NO DISMISSAL IN HALLIBURTON CASE:
Halliburton announced that a judge in Pittsburgh, Penn. has ruled that insurers lack standing to bring motions seeking to dismiss the prepackaged reorganization cases filed by DII Industries, Kellogg Brown & Root (KBR) and various other subsidiaries of Halliburton. The Texas-based oil services company filed bankruptcy proceedings in December 2003 on behalf of various subsidiaries as part of a plan to settle existing and future asbestos and silica related claims. The court also denied standing to insurers to object to the appointment of Professor Eric Green as legal representative of future claimants, according to Halliburton. The bankruptcy court has scheduled hearings for May 10-12 to consider confirmation of the prepackaged plan of reorganization being proposed for DII Industries, KBR and other affected subsidiaries. At that hearing the court also will be asked to approve the disclosure statement and procedures used in connection with solicitation of votes on the proposed plan. DII Industries, KBR and other affected subsidiaries filed Chapter 11 proceedings on Dec. 16, 2003 in bankruptcy court in Pittsburgh, after more than 98 percent of asbestos claimants and 99 percent of silica claimants voted in favor of the plan.
LOUISIANA AGENT ARRESTED:
A LaPlace, La. insurance agent was arrested and issued a Cease and Desist Order for allegedly misappropriating insurance funds, according to Louisiana Commissioner of Insurance Robert Wooley. Department of Insurance Fraud Unit investigators also served Christopher Anthony Poche, 30, with a C&D order and summary suspension of his life and health insurance license. He was arrested by members of the State Police Fraud Unit on 183 counts of unfair trade practices and premium theft. Poche is alleged to have misappropriated insurance premiums of almost $13,000, part of which has been recovered. He is prohibited from engaging in any activity relating to the business of insurance, and faces fines and other penalties for the activities outlined in the order. DOI records show that Poche held a life and health insurance license from November 1995 until the present suspension of that license. He also held a property and casualty license from 1995 through May 1, 2001. Department records list his addresses as 1036 W. Airline Highway, LaPlace (business), and 459 Yetta Ave., Harvey (home). Consumers who have paid life insurance premiums to or conducted other insurance business with Christopher Anthony Poche in New Orleans and surrounding areas should verify their insurance coverage with the insurance company. Anyone who has trouble reaching their insurance company can call the Louisiana DOI at (225) 342-5900, or toll-free statewide, (800) 259-5300, for assistance.
FIRST ARSON HOTLINE REWARD:
A $500 reward has been given to a man who called the State Fire Marshal's Office Arson Hotline to report a case of arson. The call led to the arrest and conviction of 26-year-old Laurie Granado of Austin on charges of first-degree arson. It is the first cash reward to be given to an informant since the program was created in 2000. Austin firefighters extinguished the smoldering remains of a $23,000 Lincoln Town Car in a remote area of south Austin on April 28, 2002. The inside of the vehicle had been doused with gasoline. The vehicle was not reported stolen until minutes before AFD's Captain of Inves-tigations Aaron Woolverton placed a call to the Granado residence inquiring about their car. When Granado finally agreed to meet with fire investigators at her home after dark, she was dressed in a long sleeved shirt, which hid her flash burns. An anonymous caller told investigators that Granada had set the car on fire and had been burned in the process. Austin fire investigators checked medical records showing Granado had been treated for burns. Two months after setting her car on fire, Granado was arrested. In October 2003, Granado pled guilty and received a 10 year probated sentence. A Travis County District Court Judge ordered her to provide restitution to her insurance carrier for the cost of a rental car for one month as well as provide community service. The arson hotline reward system was the brainchild of the State Fire Marshal's Office and A Texas Advisory Council on Arson, a group of fire, law enforcement and insurance investigators who advise the SFMO on matters pertaining to arson investigations. Higher rewards are offered to callers who assist arson investigators on fires involving injuries or fatalities.
TCIF HEARS FRAUD EXPERTS:
Elliott Flood, vice president of special investigations for Texas Mutual Insurance Company, recently addressed the Texas Committee on Insurance Fraud (TCIF) on the topic of workers' compensation fraud. He was one of several speakers who discussed various types of insurance fraud at the Committee's inaugural meeting. He noted that one of the biggest stumbling blocks to enforcement is that some district attorneys are reluctant to prosecute insurance fraud. This is especially true when the case involves health care provider fraud or premium fraud, the two most costly types of fraud in the workers' comp system, he said. District attorneys often lack "the technical knowledge to handle white-collar crimes," commented Flood. "Unlike so-called regular crimes, prosecuting insurance fraud, especially premium fraud or health care provider fraud, may require intensive record reviews and an in-depth understanding of [Texas Workers' Compensation] Commission fee guidelines and rules. We need prosecutors who are dedicated to fighting insurance fraud." Texas Reps. Jack Stick and Larry Taylor also attended the meeting. Both said they supported TCIF's efforts. Taylor said a big part of TCIF's mission will be educating the public and his fellow legislators on the high cost of insurance fraud. TCIF Chairman Craig Sparks said insurance fraud costs an estimated $120 billion per year, nationally. Other TCIF speakers included Insurance Commissioner José Mon-temayor, Dennis Pompa of the Texas Department of Insurance, Dave Hennings of the National Health Care Anti-Fraud Association, Beverly Boone of the Automobile Insurance Agents of Texas, Thomas Dixon of the National Insurance Crime Bureau, Howard Goldblatt of the Coalition Against Insurance Fraud, Jay Thompson of the Association of Fire & Casualty Companies of Texas, and Mark Hanna of the Insurance Council of Texas. TCIF will meet again on April 21 at the Texas Department of Insurance in Austin.
COMP SEMINARS COMING UP:
"Texas Workers' Compensation Insurance Issues," will be the subject of two upcoming Public Policy Seminars sponsored by Southwestern Insurance Information Service. Each seminar will offer two hours of Texas Department of Insurance Continuing Education credit. The first event will be March 1, 2004, in Austin, Texas at 9 a.m. at the Red Lion Hotel. The second will be held at the Sheraton Park Central Hotel in Dallas on March 10 at 9 a.m. The seminars will consist of a panel discussion featuring Lee Ann Alexander, assistant vice president-Legislative Counsel, Liberty Mutual Insurance; Cyndi Taylor Krier, vice president-Texas Government Relations, USAA; Joe Woods, assistant vice president and Southwest Regional Manager, Property Casualty Insurers Association of America; Bo Gilbert, government affairs director, Independent Insurance Agents of Texas and Lucinda Saxon, government affairs manager, Texas Association of Business. For more informatio, visit the SIIS Web site at www.siisinfo.org or call (512) 795-8214.
RESIDUAL MARKETS A BURDEN:
A new report by the Property Casualty Insurers Association of America (PCI) shows that residual market plans for private passenger auto insurance continue to result in significant losses for insurance companies. All states and the District of Columbia have systems in place—commonly known as "assigned risk plans"—that guarantee coverage for motorists who cannot obtain insurance in the private market. The assigned risk plans and similar programs are part of what's known as the shared, or residual market. Policyholders are assigned to various companies that write business in that state. Insurers must provide coverage and pay claims for these policyholders. According to the report, the private passenger auto residual market increased from 1.5 percent of premiums nationwide in 2000 to 1.8 percent in 2001. That reverses a trend that has seen an annual decline in the residual market share since 1992 when it was at 5.6 percent. In the vast majority of states, the market share is less than one percent, but seven states have more than the average market share, such as North Carolina at 15.4 percent and Massachusetts, at 11.2 percent. South Carolina was noted as a "bright spot." Its residual market share "dropped from over 25 percent of all policies in 1998, to 1.2 percent in 2001" after reforms were implemented in the late 1990s. The report found that automobile business written by residual market plans in nine states—Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, North Carolina and South Carolina—generated an underwriting loss of $596 million in 2001. Losses in North Carolina amounted to $171 million and in Massachusetts, which has a unique plan, losses totaled $337 million for both personal and commercial auto policies.
BIG 'I' CONFERENCE SCHOLARSHIPS:
A number of scholarships are available to help young agents and brokers attend the Independent Insurance Agents & Brokers of America's (IIABA) National Legislative Conference—taking place April 21-23, 2004 at The Capital Hilton in downtown Washington, D.C. First-time young agent attendees can apply for a $1,000 scholarship to help them attend the Big "I" National Legislative Conference. Only one $1,000 scholarship will be awarded by the Big "I" National Young Agents Committee. This new scholarship memorializes the late Maurice G. Herndon. Herndon was known as "Mr. Washington" by independent agents and brokers across America while directing the Big "I" Washington D.C. office from 1949 to 1976. To be eligible for this scholarship, applicants must be a young agent or broker member (40 years old or younger); attending the National Legislative Conference for the first time; complete an application form; and submit a maximum 500-word essay describing why they should receive the scholarship. The recipient of the Herndon Scholarship will be selected by March 15. Additionally, the National Young Agents Committee is providing a $300 scholarship to each state association to award to first-time young agent and broker attendees. Interested young agents and brokers should fax scholarship application forms directly to their state association. Maurice G. Herndon Scholarship applications and state scholarship application forms are available on the IIABA Web site at www.independentagent.com. The submission deadline for each scholarship is March 1. Young agents and brokers will be treated to a special luncheon on April 21 featuring a prominent national legislator. Young agents and brokers should phone Leslie Mularski at (800) 221-7917, or contact via fax at (703) 683-7556, or e-mail at leslie.mularski@iiaba.net concerning the scholarships and luncheon. For information about the National Legislative Conference, contact Tabitha Gass at (800) 221-7917.
WASH. PHYSICIANS MEET WITH LEGISLATORS TO DISCUSS MALPRACTICE CRISIS:
Steve Woods, MD, Overlake Hospital OBGYN and partner in a private medical practice, along with several of his Overlake Hospital and Evergreen Hospital colleagues, met in Olympia, Wash., recently to talk to King County Legislators about Washington's medical malpractice crisis and the need for tort reform. "Malpractice insurance rates for physicians are going up drastically in this state and unless something is done about the tort system, more doctors will have to close, move their practice to another state or drop their specialty," Woods said. "Unlike a normal business, we can't increase fees to cover the $60,000 to $80,000 per year malpractice insurance costs because our reimbursement rates are fixed and are not negotiable." According to the Washington State Medical Association, out of control jury awards and settlements are overloading the system and raising physician's insurance premiums to impossible levels. Consequently, doctors in this state are facing some tough choices: limit services, move out of state or close completely. Woods and his colleagues met with the following King County Legislators: District 5 — Senator Cheryl Pflug (R), Representative Glenn Anderson (R), Representative Jay Rodne (R); District 45 — Senator Bill Finkbeiner (R), Representative Toby Nixon (R), Representative Laura Ruderman (D); and District 48 — Senator Luke Esser (R), Representative Ross Hunter (D), Representative Rodney Tom (R). For more information on the Tort Reform, go to www.wsma.org.
