PEOPLE
Bart Koch, Tejas American General Agency (TAGA) and Garrett Sprowls, PLUS/Towerstone, have been appointed by Commissioner Cassie Brown to serve on the board of the Surplus Lines Stamping Office of Texas. They replace Teri Brinson, LP Risk, and Randy Myers, Axa XL, who completed terms on the board that began in 2019. The terms of both Koch and Sprowls are set to expire Dec. 31, 2024. Koch previously served on the SLTX board from 2007 to 2009. Since 1997, Koch took part in creating TAGA where he leads commercial lines, accounting, human resources and marketing teams. Prior to TAGA, he was vice president of operations and partner with another managing general agent and worked for both an independent insurance agency and a major insurer. Koch is a member of the Texas Surplus Lines Association, Wholesale and Specialty Insurance Association and the Society for Human Resource Management and affiliated with the Independent Insurance Agents of Texas and the Federation of Insurance Women of Texas. Koch received a B.S. in management and administration from Louisiana State University in 1982. Sprowls has been a broker for professional and management liability since completing law school in 2009, He spent his entire career with PLUS, then joined Towerstone upon the merger of the two wholesalers. Currently, Sprowls leads the professional and management liability team for PLUS/Towerstone. He served as president of TSLA in 2017-18 and was the first Texan and third in the nation to receive the RPLU+ designation. Sprowls received a BA from Hendrix College in 2006 and his juris doctor from Wake Forest University in 2009.
MEETINGS/EDUCATION
The Texas Department of Insurance is offering one-hour webinars in its 2022 Virtual Compliance Conference. The webinars are related to life and health issues on April 14, April 28, May 12 and May 26. On June 9, there will be the Property and Casualty Filings and Update. All webinars will run from 2 p.m. to 3 p.m. and include opportunities for Q&A. Continuing education credit will be awarded, and advance registration is required.
The Independent Insurance Agents of Texas will host a four-hour continuing education credit class on insuring truckers. The course will be offered through a webcast on April 20, 9 a.m. until 3 p.m. with a lunch break from 11 a.m. to 1 p.m. Bettye Hutchison will explore the history and regulation of transportation companies and how the history has influenced insurance policies and endorsements. The class will also cover non-trucking auto liability coverage forms. The registration fee is $127 for members, $164 for nonmembers. On the next day, April 21, IIAT will offer a one-hour noncredit conversation on key person coverage. This event is free to members and will be held from 11 a.m. to noon. Online registration is available for both webinars.
In addition to providing the annual PIA Agency Marketing Guide, available electronically for members, the association will begin sending marketing tips periodically to members by email. The tips will include an industry-specific guide to social media marketing, content to use in website posts and strategies to boost agencies’ search engine optimization. For more information, contact Victoria Reece, vicki@piatx.org.
NOMINATIONS
The Insurance Council of Texas is seeking nominations for its prestigious Raymond Mauk Leadership Award. Since 1998, ICT has annually recognized an individual who has made a notable contribution to the Texas property and casualty insurance industry and helped build the industry into a key component of the Texas economy. Nominees can be active or retired company employees, regulators, agents, elected officials, educators or anyone else connected with the Texas P&C industry. All nominations should include the nominee’s name, title, a short bio and brief explanation as to why the person should be considered for this distinguished honor. The honoree will be revealed on July 20, in conjunction with the 30th Annual ICT/AFACT Property and Casualty Insurance Symposium. Nominations should be sent to lvallejo@insurancecouncil.org by Friday, April 15.
NCOIL
The National Council of Insurance Legislators unveiled its public policy agenda for 2022 when it met in Las Vegas on March 6. Among the issues the association will consider are paid family medical leave insurance, use of dog breed information in insurance underwriting and health insurance coverage for biomarker testing for diagnosing, treating and managing a covered person’s disease or condition. Developing a model on a regulations applying to an insurance sandbox is planned by the Financial Services and Multi-Lines Issues Committee. NCOIL’s State-Federal Relations Committee and Executive Committee approved a resolution supporting independent contractor status for insurance agents and licensed financial professions.
AM BEST
The U.S. property/casualty industry produced a $4.1 billion net underwriting loss in 2021 as increased expenses and losses outpaced premium gains, AM Best said on March 9. While net premiums written rose 9.2 percent to $690.7 million for the group of insurers included in Best’s data, losses and loss adjustment expense increased 11.7 percent to $483.8 million and underwriting expenses grew 5.4 percent to $182.0 million, Best figures showed. The data contained in the report is from companies whose 2021 annual statutory statements were received as of March 4 and which account for an estimated 96 percent of total industry net premiums written and 94 percent of policyholder surplus, Best said. The combined ratio for the group worsened to 99.6 percent in 2021 from 98.4 percent in 2020, the data showed. Net income rose 4.5 percent to $63.6 million. Net investment income was a bright spot for the group, increasing 8.5 percent to $56.1 million. Policyholder surplus increased 7.6 percent to $895.9 million.
RATES
According to Willis Towers Watson, U.S. commercial insurance prices increased by more than seven percent in the fourth quarter of 2021. The report said fourth-quarter price changes were similar to those reported in the third quarter, with data for most lines showing significant price hikes. Professional liability had the largest increases, while cyber also showed a significant rate increase, even though the volume of cyber was much smaller than all other lines. Excess/umbrella liability and D&O liability data reported significant price increases in the fourth quarter, though lower than the increases in the third quarter. Workers’ compensation had rate decreases consistent with previous quarters, but less than prior quarter decreases.
On March 10, Ivans Insurance Solutions, announced that thus far in 2022, the majority of commercial lines of business remain up year-over-year, but that rate increases slowed in February. Among the coverage lines with slower growth in February were commercial auto, general liability, commercial property and umbrella. Workers’ comp decreases also slowed. Ivans is a cloud-based software company that analyzed more than 120 million data transactions gathered from 33,000 independent agencies and 430 MGAs and insurer partners.
SLTX
The Surplus Lines Stamping Office of Texas recorded $539.6 million in Texas surplus lines premium during February, a 5.9 percent increase over February 2021, making it the highest February premium recorded. Renewal policies made up 51.5 percent of the premium and 36.8 percent of the items reported. New policies made up 44.4 percent of premium and 51.5 percent of the items. Remaining premium and items resulted from non-policy transactions, such as endorsements, cancellations, audits, installments and more. Most lines of business experienced some growth over February 2021, but 92 percent of the premium increase was due to just two coverages: Commercial Auto Liability grew by $16.1 million, or 86.0 percent; Professional Liability by $11.5 million, or 87.5 percent. SLTX’s March 7 eNews noted that surplus lines premiums continue to trend with existing hard market conditions, including results of the changes to diligent effort requirements. As of the end of February, stamping fee collections were $944,121, a decrease of 28.4 percent from the prior year, which included policies with inception dates prior to Jan. 1, 2021, when the reduced stamping fee became effective.
On Feb. 22, SLTX published an infographic defining what the office counts as items. “Item counts include all transactions processed by SLTX during a given time period. This includes all policies, child or non-policy transactions such as endorsements, audits, cancellations, etc., and transactions related to record-keeping. Record-keeping transactions include all reversal transactions (a primary mechanism to resolve incorrect filings) and items which have been reversed. For example, if a policy is filed with two endorsements and an audit, the total item count is four, and the policy count is one.”
NAIC
The National Association of Insurance Commissioners released its annual Dwelling, Fire, Homeowners Insurance Report, which used data from 2019 on March 10. Key findings of the report include: Countrywide average premium increased by 2.2 percent between 2018 and 2019. HO-3 average premium increased by 1.8 percent countrywide from 2018, while HO-4 average premium decreased by 2.8 percent between 2018 and 2019. HO-3 coverage accounts for 77.68 percent of owner-occupied exposures. HO-3 provides all-risk coverage on buildings and broad named-peril coverage on personal property. HO-3 accounts for 55.4 percent of all policy exposures and remains the most common policy sold by far. HO-4 coverage accounts for nearly 74 percent of the non-owner-occupied exposures. Tenant and condominium policies do not provide coverage for the building; therefore, the distribution of exposures for these types of policies is concentrated at significantly lower insurance amounts. The NAIC report noted that the average premium in Texas insured for all owner occupied residential policies was $1,925, and tenants and condo policy forms averaged $250 per year. The 196-page report can be downloaded at www.naic.org.
On March 7, the National Association of Insurance Commissioners issued advice on cybersecurity risk management for consumers to avoid identity theft. “Data thieves gain access to information from a variety of places,” says the advisory. The brief document helps consumers identify their risks and offers ways to keep their information safe online. Among the advice: Do not connect to public Wi-Fi; back up files to an encrypted flash drive; use antivirus or anti-malware software. The NAIC points victims of identity theft to the Federal Trade Commission’s identity theft reporting system, identitytheft.gov, for additional resources.
OTHER STATES’ LEGISLATION
On March 2, Florida CFO Jimmy Patronis issued a statement upon passage of the Florida House’s tax package. The package includes the CFO’s “Home Hardening” initiative, which provides tax relief for homeowners to fortify their homes against storms by installing impact-resistant items. The tax package moves next to the Florida Senate. Patronis said, “In Florida, it’s not if, but when, a storm will strike, and I am committed to helping Florida families harden their homes against storms while lowering their insurance premiums. There is no doubt that this is a practical way of saving folks money while incentivizing homeowners to better protect their homes from hurricanes.”
The American Property Casualty Insurance Association is sounding the alarm over legislation pending in Illinois that would sanctify in law the practice of third party litigation financing at interest rates of 18 percent every six months for nearly four years. According to an APCIA release, “The dangerous lending practice allows secret and even foreign investors to line their pockets with the proceeds from consumers’ injury lawsuits, robbing the insured of long-awaited settlement money they need to pay medical bills and make up for lost work time.” APCIA urged defeat of SB 1099, which it characterized as “speeding through the halls of Springfield with little debate.”
TDI
On March 11, the Texas Department of Insurance reported that Clint Ingram, one of eight former NFL players accused of taking part in a scheme to steal money from the league’s health care reimbursement fund, pleaded guilty to submitting false claims totaling more than $31,000. The case was led by TDI investigators and prosecutors working with the Harris County District Attorney. TDI prosecutor Rick Watson said investigators discovered the scheme led by a Houston athletic trainer. “They’d submit false claims to the Gene Upshaw NFL Player Health Plan for treatments that were never actually performed,” said Watson, then the players and trainer would pocket the plan’s reimbursement. Ingram was a former linebacker for the Jacksonville Jaguars. He pleaded guilty to a third-degree felony, is paying restitution and must serve five years’ probation. Former linebacker for the Houston Texans Shantee Orr pleaded guilty in this scheme in January.
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