Faster life insurance payouts on the way

Life insurance claims will be paid out more quickly after insurers were issued with new guidance over how to process claims.

More than 32,000 life insurance claims are made by families who have lost a loved one every year in the UK, with a typical wait of around four months before the payment is made.

However, under guidelines put forward by the Association of British Insurers (ABI), it is hoped claims will be able to be turned around in just four weeks.

Working with the Law Commission, the trade body has developed a solution to get around the lengthy legal process associated with winding up a deceased person's estate.

The process involves the life insurer asking the claimant to provide evidence that they are the main beneficiary, rather than having to wait for the legal process to prove they are.

At the same time, however, the claimant will also have to complete a declaration agreeing to pay back any money they receive from the policy if the legal process goes on to decide they were not the rightful recipient.

"Dealing with bereavement is hard enough, without the added stress of worrying about money," said Otto Thoresen, the ABI's director general.

"This new life insurance claims process means the time it takes on average to receive a payout will drop from four months to just four weeks.

"We believe that this will go some way to alleviating financial hardship for a deceased person's dependents, especially families on lower incomes who have few other assets available to rely on."

Many people take out life insurance because, if they die, they want their partner, spouse or family to be able to cope financially.

It usually pays out a lump sum after the insured person dies, and can be taken out by one person on their own or jointly with someone else, for example by a couple who are buying a home together with a joint mortgage.

Protecting yourself and your family financially against any unforeseen circumstances should always be at the top of your list of priorities.

New report: Fixed-payment insurance policies decreasing in Washington state

Fixed payment insurance plans pay a specific amount -- $25 per doctors visit, say, or $200 a day for a hospital stay -- regardless of the bill. The patient pays the rest.

Plans like this allow employers a way to buy minimal coverage for employees. But it's not comprehensive health insurance. The medical bills may be much more than what the plan pays out.

Each year, we survey fixed-payment companies doing business in Washington state, and compile the results into a report on fixed payment insurance plans.

Here's what we're seeing:

• Sales for group policies have decreased significantly, as has the number of group enrollees. (Group enrollees decreased by 88 percent.)
• Among individual plans, the number of policies and enrollees both decreased.

The full report -- click on the link above -- includes a breakdown in the number of policies sold by each company.

History lesson

Here are Part I and Part II of a really interesting article on the history of insurance regulation.

Have a serious medical condition and need health insurance?

Do you have pre-existing condition and need health insurance? Here’s how the new federally-funded Pre-existing Condition Insurance Plan helped a local Olympia man:

Dusty of Olympia, is a 28 year-old with lymphoma. When he was 25 he started his own business. In order to save money he chose not to purchase health care insurance - like others of his age, he felt he could take the risk. Six months later he was diagnosed with stage 4a lymphoma. He received treatment and owes over $200,000 in medical bills. He hadn’t been to the doctor in months because he could not afford any treatment that may be recommended and didn’t want to add to his debt.

Dusty learned about the new Pre-Existing Condition Insurance Plan (PCIP-WA) from one of our employees who met his girlfriend. Today, he’s enrolled in PCIP-WA and finally receiving the care he needs. Here’s what he had to say about the plan:

“As of this July this year, I’ll have been in remission for three years. The
Pre-existing Condition Insurance Plan lets me get all of my tests and everything
is showing that I’m still clear. Life is going really well! My partner and I are
expecting a baby in August and we’re excited.”

If you have a pre-existing condition medical condition and need health insurance – or know of a family member or friend in need, tell them about PCIP-WA today.

Who can apply?
How much does it cost?
How does the plan work?

Apply today!

How to look up info on your agent or broker (plus the answer to the quiz)

Last week we posted a quiz question: How many agents and brokers are licensed in Washington state?

Out of three choices, about half picked the right answer: 118,415.

If you want to check your agent's credentials, find a broker in your area, look for past disciplinary cases, etc., take a look at our new online lookup for agents and brokers.

If you want to also look at company cases, check our insurance disciplinary orders search engine.

New Look for the Blog

This is the second anniversary of the Ontario Insurance Law Blog and so we have decided to make some minor changes that will hopefully make it more user friendly. We just wanted to let you know that there may be some changes to the look of the blog but the content and purpose will continue the same.

Our goal, as always, is to create a forum for discussing insurance law. The goal is not to provide only case summaries but also to encourage discussion and commentary. We really appreciate receiving your feedback. If you have a comment to make, please email us and (with your permission) we will post your comment to the blog for others to read.

Best regards!

John Norton and Tara Pollitt

Treasury Department Gets Schooled on Stop-Loss Insurance

Earlier this year, I wrote about how the Treasury Department/IRS had taken a keen interest in stop-loss insurance as evidenced by a request for comment notice regarding PPACA code section 162 m. At issue is how stop-loss insurance figures into new tax rules mandated by the health care reform law restricting the tax deduction health insurance companies can take for compensation paid to certain employees.

More precisely, Treasury/IRS is suspicious that self-insured health plans with low attachment point stop-loss policies are really fully-insured plans in disguise. This was made clear in a meeting this week with senior Treasury Department and IRS officials when Treasury’s point person on the issue commented that “obviously products that look, smell and breathe like health insurance have our attention.”

While the audience was new the line of interrogation was not.

In meetings with HHS and DOL officials late last year in connection with the preparation of PPACA-mandated reports on self-insured group health plans, pointed questions were raised about “sham self-insurance,” which has become a popular catch phrase among the regulator class.

Of course, this suspicion did not materialize immaculately. The HHS/DOL team volunteered that they had been lead to believe that sham self-insurance is commonplace. While they did not disclose their sources, it is reasonable to believe that our friends from AHIP were among those whispering in their ears.

Getting back to the meeting this week, Treasury/IRS picked up where HHS and DOL left off although without any obvious bias. Stop-loss was clearly a new animal to them and my sense was that they were truly interested to understand it better.

Joining me was the “Seal Team Six” of stop-loss insurance experts who deftly responded to questions about low attachment point stop-loss polices by pointing out that this does fit the business model of carriers which control the vast majority of the marketplace.

As part of this discussion it was pointed out that contrary to the hype that small employers are moving to self-insurance in big numbers (and buying low attachment point policies) to avoid PPACA regulatory requirements, the facts don’t bear this out. In fact, the carrier representatives noted that that the lack of claims data is a major hurdle for companies with fewer than 100 employees for making the switch to self-insurance. They reported that the real growth in the stop-loss marketplace is actually coming from larger employers who may have not utilized stop-loss insurance in the past but are buying it now in response to unlimited lifetime limits.

Oh and by the way, the contention that there is a motivation among smaller employers to self-insure to avoid new regulatory requirements is specious because for non-grandfathered self-insured plans there really are no significant regulatory advantages.

We also highlighted the fact that states regulate stop-loss insurance separately than health insurance, PPACA regulatory guidance has acknowledged the difference, and legal precedent supports this position. All in all we made a pretty compelling case why stop-loss insurance should not be construed as health insurance.

While a contrary interpretation would create tax complications for stop-loss carriers, the broader concern is that if the IRS comes out with a new definition of stop-loss insurance this could completely disrupt the current regulatory environment.

Our audience maintained poker faces throughout the meeting (which I suppose is typical of tax people) so it was tough to get a read on how they were digesting our input. We’ll know for sure when the proposed rule comes out, but that won’t like be published for a while because the new compensation rules are not scheduled to take effect until 2013.

In the meantime, it should be instructive to those in the self-insurance industry that federal regulators are watching what is going in the marketplace. For companies pushing the envelope with “innovative” stop-loss products beware that you may be inviting negative attention.

Revival of the Special Circumstances Doctrine?

Has the special circumstances doctrine been revived for limitation periods? We thought the Courts have been clear that under the new statute of limitations there is no exception for special circumstances. However, Wood J. recently held that special circumstances applied and granted an extension of time. In the case the plaintiff was trying to add defendants who were already third and fourth parties. Perhaps the exception will apply then only to when third and fourth parties are being added as defendants?

The case of Chodowski v. Huntsville Professional Building Inc., [2010] O.J. No. 3773, looks at the issue of joining parties after limitation periods have expired. In Chodowski, the motion is the result of plaintiff’s counsel, who had brought a timely motion seeking leave to join the third and fourth parties as defendants. It was not until the newly retained plaintiff’s counsel set the matter down for trial, that the omission was realized.
Justice T.M. Wood held that the test to be applied is a two part one in which the moving party must first satisfy the court that “no prejudice would result that cannot be compensated for by costs or an adjournment”. The second part, having been developed through the case law, requires that where a limitation period has expired, the moving party must demonstrate “special circumstances” which would justify extending the limitation period.

Justice Wood wrote that:

[I]t must be remembered that both defendants have been aware of their exposure since the day after the incident. Both were aware of the order allowing them to be joined as defendants in the main action, and both participated fully in discoveries as third and fourth parties.

The Judge found that plaintiff’s counsel’s prompt move for leave to amend, and the fact that plaintiff’s first counsel was a generalist “whose practice was not attuned to the requirements of tort litigation”, lends credibility to the argument that this was a sin of omission rather than commission.

The Court found that the failure to join the defendants in a timely fashion was fully explained.

Wood J. held that: The conduct of the proceedings as a whole and the nature of the mistake in that context are in my view special circumstances sufficient when coupled with the lack of real prejudice to the defendants, to justify an extension of time to issue and serve a new statement of claim on the defendant number company and Mid-North to March 1, 2010, the date of service.

Thanks to Alex Lacko for reviewing this case.

Hold on to all of your insurance policies forever

One of the very first steps in every insurance coverage case, large or small, is obtaining a copy, preferably certified, of the applicable insurance policy. It's also often one of the hardest and most time-consuming steps, even for a recent loss under which coverage of only a single policy is triggered.

In occurrence-based policies, every policy that was in effect during a loss potentially provides coverage. In long-tail losses such as environmental or asbestos claims where the exposure took place over decades, it is sometimes difficult to identify what insurer issued the policies for each year, much less to obtain a copy of them.

Not surprisingly insureds frequently have no idea what insurer provided coverage to them fifty years ago. And if you go back far enough, even if an insured knows the name of the insurer, it can be difficult to determine the applicable policy forms. Some cases address whether it is acceptable to make an educated guess as to the terms of the policy.

In House of Clean, Inc. v. St. Paul Fire & Marine Ins., Co., __ F.2d __, 2011 WL 1321197 (D. Mass), the United States District Court for the District of Massachusetts held that the insured bears at least some responsibility for knowing what policies were historically issued to it.

House of Clean operated a dry cleaning business from 1967 to 2007. In 2005, chemical pollutants used in the cleaning process were detected in nearby soil and groundwater. Neighbors sued and the Department of Environmental Protection issued a notice of responsibility. House of Clean sought coverage from its insurer, St. Paul. When a coverage dispute arose, it sued St. Paul for declaratory judgment and breach of contract.

House of Clean subsequently sought to amend its complaint. One of the new allegations was that during discovery, St. Paul provided over 10,000 pages of disorganized documents which included two insurance policies from 1981-1982. House of Clean had been previously unaware of those policies. It sought to amend the complaint to add allegations of coverage under those policies.

The court denied House of Clean's motion to amend the complaint. It held that the motion to amend was untimely given that it would require the addition of two new defendants (insurers related to St. Paul). It stated, "The Court acknowledges that HOC was unaware of those policies before October, 2010, but notes that it bore at least some responsibility for maintaining records of insurance policies it had purchased."

The lesson: Keep full copies of your occurrence-based insurance policies forever. Really, forever.

Graduation Advice

Congratulations Graduates

But be warned:

In this time of year, graduation invitations fill our mailboxes and ceremonies fill large churches and civic centers. And of course, there are speeches

Most of the talks by local dignitaries will talk about the new beginning the end of high school marks. "commencement" is the term after all.

But what world awaits the class of 2011?

It's certainly a very different world than when I sat through speeches with the class of 1987. But I recall nothing of those speeches. I know some things now that I wished they had said then.

So, if you know a graduate, you might want to pass along this information that is sure to be missing from their ceremonies

1. Life is not a handout. You have what you were given. Giftings, contacts, skills, energy and the ability to learn. The degree to which you use those gifts diligently will determine the heights you reach.

2. Keep learning. Not just from books Meet with any adult you can and find out what they did right and what they regret. It is a smart person who does not repeat his own mistake but it is a wise person who avoids it to begin with.

3. Seek God. Your parent’s belief or lack thereof does not define your souls eternal destiny. You and only you can choose. (John 3) There is a narrow path that few choose, called faith It has some troubles but leads to eternal bliss. The wide path is deceptive and seems easy, and leads to eternal torment. It is this choice more than any other, that affects your life and that of your descendants

4. Learn to put off pleasure, status and leisure until your hard work has earned them. If not, you will always be in such debt you can't enjoy life. What a foolish thing to pay notes on a nice car but have no money for gas. The inability to live at less than your means is crippling. Tithe and save. You must be able to postpone pleasure or you will always be an overgrown child. Adults delay gratification.

5. Follow your passion. Whether you choose to believe it or not, God made you special. You have gifts to do that which you were meant to do. Pursue it and it will become clearer to you.

Congratulations. If you are even reading a newspaper, you are ahead of the game. Seek God as He is truth. Don’t be deceived by this world. Never quit learning. But never change what you know is right.

Welcome to your future!

Mr. Peel is a local attorney who practices in the areas of Accident, Injuries, Malpractice and Nursing Home Neglect. Mr. Peel often addresses churches and clubs and can be contacted through www.PeelLawFirm.com, wherein other articles can also be found.

It's not too late for Rapture Insurance

You can buy it on ebay here. Act now, because by 6:05 tonight the Rapture will be a known loss and no longer insurable.

Here's a great blog post on other Rapture-related insurance issues.

Quiz: How many agents and brokers are licensed in Washington?

We've posted a one-question quiz: How many agents and brokers are licensed in Washington state?

You can pick an answer in the poll box, which on the lower right-hand side of this web page.

Check back --we'll post the correct answer in a few days.

More than 1/4 of hospital emergency rooms in non-rural areas have closed in the past two decades

More than a quarter of urban/suburban hospital emergency rooms have closed in the past two decades, researchers have found.

The Journal of the American Medical Association published the study, titled "Factors Associated With Closures of Emergency Departments in the United States." The researchers found that the number of non-rural emergency rooms declined from 2,446 to 1,779 between 1990 and 2009. That's a decline of more than 27 percent.

Mass. Appellate Division holds that insurer's non-specific denial to allegation of complaint does not preclude summary judgment for insurer

Commerce Insurance Company insured a car which was struck by a motorcycle. Belizaire, a passenger in the car, made a claim for PIP coverage. Commerce eventually denied the claim on the basis of non-cooperation.

Lynn Physical Therapy sued Commerce, claiming it was entitled to payment for treatment it had provided to Belizaire. Summary judgment was granted to Commerce on the ground that Belizaire's failure to cooperate precluded coverage.

On appeal to the Massachusetts Appellate Division, Lynn PT argued that summary judgment should be reversed because Commerce never acknowledged that it insured the vehicle in which Belizaire was a passenger. Lynn PT based that assertion on the answer to the complaint and a response to a request for admission. In both instances Commerce denied a lengthy statement which included, among many other facts, the assertion that the vehicle was insured by Commerce.

In Lynn Physical Therapy Inc. v. Commerce Ins. Co., 2011 WL 1744225 (Mass. App. Div.), the court disagreed, noting that Commerce had admitted during the course of discovery that it insured the vehicle.

For some reason the court did not make the most obvious point: If Commerce did not issue the policy, it would not be liable for PIP payments. If it did issue the policy, it was entitled to deny the claim (according to the trial court's findings) because of Belizaire's noncooperation. In either event, Lynn PT would not be entitled to PIP payments.

Health insurance rates, by state

What's an average health insurance premium?

The Commonwealth Fund recently came out with a lengthy report summarizing state trends in health insurance premiums and deductibles from 2003 through 2009. (The upshot: premiums rose 41 percent nationally during those years, while per-person deductibles jumped 77 percent.)

In Washington state, the study found, the cost of premiums rose 38 percent between 2003 and 2009, with family coverage costing an average of $12,758 here in 2009.

How's that compare to everyone else? About in the middle. In a list of the 50 states plus Washington, D.C., from highest family premiums to lowest, we come in 28th.

Also, the Kaiser Family Foundation does an annual survey on employer health benefits. The most recent one -- based on data from January through May 2010 -- found that premiums had risen 114 percent from 2000 through 2010, to a national average of $13,770. Worker contributions during the same time rose -- brace yourself -- 147 percent. (Here's a link to the gigantic full health benefits report.)

Recent cases from our consumer files

Got an insurance question or problem and live in Washington? We may be able to help. (We're the state insurance regulator for Washington.) Give us a call at 1-800-562-6900 or e-mail AskMike@oic.wa.gov.

What kinds of things do we deal with? Here's a sampling of cases from last month:

• We convinced a health insurer to pay an additional $3,000 in surgery claims for a patient.
• We got another insurer to pay more than $10,000 in claims that had been denied due to what the company maintained was a pre-existing condition.
• We helped a Seattle consumer resolve claim delays on his mother's life insurance policy, leading to a $25,000 payment, plus interest.
• When a health insurer repeatedly refused to pay claims because the patient's birthdate on the claim forms didn't match what they (erroneously) had in their records, we got the situation resolved and the claims paid.
• And we helped mediate a dispute over a totaled vehicle's value, meaning that the consumer got nearly $1,000 more than originally offered.

Public Transit

This blog was prepared by Jennifer Stirton.

The Insurance Act has been amended by Bill 173, the Better Tomorrow for Ontario Act (Budget Measures), 2011, which received Royal Assent on May 12, 2011.

The amendments relate to incidents involving public transit and make two major changes. First, owners and drivers of public transit vehicles are not protected by subsections 267.5(1), (3) and (5) of the Insurance Act, which provide threshold protections and limit income loss claims, if the public transit vehicle does not collide with another automobile or any other object in the incident. In other words, public transit drivers and owners are not protected defendants unless there is a collision. The second major change is the addition of subsection 268(1.1), which provides that occupants of public transit vehicles who are injured are not entitled to statutory accident benefits if the public transit vehicle does not collide with another automobile or any other object.

These changes are clearly aimed at passengers who allege injury arising from incidents that do not involve collisions, such as sudden start/sudden stop claims. While it will reduce the cost of accident benefits being paid, it may result in an increase in tort actions against defendants who are no longer entitled to statutory protections.

Renewal Results

A midwest bank came to me with concerns about their upcoming renewal. Their insurer was not enthusiastic, and their agent seemed resigned.



The bank's current insurance premiums were $88,000 for the bond, directors' and officers,' and cyber liability.



I poked and prodded the agent, who agreed to alternative quotes from another insurer. The initial renewal quote was $97,000 from the current insurer. I knew we could do better.



After negotiations, combined with gnashing of teeth and stomping about, the final quote was $65,900 with coverage far in excess of what the bank had before. The bond was increased from $2.5 million to $4 million. The D&O was increased from $2 million to $4 million. Coverage was streamlined, and the insurer was pushed to provide a three year policy. Many policy conditions were moved from benefiting the insurer to benefiting the bank.



A lackluster renewal with a higher premium was turned into a $23,000 premium reduction with exceptional insurance enhancements.



This is the work I do. I promise valuable results for all my clients.

Why Are We Fat?

Why Are Americans Obese?

Have you noticed the trend of obesity in our country? Especially among children, it is just staggering. Just consider these points:

•Diabetes has increased over 90% in the last decade.

•Childhood obesity had more than tripled in the last 30 years!

I wanted to know why. I know that kids are lazier than ever, playing video games and watching television while parents won’t make them do any chores. But I know there had to more to it. Why are there 12 year olds that weigh more than I do?

Some people may suspect some vast secret conspirator has placed some agent in our food supply to make sure they can sell diabetes supplies. Well, if so, the food industry has played a role.

They have added ever-increasing amounts of High Fructose Corn Syrup (HFCS). And who could blame them? HFCS is a lot cheaper than sugar. It is made from corn, so it sounds quite safe and “natural.” (Of course gasohol is also made from corn, and you run your car on it.)

To create HFCS, corn kernels are soaked, heated and spun. Using enzymes, they create high fructose, making it as sweet, if not many times sweeter than regular sugar. Much of the corn used is reported to have been genetically modified.

Currently over 55% of all sweeteners are made from corn! It is the number one source of calories in the United States. The consumption of HFCS between 1970 and 2005 has increased a whopping 10,673% in the United States!

It is not only cheap and widespread, but it is stealthy. High Fructose Corn Syrup rears it head not just in the Cola aisle, but it is found all over your local grocery store. Just look at this list:

Breakfast Cereal: Whether it sounds healthy or not, check for HFCS. Many kids are starting their day with pure sugar in the form of healthy looking cereal. It is like feeding your kids cake and ice cream for breakfast.

Yogurt: Once again, healthy sounding foods like yogurt often contain HFCS.

Ravoli and Canned Goods: Yes, ravoli! If it is sweet or salty, check it out.

Salad Dressings and Condiments: HFCS is used to offset the saltiness of un-sweet items like salad dressings.

Nutrition Bars and Candy Bars: There is not much difference between the two. Don’t let the word “nutrition” fool you. They tend to have a lot of HFCS.

Breads: Just because it says “whole grain” does not make it less fattening. Many contain HFCS.

Waters: Just because they talk of vitamins, it is also full of sugar.

The main concern is that HFCS seems to metabolize fat far more rapidly than regular sugar.

Thus the chart linking obesity and HFCS look like the same data.

Obesity leads to diabetes, and high levels of LDL (the bad cholesterol), and heart attacks and stroke. In short, our sweet tooth is killing us.

Mr. Peel is a local attorney who practices in the areas of Accident, Injuries, Malpractice and Nursing Home Neglect. Mr. Peel often addresses churches and clubs and can be contacted through www.PeelLawFirm.com, wherein other articles can also be found.

Workers' Compensation Classifications - Using The Clerical Code

Reader Question



Hi Mr. Simmonds,



I have a random question, which I'm not sure if you can answer or not. Our organization is a non profit that does pre-school, after school, and summer camp programs as well as helps out the community with a local food pantry.



We recently received our workmen comp. bill, and they now have the entire staff listed as code 8868 Daycare Provider. The broker claims the auditor used a classification that reads, "a day care operation must include clerical" and cannot be broken out seperately. Previously we had the office / clerical staff (located in a completely separate building) listed under it's own classification. From reading your material online, we (clerical / admin) should be coded as 8810. I would gather it would be the same as an organization such as the Boys & Girls Club. Am I wrong here?





My Reply:



I suggest you ask the agent for a copy of the complete definition of the classification the auditor is using - sometimes called the SCOPES definition.



That will tell you if you can use the clerical code or not. There are some codes that do not allow the standard exceptions of clerical, drivers, and sales.



Best of luck.

New study: Dog bites account for 1/3 of homeowners insurance liability claims

The Insurance Information Institute, an industry-funded research group, has released a study saying that dog bites account for more than one third of all homeowners insurance liability claims last year.

The total: nearly $413 million, which averages out to more than $26,000 per claim.

The number of claims dropped slightly in recent years, although the cost of the claims rose.

According to the III, there were 15,770 dog bite claims filed last year. According to the federal Centers for Disease Control and Prevention, 4.5 million Americans are bitten by dogs each year, with one in five of those bites needing medical care.

Update: Also, here's a summary of Washington's dog bite liability laws from, yes, the website dogbitelaw.com. (Thanks to Fritz for passing that along, and all these links come with our usual disclaimer: linking ≠ endorsement.)

Rule 53.03 does not Apply to Accident Benefits Assessors - Beasley not Followed

You may recall that we blogged about Justice Moore's decision in Beasley v. Barrand, which held that accident benefits assessors could not testify as they had not complied with the new r. 53 pertaining to experts. A new decision was released on April 26, 2011 which refused to follow Beasley.

In McNeill v. Filthaut, 2011 ONSC 265 (S.C.J.), the defendants sought to call DAC assessors to testify at trial. The plaintiff objected on the basis that they had not provided r. 53.03 compliant reports.

Justice MacLeod-Beliveau held that r. 53.03 does not apply to individuals retained by non-parties to the litigation.

Justice MacLeod-Beliveau held that since r. 4.1.01 (acknowledgment of expert's duty) refers to experts "engaged by a party", it does not apply to experts retained by non-parties, such as accident benefits assessors. Interpreting the rules otherwise potentially deprives the Court of relevant evidence.

There are now two different lines of decisions regarding the testimony of non-party experts. It will be necessary for the Court of Appeal to clarify this important area of the law.

SJC rules on statute of limitations, penalties for insurance agency hiring unlicensed broker

Last year I published a number of posts on the Appeals Court decision in Anawan Ins. Agency v. Div. of Ins. (Click on the link and then scroll down to see those posts.) The case concerned an insurance agency that had employed an unlicensed broker.

In Anawan Ins. Agency v. Div . of Ins., 2011 WL 1588424 (Mass.) the Supreme Judicial Court has affirmed in part and reversed in part the decision of the Appeals Court.

The SJC held, first, like the Appeals Court, that the four year statute of limitations of Mass. Gen. Laws ch. 260 §5A applied, rather than the two year statute of limitations of Mass. Gen. Laws ch. 260 §5. §5A applies to "actions arising on account of violations of any law intended for the protection of consumers." The court held that Mass. Gen. Laws ch. 175 §177, which prohibits an insurance company from paying an individual who is not a licensed insurance agent, is a statute intended for the protection of consumers.

The SJC then overturned the decision of the Appeals Court with respect to the discovery rule, holding that the discovery rule does apply to an action by the Division of Insurance to enforce Mass. Gen. Laws ch. 175 §177.

Finally, the SJC overturned the decision of the Appeals Court that the only fine that could be imposed was a fine under Mass. Gen. Laws ch. 175 §177, and that a fine under Mass. Gen. Laws ch. 176D §7 could not be imposed. The SJC held that separate penalties under both statutes could be imposed.

BEING PREPARED

Being Prepared

The saying “Be Prepared” has long been uttered respectfully by Boy Scouts across the United States. As one who was blessed to achieve an Eagle Scout rank, I look back fondly upon lessons learned in readiness and self-reliance.

With record-breaking tornadoes leveling the South, flooding threatening thousands of homes, terrorists’ frightful scheming and the constant threat of living in an earthquake zone, it is apparent that a heightened sense of readiness is required. Think of those who had to evacuate for what may be months from their homes in Japan near the failing nuclear plant. The Bible admonishes us to plan for the future:

For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish. Luke 14:28-30

There are several ways we can be more prepared. Items listed can be packed in “go-bags” that allow a quick exit. There is a hierarchy of needs, form most urgent to least, but they are all important.

• · Water, one gallon of water per person per day, for drinking and sanitation;
• · Non-perishable food with a can opener, all in a backpack or duffle bag;
• · NOAA Weather Radio with tone alert, a flashlight and extra batteries for both;
• · First aid kit and whistle to signal for help;
• · Moist towelettes, garbage bags and plastic ties for personal sanitation;
• · Wrench or pliers to turn off utilities, and hatchet or axe to help rescuers;
• · Cell phone with chargers, and important phone numbers;
• · Important documents such as powers of attorney, living will, driver’s license, pictures of your family and pets, cash, ATM card, Health insurance card, insurance policies, and tax records;
• · Comfortable clothing and blankets, ponchos and duct tape;
• · Unique family needs such as prescription medications, pet supplies, infant supplies or any other needs your family may have;
• · Some will want to stockpile extra gasoline or diesel; and
• · Some may prefer to keep a firearm and ammunition.

Consider well ahead of time what you'd take if you had only a:

• ü a day's notice,
• ü a couple of hours' notice to pack the car, or
• ü five minutes' notice to 'get out now' (the go bag)

Make arrangements for places to stay well ahead of time. Make a deal: If there's an emergency/evacuation, they can come to your home, or you to theirs. Crashing on someone's sofa or camping in their yard is infinitely preferable to a public shelter.

If you have to take medications, make sure you keep them all in one place, and can sweep them into the go bag without any searching. A "shelter-in-place" kit and a "to-go" bag can share items as long as they can be moved from one pace to the other quickly. For example, it makes sense to have three-days worth of water in your shelter-in-place kit but take a day's worth with you when you leave. However, it is always best to keep things compartmentalized in case you have to shelter in place and then later leave. Remember that if you are prepared you may be able to minister to those who are not.

A component of your disaster kit is your Go-bag. Put the items together in a backpack or another easy to carry container in case you must evacuate quickly. Prepare one Go-bag for each family member and make sure each has an I.D. tag. You may not be at home when an emergency strikes so keep some additional supplies in your car and at work, considering what you would need for your immediate safety.

May God bless and protect your family.

Mr. Peel is a local attorney who practices in the areas of Accident, Injuries, Malpractice and Nursing Home Neglect. Mr. Peel often addresses churches and clubs and can be contacted through www.PeelLawFirm.com, wherein other articles can also be found.

Seattle woman pleads guilty to insurance fraud

A Seattle woman has pleaded guilty to insurance fraud after claiming $6,503 for auto damage that occurred prior to getting coverage.

Margaret Balderama told Seattle police and her insurance company, GEICO, that she was driving home shortly after midnight on July 5, 2010 when an unknown vehicle hit her 2005 Honda CRV and fled the scene.

She had renewed her auto insurance policy that very afternoon. (It had been cancelled for nonpayment more than 7 months earlier.)

The problem: Area residents told an investigator that they'd seen the car with extensive damage nearly 24 hours earlier than Balderama claimed -- and hours before she called GEICO to renew the lapsed policy.

Balderama pleaded guilty to a gross misdemeanor charge of insurance fraud on April 25th. Sentencing is slated for May 13th.

Free help with insurance complaints, questions and problems

We offer free insurance help to Washington state residents. (We won't try to sell you anything; we're the state agency that regulates the insurance industry.)

You can call us at 1-800-562-6900 or e-mail AskMike@oic.wa.gov. We have staff insurance experts who can answer questions or help you file a complaint about an insurance company or agent.

In many cases, you can even track the status of a complaint online, seeing what we send to the company, their response, etc.

(Not a Washingtonian? Contact your state's insurance regulator.)

Here are some real-life examples of the sorts of cases we've handled recently:

-A business owner near Yakima was hosting a business event, but couldn't get a copy of her insurance certificate from her company. With time running out, she had to buy additional coverage to make sure she was covered. She complained to us, and we got the company to refund the cost of the extra coverage.

-An insurer offered $1,695 for a totalled vehicle. We helped get the consumer $3,250 -- plus tax, title and license fees.

-When a Puget Sound man's trip was delayed, boosting his costs more than $7,000, his travel insurance company paid him $3,266. We got them to boost that by an additional $4,035.

-We helped speed up payment on a delayed claim for a mobile home fire. The amount: $74,362.

Costs to Unrepresented Litigant

Mustang Investigations v. Ironside et al, 2010 ONSC 3444 (Div. Ct).

Thanks to Alex Lacko, articling student, for preparing this case summary.

The plaintiff appealed from a costs order in which the motion judge awarded the self-represented defendant a counsel fee of $20,000 on the basis that he had done work ordinarily done by a lawyer.

The parties made written submissions as to costs. Mustang submitted that Ironside should receive costs limited to disbursements in a net amount of $1,541. Ironside delivered two bills of costs, the larger one for $208,138.40, inclusive of disbursements. The motion judge disallowed $87,500 claimed by Ironside as being not a proper claim for costs. The motion judge then considered the leading authority on costs to be awarded to unrepresented litigants, Fong v. Chan (1999), 46 O.R. (3d) 330, (C.A.). The motion judge correctly set forth the two principles enunciated by Sharpe J.A. and the Court of Appeal in that case in the following language:

First, the self-represented litigant should not recover costs for the time and effort that any litigant would have to devote to the case. Second, costs should only be awarded to those litigants who can demonstrate that they devoted time and effort to do the work ordinarily done by a lawyer retained to conduct the litigation and that, as a result, they incurred an opportunity cost by foregoing remunerative activity.

The motion judge interpreted the second principle as requiring a self-represented litigant to simply show that he or she did work ordinarily done by a lawyer without any reference to incurring an opportunity cost by foregoing remunerative activity.

The issue on appeal was whether the motion judge applied the correct principles for awarding costs to a self-represented litigant.

Jennings J. delivered the judgment of the Divisional Court and found that a number of cases, while purporting to apply Fong, in fact introduced a “spin” on Sharpe J.A.’s proviso to the second principle which he found troubling.

Jennings J. found that the motion judge erred by ignoring the proviso regarding an opportunity cost and further, awarding the self-represented litigant the partial indemnity costs that the plaintiff could reasonably be expected to have paid to a lawyer had one been retained by Ironside.

Justice Jennings stated that the language used by Sharpe J.A. was clear and that in order to receive costs, a lay litigant must demonstrate (1) that he or she devoted time and effort to do the work ordinarily done by a lawyer, and (2) that as a result, the litigant incurred an opportunity cost by foregoing remunerative activity. He further stated that if an opportunity cost is proved, a self-represented litigant should only receive a moderate or reasonable allowance for the loss of time devoted to preparing and presenting the case.

Several trial judges as well as a master, seem to have interpreted Fong as saying that even in the absence of proof of an opportunity cost, one may assume that because the lay person was involved in the litigation preparing material that might otherwise be prepared by a lawyer, he or she should nevertheless be entitled to nominal costs. Jennings J. wrote that:

“With great respect to the master and those judges, I’m unable to find that the language in Fong permits an award to be made without the self-represented litigant demonstrating that, as a result of the lawyer-like work put in on the file, remunerative activity was foregone. Simply stated, no proof of opportunity cost, no nominal costs available.”

Jennings J. further stated that in the case that an injustice will result, he had two responses:

(1) It is difficult to see any injustices in compensating someone for a loss not incurred; and

(2) Regardless, the principle of stare decisis does not permit this court, or judges sitting in motions, or masters, to modify a decision of the Court of Appeal.

The appeal was allowed and the award of $20,000 for counsel fee on a partial indemnity basis was set aside.

University Place man pleads guilty to insurance fraud

A University Place, Wash. man has pleaded guilty to felony insurance fraud after lying about the cause of a Pierce County crash that damaged his Jeep.

Warren Gardinier, 22, was sentenced on April 20th to 40 days in jail (concurrent with an unrelated firearms charge) and ordered to pay court fees and a victim penalty assessment.

On Dec. 9, 2009, Gardinier told the Tacoma Police Department that another vehicle had clipped his red 1996 Jeep Grand Cherokee, causing him to spin out of control, into a fence and then into a tree. He and a passenger sustained minor injuries. The vehicle was insured by his 26-year-old sister for liability coverage only. (Liability coverage will pay for damage you cause to someone else or their property, but not damage you cause to your vehicle or yourself.)

Gardinier called his sister. She called State Farm 36 minutes after the wreck and added uninsured motorist coverage.

Five days later, the two told State Farm the damage stemmed from a hit and run collision Dec. 10. State Farm paid $4,523 for the damage to the Jeep.

Unbeknownst to Gardinier and his sister, however, a witness had seen the crash and called 911. The witness -- who followed the Jeep and got the license plate number -- said there was no other vehicle involved. He said that Gardinier's Jeep had been speeding erratically, fishtailing, and driving off the shoulder and across the road. After several swerves, the witness said, Gardinier's Jeep crashed into the fence and rapidly left the scene.

That 911 call took place before Gardinier's sister called State Farm.

Gardinier's sister agreed to pay full restitution to State Farm. When she has paid that in full, an insurance-fraud charge against her will be dismissed.