September 15, 2014 by C Acunto

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VOLUME 125, NUMBER 15 / September 15, 2014

A CINN Group, Inc. Publication

Serving: New York, New Jersey, Connecticut, Pennsylvania and Washington D.C.

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Contents [COVER STORY ] 20

ShelterPoint Life: New York’s First Rehab Life Unfolds Fresh Brand, Bright Plan for National Expansion Art Shea

[FEATURES] 4

Foreword: Single-Handedly Steve Acunto, Publisher

Insight: A Man of Letters Peter H. Bickford

Exposures and Coverages: Short Takes on Sunday Topics Jerome Trupin, CPCU

The Social Notebook: Mobile Moments: Are You Ready? Christopher Paradiso

September 15, 2014 | volume 125 number 15 38

On the Level: Out With the Old, In With the New Jamie Deapo

On My Radar: Other Insurance Clause Raises Actual Controversy Barry Zalma

Looking Back: May 1989

Courtside: Disclaimer Issued 24 Days After Notice of Suit is Timely; Carrier Needed to Investigate Lawrence Rogak

Classiﬁeds

The Last Word: Take Control of Your Brand: The 4Cs of Brand Management DeEtta Jones

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20 INSURANCE ADVOCATE / September 15, 2014 3

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[ FORE WORD ]

Steve Acunto

Single-Handedly

very New York taxpayer should thank DFS leader Ben Lawsky for the spate of fines – and their size – that seem big enough to balance the State’s budget. Looks like he’s bolstering the bottom lines single-handedly. Ben is an ambitious man, hardly a fault, but his recent, aggressive, high profile approach to bigger and bigger fines for bigger and bigger companies has fanned speculation about his next step. The TIMES has done a lot of cheerleading for him and his reputation is rather spotless, albeit a little harsh on financial sector “sinners”. The buzz on Ben has included the FIO, a run for a Washington post, and candidacy for one of the SUPT. LAWSKY major national regulatory bodies in banking. Regardless, he has stepped up to the Goliaths and used his slingshot carefully….and profitably for the State…… Our prayers go out to Bob Benmosche as he fights 10 rounds with cancer. Bob reset AIG on a path that seemed improbable to many and now deserves a win in his battle. Peter Hancock has taken the helm with an ambitious agenda for AIG that will look to technology’s role in its growth of the Companies……There are parts of upstate New York that rival any American state in the variety of natural beauty. The Adirondacks and places like Thousand Islands, Saratoga, and Tupper Lake deserve a visit from down-staters who consider the Bronx Zoo the beginning of the upstate wilderness. Each year, the northernmost insurance social event draws agents and company BOB BENMOSCHE reps to South of the Border in Tupper Lake, a combined golf and networking event. The border refers to Canada not Westchester County. It is, I am told, a pilgrimage of Thruway and secondary road driving, but worth it “even if just for the scenery.” This year’s event brought together several past Presidents of the IIABNY, which has a local affiliated chapter. Columnist Jamie Deapo sent along the attached photo. A special hello goes out to Tommy Dietz, center in the picture, who was a major force for all agents and brokers in New York and in the U.S. during his long career. Tom is retired now and lives in Florida. TJD was a key leader in BRACE (the greatly successful PIANY, IIANY and NYSALU effort opposing bank entry into insurance) in the effort to undo the Hartford’s AARP program, in the founding of an agentowned seat on the Insurance Exchange, in supporting the reorganization of IIAA, as a state national director, and as a PAC leader nationally. He has not appeared in these pages in a while. FRONT ROW: JIM SUTTON, TOMMY DIETZ, MARK HAGAN; BACK ROW: STEVE ZOGBY, ED HIGGINS, ANDY KAUFMAN, FRED COSTE Good to see you, AND RON BELLEVILLE Tommy.[IA] 4 September 15, 2014 / INSURANCE ADVOCATE

VOLUME 125, NUMBER 15 SEPTEMBER 15, 2014

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Sari Gabay-Raﬁ Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Creative Director Gina Marie Balog 914-966-3180, x113 g@cinn.com PROOF READER Maria Vano SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x117 circulation@cinn.com PUBLISHED BY CINN Group P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 966-3264 www.cinn.com | info@cinn.com President and CEO Steve Acunto

CINN G R O U P, I N C .

INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 21 times a year, and once a month in July, August and December by CINN ESR, Inc., 131 Alta Avenue, Yonkers, NY 10705. Periodical postage paid at Yonkers, NY and additional mailing ofﬁces. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $110.00. TO ORDER Call 914-966-3180, fax 914-966-3264, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2014. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Ofﬁce.

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[ INSIGHT ]

By Peter H. Bickford

A Man of Letters

ho says the art of letter writing is dead? In this age of smart phones, instant messaging, initials in place of sentences, and the general demise of the printed word, it is quite refreshing to see at least one regulator that seems to relish the written word and the artful turn of a phrase. That regulator is New

found his voice and his syntax, Mr. Lawsky learned to translate his own aggressive approach to regulation into his letters as well. And it does not matter that the recipients do not often agree or react favorably to the message: the sport is in the letters themselves. The transformation in style is epito-

As he found his voice and his syntax, Mr. Lawsky learned to translate his own aggressive approach to regulation into his letters as well. And it does not matter that the recipients do not often agree or react favorably to the message: the sport is in the letters themselves. Peter H. Bickford

York’s own Superintendent of Financial Services, Benjamin Lawsky, who has developed a strategic voice in letter format. Of particular note are Superintendent Lawsky’s pointed, acerbic and richly critical epistles to the NAIC taking his brethren commissioners to task for not following his lead in such matters as eliminating abusive force-placed insurance, reversing course on principles-based reserving, and the use of captives by life insurers to move liabilities off balance sheet. It does not matter that the targets of his barbs have shown a remarkable propensity to ignore his dire warnings. Superintendent Lawsky has created a personal art form that transcends the actual issues. In fact, these missives are so important that they have their own category on the Department of Financial Services website – Superintendent’s Letters – right up there with press releases, regulations and opinions. Oh, wait. I forgot. NY does not issue opinions anymore. If one reads these letters in more or less chronological order, the evolution of the form is quite apparent. His early letters on topics like principles-based reserving and force-placed insurance were more or less routine position statements. As he

mized in the aggressive and pointed August 12, 2014 letter to the NAIC on the topic of captives. Timed to circulate just before the NAIC’s Summer National Meeting, the letter takes the NAIC to task for backing away from recommendations to rein in the use of captives by life insurers to move liabilities off balance sheet. Particular aim was taken at a revised report by the NAIC’s consultant that Lawsky considered “a now-toothless” proposal that “bent over backwards to assuage the life industry’s worries and, in the process, essentially defanged” the consultant’s earlier report. The letter also showers its disdain on small state regulators by alleging that the proposal “keeps in place the existing fragmented system that encourages a race to the bottom amongst a small minority of states that ‘compete’ with one another about who can be more lenient in exercising supposed regulatory oversight over these structures.” Most certainly, faced with these truths the NAIC members would have no choice but to confess the error of their ways and accede to Superintendent Lawsky’s persuasive guidance and leadership. Alas, that is not the case, as the NAIC has largely ignored the rhetoric and moved toward acceptance of the revised report.

Superintendent Lawsky, of course, is not the only commissioner that has taken aim at his or her fellow commissioners in letters. He is the one, however, who has taken the art form to the next level, particularly given his relatively short tenure in the field. Also, his letter-writing prowess is not limited to the NAIC. Superintendent Lawsky’s epistles have also been directed toward the Feds, most recently through his ironic July 30, 2014 letter to the Secretary of the Treasury, Jacob Lew, as head of the Financial Services Oversight Committee (FSOC) arguing against the designation of Met Life as a systematically important financial institution, or SIFI. What makes the letter ironic? The obvious irony is that while attacking state regulators’ abject failure to effectively control abusive industry practices, and copying Secretary Lew and other Federal representatives on his letter, he is concurrently expressing strong support for state regulation of major institutions like Met Life. In other words, while arguing in support of state regulation, he is providing a road map to the Feds on why they should assume more control over the regulation of the business of insurance. But there is another, closer-to-home irony in the letter to Lew: Lawsky’s assertion that the state regulators have the ability and capacity to “ensure an orderly resolution” in the event of the financial failure of a major life insurer such as Met Life. Given his own record with the failed Executive Life Insurance Company of New York (ELNY), Lawsky’s support for the states’ ability to effectively resolve insolvent estates is stunning. Consider, for example, the following remarkable excerpt from the letter, apparently meant to be serious: “Because the life insurance business is based on contractual liabilities that develop over time, life insurance failures are relatively slow moving. Regulators can generally intervene early when significant assets are still available, and commence a receivership that runs off the liabilcontinued on page 8

6 September 15, 2014 / INSURANCE ADVOCATE

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[ INSIGHT ] the New York regulators to “protect it” from its insolvent parent, Executive Life of California. After twenty years of glaring mismanagement by the NY Liquidation Bureau, ELNY was finally liquidated last year at a point where it was insolvent to the tune of close to $2 billion (yes, billion). Roughly half of this $2 billion hole – created under the watchful eyes of a long string of superintendents – was filled by state guaranty funds while the other half, or close to $1 billion, was foisted primarily

continued from page 6

ities against the assets as they mature. And all the while, policyholders benefit from a guaranty fund system that keeps their losses, if any, to a minimum.” For those who may have forgotten the ELNY saga – or who have deliberately chosen to do so – ELNY was a solvent company when taken into “rehabilitation” by

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If ELNY, which was a mere fraction the size and complexity of a company like Met Life, effectively exposes serious deficiencies in state oversight of liquidations and the state guaranty fund system, the insolvency of a company like Met Life would magnify those weaknesses exponentially.

on a small segment of ELNY policyholders – structured settlement annuity holders – who could least afford the loss. Incredibly, no attempt has ever been made by the receiver to hold accountable those responsible for the mismanagement. Instead the last receiver, Superintendent Lawsky, sought and obtained broad judicial immunity for everyone associated with the rehabilitation, and sought and obtained a citation of contempt against counsel for a number of the affected annuitants for independently seeking accountability. The ELNY debacle also uncovered some serious flaws in coverage and consistency in the state guaranty fund system. Even the December 2013 Report of the Federal Insurance Office (FIO) on modernizing the regulation of insurance recognized some of these problems. If ELNY, which was a mere fraction the size and complexity of a company like Met Life, effectively exposes serious deficiencies in state oversight of liquidations and the state guaranty fund system, the insolvency of a company like Met Life would magnify those weaknesses exponentially. In other words, Lawsky’s support of the states’ ability to resolve estates of large insolvent insurers – particularly life companies that write volatile annuity business – is grossly overstated. There are a number of lessons to be learned from Superintendent Lawsky’s reliance on an acerbic letter writing style, but the one that jumps out the most is the following: when firing a cannon, be careful not to use more powder than necessary or it may blow up in your face.[IA]

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[ EXPOSURES AND COVERAGES ]

By Jerome Trupin, CPCU

Short Takes on Sundry Topics: Sandy Claims Deadline, Sewer Backup, Continuing Ed Problems, Security Breach Law, and Hail & Ice My “possible topics” file runneth over, so I thought I’d combine a number of brief items into one column.

It’s Almost Midnight for Sandy Claims Most states mandate that insurance policies provide at least two years from the date of a property loss for an insured to commence suit against the insurer and that’s what most property insurance policies provide.1 Sandy made its New Jersey landfall on October 28th, 2011. That means that the clock will strike 12 for most Sandy claims in our area at the end of October. Once that happens, the claims turn into pumpkins and mice—and mice damage is always excluded. If you have clients whose claims are still open, urge them to get an extension of time from the insurance company and, if they can’t, advise them of the deadline to start suit. The two-year time limit is strictly enforced by most courts and the fact that negotiations were still going on doesn’t toll the deadline. Some insureds may have already missed the deadline. National Flood Insurance policies are not governed by state law. The NFIP policy reads: “If you (the insured) do sue, you must start the suit within one year of the date of the written denial of all or part of the claim…”2 That may be more or less than two years from the date of loss depending on the date of the written denial.

Water Backup from Sewers and Drains When water poured into the first floor apartments of two buildings in an apartment complex, the insured submitted a claim. Then he called the plumber. (I don’t know for a fact that that was the sequence, but it often seems that way.) The water had entered through toilets, bathtubs and condensation drains. The insurance company denied the claim, citing the Water Damage exclusion, which excludes loss caused by “water which backs up through sewers or drains.” The insured argued that the policy provided coverage for accidental overflow or discharge of a plumbing system as an exception to the exclusion. The lower court decided in the insured’s favor. The appellate court sent the case back to the lower court to determine the cause of the loss.3 The court said that it couldn’t find New York cases on the issue, but seemed to agree with the insured’s position. Citing cases from other states, it wrote: “…these cases stand for the proposition that water damage caused by a backup/overflow that originates from a pipe or clogged drain located within the insured’s property line comes from the insured’s plumbing system and is covered by the policy; conversely, if the cause of the backup/overflow is from outside the insured’s property boundaries — such as a clogged munic-

1 If the policy is silent on the question of a time limit, the state statute of limitations on commencing suit would apply. In New York the statute of limitations for contracts is six years, although there are exceptions. 2 There are other policies that are not subject to the two-year requirement and some of them grant only one year from date of loss to commence suit. 3 Pichel v Dryden Mut. Ins. Co. 2014 NY Slip Op 03575 Decided on May 15, 2014 Appellate Division, Third Department

10 September 15, 2014 / INSURANCE ADVOCATE

Jerome Trupin

Jerome “Jerry” Trupin, CPCU, is a partner in Trupin Insurance Services located in Briarcliff Manor, NY. He provides property/casualty insurance consulting advice to commercial, nonproﬁt and governmental entities. He is, in effect, an outsourced risk manager. Jerry has been an expert witness in numerous cases involving insurance policy coverage disputes and has taught many CPCU and IIA courses. Jerry has spoken across the country on insurance topics and is the co-author of over ten insurance texts used in CPCU and IIA programs including Commercial Property Risk Management and Insurance and Commercial Liability Management and Insurance. He regularly contributes articles to CPCU Society publications, the Insurance Advocate, and others. He can be reached at jtrupin@aol.com. Thanks to Jerry Trupin for this article and to the CPCU Society for letting us reprint it.

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[ EXPOSURES AND COVERAGES ] ipal sewer that forces water from outside the insured’s plumbing system to overflow — the sewer or drain exclusion is applicable.”4 The insured may lose when the case is retried, or the parties may settle before the next round of trials. What intrigued me about this case was that it involved the backup of sewer and drains exclusion.5 I feel that the exclusion is often applied too broadly. That was the case with a loss a client suffered a few years ago. While he and his wife were on vacation, the drain that served all the apartments in their line became clogged just below his apartment. As a result, all the sewage from the apartments above theirs couldn’t get out of the building and instead flowed into their apartment. When they returned home, their apartment resembled Carlsbad Caverns. Stalactites of mold came down from the ceilings and stalagmites grew up from the floor. Their policy included $3,000 additional coverage for backup of sewers and drains. The insurance company sent him a check for $3,000—the damage exceeded $50,000. He called me. I told him I disagreed with the insurance company and wrote a report for him to send to the insurer making the argument that this was not a backup. The water didn’t back-up, it flowed down from the apartments above his. The insurance company reconsidered and sent him a check for the full loss.

What I Learned Today at Continuing Ed I usually accumulate my CE credits at seminars that I’m involved in, but this year I was two credits short. With the license renewal deadline approaching, I signed up for a course with one of the country’s largest providers of insurance CE courses. I carefully selected a course because it was offered at a convenient time. The course dealt with ins and outs of personal auto insurance. Since my work deals primarily with commercial insurance, it’s been some time since I’ve closely studied the personal auto policy. I rationalized that this would make the course useful for a reason other

Auto liability judgments are not discharged in bankruptcy. That’s not true. Only judgments arising from DUI incidents survive bankrupcy. There aren’t many items that aren’t discharged in personal bankruptcy, the most well known are probably student loans.

than earning my needed CE credits. The instructor, in real life a broker who seemed dedicated to doing the right thing for his clients, was personable, told a lot of good stories (some of them even related to insurance), and made the four hours pass pleasantly. (Actually only three hours and twenty minutes, since like a psychiatrist, a CE instructor’s hour only has fifty minutes.) Despite saying he wouldn’t, he frequently read aloud the generalities (prepared by the provider) shown on the screen. What was worse, some points were just wrong and when I raised questions about them, he insisted I was in error. No one in the class expressed an opinion one way or the other. He didn’t have a copy of the policy form available to settle the questions. Here are the more serious items that I think he got wrong. He claimed that: • One of the reasons insureds need high limits of auto insurance is that defense expenditures can use up the policy limit. That’s not correct. Insureds do need high limits and defense costs mount up rapidly. Defense expenses erode the limit available for paying claims in some policies, but personal auto insurance is not one of them. The auto policy clearly states that the insurer’s duty to defend ends only when the limit

of liability is exhausted by payment of judgments or settlements. I thought every insurance broker knew that defense expenses, in insurance jargon, are typically outside of limits. • Auto liability judgments are not discharged in bankruptcy. That’s not true. Only judgments arising from DUI incidents survive bankrupcy. There aren’t many items that aren’t discharged in personal bankruptcy, the most well known are probably student loans. (I did learn something here. I didn’t know that judgments as a result of a DUI accident weren’t discharged. All other auto liability judgment awards are discharged in bankruptcy.) • Business use is not covered. That’s true only for auto-business related parties—parking lot owner, garage, repair shop, etc. He may have just misspoken on this one because before class he was discussing with a student how she should write auto insurance for a stockholder/owner of a corporation, whose car is registered in his individual name. Nevertheless, the PowerPoint on the screen showed that business use was excluded and that’s what he read to us. On the positive side, I did learn some things: • An exception to the rule that insurance information is not admissible at trial is when it bears on question of liability. An example: The injured passenger alleges that he told the driver to be careful and that the driver responded “Don’t worry. I have insurance.” That will indicate to the jury that the defendant probably had insurance, but because it bears on the driver’s attitude towards safety courts allow it. (Prior to trial the opposing counsel is entitled to the insurance information including limits; I knew that. It’s felt it saves the court time by encouraging settlements.) • Both Collision and Other than Collision for a newly acquired car is provided even when no presently continued on page 12

4 op.cit. 5 I advise clients to be sure their policies cover losses resulting from the backup of sewers or drains, but that’s another story.

INSURANCE ADVOCATE / September 15, 2014 11

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[ EXPOSURES AND COVERAGES ] continued from page 11

insured car has such coverage. The coverage is subject to a $500 deductible and the insured must notify the insurer within four days after the insured acquires ownership.6 • Uninsured Motorist (UIM) coverage is triggered when the other car owner’s insurer becomes insolvent. I’ve never thought about this. Since umbrella policies do not drop down when the underlying insurance company becomes insolvent, my guess would have been that UIM wouldn’t be available, but that’s not the way it is.

Security Breach Laws Forty-seven states, the District of Columbia and Puerto Rico all have laws requiring notification of cyber breaches and other loss of personal information. Personal information is typically defined as an individual’s first name or first initial and last name in combination with any one or more of the following data elements: • Social Security Number; • Driver license number or identification card number; or • Account number or credit card number or debit card number in combination with any required security code, access code, or password that would permit access to an individual’s financial account. New York, New Jersey, Connecticut, Massachusetts and 14 other states require notification to the state attorney general or regulator as well as the individual or entity whose information has been compromised. (The three states that don’t are Alabama, New Mexico and South Dakota—probably not your prime markets.)7 If more than 5,000 New York residents are to be notified at one time, consumer reporting agencies must be informed of the timing, content and distribution of the notices and approximate number of affected persons.8 The laws apply to all firms doing business in the state, not just those domiciled there. In the event of a breach, there may be a mountain of paper work. One argument for carrying insurance is that the insurance company can be very helpful in advising the firm how to comply with the 12 September 15, 2014 / INSURANCE ADVOCATE

laws. And, depending on the exact coverage, the expenses of complying may be covered.

Hail & Ice Bill Wilson, CPCU, the IIABA insurance guru, has this question on his excellent Virtual University (VU) website.9 “A large hailstorm and heavy rain resulted in substantial interior damage to a commercial building. There was no wind or hail damage to the metal roof but it is the opinion of several roofers and contractors that hail stones clogged up the drains causing the water to back up into the interior of the building. Our question is whether we could find coverage for this type of situation under the Commercial ISO Special Cause of Loss form CP 10 30? Could this still be considered ‘Hail damage’?” Interesting question. I’ve encountered claims for interior damage from rain that leaked into the building when it couldn’t get down stopped up drains allegedly clogged by vandalism. If vandals stopped up the drains, I think there is coverage for the interior damage. Hail might be another story. The ISO Commercial Property Special Form (CP 10 30) contains this exclusion: c. The interior of any building or structure, or to personal property in the building or structure, caused by or resulting from rain, snow, sleet, ice, sand or dust, whether driven by wind or not, unless: (1) The building or structure first sustains damage by a Covered Cause of Loss to its roof or walls through which the rain, snow, sleet, ice, sand or dust enters. My first reaction was there’s coverage because the exclusion doesn’t mention “hail.” But hail might be excluded by ice exclusion. If so, it’s excluded. The dictionary definition of hail is: “precipitation in the form of small balls or lumps usually consisting of concentric layers of clear ice and compact snow.”10 The definition says “usually,” which gives the insured the opportunity to argue that it’s at least ambiguous that the “hail” is always included by the word “ice.”

One of the responses that VU printed11 pointed out that the Basic Form (and of course Broad Form) covers hail together with windstorm. The hail coverage reads: …hail, but not including: …b. Ice (other than hail), snow or sleet, whether driven by wind or not;”… As the responder pointed out, it’s generally held that the Special Form is at least as broad as the Basic and Broad forms. That would argue for coverage from a fairness point of view since the Basic and Broad forms cover hail damage and the insured paid an additional premium to get the special form coverage. Predicting how a court would react is not so simple. As Oliver Wendell Holmes, Jr. said: “The life of the law has not been logic; it has been experience.” To clarify the coverage ISO should except “hail” from the ice exclusion by changing the wording to read “ice (except hail)” in the Special Form exclusion just the way “ice” is excluded from hail coverage in the Basic and Broad forms. That would make the Special Form coverage clearly equal to Basic and Broad. A good idea, even if it violates AFEA (Attorneys Full Employment Act).[IA]

6 The ISO business auto policy handles newly acquired autos differently. Many of the business auto coverage symbols, e.g. Symbol 1 Any Auto, provide automatic coverage for newly acquired autos, but the one commonly used for physical damage is Symbol 7, Specifically Described Autos. Symbol 7 states that unless the insured carries physical damage coverage either on all insured autos or on the replaced auto and the insurer is notified within 30 days, there is no physical damage coverage for newly acquired vehicles. 7 Melissa J. Krasnow “Changes in State Breach Notification Laws” © 2000-2014 International Risk Management Institute, Inc. (IRMI) http://www.irmi.com/expert/articles/2014/krasn ow08-cyber-privacy-risk-insurance.aspx 8 Security Breach Notification Chart, Perkins Cole http://www.perkinscoie.com/files/Uploads/Doc uments/Sec%20Breach%20Chart/Security%20Br each%20Notification%20Law%20Chart%20— %20June%202014%20rev.pdf 9 If you’ve never seen the Virtual University newsletter take a look: http://www.iiaba.net/ad_profile/accountrequest .aspx?p=vupoint. It’s a wonderful resource. 10 Merriam-Webster Dictionary http://www.merriam-webster.com/ dictionary/hail 11 http://www.independentagent.com/ Education/VU/Insurance/Commercial-Lines/ Property/Perils/FacultyHailYesNo.aspx

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NYIA you need to to k keep eep y e your our N YIA has what what you New York operations smoothly. N ew Y ork op o erations running smo othly y.

The The New N ew Y York or o k IInsurance nsurance A Association ssociation ccan an help you: you: t Simplify and diversify your board of directors. t Understand recent changes in the workers compensation system. t Streamline the financial and marke et conduct exam processes. t Increase the visibility of your company and agent partners. NYIA has represented the New Yo ork property and casualty industry fo or more than 130 years. The association is dedicated to making New Yo ork a better place to do business fo or insur ins ance companies. Whether itâ&#x20AC;&#x2122;s fighting mounting taxes and assessments, facilitating regulatory matters, reporting on guaranty fund implications, analyzing the impact of proposed legislation and new laws or helping navigate rate and for o m filings, NYIA is working for o property and casualty insurers. To learn more about how NYIA can help your company visit www.nyia.org or call 518.432.4227.

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INA 9-8-14_INA 9-15-14 9/26/14 11:06 AM Page 14

[ THE SOCI AL NOTEBOOK ]

By Christopher Paradiso, CPA

Ways to Get Ahead in the Social Media Arena

hen you think of social media and the success that can be gained from it, one thing that we always need to keep in mind is to continuously keep learning. Social media is constantly changing because of Google’s fluidity, and that’s why we can never stop learning. Remember, Google is the boss of the Internet because it is the one making the rules. They are constantly changing search algorithms, so much so that one occurs about every 18 hours. That’s why it

Chris Paradiso

Your marketing strategy may change based on what the prospects are using for keywords within Google to find your agency. So measurement plays an enormous role in figuring out your social media success.

is so difficult for business owners to keep up with the changing winds of the search engine world. Now while this proves challenging for small business owners, Google has made significant strides to help small businesses achieve an equal footing in the internet world to avoid a complete saturation of only major players. The reason I’m bringing this up is because it’s important for insurance agents to invest in an outside company who can keep us up-to-date and informed with what’s going on in the world of Google. Moreover, I’m stressing to you all the importance of algorithm changes because they directly dictate how you should formulate and implement your social media strategy. The key to a social media strategy is simply have one first. But before you even begin to hatch a social media marketing strategy, I would highly recommend you take the time to hire a social media point person to work inside your agency to handle your social media marketing. 14 September 15, 2014 / INSURANCE ADVOCATE

Furthermore, I would highly recommend you hire someone full-time because there are so many different moving parts to social media that it really is a 40-hour-perweek job. Once you have your social media person in place, you then need to focus on how you’re going to measure the success of your strategy. What we do at my agency is inquire, with every single quote, where that lead came from. But we don’t stop if they say “from Google” – we ask them what they physically typed into the search bar that eventually brought them to our agency. This is an important part of understanding where your clients and/or prospects are coming from that can drive future business into your agency. Your marketing strategy may change based on what the prospects are using for keywords within Google to find your agency. So measurement plays an enormous role in figuring out your social media success. Let’s not forget that there are two separate ways to measure success within your

agency though. The first is your return on investment (ROI) and the other is the importance of your agency’s brand. All agency owners want to have a positive ROI but aren’t sure how to achieve it. I personally measure the ROI of our social media marketing every quarter by looking at how many dollars and cents are going out the door for social media, and then I look at the amount of commissions that have been generated from our social media marketing team. The social media marketing team is responsible for creating opportunities and establishing/enhancing the agency brand. Then it’s my job as agency owner to look at the closing ratio of my salespeople and make sure that that process is being handled the right way. That data together allows me to gauge how well the social media strategy is working. Business owners and consultants talk very highly about how many ‘likes,’ comments or shares they generate on Facebook. I will tell you that yes, this is a part of measuring your agency’s social media success, but remember the real succontinued on page 16

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[ THE SOCIA L NOTEBOOK ] continued from page 14

cess is about having the right audience who is liking, sharing or commenting on your posts. It is not about the quantity of how many you have — the most important aspect of the quantity is having the right audience. For example, I was recently working with an agency out of New York who has in excess of 500 Facebook likes. Now instead of congratulating them, I asked them to review who those people are. After the review was completed, we found that over 300 of the 500 likes came from people in states where they did not even sell. Success in social media marketing comes from understanding who your agency’s audience truly is and mastering your brand. Your agency’s brand is one of the most critical aspects of marketing success. Your brand has two vital components, A and B. Component A is something we all have in common — we sell insurance. Component B is your identity. The identity is so very important because it is what separates each and every one of us from our competition. An insurance company that does a great job with component B is the gecko. What they do extremely well is create the brand and they utilize their brand in every single advertisement. You know that their brand is simple and straightforward — cheap and fast. In every ad, the gecko talks about sav-

I understand that branding is difficult to do and it’s even harder to measure its success, but overall, branding is having the ability to create common interests between our agency’s identity and those with our prospects. Social media success may be a little different for each and every one of our agencies, but we have to believe in social media marketing and take the time, the money, and the effort to measure all aspects of our marketing efforts.

ing 15% in 15 minutes or less. Most independent insurance agents understand that it takes longer than 15 minutes to get a quote because we have many insurance options for our prospects. We as independent agents need to fight back in the social media world and talk about the difference

4441 Sepulveda Blvd., Culver City, CA 90230-4847 www.zalma.com | zalma@zalma.com 310-390-4455 | fax: 310-391-5614 http://zalma.com/blog Zalma Insurance Consultants provides expert advice to counsel for insurers and counsel for policyholders. Advice from Zalma Insurance Consultants is indispensable to the resolution of insurance disputes. Consultation from Zalma Insurance Consultants can save you, your counsel or client hundreds of hours of investigative and legal work. 16 September 15, 2014 / INSURANCE ADVOCATE

between an independent agency and these other companies. We also need to talk about how customers are far more valuable to us than simply 15 minutes. Imagine if your doctor only spent 15 minutes on you during your checkup — chances are you wouldn’t feel confident in the examination! Let’s not forget that creating a brand may not generate an ROI in the short term, but my challenge to you is to stick with it. I understand that branding is difficult to do and it’s even harder to measure its success, but overall, branding is having the ability to create common interests between our agency’s identity and those with our prospects. Social media success may be a little different for each and every one of our agencies, but we have to believe in social media marketing and take the time, the money, and the effort to measure all aspects of our marketing efforts. Christopher Paradiso, CPIA, is President of Paradiso Financial & Insurance Service. He has been acknowledged by several insurance publications as a leader in the industry for his use of digital marketing and social media to help brand his agency and promote other small businesses within his community. Chris has also been recognized for his charity work with The Connecticut Children’s Medical Center. In 2011, Chris introduced “Paradiso Presents LLC,” a social media program aimed at teaching small agencies how not only survive, but compete in today’s complex online marketing world. Chris resides in Stafford Springs, CT with his wife and two children, Mia and Gianni.

Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889.

INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 17

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INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 18

[ RESOURCES ]

APIx, a New Art Stability Rating System, to Lower Risk on Blue-Chip Art

os Angeles, CA—A provisional patent application for the Art Preservation Index or APIx was filed in July to standardize the measurement of stability risks of blue-chip paintings and other types of artwork that may deteriorate over time. The APIx is a rating system similar to investment ratings from Moody’s and Standard & Poor’s for the financial industry, but with the goal to quantify stability-related investment risks for fine art. APIx scores are generated by scientific and historical research that is completed by a staff of professionals who base their artwork analyses on multi-layer assessments of the materials, their application, and the way they interact chemically and physically to determine their sustainability. “Art conservators know that a great deal of art being sold today may deteriorate quickly and cause the monetary value to decline – precipitously in some cases,” said Emily MacDonaldKorth, an art conservator and one of the inventors of the rating system. Emily goes on to say, “A prime example was the stunning deterioration of the Rothko paintings donated to Harvard University that irreparably faded after exposure to harmful light over the years. Experts know the materials Rothko commonly used to paint his remarkable color studies are unstable. Yet a Rothko painting, almost certainly painted using similar light-sensitive colorants, was recently sold at auction for over $56 million. This new buyer, for example, would have been alerted to the vulnerability to fading if APIx had been consulted prior to purchasing the investment. The Rothko case is just one of thousands. Art is created with many materials that are visually appealing and seem innocuous, but most artists, gallery owners, and buyers of art know very little about the stability of these materials or how they interact with one another over time.” The APIx rating system will illuminate these facts for the entire art world and the founders expect that many buyers of fine art will engage it. Leading Miami gallerist Robert Fontaine is the first art dealer to request APIx provisional ratings for his inventory, including works by Rauschenberg and Komar & Melamid. According to Fontaine, “The Art Preservation Index truly fills a void in an otherwise unregulated market. If you believe that each artwork has a life of its own, then the attention given to each piece should be paramount in discovering its history and condition, while working to preserve its future integrity for many years to come.” “Fine art is extremely expensive. Buyers of art, like buyers of investments, should seriously consider getting an APIx rating before making a purchase. Obtaining a rating will be a modest additional cost to the acquisition of fine art and it could prevent a financial disaster like the Rothko situation,” said James Korth, co-inventor, father to Emily, and an investment banker. The APIx inventors expect that art buyers, conservators, and insurers everywhere will be excited about the APIx as it will make investing in art a safer process while creating a higher profile and 18 September 15, 2014 / INSURANCE ADVOCATE

more work for preservation experts and a safer bet for those who insure it. Each Stability Rating Report will include details about the artwork, the Stability Rating, and rating rationale; additional features such as high-resolution photodocumentation, scientific analysis, and preservation recommendations will be available. The APIx Inventors: Emily MacDonald-Korth is an art preservation specialist working in art conservation, research, and consulting; she has published, lectured, and taught internationally and worked on conservation projects across the United States, in China, and in Italy. In 2013, MacDonald-Korth founded the conservation practice Longevity Art Preservation, LLC; formerly she was practicing as Associate Project Specialist at the Getty Conservation Institute. MacDonald-Korth is a graduate of the Winterthur/University of Delaware Program in Art Conservation where she earned the highest degree, a Master of Science in Art Conservation, with a specialty in the conservation of paintings. More information can be found at: www.ArtLongevity.com James W. Korth started J W Korth & Company in 1982. Throughout the 80s and 90s Korth focused on investment banking, underwriting debt of major corporations for retail issue, and pioneered many of the corporate debt programs that are found today. As the internet took hold in the early 2000s, Korth launched the Shop4Bonds website in 2003. J W Korth & Company brings institutional investing expertise to individual investors, registered investment advisors and small institutions. The company has offices in Miami, Orlando, and Lansing, Michigan, and clients located across the country and around the world. More information can be found at: www.jwkorth.com [IA]

INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 19

MEMORANDUM To:

New York Agents and Brokers

From: Physicians’ Reciprocal Insurers Re:

Placing Hospital, Medical Facilities and Physicians Professional Liability

Dear Colleagues, We continue to underwrite medical facilities, hospitals and particularly, physicians who are leaving RRG’s. The distinction between admitted insurers and Risk Retention Groups is clear. PRI, for more than 31 years, is a successful insurance company regulated by the New York State Department of Financial Services. We offer excellent claims defense, fair pricing and exceptional service your clients expect and deserve. We are pleased to continue to serve New York’s agent and broker community. Thank you.

The Professionals at PRI

1800 NORTHERN BOULEVARD | ROSLYN, NEW YORK 11576 (800) 632-6040 | INFO@PRI.COM | WWW.PRI.COM

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[ COVER ] Introducing…

ShelterPoint Life New York’s First Rehab Life Unfolds Fresh Brand, Bright Plan for National Expansion Company’s leaders flag growth in key states under new banner, as industry’s “most frequently explained name” is retired.

20 September 15, 2014 / INSURANCE ADVOCATE

ew York’s familiar First Rehab Life Insurance Company (First Rehab) has adopted a fresh, new banner as it sets sail on a full scale effort to attract a national audience. The venerable Long Island-based resource that has served agents and brokers for 42 years with a name that has demanded an explanation to its several constituencies many thousands of times, will now be known simply as ShelterPoint Life Insurance Company. The Company’s former name evolved from the interest of its founder, the late Dr. Donald Goldberg, MD, a wellknown orthopedist for whom rehabilitation was part of the focus for the Company’s first product concept. Today, newly-branded ShelterPoint, with no change in ownership or management, is the largest writer of New York State Statutory Disability Insurance (DBL) with currently over $70 million in covered premium* and more than 150,000 covered employers for this line of business alone, all of which has been sold exclusively by independent insurance agents and brokers. The company has been a familiar fixture on the insurance scene since its founding and has developed a loyal producer following through old-fashioned field level contact and exceptional service. The level of the Company’s acumen is evidenced by the fact that it has operated DBL profitably. DBL, of course, is a line of business that has lower margins than most. ShelterPoint Life will now expand nationally through its newly-acquired subsidiary, a Florida-domiciled insurance carrier that is licensed in 48 jurisdictions. The blueprint for growth includes the development of new products positioned for success in today’s changing health insurance mar-

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[ COVER ]

ketplace and a stepped-up effort in web-based features/ tools that will empower producers, policyholders, and members alike. Seasoned insurance executive, Richard White, CEO of ShelterPoint, calls the name change “reflective”: “As we have evolved over our 42 year history, it is time to go with a name that is more reflective of who we are and what we do today. We chose a name that expresses our mission of offering benefits that are simple, to the point, and which embrace our commitment to shelter our clients. At the same time, we are growing rapidly, having just acquired a company that is licensed in 48 states. We sought a name that illustrates our next chapter and will give us a nationwide identity. It’s a very exciting time for our entire team and will prove to be an increasingly compelling plan for our producers,” he stated. According to Mr. White, the new name was chosen from among 250 options that the project team conceptualized,

PICTURED LEFT TO RIGHT: RICHARD WHITE, CEO; CONSTANTINE LAPPAS, EVP & COO; BRUCE WALLACH, EVP & CFO

Today, newly-branded ShelterPoint Life… is the largest writer of New York State Statutory Disability Insurance (DBL) with currently over $70 million in covered premium* and more than 150,000 covered employers for this line of business alone… assessed, scored, and ranked for various factors such as legal viability, likeability, and creative potential. continued on page 22

P H O T O C R E D I T : V I T O C ATA L A N O

INSURANCE ADVOCATE / September 15, 2014 21

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[ COVER ]

About ShelterPoint

continued from page 21

“Along with the new name, it was time for a new corporate visual identity that reflects the new chapter in the company’s history, including a new logo and a fresher look of materials and collateral,” added Katrin Atienza, AVP Marketing and Rebranding Project Manager. "The overall goal for the new corporate visual identity was to be simple, clean, modern, symbolically reflective of the new name, and to mesh well with the industry while standing out of the crowd. Our team completed this with a small but strong, can-do-all, inhouse team over several months. Crowdsourcing was one of the tools we had to leverage a lot: we used crowdsourced focus groups and surveys during the name and logo selection,” she continued. The icon component of the final logo reflects the name in form of a map pin that points to the “point of shelter” and incorporates a cut-out “S” that is “sheltered” by the shape of the pin. From a policyholder’s perspective, the name change means business as usual. To ease the transition, however, all

The ShelterPoint family of companies consists of ShelterPoint Life Insurance Company (formerly First Rehab Life) and ShelterPoint Insurance Company. ShelterPoint Life was founded in 1972 as The First Rehabilitation Life Insurance Company of America (First Rehab Life) and is headquartered in Great Neck, NY. Since its inception, ShelterPoint Life has grown into New York’s largest* statutory disability carrier and holds the rating of A- (Excellent) by A.M. Best Company and A- by Standard & Poor’s. Through the years, ShelterPoint Life has added additional employee beneﬁts to its product portfolio and currently insures more than 150,000 employers and over 1.3 million members. In 2014, First Rehab Life changed its name to ShelterPoint Life Insurance Company. A Florida-domiciled carrier was acquired in 2014, which was renamed ShelterPoint Insurance Company. This newly acquired entity is a wholly-owned subsidiary of

continued on page 26

ShelterPoint Life and is licensed in 48 states and territories.

“Along with the new name, it was time for a new corporate visual identity that reflects the new chapter in the company’s history…” – Katrin Atienza, AVP Marketing and Rebranding Project Manager

PICTURED L-R: KATRIN ATIENZA, AVP MARKETING & PLANNING, STEPHANIE HABER, SENIOR MARKETING & CREATIVE COORDINATOR AND YIU-WA TSO, ONLINE CUSTOMER EXPERIENCE DESIGNER 22 September 15, 2014 / INSURANCE ADVOCATE

INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 23

ShelterPoint Life,

www. s h e l t e r p o i n t . c om

sheltering you

formerly First Rehab Life

800.365.4999 sales@shelterpoint.com | 800.365.4999 facebook.com/shelterpointgroup facebook.com/shelterpointgroup

INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 24

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[ COVER ]

PICTURED L-R: DAVID EPSTEIN, V.P. OF SALES AND SIMON KLARIDES, DIRECTOR SALES OPERATIONS

continued from page 22

ShelterPoint Life envelopes and key correspondence are cobranded with First Rehab Life. Policyholders will be notified via mail and receive an endorsement for their policies. While the ShelterPoint Life name change has been officially finalized in New York, the company’s state of domicile, it is in the process of obtaining approval of the new name in other states in which First Rehab Life has been licensed. Policyholders outside New York will receive a name change endorsement in the future – but in the meantime, they may start seeing or hearing the new company name in communications, such as billing, claims or other correspondence. ShelterPoint Life’s location, claims addresses, and phone numbers remain the same, while new web and email addresses are necessary to reflect the changed name. The new URL is www.shelterpoint.com. One person who will welcome the change is David Epstein, Vice President of Sales. David has worked with the company for almost three decades and has probably had to introduce the old name thousands of times, distinguishing First Rehab Life from rehabilitation companies. “I feel extremely proud to be part of the evolution of the former First Rehab Life; 2014 represents my 27th year anniversary with this company, and I have had the opportunity to shake hands with thousands of our producers, and have turned business relationships into valued friendships. I am humbled 26 September 15, 2014 / INSURANCE ADVOCATE

“I feel extremely proud to be part of the evolution of the former First Rehab Life; 2014 represents my 27th year anniversary with this company, and I have had the opportunity to shake hands with thousands of our producers, and have turned business relationships into valued friendships.…” – David Epstein, Vice President of Sales

by the joint accomplishments with our producers and sincerely thank them,” he said. The new flag is raised and the crew is setting sail from sea to shining sea.[IA]

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IN THE MATTER OF THE LIQUIDATION OF CAPITAL MUTUAL INSURANCE COMPANY Supreme Court County of New York Index No.: 402044/00 NOTICE Pursuant to an order of the Supreme Court of the State of New York, County of New York (“Court”), entered on October 5, 2000, the then-Superintendent of Insurance of the State of New York and his successors in office were appointed as liquidator (“Liquidator”) of Capital Mutual Insurance Company (“CMIC”) and, as such, has been directed to take possession of CMIC’s property and liquidate its business and affairs pursuant to Article 74 of the New York Insurance Law (“Insurance Law”). The Superintendent of Financial Services of the State of New York has now succeeded the Superintendent of Insurance as Liquidator of CMIC. The Liquidator has, pursuant to Insurance Law Article 74, appointed Scott D. Fischer, Acting Special Deputy Superintendent (“Acting Special Deputy”), as his agent to liquidate the business of CMIC. The Acting Special Deputy carries out his duties through the New York Liquidation Bureau, 110 William Street, New York, New York 10038. The Liquidator has submitted to the Court a verified petition (“Verified Petition”) seeking an order: (i) approving the Liquidator’s report (“Closing Report”) on the status of and request to close the CMIC liquidation proceeding (“Liquidation Proceeding”) and the financial transactions delineated in such Closing Report; (ii) authorizing the continued payment of administrative expenses, including such expenses pertaining to the closing of the Liquidation Proceeding; (iii) terminating and closing the Liquidation Proceeding, subject to this Court’s approval of Court Order No. 547; (iv) authorizing the Liquidator, without further application to the Court, to continue, after the termination of the Liquidation Proceeding, to receive and disburse assets, pursuant to Insurance Law Article 74, to those creditors of CMIC with allowed claims who are eligible to share in a pro-rata distribution and to pay administrative expenses incurred in connection with the collection and disbursement of such assets; (v) releasing and discharging the Liquidator, his predecessors and successors in office, and their agents, attorneys and employees, from any and all liability arising from their acts or omissions in connection with the Liquidation Proceeding; (vi) authorizing and directing the Liquidator, in his discretion, to destroy or otherwise dispose of any and all of the books, files, records and other property of CMIC without further order of the Court; and (vii) providing for such other and further relief as the Court deems appropriate and just. A hearing is scheduled on the Verified Petition on the 8th day of October, 2014, at 9:30 a.m., before the Court at the Courthouse, IAS Part 16, 60 Centre Street, Room 222, New York, New York. If you wish to object to the Verified Petition, you must serve a written statement setting forth your objections and all supporting documentation upon the Liquidator and Clerk of the Court, at least seven (7) business days prior to the hearing. Service on the Liquidator shall be made by first class mail at the following address: Superintendent of Financial Services of the State of New York as Liquidator of Capital Mutual Insurance Company, 110 William Street, New York, New York 10038 Attention: John Pearson Kelly, Esq., General Counsel. The Verified Petition and Closing Report on the status of and request to close the Liquidation Proceeding are available for inspection at the above address. In the event of any discrepancy between this notice and the documents submitted to Court, the documents control. Requests for further information should be directed to the New York Liquidation Bureau, Creditor and Ancillary Operations Division, at (212) 341-6809. Dated: August 12, 2014 BENJAMIN M. LAWSKY, Superintendent of Financial Services of the State of New York as Liquidator of Capital Mutual Insurance Company.

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[ COVER ]

Company History in Brief 1972-1996 First Rehabilitation Insurance - Chapter 1 1972 “The First Rehabilitation Insurance Company of America” is founded in NY. 1974 The company sells its ﬁrst NY State DBL policy. 1990 First Rehab adds more employee beneﬁts to its product portfolio. Today, the company writes Dental, Vision, Short-Term Disability, NJ TDB, Long-Term Disability, Term Life with AD&D.

1997-2013 First Rehab Life - Chapter 2 1997 The company obtains its Life License and amends the name to “The First Rehabilitation Life Insurance Company of America” (short “First Rehab Life”). 1999 First Rehab Life starts branching out into other states. 2000 First Rehab Life named Company of the Year 2000 by CIBGNY (Council of Insurance Brokers of Greater New York). 2001

The company receives its license from the NY State Insurance Department to teach Continuing Education classes for brokers/agents. The company starts adding enhanced beneﬁt options to its DBL policy. Today, these options range from 1.5x, 2x, 3x, 4x, and 5x DBL to in-hospital and AD&D beneﬁts.

2003 First Rehab Life named Company of the Year 2003 by PIA NY Long Island RAP (Regional Awareness Program). 2004 First Rehab Life named Company of the Year 2004 by KAIA (Korean American Insurance Association). 2006 First Rehab Life celebrates its 100,000th active DBL policy. 2009 The company enters a new era with its new Executive Management Team: Richard White (CEO), Constantine Lappas (COO), and Bruce Wallach (CFO). 2010 First Rehab Life introduces a new Dental policy with an intuitive online quote and application system. The Company’s web site was awarded an APEX (Awards for Publication Excellence). 2011 The company introduces a new Term Life product on a non-roster basis, which is the first product of the newly developed BaseLine Product Suite (employee benefits without enrollment or roster lists). 2012 First Rehab Life launches BenePaks (packaged small group benefits) and Hospital Cash, which is also available as a BaseLine version. 2013 The Company becomes the leading carrier of New York State DBL*. The company currently insures more than 150,000 policyholders.

2014 ShelterPoint - Chapter 3 2014 First Rehab Life changes its name to ShelterPoint Life Insurance Company. The Company also acquires a Florida-domiciled insurance company that’s licensed in 48 states and territories: ShelterPoint Insurance Company is a wholly owned subsidiary carrier. Both entities are branded under the name ShelterPoint. *Source: DB-680 reports as filed by all statutory disability carriers with the State of NY, at time of report covered premium was at $65m.

28 September 15, 2014 / INSURANCE ADVOCATE

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INA 9-8-14_INA 9-15-14 9/26/14 11:07 AM Page 30

[ NEWS NOTES ]

MSO Outing Benefits Emmanuel Cancer Foundation

len Rock, N.J.—MSO®, Inc., an insurance rating/service bureau located in Glen Rock, NJ, held its 21st Annual MSO Golf Outing on May 20, 2014. At the outing, held at the Heron Glen Golf Course in Ringoes, N.J., MSO offered attendees and companies the opportunity to sponsor a hole, with proceeds going to Emmanuel Cancer Foundation. For over 20 years, MSO has held a biweekly food collection for the Emmanuel Cancer Foundation (ECF) and their food pantry. (www.emmanuelcancer.org) ECF provides much-needed support to New Jersey families of children who have been diagnosed with cancer. Thanks to the generous donors, MSO was able to collect $4,173 for ECF. The “big” check was delivered to Laura Savage, Northern Regional Director for the Emmanuel Cancer Foundation Northern Regional Center by Jan Scites, Megan Richards and Pepper Treuvey of MSO, Inc. MSO is a national property/casualty rating service bureau, providing product development and rating services to the insurance industry since 1944. MSO has long been an industry leader, offering programs that are comprehensive and easy to use. MSO’s plain language programs save companies money

L-R: MEGAN RICHARDS, MSO MANAGER OPERATIONS AND MARKETING; LAURA SAVAGE, NORTHERN REGIONAL DIRECTOR FOR THE EMMANUEL CANCER FOUNDATION; AND PEPPER TREUVEY, MSO CORPORATE SECRETARY AND SENIOR PRODUCT DEVELOPMENT ANALYST.

by clearly excluding coverage for claims that were never intended to be paid. Consistency of policy wording between the programs also makes claims handling easier. MSO will work with companies to customize programs to meet a company’s marketing and underwriting requirements.

Daniel Stedman to VP Commercial Lines Preferred Mutual

EW BERLIN, N.Y.—Daniel Stedman was recently promoted to the role of Vice President, Commercial Lines Profit Center at Preferred Mutual Insurance Company. Stedman joined the Company in 2013 as the Director of Commercial Lines Underwriting. “During his time here, Dan has partnered with his leadership team to develop and deploy strategies that support our growth and profitability goals, while striving to achieve operational excellence,” said Brian Lopata, Senior Vice President, Profit Center Operations and Customer Relations. “Dan’s experience, in combination with his subject-matter expertise, are important to our organization’s future growth in com30 September 15, 2014 / INSURANCE ADVOCATE

mercial lines and our ability to reach our 2020 vision.” Stedman has more than 30 years of experience in Commercial Lines underwriting, having worked as an underwriting manager for large accounts at a super-regional carrier. He also has leadership experience for general business underwriting in multiple states. DANIEL Stedman obtained his Bachelor of Science degree from the State University of New York at Oswego. He holds the Chartered Property Casualty Underwriter Associate in Risk Management, Associate in Underwriting,

For information on all of the programs and services offered by MSO, call Sue C. Quimby, CPCU at (800) 935-6900 ext. 111. Email: MSO_Press@msonet.com. Mail to: MSO, Inc., 139 Harristown Road, Suite 100, Glen Rock, NJ 07452. Visit us on the Internet at www.msonet.com .[IA]

Associate in Automation Management, Associate in Reinsurance, Associate in Fidelity and Surety Bonding, Associate in General Insurance, and the Certificate in General Insurance designations. Preferred Mutual Insurance Company provides property and casualty insurance coverage to more than 250,000 individual and business customers through a network of more than 450 independent agents throughout New York, New Jersey, Massachusetts and STEDMAN New Hampshire. The mutual insurance company, in business since 1896, employs more than 260 employees and is headquartered in New Berlin, New York. The company is rated “A” for excellent through A.M. Best.[IA]

INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 31

INDEPENDENT INSURANCE AGENTS ASSOCIATION

Annual Golf Classic Thursday October 9, 2014 New Location Hempstead Golf & Country Club 60 Front Street Hempstead, NY 11550 Honoring

Peter N. Resnick Executive Vice President Interboro Insurance Group

2014 Outstanding Company Executive Award

INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 32

[ IN THE ASSOCIATIONS ]

Ian McKechnie Named MSO Vice President, Actuarial Services

len Rock, N.J.—MSO, Inc. (the Mutual Service Office, Inc.) is pleased to announce the addition of Ian M. McKechnie, CPCU, ARP, CIDM, AIAF, CSF, ARe, FLMI, ARC, AU to their management staff. As Vice President, Actuarial Services, he is responsible for development of loss costs, creation of an updated statistical database and introduction of additional actuarial services. Mr. McKechnie previously served as an actuarial consultant to MSO. Prior to his work at MSO, Mr. McKechnie was involved in pricing and product development for a number of property and casualty insurance companies. Mr. McKechnie is a graduate of Johns Hopkins University and has earned numerous actuarial and insurance designations. When asked about joining MSO, Mr. McKechnie stated, “I am excited to join the MSO team and participate in the

“This is an exciting time to join MSO as the scope and scale of MSO’s offerings expands.” improvement of existing MSO products and & services and the development of new ones. MSO has a rich history of providing innovative programs that open new market opportunities for MSO member companies. This is an exciting time to join MSO as the scope and scale of MSO’s offerings expands.” According to MSO CEO, Jan Scites, “We are delighted to have Ian McKechnie join our staff. He brings proven analytical skills to help in our development of upgraded statistical and actuarial services and program loss costs as we expand nationally. ”

MSO is the oldest continuously operating property/casualty rating service bureau, providing product development and rating services to the insurance industry since 1944. MSO has long been an industry leader, offering programs that are comprehensive and easy to use. MSO’s plain language programs save companies money by clearly excluding coverage for claims that were never intended to be paid. Consistency of policy wording between the programs also makes claims handling easier. MSO will work with companies to customize programs to meet a company’s marketing and underwriting requirements. For information on all of the programs and services offered by MSO, call Sue C. Quimby, CPCU at (800) 935-6900 ext. 111. Email:MSO_Press@msonet.com. Mail to: MSO, Inc., 139 Harristown Road, Suite 100, Glen Rock, NJ 07452. Visit us on the Internet at www.msonet.com.[IA]

INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 33

Defensive Driving Class Opportuni es! We are looking for Delivery Agents, Instructors, and Facili es in ALL Areas of New York to Par cipate! The Benefits of choosing Empire Safety Council: · LOW START UP COST All required materials compare favorably in price. · EASY TO TEACH FORMAT Instructor’s manual is logically organized and cross referenced to the student workbook and the NYS Vehicle & Traffic Laws. · PIRP IS GROWING Every year, on average 150,000 of New York’s drivers choose Empire for their Point / Insurance Reduc on needs. · BACKED BY SCIENTIFIC RESEARCH Empire’s Accident Preven on Workshops, in fact, save lives by reducing both the number of vehicle accidents and repeat traffic offenses for the highest overall effec ve rate in driver safety educa on. · MAINTAIN THE HIGHEST INTEGRITY Empire maintains the highest integrity among all sponsors by referring all students to Empire’s officially approved Delivery agencies

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By law, NYS drivers who complete Empire’s 6-hour accident preven on workshop save 10% on all their vehicle liability, personal injury protec on, and collision insurance premiums for three years. Addi onally, students can reduce up to four traffic violator points on their driving record every 18 months. Upon comple on of the course, students will receive an official course comple on cer ficate. ESC helps organize classes, appoint delivery agents, train instructors, fill out applica on to obtain approval (usually within two weeks), refer students, and further assist you with adver sing support programs.

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INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 34

[ TECHBI T E S ]

By Jim Dicso, President & CRO, SundaySky

The Age of the Customer: Companies Turn to Enhanced Video Communication

n the last century, business sources of dominance have evolved from mass manufacturing to global distribution to information mastery. Today, we’ve entered the next generation of the business evolution – the age of the customer – in which the standout brands, such as Apple, USAA and Southwest Airlines, hold power

tions and claims submissions, details and status notifications. They should complement traditional quote, policy, statement and claims communications for an integrated CRM process. Insurance carriers continue to hold customer acquisition and retention as top initiatives, and personalized video is an effective tool delivered at

As digital experiences continue to disrupt every industry, especially traditional insurance, brands need to find a way to address rising customer expectations while enhancing customer experience and satisfaction.

estimate process. Retargeted pre-roll ads can pull in data elements such as the prospect’s zip code and age, and deliver a 15- or 30-second personalized video ad most relevant to the viewer, whether referencing the Los Angeles traffic scene and accident forgiveness plans, or safe driving rewards to teenage drivers in upstate New York. Personalized video ads should include calls to action that drive performance, such as “get a quote today.” Once a prospective customer has returned back to the webpage to complete the quote estimate process, a personalized video follow-up communication recapping and detailing the proposed policy can further drive customer acquisition. By includ-

Jim Dicso

by being customer-obsessed and by engaging with empowered customers where and when it matters most to both the brand and customer. As digital experiences continue to disrupt every industry, especially traditional insurance, brands need to find a way to address rising customer expectations while enhancing customer experience and satisfaction.

Enter Digital Video From the origins of the YouTube video portal to scalable on-site e-commerce product videos to multichannel strategies, video has evolved significantly to become a digital communication that can now be personalized to the individual viewer. Customer data and analytics from CRM and lifecycle marketing platforms can be applied to the highly engaging, visually appealing and powerful storytelling medium that is video. When personalized video is delivered to the customer at the most relevant touch point with information in real time, the experience is even more effective and appealing. Specifically for insurance marketers, data-driven videos might include an individual’s policy information, agent interac34 September 15, 2014 / INSURANCE ADVOCATE

touch points throughout the customer lifecycle and across devices and channels, especially via email and mobile, as well as within portals and via IPTV.

The Value of Video for Customer Acquisition Typically, insurance marketers use online video as an awareness tool, yet personalized videos can also offer value as effective mediums to drive conversions and acquire new policyholders. Personalized video ads can be delivered mid-funnel after a prospect abandons a website page before completing the quote

ing the prospective policyholder’s information – such as quote explanation, monthly payments and additional coverage options – a relevant yet easily digestible and visual tool can help educate a consumer and drive him to purchase a policy. Additionally, the use of personalized video communication at the onset of the customer relationship establishes positive customer expectations for future communications.

Personalizing Customer Onboarding After a customer purchases a new pol-

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[ T E C HB IT E S ] icy, it is imperative he feels reassured that he made the right choice, as this is the optimal window of time in which insurers can create brand stickiness with the customer. This begins with how new policyholders are welcomed and continues with proactive, multi-touch engagement throughout the first year the policyholder is with the insurance company. Insurers can use customer information to generate personalized videos to engage and educate individual customers about their specific policies, explain the first policy statement using the customer’s account data, set expectations for delivery of documents, and highlight value-added services for the customer. In addition, personalized video can transform the traditional insurance statement experience into one powered by sight, sound and motion to more easily understand a typically overwhelming communication piece. Personalized onboarding videos have proven to deliver, on average, a 16 percent click-through rate on in-video calls to action promoting self-service tools such as auto-pay and paperless statements, an 80 percent positive brand impact rating and a 97 percent “found video helpful” rating from new policyholders who view their videos.

The impact on Customer Retention There are moments throughout the customer lifecycle when personalized, individual attention is necessary to resolve issues that often spur excessive support calls to the contact center. The claims-handling process in particular is unfortunately known as a pain point for customers and, more often than not, a barrier to growing customer relationships, satisfaction and loyalty. Even more, claims are a top churn factor and represent a company’s largest operational expense. How insurers educate claimants and handle the communication process can make all the difference to customer satisfaction, retention and profitability. Personalized videos can leverage policyholder profiles and claim-specific data to proactively support the complex claims process. Depending on where the claimant is in the process, the video might explain the claims process, set expectations based continued on page 36

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[ TE CHBITE S ] continued from page 35

on claim type and coverage level, specify steps that can be taken to expedite the process, identify a claim adjustor and local repair shops, or explain how to check future claim status online. Insurance companies can build consumer confidence in the claims process and control the high costs associated with these calls throughout the claims lifecycle, including reduced number of claim-related

calls to the contact center and a reduction in average handle time of calls that are received. And a positive, enhanced customer experience means increased customer satisfaction, and ultimately, a higher customer retention rate. Companies that put the customer front and center separate themselves from the pack with excellent customer experience. Insurers that move toward a smarter, more data-driven approach to customer communications can expect higher retention

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Insurers that move toward a smarter, more datadriven approach to customer communications can expect higher retention rates of policyholders and higher satisfaction, increased customer referrals and a reputation for staying relevant in a changing market.

Jim Dicso is President and Chief Revenue Officer at SundaySky. Prior to joining SundaySky, Jim was executive vice president of sales and services at LivePerson, a SaaS-based provider of real-time online customer engagement solutions. During his tenure, LivePerson business solutions revenue grew from $17M to $96M and operating earnings grew from $2M to $30M. While at LivePerson, he built the enterprise sales organization from scratch and led the extended sales and service organization in developing and executing the go-to-market strategy while also leading the introduction of new business models to scale the business. Prior to LivePerson, Jim held multiple sales leadership roles in his two years at Witness Systems and eight years at Parametric Technology Corporation (PTC), including a four-year assignment in the UK and Europe. Prior to that, Jim served in a variety of sales positions over four years with Xerox Corporation. At SundaySky, Jim drives the go-tomarket strategy, sales execution, business development and revenue growth for SundaySky to support the growing market demand for the company’s solution. Mr. Dicso received a B.S. in Electrical Engineering from Villanova University.

INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 37

[ COMPANY NEWS ]

Interboro Celebrates 100 Years!

nterboro Insurance Group was proud to host their 100th Anniversary Party on July 9, 2014, at The Carltun in Eisenhower Park. The evening was enjoyed by over 250 guests who included employees, brokers, vendors and a variety of other business associates. To make the event more enjoyable, it was complete with buffet stations all through the venue, three open bars, a one man band with corresponding dance floor, a professional photographer, speeches including employee recognition,

ABOVE L-R: MADELINE PILOTO, ALBERT BREWER, BARBARA PUMA AND BARBARA REGINIO.

BELOW L-R: DAVID NICHOLS, LINDA JOHNSON, PETER SCHIFF, CHANTAL LECORPS, JOHN REED, PETER RESNICK AND ALBERT BREWER.

customized mint packs on all the tables, plus company umbrellas and travel bags for everyone. Interboro received compliments right from the start after sending the artistically tasteful e-vites, as well as both during and after the impressive event itself which created quite a buzz. The attendees were in awe and expressed their gratitude for being included in the celebration. Cheers to Interboro and hereâ&#x20AC;&#x2122;s hoping for the next 100 years to be even bigger and better![IA]

ABOVE L-R DAVID NICHOLS AND PETER RESNICK

BELOW L-R: DAVID NICHOLS, STEVE ACUNTO, PETER RESNICK AND THOMAS COLLETT

INSURANCE ADVOCATE / September 15, 2014 37

INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 38

[ ON TH E LEVEL ]

By Jamie Deapo

Out With The Old, In With The New

n October 28th, 2014 a unique and exciting insurance event will be revealed. Unique because it offers an event that embodies what today’s independent agent and broker are looking for. Exciting because in its first year NYiDAY has developed into exactly the event agents indicated they would definitely support and attend. NYiDAY started out as an idea and discussion less than one year ago. Agents in Metro New York and Long Island wanted to recreate a big insurance event in their backyard that delivered the Jamie Deapo characteristics they felt would bring active participation by agency owners and key staff. The solution was developed after many conversations and discussions. Those discussions indicated that current insurance events were not providing owners and key staff with the information they wanted and needed. The events weren’t exciting and interactive as they lacked the benefits of today’s technology. Most important of all, because of these shortcomings, current events weren’t attracting the right attendees in sufficient numbers to be successful. All of this input was gathered and closely reviewed. The result became the basis of the theme for NYiDAY: Hundreds will gather in Times Square, New York City with some of the top names in the insurance industry for a one-day infusion of progressive ideas, knowledge, contacts and solutions that can be implemented immediately. Actionable, thought-provoking sessions will deliver relevant and forward thinking info for the agency of today and the future. A dynamic trade show format will expose you to high-end solution providers. Live demonstrations will showcase the latest technology. Engaging speakers will inspire. 38 September 15, 2014 / INSURANCE ADVOCATE

In one day you will change the way you look at your agency and yourself. This is the new insurance event for New York. This is NYiDAY. Having an excellent location for the event was critical. Agents advised “go big or go home”. We took that advice and chose the Millennium Hotel in Times Square as our location. After a long day of insurance talk, education and technology our agent advisors said they wanted a well known Keynote Speaker that came from outside the insurance industry. Although not completely outside the insurance industry, we were really excited in landing our Keynote Speaker, Boomer Esiason. Boomer was born and raised on Long Island. He had a 14-year NFL quarterback career including 3 seasons with the New York Jets from 1993-1995. He is currently the co-host of Boomer and Carton in the Morning broadcast on WFAN. Boomer isn’t totally outside the insurance industry as you will find him on the cover of this September’s Best Review magazine that talks about his role as National Spokesperson for Life Insurance Awareness Month. With the exceptional location and exciting Keynote speaker another challenge was to put together a handpicked group of exhibitors that would expose registrants to new and unique products and services designed to use current technology and information in streamlining agency operations. In today’s competitive marketplace providing agents and their staff more time to spend working with clients and prospects is critical to writing and retaining business. We believe we have developed a focused group of exhibitors offering the right products and services. Several of the exhibitors will also be demonstrating their products in a special demonstration area for attendees to actually see how they work. Another challenge was to create a list of programs and classes offering attendees a wide selection of current and important subjects to discuss and learn. The morning starts with the two major User Groups hold-

ing meetings where discussions will center on enhancements to the Applied and Vertafore agency management systems. Along with the User Group Meetings there will be seven classes and seminars throughout the day starting at 10:30 and ending at 3:45. The instructors were chosen based on their significant expertise and the timeliness and relevance of their subject matter. The Insurance Think Tank discussion will be like nothing you’ve ever seen before at an insurance event. Rapidly advancing technology and changing demographics are shaping our world and the future of our industry. Residential 3-D printing, driverless cars, smart houses and wearable technology—the list goes on. Through lively discussions and video vignettes, our “thinkers” will examine these emerging consumer technologies; discuss the associated risks; and talk about the new opportunities that will exist for the insurance industry, including agents. Rather than try and highlight everything in this article I would merely recommend you visit the NYiDAY website and check out all this event has to offer. I can’t close without mentioning all of the technology that will be utilized at NYiDAY. From a mobile application to QR code name badges that attendees wear and exhibitors can scan with their smart phone this event will be truly state of the art. There will be digital signage updated regularly showing attendees what events are coming up and where they are located. Attendees will have access to a Digital Resource Center during, and for several months after, the event where exhibitors will be able to provide documents, video links and other electronic resources related to their products and services. As I mentioned before this event is definitely going to be different. I’ll just close by saying if you want to attend and experience a unique and informative insurance event like no other offered before then you need to be at NYiDAY. If you’ve already registered we thank you and encourage you to get ready for an awesome oneoday insurance event. If you haven’t registered don’t wait. Spots are filling up fast and if we sell out there isn’t any flexibility. I believe this day will be talked about for some time after it’s over and if you miss it you’ll have to wait for the 2nd Annual NYiDAY.[IA]

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INA 9-8-14_INA 9-15-14 9/26/14 11:08 AM Page 40

[ ON M Y RADAR ]

By Barry Zalma

Other Insurance Clause Raises Actual Controversy Self-Insured & Insurer “Other Insurance Clause”

hen two or more insurers agree to insure against the same risk of loss disputes often arise as to which insurer must pay on a primary basis, which is excess or whether they must

Dr. Cinoman is insured under a professional liability insurance policy issued by MMIC, which has treated its coverage as broad enough to cover the claims asserted against Dr. Cinoman in the underlying

its determination that no actual controversy exists as to the UNC–LITF’s duty to indemnify until the underlying malpractice action is finally resolved.

ANALYSIS When more than one insurance policy affords coverage for a loss, the “other insurance” clauses in the competing policies must be examined to determine which policy provides primary coverage and which policy provides excess coverage. Barry Zalma

share the liability of the insured on a pro rata basis. In Cinoman v. University of North Carolina, — S.E.2d —-, 2014 WL 2937050 (N.C.App.), the North Carolina Court of Appeal was called upon to resolve the dispute, not once but twice. In its final review of the case the court made its final order.

FACTS Plaintiffs Michael I. Cinoman, M.D. and Medical Mutual Insurance Company of North Carolina (“MMIC”) appeal from an order granting UNC defendants’ motion to stay this declaratory action pending a final resolution of the underlying malpractice action. In February 1999, Dr. Cinoman served as a temporary attending physician for fulltime rotations in the University of North Carolina Hospital at Chapel Hill Pediatric Intensive Care Unit (“UNC–PICU”) as part of an agreement to assist UNC defendants with a staffing shortage in the UNC– PICU. On 21 June 2007, Thomas M. Stern, as guardian ad litem for Armani Wakefall, initiated a medical malpractice action against Dr. Cinoman and others for damages allegedly incurred by Wakefall as a result of negligent treatment she received at the UNC–PICU in February 1999 (“underlying malpractice action”). 40 September 15, 2014 / INSURANCE ADVOCATE

malpractice action. UNC defendants maintained that Dr. Cinoman is not entitled to coverage under the University of North Carolina Liability Insurance Trust Fund (“UNC–LITF”), which provides coverage for claims against employees and agents of UNC defendants, because he was not a full-time employee of UNC defendants at the time of the events giving rise to the underlying malpractice action. In the absence of coverage by the UNC–LITF, the damages demanded in the underlying malpractice action allegedly exceed Dr. Cinoman’s professional liability insurance coverage. Dr. Cinoman and MMIC filed this declaratory judgment action to determine whether he is entitled to coverage under the UNC–LITF, in addition to his coverage under the MMIC policy, and the relative liabilities of MMIC and the UNC–LITF. Plaintiffs and UNC defendants moved for summary judgment, and the trial court granted summary judgment in favor of UNC defendants. After the trial court decision was reversed the UNC defendants moved to stay further proceedings in the declaratory relief action pending the final resolution of the underlying malpractice action. On appeal, it was claimed that the trial court erred by granting the stay based on

An actual controversy between adverse parties is a jurisdictional prerequisite for a declaratory judgment. An actual controversy exists where an insurer seeks a determination that primary coverage is not provided under its policy and is instead provided under policies issued by other insurers. No such controversy exists, however, in a declaratory judgment action to determine whether coverage is provided under an excess insurance policy where the underlying liability action has not yet been resolved. When more than one insurance policy affords coverage for a loss, the “other insurance” clauses in the competing policies must be examined to determine which policy provides primary coverage and which policy provides excess coverage. An excess clause is a type of “other insurance” clause which “generally” provides that if other valid and collectible insurance covers the occurrence in question, the excess policy will provide coverage only for liability above the maximum coverage of the primary policy or policies. An excess clause is distinguishable from a pro rata “other insurance” clause. Where a pro rata clause in one policy competes with an excess clause in another policy, the policy with the pro rata clause provides primary coverage, and the policy with the excess clause provides secondary coverage which will only be triggered if the limits of the policy containing the pro rata clause are first exhausted. In general, there is no primary versus excess insurance policy relationship where a self-insurance program is at issue because self-insurance does not constitute other collectible insurance within the meaning of an insurance policy’s “other insurance” clause. Self-insurance is equivalent to a primary insurance policy, however, when the self-insurance expressly provides that it is

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[ ON M Y RADAR ] primary to other insurance. The UNC–LITF is a self-insurance program for professional liability, authorized by state statute. The plain language of the following “other insurance” clause in the UNC–LITF Memorandum of Coverage is controlling: “When this agreement and other collectible insurance both apply to a loss on the same basis, whether primary, excess or contingent, the Trust Fund shall not be liable under this agreement for a greater proportion of the loss than that stated in the applicable contribution provision below: A. Contribution by Equal Shares. If all such other valid and collectible insurance provides for contribution by equal shares, the Trust Fund shall not be liable for a greater proportion of such loss than would be payable if each insurance company contributes an equal share until the share of each company equals the lowest applicable limit of liability under any one policy or the full amount of the loss is paid. With respect to any amount of loss not so paid, the remaining companies shall continue to contribute equal shares of the remaining amount of the loss until each such company has paid its limit in full or the full amount of the loss is paid. B. Contribution by Limits. If any of such other insurance does not provide for contribution by equal shares, the Trust Fund shall not be liable for a greater proportion of such loss than the applicable limit of liability under this agreement for such loss bears to the total applicable limit of liability of all valid and collectible insurance against such loss.” Nothing in this provision indicates that the UNC–LITF’s liability arises only after the limits of other collectible insurance policies have been exhausted. Rather, the provision provides that the UNC–LITF shares liability with other collectible insurance according to their respective limits.

Although a self-insured program like UNC–LITF is not insurance, when they write into their operational agreement an other insurance clause that requires UNC–LITF to share with other collectible insurance on a pro rata basis it creates a situation where it becomes “insurance” for the purpose of sharing the costs to defend or indemnify the insured. The pro rata clause means that the UNC– LITF provides primary coverage regardless of the terms of the MMIC policy. Because the UNC–LITF affords primary coverage, an actual controversy exists as to the UNC–LITF’s duty to indemnify, and the trial court erred by granting the stay based on its determination that no such controversy exists pending a final resolution in the underlying malpractice action.

ZALMA OPINION Other insurance clauses are important to every dispute between insurers. Although a self-insured program like UNC–LITF is not insurance, when they write into their operational agreement an other insurance clause that requires UNC– LITF to share with other collectible insurance on a pro rata basis it creates a situation where it becomes “insurance” for the purpose of sharing the costs to defend or indemnify the insured. Therefore, hoist on its own petard, UNC–LITF created an actual controversy that must be tried to determine if it owes a share of Dr. Cinoman’s defense. UNC–LITF could have avoided this decision and problem, if that is what it intended, by rewriting the other insurance clause to read: When this agreement (which is not insurance) and collectible insurance both apply to a loss on the

same basis, whether primary, excess or contingent, the Trust Fund shall not be liable under this agreement for any costs of defense or indemnity until the other collectible insurance is exhausted. UNC–LITF wrote their self-insurance program as if it was insurance and must, therefore, if coverage applies, share with MMIC on a pro rata basis. [IA] Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Mr. Zalma recently published the ebooks, “MOM and the Taipei Fraud;” “Zalma on Insurance Fraud – 2013 , “Zalma on California Claims Regulations – 2013 ; “Rescission of Insurance in California – 2013;” “Random Thoughts on Insurance” a collection of posts on this blog; “Zalma on Diminution in Value Damages – 2013,”“Zalma on Insurance,” “Heads I Win, Tails You Lose,” “Arson for Profit” and others that are available at www.zalma.com/zalmabooks.htm. Specialty Technical Publishers recently published Mr. Zalma’s new E-Book, “Getting the Whole Truth” which is available at http://www.stpub.com/ Getting-the-Whole-Truth_p_254.html. Specialty Technical Publishers publishes Mr. Zalma’s book, “Insurance Claims: A Comprehensive Guide” where you can get additional details on this subject by purchasing the book in print or digital format at http://www. stpub.com/insuranceclaims-a-comprehensive-guide-online. Mr. Zalma’s reports on World Risk and Insurance News’ web based television programing, http://wrin.tv or at the bottom of the home page of his website at http://www.zalma.com. INSURANCE ADVOCATE / September 15, 2014 41

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[ COURTSI DE ]

By Lawrence Rogak

Disclaimer Issued 24 Days After Notice of Suit is Timely; Carrier Needed To Investigate Guideone Ins. Co. v Darkei Noam Rabbinical Coll.

n an action for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendants Darkei Noam Rabbinical College, Darkei Noam, Inc., Keren Hachesed, and Keren Hachesed, Inc. in the underlying personal injury actions entitled Sigler v Keren Hachesed, Inc. (commenced in the Supreme Court, Kings County, under Index No. 6573/06) and Sigler v Yeshiva Darkei Noam (commenced in the Supreme Court, Kings County, under Index No. 35344/07), the plaintiff appeals from an order of the Supreme Court, Kings County (Solomon, J.), dated September 27, 2012, which denied its motion for summary judgment declaring that it is not so obligated and granted the cross motion of the defendants Darkei Noam Rabbinical

Where, as here, a policy of liability insurance requires the insured to provide notice of an occurrence “as soon as practicable,” notice must be given “within a reasonable time under all the circumstances…” College, Darkei Noam, Inc., Keren Hachesed, and Keren Hachesed, Inc., for summary judgment declaring that the plaintiff is so obligated. ORDERED that the order is reversed, on the law, with costs, the plaintiff ’s motion for summary judgment declaring

that it is not obligated to defend or indemnify the defendants Darkei Noam Rabbinical College, Darkei Noam, Inc., Keren Hachesed, and Keren Hachesed, Inc., in the underlying actions is granted, the cross motion of the defendants Darkei Noam Rabbinical College, Darkei Noam, Inc., Keren Hachesed, and Keren Hachesed, Inc., for summary judgment is denied, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the plaintiff is not so obligated. On July 25, 2005, David Sigler allegedly was injured when he slipped and fell on property owned by the defendants Keren Hachesed and Keren Hachesed, Inc. (hereinafter together the Keren Hachesed defendants). The defendants Darkei Noam

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[ COURTS I D E ] Rabbinical College and Darkei Noam, Inc. (hereinafter together the Darkei Noam defendants), leased that property to operate a synagogue and rabbinical college. By September or October 2005, the Darkei Noam defendants learned that someone had fallen in the synagogue, but did not investigate further. On June 6, 2006, a few days after the Darkei Noam defendants learned of Sigler’s personal injury action against the Keren Hachesed defendants, the Darkei Noam defendants notified their liability insurance carrier, the plaintiff Guideone Insurance Company, of the underlying incident. After investigating the delay in notice, the plaintiff disclaimed coverage for the loss, citing the Darkei Noam defendants’ late notice of the occurrence in violation of the insurance policy. The Darkei Noam defendants contested the disclaimer. Thereafter, the plaintiff commenced this action for a judgment declaring that it is not obligated to defend or indemnify the Darkei Noam defendants or the Keren Hachesed defendants. The Supreme Court denied the plaintiff ’s motion for summary judgment and granted the cross motion of the Darkei Noam defendants and the Keren Hachesed defendants for summary judgment declaring that the plaintiff is obligated to defend and indemnify them. The plaintiff appeals. Where, as here, a policy of liability insurance requires the insured to provide notice of an occurrence “as soon as practicable,” notice must be given “within a reasonable time under all the circumstances” (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441 [internal quotation marks omitted]; see Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 19; Sputnik Rest. Corp. v United Natl. Ins. Co., 62 AD3d 689, 689). Here, the subject policy was issued in 2004, and therefore, is not governed by the 2008 Amendment to Insurance Law § 3420 (for policies issued after January 17, 2009), which provides that an insurer can only disclaim coverage based on untimely notice if it shows that it was prejudiced by the failure to provide timely notice (see Insurance Law § 3420[c][2][A]; see also Zimmerman v Peerless Ins. Co., 85 AD3d 1021, 1023). An insured’s failure to satisfy the insurance policy’s notice requirement constitutes “a failure to comply with a condition prece-

dent which, as a matter of law, vitiates the contract” (Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339; see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; White v City of New York, 81 NY2d 955, 957; McGovern-Barbash Assoc., LLC v Everest Natl. Ins. Co., 79 AD3d 981, 983). Here, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law with evidence that the Darkei Noam defendants learned of the underlying incident in September or October 2005, but waited until June 2006, approximately nine months later, to notify the plaintiff (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742; Argentina v Otsego Mut. Fire Ins. Co., 86 NY2d 748, 750; Albano-Plotkin v Travelers Ins. Co., 101 AD3d 657; Columbia Univ. Press, Inc. v Travelers Indem. Co. of Am., 89 AD3d 667). In opposition, the Darkei Noam defendants failed to raise a triable issue of fact as to whether their failure to investigate the underlying incident in September or October 2005 was reasonable, or to otherwise demonstrate a goodfaith belief in nonliability (see Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436; Lancer Ins. Co. v Super Value, Inc., 96 AD3d 807; Fine Line Bldrs. & Remodelers, Inc. v Atlantic Cas. Ins. Co., 90 AD3d 702). Contrary to the contention of the Darkei Noam defendants and the Keren Hachesed defendants, the plaintiff’s short delay in disclaiming coverage was reasonable under the circumstances. While Insurance Law § 3420(d)(2) requires an insurer to give written notice of a disclaimer of coverage “as soon as is reasonably possible” (Insurance Law § 3420[d][2]; see Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029), an investigation into issues affecting the decision whether to disclaim coverage may excuse delay (see Quincy Mut. Fire Ins. Co. v Enoe, 107 AD3d 775, 776). The insurer bears the burden of explaining the delay in notifying the insured of the disclaimer. Here, the plaintiff made a prima facie showing of its entitlement to judgment as a matter of law by demonstrating that it sent a disclaimer only 24 days after receiving notice of the underlying incident and, during those 24 days, it diligently investigated the possibility of a disclaimer based on the Darkei Noam defendants’ untimely notice. In opposition, the insureds, the Darkei Noam defen-

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Ask For Richard or Evan Bower. 516-576-0400 Ext. 0 E-Mail: rbower@thebggroup.com www.thebggroup.com dants, failed to raise a triable issue of fact as to the timeliness of the disclaimer. Therefore, the plaintiff’s notice of disclaimer was timely as a matter of law. Moreover, the plaintiff correctly contends that the Keren Hachesed defendants are not a named insured or additional insured under the Darkei Noam defendants’ insurance policy (see Fieldston Prop. Owners Assn., Inc. v Hermitage Ins. Co., Inc., 16 NY3d 257; Raymond Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 5 NY3d 157). Accordingly, the plaintiff is not obligated to defend or indemnify the Keren Hachesed defendants. Because this is a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of a judgment declaring that the plaintiff is not obligated to defend or indemnify the Darkei Noam defendants or the Keren Hachesed defendants in the underlying actions (see Lanza v Wagner, 11 NY2d 317, 334). [IA] 2014 NY Slip Op 05839 Decided on August 20, 2014 Appellate Division, Second Department INSURANCE ADVOCATE / September 15, 2014 45

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[ THE LAST WORD ]

By DeEtta Jones

Take Control of Your Brand: The 4Cs of Brand Management

here are plenty of reasons to care about your brand, and high among them should be to make your voice heard: your unique voice. Voice is the contribution made to something larger than oneself. It’s the medium for sharing one’s purpose, values, talents and vision for the future. Yes, there are plenty of examples in contemporary society of people creating a shallow brand seemingly for the sole purpose of increasing the number of social media followers. But, before you too hastily follow that line of thinking, consider the bigger picture—and your values. Where do you want your name and legacy to appear in people’s minds and hearts? Some of the most fundamental elements of a value-rich personal brand are reflected in the 4Cs of brand management: 1. Conviction. How do your values show themselves in your life? In the way you carry yourself? In your conversations, friendships, choices? How do others know what you stand for? People with strong brands—those who are most influential and apt to attract followers and allies—are mission-driven. Their words and deeds are predictably consistent with their values. Conviction is more than a noble concept; it’s about having an unimpeachable character that is, and is understood by others to be, working in the service of something greater than yourself. Again, what is the “greater good” that you are striving for, and is it known to others through the large and small behavioral choices you make on a regular basis? 2. Caring. Managing your brand means caring enough about how you are perceived to invest time and be open to behavioral modifications. Captain Ronald Johnson of the Missouri Highway Patrol, brought in to turn around the riots in Ferguson, MO, personified caring at the press conference held on August 15, following the shooting of Michael Brown. Media from around the country were carefully positioned to record his every word, yet the locals standing 20 feet in front of him could not hear his remarks. Brown walked away from the staged microphone and into the crowd because, as he stated, “my concern is that 46 September 15, 2014 / INSURANCE ADVOCATE

the members of our community hear me and be heard.” People who are most in control of their brand are able to keep small the gap between how they see themselves and how others see them. Research shows that with ascension in titular leadership this becomes more difficult, particularly because there is less access to the unfettered truth. Simply, the higher one goes up the proverbial ladder, the smaller the peer group becomes. Fewer peers means there are less people willing (often because of fear of reprisal) to share honest perspectives about the behaviors that need to stop or be changed. Without access to this feedback, and with ascension, it is easy to only pay attention to the limited, and affirmative, feedback received. Over time, and as people are expected to perform in increasingly sophisticated and politically nuanced environments, the higher the probability that past strengths will become weaknesses. A classic example of this is people who move from #2 to #1 positions in an organization. The operational strengths that helped them move through their career are no longer considered as relevant when one is expected to perform as a strategy-savvy CEO. Caring is also—and perhaps appropriately weighted—being concerned about the impact you are having on others. 3. Class. “Keep it classy” is a mantra for those who sometimes forget that brand is shaped with every choice made, every word uttered. Whether choosing to act or not act a choice is being made. Even thoughts are choices—choosing to focus mental and emotional energy on certain things over others. Classiness requires intentionality. Think of your life as a story to be displayed on a television show. You are one of several cast members, each requiring a clear identity that contributes to the overall theme of the show. Who are you relative to the other members of the cast? Are you the Protagonist? Hero? Victim? Underdog? Create a personal narrative; psychologists call it self-authoring. You decide the story line, then position yourself in the role that is most desirable for you and others.

Writing the story forces you to explore the needs and motivations of others; to develop the characters and your relationship to them—your colleagues, boss, clients, children, spouse or partner and friends. This desire to understand what motivates others is a key to fully fleshing out your character’s role and behaviors in enacting the story. It is also the essence of building a strong personal identity—understanding yourself in relation to the needs and motives of others is one of the most effective ways to create a credible brand, a brand powerful enough to positively influence others. 4. Conﬁdence. Confidence is the toughest of the Cs in this list. It can’t be taught or bought; it has to be earned. There are people who are full of shallow entitlement that comes across as smug confidence. Don’t pay attention to them, and certainly don’t let yourself become one of them. It’s transparent. They’re hiding something, which will be discovered in time. Earned confidence is beautiful to observe. It shows itself as an effortless comfort in one’s being, requiring no airs. People with a deep sense of personal confidence often have many relationships, varied interests and deep passions, make an effort to stretch their boundaries and are comfortable saying no. Confidence is built through experience and relationships, and wise people invest—on an ongoing basis—in the nurturing and acquisition of both. Here’s the simple truth: perception does count. People make split-second judgments all the time. Taking control of your brand means that you are putting yourself in the driver’s seat, making a conscious choice to intentionally reflect behaviors and choices that allow the best of you to shine.[IA] DeEtta Jones is a leadership strategist, social justice advocate and author. She has more than 20 years of experience working with individual leaders and teams in some of the world’s most prominent universities and corporations. Her multidimensional background and fresh perspective leaves clients feeling heard and empowered to take on some of the major organizational and workforce challenges of our times. For more information or to have DeEtta speak at your next event, please visit http://www.deettajones.com.

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