NO DIMINISHED VALUE IN TEXAS:
The Texas Supreme Court overturned a lower court ruling and found that insurance contracts do not require an insurer to pay a policyholder for the vehicle's so-called diminished value. According to the National Association of Independent Insurers, the Supreme Court made the ruling in the case of American Manufacturers Mutual Insurance Co., et al v. Schaefer. In that case Gary Schaefer filed a class action lawsuit against several insurance companies seeking a ruling that personal auto policies cover diminished value. The NAII said a district court granted summary judgment in favor of the insurer, but the Court of Appeals for the Ninth Judicial District reversed that decision. However the Texas Supreme Court noted that to expand the ordinary meaning of repair to include an intangible, diminished value element would ignore the policy's language or give the contract's text a meaning it never intended. In addition, the court took into account arguments advanced in an amicus brief filed by NAII that cited the Texas Department of Insurance bulletin as well as numerous other court decisions that state an insurer is not obligated to pay for diminished value. The NAII pointed out that in the last few years there have been numerous court decisions supporting insurers on the issue of diminished value. State supreme and appellate courts in Alabama, Delaware, Florida, Louisiana, Maine, Missouri, South Carolina and Wisconsin have recently addressed the issue and ruled that diminished value is not recoverable.
MED-MAL HEARING IN OKLAHOMA:
Oklahoma Insurance Commissioner Carroll Fisher will conduct a hearing Nov. 18 on a proposed increase in medical malpractice insurance rates filed by Physicians Liability Insurance Co. Under a recently enacted state law, policyholders impacted by proposed medical malpractice rate changes can request a formal hearing, and several requests have been made for a hearing on this issue. In an effort to help reduce high increases in medical malpractice rates in Oklahoma, the Legislature approved reforms to state laws governing medical malpractice which limit liability in some circumstances. The hearing is set for 8:30 a.m. on Nov. 18 at the Oklahoma Insurance Department, 2401 NW 23rd, Suite 28, in Oklahoma City. Persons wishing to make oral comments at that time must notify the department in writing by Nov. 14 at 1 p.m. Written comments will be taken until that time as well.
SCORING, TERRITORIAL RATING STUDIED:
At the recent Texas Department of Insurance (TDI) hearing on insurance scoring and territorial rating rules, insurers expressed their support for proposals they believe will ensure consumers are charged premiums that reflect their risk characteristics, according to the National Association of Independent Insurers. "The rules as currently proposed represent a well reasoned approach to regulation of the insurance industry in these areas," said Donald Hanson, NAII southwestern regional manager. "Both insurance scores and territorial rating are based on the bedrock principles of risk-based pricing and fairness. Rates should be based on the risk exposure." All Texas insurers who use insurance scoring in their underwriting practices were required to file their models with TDI in September 2003. The department has been reviewing those models to determine if they are in compliance with Senate Bill 14 and, ultimately, based on sound actuarial practices. TDI is expected to finalize the rules on both insurance scoring and territorial rating by the end of the year.
ALL WORK, TOO MUCH PAY:
Texas Mutual Insurance Company reported that Raymond Hicks of Del Valle, Texas pleaded guilty to workers' compensation fraud before the 147th Travis County District Court in Austin. He received a sentence that included $8,212.60 in restitution to Texas Mutual, a $500 fine, court costs, the costs of any counseling or treatment required by the Travis County Community Supervision Department, two years of deferred adjudication and 80 hours of community service. Hicks allegedly claimed he suffered an on-the-job injury while working for Cook Mail Service in Austin. He told the insurer and his treating doctor that he was unable to work due to the injury. According to Texas Mutual an anonymous tipster said Hicks was working while continuing to collect benefits for his alleged work-related injury. A Texas Mutual investigation revealed that Hicks was in fact working as a truck driver for Libre Trucking Inc. of Austin. The investigators shot surveillance video of Hicks on the job and asked the Travis County District Attorney office to prosecute the case.
NOT SO FAST:
Despite the fact that driver distractions are a major reason for car accidents many people continue to use risky behavior while driving, according to a survey recently released by Allstate Insurance Company. Five percent of drivers surveyed said they drive at least 20 miles over the speed limit. Nearly 10 percent said they drive while feeling tired. And almost 30 percent admitted to eating and drinking while driving. Other driver distractions include cellular phone use, reading, children and putting on make-up. Experts say just a few simple steps can help avoid an accident. For instance, basic vehicle maintenance such as checking your tire pressure and brakes, and even making sure your windshield is clean will make driving safer. Other tips include using large print directions posted in an easy-to-read place so you can keep your eyes on the road, using hands-free devices if you must talk on the phone while driving, and to take frequent breaks during long trips to avoid driving while tired.
NEW WEB SITE FOR AAIP:
The Austin Association of Insurance Professionals (AAIP) launched a new Web site at www.aaip.info. The group said the new site was developed to assist in its mission to broaden the knowledge of insurance and to cultivate, endorse, and foster goodwill and fellowship among association members. The Web site includes a calendar of events for the 2003-2004 year, monthly newsletters with current and future functions, membership forms, and AAIP contact information.
FISHER TO GIVE UP STATE CAR:
After pleading no contest to a charge of driving while intoxicated, Oklahoma Insurance Commissioner Carroll Fisher agreed to give up his official state car, according to Associated Press reports. He was driving his state car when he was pulled over in early August in Oklahoma City. Fisher had reportedly been drinking beer at a charity event. Although Fisher has continued to use his state vehicle since his arrest, he has been driving under a modified license requiring him blow into a Breathalyzer before starting the car. The Breathalyzer machine will be transferred to Fisher's private vehicle. According to the Daily Oklahoman, Foster will pay $1,186 in fines and other costs as a result of his guilty plea. He will give up his state car for five months.
