Coventry First to pay $12 million to end N.Y. life settlement suit

Transcription

Cutting
costs
7
Pennsylvania
New Jersey
With open enrollment, employers
will pay less, expecting their
employees to pony up more for
their benefits in 2010.
Delaware
Required reading for successful insurance and financial service professionals
Volume 4, Issue 5 |
Company conversion
Allentown-based
Penn Treaty and
subsidiary should
be liquidated,
according to Pennsylvania
regulators.
Page 6
2
Consumer caution
New Jersey’s
insurance
commissioner
encourages
consumers to review life
settlement agreements prior
to purchase.
Page 10
3
Departments
CAPITOL HILL
13
LEGAL BRIEFS
7
NEW PRODUCTS
4, 15
PEOPLE
11
RECORD/FINES
16
Subscription information
available online at:
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subscribe
Insurer avoids penalty, fine in deal with
attorney general’s office regarding 2006 suit
By Keith L. Martin
Three years after it was filed, Coventry First
has agreed to settle a civil suit against it by the
New York Attorney General’s Office for $12 million.
The Fort Washington, Pa.-based insurer said
that the attorney general’s office determined that
it should have paid policyholders an additional
$1.4 million for the market value of their life insurance policies. Through a settlement agreement, Coventry First will also pay $10.5 million to
the state of New York to end the litigation.
The suit was originally filed
in October 2006 by then-attorney general Eliot Spitzer, accusing the company of deceiving customers into selling their
policies at below-market value.
Coventry CEO Alan Buerger
said in a statement he appreci- Alan Buerger
ated the attorney general office’s “attention to these important issues in our
developing industry.”
Buerger added he “hopes the attorney general
will continue to look into issues affecting policyowners, especially the anti- See “Settlement” on p 6
Property-Casualty: page 14
Deer an increasing threat
to motorists, data shows
Move to raise producer licensing fees
seen as unlikely to area’s agent groups
Conn. approval of doubling fees may open
door for other cash-strapped states to follow
As Pennsylvania continues to deal with its
budget problems, agents groups in the state say
they do not expect to see higher licensing fees.
In Connecticut, as part of a new budget, the
state doubled the majority of its licensing fees
levied by the department of insurance as one
way to help eliminate an $8.5 billion deficit. That
left agents’ groups in the state to figure out how
their members, many of whom are small business owners, can operate with the new fee sched-
ule while the economy already
presents them with daily challenges.
“I don’t think Pennsylvania
is looking at that as a way to
make up some budget shortfall, but since Connecticut
broke the ice, it could be some- Shelly Bloom
thing they’ll consider in the future,” said Shelly Bloom, president of the Pennsylvania Association of Health Underwriters.
Bloom added “without any logic for the increase,” it was unlikely to get
See “Fees” on p 9
New York, national regulators take actions
calling new attention to issue of transparency
By Keith L. Martin
The possible end of bans on contingent commissions and New York’s proposal of new rules on
broker compensation could lead to national and
state regulatory changes affecting insurance sales.
Four years ago, Aon, Arthur Gallagher & Co.,
Marsh & McLennan and Willis Group Holdings
agreed to multi-million dollar settlements, ending their use of contingent commissions. With
Gallagher recently reaching a deal with Illinois
regulators to end that ban, published reports indicate the other three firms are also trying to get
out of their deals, including those made with
former New York Attorney Gen- See “Debate” on p 12
A bad balance
Insurance regulation is often likened
to a three-legged stool, with consumers,
insurance companies and agents
making up each leg.
How does insurance
regulation in
your state
stack up?
Source: IFAwebnews.com poll, Aug. 31 – Sept. 8
DATED MATERIAL
1
Broker compensation
debate ‘ramping up’
Insurance & Financial Advisor
10600 York Rd. Suite 203, Hunt Valley, MD 21030
Pa. Insurance
Department
expects to begin
shift to birth-month
license renewals in November
with complete change starting
in 2010.
Page 4
Coventry First to pay $12 million
to end N.Y. life settlement suit
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November 2009
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Dominion Dental taking bite of
region’s vision benefit market
Move marks ‘major step forward’
for company, says president
Dominion Dental Services is sinking its
teeth into a new area: employer-paid and
voluntary vision benefits to groups.
The Alexandria, Va.-based dental benefits corporation provides coverage to companies based in Virginia, Maryland, Pennsylvania, Delaware and Washington, D.C.
Dominion’s clients can access the EyeMed network, a vision network that includes more than 46,000 provider listings
and such familiar names as LensCrafters,
Pearle Vision, Sears Optical, Target Optical and Wal-Mart, along with independ-
ent optometrists, ophthalmologists and
opticians.
The new vision plans provide coverage
for eye exams, eyeglass lenses, frames and
contact lenses, as well as discounts on
LASIK laser vision correction. Out-ofnetwork coverage is also included.
“Dominion’s entrance into the vision
benefit market is a major step forward for
our company,” said Dominion President
Mitch McGlynn in a statement. “There is
great demand for vision plans from employer groups and we are offering groups a
single-billing solution for both dental and
vision coverage, two of the most-requested
benefits after medical.” IFA
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// Publisher’sNote
Like life, insurance industry
has its heroes and villians
Just when you thought it was safe to stay
in your hotel room, along comes Michael
D. Barrett of Westmont, Ill., who is accused
of taking secret videos of ESPN reporter
Erin Andrews and trying to sell them. The
insurance salesman allegedly taped the
woman through her hotel room’s peephole – not once, but many times – and allegedly did the same to other women. Barrett was released on bail, but not before
embarrassing his employer, a mid-Western
life insurer that has certainly had enough
of its 15 minutes of infamy.
Then along come Bob Parker and Dave
Nelson, agents for CLA-USA Insurance,
who saved a 79-year-old Missouri man
who had fallen down his stairs and was
trapped for two days. Parker and Nelson
were paying a home visit to the policy-
holder, and heard his pleas for help. Authorities said the man might not have survived another night if not found.
In an era of electronic gadgets and communication tools, it’s refreshing to hear of two
agents whose mandate to meet with clients in
person instead of through email and text messages resulted in the saving of a life.
Insurance has its share of those who
abuse others – even when it is not related
to insurance – and those who embody the
best of humanity. The latter fits our industry much better.
That’s my take,
Tony Ondrusek
Publisher
// OnlineDigest
Most read online stories
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1 House passes surplus lines,
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2 IRS extends undeclared income
tax amnesty deadline
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“In a particularly distasteful
diatribe dealing with health
care reform on his show this
week, Keith Olbermann
warns viewers that
employers are ‘secretly’
taking out life insurance
policies on their employees.”
- Tony Ondrusek, Publisher
entry on 3 Tools of the Trade blog
10600 York Rd., Suite 203
Hunt Valley, MD 21030
phone: 877-IFA-5001 / 410-667-0864
fax: 410-667-7977
admin@IFAmedia.com subscribe@IFAmedia.com
New Horizon Group Inc. owns Insurance & Financial Advisor – Maryland/DC
Edition, Insurance & Financial Advisor – Virginia Edition and Insurance &
Financial Advisor—Pennsylvania/NJ/DE Edition. The paper is free for retail
insurance and financial service professionals in these areas. I All content
is protected by U.S. copyright law and may not be reproduced, copied or
transmitted in any form without permission of the publisher, New Horizon
Group Inc. I News, photos and articles are published for free. Submissions
may be edited or altered, and become the publisher’s property. The publisher
assumes no liability for errors or omissions.
November 2009
Insphere to offer UnitedHealthcare plans throughout region
‘Golden Rule’ coverage features pairs of
HSA, co-pay options for new customers
By Keith L. Martin
One of the nation’s largest independent career agency distribution groups has
reached a deal to sell four insurance plans
from UnitedHealthcare’s Golden Rule Insurance Co.
Insphere Insurance Solutions, headquartered in Dallas/Fort Worth, Texas, announced
a deal to offer the plans first in Alabama, Arizona, Delaware, Florida, Illinois, Maryland,
North Carolina, Tennessee, Virginia, Wisconsin and Washington, D.C. The company said
it then plans expansion into the other markets where UnitedHealthcare’s personal
health plans are currently available.
Insphere Insurance Solutions specializes in small business and middle-income
market life, health, long-term care and retirement insurance. The company is authorized in 49 states and the District of Columbia and said it expects to have an
anticipated force of 3,000 agents when it
commences full services in 2010.
Coverage options
The company will market four health
plans underwritten and administered by
UnitedHealthcare’s Golden Rule designed
for the needs of individuals and families
seeking cost-effective, quality coverage, Insphere Insurance Solutions said. This includes two “co-pay” plans similar to traditional employer-sponsored plans and two
health savings account
(HSA) plans offering a
high deductible plan with
a tax-favored savings account.
Phillip J. Hildebrand,
Insphere Insurance Solutions’ president and CEO, Phillip J.
said UnitedHealthcare of- Hildebrand
fers “quality products that fit the budget
needs of most consumers who buy their
own health insurance.
“In addition, their health plans are
supported by a strong national network
of physicians and care providers, excellent service and their organizational
commitment to evidence-based clinical
care,” he said. IFA
// PROPERTY-CASUALTY
Merger proposed for two
Tuscarora Wayne subsidiaries
The board of directors for Tuscarora
Wayne Mutual Group have announced
an intent to merge two of its property-casualty subsidiaries.
Washington Fire and Storm Insurance
Co. of Falls Creek, Pa., would merge with
Tuscarora Wayne Insurance Co., of
Wyalusing, Pa., with the latter being the
surviving entity, according to the company.
Jay W. Chadwick, president and CEO
for the parent company, said in a statement the merger is to “create a stronger,
more efficient company which will allow
us to better serve our policyholders.”
The transaction is scheduled for completion by the end of the year. IFA
KTB Broker Services
KTB Broker Education Center
KTB Flex Services
On-line HR Resource
COBRA Control Services
Health Connect/HR Connect
Broker Tool Kit
www.ktbrokers.com | KTB Broker Services
400 Berwyn Park #200
899 Cassatt Road, Berwyn, PA 19312
Want to be? Ask how… call 1-800-396-4309
Pennsylvania / New Jersey / Delaware
|
IFAwebnews.com
November 2009
|
3
Pa.’s licensing switch to begin in January
Conversion to agent birth-month renewals
expected to start Nov. 17, regulators say
By Bob Graham
The Pennsylvania Insurance Department’s plan to move agent and broker license renewals to the applicant’s birth
month is scheduled to begin with January
2010 renewals, according to the department.
The PID said in the summer it would
eliminate the current system, where agents
and brokers renew their licenses on the
two-year anniversary.
The shift has been undergoing internal
testing at the department, and things “are
going as planned,” according to Melissa
Fox, a PID spokeswoman. The Licensing
and Enforcement Bureau has been preparing for the change since spring.
The transition to all birth-month renewals for Pennsylvania insurance licensees
is expected to be completed next year.
No interruptions to licensing system or
online services are expected during the
conversion process, which should begin
about Nov. 17, Fox said.
Notices for producers detailing more
information about the changes should be
posted on the PID website.
The shift to birth-month renewals will
put Pennsylvania in line with licensing
standards created by the National Association of Insurance Commissioners, which
represents all state regulators. IFA
Are you experiencing LTCi declines
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In addition to this exciting new product, we’ve also introduced to our existing
product – LifeStyle SolutionsSM – two new underwriting classes, Class 1 and Class
2, along with the existing Preferred and Standard classes. Here are some of the
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• History of Cancer (skin, breast or prostate)
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Phone: 800-872-3044
Fax: 215-723-8036
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NewProducts
For more go to IFAwebnews.com/Products
Online agency tool aids clients
control workers’ comp. costs
WorkersCompEdge
announced a new online tool
to help agencies in response to predictions
that the workers’ compensation market will
remain down, at least through next year.
PropertyCasualty
WorkersCompEdge.com, published by
Brentwood, Tenn.-based Specific Software
Solutions, delivers workers’ compensation
training, tools and cost-saving strategies in
areas including hiring practices, the premium
audit and safety, through its Agency Plus
license, according to the company.
The license sells for $1,000 per year.
The new offering is geared to insurance
agencies to use for internal training and coordination of sales and service activities
associated with helping employers control
workers’ compensation costs.
Investment advisor introduces
new ‘custom wealth platform’
Curian Capital, a registered
investment advisor headquartered in Denver, Colo., launched its new
Custom Wealth Platform for investors to
obtain a convenient, aggregated view of
their company holdings, the company said.
Financial
Services
Curian, which provides fee-based managed
accounts to financial professionals, said by
using the new platform, advisors can integrate a household’s existing Custom Style
Portfolios with the new investment proposals to generate a plan outlining the risk
tolerance and asset allocation for multiple
investment goals.
The new platform utilizes a purpose-based
approach to realizing client objectives, Curian
said in a statement, as investors first consider the various goals for each portion of
their assets and work with an advisor to create a Custom Wealth Plan.
Company unveils healthcare
insurance fraud finder
A Minneapolis, Minn., company has announced the
general availability of a product to help target
health insurance fraud.
Health
Insurance
FICO, a provider of analytics and decision
management technology, said its
Insurance Fraud Manager (IFM) 3 uses
real-time predictive analytics to find patterns of fraud and abuse before payments
are made, significantly reducing the costs
of fraud by enabling insurers to better
avoid paying fraudulent claims.
|
IFAwebnews.com
FICO said its IFM 3 leverages a predictive
analytics model – in contrast to rules-based
systems that power most insurance industry fraud detection systems today – to
identify aberrant data patterns indicating
fraud earlier in the claims payment process
and provide proof of fraud before payment is
required by law.
Universal life product offers
new services for advisors
Nationwide Financial has
added the new YourLife
No-Lapse Guarantee UL to
its selection of fixed life insurance products,
to provide clients with greater flexibility and
enhanced services for financial advisors, the
company said.
Life
Insurance
The product was designed to meet the
needs of clients between 50 years old and
70 years old, seeking “competitively priced,
permanent death benefit protection with
guarantees that can help them leave a
legacy for loved ones or a favorite charity,”
the company said.
For financial advisors, the new product features enhancements including a shorter
underwriting window from 25 calendar days
to 23 calendar days, a new illustration program and a new online tool to help simplify
the application process available on Nationwide’s website.
New offerings for pest control,
security personnel markets
Those in the pest control and
security markets now have
access to two new products through
Philadelphia Insurance Cos.
PropertyCasualty
Pest control eligible classes include operators specializing in residential, commercial
and industrial buildings with a minimum of
four years in the industry and a workforce of
fewer than 50 employees. Security service
eligible classes include armed and unarmed
security services, alarm monitoring and
installation services, security consultants,
armored car services and personal security
for executives.
The company said the two new products
offer broad coverage, including pollution
liability tailored to meet the needs of structural pest control operators and adding the
security services insurance sector was a
“natural progression,” given its experience
in writing risk that provide their own security or are contractually responsible for
security services, including sports teams
and stadiums.
November 2009
Your clients shouldn’t
have to choose
between the health
of their business
and their employees’
health care coverage.
At UnitedHealthcare,
we offer a breadth of
plans that allow them
to choose the one
that’s right for their
business, their budget
and their employees’
health coverage needs.
It’s one reason why
we’re the #1 carrier for
small business. Visit
uhctogether.com/ifa-pa
or call 1.877.277.2027.
Small
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© 2009 United HealthCare Services, Inc. #1 For Small Business claim based on UnitedHealthcare membership systems (May 2009) for groups with 2 – 99 employees. Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates.
Administrative services provided by UnitedHealthcare Insurance Company, United HealthCare Services, Inc. or their affiliates. Health Plan coverage provided by or through a UnitedHealthcare Company. UHCPA449333-000
|
IFAwebnews.com
November 2009
|
5
Elizabethtown agent sanctioned for
bilking investors out of $229,000
License surrendered to state regulators after failing to report prior action as well
By Bob Graham
A licensed insurance agent from Elizabethtown, Pa., was barred from associating with any FINRA members after he was
found to have sold $180,000 in fake investments and misappropriated $49,000
in insurance proceeds, records show.
The FINRA action against Steve A.
Brubaker follows action earlier this year
by the Pennsylvania Insurance Department leading him to surrender his producer’s licenses in the state.
FINRA sanctioned Brubaker after he
was found to have recommended that his
customers invest in bearer bonds, falsely
representing that the bond issuer was a
nonprofit entity that helped needy people
and had been in existence for 15 years.
FINRA officials said no such security investments existed.
Brubaker was found to have provided
his customers with fake certificates for the
bonds and used the $180,000 he obtained
from customers for his personal benefit.
He also misappropriated $49,000 in insurance proceeds that customers provided
him, after misrepresenting to customers
that they were invested in the bonds, according to FINRA.
Brubaker neither admitted nor denied
the FINRA allegations.
In May, Brubaker surrendered his insurance license after PID investigators
found evidence that he failed to report to
the insurance department charges stemming from his selling of unregistered securities to nine of his existing elderly
clients from March 2007 to February 2008,
according to a consent order signed by
Brubaker May 28. Agents must report actions against them in any jurisdiction
within 30 days.
The order states that Brubaker charged
each client $30,000 and kept the money
instead of investing it.
Pennsylvania records show Brubaker
failed to notify authorities of 18 felony
charges filed against him, including six
counts of theft by deception, six counts of
theft by failure to make required disposition
of funds received and five counts of sales
and purchases under the Securities Act. IFA
Dominion Now Offers Vision Benefits!
Dominion is your single source
for competitive dental and
vision plans. We offer:
Two-year rate guarantees
Very attractive level
commissions on all group
dental and vision benefit sales
Troubled insurer Penn Treaty
should be liquidated, Ario says
Insolvent Allentown-based firm would
need large premium hike to meet claims
By Keith L. Martin
Citing the need to treat policyholders
fairly, Pennsylvania’s insurance commissioner
has petitioned that the Penn Treaty Network
America Co. and its subsidiary, American Network Insurance Co., be liquidated.
Joel Ario filed the petition in Commonwealth
Court Oct. 2, following an
analysis of the business’
operations by the Pennsylvania Insurance Department. In January, the
Commonwealth Court
Joel Ario
placed Allentown, Pa.based Penn Treaty into rehabilitation under the statutory control of the PID, following financial troubles by the insurer.
In the petition, Ario says as of Dec. 31,
2008, Penn Treaty reported a negative total
statutory capital and surplus of $224 million, making the insurer insolvent.
Ario said in a statement that the PID has
been analyzing Penn Treaty’s assets, liabilities, reserves and surpluses since that time.
’Significant’ increase needed
“Our comprehensive, independent evaluation has determined that the companies
do not have the ability to pay future claims
without significant rate increases that
would have to be requested and approved
in all 50 states,” he said. “In the current circumstances, those rate increases simply
would not be fair to policyholders.”
Go to DominionDental.com
or call 877-559-9624
We Work For Your Benefit.
Vision plans are underwritten by Security Life
Insurance Company of America (Minnetonka, MN)
and are marketed and administered by Dominion
Dental Services USA, Inc.
This communication is not intended for presentation,
distribution, or dissemination to the public, and is for
internal use by sales agents/brokers ONLY.
Rehabilitation not enough
“Keeping [Penn Treaty] in rehabilitation
will cause substantial losses to policyholders which can be reduced and, in
some cases avoided, in liquidation,” the
petition states. “[Penn Treaty] if it remains
in rehabilitation, even if it could raise rates
by 60% over the next 10 years, will exhaust
its assets in 2025 and will leave $2.2 billion
of remaining policyholder liabilities.”
He added that long-term care policies
will not be canceled, except by the policyholder, and will be transitioned to the
states’ guaranty funds once an order takes
effect. Guaranty funds have the right to assess other insurance companies to cover
policyholder claims up to coverage limits
that vary by state, Ario noted.
A spokesman for the National Organization of Life & Health Insurance Guaranty Associations told Bloomberg that
Penn Treaty’s liquidation would be the
largest in at least five years.
Penn Treaty and American Network
provide long-term care insurance to more
than 120,000 policyholders nationwide. IFA
Settlement: Coventry First, N.Y. reach deal
From page 1
Access to the EyeMed
provider network, one of the
nation’s largest vision networks
In the petition, Ario argues that “even
under optimistic projections,” for premiums to be sufficient to support the coverage provided and for Penn Treaty to be solvent, it would need rate increases of 153%
approved and in effect by July 2010, plus
additional rate increases after that of 60%
over 10 years.
Indicating that policyholder claim payments “are our number one priority,” Ario
said the petition was filed instead.
consumer actions of the life insurance
companies that are calculated to deprive
policyowners of the full market value of
their policies.”
Through the settlement, Coventry was
not assessed any fine or penalty.
The insurer said it has paid more than
$2.8 billion to consumers for insurance
policies they no longer need. Over the past
year, Coventry has paid policyowners five
times more than they would have received
had they surrendered their policies back to
the insurance company, it said.
According to Coventry, the parties
agreed on a set of business practices establishing a model for the life settlement
|
IFAwebnews.com
industry. This agreement provides for disclosure to New York policyholders of compensation paid to intermediaries in life
settlements.
Coventry said it has “long supported”
legislation in the state requiring full disclosure of compensation and agreed to cooperate with the attorney general’s office to
“ensure that the industry continues to support the interests of consumers.”
“We will continue to fight for consumers’ rights to access the market value
of their life insurance policies,” said
Buerger. “We are proud to have created
this market and to have paid consumers
billions of dollars for their unneeded life
insurance.” IFA
November 2009
Employees to ‘share the burden’ in ’10
LEGALBRIEFS
Surveys show employers looking for help
covering double-digit health benefits hike
News from the federal and state courts.
Ex-AIG advisor gets prison time, despite use of voodoo
Voodoo dolls and a psychic could not keep the former CEO of a Tennessee
employee benefits administration company out of prison for cheating
thousands of clients out of more than $19 million.
Voluntary
Benefits
Barry Stokes, 52, CEO of Dickson, Tenn.-based 1Point Solutions, was sentenced to 151 months
in prison for orchestrating the fraud, embezzling funds from victims’ 401(k), health savings and
dependent-care accounts, according to the U.S. Attorney for the Middle District of Tennessee.
Stokes was a former registered representative of AIG Financial Advisors who has been in jail
awaiting sentencing since 2006.
Part of that time behind bars, according to The Tennessean newspaper, was spent making
voodoo dolls of financial victims and sticking them with pins to prevent them from testifying.
Stokes also paid a psychic with a credit card to give him readings while in jail and wrote the
psychic to say he was lighting candles and throwing salt over his shoulder in order to keep
creditors and critics away, according to the report.
When they receive their open enrollment
materials this year, employees can expect
to dig deeper into their pockets for their
health benefits in 2010.
Employers are expecting their workers
next year “to share the burden of doubledigit rate increases,” said John Zern, U.S.
Health and Benefits Practice director at
Aon Consulting.
November and December are traditionally the busiest months for health brokers,
as the majority of companies implement
new health benefits plans Jan. 1.
Faced with a flagging economy, fewer
than half of employee benefit plan spon-
Minn. suing firms for promising affordable health care
Health
Insurance
Financial Planning
Charging them with “aggressively promoting” non-insurance products, Minnesota’s attorney general has filed suit against two companies.
fastest
growing careers.
Consumer Health Benefits Association, a Missouri non-profit corporation with a headquarters in Florida, and Home Health America LLC of Nevada are the focus of a pair of civil suits
filed by Minnesota Attorney General Lori Swanson, seeking injunctive relief, restitution for
consumers and civil penalties. Both companies have reached consent agreements with
other state regulators regarding their practices.
is among the
The Minnesota suit against CHBA alleges that the company violated the state’s consumer
fraud and deceptive trade practices laws. Among the claims is that the company targeted
people looking for affordable health insurance, misrepresenting that it offered health insurance or the “functional equivalent,” according to Swanson’s office.
The suit against Home Health America and its owner, Michael Woodward, alleges violations
of the state’s consumer fraud, deceptive trade practices, long-term care insurance and home
solicitation laws. Swanson’s office said the company allegedly sold elderly customers longterm and home care coverage, while not licensed as an insurance company.
Financial-management acumen is
expected to be one of the most
marketable skills in the next decade
and the CFP® designation is the best
known credential.
Judge shaves no prison time off for false razor claims
A Palmdale, Calif., man will spend more than 14 years in prison for trying to
sue several razor manufacturers over the same injury, collecting $9,500 from
the self-insured companies.
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Larry Butler, 40, was convicted of insurance fraud, grand theft and perjury, according to the
California Department of Insurance.
The department began an investigation after receiving a complaint from one of the four companies sued by Butler, who claimed that over a five-month period, the razors caused him to
have ingrown hairs, resulting in scarring on his face. To support his claims, the department
said, Butler submitted identical photographs of the alleged injury, and the same receipt and
price quote for seeing a dermatologist to the companies.
For program details and application,
call 412.396.5600 or visit
www.duq.edu/fp.This program is
approved by the Veteran’s Administration
for tuition funds.
N.C. agent accused of embezzling funds from 90-year-old
The owner of a Smithfield, N.C., insurance agency faces a pair of felony
charges for allegedly cheating a 90-year-old woman out of $168,176, a case
investigators believe is part of a larger scheme.
Life
Insurance
For the latest Legal news go to IFAwebnews.com/Record
The next session begins on
January 15. Courses will be
held on Friday evenings and
Saturdays on alternating weekends.
Certified Financial Planner Board of Standards, Inc.
owns the mark CFP®, which it awards to individuals
who successfully complete initial and ongoing
certification requirements.
Charles Mark Hall, 50, owner of Market Street Advisors, was arrested with more charges
pending as investigators say the total losses to his clients stands at $2.5 million, according to
the North Carolina Department of Insurance.
Hall is accused of embezzling and converting to his own use three separate annuities. Hall
also allegedly convinced the woman to sign surrender forms for her annuities, then took the
money without her knowledge, consent or endorsement, according to arrest warrants.
sors say the money they pay toward workers’ benefits has increased this year, according to a Prudential Financial study.
In 2007 and 2008, two-thirds of employers surveyed reported increasing their
spending.
Nearly half (41%) of employers expect to
make substantial changes to their 2010
medical benefits, according to the Aon
Consulting survey.
Of those business owners, 70% said they
are planning to increase employee contributions and 67% are expecting to raise copayments, co-insurance or out-of-pocket
premiums, the survey found.
About one-third of companies are maintaining their 2008 budget levels, while 15%
say budgets decreased from last year. IFA
Attend an information session on Wed., Nov. 18 - 5:30 to 7 pm
or Wed., Dec. 9 - 5:30 to 7 pm. To register, call 412.396.5600.
|
IFAwebnews.com
November 2009
|
7
White disconnects himself from robo-calls
State senator denounces early Sunday morning call promoting financial services
By Keith L. Martin
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PA’s Leading Provider-Owned, BROKER-FRIENDLY PPO
State Sen. Don White
(R-Indiana) is distancing
himself from a recent
round of early morning
“robo-calls” touting financial services for
Pennsylvania residents.
Joe Pittman, chief of Don White
staff for the chairman of
the Senate Banking and Finance Committee, said the office received about two
dozen calls from angry constituents over
calls received between 4:30 a.m. and 5
a.m. Sunday, Sept. 27. The calls, Pittman
told Insurance & Financial Advisor, featured a message from a “Jim White,”
about a federal mortgage lending and
housing program.
Given Sen. White’s position with the insurance committee, Pittman said some
callers were adamant that the call came from
a “Don White,” hence the angry reaction.
In a statement, the senator said he did
not know a “Jim White” nor was he associated with is organization in any way.
“I am extremely disgusted to learn of
many residents receiving repeated calls in
the early hours of Sunday morning,” White
said. “Such activity goes way beyond bad
taste and abysmal business sense – it is
plain and simple harassment. I feel badly
many people thought the calls were associated with me and my office because of
the similar names.”
Pittman said the calls, which were
placed primarily in Armstrong County,
were likely scheduled incorrectly, set to be
automatically dialed at 4:30 p.m. rather
than 4:30 a.m.
Pittman said no one from White’s office
could reach the financial services group
directly. Constituents upset by the robocalls were urged to register their phone
numbers under Pennsylvania’s “Do Not
Call” program. IFA
// HEALTH INSURANCE
Coventry Health Care expands PPO network in mid-Atlantic
Coventry Health Care, the Bethesda,
Md.-based health insurer, has expanded
its regional PPO network in the mid-Atlantic region.
“This expansion of the regional PPO
network will provide Coventry Health Care
the opportunity to grow in the DC Metropolitan region, by offering our employers
affordable pricing, great benefit plan designs and excellent customer service,” said
Deborah Gough, Coventry’s vice president
of sales, in a statement.
The expanded network, which became
effective July 1, will serve employers with
employees along the I-95 corridor and in
particular, employers with employees in
the Washington, D.C., metropolitan area,
according to the company.
The regional PPO Network now includes Delaware, Maryland, Southeastern
Pennsylvania, Southern New Jersey, Virginia, West Virginia and Washington, D.C.
The company said its new network provides “a seamless and integrated PPO network solution” for employer groups
throughout the mid-Atlantic region.
The products based on this larger network will be sold through the company’s
broker distribution and supported by
Coventry’s sales and marketing teams located in Maryland, Virginia and West Virginia, the company said. IFA
// HEALTH INSURANCE
Penn. dental insurer donates $10,000 to clinic for uninsured
Delta Dental of Pennsylvania is helping a
community clinic get its dental program up
and running through a $10,000 donation.
The insurer, headquartered in Mechanicsburg, Pa., issued a grant to The Community Health Clinic of Butler County, which
provides free medical care to more than
1,000 uninsured patients. The clinic, which
opened in 2008, built two dental suites and
enlisted dentists to provide services, but a
budget shortfall has stalled the offering of
dental services to low-income individuals
with unmet dental needs.
|
IFAwebnews.com
Gary D. Radine, Delta Dental president
and CEO, said when the company heard
about the clinic, “there was no question
that we would do what we could to help.”
Basic dental services such as cleanings,
exams, fillings and extractions will be provided one to two times monthly to eligible
patients. IFA
News straight to your inbox.
Subscribe at
November 2009
// REGULATORY ACTION
Va. regulator has ‘substantial
doubt’ about York insurer
By Bob Graham
A Pennsylvania insurance company’s
recent financial reports – noting a 71%
decrease in its policyholder surplus in
the last year and nearly $111 million in
net losses for the second quarter – have
raised “substantial doubt about its ability
to continue” to operate, according to Virginia insurance regulators’ records.
Lincoln General Insurance Co., based
in York, Pa., reported in its June quarterly
statement to Virginia regulators that it
had a net loss of $110,966,613.
The company also reported that its
policyholder surplus decreased from
$142.9 million July 1, 2008, to $41.7 million last July.
The Virginia State Corporation Commission Bureau of Insurance intends to
suspend the company’s license to operate in Virginia after Nov. 14 if the insurer
cannot resolve the potentially hazardous
condition to policyholders, according to
Virginia insurance records, filed Aug. 31.
The Order to Take Notice calls the situation “a growing concern.” IFA
Fees: Groups don’t see hikes on horizon
From page 1
PAHU support.
“Paying the fee is a necessary part of
doing business as an agent,” she said.
“There are some carriers and employers
that pay that fee on behalf of their licensed
agents. It’s a good way to make sure that
all stay current.”
In New Jersey, there is also no word on
raising licensing fees, according to the
Independent Insurance Agents & Brokers
of New Jersey.
“For now, we are hopeful there are no
plans for a change, but it could change with
licenses or renewals for insurance producers ($80; up from $40), public adjusters
($250; up from $125) and surplus lines brokers ($625; up from $500). Fees for other
services such as exams, copies of licenses
and filings for appointments also doubled.
Warren Rupar, president of the Independent Insurance Agents of Connecticut,
’The difficulty of the increases, for an agent, is
that you can’t pass [it] on to your customer.’
‘Quite a hardship’
Kathleen Glattly, chairwoman of the Insurance Agents & Brokers
Service Group, serving
Pennsylvania
and
Delaware, said an increased fee “would be quite
a hardship,” given the toll
on the industry the economy is having already.
Kathleen Glattly
“We are hearing from
our agencies a decrease
in revenues from last year and not hearing a lot of people growing their business,” she said. There are also businesses
not making it, so it would be difficult for
agencies we represent if there was an increase in licensure.”
a new budget cycle [in the spring],” said
Jeanne M. Heisler, government affairs representative for the IIABNJ.
N.J. fee ‘adequate’
Heisler added that with the switch from
a four-year to two-year license renewal
process in the state, paying $150 every two
years “is adequate, and we would oppose
any change.”
“In New Jersey, anyone who deals with
the public needs a license,” she said. “So an
agency needs to be licensed and so does its
agents, so to increase that would be difficult, especially in this economy.”
Among the increased fees facing Connecticut’s agents and brokers directly are
told Insurance & Financial Advisor the increase “is one of those hard pills to swallow,
but you know as a businessperson you are
going to see it.”
“You have to pay the fees to stay in business,” he said. “The difficulty of the increases, for an agent, is that you can’t pass
the increase on to your customer. You need
to absorb it. You throw that [on top of the
difficulties from the economy] into one big
pot and it’s difficult.”
Diane Fowler, executive director of the
Professional Insurance Agents of Connecticut (PIACT), said her group also “anticipated” the fee increases “as the state is
looking for solutions to a growing budget
crisis.” IFA :: Keith L. Martin
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November 2009
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9
New Jersey officials urge caution when
considering life settlement purchases
Commissioner warns if promises ‘too good to be true, they probably are’
Filed Under:
Success.
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“Insurance & Financial
Advisor has been one of
our single best marketing
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region where we’re looking
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Jon Pappas
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Baltimore, Md.
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INSURANCE & FINANCIAL ADVISOR
publishes three print editions, mailed free of
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The New Jersey insurance commissioner
is warning consumers to “take precautions” before signing any life settlement
documents.
New Jersey Department
of Banking and Insurance
Commissioner Neil N.
Jasey issued the warning
in the wake of media reports indicating a possible
increase in demand for life
settlements or viaticals.
No complaints about Neil N. Jasey
the practice have been
reported to the agency, according to NJDOBI officials.
Jasey urged “consumers to review life
insurance policy sales very carefully and to
take precautions before signing any documents pertaining to transactions involv-
ing life insurance contracts,” according to
a statement. “Consumers should exercise
particular caution when considering a viatical settlement, the sale of a life insurance policy to a third party.”
Jasey said the media attention could encourage more people to sell their policies
to obtain cash.
“Life insurance policy holders may find
a financial solution that makes more sense
and leaves them less vulnerable to offers
that do not put their interests first,” the
statement said.
“If the promises made by a salesperson
sound too good to be true, they probably
are,” Jasey said.
NJDOBI officials also urged consumers
to verify that providers and producers involved in life settlement transactions are licensed in the state. IFA
// LEGAL ACTION
Scranton agency, home of former executive raided by state
Agents with the Pennsylvania Attorney
General’s Office raided the office of a
Scranton, Pa., agency and the home of one
of its former executives.
The Citizens Voice (Wilkes Barre, Pa.)
reported that agents with search warrants
issued by a Harrisburg grand jury began
arriving at the office of Murray Insurance
Oct. 5 as part of an ongoing investigation
into possible insurance fraud. Agents also
searched the nearby home of Christine M.
Oliver, the report said.
Oliver, a former Murray employee, surrendered her insurance license last year af-
ter signing a consent order stating she misappropriated $500,000 in client premiums.
The search comes after the agency’s
owner, Brian J. Murray, surrendered his
insurance license and was forced to sell
his agency by the Pennsylvania Insurance
Department for failing to properly manage Oliver.
Murray recently filed for Chapter 7
bankruptcy for himself and his business,
listing individual assets and liabilities between $1 million and $10 million for himself and the agency, according to published reports. IFA
// HEALTH INSURANCE
UPMC lobbyist to pay fine for improper Pirates ticket usage
A University of Pittsburgh Medical
Center lobbyist used Pittsburgh Pirates
baseball tickets purchased by the center’s Insurance Services Division to
court film executives and others, according to the Pennsylvania State Ethics
Commission.
Leslie McCombs, a UPMC consultant, was fined $5,025 by the commission for failing to properly register as a
lobbyist for the film company, Lions
Gate Entertainment Group, and for failing to include a daytime phone number when registering as a lobbyist for
UPMC, according to a commission de-
|
IFAwebnews.com
cision this summer. The decision, which
is confidential, was obtained by The
Pittsburgh Post-Gazette.
McCombs was lobbying for a state film
tax credit and had the approval of UPMC
President and CEO Jeffrey Romoff in spring
2007 to lobby for Lions Gate, according to
the report, which noted that McCombs assured him that “UPMC signs will be prominently featured throughout series,” her reference to a miniseries, renamed The Kill
Point, which began filming in March 2007.
The UPMC Insurance Services Division
provides health plans to about 6,000 employers and 1.4 million people. IFA
November 2009
PeopleNews
for CIGNA HealthCare, overseeing new business sales
in the Northeast.
Amber DiRocco
Fahima (Faye)
George-Harvey
Russell Roeder
AIA Benefits Resource Group of
Mechanicsburg, Pa., recently hired
Amber DiRocco as a client service
manager responsible for the company’s ancillary benefit products and
services division; Fahima (Faye)
George-Harvey as a senior client
Eve Pressley
service manager to support the
firm’s account executives; Eve
Pressley as human resources manager; and Russell
Roeder as a senior consultant for market development.
F. Scott Addis, president and chief executive officer of King of Prussia, Pa.-based The
Addis Group, will serve as society at-large
director for the Chartered Property Casualty
Underwriters Society for 2009-2010.
Brad Mantzell
David Irwin
Brad Mantzell was named vice president
and David Irwin chief operating officer for
Sharon, Pa.-based Gilbert’s Insurance &
Consulting.
Ellen Goodman joined Simpson &
McCrady, based in Pittsburgh, Pa., as director of marketing.
Michael S. King joined
HealthAmerica’s southeastern Pennsylvania
region as sales director.
Anthony Colistra has
joined Care Improvement Plus, a Medicare
Michael S. King
Advantage health plan
owned and operated by
XLHealth as vice president of market growth
and development. Colistra most recently
served as vice president of national accounts
Donn Sharer of Millstone
Township, N.J.-based
Sharer & Associates and
Allstate New Jersey Insurance is one of several
agency owners and personal
finance representatives serving on Allstate New Jersey’s
Business Advisory Board.
Herbert Wall opened Property Loss/Claims LLC, a
property claim consulting
firm in Bethel Park, Pa.
compensation; Gail L. Peterson to vice president and director of communications; and
Stephen C. Petzold to assistant vice president of safety operations manager for
Selective’s New Jersey region.
Andrew S.
Becker
Send Your News!
Cyndi Bennett
Andrew S. Becker was appointed director of
commercial lines pricing and research for
Selective Insurance Co. of America, a subsidiary of Branchville, N.J.-based Selective
Insurance Group. The company also
appointed Cyndi Bennett to vice president of
The easiest way to submit news about
your promotions, new hires, awards and
other honors is online. It’s fast and free.
Phone: 877-IFA-5001 Fax: 410.667.7977
Email: Edit@IFAwebnews.com
Smaller
Jim Mohler was named
region sales manager for
Wexford, Pa.-based Nationwide Specialty Health, and
is opening a new Nationwide Better Health division
for the company.
independent
agencies are
thriving!
Leslie Heindel, executive
client service agent for
the benefits department
of York, Pa.-based
McConkey & Co. Insurance and Benefits,
earned her Certified
Employee Benefit Special- Leslie Heindel
ist designation.
The Alternative
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Albert J. “Bert” Kieres
joined Miers Insurance of
Allentown, Pa., as a business insurance account
executive.
Brian O’Connor joined
Liberty Insurance
Albert J. “Bert”
Agency
of Pittsburgh,
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Cappy Stults of Highstown, N.J.-based
Allen & Stults will serve on the national Big
I Consumer Agents Portal Task Force and
the Professional Liability Committee; Jacki
Frank of Brick, N.J.-based Tri County
Agency on the Council for Best Practices;
and Sheri Acconzo, IIABNJ president and
CEO, as chair of the IIABNJ co-branded
Website Oversight Task Force.
Now nationally at over 3,000 agencies
and $6 billion in premium
Beth Hartman of Valley Agency in Chambersburg, Pa., earned her Certified Insurance
Service Representative designation.
|
IFAwebnews.com
November 2009
|
11
Debate: Commissions disclosure returns to spotlight
From page 1
eral Eliot Spitzer.
“What’s really happening here
is that the mega-brokers regret acquiescing to Spitzer and Company,” said Wesley Bissett, senior
counsel for government relations
for the Independent Agents & Brokers of America.
The possible end of those bans
has lead the National Association
of Insurance Commissioners to
coordinate a new Broker Compensation Task
Force, headed
by Illinois Insurance Director
Michael
T.
McRaith, to coordinate the impact for state Michael McRaith
regulators.
“This is a difficult issue, but not
one that is cause for great alarm,”
McRaith told Insurance & Financial Advisor. “It reflects the factual
reality at least one regulatory
agreement has been amended
and if the other three are
amended, there are settlements
that are affected.”
Guidance for producers
The Broker Compensation Task
Force’s charge also called for promoting “best practices in related
disclosure for state insurance departments and regulated entities
to consider implementing,” according to the NAIC.
McRaith said he is unsure the
group will address that second
charge, as “I’m not certain it is appropriate for us, at this time, to
address that concern.”
He added that if the group addressed the matter, it would not
be in creating a model regulation
or statute for states, but rather “as
a service to producers ….so they
have a sense of what are the
guidelines and what are thoughtful ways to evaluate disclosure.
“We know the industry as a
whole has moved toward in-
creased transparency,” McRaith
said. “As it evolves into a customary practice, producers are asking
us for guidance.
“The important message to
agents and brokers is to understand that we, as regulators, have
tremendous respect for their interaction with consumers, the
service they provide and the value
of that relationship,” he said.
New York moves forward
One of the outcomes from the
mega-broker deals four years ago
was New York exploring the topic of
broker compensation transparency,
an issue its insurance department
and attorney general’s office revisited in hearings last summer.
“Out of the blue, New York announces they will have hearings
and what is happening now could
reopen this otherwise dormant issue,”Bissett said at a recent industry event in Maryland. In September, the New York State
Insurance Department submitted
|
// Mid-Atlantic states still mulling compensation rules
Maryland Insurance Commissioner Ralph S. Tyler told Insurance & Financial Advisor this spring he would explore enacting a rule like New York’s and was
collecting input from stakeholders. Recently, Tyler said he has spent the past few
months doing just that to “review information and decide a direction to pursue.”
“The reaction varies from those who feel fairly strongly this is something we
should do, those who are indifferent and others who strongly oppose it,” he said.
“I think we’ll make a direction about the direction we plan to go in very soon.”
Former commissioner of the District of Columbia’s Department of Insurance,
Securities and Banking, Thomas E. Hampton, said he hoped to have a new regulation in effect by the end of the year, but his successor is taking a step back.
“At the present time, I do not have a proposal to implement any new disclosure
regulations,” said Acting Commissioner Gennet Purcell. “I am, however, aware
of it and looking into the issue, monitoring our neighboring jurisdictions and will
make a determination as to what stance will appropriately inform and protect our
District consumers going forward.”
Officials in Delaware, who indicated this summer that they were in the fact-finding phase of considering commission disclosure rules, did not respond to
inquiries for an update on their progress. :: By Keith L. Martin
new rules on producer compensation transparency to the governor’s office for review, bringing it
closer to becoming regulation.
The proposed rule requires oral
or written disclosure of compensation prior to the submission of
an application and, if requested,
IFAwebnews.com
additional information including
how compensation can vary and
gives the purchaser up to three
years after a policy is issued to request the disclosure.
Bissett said the Big I has “serious
questions” about the department’s
legislative authority on the matter. IFA
November 2009
On the Hill
Calendar of Events
has gone digital.
News From The Nation’s Capitol
Prudential calls for simple
disclosure in pension reform
Reinsurance regulation bill
by NAIC pitched to Congress
Government reform of pension plan regulations should guarantee participants that
disclosures will be “relevant, timely and succinct,” according to Prudential Financial.
The National Association of Insurance Commissioners will send to Congress a federal bill
to modernize the regulation of reinsurance.
The Newark, N.J.-based financial services
firm recently had three executives testify,
along with other industry leaders, before the
U.S. Department of Labor’s ERISA Advisory
Council, which is weighing possible reform.
The Prudential executives called on the
Department of Labor, the U.S. Treasury and
the Securities and Exchange Commission to
better coordinate retirement plan notice and
disclosure requirements.
“We strongly urge active and coordinated
pursuit of any actions needed to bring about
improvements to required participant
notices and general retirement literacy,” said
Michelle Morey of Prudential Retirement.
Repeal of federal antitrust
exemption for insurers sought
Patrick Leahy, chairman of the U.S. Senate
Judiciary Committee, introduced a bill eliminating the federal antitrust exemption given
to health and medical malpractice insurance
companies, as a means of cutting costs.
If approved by Congress
and President Barack
Obama, the bill would
repeal the exemption
under the 1945 McCarran-Ferguson Act, which
empowers states to regulate “the business of
insurance.”
To provide the latest, most accurate
Calendar of Events information, the
calendar is now online at
IFAwebnews.com/calendar. A print
calendar will no longer appear each month.
Associations and other groups are encouraged to post
events, seminars and other activities on the calendar
at no charge. It’s quick, easy and always up-to-date.
The Reinsurance Regulatory Modernization
Act of 2009 would create “national reinsurers” located in the U.S. and “port of entry
reinsurers” outside of the country. Each
class would be governed by a state regulator with a federal review board for evaluating
states and non-U.S. jurisdictions.
“We are supporting this
federal legislation in
order to preserve and
improve state-based
regulation of reinsurance, ensure timely and
uniform implementation
of this legislation
Scott Richardson
throughout all states,
and as a more comprehensive alternative to the reinsurance
provisions of the recently passed Nonadmitted and Reinsurance Reform Act,” said
Scott Richardson, acting chairman of the
NAIC’s Reinsurance Task Force.
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White House praised for work
to improve 529 college plans
Professional Liability
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• Architects & Engineers
• Allied Medical
• Miscellaneous E & O
• Real Estate
• Consultants
• Technology E & O
• Contractors Professional
A national group advocating for reforms to
539 college plans at the state and national
level is commending the Obama Administration for its dedication to aid Americans in
saving for college.
Patrick Leahy
Leahy (D-Vt.) said insurers are treated differently than other companies in the U.S. and
the bill would hold insurers to greater penalties for “flagrant antitrust violations.”
“A few industries have used their influence
to obtain a special, statutory exemption from
the antitrust laws, and the insurance industry is one of them,” he said. “In the markets
for health insurance and medical malpractice
insurance, patients and doctors are paying
the price, as costs continue to increase at an
alarming rate. Insurers should not object to
being subject to the same antitrust laws as
everyone else.”
Environmental
• Environmental Contractors
• Non Environmental
Contractors - Pollution
• Site Coverage
The College Savings Initiative, a joint venture
between the public policy advocate New
America Foundation and the Center for
Social Development at Washington University in St. Louis, Mo., recently praised the
White House for its support of the plans. In
September, Vice President Joe Biden
hosted a forum on college affordability and
the U.S. Treasury released an interim report
on the effectiveness of 529 plans.
Contact us:
Products Liability
• Builders Risk
• Coastal
• Vacancies
• Apartments/Condominiums
General Liability
• Contractors
• Special Events
• Distributors
• Vacancies
• Real Estate
• Nurses Registry
• Landscapers
• Snow Plow
• Welders
• Apartments/Condominiums
• Manufacturing and
Non Manufacturing
• Discontinued Products/
Completed Operations
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Liability Inland Marine
• Builders Risk
• Contractors Equipment
• Special Floaters
• Medical/Scientific
Equipment
Rick Sullivan – rsullivan@ctunderwriters.com
Rita Hanebury – rhanebury@ctunderwriters.com
(610) 260-1499 FAX (610)828-8257
WWW.CTUNDERWRITERS-PA.COM
“College savings plans have been around for
nearly two decades now, and while they were
originally intended to help moderate-income
families save for college, we believe that they
can be helpful in increasing college access
and affordability for families at every income
level,” said Jackie Williams, director of the
College Savings Initiative, in a statement.
Property
600 West Germantown Pike,
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Plymouth Meeting, PA 19462-11046
|
IFAwebnews.com
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November 2009
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13
Concerns remain over revamped federal insurance office bill
NAIC fears new national bureau could
‘displace’ work of state-based regulators
By Keith L. Martin
Legislation aimed at creating a national
insurance office has a new name, but the
same proponent seeking to establish a federal insurance regulator.
Rep. Paul Kanjorski (DPa.) released a discussion
draft of HR 2609, originally dubbed the Insurance Information Act of
2009 when it was released
in May. The new draft,
called the Federal Insur- Paul Kanjorski
ance Office Act of 2009, is
similar to the bill Kanjorski introduced in
last year, which died in Congress.
The intent of Kanjorski’s bills, to create
the national office, is backed by the Obama
Administration and included in its financial
services regulatory reform, which has taken
a back seat to health care reform.
pertise within the federal government regarding the industry, especially during the
collapse of American International Group
and last year’s turmoil in the bond insurance
markets,” the congressman said.
Bill ‘strays too far’
Impact of AIG
The Federal Insurance Office Act calls for
the creation of an office within the U.S. Treasury to “provide national policymakers with
access to the information and resources
needed to respond to crises, mitigate systemic risks, and help ensure a well functioning financial system,” Kanjorski said.
“Insurance plays a vital role in the smooth
and efficient functioning of our economy,
but the credit crisis highlighted the lack of ex-
Testifying before Congress, the National
Association of Insurance Commissioners
said the proposed federal office should
connect state regulators rather than “displace or diminish” their work.
“A formal federal interface is appropriate, but the current ...proposal strays too far
from past legislation that included important safeguards against preemption of state
laws and consumer protections,” said NAIC
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IFAwebnews.com
// PROPERTY-CASUALTY
Pa. ranks third in likelihood
of auto-deer collisions
One in every 94 Pennsylvania motorists
is likely to strike a deer in the next year,
the third largest ratio in the United States
according to new data by State Farm.
Utilizing its claims data, State Farm
estimates that 2.4 million collisions between deer and vehicles occurred in the
U.S. from July 1, 2007 to June 30, 2009.
The insurer said that tally, 100,000 collisions per month, is 18.3% more than five
years earlier.
In New Jersey, the likelihood is 1 in
182 and for Delaware, 1 in 198. IFA
// EMPLOYMENT
The Hartford adding 400 jobs
in Lehigh Valley through 2010
The Hartford announced it will add
another 400 jobs in the Lehigh Valley
through 2010, according to the Allentown
Morning Call.
The announcement came at a recent
job fair in Allentown, Pa.
Jeff Bergen, assistant vice president of
sales, told the newspaper that the jobs
are with The Hartford as well as its affiliated health insurance company, Catalyst
360. The company currently employs
about 1,200 in the Lehigh Valley.
Bergen said The Harford has been “very
successful” in hiring in the area and is expanding because it can find good employees, the Morning Call reported. IFA
// LEGAL ACTION
Williamsport man cleared in
workers’ comp. fraud trial
A Lycoming County jury determined
that a Williamsport, Pa., man was not
guilty of trying to collect $32,000 in workers compensation benefits by lying about
a job-related injury.
Terry Hill, 39, was cleared of charges of
workers compensation insurance fraud
and criminal attempt to commit theft by
deception, according to a report.
Hill said he hurt his knee lifting garage
door panels as a temporary employee at
Thermacore in 2005, the report said.
However, at least one witness testified he
saw Hill hurt himself while lunging for a
volleyball at a company picnic.
Hill’s attorney said it was quite possible
his client aggravated the knee during the
volleyball game and the burden was on
the commonwealth to prove otherwise. IFA
November 2009
NewProducts
For more go to IFAwebnews.com/Products
‘Life Events’ kit assists
advisors meet clients’ needs
Principal Financial Group is
offering financial professionals
a new set of tools to identify opportunities to
help clients address the numerous planned
and unplanned events in their lives.
deductible, co-insurance and length of coverage needed, according to the company.
Clients also have the choice to purchase the
product either through their professional
health insurance agent or online through the
company’s direct insurance agency, HCC
Medical Insurance Services.
The new “Life Events” kit is the latest segment of The Principal’s “More Business.
Less Time.” program, helping financial advisors work their book of business easily and
efficiently, according to the company.
The company said the product is appropriate
for those in transition such as recent college
graduates, unemployed individuals, new
employees awaiting benefit eligibility and those
seeking an alternative to COBRA coverage.
Financial
Services
The company said the kit provides step-bystep instructions and effective marketing
materials focusing on: how to identify when
life events are occurring; what life event
strategies to use with clients; how to help
clients identify action steps through a series
of event-specific checklists; and how to get
started using life events to build an existing
book of business.
New service line coverage for
homeowners comes to surface
A new product by Hartford
Steam Boiler Inspection
and Insurance Co. is designed to aid homeowners in the event an outdoor water,
sewer or electrical service lines fails, causing
damage to their homes.
PropertyCasualty
The Hartford, Conn.-based company said
that most homeowners don’t know that
they own outdoor service lines and are
responsible for repairs, as the damage is
excluded under most homeowner policies.
The new service line coverage is added to
the policies of other insurance companies
and pays up to $10,000 per service line
break, according to Harford Steam Boiler.
The coverage is provided as an enhancement to a company’s homeowner policies or
packaged in an extended coverage endorsement, with a deductible that follows the
homeowners policy.
Insurer renames short-term
medical insurance product
Formerly named the Amigo
Short Term Medical Plan,
HCC Life Insurance Co. announced that the
product is now known as HCC Life Short
Term Medical.
Life
Insurance
The product offered by the Indianapolis, Ind.based company is designed to provide
healthcare coverage for individuals and families in need of medical insurance on a
short-term basis.
HCC Life STM features a choice of
Highway, street and road
contractors program rolls out
To help meet the need for
added coverage to those
working to improve the nation’s infrastructure,
Travelers is paving the way with a new highway, street and road contractors program.
PropertyCasualty
The Hartford, Conn.-based company
developed the IndustryEdge program to meet
the specific and risk management needs of
these professionals, it said, who have 20 or
more employees. Through feedback from its
independent agents, Travelers said it built the
program to provide a program that addresses
general liability, workers compensation,
umbrella, contractors pollution liability and other
coverage for these specific professionals.
The product also features a collection of
safety and risk management resources for
contractors and benefits from Travelers’
experienced construction claims staff to
work exclusively on handling claims fairly
and efficiently, according to the company.
New dual coverage UL policy
pays benefit on first death
The Phoenix Cos. introduced
a new first-to-die universal
life insurance product for two lives, featuring
flexible premiums and cash accumulation.
Life
Insurance
The Phoenix Joint Advantage Universal Life
product gives customers vital insurance protection and the opportunity to grow their
cash values, according to the company,
headquartered in Hartford, Conn.
The new stand-alone product is designed
to appeal to couples or small business
partners who are concerned about cash
flow or liquidity on the first death.
The new product pays a death benefit on
the first death and, with the addition of the
Survivor Purchase Option Rider on a policy,
the surviving spouse or business partner can
buy a new Phoenix policy at that time with
no need for medical evidence or insurability.
|
IFAwebnews.com
November 2009
|
15
For the Record
and theft by failure to make required disposition of funds,
charges she failed to report within 30 days, as required.
Pennsylvania Agent & Carrier Actions
The following summaries are based on information
obtained from the Pennsylvania Department of Insurance.
■
Stephen Honowitz
Lansdale, Pa.
Action: Five years of license supervision
Synopsis: Honowitz was found to have failed to report on
renewal applications, appointment applications and a Jan.
19 electronic application for a resident viatical settlement
broker license that he was convicted in June 1975 of four
felony counts of distribution of narcotics and non-narcotic
drug controlled substances.
Docket No. CO09-04-016
■
Michael Clineff
Westgrove, Pa.
Action: Three years of license supervision
Synopsis: Clineff was found to have failed to report on a
March 25 electronic application for a resident producer license his August 1989 convictions on felony and misdemeanor drug charges.
■
FINRA Case #2007010438801
■
N.J. Agent and Carrier Actions
The following summaries are based on information obtained
from the New Jersey Department of Banking and Insurance.
■
FINRA Case #2007009411901
■
FINRA Case #2008014201601
■
FINRA Actions
The following summaries are based on information
obtained from FINRA.
Akim Frederic Czmus
Philadelphia, Pa.
Action: Barred from association with any
FINRA member
Gregory Nicholas Elinsky
Westchester, Pa.
Action: Suspended by FINRA from Oct. 16, 2008, to June 4
Synopsis: Elinsky was suspended for failing to comply
with an arbitration award or settlement agreement
under FINRA Rule 9554.
Consent Order #E09-46
■
David Edward Weiner
Tenafly, N.J.
Action: Fined $5,000 and suspended from associating
with any FINRA members through July 11, 2011
Synopsis: He was found to have failed to appear for a
FINRA on-the-record interview.
Triad Healthcare Inc.
Plainville, Conn.
Action: Paid a $50,000 fine and remediated improperly
denied or underpaid claims
Synopsis: Triad, a licensed organized delivery system,
denied or underpaid certain chiropractic claims on the erroneous basis that the underlying services were subject
to precertification.
Tyler Anders Waltsak
Wall Township, N.J.
Action: Barred from association with any FINRA member
Synopsis: Waltsak was found to have failed to respond to a FINRA request for documents and
information, and engaged in outside business activities
without providing written notice to his member firm.
Diane Batt
Erie, Pa.
Action: License revoked and five-year future license
supervision
Synopsis: Batt was found to have failed in June 2008 to forward a policyholder’s full cash auto premium of $688 to her
employer, Bayline Insurance Agency. She only forwarded half
to Erie Insurance and paid the other half with a personal
check. In August 2008, she was charged by the McKean
County District Attorney’s Office with theft by unlawful taking
Gretchen J. Bartram
Oxford, Pa.
Action: Five years of license supervision
Synopsis: Bartram failed to report a May 2008 criminal
conviction involving misdemeanor possession of a controlled or counterfeit substance.
■
Synopsis: Czmus was found to have failed to appear for
a FINRA on-the-record interview and willfully failed to
disclose material information on his Uniform Application
for Securities Industry Registration or Transfer (Form U4)
Actions by other states
The following summary is based on information obtained
from the state noted in the last line of the item.
■
Federal Insurance Co.
White House Station, N.J.
■
Great Northern Insurance Co.
■
Pacific Indemnity Insurance Co.
Action: Paid a $3,000 fine, based on $1,000 per company
Synopsis: Companies were found to have issued insurance
contracts or policies not in accordance with rate and supplementary information filings in effect for the companies.
Virginia Case No. INS-2009-00098
New Insurers
The following new insurers were recently noted by the
Maryland Insurance Administration.
American Summit Insurance Co., P.O. Box 2650,
Waco, TX 76702, domiciled in Texas.
Eastern Advantage Assurance Co., P.O. Box 83777,
Lancaster, PA 17603, domiciled in Pennsylvania.
Envision Insurance Co., 2181 East Aurora Road,
Twinsburg, OH 440897, domiciled in Ohio.
Express Scripts Insurance Co., Mailstop HQ2E04,
Saint Louis, MO 63121, domiciled in Arizona.
OneCIS Insurance Co., 11860 West State Road 84,
Suite 1, Davie, FL 33325, domiciled in Illinois.
Starr Indemnity & Liability Co., 90 Park Avenue, 7th
Floor, New York, NY 10016, domiciled in Texas.
SureTec Insurance Co., 925 Echo Lane, Suite 450,
Houston, TX 77204, domiciled in Texas.
Universal Health Care Insurance Co. Inc.,
100 Central Ave., Suite 200, St. Petersburg, FL
33701, domiciled in Florida.
New Risk Retention Groups
The following are new risk retention groups, based on
the Maryland Insurance Administration’s records.
ARCOA Risk Retention Group, 2721 N. Central Ave.,
Phoenix, AZ 85004, domiciled in Nevada.
|
IFAwebnews.com
Architects and Engineers Insurance Co., 2056
Westings Ave., Suite 20, Naperville, IL 60563,
domiciled in Delaware.
ARISE Boiler Inspection and Insurance, Company
Risk Retention Group, P.O. Box 23790, Louisville,
KY 40223, domiciled in Kentucky.
Caring Communities, A Reciprocal Risk Retention
Group, 20 Kimball Avenue, Suite 305, South Burlington, VT 05403, domiciled in Washington, D.C.
College Risk Retention Group Inc., P.O. Box 530,
Burlington, VT 05402, domiciled in Vermont.
Fairway Physicians Insurance Co., 15255 N. 40th
Street, Suite 109, Phoenix, AZ 85032, domiciled in
Washington, D.C.
ICI Mutual Insurance Co., 40 Main St., Suite 500,
Burlington, VT 05401, domiciled in Vermont.
Wellspan Reciprocal Risk Retention Group, 100
Bank St., Suite 610, Burlington, VT 05401, domiciled
in Vermont.
New Surplus Lines Insurers
The following are new surplus lines insurers, based on
Maryland Insurance Administration records.
Merchants National Insurance Co., 250 Main St.,
Buffalo, NY 14202, domiciled in New Hampshire.
Starr Surplus Lines Insurance Co., 90 Park Avenue,
7th Floor, New York, NY 10016, domiciled in Illinois.
United Specialty Insurance Co., 8200 Anderson Blvd.,
Fort Worth. TX 76120, domiciled in Delaware.
Redomestications
The following companies were redomesticated, based
on Maryland Insurance Administration records.
Continental Heritage Insurance Co., from Ohio
to Florida.
Fairmont Specialty Insurance Co., from Delaware
to California.
SPARTA Insurance Co., from Massachusetts to
Connecticut.
Union Central Life Insurance Co., from Ohio
to Nebraska.
Verlan Fire Insurance Co., from Maryland to New
Hampshire.
XL Select Insurance Co., from Oklahoma to Delaware,
// CRIMINAL CASE
Pennsylvania man gets
probation for false auto claim
A Souderton, Pa., man received two years
probation after trying to convince his insurance company that damage from an
accident was done by thieves.
Kyle Williams, 34, pleaded guilty to an
attempted theft charge, according to the
Doylestown Intelligencer.
Williams damaged his vehicle in a 2007
accident, but his insurance policy did not
cover any of the damage, according to the
report. The insurer was still notified about
the accident and took photos of the vehicle.
A month later, Williams told police his
car was stolen from outside his residence.
When it was recovered a week later,
Williams asked the insurer to pay for damage he said occurred during the theft. IFA
November 2009
NAIFA-Greater Philadelphia members Barbara Gelber and David Barrist (right) visit with Pennsylvania
State Rep. Michael F. Gerber during NAIFA-Pennsylvania’s Annual Day on the Hill.
For more photos, visit IFAwebnews.com and click on “Photo Gallery.”
NAIFA-PA visits state legislators in
Harrisburg with call for cooperation
Industry professionals offer expertise as ‘a
resource’ to elected officials in Harrisburg
By Bob Graham
About 40 members of the Pennsylvania chapter of the National Association of
Insurance and Financial Advisors visited
state legislators in Harrisburg, Pa., Oct. 6,
delivering a message of cooperation to
politicians.
The annual Day on the Hill gives NAIFA
members from all over the state the chance
to meet with their district legislators or
staff members.
“We are not asking for anything in particular,” Matt Steck, a NAIFA-PA lobbyist
with Greenlee Partners, told attendees before they set out in small groups of two to
four members. “The message is a good one.
You are not beating them up on the budget.”
Steck warned members that the state
legislators had been battling over the
budget at the time of the visit and probably would welcome the distraction offered
by NAIFA’s agenda.
Where in the past, the group asked legislators to approve or kill bills of interest,
this year’s list of concerns were minimal.
with SAVOY ASSOCIATES.
Many discussions focused more on how
General Assembly members can call on
NAIFA for expertise on insurance and financial service matters.
“Our message is that we want to be a resource to you,” David Barrist, president of
the Greater Philadelphia chapter of NAIFA,
told Rep. Michael F. Gerber, a Democrat
serving Montgomery County, Pa.
“We like things the way they are, and we
want to continue to provide people with
the products we offer,” added Barbara Gelber, a NAIFA-GP member from Brokerage
Concepts Inc. “We don’t want to explain to
them that what we promised has changed
because of what happens here.”
Among the concerns Steck suggested
members might address with the legislators they meet were a collection of bills
seeking to tighten regulations for insurance fraud prevention and detection, an
insurance bad-faith bill seeking to require juries to hear all cases, a bill that
would add new requirements for producers handling annuities, and two
budget bills regarding a tax on managed
care organizations and a capital stock
and franchise tax. IFA
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// LIFE INSURANCE
Luzerne Co. agency to save $120,000 with switch of carriers
The Luzerne County Transportation
Authority will see a savings of nearly
$120,000 over the next two years after it
switched carriers for some of its insurance policies.
The board approved a switch from
Sun Life to Unum for its short- and longterm disability, accidental death and dismemberment and life insurance for current employees and to increase some
death benefits, according to the WilkesBarre Times Leader. IFA
877.584.8112
www.savoyassociates.com
|
IFAwebnews.com
November 2009
|
17
Judge approves class action for Erie Indemnity claims adjuster suit
Initial approval by federal court lets case
regarding overtime pay move forward
A U.S. District Court judge has given his preliminary approval of a class action suit against
Erie Indemnity Co. alleging the company
failed to pay overtime to claims adjusters.
John Stanislaw, the lead plaintiff in the
case, says since February 2006, claims adjusters in the Murrysville, Pa., office have
been denied overtime pay because Erie Indemnity management altered pay records
or knowingly failed to record pay hours adjusters worked outside the office, according
to the Erie Times News.
The case was originally filed in 2007, seek-
ing the insurance company to pay overtime
and interest, damages and penalties on
wages to claims adjusters who were affected.
U.S. District Court Judge Sean J.
mailed to affected employees of the Murrysville office, the report said, who may join
the suit and share in any proceeds.
Erie Indemnity, which has denied the
Insurer accused of altering pay records,
failing to record pay hours for its employees.
McLaughlin ruled recently that Stanislaw
presented enough evidence to pursue his
claim that other adjusters were treated similarly by the company, the management
arm of Erie Insurance Group.
The ruling allows the parties to submit a
proposed notice to be advertised and
claims, will have a chance to challenge the
class action status of the case once a discovery period of evidence gathering is complete, the judge said in his ruling. IFA
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Tax-form scouring nets 3,000
NJ FamilyCare enrollees
New Jersey’s effort to find possible enrollees in state-funded health insurance
programs from tax forms appears to be
working, state officials said.
The Express Lane Eligibility project,
the first in the U.S., led to nearly 3,000
new children enrolling in the NJ FamilyCare program in its first three months,
state officials said.
Through the program, NJ FamilyCare
applications have been sent to families
who indicated on their 2008 state tax
forms that at least one child in their
household was uninsured.
Neil N. Jasey, commissioner of the
New Jersey Department of Banking and
Insurance, said the program’s success in
part explains the state’s reduction in the
number of uninsured people by more
than 11% or 147,000 individuals. IFA
// TECHNOLOGY
New Jersey health insurer
sees big hike in online claims
Call 267-419-1180
®
// HEALTH INSURANCE
|
IFAwebnews.com
In what it says is a move away from more
expensive and time-consuming paper
transactions, AmeriHealth New Jersey has
witnessed a 50% increase in claims submitted electronically by its providers.
The insurer, with offices in Iselin and
Mt. Laurel, N.J., says the increase equates
to three out of every four claims transmitted by computer. The company’s goal,
it said, is to have 90% of all provider
claims submitted electronically within
the next two years.
“We are working in close partnership
with our providers to help them make
the shift,” said Judith Roman, AmeriHealth New Jersey president and CEO, in
a statement. IFA
// DONE DEAL
Aetna to provide Medicare
plans to Pa. trust members
The Pennsylvania Employees Benefit
Trust Fund has selected Aetna as the sole
provider of Medicare Advantage PPO
plans to retired state employees statewide.
Under the contract, which takes effect
Jan. 1, 2010, Blue Bell, Pa.-based Aetna
will also be one of three health plans providing Medicare Advantage HMO plans
to retired state employees in Southeastern Pennsylvania and select sites outside
of the state. IFA
November 2009
In Memoriam
■ Catherine Binetti-Chiorazzi, 61, of
Secaucus, N.J.; former vice president of Binetti
and Insurance Co. in Union City, N.J.
■ Mary J. Butler, 83, of Lawrenceville, N.J.;
former employee with the New Jersey
Department of Banking and Insurance.
■ Richard Clark Caffee, 89, of Ewing, N.J.;
former employee of Metropolitan Life
Insurance Co.
■ James Gould Fischer, 84, of Bucks
County, Pa.; long-time insurance agent
with State Farm.
■ Anne M. (Quirk) Hannan, 77, of Ocean City,
N.J.; former claims adjuster for Narrigan
Insurance Co. in Radnor, Pa.
■ Walter A. Hartye Jr., 71, of Jersey City, N.J.;
retired insurance agent with John Hancock.
■ George Hayeck, 67, of Lower Gwynedd, Pa.;
25-year career as agent, account vice
president and human resources manager for
Liberty Mutual Insurance.
■ George F. Kennedy, formerly of Philadelphia,
Pa.; former agent for New York Life Insurance
in Bala Cynwyd, Pa.
■ John J. Lister, 82, of Villanova, Pa.; actuary
with Marsh & McClennan, then firm owner in
Drexel Hill and Villanova.
■ John P. McAuliffe, 67, of Verona, N.J.; 32year insurance career included Prudential
Insurance Co. in Morristown, Newark and New
York City, and Hartford Insurance, retiring as
group regional sales manager in 1999.
■ Robert E. “Bob” Ohle, of Monroe Township,
N.J.; 30-year agent and appraiser for Allen &
Stults Insurance Agency.
■ James J. Sheeran, 84, of Princeton, N.J.;
former New Jersey Insurance Commissioner
(1974-1982) and co-founder of NJ CURE auto
insurance and NJ PURE for medical
malpractice insurance.
■ F. Oliver “Ollie” Steinmtez, 80, of Wildwood
Crest, N.J.; 40-year employee of Insurance of
North America, including president of
employees’ association.
■ Geraldine R. Smith Tornetta, 72, of
Norristown, Pa.; former employee of World
Life Insurance Co.
■ Raymond C. Turoni, 77, of Wyoming, Pa.;
retired insurance agent with Prudential.
■ Jane M. Connolly Walsh, 79, formerly of
Paramus, N.J.; former employee of Equitable
Life Insurance.
■ William Weber, 57, of Phoenixville, Pa.;
president of Affinity Insurance Co. in Hatboro,
a division of AON Corp; also held positions
with Allstate and Independence Blue Cross.
■ Edgar M. Wright, 59, of Fayetteville, Pa.;
agent with Red Oak Insurance Agency in
Chambersburg for the last 10 years.
Pennsylvania House approves landslide insurance program
Bill would fill need not met by private
insurance companies, legislator says
The Pennsylvania House Insurance Committee has approved legislation to establish
the Pennsylvania Landslide Insurance and
Assistance Program, which would be operated by the Department of Environmental
Protection.
Rep. Tony DeLuca (DAllegheny) said the program, which still needs
the approval of the full
House and Senate,
would fill a need not
served by private insurance companies.
Tony DeLuca
“I know many people
in western Pennsylvania have lost their
homes to landslides because they did not
have an opportunity to purchase insurance
to protect their homes,” DeLuca said in a
statement. “This program would give them
gram to help residents with repairs.
DeLuca said the funding would be
administered by a Pennsylvania Landslide Insurance and Assistance Board.
The board members would determine
Proposed initiative would include insurance
fund, loans and grant program to aid repairs.
an opportunity to buy landslide insurance,
which is not offered right now by the private insurance companies.”
The legislation, H.B. 523, would create a
statewide program consisting of three
parts: an insurance fund; a revolving loan
program, which would include a $2.5 million low interest loan fund; and a grant pro-
insurance eligibility and coverage limits,
and regulate the adjustment and settlement of claims.
DeLuca added that mine-related subsidence or heavy rains can cause the earth to
move and result in severe damage to
homes. He said many other areas in the
state are susceptible to landfills. IFA
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|
IFAwebnews.com
November 2009
|
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