BDI-Insurance

Recognition

2012-02-22T07:53:00.000-06:00

The Independent Insurance Agents of San Antonio held their Professional Development Recognition luncheon today at the Oak Hills Country Club.

Congratulations to our very own Mark Rankin for being the recipient of the 2012 CAM scholarship sponosored by the IIASA.

Also recognized at the luncheon today :

New ACSR Designees:

Kim Bowers

Delia Moreno

Mark Rankin

New CIC Designees:

Wes Becknell

Chris Stansel

New CSRM Designee:

Wes Becknell

10 Year Anniversary ACSRs

Gloria Burton

Martha Fellers

Sally Singley

Because BDI was recognized time and time again today, Bruce was acknowledged for his dedication to the insurance industry by promoting, supporting and encouraging the professional development of his staff.

Congratulations to all!

Here’s a holiday brochure by the US Consumer Product Safety Commission

2011-12-06T12:31:00.000-06:00

TreesMany artificial trees are fire resistant. If you buy one, look for a statement specifying this protection.
A fresh tree will stay green longer and be less of a fire hazard than a dry tree. To check for freshness, remember:
A fresh tree is green.
Fresh needles are hard to pull from branches.
When bent between your fingers, fresh needles do not break.
The trunk butt of a fresh tree is sticky with resin.
When the trunk of a tree is bounced on the ground, a shower of falling needles shows that tree is too dry.Place tree away from fireplaces, radiators and other heat sources. Heated rooms dry trees out rapidly, creating fire hazards.
Cut off about two inches of the trunk to expose fresh wood for better water absorption. Trim away branches as necessary to set tree trunk in the base of a sturdy, water-holding stand with wide spread feet. Keep the stand filled with water while the tree is indoors.
Place the tree out of the way of traffic and do not block doorways. Use thin guy-wires to secure a large tree to walls or ceiling. These wires are almost invisible. • • • • • "Snow"Artificial snow sprays can irritate lungs if inhaled. To avoid injury, read container labels; follow directions carefully.LightsIndoors or outside, use only lights that have been tested for safety. Identify these by the label from an independent testing laboratory.
Check each set of lights, new or old, for broken or cracked sockets, frayed or bare wires, or loose connections. Discard damaged sets or repair them before using.
Fasten outdoor lights securely to trees, house, walls or other firm support to protect from wind damage.
Use no more than three standard-size sets of lights per single extension cord.
Turn off all lights on trees and other decorations when you go to bed or leave the house. Lights could short and start a fire.
Never use electric lights on a metallic tree.
The tree can become charged with electricity from faulty lights, and any person touching a branch could be electrocuted! To avoid this danger, use colored spotlights above or beside a tree, never fastened onto it!
Keep "bubbling" lights away from children. These lights with their bright colors and bubbling movement can tempt curious children to break candle-shaped glass, which can cut, and attempt to drink liquid, which contains a hazardous chemical.
CandlesNever use lighted candles on a tree or near other evergreens.
Always use non-flammable holders.
Keep candles away from other decorations and wrapping paper.
Place candles where they cannot be knocked down or blown over.TrimmingsUse only non-combustible or flame-resistant materials.
Wear gloves while decorating with spun glass "angel hair" to avoid irritation to eyes and skin.
Choose tinsel or artificial icicles or plastic or non-leaded metals. Leaded materials are hazardous if ingested by children.
In homes with small children, take special care to:
Avoid decorations that are sharp or breakable.
Keep trimmings with small removable parts out of the reach of children. Pieces could be swallowed or inhaled.
Avoid trimmings that resemble candy or food. A child could eat them!FiresBefore lighting any fire, remove all greens, boughs, papers, and other decorations from fireplace area. Check to see that flue is open.
Keep a screen before the fireplace all the time a fire is burning. • • • Use care with "fire salts" which produce colored flames when thrown on wood fires. They contain heavy metals which can cause intense gastrointestinal irritation or vomiting if eaten. Keep away from children.PaperWhen making paper decorations, look for materials labeled non-combustible or flame-resistant.
Never place trimming near open flames or electrical connections.
Remove all wrapping papers from tree and fireplace areas immediately after presents are opened.
Do not burn papers in the fireplace. A flash fire may result as wrappings ignite suddenly and burn intensely. General Rules for Holiday Safety
Keep matches, lighters, and candles out of the reach of children.
Avoid smoking near flammable decorations.
Make an emergency plan to use if a fire breaks out anywhere in the home. See that each family member knows what to do. PRACTICE THE PLAN!
Avoid wearing loose flowing clothes—particularly long, open sleeves—near open flames - such as those of a fireplace, stove, or candlelit table.
Never burn candles near evergreens. Burning evergreens in the fireplace can also be hazardous. When dry, greens burn like tinder. Flames can flare out of control, and send sparks flying into a room, or up the chimney to ignite creosote deposits.
Plan for safety. Remember, there is no substitute for common sense. Look for and eliminate potential danger spots near candles, fireplaces, trees, and/or electrical connections.

Tis the Season for Holiday Parties... and Food Poisoning

2011-12-06T12:28:00.000-06:00

The holidays are almost here, which means hauling out the holly, stringing up the lights, and dashing through the snow. The holidays also mean lots of fun, festive parties to celebrate the season. These celebrations usually feature an array of delectable foods and tasty drinks that are dangerous to your waistline, but if you’re hosting a party, you have more to worry about than added pounds or lumpy gravy.

According to the Center for Disease Control, an estimated one in six people in the United States come down with food poisoning every year. And whether you’re preparing the food and drinks for your party yourself or purchasing them, you could be liable if your party guests get sick. Food poisoning doesn’t just happen to bad cooks either. Foods, such as bagged spinach -- that’s supposedly pre-washed and ready to eat -- can contain E. coli, which is undetectable to even the most well trained chef.

Fortunately, most homeowner’s insurance policies cover food poisoning situations in which your guests incur medical expenses or endure “pain and suffering” (i.e. missing work because they’re hovering over a toilet bowl). There are limits to both of these coverages and intentional poisoning is not covered (so don’t try slipping something into your pesky aunt’s pumpkin pie), but most policies provide protection from unintentional food-borne illness.

The best way to avoid a food-poisoning claim is to take the proper precautions when preparing your holiday fare. Here are some tips to ensure your guests leave with leftovers and fond memories, not food poisoning.

1. Wash your hands thoroughly after handling raw meat or poultry.
2. Use an anti-bacterial cleaner to wipe down any surfaces, including counters and cutting boards, that come into contact with raw meat or poultry.
3. Check the expiration date on foods before using them to cook or offering them to guests.
4. Wash all produce, even the kind that’s “pre-washed,” before using it.
5. Avoid cross-contamination by using separate utensils to stir raw and cooked food.
6. Make sure all foods are cooked to the appropriate temperature. This rule doesn’t apply to just meat and poultry either. Eggs, seafood, and even potatoes can cause illness if they are undercooked.
7. Don’t leave foods that require refrigeration or freezing out for more than two hours.
8. When in doubt, throw it out. If you’re unsure about any food – raw or cooked, prepared or homemade – don’t use it.

If you have questions about whether you homeowner’s policy covers food poisoning or any other party-related risk, your Trusted Choice® independent insurance agent is happy to answer any of your policy questions. You can even invite him or her to your party, just be sure the food is cooked!

National Traffic and Road Closure Information

2011-12-06T12:26:00.002-06:00

This national traffic and road closure information map will help you stay

safe and traffic-free during the holidays:

http://www.fhwa.dot.gov/trafficinfo/index.htm

State Commissioners Support Agents

2011-12-06T12:16:00.000-06:00

Misty Baker, Health Insurance Information
The National Association of Insurance Commissioners (NAIC) has adopted a resolution supporting the role of insurance agents in the purchase of health insurance, asking the U.S. Department of Health and Human Services (HHS) to exclude agent commissions from the minimum loss ratio (MLR) calculation. MLR calculations require health insurance companies to spend at least 80 percent of small and individual plan premiums and 85 percent of large group premiums on medical claims and activities to improve healthcare quality. Excluding commissions from the administrative costs of carriers, which HHS would have to approve, could result in carriers increasing compensation to agents. Agent groups are unlikely to wait for HHS to react and are expected to pursue changes in Congress. The Texas Department of Insurance requested a phase-in of the MLR restrictions from HHS last winter but HHS has left the Texas request pending.
The Independent Insurance Agents & Brokers of America issued a press release praising the NAIC for its actions. "Since the MLR rules went into effect they have created tremendous upheaval in the marketplace. The effect on agents and brokers in particular has been damaging as many insurance carriers have significantly cut their agent compensation in an effort to meet these new regulations. This has in turn reduced consumer access to agents and brokers, leading to a detrimental impact on essential services provided for consumers such as guidance in claims processing and tailoring health plans to fit the needs of individuals and small businesses."
Texas Commissioner of Insurance Eleanor Kitzman was one of five commissioners abstaining from the 26-20 vote, issuing this statement, "I appreciate the NAIC's work and leadership on this important issue. While I support the goal of the NAIC resolution and believe consumers need the qualified assistance of health insurance agents and brokers now more than ever, I do not believe this resolution is the best way to ensure that agents and brokers are able to continue to provide valuable services to consumers."

Certificates of Insurance Update

2011-12-06T12:14:00.002-06:00

David Surles, IIAT Insurance Agency
Major provisions of SB 425, the new law regulating certificates of insurance, go into effect on Jan. 1. The Certificates of Insurance Resource Center has been updated with information you need to comply with the law, including an overview of the major provisions and the following items ready to download:

January 2012 edition of Best Practices for Certificates of Insurance
Nov. 17 webcast and presentation slides
Questions and answers from the webcast
Sample Notices to Certificate Holders and Policyholders (for use prior to Jan. 1)

Watch for further updates on iiat.org as TDI introduces rules to implement SB 425 and begins the certificate approval process.

Independent Agents Top the Trust Scale

2011-12-06T12:13:00.002-06:00

Todd Kilkenny, Agency Management
Small business owners have a higher level of trust in their independent agent and carrier than other financial services firms including banks, healthcare companies and stock brokers according to a recent study commissioned by The Hanover Insurance Group, Inc.
The survey found trust to be the single most important consideration when choosing an insurance provider, with 86 percent of small business owners rating trust "very important." In addition, survey results revealed that small business owners trust their insurance agents 48 percent more than banks, 97 percent more than healthcare companies and 295 percent more than stock brokers.
The finding that independent agents and carriers are perceived as having a higher level of trust is important as thousands of protesters host Occupy Wall Street events across the country to force change with the financial system. "In a time of considerable economic uncertainty, small business owners want to know they are working with an agent and a carrier they can count on," said Michael Keane, president, small commercial at The Hanover.
The study was conducted by The Pert Group, a third-party independent consulting and research firm with broad experience in financial services industries. Results are based on online interviews conducted Sept. 14-23, 2011, among 501 small business owners with fewer than 30 employees.

Tell Your Story on the Agent Locator

2011-12-06T12:12:00.002-06:00

Trusted Choice offers a national agent locator service that includes the name and address of all IIAT agency members, but your listing could include much more. More than six hundred Texas agents have updated their listings to include such information as lines of insurance, agency history, agency logo, website links and the Trusted Choice partner companies represented.
There have been more than 13,000 hits on Texas zip codes since the locator was launched four years ago. Be sure you can be found and that your information is current. Go to www.trustedchoice.com/agents and use your IIABA/Trusted Choice password to enter the site. While there, check out the national ad schedule, the marketing reimbursement program, and the RSS feed for consumer news that delivers continuously updated articles to your website. If you can't remember your password, just click the "Forgot Your Password?" link.

2012 Education Schedule Now Available

2011-12-06T12:11:00.000-06:00

IIAT's education calendar for January-August 2012 is now available. Plan your educational training and CE ahead of time, and choose from 25 classes IIAT offers in 17 cities across the state. The Personal Lines Essentials and Commercial Lines Essentials series of workshops that lead to the ACSR designation will be available in eight cities starting in mid-January. Starting in February, IIAT will again be offering Roundup classes with an all new slate of commercial lines and personal lines topics. The popular Construction Risk and Insurance Specialist (CRIS) designation program courses will launch in April and be held in Austin, Dallas and Houston. The Producer Development Program gets underway in Austin in March, and Certified Account Manager classes begin in February. View the education calendar and register for classes

Gain Insight Into Designing a Competitive Compensation Plan

2011-12-06T12:10:00.000-06:00

IIAT's 49th Annual Joe Vincent Management Seminar, Jan. 29-31, in Austin features engaging sessions on the latest news and most relevant topics that affect your business, all while you earn CE and make new business connections.
Mary Newgard of Capstone Search Group is one of the many experts that will be leading impactful sessions at the seminar. Mary is a successful insurance producer for a nationally recognized independent agency and an accomplished consultant with national brokerages, regional firms and independent agencies. During the session "Designing Competitive Compensation Plans," Mary discusses when it's time to change your compensation plans and how to design a plan that is profitable for you and your producers.
"Threlkeld & Company has been attending the Joe Vincent Seminar since the 1960s. When it comes to industry trends, technology, management philosophies, politics and opportunities to network, there is not a better venue in the state. The Joe Vincent Seminar is a priceless tool to our agency."
– Suzi Stein, CFO, Threlkeld & Company, Tyler

D&O for Private Companies

2011-12-06T12:08:00.002-06:00

Commercial property insurance? Check. Commercial General Liability? Check. Workers' Compensation? Check. Business Auto Policy? Check. You sold all the easy policies because they provide coverage required by other parties your customer does business with. Is that all they need? Of course not. One policy not offered often enough is directors and officers' liability (D&O) for private companies. The directors and officers of such companies, even closely-held corporations, can be sued by individuals or companies who have suffered financial harm as a result of decisions made by the directors and officers, including shareholders, employees, suppliers, competitors and creditors. Claim scenario examples and sales tools are abundant on websites provided by insurers who specialize in D&O insurance. Take a look at the free online resources offered by Philadelphia, Chubb and Travelers.

Legal Liability for Damage to Rented Buildings

2011-12-06T12:05:00.002-06:00

David Surles, IIAT Insurance Agency
A building lease agreement often creates insurable obligations by making tenants responsible for all kinds of damage to the rented building, even when the tenant isn't otherwise legally responsible for the damage – see the Lease Agreements technical report under the Commercial Property Policy on InfoCentral at iiat.org. With or without a lease, however, a tenant is legally liable for damage to the building caused by the tenant's negligence or negligence of the tenant's employees. The most obvious example is fire damage resulting from the tenant's operations, but two member agents recently reported cases involving damage caused by vehicles operated by the tenants' employees. In one case, the employee backed a pickup through the overhead garage door, causing $15,000 in damage. In the other case, a forklift operator lost control of the machine and ran it through the side of the building, causing $25,000 in damage. In the first case, the tenant didn't have a written lease. In the second case, the lease agreement did not specifically obligate the tenant to repair damage caused by negligence, but there was no waiver of subrogation in the agreement. In both cases, the landlords' property insurers adjusted the claims, paid the landlords and then sent letters to the tenants demanding reimbursement. Also in both cases, the tenants' CGL insurers declined to pay for the building damage or respond to the subrogation demand letter. Why did the CGL insurer refuse to pay, and how can the tenants protect themselves from similar claims in the future?
These types of losses are excluded by the CGL. Exclusion j.(1) and ISO BOP exclusion k.(1) exclude property damage to property owned, rented or occupied by the named insured. Exceptions to these exclusions provide a separate limit (usually $100,000 or less) for fire damage to premises rented to or temporarily occupied by the insured, or any kind of damage to premises rented to the insured for a period of seven or fewer consecutive days. The separate limit for such damages can be increased for an additional premium, but this still wouldn't cover damage caused by a vehicle or anything else except fire damage to a building rented to the insured for more than seven days.
The tenant has two choices when considering how to address this exposure. The first choice is available before the lease agreement is executed. If the lease agreement requires both parties to provide open perils property insurance on their own respective interests (the landlord's building and the tenant's business personal property) and includes a mutual waiver of subrogation, the problem is solved. Property losses will be covered by the insurance policies and the insurance companies will be unable to demand reimbursement for losses negligently caused by either party. If the lease agreement doesn't solve the problem, the tenant can purchase open perils legal liability coverage to address the exposure. Endorsement BP 04 55 (Broadened Coverage for Damage to Premises Rented To You) provides coverage on the ISO Businessowners Policy. On the commercial property policy, CP 00 40 (Legal Liability Coverage Form) with CP 10 30 (Causes of Loss – Special Form) provides the necessary coverage.

Central Insurance Suspends Binding Authority Due to Oklahoma Earthquake

2011-11-08T10:51:00.002-06:00

According to the United States Geological Survey (USGS), a 5.6 magnitude earthquake struck Sparks, Oklahoma on November 5, 2011. In the event of an earthquake registering 5.0 or higher on the Richter Scale, agents may not bind earthquake coverage for a period of 14 days within 500 miles of the epicenter.

This earthquake may have affected some of our customers. Central Mutual Insurance has been monitoring the situation and stands ready to begin working in the affected area. We are prepared to provide prompt, professional, and efficient claims service to our policyholders.

Claims related to this event should be reported via the myCentral ® website or by contacting Central’s Claims Services Department.

· Call 888-263-2924 during our regular office hours of 8:00 am to 7:30 pm Eastern Time, Monday through Friday.

· Call 877-346-0300 after regular office hours and on weekends.

· For Glass Claims, please call Central's glass network at either 866-410-4753 or 800-988-9808. Both numbers will have someone available to assist you around the clock.

· E-mail claims to Hoclaimservices@central-insurance.com.

· Fax claims to the attention of Claims Services at 800-736-7026.

In storm situations, Central’s contact standard is 24 to 48 hours. If severe weather should occur, please advise your customers that someone will be in touch regarding their claim as soon as possible.

It is possible that not all losses resulting from a severe weather event will be covered. To further aid your customers, you can recommend that they apply for disaster assistance from the Federal Emergency Management Agency (FEMA). Victims can apply for assistance by calling 800-621-3362 or apply online at DisasterAssistance.gov.

It is important for your agency to maintain regular contact with Central and work together to provide the best possible service to our policyholders. Each claim is an opportunity to show you and our policyholders the value of Central and we will strive to provide the best service possible. Thank you for your continued support.

PERSONAL LINES report

2011-08-29T09:41:00.000-05:00

High-tech system on Volvos is preventing crashes

2011-08-29T09:37:00.001-05:00

ARLINGTON, VA — Vehicles are doing a better job of protecting people in crashes, but a new crop of advanced technology aims to prevent many crashes from happening altogether. A new study by the Highway Loss Data Institute (HLDI) finds that one kind of advanced forward collision avoidance system is working to prevent about a quarter of the common low-speed crashes that happen in everyday commuter traffic.

The study of insurance claims found that Volvo XC60 midsize SUVs outfitted with a standard collision avoidance feature called City Safety are far less likely to be involved in low-speed crashes than comparable vehicles without the system. City Safety is designed to help a driver avoid rear-ending another vehicle in slow-moving, heavy traffic. Claims under property damage liability coverage — the insurance that pays for damage to vehicles that an at-fault driver hits — were filed 27 percent less often for the XC60 than other midsize luxury SUVs.
"This is our first real-world look at an advanced crash avoidance technology, and the findings are encouraging," says Adrian Lund, president of HLDI. "City Safety is helping XC60 drivers avoid the kinds of front-to-rear, low-speed crashes that frequently happen on congested roads."
Volvo and other automakers also offer optional forward collision warning systems designed to help drivers avoid crashes at higher speeds than City Safety does. HLDI is working with several automakers to evaluate the loss experience of these and other crash avoidance technologies as the features make their way into more vehicles. City Safety is the first system of its kind. It addresses more common crashes than higher-speed systems do and has been standard on XC60s since the 2010 model year. It also is standard on 2011-12 S60 sedans and 2012 model S80 sedans and XC70 wagons.
City Safety automatically brakes to avoid a front-to-rear crash in certain low-speed conditions. It uses an infrared laser sensor built into the windshield to monitor the area in front of the SUV when traveling at speeds of about 2 to 19 mph. It detects and reacts to other vehicles within 18 feet of the XC60's front bumper during both daytime and nighttime driving. If the speed difference between vehicles is less than 9 mph, City Safety helps drivers avoid some crashes altogether. If the difference is between 9 and 19 mph, the feature may not prevent the crash but will reduce the consequences. It's not designed to work at speeds faster than 19 mph.
Unlike forward collision warning systems developed to address higher-speed crashes, City Safety doesn't alert the driver before it engages and brakes at the last instant if the driver doesn't react in time.
How HLDI did the study: HLDI analysts compared insurance claims data for the 2010 XC60 with 2 groups: other 2009-10 midsize luxury SUVs and other 2009-10 Volvo models. The analysis controlled for a variety of geographic and demographic factors that can affect claims. Geographic factors include garaging state and vehicle density (the number of registered vehicles per square mile). Demographic factors take into account such things as the primary driver's age, gender, and marital status. Other factors include calendar year and the policy deductible.
HLDI looked at how often claims are filed, also known as claim frequency, and claim costs, also known as claim severity. Researchers examined claim frequency and payouts under 3 types of auto insurance coverage: property damage liability, bodily injury liability, and collision. Property damage liability pays for damage an at-fault driver's vehicle does to other people's property as a result of a crash. Bodily injury liability generally pays for injuries to people involved in the crash other than the insured at-fault driver. Collision pays for damage to the insured vehicle.
Lower claim frequencies: Claim frequency rates for the XC60, the only Volvo with the feature in the study, were lower than all other midsize luxury SUVs combined, as well as other Volvos, under all 3 types of insurance coverage.
"These are very large effects," says Lund, who notes that some differences in driving styles of XC60 owners might come into play. However, "the pattern of results strongly indicates that City Safety is preventing low-speed crashes and reducing insurance costs.
"That's great news for consumers. As people grow more aware of the risks of distracted driving, crash avoidance systems like this one can help to ensure that a momentary lapse of attention during a congested commute doesn't result in a crash."
XC60s in the study had fewer claims, but when owners did seek payment under property damage liability, the average claim cost of $3,058 was higher than for vehicles in either control group — 10 percent higher than for other midsize luxury SUVs and 27 percent higher than for other Volvos.
"Although it may seem counterintuitive, higher payouts for property damage liability are a sign that City Safety works," says Matthew Moore, HLDI vice president and director of the study.
Because the feature is preventing the kinds of fender-benders drivers get into on busy roads, XC60 owners aren't filing as many low-cost claims (those less than $1,500) as people who drive other midsize luxury SUVs. The frequency of high-severity claims ($7,000 and higher) was about the same for the XC60 as it was for the control vehicles.
"Crash avoidance technology has a lot of promise," Lund says. "We are doing more research to see if other systems live up to their billing."

	Claim frequency	Claim severity	Overall losses
VOLVO XC60 CITY SAFETY INSURANCE LOSSES
vs. other midsize luxury SUVs
Property damage liability	-27%	+$270	-$17
Bodily injury liability	-51%	—	—
Collision	-22%	-$517	-$98
vs. other Volvos
Property damage liability	-19%	+$646	+$2
Bodily injury liability	-49%	—	—
Collision	-17%	-$147	-$53

Subrogating a claim

2011-08-29T09:35:00.002-05:00

Subrogating a claim – the sometimes lengthy process by which an insurer that has paid a loss, seeks to recover the loss amount from another party who is legally liable for it – is about to become more streamlined now the final link in a nationwide
electronic subrogation network is complete.
The web-based paperless system, called E-Subro Hub, will transform a traditionally slow subrogation process and provide
significant operational savings to the insurance industry.
According to Arbitration Forums, Inc. (AF), which developed the system, E-Subro Hub will handle more than 500,000 demands valued in the billions of dollars in 2011 now that it is available in all 50 states and the District of Columbia.
In 2010, nearly 115,000 subrogation demands valued at nearly $206 million were resolved by E-Subro Hub while operating in only 23 states.
AF noted that E-Subro Hub saves time by enabling users to electronically send and receive subrogation demands, attach supporting documents, manage subrogation claims and electronically file intercompany arbitration where necessary.
According to W. Russ Smith, president and CEO of AF, current users of E-Subro Hub are reporting that cases are frequently closed within days as opposed to weeks or months as in the past; printing and mailing costs have been eliminated and expenses associated with preparing an arbitration filing have been reduced.
E-Subro Hub also enables insurers to return deductibles to their policyholders faster, which reflects positively on customer service. Smith noted:
“Already, E-Subro Hub has vividly demonstrated to participating carriers and self-insureds that the electronic system can manage their subrogation workflow more effectively, reduce subrogation-related expenses and lower cycle times.”
AF offers the service at no-cost to participants. It predicts the paperless system will save over 44 million sheets of paper weighing more than 586,000 pounds annually.

Dependent Properties

2011-08-29T09:34:00.002-05:00

The damage caused by the March 2011 earthquake and tsunami in Japan caught the world by surprise. The devastation was indescribable at the local level. Also shocking were the resulting losses by businesses thousands of miles from the wreckage—losses suffered due to an interrupted supply chain.
You always hear the term “global economy,” but it takes something like what happened in Japan to prove it’s real. Stories quickly surfaced of auto manufacturers, distributors and other companies here in the U.S. unable to continue operations because their product source overseas was shut down indefinitely.
Your firm’s commercial property policy covers only direct physical damage by a covered cause of loss such as fire or windstorm. Your firm’s business interruption policy (assuming you have one) kicks in to help compensate for lost income resulting from a covered cause of loss. So what happens if your firm is not directly damaged by the cause of loss, but a business that your firm depends on is?
Consider the following:
-If a business that buys a significant amount of product from you suffers damage in a hurricane, would you be able to replace the money they can no longer pay you?
-If a business from which you buy a significant amount of product suffers damage in a hurricane, would you be able to find a replacement supplier?
-Could such a loss cause you to have to negotiate less favorable purchasing terms?
-Could you face a breach of contract due to the inability to uphold a contractual requirement, such as a pre-determined quantity of product?
Securing adequate business interruption coverage can be complicated for many insurance buyers, and the complexity often scares business owners away from the purchase—a frightening truth due to the fact that most businesses don’t fully recover after a disaster because of lost income.
The Japan disaster adds a couple of additional concerns to the already nettlesome process—specifically, cause(s) of loss, coverage territory, and period of restoration.
CAUSE(S) OF LOSSCoverage under a typical business interruption policy is triggered only if the event causing the loss, such as windstorm or fire, is covered by the policy. In the Japan disaster, major causes of property damage included earthquake and tidal surge, both of which are excluded by standard commercial property insurance.
To bring excluded perils under your policy, consider purchasing earthquake and/or flood coverage by endorsement. If such endorsements aren’t available, you may need to turn to a specialty policy sometimes called a “Difference in Conditions” (DIC) policy. If you go this route, keep in mind that they are not traditional insurance policies and should be carefully reviewed in order to determine if business interruption is applicable.
DEPENDENT PROPERTIES
“Dependent properties” is a term used by the business interruption policy to describe businesses on which your firm depends for the purchase or sales of goods and services. For example, consider how a building materials manufacturer relies on a large home improvement store or building materials wholesaler. If the store or wholesaler suffered damage that prevented them from doing business, the manufacturer would likely suffer lost income.
It’s important for your firm to consider those companies on whom you depend to operate at your normal capacity. This is the first step to securing adequate coverage. Ask yourself these questions:
-How long could I tolerate that company’s inability to supply things to or purchase things from me?
-Is a contingency plan, such as an agreement with an alternative supplier, in place?
-Are there contractual obligations, such as a purchase agreement, that I could violate if that company is shut down indefinitely due to the loss?
BUYING INSURANCEMost business interruption policies can be modified by endorsement to cover damage to a dependent business. Some companies may ask for a separate limit of insurance applicable to the dependent business. Others will pay the loss out of your business interruption limit. Some insurance companies will offer coverage if the dependent business’s operations are reduced due to the loss; others may require a complete cessation.
A typical business interruption policy will require that the dependent business be located within the policy’s coverage territory. Traditionally, this territory includes the U.S., its territories and possessions, Canada and Puerto Rico. If the dependent business is located outside the coverage territory, such as in Japan, a different version of the dependent business endorsement may be required.
PERIOD OF RESTORATIONThis term refers to the time between the date the loss that interrupts the business occurs and the date by when the damaged property should be repaired or reopened elsewhere. It represents the amount of time you are usually able to receive payment from your business interruption policy. If you are adding coverage for dependent businesses, consider potential differences in this time frame. For example, if your business is damaged, you may be able to make repairs and reopen in only a few months. However, if the dependent business is in Japan, it may be several months before repairs are able to begin.
CONCLUSIONThere are many factors in determining adequate business interruption insurance. The process becomes more complicated when insuring dependent businesses. Your Trusted Choice® insurance professional can help you with this important process, including determining your exposure and setting coverage limits. Call today.

Insurance Corner

2011-08-29T09:28:00.001-05:00

An East Coast earthquake? Suffering damage from a seismic shift isn't a risk many homeowner's outside of California worry about.

Most standard homeowners, renters and business insurance policies do not cover damage from earthquakes -- specifically, the potential losses from the shaking and cracking that can destroy a building and other property.

Here's a look at the extent to which individuals and businesses have purchased additional earthquake insurance protection.

Rank State Direct premiumswritten in 2009(thousands)

1. California $1,584,897

2. Washington state 134,970

3. Missouri 88,542

4. Tennessee 59,612

5. Oregon 53,777

6. Illinois 49,999

7. Kentucky 35,141

8. Florida 31,645

9. Indiana 31,161

10. South Carolina 30,515

11. Texas 30,264

12. New York 29,825

13. Utah 29,121

14. Ohio 26,665

15. Alaska 20,840

16. Arkansas 19,113

17. Mississippi 17,851

18. Nevada 17,708

19. Massachusetts 15,207

20. Georgia 13,713

21. Pennsylvania 13,303

22. New Jersey 12,417

23. Virginia 10,013

24. North Carolina 9,053

25. Louisiana 8,430

26. Colorado 8,351

27. Hawaii 7,878

28. Alabama 7,238

29. Arizona 6,774

30. Maryland 6,559

31. Michigan 6,265

32. Kansas 5,564

33. Connecticut 5,140

34. Oklahoma 4,845

35. Minnesota 4,242

36. Wisconsin 3,796

37. Iowa 3,629

38. Montana 3,460

39. Wyoming 2,902

40. Nebraska 2,385

41. Idaho 2,372

42. Rhode Island 2,218

43. New Hampshire 2,217

44. New Mexico 1,857

45. Washington, D.C. 1,782

46. Maine 1,428

47. West Virginia 1,352

48. Vermont 860

49. Delaware 747

50. South Dakota 440

51. North Dakota 329

__ United States $2,468,141

includes state funds

Source: SNL Financial LC, Insurance Information Institute

IIAT Texas Agent

2011-08-29T09:23:00.001-05:00

Loss Control and You

2011-08-11T11:39:00.001-05:00

Basics of Bloodborne

Pathogens

Mike Huss

Loss Control Supervisor

By definition, a pathogen is any agent that can cause disease -- Bloodborne Pathogens (BBP) are microorganisms in blood or other bodily fluids that can cause illness and disease in people through contact with contaminated blood and body fluids. The standard on which all Bloodborne Pathogen programs are based is OSHA Standard 29 CFR 1910.1030.

Bloodborne Pathogens..

Means of Transmission
BBP.s are transmitted when contaminated blood or body fluids enter the body of another person. This can occur through a number of pathways, such as:

The Centers for Disease Control and Prevention (CDC) estimates that between 600,000 and 800,000 occupational needle stick injuries occur each year, many of which are unreported. Of these, roughly 385,000 needle stick and other sharps-related injuries are sustained by healthcare personnel in hospital settings. Among the 35 million healthcare workers worldwide,
about 3 million receive percutaneous (through the skin) exposure to BBP annually, according to the World Health Organization (WHO). About 2 million of these incidents involve hepatitis B (HBV); 900,000 involve hepatitis C (HCV); and 170,000 involve human immunodeficiency virus
(HIV). Symptoms of a bloodborne infection sometimes are not apparent for weeks or months following exposure.
An accidental puncture by a sharp object (needles, scalpels,broken glass, razor blades) contaminated with a pathogen

Secual Contact

Indirect transmission (touching blood, including fried blood then touching the eyes, mouth, nose, or an open cut

Minimizing Exposure
The BBP standard is composed of; a written plan (entitled the Exposure Control Plan), training requirements and recordkeeping guidelines. Employers must minimize the exposure of employees to BBP whenever the potential for that exposure exists. OSHA has taken the position that there are no riskfree populations and enforcement of OSHA's general duty clause implies that employers must be knowledgeable of and comply with the BBP standard. Risk can be minimized through improved engineering design and with work practices (administrative controls) through the use of appropriate personal protective equipment (PPE), and by addressing housekeeping
issues.

Do:
Use appropriate PPE when working with blood or infectious materials

Remove PPE carefully to avoid self-contamination
Dispose of contaminated PPE correctly
Ensure you are trained in the use of PPE and document it

Know the proper response for accidental exposures

Don't:

Safety Calendar
By
Kim Coonrod
Loss Control Manager
August .
Month
Eye Health and Safety
September .
Month
National Preparedness
October .
Month
Safety News
By
Kim Coonrod
Loss Control Manager
New OSHA Residential Construction Regulation in 2011
On June 9th, OSHA announced a three-month enforcement phase-in period to allow residential construction employers to come into compliance with the agency’s new directive to provide residential construction workers with fall protection. During the phase-in period June 16 - September 15, if an employer is in full compliance with the old directive (STD 03-00-001), OSHA will not issue citations, but will instead issue a hazard alert letter informing the
employer of the feasible methods that can be used to comply with OSHA’s fall protection standard or implement a written fall protection plan. If the employer’s practices do not meet the requirements set in the old directive, OSHA will issue appropriate citations. If an employer fails to implement the fall protection measures outlined in a hazard alert letter, and OSHA finds violations involving the same hazards during a subsequent inspection of one of the employer’s workplaces, the Area Office will issue appropriate citations.

New OSHA Online Tool to Help with Recordkeeping
The U.S. Department of Labor has issued the OSHA Recordkeeping Advisor, a new Web tool to help employers understand their responsibilities to report and record workrelated injuries and illnesses. The OSHA Recordkeeping Advisor helps employers quickly determine whether an injury or illness is workrelated, whether a work-related injury or illness needs to be recorded, and which provisions of the regulations apply when recording a workrelated injury or illness. The Advisor is written in plain language to help employers, especially small
business employers, understand OSHA's recordkeeping requirements.The Advisor is not, however,
a substitute for compliance with OSHA.s recordkeeping requirements.

New NIOSH Fact Sheet Highlights Trenching Safety
From 2000
-2009, 350 workers died in trenching or excavation caveins,an average of 35 fatalities per year. NIOSH recently released a fact sheet detailing how to prevent worker deaths from trench cave-ins. Workers are at risk of death from cave-ins during trenching and excavation activities. NIOSH recommends engineering controls, protective equipment, and safe work practices to minimize hazards for workers.
New OSHA Campaign Targets Heat Illness
OSHA recently launched a national outreach initiative to educate workers and employers about the hazards of working outdoors in the heat. The campaign focuses on the importance of providing workers with water, rest, and shade, which are core components of the heat illness
prevention standard adopted by California.s Division of Occupational Safety and Health.

Service Focus Loss Control Consultation
By
Nick Gustafson
Loss Control Coordinator
FirstComp employs a dedicated team of loss control professionals who are ready and able to provide advice and answer questions pertaining to all areas of workplace safety. The Loss Control staff has over fifty years of experience providing safety & health advice to employers around the country. The staff is available to assist with training programs, safety resources and compliance concerns.
Policyholders in western states (CA,AK, HI, NM, NV and CO) can contact Mike Huss in our Nevada office.
Midwestern policyholders (AR,IA, KS, MN, MO, NE, OK, SD and TX) can contact Nick Gustafson in
Omaha.
Eastern state policyholders (AL, CT, DE, FL, IN, LA, MI, MS,NH, NC, PA, RI, SC, TN, VT, VA
and WV) can contact Courtney Rosengartner in Omaha.

Lessons from Losses
By
Nick Gustafson
Loss Control Coordinator
Loss: A nurse was giving an infant patient an immunization shot. Immediately after administering the vaccine, the nurse was kicked in the hand by the infant, causing the used
needle to puncture her left index finger. Luckily, she was not exposed to any serious infections. Nonetheless, treatment and lost work time cost nearly $13,000.
Lesson: Always use caution when working with or around any sharp objects, particularly needles. The risk of contagion is extremely high, and in some cases could cause lifelong
illness or disability for employees.
Never re-use needles and always be sure to use any safety measures available. For more information about the risk of needlestick injuries and how to avoid them, please contact the
FirstComp Loss Control department.
For information about any of FirstComp.s Loss Control Services,
please call (888) 500-3344 or email
Class Focus Day Care Providers
Accident Prevention Plan - Program Guide - TX Dept. of Insurance
Bloodborne Pathogen Exposure Control Plan for Child Care Facilities - SC Bureau of Child Development
Childcare Worker Safety - Texas DOI
Day Care Facilities Emergency Planning Guide - PA Emergency Management Agency
Emergency Response Planning Guide - Healthy Child Care Iowa
Fire Prevention Plan - Texas DOI
Hazard Communications / Right to Know - Capital Region BOCES
Immunization - Workplace Health and Safety Queensland
Key Health and Safety Tips for Childcare Workers - WHSQ
Kitchen Safety Checklist - Coles County (IL) Health Department
Safe Lifting Techniques of Children - Occupational Health Clinics for Ontario Workers, Inc.
Source: FirstComp:
FirstComp is a registered trademark of Markel Aspen, Inc. used under license by its affiliates including but not limited to those doing business as FirstComp Insurance
Company, FirstComp Underwriters Group, Inc., FirstComp Group Inc., FirstComp Group, FirstComp Insurance Agency, Inc., FirstComp Insurance Services of Nebraska
and Risk Exchange Insurance Services, Inc., a subsidiary of REX, Inc. also doing business as Risk Exchange Insurance Agency Services, Inc.
losscontrol@firstcomp.comNational Crime PreventionKnow the BBP standard so you can respond without fear
Report on-the-job exposures promptly and seek immediate medical attentionHave unprotected sex, use illicit drugs or share needles
Worry about getting one of these diseases through casual contact
Eat or drink or keep food and drinks in areas where infectious materials are used
Break, bend or recap contaminated needles
Clean up broken glass by hand, use a broom and dustpan
Wash exposed skin immediatelywith soap and water
Wash thoroughly after removing PPE
Flush exposed eyes, nose ormouth quickly and thoroughly with water
Cover open cuts Use good work practices
Minimize splashing of infectiousmaterials

Clean and decontaminate all equipment and surfaces in contact with blood or other infectious material
Dispose of sharps in a puncture-proof, labeled containerClean up spills immediately
Use good personal hygiene
Check for damage

Open cuts or skin abrasions that come in contact with contaminated blood or body fluids

Fake security

2011-08-03T10:07:00.002-05:00

Here's a recipe for illicit online riches:

1. Hack a Web site to insert pages full of keywords to popular terms.

2. Redirect the millions of people who click on the search result links to the fake pages to a site selling rogue antivirus software.

3. Sit back and collect affiliate fees from the rogue software seller, to the tune of up to $10,000 a day.
Web security company Finjan gathered details on this kind of operation after gaining access to a traffic management server used by the bad guys. The redirection that started with a poisoned search link went through the traffic servers on the way to rogue AV sites, allowing Finjan to observe the process.

The company found that crooks were hacking legitimate Web sites to insert parasite pages stuffed full of search terms pulled from the Google Trends system, along with others with minor typos from real terms like Gogle or Obbama.

These fake pages, designed to get search engines to find and display the pages in online searches, would redirect anyone who clicked on them to a site selling rogue AV software. Pushing the fake apps has become a popular profit-making technique among online crooks, and for good reason.

Finjan found that affiliate programs from the crap software pushers pay hackers 9.6 cents per redirection to the software-selling sites. That adds up to serious cash when you're talking about 1.8 million unique user redirections in 16 consecutive days, as Finjan observed.

Of those 1.8 million users, 1.79 percent of them paid $50 for the fake AV software. The software sellers used those profits to pay a total of $172,000 - or $10,800 per day - to affiliates.

With numbers like these, it's no surprise that rogue antivirus is becoming more common. And its spread doesn't just hurt those who get conned out of $50 or more for the software. Search engines will typically penalize sites that they believe are trying to game the system by stuffing pages full of random search terms, Finjan says. So the legitimate sites that get hacked may be penalized and see their real pages drop in search engine rankings.

Ask yourself two questions: 1) "Are you online and viewing a website?" and 2) "If you already have anti-virus software on your PC, do you see the logo of that program anywhere in the warning?"

If you are online, I simply close their browser and reboot. If the problem returns, to let tech support know (they may already be infected or the message could be real.)

If you dont't see the logo of their anti-virus program anywhere in the warning, it is almost certainly a fake warning. "Don't click 'fix' or agree to anything." Again, the solution is to simply reboot.

There is no sure-fire software to protect you from these kinds of "attacks" because they always require "user interaction" on your part to become infected. The "solution" is simply knowing what to look out for.

As already stated, don't do it. The couple I've had pop up have been worded to this effect: "Your computer is infected. Scan now!" Notice the emotive style, calculated to cause panic in inexperienced users. And of course, as previously stated, the window won't identify itself as belonging to the antivirus program you have installed.

Domino’s Sued After Texas Deliveryman’s Death

2011-07-18T10:17:00.003-05:00

Domino’s is being sued by the widow of a Texas employee who died a year after being robbed and beaten with a baseball bat by teens who lured the deliveryman to a vacant house.
The lawsuit alleges the company was negligent in failing to follow safety procedures and seeks “all damages” available under state law to Fred Rein’s widow, Jackie, plus exemplary and punitive damages. The suit filed July 11 in Tarrant County names as defendants the local franchise and national corporation, including Mark of Excellence Pizza Co., Domino’s Pizza and Domino’s Pizza Franchising, the Fort Worth Star-Telegram reported.
“The purpose of this lawsuit is to ensure that nothing this tragic ever happens to anybody else,” said attorney Geno Borchardt, who represents Jackie Rein.
Borchardt said the teens used a prepaid cell phone to place a phony order, and that Domino’s had never before delivered pizza to the vacant Fort Worth house. When Rein arrived with the pizzas that night in 2009, he was attacked and suffered brain damage. His death 14 months later was ruled a homicide.
Domino’s spokesman Tim McIntyre said the company does not comment on lawsuits but is saddened by the loss and sorry for Rein’s family.
The three teens were charged as juveniles, but the cases went to court before Rein died.
A boy who was 16 at the time and testified that he beat Rein with the baseball bat pleaded guilty to aggravated robbery and was sentenced to 40 years in a Texas Youth Commission facility. But the teen, who turned 18 this week, was ordered in March to be transferred to adult prison, where he must serve at least half of the 40-year sentence minus time spent in the youth facility.
Prosecutors did not charge the boy with murder after Rein died because state law required him to remain in the juvenile court system, where a murder conviction carries a maximum 40-year term and sentences are served concurrently, prosecutor Riley Shaw said. If tried and convicted as an adult, the teen would have faced up to life in prison.
The Texas Legislature passed a bill during the recent session that allows prosecutors to ask that a teen offender be tried as an adult, even if he or she has gone through the juvenile court system, if a victim injured in the same offense later dies, Riley said.
Two other teens, 15 and 16 at the time of Rein’s attack, also pleaded guilty to aggravated robbery and were sentenced to five years in a youth facility.
Information from: Fort Worth Star-Telegram

S&P Threatens Downgrade of Insurers, Financial Firms Over Debt Ceiling

2011-07-18T10:17:00.000-05:00

Standard & Poor’s Friday raised the pressure on debt negotiators in Washington, saying it could downgrade insurers, securities clearinghouses, mortgage agencies and a laundry list of other firms without a deal soon to lift the U.S. debt ceiling and cut the deficit.

While S&P had already made clear it could downgrade the United States’s sovereign credit rating, the Friday move struck directly at the heart of the financial system, raising the prospect of knock-on effects should the country exhaust its ability to borrow to pay bills.
The U.S. Treasury took the last available step Friday to try and extend that borrowing capacity. S&P on Friday put on review for possible downgrades a range of powerful financial firms — many of them little known to the public but crucial to the country’s financial infrastructure.
U.S. government securities are central to the operations of most of the companies cited. They include the Depository Trust Co, which facilitates payment transfers among major banks, as well as several Federal Home Loan Banks and Farm Credit System Banks. They also singled out Fannie Mae and Freddie Mac, the two government-sponsored enterprises that are central to the U.S. residential mortgage market.
S&P characterized its targets as “entities with direct links to, or reliance on, the federal government.”
Separately, the agency said the four remaining U.S. nonfinancial companies with triple-A ratings were not affected by the downgrade threat.

‘WARNING SHOT’

“S&P is firing a warning shot, saying the entire financial clearing system is in question,” said Peter Niculescu, a partner at Capital Markets Risk Advisors, a risk management advisory firm in New York.
He raised the prospect of a financing squeeze for financial institutions if Treasury debt is downgraded. S&P said Friday it still sees the risk of default as “small, though increasing.”
Nik Khakee, an S&P analyst who worked on the team assessing the clearinghouses, emphasized that the decline for the triple A-rated companies from “outlook negative” to “creditwatch negative” — signaling a 50 percent chance of a downgrade within three months — directly follows a similar change for the debt of U.S. government securities.
Earlier this week, Moody’s also put its U.S. credit rating on review for a possible downgrade.
Some investors downplayed the chances of a severe market reaction if the United States is downgraded, given that the market has known this could be coming.
“Do you think China is going to sell all their Treasuries when they find out the ratings are lowered? They know the situation, they’ve known it all along,” said James Melcher, founder and president of Balestra Capital Ltd, a global-macro investment manager based in New York. “They cannot sell a significant amount of their Treasuries without running interest rates up to 20 percent or more; they would be shooting themselves in the foot.”

ONUS ON WASHINGTON

Many of the firms put on review for a possible downgrade were quick to turn the focus back on President Barack Obama and the congressional leaders trying to hash out a deal to stave off a debt default.
“Whatever happens will have nothing to do with us, and everything to do with Washington. The hope on everyone’s part is obviously that Washington gets its act together so that both their rating and ours can remain where they belong — at AAA,” said Patrick Korten, a spokesman for insurer Knights of Columbus, which was included on the negative watch list.
A spokesman for Goldman Sachs, parent company to Goldman Sachs Mitsui Marine Derivative Products LP, declined to comment. A spokesman for New York Life said S&P told it no financial institution can carry a higher rating or outlook than its sovereign rating, and that the insurer believes its rating to be fully justified.
Northwestern Mutual said it remained “completely confident” in its financial strength.
Other insurers on the list were not immediately available to comment.
Another broad group in S&P’s sights is the clearinghouses, which guarantee contracts tied to everything from oil contracts to shares of Google Inc and are critical to U.S. financial market stability.
“It’s not unexpected and we don’t see this as a reflection on how OCC conducts its business,” said Jim Binder, spokesman for the Options Clearing Corp., which clears U.S. options or futures for 14 exchanges. “It’s all about what’s going on in Washington.”
The U.S.-based Depository Trust & Clearing Corporation, which provides custody and asset servicing for more than 3.6 million securities issues from the United States and 121 other countries and territories, valued at $33.9 trillion, said the S&P action was expected.
“Changing the outlook on various financial institutions is common practice for ratings agencies when the outlook on a sovereign is changed,” DTCC said in a statement. DTCC runs the National Securities Clearing Corporation and the Depository Trust Company.
Freddie Mac also declined to comment. Fannie Mae did not immediately respond to requests for comment.
Source: Reuters.

House Approves Flood Insurance Program Renewal, Reforms

2011-07-18T10:10:00.000-05:00

The House of Representatives has approved a bipartisan bill to reauthorize the federal flood insurance program for five years and change some of its practices to improve its financial operations.
The measure to renew and reform the National Flood Insurance Program (NFIP) passed by a vote of 406 to 22, with 21 Republicans and one only Democrat, Rep. Brian Higgins of New York, voting against it.
An amendment to completely shut down the program failed.
The House bill (HR 1309) was authored by U.S. Representative Judy Biggert, R-Ill., who chairs the Subcommittee on Insurance, Housing and Community Opportunity.
The Senate must still act on the bill. Lawmakers hope to send the bill to the President Obama for signing before Sept. 30, when the program’s current authorization is set to expire. A Senate banking subcommittee held a flood insurance hearing in June.
“Homeowners and communities that rely on the NFIP are the clearest winners in today’s vote, but with these reforms, the taxpayers also will finally get the protection they deserve,” said Biggert. “We worked with Members of Congress and stakeholders from every corner of the country to craft this bill, and I’m pleased that its bipartisan passage reflects our collaborative approach.”
NFIP, which currently operates with a debt of nearly $18 billion, is administered by the Federal Emergency Management Agency (FEMA). Since 2006, auditors at the Government Accountability Office have identified the program as high-risk, and it has been widely criticized for under-pricing risk and promoting development in flood-prone areas that are more suitable for conservation.
“As the first significant reform to the program in nearly a decade, this bill will phase-out taxpayer-subsidized rates and restore the integrity of the flood mapping system,” said Biggert. “It also eliminates barriers to the development of a private flood insurance market, and helps take taxpayers out of the risk business. The NFIP is too important to let lapse, and too in debt to continue without reform. I urge my colleagues in the Senate to speed this legislation to the President’s desk.”
The bill was co-sponsored by Reps. Maxine Waters, D-Calif., Shelly Moore Capito, R- W.Va., Scott Garrett, R-N.J., Robert Dold, R-Ill, Steve Stivers, R-Oh., and 14 others.
In addition to reauthorizing the NFIP until 2016, the bill phases in risk-based premiums, and phases out subsidies for certain properties, including high-risk buildings subject to repeat claims. It raises the cap on annual premium increases from 10 percent to 20 percent, which supporters hope will help transition properties newly mapped into flood zones, and it indexes maximum coverage limits to inflation.
The bill also confirms FEMA’s authority to utilize private reinsurance in lieu of taxpayer exposure to mitigate risk, and directs the agency to report on proposals from the private market for assuming risk within the program.
It also addresses risk mapping standards and mitigation assistance.
It expands the options NFIP can offer to include actuarially priced business interruption and additional living expenses coverages, a provision sought by insurance agents.
An amendment by Rep. Jeff Flake, R-Ariz., that would have stripped these additional coverage options from the bill was handily defeated.
The Independent Insurance Agents & Brokers of America (Big “I”) praised the House vote.
“A five year extension is of the utmost importance, as are reforms to put the program on sound financial footing. The Big ‘I’ strongly supports efforts to extend and improve the NFIP and we urge the Senate to take up extension legislation as soon as possible to avoid the program’s looming expiration at the end of September,” said Robert Rusbuldt, Big “I” president & CEO.
“The Big ‘I’ especially thanks the House for overwhelmingly rejecting the Flake amendment to strip the optional business interruption and additional living expenses coverages,” said Charles Symington, Big “I” senior vice president of government affairs. “These coverages are critically important to consumers and small businesses and the Big “I” strongly supports their inclusion in the Flood Insurance Reform Act.”
Insurers also welcomed the House action.
The National Association of Mutual Insurance Companies (NAMIC) said the bill is a major step in bringing fiscal responsibility to the debt-ridden program.
“These commonsense, bipartisan reforms will help the NFIP address problems that have plagued the program for years,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “For the NFIP to survive, it must be able to price coverage to reflect the risk of flooding facing a property, and cut the losses from those properties that will not undertake any mitigation efforts despite repeated flooding.”
Grande praised the defeat of an amendment by Rep. Candice Miller, R-Mich., to eliminate the NFIP altogether. “The Miller amendment would have been devastating for taxpayers and consumers, and defeating it was a top priority” Grande said. “There is no viable private market for flood insurance, and eliminating the NFIP won’t create one. Instead, the Miller amendment would have left millions of homes and businesses at risk of flood losses and increased the need for taxpayer-funded federal aid in the aftermath of a natural disaster.
Among the amendments approved is one sought by some private insurers that would assure that the more than 780,0000 NFIP policies that State Farm administered before it dropped out of the program are offered to private insurers to administer under the Write-Your-Own Program, rather than being transferred to the NFIP’s own direct administration. The amendment requires FEMA to ensure that all policies eligible to be administered by the 90 participating private WYO insurers are made available to them. Under the WYO, private insurers are paid for administering the policies while NFIP retains responsibility for any losses.
FEMA had opposed transferring the State Farm policies to the WYO private insurers, arguing that keeping them under the government administration would save millions.
State Farm also opposed having the policies go to private insurers, many of them its competitors.
The Property Casualty Insurers Association of America (PCI) supported this WYO amendment, which was sponsored by Reps. Spencer Bachus, R-Ala., Brad Sherman, D-Calif., and Gregory Meeks, D-N.Y.
Ben McKay, senior vice president of federal government relations for PCI, said that without the Bachus-Sherman-Meeks amendment, the federal government’s management of flood insurance could have ballooned by 700 percent.
“This amendment is a victory for the 800,000 NFIP policyholders that have recently been displaced and will bring greater consumer choice for these home and business owners,” McKay said.
SmarterSafer.org, a national coalition of business and environmental groups that has lobbied on flood insurance also urged the Senate to pass the measure.
“HR 2018 is certainly a step in the right direction. It will help put the program on firmer financial footing, and it will better protect people by using the best science to map flood zones,” said Joshua Saks, a senior legislative representative with the National Wildlife Federation, one of the groups in the coalition.
The wildlife group said, however, that additional reforms are needed to make sure the program is fiscally and environmentally sound. “Healthy wetlands and floodplains are the best flood protection money can buy. The NFIP needs to recognize the value of these natural defenses and incentive better land use planning and the mitigation of flood risks,” said Saks.
The bill is “good but not perfect,” said Eli Lehrer the Heartland Institute, also a member of SaferSmarter.org. “I’m glad that it moves rates towards adequacy but disappointed that it delays mapping, adds needless coverage, and fails to address long-term problems that the program faces. Now the Senate has to follow the House’s lead and pass a bill that’s at least as strong and as good.”
The NFIP handles about 5.6 million policies.

Hurricane Season 2011 Forecast

2011-06-21T14:08:00.000-05:00

AccuWeather.com Hurricane Center meteorologists, led by Meteorologist and Hurricane Forecaster Paul Pastelok, are predicting an active season for 2011 with more impact on the U.S. coastline than last year.
The team is forecasting a total of 15 named tropical storms, eight of which will attain hurricane status and four of which will attain major hurricane status (Category 3 or higher).
In a normal year, there are 10 tropical storms, six of which become hurricanes and two of which become major hurricanes, or attain winds that exceed 110 mph.
2010's historic season had a total of 19 named storms and ranks as the third most active season on record, but there was little impact on the United States coastline. Twelve of these storms became hurricanes, five of which were major hurricanes. Two names from the 2010 season were retired on March 16.
"It looks like we're going to have more impact on the mainland of the U.S. coming up this year compared to last year," Pastelok said. "We had a lot of storms last year, but not a lot of impact [on the U.S.]."
In order to project the number of storms and impacts, the team looks at past years that have similar weather variables and patterns that closely resemble the most recent fall, winter and early spring months.

Factors for this Season
There are a number of physical drivers that have the team concerned for this upcoming hurricane season. These include:
--The orientation and position of the Azores and Bermuda high-pressure areas in the Atlantic
The Azores high is one of the bigger influences on the movement of tropical cyclones. High pressure systems alter the direction of a storm by steering the storm, a low pressure system, around it. This is one way forecasters can predict the track of a hurricane.
"The forecast position and strength of the Azores or Bermuda high is always a challenging forecast," Pastelok said. "An unexpected change could greatly alter where both early season and mid season storms track."
AccuWeather.com Expert Tropical Forecaster Dan Kottlowski added, "We do see some changes in the overall pattern across the Atlantic."
Kottlowski continued, "The water temps are not nearly as warm as they were last year, and also the upper air pattern looks slightly different... than last year, so that could have an impact as to where that subtropical high, that big high pressure area that helps guide tropical storms, sets up."
"It may weaken or actually reposition itself a little bit to the northeast as we get later in the season, which would allow more of a storm track closer to Florida and also up the East Coast," Kottlowski concluded.
--The future state of the ongoing La Niña
La Niña is a phenomenon that occurs when the surface waters in the central and eastern equatorial Pacific are colder than normal. La Niña results in low wind shear, especially in the main tropical development area in the Atlantic. Shear refers to strong winds that are high in the atmosphere. Wind shear is a "hurricane killer," in that it can hinder storm development as well as break up existing storms.

"Currently, right now we still are in a La Niña scenario, but it is starting to weaken," Pastelok said. "The signal is starting to show some signs of going neutral. That could have an impact on the westerly wind component down in the tropical Atlantic as well as the Caribbean. Stronger westerlies would prohibit major storms or a lot of storms, so it is a critical factor."
--The frequency and amount of dust that accompanies disturbances moving off the African coast
The presence of dust indicates dry air, which can hinder tropical development in the eastern Atlantic.
"Current projections on the weather pattern over Africa for this coming tropical season suggests there will be episodes of dust affecting development, but no more than normal," Pastelok said.
--A phenomenon known as Atlantic Multidecadal Oscillation (AMO)
AMO refers to the sea surface temperature in the northern Atlantic, and the temperature fluctuates from colder than average to warmer than average every few decades. Currently, the sea surface temperature is in the warm phase, and warm water is "hurricane fuel," in that it supports the development of tropical systems.
"We continue to observe the positive phase of the Atlantic Multidecadal Oscillation," said Paul Pastelok. "This will help to maintain warmer-than-normal water temperatures across most of the Atlantic Basin."

This Season's Concern Areas
As with most Atlantic hurricane seasons, the areas where storms are most likely to make landfall shift as the season progresses.
This year, the early season threat area will be the western Gulf of Mexico and the southern portion of the Caribbean. Within this zone, the higher concern for landfalls will be along the Texas and Louisiana coastlines.
As for the mid-to-late season zones, the eastern Gulf and Caribbean will be the focus. The higher concern areas will be the Florida Peninsula to the Carolinas.
"What we see is there is a clustering of storm impacts over the southeastern US, and that's the reason why we earmarked this as a concern area," said Kottlowski.
Another mid-to-late season concern for landfalls will be northern New England and the Canadian Maritimes.
"We feel that this season, there will be a higher potential for impacts across the southern part of the Basin into the Gulf of Mexico during the first part of the season," Pastelok stated. "This higher potential for impacts shift farther north into the southeast U.S. during the latter half of the season."
Hurricane season officially begins June 1 and ends Nov. 30.
For all the latest tropical information, be sure to check the AccuWeather.com Hurricane Center for the most up-to-date videos, information and storm tracks.

Even though hurricane season has started people can still get the extra protection they need for flood, windstorm, hail protection for themselfs and their loved ones. However it takes 30days for flood insurance to take effect. If a named storm has taken effect it may be too late. Call us or come by and let us help protect you.

Texas Gov. Rick Perry Vetos Bill That Would Make It Illegal To Text While Driving

2011-06-20T16:17:00.000-05:00

Texas Gov. Rick Perry vetoed 23 bills on June 17, including legislation that would have outlawed sending or reading text messages while driving.
Lawmakers approved the texting ban last month, but Perry called it an “overreach” and “government effort to micromanage the behavior of adults.”
Former House Speaker Tom Craddick had pushed the texting while driving ban, touting it as a public-safety measure. But the bill triggered more than a half-hour of debate on the House floor with opponents arguing the bill would amount to criminalizing drivers simply for receiving a text message while driving.
San Antonio and El Paso already have laws forbidding texting while driving, and at least 30 other states have enacted similar statewide bans.
“The keys to dissuading drivers of all ages from texting while driving are information and education,” Perry said in his veto statement. “I recommend additional education on this issue in driving safety and driver’s education courses, public service ads, and announcements, and I encourage individuals and organizations that testified in favor of the anti-texting language included in this bill to work with state and local leaders to educate the public of these dangers.”

Source: InsuranceJournal.com