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  Feb. 05, 2013

One-page policy summary bill passes Assembly, Senate Committee

On Feb. 4, 2013, the New Jersey State Senate Commerce Committee voted to approve A-3642, which now is ready for a floor vote. This bill, which previously passed the Assembly would require homeowners policies’ consumer information booklet to contain a plain-language one-page summary of the policy that includes information on the policy’s hurricane deductible, other flood insurance provisions and notable coverages and exclusions. The bill was amended to make clear that this summary does not alter the coverage provided in the policy or in any way afford rights or protections beyond those expressly stated in the policy, and is for guidance purposes only.   

Public adjuster compensation limit bill reported from Senate Committee

S-2474, a bill that seeks to constrain compensation for public adjusters was passed by the Senate Commerce Committee. According to the statement, the bill, introduced by Sen. Nia H. Gill, D-34, provides that "no individual, firm, association or corporation licensed under the "Public Adjusters’ Licensing Act" shall charge, agree to, or accept any compensation in excess of 10 percent of the amount of insurance claim payments made by the insurer for claims based on events that are the result of a catastrophic loss occurrence."   

Consumer Protection Act of 2012 introduced in the Assembly

A-3710, also known as the "Consumer Protection Act of 2012," has been introduced in the state Assembly. The bill would establish a private cause of action for insureds or their assignees regarding unfair practices in the settlement or attempted settlement of insurance claims arising out of property/casualty insurance policies. The bill would provide that a claimant may, regardless of any action by the commissioner of Banking and Insurance, file a civil action in a court of competent jurisdiction against its insurer for any violation regarding unfair claim settlement practices, notwithstanding that the insurer did not violate any applicable provision with enough frequency as to indicate a general business practice. Currently, PIANJ is monitoring this bill and will keep members informed of its movements.   

Senators call for Sandy aid to help N.J. homeowners impacted by FEMA flood maps

Last week, U.S. Sens. Frank R. Lautenberg, D-N.J., and Robert Menendez, D-N.J., called on the U.S. Department of Housing and Urban Development to make additional resources available to New Jersey homeowners who are in the process of rebuilding after Superstorm Sandy and have found their homes subject to new elevation requirements under Federal Emergency Management Agency’s interim floodplain maps. In a letter to HUD Secretary Shaun Donovan, the senators called for the use of new Community Development Block Grant funds allocated in the Sandy disaster relief bill to pay for home elevations.   

Article explains where Sandy aid will be spent

An article written by the Associated Press examines how the money passed in the Sandy-aid bill, which recently was signed into law by President Barack Obama, will be spent. According to the article, the largest portion of funds —$16 billion—will go toward "Housing and Urban Development Department community development block grants. Of that, about $12.1 billion will be shared among Sandy victims as well as those from other federally declared disasters in 2011-13. The remaining $3.9 billion is solely for Sandy-related projects."   

MVC and DCA creates online flood-damaged vehicle database

The New Jersey Motor Vehicle Commission and Division of Consumer Affairs announced a partnership to educate the public and prevent consumers from unknowingly inheriting the problems of a vehicle damaged by Superstorm Sandy. The most notable component of the partnership is the creation of an online Vehicle Identification Number database that consumers may access 24/7 to verify whether a vehicle was damaged due to flooding or other means. More than 13,000 vehicles, which have been processed by the MVC as either flood- or salvage-titled since Oct. 27, 2012, are posted in an easily searchable database on the Consumer Affairs website by VIN, make, model and year. While it is not illegal to sell a vehicle with either a flood or salvage title, specific requirements exist to ensure the status of such vehicles is disclosed to potential purchasers.   

Upcoming Webinars to focus on storm preparedness

PIA has prepared a series of CE Webinars to focus on these and other disaster-related issues, presented by nationally recognized flood and agency management expert Rita Hollada, CIC, CPCU, CPIA. Each Webinar is appropriate for agency management as well as agency sales and service personnel. Lessons Learned from a Superstorm, Wednesday, Feb. 20, 2013, from 10 a.m.-1 p.m. (NJCE: 3 GEN) will focus on insurance issues and coverage concerns. The program will detail coverages,  limitations and exclusions in property and flood insurance policies; it will discuss the ongoing challenges our industry will face as the result of this storm; and will address reconstruction concerns and new flood elevation standards . Avoiding E&O in Writing Flood Insurance^FF^UM, Tuesday, March 5, 2013, from 10 a.m.-1 p.m. (NJCE: TBA). This course will review the NFIP rules and procedures of concern to agents and policyholders; explore common causes of E&O claims against agents for failure to advise the insured of unique definitions, limited scope of coverage as well as alternative coverages; and enumerate practices to prevent E&O situations at the agency level. Real-life claim scenarios will be reviewed. ^FF^UM—This course has been approved for E&O loss-prevention credit for Fireman’s Fund and Utica Mutual. Disaster Planning: Preparation for the Next Disaster, Tuesday, March 19, 2013. (NJCE: TBA). This course will focus on ways you and your agency can be better prepared for any future disasters—natural or man-made. This program will help you to develop a plan to mitigate damage to your home, your agency and your community; and ensure that your agency is able to operate effectively without power, phone service, Internet connection or even access to your agency building. PIA’s Disaster Planning Manual and other resources will be reviewed. For more information, or to register, click here.   

Sam Friedman suggests including an opt-out for flood coverage in home and business policies

Research Team Leader at Deloitte’s Center for Financial Services Sam Friedman posits: What if federal flood insurance was added automatically to all home and business owner policies—at least for properties in higher-risk zones? The policy and any bill delivered would include a cover sheet explaining that flood coverage is being offered, while emphasizing that keeping it is voluntary. People could choose to opt-out at the time of purchase or when they pay their bill. But, they would be warned in no uncertain terms that by refusing the optional coverage, their home or business would be exposed to substantial out-of-pocket losses if a flood should hit. The potential upside is that many more people may end up buying insurance for flood and not be left exposed if a disaster like Sandy strikes again. They can rebuild more quickly, and be less dependent on FEMA grants and loans. There would also be less negative publicity about policyholders being sold insurance with a gaping hole for flood damages, and likely fewer E&O suits against agents and coverage litigation with carriers.   More…

AAIS introduces optional "cosmetic" damage exclusion

Homeowners insurers would not have to pay for wind and hail damage that is merely "cosmetic" under an exclusion developed by the American Association of Insurance Service. The exclusion, available as an optional policy endorsement, would exclude coverage for exterior surfacing of walls, roofs and/or doors and windows, if wind and hail damage to such surfaces merely affects their appearance, but does not impair their ability to keep out weather elements. "Cosmetic damage claims drive up loss costs and premiums for all policyholders," says Susan Luecke, AAIS assistant vice president for personal lines. "Our cosmetic damage exclusion is an option we’re making available to help insurers mitigate their wind-hail losses and reduce the need for premium increases." For more, go here.   

U.S. Labor Department marks 20th anniversary of FMLA

Today, the U.S. Department of Labor marked the 20th anniversary of the signing of the Family and Medical Leave Act by issuing a final rule implementing two important expansions of FMLA protections. The first expansion provides families of eligible veterans with the same job-protected FMLA leave currently available to families of military service members and it also enables more military families to take leave for activities that arise when a service member is deployed. The second expansion modifies existing rules so that airline personnel and flight crews are better able to make use of the FMLA’s protections. More… PIANJ has a number of resources to help you understand the FMLA, including the following: QS90400Family Medical Leave Act; and QS29221Family leave laws in New Jersey—paid and unpaid.   

Employers get more time on health exchange notices

The March 1 deadline for employers to notify workers about health insurance exchanges available under the Affordable Care Act is being pushed back, the government said this week. Under a provision of the ACA, businesses need to provide to each employee a written notice informing them about the existence of exchanges and the employer’s cost-sharing plans. The original deadline for providing the notice was March 1, 2013. However, the Labor Department delayed the deadline, saying it was "committed to a smooth implementation process including providing employers with sufficient time to comply."   More…

January ACORD forms update

In the latest ACORD forms update, a new countrywide form ACORD 821, Producer Information Form, is introduced as a standard form used to initiate the relationship between the life, annuity, health and/or property/casualty producer and the carrier. This form is to be completed by a producer and then sent to the new carrier. Some sections on this form may not be applicable to some carriers; therefore, producers may need to contact the carrier to verify the appropriate sections to complete. This and other ACORD forms are now directly available under the ACORD Advantage Program. If you already are registered for the ACORD website, enter your username and password here.   

Marsh: Further firming expected in U.S. commercial insurance market in 2013

U.S. commercial insurance rates are expected to continue firming in many lines of business and industry sectors in 2013 as above average losses, subdued investment returns, and receding reserve releases impact insurers, according to a comprehensive report published by Marsh. However, traditional signs of a conventional hard market are not evident as price increases are not uniform, capacity is plentiful, and competition among insurers remains intense, Marsh said in its U.S. Insurance Market Report 2013. More…   

Fourth-quarter reports

The Chubb Corp. reported net income in the fourth quarter of 2012 of $102 million or $0.38 per share, compared to $452 million or $1.60 per share in the fourth quarter of 2011. According to Chubb’s fourth-quarter 2012 results, earnings call transcript, Dino E. Robusto, president of personal lines said: "Post Sandy, we plan to file for rate increases up to the low teens in some areas of the Northeast."  

More fourth-quarter reports

ACE Ltd. reported net income of $765 million for the fourth quarter of 2012, or $2.22 per share, compared with $735 million, or $2.15 per share, for the same quarter of 2011. Markel Corp. reported diluted net income per share of $25.89 for the year ended Dec. 31, 2012, compared to $14.60 in 2011.For the fourth quarter, Selective reported its net income per diluted share was $0.02 and operating loss was $0.04. Net income for the year was $0.68 per diluted share and operating income was $0.58 per diluted share. Overall net premiums written grew 5 percent in the quarter and retention was up a point to 85 percent. W.R. Berkley Corp. reported net income for the fourth quarter of 2012 of $165 million, or $1.17 per share, compared with $117 million, or $0.82 per share, for the fourth quarter of 2011.   

Company rating news

A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of "A" (Excellent) and issuer credit ratings of "a" of the insurance operating subsidiaries of American Safety Insurance Holdings Ltd. (Hamilton, Bermuda), which includes: American Safety Casualty Insurance Co., American Safety Indemnity Co. (both domiciled in Oklahoma City, Ok.), American Safety Reinsurance Ltd. (Hamilton, Bermuda) and its affiliate, American Safety Risk Retention Group Inc. (Burlington, Vt.). Concurrently, A.M. Best has revised the outlook to negative from stable and affirmed the issuer credit rating of "bbb" of ASI. According to A.M. Best, "The ratings are based on the consolidated financial condition and operating performance of ASRE and its three U.S. domestic subsidiaries and affiliate (entities), with each one receiving significant quota share reinsurance support from ASRE." More…  

14th annual March CE Madness 2013, March 20-21

Don’t miss out on this year’s March CE Madness, March 20-21, 2013, at the Sheraton, Edison Hotel Raritan Center, Edison, N.J. This year, take advantage of March Madness and learn more with the following concurrent sessions. Classes on March 20 include: 50 Months of Recession and its Effect on Your Clients’ Insurance Needs (NJCE: 4 GEN); Don’t Get Burnt—25 Potential E&O Issues^FF^UM (NJCE: 4 GEN); Personal Lines Customer Service, the Renewal Process and Customer Service Centers (NJCE: 3 GEN); The Businessowners Policy, ISO Style (NJCE: 3 GEN); Ethics: The Choices You Make (Earn NJCE: 3 ETH) Classes on March 21 include: Nasty Stuff You Don’t Want on Your Policy, If Possible (NJCE: 4 GEN); Good Stuff—Endorsements You Want On Your Policy, If Possible (NJCE: 3 GEN). Package registration discounts are available. Sponsored by: Platinum: Harleysville; Gold: FMI. For more information, or to register, click here or call PIA for more information at (800) 424-4244.   

Workers’ compensation for LLCs

New Jersey limited liability companies are no longer subject to mandatory workers’ compensation coverage, but may elect coverage as sole proprietors and partners are permitted to do. You can send to your commercial-lines customers a comprehensive consumer flier, Workers’ compensation election for sole proprietors, partners and LLC members, which explains workers’ compensation for sole proprietors, partners and LLC members. To access this document, log on to the PIANJ website and click "Agency Marketing Tool Kit" under "Tool kits," and then select "Consumer fliers," or fax a request to PIANJ’s Industry Resource Center at (888) 225-6935.   

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