Arkansas
2006 Comp Rates Released
The Arkansas Workers’ Compens-ation Commission released its revised Advisory 2000-1, which describes the maximum and minimum rates to be paid to employees who suffer job-related injuries and illnesses from Jan.1, 2006, through Dec. 31, 2006.
For work-related accidents covered by Arkansas workers’ comp laws, the maximum weekly rates in 2006 will be $488 for total disability and $366 for permanent partial disability. For accidents on and after Jan. 1, 2006, through Dec. 31, 2006, maximums for workers’ compensation weekly indemnity benefits are based on 85 percent of the state average weekly wage of $573.65.
For more information visit the AWCC’s Web site at www.awcc.state.ar.us.
LCPI Target of Complaints
The Louisiana Citizens Property Insurance Corpora-tion, created in 2003 as a state-sanctioned “insurer of last resort” providing homeowners insurance to those who couldn’t get it on the open market, is being slammed by policyholders and an advocacy group for its alleged unresponsiveness following Hurricane Katrina, according to the Associated Press.
“It seems like the policy holders are being kind of universally ignored and unable to get any response at all,” said Joanne Doroshow, executive director of Americans for Insurance Reform.
LCPI chief executive officer Terry Lisotta said a major reason for the problems has to do with a change in companies who run the program. Audubon Insurance was the initial administrator. But LCPI put the job up for bids earlier this year, eventually awarding the contract to three companies: MacNeill Group, Bankers Insurance Group and First Premium Insurance Group. But Audubon and another bidder challenged the decision in court.
“We won,” Lisotta said. But the litigation resulted in a delay in the changeover at perhaps the worst possible time-after Katrina hit.
Margie Dotson, whose home in St. Bernard Parish was devastated by Katrina flood waters, said she tried 12 different telephone numbers in an attempt to get her claim taken care of and has been bounced from one number to another with conflicting information on who is to handle her business.
New Orleans resident Toni Swain Orrill filed an Oct. 6 lawsuit against Audubon, its parent company, AIG Inc., saying policyholders were not provided with any effective way for policyholders to contact the company, initiate claims or receive emergency payments.
An AIG spokesman said the company does not comment on pending litigation. Lisotta also declined comment on the lawsuit but said he does not blame Audubon or AIG for the post-Katrina complaints, since they had been preparing to end the relationship with LCPI.
Another problem possibly contributing to communications problems is the failure of companies and agents who want to do business with LCPI to properly register on the company Web site, Lisotta said.
Creation of LCPI was pushed in 2003 by insurance industry leaders who said at the time that one of several reasons for the dearth of policy writers was the risk entailed in Louisiana by the then-existing last-resort insurers-the FAIR and Coastal plans.
LCPI took over the FAIR and Coastal plans and was allowed to build up reserves tax-free, an advantage the old plans didn’t have. And, in the event of a disaster where damages outstrip reserves, as is the case with Katrina, LCPI can sell bonds to pay off the claims and pay the bonds off gradually, assessing the private companies a monthly fee that can be passed onto customers.
That is expected to happen in the coming months. Katrina is expected to cost LCPI more than $900 million in damage claims and related expenses.
Copyright 2005 Associated Press.
Oklahoma
Bond Businesses Shut Down
Oklahoma Insurance Commissioner Kim Holland has ordered Dan Lyon to stop conducting unauthorized business involving insurance in Oklahoma.
The commissioner’s order states that Lyon provided a surety bond that may be
illegal to guarantee performance of a
construction contract with Edmond Public School District. It also directs companies
and individuals associated with Lyon, including Shonto Surety Inc., Belfort Bancorp
Inc., Carter Green, Karen Willliams, M. Tyndall and Regal Diversified Inc. to
cease conducting insurance business in Oklahoma. Belfort Bancorp Inc. and Regal Diversified Inc. purportedly provided financial backing for the surety bond.
Texas
Judge Extends Allstate Injunction
Travis County, Texas, District Judge Stephen Yelenosky has extended until Dec. 12 an injunction prohibiting Allstate Insurance Company from denying certain claims related to Hurricane Rita.
In early October, the Texas Department of Insurance and the state attorney general filed a petition requesting that Allstate be ordered to pay the living expenses of policyholders who were unable to return to their homes after the hurricane struck Sept. 24.
Allstate reportedly had refused to cover additional living expenses for policyholders who had little or no damage to their homes but could not return due to power outages or blocked roads. According to the the Austin American-Statesman, TDI says Allstate’s policies do not require policyholders’ property to be damaged in order to pay for additional living expenses.
In reaction to the judge’s decision, Southwestern Insurance Information Service released the following statement:
“The issue involving Allstate and TDI has far reaching implications for the entire insurance industry in Texas and not just one company. If insurers in this state are forced to pay claims that are not covered in policies, then people will have absolutely no level of confidence in the contracts insurers have between themselves and their customers. If insurers are required to go back and rewrite these contracts after the fact, we will have a crisis in Texas which will make the mold issue look like child’s play.
“This decision could turn the insurance industry upside down with the potential of creating an availability problem the likes of which we have never seen in Texas.
“Rewording these agreements would render former contracts null and void and, potentially, could have a catastrophic impact on insurer solvency and product availability.”
According to the New Orleans Times-Picayune, Allstate plans to reduce its coverage in Louisiana and in neighboring Gulf Coast states as a result of claims it anticipates from Hurricanes Katrina and Rita. Allstate has said it expects $4.53 billion in claims resulting from the two hurricanes.
Topics Carriers Texas Claims Louisiana Hurricane Market Oklahoma Arkansas
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