Rygiel on WC fraud working group Letter on DAD policies from

Document Sample
Rygiel on WC fraud working group Letter on DAD policies from Powered By Docstoc
					Professional Insurance Agents of New Jersey Inc.                                                  Aug. 6, 2004
Rygiel on                PIANJ wins legal battle to protect agents from expanded
WC fraud                 E&O liability
working                       The Supreme Court of New Jersey de-         dent Louis Beckerman, CIC, CPCU. “PIANJ
                         cided an important case today that maintains     exists to support such professional, indepen-
group                    the current standard of care agents and bro-     dent agents and we are proud to have been
     PIANJ treasurer,    kers owe to their clients. PIANJ had filed an    the association that stood by them in court.”
Gary C. Rygiel, CIC,     amicus curiae (friend of the court) brief in          In this case, the policyholder, Dr.
CPCU, ARM, was           the case, President vs. Jenkins, because the     Reginald Jenkins, alleged that his insurance
selected to represent    court could potentially have raised the stan-    agent, C&R Insurance Agency, breached its
the association in a     dard of care producers owe to their clients      professional duty of care by failing to
working group ad-        and could have required producers to be-         bridge a gap in his medical malpractice cov-
dressing workers’        come guarantors against coverage gaps.           erage. Before applying for insurance
compensation pre-             We appreciate the significance of this      through C&R, Jenkins had been insured for
mium fraud and eva-      decision for C&R Agency and for indepen-         medical malpractice with Princeton Insur-
sion. The group is       dent agencies in protecting them from            ance Co. under an “occurrence” policy.
under the direction      broader E&O exposure,” said PIANJ Presi-                                  (Continued on page 5.)
of the Office of
Fraud Prosecutors.       Letter on DAD policies from Commissioner Bakke
Rygiel is executive           The Department of Banking and Insur-        PAIP has sent SAIP information and appli-
vice president of        ance recently issued this letter to producers,   cations to its certified producers. Additional
Liberty Insurance,       regarding the Dollar-a-Day Policies:             applications and ID cards are available from
Millstone Township            The Department of Banking and Insur-        the PAIP office. Since there is no under-
     The Office of       ance is taking this opportunity to remind        writing required, the application is very
the Insurance Fraud      producers about the Special Automobile In-       short and simple. Qualified applicants have
Prosecutor, the          surance Policy, also known as the Dollar-a-      a Medicaid identification card that has
Workers’ Compen-         Day policy. The SAIP policy is designed to       “SAIP” printed in the lower right hand cor-
sation and Rating        help uninsured low-income New Jersey resi-       ner of the card. A SAIP policy costs $365 a
and Inspection           dents who are enrolled in Medicaid become        year that is payable in two installments. The
Bureau, as well as       “street legal.” This is particularly important   charging of Service Fees for SAIP policies
several insurance        as the state cracks down on uninsured            is not permitted.
company representa-      motorists.                                            The policy provides a medical expense
tives also are part of        All producers who are PAIP certified        benefit for emergency room and
the group.               may sell the SAIP to qualified applicants.                                (Continued on page 4.)

 Judge rules buyer’s guide deficient
      A recent decision by a New Jersey Superior Court judge could have serious ramifications for the insurance
 industry. Judge Alexander Lehrer recently ruled that the buyer’s guide provided to Dawn Relli and her husband
 by her auto insurer, Liberty Mutual Fire Insurance Co., was “clearly deficient” because it did not explain that, if
 they chose the verbal threshold option, they would have to prove any injuries they sustained had a serious impact
 on their lives. This requirement was not mentioned in their 1999 buyer’s guide. In 2002, an Appellate Court de-
 cision determined that to sue under the verbal threshold, the injuries sustained must have a serious life impact.
 The Rellis claimed that the information in the buyer’s guide was inadequate and misleading, and because of this,
 they did not make an informed decision when selecting the verbal threshold option.—Muratori

PIA Reporter Aug. 6, 2004                                                                                              1
Lunch ‘n’ Learn—Now available on CD
     For a limited time, PIA is offering multimedia      limited time offer—order yours today! CDs are $60 per ses-
CD reproductions of the spring installment of the        sion and the entire collection is available for $150. Session
Lunch ‘n’ Learn series. Purchase a CD today—it’s         CDs include: “New Jersey Auto Reform;” ”Employee vs. In-
an economic way to educate your entire agency            dependent Contractor;” and “Employee Handbooks—Your
staff. It’s not just a CD! The spring series CD kits     Agency’s Best Friend.”
include: a multimedia CD containing a presentation            Did your office participate in any of the live Lunch ‘n’
slide-show, the audio recording of the live telecon-     Learn teleconferences? If so, PIA is offering teleconference
ference, additional reference materials pertaining to    participants a special discount rate on the CD only. If you
each topic, an inclusive Q&A and print-outs of all       would like a copy of the program in which your office par-
presentation materials.                                  ticipated, the CD is ONLY $20. For more information, or to
     If you missed out on the live teleconferences,      order any of the CDs, logon to the PIA Web site and type
this is a chance to keep your staff ahead of the pack    EC10059 into the Quick-Link box.—Hoesten
when it comes to hot issues in the industry. This is a
Look to PIA’s Creative Services for all your marketing needs
     PIA’s Creative Services Department can help         turn out striking, high-caliber pieces for our clients, we
you with all your marketing needs. We handle it all,     charge a fraction of what you’d pay for a “big-name” ad
from idea generation to copywriting to graphic de-       agency.
sign to printing: agency brochures, direct marketing          Don’t waste your valuable time (and money) trying to
packages, logo design, post cards, sales/prospecting     teach marketing companies and ad agencies about the insur-
letters, advertisements and more.                        ance business. PIA Creative Services knows the independent
     If you’ve ever relied on a commercial advertis-     agency system. We put that knowledge to use, creating strik-
ing agency for your marketing pieces, you will be        ing promotional pieces that will help bring customers to
amazed at the cost savings that await you through        your door. Contact Jennifer Hammond at (800) 424-4244,
Creative Services. Though we’re rich in talent and       ext. 282, for more information.—Aleksejczyk
                        Save the date—PIANJ Golf Classic, Sept. 13
                         “Play it forward” at the 21st Annual PIANJ Golf Classic, Sept. 13, benefiting Special
                     Olympics New Jersey. The event, sponsored by the Mercer Insurance Group, will be held at
Address comments to: the Sea Oaks Golf Club in Little Egg Harbor.
PIANJ Reporter           The registration brochure was mailed to PIANJ members June 7, but you can view it
Phone:               online and print it out to register now. Logon to the PIANJ Web site, and type in the Quick-
(800) 424-4244
Fax: (888) 225-6935 Link, YP10017. For more information, call PIANJ at (800) 424-4244, ext. 308.—Karr
Web site:            PIANJ Industry Resource Center
Editorial staff:
Lisa Lannon,             Insurance scoring—a refresher
  Managing editor             It is becoming commonplace in the in-      Act and the Driver Privacy Protection Act,
Stacey Aleksejczyk,      dustry for insurance carriers to use a          to what agents need to know to assist cus-
  specialist             method of screening potential customers         tomers. PIANJ’s technical staff has taken
Deb Bastian, CIC         for underwriting acceptability through a        all of these questions into consideration
Kenneth Bessette         practice of “insurance scoring.” These          and developed a comprehensive resource
Mary Christiano
Dan Corbin               scores obtained are a result of an objective,   kit, What’s the score?, to assist agents in
 CPCU, CIC, LUTC         statistical analysis of a person’s credit re-   understanding the requirements and how to
Jaye Czupryna            port information. Many agents have called       explain this concept to their customers.
Steven Imbriaco, Esq.
Diane Kattrein, CAE      PIA’s Resource Center with a variety of         This handy kit is a “must have” for any
Ellen Kiehl,             questions from how is this scoring system       agency. Logon to PIA’s Web site and type
 Ph.D., CAE
Nick Marchetti           developed, what are the federal and state re-   QS29104 into the Quick-Link box to view
Jill Muratori, Esq.      quirements under the Fair Credit Reporting      the kit.—Albright

                                                                                           PIA Reporter Aug. 6, 2004
Association (Continued)
PIANJ offers agents access to health markets for their clients
     Adding to its ever-growing member benefits,             health market will be able to earn commissions through
PIANJ now offers its members access to PIA                   a special referral program.”
HealthPlus. The PIA HealthPlus program gives licensed             As knowledge and comfort level in the life/health
life/health insurance agents access to numerous life,        market grows, insurance agents can choose to service
health and dental markets for their clients.                 their clients’ life/health insurance needs and increase
     “This new program is designed to expand or open up      their earnings. This unique program allows PIANJ’s
new insurance markets for our members and their cli-         members to earn as they learn.
ents,” said Kenneth Bessette, president and chief execu-          For more information, contact PIANJ’s Member
tive officer of PIA Management Services Inc., the            Services Department at (800) 424-4244, ext. 204; via e-
umbrella corporation that manages PIANJ. “Those who          mail at; or logon to
already offer insurance products will be interested in the   PIANJ’s Web site and type SV10017 in the Quick-Link
alternative products available and traditional property/     box.—Czupryna
casualty agents who have stayed away from the life/

DOBI approves United/Oxford merger; MSNJ files suit
    The Department of Banking and Insurance recently         holders currently covered by the two companies.
issued an order approving the acquisition of Oxford                The DOBI found that the merger would result in
Health Plans Inc. by UnitedHealth Group Inc. The             various efficiencies that would enable the combined en-
merger has also been approved by Calif., Conn. and N.Y.      tity to achieve lower costs than it could have achieved as
The merger will create the third largest healthcare in-      separate companies. According to the DOBI’s press
surer in New Jersey—with a total of 440,620 policy-                                                (Continued on page 5.)
Reminder: DOBI requires insurer submission of auto ID cards
     Earlier this year, the Department of Banking and In-    ACORD ID cards as long as their insurers notify the
surance adopted proposed amendments to the insurance         DOBI of this option when they file their ID cards.
ID card regulation. The new rules required insurance ID           An existing ACORD ID card, ACORD 50WM meets
cards, both temporary and permanent, to contain at least     the requirements of the revised regulation for the per-
one DOBI-approved anti-counterfeiting measure.               manent automobile identification card.
     Last year, PIANJ met with the DOBI last year to dis-         In addition, ACORD developed and released
cuss the proposed changes to the ID card regulation. At      ACORD 50NJ, Temporary State of New Jersey Insur-
that time PIANJ requested that the DOBI allow produc-        ance Identification Card. This new form meets the re-
ers to use ACORD ID cards as an alternative to issuing       quirements for a temporary identification card.
their insurers’ ID cards, which may vary from insurer to          For questions and additional information regarding
insurer. The DOBI agreed that because consumers need         these changes, please contact Joel Volker at
to be able to obtain ID cards, producers may use   —Aleksejczyk, Bastian

 Compliant ID cards—what you need to know
     While the amendments to N.J.A.C. 11:3-6.1-6.4 were effective April 19, 2004, the Department of Banking
 and Insurance has not yet implemented the amended regulation. Therefore, insurance companies and producers
 must continue to comply with the requirements of the previous regulation regarding the design, format, content
 and issuance of insurance ID cards until the DOBI has chosen a date to implement the amended regulation. For a
 summary of the details you need to issue compliant ID cards, simply logon to and key
 QS29009 in the Quick-Link box, or fax PIANJ’s Industry Resource Center at (888) 225-6935.—Albright

PIA Reporter Aug. 6, 2004                                                                                            3
State (Continued)
Letter on DAD policies from Commissioner Bakke (Continued from page 1.)
hospitalization that “wraps around” the medical expense       uninsured motorist coverage.
benefit these individuals already receive from Medicaid.           The department expects producers to write SAIP
     The SAIP policy does not provide any liability in-       policies for the qualified individuals for whom this
surance since Medicaid recipients typically have no as-       policy is intended. Producers who have questions about
sets to protect. If DAD policyholders are at-fault in         the SAIP should direct them to the department through
accidents with automobiles covered by standard policies,      their trade organization representatives.
the standard policyholder can make a claim against their

Say goodbye to pedestrian PIP
    Many auto insurance changes have been imple-              instructed to process pedestrian PIP claims in
mented by Chapter 89 of the Public Laws of 2003 (com-         accordance with existing policies and procedures pend-
monly referred to as the 2003 auto reform legislation).       ing the department’s approval of revisions to their
One of these changes impacts Personal Injury Protection       current policy forms.
benefits for pedestrians. Section 39:6A-4 of the Motor             The Insurance Services Office Inc. obtained ap-
Vehicles and Traffic Law was amended to eliminate the         proval for its revised PIP coverage endorsements PP 05
requirement for an auto policy to cover pedestrians           76 01 04 (Basic PAP) and PP 05 77 01 04 (Standard
(other than a family member) injured by the named             PAP) effective Jan. 1, 2004. However, the approval for
insured’s automobile. Pedestrian PIP is now history.          the revised commercial PIP endorsement CA 22 30 11
    While pedestrian PIP is officially gone, claims will      04 is not effective until Nov. 1, 2004. Consequently,
continue to be honored until your insurers revise their       until then, insurers using ISO forms will be required
PIP endorsements. In Order No. A03-136, issued by the         to honor pedestrian PIP claims on commercial auto
Department of Banking and Insurance, insurers were            policies.—Corbin
DOBI approves MSO New York commercial liability endorsements
     Effective immediately, the Mutual Service Office              The coverage restrictions in these endorsements ap-
Inc. has obtained approval from the Department of             ply only to New Jersey-based contractors working in
Banking and Insurance for new endorsements MCL 193            New York. The MSO developed them as a result of some
and MCL 754 to be used with its Businessowners, Com-          safe-place-to-work sections of the New York Labor
mercial Liability, Special Contractors and Commercial         Law, specifically, sections 240, 241 and 241-a, which
Umbrella programs. The Contractors New York State             impose an absolute liability standard upon owners and
Bodily Injury Limitation MCL 193 endorsement pro-             general contractors for workers injured under specific
vides for a liability sublimit of $15,000 for injuries sus-   circumstances at their job sites. While these laws are
tained at a job location in New York. The Contractors         decades old, insurers have blamed them in recent years
New York State Bodily Injury Exclusion MCL 754 en-            for the disruption in the market for New York
dorsement excludes commercial umbrella liability cov-         contractors.—Corbin
erage for all injuries sustained at a job site in New York.

 Lunch ‘n’ Learn—Subrogation Basics
      Join PIA Sept. 15, 2004, noon-12:45, for the next installment in the PIA Lunch ‘n’ Learn series. PIA’s
 Director of Research, Dan Corbin, CPCU, CIC, LUTC, will help your staff weave their way through the basics of
 subrogation. Topics include: how subrogation works, distinguishing between the subrogor and the subrogee and
 the benefits of subrogation. Don’t miss out on this crucial lunch hour! Logon to the PIANJ Web site and click the
 “Education” button for more information.—Hoesten

 4                                                                                          PIA Reporter Aug. 6, 2004
State (Continued)
PIANJ wins legal battle to protect agents (Continued from page 1.)
In the fall of 1997, Princeton informed Jenkins that it      coverage.
would cancel his policy unless he paid an overdue pre-            When the case was heard by the appellate division
mium. Jenkins subsequently failed to pay the premium         last year, the majority of the justices found that C & R
and on Jan. 9, 1998, Princeton issued a letter informing     did not breach any legal duty to Jenkins. However, one
Jenkins that his policy was canceled retroactive to Oct.     judge dissented, bringing the matter before the Supreme
26, 1997.                                                    Court.
     In August 1997, Jenkins met with Patrick O’Brien,             PIANJ realized the far-reaching implications the
a sales representative for C&R Insurance Agency, to          case could have on producers and asked to be heard by
discuss obtaining replacement coverage. Jenkins told         the high court. In its amicus brief, PIANJ asserted that
O’Brien he was currently insured with Princeton and          the appellate division appropriately declined to extend
that his policy would expire at the beginning of Febru-      the legal obligation of agents and brokers beyond the
ary 1998. He completed a “non-binding information            boundaries established through years of precedent and
quote form” on which he stated he was insured with           that an extension of the existing legal duty would make
Princeton under an “occurrence plus” policy and would        agents and broker guarantors against coverage gaps.
need new coverage effective Feb. 1, 1998.                         The Supreme Court agreed with PIANJ and C&R. It
     On Jan. 8, 1998, Jenkins met with O’Brien and           held that the agency had not breached its duty of care
completed and signed an application for insurance in         and that this duty should not be expanded. The court held
which he stated that his Princeton insurance policy ex-      that based on Jenkins’ assertions, C&R justifiably be-
                                                             lieved that there was no need for coverage prior to Feb.
pired on Feb. 1, 1998, and that his professional liability
                                                             1, 1998, and C&R’s actions were consistent with cus-
insurance had never been denied, canceled, or not re-
                                                             tomary industry practice.
newed. Jenkins also asked O’Brien what he should do
                                                                  Therefore, insurance producers’ standard of care re-
about the final payment he owed Princeton. O’Brien
                                                             mains unchanged. “We are very pleased with the Su-
advised him to promptly pay the premium. Jenkins
                                                             preme Court’s decision,” said Beckerman. “Professional
never paid the premium and never told O’Brien that his
                                                             agents and brokers have the utmost duty to provide accu-
Princeton policy had been canceled before Feb. 1, 1998.
                                                             rate and ethical service for their clients. However, poli-
     Based on Jenkins’ assertions, O’Brien obtained a
                                                             cyholders hold an equally important responsibility to be
“claims-made” policy with a retroactive date of Feb. 1,      truthful and forthcoming so that their producers can do
1998. Jenkins committed acts of malpractice on Jan. 3        their jobs.”—Muratori
and 4, 1998, dates on which he had no insurance

DOBI approves United/Oxford merger; MSNJ files suit (Continued from page 3.)
release, this will allow the combined company to offer       New Jersey whether the acquisition by UnitedHealthcare
health plans at a lower price. Cost savings will affect      should be allowed to proceed.
two areas: favorable reimbursement rates for Oxford               According to the medical society, the projected
members and efficient administrative operations              statewide market share of the merged entity approaches
through a consolidated effort.                               20 percent, and it will be significantly greater in New
     However, the Medical Society of New Jersey has          Jersey’s six northern counties (Bergen, Essex, Passaic,
filed a lawsuit to block the merger of the two compa-        Sussex, Union, Morris), where the majority of United’s
nies, claiming it would create a health care monopoly        and Oxford’s insured base is currently located. The soci-
that would not benefit consumers. The filing of the law-     ety has charged that the market shares in these regions
suit effectively stays the merger in the state, pending a    violate anti-competitive guidelines set by the state’s
ruling by a judge of the Superior Court of the State of      attorney general.—Aleksejczyk

       Logon to the PIA Web site, for up-to-date
       industry news and information.

PIA Reporter Aug. 6, 2004                                                                                            5
PIA Industry Watch
     ISO: Insurers to pay policyholders $1.65 billion for    Exchange Commission has asked two dozen fund firms,
second-quarter cat claims. U.S. property/casualty insur-     including Fidelity Investments and Putnam Invest-
ers are expected to pay homeowners and businesses an         ments, to provide details about payments they may
estimated $1.65 billion for insured property-loss claims     make to ensure their funds are included in corporate
from six catastrophes affecting 23 states in the second      401(k) plans that are held by millions of Americans,
quarter, according to preliminary estimates by ISO’s         The New York Times reported.
Property Claim Services unit.                                     According to The Wall Street Journal, the SEC’s
     This compares with insured losses of $5.1 billion in    director of compliance inspections and examinations
the second quarter 2003 and $2.8 billion in second quar-     said while there was no evidence that funds had done
ter 2002. PCS estimates the six catastrophes in the quar-    anything wrong, the agency wanted to look into the
ter are expected to generate nearly 495,000 claims, of       issue to head off potential problems.
which more than 270,000 are from homeowners.                      Bill to limit some suits falls victim to politics. The
     PIA, partners send TRIA letter to Oxley. PIA to-        New York Times reports the Class Action Fairness Act
gether with a coalition of insurance associations work-      of 2004 failed on a procedural vote July 8 in the Senate,
ing to convince Congress to extend the Terrorism Risk        making it very unlikely that Congress would act on the
Insurance Act, sent a letter to House Financial Services     Bush administration’s proposal to limit class actions.
Committee Chairman Michael Oxley, R-Ohio. In the             The bill gained the support of more than 60 senators but
June 29 letter, the coalition urges Congress to act this     many backers changed their position during heated de-
year to extend TRIA beyond its scheduled expiration          bates over the attachment of unrelated provisions. Sen.
of Dec. 31, 2005.                                            Thomas R. Carper, D-Del., who was a key sponsor of
     “The commercial policyholder community, state in-       the bill, accused Republicans of undermining support so
surance regulators, insurers, reinsurers, insurance bro-     they could gain the political advantage in the impending
kers and agents, and many members of Congress on both        election by characterizing Democrats as obstructionist.
sides of the aisle have been actively advocating Congress    The Republicans attributed the bill’s defeat to the
act this year to extend the program,” the joint letter to    Democrats’ insistence on attaching unrelated
Oxley states. “Although the industry has concerns with       amendments.
some aspects of the legislation, we welcome the oppor-            Life, health insurers ride profit surge. The nation’s
tunity H.R.4634 provides to work with you, the bill’s        life and health insurers enjoyed a 310.8 percent increase
sponsors and all interested parties to enact extension       in net income during 2003, earning $30 billion com-
legislation this year. H.R.4634 is a positive first step.”   pared to $7.3 billion in 2002, according to Weiss Rat-
     Maritime security measures begin. The Wall Street       ings. The rebound in the equity market was primarily
Journal reports the world’s business executives and se-      responsible for the industry’s surge in profitability as
curity experts are concerned new maritime securities         insurers saw improvement on the sale of invested assets,
standards that take effect at ports worldwide July 1 will    suffering only a $4.6 billion capital loss compared to
not be sufficient to prevent terrorist attacks and will      the $15.5 billion capital loss reported in 2002.
leave the shipping industry vulnerable to a disaster that         As industry profits climbed, so too, did capital and
could interfere with international trade. The new rules in   surplus, which had its largest increase since 1997, rising
the International Ship and Port Facility Security Code       12.9 percent, from $242.7 billion at year-end 2002 to
require all ports to have official security plans and some   $274 billion at Dec. 31, 2003.
must also be protected by surveillance cameras and high           In analyzing line of business results of life and
fences. The code also includes security rules for ships.     health insurers, Weiss found that individual annuities,
     SEC broadens fund probe to retirement plans. U.S.       the industry’s second largest product line after indi-
regulators have expanded a probe into the $7.4 trillion      vidual life, increased its profits by $7.6 billion from last
mutual fund industry to include certain investment           year, earning $6.9 billion in 2003 compared to a $689.2
firms’ payments to 401(k) retirement plans, according        million loss in 2002.—Lannon
to recent newspaper reports. The U.S. Securities and

6                                                                                           PIA Reporter Aug. 6, 2004
Companies report second quarter financial results
     • American International Group reported a 25.7           provisions for uncollectible reinsurance. The issue in
percent jump in second quarter consolidated net income.       question is whether this will be treated as an adjustment
AIG’s consolidated net income for the quarter was $2.9        to the opening balance sheet of the merged companies,
billion, or $1.09 per share, compared to $2.3 billion, or     with no hit to second-quarter income, or whether the ad-
87 cents per share, for the same period last year. Operat-    justment will indeed flow through the income statement.
ing income, excluding realized capital losses on invest-            Also, St. Paul Travelers plans to eliminate roughly
ments, was an even $3 billion, up 19.2 percent from           3,000 positions company-wide as part of ongoing efforts
second-quarter 2003.                                          to find operating efficiencies following the merger. The
     • Allstate Corp. reported net income of $1.03 bil-       layoffs, which would represent 10 percent of the total
lion for the second quarter, compared with $588 million       work force, are expected to yield annual savings of at
for the same quarter last year. The insurer attributed the    least $350 million, according to CEO Jay Fishman.
76 percent increase to improved income from its prop-               • The United States Bankruptcy Court in Newark
erty-liability underwriting and a decline in catastrophe      has ordered a former New Jersey chiropractor to pay
losses. Premiums for property-liability written in the        Allstate New Jersey and Encompass Insurance more
quarter increased 5.1 percent, largely because of an          than $6.6 million dollars. The court found Mathew E.
increase in the number of policies in force.                  Lister, D.C.’s undisclosed ownership in multiple medical
     • Safeco Corp. reported second quarter results were      facilities and his self-referral of patients among those fa-
driven by solid underwriting performance and relatively       cilities constituted a pattern and practice of fraud under
light weather-related catastrophe losses. Quarterly earn-     the New Jersey Insurance Fraud Prevention Statute. In
ings rose to $247.5 million, or $1.77 per share, from         November 2000, Encompass and Allstate New Jersey
$111.9 million, or 81 cents per share. Total revenues         filed suit against Lister, accusing the chiropractor of cre-
from continuing operations rose to $1.56 billion from         ating and using sham companies to defraud the
$1.34 billion a year ago.                                     insurance companies and their policyholders.
     • Bermuda-based Everest Re Group, Ltd. reported a              • Liberty Mutual recently announced it will be re-
141 percent jump in second-quarter income to $264 mil-        turning nearly $15 million to more than 200,000 policy-
lion, or $4.64 per share, from $109.6 million, or $1.99 a     holders. The company plans to issue a special dividend
share, for the same period, last year. After-tax operating    totaling $9.3 million that will affect 180,000 long-term
income, which excludes realized capital gains and losses,     LMFIC policyholders who carry comprehensive and/or
was $174.4 million, or $3.07 per share—a 63 percent           collision coverage. Liberty Mutual has also submitted a
jump over last year’s second quarter.                         filing with the DOBI to reduce its rates for 41,000 LIC
     • Atlantic Mutual Insurance Co. announced it will        policies totaling $5.6 million.
reduce home and auto insurance policy deductibles by                Liberty Mutual, the fourth largest auto insurer in
10 percent for many customers each year they are claim-       New Jersey, is the latest carrier to announce a return
free “providing long-term savings.” Atlantic Mutual           based on special dividends and rate reductions. Earlier in
homeowners policyholders with a $2,500 deductible or          July, Allstate New Jersey announced it would be giving
more receive a 10 percent credit in their “deductible         $15 million in dividends to more than 200,000 auto
reserve” for every year they are loss-free.                   insurance policyholders starting this fall.
     • The St. Paul Travelers Cos. is seeking Securities            • The Insurance Services Office Inc. added a work-
and Exchange Commission guidance on correct account-          ers’ compensation claims-handling solution to its ISO
ing treatment for a $1.625 billion addition to reserves it    Claims Outcome Advisor. The new Workers’ Compen-
is making in the second quarter. The insurer, which           sation COA solution addresses the rising costs of pay-
formed from the merger of Travelers Property Casu-            ments for lost wages and medical treatments by
alty Corp. and The St. Paul Cos. April 1, said it is uncer-   streamlining claims-handling practices and calculating
tain whether it will record a net income gain or net loss     more accurate loss reserves. According to the ISO, the
after accounting for the action.                              product is based on scientific methodology that adheres
     Among the items cited for the reserve increase were      to medically-recognized standards.—Aleksejczyk
surety claims, rising construction defect claims and
PIA Reporter Aug. 6, 2004                                                                                               7
PIANJ Calendar of Events
September                                  Sept. 15—Lyndhurst                      Sept. 22—East Windsor
Sept. 8—Edison                             • Insuring Defective Construction       • CISR PR: Insuring Personal Residential
• NJYIP Third Annual Sponsor               NJCE: 4                                 Property
Appreciation Dinner                                                                NJCE: 8/12 with designation
                                           Sept. 15—Lyndhurst
Sept. 13—Little Egg Harbor                 • Hidden Coverages                      Sept. 23—Mt. Laurel
• 21st Annual PIANJ Golf Classic           NJCE: 4                                 • CISR IC: Insuring Commercial Casualty
Sept. 14—Edison                            Sept. 16—Short Hills                    NJCE: 8/12 with designation
• Agency Benchmarking                      • NJYIP Leadership Development
NJCE: 3                                    Series: Transitioning from man-         Sept. 28—Branchville
                                           agement to leadership                   • CISR AO: Agency Operations
Sept. 14—Edison                                                                    ^FF, ^UM
• Building Agency Value Through            Sept. 21—Florham Park                   NJCE: 6/12 with designation
Perpetuation                               • CISR IP: Insuring Commercial
NJCE: 3                                    Property Exposures                      Sept. 29—Montvale
                                           NJCE: 8/12 with designation             • CISR ALS: Advanced Learning Seminar
Sept. 15—Your office                                                               NJCE: 12 (Open to the following
• PIA Lunch ‘n’ Learn:                                                             designations: CISR, ACSR, CPSR, CIC.)
Subrogation Basics

  To register for an education event, call the Education Department, (800) 424-4244. Or, logon to the PIA Web site, click
  “New Jersey,” “Education,” and then “Schedule.” ^FF ^UM—Contact the PIA E&O Department for details.

Shared By: