Indicted for Insurance Fraud
A Travis County grand jury has indicted Houston businessman Randall C. Long on charges of defrauding the Texas Workers' Compensation Insurance Fund of some $167,000 in premiums. With the indictment, Long, owner of ST Concrete Construction, Concrete Services and CCST, dba Concrete Services of Texas, faces a second degree felony conviction that carries a maximum penalty of up to 20 years in prison. The indictment charges Long with perpetrating a premium fraud scheme by misrepresenting the nature of his businesses to his insurer. The case was investigated jointly by the Texas Fund and the Travis Count district attorney's office.
Allison to Cost Insurers $ 1.2 Billion
U.S. P/C insurers will pay homeowners and businesses $1.2 billion for insured property damage wreaked by Tropical Storm Allison during the first two weeks in June, according to preliminary estimates by Insurance Services Office Inc., Property Claim Services unit. Of the total, Texas sustained $1 billion of the insured property damage, most of that in the Houston area. Pennsylvania was the second hardest hit with $120 million in damages. State and local officials estimate total damages in Houston caused by Tropical Storm Allison at more than $5 billion following ongoing assessments of losses and repairs. The Houston Chronicle reports that some 2,000 homes in Harris County with flood damage exceeding 50 percent of their value may be "red tagged" and eligible for a voluntary buyout by the county. An estimate 15,700 homes suffered flood damage. Officials of property restoration company BELFOR describe Houston flood damage as the most extensive ever encountered in a clean-up effort. Working with some 500 employees on more than 60 projects in all parts of Houston, BELFOR, which specializes in large-loss commercial damages, has assembled its largest catastrophe crew ever. BELFOR assisted after hurricanes Andrew and George, the North Ridge earthquake and the Midwest flood Tropical Storm Allison dumped 36 inches of rain on the area causing widespread damage in the downtown area. Port of Houston Authority damages were pegged at $2.4 million, much of which will not be covered by insurance, reports the Chronicle. Restoring the depth of the Houston Ship Channel near the port's docks will account for most of the cost. The port expects to spend an estimated $1.8 million dredging the channel.
Old Republic to Close Division
Old Republic International Corp. plans to close its general insurance business underwritten through the Old Republic Standard Underwriters division, headquartered in Houston. Formed in 1988, the group targeted grain elevator, petroleum and propane distribution, and natural gas utility accounts. The company said the unit's gross premium production in 2000 was $27.7 million. Old Republic has no expectation that the runoff of this portion of its general insurance business will have a meaningful impact on operating results or financial standing.
Texas Sets HO Rate-Making Hearing
The TDI has set an open meeting for July 17, 1:30 p.m., Room 100, in the TDI office building, Austin, to finalize recommendations revising the homeowners' and residential property benchmark rates for 2001. The Administrative Law Judge (ALJ) recommends, which reflects the thinking of the Insurance Council of Texas, a six-tenths of a percent reduction on all property lines and 1.3 percent reduction on homeowners. The department is looking for reductions of 2.7 percent on all lines and 3.5 percent on homeowners. Nearly 90 percent of Texas homeowners policies are written by unregulated carriers and are not affected by the benchmark rates. The current fact-finding step by the State Office of Administrative Hearings has been eliminated following passage of HB 2102 which will speed up the rate-setting process by at least six months.
INSpire wins Software Award
INSpire Insurance Solutions' INSideOUT agency interface, TransFluent, has received ACORD's XML certification, as well as an ACORD XML Champions Award. Property and casualty outsourcing provider INSpire said the award was presented at the 2001 ACORD Technology Conference.
Council to Hold WC Seminars
The Insurance Council of Texas announced plans for a series of seminars designed to help the insurance industry navigate through the Texas workers' compensation system. The seminars will be held in Houston August 1, Dallas September 5, and Austin September 26. The series will include an overview of how the 77th Texas Legislature changed the delivery and administration of medical benefits. An overview of House Bill HB 2600, the omnibus workers' compensation bill, will be presented along with a discussion of the Texas Workers' Compensation Commission's (TWCC's) medical benefits rules and the impact HB 2600 will have on those rules. Featured speakers will be Richard S. Geiger, the Insurance Council's general counsel and a former member of the Texas House of Representatives, and Julie Shank, a consultant and former director of TWCC's Medical Review Division.
NFIB, Fund to Offer WC Programs
The National Federation of Independent Business (NFIB) and the Texas Fund announced an agreement to provide NFIB members with two new safety groups for lowering the cost of workers' compensation insurance. The programs will be sold through Texas insurance agents and will provide NFIB members in the retail-wholesale and construction industries with potential premium savings and dividends in return for providing a safe workplace. The construction group is the NFIB Construction Safety Group for Texas and the NFIB Retail Safety Group will serve the retail industry. The groups are designed so that businesses in similar occupations can join to reduce costs and improve loss prevention.
InsureZone BUYS AgentSecure
In separate but concurrent developments, Fort Worth-based InsureZone acquired AgentSecure Enterprises Inc., garnered endorsements for from various Independent Insurance Agents of America (IIAA) organizations and entered into an agreement with IIAA Eagle agency for co-marketing of AgentSecure's Internet-based insurance service, AgentSecure.com. Last October, AgentSecure launched AgentSecure.com as a web-based insurance service designed small and rural commercial agents. InsureZone said that IIAA organizations in Georgia, Oklahoma and Kentucky have announced exclusive endorsements of AgentSecure.com and that IIAT has endorsed InsureZone as the provider of the AgentSecure.com product. Separately, the IIAA Eagle Agency signed a letter of intent to co-market AgentSecure.com.
Amwest Surety Insolvent
Lancaster District Court Judge John A. Colborn entered an order for the liquidation of Amwest Surety Insurance Company, a Nebraska-domiciled insurer based in Calabasas, Calif. The order was entered June 7 after Nebraska Director of Insurance, L. Tim Wagner, found Amwest to be insolvent. Amwest specialized in underwriting various types of bonds, including bail and contracting. Approximately 40,000 bonds, exclusive of bail bonds, are in the process of being terminated in accordance with Nebraska statutes. Amwest's remaining bail bonds business will likely be transferred to Amwest subsidiary, Far West Insurance Company. Wagner, as liquidator, expects to offer Far West for sale.
