• Insurance Agent Dropped the Ball? You May Have a Claim

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    This is a great piece from JD Supra. Make sure you choose a qualified agent that is looking out for your best interests.

    In 2001 the Arizona Supreme Court ruled in Webb v. Gittlen that a claim can be assigned to a third party if a case involves insurance company negligence. In this particular instance, a liquor store sold a keg of beer to a minor who later drove drunk and crashed, killing the passenger riding in his car. The Webbs, owners of the store, claimed that their insurance agent had failed to inform them that the umbrella policy they had purchased did not cover accidents involving liquor. In the wrongful death suit that followed, the Webbs assigned the right to sue the insurance agent for negligence to the parents of the deceased minor.

    This case illuminates one of many aspects in the growing field of insurance company malpractice. During the process of purchasing, filing and activating an insurance policy, agents can potentially make mistakes that later harm their clients, such as:

    Providing inadequate information about the policy
    Making errors in paperwork that result in inadequate or incorrect coverage
    Failing to regularly review or update the policy
    Inferring to a client that they have coverage for something they do not
    While these oversights could be attributed to simple human error, in an environment of fierce competition and commission-driven sales, insurance agents are often pressured into practices that might leave their clients at a disadvantage. Errors in writing, explaining or applying an insurance policy can result in missing essential coverage, causing serious and irreparable damage to clients.

    If your insurance claim has been denied, the insurance company may not be completely forthright about the reason. If you believe your insurance company is acting in bad faith, either intentionally or simply due to human error, consult an insurance litigation attorney to find out more about your rights.

  • Heatlhcare Seminar Series | Emergency Preparedness for the Affordable Care Act

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    We are pleased to invite you to Diversified Insurance’s Seminar Series, designed to help employers prepare for the upcoming Affordable Care Act (ACA) timelines. Our three part seminar series is not only designed to just teach you how the ACA will affect your business, but to also help you look at employee benefits in a new way.

    Our first seminar, “Knowing the Rules”, is designed to help you deeply understand the impact the ACA will have on your company. Diversified is excited to host our nationally recognized, expert Compliance Director, Peter Marathas, Esq. to guide you through the new rules and regulations regarding the Affordable Care Act (ACA). We promise he will make a complicated subject entertaining!

    Please click the LINK to learn more about these seminars and register for “Knowing the rules” for what is surely to be the best series you will attend.

  • Risky Bets on Healthcare Sometimes Pay Off – Sometimes Don’t

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    SouthCoast Medical Group iStock_000001411901XSmallhad long provided health insurance to its employees the conventional way, paying premiums to an insurance company that covered medical claims. Then in January 2011 the 65-doctor practice with offices in and around Savannah, Ga., opted to take on more of the risk itself.

    SouthCoast thought it could save money by self-insuring, a strategy typically used by much larger companies. Today it pays directly for the medical care of the 280 staffers and family members on its plan, setting aside the cash it would have spent on premiums to cover claims and paying an administrator to process them. To limit its risk, the group also purchased “stop-loss” insurance that would kick in after any individual’s medical bills exceeded $100,000.

    The approach is common for corporations with thousands of employees, where the cost of care and the attendant risk is spread out over large numbers of people. For small employers, though, one car accident or organ transplant can push expenses far above the expected level. Still, with premiums for traditional policies continuing to rise, small businesses are increasingly ready to roll the dice. Some 20 percent of companies with 50 to 199 workers self-insured in 2010, up from 14 percent four years earlier, according to a Rand Corp. analysis commissioned by the U.S. Department of Labor.
    . . .
    Self-insured plans are governed by federal law and not states, which typically oversee health insurance. Some regulators fear that insurers attempting to avoid state taxes on insurance premiums and skirt state laws requiring minimum benefit levels will offer plans that are self-insurance in name only. One way they can do that is with stop-loss policies that start paying out at very low levels, after as little as $10,000 in claims, which sharply reduces the risk companies face. If “the employer is not in fact bearing the risk and the insurance company is, then the states take a look,” says Sabrina Corlette, a researcher at the Georgetown University Health Policy Institute. New York and Oregon already forbid insurance companies from selling stop-loss insurance to groups with fewer than 50 employees, and California’s insurance commissioner wants to outlaw the sale of certain stop-loss policies to small businesses.

    Self-insuring appeals to employers because dollars not spent on medical care stay in the company instead of flowing to the insurance carrier’s bottom line. The approach also gives businesses more detailed information about how their workers use health care. Claims data, which insurers are often reluctant to share, can help companies tailor plans and wellness programs to improve workers’ health by helping them quit smoking or lose weight.

    For small employers, self-insurance programs can bring unexpected problems. In its first year of self-insuring, SouthCoast faced a spike in major claims that ate up 60 percent of its reserves. When the company’s stop-loss policy came up for renewal, the premiums more than doubled, to $250,000, because of the costly claims, even after SouthCoast agreed to take on an additional $25,000 of risk per employee. The total cost to SouthCoast—including claims, stop-loss coverage, and administrative fees—jumped 25 percent, says Chief Financial Officer Gary Davis. Traditional insurance, though, would cost double what the company spent last year, he estimates. “You have to keep your eyes open that it’s a risk,” says Davis. “One out of every five or six years, you’re going to have a bad year.”

    Insurers offering stop-loss policies sometimes protect themselves with what the industry calls “lasering.” That’s when they raise the dollar amount the employer must pay before stop-loss kicks in for certain workers deemed to be high-risk—which can shift even more cost to employers. The practice can be “devastating” to small businesses, says Carl Mowery, a managing director in consultancy Grant Thornton’s compensation and benefits practice. Employers pay more up front for guarantees that they won’t have sick workers carved out later on, but Mowery says small businesses should insist on that protection to avoid being overwhelmed by catastrophic claims. “A premature baby who has a lot of health issues could be a million-dollar claim in a single year,” he says. “That could be twice as much as [small companies] pay in health premiums altogether.”

    Any benefits from self-insurance don’t materialize overnight, cautions Sam Fleet, president of AmWINS Group Benefits, a wholesale insurance brokerage in Charlotte. “You need an engaged employer, and it’s not a one-year savings,” he says. Fleet says small companies drawn by the promise of lower costs may not fully grasp the risk involved. “What scares me is there are a lot of people out there that recommend self-funding to employers,” he says. “It’s really, really important that you understand what you’re getting into.”

    Full Businessweek Article can be found HERE

  • Property and Casualty Rates Edging Higher

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    Some Segments Experiencing Modest Firming but No Uniform Market Hardening

    For the Property insurance market, 2011 was a challenging year,Analyzing the business graph with insured global catastrophe losses totaling $108 billion. Revisions to catastrophe modeling tool RMS 11.0 is also putting upward pressure on rates. Catastrophe-exposed accounts saw rates climb an average of 5%-10% in Q4 2011, with many accounts experiencing increases in the 10%-15% range – a trend that has continued through Q1 2012. While Willis expects rates for catastrophe risk to continue to climb throughout 2012, abundant capacity and the lingering weak economy have tempered upward pressure on a broader level.

    In primary/umbrella Casualty lines, more than 75% of insureds are seeing modest rate increases on renewal, driven by gradual increases in revenues and rating exposures.

    Key Price Predictions for 2012


    • Non-CAT risks: Flat
    • CAT-exposed risks: +7.5% to +12.5%


    • General Liability: Flat to +7.5%
    • Umbrella: +2.5% to +7.5%
    • Excess: Flat to +7.5%
    • Workers’ Compensation: +2.5% to +7.5%
    • Auto: Flat to +10%

    Executive Risks

    • Directors & Officers: -5% to +5%
    • Errors & Omissions: Flat to +5% with good loss experience; +10 to +20% with poor loss experience
    • Employment Practices Liability: Flat to -5%
    • Fiduciary: Flat to -5%


    Flat to -5%; more competitive for first-time buyers



    Information excerpted from Yahoo!Finance