COURT DECISION EXPECTED TO IMPACT INSURANCE CONTRACTS WITH MULTIPLE-YEAR RATE GUARANTEES:
A recent decision to award Childrens Hospital Los Angeles $3.6 million in a reported dispute with its insurer may make the industry more wary of signing multiple year contracts for professional liability insurance, according to Drew Pomerance, a partner of Los Angeles based Roxborough Pomerance & Nye LLP, who represented the hospital. The decision was reached by a panel of three private arbitrators after Childrens Hospital reportedly filed a lawsuit against its insurer, San Francisco-based Norcal Mutual Insurance Company, for breach of contract. Norcal Mutual had entered into a series of contracts with three-year rate guarantees starting in 1994. However, after its last agreement in 2000, the insurer reportedly denied to continue the hospital's professional liability coverage in 2001. Pomerance argued that it was impossible for the insurer to guarantee rates for three years unless it was obligated to renew coverage each year. The panel reportedly agreed, stating that Norcal contractually committed itself to issue annual policies to the hospital and was required to renew the policy for each successive year within each of the agreed upon three year terms. The panel found that when Norcal notified the Childrens Hospital in July 2001 of its intent not to renew the policy for the following year, it reportedly breached its contract with the hospital.
ACIC COMMENDS GOV. SCHWARZ-ENEGGER FOR ADDRESSING WC ISSUES:
Gov. Arnold Schwarzenegger has displayed strong leadership in addressing workers' compensation issues by calling the California Legislature into special session to enact further cost-saving reforms to the state's workers' compensation system, according to the Association of California Insurance Companies. Reforms approved by the Legislature and signed into law earlier this year represent important first steps in revitalizing California's beleaguered workers' compensation system, according to ACIC President Sam Sorich. Among the specific issues ACIC would like to see addressed in the special legislative session are: permanent partial disability benefits, legal costs and administrative costs.
$1.5 MILLION, 50,000 VOLUNTEER HOURS DONATED DURING IICF BRIDGEWEEK:
The insurance industry in California's East Bay put down their pencils and put on their work clothes again this year in celebration of the Insurance Industry Charitable Foundation's Bridge Week. Teams of volunteers from local insurance agent's offices and companies went to work donating three or four hours at various local non-profit organizations. Statewide, there were over 50,000 volunteer hours donated and over $1.5 million donated. Three teams of volunteers representing the Insurance Industry Charitable Foundation - Child Abuse Prevention Program (IICF-CAPP) volunteered at two Concord non-profit organizations to help out in their community. Two different teams worked at the Child Abuse Prevention Council in Concord. They sorted literature and placed it in "baby bags" to be distributed to nine hospitals in Contra Costa County. Over 2,000 bags were prepared, which is a little over a two month supply. Still a third team grabbed paintbrushes and shovels at the Family Stress Center. The interior walls were given a fresh coat of paint and the exterior grounds received fresh gravel. The volunteers and their companies included Cathie Speakman of Golden Eagle Insurance Company; Richard and Nancy Coskran of Insurance Educational Association; Janet Farr and Chris Behrens of Talbot Insurance; Jennifer Amador of Diablo Valley Insurance; Sharon Delano and Cynthia Rucker of R. C. Fischer Insurance; Julia Alexander of Bay Risk Insurance; Sharon Schweitzer of Arthur J. Gallagher; Rick Fowler; Linda Grace of Centurian Insurance and Elizabeth Parker of IIW Insurance.
MOODY INSURANCE NOTES LARGE DIVIDEND FOR COLO. ROOFING ASSOCIATION:
Moody Insurance Agency, which specializes in bonding services for contractors, risk management and insurance, announced a $475,236 dividend for 17 members of its Colorado Roofing Association Workers' Compensation Program, offered through Pinnacol Assurance. The dividend is for the 2001-2002 policy year and is the fourth consecutive annual dividend. Since starting the program in 1998, Moody Insurance has declared more than $1.6 million in dividends for participating program members. The average dividend per member equals nearly 30 percent of the annual insurance premiums, making this reportedly one of the construction industry's most attractive and successful workers' compensation programs. The most recent dividend was shared among the following 17 participating contractor and supplier members: Academy Roofing Inc.; Arapahoe Roofing Inc.; Basalt Industries Corp.; Black Roofing Inc.; Campbell Beard Roofing; Plath Construction Inc.; Pro-Tech Roofing Systems LLC; Roofing Supply of Colorado Inc.; Stahl Roofing Inc.; Statewide Wholesale Inc.; Summit Roofing Inc.; Tennant Roofing Inc.; Tiley Roofing Inc.; Turner Morris Inc.; Weathersure Systems Inc.; Western Roofing Inc.; and Wilson Brothers Inc. Moody Insurance created the Colorado Roofing Association Workers' Compensation Program to take advantage of the preferred pricing offered to association programs by Pinnacol Assurance. The program is offered to large and small contractors who can meet stringent participation criteria. There are currently 29 program members.
SCHOLARSHIPS AWARDED FOR NAT-IONAL ALLIANCE PRODUCER SCHOOL:
James Johnson, an account executive with Talbot Insurance and Financial Services (Riverside, Calif.) has been selected by Mark Wells, CEO of Wells Publishing, to receive the Matt Wells Scholarship for Producer Development. The Matt Wells Scholarship entitles Johnson to receive a tuition-free enrollment in the National Alliance Producer Development School, an intensive three week series of sales skills-enhancing courses slated for Anaheim, Calif. in Jan. 2004. Before joining Talbot, Johnson had a sales position with a customer relationship management software firm. In addition, the National Alliance selected an AON Producer Scholarship Fund recipient from among the large number of applications for the Matt Wells Scholarship. Steven Young, a sales producer for Alliance Insurance Services (Canoga Park, Calif.), will be receiving a $1,500 award to be used towards his registration fees for the Anaheim Producer School. Young started his career as an underwriter at a firm that specialized in workers' comp and GL for artisan contractors, and has recently transitioned his career into a producer role at Alliance Insurance.
WCIRB RELEASES REPORT ON Q2 INSURER EXPERIENCE:
The WCIRB has compiled a summary of insurer reports of loss and premium experience valued as of June 30, 2003. The report is based on data reported to the WCIRB by insurers who wrote approximately 99 percent of statewide 2002 premium and contains information such as calendar year written premium, estimated ultimate losses by accident year, accident year combined loss and expense ratios, and estimated ultimate losses per indemnity claim. Estimates of ultimate losses and ultimate loss severities have been updated to reflect the estimated impact of AB 227 and SB 228 on unpaid medical losses. To view the full report, visit www.wcirbonline.org.
