stpub. com.]
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THE ADVISOR Have We Reached A Tipping Point in America? freebies - just hold out your hand. It’s a much easier sell to the unsophisticated voter with no real perceived stake in the future or present of America. Used to be, folks in the country voted for the good of the country. Now they vote for themselves. It’s the politics of “Gimmee.” More and more voting themselves the assets and workproduct of fewer and fewer. It’s easy to see where it is headed - and it ain’t pretty.
Land of the Freebies, Home of the Brazen... Republicans made the fair assumption that voters in the states hit hardest by Obama’s failure to right the economy - those states with the highest unemployment - would turn out for change; for Romney. Instead, the opposite happened. These voters were afraid that the gravy train would be stuck at the station if Romney were elected. They wanted to keep the freebies and hand-outs coming. In the simplest of terms, Obama has used the national treasury - your tax dollars and mine - to buy votes. No voter who cared about the future of this country could possibly vote for the continuation of the Obama economic plan, with $6 trillion in additional debt in just the first four years - and much more to come.
It is now also apparent that Romney failed to get his message across hoping that his positive “gentleman campaign” was sufficient to counter the Obama campaign’s vicious personal attacks - almost entirely contrived - filled with distortions and half-truths. Since the election, the Advisor has spoken to two women who voted for Obama. One was convinced there was a Republican “War on Women,” when, in fact, there was not a single Republican candidate that had plans to outlaw abortion or restrict birth control. The other, a woman who had been unemployed for four years and still blamed Bush, had the notion that Romney was a criminal and had personally and heartlessly fired elderly employees after decades of service - just before they would have been eligible for retirement. Where did they acquire these fanciful, distorted, wholly false opinions? From shameless, contrived, Obama campaign ads - in one case even claiming that Romney was responsible for the death of a man’s wife from cancer for failure to provide her health insurance. After the tsunami of lies and distortions coming from the Obama campaign, they even had the gall to trot out Bill “ I did not have sex with that woman” Clinton to speak on the frightening prospect of having a president lie to the American public, referring to Romney. And they got away with it. The Advisor has little to add to the cacophony of surprised pundits on what happened in this election or why - but it is certainly not a good omen for the future of this great country.