IN THIS ISSUE OCTOBER 2019 VOL 15 ISSUE 10
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Secret To Scoring Top Electronics At A Big Discount
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Free Financial Seminars May Not Be A Bargain
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As Evil As They Can Be, A Racoon Can Never Be A Vandal
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More Benefit To Coffee Drinking? • Asia Pacific Region: 42% of Global Insurance Premiums
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Financial Advice: Smarter Charitable Giving
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California Agent Busted: Allegedly Steals $590,000 In Fraudulent Life Insurance & Investment Scheme
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NAIC Releases Statistical Compilation Of Annual Statement Information For Property Casualty Insurers Washington State Orders Alaska Air Captive Insurer To Pay $2.5 Million In Taxes & Penalties
Special Report - Your Driving Costs: Going Up!
N. Carolina Insurance Commissioner Calls For BC/BS CEO To Resign After DUI Arrest
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Florida Announces Three Arrests In $39,000 Miami PIP Fraud Scheme
Composite Rate For Personal Lines Insurance Rises To Plus 4.5%
The Truth About Independent Contractors Vs Employees
California Insurance Agent Arrested For Grand Theft & Identity Theft
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Arizona DOI Warns Against Phishing Scam Targeting Insurance Professionals
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The Insider Advisor Byte Me: Digital Size Units Explained
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Rent Rescue Debuts New Rent Default Insurance For Real Estate Investors
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New Jersey Fines Lockton Affinity $1 Million For Violations
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Left Demonstrates Insanity • Bernie’s Scandinavian Socialism? Not... • CNN Uses 9/11 To Blame “RightWingers”
PREFER TO READ OFFLINE? DOWNLOAD & VIEW PDF: HERE!
PAGE 8 - MATT TRESKOVICH SMARTER CHARITABLE GIVING
Special Report Page 12
AAA: Your Cost To Drive: Going Up!
HOW (AND WHY) TO WRITE A PRESS RELEASE THAT ACTUALLY GETS PUBLISHED
PG 38 FEATURES
INSURANCE AND THE LAW PAGE SIX
2019 FAIA & LAAIA TRADE FAIR BOOTH IMAGES NOW ONLINE! PG 40
5 6 8 19
Kim Komando
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Breaking News
26 30
Insider Advisor
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Back Issues
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Cover Image: © R Manera
Barry Zalma Matt Treskovitch Advertise
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OCTOBER 2019 INSURANCE - POLITICS - TECHNOLOGY - PEOPLE A Publication of AdMax Corp., Inc. Corporate Offices P.O. Box 31551 Palm Beach Gardens, Florida 33420 Ron Manera, Publisher/Senior Editor Join Me On Linkedin: HERE Follow Me On Instagram: @rj.0521 561.718.0745 • ron@insurmedia.com
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OCTOBER 2019
TECHNOLOGY
A SECRET TO SCORING TOP ELECTRONICS AT A BIG DISCOUNT
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Really Cool Tech Info - From Kim Komando mortar employer of all. Now, in the shadow of online e-commerce, the big-box retailer has seen its shares and profits start to decline. But that’s the nature of competition and to stay in the fray, Walmart is offering a range of excellent deals on tech products that are guaranteed to turn heads.
s high-end electronics continue to make their way into our homes and offices, more and more people each day are on the hunt for the best places to buy them. Traditionally, people relied on electronics stores like RadioShack or Best Buy. But nowadays, there are enough choices to where you don’t even need to leave your home in order to find a good deal. Despite popular belief, the e-commerce giants of the web aren’t always the best place to snag a deal on the latest gadgets and gizmos. In fact, one of the best resources for low prices on electronics is actually quite well known — just not for selling technology like its competitors. If you’ve been looking to pick up a new TV, a laptop, or even a portable smart device, there’s an online shop you have to check out that has prices that even other low-cost retailers look expensive. OCTOBER 2019
This lightweight laptop gives you a massive screen for under $500 HP 14 SLIM LAPTOP, 14” HD
Here’s the secret to grabbing killer deals from this one major retailer.
Walmart is fighting for your wallet in the world of electronics Walmart is one of the biggest companies in the U.S. and for years was the largest brick-andTable of Contents
The sub-$500 category of laptops is always yearning for improvement. But every so often, a deal comes around that really makes you wonder why you would even spend more on a computer. See Kim Komando Pg 36 www/underwritersinsider.com
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CLAIMS & THE LAW
AS EVIL AS THEY CAN BE A RACOON CAN NEVER BE A VANDAL Expert Analysis & Commentary by Barry Zalma, Esq., CFE Animals Do Not Have Conscious Agency and Are Not Subjects of Human Law
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awyers are creative people. They will try almost anything to get money out of an insurance company. Sometimes, however, their creativity approaches stupidity and a waste of the time of a court and lawyers.
2019) a USDC in Pennsylvania was faced with a creative but ridiculous attempt to find coverage for loss not one of the named perils specified in the policy.
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Capital Flip, LLC (“Capital Flip”), sued asserting claims for breach of contract and In Capital Flip, LLC v. American insurance bad faith arising out Modern Select Insurance of Defendant American Modern Company, Civil Action No. 2:19- Select Insurance Company’s cv-180, United States District (“American Modern”) denial Court for the Western District of insurance coverage for of Pennsylvania (September 19, substantial property damage
caused by racoons. Capital Flip argued that the raccoons engaged in “vandalism and malicious mischief” which is unquestionably covered by the insurance policy. Defendant countered that raccoons cannot, as a matter of law, engage in vandalism or perpetrate mischief—much less with malice.
FACTUAL BACKGROUND Capital Flip was the owner of a dwelling located in the Pittsburgh area. In April of 2018, Capital Flip discovered that racoons had somehow entered the dwelling and caused a substantial amount of damage to the interior. The property was
Barry Zalma, Esq., CFE, practiced law in California for more than 43 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. 6
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OCTOBER 2019
insured by a Dwelling Policy “malicious mischief” is one of issued by American Modern. first impression in Pennsylvania and, therefore, does not lend The Dwelling Policy offered itself to disposition on a motion coverage for a limited number to dismiss. of “perils insured against.” The only insured peril relevant to Regardless of this case covers losses arising the statements out of “vandalism or malicious mischief.” of the soCapital Flip contended that the called “animal rights” damage to its property was a organizations animals result of “vandalism or malicious mischief” by the culprit racoons. cannot subject themselves American Modern denied the to the law, cannot be claim stating “since your loss held and imprisoned was the result of an animal or animals damaging the dwelling for their crimes, nor can and this is not covered in the list they act with conscious of perils, as stated above, there or malicious mischief as is no coverage under your policy for the loss. Therefore, your much as humans dislike claim is respectfully denied.”
what they do.”
American Modern filed a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6), arguing that Capital Flip’s claims fail as a matter of law because its denial of coverage was warranted. Capital Flip counters that the Policy is ambiguous because it does not specifically define “vandalism” or “malicious mischief.” It contends that, because those terms are undefined, they may include damage caused by racoons and/or other animals. At the very least, Plaintiff argues, the question of whether an animal can engage in “vandalism” or OCTOBER 2019
ANALYSIS The Court found that Capital Flip has failed to plead a plausible claim either for breach of contract or for insurance bad faith. Both of those claims hinge on a finding that Capital Flip was entitled to coverage under the Dwelling Policy at issue. This finding would require this Court to determine that the acts of animals — the raccoons — can reasonably be understood to constitute “vandalism or malicious mischief” as used in the insurance policy.
At its heart, this case requires a simple interpretation of the Dwelling Policy purchased by Capital Flip. Insurance policies are considered contracts and contract interpretation is generally a question of law requiring ordinary principles of contract law. The role of a court in interpreting an insurance policy must be to ascertain the intent of the parties as manifested by the language of the written agreement. When the policy language is clear and unambiguous, the court must give effect to the language of the contract. The words of the insurance policy must be construed in their natural, plain and ordinary sense. Moreover, an insurance policy, like every other written contract, must be read in its entirety and the intent of the policy is gathered from consideration of the entire instrument. The USDC found that the relevant portion of the Dwelling Policy is clear and unambiguous. Section 10 of the Policy clearly and unequivocally states that it covers direct physical loss to the property caused by “vandalism or malicious mischief.” A contractual provision is only ambiguous if it is reasonably susceptible to different constructions and
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ANALYSIS - FINANCIAL
“InvestmentZen”Credit: www.investmentzen.com
SMARTER CHARITABLE GIVING By Matthew Treskovich, CPA/PFS, CFP®, CMA, MBA
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upporting charities is an important estate planning goal of many people. Donating to charity can give you the personal satisfaction of helping people and building a stronger community. Smart charitable giving can also provide tax benefits. Careful planning will allow you to make the best possible use of the funds you have set aside for charity. 8
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Outright Gifts and Bequests The easiest way to support charities is through outright gifts while you are alive, and through bequests of cash in your will. Gifting while you are alive is as simple as writing a check. Bequests can be as simple as adding a paragraph to your will. Naming a charity as the beneficiary of your retirement plan is another simple and straightforward way of giving. Table of Contents
Outright gifts and bequests are not always the most-tax efficient way of giving. Once the gift is made, you as the donor have no further control over the funds. For a small, simple gift, with no strings attached, an outright gift or bequest can work well. For larger gifts, other strategies may be better, especially if saving on taxes is important.
Charitable IRA Rollover A charitable IRA rollover allows you to give money directly to a charity OCTOBER 2019
from your IRA. The rollover amount is excluded from your taxable income. The charitable rollover also counts toward your Required Minimum Distribution (RMD) amount. You can use this method to give up to $100,000 per year to charity if you are over age 70½ and have money in a traditional IRA. Charitable rollovers to donor-advised funds and private foundations are not allowed. Charitable IRA rollovers are a good way to use money in a retirement plan that you don’t need and want to go to charity.
Donor-Advised Funds For more sophisticated giving, you might want more control over how your gift is ultimately used by the charity. A Donor-Advised Fund allows you to make a charitable gift today, and get the tax benefit, while deciding later how the funds will be used. When you contribute to a donoradvised fund, you are making an irrevocable gift to the fund. The money in your donor-advised fund account can be invested, and you can choose the investment advisor
who manages the fund’s assets. Money in the donor-advised fund will grow tax-free until you decide to distribute funds to qualified charities. When you are ready to fund a specific charity, you can recommend a grant from the fund to the charity. Most 501(c) (3) charities are eligible to receive money from a donor-advised fund. Outright gifts, charitable IRA rollovers, and donor-advised funds are all good ways of providing funds to charity. Careful planning will help you maximize the impact of your charitable gifts, and your tax benefits as a donor. Planning charitable gifts often requires expertise in several areas of financial planning, including retirement planning, estate planning, and income tax planning. If you need help planning charitable gifts, make sure your advisor is competent to give you advice in all these areas.
About the author:
Matt is the Chief Investment Officer of the firm of CPS Investment Advisors with 18 years of experience in financial services also serving as the CFO of an insurance brokerage. With a Master’s degree in Business Administration, with an emphasis on accounting from the University of Phoenix, Matt is a CPA licensed in Florida and holds the AICPA’s Personal Financial Specialist (PFS) designation. Matt is a CERTIFIED FINANCIAL PLANNER ™ and a Certified Management Accountant (CMA). and received a Certificate of Distinguished Performance from the IMA for achieving a CMA exam score in the top ten worldwide. In 2017, he was awarded an AICPA Standing Ovation for exemplary professional achievement in personal financial planning services. Treskovich also is certified as an Accredited Estate Planner® (AEP®) designee by the National Association of Estate Planners & Councils (NAEPC). He is a member of the Institute of Management Accountants, former President of the Mid Florida Chapter and former Treasurer of the IMA Florida Council.
OCTOBER 2019
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NEWS
NAIC RELEASES STATISTICAL COMPILATION OF ANNUAL STATEMENT INFORMATION FOR PROPERTY/CASUALTY INSURERS
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ASHINGTON (Sept. 26, 2019) — The National Association of Insurance Commissioners (NAIC) has released data on property and casualty (P&C) insurance companies. The reportis broken into three sections: Annual Statement Financial Data; State, Territory, and Aggregate Other Alien Insurance Data; and Selected Data Elements from Company and Combined Statements.
Highlights from the report include:
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•
Direct written premium in 2018 ($677,382,129,000) is up 40.7% from 2009. • P&C industry surplus is $779 billion, up from $556 billion in 2009. • The combined ratio in 2018 of 99.3% indicates an industry-wide underwriting profit for the year. • The largest line of business in the P&C industry is private passenger auto with 36.4%, (includes liability and physical damage coverage) of total industry
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direct written premium. Homeowners premium makes up 14.6% of total industry direct written premium. Comments on this report are encouraged to ensure the report continues to meet the needs of NAIC members and other users. Please send any questions regarding this report to researchrequest@naic.org. Links to this report and other NAIC reports can be found on the NAIC publications page.
OCTOBER 2019
NEWS
WASHINGTON STATE ORDERS ALASKA AIR CAPTIVE INSURER TO PAY $2.5 MILLION IN TAXES, PENALTIES ASA Assurance demands hearing to contest authority to regulate, tax unauthorized insurance
ASA Assurance is a captive insurance company formed by Alaska Air Group for the purpose of insuring its risk in states including Washington . It issued four policies for Alaska Air Group and its subsidiaries, Alaska Airlines, Inc., Horizon Air Industries, Inc., and McGee Air Services, Inc., collecting $91 million in premiums. ASA is not admitted to sell insurance in Washington state. OCTOBER 2019
companies are using captives to purchase their own insurance and failing to pay premium tax. His office is working to identify all captives doing business in Washington state. To date, nine captives have self-reported and two captives have paid $2.9 million in unpaid premium taxes and $1.4 million in fines, tax penalties and interest. Kreidler reached a settlement of $876,820 with Cypress, a captive insurer for Microsoft Corp., in August 2018.
Washington state does not currently license captive insurers. Companies must buy insurance from either an admitted insurer or through a licensed surplus line broker and they must pay premium tax on the insurance they buy. Kreidler determined in December 2018 that many large Washington Table of Contents
Kreidler reached a settlement with NW Re Limited, captive insurer for Costco Wholesale Corp., on March 8. It paid $3.6 million in premium taxes, tax penalties, interest and fines. ASA Assurance, domiciled in Honolulu, Hawaii, has demanded a hearing before an administrative law judge. A prehearing telephone conference has been scheduled for Sept. 30. www/underwritersinsider.com
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Eddie Maloney from North Las Vegas, USA, ALASKA AIR (2225742034), CC BY-SA 2.0
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LYMPIA, Wash. – Washington state Insurance Commissioner Mike Kreidler ordered ASA Assurance Inc., a captive insurer for Alaska Air Group, to pay more than $2.5 million in unpaid premium tax and penalties owed to Washington state for the unauthorized sale of insurance.
A captive insurer is an insurance company established by a parent company for the purpose of insuring its risk. State law requires insurance companies to pay a 2% tax based on their written premiums. The tax revenue is sent to the state general fund to pay for government operations. ASA paid no premium tax on the insurance it unlawfully sold.
SPECIAL REPORT - AAA
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RLANDO, Fla. (September 12, 2019) – It’s going to cost more for those looking to buy a new car this year. Finance costs on new car purchases have jumped 24% in 2019, according to new AAA research, pushing the average annual cost of vehicle ownership to $9,282, or $773.50 a month. That’s the highest cost associated with new vehicle ownership since AAA began tracking expenses in 1950 and a reminder that the true costs of owning a vehicle extend far beyond maintenance and fuel.
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The Underwriter’s Insider
“Finance costs accounted for more than 40% of the total increase in average vehicle ownership costs,” said John Nielsen, AAA’s managing director for Automotive Engineering & Repair. “AAA found finance charges rose more sharply in the last 12 months than any major expense associated with owning a vehicle.”
Additional Resources Brochure
by rising federal interest rates and higher vehicle prices. It comes as 72-month car loans have become increasingly common – meaning car buyers are paying more, and longer, for vehicles that lose value the moment they’re sold. Longterm loans offer lower monthly car payments, but they ultimately cost the consumer more. AAA found that, on average, every 12 months added to the life of a loan adds nearly $1,000 in total finance charges.
The spike in finance charges – which rose from $744 to $920, a “Smaller monthly payments may nearly $200 increase — was fueled be tempting to potential buyers, Table of Contents
OCTOBER 2019
https://pixabay.com/photos/driving-car-automobile-driver-407181/
YOUR DRIVING COSTS: GOING UP
but they can add big costs in the long run,” Nielsen said. The new figures come from Your Driving Costs, which reviews nine categories of vehicles – consisting of 45 models – to determine the average annual operating and ownership costs of each. AAA focuses on top-selling, mid-priced models and compares them across six expense categories: fuel prices; maintenance/repair/ tire costs; insurance rates; license/ registration/taxes; depreciation; and finance charges. Annual average costs increased in each category. Of all costs, depreciation, a measure of how quickly a car loses value, remains the single biggest cost of ownership, accounting for more than a third (36%) of the average annual cost. It slowed a bit this year, with vehicles included in the study losing an average of $3,334 a year, up $45 – or 1.4% – from last year. In 2018, depreciation rose by $117, or 3.7%. In two vehicle classes this year – small and medium sedans – depreciation costs actually declined.
Other key findings of this year’s Your Driving Costs include:
timeframe covered by the study. Electricity prices for EV charging also rose 0.1 cent per kilowatt-hour (0.08%), but the market share of the electric vehicles in the study (0.48%) makes the effect of this increase on the overall average fuel cost negligible. Fuel costs vary widely by vehicle type, ranging from a low of 3.65 cents per mile for electric vehicles, to 15.67 cents per mile for pickup trucks.
Average fuel cost rose to 11.6 cents per mile, 5% higher than last year. The per-mile increase was driven by gasoline prices, which are up 15.6 cents per gallon Average maintenance and over the timeframe covered by repair costs climbed marginally
to 8.94 cents per mile, up 8.9% over last year. The increase was fueled by the growing complexity of vehicle systems and an updated methodology for calculating repair costs. Electric vehicles had the lowest maintenance and repair costs – 6.6 cents per mile – while medium-sized SUVs had the highest at 9.6 cents per mile.
See Driving Costs Page 34
NEWS
NORTH CAROLINA INSURANCE COMMISSIONER CALLS FOR BC/BS NC CEO RESIGNATION AFTER “DEMONSTRATED LACK OF LEADERSHIP, ARREST COVER-UP”
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ASTONIA -- North Carolina Insurance Commissioner Mike Causey today called for the resignation of Blue Cross and Blue Shield of North Carolina Chief Executive Officer Patrick Conway for Conway’s lack of leadership and professionalism and for the insurance giant’s cover-up of Conway’s June arrest for drunk driving and child neglect.
become apparent to me that there has been a significant breakdown in the corporate governance at Blue Cross Blue Shield of North Carolina.
misrepresented to the Department of Insurance the actual arrest — telling me that the incident was without incident and was a routine arrest.
The efforts by the board of directors to hide the arrest of their CEO for On Tuesday, Sept. 24, news reports drunk driving and child neglect showed the arrest was anything but is very disturbing. When news accounts surfaced of the June 22 incident last week, the board See NC Calls For Resignation Pg 45
In a press conference outside of the Gaston Gazette in Gastonia, N.C., the Commissioner said this decision follows his examination of the arrest police report and numerous news reports that showed the CEO driving in an erratic way, putting his daughters’ and other drivers’ safety in jeopardy. The Commissioner issued the following statement: “When I put my hand on the Holy Bible and took an oath to serve as North Carolina’s Commissioner of Insurance — I promised myself, my staff and the citizens of this state, that honesty will be the top priority, that this office will be accountable to the people we serve, that we will root out corruption and malfeasance and that leaders lead. Over the last few days, it has 14
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Mr. Zalma recently published on Amazon.com with links at the Zalma Books site with the following volumes:
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OCTOBER 2019
NEWS
FREE FINANCIAL SEMINARS MAY NOT BE A BARGAIN Alabama DOI Issues Warning Against “Free” Financial Seminars
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undreds of financial seminars are presented each year, often boosting attendance by offering a free meal at an upscale restaurant. However, the costs of these seminars can far exceed the price of a steak dinner for attendees, according to the National Association of Insurance Commissioners (NAIC). A recent survey sponsored by the NAIC and conducted by the research firm Caravan found that one in five Americans has attended such an event. A surprising 41 percent of those report actually purchasing some product or service. That number jumps to 58 percent among the youngest age group surveyed: 18 to 34. “We believe that insurance and other financial products are an essential part of an overall plan for a strong financial future,” said NAIC President Eric Cioppa. “But consumers need to be cautious of one size-fits-all marketing programs and make sure that they OCTOBER 2019
understand the products being offered and that they are designed to meet their individual needs.” When it comes to free meal financial seminars, the NAIC offers these reminders:
impossible to assess the nuanced financial needs of any individual or family during a two-hour seminar. Such sessions often take a generic approach to boost sales, which means some people may wind up paying for services that aren’t a good match to their situation.
• Personal information is valuable. The information you provide to register for a seminar may be sold to other • Ask if the presenter people intent on selling you is licensed. There is no other products or investments. required professional Make sure you understand credential for merely hosting what the sponsors of the a seminar. Research the event intend to do with your sponsoring company and information. the representative by calling the Alabama Department of • Prepare for a high-pressure Insurance. Are they licensed? pitch. The NAIC survey Have they been the subject of reports that 57 percent of any formal complaints, lawsuits those who attended such or enforcement actions? a seminar felt pressured to purchase something or to • If it sounds too good to provide personal information. be true, it probably is. All The meal does not commit investments carry some you to anything. If you don’t degree of risk, and many understand the product, the investments can’t guarantee presenter comes on too strong a particular return. If you feel or you want to shop around, you have been wronged by the don’t commit to purchasing a presenter of a financial seminar, product. or by any financial professional, your state insurance • The product offered may commissioner’s office not be right for you. It’s can help. Table of Contents
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THE INSIDE TRACK - BREAKING NEWS At Risk For Gallstones? Drink More Coffee...
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he results of an 8-year study tracking 105,000 Danes are in and offer a surprising new benefit to coffee drinkers. Those in the study who drank more than six cups a day realized a 23% lower risk of gallstones. While the average Dane only drinks 2 cups of coffee daily, those folks saw good news in results showing even 1 cup of coffee daily resulted in a 17% reduced risk.
lines. According to Thomas Holzheu, chief economist for the Americas at Swiss Re, “around 2015, we saw an increase in frequency and severity for motor [claims], both in personal and commercial. [Now,] we see denser traffic on the roads, and we see distracted driving taking hold as an issue and driving up frequency,” resulting in rate increase on both the commercial
and personal lines side of the market. As low interest rates make underwriting profitability essential, look for strong unabated rate increases with steep loss ratios. And premiums are moving towards Asia-Pacific. “It’s two fundamental forces [driving this], and one is the growth of the economies in Asia, centring around the two big economies in China and India, which will
Look To The Eest Or Is It Wast?
4
2% Of Global I n s u r a n c e Premiums Will Come From Asia-Pacific by 2029. While global premum volume reached a new high of $5 Trillion in 2018, profitability was challenged due to CAT losses and other commercial sector
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THE INSIDE TRACK - BREAKING NEWS continue to grow at a faster pace than Europe, the US, or Japan and Australia,” said Holzheu.
NCDOI launches first Criminal Investigations Reserve Unit
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orth Carolina Insurance Commissioner Mike Causey has organized its first Criminal Investigations Reserve Unit to combat the extensive number of
at 325 N. Salisbury Street in Raleigh. They join the force of 40 full-time agents serving North Carolinians across the state. Because of the Commissioner’s commitment to fighting fraud, the number of fraud arrests have more than doubled since he took office. In 2016, the Criminal Investigations Division made arrests in 57 of the 100 North Carolina counties; in 2018, those arrests increased to 93 of the state’s 100 counties.
New Government Service Contractor Insurance Program
A Credit: NCDOI NCDOI Commissioner Mike Causey
fraud cases in the state. The new inductees, four veteran law enforcement personnel, were sworn-in Thursday at a ceremony at the Albemarle Building OCTOBER 2019
ll Risks, Ltd., the nation’s largest independent wholesale insurance brokerage firm, is pleased to announce that it is launching a new Government Service Contractor Insurance Program. All Risks’ National Specialty Programs unit, specialty insurance programs administrator for over 20 years, is the exclusive administrator of this new program. Available Table of Contents
nationwide, the new program features an A.M. Best “A+” XV rated carrier, and focuses on serving a wide range of federal service-related contractors, including security guards, fire suppression contractors, commissary and food service operations, janitorial services, warehousing, landscaping and grounds care, and more.
Risk Strategies Best Place To Work...
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OSTON, -- Risk Strategies, a privately held, rapidly growing national insurance brokerage and risk management firm, today announced it has been named for the second consecutive year in the annual Best Places to Work in Insurance program, which recognizes employers for their outstanding performance in establishing workplaces where employees can thrive, enjoy their work and help their companies grow. Founded in 1997, Risk Strategies is a leading national brokerage.
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17
NEWS
CALIFORNIA AGENT BUSTED: ALLEGEDLY STEALS $590,000 IN FRAUDULENT LIFE INSURANCE AND INVESTMENT SCHEME Scheme targeted 18 victims, three of the victims were seniors
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RANGE COUNTY, Calif. — Joseph Ramiro Garcia, 37, formerly of Brea, was arrested today on multiple felony counts of grand theft, fraud, elder abuse and burglary after allegedly submitting fraudulent life insurance applications to collect advance commissions and embezzling over $590,000 from 18 different victims.
received approximately $20,382 of these funds. All the life insurance applications contained the same banking information for premium payment, resulting in unauthorized attempted deductions from an unrelated insured’s bank account. The applications also contained information pertaining to the proposed applicants’ personal identifying information, including Social Security numbers, contact information, and Driver’s Licenses which was found to be bogus.
After receiving a complaint from Transamerica Premier Life Insurance Company, the California Department of Insurance Investigation Division uncovered a far-reaching fraud and embezzlement scheme. Garcia submitted seven fraudulent life insurance applications to the insurance company between December 2014 and January 2015, which caused the company to issue over $50,000 in advanced commissions to the managing general agent, World Financial Group. Garcia 18
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became aware of victims whose relationship with Garcia began when he prepared their income taxes. After gaining their trust, Garcia convinced them to rollover their retirement accounts into another account he controlled through two of his companies, Building Bridges Financial Firm LLC and VOS Financial LLC. From February 2014 to February 2018, Garcia represented himself as a financial advisor and allegedly embezzled roughly $598,906.52 from 18 different victims, who were unware their funds were not applied as intended. The majority of the stolen funds were from the victims’ IRA or 401(k) retirement accounts which were never properly rolled over to another independent financial institution. A small portion of the stolen funds were miscellaneous personal checks Garcia negotiated. One victim’s annuity account was systematically liquidated without her knowledge. As a result of the
Ramiro Garcia, 37
After executing multiple bank search warrants, CDI Investigators Table of Contents
See Agent Busted Page 18 OCTOBER 2019
OCTOBER 2019
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NEWS
FLORIDA ANNOUNCES THREE ARRESTS IN $39,000 MIAMI PIP FRAUD SCHEME
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IAMI – Chief Financial Officer (CFO) Jimmy Patronis announced the arrest of Alean Machado, Barbarito Leyva-Claro, and Yoandra Rodriguez-Pena for their role in an alleged personal injury protection (PIP) fraud scheme. The scheme was exposed during an undercover operation charging the three individuals with Insurance Fraud, Grand Theft, Patient Brokering and Organized Scheme to Defraud. CFO Jimmy Patronis said, “Insurance fraud is a serious crime that is estimated to cost Americans more than $40 billion a year. Reports show that this translates to an estimated cost to the average U.S. family of between $400 and $700 a year in the form of higher premiums. This is unacceptable and that is why I launched my Fraud Free Florida initiative to further enhance investigative efforts to combat the rampant fraud in Florida. I encourage all Floridians to report fraud tips at FraudFreeFlorida.com to help our detectives track down these fraudsters and bring them to justice.”
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State Attorney Katherine Fernandez Rundle said, “These types of clinics are the core elements of any ongoing PIP insurance fraud scam as they exist only to steal, not heal. Those individuals who hope to snatch some cash from the pockets of Miami-Dade’s insured motorists should know that the dedicated investigators from CFO Jimmy Patronis’ Division of Insurance Fraud and my Insurance Fraud prosecutors are out to get you. Find a new line of business or prepare to go to jail.” Between January 2019 and March 2019, CFO Patronis’ Bureau of Insurance Fraud conducted an undercover operation into Professional Medical Practice, a Miami physical therapy clinic. Investigators used two cooperating witnesses to pose as vehicle accident victims at which time, it was discovered that clinic owner Alean Machado, with the assistance of Barbarito Leyva-Claro acting as recruiter, allegedly offered to pay participants $2,500 for their involvement in fraudulent physical therapy treatments. Yoandra Rodriguez-Pena, a physical therapist, coached the cooperating Table of Contents
participants on what to say if ever questioned by their insurance company about therapy treatments that were never provided. As result of the scheme, Machado fraudulently billed two insurance companies over $39,000 for numerous days of physical therapy treatments that never occurred. Machado, Rodriguez-Pena and Leyva-Claro were arrested and booked into Turner Guilford Knight Correctional Center (TGK) on October 1. Charges include Insurance Fraud, Grand Theft, Patient Brokering and Organized Scheme to Defraud and if convicted on all charges, Machado and Rodriguez-Pena face up to 45 years in prison. Barbarito LeyvaClaro, if convicted on all charges, faces up to 50 years in prison. Individuals charged with a crime are presumed innocent until proven guilty. This investigation was conducted in conjunction with the National Insurance Crime Bureau (NICB) and is being prosecuted by MiamiDade State Attorney Katherine Rundle’s Office. OCTOBER 2019
COMPOSITE RATE FOR PERSONAL LINES INSURANCE RISES TO PLUS 4.5% Homeowners rates continue to increase across US
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for large homes over $1,000,000 in coverage A value increased the most at plus 6.5 percent. This is a notable increase and is somewhat driven by large
he composite rate for personal lines continued to increase. Rates increased from plus 3.5 percent in the second quarter 2019 to plus 4.5 percent in the third quarter. Average rates for homeowners coverage OCTOBER 2019
homes in CAT prone areas such as California and Florida. Rates for homes under $1,000,000 also increased from last quarter. Rates for auto and personal articles coverages increased by one full percentage point from the third to the fourth quarter. Richard Kerr, CEO of MarketScout noted, “So far we have not been hit hard with any catastrophic losses in the second half of 2019.
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ANALYSIS
INDEPENDENT CONTRACTOR VS. EMPLOYEE, OR HOW SOME WORKING PEOPLE REALLY SCREW THEMSELVES OVER, AND PUT YOU AND YOUR INSUREDS AT RISK. (AND WHAT YOU CAN DO ABOUT IT)
I
had a rich Relative, but late in his life he had a major business reversal and lost it all. Now he lives on Social Security payments of about $3500.00 per month. Now, while he is miserable, he does have a steady source of income that most people in this country and the world would be very happy with. While he was rich my relative paid Social Security taxes on his substantial income. Had things worked out the way my relation expected, this money from Social Security would be fun money. Now it’s his lifeline. But I am seeing more and more people suffering because they
are being paid as a business as under $500 a month in Social opposed to being paid as an Security just wasn’t cutting it. employee. This is cutting them off from ever accessing Social Example #2: Security. A very nice young woman my wife used to take care of came to Example #1: town; we met her for a meal. This Earlier this week I heard from an very pretty 20 something is now electrical contractor. Sounded making a living as a freelance yoga like a really nice guy who wanted instructor in NYC. Hearing about to get a workers’ compensation her work I asked, “what about your policy in order to work on some taxes”. Well, turns out she went to jobs that required insurance file her taxes a few years back and certificates. The Catch? He was when told she owed money she only going to work off and on part stopped filing taxes. time over the year, after all being over 80 he didn’t work as much as Example #3: he used to. When signing on a new customer, one of the employees pulled me So I asked, at 80, why are you still working? Well he said, getting See Employee vs Contractor Next Pg
About The Author: Michael Speizman is a voting member of the Florida Workers Compensation Fraud Task Force. Michael has over 25 years’ experience with Employee Leasing and Professional Employers Organizations as both an owner and broker. He is an experienced HR Outsourcing consultant and the owner and president of Employee Leasing Marketplace, Inc.. Michael’s specialties include Blue Collar Industries, JUA, Staffing, Transportation and hard to place risks of all sizes. You can reach Michael at: 561 239 7356 22
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Continued From Previous Page
EMPLOYEE VS INDEPENDENT CONTRACTOR
All of these people are royally screwing themselves over by excluding themselves from the Social Security System. In order to qualify for Social Security you must have worked for at least 10 years (40 quarters) same for Social Security disability. What you get from the program is dependent on what you put in. Tell the government you made $1000.00 per month; expect a very small monthly check. In todays gig economy more and more workers are putting themselves in debt to the IRS, while at the same time putting them outside the Social Security system, or permanently lowering their monthly benefit to something below poverty level.
aside and confided that he had never paid taxes before. This gentleman was in his early sixties and bragged about his past work for “the Gottis” and others. All of his prior jobs involved getting paid cash off the books. He then asked me how he could get Social Security in a few years. Two notes, 1, I did not sign up this customer and 2, this guy looked as if he was drinking an entire bottle of What does all of the above have Scotch every day since he was 15. to do with Insurance? Desperate People Do Desperate Things... All of the people above have fallen into a trap of being treated We all see ridiculous claims being as business when in fact they made against our customers, but have acted as employees. Or in many cases, these ridiculous they were enjoying getting paid claims are being made out cash without paying any taxes or desperation, not greed. both. The guy who worked for cash Businesses are expected to his whole life, the free-lance manage their cash flows to be yoga instructor the 80+ year able to pay taxes on a quarterly old electrician, all have to and annual basis. Employees sue someone and everyone if are subjected to withholding on something bad happens to them. every check they get to ensure They have no other choice except that when the year-end comes, poverty and death. the taxes they owe can be paid with the money already collected My advice to business owners, make sure everyone who works from them.
for you and your vendors is paid as an employee with taxes withheld from their paychecks and workers’ compensation coverage. (IOW, don’t pay everyone you can as a “1099”) To those of you in the Gig economy, or who work for your selves, save over 20% of every dime you make to pay your taxes, and look into getting workers’ compensation coverage for yourself. Or get a real job from a real business that treats you as a real employee.
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NEWS
CALIFORNIA INSURANCE AGENT ARRESTED FOR GRAND THEFT AND IDENTITY THEFT
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OS ANGELES, Calif. — Ex-insurance agent Yolanda De La Torre, 35, of Whittier, was arrested today on one felony count of grand theft and one felony count of identity theft after allegedly collecting over $13,000 in insurance payments from approximately 10 clients and leaving her clients uninsured. De La Torre, as a licensed insurance agent doing business as Yoly’s Insurance Services, collected payments from clients for car insurance but failed to place it with an insurance company or pay premiums leading to cancellations. The department revoked De La Torre’s license and licensing rights on June 11, 2019, in order to protect consumers. The department’s investigation found that De La Torre accepted “cash only” payments and would
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pay the victims’ initial insurance payment, allow the premiums to be cancelled for non-payment yet continue to accept monthly payments from the victims.
Some of De La Torre’s victims became aware of the crimes when they were in car accidents and upon filing a claim with the insurance company found they had no coverage or their coverage had been cancelled for non-payment. Other victims became aware when they received notices from the DMV indicating registration was suspended due to no proof of insurance.
Some of De La Torre’s victims became aware of the crimes when they were in car accidents and upon filing a claim with the insurance company found they had no coverage or Yolanda De La Torre, 35, of Whittier, CA their coverage had De La Torre also made been cancelled for non-payment. unauthorized electronic payments with an unsuspecting This case is being prosecuted by victim’s checking account to pay the Los Angeles County District for another client’s insurance Attorney’s Office. coverage. Table of Contents
OCTOBER 2019
NEWS Continued From Page 25
AGENT BUSTED IN $590,000 LIFE INSURANCE FRAUD
ARIZONA DOI WARNS AGAINST PHISHING SCAM TARGETING INSURANCE PROFESSIONALS
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Garcia was booked into Orange County Jail and bail was set at $600,000. This case is being prosecuted by the Orange County District Attorney’s Office under the Life and Annuity Consumer Protection Program (LACPP). Garcia is no longer licensed as an insurance agent. OCTOBER 2019
According to a report by Insurance Business Mag (www. insurancebusinessmag.com), “Citing information from the actual NAIC and the Arizona Department of Administration Security Operations Center (AZSOC), AZDOI noted that the virus has been identified as Lime RAT, a remote access trojan. Lime RAT can be used to perform malicious actions on the affected computer, such as installing ransomware.
to click on a link to download the complaint notification. Certain antivirus products will detect this as a malicious email. If you receive a similar email and have any concerns, contact the NAIC Service Desk at (816) 783-8500 or help@naic.org.” Table of Contents
AZDOI also shared that the phishing email originally targeted insurance producers in Wisconsin, but has now spread to Illinois, Minnesota, and Washington.” www/underwritersinsider.com
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U.S. Air Force photo/Airman 1st Class Christopher Thornbury
rizona’s Department unknown withdrawal of retirement of Insurance has sent funds, some victims are also facing notification to all insurers IRS tax penalties for the early operating in the state to bewar withdrawal of funds and the failure e of a phishing scam targeting to report income due to Garcia’s insurance professionals: actions. The majority of the victims had a close relationship with Garcia “We are aware of a phishing and three of the victims were 65 or scam targeting insurance older at the time of the theft. professionals claiming that the National Association of The investigation determined Insurance Commissioners the majority of stolen funds were received a complaint that deposited into business bank the professional submitted a accounts controlled by Garcia and falsified claim. used instead for personal expenses, such as designer clothing, Disneyland This fraudulent email season passes, restaurants, and displays the NAIC and travel. When the embezzlement was CIPR logos, can originate discovered, Garcia refunded monies from what appears to to some of his victims and belatedly be an naic.org or gmail. set up financial investments for com email account, and others to cover his activities. instructs the recipient
“The Final Authority on Everything!” WARNING!
The Advisor has been known to be politically incorrect and may send certain Millennials scurrying to their safe space. Please read at your own risk.
Byte Me...
I
remember back in the days of my first computer, many files were in KB sizes. Then everything grew and most files were in MB sizes. Now it’s GB sizes and the office is confused as to the difference. One of the crew suggested we ask the Advisor. Can you explain in lay-person language? G.G. Los Angeles, CA
ADVISOR
today’s computer universe. So multiply by another 1000 and now you have a more useful and familiar quantity of digital data, called the “megabyte.” And back in the day, when a floppy disk only held 1/2 of a megabyte, and most file sizes were in the kilobytes, it was a big deal. The first hard drives held only about 10 megabytes - not enough to hold a decent size image from today’s digital cameras. As file sizes grew and operating systems expanded to hundreds of megabytes,
storage devices holding only a few megabytes were soon insufficient. It wasn’t too long before computer users were introduced to the next level of data units - a 1000 times larger that a megabyte: the “gigabyte.” The first such drives were still very small by today’s standards - only 2-3 gigabytes (or 2000 to 3000 megabytes) - but representing a huge leap in storage capacity over older, slower drives. But with the ever advancing size of programs and files, even the
Thanks for your question G.G. and The Advisor will try and clear this all up for you. The smallest unit of digital information is a “bit.” The information in that bit is a zero or a one. You add up 8 of those bits and you’ve got a “byte,” still a very small unit of information. But a thousand of them add up to a “kilobyte” still a very small amount of data in 26
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Yottabyte LLC, Yottabyte Logo Horizontal, marked as public domain, more details on Wikimedia
mighty gigabyte failed to satisfy the growing appetite for larger and larger operating systems, applications and file sizes, including video, digital images and music. And once again, the next increment in data units was a 1000 times larger than the gigabyte, the “terabyte.” And for those of us that store significant data, it’s not uncommon to utilize 1, 2 or even 5 terabyte drives OCTOBER 2019
We are never going to need more than the terabyte, right? Wrong. The next level is just as inevitable as the move from kilobyte to megabyte - it’s just a matter of time with for storage and backup. The 100MB digital cameras and Advisor’s computer contains supercomputer data files. multiple drives adding up to almost 10 terabytes, including So what’s next? It’s almost a back-up drive. inevitable that the current king, the terabyte, will one day fall At the enterprise level (larger and when it does, what will they companies) How big a drive call the next data unit - a 1000 can you buy? A California times larger than the terabyte? based company Nimbus Data, That would be a “petabyte.” recently released a solid state 1000 times larger than a drive (SSD) with the enormous petabyte? A zettabyte, and, capacity of 100 terabytes then a yottabyte - equivalent to that’s the equivalent of 20,000 DVD disks! So that’s it, right? one billion terabytes! Table of Contents
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NEWS
RENT RESCUE DEBUTS NEW RENT DEFAULT INSURANCE FOR REAL ESTATE INVESTORS AND PROPERTY MANAGERS Available Online, Product Covers Common Financial Risks Facing Landlords
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hiladelphia (September 11, 2019) -- Next Wave Insurance Services and industry veteran Aaron DiCaprio have collaborated to launch Rent Rescue, a rent default insurance product for real estate investors and property managers. Rent default insurance has been available in the United Kingdom and Australia for decades, but prior to Rent Rescue it had gone largely ignored by the U.S. insurance industry. DiCaprio, co-founder and CEO of Rent Rescue, says, “Rent Rescue helps protect the cash flow of residential investors with just one or two units all the way up to property owners with thousands of units.” Rent default insurance reimburses property owners for up to six months for their lost rental income when a tenant defaults. Rent Rescue’s coverage also repays certain legal expenses associated with a default.
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Residential rental real estate is a growing market: Between 2006 and 2016, the number of single-family homes available for rent increased by nearly 4 million, lifting the total to 18.2 million in the U.S., according to the Joint Center for Housing Studies of Harvard University. Until now, landlords have relied on a combination of security deposits and tenant screening to protect their income, which is often unreliable, says DiCaprio. “Now, landlords here in the U.S. finally have a solution to this headache, just like they can insure against fire, flood, liability and other propertythreatening risks. In fact, it’s possible for property owners to erase the bad-debt expense from their property’s financial statements.” Rent default insurance is available for single-family homes, townhomes, condo units and multi-family dwellings. Average monthly cost is $25 per unit. Property Table of Contents
owners and property managers (on behalf of owners) can apply for coverage. “Property managers can create a new revenue stream by bundling rent-default insurance into their service offering,” says DiCaprio. The online application process is simple: Provide the rental property address and monthly rent amount, and answer a handful of tenant selection questions. Claims also are handled online.
About Rent Rescue: Rent Rescue offers rent default insurance through one of the largest insurance groups in the world rated “A” by A.M. Best and “A+” by Standard & Poor’s. Rent Rescue is a division of Next Wave Insurance Services LLC, an insurance brokerage and program administrator. Rent Rescue’s tenant-default insurance is available in all U.S. states except Kentucky. For more information, visit RentRescue. com. OCTOBER 2019
NEWS
NEW JERSEY FINES LOCKTON AFFINITY $1 MILLION FOR ADMINISTERING NRASPONSORED CARRY GUARD INSURANCE IN VIOLATION OF INSURANCE LAW
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RENTON —New Jersey Department of Banking and Insurance Commissioner Marlene Caride today announced that Lockton Affinity, LLC has agreed to pay a $1 million fine as part of a consent order with the department for administering a National Rifle Associationsponsored insurance program in violation of state insurance laws. An investigation by the department found that Kansas-based Lockton Affinity violated various state laws and regulations in administering the Carry Guard insurance program in New Jersey on behalf of the NRA. The department found that Lockton Affinity, a licensed insurance producer that contracted with the NRA, permitted the NRA to directly market and solicit for the Carry Guard insurance program in New Jersey. The Carry Guard program was advertised as providing personal firearms liability insurance, including selfOCTOBER 2019
defense insurance for those who lawfully carry firearms and their families, including protection against civil liability, the cost to defend against civil and criminal legal actions and immediate access to attorney referrals. It is a violation of state regulation for a licensed insurance producer to permit or allow any unlicensed person to transact the business of an insurance producer in the state. “The marketing and solicitation of a product that encourages firearms use, as carried out by the NRA and permitted by Lockton Affinity, in contravention of state laws is a serious violation. As regulators we have a responsibility to ensure that companies that profit from having guns on the streets are not conducting business in our state in violation of the law,” said Commissioner Caride. “Entities regulated by the department are expected to fully comply with the statutory and regulatory requirements of the state and will be held Table of Contents
accountable if they fail to do so,” added Caride. “Lockton Affinity accepted responsibility in this matter and will take the necessary steps to ensure that unlicensed entities are not able to solicit insurance products in the state.” While Lockton Affinity is licensed by the department as a nonresident insurance producer with various lines of authority including surplus lines, the NRA is not licensed as an insurance producer in New Jersey. The department’s investigation found that the Carry Guard website maintained and hosted by the NRA and emails sent by the NRA were solicitations of insurance by an entity not licensed as an insurance producer in New Jersey. The Carry Guard self-defense insurance program included benefits for health insurance. State law prohibits surplus lines
See NJ Fines Lockton Affinity Pg 45 www/underwritersinsider.com
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NOTABLE QUOTABLES IN THE NEWS - WITH COMMENTARY
SAY WHAT? The Left Demonstrates It’s Insanity
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merica was never great! That’s us who burned that rag cuz the Trump/Pence are fascists & the Democrats are war criminals & we need REVOLUTION!”
Jgaray, Marx Engels Lenin, CC BY-SA 3.0
A radical Communist group, Revolution Club Los Angeles outside the Beverly Hills Hotels as they proudly burned an American flag. The event happened near a Trump fund raiser put on by major Trump-supporter Geoffrey Palmer. The Marxists desiring revolution would apparently wish to replace our republic with the same failed system that has so impoverished Cuba and Venezuela, and resulted in the deaths of an estimated 100 million souls during the last century. Remember when history was taught in American schools - now replaced by gender-studies?
countries are home to some of the freest economies in the world. The confusion arises because many Sanders talking points haven’t been updated since the 1970s, when these countries were conducting disastrous experiments in government expansion. News of several decades of reform and revival hasn’t yet reached Sanders campaign headquarters.” From a recent Wall Street Journal OP/ED piece refuting crazy, angry Bernie’s tired old claim that his proposed socialism matches a successful Scandinavian socialist model. It does not.
It’s About Time...
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he Washington Post reported Saturday that as many as 130 former Clinton aides have been contacted by State Department investigators in recent weeks, with many being informed that they have been found “culpable” for transmitting information Bernie’s Scandinavian Socialism? Not... that should have been classified at a higher level r. Sanders often falsely than it was originally sent.” claims that Scandinavia demonstrates the success of his From a recent story in The Hill reporting on socialist schemes, even though Scandinavian the intensification of the investigation of the
M
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OCTOBER 2019
Hillary Clinton private email server. Many had thought this investigation dead, but, according to the reporting, “The Washington Post reported Saturday that as many as 130 former Clinton aides have been contacted by State Department investigators in recent weeks, with many being informed that they have been found “culpable” for transmitting information that should have been classified at a higher level than it was originally sent.”
From an OP/ED on trendingconservatism.com pointing out CNN’s obvious liberal bias on the anniversay of 9/11.
CNN Reflects On 9/11 By Blaming “Right-Wingers”
From a tweet from noted author and lecturer Ben Shipiro, pointing out CNN’s biggest competitor for “fake news,” The New York Times also went out of their way to deemphazise the role of Muslim fanatics in 9/11 and instead focus on the incredibly minimal “Islamophobia” resulting from the attack. The word “phobia” denotes an unreasonable fear. A real concern about radical Islam post-911 can hardly be described as an ureasonable fear.
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hese people have no shame at all. CNN continues its march past the brink of insanity by using the anniversary of 9/11 to push their favorite narrative. Namely, that Republicans are racist and that the real shame of today is that we have “amnesia” by not treating white supremacy seriously. Yes, on the anniversary of the worst attack on America in history, instead of reflecting on Islamic terrorism or simply focusing on the victims, CNN decided to run interference for terrorists and lecture Americans on the violence of “right-wingers.” Because of course they did. They couldn’t give it a rest for even one day. CNN calls it a “reality check” and instead of focusing on what happened on 9/11, including who perpetrated it, they deflect to blaming “Right-wingers” for being the “deadliest terrorists.” I’m a right-winger. Am I a terrorist now? CNN apparently thinks so based on their vague use of language, which is obviously purposeful.”
OCTOBER 2019
And Then There’s The NYT... t is pretty incredible that on the Ionline 18th anniversary of 9/11, the NYT op-ed page has precisely
one editorial on that historic marker — and it’s about the effects of Islamophobia on American Muslims post-9/11.”
NC DOI Asks For Resignation Of CEO
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ver the last few days, it has become apparent to me that there has been a significant breakdown in the corporate governance at Blue Cross Blue Shield of North Carolina. The efforts by the board of directors to hide the arrest of their CEO for drunk driving and child neglect is very disturbing. When news accounts surfaced of the June 22 incident last week, the board misrepresented to the Department of Insurance the actual arrest — telling me that the incident was without incident and was a routine arrest. I call on the board of directors to fulfill their duty and put this matter behind them by finding a new CEO who can step in an provide the leadership and inspiration that the company needs moving forward.”
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BACK ISSUES
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OCTOBER 2019
BACK ISSUES
OCTOBER 2019
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SPECIAL REPORT - AAA Continued From Page 13
AAA: YOUR DRIVING COSTS GOING UP The cost of licenses, registration fees and taxes rose $14 to $753 per year, an increase of 1.9% average annual costs by new vehicle category (based on 15,000 miles driven annually): The AAA study gives the public a window into the true costs of owning and operating a vehicle by quantifying expenses that owners may overlook. Additional information and details can be found at AAA. com/YourDrivingCosts. After purchasing a home, buying a vehicle is probably a consumer’s second biggest expense. Research is key, as is acting carefully and methodically. AAA.com/ autobuying is a comprehensive resource that can help make the process more manageable. Here 34
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are some tips to keep in mind: • Know what you can afford to spend before going to the dealership. Determine your budget and stick to it. • Minimize total finance costs by getting the shortest loan term you can afford. • Seasonally, the best times to buy tend to be the last two weeks of December – when dealers are trying to hit yearend goals – and, to a lesser extent, between July and October. That’s when dealers are trying to clear lots to make way for the next year’s models. • The best time to buy is the end of the month because sales managers like to build campaigns around monthly quotas. Shop toward the end of the month and you’ll find a dealer may offer additional price concessions. • Consider a late-model, gently used vehicle. New cars lose around 20% of their value the moment they leave the lot, so you can save big if you look for a car that’s a year or two old. Your insurance costs could be less, too. • If you belong to AAA or a similar organization, you may qualify for dealer discounts. Dealer networks sometimes agree to limit Table of Contents
profits when selling to club members, though the deals will be limited to certain makes and models.
Methodology AAA’s Your Driving Costs study employs a proprietary AAA methodology to analyze the costs of owning and operating a new vehicle in the United States. The methodology incorporates standardized criteria to estimate the costs of using a new vehicle for personal transportation over five years and 75,000 miles of ownership. Your Driving Costs is designed to help consumers make informed vehicle purchase decisions and budget for annual automotive expenses.
About AAA AAA provides more than 59 million members with automotive, travel, insurance and financial services through its federation of 34 motor clubs and nearly 1,100 branch offices across North America. Since 1902, the not-for-profit, fully taxpaying AAA has been a leader and advocate for safe mobility. Drivers can request roadside assistance, identify nearby gas prices, locate discounts, book a hotel or map a route via the AAA Mobile app. To join, visit AAA. com. OCTOBER 2019
CLAIMS & THE LAW Continued From Page 7
ZALMA
capable of being understood in more than one sense. Read in the context of the Dwelling Policy, “vandalism” and “malicious mischief” are not ambiguous — especially not with regard to whether they can be construed to encompass the conduct of animals. A term is not ambiguous merely because an insurance policy does not provide a specific definition. Rather, where a term is not specifically defined, courts apply the common law definition historically used by courts and apply it to the facts of the case. The absence of a definition of “vandalism” and “malicious mischief” does not render the terms ambiguous. On the contrary, both their common dictionary definition and their specific legal usage show that they are inapplicable to animal behavior. For example, by its very language criminal mischief, like all crimes, requires a human actor. Animals are subject only to the laws of nature, not the Pennsylvania Crimes Code or law governing human conduct. OCTOBER 2019
All of the courts which have examined whether animal damage is included within coverage for vandalism and malicious mischief have declined to interpret those terms to encompass animal behavior and held that, as a matter of law, they can only apply to human conduct. An animal is incapable of forming an intent to commit a wrongful act or to act maliciously. An animal, nonhuman, acts or reacts instinctively without knowledge of right or wrong as defined by man. The plain and ordinary definition of the term “vandalism” only refers to intentionally destructive conduct by a human being. Damage caused by animals — in this case, raccoons — cannot be deemed to have arisen from “vandalism” or “malicious mischief.” Both the common and legal usage of those terms presuppose conscious, willful misconduct by a human being. Raccoons and their companions in the animal kingdom cannot formulate the intent needed to engage in “vandalism,” “malicious mischief” or any other criminal or actionable conduct. Animals do not have conscious agency and are not subjects of human law. The threshold premise for both of Capital Flip’s claims — that there is coverage under the Dwelling Policy for the raccoon damage Table of Contents
— cannot stand and so, sorry, the Plaintiff won’t get paid. That’s how the contract was made. This policy does not apply when the racoons ran awry.
ZALMA OPINION Regardless of the statements of the so-called “animal rights” organizations animals cannot subject themselves to the law, cannot be held and imprisoned for their crimes, nor can they act with conscious or malicious mischief as much as humans dislike what they do. If Capital Flip wanted coverage for damage by animals they could have asked that their insurer include such damage as one of the named perils and pay an appropriate premium if an insurer
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TECHNOLOGY Continued From Page 5
KIM KOMANDO
browsing, and streaming, you’ll get far more out of a tablet than you would a computer.
And now, in light of Apple’s new 7th generation iPad, the 6th generation model is on sale for a steep discount. Best of all, this model comes with iOS 12, Apple’s current operating system, and will be totally compatible with Unlike a previous entry on this iOS 13 once it launches. list, these AirPods are anything This deal on a new HP laptop gives but outdated. In fact, these latest you a sleek, streamlined frame model earbuds still pack the same A 50-inch smart TV that weighs less and takes up less long-lasting battery and wireless for a price that won’t space without compromising on connectivity but have a stronger break the bank the display. And by the way, that connection and faster processing display is a massive 14-inches, VIZIO 50” CLASS 4K ULTRA HD than before. and the computer already comes equipped with Windows 10. It’s a The battery now even gives you perfect back-to-school gift! more time for music. It’s a worthy upgrade for a series of products A new iPad for less that are already hard enough to find in stores. Now, they’re only a IPAD 6TH GENERATION click away. Smart TVs aren’t the walletdraining behemoths they used to be. Now, you’d be hard-pressed to find a non smart TV at such a good rate, and this Vizio model is no exception. This sleek, stealthy monitor provides crystal clear 4k graphics and runs all of your favorite streaming apps in one handy device. Pick it up and watch as your living room instantly transforms into a home theater.
The latest AirPods at
Of course, if you’re more of a casual computer user that uses a cutthroat price your device mostly for emails, APPLE AIRPODS 36
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An even larger laptop for less ASUS VIVOBOOK F510QA 15.6”
Let’s get this straight: A 14-inch display is already huge. Add another diagonal inch of picture, however, and you’ll end up with something truly immersive. OCTOBER 2019
TECHNOLOGY Now, famed laptop designer ASUS is bringing you a high-end 15-inch display in a package that is still, somehow, under $500. If you want the most bang for your buck in the laptop world, you can hardly go wrong with this workhorse of a PC.
Komando.com may receive a commission for purchases made from product affiliate links that are contained in this article.
ALABAMA NAMED DOMICILE OF THE YEAR
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he state of Alabama was chosen as Domicile of the Year at the 2019 U.S. Captive Review Awards.
The winners were announced in August and members of the Alabama Department of Insurance recently picked up the award at the local Alabama The award category was for domiciles with less than $5 Captive Association meeting. billion of gross written premium. Accepting the award for the It was the state’s first win in the department were Jill Gregory, category. Finalists included Todrick Burks, Sean Duke and Georgia, North Carolina and Belinda Williams. Missouri.
Copyright 2019, WestStar Multimedia Entertainment. All rights reserved. Learn about all the latest technology on the Kim Komando Show, the nation’s largest weekend radio talk show. Kim takes calls and dispenses advice on today’s digital lifestyle, from smartphones and tablets to online privacy and data hacks. For her daily tips, free newsletters and more, visit her website at Komando.com OCTOBER 2019
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SPECIAL REPORT
HOW (AND WHY) TO WRITE A PRESS RELEASE By Ron Manera, Senior Editor
T
he most overlooked source of free promotion for small to medium-sized companies? Press Releases. Those little info blurbs that strengthen your brand and inform your market can be powerful tools if employed effectively. With a press release, your company can inform the world of a new hire, promotions, a key person retiring, a new product, a merger or acquisition, a new office or a thousand other events positive and timely. But even more important: Getting your company name out in front of tens of thousands of your prospects and customers, (even competitors) often, and at little or no cost. As an editor of a couple of insurance industry specific journals, I am on the receiving end of dozens of press releases daily - all wishing a free ride in one of my next issues. I welcome press releases because they often provide valuable content to my readers. Because of space and relevancy limitations, I can’t run them all. As a matter of fact, only a small percentage of the PRs I review
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make it into the magazines. How do I decide what to run? I look first for relevancy. Is the information in the press release something likely to be interesting or valuable to my subscribers? I can discard 80% of the PRs I review simply because the content is not focused on my audience. Next, I look for length, style and format. Will the original PR take up two pages requiring radical editing for size? Can I easily move the content into my publication without extensive reformatting? Are there bulleted paragraphs or multiple hyperlinks to contend with? I look for a news-style press release. When I receive a PR that is 80% promotional and 20% news, I’m likely to pass it up. I don’t charge for news - I do charge for advertising.
Up The Odds Your Press Release Will Be Printed And Effective
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suspect most editors rely on criteria much like mine when reviewing incoming press releases for publication. Table of Contents
Here are eight tips to increase your odds of actually making it to the show: 1. Give me a compelling headline! Hint: Write your headline last after you review your entire PR. A good headline will not only get my attention, but that of my readers. 2. Don’t open with “ABC Company announced today...” because the PR may not appear for another 30 days. Include the actual date. 3. Keep your copy succinct! 375-450 words max. That’s an entire page, so you have plenty of room to cover your subject. I’m not going to give you more space - so if you run long, you are asking me to trim your copy and you may not like what I remove. 4. Learn to write like a journalist: Who, What, When, Why & Where. List those 5 categories out on a worksheet and work from it as you script your PR. To the ultimate reader, it should not read as if it were written by your marketing department but as if we sent a reporter out to cover your news story. OCTOBER 2019
Image Credit: Creative Commons
While larger operations use paid services like Businesswire, PRweb, PRNewsire and others to distribute their press releases, smaller companies can maintain a list of media outlets that make more sense for their target market. I review PRs from the big distribution houses all the time - but I am more likely to notice one emailed directly to me.
from a company officer. I 5. Important! Don’t often include company make your PR into an logos when they are made advertisement. First, it will available. lesson the chance I include 8. About (Your Company) your piece, (remember, I It’s good to include a short charge for advertising) but “About ABC Company” at just as important, it will lack the end of your PR. Keep it credibility to the readers if it short and within the word just looks like a puff piece. limit for the entire piece. It’s okay to sound enthused Include contact info for about the topic and your “further information.” company, but the ideal PR 9. Make certain to place a will look as if your company copy of each PR on your made the news because of company website under some newsworthy event. your NEWS tab. The practice 6. Give me at least one quote, will make your site more e.g. “Frank’s extensive relevant to search engines experience in restaurant and more valuable to risks will bring a new depth visitors. to our commercial insurance department,” said John ow that you’ve created Smith, CEO... the perfect press 7. If appropriate, include release, where should an image, especially if you send it? the PR involves personnel or a mention or quote
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In the insurance business, include every trade journal that covers your region. If you are introducing a new restaurant program, for example, you may wish to include some of the trade journals in that industry. If you are a local retail agent, by all means include local print media, especially neighborhood newsletters or city-wide newspapers. Build your list in a spreadsheet database so you can one-click mail-merge a personalized copy to each media outlet. Make it a habit! Find the best copywriter in your office and assign them the task of churning out one press release each month. You’ll be building your brand and status within your industry. Where to send at TUI? Send directly to me, Ron Manera at ron@insurmedia.com.
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2019 FAIA CONVENTION TRADE FAIR BOOTH IMAGES NOW ONLINE!
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ne of the biggest insurance events held each year in Florida is the Florida Association of Independent Agents (FAIA) Convention. This year was the 116th annual convention, making it not only one of the largest, but one of the longest running events in US insurance history.
Click On The Image Below To View Booth Images
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2019 LAAIA CONVENTION TRADE FAIR BOOTH IMAGES NOW ONLINE!
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he largest insurance trade fair in S. Florida, the Latin American Association of Insurance Agents pulled off another incredible event with their 48th annual convention and trade fair this August. This time no camera equipment issues and had time to shoot every booth.
Click On The Image Below To View Booth Images
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BECOME A CERTIFIED EXPERT IN CORPORATE PROPERTY INSURANCE AND A CERTIFIED EXPERT IN CORPORATE LIABILITY INSURANCE Now available from Illumeo and Barry Zalma!
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veryone involved in insurance – either as an insurer or as an insured – requires excellence in claims handling. Businesses need to deal with insurers who have an excellence in claimshandling mandate. Insurers who wish to profit need an excellence in property and/or liability claims-handling program. Everyone in business needs an insurer who has an excellence in property or liability claims-handling program in effect. Two comprehensive programs enabling insurance professionals to become Certified Expert in Corporate Property Insurance and/ or Certified Experts in Corporate Liability Insurance are available from Illumeo.com and https://www.illumeo.com/curriculum/certifiedexpert-corporate-property-insurance and https://www.illumeo.com/ curriculum/certified-expert-corporate-liability-insurance. The programs are complete courses of study providing education and training to allow insurance professionals, after completing the individual classes, to become a Certified Expert. The programs cover everything an employee, an officer, or a director of a corporation needs to know about the need to acquire proper insurance and to resolve any claim presented by the corporation to the insurer. Major topics of study include, but are not limited to: the importance of insurance; how to acquire insurance and understand an insurance policy; the methods used by insurers to investigate claims; the various types of insurance that corporations need; the duties and obligations of a public adjuster; and how The full curriculum of the courses and other courses from Barry Zalma are available at http:// www.ilumeo.com by entering in the search bar the word “zalma.”
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NEW INSURANCE CLAIMS BOOKS BY BARRY ZALMA The Making of an Insurance Claims Professional
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t is the insurance claims person - the adjuster - who meets with the person insured and works to keep the promises made by the insurance policy. The adjuster cannot, however, help the insurer keep the promises made unless he or she understands insurance, insurance claims, the types of claims presented and the law surrounding insurance and insurance claims. For the minimal cost of a paperback or Kindle book every insurer can place in the hands of their claims people information that will help them become professional, well trained, thoroughly educated claims professionals who are able to read and understand every insurance policy so that he or she is able to keep the promises made by the insurance policy. Read about these and many more insurance books by Barry Zalma at http://zalma.com/zalma-books/
• Construction Defects and Insurance • Zalma on Insurance Claims • Zalma on Insurance Claims Volume 101 • Zalma on Insurance Claims Part 102 • Zalma on Insurance Claims Part 103 • Zalma on Insurance Claims Part 104
• Zalma on Insurance Claims Part 105 • Zalma on Insurance Claims Part 106 • Zalma on Insurance Claims Part 107 • Zalma on Insurance Claims Part 108 • Zalma on Insurance Claims Part 109 • Zalma on Insurance Claims Part 110
VISIT ZALMA BOOKS NOW!
OCTOBER 2019
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NEW JERSEY NC DOI CALLS FINES LOCTON FOR RESIGNATION $1 MILLION FOR OF BC/BS CEO ADMINISTERING AFTER ARREST NRA-SPONSORED COVERUP CARRY GUARD INSURANCE
insurers from writing health insurance. Further, Lockton Affinity did not execute a separate agreement with the New Jersey Carry Guard certificate holders for the administrative fee retained by Lockton Affinity, as is required by state law. In addition to paying the fine, Lockton Affinity must take necessary steps to prevent any future solicitation of insurance by unlicensed persons or entities for insurance products for which Lockton Affinity is the producer. The department is continuing to investigate other firearm-related insurance programs for potential violations of state insurance laws. The consent order may be found here: www.state.nj.us/ dobi/division_insurance/ enforcement/e19_86.pdf. OCTOBER 2019
routine and Dr. Conway showed a complete lack of professionalism, respect and composure for the law enforcement officer and the legal process. The fact that the board represented to this office otherwise is another example of poor judgement and misinformation that cannot be tolerated. As Commissioner of Insurance, I cannot move forward with any type of trust and confidence in the CEO at BCBS-NC. I believe the board has been seriously mislead and that is very troubling to me. Furthermore, the board has failed in their duties to protect their policy holders. They have failed to be open and honest with their regulators and more importantly with the people of North Carolina. Dr. Conway demonstrated more than poor decision making by putting his own children at risk as well as Table of Contents
the lives of other motorists on the road with him that day. Dr. Conway demonstrated a total lack of professionalism and utter disregard and disdain for our hard-working law enforcement community. As a former military police officer in the U.S. Army, this sickens me. As a result of this lack of leadership and governance by the CEO and Board of Directors, I am today asking for the resignation of Dr. Patrick Conway as CEO for Blue Cross Blue Shield. I do not take this action lightly. It pains me greatly because this tragic incident has put a big dent in the reputation of a good company. But there is no path forward for this office to have a trusting, confident and reliable working relationship with the chief executive officer at Blue Cross Blue Shield of NC. I can deal with the criminal charges, even as disturbing as they are; what I cannot accept is the cover-up, the misrepresentation of facts, the lack of respect for oversight and regulation of the company and lack of respect for law enforcement officers who are only doing their duty. This is a very serious matter because BCBS-NC is a $10 billion a year company. I call on the board of directors to fulfill their duty and put this matter behind them by finding a new CEO who can step in an provide leadership and inspiration.
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