The Underwriter's Insider 2012 Issue 4 by The Underwriter's Insider

INSURANCE • POLITICS • TECHNOLOGY • PEOPLE VOLUME 9 • 2012 • ISSUE 4

TABLE OF CONTENTS

Features News 5

Advertising

Who’s On First? Analysis by Barry Zalma

Kim Komando

Florida Arrests Tampa Bay Men on Worker’s Comp Fraud

Inside Track

Tom Preston Acquires All Shares of Agency Advantage

Marketplace

Buying an Agency? Five Key Due Diligence Steps by Carissa Newton

Insider Advisor

Florida Busts Miami-Based Worker’s Comp Fraud Ring

Classifieds

Man Straps Cruise Missile Engine to ‘67 Chevy

Texas Congresswoman Warns America - Read This!

Florida P.I.P. Abuse a Thing of the Past? Think Again...

26 28

Say What?

Back Issues

Table of Contents Continued...

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News 24

Rethinking Retirement? by Matthew A. Treskovich

FEMA Takes A Position on Agent Rebating Flood Ins

Mississippi Top Scoring Ins Dept in New Report

Georgia Scores Dead Last on Corruption Risk Report Card

Universal Insurance Declares Cash Dividend

Analysis Shows â&#x20AC;&#x153;Buffet Ruleâ&#x20AC;? Claims Contrived

Obama Tax Policy Hypocrisy: No Plan to Pay More Than his Secretary

Beer Smarts - Is it Real? Finally the Answer!

SLB Insurance Group Announces Expansion of Operations

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CONTENTS 2012 • Issue 4

A Publication of AdMax Media Corp Corporate Offices P.O. Box 31551 P. Beach Gardens, FL 33420

Ron Manera Editor/Publisher

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PREVENTING ONLINE INFIDELITY by Kim Komando

he Internet can be a marriage killer, one of my listeners told me in an email last week. He wasn’t speaking philosophically. He said it almost happened to him. This wasn’t because his wife spent too much money on eBay, or the result of his fascination with streaming online sports. Instead, they had each, separately, fallen down the rabbit hole of online infidelity. “Our counselor said the problem is growing, especially among couples that have been married more than 18 years,” he said. It’s true that the Internet has made infidelity much easier. According to PsychCentral. com, the Internet is now where the majority

of people go to find sex partners. Additionally, there are numerous sites specifically devoted to helping married couples cheat online. And I know this is where you might expect me to name some of those destinations. But I’m having nothing to do with handing anyone a link to destructive temptation. Trust me, there is no shortage of examples. The culprit in all of this is Internet anonymity. It leads to connections that wouldn’t be made offline. It also encourages participants to share more about themselves with online partners than they do with their spouses, says researcher Beatriz Mileham. Her University of Florida study on Internet infidelity looked at 86 cyber-cheaters. In almost every example, the o n l i n e relationships began as curious

friendships, but soon became more. Mileham interviewed men and women who used popular chat rooms specifically geared for marriedbut-searching individuals. Almost a third of the study participants went on to meet the person with whom they made contact. The study participants included stayat-home moms, construction workers, engineers, nurses and presidents of large corporations. Her research showed that more men than women used chat rooms. But more recently, women are catching up to men when it comes to infidelity, says Katherine Hertlein, a licensed marriage and family therapist and assistant professor at the University of Nevada, Las Vegas. Hertlein specializes in helping those who are experiencing marital difficulties caused by online cheating. She recently told Discovery News that she blames the growth in female infidelity on social sites. She said it is a result of their anonymity – and their popularity among women. Can technology be used for good in this situation? There are many useful tools available. Here are just two, but each is useful for a different approach: OpenDNS and FamilyShield are prevention tools, offering protection against adult websites. The sites primarily block pornography, drug content and violence, but can be broadened to include places where spouses are likely to wander.

See Kim Komando Pg 37 www.underwritersinsider.com

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WHO’S ON FIRST? By Barry Zalma, Esq. The Selective Tender Rule

the court found it necessary to tread with caution applying right of selective tender which is uncommonly generous to insured parties.

Background

he Illinois Court of Appeal he District is a public was asked to resolve a entity that oversees dispute between the St. Charles East High Illinois School District Agency School, which suffered a mold (ISDA), a provider of commercial infestation. The ISDA was general liability insurance and St. established by certain school Charles Community Unit School districts of Illinois to pool District 303 (District) concerning their risk. It offers for purchase a series of lawsuits stemming by its members insurance from mold infestation in the coverage, much like ordinary District’s high school building. commercial insurance carriers. In Illinois School District Agency The ISDA provided commercial v. the St. Charles Community general liability (CGL) insurance Unit School, 2012 IL App 100088 coverage to the District from (Ill.App. Dist.1 03/30/2012) the July 1, 1995, through July 11, court recognized that Illinois 2001. is one of only three states that allow an insured to selectively Its policy provided that the ISDA tender the defense of a lawsuit “will have the right and duty to Barry Zalma, Esq., CFE is a California attorney specializing in insurance coverage, insurance to one insurer over other defend any ‘suits’ seeking *** claims handling and fraud who serves as chronologically concurrent damages.” It also provided that a consultant and expert for insurers and insurers and the District the ISDA “will pay, with respect policyholders. He founded Zalma Insurance selected ISDA. The District to any claim or ‘suit’ we defend: Consultants in 2001 and serves as its senior sought approval of its attempt *** All reasonable expenses consultant. He recently published an e-book, to select which, of consecutive incurred by the [District] at “Insurance Fraud,” which is available at his Web site, www.zalma.com. Go to Zalma Books at insurers, was required to our request to assist us in the http://www.zalma.com/zalmabooks.htm. defend and indemnify it while investigation or defense of the contemporaneously making claim or ‘suit.’ ” settlements with other insurers to the detriment of the insurer Abbot & Costello could write this Prior to coverage by the ISDA, the better but the right to selective District held CGL policies various selected. tender places insurers in a state commercial insurers from 1971 to of confusion as to who should be 1995. Join Barry Zalma’s new Blog: on first in providing defense and http://www.zalma.com/blog indemnity to an insured. The Court The Mold Lawsuits of Appeal was called upon to make Only Montana and Washington have the question serious and humorless. joined with Illinois to recognize the See Zalma Pg 33 right of selective tender. Therefore,

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FLORIDA CFO JEFF ATWATER ANNOUNCES ARREST OF BAY AREA RESIDENTS FOR WORKERS’ COMPENSATION FRAUD

ALLAHASSEE—Florida Chief Financial Officer Jeff Atwater announced today the arrest of two Tampa Bay area residents for workers’ compensation fraud. Yvonne C. Timmons, 61, of St. Petersburg, and Willie Lee Kendrick, 52, of Palmetto, are charged with filing false or misleading information in order to fraudulently obtain workers’ compensation insurance benefits. Since CFO Atwater took office, the Division of Insurance Fraud has arrested 318 individuals for workers’ compensation fraud, resulting in 298 convictions. “Workers’ compensation insurance laws are intended to protect businesses and employees from losses when legitimate accidents occur,” CFO Atwater said. “We will not stand by and watch while fraudsters like these deliberately undermine the system for their own personal gain.” An investigation by the Florida Department of Financial Services’ Division of Insurance Fraud revealed that Timmons collected medical benefits through her employer’s workers’ compensation policy after an accident at work. Although she

claimed that she could not work, she continued to collect full pay from her employer while also collecting these benefits. Timmons denied under oath that she was working and as a result of Timmons’ false statements, Sentry Insurance paid Timmons more than $60,000 in fraudulent workers’ compensation benefits. In a separate but similar case, Kendrick claimed he experienced a work-related back injury. Further investigation revealed previous medical records showing Kendrick had claimed back injuries in 1983 and 1985 and sought disability benefits on both occasions. As a result of Kendrick’s false statements, Alternative Service Concepts, LLC, paid over $71,000 in fraudulent workers’ compensation benefits. Timmons and Kendrick were booked into the Hillsborough County Jail and Manatee County jail respectively. If convicted, they each face up to 15 years in prison.

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TOM PRESTON ACQUIRES PARTNER’S SHARE OF THE AGENCY ADVANTAGE Founder Focuses on Becoming the Market Leader in Affordable Agency Management Systems by Providing Leading Edge Tools and Features in a Cloud Based Environment

he Agency Advantage, a leading agency management software vendor to the P&C insurance industry, announced today that President and founder Tom Preston has purchased the shares of longtime partner Bruce Brownlee.

“Agents love our Acord form handling and PDF creation functions,” stated Preston, “because it allows them to solicit quotes from multiple companies in just minutes. It’s just a great productivity enhancment.” Another powerful feature of The Agency Advantage is the ability to download commercial or personal lines data directly into a customer file. (Acord Level 3), not only saving time but assuring accuracy.

The Agency Advantage was founded in 1990 when Preston recruited Brownlee to be his programmer and partner. Preston, after owning an agency for many years, had been the national sales manager for a well known management software company while Brownlee had been involved in other professional programming projects. The goal from the beginning was to create a featurerich agency management system affordable to any agency. The proof of Preston’s concept, of course, is in the pudding - and 22 years later, the pudding is thousands of efficient agency desktops running the powerful Agency Advantage system. Preston’s current vision and plan is to become the market leader in affordable agency management systems by providing leading edge tools and features in a cloud based environment.

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Tom Preston, President

Preston says, “Our goal is to meet today’s agency owners desire to access real time information from virtually anywhere, including their mobile devices and to extend this capability to their customers, allowing them to easily view their insurance policy and account information and quickly communicate their needs to the agency.” According to Preston, The Agency Advantage has the “best Certificate of Insurance and certificate holder handling and management in the industry.”

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The last of the new, powerful features involves proprietary technology developed by The Agency Advantage allowing an agent in a customer file to automatically log on to a company website and pass client information directly onto that web site. This feature can fill in forms or enter any information from the Agency Advantage customer folder. The software has proven very popular with agents located in almost every geographical region because, according to Preston, “our strong feature set, our 22 year record of top-tier customer service, a core team of dedicated longterm staff and the rock-solid reliability of The Agency Advantage software.” Agents looking to learn more about The Agency Advantage should contact Tom Preston direct: 1-800-833-5179 Ext. 115 or Tom@AgencyAdvantage.com

CONSIDERING AN AGENCY ACQUISITION?

FIVE KEYS TO BUYER’S DUE DILIGENCE

s the insurance market is showing signs of hardening and the economy is finally inching towards recovery, 2012 may be a strong year for agency mergers and acquisitions. But will agency buyers be happy with their purchases? An estimated 70 to 90 percent of all mergers and acquisitions fail to result in expected results (Harvard Business Review). Failures are largely because buyers don’t perform — or adequately perform — the right kind of due diligence analysis. Whether you’re planning to make an asset or stock purchase, do your homework to learn as much as you can before deciding to acquire another insurance agency. Here are some key areas to research.

1. Determine why the agency is selling There are many legitimate reasons for selling, such as retirement or succession planning, but sometimes there are other hidden factors. Make sure the seller doesn’t have any skeletons in the closet that could hurt your business down the road. If the acquisition is a stock transition, which carries more risk than an asset transaction, you need to investigate more. Contact carriers that have been used in the past, review the state insurance department website, contact the local Better Business 14

By Carissa Newton Bureau and conduct Internet searches. All these resources could reveal evidence of trouble.

Carissa Newton oversees marketing and new business development for Oak Street Funding. She has over 17 years of marketing experience in a variety of industries including financial services, insurance and technology. Newton is an active member of the Business Marketing Association and the American Marketing Association (AMA). She earned a B.A. degree from Northwood University, an M.B.A. from Anderson University and an AMA Professional Certified Marketer designation. She is also an adjunct professor of marketing and management.

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2. Analyze seller’s book. Look beyond total commissions from the past few years. See what percentage of the accounts have been on the books for two years, for five years, and even for 10 years. If the acquisition has an earnout provision, ensure that what the seller is representing on the commission book is truly in force. Plus, review the agency’s loss ratios, carrier persistency, carrier contracts, and types of accounts. Anticipate the likelihood of clients sticking around after the acquisition. Identify trends in commissions. For example, if total commissions have doubled in the past three months, or if the agency just landed a huge new commercial contract that now represents a disproportionate share of commissions, you need to determine why. Review the average commission per account and determine the mean, the median, and other pertinent statistics.

3. Review employee relationships Only consider agencies with an ironclad non-compete contract, which will be followed not only by the seller but by the agency’s producers. In cases when an agency is about to be sold, many of its producers view the imminent transaction as a threat to their livelihood. The Underwriter’s Insider

A few of the less ethical ones may use this uncertainty to justify shifting accounts to their own private businesses or to another agency promising a more favorable commission split. The best case scenario is for employees to be under an employment agreement that includes both a non-compete agreement and a non-solicitation agreement.

4. Analyze financials See if the selling insurance agency’s tax returns match up with the commission statements – a good independent check on what the seller represents. Also examine ratios, margins, and nonoperating expenses. If assets are being purchased, they should be well-defined. In addition, buyers should ensure the following:

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• The assets are free and clear of all liens and encumbrances. • The value of the book is as represented • All taxes are paid. • The seller is in compliance with all laws.

5. Spot trends in carrier activity Determine with which insurance companies the agency is placing most of its business. See if these carriers plan to lower commission rates, give less favorable terms with contingent contracts, change product offerings, or are considering pulling out of your state. Talk to the carrier representatives for this information. Find out if the carriers’ direct writers have been trying orsucceeding in encroaching on the agency’s business. Always retain copies of all the agency’s contracts with carriers.

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Acquisition funding If you need a loan to fund an acquisition, acquisition financing is available from different sources. A bank is usually the first funding source to be considered, but most banks lend on balance sheet financials and aren’t willing to lend against the future cash flow embedded in an in-force book of business. Consider a lender that has funding just for insurance agencies. With a loan that allows you to borrow against future commission streams, you won’t have to risk losing control of the business you built. It’s a solution hundreds of agency owners have used to finance acquisitions. If you choose acquisition financing from a lender, the due diligence you perform early on will provide a head-start on the loan approval process.

FLA ARRESTS OWNER OF FAKE COMPANY FOR CREATING FRAUDULENT INSURANCE CERTS AND AVOIDING MILLIONS IN PREMIUMS

lorida Chief Financial Officer Jeff Atwater announced the arrest today of a Miami shell company owner accused of creating more than 250 fraudulent certificates of insurance to help uninsured contractors avoid $2.1 million in w o r k e r s compensation premiums. Yucet Batista, 29, was arrested following a joint investigation by the Department of Financial Services’ Division of Insurance Fraud and the Broward Sheriff’s Office. The investigation determined that Batista created a shell company, Y&L Construction Services, Inc., and used money service businesses to carry out the scheme. She was arrested on

See Worker’s Comp Fraud Page 40 16

MAN STRAPS CRUISE MISSILE ENGINE TO ‘67 CHEVY Where Else Are You Going To Hear About This Stuff ?

aul Stender, just off his 750mph Naturally, the idea of strapping a 10,000 (he claims) jet-powered HP cruise missile to the car came bus project was looking for immediately to mind. Click on Image! something new. The guy’s a little crazy. He’s drag raced a jetpowered Porta-Potty, for Pete’s sake. So he had a inspiration one day sitting on his porch, smoking a cigar and looking out at his hulking ‘67 Chevy Belair.

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lorida Insurance Commissioner Kevin McCarty issued an order to United States Contractors Trust (USCT) and Access Health Now (ACCESS) to cease and desist engaging in the unauthorized and unlicensed sale of insurance in the State of Florida. The Office conducted an investigation and concluded that USCT and ACCESS provided and/or offered to provide limited health insurance to Florida residents without a license. USCT is a Delaware statutory trust and ACCESS does business via its website, www.accesshealthnow.com. Both represent themselves as membership associations which offer their members accident and healthcare benefits. Office records indicate USCT and ACCESS have never been authorized to sell health insurance in the State of Florida.

lorida Chief Financial Officer Jeff Atwater today announced $25,000 in rewards for three Floridians who provided key information that led to arrests and convictions in five major insurance fraud cases. These citizens helped the Florida Department of Financial Services Division of Insurance Fraud uncover almost $560,000 in fraudulent insurance billings leading to 10 arrests to date.

Elected to new three-year terms were Craig Most, of Most Insurance, LLC, Tampa, Fla.; and Charles Venus, of Johnson & Strachan, Inc., Fairfax, Va. Reelected to three-year terms were Philip Bogle, CPIAL, of Bogle Agency Insurance, Lyndhurst, N.J.; Keith Savino, CPIA, of Warwick Resource Group in Warwick, N.Y.; and George Zelhof, CPIA, of United Assurance, Fair Lawn, N.J.

fter careful consideration, FIMA has concluded that the goals of the NFIP are better served by a system of uniform national pricing that will ensure that policyholders pay the same price for the same risk. FEMA does not directly regulate insurance agents who sell Standard Flood Insurance Policies. Pursuant to 44 C.F.R. Section 62.23 and the Financial Assistance/Subsidy Arrangement, 44

C.F.R. Part 62, Appendix A, however, FEMA administers the NFIP and sets standards governing the activities of participating WYO Companies related to the sale and marketing of flood insurance. Accordingly, effective October 1, 2012, WYO Companies shall not authorize the rebating of commissions on new or renewal NFIP policies.

niversal Insurance Holdings, Inc. (the Company or Universal) (NYSE Amex: UVE), a vertically integrated insurance holding company, reported net income of $20.1 million, or $0.50 per diluted share, for the full year of 2011, compared to $37.0 million, or $0.91 per diluted share, for the full year of 2010. For the fourth quarter of 2011, the Company reported a net loss of $2.3 million, or $0.06 per diluted share, compared to net income of $6.2 million, or $0.15 per diluted share, for the same period in 2010.

nsurance software company Applied Systems announced April 27 as the general release date for Applied Systems Epic 6, the new

he American Insurance Marketing & Sales (AIMS) Society, a professional organization dedicated to building insurance sales, marketing and technical expertise, has elected two new members to its board of directors. The election took place at the organizationâ&#x20AC;&#x2122;s annual meeting in Tampa, which was part of the AIMS Society PRO-to-PRO Executive Retreat.

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release of, what the company calls, the most technologically advanced management software for insurance agencies and brokerages. Applied Systems said Epic 6 provides agents and brokers with further capabilities to increase revenue, enhance productivity and profitability, and improve service levels for greater customer retention.

ccording to a recent PEW report, “About a quarter (24%) of all young adults ages 18 to 34 say they moved back in with their parents in recent years after living on their own because of economic conditions. Among those who say they moved back in with their parents after living on their own, 25% say this was good for their relationship, 24% say this was bad for their relationship, and 50% say it hasn’t made any difference.”

elissa Shelk, vice president for federal affairs at the American Insurance Association (AIA), issued a statement today on an amendment added to H.R. 5, Protecting Access to Healthcare (PATH) Act, which would repeal the limited federal anti-trust exemption, provided under the McCarran-Ferguson Act, for health insurers. The amendment, sponsored by Rep. Paul Gosar (R-AZ), includes provisions which specifically exclude property-casualty insurance products from its intended scope. The McCarran-Ferguson Act, adopted in 1945, provides insurers a limited exemption from federal anti-trust law where the business of insurance is regulated by the states. It reflects a Congressional balancing of regulatory and anti-trust policy. Under it, states regulate virtually every aspect of insurance, including licensing, market conduct, financial solvency, policy www.underwritersinsider.com

language, and underwriting standards. McCarran does not promote anticompetitive behavior and in fact enables smaller and start-up insurers to enter insurance markets.

he Florida Department of Financial Services (“Department”), Division of Agent and Agency Services, is alerting the Florida agent community of possible instances of multi-state sales of fraudulent insurance focusing on commercial general liability coverage, particularly targeting apartment buildings, condominium developments, hotels,

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and other commercial risks. Please be sure to carefully review binders of coverage or insurance policies obtained from Michael A. “Mike” Ward, or his related company, JRSO, Inc. Neither Ward nor JRSO, Inc. is licensed to transact insurance business in Florida. The NAIC has warned various states that this unlicensed individual may be providing invalid binders of coverage or insurance policies to the insurance producing community. There are concerns that Ward/JRSO, Inc. is working with others who are marketing the invalid coverage to retail or surplus lines agents. 19

Marketplace Recently Announced P&C Markets

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ational Ins Underwriting - Limits $300K to $2M - Premiums starting at $1400 with low ded. Available most states. Discounts for loss-free experience and losscontrol efforst. Call Craig Calver - 800-3382680 X 507.

Aviation

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Chemical Mfg & Distribution Risks

uel additives, Industrial gases, paints, varnishes, lacquers, enamels, solvents, adhesives, sealants and a multitude of other chemical manufacturing and distribution risks. Min Prem $20,000 and other underwriting criteria. See Sloan Mason: Contact Grant Kanamori @ 619814-2488 or grant@sloanmason.com. [117]

Commercial Auto

ational Ins Underwriting - Light, medium & heavy up to 66,000 lbs. up to 500 mile radius, Up to $1M CSL or $1/$2M split, Phys Dam up to $100K - Med Pay, Hired and NOL. Contact: Call Craig Calver - 800-338-2680 X 508.

ingsway/Amigo Competitve commercial auto program. Any size fleet, - all types of cars, light trucks and vans - specialty services, like landscaping, electrical, plumbing, lunch trucks and other various occupations. info@kinswayamigo. com

Condo Assoc Program

rident is offering tailored coverage designed for condominium town home and single-family community associations claiming competitive rates and terms. Coverages available include property, including flood, earthquake and coastal windstorm, general liability, D&O, umbrella, worker’s comp, auto, crime and property mgrs E&O. Trident Community Association Program - 5100 N. O’Connor Blvd, #200, Irving, Texas 75039 or email to csmktgprograms@argogroupus.com 877590-0775 [11-6]

Contractors

eavy construction risks including steel erection contractors, concrete contractors, roofing contractors, bridge, street & road contractors, etc. Norman Spencer - Contact Brian Harrold p: 937.432.1469 brianharrold@normanspencer.com [11-7]

Contractor’s Pollution

ost contractors - including those with mold exposures and cleanup contractors. Program includes CPL - Occurrence or Claims Made form - mold coverage available - Annual & Per Project policies. Highly competitive rates claimed. All Risks, Ltd - Lou Ann Cook - 800-3665810 X 3030 email: nspflyer@allrisks.com [12-4]

Convenience Store

rgo Insurance announces expanded program and competitive rates for convenience store accounts. Company is looking for stores open until 11PM, fuel sales up to 90%, alcohol sales up to 30% with no fuel hauling exposure. Not available in Florida at this time. Email csmktgprograms@argogroupus.com 877590-0775 [11-6]

Design & Construction Industry

rchitects, engineers & surveyors, construction managers, contractors, environmental consultants, landscape architects, specialty construction consultants. Contact Jeff Grigsby -

877.453.2071 - JeffG@schinnerer.com [116]

Energy & Utility Risks

il & Gas Companies, pipeline operations, utilities, HVAC contractors and water & sewer contractors. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ schinnerer.com [12-1]

ropane Dealers - PowerWrap is an endorsed insurance program offering specialized, full spectrum coverage. Contact Alteris: 877-590-0775 [12-1]

Entertainment & Sports

&K Insurance claims “over 75 programs available on admitted paper with no prior approval or appointment needed to submit applications for quotation. “ The MGA can be reached at 800-637-4757 or www. kandkinsurance.com. [11-6]

Group Homes

roup Homes Programs for such risks as Hospice, Agencies for Aging, Homeless Shelters, Rehab Facilities, Adult Day-Care Facilities, etc. Comprehensive packages available - limits up to $1M/$3M - customize with many optional coverages. AFC Insurance - Toll Free: 877-456-5323

Hair & Beauty Insurance Program

ASS - Salon & Spa Specialty Insurance administered by Brownyard Group open to agents seeking access to program. 888-823-9380 or Email: sassi@brownyard. com [11-7]

Health & Human Services

FC Insurance - Package programs or ala carte. Contact: 877-456-5323 www.afcins.com submissions@afcins.com [12-2]

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Homeowners

ational Ins Underwriting -Webbased quick quotes, most protection classes & zip-codes OK - $40K - $750K dwelling values with replacement cost available. No credit scoring. Renters policies available. Contact: Craig Calver - 800-338-2680 X 508.

Kidnap & Ransom

cademic institutions, energy companies, engineering firms, hospitals and healthcare, houses of worship, manufacturing firms, etc. Contact Victor O. Schinner & Co., Inc. Jeff Grigsby - 877-453-2071 or jeffg@ schinnerer.com [12-1]

Life Agent E&O

ife agent E&O from Rockwood Programs. Coverage limits from $250K to $1 Million. Base rates from $400 to $550. Individual policies. Indentity theft included. No shared aggregates. Includes mutual fund placement. Call 877-242-2487 or email sales@rockwoodinsurance.com. [12-4]

Marine Risks Worker’s Comp & Longshore & Harbor Workers’ Comp

eaBright Insurance Company offers high quality workers’ compensation coverage for your clients who are small maritime employers and other marine-related businesses. SeaBright provides seamless cov All Risks, LTD 410-828-5810 rlang@allrisks. com or Appalachian Underwriters, Inc. – Oak Ridge, TN 865-425-1051 warren. palmer@appund.com or Peachtree Special Risk Brokers – Metairie, LA 504830-7347 jlasseigne@psrllc.co [11-7]

Martial Arts

&K Insurance announces expanded coverage & lower minimum premiums on martial arts coverage. General Aggregate Limit increased to $5M - Participants Med Pay to $150K. The MGA can be reached at 800-637-4757 or www.kandkinsurance. com. [11-6]

Ocean & Inland Marine

prdwode Facilties, Contractors doing:

Inc. piers,

Have a P&C Product Announcement? Send your press release or one-paragraph announcement to ron@insurmedia.com docks, wharfs, bridges, breakwaters, cranes, dredging, etc. 6455 East Johns Crossing, Suite 115 Johns Creek, GA 30097 (678) 736-6720 • Facsimile: (678) 736-6726 - Carter, Kimberly - 678 7366720, Ext. 1000 - kcarter@wwfi.com [11-7]

Professional Liability

echnology & Cyber, Architects & Engineers, RE Agents, Insurance Agents E&O, Misc. Pro Liability - and more: Contact Atlantic Specialty Lines lorie@atlanticspecial.com 877-5459100 [12-1]

ictor O. Schinnerer - A-rated carriers -Real Estate Agents, Healthcare Consultants, General & Artisan Contractors, Architects, engineers & consultants, public entities such as school leaders and public officiials. Contact: 877-4532071 www.schinnerer.com jeffg@ schinnerer.com

Real Estate E&O

overage for open houses, mold, network risks and privacy claims are now part of Victor O. Schinnerer & Company’s Real Estate E&O policy. Schinnerer includes the three new coverages at no additional premium. Call to ck on your state: Starr Crusenberry Starr.N.Crusenberry@ Schinnerer.com - 301-951-6904 [116]

Restaurant

rgo Insurance announces lower rates filed on restaurant coverage including food spoilage coverage. Full commission and no agency appointment necessary. Company is looking for family style, family grills, casual style, fine dining and limited cooking restaurants such as pizza and sub shops. Email csmktgprograms@ argogroupus.com 877-590-0775 [11-6]

orman Spencer’s Real Estate Program - “one of the most

comprehensive policies in the market with highly competitive pricing” Coverage is available to risks whose services include Residential and Commercial Sales, Leasing, Property Management, Real Estate Consulting, Auctioneering, Mortgage Brokering, BPO’s and Appraisal, and Escrow Services - Michael Ryder michaelryder@ norman-spencer.com 800.477.9192 x204 [11-7]

Security Guard

rownyard Programs announces coverage for security guards, claiming to insure 15 of the top 40 security guard companies in the U.S. Brownyard Programs - www. brownyardprograms.com or pvancott@ brownyardprograms.com [12-4]

Tech Consultants E&O

odern Insurance Consultants - website design, software development, database admin, web hosting, software/hardware sales - and more. IT consultants up to $15M in annual sales. Contact Andrew Lawrie - 305-248-9495 X 9108 - alawrie@ modernins.com [12-2]

Welding Supply & Industrial

Gas Distributors

he WDPG Program is dedicated to this class of business and has been a leading choice of agents and welding supply distributors since 1987. Quick Turn around Quotes: Jeannie Coda: kentidwell@wdpginsurance.com [11-6]

Privacy/Data Breach Coverage

irst party expense and third party liability coverage available for many E-Threats and E-Exposures. Contact RPS, Inc. at 800-336-5659 or techcyber@rpsins.com. 11-7]

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TEXAS CONGRESSWOMAN KAY GRANGER WARNS AMERICA ABOUT THE IMPLICATIONS OF PRESIDENT OBAMA’S MARCH 2012 EXECUTIVE ORDER

“It is still unclear why this order was signed now, and what the consequences are for our nation” ear Friend,

resources, construction services and materials (steel, concrete, etc.), our With all that is going in civil transportation system, food and Washington these days some things health resources, our energy supplies don’t make the news the way they including oil and natural gas – even farm equipment – can be taken over by the President “All of our water resources, and his cabinet secretaries. construction services and The Government can also draft U.S. citizens into the materials (steel, concrete, military and force U.S. citizens etc.), our civil transportation to fulfill "labor requirements" system, food and health for the purposes of "national resources, our energy supplies defense." There is not even any including oil and natural gas Congressional oversight, only – even farm equipment – can briefings are required.

be taken over by the President and his cabinet secretaries.”

By issuing this as an Executive Order the President puts the federal government above the should. [Last month] President law, which, in a democracy, is never Obama issued an Executive Order supposed to happen. As President that you should know about. This and Commander in Chief of the Armed order gives an unprecedented level Forces, he has the Constitutional of authority to the President and the authority to issue executive orders. federal government to take over all And while similar orders have been the fundamental made before parts of our by presidents “By issuing this as an economy - in the f r o m Executive Order the name of national Eisenhower President puts the federal security in and Reagan government above the law, times of national to Clinton which, in a democracy, is emergency. and George This means all Bush – it has never supposed to happen.” of our water never been 22

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Congresswoman Kay Granger Texas (R) 12th District

done to this extent. It is still unclear why this order was signed now, and what the consequences are for our nation – especially during times of peace. This type of Martial Law imposes a government takeover on U.S. citizens that is typically reserved for national emergencies, not in a time of relative peace. I want you to know I am following this very closely. If you would like to read the order for yourself please click here. Sincerely, U.S. Congresswoman Kay Granger State of Texas 12th District The Underwriter’s Insider

FLORIDA: THINK PIP ABUSE IS A THING OF THE PAST?

One referral service seems to have an end-run already in place...

he flyer shouts, “Chiropractors. Don’t miss out on your $7.500! We Have The Medical Doctors You Need Now!” Imagine the poor auto accident victim, all banged up after an auto accident, in obvious, critical need of “emergency medical” care, where does he go? To the emergency room? To his personal physician? To an urgent care facility?

medical professional asserts the accident “victim” has a real “emergency medical condition.” And $2,500 is not nearly enough for the series of x-rays, neck-yanks, back-rubs and ultrasound treatments any self-respecting chiropractor will prescribe for any soul crossing his lobby carpet.

Hell no! He runs straight to a chiropractor for an adjustment, the inevitable diagnosis of scoliosis, a vitamin regiment and maybe a little cellulite treatment while he’s at it.

It seems the Medical On Demand, LLC of Tampa has the solution - a stable of physicians that “will do assessments, fill out and sign forms that state the Insured has an emergency medical conditions.” Does the patient have to have a true medical issue to earn the assessment? Guess...

But now the new law shuts off the money flow at $2,500, unless a real

Once the assessment is in place, it opens up the cash spiggot for the chiropractor

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where the endless flow of adjustments and heat treatments can suck up another $7,500 of policyholder surplus - insuring auto insurance in Florida will remain punishingly expensive for the vast majority of insureds. It’s been said by detractors the practice of chiropractic is 1% medicine and 99% marketing. In Florida, at least, it may be 1% medicine, 49% marketing and 50% fraud. There are many honest, professional chriropractors out there who offer truly helpful therapy to their patients and who refuse to participate in PIP fraud. But the tempation for easy money is great and many chiropractors have fallen victim to the lure.

RETHINKING RETIREMENT by Matthew A. Treskovich, CMA, CFP®, MBA, CLU, ChFC, FLMI

he past four years of economic turmoil and uncertainty have permanently changed the way your clients think of retirement. This should be intuitive to anyone who hasn’t been asleep for the past four years, but SunAmerica has taken the time to study the changing attitudes, goals, and expectations of the public, with interesting and useful results. 1. Anger and worry are giving way to financial security The number of individuals who described themselves as “angry” or

“worried” – clients who are angry at about their the financial system and situation has economy are less likely declined since to make good decisions, the depths of and be good clients, than the recession, ones who are insecure but is still but willing to chart a higher than course forward. before it. Significantly 2. Retirement will m o r e start later, and include individuals are continued work “secure” with their financial The typical pre-retiree is Matthew A. Treskovich situation, and now targeting age 69 for most believe they retirement, compared to age can still “get there from here”, but this 64 before the recession. Also, a majority number is still less than half of the public. This is good news for advisors See Treskovich Page 34

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“The Final Authority on Everything!” A Sucker Bet For The Unwary Traveler

y wife and I need you to settle an argument. When she travels on business, she always takes the rental car deal where you buy a tank of gas up front at a discounted rate rather than filling up the tank before you return it. I say it’s a bad deal. What say the Advisor? - C.R. Miami, FL You won this argument C.R. - This is a classic buyer-beware contrivance created solely for the benefit and profit of the rental company. Here’s how it works: Option 1: The renter is offered the option of bringing the car back with a full tank of gas - with confiscatory penalties for failing to do so (up to $13.00 per gallon!) At the same time, the renter is offered another option to simply prepay for a full tank of gas, usually at a rate per gallon somewhat less than the current retail rate - and then told to bring the car back as close to empty as possible to take maximum advantage of the offer. To the uninformed consumer, the second option may seem reasonable - the gas is taken care of in advance at a great rate and now there are no worries about finding a gas station in a strange city while rushing back to the airport to catch a plane. Option 2 will save you a stop for gas, but it will almost never save you money - in fact it can cost you a bundle. Here’s why:

ADVISOR

miles out from the airport while they are rushing to catch a flight? The fact is most of these drivers return the car with at least 2 to 3 gallons remaining in the tank - and often much more than that. If you just don’t use an entire tank, what are you going to do? Drive around the city for a couple of hours just to make certain you aren’t giving the car back with half a tank of gas? Second, the “discount” rate on the gas offered by the rental car company on Option 2 is hardly enough to make up for the difference even if only a single gallon remains in the tank on return. Say gas is retailing at about $4.00 per gallon. Take for example a rental vehicle with a 15 gallon tank. (If it was 14.5, you can bet the rental company will round up!) The Option 2 cost to

Have a question for The Advisor?

Click HERE! the renter will be $58.50 at the rental car company’s discounted rate of $3.90 per gallon. Now say the renter selected Option 1, stopped and put in 14 gallons at the retail rate of $4.00. The cost of the fill-up - only 1 gallon shy of a full tank would be $56.00 - or a $2.50 savings over Option 2. Any amount of gas purchased less than 14 gallons (far more likely) would yield a much greater difference. Leave 3 gallons in the tank on return, for example, and your “stupid cost” goes to $10.50. Solution: Always select Option 1. Plan ahead: Scope out your return gas station on the way out of the airport so you don’t find yourself scrambling.

First, how many travelers are going to risk bringing the car back on fumes - stranding themselves three www.underwritersinsider.com

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FREE CLASSIFIED RULES: Submit all ads online at: www.underwritersinsider. com/classifieds. Ads must be less than 501 characters plus a title line. Eligible free classifieds include help wanted, position wanted, personal ads, agency for sale/purchase, or the one-time sale of an item or items. REGULAR CLASSIFIED RULES: Submit all ads online at: www. underwritersinsider.com/classifieds. Only $1.00 per word, including title line and response info. Payment must be received prior to print date. Nationwide Agency Owner Wanted - Chicago SW Burbs! Business is expanding so rapidly and we need talented, business-minded individuals. What We Offer - Base salary, commissions and limited benefits for the first 18-24 months - Up to $95K in financial support upon graduation to offset agency start-up costs - Brand name recognition of a Fortune 500 company - Extensive sales and product training opportunities - Dedicated support from a team of agency development specialists 9-3

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220 and Life Agents Wanted - Coral Springs Area Licensed 220 and life Agents wanted for P & C Agency Leads available. Daily commission paid to Life Agents. Email: tamiller91@yahoo.com 8-7 "Socialism is the philosophy of failure, the creed of ignorance and the gospel of envy. Its only inherent virtue is the equal sharing of misery." - Winston Churchill

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FEMA STATEMENT ON AGENTâ&#x20AC;&#x2122;S FLOOD INS REBATING

nsurance rebating is a practice whereby insurance agents return a portion of their commission or something else of value to applicants to induce the purchase of insurance. Insurance rebating is confusing to consumers, and it has been the source of many complaints from agents and companies. The Federal Insurance and Mitigation Administration (FIMA) has received inquiries over the past several years from interested parties, inside and outside of the insurance industry, expressing divergent views on the manner in which the National Flood Insurance Program (NFIP) should address insurance rebating.

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After careful consideration, FIMA has concluded that the goals of the NFIP are better served by a system of uniform national pricing that will ensure that policyholders pay the same price for the same risk. FEMA does not directly regulate insurance agents who sell Standard Flood Insurance Policies. Pursuant to 44 C.F.R. Section 62.23 and the Financial Assistance/Subsidy Arrangement, 44 C.F.R. Part 62, Appendix A, however, FEMA administers the NFIP and sets standards governing the activities of participating WYO Companies

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related to the sale and marketing of flood insurance. Accordingly, effective October 1, 2012, WYO Companies shall not authorize the rebating of commissions on new or renewal NFIP policies. Any questions regarding this matter should be directed to Jhun de la Cruz, Underwriting Branch Chief, National Flood Insurance Program, Federal Insurance and Mitigation Administration, at jhun.de-la-cruz@ dhs.gov. 27

“

“I think the Obama administration has long believed

that an Israeli attack was worse than an Iranian nuclear weapon. The president says that containment and deterrence of Iran is not his policy, and I think today that’s true. But it’s his plan B, it’s his backup plan when his current efforts at sanctions fail, diplomacy fails, and Iran gets nuclear weapons. And I think the pressure the administration has put on Israel has been just merciless behind the scenes. So the Obama administration has torqued it up a notch, and now they’re going to reveal very sensitive, very important information that will allow Iran to defeat an Israeli attack. I think that’s what’s going on. Releasing this information, so that the Iranians now know about it, takes away a potentially very powerful mode of attack that hitherto the Israelis have been able to keep secret.” - Former United States Ambassador to the UN, John Bolton, always the smartest guy in the room on foreign affairs, explaining to a news organization how President Obama is secretly undermining our closest ally in the Middle East, Israel, while they face the threat of nuclear attack and annihilation. If Israel continues to share secret information with the U.S., they do it to their own detriment while an apparent sympathizer to radical Islam continues to sit in the White House.

“Why is a big gift from the federal government a matter

of coercion? In other words, the federal government is here saying: we’re giving you a boatload of money. There are no, is no matching funds requirement. There are no extraneous conditions attached to it. It’s just a boatload of federal money for you to take and spend on poor people’s healthcare. It doesn’t sound coercive to me, I have to tell you.” – Supreme Court Justice and Obama appointee Elena Kagan during recent arguments on the constitutionality of the personal mandate contained in Obamacare. Kagan offers a rare, crystal clear window into the mind of a committed liberal with her flippant reference to a “boatload of federal money,” as if that money had somehow dropped from heaven - rather than being confiscated from American families - at the coercive point of a gun if necessary. She cannot, apparently, even conceive of anything more wonderful than the federal government with a boatload of taxpayer dollars ready for redistribution. The “big gift from the federal government,” we’d like to inform Ms. Kagan, 28

is, in reality, a big theft from the American taxpayer. Let me tell you, the things that’s about to happen, to these honkies, these crackers, these pigs, these pink people, these f-----g people. It has been long overdue! My prize right now this evening … is gonna be the bounty, the arrest, dead or alive, for George Zimmerman. You feel me? It’s in me to fight. It’s in me to raise up soldiers. It’s in me that every time my feet touch the ground the state of Florida- these crackers- they scared.” - Michelle Williams, Chief of Staff for the New Black Panthers, ironically while railing against racism, in an interview about the Travon Martin shooting in Sanford, FL.

“That’s not the way we operate our tax system, okay? We don’t run bake sales. It’s not about volunteerism. We all kick in according to the system.” - A testy David Axlerod, Obama’s top campaign advisor, responding to the question on Fox News Sunday as to whether Obama was going to add to his personal tax liability since his effective tax rate of 20.5% turned out to be less than his secretary’s. Obama has been touring the country, ginning up class-warfare, using as an example the fact that Warren Buffet’s effective tax rate was less than his secretary’s - no mention, of course, that Buffett paid $ millions in federal income tax while his secretary paid a tiny fraction of that amount. Liberals are only interested in the rate, it seems, while the actual amount is never mentioned.

“And I think that if you would take the time to study the

political spectrum of ideologies, you’d understand that at the turn of the [20th] century, American Communists renamed themselves as progressives. If you study the Woodrow Wilson administration, people referred to the Woodrow Wilson administration as a progressive administration. It’s about nationalizing production, it’s about creating and expanding the welfare state. It’s about this idea of social and economic justice. And you hear that being played out — you know, now with fairness, fair share, economic equality, shared sacrifice, ad nauseum, ad infinitum. I’m not gonna back down, I’m not gonna be afraid about the fact that I call a spade a spade. That’s my responsibility to the American people.” - U.S. Congressman Alan West (FL-R), one of the few politicians in the country with the courage to tell the truth without apology - responding to questions concerning a previous statement in which he called a certain cadre of fellow members of the U.S. House of Representatives communists. Indeed, American Communists did rename themselves “progressives,” and modern progressives follow an idealogy of expanding government and class division far closer to that of Karl Marx than of our founding fathers.

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MISSISSIPPI TOP SCORING INSURANCE DEPARTMENT IN NATION IN NEW REPORT

ACKSON – The Mississippi Insurance Department has ranked best in the nation in a new report that evaluates state governments on integrity and the ability to prevent corruption among state officials and employees. Scores for all 50 insurance departments in the United States were part of the criteria used in the overall ranking of state governments. The Mississippi Insurance Department received an A grade, 91 percent, on questions regarding political and special interest influence, capacity to carry out its mandate, conflict of interest, and public document

disclosure. Only one other state insurance department, Connecticut, was given an A grade with 90%. “I am proud and honored that this report recognizes the outstanding effort the department makes in enforcing the laws and regulations in the state, while providing our citizens with the maximum amount of consumer protection,” Commissioner of Insurance Mike Chaney said. “Every day our dedicated staff works hard to fulfill the goals of the Mississippi Insurance Department in creating the highest degree of economic security, quality of life,

public safety and fire protection for the State's citizens at the lowest possible cost. We are committed to providing assistance to consumers in a timely, caring and ethical fashion,” Chaney added. Overall, the state of Mississippi received a C+ grade and ranked in the top ten states in the report. The “State Integrity Investigation Corruption Risk Report Card,” was created and released through the partnership of the Center for Public Integrity, Global Integrity and Public Radio International. The complete Report Card is available online at www.stateintegrity.org.

GEORGIA SCORES DEAD LAST ON CORRUPTION RISK REPORT CARD

Overall Grade: F

n March, the Center for Public Integrity published a state-by-state ranking of ethics laws and enforcement. Georgia scored the lowest of all 50 states on the Corruption Risk Report Card with a grade of “F.” The report card, (shown at right) graded the state in several related categories.

“F.” North Carolina tied Florida at 18th of 50 and a C- Score. Other scores in the region: Alabama, 15th rank, CMississippi, 6th rank, C+ Louisiana, 15th rank CTennessee, 8th rank, C Other scores of interest:

Florida scored a “C-” in the same report, 18th among the 50 states, South Carolina fared little better than Georgia earning 45th rank also with an 32

California, 4th rank, BTexas, 27th rank, D+ Illinois, 11th rank, C New York, 36th rank, D

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The Underwriter’s Insider

Continued from Page 10

ZALMA

n March 1999, the District notified the ISDA that it faced potential tort liability stemming from mold exposure to St. Charles East High School students. The ISDA reserved its rights and retained attorney Robert Smyth of the law firm of Donohue, Brown, Mathewson & Smyth to investigate and monitor mold-based claims. Between March 2001 and March 2002, three separate lawsuits were filed against the District alleging the District’s negligence caused the former students to suffer moldrelated injuries. In April 2001, the District tendered the defense of the suits to the ISDA. On June 26, 2001, the ISDA accepted the defense of the suits against the District, subject to a reservation of rights; the ISDA retained attorney Smyth to represent and defend the District in the lawsuits. Later the District tendered the defense to its various past commercial insurers. Some agreed to defend subject to a reservation of rights. As time passed the District reached settlements with its commercial insurers in separate negotiated settlements that included a release of the demand for defense and indemnity.

The Coverage Lawsuits

he ISDA sued the District seeking a declaration that the District’s “secret”

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settlements with the other three insurers breached its insurance contract with the ISDA. The District filed an answer and a four-count counterclaim. The circuit court entered summary judgment for the District holding the District had the right to deactivate tender of the litigation defense as to the other three insurers, and that doing so in exchange for settlement payments did not breach its policy with the ISDA. The court granted leave to the ISDA to file an amended complaint alleging the District received a “double recovery” from its settlement with the other insurers and the unspecified insurance proceeds it received from the ISDA.

he ISDA contended that the District violated the terms of its insurance policy by entering into “secret” settlements with the other insurers and tendering the defense of the mold litigation to the ISDA alone. It argued these actions constituted a breach of the District’s purported fiduciary duty to the ISDA, and that the District received a “windfall” in the amount of the insurance proceeds it received that exceeded the amount of its litigation costs.

The ISDA noted that the insurance agreement expressly provided the ISDA’s coverage is applicable only as excess over other applicable insurance. The ISDA policy provided: “Coverage provided by this Plan shall apply only as excess over The ISDA remained the lone insurer other insurance and/or coverage that defended and indemnified the applicable to a loss hereunder District in the lawsuits, which settled regardless of whether such other coverage provides primary, excess, umbrella or contingent coverage. When both this coverage and other insurance apply to the loss on the same basis, whether excess or contingent, the Agency shall not be liable under this Plan for a greater proportion of the loss than that stated http://www.zalma.com/zalmabooks.htm in the [contribution by equal shares provision].” for $90,000 in September 2007. The ISDA alleges it paid “$550,889 in It argued the District breached defense fees and expenses related the policy’s provision of “other to the Mold Lawsuits, and $90,000 insurance” when the District, to settle the Mold Lawsuits,” for a through its settlements with the total expenditure of $640,889. commercial insurers prevented the ISDA from seeking equitable contribution from these other ANALYSIS insurance companies for the mold See Zalma Pg 35

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UNIVERSAL DECLARES CASH DIVIDEND

niversal Insurance Holdings, Inc. ("Company") (NYSE Amex: UVE) announced today that its board of directors declared a cash dividend of $0.08 per share to be paid on July 9, 2012, to shareholders of record on June 26, 2012. The board further indicated that it expects to declare additional quarterly dividends in the same amount to shareholders of record in the third and fourth quarters of 2012. If declared and paid as intended, the annual dividend in 2012 would be $0.34 for each common share, which includes the $0.10 per share dividend paid on April 6, 2012. more>>

wealth accumulation. A majority of pre-retirees want asset classes that are guaranteed to not lose value, and are interested in types of insurance that can protect income from market losses. These factors explain the continued growth of indexed life and annuity products, and is more good news for insurance planners who offer these products. 4. New, unplanned expenses are being added to the budget

5. Communication is the driving factor for client satisfaction Consumers say the most important trait in a financial advisor is effective communication skills, and being able to explain complex concepts in understandable language. This is the single most important finding in the study. Advisors should take note: being able to clearly explain financial concepts trumps slick sales presentations, and understandable products will beat products with obscure bells and whistles.

Continued From Page 24

TRESKOVICH

The complete report from SunAmerica is available online at www.LifeAgents.com

say that an ideal retirement will include some productive work. These two factors will cause many advisors and insurance planners to question the traditional “accumulation phase / distribution phase” paradigm, and open the door for advisors offering solutions tailored for the new retirement mindset.

Creekmore Insurance Group is a full-service life insurance brokerage specializing in impaired risk and jumbo life cases, serving independent agents, agencies, and financial advisors. Matt is the CFO and oversees advanced case design and underwriting. He can be reached via email Matt@ LifeAgents.com or at 800-9360339. For more information, visit www.LifeAgents.com

3. Protection from losses outweighs higher returns Financial peace of mind is now significantly more important that 34

The concept of retirement is shifting away from the traditional idea of “pure leisure” toward a rebalancing of work and leisure. Pre-retirees are also planning to receive fewer government entitlements than the previous generation enjoyed, while also taking on obligations to financially support their children and grandchildren far longer than they previously thought would be necessary.

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Continued from Page 33

he Court of Appeal concluded that the District was not entitled to judgment as a matter of law. It litigation. The District countered found that the circuit court erred in that it had the unfettered right to granting summary judgment to the tender the defense of the lawsuits District based on its purported right to selectively tender the defense to any of its insurers. of the mold lawsuits to “Other insurance” “The underlying lawsuits for the ISDA as a excess clauses injuries allegedly resulting consecutive are designed from mold infestation settled insurer. The to override an for only $90,000 yet the ISDA was insured’s right to correct that expenses and legal expenses choose among an insured were more than $550,889.” co-insurers. Such party may provisions, as in not receive this case, attempt to render otherwise primary a double recovery for the same insurance as excess over any other “harm or injury” and the case was collectible insurance, most often remanded to the trial court to with statements in the policy that resolve who paid what to whom.

ZALMA

declare the insurer’s coverage to be excess over any other valid and collectible insurance available to the insured. An “other insurance” provision does not in itself overcome the right of an insured to tender defense of an action to one insurer alone. The issue decided by the Court of Appeal was whether an insured’s right to selective tender among chronologically concurrent policies extends to consecutive ones such as the policies at issue in this case. Finding no Illinois Supreme Court precedent the court noted that the selective tender rule is only applicable to concurrent insurance coverage and not consecutive primary or excess coverage policies where other primary coverage is available.

CONCLUSIONS

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The Court of Appeal declined the District’s invitation to extend the targeted tender rule beyond cases involving concurrent insurance was more than $550,889 policies, as the only context in which the Illinois Supreme Court has applied the rule. Because the District’s insurance policies were all consecutive, the selective tender rule did not apply to compel the ISDA to defend alone, without the prospect of equitable contribution from other insurers, the mold lawsuits against the District.

ZALMA OPINION

his decision teaches many lessons about insurance, not the least of which is that multiple insurers for a single insured worked adverse to each other to mold special deals that had nothing to do with insurance. The underlying lawsuits for injuries allegedly resulting from mold

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infestation settled for only $90,000 yet the expenses and legal expenses were more than $550,889. Insurers are professional at resolving disputes. Had the insurers and the District sat together with the plaintiffs unified against the allegedly injured persons they would have settled early, probably for less than $90,000 and certainly for less than $550,889 in expenses. Insurance claims presented by professional coverage counsel should never be considered a method for an insured to profit. Rules like the selective tender rule accepted in Illinois should not be used by an insured to profit. The Court of Appeal saw the problem and sent the case back to the trial court to resolve the issue. The covenant of good faith and fair dealing incorporated by law into every insurance contract is defeated by the selective tender rule because it sets the insured and the insurer adverse to each other. Insurance claims situations should not be an adversary relationship. Courts should not be asked to waste their time dealing with insureds and insurers who — rather than treating each other with the utmost good faith — seek to profit from an ability to drag insurers whose policies have long expired into a dispute and extort money from them to avoid the cost of defense and indemnity of a lawsuit that had the parties worked together could have been resolved quickly and cheaply. Barry Zalma, Esq. © 2012 – Barry Zalma 35

Experts and Consultants for Insurance Disputes 4441 Sepulveda Boulevard Culver City, California 90230 310-390-4455 zalma@zalma.com http://www.zalma.com

Consultation from Zalma Insurance Consultants (ZIC) can save you or your client thousands of dollars in the defense or prosecution of an insurance dispute. ZIC provides expert advice and counsel insurers and plaintiffs’ counsel find indispensable. Consultation from ZIC can save you, your counsel or client hundreds of hours of investigative and legal work. ZALMA INSURANCE CONSULTANTS is a service of Barry Zalma, Inc. a California professional corporation. Barry Zalma is an internationally recognized expert on insurance coverage, insurance claims handling, insurance bad faith, insurance fraud detection, the defeat of false and fraudulent claims, Barry Zalma, Esq. insurance claims handling, and the resolution of insurance disputes. As a consultant, expert witness, lawyer, author, mediator or arbitrator he serves all parties who need consultation or expert testimony on matters relating to insurance coverage, insurance claims handling, insurance fraud and the tort of bad faith. Barry Zalma founded Zalma Insurance Consultants to help resolve any insurance claim problem faced by you or your clients that do not need Mr. Zalma’s services as a lawyer. His experience and skill as a consultant and expert witness can make the difference before a jury or other trier of fact. For more than 44 years as a claims person and insurance coverage attorney, Barry Zalma has represented insurers, advised insurers on claims handling, interpreted coverages and testified as an insurance coverage, insurance bad faith, insurance claims handling and insurance fraud expert on behalf of insurers and policyholders in state and federal courts.

Expert Testimony

Zalma Insurance Consultants serves insurers, policyholders, underwriters, brokers, agents, adjusters, public insurance adjusters, lawyers and any person involved in an insurance dispute. Because he is an attorney licensed to practice law in the state of California M r. Zalma may be prohibited by California case law from acting as a consultant or expert witness and, therefore, refuses to serve in any situation where a past client of his law firm, Barry Zalma, Inc. is adverse to anyone seeking his services.

Y ou can obtain M r. Zalma’s C.V . at http://www.zalma.com and his e-book publications http://www.zalma.com/zalmabooks.htm and blogs daily at Zalma on Insurance, http://zalma.com/blog.

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The Underwriter’s Insider

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KIM KOMANDO For those more interested in monitoring, a program like TimeSnapper can be used. It takes screenshots of a computer monitor at regular intervals and reveals how it’s being used. It will record all the dirty laundry, whether it’s pornography or inappropriate chatting.

his wife received from the counselor they eventually consulted.

Kim Komando hosts the nation’s largest talk radio show about consumer electronics, computers and the Internet. Get the podcast or “Please warn couples about this,” find the station nearest you at www. he urged me in his email. “It’s an komando.com/listen. Subscribe to important part of anyone’s digital life. Kim’s free e-mail newsletters at www. Open access is the only solution.” komando.com/newsletters. “She recommended that we both have total access to all of each other’s sites and passwords,” he said.

But is such spying just as harmful to a marriage? Dr. Willard F. Harley Jr., author of several books on the subject and founder of marriage counseling center, Marriage Builders, believes a spouse has every right to investigate, whether it involves installing tracking software or hiring a professional. “A husband and wife should be so transparent that any effort on the part of one to look at what the other is doing should never be considered off limits,” says Harley. Many counselors now recommend that both partners have total access to each other’s sites, including Facebook and Twitter, to build accountability. Researcher Mileham believes it’s time for couples to discuss the Internet as seriously as they discuss whether or not to have children before they marry. “To prevent future problems, young couples, as well as long-term committed couples, need to talk about what role the Internet will play in their relationship,” she said. That was the advice my listener and www.underwritersinsider.com

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OBAMA AND THE “BUFFETT RULE” Independent Analysis Shows Obama Claims Are Entirely Contrived Reprinted by permission from FactCheck.org

n their zeal to pass the “Buffett Rule,” President Obama and Vice President Biden leave the false impression that many, if not most, millionaires (people who earn $1 million or more a year) are paying a lower tax rate than the middle class. The fact is that even without the Buffett Rule “more than 99 percent of millionaires will pay” a higher tax rate than those in the very middle of the income range in fiscal year 2015, according to the nonpartisan Tax Policy Center. The president and vice president have given a series of speeches in recent days to gather public support for the Buffett Rule. The proposal is named after billionaire investor Warren Buffett, who famously wrote that many of his office staff pay a higher tax rate than he does. It would require high-income taxpayers to pay an effective tax rate of at least 30 percent of their adjusted gross income. (The effective tax rate includes not just income taxes, but also the employee share of payroll taxes and other federal taxes.) The proposal is expected to come up for a Senate vote during the week of — yes, you guessed it — April 15. But Obama and Biden have distorted the facts when explaining the proposal and its impact. In an April 10 speech, the president described the Buffett Rule this way: “[W]hat the rule says is you should pay the same percentage of your income in taxes as middle-class families do.” But that’s largely the case

now. Two days later, Biden declared that Buffett is “not alone,” and there are “tens of thousands and several millions of people who are in that same situation.” It may be “tens of thousands,” but certainly not “several millions.” Warren Buffett is the exception, not the rule. Obama, April 10: In the next few weeks, we’re going to vote on something called the Buffett Rule — very simple: If you make more than $1 million a year — now, I’m not saying you have a million dollars — right? I’m not saying you saved up all your money and you made smart investments and now you’ve got your nest egg and you’re preparing for retirement. I’m saying, you’re bringing in a million bucks or more a year. Then, what the rule says is you should pay the same percentage of your income in taxes as middle-class families do. Biden, April 12: But the thing is [Buffett's] not alone. There are tens of thousands and several millions of people who are in that same situation that — making over a million dollars do the same exact thing. The Tax Policy Center did an analysis of the Paying a Fair Share Act of 2012. Roberton Williams, a senior fellow at

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the center who spent 22 years at the nonpartisan Congressional Budget Office, wrote that even without the Buffett Rule, only about 4,000 of those with $1-million-andabove incomes will pay less than the 15 percent effective federal tax rate that middle -income households will pay in fiscal year 2015. Williams, Feb. 9: The Buffett rule sounds good in principle. High-income taxpayers should pay at least as large a share of their income in taxes as the rest of us. But most already do. On average, middle-income households will pay 2015 taxes totaling about 15 percent of their income (using the legislation’s definition). Without the Buffett rule, more than 99 percent of millionaires will pay more than that and only about 4,000 will pay less. The legislation would raise taxes for a lot more individuals than those 4,000 “millionaires,” however. That’s because it would impose a minimum effective rate of 30 percent for those in the million-and-over income range — which is actually double the average rate for truly “middle-income” persons. Those are the individuals with incomes that fall in the middle 20 percent — earning between $39,862 See Buffett Rule Page 40 The Underwriter’s Insider

OBAMA’S TAX RATE LESS THAN HIS SECRETARY’S - AND HE HAS AS NO PLAN TO CONTRIBUTE MORE

Proving Socialism is Only for the People - Never for the Socialists...

ronically, a central figure in Obama’s ongoing Hate-The-Rich campaign is one of America’s richest: That little curmudgeon and legendary investor, Warren Buffett, who, while worth billions, prefers to live as if he is on a school teacher’s salary. Buffett interjected himself into Obama’s scheme to raise taxes on America’s job creators by claiming that his secretary paid a lower tax rate on her salary than he did on his income. Soon, the Obama team distilled the message down to an even simpler twisting of the truth: “A poor secretary was paying more income tax than a filthy-rich billionaire. How unfair. We must fix this. We must punish the rich. They must pay their fair share.” The truth: 1)The secretary is paying a tax on earned income - Buffett’s income is primarily capital gains income - taxed to all Americans at a lower rate to encourage investment. 2) Whatever the rate difference, Buffett undoubtably paid millions in income tax while the secretary paid a tiny fraction of his tax bill.

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falsehoods to further his political fortunes. Yet in a way, he is absolutely correct. There is nothing fair about the current tax code. According to Will McBride of the Tax Foundation, “The top 10 percent income earners pay about 70 percent of federal

income taxes. The bottom 50 percent of tax filers - they pay almost no federal income tax. They pay about 3 percent of federal income taxes.” As a result of the constant lie coming from the political left, most of America actually believes the rich pay no taxes and ride on the backs of the poor and middle class.

BEER SMARTS... IS IT REAL? Click on Image to View

A review of the 2011 tax return of the Obamas shows, like Buffett, his secretary also paid a lower rate then he - probably for similar reasons. Yet Obama, in an act of incredible hypocrisy, failed to correct this (what he calls) gross inequity by adding to his tax payment. While Obama prattles on endlessly about “fairness,” in our tax structure, one most wonder if he is simply ignorant of the current structure or spreading complete www.underwritersinsider.com

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WORKER’S COMP FRAUD multiple felony charges and was booked into the Miami-Dade County Jail.

services industry that aid in workers’ Continued From Page 38 compensation premium fraud. The work group released its report in November. “This is the first time that we have detached detectives to work a task force with the Department of Financial Services and it proved worthwhile,”Sheriff Al Lamberti said. “Fraud impacts and undermines honest businesses and the criminals who perpetrate it need to be pursued and prosecuted. I look forward to future joint enforcement operations with DFS.”

“I am proud of the work of my Fraud Division and this first-of-its-kind collaborative effort between the Broward After Batista Sheriff’s Office and set up her shell In her tax return last year, the division,” CFO company, she Atwater said. “As a Batista reported $14.7 told her workers’ result of bringing million in payroll. Ascendant compensation all stakeholders determined, as a result of her i n s u r a n c e to the table, we c o m p a ny, underreporting her payroll, are protecting the Ascendant she underpaid premiums by responsible players Commercial in the marketplace $2.1 million. Insurance, Inc., while ensuring that she had those who are been in the construction business for 10 diverting more than a billion dollars from years and that she had five employees. Florida’s economy are caught and held Investigation revealed that Batista had accountable.” never been in the construction industry, but rather she created the company and Just last week, Gov. Rick Scott signed HB obtained the workers’ compensation 1277, sponsored by Rep. Daniel Davis insurance policy for the purpose of (R-Jacksonville) and SB 1586 sponsored “renting” it, or making it available to by Sen. John Thrasher (R-Jacksonville), dozens of uninsured subcontractors for aimed at curbing this complex form of a fee. workers’ compensation fraud. In addition, CFO Atwater convened a working group in August 2011 to review the practices of certain bad actors in the check cashing services industry who were aiding in a complex workers’ compensation premium fraud scheme. The new law is based on recommendations from a work group convened in August 2011 by CFO Atwater to review the practices of certain bad actors in the check cashing 40

In her tax return last year, Batista reported $14.7 million in payroll, underpaying premiums by $2.1 million. This case is being prosecuted by the State Attorney’s Office of the 20th Judicial Circuit and the dedicated workers’ compensation fraud prosecutor in the State Attorney’s Office of the 11th Judicial Circuit.

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BUFFETT RULE

and $69,074 in 2011, according to the Tax Policy Center’s analysis. Under current law (which assumes the Bush tax cuts expire as scheduled at the end of this year), the Tax Policy Center estimates the Buffett Rule would raise taxes for 116,000 households (or about a quarter of the 438,000 households with adjusted gross income of $1 million or more minus charitable deductions).

Small Impact on Deficit Furthermore, imposing the Buffett Rule wouldn’t raise as much money as you might think listening to the president and vice president. It would generate $20 billion a year in additional tax revenue — which is about 3 percent of the $609 billion deficit the White House projects for fiscal year 2015 (and only 1.5 percent of last year’s $1.3 trillion deficit). Williams said the bottom line is that there is a “big difference” in income tax rates paid by the wealthy and the very wealthy. That’s because the very wealthy, like Buffett, accumulate wealth not through income but through investment profits, dividends and interest, which are taxed at the current capital gains tax rate of 15 percent, rather than the current top income tax rate of 35 percent. (The capital gains would return to 20 percent and the top income rate to 39.6 percent, if the Bush tax cuts expire, as explained by the Congressional Budget Office’s analysis of the president’s budget.) The Underwriter’s Insider

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“Some pay a lot of [income] taxes and some don’t pay a lot of taxes,” Williams said. “That was made very obvious by the fact that Mitt Romney paid just 13.9 percent [in 2010].” The Obama campaign has a “Pass the Buffett Rule” calculator on its website that allows visitors to compare their tax rates with Romney’s. But that’s misleading, too. Romney, like Buffett, isn’t your average rich guy. He reported earning $21.7 million in 2010 — mostly in dividends and investment income. His 13.9 percent tax rate was far lower than the 24.1 percent average for those earning more than $1 million. But visitors to the campaign site wouldn’t know that, and they wouldn’t know it listening to Obama and Biden, either. – Eugene Kiely www.underwritersinsider.com

SLB INSURANCE GROUP ANNOUNCES EXPANSION OF OPERATIONS

ORT LAUDERDALE, FL, Standard Lines Brokerage dba SLB Insurance Group, a leading provider of wholesale insurance products, today announced that in the past two years it has doubled its agency volume, significantly increased its geographical presence and increased its number of employees. Through a laser focus on core business - providing small to medium account business with the same level of service usually reserved for larger accounts - and a commitment to invest in intellectual capital and state of the art technology even in a struggling economy, SLB Insurance Group is emerging as a leader in the industry and the nation. Darren Marsh, Managing Director at SLB Insurance Group, said, "In the past, underserved retail agents have been denied access to premier markets due to agency size, geographical location, or company volume restrictions. At SLB Insurance Group, we believe that clients of all sizes deserve world class solutions and service. We pride ourselves in low touch/high volume account binding." SLB Insurance Group's success is being achieved through a fine-tuned, two pronged strategic approach. The first is a unique submission tracking system. This sophisticated paperless

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technology keeps the workflow moving forward by triggering certain actions that must be performed timely each step of the way. This benefit to employing this automated system is that nothing can fall through the cracks and there is complete accountability which increases the quality of customer service and decreases waste. The need for fewer resources to process business enables SLB to concentrate on servicing clients and growing the business. The second is a commitment to putting profits back into the business. By making key hires in lines of business that are less impacted by a turbulent economy such as trucking and autorelated risks, professional liability and underserved agent account business, SLB is able to stay several steps ahead of its peers and be properly positioned for a turn in the insurance market or a turn in the economy. Mr. Marsh explained, "Our decision to continue investing in the business, specifically intellectual capital and technology, even as the economy has struggled has paid off tremendously, both for our clients and our bottom line. We know that our strategy is working when we are being approached by well-known, respected industry players asking us: 'How do I become one of your key hires?' That is exactly what we are experiencing. I am pleased to say that SLB Insurance Group is a company that is making its own success." Founded in 2000, SLB Insurance Group is a leading provider of wholesale property & casualty solutions for small to medium sized serving underserved agents in all 50 states. SLB Insurance Group has offices in Florida and Louisiana. For more information, visit www.slbig.com. 41