The Underwriter's Insider 2011 Issue 6

INSURANCE • POLITICS • TECHNOLOGY • PEOPLE VOLUME 8 • 2011 • ISSUE 6

TABLE OF CONTENTS

Features News 9

Kim Komando

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Profitability & Growth ASCnet’s 2011 TENcon

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Barry Zalma - Extrinsic Evidence Must Be Considered

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Fla Announces Decision on Citizens Rate Filing

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Inside Track

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Marketplace

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Nationwide Asquires Harleysville

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Insider Advisor

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Matt Treskovich - Starting The Live Insurance Conversation

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North Georgia Storms $15 Million in Damages

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NC American General Charged With Embezzlement

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Classifieds

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Say What?

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Florida OIR Announces Staff Changes

Back Issues

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U.S. Risk Acquires American Special Risk Ins Services

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Florida Fraud Team Busts Clinic Operator

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Advertising

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News 22

The Rich Get Richer - And The Poor Get Richer...

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Liberal Professor Laments Obama Performance

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LaLonde Promoted To Mgr. of Ins Solutions at B&W

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Florida Grants Lloyd’s Eligible Reinsurance Status

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Survey - 30% of Employers May End Healthcare by 2014

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Florida Appoints New Deputy Insurance Commissioner

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Louisiana Granted Motion Against Bond Fraud Ring

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Another Obama “Green Jobs” Debacle

State Farm Cat Losses Reach $5B - So Far! Louisiana Agent Arrested For Insurance Fraud

Broadway Premium’s Jorge Hernandez Honored Fla. Users Group Earns ASCnet Chapter Of The Year

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Sponsors 4 5 6 7 8 11 12 15 16 17 18 19 23 24 28 36

The Agency Advantage Modern Insurance Consultants Broadway Premium Funding Kingsway - Amigo Broadway Premium Funding United Automobile Insurance Co. Encore HR - Personnel Solutions St. James Insurance Company Aggressive Insurance National Insurance Underwriters National Insurance Underwriters NASA - Eclipse Agency Mgt. Northfield Leads Accu-Auto The Towing & Rental Group Zalma

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PROFITABILITY & GROWTH: TECHNOLOGY GETS AGENCIES THERE, REPORT PRINCIPALS AT ASCNET’S 2011 TENCON Best Practices Expert, Agent Panel Also Offer Insights on Disaster Preparedness

social networking tools to reach out to prospects and connect with clients, Lukens said.

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RLANDO, Fla. (September 23, 2011) -Profitability and growth continue to be the drivers of independent insurance agency valuations, and leading agencies around the country are using new ways to produce profitable growth, according to speakers at the TENCon "Insiders Idea Exchange" held this week as part of ASCnet's annual Technology, Education & Networking Conference in Florida.

"You cannot have strong profits, and you cannot grow, unless you are using technology effectively," stated Shirley Lukens, AAI, principal, Reagan Consulting, Atlanta, and project manager of the Best Practices study series produced in conjunction with the Independent Insurance Agents & Brokers of America. Noting that the first Best Practices study in 1993 found an average revenue per agency employee of $81,000, compared with $150,000 in the most recent 2010 study, Lukens added: "Most of that increase in revenue per employee for Best Practices agencies has been driven by technology implementation."

Citing new data in the 2010 Best Practices study, these agencies also

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Ryan Headley, principal and chief technology officer, Stratton Agency, San Carlos, Calif., which aims to exceed $210,000 revenue per employee, noted that his Silicon Valley-based agency must use social technologies to match its customer base. “We use the power of social media. We are using these ways of communicating that you didn’t have three years ago. We can publish something on our blog that is then sent out through Twitter and then to Facebook.”

Headley added that consumers younger than 40 are looking for knowledgeable, professional independent agents to protect their interests, but want to be connected via social networking tools. “We’re in the data revolution now. We had mainframes, then software, then the Internet.

Now we have data and all the connections it can give us” as agents.

Three agency leaders gave insights into methods of agency management system utilization:

Donna Barr-LaGoy, president, Premier Insurance Consultants, Palm City, Fla., said she took her agency paperless after purchasing it just two years ago. Experience was her teacher. Barr worked for a large broker with home office operations in New York City’s World Trade Center, and encountered several hurricanes when she worked in its South Florida office later in the decade.

See TENCON Page 13

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CONTENTS 2011 • Issue 6

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

Ron Manera Editor/Publisher

561.718-0745

ron@insurmedia.com

© Entire Contents 2011 AdMax Media Corp

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To best navigate The Insider, begin with the Table of Contents and select your topic. On the bottom of most pages is a Table of Contents link that will immediately return you for your next topic selection.

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WATCHING FOOTBALL ONLINE

By Kim Komando

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t was only two years ago that I came to fully understand the magic of football. The occasion was attending my first Super Bowl.

I was caught up in the crowd’s escalated enthusiasm and impressed by the agility and strength of the players, who were truly at the pinnacle of their careers and their sport.

Watching from home isn’t quite the same, but I enjoy it much more after that experience. Football is also a great excuse to have a few friends over to the house.

The latest wrinkle in football

fever is watching online, and I’m sure you’ve heard of websites that offer free live streaming of NFL games.

Doesn’t that sound like a great way to get around all the additional charges for sports subscription programs?

If it sounds too good to be true, there’s a reason. The unfortunate fact is these sites aren’t genuine. That isn’t to say you don’t get to watch the game. It just won’t be legal.

Why should you care? First, you can get in trouble with your service provider, which means you might lose your Internet privileges.

Also, the streaming video quality is usually terrible.

It especially gets corrupted during fast-paced action – the very thing you most want to watch!

A n d there are

even bigger risks to your computer, your identity and personal information.

If you search online for free NFL football, you could land on a virusladen site. Anytime you visit a questionable website, the risk of exposing your computer to viruses is high. And any site offering illegal downloads is highly questionable.

You might be asked to download a media player that is really a keylogger, giving hackers direct access to your computer from the inside. Another ploy is to ask you to pay a low-cost subscription that requires you to provide credit card information, opening you to further identity and credit risks.

Not surprisingly, the NFL is very particular about how its content is broadcast. It has extremely lucrative deals with major distributors and service providers. If the programming is given away for free, they lose a lot of revenue. Naturally, they’re doing all they can to keep that from happening.

So the best ways to watch football are the legitimate ways. This doesn’t mean you can’t watch online, but you’ll want to get access by subscribing through an official provider.

Here are some of the legitimate ways to watch NFL games beyond those available on over-the-air broadcasts and basic cable: • DirecTV has the NFL Sunday Ticket.

It brings you out-of-market, nonnationally televised games along with pre-game shows and statistic

See Kim Komando Pg 35 www.underwritersinsider.com

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EXTRINSIC EVIDENCE MUST BE CONSIDERED IN UTAH TO DETERMINE DUTY TO DEFEND Unless The Policy Requires It The “Eight Corners Rule” Is Dead In Utah He remained a paid employee of EAGALA until his employment was terminated on November 16, 2005. The day after his termination, Mr. Kersten sued EAGALA’s board of trustees seeking monetary damages and injunctive relief.

The Need For a Thorough Investigation

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ince insurance is a contract of the utmost good faith insurers must conduct a thorough investigation of the policy and the claim before making a decision to defend or not defend a suit. Had Carolina Casualty Insurance Company performed a thorough investigation and accepted the fact that a suit was brought against its insured improperly and miscaptioned it would have concluded that it had the obligation to defend its insured.

Mr. Kersten captioned the complaint so it appeared that EAGALA was the plaintiff, and Mr. Kersten signed the complaint as “President and CEO” of EAGALA. Although Mr. Kersten had no authority to sue on EAGALA’s behalf, he nevertheless obtained Barry Zalma, Esq., CFE is a California attorney a temporary restraining order specializing in insurance coverage, insurance claims handling and fraud who serves as giving him control of EAGALA. The a consultant and expert for insurers and EAGALA board members were policyholders. He founded Zalma Insurance forced to demonstrate that Mr. Consultants in 2001 and serves as its senior Kersten was no longer affiliated consultant. He recently published an e-book, When a policy agrees to defend with EAGALA and that he had no “Insurance Fraud,” which is available at his Web it insured it must do so if there is standing to sue in its name. The site, www.zalma.com. Go to Zalma Books at a potential for the loss or claim http://www.zalma.com/zalmabooks.htm. district court eventually dissolved to be covered by the terms and the temporary restraining order, conditions of the policy. When a and Mr. Kersten voluntarily so-called eight corners rule – review suit is improperly filed by someone dismissed the case. EAGALA incurred without authority in the name of the of the pleadings alone to the policy to substantial costs defending itself insured against officers and directors determine if there is a duty to defend and its board members against Mr. of the insured the insurer must – does not always apply and under certain circumstances, the court must Kersten’s miscaptioned suit. consider extrinsic evidence before Join Barry Zalma’s new Blog: AGALA notified its insurance carrier, making a decision to defend. http://www.zalma.com/blog Carolina Casualty, of Mr. Kersten’s complaint and requested coverage Background consider extrinsic evidence before for the costs of its defense. Carolina making a decision to defend or not. In Casualty had issued EAGALA a nonprofit Equine Assisted Growth and Learning In March 2005, Greg Kersten resigned organization liability insurance policy.

Association v. Carolina Casualty as the chief executive officer and Insurance Company, 2011 UT 49, No. trustee of Equine Assisted Growth 20090676, Filed August 19, 2011 the and Learning Association (EAGALA).

See Zalma Pg 33 Utah Supreme Court decided that the

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FLOIRDA ANNOUNCES DECISION ON CITIZENS PROPERTY INSURANCE CORPORATION’S RATE FILING

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ALLAHASSEE, Fla. – The Florida Office of Insurance Regulation (Office) issued an Order establishing homeowners’ and dwelling fire rates for Citizens Property Insurance Corporation (Citizens). The effective dates for the new rates for both the homeowners’ and dwelling fire policies are January 1, 2012 for new and renewal multi-peril business, and February 1, 2012 for new and renewal wind-only business.

The overall rate changes established by the Office are: Homeowners # 11-12402 & 12403 Original Rate Requested 21.2% Board Proposal Rate Established 6.2%

[Sinkhole Portion]

447.0% 41.8% 32.8%

Dwelling Fire #11-12716 Original Rate Requested Board Proposal Rate Established

631.5% N/A 96.5%

The Florida Legislature passed Senate Bill 408 to address cost-drivers affecting all property insurers operating in Florida. In the Order, the Office has instructed Citizens to contract with an independent firm to conduct an analysis of the impact of Senate Bill 408.

For the sinkhole rate changes, the Office grouped territories into four regions reflective of claims experience and 12

"The Office's decision is intended to reflect the Legislature's intention to give Citizens actuarially suppor table rates for the sinkhole portion of the p r e m i u m ," remarked Fla Insurance Commissioner Insurance Kevin McCarty Commissioner Kevin McCarty. "Although more credible data and study is required, these established rates will start Citizens on the path of having a sound rate for their sinkhole risk."

Although the frequency and severity of sinkhole claims has increased dramatically, Citizens was not able to provide a study or credible evidence in their rate filing that supported the sinkhole rate changes. The Office found that additional data on the impact of provisions of Senate Bill 408 on sinkhole claims is necessary to evaluate prospective trends accurately for future rate filings.

Dwelling Fire #11-12716 & 12717 Original Rate Requested 18.1% Board Proposal Rate Established 8.6%

Homeowners # 11-12403 Original Rate Requested Board Proposal Rate Established

losses, to compensate for the limitations in the territorial data. In Senate Bill 408, the Legislature eliminated the 10% statutory cap on sinkhole rates, but at the same time it enacted fundamental changes to reduce sinkhole losses.

The rates established by this order contemplate costsavings of Senate Bill 408, but do not fully quantify the cost-saving effects due to the lack of data at this time.

The Office reached its decision following a 45-day deliberative process, including a public hearing conducted on September 13 in Tampa, Florida. This hearing allowed Citizens to present additional information, and featured feedback from the Office of the Insurance Consumer Advocate, and from Citizens’ policyholders, and the public.

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TENCON “I knew what I wanted when I bought my agency,” she recalled. “I needed to be paperless, and I got rid of every single paper file.” Her current twoperson agency also uses call center backup capabilities on a routine basis, which allow her flexibility to be in touch without having employees in the office. “Because of the technology we are able to spend more time being proactive with our clients, reaching out to them and actually spending time visiting them.”

Barr-LaGoy’s disaster-preparedness advice is simple: “One: Go paperless with Epic. Two: Artizan CSR24 for backup. And three: A generator to maintain power.”

Lisa Parry-Becker, vice president, William B. Parry & Son, Langhorne, Pa. and immediate past chair of ASCnet, added that the recent experience of Hurricane Irene and Tropical Storm Lee found her out of power but not out of business. She was able to stay in touch with clients via cell phone, email and social networking, despite not being able to physically cross the Delaware River from New Jersey to visit client sites in Pennsylvania.

Technology is enabling growth opportunities, Parry-Becker added. For example: Her agency used analysis tools in its agency management system to generate a list of clients with coverage gaps in medical benefits, then created an email and letter campaign to those clients. “In most cases we were able to upsell” by following up with a phone call, she noted. www.underwritersinsider.com

ASCnet Chair Brian Bartosh, CIC, LUTCF, who is president of Alpena, Mich.based Top O’ Michigan Insurance Agency, led the session. Noting that the 2011 TENCon event drew 150 firsttime attendees, including numerous agency principals, Bartosh said, “It’s not that agencies are not doing a good job, but this is about the future of the independent agency for the next generation.”

New education components of TENCon are built around on sales and marketing tracks, Bartosh added.

“Agency owners are focused on sales and marketing, and using technology to enable those to happen. As agencies and brokerages, we’re sales organizations, and ASCnet wants to get us from point A to point B in sales and marketing.

ASCnet has published several videos of the “Insiders Idea Exchange” on its video site www.youtube.com/AskUsASCnet.

Agents with questions or comments about topics covered in the ASCnet videos are encouraged to share them on Twitter using the hashtag #Press@ TENCon. About ASCnet: Founded in 1985 and based in Des Plaines, Ill., Applied Systems Client Network, Inc. (ASCnet) is an international association representing more than 80,000 insurance professionals. The only authorized users group for Applied Systems software, ASCnet’s vision is for members to increase system utilization, resulting in increased agency value and profitability. The organization will provide opportunities for members to achieve this success through advocacy, education and networking. For more information: www.ASCnet.org.

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DO YOU KNOW A KEY PERSON IN THE CIGAR MFG. BUSINESS? National brokerage seeks individual with connections in cigar manufacturing and distribution. Exclusive business opportunity!

Call John or Matt 1-800-359-5102

NATIONWIDE INSURANCE TO ACQUIRE HARLEYSVILLE

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n a deal valued at $800M, Nationwide will acquire Harleysville Mutual Insurance Co.

When the deal closes, estimated to occur early next year, Harleysville will become part of Nationwide’s P&C business and will retain the Harleysville name.

Nationwide is interested in Harleysville commercial insurance expertise and broader portfolio of coverages.

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STARTING THE LIFE INSURANCE CONVERSATION

by Matthew A. Treskovich, MBA, CMA, CLU, ChFC, FLMI

a regular schedule even if it does not have cash value.

t can be difficult for advisors who practice in other areas to talk to their clients about life insurance.

This conversation doesn’t need to be difficult, and can be started with a very simple question:

The hardest part of the conversation is moving past the “I don’t want to be sold anything” objection. The goal is to sell the client on the idea of having the conversation and participating in a review. Once the client agrees to proceed with the review process, opportunities to make beneficial changes will come naturally. Showing the client the review process can help overcome this objection.

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When was the last time someone reviewed your life insurance?

According to LIMRA statistics, 41% of US adults have no life insurance at all. Of the remaining 59%, The basic steps of the the majority are likely review process are: to be only vaguely aware of what kind 1. C o l l e c t of life insurance annual statements they have, and the and copies of policies features, guarantees, and costs built in to 2. Summar ize the contract. Very the face amounts, Matthew A. Treskovich few meet regularly p r e m i u m s , with an insurance professional to have guarantees and features, and beneficiary their coverage reviewed. and owner of each policy One of the unique characteristics of life insurance is that it gives the client the opportunity to lock in guaranteed rates and guaranteed insurability over a very long period of time. Despite this feature, clients should not take a “set it and forget it” approach to life insurance.

Life insurance is a financial asset, and should be monitored and reviewed on 14

3.

Discuss life changes with the client to see if any events have occurred that would impact insurance needs or the ability to purchase new coverage 4.

Ask the client to describe the goals they had in mind when they purchased each existing policy

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5.

Perform a basic needs analysis to get a general idea of how much coverage the client should have, and what it might cost to buy that coverage in the open market 6.

Compare the results of #3, #4, and #5 and look for opportunities to save the client money and make adjustments to align the coverage with the needs and goals of the client.

Several insurers offer turnkey “policy review kits” that have all of the forms and fact-finders that can help guide the process. The most difficult step is to persuade the client to proceed with a review, and the to gather all of the relevant information. Once all of the information is in one place, it is simple to conduct a follow-up review the next year.

Working through the review process is beneficial for both the client and the advisor. The client will (hopefully) gain a clearer understanding of what they are paying for, and what benefits they will gain from their coverage.

The advisor will benefit from building a long-term relationship from the client, gaining insight needed to align recommendations with the client’s desires and financial goals, and being perfectly positioned to take advantage of sales opportunities in the future.

Creekmore Insurance Group is a full-service life insurance brokerage specializing in complex life cases and impaired risks.

Creekmore serves independent agents and financial advisors across the country.

Matt is the CFO and oversees advanced case design and underwriting. He can be reached via email Matt@LifeAgents.com or at 800-936-0339. For more information, visit www.LifeAgents.com The Underwriter’s Insider

HUDGENS: $15M IN INSURED LOSSES FROM THE LABOR DAY STORMS ACROSS NORTH GA

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tlanta – Insurance Commissioner Ralph T. Hudgens estimates insured losses across north Georgia from severe weather has now reached an estimated $15 million. www.underwritersinsider.com

“I want to remind everyone that these are very preliminary numbers,” Hudgens said. “It takes weeks for both the insurers and the insured to fully assess the extent of the damage from the storm. To date, we have had 408 insurance companies report their storm-related data.

NC AMERICAN GENERAL LIFE AGENT CHARGED WITH EMBEZZLEMENT

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ALEIGH, NC -- Insurance Commissioner Wayne Goodwin today announced

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the arrest of Earl E. Gay, 58, of 785 Green Hill Road, Leland; he is charged with 14 counts of embezzlement by an insurance agent.

Department of Insurance criminal investigators allege that Gay embezzled more than $7,000 in combined life and accident insurance premiums while employed as an insurance agent with American General Life and Accident Company in 2010. An investigation was launched, and victims identified, as the result of consumer complaints filed with the Department of Insurance.

With the assistance of the Brunswick County Sheriff’s Office and New Hanover County Sheriff’s Office, Gay was arrested on Sept. 14 in Brunswick County and placed under a $10,000 secured bond.

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FLA OIR ANNOUNCES STAFF CHANGES

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ALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the following staff changes at the Florida Office of Insurance Regulation (Office): Richard Koon has been appointed Deputy Commissioner for Property & Casualty, succeeding Al Willis who has accepted a position as the Assistant Division Director of the Division of Rehabilitation and Liquidation under the Department of Financial Services.

Koon has over 20 years of insurance regulatory and management experience. He has expertise in personal and commercial lines of property and casualty insurance, including workers’ compensation, private passenger automobile and homeowners’ insurance. He was most recently the Director of the Property & Casualty Product Review unit. He received a Bachelor of Science degree in Risk Management and Insurance from Florida State University. In his new role, he will oversee both the Product Review and Financial Oversight units for Property & Casualty.

acting Director since March 2011.

Wilkerson was formerly the Financial Administrator in the Life & Health Financial Oversight unit. She has worked in the field of life and health insurance company regulation since 1996, both in the Office of Insurance Regulation and the Agency for Healthcare Administration (AHCA).

Wilkerson graduated from the University of West Florida with a Bachelor of Arts degree in Business, and has achieved the Certified Public Manager (CPM) designation.

Carolyn Morgan has been appointed Acting Director of Property & Casualty Financial Oversight. She was most recently the Chief Analyst in the Property and Casualty Financial Oversight unit, and began her career at the Office as an analyst in the Life and Health section in 2004. Morgan earned

the Associate Professional in Insurance Regulation (APIR) designation from the NAIC, and received her Bachelor of Science degree in Accounting from Florida State University.

Sandra Starnes has been appointed the Director of the Property & Casualty Product Review unit, and will be succeeding Richard Koon. Starnes began her career with the Office in 1996 as an actuarial analyst in the workers’ compensation area, and was promoted to the senior actuarial analyst position in the commercial lines area. She left in 2002 to work for the National Council on Compensation Insurance (NCCI) as an actuarial consultant, but returned to work for the Office in 2007 and was most recently the Deputy Director of Property & Casualty Product Review. She received a Bachelor of Science in Mathematics from Florida State University.

Belinda Miller has been appointed the General Counsel. Miller assumed the role of acting General Counsel in February 2011 following the retirement of Steve Parton. Miller had been the Deputy Commissioner for Property & Casualty since 2006, and has more than 20 years of experience in insurance regulation and receiverships. Miller received her Bachelor of Arts degree with an major in International Studies from Emory University, and has a Juris Doctor from Florida State University.

Toma Wilkerson has been appointed Director of Life & Health Financial Oversight. She assumed the role of 16

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The Underwriter’s Insider

U.S. RISK ACQUIRES AMERICAN SPECIAL RISK INSURANCE SERVICES

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allas — September 21th 2011 — U.S. Risk Insurance Group, Inc. (www. usrisk.com), the eighth largest managing general agency and surplus line wholesaler in the nation, today announced that it has acquired American Special Risk Insurance Services in Woodland Hills, California.

Division, which offers program underwriting for healthcare accounts. The U.S. Risk healthcare product portfolio includes professional and general liability, automobile, umbrella, as well as risk management products and services for a vast array of healthcare risks. In addition to the healthcare division, U.S. Risk also has specialty underwriting programs for entertainment, staffing, energy, parking and valet services and financial services.

“We are delighted to be joining U.S. Risk and the ability to gain access to greater resources and additional insurance markets,” said Rocio Orta, president of ASR. “We look forward to delivering these expanded resources to our agents and brokers throughout the Southwest region.”

Contact: Rocio L. Orta, President 818-887-7711 Ext 222 Email: rorta@asris.com

American Special Risk (ASR) (www.asris.com) is a managing general agent for professional liability and miscellaneous healthcare risks.

“American Special Risk is a strong and well-respected California MGA that offers similar professional lines to those of U.S. Risk,” said Randall Goss, chairman and CEO of U.S. Risk Insurance Group. “We’re excited about the opportunity that this acquisition provides us to expand our footprint in California. Acquisitions remain a key component of the U.S. Risk growth strategy.”

American Special Risk Insurance Services will become a subsidiary of U.S. Risk of California, Inc. and will report to the U.S. Risk Underwriters Healthcare www.underwritersinsider.com

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FLA. FRAUD TEAM BUSTS CLINIC OPERATOR: FILES CLAIMS ON BEHALF OF DEAD DOCTOR

PIP in Florida so our citizens don’t have to foot the bill for these outrageous schemes.”

Puigros owned the clinic from late 2007, until it was dissolved in late 2009. Sworn statements indicate that employees of the clinic knew the doctor had died, but Puigros continued to use his name for reports and billing and instructed the employees to do so as well. Employees were also told to make patients sign blank forms which were then fabricated by Puigros in

order to fraudulently bill for medical services never rendered.

Puigros never applied for or received a license to operate the clinic, as indicated by the Agency for Health Care Administration (AHCA), nor had she applied for a license with the Department of Health (DOH). It is a third degree felony to operate without a license. Puigros was booked into the Miami-Dade County Jail and released after posting a $160,000 bond.

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ALLAHASSEEFlorida Chief Financial Officer Jeff Atwater today announced the Division of Insurance Fraud on Wednesday arrested Hialeah accident clinic operator Daysi Puigros on more than 30 felony counts stemming from allegations that she filed more than $200,000 in fraudulent Personal Injury Protection (PIP) claims using the name of a deceased doctor.

Puigros used her clinic, Better Life Medical Center LLC, to submit physical evaluations allegedly performed by Juan Julio Hernandez Pombo, a doctor who she knew had died. She is charged with 15 counts of insurance fraud, 15 counts of grand theft (3rd degree), one count of operating a clinic without a license and one count of an organized scheme to defraud.

“I have no tolerance for masterminds of these types of egregious crimes,” said CFO Atwater. “We need to look at tightening laws and reforming

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lorida Chief Financial Officer Jeff Atwater announced today the appointment of Carlos Lacasa as the Chairman of the Board of Governors for Citizens Property Insurance Corporation. Lacasa, from Miami, is a former state representative and has more than 20 years of experience as an attorney with expertise in the insurance industry. “As the longest serving member of the Citizen’s Board of Governors, Carlos has the experience needed to lead the board and serve the more than 1.4 million Florida insurance consumers covered by Citizens,” said CFO Atwater. “Most importantly, Carlos was a member of the legislature when Citizens was created, so he knows firsthand the original intent behind Citizens and can guide the board back to that intended purpose.”

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TLANTA, GA - Charles (“Charlie”) Geer, one of the country’s preeminent engineering talents, is bringing his risk management and engineering expertise to Greyling Insurance Brokerage. Geer is a client executive and a senior vice president with Greyling. He is responsible for developing new business and providing service to clients. Geer has opened Greyling’s new Florida office in the West Palm Beach area. He is in charge of operations.

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ccording to an article on Lewis & Tompkins (Maryland attorneys) website, “GEICO spent $502 million on advertising in 2005 alone. The cost of a 30 second Super Bowl advertisement is over $2 million dollars. A 30 second ad during a lower profile national broadcast is close to $350,000. You can also factor in local television

advertising, which is cheaper and can therefore be utilized more often, plus a near constant stream of radio and print ads. If you consider what all this advertising costs compared to how much GEICO is spending, then the near constant parade of GEICO visibility starts to make sense. And when you hear an enormous number like $502 million, you start to wonder how it is that you can possibly save “up to 15% on your car insurance” if so much of GEICO’s revenue is being put toward advertising. The answer is simple. GEICO is part of an investment group called Berkshire Hathaway, and to them, $502 million is a drop in the bucket. Warren Buffett’s stated philosophy: ‘When Berkshire acquired control of GEICO in 1996, its annual advertising expenditure were $31 million. Last year we were up to $502 million. And I can’t wait to spend more.’”

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lorida Citizens took in $32 Million in sinkhole premiums in 2010 while losses and related expenses were an estimated $245 Million on the same peril.

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OP Win in NY Democratic stronghold viewed as “stunning rebuke” to Obama.

Political newcomer Bob Turner, a former TV executive stunned political observers by whipping Democrat candidate David Weprin, a hand-picked NY state assemblyman choosen to run for the seat formerly held by Democrat icon Anthony Weiner - forced to resign recently after a humiliating sex scandal.

Both former NY mayor Ed Koch and Donald Trump campaigned for Turner while Bill Clinton tried hard to bring in a win for the Democrat. The GOP win of a seat held by Democrats for almost a century is considered by political pundits as extremely bad news for President Obama as he seeks reelection in 2012.

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Marketplace Recently Announced P&C Markets Entertainment & Sports

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AS Insurance appoints Jerid Schmickle as Senior Vice President of its newly launched Entertainment and Sports Division. He will spearhead the facility targeting risks within the Entertainment, Hospitality, Media and Sports industries. Jerid joins NAS from Allianz/Fireman’s Fund where he was a Director of Underwriting.

He has created numerous profitable programs throughout his career, while underwriting unique and unusual risks.

NAS will be announcing new product launches in the near future. NAS Insurance Services is an underwriting manager located at 16501 Ventura Blvd., Suite 200, Encino, CA 91436, telephone (818) 382-2030, fax (818) 382-2040, website: www.nasinsurance. com.

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&K Insurance claims “over 75 programs available on admitted paper with no prior apporval or appointment needed ot submit applicatons for quotation. “ The MGA can be reached at 800-637-4757 or www.kandkinsurance.com.

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adler Sports & Recreation Insurance specializes in ultra-fast time to quote, bind and issue. www. sadlersports.com. Sadler & Company, Inc. P.O. Box 5866 - Columbia, SC 292505866 - Phone: (800)622-7370

Real Estate E&O

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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.

Coverage for privacy claims and client network damage claims are now included in the policy. The coverage applies to allegations of privacy injury and identity theft and claims that allege a security breach or electronic infection caused network damage to a client’s network while performing professional real estate services. The filing of the enhancements is currently under way. Call to ck on your state: Starr Crusenberry Starr.N.Crusenberry@ Schinnerer.com - 301-951-6904

Welding Supply & Industrial Gas Distributors

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he WDPG Program is dedicated to this class of business and has been a leading choice of agents and welding supply distributors since 1987. The WDPG underwriters have knowledge and experience your clients need and is a long standing member of The Gases and Welding Distributors Association (GAWDA) Quick Turn around Quotes: Jeannie Coda: kentidwell@wdpginsurance. com

Restaurant

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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

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Martial Arts

K

&K Insurance announces expanded coverage & lower minimum premius 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.

Aviation

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viation Products & Liability Insurance from Arlington/Roe & Company - MGA - representing mulitple markets.

Contact: 800.878.9891 X 2401.

Cfrench@ arlingtonroe.com

Convenience Store

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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 877-590-0775

Contractors

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cGowan Excess & Casualty announces in-house binding authority for general contractors, trade contractors and residential construction.

Strong carriers & competive pricing.

Contact: 732.335.8470 Chris Longo • clongo@ mcgowanexcess.com The Underwriter’s Insider

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Condo Association Program

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rident is offering tailored coverage designed for condominium town home and single-family community associations claiming competitive reates 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 877-590-0775

Have a P&C Product Announcement?

Send your press release or

one-paragraph announcement along with your contact information to ron@insurmedia.com

Social Services

I

rwin Siegel Agency claims to be a partner who can provide Insurance Solutions for the Social Services field. Contact: 800-622-8272 siegel@ siegelagency.com.

Worker's Comp for Healthcare Teams

S

eabright Insurance & Phoenix Risk Mgt. announced their Comp plan for healthcare teams including most classes of medical professionals.

Contact Phoenix Risk Mgt. at 877-5791500 or Michael Silcox, Marketing Rep: 916-705-7451.

Design & Construction Industry

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rchitects, engineers & surveyors, construction managers, contractors, environmental consultants, landscape architects, specialty construction consultants.

Contact Jeff Grigsby - 877.453.2071 JeffG@schinnerer.com 21

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THE POOR IN AMERICA: THE RICH GET RICHER AND THE POOR GET RICHER Bill Whittle Examins the Facts and Explodes The Liberal Myths of the Impovershed Class in America

STATE FARM WEATHER RELATED CAT LOSSES REACH $5B 2011 - SO FAR!

B

loomington, IL - According to Brian Boyden, State Farm executive Vice-president, “The unrelenting, widespread volatile weather continues to cause problems for our policyholders. Our claim teams have risen to the challenge and we are prepared with the necessary resources to respond. About 4,300 specifically dedicated catastrophe claim representatives have joined thousands of local claim professionals and agents at catastrophe sites.”

Click Here to Watch the Video

IN THE LIBERAL NEW YORK TIMES, DREW WESTON, A FARLEFT PROFESSOR, LAMENTS

I

t seems that even the far-left has begun to figure out what has been so obvious to so many for so long: The Obama mantra of “Hope and Change” was all smoke and mirrors. Yet none of the information contained in the excerpt of the former Harvard professor’s NY Times column below was unknown prior to the 2008 election. What were you thinking when you voted Drew?

“Those of us who were bewitched by his eloquence on the campaign trail chose to ignore some disquieting aspects of his biography: that he had accomplished very little before he ran for president, having never run a business or a state; that he had a singularly unremarkable career as a law professor, publishing nothing in 12 years at the University of Chicago other than an autobiography; and that, before joining the United States Senate, he had voted ‘present’ (instead of ‘yea’ or ‘nay’) 130 times, sometimes dodging difficult issues.”

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Boydon added that it is “likely to be one of the company’s busiest years on record for catastrophe losses,“ resulting from a “summer of wildfires, tropical storms and hurricanes followed a spring of relentless tornadoes and hail storms.”

The company reportedly has helped policyholders on more than 970,000 catastrophe claims this year through Sept.

In January of 2009, after a bitter dispute with the Fla. Insurance Commissioner over a requested rate hike, State Farm announced they would be withdrawing from the property insurance market in Florida: “State Farm Florida is a private company and must have adequate capital to ensure financial stability. And it is our responsibility to our policyholders to provide a sound financial framework for the coverages we offer.” - Jim Thompson, State Farm Florida President.

The Underwriter’s Insider

IS THERE A LESSON HERE? “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship. The average age of the world’s great civilizations has been two hundred years. These nations have progressed through the following sequence: from bondage to spiritual faith, from spiritual faith to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency from placency to apathy, from apathy to dependency, from dependency back to bondage.”

— Alexander Tyler, about 100 years ago, writing about the fall of the Athenian empire.

Editor’s note: As the “takers” in America, encouraged by the Obama Administration and the Democrats, brazenly attempt to vote themselves more and more of the resources of the “makers,” we must ask ourselves: Is there a lesson here? www.underwritersinsider.com

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LA AGENT ARRESTED FOR INSURANCE FRAUD

Metairie insurance agent was arrested by the Louisiana State Police Insurance Fraud/Auto Theft Unit and served by Louisiana Department of Insurance Fraud Section Investigators on September 23 with a Notice of Proposed Action, License Suspension and Civil Fine Notice for alleged insurance fraud.

It is alleged that Bodenheimer, realizing that the insurance policy on her vehicle had lapsed after the vehicle was involved in a wreck, fraudulently manipulated an insurance company upload system in order to create an application for insurance and a declaration page that showed the effective date and time of the policy as being prior to the accident. She then filed a fraudulent claim with the company for the accident.

Angela Bodenheimer, 49, was arrested by the Louisiana State Police Insurance

Bodenheimer has 30 days from time of service to appeal this action.

A

24

Fraud/Auto Theft Unit on one count of insurance fraud. She was also served by the Department of Insurance Fraud Section Investigators with a six month license suspension and a $1000 fine notice for alleged insurance fraud.

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Other Louisiana Enforcement Actions Achillea Kirkikis, 33, of Rushton, LA, was served by the Department of Insurance Fraud Section Investigators yesterday with a Notice of Proposed Action, License Revocation and $6,000 fine notice for misappropriation of annuity premiums.

It is alleged that Kirkikis misappropriated $111,000 in annuity premiums and provided the client with fraudulently altered annuity contracts that belonged to another person. He also allegedly promised to repay the funds on two occasions and currently owes a balance over $60,800.

On August 8, 2011, he was arrested by the Financial Crimes Task Force and charged with Theft in relation to these allegations.

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The INSIDER’S

“The Final Authority on Everything!”

Computer Is Slow — But IT Guy is Slower...

My computer is only three years old but it seems to get slower by the day. We have an IT guy here at the company, but he seems to know more about networking then individual computers and it takes him two weeks to get around to a service request, then another month to do anything about it.

When I first got this computer, I thought it was the fastest ever. One time when moving the computer it slipped and hit the floor fairly hard and another time somebody in the office used the CD player as a drink holder and spilled some Coke in it. Now it’s dog slow. Do you think either of these events have damaged it and do you have any suggestions? — T.J. Lakeland, FL Yes. Take it easy on your computer! Do NOT use the CD player as a drink holder and try not to drop it from more than a couple of feet. Yet I doubt that either of these events is related to your perceived slow down. Much more likely, your machine is loaded with spyware and/or non-essential scripts or programs that load on boot. Spyware consists of several types of software that are usually loaded onto your computer from various sources including web sites you visit and e-mail you open.

This so-called spyware can track and report your web travels (usually for marketing purposes), can run ‘pop-up window’ scripts and initiate other annoying behavior. Each one of these programs consumes a small amount of system resources, but we’ve seen computers with dozens of these little devils running simultaneously. Fortunately, there are a number of free applications available for eliminating spyware. Our favorite is SpyBot, which will not only scan your computer for existing spyware, it will “inoculate” it against future attempts by spyware to load on your system. Get a free copy at www.download. com, a CNET site that offers numerous shareware and free software programs. Many legitimate software programs are in the bad habit of sticking a little monitoring program in your start-up directory, just to make things a little easier or faster for their program.

AOL, Quick Time Media Player, Real Media Player, Adobe and others just can’t break this habit. When you get about a dozen of these little utility programs running on startup, it not only slows your boot considerably, but it sucks up system resources, slowing your

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ADVISOR

computer. There are a number of free programs out there that can easily inspect your startup folder and advise you what is loading on boot-up. We like Codestuff’s Starter. It is also free at www.download. com. A simple program to use, it will show you what programs are loading at boot and allow you to disable those programs from loading that are not necessary to the operation of your computer.

We have continuously disabled every program other than anti-virus and operating system utilities without ill-effect. If you make a mistake, you can always go back in and allow the program to load.

Don’t Make Me MADD!

I went to a party with my girlfriend over Labor Day and drank four beers before leaving. I was pretty sure I was below the legal limit (I’m 220lbs) but I was sleepy and wanted to stop and pick up a cup of coffee. My girlfriend said that I shouldn’t bother because I would still be drunk - but just a “wideawake” drunk. Settle an argument. Doesn’t a cup of coffee or a No-Doz help if you’ve had a couple of drinks and have to drive home? — T.T. Tallahassee, FL According to one online blood alcohol calculator, your blood alcohol level, assuming that you drank

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the four 12oz beers over a two-hour period would still have been only .03 BAC — well under the .08 limit in Florida and most other states. But you could easily have been fatigued and sleepy. The Advisor believes it is Mothers Against Drunk Drivers (MADD) that has been responsible for disseminating the tired old line about “wide-awake drunks.” They may also be responsible for hundreds of deaths resulting from sleepy drivers and their victims who took their bad advice. Ask yourself this: would you rather be sharing the road with a wide-awake drunk or a falling-asleep drunk? In a perfect world, no one will ever drink and drive. In the real world, it happens.

For those foolish enough to drive impaired - I’m hoping they at least stop and have a couple of cups of strong black coffee. Why would MADD offer bad advice? MADD, in our opinion and that of others, has become politicized and radicalized into a group of neo-prohibitionists who will not rest until they have lowered the legal limit to 0.0 BAC. They realize they have to do this in increments. MADD’s real agenda is anti-alcohol, not anti-drunk driving and the group’s founder has resigned over this very issue.

25

CLASSIFIEDS

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.

Insurance Agency 4-Sale Miami-Dade County area

Miami Agency For Sale Well established agency for sale. Owner is retiring. Positive cash flow/ $1,200,000 sales, prime location, over 20 years in business/ representing eight companies, turnkey operation, priced for a quick cash sale 50% commercial/50%personal lines industry special/ commercial auto.

Contact: Medero@bellsouth. net

Personal Lines Acct Manager or Claims Full-time employment in the Tampa, Florida area.

Must have 2-20, 2-15 or 5-20 license.

Contact: janice50griffin@yahoo.com.

8-3

CSR Wanted Memphis, TN area P&C CSR to produce quotes for progressive agency.

Need commercial P&C experience.

Contact: jake1934@ msn.com

Sale price $110,000. in Hialeah Area. Established 1979. Call me at (305)3229039.

- POSITION WANTED COMMERCIAL PRODUCER TAMPA AREA Recent FSU Grad with a BS in Marketing and a focus on insurance.

Looking for full time career-level opportunity as commercial P&C Producer. Ambitous, focused, hard-working, fast-learner. Please request resume: zmanera@ gmail.com

P & C PRODUCER WANTED - SARASOTA 2-20 Licensed Outside producer for Sarasota Agency. Have multiple markets.

Send resume to northwick@ mindspring.com 8-1

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You may also place FREE position-wanted classified ads in this section. Just click on the link below and fill out the simple form and we’ll get you online.

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HERE All Lines Agent Wanted Dawsonville GA

Personal lines agent needed for growing Independent Agency on Hwy 400. We are looking for a friendly, personable individual to offer home, auto, small business.

Life & Health also available. Over 30 markets.

Looking for long term Agent with equity share potential for the right person.

Very generous new and renewal commissions paid. Full time or part time. You earn what you sell. 50k potential 1st year. Hours and work location flexible. email

CSR/Agent Medley/Doral Area Doral/Medley Ins Agency seeks sales producer/CSR. Must have previous ins exp & knowledge of Auto & Home ins. Commercial exp a plus. A min of a 4-40 ins lic. Applicant must possess excellent communication skills in Eng & Span. Respond to this at: info@jmendezandassociates.com

8-5 26

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The Underwriter’s Insider

FREE CLASSIFIEDS! HELP WANTED — POSITION WANTED 4 — SALE ITEMS

CLICK HERE!

Experienced Commercial Lines Underwriter Boca Raton Base MGA seeking experience Commercial lines UW /rater should have company experience, must be able to multi task and deal with Ins Agents and companies as part of you daily duties must have good computer skills and be a team player.

Send resume to: ccalver@niuw.com

POSITION NEEDED Experienced 2-20 looking for position in South Palm Beach or North Broward counties. Please contact:

Part time/Full Time Insurance Agents – P&C

Expanding agency looking for full and part time licensed 220 agents, who will operate out of their home or home office in Central and North Florida.

1. Commission based remuneration – 50% for new and renewal policies, paid monthly; vesting plan. 2.

Leads provided 3. Training provided 4. Office support provided 5. Markets to meet a variety of client needs: virtually all industries and risk profiles. Call Bob at 850-8944709, or email a resume to me at bob.hartsell@com-

FEDUSA Insurance Agency 4-Sale Ft Myers area

Established in 2007. Growing business opportunity. Good mix of HO, auto & Commercial business. Owner motivated to sell for less than $100k. Close to 400 customers and $60000 in commissions. Call Raj Singh at 239-699-7047 7-6

jonathandrausch@hotmail. com 8-5

Active property and casualty insurance agency located in kissimmee FL,representing multiple carriers.busy street front store extremely organized smooth operating and clean. over 500 policies in force with great retention income tax services also offered at this location buyer must provide personal financial statement. asking $240,000 price is negotiable.for more info agencyforsale1@yahoo.com

2-20 Agent Wanted Lakeland, FL

Need 2-20 Commercial Agent for Lakeland, FL office.

Contact Teresa Bailey.

Phone: 863-686-3100 Email: teresa@baileyharris.com 8-1

2-20 Agent Wanted Plant City, FL

2-20 Commercial Agent need for Plant City, FL office.

Commission based. Contact Deb Newman Phone: 813-752-5200 Fax: 813-752-2011 Email: dnewmaninsurance@ yahoo.com 8-1

2-20 Agent Wanted Margate, FL

Suppose you were an idiot. And suppose your were a member of Congress...

Great Opportunity,for a self motivated individual. Busy P&C agency looking for an experienced agent-csr. Must be organized, great work ethics.

Good growth potential, competitive salary plus commissions. drivera@atlanticainsuranceagency. com

But then I repeat myself.

- Mark Twain

www.underwritersinsider.com

Property And Casualty Insurance Agency 4-sale Kissimmee, FL

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27

“ There

are no real political refugees within the United States, and few families move from one state to another to search for more congenial political leadership. Climate, family concerns and job opportunities are all factors. But the contrasting cultures that state politics help to shape make a big difference in determining which parts of the nation seem more or less promising to potential migrants. With the Gallup Poll showing selfdescribed “conservatives” outnumbering self-proclaimed “liberals” by nearly 2 to 1 (41 percent to 21 percent) it’s not surprising that states with pro-business, pro-family attitudes draw disproportionate numbers of new arrivals. At the same time, it makes sense that those states with aggressive, intrusive bureaucracies, high taxes and relentless experiments in multiculturalism will encourage mass departures.” Columnist Michael Medved in a recent column pointing out that Americans are voting strongly conservative - with their moving vans!

“ There is no reason anyone would want a computer in their home.” — Ken Olson, President and Chairman and founder of Digital Equipment Corp — in 1977.

He was correct - you need at least five of them not including the Playstations, Xboxes, Game Cubes, Wii’s, iPhones and Blackberrys.

“ [Tea Partiers would] love to see us as

second-class citizens…some of them in Congress right now of this tea party movement would love to see you and me…hanging on a tree.” - Perpetual Race Baiter Indiana Rep. Andre Carson (D) revving up the crowd as he spread division and his own racism in a August speech to the CBC (Congressional Black Caucus).

“ Carson and the CBC [Congressional Black Caucus] want black Americans to forget about the racist legacy of the Democratic Party by falsely portraying the tea party as ‘racist.’ Let us not forget that most of the segregationists of the past like Sen. J. William Fulbright, Gov. George Wallace, Sen. Robert Byrd, and Al Gore, Sr., were all Democrats. The CBC’s town hall meetings

28

have been nothing more than political pep rallies to motivate the Democrats’ base by blaming the tea party for President Obama’s failures. Rep. Carson, Waters, and other members of the CBC don’t care about the black community or the nation at large. They are using the town halls to directly lie to the black community so that they will remain in a hypnotic trance and stay on the Democrats’ plantation.” - The Rev. Jesse Lee Peterson, founder and president of the South Central L.A. Tea Party, demanded that both Rep. Andre Carson (D-IN) and Rep. Maxine Waters (D-CA) (who just a few days prior had suggested that the Tea Party “go straight Rev. Jesse Lee Peterson to Hell,”) apologize immediately.

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The Underwriter’s Insider

Continued from Page 10

ZALMA The policy covered the “Costs of Defense.” It defined a “Claim” as “a written demand for monetary or nonmonetary relief including . . . a civil, criminal, administrative or arbitration proceeding.” However, the policy excluded from coverage “any Claim made against an Insured . . . by, on behalf of, or in the right of the Insured Entity.”

The suit, although miscaptioned, clearly sought monetary damages from EAGALA to be paid to Mr. Kersten.

Carolina Casualty, relying solely on the allegations of the complaint, denied coverage, contending that the complaint was brought “by, on behalf of, or in the right of [EAGALA].” Even after EAGALA explained that Mr. Kersten had no authority to file the complaint, Carolina Casualty argued that it was still an excluded claim because the complaint was captioned in EAGALA’s name.

The Dispute EAGALA sued Carolina Casualty to establish coverage for the costs of defending Mr. Kersten’s unsuccessful suit. Carolina Casualty sought judgment on the pleadings on the basis that any claim in the complaint was one “by, on behalf of, or in the right of [EAGALA]” because it was captioned as such. In response, EAGALA proffered extrinsic evidence www.underwritersinsider.com

that Mr. Kersten had no authority to sue in EAGALA’s name and, therefore, the “insured versus insured” exclusion to coverage did not apply. The trial court refused to consider any extrinsic evidence. Instead, it compared the complaint with the policy and held that, on its face, Mr. Kersten’s complaint fell within the “insured versus insured” exclusion to coverage.

EAGALA appealed, and the court of appeals reversed. The court of appeals explained that whether extrinsic evidence is admissible in the duty-to-defend analysis turns on the parties’ contractual terms. The court of appeals concluded that under the language of the insurance policy,

extrinsic evidence was admissible to determine whether the complaint was “actually” filed “by, on behalf of, or in the right of [EAGALA].”

Analysis In past decisions the Utah Supreme Court noted that an insurer may base its decision on the duty to defend on the face of the complaint and its allegations, or on the facts and circumstances underlying the complaint. In Utah, whether a court may consider extrinsic evidence depends on how the duty is described in the contract.

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Whether extrinsic evidence is admissible to determine whether an insurer has a duty to defend an insured turns on the parties’ contractual terms.

The Supreme Court found that when policy terms define the scope of the duty to defend in reference to something other than the allegations in the complaint and a court may look beyond the text of the complaint to determine whether the duty has been triggered. In that situation, an inquiry limited to the face of the policy and the complaint leaves unanswered the question of whether the insurer has a duty to defend. Analysis of the duty must always begin with an examination of the policy language and the complaint, it ends there only if the policy terms when compared with the allegations definitively indicate that there is or is not a duty to defend.

The primary purpose of contract interpretation is to “ascertain the intentions of the parties” at the time of contracting. To discover these intentions, the court first examines the plain language of the contract. Additionally, it considers each contract provision in relation to all of the others, with a view toward giving effect to all and ignoring none.

While the insurance agreement provides a broad duty to defend any claim brought against EAGALA and its agents, it narrows that duty with a list of coverage exclusions. Among these exclusions is an “insured versus insured” clause that excludes from coverage claims brought by EAGALA against itself or its agents.

See Read The Policy Page 34 33

Continued from Page 33

ZALMA The Supreme Court concluded it must answer is whether a complaint that is incorrectly captioned in a manner designed to make it appear as if it were a legitimate lawsuit in which EAGALA is the plaintiff is a claim made “by, on behalf of, or in the right of [EAGALA]” under the terms of the insurance agreement is in fact such a suit.

Although Carolina Casualty concedes that Mr. Kersten had no authority to caption the complaint in EAGALA’s name, it contends that Mr. Kersten’s authority is immaterial. Specifically, Carolina Casualty argued that a duty to defend may arise only within the “eight corners” of the policy and the complaint and that extrinsic evidence is inadmissible and irrelevant when determining whether a duty to defend exists. It reasoned that because the complaint was captioned as though it were brought by EAGALA, the “insured versus insured” clause governs, and Carolina Casualty did not have a duty to defend EAGALA. Because an insurance policy is a contract, the Supreme Court examined the language of the policy and compared it to the allegations made in the complaint to ascertain the scope of coverage provided by the policy. This so called “eight corners” rule allows a court to determine whether the allegations alone trigger the terms that provide the duty to defend in the insurance policy. If coverage is premised on information not contained in the complaint, the Supreme Court concluded it is obligated to continue its inquiry to examine that information.

34

The fact that Mr. Kersten brought an

unauthorized suit and miscaptioned his complaint in the name of EAGALA did not trigger the exclusion at issue. As noted by the court of appeals, whether a claim is made by, on behalf of, or in the right of EAGALA is an objective fact, the truth or falsity of which is not determined solely by the allegations, or in this case, the captioning, of the complaint. In light of the language defining the scope of the exclusion, an analysis limited to the “eight corners” of the policy and the complaint is incomplete and fails to resolve the central inquiry whether the claim brought by, on behalf of, or in the right of EAGALA?

Since the question cannot be answered through an inspection of the complaint alone, the court’s examination must go on to develop the facts relevant to answer the inquiry. Accordingly, the court of appeals correctly concluded that the trial court erred when it discontinued its analysis and limited its examination to the “eight corners” of the policy and complaint.

An insurance contract, if the parties

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agree when it is issued, may premise the duty to defend on information in the complaint. However, when an insurance policy conditions the duty to defend on something outside of the complaint, extrinsic evidence is necessary to determine whether the duty has been triggered. In this case, Carolina Casualty issued a policy that hinged the duty to defend on whether the claim was brought “by, on behalf of, or in the right of [EAGALA].” Because this determination is based on objective facts that are not apparent from the face of the complaint, the trial court erred when it refused to consider extrinsic evidence proffered

by EAGALA in opposition to Carolina Casualty’s Motion for Judgment on the Pleadings.

Accordingly, the Supreme Court affirmed the decision of the court of appeals, reversing the district court’s dismissal of EAGALA’s action.

LESSON If an insurer desires to limit its decision on the four or eight corners of a complaint and avoid analysis based on extrinsic evidence it should write its policy to limit its obligation to defend to the allegations. Instead of the definition contained in the Carolina Casualty policy expressed in EAGALA’s suit it could have defined “claim” as: “‘Costs of Defense,’ are the costs and expenses resulting solely from the investigation, defense and appeal of any ‘Claim’ against the Insureds as alleged in the claim or suit. ‘Claim’ is a written demand for monetary or non-monetary relief including a civil, criminal, administrative or arbitration proceeding as alleged in the written claim, demand or suit without The Underwriter’s Insider

consideration of facts not alleged in the claim, demand or suit.”

If standard language is to be used, since a policy with such restrictive language as suggested above would be difficult to sell, insurers should thoroughly investigate every claim and determine whether it is appropriate to consider extrinsic evidence to determine if there is a potential for coverage. For example, the extrinsic evidence produced by EAGALA to Carolina Casualty made clear that their reliance on an insured vs. insured exclusion was misplaced. © 2011, Barry Zalma

Barry Zalma, Esq., CFE, is a California attorney, insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud. Mr. Zalma serves as a consultant and expert, almost equally, for insurers and policyholders. He founded Zalma Insurance Consultants in 2001 and serves as its senior consultant. He recently published the e-books, “Heads I Win, Tails You Lose — 2011,” “Zalma on Rescission in California,” “Zalma on Diminution in Value Damages,” “Arson for Profit,” “Insurance Fraud,” “Zalma on California Claims Regulations,” “Murder and Insurance Fraud Don’t Mix” and others that are available at www.zalma.com/ zalmabooks.htm.

Continued From Pg 9

KIM KOMANDO tracking. To receive it, you’ll need to be a DirecTV subscriber and pay the additional $340 charge. For an additional $50, you can add the To-Go feature. This lets you stream the games to your computer or mobile gadget.

• On Sept. 1, Sunday Ticket became available through an onlineonly package. This streams the programming directly to your PC and mobile gadgets. Cost is $350.

• Many games are offered through the NFL Network channel. You can order this from your cable or satellite provider. This channel carries all the preseason games, weekly season games and hosts the popular show, NFL Total Access. It also includes NFL Replay, which offers the five best games of the week.

Copyright 2011, WestStar TalkRadio Network. All rights reserved.

Kim Komando hosts the nation’s largest talk radio show about consumer electronics, computers and the Internet. To get the podcast, watch the show or find the station nearest you, visit: http://www.komando.com/ listen. To subscribe to Kim’s free email newsletters, sign-up at: http://www. komando.com/newsletters.

LALONDE PROMOTED TO MANAGER OF INSURANCE SOLUTIONS AT BURNS & WILCOX

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ames LaLonde previously served as an insurance solutions analyst II in the insurance solutions group of the IT department. He is the lead on several key projects, including SlipStream CGL Indication and he will continue to develop overall solutions to improve business efficiency

• For a free but legitimate viewing option, check out Hulu’s NFL page online. You can watch past games, highlights and interviews. Just look under your favorite team’s name or in the Game of the Week section.

LaLonde started with Burns & Wilcox in 2008 as an underwriter trainee with the • Are you even more passionate about KELP Program. He acted as an excess and college football than NFL games? umbrella underwriter for the special risk ESPN 3 is a great destination for division and a commercial underwriter in Mr. Zalma can be college football viewing. You can get the Michigan local office before joining contacted at http://www.zalma.com, a GamePlan subscription through the insurance solutions team. zalma@zalma.com and you can access your cable or satellite provider for his free “Zalma on Insurance Fraud” $135 for the regular season (excluding Prior to joining Burns & Wilcox, he was an newsletter at http://www.zalma.com/ bowl games). Some Internet providers agent for Marsh USA. He has Chartered ZIFL-CURRENT.htm.

Access Barry let you watch online; ask about that Property Casualty Underwriter (CPCU) Zalma’s Martindale-Hubbell profile on option before subscribing if that and Associate in Surplus Lines (ASLI) martindale.com. feature is important to you. designations.

www.underwritersinsider.com

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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

FLORIDA GRANTS LLOYD'S ELIGIBLE REINSURER STATUS

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ALLAHASSEE, Fla. The Florida Office of Insurance Regulation (Office) signed a Consent Order in early October that will allow Underwriters at Lloyd’s, London to post reduced collateral and operate in Florida as an eligible reinsurer. Lloyd’s represents one of the oldest and largest non-U.S. reinsurers in the United States, and will represent the seventeenth eligible reinsurer operating in Florida with similar terms; it is also the first eligible reinsurer operating in Florida headquartered in the United Kingdom.

'We are very pleased the Florida Office of Insurance Regulation has recognized Lloyd's financial security and approved our application for reduced collateral,” remarked Sean McGovern, General Counsel and Director of Lloyd’s America.

Florida is the first state to allow ceding insurance companies to receive full credit on their financial statements for reinsurance purchased from nonU.S. based reinsurers that are highly rated, and financially sound. Lloyd’s reported statutory capital and surplus of $29.9 billion, which exceeds the $250 million requirement. Lloyd’s also indicated secure financial strength by demonstrating favorable ratings from two statistical rating organizations deemed acceptable www.underwritersinsider.com

by the commissioner as having experience and expertise in rating insurers doing business in Florida.

Lloyd’s has already been granted status as an eligible reinsurer in the state of New York.

FLORIDA APPOINTS NEW DEPUTY INS COMMISSIONER

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ALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the addition of Michelle Robleto to the Office’s senior staff.

Ms. Robleto will serve as the new Deputy Insurance Commissioner for Life and Health Insurance.

“Michelle Robleto is a consummate professional with an outstanding reputation in the health insurance industry, and as a public servant for the State of Florida,” remarked Commissioner McCarty. “I am confident she will be a strong addition to our team who will provide the leadership we need to navigate difficult issues in the life and health insurance marketplace.”

As the Deputy Insurance Commissioner for Life and Health, Ms. Robleto will oversee the daily activities of the Life and Health Product Review and Life and Health Financial Oversight Units, which provide oversight and services to insurers operating in Florida including life and health form and rate filings, licensure, and financial solvency. Ms. Robleto’s first day at the Office will be Monday, October 31.

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UNINTENDED CONSEQUENCES? Survey Shows 30% Of Employers May End Employee Healthcare by 2014 - The $2,000 Penalty Will Be “A Fraction Of The Cost Of Typical Group Plans”

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ccording to a recent Business Insurance article, citing evidence from a McKinsey Quarterly study published in June of this year, “The shift away from employer-provided health insurance will be vastly greater than expected and will make sense for many companies and lower-income workers alike.”

Other studies have shown similar results. A survey of 200 medium sized companies at a Locton Benefit Group conference showed that 50% of them intended to quit providing group medical insurance beginning in 2014.

Some observers point to Obama’s reassuring words while campaigning for his signature health care bill: “You will be able to keep the insurance you have now!”

In truth, it seems millions of workers will be forced into the government run health-care plan as more and more employers simply opt out of the private medical insurance market.

Pundits ask, “Was this forced shift from the private market forseen by the administration - as a cynical end-run around massive public dissaproval of government run health-care?”

One man on the street commented, “As Nancy Pelosi famously stated, ‘We have to pass it (health-care bill) to find out what’s in it. ‘ Well, now we know.”

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LA COMMISSIONER DONELON GRANTED MOTION IN COURT AGAINST CONSTRUCTION BOND FRAUD RING

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n s u r a n c e in premium taxes Commissioner Jim and penalties due on Donelon of the premiums received Louisiana Department from Great Southern of Insurance (LDI) was Dredging, put up granted a Motion of a $50,000 bond to Summary Judgment come into court, pay on June 13, 2011 by attorneys’ fees incurred the Nineteenth Judicial

by LDI of $120,577.40, District Court of Louisiana. pay fines and penalties The judgment was of $50,000 and pay all in favor of LDI, Great court costs and judicial LA Ins Commissioner Southern Dredging, Inc. interest.

Jim Donelon and Entek Mechanical Corporation and against defendants Construction Bonds are a type of United Assurance Company, Ltd., AA insurance that pays to complete Communications, Inc., and James construction projects if contractors fail Zoucha, Cong Li and Gwen Moyo. The to complete the specified job or fail defendants were issued a permanent to pay subcontractors. As a word of injunction and required to cease and caution to the public, Commissioner desist from all insurance activities in Donelon warns that the only way Louisiana. a political subdivision (or any other owner for that matter) can be certain “I’m delighted with the success of this that a person giving a bid bond, motion, which has proved to be very payment bond, and/or performance protective of Louisiana citizens, both bond is legitimate is to contact LDI’s at Great Southern Dredging and in St. Office of Licensing and Compliance Tammany Parish,” said Commissioner and have the staff look up the entity Donelon on this ruling. “Our intent and give the verification needed. was to prevent those involved with this insurance fraud ring from harming In October, 2008, a New Orleans others in Louisiana.

Crime like federal jury found Moyo guilty of insurance fraud does not pay.”

41 counts of fraud, conspiracy and money laundering for selling bogus In addition to the permanent construction bonds and pocketing injunction, the defendants were approximately $2 million in the process. ordered to make restitution to Great She was later sentenced to 20 years in Southern Dredging, Inc. in the amount prison in April, 2009 and ordered to pay of $365,555.00, make restitution to approximately $2.4 million in restitution Entek Mechanical Corporation in the to three of her victims, including a West amount of $187,018.35, pay $19,293.30 Memphis, Arkansas church.

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Moyo was also convicted in Arizona in 1989 on similar charges. The case was prosecuted by the U.S. Attorney in New Orleans subsequent to a joint investigation by the FBI and the Louisiana Department of Insurance.

ANOTHER OBAMA ‘GREEN JOBS’ DEBACLE

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nother of the Obama Administration’s so-called Green Jobs iniative has failed miserably in a Seattle-based program to weatherize homes.

After 16 months, the program, funded with $20 Million in taxpayer funds, has succeeded in created only 14 administrative jobs - at $1.4 Million per job - and retrofitting only three homes in the area.

According to one report, “The weatherization upgrades are aimed at saving 15 percent on energy consumption. If the retrofit costs $10,000 even with all the government incentives, it will take over 30 years to pay off through lower energy bills.”

Obama has stated that he wanted to create 5 million “green” jobs.

The Underwriter’s Insider

BROADWAY PREMIUM FUNDING’S JORGE HERNANDEZ HONORED This statewide conference focuses on the sharing and promoting of leadership excellence skills in the Georgia area.

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TLANTA— October 3, 2011 – The 2nd Annual Georgia Diversity & Leadership Conference, was held Thursday, September 29th in Atlanta, affording professionals the opportunity to strengthen their leadership skills, network and build lasting relationships.

man who can make things happen in the premium finance world.

Mr. Hernandez, who’s current operating region with Broadway extends throughout the SE United States and Texas, is well known for his enthusiasm and leadership and can be reached at: financejorge@ bellsouth.net or 770-834-5248.

“The Georgia Leadership Conference is a wonderful opportunity for Georgia to gain knowledge and skills from some of its very own leaders,” Dennis Kennedy, Founder and CEO of the National Diversity Council said.

This year's theme is "Leadership First: Spearheading Advancement".

Competent leadership skills are imperative for individuals who strive to have upward mobility in their chosen career fields. A company's development also relies heavily in its ability to effectively equip its leaders.

Jorge Hernandez

Among the notables honored for Multicultural Leadership was Jorge Hernandez, Vice President at Broadway Premium Funding, acknowledged among his peers as one of the top premium finance marketing experts in the country.

Jorge is well-known and respected among insurance professionals as a www.underwritersinsider.com

The conference consisted of over 12 excellent sessions, which were designed so that every attendee may obtain valuable information to help them grow as leaders. The conference also featured nationally known keynote speaker, Donna Brazile.

Awards were presented at the conferences for the Most Powerful and Influential Women of Georgia, Multicultural Leadership, Leadership Excellence and the Woman of the Year.

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FLORIDA USERS GROUP EARNS ASCNET CHAPTER OF THE YEAR AWARD

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ES PLAINES, IL, - The Florida Users Group of Applied Systems has been named Applied Systems Client Network (ASCnet) 2011 Chapter of the Year. ASCnet Chapters Committee Chair Leah Purmort-Treece, of Purmort Brothers Insurance in Van Wert, Ohio, presented the award yesterday during the users group's 26th annual Technology, Education & Networking Conference (TENCon) in Orlando.

The Chapter of the Year Award honors an ASCnet local affiliate that has shown outstanding leadership and provided their members with exceptional opportunities to increase their profitability and grow the value of their agencies through their education programs and services.

In presenting the award, Purmort-Treece noted that, in 2009, FUGAS officers "established a vision for what the chapter could become and set out to make changes and improvements to turn that vision into reality."

Florida chapter officers set specific goals around "attendance, member retention, new member growth, communication, quality of meetings and lastly, to become Chapter of the Year," she added. The chapter met most of its goals within a year.

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