SODA DRIVER PLEADS GUILTY
Armando M. Villesca Sr. of Fort Stockton, Texas, pleaded guilty to charges of workers' compensation fraud in a Travis County District Court. Texas Mutual Insurance Company said the court ordered Villesca to submit to three years of community supervision, perform 180 hours of community service, pay a $2,000 fine, and repay $2,965.30 in benefits he fraudulently obtained from Texas Mutual. Villesca allegedly injured his right knee while working as a delivery driver for the Fort Stockton branch of Abtex Beverage Corp. He claimed he was unable to return to work because his injury prevented him from climbing in and out of his delivery truck and Texas Mutual began paying temporary income benefits (TIBs). Texas Mutual then received information that Villesca was working as a contractor repairing homes and businesses while collecting TIBs for his alleged injury. Under state law, an injured worker who collects benefits must notify the insurance carrier if he or she returns to work in any capacity. Texas Mutual investigator Tommy Jones obtained statements, canceled checks, and other documents that proved Villesca was working while collecting TIBs. In order to prove fraud, however, Texas Mutual had to show that Villesca knowingly collected benefits he was not entitled to. Jones called Villesca and recorded a conversation in which the man denied working. Texas Mutual presented the evidence to Assistant District Attorney James Young, who prosecuted the case.
LOUISIANA AGENT FACES CHARGES
Acting Louisiana Insurance Commissioner Robert Wooley confirmed that a Monroe, La. insurance agent was arrested as a part of an ongoing statewide crackdown on insurance fraud being conducted by the La. Department of Insurance Fraud Section and the La. State Police Insurance Fraud Unit. Sharon McGraw Burns, A/K/A Ruby M. Burns was charged with two counts of filing or maintaining false public documents. She allegedly filed documents with the Office of Motor Vehicles in Monroe, claiming her clients had insurance coverage when they did not. She also allegedly failed to remit certain insurance premiums paid to her by her clients. At the time of the arrest, DOI Fraud Unit investigators served her with a Cease and Desist order and summary license suspensions. Burns has held life/health and property/casualty insurance licenses since 1986. Policyholders in Northeastern Louisiana who have purchased insurance from Sharon McGraw Burns A/K/A as Ruby M. Burns should call their insurance company to verify their insurance coverage. If they have trouble reaching the insurance company they can call the Louisiana Department of Insurance, at (225) 342-5900, or toll-free, at (800) 259-5300, for assistance.
COURT SAYS NO DOUBLE-DIPPING
The Amarillo Court of Appeals upheld a law preventing injured workers from collecting benefits for a work-related injury from two different sources. According to the Texas Mutual Insurance Company, the court ruled that a Houston man who settled out of court with his employer over an on-the-job injury is not entitled to workers' compensation benefits. Glen Everett allegedly suffered injuries to his left arm and wrist while working for The Finished Touch, a general contracting company in Houston. Everett filed a negligence suit against The Finished Touch, but later dropped it and filed a claim for workers' compensation benefits from Texas Mutual, which disputed the claim. Before the parties could resolve the claim, Everett settled with The Finished Touch for $37,500.00. He later decided to re-file his claim for workers' compensation benefits. Texas Mutual denied Everett's claim, arguing that under the election of remedies law, he was not entitled to benefits because he received compensation for his injuries through the settlement. The Texas Workers' Compensation Commission (TWCC) disagreed, and ordered Texas Mutual to pay benefits to Everett. When the 127th District Court of Harris County reversed TWCC's decision, Everett did not appeal, but TWCC did. Because the Houston Court of Appeals was overloaded with cases, the appeal was transferred to Amarillo. TWCC has filed for a rehearing.
ARKANSAS LANDS CAPTIVE
American Management Corporation (AMC), an insurance agency in Conway, has formed Arkansas's first captive insurer, AMC Re. Arkansas State Insurance Commissioner Mike Pickens said the new company will reinsure risks written or placed by its parent company, AMC. Due to the hardening insurance market, more businesses are turning to captive companies to fulfill insurance coverage needs. The Arkansas General Assembly passed in 2001 Act 1428, which provides for the licensing and regulation of captive insurance companies. The captive law allows for several captive options. It also requires portions of captive company assets to be reinvested in bonds and securities. Those investments would be used by the State or local community to support hospitals, and other improvement projects. Pickens said his department is "excited about the development of this new company."
TORT COSTS ROSE IN 2001
The U.S. tort system cost $205 billion in 2001, or $721 per U.S. citizen, representing a 14.3 percent increase in tort costs since the year 2000, according to a study by Tillinghast- Towers Perin (Tillinghast) in "U.S. Tort Costs: 2002 Update." At current levels, U.S. tort costs are equivalent to a 5 percent tax on wages. Among other things, the study revealed that: The U.S. tort system is a highly inefficient method of compensating injured parties, returning less than 50 cents on the dollar to people it is designed to help and returning only 22 cents to compensate for actual economic loss; As of 2001, U.S. tort costs accounted for slightly more than 2 percent of GDP, ending a 13-year decline in the ratio of tort costs to GDP; Medical malpractice costs have risen an average of 11.6 percent a year since 1975 in contrast to an average annual increase of 9.4 percent for overall tort costs; The largest single factor in the rise of tort costs in 2001 was a significant reassessment of liabilities tied to asbestos claims. For copies of the report, email: robyn.hennessy@tillinghast. com.
TRY AGRIBUSINESS FOR GROWTH
The 16th Annual Agribusiness Conference will be held March 20-21 in Sacramento, Calif. Agencies that specialize in writing farm and agribusiness risks are strongly encouraged to attend, as the conference is dedicated to providing a productive, specialized curriculum focused on the agricultural needs of broker/agents, CSRs and company representatives. New to this year's conference is the introduction of the nation's first designation for agri-insurance professionals, the Agribusiness and Farm Insurance Specialist (AFIS). Sessions include: Dairy Farms, Livestock, Nurseries, Agro-Terrorism, Benefit Programs, Trucking, Mold, Genetically Engineered Crops, Wineries and Vineyards, Mechanical Breakdowns and more. For more information, visit the Website: www.insuranceskillscenter.com.
