January 28, 2019 Insurance Advocate

Vol. 130 No. 2 | January 28, 2019

Eager for Their Inheritance Gen Xers and Millennials are ready to carry the collec ble-car torch

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Sheltering You.

16 Eager for Their Inheritance

Contents

4 Foreword: Hear and There

Steve Acunto, Publisher 6 HR Update: Offer Letters and Employment Agreements: Is There a Difference?

Alfred T. DeMaria 8 In the Associations: PIANY Announces Award Recipients at this Year’s MetroRAP 10 In the Associations: NAIC Names 2019 Leadership 11

MSO: Tips for Safer Winter Travel Sue C. Quimby

12 In the Associations: Sen. Breslin Introduces ELANY Supported Bill 14 In the News: AmTrust Names Executives, Announces Long-Term Effort

15 In the News: ATIC Files $28M Lawsuit

Preferred Mutual Announces Executive Team Appointments

20 Guest Article: Millennials: A Generation Receptive to Financial Guidance

Joseph B. Fitzgerald 24 On My Radar: A Clear and Unambiguous Exclusion Can’t Beat a Great Lawyer

Barry Zalma 26

Looking Back: December 11, 1993

28 Courtside: Court Orders Sanctions Inquiry Against Attorneys Who Sued Wrong Insurer

Lawrence N. Rogak info@insurance-advocate.com www.insurance-advocate.com

29 Guest Opinion: New Years Wish: No More Morally Superior Phonies

Marilyn M. Singleton, M.D. INSURANCE ADVOCATE / January 28, 2019 3

[ FOREWORD ]

STEVE ACUNTO, EDITOR & PUBLISHER

Hear and There

4 January 28, 2019 / INSURANCE ADVOCATE

H

appy to hear from Dan Palmieri, John Di Forte, Joe Coughlin and so many friends over the holidays. Had a lovely dinner with friends and their spouse in Palm Beach: Jim Wrynn, Vince Laurenzano, Marty Carus, and Marsha Cohen. There is life in Palm Beach…up to about 9:00PM.… Am I missing something or is the NAIC going a little overboard in its assumed mandate?

Look at the topics covered by the group in this issue.…The Bill S 769 that Senator Breslin has introduced needs work but holds benefit for agents and brokers – see the article in this issue.… According to Amit Unde, Chief Technology Officer for the Insurance practice at LTI, a global IT firm specializing in Artificial Intelligence (A.I.). A.I. can solve several issues for both the insurer and consumer. A.I. can: enhance the quality of search results with contextual relevance rankings; enhance user’s experience by suggesting Google-like word suggestions; be leveraged for developing digital assistants that can parse ‘natural language’ and understand the intent of the requested search; add value by recommending other relevant products/documents that typically go together; do the heavy lifting of classifying and annotating millions of docs to improve the relevance of search. To skeptics like me, the only Artificial Intelligence I would like to see is the brain that I would like to insert into one insurance exec who is wasting time and money on an insanely politically correct initiative instead of sticking to their knitting. Otherwise, I am willing to see what A.I. can do for the business. Agents need not worry about being thus replaced; I have heard and seen the press predictions about A.I.’s value as a replacement and, believe me, it is NOT happening, except maybe in the areas lined up by Unde above.…

Speaking of predictions, Scott Walchek (pictured right), CEO of TROV, a California based international company in InsurTech, has these predictions for his field: consolidation in InsurTech is forthcoming and will be primarily driven by incumbents acquiring to either strengthen or expand their product and con-

sumer offerings; funding for InsurTechs will be harder to come by as VCs tighten their wallets given the extended time horizon accompanying insurance economics; the first cohort of InsurTechs will be reaching their refinancing threshold, and some may not make it; artificial intelligence (AI), particularly for claims and risk selection, will become more nascent while blockchain will fade from the popular narrative; and, mobility will be the battleground for both carriers and InsurTechs, especially concerning micro-mobility (e.g., first and the last mile), and new models employed by OEMs. With all of the conferences springing up on the subject, I hope that he is wrong about the interests of investors.… LICONY President Mary Griffin (pictured above) weighed in on the departure of Maria Vullo (pictured left) as reported in our last issue: “Maria T. Vullo has served the Governor with distinction at the Department of Financial Services. She has been a strong, energetic regulator and can claim a number of accomplishments during her tenure – including support for principle-based reserving, establishment of the first Insurance Advisory Board, and promulgating the first state-level cyber security regulation in the nation. As Superintendent, Maria was generous with her time and spoke at many LICONY functions, met with companies and our Board, provided insight on compliance questions and set up task forces for industry input on new and proposed regulations. We wish Maria well in her future endeavors.”

We join with Mary and the chorus of those who feel she did a fine job.

S I N C E

1 8 8 9

VOLUME 130 NUMBER 2 JANUARY 28, 2019

www.insurance-advocate.com EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Jamie Deapo Alfred T. DeMaria Sari Gabay Lawrence N. Rogak Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Gina Marie Balog-Sartario 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x113 circulation@cinn.com PUBLISHED BY CINN Global Initiatives P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | info@cinn.com www.cinn.com President and CEO Steve Acunto

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[ HR UPDATE ]

ALFRED T. DEMARIA

Offer Letters and Employment Agreements: Is There a Difference? u A common question that often arises when hiring new employees is whether to use an offer letter or an employment agreement. Both the offer letter and employment agreement serve the same basic purpose – to memorialize in writing the terms and conditions of employment. But each also serves additional purposes and understanding the differences will ensure that you use the right document in the appropriate situation.

Offer letters are typically short documents containing very basic terms and conditions of employment. A hallmark of an offer letter is the “atwill” employment provision, which provides that an employee can be terminated for any reason or for no reason at all (except an illegal one).

Employment extended through offer letters can also be made contingent on successful completion of background checks and employment eligibility verification.

Importantly, they should contain language specifying that the letter is not a contract.

This gives the employer the ability to change terms as new circumstances arise.

A hallmark of an offer letter is the “atwill” employment provision, which provides that an employee can be terminated for any reason or for no reason at all (except an illegal one).

Employment agreements on the other hand are lengthier documents that include more complex and sophisticated terms covering such things as non-solicitation, confidentiality, compensation, benefits, job duties and the circumstances under which the employee can be terminated. They are intended to be binding on both sides.

Which One Should Employers Use? It depends on the type of hire. The more formal employment agreement is most commonly used with highlevel employees due the complexity of their relationship with the employer.

BARRY ZALMA, INC. 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

Mr. Zalma recently published on Amazon.com with links at the Zalma Books site, with the following: Non Fiction books: • “Random Thoughts on Insurance • “Insurance Fraud & Weapons to Defeat Volumes IV and V: Digests from Barry Insurance Fraud” In Two Volumes Zalma’s Blog: ‘Zalma on Insurance’” • “The Compact Book on Adjusting Fiction: Liability Claims: A Handbook for the • “HEADS I WIN, TAILS YOU LOSE” Liability Claims Adjuster” • “Candy and Abel: Murder for • “The Compact Book on Adjusting Insurance Money” Property Claims” • “Ethics for the Insurance Professional” • “Murder And Insurance Fraud Don’t Mix” • “Rescission of Insurance” • “Murder & Old Lace” • “The Insurance Examination Under Oath”

Alfred T. DeMaria is a Senior Partner at Clifton Budd & DeMaria, LLP and is recognized as one of the preeminent management labor attorneys in the field. He has extensive experience in all areas of employment law, including advice on avoiding liability under disability, race, gender, age and related anti bias laws.

Mr. DeMaria advises on compliance with all federal, state and local laws governing the employment relationship, including the defense of lawsuits brought by employees against the companies that employ them.

Prior to his work at Clifton Budd & DeMaria, LLP, he served as a trial attorney with the National Labor Relations Board.

Employment agreements are also used to help protect the employer’s assets, such as preventing a departing employee from taking IP, clients, customers and other confidential information.

By contrast, the more informal offer letter should suffice for mid to low-level employees whose relationship with the employer is not as complicated.

What Should I Include in Employment Agreements?

Employment agreements come in different shapes and sizes, but will almost universally contain these same basic provisions: • Term of Employment • Title and Duties • Exclusivity • Compensation and Benefits • Confidentiality • Termination • Severance Pay • Arbitration CONTINUED ON PAGE 8

6 January 28, 2019 / INSURANCE ADVOCATE

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8864 Developmental Organizations 8865 Residential Care Facility Hotel/Motel 9052 Hotels NOC 9058 Restaurants in Hotels

Wholesale

4310 Greeting Card Dealer 7390 Beer/Ale Dealer 7999 Hardware Store 8018 Wholesale Store/NOC 8021 Meat, Fish Dealer-Wholesale 8032 Dry Goods, Clothing, Shoe 8047 Drug Store 8048 Fruit & Vegetables 8111 Plumbers Supplies Dealer-Wholesale Restaurant 9061 Clubs 9071 Full Service Restaurants 9072 Fast Food Restaurants– Including Drivers 9074 Bars & Taverns Social and Health Services 8854 Home Health Care – Prof. Employees 9051 Home Health Care – Non Prof. Employees 8857 Counseling – Social Work – Traveling Oil and Gas Dealer 5193 Oil Burner Installation 8350 Fuel Oil & Gas Dealer 8353 Gas Dealers, LPG & Drivers

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[ IN THE ASSOCIATIONS ]

HR UPDATE CONTINUED FROM PAGE 6

PIANY Announces Award Recipients at this Year’s MetroRAP Calick named PIANY’s MetroRAP Industry Professional of the Year GLENMONT, N.Y.—The Professional Insurance Agents of New York State will present Steven Calick with its Industry Professional of the Year award at the annual Metropolitan Regional Awareness Program. Calick is marketing director for Capital Payment Plan/Imperial PFS in Albany. MetroRAP will be held at The Roosevelt Hotel on Thursday, Jan. 31.

This award recognizes an individual from an insurance company, general agency, managing general agency or other insurance industry profession, who has demonstrated qualities that foster a strong working relationship with agents and brokers, and who has exemplified a commitment to professionalism and service.

“Steven has demonstrated a strong drive to improve his company’s relationships with the industry to benefit customers,” said Jamie Ferris, CIC, CCI, CPIA, PIANY president. “This award reflects his dedication to the business and his reputation for professionalism.”

MetroRAP is PIANY’s first Regional Awareness Program for the year—two more are scheduled for 2019; on Long Island in May and Hudson Valley in October.

Other highlights of the daylong event include an expansive trade show and the keynote/awards luncheon. A Welcome Reception will be hosted by the NYYIPs Wednesday evening, Jan. 30 from 6:30-8:30 pm., to kick off the event at Connolly’s Time Square, 121 West 45th St., New York, NY. Register for the NYYIP reception at NYYIP.org.[IA]

Register for the NY-YIP reception at NYYIP.org.

8 January 28, 2019 / INSURANCE ADVOCATE

Headd to receive Executive of the Year at PIANY’s MetroRAP GLENMONT, N.Y.—The Professional Insurance Agents of New York State will present Joseph W. Headd, CPCU, ARM, Regional Director, Business Lines – New York & New Jersey for Liberty Mutual, with its Executive of the Year award at its annual Metropolitan Regional Awareness Program, Jan. 31, at Roosevelt Hotel in New York.

The MetroRAP Executive of the Year award recognizes an individual from an insurance company, a general agency or a managing general agency who has demonstrated a strong working relationship with agents and brokers, and who has exemplified a commitment to professionalism and service.

A resident of Fayetteville, N.Y., Headd has been with Liberty Mutual, since 1991 when in was Peerless Insurance. He has over 30 years of experience in the insurance industry. In 2014, Headd was presented with the Insurance Person of Distinction award by the Independent Agents of Central New York, The Syracuse CPCU Chapter and the Syracuse Insurance Professionals. [IA]

What Should I Include in Employee Offer Letters?

At a minimum, an offer letter should contain the following provisions: • Position • Start Date • Compensation • At-Will Employment Statement In addition to the offer letter, many jurisdictions require that employers provide nonexempt employees with certain notices in writing at the time of hire.

In New York, for example, employers must provide the following notices and statements: • The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including any rates for overtime, as applicable.

• Any allowances taken as part of the minimum wage (e.g., tips, meal and lodging deductions).

• The regular payday designated by the employer.

• The name of the employer, including any d/b/a names used.

• The physical address of the employer’s main office or principal place of business, and a mailing address, if different.

• T he telephone number of the employer.

• The name, address and telephone number of the employer’s workers’ compensation insurance carrier.

Because there are monetary penalties for even simple and incidental violations of these wage statement laws, employers should review their offer letter and employment agreements and site laws to ensure compliance with all applicable requirements.[IA]

Employment agreements Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889 www.insurance-advocate.com

are also used to help protect the employer’s assets, such as preventing a departing employee from taking IP, clients, customers and other confidential information.

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[ IN THE ASSOCIATIONS ]

NAIC Names 2019 Committee Leadership uWASHINGTON—The National Association of Insurance Commissioners (NAIC) has named its 2019 committee chairs and vice chairs. The association also assigned members to the organization’s standing committees based on preferences, experience and requirements established by the NAIC’s Bylaws.

“The 2019 NAIC committee leadership reflects deep expertise and a strong commitment to service across all our committees,” said Eric Cioppa, NAIC President and Superintendent of the Maine Bureau of Insurance. “We look forward to a productive year and continued success with our State Ahead strategic plan and initiatives.”

The 2019 NAIC committee leadership assignments are as follows: Life Insurance and Annuities (A) Committee Chair: Doug Ommen, Commissioner, Iowa Insurance Division Vice Chair: Stephen C. Taylor, Commissioner, District of Columbia Department of Insurance, Securities and Banking Health Insurance and Managed Care (B) Committee Chair: Jessica Altman, Commissioner, Pennsylvania Insurance Department Vice Chair: Lori K. Wing-Heier, Director, Alaska Department of Commerce, Community and Economic Development, Division of Insurance Property and Casualty Insurance (C) Committee Chair: Elizabeth Kelleher Dwyer, Superintendent, State of Rhode Island Department of Business Regulation, Division of Insurance Vice Chair: Scott A. White, Commissioner, Virginia State Corporation Commission Bureau of Insurance Market Regulation and Consumer Affairs (D) Committee Chair: Chlora Lindley-Myers, Director, Missouri Department of Insurance, Financial

Institutions and Professional Registration (DIFP) Vice Chair: Allen W. Kerr, Commissioner, Arkansas Insurance Department Financial Condition (E) Committee Chair: David Altmaier, Commissioner, Florida Office of Insurance Regulation Vice Chair: Tom Glause, Commissioner, Wyoming Insurance Department Financial Regulation Standards and Accreditation (F) Committee Chair: Todd E. Kiser, Commissioner, Utah Insurance Department Vice Chair: Jillian Froment, Director, Ohio Department of Insurance International Insurance Relations (G) Committee Chair: Julie Mix McPeak, Commissioner, Tennessee Department of Commerce and Insurance Vice Chair: Gary Anderson, Commissioner, Massachusetts Office of Consumer Affairs and Business Regulation Division of Insurance

NAIC Names 2019 Consumer Liaison Representatives

uWASHINGTON—NAIC recently named 34 consumer liaison representatives for 2019. The 20 funded and 14 unfunded consumer representatives began their terms Jan. 1. Seventeen of the funded consumer representatives participated in the program in 2018.

Established in 1992, the Consumer Liaison Program promotes consumer interaction with the NAIC’s members, the insurance industry and interested parties through the individuals’ dedication and commitment to serving the public interest.

The 2019 Funded Consumer Liaison Representatives New funded representatives are noted with an asterisk.

Luc Athayde-Rizzaro: Policy Counsel, National Center for Transgender Equality* Amy Bach: Executive Director, United Policyholders Birny Birnbaum: Executive Director, Center for Economic Justice

Brendan M. Bridgeland: Director, Center for Insurance Research Bonnie Burns: Training and Policy Specialist, California Health Advocates CONTINUED ON PAGE 12

10 January 28, 2019 / INSURANCE ADVOCATE

ADVERTORIAL

Tips for Safer Winter Travel

By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE - Assistant Vice President/Media Editor uWINTER WEATHER MEANS potentially hazardous travel conditions, leading to injuries and property damage.

The winter driving hazard impacts all types of clients, from individuals to major corporations, including lost wages, reduced productivity and out of service personal and business vehicles due to accidents. Assisting clients with preparation for, and prevention of, winter driving losses, is another sign of the true insurance professional.

Each year over 116,800 Americans are hurt, and more than 1,300 are killed, on roads that are icy, slushy or snowy (www. safewinterroads.org). NHTSA statistics show that 17% of all crashes occur during the winter (www.nhtsa.gov). 70% of U.S. roads are in snowy regions: those areas where snowfall is at least five inches per year. There are simple ways to reduce the likelihood of breakdowns and accidents.

Vehicle maintenance is always important, but especially during the winter, when a breakdown could be tragic. Low temperatures take a toll on car batteries: more power is needed to start a cold engine, for either a conventional vehicle or an electric or hybrid. Older batteries should be replaced. In areas of extremely low temperatures, a blanket, light bulb or other heating device may be used to keep the engine from freezing overnight. To enhance battery operation in cold weather, electric vehicles should be plugged in when not in use, and the passenger compartment should be heated prior to unplugging.

This will help extend the driving distance. Extra care should be taken to keep the gas tank filled in hybrid vehicles during the winter.

Properly maintained brakes and wipers become even more important during periods of inclement weather, when stopping distances and visibility are impacted. All fluid levels should be checked, including oil and radiator (www.nhtsa. gov). Check that there is air in the spare tire, and the jack is present.

Winter tires are designed to handle the wet and cold better than “all season” or standard tires. Tires lose their traction as the temperatures fall because the rubber hardens. Winter tires are made of special rubber compounds that respond better in the cold. They also have tread designed for slippery conditions. Some insurers offer a discount for winter tires.

State and local laws vary regarding the use of snow or studded tires, including the time during the year when they are allowed to be on the vehicle.

It is a common misperception that all wheel drive vehicles do not need winter tires. While some all- wheel vehicles may perform better in snowy and slippery conditions, studies show that winter tires offer significantly better operation than all-wheel drive alone (www.consumerreports.org). The main purpose of all wheel drive is to assist with getting the vehicle moving and steering.

Essential items to carry include a shovel, ice scraper, jumper cables, flashlights and flares or other means of alerting others to the presence of your vehicle should you break down or get stuck in the snow. Cat litter or other material to improve traction if the car gets stuck on ice or snow is also a good idea.

Safe winter travel preparation does not end with the vehicle itself. Pack emergency supplies, such as food, water, blankets and necessary medication. Carry a cell phone and charger. A hand crank radio/charger comes in handy if the car battery dies and you need to rely on your phone. Familiarity with the route is essential, as a GPS is not always reliable. Inform others of your travel plans.

Before heading out during or after a storm, be sure to clear the car of all snow and ice, including lights, sensors and cameras. In some states, including NY and NJ, it is illegal to drive a vehicle with snow and ice on it. Familiarize yourself with how your vehicles operate when roads are covered with ice and snow. Features such as anti-lock brakes impact the vehicle’s response. If possible, practice driving in a parking lot or a light traffic road to improve your skills. Practice safe driving – Slow down and maintain extra distance between your car and others.

Winter weather can bring unexpected driving challenges.

Helping clients avoid damage and injury is another valueadded service of the professional insurance agent.

R

139 Harristown Road, Suite 100 Glen Rock, NJ 07452 (800) 935-6900 | www.msonet.com INSURANCE ADVOCATE / January 28, 2019 11

[ IN THE ASSOCIATIONS ]

Senator Breslin Introduces ELANY Supported Bill Favoring Brokers uSenator Breslin has filed Bill # S-769, supported by the Excess Line Association of New York that implies simplified requirements for agents and brokers placing business in the state’s E & S lines marketplace.

The bill would “excuse retail insurance brokers and any unaffiliated wholesale excess line insurance brokers from making a diligent effort when procuring commercial lines insurance”.

The full bill as filed appears opposite.

PIANY has weighed in, stating in a press release that, as currently drafted, the relief sought is not fully realized. “PIANY would urge the Senate to amend the bill to ensure the spirit of the

bill is fully implemented. Further, it would reduce the affidavit requirement on brokers when procuring non-commercial lines insurance—they would need to only record the name of the carrier, National Association of Insurance Commissioners’ number and the information the agent/broker relied upon to indicate why the authorized insurer might write the type of coverage and class of insurance involved. No additional information would need to be reported on the affidavit.

This legislation would remove an artificial barrier that can prevent consumers from obtaining the necessary coverage for their risks”.[IA]

NAIC CONSUMER LIAISON REPS CONTINUED FROM PAGE 10

Thomas M. Callahan: Executive Director, Massachusetts Affordable Housing Alliance

The 2019 Unfunded Consumer Representatives New representatives noted with an asterisk.

Laura Colbert: Executive Director, Georgians for a Healthy Future

Ashley Blackburn: Senior Policy Analyst, Community Catalyst

Brenda J. Cude: Professor, Department of Financial Planning, Housing and Consumer Economics, University of Georgia

Benjamin Chandhok: Senior Director of State Legislative Affairs, Arthritis Foundation*

Erica Eversman: President, Automotive Education & Policy Institute*

Lucy Culp: State and Community Advocacy Advisor, American Heart Association

Justin Giovannelli: Associate Research Professor, Georgetown University Center on Health Insurance Reform* Debra K. Judy: Policy Director, Colorado Consumer Health Initiative Katherine (Katie) Keith: Consultant Advisor and Steering Committee Member, Out2Enroll Karrol Kitt: Emeritis Associate Professor, University of Texas at Austin School of Human Ecology Department of Human Development & Family Sciences Peter R. Kochenburger: Associate Clinical Professor of Law, Executive Director, Insurance Law Center, University of Connecticut School of Law Michelle Lilienfeld: Senior Attorney, National Health Law Program Sarah Lueck: Senior Policy Analyst, Center on Budget and Policy Priorities Claire McAndrew: Director of Campaign Strategy, Families USA

Deborah Darcy: Director of Government Relations, American Kidney Fund Eric Ellsworth: Director, Health Data Strategy, Consumers Checkbook/Center for the Study of Services Marguerite Herman: Lobbyist, Wyoming High School Mock Trial/Healthy Wyoming Anna Howard: Principal, Policy Development, Access to and Quality of Care, American Cancer Society Cancer Action Network Amy Killelea: Director, Health Systems Integration, National Alliance of State and Territorial AIDS Directors Ken Klein: Professor of Law, California Western School of Law* Carl Schmid: Deputy Executive Director, The AIDS Institute Matthew Smith: Director of Government Affairs, Coalition Against Insurance Fraud

Brendan Riley: Health Policy Analyst, North Carolina Justice Center

Andrew Sperling: Director of Legislative Advocacy, National Alliance on Mental Illness

Jackson Williams: Director of Government Affairs, Dialysis Patient Citizens

Harold M. Ting: Consumer Advocate Volunteer, Chester County Department of Aging Services Apprise Program*

Silvia Yee: Senior Staff Attorney and Analyst, Disability Rights Education and Defense Fund

Lorri Shealy Unumb: Vice President, State Government Affairs, Autism Speaks

12 January 28, 2019 / INSURANCE ADVOCATE

UPCOMING NY CYBER REGULATION DEADLINES JANUARY 1 - FEBRUARY 15, 2019 All exempt Agencies AND Individuals must refile an Initial Notice of Exemption (Exemptions filed in 2017 and 2018 have expired)

MARCH 1, 2019 Third Party Service Provider Requirements

Don’t worry, we have your back.

Visit BigINY.org/cyber for member-only benefits including free policy templates and forms for compliance.

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[ IN THE NEWS ]

AmTrust Names Execs, Launches AmTrust Forward to Position for Long-Term uNEW YORK– AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) has stepped up its strategy and plans with the launch of AmTrust Forward and with the naming of several executives.

“Our vision for AmTrust is to be a leading specialty commercial P&C insurer. We believe we can achieve this by focusing on local markets and niche products where we can add significant value,” said Barry Zyskind, Chairman and CEO of AmTrust. “As a private company, we have the opportunity to return to the core of what made AmTrust so successful over the past 20 years and manage our business for long term success through sustainably profitable future growth.”

AmTrust Forward is an organization-wide program focused on leveraging the Company’s unique strengths to offer select commercial P&C products and services globally where it can differentiate its offering and bring added value.

Mr. Zyskind added, “As a private enterprise, we believe we are better positioned to take a long-term view of every opportunity. We will continue to ensure we are making the right decisions for the future of our business, our employees, and the agents, brokers, partners and clients we serve around the world. As always, we will be driven by our core values of Excellence, Innovation, Integrity, Responsibility, Inclusion and Teamwork. We are creating an exciting place to work with opportunities for career development and advancement, and participation in AmTrust’s future success and profitability. This is a new era 14 January 28, 2019 / INSURANCE ADVOCATE

for AmTrust, and we are positioning our company to thrive for the next 20 years and beyond.”

Executive Succession AmTrust is also announcing the succession of certain executive leaders.

Michael Saxon, EVP – U.S. Commercial Lines, and Max Caviet, CEO of AmTrust International Limited, the Company’s European parent holding company, each announced his intention to retire effective December 31, 2018. Mr. Saxon has been with the Company since 2001 and Mr. Caviet has been with the Company since 2003. Mr. Saxon will continue on a consultative basis, as Vice Chairman of AmTrust North America.

Mr. Saxon and Mr. Caviet will assist in the transition to their respective successors, Christopher Foy and Peter Dewey.

In addition, Christopher Longo, the Company’s Chief Operating Officer, announced his intention to resign effective December 31, 2018, to pursue other opportunities, following the completion of the Company’s go-private transaction. Mr. Longo has been with the Company since 2001.

Mr. Zyskind said, “I would like to recognize and thank Mike, Max and Chris, who have been instrumental in building AmTrust over the past 20 years. I greatly appreciate the commitment and dedication they brought to our Company, throughout our many years of working together. I am very pleased to welcome Chris Foy (pictured left)and Peter Dewey to their new, expanded

roles. Each is a talented leader, with sound decision-making skills, driven by integrity and a deep commitment to excellence and service. AmTrust has deep bench strength to draw upon as we embark on our journey as a private company to be one of the leading specialty commercial P&C players in the industry.”

Christopher Foy will serve as EVP, Head of North American Commercial P&C, with responsibility for leadership of AmTrust’s North American commercial business and specialty programs segments. Mr. Foy joined AmTrust in 2016 as President of AmTrust Underwriters, with responsibility for the specialty program business segment. Prior to joining AmTrust, Mr. Foy was President and owner of Total Program Management, a specialty MGA. Previously, he was Senior Vice President at Clarendon National Insurance Company specializing in MGAs and program business nationwide.

Peter Dewey (pictured left) will serve as EVP, Head of International, with oversight of AmTrust’s international business. Mr. Dewey joined AmTrust in 2003, and has served as CEO at AmTrust at Lloyd’s since 2014. Prior to joining AmTrust at Lloyd’s, Mr. Dewey was Chief Underwriting Officer of AmTrust’s Specialty Risk & Warranty Division overseeing a team of actuaries, underwriters and risk management professionals. Prior to AmTrust, Mr. Dewey was an Underwriter with Trenwick International Limited and prior to that, he worked for an MGA as an Underwriting Manager.[IA] AmTrust Financial Services, Inc., a multinational insurance holding company headquartered in New York, offers specialty property and casualty insurance products, including workers’ compensation, commercial automobile, general liability and extended service and warranty coverage through its primary insurance subsidiaries rated “A-” (Excellent)

by A.M. Best. AmTrust is included in the Fortune 500 list of largest companies.

[ IN THE NEWS ]

ATIC Files $28M Lawsuit Against Health Care Providers and Others u BROOKLYN, NY—American Transit has filed a lawsuit in the Supreme Court, New York County against multiple defendants including medical doctors, chiropractors, ambulatory surgery centers and related parties alleging that the Defendants submitted fraudulent and abusive claims under the New York automobile no-fault coverage.

This coverage provides for reimbursement of health care expenses as well as other benefits. American Transit has received over $28 million in claims from these Defendants. American Transit seeks a declaration that it has no obligation to pay these claims and to recover the payments that it has made.

The complaint alleges that the Defendants billed abusively and were paid over five million dollars by American Transit. The Defendants included a number of related entities who referred patients to each other in order to inflate the billing and in many cases without regard to the needs of the patients. The complaint alleges that unnecessary services and services that were not provided as billed were billed to American Transit. The Complaint alleges that numerous unnecessary manipulations under anesthesia were billed with the administration of unnecessary anesthesia. Numerous patients were brought from New York to another State in order to inflate the billing.

The complaint was filed against the following defendants: Peter D. Albis, D.C., Reuven Alon aka Rob Alon, Diana Beynin, D.C., Nachmy Bronstein, D.C., Ronald A. Hayek, D.C., Mark Heyligers, D.C., Todd Koppel, M.D., Margarita Moshe, Regina Moshe aka Regina Leviyev, M.D., Yan Moshe aka Yan Leviyev, Ramkumar Panhani, M.D., Dipti R. Patel, D.C., Leonid Shapiro, M.D., Advanced Spinal Care Rehabilitation, PA, Albis Chiropractic Care, P.C., Axis Chiropractic Care, P.C., Citimed Services, P.A., Citimedical I,

P.L.L.C., Columbus Imaging Center, L.L.C., Drugs R Us Pharmacy, Inc., Dynamic Surgery Center, L.L.C., Dynasty Medical Care, P.C., Excel Surgery Center, L.L.C., Garden State Pain Management, P.A., Metro Pain Specialists Professional Corporation, Premier Health Choice Chiropractic, P.C. and Union Wellness Center, L.L.C. The New York State Department of Financial Services (DFS), which oversees the no-fault insurance coverage has set forth that no-fraud has included billing for services that were not provided and billing for unnecessary services. According to the Department, no-fault fraud constituted the majority of all health care fraud in New York.

The Department has stated that no-fault

insurance fraud costs the public in New York “hundreds of millions of dollars” in insurance costs. The DFS has also specifically expressed its concern with schemes that bring patients across State lines and submit billing in excess of the fee schedule. It has gone on record as finding this practice to contain the potential for abuse and for depletion of the insured’s coverage.

Ralph Bisceglia, the Chief Executive Officer and President of American Transit, stated that “American Transit insures many livery drivers. This is a demanding occupation and there are many challenges for the driver. American Transit is committed to industry efforts to support the drivers. On top of the challenges the drivers face, they should not be pawns used by providers seeking to take advantage of the system and submit improper and/or exaggerated claims.” John Poklemba, the General Counsel of American Transit added that “abusive and exaggerated claims affect not only the insurer, they affect the public as well and American Transit believes every effort should be made to combat and discourage such claims.”[IA]

Preferred Mutual Announces Executive Team Appointments u NEW BERLIN, NY - Preferred Mutual (“Preferred Mutual”) Insurance Company President and Chief Executive Officer, Christopher P. Taft, recently announced several key promotions within the company’s management team. “As we look to our future,” Taft commented, “we have identified the opportunity to capitalize on enterprise perspectives in order to drive our strategic initiatives by building upon our leadership team.”

Jeff Lopata - Executive Vice President and Chief Strategy Officer Since Joining Preferred Mutual in 2005, Jeff has been instrumental in developing and driving enterprise digital, project management and operational strategy. Jeff will work with the organiza-

“As we look to our future,” Taft commented, “we have identified the opportunity to capitalize on enterprise perspectives in order to drive our strategic initiatives by building upon our leadership team.” tion’s leadership team to develop corporate strategy and catalyze new initiatives that will drive the achievement of the company’s short and long-term vision.

CONTINUED ON PAGE 30 INSURANCE ADVOCATE / January 28, 2019 15

Eager for Their Inheritance Gen Xers and millennials are ready to carry the collectible-car torch

16 January 28, 2019 / INSURANCE ADVOCATE

BY MIKE GUILFOYLE PHOTOS BY SABRINA HYDE REPRINTED COURTESY OF HAGERTY MAGAZINE, COPYRIGHT 2019 WWW.HAGERTY.COM

Already blamed for the death of everything from neckties to napkins, millennials are often pegged as the generation that will bring doom to the collectible-car market...

uWe are surrounded by stuff that will outlast us. The house and the furniture will go to someone else when you’re gone, and because common ceramics are the man-made thing lasting the longest, that coffee mug that says “Grumpy Old Fart” will still be around in thousands of years. Chances are your vintage vehicle has already outlived at least one or two owners, and if those former caretakers of your slick machine could see the snot-nosed kid that has the keys now, do you think they would approve?

Already blamed for the death of everything from neckties to napkins, millennials are often pegged as the generation that will bring doom to the collectible-car market—at least according to commonly overheard jeremiads at car shows and auctions that prophesy the imminent collapse of everything good.

Baby boomers, the theory goes, still make up the vast majority of classic-car buyers, collectors, and drivers. As boomers exit the hobby one way or another, members of the subsequent generations X and especially Y, the so-called millennial generation born in the 1980s and ’90s, lack the enthusiasm to maintain any sort of demand for old cars and their antiquated, non-computerized CONTINUED ON PAGE 18

INSURANCE ADVOCATE / January 28, 2019 17

CONTINUED FROM PAGE 17

PERCENTAGE OF TOTAL VEHICLE COUNT

technology. Prices will collapse for almost every boomer-iconic 100% vehicle from before the 1980s, which will in turn drag down the Silent Generation (1925-1945) 90% entire market.

Although everyone knows, 80% just knows, that today’s kids don’t care about old cars, data 70% collected by Hagerty, which fields between 2000 and 2500 60% Baby Boomers (1946-1964) calls a day from the public, tells a significantly more upbeat 50% story. It’s true that baby boomers account for the plurality of 40% demand in the collectible-car market—about 42 percent ac30% cording to Hagerty data. But as of the fourth quarter of 2017, 20% Generation X (1965-1980) the most recent data available, Generation X and the millenni10% als have matched the boomers Millennials (1981-2000) and their elders, the so-called 0 greatest generation, in terms of 2009 2010 2011 2012 2013 2014 2015 demand.

And whereas the average buyer is still a boomer (barely—right now, the tail end of that generation is in their early 50s), the result of the growth in the overall market and among younger generations in particular means there are as many collectors in their early 40s today as there were collectors in their early 50s eight years ago, and as many early-30s collectors now as there were early-40s collectors then. Younger generations are absolutely entering the collectible-car market to replace those who are exiting, and the continuing extreme popularity of the hobby among boomers should not be mistaken for a lack of popularity among younger collectors.

Also worth noting is that the hobby’s popuCollection size Collection size Collection size larity among boomers is increased unchanged decreased continuing and extreme, 47% 14% 39% despite their advancing age, suggesting that doomand-gloom predictions about when a collector begins a sell-off might be exaggerated. To investigate this, Hagerty looked at 1000 top collectors in 2010 and tracked their behavior during the subsequent eight years. The average age of these collectors is 68 today, solidly in the baby boom generation.

Collectors adding vehicles, on net, outnumbered collectors subtracting them 470 to 390, with the remaining 140 maintaining

BABY BOOMERS: STILL ACTIVE

18 January 28, 2019 / INSURANCE ADVOCATE

2016

2017

a collection of the same size. In all cases, age was not a factor in determining who would expand or contract a collection.

Collectors who decreased 300,000 vehicles quoted Baby their collection size primarily 280,000 Boomers sold off cars from the 1940s to 260,000 the 1970s, and they primarily 240,000 sold off American cars. People 220,000 Generation X who increased their collections primarily added cars from the 200,000 1980s and ’90s, especially cars 180,000 from Germany.

160,000 In a separate study, Hagerty 140,000 investigated the values of 10,000 120,000 Millennials specific vehicles currently in100,000 sured by high-net-worth indi80,000 viduals that can be traced, using Silent the VIN, to a different owner and 60,000 Generation a value in the past, going back 40,000 seven years. For 62 percent of 20,000 the cars, the value now is greater 0 than the previous value, and, on 2009 2017 average, cars have a value that is 20 percent greater than the older value. Included in the set of 10,000 cars with two or more owners were 830 cars where the current owner was at least 25 years younger than the previous owner—in other words, cars that have moved from an older generation to a younger generation. In these cases, 51 percent have a current value greater than the previous value, and, on average, their current value is only five percent greater than their original value.

What does it all mean? Younger generations do seem to exert some downward pressure on car prices, or at least on their insured values. In particular, Volkswagens and vehicles from the Big Three American manufacturers are most likely to lose value from one generation to the next. That is partly explained by the fact that younger people simply have less money to pay for cars. Even so, there are some marques that younger generations tend to value more than their original older owners did, including luxury brands such as Ferrari, Porsche, BMW, Alfa Romeo, Jaguar, and Mercedes-Benz.

Particular tastes and values might shift across generations, but on the whole, the growth that the collectible-car hobby enjoyed over the past few years was not driven exclusively by baby boomers.

Gen Xers have reached their prime earning years and collect as enthusiastically as the boomers did before them. We are already seeing the influence of 100-million-strong millennials, who are entering the hobby in greater numbers every day.

You might not be around to see who eventually inherits your precious collectible, but all evidence suggests that someone out there, someone who might be in diapers or playing video games on a phone rather than doing algebra homework, will want it. When that time comes, that kid, that snotnosed, pimple-faced phone junkie, might prove to be not all that different from you.

GEN X AND MILLENNIALS ARE BUYING

Although everyone knows, just knows, that today’s kids don’t care about old cars, data collected by Hagerty, which fields between 2000 and 2500 calls a day from the public, tells a significantly more upbeat story.

INSURANCE ADVOCATE / January 28, 2019 19

[ GUEST ARTICLE ]

JOSEPH B. FITZGERALD

Millennials: A Generation Receptive to Financial Guidance uWhile any advisor would be excited to acquire his or her next high net-worth client, too often the search for high-earners means an advisor might miss out on an opportunity to cultivate relationships and work with younger generations.

Advisors should keep millennials, ages 22 to 37, top of mind as they acquire clients. The generation is driven and perceptive, and while they may not be high net-worth today or tomorrow, millennials are seeking upward mobility and they want advice on how to achieve success. In fact, as smart and tech savvy as they are, millennials are incredibly receptive to guidance, and they see the value of working with an advisor early on in their financial journey.

Millennials frequently use online software, free online tools, and mobile banking apps to manage their finances, but what may come as a surprise to some advisors is that a large percentage are also looking for a human touch. A recent Guardian study, “Millennials and Money: Understanding What Drives Financial Confidence,” reveals millennials value a balance between digital and human experiences to be financially confident. This means there is a strong opportunity for advisors to provide sound advice to millennials and help them reach their long-term goals through thoughtful financial planning.

When breaking the data down by region, the study reveals that millennials in the Northeast say they prefer learning about financial strategies via faceto-face meetings with an advisor more so than others across the nation. These meetings are opportunities to get to know younger clients and establish their financial goals, as well as familiarize them with products and services, such as life insurance or retirement planning, that will help them feel secure. While having technology at their fingertips is routine for the generation, advisors and 20 January 28, 2019 / INSURANCE ADVOCATE

firms should opt for in-person programs like financial seminars on a relevant topic or hosting a networking event with peers. These social learning opportunities will resonate with current and prospective millennial clients.

Millennials’ top priorities include liquidity and access to their money. Many have goals that include opening their own businesses, investing in real estate or protecting themselves in case of an emergency. These initiatives require access to money, so millennials are often looking for an expert to guide them through strategies for saving money in places that allow them flexible access, and access to plans beyond standard employer offerings. Explore conversations about the options available and how millennials can build a plan that creates easy access to cash, while also setting some funds away for longer-term growth.

Interestingly, Guardian’s study also reveals millennials tend to care not only about saving and investing, but that they prioritize protection, too. As an advisor, you can work with this generation to integrate both strategies into one plan that leverages growth through investing, while also encompassing protection through insurance products.

Joseph B. Fitzgerald, RICP® is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Northeast Planning Corporation is not an affiliate or subsidiary of PAS or Guardian.

Emphasize the importance of establishing an offensive and defensive strategy to proactively grow income, but also to protect it in the event of a disability, a longer retirement, or other life events and changes.

On top of providing tactics and strategies, regular meetings with your millennial clients can instill a greater sense of financial confidence and security.

Guardian’s study found that nearly 90 percent of millennials across the U.S. say having a detailed financial plan would improve their confidence in achieving their financial goals. So much so, they say having a detailed financial plan is equally as important to them as getting a bonus at work.

These insights reveal an immense opportunity for advisors in the Northeast to step in and offer their expertise, so millennials can prepare for long-term financial health. Encourage your younger clients to keep up in-person meetings and leverage online capabilities so that your clients have the benefits of in-person and digital solutions. With proper guidance and careful preparation, your millennial clients will want you to be a part of their journey to financial confidence through all of their milestones.[IA]

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[ IN THE ASSOCIATIONS ]

NYIA Elects 2019 Officers and Board of Directors u ALBANY, N.Y.—The New York Insurance Association (NYIA) announces the election of its 2019 officers and board of directors.

The following officers were elected for a one-year term ending Dec. 31, 2019: Chair: Elizabeth Heck, president and chief executive officer, Greater New York Mutual Insurance Company, New York, N.Y. First vice chair: Mark Prechtl, executive vice president and chief executive officer, Chautauqua Patrons Insurance Company, Jamestown, N.Y. Second vice chair: Charles Makey, senior vice president, insurance operations, Merchants Insurance Group, Buffalo, N.Y. Treasurer: Norman Orlowski, Jr., president/chief executive officer, Erie and Niagara Insurance Association, Williamsville, N.Y.

The following directors were elected for a three-year term ending Dec. 31, 2021: • Matthew Benedict, president and chief executive officer, Midstate Mutual Insurance C ompany, Auburn, N.Y. • Jennifer Cavolo, product manager, Progressive, Mayfield Village, Ohio.

• M arc Craw, senior counsel, MLMIC Insurance Company, Latham, N.Y. • Elizabeth Heck, president and chief executive officer, Greater New York Mutual Insurance Company, New York, N.Y. • Jaynine Warner, legislative affairs– North Atlantic, Farmers Group, Inc., Wilmington, De.[IA]

PIANY Commends Legislation Proposed by ELANY u G L E N M O N T, N . Y. — T h e Professional Insurance Agents of New York State is pleased to be the first to support the Excess Line Association of New York’s introduction of a bill that would simplify requirements of agents and brokers placing business in the state’s excess & surplus lines marketplace.

The bill, S-769, filed in the New York Senate, as intended would excuse retail insurance brokers and any unaffiliated wholesale excess line insurance broker from making a diligent effort when procuring commercial lines insurance.

However as currently drafted, this intent 22 January 28, 2019 / INSURANCE ADVOCATE

“The removal of these overly stringent requirements would streamline the insurance procurement process, and remove the need for filing unnecessary and timeconsuming paperwork.”

is not fully realized. PIANY would urge the Senate to amend the bill to ensure the spirit of the bill is fully implemented.

Further, it would reduce the affidavit re-

quirement on brokers when procuring non-commercial lines insurance—they would need to only record the name of the carrier, National Association of Insurance Commissioners’ number and the information the agent/broker relied upon to indicate why the authorized insurer might write the type of coverage and class of insurance involved. No additional information would need to be reported on the affidavit.

This legislation would remove an artificial barrier that can prevent consumers from obtaining the necessary coverage for their risks.

“PIA applauds the proposed amendment and Sen. Neil Breslin for his sponsorship. We are a strong advocate for its passage,” said PIANY President Jamie Ferris, CIC, AAI, CPIA. “The removal of these overly stringent requirements would streamline the insurance procurement process, and remove the need for filing unnecessary and time-consuming paperwork.” [IA]

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[ ON MY RADAR ]

BARRY Z ALMA

A Clear and Unambiguous Exclusion Can’t Beat a Great Lawyer Bar Negligent for not Seeking Arrest of Drunk & Disorderly Customer uIt is axiomatic among plaintiffs’ personal injury lawyers that the more serious the injury the less the need for legal niceties. In a case of the wrongful death of a young woman at the hands of a violent, intoxicated and unlicensed driver a clear and unambiguous exclusion is insufficient to avoid liability when a trial court finds liability for the bar distinct from the service, use, or removal of an intoxicated patron.

In Mesa Underwriters Specialty Insurance Co. v. Secret’s Gentleman’s Club; Glmr, Inc., Dba Secret’s; Sharon Snyder, Individually And As Administratrix Of The Estate Of Deceased Desiree Snyder; Terry Snyder, No. 17-3779, United States Court Of Appeals For The Sixth Circuit (October 16, 2018) refused to protect the insurer who refused to defend or indemnify the bar.

Mes a Under wr iters Sp e cia lty Insurance Co. (Mesa) appealed the district court’s grant of partial summary judgment in favor of Defendants Secret’s Gentleman’s Club and GLMR, Inc. (together Secret’s), and Sharon and Terry Snyder (the Snyders), and the district court’s denial of Mesa’s motion for judgment on the pleadings.

FACTS

On April 5, 2014, twenty-two year old Desiree Snyder was killed when the vehicle she was a passenger in was struck head-on by a vehicle driven by Julio Vargas who, heavily intoxicated, was driving the wrong way on I-480.

Minutes before the head-on collision, Defendant Secret’s, an adult entertainment bar in Cleveland, had ordered Vargas to leave its establishment.

At the time, Mesa insured Secret’s under a Commercial General Liability Coverage policy that afforded liability coverage for “bodily injury” (defined 24 January 28, 2019 / INSURANCE ADVOCATE

The trial court concluded that the Plaintiffs’ common law negligence claims were sufficiently distinct, separate and independent from a statutory cause of action premised on the sale or service of alcohol. to include death) caused by an “occurrence” (defined as an “accident”). As pertinent here, the policy contained a liquor liability exclusion, which excluded coverage for: “Bodily injury” or “property damage” for which any insured may be held liable by reason of: • causing or contributing to the intoxication of any person; • the furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or • any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

State-Court Action Desiree’s parents sued. alleging claims of common-law negligence, wrongful death, conscious disregard/ willful and wanton misconduct, survivorship, loss of consortium, and violations of Ohio’s Dram Shop Act by Gigi’s Lounge and Secret’s.

After receiving notice of the statecourt action, Mesa notified Secret’s by letter dated February 25, 2015, that it would not defend or indemnify Secret’s against what it termed a “liquor liability” claim.

The Snyders and Secret’s executed a Confidential Agreement and Stipulation for Consent Judgment. The case went forward against Secret’s and GLMR. Secret’s and the Snyders entered into

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant 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 practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 51 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Mr. Zalma’s books are available as Kindle books or paperbacks at Amazon. com and can be reached at http:// zalma.com/zalma-books/ Mr. Zalma’s reports can be found on Tumbler at https://www.tumblr.com/search/ bzalma on Facebook at https://www. facebook.com/barry.zalma and you can follow him on Twitter at https:// twitter.com/bzalma.

His blog, Zalma on Insurance is available at http://zalma.com/blog and his videoblog, Zalma’s Insurance 101 is available at http://www.zalma.com/ videoblog/

an Amended Stipulation for Consent Judgment allowing Secret’s to continue to deny liability and allowing the state court to determine Secret’s liability and damages, if any, for the Snyders’ common-law negligence, wrongful death, and survivorship claims.

The state trial court found, among other things: • The toxicological evidence shows that Julio Vargas’ blood alcohol content (BAC) at the time of the crash was likely .263 to .265-well over three times the legal limit.

• T he Court’s determination of

[ ON MY RADAR ] Secrets’ liability is not premised on its selling or furnishing of alcoholic beverages to Mr. Vargas or on a statutory violation of Ohio’s Dram Shop statute, R.C. § 4399.18.

Instead, and pursuant to the parties’ Stipulation, this Court’s sole focus is on Secrets’ alleged common law negligence based on the unique and case-specific facts and attendant circumstances.

• As of April 5, 2014, Julio Vargas did not have a valid driver’s license.

• Vargas was drinking almost continuously on the night of the accident.

CONCLUSIONS OF LAW

The trial court concluded that the Plaintiffs’ common law negligence claims were sufficiently distinct, separate and independent from a statutory cause of action premised on the sale or service of alcohol. Secrets was negligent in failing to inform the Cleveland Police Officer working on its premises of Julio Vargas’ noticeably and extremely intoxicated condition, of his assault of a club dancer in violation of Ohio law, and of his unauthorized use of a woman’s credit card that was clearly not his own. It also includes Secrets’ negligence in failing to take any action whatsoever to prevent Vargas from driving, despite the foreseeable consequences of its inaction in these regards, along with its negligence in instead choosing to personally escort Vargas out of the club to ensure that he would drive away in the extremely intoxicated condition he was in.

Secrets had a common law duty to use reasonable care to prevent foreseeable harm to others, including to Desiree Snyder. This includes Secrets’ duty to call or involve the police (recognizing that an off duty police officer worked at Secrets) to prevent patrons who are known to be noticeably intoxicated from driving, or to, at a minimum, provide them with a ride or call them a taxi. Secrets breached its common law duty of reasonable or due care. The trial Court further held that Secrets’ negligent acts and omissions are a proximate cause of Desiree Snyder’s conscious pain and suffering and wrongful death.

Vargas was more than merely intoxicated. He was over three times the legal limit, had just criminally assaulted

Because Mesa presents no argument undermining the district court’s analysis of the policy language, the district court’s determination that Mesa has a duty to indemnify Secrets was affirmed. a dancer and was, contrary to Secrets’ own rules, trying to use a credit card that was clearly not his own.

Had Secrets notified Officer Butler (who was on scene) of Vargas’ extremely intoxicated condition, Vargas wouldn’t have driven anywhere.

When, as here, the case-specific facts and attendant circumstances show independent acts or omissions of negligence that are separate, distinct and independent from the sale or service of alcohol, Ohio Courts have permitted common law negligence actions to be maintained against the establishment.

Secrets’ negligence claims in this case are separate, distinct and independent from any statutory claim involving or arising from its sale or service of alcohol. While Mesa may disagree with the State Court’s determination that Secrets is liable for common law negligence-separate, distinct and independent from anything having to do with the sale or service of alcohol-the doctrine of collateral estoppel precludes Mesa from attempting to relitigate Secrets’ liability in the Sixth Circuit Court of Appeal.

The district court determined that under the insurance-policy language Mesa had a duty to indemnify Secret’s.

Regarding Mesa’s duty to defend, the district court concluded that because the Snyders’ common-law negligence claims were not “indisputably outside the contracted policy coverage” and could arguably have been covered under the Policy, Mesa’s duty to defend was triggered.

When, as here, the case-specific facts and attendant circumstances show independent acts or omissions of negligence that are separate, distinct and independent from the sale or service of alcohol, Ohio Courts have permitted common law negligence actions to be maintained against the establishment.

Under Ohio law, an insurer’s duty to defend arises when a complaint alleges claims that arguably could be covered under the insurance policy. An insurer has an absolute duty to defend an action when the complaint contains an allegation in any one of its claims that could arguably be covered by the insurance policy, even in part and even if the allegations are groundless, false, or fraudulent.

Mesa does not contend that there is no coverage under the policy’s statement of coverage; rather, it argues that coverage is excluded by the liquor liability exclusion.

The district court correctly noted that the Snyders’ allegations “contemplate action or inaction on the part of Secrets’ employees which would arguably amount to negligence whether or not Mr. Vargas was sold or consumed any alcohol at Secrets.” And, as the district court observed, “even if [Mesa’s] initial review of the Complaint did not convince Mesa of its duty to defend Secrets, Mesa was contacted repeatedly by Secrets’ Counsel regarding the fact that allegations of common-law negligence-separate and distinct from causing or contributing to Mr. Vargas’s intoxication or the sale or service of alcohol-were being asserted.”

Although Mesa insists that Secret’s liability is premised on “contributing to the intoxication of Vargas,” this is contrary to the state court’s decision and analysis. Because Mesa presents no argument undermining the district court’s analysis of the policy language, the district court’s determination that Mesa has a duty to indemnify Secrets was affirmed.

ZALMA OPINION

The plaintiffs’ lawyers were brilliant when faced with judgment proof defendants to withdraw the dram shop cause of action and limit their allegations to common law negligence to dip into the assets of the insurer, Mesa. To me, had Vargas been stone cold sober, a boor, and a licensed driver the accident would not have happened. What caused him to drive on the wrong side of the road and hit the decedent head on was due to his intoxication. The court should have considered reality rather than the limitations on the analysis caused by the plaintiffs’ lawyers.[IA] INSURANCE ADVOCATE / January 28, 2019 25

[ LOOKING BACK ]

INSURANCE ADVO CATE - 26 YEARS AGO

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[ LOOKING BACK ]

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INSURANCE ADVOCATE / January 28, 2019 27

[ COURTSIDE ]

LAWRENCE N. RO GAK

Court Orders Sanctions Inquiry Against Attorneys Who Sued Wrong Insurer Natural Therapy Acupuncture, P.C. v Omni Indem. Co. Edited by Lawrence N. Rogak Plaintiff medical provider brought suit against Omni Indemnity. Omni was granted summary judgment after it proved that it did not issue a policy for the subject accident, but that a different insurer did.

Plaintiff appealed. The Appellate Term affirmed the dismissal of the suit, and ordered both sides to submit affidavits on the subject of why plaintiff ’s attorney should not be sanctioned, as it had made the same arguments in numerous prior cases and this court had rejected those same arguments each time.—LNR uAppeal from an order of the Civil Court of the City of New York, Kings County (John J. Kelley, J.), entered November 2, 2016. The order granted defendant’s motion for summary judgment dismissing the complaint and ordered that counsel for the respective parties are directed to show cause why an order should or should not be made and entered imposing such sanctions and costs, if any, against plaintiff ’s counsel pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1 (c) as this court may deem appropriate, by each filing an affidavit or affirmation on that issue in the office of the clerk of this court and serving one copy of same on each other on or before January 31, 2019; and it is further.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint on the ground that defendant had not issued an insurance policy covering the vehicle which was involved in the accident in question and that, therefore, plaintiff had sued 28 January 28, 2019 / INSURANCE ADVOCATE

the wrong party. The order also implicitly denied plaintiff ’s cross motion for summary judgment.

In support of its motion, defendant submitted affidavits by its litigation manager and by a manager of American Independent Insurance Company (AIIC), which affidavits sufficiently established defendant’s lack of coverage defense (see Great Health Care Chiropractic, P.C. v Omni Indem. Co., 40 Misc 3d 139[A], 2013 NY SlipOp 51450[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Astoria Quality Med. Supply v State Farm Mut. Auto. Ins. Co., 31 Misc 3d 138[A], 2011 NY Slip Op 50743[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). Notably, the AIIC manager attested that her company had issued the policy covering the accident in question. Plaintiff failed to raise an issue of fact in response. As defendant demonstrated that plaintiff had sued the wrong insurance carrier, defendant was entitled to summary judgment dismissing the complaint (see Tam Med. Supply Corp. v Omni Indem. Co., 48 Misc 3d 142[A], 2015 NY Slip Op 51294[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015];Vincent Med. Servs., P.C. v Omni Indem. Co., 42 Misc 3d 142[A], 2014 NY Slip Op 50224[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).

We conclude that sanctions may be warranted for the conduct of counsel for plaintiff, as that conduct appears to be frivolous (see Flushing Expo, Inc. v New World Mall, LLC, 116 AD3d 826 [2014]; Ram v Torto, 111 AD3d 814 [2013]). As relevant here, frivolous conduct includes the assertion of arguments that are “completely without merit in law and [which] cannot be supported by a reasonable argument for an extension, modifica-

Lawrence N. (“Larry”) Rogak has been practicing insurance law since 1981.

He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations.

Lawrence N. Rogak LLC is listed in Best’s Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers.

A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

tion or reversal of existing law” (Rules of Chief Admin of Cts [22 NYCRR] § 1301.1 [c] [1]). Since 2013, plaintiff and/or other providers represented by plaintiff ’s counsel have been before this court more than 20 times in similar actions wherein these providers, while represented by plaintiff ’s counsel, have made the same or essentially the same arguments which plaintiff raises in the instant appeal (see e.g. Masigla v Omni Indem. Co., 58 Misc 3d 131[A], 2017 NY Slip Op 51767[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Maiga Prods. Corp. v Omni Indem. Co., 58 Misc 3d 129[A], 2017 NY Slip Op 51731[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Island Life Chiropractic, P.C. v Omni Indem.

Co., 57 Misc 3d 134[A], 2017 NY Slip Op 51255[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Compas Med., P.C. v Omni Indem. Co., 51 Misc 3d 134[A], 2016 NY Slip Op 50528[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Arguelles M.D., P.C. v Omni Indem. Co., 51 Misc 3d 133[A], 2016 NY Slip Op 50524[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016];Tam Med. Supply Corp. v Omni Indem. Co., 48 Misc 3d 142[A], 2015 NY Slip Op 51294[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Great Health Care Chiropractic, P.C. v Omni Indem.

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MARILYN M. SINGLETON, M.D., J.D.

New Years Wish: No More Morally Superior Phonies uMy new year’s resolution is to expose the hypocrisy of the morally superior politicians whose election strategy was to pretend they cared about crafting policies in the country’s best interest.

Take “the wall” on our southern border. Ignoring the opinion of the border patrol agents (51 percent of whom are Hispanic) that it would “without a doubt” be a helpful tool, Nancy Pelosi and her people claimed it would be ineffective in stopping everybody. That’s like the Centers for Disease Control and Prevention (CDC) stopping its flu vaccination campaign because the vaccine is only 40-60 percent effective.

And sanctuary state California Senator Kamala Harris was quick to the gun control microphone when some people were shot in a brawl but not a peep out of her when a community is in mourning after its brown-skinned legal immigrant policeman is gunned down at a traffic stop by a twice arrested illegal immigrant.

Expanding on the racist meme, the new talking point is that a wall is “immoral.” Where is the morality in enabling 1.5 million pounds of drugs to enter our country through Mexico contributing to the 70,237 drug overdose deaths — over 200 deaths per day— in the U.S. in 2017? Or in turning a blind eye to MS-13 gang members and criminals entering the country? I imagine the Costa Ricans and Panamanians are racist for securing their borders from the flood of illegal immigrants, and the El Salvadorians are immoral for putting razor wire walls around entire neighborhoods.

There is no morality in exploiting the deaths of two children who had endured a trek through an unfriendly landscape to score anti-Trump political points.

(Some parents have admitted that their child was “their passport” to a better chance of getting in the United States.).

There is no morality in exploiting the deaths of two children who had endured a trek through an unfriendly landscape to score anti-Trump political points. (Some parents have admitted that their child was “their passport” to a better chance of getting in the United States.).

It is heartbreaking when any child dies. It is frustrating when there is no obvious cause. The CDC reports that in 2015 in the U.S., 393 children in good health between the ages of 1-18 years died suddenly without a clear cause of death, known as Sudden Unexplained Death in Childhood (SUDC). One migrant child reportedly died of sepsis.

Sepsis and septic shock can result from an infection anywhere in the body, including an open cut or scrape. In the United States, more than 75,000 children develop severe sepsis each year.

Almost 7,000 of these children from all socioeconomic groups die – this is more than those who die of pediatric cancers.

These families also deserve compassion. I didn’t see these outraged, compassionate legislators listed as co-sponsors to the bipartisan House Resolution to increase awareness of sepsis.

Where are the tears for the children of Chiraq? At about 24 deaths a year, children in Chicago’s deteriorating black neighborhoods are being killed 24 times the rate that Chicago soldiers are being killed in Iraq. From September 2011 to 2016, at least 174 children under the age of 17 have been killed in shootings. I’m still waiting for the Obamas to mention the problem, much less solutions to their hometown tragedy.

[ GUEST OPINION ]

Dr. Singleton is a board-certified anesthesiologist. She is also a Boardof-Directors member and Presidentelect of the Association of American Physicians and Surgeons (AAPS). She graduated from Stanford and earned her MD at UCSF Medical School. Dr. Singleton completed 2 years of Surgery residency at UCSF, then her Anesthesia residency at Harvard’s Beth Israel Hospital. While still working in the operating room, she attended UC Berkeley Law School, focusing on constitutional law and administrative law. She interned at the National Health Law Project and practiced insurance and health law. She teaches classes in the recognition of elder abuse and constitutional law for non-lawyers.

Multimillionaire Nancy (“We have to pass the bill to find out what’s in it” and if you disagree with me you are sexist) Pelosi is safe in her Napa Wine Country or San Francisco home, far from the drug addicts, dirty needles, feces, gang members and homeless lining the streets of San Francisco. Her voters may be too uninformed or willfully blind to see what she and her ilk have done to this formerly beautiful city. Sadly, the nation will be forced to suffer from her policies that reward scofflaws, patronize the poor, create dependency, and are designed to hustle votes.

Many of the morally superior advocates of government-run healthcare frame the issue as a matter of compassion and social justice for all. The opposite is true. The program will rob every worker of their hard-earned income by doubling their taxes to fully fund Medicare-forAll’s $32 trillion 10-year price tag.

CONTINUED ON PAGE 30 INSURANCE ADVOCATE / January 28, 2019 29

IN THE NEWS CONTINUED FROM PAGE 15

Jenifer Rinehart - Executive Vice President and Chief Human Resources Officer Jenifer joined Preferred Mutual in 2017 and has over 20 years in the insurance industry and over 30 years in Human Resources. Jenifer will drive the transformation of the organization’s talent into a cohesive enterprise team, creating shared values and goals, while understanding the unique needs of its operations and employees.

Michele Graham - Senior Vice President of Strategic Services Michele joined Preferred Mutual in 2004. Michele will utilize her experience in building enterprise services to shape the company’s operational performance.

Leading the company’s project management, business services and product advancement functions, Michele will drive strategic and operational improvements with a focus on efficiency and advancing the customer experience.

Tim Hyle - Senior Vice President, Chief Financial Officer and Treasurer Tim joined Preferred Mutual in 2008.

Tim will lead the organization’s planning and financial strategies to drive strong performance results that support corporate goals. Tim will also oversee critical organizational functions including reinsurance, investments and risk management.

Ray Muller - Senior Vice President and Chief Actuary and Data Analytics Ray joined Preferred Mutual in 2018, bringing over 30 years of actuarial expertise to the company. Ray will drive pricing sophistication as well as strategic and operational decision making through the advancement of analytics and actuarial capabilities.

Dave Smith - Senior Vice President of Technology Dave joined Preferred Mutual in 2010. Dave will develop and advance the organization’s digital strategy, enterprise architecture, and delivery of stateof-the-art cyber security. Dave will be instrumental in driving business strategy, advancing distribution partnerships and enhancing the customer experience through technology.

30 January 28, 2019 / INSURANCE ADVOCATE

Ernie Weeks - Senior Vice President of Underwriting and Sales Ernie joined Preferred Mutual in 2015, bringing over 35 years of insurance industry experience in both underwriting and sales. Ernie will develop and direct the organization’s underwriting/ sales growth and profit strategies while continuously advancing levels of service we provide to our agents and customers.

“We are excited about leveraging the talents of our staff to continue to drive our organization forward, prepare us for the future, and execute on our strategic plans and initiatives,” Taft stated. The realignment of the Executive Team also reinforces Preferred Mutual’s focus on delivering on the promise to help our customers Live Assured.[IA] About Preferred Mutual Preferred Mutual Insurance Company provides property and casualty insurance coverage to more than 232,000 individual and business customers through an exclusive network of more than 500 independent agents throughout New York, New Jersey, Massachusetts and New Hampshire. In business since 1896, Preferred Mutual is rated “A” by A.M. Best Company and is headquartered in New Berlin, New York. Learn more at www.preferredmutual.com.

COURTSIDE CONTINUED FROM PAGE 28

Co., 40 Misc 3d 139[A], 2013 NY Slip Op 51450[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).

Although defendant has prevailed in each appeal, plaintiff ’s counsel continues to advance essentially the same arguments notwithstanding the fact that defendant’s appellate brief expressly notes that this court has previously considered and rejected the arguments put forth by plaintiff ’s counsel and cites every such prior appeal. As plaintiff ’s counsel has persisted and raised the same arguments in the instant appeal, we direct counsel for the respective parties to show cause why sanctions should or should not be imposed against plaintiff ’s counsel (see Flushing Expo, Inc., 116 AD3d 826; Ram v Torto, 111 AD3d 814).

GUEST OPINION CONTINUED FROM PAGE 29

Worse yet, everyone’s liberty will be curtailed. With Medicare-for-All, private insurance is prohibited, doctors will still have to prove that their desired treatment is “medically necessary,” and patients will have longer wait times for services and still get a 7 minute visit with a “provider.” The 63,000 Canadians who left for healthcare in 2017 will have to rely heavily on other medical tourist destinations.

It is highly unlikely that the political elite will be forced to go to the retail clinic at the local drug store or Walmart—certainly not the same southern Virginia Walmart where FBI higher-up Peter Strzok “could SMELL [sic] the Trump support.”

Barely a nanosecond had passed after Speaker Pelosi promised less divisiveness when the newest identity politician shouted from the rooftops (in front of her child), that “we’re going to go in and impeach the mother f-----!”

Because their lives are so much more precious than ours, the power brokers have their private security and the medical care of their choice. They also have no shame.[IA]

With Medicare-for-All, private insurance is prohibited, doctors will still have to prove that their desired treatment is “medically necessary,” and patients will have longer wait times...”

In light of the foregoing, the order is affirmed, and, on the court’s own motion, counsel for the respective parties are directed to show cause why an order should or should not be made and entered imposing such sanctions and costs, if any, against plaintiff ’s counsel pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1 (c) as this court may deem appropriate, by each filing an affidavit or affirmation on that issue in the office of the clerk of this court and serving one copy of same on each other on or before January 31, 2019.[IA] 2018 NY Slip Op 51931(U) Decided on December 21, 2018 Appellate Term, Second Department

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