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2013: 100913 IIABNY News - Abstract
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10/09/13 -- IIABNY Advances Reform Message at Senate Forum

IIABNY Insider

October 9, 2013

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IN THIS ISSUE:

IIABNY Calls for Reform of Scaffolding Law, Other Rules, Regulations at Senate Forum
New York’s scaffolding law is harming the state’s economy, IIABNY Chair of the Board Andy Kaufman told the State Senate Tuesday. Kaufman, speaking at a forum on regulatory reform held at the Senate office building in Manhattan, said that the law should either be reformed or repealed outright.

  Advocacy

The scaffolding law is comprised of Sections 240 and 241 of the New York State Labor Law. “Because of these antiquated laws, insurance on construction projects for both owners and contractors has become increasingly expensive and the market for this coverage severely restricted,” Kaufman said. “Lack of coverage is preventing construction projects from proceeding, costing New York State jobs. When coverage can be obtained, the cost of construction is needlessly driven up.

Section 240 requires property owners and contractors performing construction work to give workers specific safety devices. New York courts have interpreted the law to hold owners and contractors absolutely liable for workers’ injuries. This means that they are barred from raising defenses in court on their own behalf. Section 241 holds them responsible for worker injuries even if they were not directly controlling or supervising the worksite. Large legal settlements have been paid even when a worker’s own actions contributed to the accident.

IIABNY has long supported scaffolding law reform. Kaufman urged its repeal or reform so that courts can consider evidence of a worker’s contribution to the accident. He cited Senate Bill 111, sponsored by Sen. Patrick Gallivan (R – Elma) as a good measure.

The Senate Majority Coalition, which sponsored yesterday’s forum, invited guests to suggest laws and regulations that should be reformed or repealed. Kaufman advocated several other reforms, including:

  • Repeal of the regulation that requires all insurance producers to disclose to consumers in writing how insurance companies and others compensate them for the sale of insurance. Kaufman called this a “paperwork and record retention burden for producers” in which insurance consumers have shown little interest.
  • Ending an informal New York State Department of Financial Services rule requiring producers to take exams for continuing education credit in the presence of a monitor. Kaufman said New York does not require this for other professions subject to continuing education requirements.
  • Relaxing New York’s regulation requiring insurance companies to inspect automobiles before insuring them against physical damage.
  • Permitting New York to join 28 other states that allow electronic I.D. cards displayed on smart phones as proof of automobile liability insurance.
  • Repeal of a law that requires any producer advertisements that call attention to an insurance company to include that company’s full name and the location of its principal office. Kaufman argued that this requirement is unnecessary because consumers today recognize company logos. He said that IIABNY supports Senate Bill 3064, sponsored by Senate Insurance Committee Chair James L. Seward (R-Milford), which would repeal this requirement.

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Cash icon

Tower to Strengthen Reserve; A.M. Best Cuts Financial Strength, Credit Ratings
Earlier this week, Tower Group International Ltd. announced it would strengthen its loss reserves by approximately $365 million ($185 million of which is attributable to its U.S. subsidiaries) as a result of experience for accident years 2009-2011 in commercial lines of business. Since 2010, Tower has been shifting its business mix, significantly de-emphasizing the lines that contributed to the reserve strengthening and modifying its book of commercial business, according to a company-issued press release on Monday. On Tuesday, A.M. Best Co. downgraded the financial strength and issuer credit ratings of the pooled and reinsured members of the Tower U.S. Pool. The financial strength rating fell to B++ (Good) from A- (Excellent), and the issuer credit rating went to bbb from a-. All companies are under review with negative implications.

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 Industry News icon

Adirondack IE: Company Not Affected by Tower's Financial Troubles
In the wake of Tower Group’s recent challenges, Adirondack Insurance Exchange has assured IIABNY that its solvency remains unaffected. In a conversation this week with IIABNY management, a member of the reciprocal carrier’s senior leadership emphasized that AIE and Tower are separate entities and not financially intertwined, despite their management relationship.

As a reciprocal, AIE is made up of customers (known as “subscribers”) who pool their risks to fund retained losses and reinsurance premiums. In that sense, the subscribers own the company. All reciprocals are managed by an attorney-in-fact. Adirondack AIF, LLC, an indirectly wholly owned subsidiary of Tower Group, is AIE’s attorney-in-fact. While this subsidiary manages AIE’s operations, it does not provide the carrier’s surplus.

According to Adirondack leadership, AIE provides personal lines coverage to more than 75,000 members in the state of New York and is governed by an advisory committee consisting of three internal and six external committee members. AIE also maintains a separate capital pool that exceeds all state-required minimums and has crafted a strong reinsurance program, backed by reinsurers all rated A or better by A.M. Best. AIE carries a rating of ‘A’ Exceptional from Demotech, which was affirmed on Oct. 7.

Questions about Tower’s financial position have arisen recently. On Monday, the company announced that it was increasing loss reserves by $365 million. The increase was made necessary because of adverse experience in workers’ compensation, commercial auto and liability claims.

The financial strength rating assigned by A.M. Best to the Tower Group Companies was downgraded to B++ (Good) from A- (Excellent) on Oct. 8. AIE does not share the Tower Group rating.

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Storm Resources icon

FEMA Gives Sandy Victims More Time to File Paperwork
The Federal Emergency Management Agency announced last week that it has extended the deadline for filing proof-of-loss claims for a second time. The new deadline is April 28, 2014.

The Standard Flood Insurance Policy allows homeowners 60 days from the date of loss to file proof-of-loss claims. On Nov. 9, 2012, the Federal Insurance and Mitigation Administration first extended the filing deadline to one year from the date of loss.

A Proof of Loss is a form used by the policyholder to support the amount they are claiming under their policy, which must then be signed and sworn to, and submitted with supporting documentation. The policy covers structures and any personal property contained within that was damaged or destroyed by floodwaters.

This latest extension will give policyholders more time to gather the necessary paperwork, fully document their losses and account for any additional expenses that were discovered after repairs or rebuilding projects began. Benjamin Rajotte, director of the Disaster Relief Clinic at the Touro Law Center on Long Island, said that many homeowners were unaware of the one-year deadline and would not have been able to complete the filing process in time.

Nearly two dozen Senators and members of Congress from New York and New Jersey recently signed a letter to FEMA Administrator Craig Fugate, arguing that many of their constituents have been mired in bureaucratic red tape and are only just starting the recovery process and need more time to complete the paperwork.

Any policyholder whose SFIP was issued by a Write Your Own program-participating insurance company should contact his insurance adjustor or the carrier directly to find out the proper address for submitting the Proof of Loss with supporting documentation.

If the policy was issued by FEMA directly through the Direct Servicing Agent, send Proof of Loss and supporting documentation by regular mail to: NFIP Direct Servicing Agent, P.O. Box 2966, Shawnee Mission, KS 66201-1366. Or send by overnight mail to: NFIP Direct Servicing Agent, 7701 College Blvd., Suite 150, Overland Park, KS 66210.

More information on New York’s disaster recovery can be found on the FEMA website.

More from FEMA
Some policyholders enrolled in the National Flood Insurance Program soon will receive letters announcing rate increases that will phase out or eliminate subsidized rates. Companies will send the letters to policyholders at least 60 days prior to the policy renewal date to announce rate changes effective Oct. 1. The changes will affect certain pre-FIRM properties, which are older buildings constructed before the community joined the National Flood Insurance Program and adopted its first Flood Insurance Rate Map. These include properties in most high-risk A and V zones, as well as undetermined-risk D zones.

The letters explain that the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) requires the phaseout and removal of subsidized rates. Two types of rate changes will be announced:

  • A 25 percent rate increase will be applied at renewal for business and other non-residential properties, properties that have experienced severe or repeated losses, and non-primary residences (this increase began in January 2013).
  • A direct move to full-risk rates will be applied at renewal for a building purchased — or a newly purchased policy with an effective date—on or after July 6, 2012, the date the law was signed. Lapsed policies reinstated on or after Oct. 4, 2012, also will move directly to full-risk rates. The policyholder will be asked to submit a renewal application with additional information, including an Elevation Certificate, so that the building can be elevation rated.

Agents should expect questions from policyholders. FEMA’s rate guidance is available in the June 27 WYO Bulletin. Additional guidance for renewing new, lapsed, and assigned policies can be found in the July 10 WYO Bulletin. Fact sheets and other materials are available on the FEMA website.

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Trusted Choice icon

Time to Elevate Your Marketing Efforts? Trusted Choice® Can Help
It’s time to make sure you are taking advantage of a major benefit of your membership, access to Trusted Choice®, the brand that promotes and celebrates the value of the independent agent. Review this graphic to make sure you are aware of and utilizing the different assets available to you. Visit iiabny.org/trustedchoice for links to everything you need.

…and Now the Cherry on Top
Through Dec. 31, up to $500 is available per agency location through the Trusted Choice Marketing Reimbursement Program. The program reimburses Trusted Choice agencies 50 percent up to $500 during the calendar year of co-branding materials, such as business cards, stationery, brochures, logo-wear, signage and advertising expenses, as well as the cost of building or upgrading an agency website.

An effective web presence is critical in today’s marketplace. Search engines have practically eliminated directories like Yellow Pages, meaning consumers need to be able to find you online. And, you need to provide them the content and information that will make clear why they should work with you.

Are you thinking it might be time to finally upgrade your agency’s website? Consider the following:

  • Is your website more than five years old?
  • Can search engines find your website?
  • Does your website provide a strong and accurate representation of your products and services?
  • Does your website look like it was designed in the 90s? Wait—was it actually designed in the 90s?
  • Do competitor websites have features that interest you?
  • How does your website view on smartphones and tablets?
  • How well is your website integrating with social networks?
  • Is it easy for you to make changes to your website?

The requirements for reimbursement through the MRP program are pretty basic: the website must feature the Trusted Choice logo, the Pledge of Performance and a link to TrustedChoice.com. Go to Trusted Choice section on IIABNY’s website for instructions on how to apply for reimbursement.

Project CAP now offers a suite of great website options, ranging from low-cost “quick-design” versions to customized, state-of-the-art websites if you want to really make a splash. To learn more about what CAP can do for you, call (855) 372-0070 or visit the Project CAP Marketing website.

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Trusted Choice Company Profile icon

TrustedChoice.com Profile Notice
Things are moving along quickly, and we need all agencies to get in and complete your profiles! The site is live and if you haven't published your profile, agencies further away are being displayed before you in your area. This isn't great for you or consumers looking for you. It's an easy fix. Complete your profile!

The easiest way to do this is print this sheet and follow the steps. The team at Project CAP is available at (855) 372-0070 to help with any questions. Go online for more Information.

Please Complete Your Profile ASAP!

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Make-a-Wish icon

You Helped Make-A-Wish Come True
Craig was just a child at only 9 years old, but that didn't stop a potentially fatal brain condition from taking hold of his body. His wish, to leave the chaos of hospitals and treatment and go to Walt Disney World. His wish was granted. Now eight years have passed, two brain surgeries and this first-in-his-class senior had another wish, to give someone else theirs.

Douglas is 6. He is very sick. What does he wish for? To meet Mickey, Minnie and the gang.

So Craig had an idea. He went to the Make-A-Wish Suffolk chapter, the people who granted his wish. Craig wanted to create a walk with them in hopes of raising enough money to pay it forward. And…success! His walk gave Douglas his wish and raised more than $30,000, ensuring many other wishes too.

So, why share this beautiful story? Because whether or not you knew it, you had a hand in it. Trusted Choice®, working on your behalf, was the main sponsor of this race. A contributor who helped make the event possible.

It doesn't stop there. Over the next few months, we will be sponsoring Make-A-Wish events throughout the state. Events like this one and the upcoming Ms. Orange Fan Luncheon in CNY. Trusted Choice is granting us the money to make this possible, to allow us to help others while showing what it means to be Trusted Choice.

In closing, we'll share the moment Douglas found out his wish was being granted. Standing in front of Mickey, Minnie and the gang, Fairy Godmother asked "Douglas, which character are you most excited to see in Disney World?" Douglas paused, looked at each one of them, then seeming not wanting to hurt anyone’s feelings said, "all of them."

See Wish Cam photos from the event.

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Consumer Tips icon

Fire Safety Week is Great Time to Make Emergency Readiness an October Tradition
Observe Fire Safety Week (which continues through Saturday) by adding a new custom to the October traditions of Halloween candy and costumes. Now is the perfect time to change the batteries in smoke alarms and check the readiness of fire extinguishers. Visitors to TrustedChoice.com are advised that owning the proper fire extinguisher and understanding their correct use could mean the difference between a major fire loss to property and a relatively minor cleanup.

Here are five fire extinguisher inspection tips to follow from the Fire Equipment Manufacturers Association:

  • Be sure the fire extinguisher is visible and easily accessible.
  • Be sure the safety seal is not broken or missing.
  • Be sure the gauge or pressure indicator arrow points towards the green section, indicating correct pressure.
  • Be sure the extinguisher shows no corrosion or leakage and has no obvious damage, such as dents, gouges or burn marks.
  • Be sure the operating instructions are legible.
    Consumers are also advised to talk to a Trusted Choice® agent about a review of both their safety preparations and current insurance coverage to ensure they, their families and valuable possessions are adequately protected.

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IICF icon

Insurance Industry Charitable Foundation Week of Giving Begins Saturday
Insurance Industry Charitable Foundation's Week of Giving (formerly Volunteer Week) actually begins at the end of this week on Saturday, Oct. 12 and continues through Oct. 19. The eight-day industry-wide event is fueled by teams of insurance industry volunteers, who provide three or more hours of volunteer service at neighborhood and community nonprofit organizations throughout the week.

If your agency or brokerage intends to form a team (or teams), the Team Leader recruits and organizes the team, and is the main contact for Week of Giving. Similarly, if an individual would like to participate and is not already part of a company team, he or she too can register as a “Team Leader” and choose a volunteer project from the IICF website as the representative of their “team of one.”

To encourage group projects and multiple companies being represented, Team Leaders – particularly “teams of one” - can also register for a project that has been identified as an Industry Group Project. As long as the number of volunteers needed for the project has not been exceeded, any and all are invited to register for projects listed as an Industry Group Project.

Since 2001, the insurance industry, working together, has generated more than 166,000 hours of volunteer service, engaging thousands of volunteers in 36 states. More information is available online.

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Silhouettes icon

Big 'I' Diversity Task Force Offers Wealth of Demographic Info. for Agency Use
The nation’s Hispanic population, while still anchored in its traditional settlement areas, continues to disperse across the U.S., according to a Pew Research Center analysis of U.S. Census Bureau data. Today, the 100 largest counties by Hispanic population contain 71 percent of all Hispanic people. Los Angeles County alone contains 9 percent of the nation’s Hispanic population. But the share of all Hispanic people who live in these same counties has fallen from 75 percent in 2000 and 78 percent in 1990, reflecting Hispanic population growth outwards.

Half (52 percent) of those counties are in three states—California, Texas and Florida. Along with New York, New Jersey, Arizona, New Mexico and Illinois, these eight states contain three-quarters (74 percent) of the nation’s Latino population. But with the dispersal of the U.S. Latino population across the country, this share too is down from 79 percent in 2000 and 84 percent in 1990.

The geographic settlement patterns are to some degree aligned with the diverse countries of origin of the Hispanic population. For example, Hispanic people of Mexican origin are the dominant group in the Los Angeles-Long Beach metropolitan area, as well as many other metropolitan areas in the border states of Arizona, California, New Mexico and Texas. But along the east coast, the composition of Hispanic origin groups differs greatly. In the New York-New Jersey metropolitan area, the dominant origin groups are Puerto Rican and Dominican, while in Miami-Hialeah, Fla., the dominant Hispanic group originates from Cuba. In the Washington, D.C. metropolitan area, the largest Hispanic origin group is Salvadoran.

The Big “I” Diversity Task Force has collected a wealth of information to aid agencies that are interested in marketing to the growing Hispanic population. For more information, email IIABA's Madelyn Flannagan.

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