What Happens If P/C Industry Catches the Flu; Program Best Practices; Giant Program Guide Highlight IJ Magazine

May 23, 2006

The potential exposures for the property casualty insurance industry have fallen under the radar in the discussions of the effects of an Avian flu or other pandemic. Most people keeping watch on the possible effects have had their eye on the life insurance industry. But how could P/C insurers and their agents and brokers be affected? What should U.S. businesses do to prepare?

In the May 22 issue of Insurance Journal, Robert Meder and Frank Scott of Hilb Rogal & Hobbs of New York City offer insight on why businesses and their insurance partners should be evaluating their property/casualty coverages and business continuity plans.

“The main issue for most businesses is continuity of operations,” write Meder and Scott. However, they advise insurance buyers to look beyond the obvious. “In our litigious society, it is conceivable that lawsuits may arise from claimants alleging that they contracted the flu from premises or activities of third parties,” they continue. They further argue that there is even the potential for workers’ compensation claims that the flu was contracted in a workplace environment.

Best Practice
Insurance Journal’s May 22 issue also has the story of the world’s first certified Best Practice program administrator. The Target Markets Program Administrators Association has launched the TMPAA Best Practice designation.

A First for Program Managers
Click here for interview

John Solari and his Professional Underwriters did and made history by earning the first Best Practice Program Administrator designation. Here’s how and why he did it.

Although it’s brand new, TMPAA already has its first designee. Professional Underwriters Inc. of Exton, Penn., has earned the distinction of being the first program administrator in the country, perhaps the world, to be certified as a Best Practice Program Administrator and able to use the coveted seal and logo. John Solari, president of Professional Underwriters, recently discussed the Best Practice process and what the designation means to his firm in an interview with Insurance Journal’s Andrew Simpson.

“I think we learned a few things in the process. I think we learned we do an awful lot of things pretty well, which we believed that would be the case. But for our organization there were a couple of areas where we actually learned that we could probably do a little better in,” says Solari in the May 22 magazine. (For the complete interview with Solari click on the link above.)

The issue also contains Insurance Journal’s exclusive 15th Annual Program Directory, Vol. I., a complete source of program business markets and administrators throughout the country.

Insurance Journal readers also get Best Practices, a new column that profiles how some of the nation’s top performing agencies run their operations. The May 22 issue looks at California-based SullivanCurtisMonroe. William Curtis, managing partner and chief executive officer, says growth, profit and fun have meant continued success for his independent agency.

The third part in a series on the London insurance market examines Lloyd’s efforts to revamp its antiquated paper-based system and why technology will be harnessed for U.K. brokers in 2006.

Regional Reports
Unique among insurance publications, Insurance Journal regionalizes the content of its magazines to serve readers in five regions of the country. The May 22 regional editions tackle everything from an insurance regulator’s claim he was the target of blackmail, to agency errors and omissions around hurricane claims, to local governments charging insurers for police and fire services.

South Central: Hurricane E&O
Lawsuits arising from the floodwaters of Hurricanes Katrina and Rita are not all against insurance companies; the storms have spawned errors and omissions problems for agents as well. Two articles in the May 22 issue of Insurance Journal South Central consider litigation stemming from the storms and examine previous rulings that may affect how courts view the current disputes.

In addition, the South Central edition takes readers out to the farm to explore the numerous opportunities cropping up in the agribusiness field. Farmers are expanding their money generating options by adding agro-tourism and agritainment activities, and agents can take advantage of the trend by making certain their insureds are fully covered for these additional risks.

East: Car Wars
While special interests took to the airwaves to fight each other over legislative reforms, the Massachusetts auto insurance community turned its attention to the quiet courtroom of the Mass. Supreme Judicial Court, which heard whether the commissioner of insurance exceeded her authority when she ordered an assigned risk plan last year. Andrew Simpson reports on what the justices asked the lawyers for Commerce, Arbella, consumers groups and the state attorney general in the East edition.

In the same East edition, Insurance Journal reports on Liberty Mutual’s willingness to fight over contingent commissions and the latest ins-and-outs at Beacon Mutual in Rhode Island.

West: Blackmail and Wall Street
The West edition reports that California’s Insurance Commissioner John Garamendi has asked the FBI and the California Attorney General to investigate what he has called a campaign attacking him and his proposed auto insurance rate regulations. He claims he received an ultimatum from insurance industry officials to postpone the proposed rate regulations or face a $2 million political campaign attack against him.

West editor Patricia-Anne Tom offers a look at why Safeco has decided to sell its products via the Internet to supplement its existing distribution channel of independent agents.

Also, a Wall Street analyst says insurance companies are not good investments. According to Ray Joseph, vice president of the Capital Research Co., property and casualty company stocks in particular face low valuations and low returns, while rating agencies have become “de facto regulators of capital,” forcing insurers to adopt “shareholder-unfriendly capital strategies.”

Southeast: Property Bill
The Florida Legislature has passed the most significant property insurance bill since Hurricane Andrew. The package includes provisions to reduce the Citizens Property Insurance Co. deficits and establish oversight policies. Dave Kaiser provides the details in the May 22 Southeast edition.

Also, Kaiser reports on Florida’s statewide “Operation Spring Cleaning” and the arrest of perpetrators involved in 80 fraudulent schemes including filing fake hurricane claims, selling bogus insurance, staging auto accidents and faking injuries to obtain workers’ compensation benefits.

Midwest: Municipal Bills
Across the country and in most Midwestern states, insurance companies are facing the growing trend of cash-strapped municipalities billing insurers for police or fire responses to auto accidents, no matter how minor. Municipalities in no fewer than 13 states are billing for accident responses. Auto insurers are questioning the logic of paying fees for services not covered or charged for in auto insurance policies. Some in the business believe such fees are a form of “double taxation” applied only to those responsible drivers carrying auto insurance. Is it fair to penalize drivers who follow state law and carry insurance? The Midwest issue offers an industry opinion on the controversial topic.

The May 22 editions of Insurance Journal West, South Central, East, Southeast and Midwest are in the mail to subscribers now.

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