Gerald Ladner was named 2021 PIA National Company Representative of the Year. The award was announced on Sept. 23 during the annual fall meeting of the PIA National board of directors held in Detroit. Ladner is vice president of strategic agency partnerships and external relations for State Auto Insurance Companies. For nearly 15 years, Ladner has been with State Auto first as regional president in the Austin area, then as sales director for the standard lines division. He has been in his current position for almost two years. Ladner is a regular at Texas PIA conventions. Ladner and State Auto have been stalwart supporters of PIA, with State Auto, which recently celebrated 100 years in business, being a supporter of PIA since its inception 90 years ago. Along with Ladner, PIA National honored State Auto with the 2021 Company Award of Excellence, also announced at the Detroit meeting.
IMA Financial Group Inc. on Oct. 7 announced the hiring of three former executives from Liberty Mutual Insurance Group, Willis Towers Watson PLC and McGriff, Seibels and Williams to lead a marine practice in its Houston office. Katie McCord joins IMA as senior vice president and national marine practice leader, while Jason Homrighaus and Allyn Roberts both join as senior vice president, energy and marine. McCord was previously an underwriting officer at Liberty International Underwriters, the global specialty division of Liberty Mutual. Homrighaus previously served as senior vice president, global energy at Willis Towers Watson, and Roberts was vice president at McGriff. IMA expanded its energy practice to Houston in January. In addition to expertise in marine hull, liability and cargo insurance, the new hires expand IMA’s coverage for the upstream, midstream and downstream energy sector and energy construction, IMA said. IMA is the 28th largest brokerage of U.S. business, according to the latest Business Insurance ranking. In 2019, it reported $175.9 million in U.S. brokerage revenues.
Kansas agent Bob Fee, president of Fee Insurance Group Inc. in Hutchinson, was sworn in as 2021-22 Big “I” chairman at the recent Big “I” Fall Leadership Conference in Kansas City, Missouri. Fee has held numerous positions at both the state and national levels for the Big “I.” At the state association level, he served on the Kansas Association of Insurance Agents (KAIA) board of directors and as the Kansas director on the national association board. He served on several KAIA committees, including the Government Affairs Committee, and was the 2007-2008 KAIA president. At the national level, Fee has been a member of the Government Affairs Committee and the Trusted Choice board of directors, including a term as the Trusted Choice board chairman. He received the Big “I” Chairman’s Citation in 2011. John Costello, USI Insurance Services, Rochester, New York, was installed as chairman-elect and Michael McBride, Mason-McBride Inc., Troy, Michigan, became vice chairman. Fee succeeds Chairman Jon Jensen, of Correll Insurance in Spartanburg, South Carolina, who will remain on the Big “I” Executive Committee for an additional year as immediate past chairman.
The Professional Insurance Agents of Texas will offer a webinar on employment practices liability exposure on Nov. 22, 9 a.m. to 11 a.m. The two-hour C.E. class presented by Catherine Trischan, CPCU, CIC, CRM, will cover sexual harassment, employee privacy, discrimination claims, charges of immigration law violation, retaliation claims and wage and hour issues. Cost to members is $30, nonmenbers, $50. Deadline to register is Nov. 18.
The Young Insurance Professionals of the Independent Insurance Agents of Houston will host an axe throwing session at the Houston Axe Throwing center, Houston’s first indoor urban axe throwing range. Billed by the association as a “stress reliever,” the event offers participants the opportunity to learn a new skill and release their “inner lumberjack or lumberjill.” The event is on Nov. 18, with doors open at 5:30 p.m. and the axe throwing session starting at 6 p.m. The facility is located at 6734 Larkwood Dr., Suite B, in Houston. Cost to participate is $45. IIAH is also seeking sponsorships for the event. Contact Ayla Benavides for more information, firstname.lastname@example.org or 832-769-5245.
Risk Placement Services Inc., a unit of Arthur J. Gallagher, reported on Oct. 4, that industries hardest hit by cybercrime (education, public entity/government, healthcare, construction and manufacturing) have seen premium increases as high as 300 percent at renewal. “Even with the right controls in place, organizations are finding it next to impossible to secure their 2021 coverage at 2020 rates,” said RPS. The industry’s stand-alone cybersecurity loss ratios soared to 72.8 percent in 2020, from 47.1 in 2019. RPS attributed the cost increase to the unanticipated impact of ransomware claims and the additional exposure created by employees working from home during the global pandemic. “With cyber liability loss ratios climbing, even with demand increasing and premiums climbing, reinsurers began to curtail how much in premium insurance companies could layoff with them,” said Steve Robinson, RPS national cyber practice leader. “Some markets discovered that they reached their risk transfer ceiling with their reinsurer faster than anticipated.”
On Oct. 6, Christopher Salgado, a former Facebook investigator, authored guidance in combating ransomware attacks for the Coalition against Insurance Fraud. His article opens with an insider’s account of a meeting with an unnamed national insurer whose customers had been hit with a rash of ransomware attacks. The businesses, large and small of varying types – manufacturing, construction, professional services, medical, real estate and retail – were located throughout the country. What they had in common were two things: the ransom amounts demanded matched the cyber insurance limits of the policyholders and this national company was their insurer. Through investigation of the episodes, it was found that the cyber attackers identified their targets through the insurer’s security weakness: human-based operations. Despite installing high cost cybersecurity systems, the information breach occurred by bad actors posing as the insured and inquiring about their policy limits. Salgado offers insights and recommendations for strengthening data security in the Journal of Insurance Fraud in America, How to Aggressively Fight Social Engineering and Ransomware Attacks.
The American Property Casualty Insurance Association lauded the Washington State Court ruling by Judge Mary Sue Wilson on Oct. 8 that invalidated Washington insurance Commissioner Mike Kreidler’s emergency rule banning credit history. In her ruling, Judge Wilson said Washington Insurance Commissioner Kreidler did not have good cause to file the rule on an emergency basis. Part of her reasoning was that Kreidler did not tell the legislature there was an emergency while they were considering a bill that would have done the same thing. After that bill died and the legislative session ended, Kreidler promulgated the emergency rule. Claire Howard, APCIA senior vice president, general counsel and corporate secretary, called the decision important. The commissioner continues to advance a permanent rule banning credit scoring. APCIA maintains that the commissioner lacks the authority to ban credit history because two preexisting statutes in Washington explicitly authorize insurers to use it, and he has no power to overturn or suspend statutes. “Since the imposition of Commissioner Kreidler’s emergency rule, which was just deemed invalid, seniors, many of whom are on fixed incomes, have been disproportionately and negatively impacted, and the emergency rule resulted in higher premiums for more than one million Washington residents. Now it falls to the Office of the Commissioner to promptly and appropriately address the question of what happens with the rates put in place as a result of the Commissioner’s invalid emergency rule, and whether he can undo the harm to those who were unfairly and adversely affected by his unlawful emergency rule,” said Howard. The motion to invalidate the emergency rule was filed by APCIA, along with the Independent Insurance Agents and Brokers of Washington and the Professional Insurance Agents of Washington. These same trade groups called on Kreidler to withdraw the companion proposed permanent rule that is scheduled for public hearing on Nov. 22, with adoption intended for Nov. 24.
Credit scoring may be nearing the end of its life as a factor in setting personal automobile rates, if Allstate has its way. According to a published report in the Wall Street Journal, the insurer is talking with state regulators about leading an industry-wide effort to transition to underwriting customers using telematics to determine rates. At least two state regulators have voiced concerns about this transition, according to WSJ. Louisiana Insurance Commissioner Jim Donelon would want strong consumer protections for what insurers can do with telematics data. District of Columbia Insurance Commissioner Karima Woods said the data collection could lead to a new wrinkle on redlining if insurers set rates based on where cars drive or park.
On Sept. 18, Houston businessman Robert Lance Kuperman, 74, was sentenced to 24 months confinement in a federal prison, six months following his plea of guilty to interstate transportation of money by fraud earlier this year. Kuperman’s prosecution arose from a fraud investigation of an insurance claim for water damage to his home, allegedly caused by a defective water heater. His claim reached $412,836, paid in multiple checks by American Strategic Insurance Company. Along with the prison term, the U.S. Eastern District Court of Texas ordered restitution to American Strategic and to RSUI Indemnity Group, totaling $1.86 million, and an $80,000 fine payable to the court. Kuperman is to report to an institution designated by the Bureau of Prisons by Nov. 29. Court documents indicate payment to the victims begins immediately, in incremental amounts up to 10 percent of his salary, including his inmate income. The case was investigated by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, the Polk County Sheriff’s Office and the Texas State Fire Marshal’s Office.
The staff of the Surplus Lines Stamping Office of Texas presented the agency’s proposed budget for 2022 during the Sept. 23 board meeting. The proposed budget includes a 26 percent increase in expected revenues over the 2021 budget, and a 20 percent increase in total expenses. The proposal assumes that agency operating expenses will exceed revenues by $1.46 million and proposes $1.32 million in its capital expenses, effectively reducing the unrestricted reserve fund balance by these amounts. The 2021 operations budget assumed a $1.51 million reduction in the unrestricted reserve fund, which, as of Aug. 31, 2021, is about $21.67 million in excess of the reserves permitted by the plan of operation. While an operating deficit of $0.90 million was budgeted through the first eight months of this year, SLTX reported $2.20 million in excess revenue over expenses as of the end of August. The board is expected to vote on the 2022 budget during its Oct. 28 meeting.
The Texas Windstorm Insurance Association hosted a claims webinar on Oct. 6 to help smooth the claim process for policyholders affected by Hurricane Nicholas. The webinar covers how to read the damage estimate, the forms of documentation required and what can happen after payment is made. To view the archived recording of the webinar, go to https://www.youtube.com/watch?v=LEP2GE510aI.
On Sept. 23, TWIA issued a bulletin to agents reminding them of the conditions that require TWIA policyholders to obtain flood insurance. Repairs resulting from damage by Hurricane Nicholas, TWIA advised, are not the trigger for a flood insurance requirement. The requirement occurs when all of these conditions are met: (1) Any part of the property is in a V, VE, or V1-V30 flood zone, as defined by NFIP; (2) Flood insurance is available for the property through NFIP, and (3) The structure is constructed, altered, remodeled or enlarged after Sept. 1, 2009. While normal repairs do not meet the third condition, changing the pitch of the roof; adding a porch or carport, enclosing a garage, and installing larger window openings will meet this condition and also require a Certificate of Compliance.
The Texas Department of Insurance approved TWIA’s request to increase maximum limits on manufactured housing, but disapproved TWIA’s request to increase liability limits for residential dwellings, individually owned townhouses and their contents, contents of apartments, condos or townhouses, and commercial and government structures and their contents. TDI’s analysis traced the values that would result from applying the BOECKH Index since 1997 and found that only the manufactured homes fell short of the existing maximum limits that should be available through TWIA. Approval was granted for a 15 percent increase in the maximum limit for the manufactured housing, raising insurable values from $84,000 to $96,600. (TDI calculated that application of the BOECKH Index to this class of housing would result in a maximum limit of $176,400.) Maximum limits for all other residential and commercial properties are above any adjustment that would result from applying the BOECKH Index to their 1997 maximum limit. The higher limit for manufactured housing will be available on policies issued after Jan. 1, 2022.
On Oct. 7, the Texas Division of Workers’ Compensation notified Texas Workers’ Compensation insurers that DWC has adopted five forms contractors and subcontractors can use to designate which entity is responsible for providing workers’ compensation coverage. DWC said the adoption of these forms will assist certain general contractors and subcontractors, including motor carriers, owner operators, and certain building and construction workers in setting formal agreement on who will provide workers’ compensation insurance to the subcontractor and the employees of the subcontractor. “The Labor Code also allows them to agree that the independent contractor is not an employee of the hiring contractor, and the hiring contractor is not responsible for workers’ compensation insurance coverage for the independent contractor,” said Kara Mace, deputy commissioner. The forms are available on the TDI website, DWC Forms 081-085.