R.I. LEAD DEADLINE A WORRY:
New lead paint rules requiring landlords to clean up rental spaces or face fines go into effect in Rhode Island in July, but it's unclear whether property owners will meet the deadline when the new rules are causing them some confusion. The legislation, passed nearly two years ago, requires landlords to take lead-poisoning training courses, get their buildings inspected and, in some cases, deal with insurance companies on policy renewals. The new rules also take away the so-called "innocent owner status" that protected landlords from lawsuits over lead poisonings. The greatest impact will be on the estimated 145,000 apartments and housing units built before 1978, when lead-based paints were commonly used. The legislation is causing confusion among landlords because so little is known about them, The Providence Journal reported. Because no extra funds were provided with the new law, a handful of state workers and child advocates have been writing regulations, creating lead-training curriculums, drafting brochures and designing publicity campaigns. The results of all that work will start becoming public in the next few weeks. "The fact is we're not ready for prime time,'' says Monica Staaf, legal counsel for the Rhode Island Association of Realtors. "The state Housing Resource Commission has worked tirelessly on a shoestring budget. But the fact remains there is just one person working on this. The lead law itself is the state's best-kept secret. And I'm not aware of any public outreach." Staaf says it's not realistic to assume that the state's tens of thousands of landlords can be trained on lead-paint safety in the next two months. Also, landlords have to get their properties inspected, and there are only 63 certified inspectors in the entire state. State Rep. Joseph A. Trillo (R-Warwick) said insurance companies have told him they will pull out of Rhode Island, and the impact will be greatest on those owning older houses. State officials say they're doing the best they can, and they think various agencies and business groups will pull together to get the job done. Paula Pallozzi, who regulates the insurance industry at the state Department of Business Regulation, said she has been issuing bulletins to alleviate concerns by insurers.
CONN. EYES OUTSOURCING PENALTIES:
Connecticut is one of 30 states considering legislation that would penalize companies that ship jobs overseas. State and federal lawmakers are drafting a variety of bills— including barring businesses that outsource jobs from receiving government contracts and tax breaks. Since the start of the 2000 recession, the state has lost 40,000 jobs, according to the U.S. Bureau of Labor Statistics. More than 30 states are contemplating legislation that would punish businesses that lay off American workers and take jobs out of the country, according to the National Conference of State Legislatures. Four such bills are under consideration in Connecticut, including a measure that would scrap tax breaks for seven years for businesses that layoff more than 100 Connecticut workers and outsource abroad. State Rep. Andrea Stillman (D-Waterford) who sponsored the bill, said that although the free market clearly promotes economic growth, it is not acceptable to leave American workers out in the cold.
N.H. GETS SECURITY FUNDS:
New Hampshire recently received a $360,000 Homeland Security grant to improve the state's natural disaster preparedness. The money will go to nine regional planning commissions, which will form pre-emptive natural disaster plans for at least 36 communities. For example, if a town expects a flooding problem, the money will help a commission "plan ahead, see what it is and do something about it'' before disaster strikes, Gov. Craig Benson said. This may involve expanding drainage systems or relocating buildings in flood-prone areas, officials said. Each regional planning commission will receive $40,000 for studies beginning July 1 and lasting 18 months, said Michael Poirier, planning chief for the state Bureau of Emergency Management. Such pre-disaster plans prove to be more cost-effective than dealing with natural disasters after the fact, said Kenneth L. Horak, acting regional director of the Federal Emergency Management Agency. They "really do pay off in the long run," he said. New Hampshire is the first New England state to receive a grant from a federal $150 million pre-disaster mitigation fund.
MASS. 'INSURED LOCATION' DEFINED:
A Massachusetts homeowner insurer was found not obligated for injuries or defense in a case where an all-terrain vehicle (ATV) accident took place not on the insured's own premises but on a nearby beach regularly used by the insured and which the insured had claimed should qualify as an "insured location." At the time of the ATV accident, a homeowners insurance policy covered the residence where the insured garaged his ATV. The insured maintained that the policy's exception language "owned by an 'insured' and on an 'insured location'" was ambiguous and could reasonably be interpreted to mean that the recreational vehicle owned by the insured need only be garaged on the insured location. He maintained that the liability coverages would apply regardless of where the accident occurs, so long as the ATV was owned by the insured and garaged on the insured premises. But the court rejected that reasoning, finding that such an interpretation "proves too much" and, if adopted, would render the definition of "insured location" meaningless and "provide no discernible geographical limit to coverage." The court said that the definition of "insured location" is not meant to encompass adjacent, nonowned land on which an ATV might be used any more than it is intended to include parks or recreational facilities in proximity to the residence that the insured may enjoy and use regularly. Such locations are neither intended nor reasonably understood to be "insured locations" under a homeowners policy, the court ruled. The case is Massachusetts Property Insurance Underwriting Association v. Charles Brooks Wynn and others.
MAINE NONRENEWALS UPHELD:
The Maine Supreme Court has upheld the right of an insurer not to renew a homeowners policy for insureds operating at-home day care centers, even though the operators had separate commercial policies for their businesses. In York Insurance Co. v. Superintendent of Insurance, Justice Donald Alexander wrote that the insurer's stated reason that the day care business contributed to higher traffic in the home and presented the insurer with a heightened duty to defend were reasons enough for its non-renewal. The case began with two 2003 administrative rulings in which the insurance superintendent found that York had not met its burden of proving that the reasons for non-renewal were "good faith reason[s] rationally related to the insurability of the property" as required under Maine law. The case involved two homeowners insurance policies issued by York Insurance Company. The policies contain identical business pursuits exclusions and endorsements stating that a home day care is an excluded business. York's concern was over the potential for exposure to claims against the homeowners policy by users of the daycare business. A York representative testified that the company could be required to defend lawsuits arising from the day care business even though the policy excludes coverage for business-related losses because, under Maine law, an insurer's duty to defend is broader than the duty to indemnify. The court agreed that York established that a day care business will increase traffic to and at the property covered by its homeowners policy; increased traffic increases the risk that a greater number of claims could arise, compared to what would occur on a normal homeowners property without an associated day care business drawing people to the property; and York would have a heightened exposure to a duty to defend claims arising on the property covered by its homeowners policy, even if those claims arose from the on-premises business activity. Thus, the high court ruled that York met its burden to establish a rational basis for its decision not to renew.
MARYLAND SEIZES MUTUAL:
The Circuit Court For Baltimore City, Maryland, at the request of Maryland Insurance Commissioner Alfred W. Redmer Jr., and with the consent of the company's board of directors, has entered an order to rehabilitate The Mutual Fire Insurance Company of Carroll County ("Carroll County Mutual"). The consent order appointed Redmer the receiver for the company and directed him to take possession of all of the company's assets and to conduct the company's business under the general supervision of the court. Redmer stated that he was taking this action "to ensure that the company has sufficient monies to pay current and future claims." Redmer cited consistent declines in the company's financial health. "It is my hope that under the guidance of experienced insurance professionals, this company can be turned around, become healthy and continue to do business in the state of Maryland," Redmer said. Carroll County Mutual will continue to operate during rehabilitation. Carroll County Mutual began selling insurance in 1869 and is licensed to write business only in Maryland. The company primarily writes homeowners insurance through local independent agents. Carroll County Mutual's most recent financial statements reflect approximately $6.1 million in direct premium written during 2003. Financial reports showed that the company's policyholder surplus had fallen below the applicable statutory minimums and the company's risk based capital requirements had declined to the point at which action was mandated by law.
ABSENTEE DAD GETS WTC BENEFITS:
A man is entitled to half his son's World Trade Center-related death benefits, even though the father abandoned him as an infant, a New York state appeals court decided. The workers' compensation death benefit of $50,000 due Daniel Hal Crisman should be split between his mother, Deborah Ann Crisman, and his biological father, Richard Shelp, the Appellate Division of state Supreme Court said in a 5-0 ruling. Though abandoning his son, the court noted that Shelp never terminated his parental rights. The state's workers' compensation law says only that death benefits should be paid to "surviving parents" of victims of fatal on-the-job injuries if, as in Daniel Crisman's case, victims die without spouses or children. Deborah Crisman and Shelp had initially sought to split the $50,000 award, but Crisman later sought to exclude Shelp from receiving anything, citing his abandonment of his son, according to court papers. The court said it was "not unsympathetic" to Crisman's argument. But it said the workers' compensation statute is clear in such cases. If the state doesn't want biological parents who turn out to be bad mothers or fathers from collecting benefits, it's up to the "legislature, and not this court, to remedy the perceived inconsistency," Justice Bruce Crew III wrote. Daniel Crisman was one of 295 Marsh & McLennan employees killed in the attack. A state senator, Bronx Republican Guy Velella, has filed a bill that would prohibit parents who abandon children from later collecting their workers' compensation death benefits.
N.J. SUIT OK DESPITE WAIVER:
New Jersey Appeals Court has ruled that a waiver signed by participants in high risk sports activities does not prevent relatives from pursuing a wrongful death suit when the sports enthusiast is killed. It is common for instructional facilities for scuba diving, skydiving and similar risky activities to ask participants to sign waivers shielding them from lawsuits if injury or death results. A state appeals court has declared those release forms do not bar relatives from filing a wrongful death lawsuit. Justice Jose L. Fuentes, writing for the three-judge panel, in the case of the late Assistant Essex County Prosecutor Eugene J. Pietroluongo, 44, of Orange, who died in a scuba diving accident in Pennsylvania in 2001, ruled that Pietroluongo's 13-year-old daughter had the right to sue the Regency Diving Center in Millburn. The court said that a waiver "like any contract, can only bind the individuals who signed it." Thus it could not deprive his survivors of their rights to bring a wrongful death lawsuit. The case is Bonnie Gershon, et al. v. Regency Driving Center Inc., et al.
FEMA BENDS ON N.Y. CITY CLAIMS:
The Federal Emergency Management Authority has agreed to a plan that could relieve New York City of up to $350 million in costs for debris removal from the Sept. 11 terrorist attacks. The $350 million had become an issue between the city and federal officials, who had argued that $1 billion for debris removal would only kick in after the first $350 million claims were paid, or only on clean up costs incurred after Sept. 29. But FEMA has now agreed to pay the costs of debris removal beginning from Sept. 11 "The city and contractors will have full insurance coverage for debris removal claims arising from Sept. 11 forward," said Homeland Security Under Secretary Mike Brown, who heads FEMA. Mayor Richard Bloomberg hailed the agreement. "I am pleased that FEMA will now allow all claims arising from debris removal from the World Trade Center site to be eligible for coverage under the $1 billion captive insurance company, saving the city up to $350 million. This is the result of months of negotiations between FEMA, the city and state, and also the contractors who worked at the site to provide an insurance structure to address claims arising from the removal of debris. Today's decision will allow the remaining details to be resolved quickly so the insurance company may then process all debris removal claims without the city incurring any additional liability," Bloomberg said in a written statement.
INSURBANC REPORTS BANK DEALS:
InsurBanc, the independent agents' bank backed by W.R. Berkley Corp. and also owned in part by the Independent Insurance Agents and Brokers of America (IIABA), expects to break even in the second quarter of this year, its third year in business, reported Michael Herlihy, president. Herlihy reported the good news at the recent meeting of the Maine Association of Insurance Agents in South Portland. The financial institution, with $60 million in assets and $32 million in loans to agents in 20 states, is currently looking to raise an additional $10 million to fund continued national growth. As part of its plan to become a national enterprise, InsurBanc has signed agreements with national banks including Fleet, Wachovia and Wells Fargo that allow InsurBanc customers use their branches across the country for deposits and transactions. When Bank of America and Fleet complete their merger, InsurBanc will pick up even more outlets—for a total nationwide network of 11,400 branches. "We hope to continue to show that there are options for agents other than selling out to a bank," Herlihy stated, adding that InsurBanc sees itself "as a catalyst for keeping independent agents independent." He expects the bank to experience "exponential" growth and to almost double in size during 2004.
