NAPIA Fall02 by yaofenjin


                                                                                                                  FALL 2002 C

                                                                                    Seminar Features
                                                                                    “Coverage Issues”
                                                                                    Nearly 70 insurance professionals reg-
                                                                                    istered to hear FC&S Bulletin
                                                                                    Associate Editor Michael McCracken
                                                                                    present a six-hour insurance seminar
                                                                                    on October 4, 2002 at the Royal
                                                                                    Sonesta Hotel Boston in Cambridge,
                                                                                    Massachusetts. The program, entitled
                                                                                    “Is It Covered? From the Files of the
                                                                                    FC&S Bulletin,” was jointly spon-
                                                                                    sored by the National Association of
 Stately homes and carriages are                                                    Public Insurance Adjusters and the
 trademarks of New Orleans.                                                         Massachusetts Association of Public
                                                                                    Insurance Adjusters.
                                                                                        Presented in a question and
NAPIA Returns to New Orleans for                                                    answer format, McCracken’s talk
2002 Mid-Year Meeting                                                               delved into the following topic areas:
                                                                                    s Covered Property
The National Association of Public        Asbestos,” by Randy J. Maniloff, Esq.     s Direct vs. Indirect Damage
Insurance Adjusters returns to New        s “Runway 7/25 – A Case Study of          s Coverage Issues
Orleans, Louisiana for the third time     the Reno Airport Flood,” by Joel P.       s Valuation of Damaged Property
in eighteen years when the 2002           Gumbiner, Esq.                            s Interpretation of Certain
Mid-Year Meeting takes place                  The convention begins with a              Exclusions
December 5-7 at The Ritz-Carlton          reception at 6 pm on Thursday,            s Changes in the CP 00 10 and
New Orleans. The convention offers        December 5 and concludes with the            CP 10 30 (Mold, Terrorism, Data)
professional education sessions,          close of the general session at noon          (Several of the questions and
updates on legal and legislative activ-   on Saturday, December 7. NAPIA            answers used by McCracken to illus-
ities, social events (such as dinner at   officers, directors and past presidents   trate these topics    (continued on page 4)
GW Fins in the French Quarter), an        are requested to attend meetings
exceptional spouse/guest program,         beginning on Thursday.
and more. Four hours of continuing            While members are participating
                                                                                     INSIDE THIS ISSUE
education credit will be awarded to       in general sessions Friday morning,
attending SPPAs and CPPAs.                spouses and guests will enjoy a conti-     About the Mid-Year
NAPIA is also seeking credit              nental breakfast followed by a memo-         Meeting Speakers . . . . . . . . . . 3
approval from the State Insurance         rable ride in a vintage 1927 streetcar     Mid-Year Meeting
Departments of Massachusetts,             through the charming Garden                  Seminars Summary . . . . . . . . 3
Nebraska, North Carolina,                 District. The guided tour includes         Meeting Sponsors Recognized . . 4
Oklahoma, Utah and Wyoming (as            antebellum mansions, Lafayette             Congress Passes Measure
of this writing, New Hampshire and        Cemetery and visits to the homes of          On 9/11 Insurance . . . . . . . . . 6
New York approved the program for a       past and present well-known person-        Professional Certification
minimum of four CEUs). Accredited         alities. The tour ends with lunch at         Program Notice . . . . . . . . . . . 7
topics and speakers include:              the Red Fish Grill in the French           New Certified Members . . . . . 10
s “Mold – Why It Is Not The Next          Quarter. All Mid- (continued on page 2)
  New Orleans Meeting                         from the concierge with dinner reser-
                                              vations (be advised, most upscale
                        Year Meeting
  (continued from page 1)                     restaurants in New Orleans require
  attendees are invited to the Friday         men to wear a jacket).
  evening reception at the hotel and             With the run-off election for a
  dinner at GW Fins, one of New               U.S. Senate seat scheduled to take
  Orleans newest, fine-dining establish-      place on Saturday, December 7, New
                                                                                              A publication of the
  ments.                                      Orleans should be even more excit-            National Association of
     The Ritz-Carlton New Orleans is          ing and festive than usual for NAPIA         Public Insurance Adjusters
  Louisiana’s only AAA Five Diamond           members and guests attending the
  hotel, and it is ideally situated on his-   2002 Mid-Year Meeting. For further                   OFFICERS
  toric Canal Street at the edge of the       details on the agenda, professional         Stephen L. Seeherman, SPPA
  French Quarter. On property, guests         education program or other aspects of                 President
  will enjoy restaurants, lounges, live       the December 5-7 event, please refer             W. Wesley Baldwin
  entertainment and a world-class spa.        to convention related articles in this           First Vice President
  Call 504-524-1331 to make arrange-          newsletter or call headquarters at             Richard S. Cohen, SPPA
  ments for a spa treatment or for help       703-433-9217.                                    Second Vice President
                                                                                             W. Richard Burr, SPPA
                                                                                              Third Vice President
                                                 The Ritz-Carlton                             Leslie L. Knox, SPPA
          Sites in New Orleans include the
                                                  New Orleans                                  Fourth Vice President
    Cathedral at Jackson Square and above                                                       Harvey M. Lewis
     ground graves at Lafayette Cemetery.               Information for
                                                   Mid-Year Meeting attendees
                                                                                               Nicole Figlin, SPPA
                                                   Address: 921 Canal Street
                                                     New Orleans, LA 70112                         DIRECTORS
                                                  Telephone: (504) 524-1331                 James R. Beneke, SPPA
                                                   Facsimile: (504) 524-7233               Patrick W. Bickford, SPPA
                                                 Website:              R. Scott deLuise, SPPA
                                                      hotels/new_orleans/                      Steven Gutenplan
                                               Transportation: The Ritz-Carlton                 Jack Kunz, SPPA
                                                                                          Drew D. Lucurell, Esq.; SPPA
                                                 does not offer a shuttle service
                                                                                                  Robert Miller
                                               between the airport and the hotel;           Michael Palache, SPPA
                                                 however, taxis are plentiful and            Ronald R. Reitz, SPPA
                                                the one-way fare is $28 for 1 or 2           Michael Rubin, SPPA
                                                  people, $36 for 3 people, and                Diane M. Swerling
                                                        $50 for 4 people.                 Charles R. Tutwiler, CPCLA

                                                                                             Brian S. Goodman, Esq.
                                                                                           2300 Charles Center South
                                                                                             36 South Charles Street
                                                                                              Baltimore, MD 21201
                                                                                           Telephone: (410) 539-2800
                                                                                            Facsimile: (410) 659-0543

                                                                                                EXECUTIVE STAFF
                                                                                       David W. Barrack, Executive Director
                                                                                         Jonathan Bein, Deputy Director
                                                                                           21165 Whitfield Place, #105
                                                                                            Potomac Falls, VA 20165
                                                                                           Telephone: (703) 433-9217
                                                                                            Facsimile: (703) 433-0369

                                                                                              MANAGEMENT FIRM
                                                                                        Barrack Association Management
                                                                                               Potomac Falls, VA

2 NAPIA Bulletin Fall 2002
About the Mid-Year Meeting Seminar Speakers

Two professional education seminars will take place during the       Randy J. Maniloff, Esq. is with the Philadelphia law
2002 NAPIA Mid-Year Meeting in New Orleans. The follow-           firm of Christie Pabarue Mortensen and Young. Admitted
ing is a brief resume of each speaker.                            by the Pennsylvania and New Jersey Bars in 1991, his area
    Joel P. Gumbiner, Esq. is Senior Partner of Gumbiner          of practice is insurance law.
& Eskridge, LLP, a Northern California law firm specializ-           Mr. Maniloff received his B.S. from Pennsylvania State
ing in insurance coverage and bad faith claims and litiga-        University in 1988 and his J.D. from Temple University
tion. The firm was formed in 1988 by Joel Gumbiner and            School of Law in 1991. He has published numerous works
his former partner, David Rudy, to represent individual and       on insurance issues, a sample of which include:
commercial insureds in commercial property, personal              s “Mold: The Hysteria Among Us, Environmental
lines, health, life and disability disputes with insurers. Mr.    Claims Journal, Summer 2002”
Gumbiner has represented hundreds of insureds in claims           s Asbestos: Insurance Coverage Issues on a Changing
and/or litigation (trials and appellate cases) arising out of     Landscape, Mealey’s Litigation Report: Insurance, July 9,
all manner of insurance disputes.                                 2002
    In addition, Mr. Gumbiner was co-counsel in the land-         s Defendant’s Response Vital to Asbestos Cover, Business
mark California Supreme Court case of Garvey v. State             Insurance, July 1,2002
Farm (1989) 48 Cal.3d 395, which has been widely cited            s Mold: 5 Reasons Why It Is Not The ‘Next Asbestos’,
nationwide as the leading case on concurrent causation            Mealey’s Litigation Report: Insurance, May 7, 2002
under first party property, all-risk policies.                    s Construction Defect Litigation and the Mysterious
    Mr. Gumbiner has lectured and spoken before many              Insurance Crisis, Mealey’s Litigation Report: Insurance,
groups on insurance related matters including the                 March 26, 2002
American Bar Association, Northern California                     s 2001: A Case Odyssey - The Year’s 10 Most Significant
Association of Insurance Claims Representatives and               Insurance Coverage Decisions, Mealey’s Litigation Report:
Attorneys, National Association of Public Insurance               Insurance, February 5, 2002
Adjusters, United Policyholders, Commercial Insurance,               In addition, Mr. Maniloff has spoken before numerous
Insurance Educational Association INS 23, and other               groups, such as the CPCU Society, Chicago Claims
insurance-related groups.                                         Association, and Strategic Research Institiute.

Mid-Year Meeting Seminars Summary
MOLD: WHY IT IS NOT THE                     considered during his presentation          and excess insurer (Hartford) in litiga-
“NEXT ASBESTOS’                             include:                                    tion between 1998 and 2002. The case
Randy J. Maniloff, Esq., of Christie,          1. The volume of mold claims will        resulted in a settlement of $22.5 mil-
Pabarue, Mortensen and Young, P.C.,         not enable duplication of the ‘Asbestos     lion just prior to the start of trial.
presents the first program of profes-       Business Model.’                                The case arose out of flood damage
sional education at the 2002 NAPIA             2. Most mold claims are for proper-      to the foundation of one of the run-
Mid-Year Meeting with his seminar           ty damage under First-Party Policies.       ways in the Reno Airport’s airfield,
entitled, “Mold: Why it is not the             3. Mold exclusions will likely be far    and presented literally dozens of cover-
‘Next Asbestos’.” In his commentary         more effective than asbestos exclusions     age and claims adjustment issues
article reprinted from the May 7, 2000      in limiting insurers’ financial exposure.   which were addressed by the court in
issue of Mealey’s Litigation Report:           4. Mold is likely to have a much         at least three dozen motions, including
Insurance, Mr. Maniloff notes that          shorter trigger period than asbestos.       twelve summary adjudication motions
mold has been the subject of much dis-         5. The present financial state of he     on coverage issues alone.
cussion lately within the insurance         insurance industry does not bode well           Joel P. Gumbiner, Esq., a senior part-
industry, as well as by others effected     for mold.                                   ner in the firm, will focus on the cover-
in their own right, such as lawyers,                                                    age issues presented in the case (includ-
environmental consultants and con-          RUNWAY 7/25 – A CASE STUDY OF               ing issues arising out of the underwriting
sumer groups. And when the subject          THE RENO AIRPORT FLOOD                      of both the primary and excess policies
comes up, it doesn’t take long for          In a case arising out of the flooding in    at issue in the case). He will also exam-
someone to chime in that mold is the        Reno, Nevada, on January 2 & 3,             ine numerous adjustment matters arising
‘next asbestos.’ While mold is certainly    1997, Gumbiner & Eskridge LLP rep-          out of the handling of the claim by both
a cause for legitimate concern by the       resented the Airport Authority of           the Chubb and Hartford claims repre-
insurance industry, Mr. Maniloff cites      Washoe County (Reno/Tahoe                   sentatives and Adjusters International,
several reasons why it doesn’t warrant      International Airport) in a case            the public adjusting company represent-
such an ambitious label. Areas to be        against the primary insurer (Chubb)         ing the Airport Authority.

                                                                                                        Fall 2002 NAPIA Bulletin 3
  MAPIA/NAPIA Seminar                        Questions and Answers from the
                        appear on p. 4.)
  (continued from page 1)
                                             FC&S Bulletin
     The seminar was approved for
  continuing education credits by the        The following questions and answers from the FC&S Bulletin are a few that were
  State Insurance Departments of             used by speaker Michael McCracken to stimulate discussion at the October 4,
  Massachusetts, New Hampshire and           2002 MAPIA/NAPIA Insurance Seminar in Boston:
  New York (approval from North
  Carolina is still pending)                 COVERED PROPERTY
     All attending CPPAs and SPPAs           Question Our insured (CP 0010) had an extensive fire at his hotel. On top of the
  also received six credits under the        hotel was a nonfunctional water tower valued at about $40,000 to replace.
  NAPIA Professional Certification                The insurance company feels they shouldn’t have to include the cost of the water
  Program.                                   tower because it was not functional and therefore had no value. We have three reasons
     In addition to the professional edu-    to believe that the insurer should pay the $40,000 to replace the water tower:
  cation seminars to take place during            1) there could be a future potential function for the tower;
  the December 5-7, 2002 NAPIA Mid-               2) the tower is a part of the building and does have a value even though at this time
  Year Meeting in New Orleans, the           it is nonfunctional (and could even be considered decorative); and
  association is currently planning insur-        3) when you insure a structure, you insure the complete structure whether a portion
  ance seminars for next spring in Los       of it is functional or not.
  Angeles and Miami. More details on              How should the tower be adjusted?
  the seminars will be available soon.
                                             Answer The commercial property policy (CP 0010) makes no reference to func-
                                             tional or nonfunctional property. Rather, it only talks about covered and noncov-
         NAPIA                               ered property.
                                                 Covered property includes the building and its permanently installed struc-
      Recognizes                             tures. The water tower qualifies as covered property. If the insured has met any
    Meeting Sponsors                         coinsurance requirement for insuring to value, then the building – including the
                                             water tower – is covered to the full limit of the policy. If the insured has not met
      NAPIA is pleased to recognize          the coinsurance requirement, the penalty will apply, lowering the amount avail-
     the following firms for participat-     able to cover the loss and capping recovery.
        ing as sponsors at the 2002              Denying coverage for the water tower because it is “nonfunctional” is like
             Mid-Year Meeting                denying coverage on an unused second story of a building. It is not correct to
                                             reduce the value of a building due to the non-use of a portion of that building. It
         CLEAN TECH DISASTER                 is just as incorrect to reduce coverage for the loss due to the non-functionality of
             RESTORATION                     a building structure. The tower should be included in the insurance recovery.
              Wichita, KS
        Sponsored Event: Thursday            DIRECT VS. INDIRECT DAMAGE
           Welcome Reception                 Question Our HO-3 insured recently lost much of his food in his refrigerator due to a
                                             lightning strike. The lightning struck a nearby power pole, the electricity went out, and
                                             the food in this refrigerator spoiled.
             & CUMMINS
                                                 The insurer has denied payment for the food. We believe the insured’s food suffered
            New York, NY
                                             lightning damage.
        Sponsored Event: Friday
         Continental Breakfast
                                             Answer The insurer is correct. The HO policy covers direct damage. The food
         IBS-ESA SOUTH, INC.                 spoiled as a result of the power pole being struck and the electricity going out.
         Panama City Beach, FL               ISO offers an endorsement (HO 04 98) to pick up this exposure.
    Sponsored Event: Friday Luncheon
                                             COVERAGE ISSUES
         IBS-ESA SOUTH, INC.                 Question Our client has a small warehouse insured on a CP 00 10. The building was
         Panama City Beach, FL               completely destroyed and, since our insured does not intend to replace it, the insurer has
    Sponsored Event: Friday Reception        agreed to an actual cash value settlement.
                                                At issue, however, is the additional $10,000 debris removal coverage, which will be
       Mid-Year Meeting attendees are
                                             needed when the building is completely leveled. The insurer states the building must be
    encouraged to spend a few moments
                                             repaired or replace before this amount can be paid.
      with representatives of the above
                                                We disagree. Can you help?
     firms during their sponsored events
    to express our appreciation for their
                                             Answer The CP 00 10 contains no requirement that the building be repaired or
         generous support of NAPIA.
                                             replaced before debris removal coverage is available. The policy states that an
                                             additional $10,000 ($5,000 in the 1991 form) per location is      (continued on page 6)

4 NAPIA Bulletin Fall 2002
Fall 2002 NAPIA Bulletin 5
  Questions and Answers                        to the extra water, the basement wall col-   increased cost of construction cover-
                                               lapsed.                                      age. CP 10 30 has a new exclusion
                        available if one of
  (continued from page 4)                          The insurer denied the claim, citing     “h,” and additional coverage “E.”
  the following occurs:                        general exclusion 1.c. This exclusion        Comments on Terrorism: Current
     1. If the sum of the direct physical      eliminates damage caused by flood, sur-      forms say nothing about terrorism,
  loss and debris removal expense              face water, and water below the surface      they only exclude war (and 9/11 does
  exceeds the limit of insurance; or           of the ground.                               not meet the definition of war). New
     2. If the debris removal expense              We contend that if the eaves trough      IL endorsement IL 09 37 01 02 has a
  exceeds the 25% limitation.                  had not separated, the water would have      rewritten war exclusion that includes
     Neither in the description of the         been diverted and, thus, would not have      exclusion on terrorism.
  additional coverage nor under the loss       caused the problem. We also don’t think      Comments on Data: Current forms
  payment conditions does the policy           that the damage suffered by our insured      treat electronic data badly. The new
  require repair or replacement of the         meets the definition of “water damage” in    forms are not much better.
  building in order to collect debris          the exclusion.
  removal.                                         What are your thoughts?
                                                                                            9/11 Insurance
  VALUATION OF DAMAGED PROPERTY                Answer Falling rain – regardless of
  Question Our H0-3 insured built a            how heavily it falls – is not flood or       Measure Passes
  new home 3 years ago. The appliances         surface water. Neither is it backing up      U.S. Congress
  were warranted for anywhere between 6        though sewers or drains; nor is it
  months and 2 years. However, he pur-         below the surface of the ground. Each
  chased 5-year extended warranties on all     of these terms has a specific meaning;       Washington, D.C. (Reuters) -
  appliances – stove, refrigerator, water      each meaning sharply different from          Legislation that would guarantee
  softener, garbage disposal, water heater,    falling rain.                                U.S. government backing for insur-
  dishwasher, and heat pump.                       In this case, the rain collected in      ance companies in the aftermath of
      He recently suffered a severe fire in    the window well and thus never               another attack like that on Sept. 11,
  the kitchen. The fire destroyed all of the   became surface water. Once falling           2001 has cleared the U.S. Congress.
  above appliances except the water heater     rain reaches the ground, it may                 President Bush welcomed passage
  and the heat pump. The homeowners            become surface water (run-off of melt-       of the bill, which passed the Senate
  insurer is willing to replace the appli-     ing snow or rain that meanders over          by a vote of 86-11 and was recently
  ances, but has refused to pay for the        the surface of the ground) or water          approved by the House of
  unexpired portion of the extended war-       below the surface of the ground; how-        Representatives. Bush said he would
  ranties.                                     ever, in this case, it never reached the     sign the legislation.
      We believe the value of those war-       ground or ran off, but went straight            The House passed the bill after a
  ranties should be included in the settle-    from the roof into the window well.          group of House Republicans and the
  ment, but have been unable to convince           Since the HO-3 is an open perils         White House reached a deal with
  the insurance company adjuster.              form, the loss must be specifically          Senate Democrats on legal liability
      Should the value of the warrant be       excluded. Only certain causes of water       provisions. The bill would consoli-
  included or not?                             damage are excluded, and “falling            date lawsuits in federal court against
                                               rain” is not one of them.                    companies or people stemming from
  Answer The value of the warranties               The exclusion cited does not apply       another attack. Bush said he would
  should be included in the replacement        in this case and the loss should be          encourage the new Republican-con-
  cost valuation of the damaged appli-         paid.                                        trolled Congress to seek greater limits
  ances. Insurance policies are contracts                                                   to lawsuits.
  of indemnification. As such, the poli-       CHANGES IN THE CP 00 10 AND CP                  Individual companies could begin
  cyholder should be placed in the same        10 30 (MOLD, TERRORISM, DATA)                to collect federal aid once claims
  condition after the loss as before the       Comments on Mold: The Ballard                from an attack exceeded an amount
  loss. The adjuster many want to pro-         Case was a plumbing leak that result-        based on a percentage of the premi-
  rate the value of the warranty, but it       ed in mold growth. The insurance             ums they collect from policyholders.
  should be considered.                        company didn’t resolve the claim             However, they would have to partly
                                               properly and was sued by the insured,        repay the government unless claims
  INTERPRETATION OF CERTAIN                    resulting in a $35 million verdict. It       by all insurers exceeded $10 billion.
  EXCLUSIONS                                   was a bad faith verdict.                        The government would provide
  Question Our insured’s home is writ-            Current forms (CP 10 30 10 00)            aid up to $100 billion in total claims,
  ten on form HO-3. During a recent            exclude fungus (mold is a fungus) and        at which point Congress would have
  storm, 4 inches of rain fell in a short      the intent is to exclude only long-          to decide how to proceed. The pro-
  time. The eves trough separated from the     term. It covers mold that grows due to       gram, which would be administered
  home, and so most of the rain hitting the    a covered event. The new form (CP            by the Treasury Department, would
  roof went down into a window well. Due       00 10) has a definition of fungus and        last for three years.

6 NAPIA Bulletin Fall 2002
Professional                            January 1 of the year in which the
Certification                           designation is earned. While a tran-      Future
                                        sition to the new review period was
Program Rules &                         being made, the committee extend-
Regulations                             ed review periods and granted for-       & Events
                                        bearance to all those designee’s who
Revised                                 showed a good faith effort to           MID-YEAR MEETING
                                        achieve compliance with the                 Ritz Carlton
                                        requirements. Recently, however, it       New Orleans, LA
Changes to the NAPIA Professional       was necessary to revoke fourteen         December 5-7, 2002
Certification Program were recently     designations. Failure to accumulate
approved by the Professional            the required CEU’s or to pay the         ANNUAL MEETING
Certification Committee and             annual records maintenance fee is       Ponte Vedra Inn & Club
reported to the Board of Directors.     grounds for revocation of any            Ponte Vedra Beach, FL
These changes relate to the report-     earned designation.                        June 18-22, 2003
ing period for continuing education         Contact headquarters for clarifi-
credits and the number of credits to    cation regarding the above revi-        MID-YEAR MEETING
be awarded at the Annual and Mid-       sions or if you have other questions      Charleston Place
Year Meetings. Section 6. A., in the    about the Professional Certification       Charleston, SC
“Professional Certification Program     Program. And remember, submis-           December 4-6, 2003
Rules and Regulations” was revised      sions for continuing education
(revisions are underlined) to read as   credits from non-NAPIA sponsored        ANNUAL MEETING
follows:                                programs must be accompanied by a       Nemacolin Woodlands
   Requirements shall be fifteen        syllabus and evidence of course           Farmington, PA
Continuing Education Units              completion.                               June 9-13, 2004
(CEU’s) during each two calendar
year period, beginning with the
period following the award of the
designation. Subject to approval by
the Professional Certification
Committee and adoption by the
Professional Education Committee,
education programs at the Annual
Meeting, Mid-Year Meeting and
other NAPIA-sponsored events
shall count as CEU’s, subject to the
curriculum and syllabus for each
program. Actual attendance at such
education programs will be required
and recorded by the NAPIA
Executive Secretary under the
direction of the Professional
Certification Committee.
Designations awarded based on the
examination in June and December
begin the two-year period on
January 1st of the next calendar
year, and end on December 31st
two years hence.
   As revised, Section 6.A. no
longer limits the number of credits
awarded for programs at the Annual
and Mid-Year Meetings. The list of
courses qualifying for continuing
education credits has also been
   Other changes simplify the
review process by establishing a sin-
gle review period that begins

                                                                                     Fall 2002 NAPIA Bulletin 7
  Alliance Urges                            “The department now has begun
  Maryland not to                           approving national homeowners                    Member News
                                            forms, thus giving insurers more
  Mandate Mold                              freedom to underwrite and cus-
                                            tomers more product choices,”                    The Association is pleased to
  Coverage                                  Hansen said. He added that a                     announce the following new
                                            majority of states have seen the                        member firm:
  Annapolis, MD — The Alliance of           wisdom of this approach, with
  American Insurers recently urged          insurance departments in 36 states                 ALLIANCE ADJUSTMENT
  the Maryland Insurance                    and the District of Columbia hav-                       GROUP, INC.
  Administration not to impose cov-         ing approved homeowners exclu-                        Doylestown, PA
  erage mandates for mold, saying           sions for mold. “The insurance                       (R) James Wagner
  such an approach will only hurt           industry functions best when free-                     (A) Gary Lorio
  consumers by disrupting the state’s       market forces are allowed to oper-
  homeowners insurance market.              ate,” he said. “Consumers are best              Congratulations to Raymond
  “Any appropriate solution to the          served when the free market is                  Altieri, Jr., CPPA, of Transco
  mold issue must address availability,     allowed to decide what coverages                American Claims as he begins
  affordability and choice, otherwise       should be offered and for what                    serving his second term as
  the Maryland consumer will be the         price.”                                            President of the Florida
  ultimate loser,” said Neil Malady,           Reprinted, with permission, from            Association of Public Insurance
  Alliance Mid-Atlantic regional            “The INSURANCE-LETTER,” a                         Adjusters (FAPIA). Altieri
  manager speaking at an informa-           published daily Monday - Friday,               served as FAPIA’s first president
  tional hearing.                           transmitting news stories of the entire                  from 1993-94.
     “Extensive coverage for mold           insurance industry.
  was never contemplated in insur-
  ance underwriting and pricing until
  recently,” explained Kirk Hansen,
  Alliance director of claims. “And
                                            Insurance Regulators Detail
  mandating its coverage will only          Responsibilities of Insurers Within
  create financial instability for insur-
  ers and availability and affordability
                                            Terrorism Risk Insurance Act of 2002
  problems for consumers. By allow-         Regulators Recommend Insurers Take Action in Preparation for Congressional Signing
  ing insurers to offer a variety of        of the Act.
  coverages at a range of prices, con-
  sumers would be allowed to choose         Kansas City, MO. (Nov. 13, 2002) — Members of the National Association of
  the coverage they need at a price         Insurance Commissioners today recommended that insurers take steps to prepare
  they can afford.” Hansen noted that       for action by Congress on the Terrorist Risk Insurance Act of 2002. According
  wherever mold coverage has been           to NAIC President and Iowa Insurance Commissioner Terri Vaughan, insurers
  mandated, it has resulted in higher       should familiarize themselves with the provisions of the act now and be ready to
  claims costs that have led to higher      meet the required and immediate time deadlines should it be enacted into law.
  insurance premiums. “Texas’ experi-       “The act requires insurers to move quickly to provide rate quotes for new poli-
  ence should serve as an excellent         cies and send disclosure notices to existing policyholders,” Vaughan said. “The
  example as to why Maryland                act provides for general nullification of contractual provisions excluding cover-
  shouldn’t mandate coverage for            age for acts of terrorism that were in force on the date the act is signed into law.
  mold,” he said. “Because Texas in         The act also provides for preemption of state policy language approvals related
  the past mandated use of a home-          to exclusions for acts of terrorism. “To meet the notice requirements in the act,
  owners policy that did not require        each insurer should determine now what rates it will charge for providing cover-
  water discharge to be sudden and          age for acts of terrorism beneath the federal participation thresholds,” Vaughan
  accidental, as required by standard       said. “States will work together to make the implementation process as smooth
  policies in most other states, it has     as possible for insurers.”
  the dubious honor of having the               The NAIC Property and Casualty Insurance Committee, chaired by South
  highest homeowners premiums in            Dakota Insurance Director Darla Lyon, will be drafting a bulletin describing spe-
  the nation.”                              cific steps that insurers must take to comply with the act and state insurance regu-
     On top of that, he noted that          latory requirements. The model bulletin will contain information about the act, as
  the Insurance Department estimat-         well as a model disclosure form and expedited filing procedures. The model bul-
  ed Texas consumers would face             letin and related documents will be posted on the NAIC Web site as soon as they
  double-digit rate increases for the       are available. For further information, visit the NAIC Web site at
  next several years if insurers                Reprinted, with permission, from “The INSURANCE-LETTER,” a published
  weren’t allowed to limit coverage.        daily Monday - Friday, transmitting news stories of the entire insurance industry.

8 NAPIA Bulletin Fall 2002
NAPIA Educational Seminars Available on Videotape
Videotapes of the educational sessions listed below are available from   “The Corporate Culture of Insurance Companies,”
NAPIA for $75. To order, contact NAPIA headquarters. Orders              by William Burns, SPPA (1998 Mid-Year Meeting)
placed within 30 days of the seminar will receive a $15 discount.        “Issues, Concerns and Proving the Damages,” by Merle and
                                                                         Jeff Schwenk (1998 Mid-Year Meeting)
“Valued Policy Law & Broad Evidence Rule in the Wake of                  “Presenting the Case for Retaining a Professional Public
Hurricane Andrew,” by William F. Merlin, Jr., P.A. (1992                 Insurance Adjuster,” by Eugene R. Anderson, Esq.
Mid-Year Meeting)                                                        of Anderson Kill & Olick, P.C. (1999 Annual Meeting)
“How to Find Coverage in a First Party Contract,” by David               “Increased Costs Due to Construction Defects: Are
W. Rudy, Esq., Rudy & Gumbiner (1993 Mid-Year Meeting)                   Insureds Leaving Money on the Table?” by Theodore L.
“The Benefits of Using a Construction Cost Estimator in                  Senet, Esq. of Gibbs, Giden, Locher & Turner, L.L.P. (1999
Claims Adjustment,” by Lee Saylor, Saylor Group (1993 Mid-               Annual Meeting)
Year Meeting)                                                            “From the Files of FC&S,” by Michael K. McCracken,
“The Process of Bad Faith Litigation and Comparative Bad                 Associate Editor of the FC&S Bulletin (1999 Annual Meeting)
Faith Litigation,” by Arnie Levinson, Esq., Pillsbury, Levinson          “Assessing the Impact of Indoor Air Contamination on
& Mills (1993 Mid-Year Meeting)                                          Your Property Damage Claim,” by Neil S. Witkes, Esq.
“Status of Appraisal Process vs. Company Move to                         of Manko, Gold & Katcher (1999 Annual Meeting)
Arbitration,” by Mark Pistorius (1994 Annual Meeting)                    “How to Use Technical Experts Effectively,” by Ali Reza,
“Forecasting of Sales & Earnings Business Income Claims,”                P. E., Principal Engineer, Thermal Sciences, Exponent Failure
by Paul Marshall, Ph.D. (1994 Annual Meeting)                            Analysis Associates (1999 Mid-Year Meeting)
“Misreading Fire Scenes–Incendiary or Not?” by Alan                      “Handling an Apartment Complex Loss: The Implied
Milstein, Esq. (1994 Annual Meeting)                                     Co-Insured Doctrine,” by Brian S. Goodman, Esq. of Wright,
“Informing the Client: Avoiding Unreasonable Expectations                Constable & Skeen, LLP (1999 Mid-Year Meeting)
(or Worse) Through Common Sense Communications,”                         “When is Foundation Settlement Normal? Claim Settlement
by David Galanti, Esq. (1995 Annual Meeting)                             Tactics,” by Bradley K. Moss, Esq., Mesirov, Gelman, Jaffe,
“Subrogation,” by Arthur S. Alexion, Esq., and Miles A.                  Cramer & Jamison (1999 Mid-Year Meeting)
Jellinek, Esq., of Cozen and O’Connor (1995 Mid-Year                     “The Use of Subrogation by the Insured,” by Lawrence
Meeting)                                                                 Bowman of Cozen & O’Connor (2000 Annual Meeting)
“Stop Taking Pennies on the Dollar,” by Mike Rossi, Esq.,                “Lightning 101,” by Lynne Lawry of Global Atmoshpherics,
of Hill, Wynne, Troop & Meisinger (1995 Annual Meeting)                  Inc. (2000 Annual Meeting)
“Extra Contractual Damages–Practices and Pitfalls,”                      “Does the Innocent Co-Insured Recover Under a Fire
by Alan Casper, Esq. & Thomas Duffy, Esq. (1996 Mid-Year                 Policy,” by Alan Casper, Esq. (2000 Annual Meeting)
Meeting)                                                                 “Coverage Issues from the Perspective of the Insured,”
“Forecast for Public Adjusting,” by Stephen A. Cozen of                  by Scott S. Thomas, Esq., Payne & Fears LLP (2000 Mid-Year
Cozen and O’Connor (1996 Mid-Year Meeting)                               Meeting)
“Construction and Effect of Property Insurance Provision                 “Identification of In-Situ & Air Quality Pathogens & What
Permitting Recovery of Replacement Cost of Property,”                    to Do With Them,” by Dr. Douglas Rice, Ph.D., Colorado
by Randy R. Koenders, J.D. (1997 Annual Meeting)                         State University Environmental Health Services (2000 Mid-
“Business Interruption Insurance,” by William H. Danne, Jr.,             Year Meeting)
J.D. (1997 Annual Meeting)                                               “Mold Remediation & Mitigation Processes,” by Thomas
“Coverage Under All Risk Insurance,” by Jane Massey                      Adams of EnviroTest (2000 Mid-Year Meeting)
Draper, B.C.L. (1997 Annual Meeting)                                     “How Property Forms are Developed & Refined by ISO,”
“Business Interruption: Forecasts and Projections,                       by Domenick Yezzi of ISO Specialty Commercial Lines Dept.
Calculations, and Rebuttal of Insurance Company                          (2001 Mid-Year Meeting)
Positions,” by John I. Saloman, CPA (1997 Annual Meeting)                “Interpretation & Construction of Coverage Provisions,”
“Exploiting Ambiguity,” by Paul Dudey, CPCU (1997 Mid-                   by Jo Robin Davis, Esq. (2001 Mid-Year Meeting)
Year Meeting)                                                            “The History & Application of Troublesome Phrases in
“Anatomy of a Complex Case: Adjustment Through                           ISO Forms,” by Joshua Gold, Esq. (2001 Mid-Year Meeting)
Litigation–Post Fire Residues in the HVAC?–Have the                      “Withholding of Profit & Overhead,” by William Merlin,
Adjusters and Lawyers Got Their ‘Ducts’ in a Row?” by                    Esq., of Gunn Merlin Professional Association (2002
Joel Gumbiner, Esq., Jack Eskridge, Esq., & Randy Goodman,               Annual Meeting)
SPPA (1998 Annual Meeting)                                               “Definition of Damage & Replacement,” by Stephen
“The Public Adjuster as Expert Witness: Working with                     Lopez, Esq., Law Offices of Greer & Associates (2002
Attorneys in Litigation and Mediation,” by David W. Skeen,               Annual Meeting)
Esq. (1998 Annual Meeting)

                                                                                                             Fall 2002 NAPIA Bulletin 9
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10 NAPIA Bulletin Fall 2002

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