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									                                 Rivard Insurance Agency, Inc
                                 E-Mail Newsletter
SEPTEMBER – OCTOBER 2011                                                                       VOLUME 9, NUMBER 9

                                 Reinsurance Rate Hikes… reported by the Florida Underwriters
                                 The latest news of Florida’s 15% reinsurance rate hike has been the buzz. Don’t
                                 be fooled into thinking this is a new charge passed on to the Policyholder.
                                 Insurance companies have previously passed on this charge to policyholders but
                                 it was capped at 10%, now it is capped at 15%. Therefore, the increase to the
                                 policyholder is a relatively small change of 5% more than what was previously
                                 passed on to them. Policyholders should also know that before any rates
                                 increase they must be approved by the Office of Insurance Regulation, BEFORE
                                 they are passed on to policyholders.

                                 All insurance companies writing in Florida are required to purchase a mandatory
                                 layer of reinsurance from the state-sponsored Florida Hurricane Cat Fund. It is
                                 hard to believe that the money Florida insurance companies have on hand is not
                                 enough to pay for actual claims, especially following a hurricane, but it is true.
                                 It is hard for the insurance companies to figure out the cost of reinsurance
  Rivard Insurance Agency        because it is not considered a statutory asset until reinsurance losses are
    September - October
                                 incurred. When looking at annual reports for insurance companies of premiums
       Office Calendar           collected and claims paid out, those numbers do not reflect the value of
                                 reinsurance needed to pay claims even after a small hurricane. Insurance
     September 5, 2011           companies with a well-planned reinsurance program will have a surplus to pay
          CLOSED                 for everyday claims AND reinsurance to pay for the extraordinary claims such as
                                 a hurricane.
 Rivard Insurance Agency Inc
                                 Workers Compensation Fraud… reported by the Florida
 1014 Gateway Blvd.              Underwriters Magazine
 Suite 107                       Workers compensation fraud has been a troublesome area for the insurance
 Boynton Beach, FL. 33426
                                 industry costing insurers and employers about $6 billion a year. Fraudulent
 Ph: 561-739-8346                claims have been on the rise which reflects the current economic conditions.
 Fax: 561-739-8360               The claims are either false or exaggerated injury claims, like injuries not
                                 occurring on the job yet reported as such. As the economy deteriorates the
 E-mail:                         number of suspicious or questionable claims increase.
                                 Just as troubling is the impact increased medical costs have had on workers
                                 compensation. It used to be about 60% of the claim was the indemnity
                                 payment and 40% was the medical cost, it is now reversed.
 We’re on the Web!
                                 The industry is working to fight the fraud with anti-fraud efforts in fraud
http://www.rivardinsurance.com   awareness and investigation/enforcement. Florida Ranks in the top four among
                                 all the states’ fraud division and bureau. Claims are investigated looking for
                                 suspicious patterns or pre-existing injuries by using a data base to identify
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                                 potential fraud. Commercial audits are another detection method for fraud.

                                 Fraud is an ongoing problem in the workers’ compensation area and is costs
                                 insurers and self-insured’s millions of dollars each year.

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