A bill we requested, Senate Bill 5247, was approved by a key state Senate committee last night.
The bill would allow us, when considering premium rates proposed by non-profit health insurers, to take into account the large surpluses that the companies have built up in recent years. (Surpluses are not the same thing as reserves. Theres' been some confusion out there on this point.)
These surpluses have grown dramatically over the past decade. The state's three major nonprofit health insurers together now have more than $2.4 billion in surplus.
Meanwhile, the cost of individual health policies more than doubled from 2005 to 2011.
At least 11 other states, including neighboring Oregon, have the authority to consider surpluses when reviewing rates. We think it's time Washington did the same.
What's a health care exchange?
Stateline, a news service that covers state government, put together a story summarizing the new health care exchanges scheduled to launch in 2014, how they work, and the status of the efforts to create them at the state level. From the article:
There's a tremendous amount of behind-the-scenes work taking place in Olympia in preparation for these exchanges. Again, from Stateline's article:
Considered the engines of the national health law, state exchanges are online marketplaces designed to make it easier for individuals and small businesses to shop for insurance policies. They will also be one-stop enrollment centers for low-income people who qualify for Medicaid and moderate income individuals who qualify for federal tax credits.
There's a tremendous amount of behind-the-scenes work taking place in Olympia in preparation for these exchanges. Again, from Stateline's article:
One small group of states — led by Maryland, Washington, Oregon, Rhode Island and California — is running significantly ahead of the rest. Statutes have been enacted to create the exchanges and the basic decisions about how to run them have already been made.Our office and Gov. Chris Gregoire have also requested additional exchange legislation in Washington this year.
Tacoma insurance agent sentenced for stealing from clients
An insurance agent in Tacoma has pleaded guilty to second-degree theft for misappropriating checks from dozens of policyholders.
Michel Anthony James, an independent contractor who was working for State Farm, is believed to have deposited checks from more than 40 policyholders into his own business bank account. State Farm discovered the problems when it audited James' accounts. It subsequently terminated its contract with James.
Based on a subsequent iinvestigation by Insurance Commissioner Mike Kreidler's Special Investigations Unit, James:
• failed to apply premiums to policies,
•wrongly withdrew cash from his premium fund account (which is where those policyholder checks were supposed to go),
•failed to refund overpayments to policyholders,
•and violated contractual agreements with State Farm.
The theft added up to $23,926.87.
On Jan. 13 in Pierce County Superior Court, he pleaded guilty to second-degree theft. He was sentenced to community service, electronic home monitoring and $1,800 in costs and assessments. He has also paid back the misappropriated money.
(Updated Feb. 1 to note that James no longer works for State Farm.)
Michel Anthony James, an independent contractor who was working for State Farm, is believed to have deposited checks from more than 40 policyholders into his own business bank account. State Farm discovered the problems when it audited James' accounts. It subsequently terminated its contract with James.
Based on a subsequent iinvestigation by Insurance Commissioner Mike Kreidler's Special Investigations Unit, James:
• failed to apply premiums to policies,
•wrongly withdrew cash from his premium fund account (which is where those policyholder checks were supposed to go),
•failed to refund overpayments to policyholders,
•and violated contractual agreements with State Farm.
The theft added up to $23,926.87.
On Jan. 13 in Pierce County Superior Court, he pleaded guilty to second-degree theft. He was sentenced to community service, electronic home monitoring and $1,800 in costs and assessments. He has also paid back the misappropriated money.
(Updated Feb. 1 to note that James no longer works for State Farm.)
Fourth Circuit Rules in Favor of Insurer That Refused to Defend Inmate
Fourth Circuit Rules in Favor of Insurer That Refused to Defend Inmate
Finds Inmate Is Not Covered as a “Volunteer Worker”
On January 20, 2012, in an unpublished opinion, the United States Court of Appeals for the Fourth Circuit ruled in favor of an insurer that refused to defend an inmate in a lawsuit over a West Virginia jail worker’s injuries, reversing a decision by the United States District Court for the Southern District of West Virginia.
Finds Inmate Is Not Covered as a “Volunteer Worker”
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| Post by Logan Wells |
In National Union Fire Insurance Co. of Pittsburgh, Pa. v. Lambert, Hale, the plaintiff in the underlying suit, sought damages for injuries she allegedly sustained as a jail worker when an inmate working alongside her in the jail kitchen allegedly caused a mixer to fall and land on Hale’s foot. Notified of Hale’s suit, National Union filed a declaratory judgment seeking a declaration that it had no duty to defend or indemnify the inmate, Lambert, with regard to the underlying action. Specifically, National Union argued Lambert did not constitute an “insured” under the terms of the policy, which defined “persons insured” as follows:
(A) The “Named Insured” [i.e., the State of West Virginia
(B) Any elected or appointed official, executive officer, commissioner, director, or member of the “Named Insured” while acting within the scope of his duties as such,
(C) Any faculty member, employee, volunteer worker or student teacher of the “Named Insured” while acting within the scope of their duties as such.
(Emphasis added). In response, Hale asked the court to declare that Lambert was an insured “volunteer worker” under the policy and therefore entitled to a defense and indemnification. Lambert independently sought an identical declaration. National Union and Hale filed competing motions for summary judgment. The district court sided with Hale, finding that Lambert qualified as a volunteer worker under the policy. National Union appealed.
The Fourth Circuit reversed the judgment of the district court, stating it was “convinced that Lambert, a prison inmate, cannot possibly meet the definition of ‘volunteer worker’ as found in the policy...” Finding the term “volunteer worker” is unambiguous, the court considered the appropriate contours of its meaning, holding that “absence of coercion is the thread uniting the disparate definitions of ‘volunteer’”:
We first look to the “common and customary meaning,” Boggs v. Camden-Clark Mem’l Hosp. Corp., 693 S.E.2d 53, 58 (W. Va.
Thus, the court reasoned, to be considered a “volunteer worker,” Lambert must have elected to work of his own volition.
Noting Hale and Lambert’s argument “obscure[d] the broader portrait of institutional confinement, which is hallmarked by the Jail’s coercive authority over inmates like Lambert”, the court looked to West Virginia
A close look at West Virginia West Virginia
The nature of incarceration and the jail-inmate relationship further underscores that Lambert is by no means a “volunteer worker.” We have emphasized that, “[b]ecause . . . inmates are involuntarily incarcerated, the [jail] wields virtually absolute control over them to a degree simply not found in the free labor situation of true employment.” Harker v. State Use Indus., 990 F.2d 131, 133 (4th Cir. 1993); accord Vanskike v. Peters, 974 F.2d 806, 810 (7th Cir. 1992) (“[T]here is too much control to classify the [jail-inmate] relationship as one of employment.”). Because a volunteer generally enjoys more freedom than an employee and courts uniformly hold that a jail’s absolute authority over an inmate precludes a finding that an inmate is an employee, we have little trouble concluding that an inmate is not a “volunteer worker.” Indeed, Lambert’s thwarted protest provides a case study in the coercive authority of jails. Whereas a volunteer worker under the ordinary meaning of the term would have been free to leave his shift at his discretion without suffering a concrete penalty, Lambert was put in “the hole” for five days when he refused to finish his kitchen shift. At bottom, the Jail’s “virtually absolute control” over Lambert, Harker, 990 F.2d at 133, which renders Lambert’s status as a worker something approximating involuntary servitude, Vanskike, 974 F.2d at 809, yields an impossible fit between his role and the definition of “volunteer worker.”
That Lambert succeeded in his efforts to obtain a work assignment in the kitchen does not undermine his exclusion from Policy coverage. To be sure, Lambert submitted an application to work in the kitchen out of a desire “[t]o eat extra food and to get out of [his] cell.” J.A. 118. But his ability to express an assignment preference does not convert the overarching obligation to work from required to optional. See Burleson v. California, 83 F.3d 311, 314 (9th Cir. 1996) (“[P]laintiffs mistakenly equate the ability to choose between various work programs offered by the [jail], with the freedom to ‘sell’ their labor.”). Had Lambert failed to submit an application or had the Jail denied his request to serve in the kitchen, he still would have been forced to work in some capacity. Nor does Lambert’s choice to apply for a job in the kitchen alter the Jail’s broader coercive authority and “virtually absolute control” over him, see Harker, 990 F.2d at 133, factors that we find make Lambert anything but a “volunteer worker.”
Accordingly, the court rejected Hale and Lambert’s argument and found that the common and customary meaning of “volunteer worker” foreclosed Lambert’s classification as an “insured” under the policy.
For those who are interested in whether the Fourth Circuit’s reasoning would apply to a similar case in South Carolina , it is interesting to note that South Carolina has a statute similar to the West Virginia South Carolina statute together with the nature of institutional confinement as outlined by the Lambert court, it is likely that a South Carolina
Tacoma man pleads guilty to forgery and insurance fraud
A Tacoma man has pleaded guilty to two counts of forgery and one count of felony insurance fraud for filing a false auto insurance claim.
Cash B. Knott, 46, pleaded guilty Jan. 13 in Pierce County Superior Court.
On Nov. 6th, less than a month after getting coverage from Progressive Direct Insurance Co. for his 1992 Ford Ranger pickup, Knott filed a $5,674 insurance claim with Progressive. He said someone had scratched the paint, stolen his chrome wheels and tires, and stolen his navigation and entertainment system, 1,000 watt amplifier and other electronic components.
He provided Progressive with a Sept. 2 stereo shop invoice for $4,547.84 worth of stereo equipment, a copy of his check, and a bank statement showing the withdrawal from his checking account.
The problem: When contacted by an insurance adjuster, the stereo shop said it had no record of such a purchase. All they could find was that Knott had bought an amplifier -- for $109 -- on Sept. 2.
Insurance Commissioner Mike Kreidler's Special Investigations Unit obtained a search warrant for Knott's bank records. The bank found no checks written to the stereo shop, and none whatsoever for $4,547.84.
He's slated for sentencing on Feb. 17th. The standard range for the charges are 22 to 29 months in prison.
Cash B. Knott, 46, pleaded guilty Jan. 13 in Pierce County Superior Court.
On Nov. 6th, less than a month after getting coverage from Progressive Direct Insurance Co. for his 1992 Ford Ranger pickup, Knott filed a $5,674 insurance claim with Progressive. He said someone had scratched the paint, stolen his chrome wheels and tires, and stolen his navigation and entertainment system, 1,000 watt amplifier and other electronic components.
He provided Progressive with a Sept. 2 stereo shop invoice for $4,547.84 worth of stereo equipment, a copy of his check, and a bank statement showing the withdrawal from his checking account.
The problem: When contacted by an insurance adjuster, the stereo shop said it had no record of such a purchase. All they could find was that Knott had bought an amplifier -- for $109 -- on Sept. 2.
Insurance Commissioner Mike Kreidler's Special Investigations Unit obtained a search warrant for Knott's bank records. The bank found no checks written to the stereo shop, and none whatsoever for $4,547.84.
He's slated for sentencing on Feb. 17th. The standard range for the charges are 22 to 29 months in prison.
What are my odds of dying from...?
The Insurance Information Institute has released some interesting data about the odds of dying in a wide variety of accidental (or sometimes not-so-accidental) injuries.
According to the III, your odds of dying from:
See the link above for more examples.
According to the III, your odds of dying from:
- A car accident: 1 in 303.
- Being shot: 1 in 306.
- Falling down the stairs: 1 in 2,018.
- An airplane crash: 1 in 7,032.
- Falling off a ladder: 1 in 8,912
- A lightning strike: 1 in 84,079.
See the link above for more examples.
Anti-fraud group releases its "Hall of Shame" for 2011
The Coalition Against Insurance Fraud has compiled its annual "Insurance Fraud Hall of Shame" list. And this batch is pretty horrifying:
- A debt-plagued Arizona homeowner torched his home for $440,000 in insurance money -- and killed a witness and the witness' family. He got 14 years in prison for the insurance fraud, and the death sentence for the murders.
- A Rhode Island radio DJ who wanted to upgrade her home and pool had several friends simulate storm damage to her home -- smashing a hole in her roof with a tree limb, messing up the pool, etc. The problem: The weather was fair and in the 70s that day. And one of the DJ's accomplices was caught on an unrelated federal wiretap bragging about the job.
- Another home-arson case involved a California couple who hired a man to burn down their home. The man used a lot of gasoline, leading to a blast that left him horribly burned. He died later that day. The couple went to prison.
- There are several others, but we'll end with what's probably the strangest case. A mortuary workers and medical worker faked the death of a man who'd never existed. There was even a grave. And a funeral service. Using forged documents, the workers and accomplices had taken out $950,000 in life insurance policies on the fictitious man.
Long-term care insurance: Is it right for you?
Kaiser Health News and the Washington Post have an article today on the pros and cons of long term care insurance. From the article:
In recent years, we've received numerous complaints about the cost of the policies. Long term care insurance is a fairly new product, with many companies not offering it until the early 1990s. As a result, they had little experience to base their prices on, and early policies were priced significantly lower than they should have been, based on how the cost of claims and the fact that -- unlike life insurance, for example -- few people cancel the policies.
As a result, most long-term care insurers have bumped up their premiums sharply in the past few years -- in some cases 40 percent or more -- angering customers who signed up for policies at relatively low cost years ago. This is a problem across the country. Again, from the article:
The question of whether to get long-term care insurance bedevils consumers and their advisers. Unlike medical insurance, it is intended primarily to cover people who need assistance with so-called activities of daily living -- for example, the care of a dementia patient or someone recovering from a broken hip. It can be expensive: Premiums range from $1,000 to $5,000 a year, depending on the age, sex and health of the purchaser as well as the extent of the coverage. And policy details can be confusing.
Even advocates acknowledge that it isn't for everyone. Jesse Slome, executive director of the American Association for Long-Term Care Insurance, an industry group, sums it up well: "Long-term care is a universal issue facing all Americans who are getting older. But long-term-care insurance is not a universal solution."Many people think that their health insurance will cover long term care, but most don't. Nor do Medicare or Medicare supplemental policies. Medicaid will pay, but to qualify for Medicaid, your assets must dwindle away to almost nothing.
In recent years, we've received numerous complaints about the cost of the policies. Long term care insurance is a fairly new product, with many companies not offering it until the early 1990s. As a result, they had little experience to base their prices on, and early policies were priced significantly lower than they should have been, based on how the cost of claims and the fact that -- unlike life insurance, for example -- few people cancel the policies.
As a result, most long-term care insurers have bumped up their premiums sharply in the past few years -- in some cases 40 percent or more -- angering customers who signed up for policies at relatively low cost years ago. This is a problem across the country. Again, from the article:
"It's probably the most frequent complaint I hear," says (Kansas Insurance Commissioner Sandy) Praeger, who heads the National Association of Insurance Commissioners' health and managed care committee. "The problem is, the older policies weren't priced right to begin with. Companies expected about 8 percent of customers to stop paying their premiums, when, in fact the lapse rate is closer to 2 percent." That meant the insurers had to cover more beneficiaries than they expected at a time when the economic downturn has meant less returnon their investments.
Praeger acknowledges that rate increase requests have posed a dilemma for insurance commissioners. "If we don't give them the rate increase they need, the insurance carriers could become financially impaired, and that doesn't help people," she says. In fact, in recent years, a number of companies have stopped selling policies. As a result, she adds, it's hard to turn the increases down.
Insurer fined $100,000
A company that issued thousands of medical insurance policies to college students has been fined $100,000 for charging unapproved rates, as well as other violations.
Indiana-based Unicare Life and Health Insurance Co. has agreed to pay the fine.
Between mid-2004 and mid-2009, Unicare sold thousands of medical insurance policies to students at community colleges, technical schools, colleges and universities across Washington state. Insurance Commissioner Mike Kreidler’s office later determined that there were substantial problems with the coverage. Among them:
• For more than six years, the company used unapproved methods to set its rates.
• Unicare continued to wrongly cite a policy exclusion for 5 years after the law had changed to ban insurers from using the exclusion.
• Unicare allowed unlicensed insurance agents to market and sell the policies. The primary company marketing the policies was not licensed to do business in Washington until June 2009. At that point, it had been selling the policies for four years.
The company was unable to respond to Kreidler’s requests for supporting documentation on rates at specific colleges, saying that the documents were prepared by employees who no longer worked there.
Fines collected by the insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.
The policies included international students at the University of Washington, Washington State University, Bellevue Community College, Seattle Pacific University, Shoreline Community College, Tacoma Community College and South Puget Sound Community College, among others.
Indiana-based Unicare Life and Health Insurance Co. has agreed to pay the fine.
Between mid-2004 and mid-2009, Unicare sold thousands of medical insurance policies to students at community colleges, technical schools, colleges and universities across Washington state. Insurance Commissioner Mike Kreidler’s office later determined that there were substantial problems with the coverage. Among them:
• For more than six years, the company used unapproved methods to set its rates.
• Unicare continued to wrongly cite a policy exclusion for 5 years after the law had changed to ban insurers from using the exclusion.
• Unicare allowed unlicensed insurance agents to market and sell the policies. The primary company marketing the policies was not licensed to do business in Washington until June 2009. At that point, it had been selling the policies for four years.
The company was unable to respond to Kreidler’s requests for supporting documentation on rates at specific colleges, saying that the documents were prepared by employees who no longer worked there.
Fines collected by the insurance commissioner’s office do not go to the agency. The money is deposited in the state’s general fund to pay for other state services.
The policies included international students at the University of Washington, Washington State University, Bellevue Community College, Seattle Pacific University, Shoreline Community College, Tacoma Community College and South Puget Sound Community College, among others.
Advancing a claim for Contribution and Indemnity as Equitable Set-off
Goma v. Raghunanan [2011] O.J. No. 4916
Motion to amend Statement of Defence
This was a very clever motion by defendant’s counsel to add a claim for contribution and indemnity where the limitation period to start a counterclaim had passed.
This case involves a motor vehicle accident where there were two injured plaintiffs, the driver and a passenger. The defendants pleaded contributory negligence against the driver but neglected to counterclaim for contribution and indemnity against the passenger for her injuries.
When they realized the oversight, the plaintiff’s refused to consent to adding a counterclaim; the limitation period to counterclaim had passed.
The defendants decided to bring a motion to amend the statement of defence to add a claim for equitable set-off against the plaintiff. They assert that the s.18(1) Limitations Act limitation period does not apply.
Master Dash was bound by the decisive statements of a superior court, which held that claims for equitable set-off are not subject to limitation periods. See Canada Trustco Mortgage Co. v. Pierce Estate, [2005] O.J. No. 1886, 197 O.A.C. (C.A.) and Spiral Aviation Training Co. v. Attorney General of Canada, 2010 ONSC 2581.
However, after examining the test for equitable set-off and the case law presented by counsel, Master Dash held that the defendant’s could not meet the test. Specifically, the claim for contribution does not go to the root of the plaintiff’s claim for damages.
He concluded that a defendant cannot claim contribution and indemnity against one plaintiff for damages awarded to another plaintiff by pleading equitable set-off in the statement of defence; this must be done by counterclaim, and the defendants were out of time to advance a counterclaim.
Rule 26.01 allows for amendments that are “legally tenable”. Amendments must be granted “unless the claim is clearly impossible of success”. Master Dash determined that because the claim for equitable set-off cannot succeed, the motion must be denied.
- Alison McBurney
Motion to amend Statement of Defence
This was a very clever motion by defendant’s counsel to add a claim for contribution and indemnity where the limitation period to start a counterclaim had passed.
This case involves a motor vehicle accident where there were two injured plaintiffs, the driver and a passenger. The defendants pleaded contributory negligence against the driver but neglected to counterclaim for contribution and indemnity against the passenger for her injuries.
When they realized the oversight, the plaintiff’s refused to consent to adding a counterclaim; the limitation period to counterclaim had passed.
The defendants decided to bring a motion to amend the statement of defence to add a claim for equitable set-off against the plaintiff. They assert that the s.18(1) Limitations Act limitation period does not apply.
Master Dash was bound by the decisive statements of a superior court, which held that claims for equitable set-off are not subject to limitation periods. See Canada Trustco Mortgage Co. v. Pierce Estate, [2005] O.J. No. 1886, 197 O.A.C. (C.A.) and Spiral Aviation Training Co. v. Attorney General of Canada, 2010 ONSC 2581.
However, after examining the test for equitable set-off and the case law presented by counsel, Master Dash held that the defendant’s could not meet the test. Specifically, the claim for contribution does not go to the root of the plaintiff’s claim for damages.
He concluded that a defendant cannot claim contribution and indemnity against one plaintiff for damages awarded to another plaintiff by pleading equitable set-off in the statement of defence; this must be done by counterclaim, and the defendants were out of time to advance a counterclaim.
Rule 26.01 allows for amendments that are “legally tenable”. Amendments must be granted “unless the claim is clearly impossible of success”. Master Dash determined that because the claim for equitable set-off cannot succeed, the motion must be denied.
- Alison McBurney
Law gives plaintiffs right to know details of defendant’s insurance coverage
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| Attorney Jack Griffeth |
Here is the article by SC Lawyers Weekly that quotes Jack. The hard copy version will be in mail boxes this week. If you have any question about the law, please don't hesitate to call us.
Law gives plaintiffs right to know details of defendant’s insurance coverageby Phillip BantzPublished: January 20th, 2012A provision tucked inside the S.C. Fairness in Civil Justice Act of 2011 quietly became law earlier this month, and is expected to reduce the number of personal injury lawsuits filed in the state’s courts.
The law took effect Jan. 1 as part of the tort reform bill and requires auto insurers that may be liable for any part of a claim to disclose coverage limits to plaintiffs prior to the filing of a lawsuit. Plaintiffs seeking the information must first file a certified written request that includes the accident report tied to their claims. Insurers have 30 days to reply.
North Carolina enacted a similar disclosure law in 2004, but it requires plaintiffs to jump through several more hoops than the South Carolina version of the law. For instance, in order to request coverage limits, an N.C. plaintiff must give the insurer access to all of their medical records for three years prior to the date of the claim, along with any medical records pertaining to the alleged injuries.
“I call it the hostage exchange. We give you the [records] release and you give us the policy limits information,” said Christopher R. Nichols, a personal injury lawyer at the Nichols Law Firm in Raleigh. “It sounds like South Carolina’s law is better than ours.”
Columbia plaintiffs’ lawyer Joseph “Pete” Strom Jr. was a chief negotiator in S.C.’s insurance disclosure legislation. By getting insurers to lay their cards on the table upfront, both sides will be more apt to negotiate and settle cases, he said.
“This is clearly a good thing for not only the plaintiffs but the court system,” he said. “If you represent a plaintiff in a case and there are serious injuries, you cannot fulfill your fiduciary duty to determine what is collectable in a civil action without knowing the amount of insurance coverage. With this new law, lawyers will now know on the front end what the coverage is and will be able to settle cases without having to file suit.”
Strom said segments of the insurance industry initially resisted the disclosure law, but in the end most agreed that it would promote quicker settlements and less litigation. He added that he and others in the plaintiffs’ bar wanted the bill to be expanded to include commercial, fleet and umbrella insurance policies.
“Hopefully, when the insurance companies see a positive outcome from this,” Strom said, “we’ll have an opportunity to revisit the commercial piece down the road.”
Defense litigator Jack D. Griffeth of Collins & Lacy in Greenville said the disclosure law is not particularly bad news for the insurers he often represents, as long as they stay in compliance with the new criteria.
The statute, Section 38-77-250 of the S.C. Code of Laws, requires an insurer’s corporate officer or claims manager to reply to a plaintiff’s coverage disclosure request under oath. The notarized statement must include the name of the insurer, name of each insured and limits of coverage – or the insurer can provide a copy of the policy declaration page.
“Providing this insurance information is not a waiver of any defense, whether that is a merits defense or defense that coverage doesn’t exist for some reason,” Griffeth said. “It’s putting out the basic information.”
If a plaintiff’s disclosure request is insufficient, the law still requires the insurer to issue a written response detailing the deficiencies in the request. Then the plaintiff can file an amended request.
Several personal injury lawyers raised questions about two confusing facets of the new law. It is silent about whether the insurer’s declaration page must be notarized like the statement in response to a disclosure request. And it is unclear about whether the law’s effective date applies to the date that an injury occurs or when the disclosure request is filed.
Regardless of the law’s ambiguity, Griffeth is advising insurers to err on the side of caution.
“The bottom line for any practitioner is to get a declaration page with an accompanying letter, at minimum, and preferably a declaration page with a notarized affidavit of coverage,” he said. “Then there isn’t any question about it.”
G.W. King Smith, a plaintiffs’ lawyer at Smith & Griffith in Anderson, said most of his colleagues would not settle a case without first acquiring at least a certified declaration page from the insurer if there was any question about coverage. “I don’t know that it’s going to change much having a requirement to do it,” he said.
As for the effective date, Griffeth believes that it pertains to the date of a request, not of an auto accident. If an insurer received a disclosure request before the law took effect, he is advising that it is not obligated to provide a response.
“But if the lawyer filed a request in December and comes back in mid-January and says, ‘How come you didn’t answer my letter?” he added. “Well, then I think the insurance company has a duty to reply."
A blog every insurance agent in Massachusetts should be reading
My colleagues over at ForbesGallagher have a very informative and frequently updated blog, Agency Checklists, aimed at Massachusetts insurance agents. One of the recent articles discusses upcoming changes to the statutorily-mandated commissions that auto insurers pay to agents. Another article describes a recent requirement that homeowner's insurers offer coverage for oil leaks in some circumstances.
Saving money
SAVING MONEY IN A BAD ECONOMY
Everyone can use some help to save money in days like these. Here are a few that might keep a dollar in your pocket and out of someone else’s.
MAKE GIFTS THIS YEAR. Whether it be kid’s crafts, your own special hot cocoa mix, or cheaply framed family photos, this can be fun and cheap. Or, offer a card with an evening of babysitting as a gift to young parents. Maybe even swap out with them rather than exchanging gifts.
ONE MONTH WISH LIST. Put a wish list on the fridge for items you may like (new watch, camera, etc.) but may not really need (you may need a transmission). Any item over whatever dollar amount you decide must be on the list one month before it can be bought. Just write the date and see if you still really want it next month. Odds are, something else will catch your eye in between. Also, if you put your credit cards away, you will have to come home to get them. That helps with impulse spending.
FUN FOR CHILDREN. Your children really want time and attention more than stuff. Next time they deserve a treat, let young ones go wild in a dollar store and you are only out 1.09 each. Or, take them on special Daddy-dates to do something free like feeding geese, skipping rocks at the river or exploring a hiking trail.
CLEAN OUT AND SELL. Closet cleaning can lead to a yard sale, a consignment shop, Ebay or a donation for the tax deduction.
LESS PACKAGED MEALS. If it comes in a package, it is usually less healthful, more fattening and more expensive than the alternative. For instance, think of the cost and nutrition of a bag of chips and dip versus two quartered apples with peanut butter. Cooking is usually cheaper and better than just heating. Crockpots are Godsends in this area.
IF YOU SMOKE OR DRINK, QUIT. There is little out there that takes as much from you as smoking and drinking. In the case of cigarettes, they cost you dental problems, health care, dry cleaning, gum, mints and lost wages. They cost you more on insurance and cause you to live an unhealthy and shorter life. Drinking is likely to cost you a lot as well. In addition to health, it also affects the liability of driving and so forth. Unfortunately, drunk drivers will take lives every year.
CUT BACK ON TV, AND GET MOVIES. Make sure you really want the channels you pay for. Some are paying for HBO, Showtime and Cinemax and never watch them. We love NETFLIX for movies and always have what we want on our schedule, with nothing we don’t want.
USE online bill payment. No stamps, trips to the post office, cost of ordering checks, etc. There is also less chance of an overdraft, because you can check it anytime. Let your bank pay the postage.
BULK BUY AND FREEZE. “You freeze milk?” We hear that question a lot. Just because I make a good living, by the grace of God, does not mean we cannot try and save money. We buy in bulk at Sam’s or Costco every couple months and freeze seven gallons of milk. They thaw overnight, and you cannot tell. You might want to buy a freezer. We also freeze bread. Buy items we use a lot of in bulk, like trash bags, laundry detergent, aluminum foil, and oil. The bigger benefit of this might be that we almost never have to stop at the store, where the temptation to pick up a few more things usually hits.
BROWN BAG. For lunch, trips and other things, take your own lunch. We are always cooking in bulk and keep the extra for lunch or dinner later. For instance, if you brown a ton of ground beef, you can make Chili, Sloppy Joes, Tacos and Hamburger Helper, and be ready for different days.
COUPONS. Take your Wednesday and Sunday coupons, match them up to the sale flyer and use them. Also, get free or low-cost coupons over the net. Often, we can use more than one coupon, get them doubled, and buy on sale. Sometimes, the store has actually paid us to carry home a box of cereal. Many save about 45% on groceries with couponing. That means you pay about $99.00 for what others pay $180.00 for.
In addition to being thrifty, Mr. Peel seeks justice for those injured in car accidents, work place incidents, medical malpractice, and nursing homes. He often addresses churches, clubs and groups without charge. Mr. Peel may be reached though PeelLawFirm.com wherein other articles may be accessed.
Make it Meaningful - 4th Circuit Court Rules on Underinsured Motorist Coverage
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| Post by Scott Wallinger |
We handle a fair amount of litigation involving Undersinsured Motorist Coverage (UIM). Occasionally, we see the "buyer's remorse" theme. A motorist is injured due to fault of another, and the motorist's loss is not adequately compensated by the at-fault party's bodily injury liability policy. The motorist, having remorse over his failure to buy Underinsured Motorist Coverage from his own liability insurer, then claims that UIM coverage should be afforded anyway, because allegedly there was not a "meaningful offer" of UIM coverage by the insurer.
Such was the situation in a case recently decided by the United States Fourth Circuit Court of Appeals in Richmond. I love Richmond and its history. My grandfather practiced law there, which had a lot to do with my being an attorney - but, alas, I digress ...
In the January 6, 2012 decision of Bagnal v. Foremost Insurance Group, the Court of Appeals affirmed the decision of the U.S. District Court of South Carolina, which granted summary judgment to Foremost, the purported UIM insurer. The District Court ruled that, as a matter of law, Foremost was entitled to judgment in its favor, as Foremost had made a "meaningful offer" of UIM coverage to its liability insurance policyholder, consistent with South Carolina Code Annotated Section 38-77-160, and the well-known case of State Farm Mut. Auto. Ins. Co. v. Wannamaker, 354 S.E.2d 555 (S.C. 1987). For the offer of UIM coverage to be meaningful, "(1) the insurer's notification process must be commercially reasonable, whether oral or in writing; (2) the insurer must specify the limits of optional coverage and not merely offer additional coverage in general terms; (3) the insurer must intelligibly advise the insured of the nature of the optional coverage; and (4) the insured must be told that optional coverages are available for an additional premium." Id.
The District Court found that Foremost complied with the law by mailing certain information to the policyholder. Further, when the policyholder sought to create an issue of fact (for trial) as to the policyholder's contrary view of what offer of coverage had been made, the District Court found such alleged evidence was not enough to create a triable issue. The Court of Appeals took a fresh look at everything and affirmed the District Court's ruling: " [W]e find no merit in Bagnal's contention that the District Court was required to consider the documents before it in isolation from each other when examining the propriety of Foremost's offer of UIM coverage. Moreover, there is no evidence to support Bagnal's speculation that Adams may not have received a complete copy of the forms that Foremost sent to him, or that Adams' wife may have executed the forms in question without the proper authority. Accordingly, we affirm the District Court's grant of summary judgment in favor of Foremost."
Game, set, match ... By the way, speaking of courts, did you know that tennis great Arthur Ashe was born and raised in Richmond? I've seen the court where he learned to play. But, alas, I digress ...
Such was the situation in a case recently decided by the United States Fourth Circuit Court of Appeals in Richmond. I love Richmond and its history. My grandfather practiced law there, which had a lot to do with my being an attorney - but, alas, I digress ...
In the January 6, 2012 decision of Bagnal v. Foremost Insurance Group, the Court of Appeals affirmed the decision of the U.S. District Court of South Carolina, which granted summary judgment to Foremost, the purported UIM insurer. The District Court ruled that, as a matter of law, Foremost was entitled to judgment in its favor, as Foremost had made a "meaningful offer" of UIM coverage to its liability insurance policyholder, consistent with South Carolina Code Annotated Section 38-77-160, and the well-known case of State Farm Mut. Auto. Ins. Co. v. Wannamaker, 354 S.E.2d 555 (S.C. 1987). For the offer of UIM coverage to be meaningful, "(1) the insurer's notification process must be commercially reasonable, whether oral or in writing; (2) the insurer must specify the limits of optional coverage and not merely offer additional coverage in general terms; (3) the insurer must intelligibly advise the insured of the nature of the optional coverage; and (4) the insured must be told that optional coverages are available for an additional premium." Id.
The District Court found that Foremost complied with the law by mailing certain information to the policyholder. Further, when the policyholder sought to create an issue of fact (for trial) as to the policyholder's contrary view of what offer of coverage had been made, the District Court found such alleged evidence was not enough to create a triable issue. The Court of Appeals took a fresh look at everything and affirmed the District Court's ruling: " [W]e find no merit in Bagnal's contention that the District Court was required to consider the documents before it in isolation from each other when examining the propriety of Foremost's offer of UIM coverage. Moreover, there is no evidence to support Bagnal's speculation that Adams may not have received a complete copy of the forms that Foremost sent to him, or that Adams' wife may have executed the forms in question without the proper authority. Accordingly, we affirm the District Court's grant of summary judgment in favor of Foremost."
Game, set, match ... By the way, speaking of courts, did you know that tennis great Arthur Ashe was born and raised in Richmond? I've seen the court where he learned to play. But, alas, I digress ...
Tips on winter storm-related insurance claims
As this week's snowstorm turns into an ice storm, we figured that it would be a good time for a Q&A re: winter storms and insurance claims. For more, please see our winter weather page.
My neighbor’s tree fell on my house. Who pays?
Usually your insurance, even if it was the neighbor's tree. And you’ll be responsible for the deductible.
Sometimes your insurer can prove the neighbor was at fault (diseased tree, etc.) and make their insurer pay. But that can be hard to prove.
If possible, take steps to prevent further damage. For example, you might try to cover holes in walls or the roof, but only if it's safe to do so. Beware of snow, ice, and falling limbs.
And save your receipts: Your insurer may reimburse you for those costs.
A tree fell on my car or carport. Am I covered?
Car: Yes, if you have comprehensive coverage.
Carport: Yes, usually your homeowners coverage will usually cover the damage. But unattached buildings – like a garden shed – are often not covered.
Lots of limbs fell in my yard. Will an insurance company pay for cleanup?
Usually not. Homeowners insurance is mainly for the home.
Lost power and freezer thawed. Am I covered?
Most homeowners policies cover this, but it may not be worth filing a claim, esp. if you have a high deductible.
I’m concerned about flooding. Will I be covered?
Probably not. A standard homeowners insurance policy doesn't cover floods. You have to buy a separate policy, usually through the National Flood Insurance Program (NFIP).
My television set was ruined when the power came back on. Am I covered?
Most homeowner policies do cover appliances ruined by power surges. But consider your deductible -- in many cases, it may be more than the cost of simply replacing the damaged equipment.
Tips on auto insurance claims
After this week's record-setting snowstorm, it seemed like a good time to post some tips on auto- and homeowners claims. We'll start with auto, and then put up a second post specifically about homeowners claims. For more, please see our auto claims web page.
Claims process
• Get the name, contact info and insurance info of the other driver.
• Get the names and contact info of anyone in the other car. We've seen fraud cases in which friends of a car's sole occupant claim that they were in the car, too, so they can file claims.
• Call your agent or the company. They’ll walk you through the process.
• That said, if it’s just your car and the damage is minor, you may want to just pay for repair yourself., especially if you have a high deductible.
Repairs
• In Washington state, you can generally choose which shop to take your car to, but the shop and the insurer must agree on price. If they can't agree, you may be stuck paying the difference.
Who pays
• If you have collision coverage, the fastest thing may be to file a claim to your own insurer.
• There’s often disagreement over who’s at fault. Unfortunately, these disputes fall outside our administrative authority. Work with the person processing the claim. In major disagreements, you may want to seek legal advice.
• But if you’re confident that another person was at fault, you may want to wait for their insurance to pay. That way you won’t have a claim on your record
• If the other person’s at fault, your insurer can also recover its costs from their insurer. This is called subrogation. If you file the claim against your insurer and they get the other driver's insurer to pay, you may get your deductible back.
Rental car?
• If other person was at fault, their insurer will negotiate with you to pay for a rental car.
• Or your policy might pay it for you.
• Pay attention to the limitations, though: Rental car coverage is often limited to a short period of time. We often get complaints from people about this.
Diminished value
• This is the difference in value between a repaired car and one that was never damaged. See if your policy covers this.
• If you're making claim to other driver’s insurance, you need to prove that the value is diminished. This can be tough to do.
Claims process
• Get the name, contact info and insurance info of the other driver.
• Get the names and contact info of anyone in the other car. We've seen fraud cases in which friends of a car's sole occupant claim that they were in the car, too, so they can file claims.
• Call your agent or the company. They’ll walk you through the process.
• That said, if it’s just your car and the damage is minor, you may want to just pay for repair yourself., especially if you have a high deductible.
Repairs
• In Washington state, you can generally choose which shop to take your car to, but the shop and the insurer must agree on price. If they can't agree, you may be stuck paying the difference.
Who pays
• If you have collision coverage, the fastest thing may be to file a claim to your own insurer.
• There’s often disagreement over who’s at fault. Unfortunately, these disputes fall outside our administrative authority. Work with the person processing the claim. In major disagreements, you may want to seek legal advice.
• But if you’re confident that another person was at fault, you may want to wait for their insurance to pay. That way you won’t have a claim on your record
• If the other person’s at fault, your insurer can also recover its costs from their insurer. This is called subrogation. If you file the claim against your insurer and they get the other driver's insurer to pay, you may get your deductible back.
Rental car?
• If other person was at fault, their insurer will negotiate with you to pay for a rental car.
• Or your policy might pay it for you.
• Pay attention to the limitations, though: Rental car coverage is often limited to a short period of time. We often get complaints from people about this.
Diminished value
• This is the difference in value between a repaired car and one that was never damaged. See if your policy covers this.
• If you're making claim to other driver’s insurance, you need to prove that the value is diminished. This can be tough to do.
Our offices will remain closed today
Our Thurston County and Seattle locations will remain closed today due to the the road conditions as the yesterday's snowstorm became today's ice storm. Sorry for the inconvenience; we just want to keep our staff safe today.
All online services are still available at our website at http://www.insurance.wa.gov.
We expect to be fully operational during regular business hours starting tomorrow morning. We'll let you know here. Be safe!
All online services are still available at our website at http://www.insurance.wa.gov.
We expect to be fully operational during regular business hours starting tomorrow morning. We'll let you know here. Be safe!
OIC closes offices in Thurston County due to snow and ice
We've had to close our Thurston County offices this morning due to lots of snow and ice on the roads (and more coming down). This includes our office in the Insurance Building on the state capitol campus and our largest office, which is in Tumwater. We're sorry for the inconvenience, but conditions are pretty bad out there right now.
The good news: You can still:
The good news: You can still:
Limitation Period Expired – Discoverability Principle Not Applicable
In Muirhead v. Coulas [2011] OJ No. 4908 (S.C.J.), the defendants moved for summary judgment dismissing the action as statute barred. The action arose from a slip and fall in July 2005 and a claim was not commenced until July 2010.
The plaintiffs took the position that the limitation period did not begin to run until June or November 2009 when two medical opinions were received following another slip and fall in February 2006 when the plaintiff injured her same knee. They claimed that it was not until they received these reports that they discovered the 2005 injuries were ongoing and permanent.
The defendants took the position that there was no issue with respect to discoverability as the plaintiff knew she hurt her knee and she underwent surgery on her knee three days later and was unable to work for several months following.
Justice Mackinnon held that the defendants met their initial burden as they had led evidence that the plaintiff knew of her injury, it was serious enough to require surgery, she could not walk for two months after, she still had pain and restriction in movement six months later and had not been able to return to work by then. Justice Mackinnon also relied on section 5(2) of the Limitations Act , 2002 which sets out a presumption that a plaintiff has the requisite knowledge as of the day the act took place, “unless the contrary is proved”.
Addressing the plaintiffs’ submission that a proceeding would not have been an appropriate means to remedy the injury sustained as the plaintiff believed her injuries were resolving and would not be permanent, Justice Mackinnon stated that section 5(1)(a)(iv) “does not amount to a bar to an action for recovery in tort” and held that the cause of action was complete, even if the complete extent of damages was not fully known.
Justice Mackinnon agreed with the plaintiffs’ submission that an individual should not be required to commence an action where there is no reasonable prospect of recovery, but found there to be no such facts in the case at hand.
In response to the plaintiffs’ submission that the true nature of the loss from the 2005 slip and fall was not knowable until after the second incident, Justice Mackinnon held that the plaintiff clearly had a claim arising from the first incident and “the facts learned subsequently that the injury was permanent and contributed to her current severe condition may have been a basis to increase the quantum of damages sought but is not a new or different claim”.
Lastly, the plaintiffs attempted to rely on cases that extended the running of the limitation period because a medical opinion was required in order to know whether a cause of action existed. Justice Mackinnon pointed out that in all of these cases, the court had referred to the requirement that the plaintiff acted with due diligence in acquiring facts in order to be fully apprised of all material facts upon which a negligence claim can be based, including being diligent in requesting and receiving a medical opinion, if required. The plaintiffs in this case did not provide evidence as to why they did not seek out the medical reports sooner that were ultimately obtained in 2009. Also, there was evidence to suggest that there was an operative report available in March of 2007 that the plaintiffs did not request until later.
It was held that there was no genuine issue requiring a trial.
- Kristen Dearlove, Student-at-Law
The plaintiffs took the position that the limitation period did not begin to run until June or November 2009 when two medical opinions were received following another slip and fall in February 2006 when the plaintiff injured her same knee. They claimed that it was not until they received these reports that they discovered the 2005 injuries were ongoing and permanent.
The defendants took the position that there was no issue with respect to discoverability as the plaintiff knew she hurt her knee and she underwent surgery on her knee three days later and was unable to work for several months following.
Justice Mackinnon held that the defendants met their initial burden as they had led evidence that the plaintiff knew of her injury, it was serious enough to require surgery, she could not walk for two months after, she still had pain and restriction in movement six months later and had not been able to return to work by then. Justice Mackinnon also relied on section 5(2) of the Limitations Act , 2002 which sets out a presumption that a plaintiff has the requisite knowledge as of the day the act took place, “unless the contrary is proved”.
Addressing the plaintiffs’ submission that a proceeding would not have been an appropriate means to remedy the injury sustained as the plaintiff believed her injuries were resolving and would not be permanent, Justice Mackinnon stated that section 5(1)(a)(iv) “does not amount to a bar to an action for recovery in tort” and held that the cause of action was complete, even if the complete extent of damages was not fully known.
Justice Mackinnon agreed with the plaintiffs’ submission that an individual should not be required to commence an action where there is no reasonable prospect of recovery, but found there to be no such facts in the case at hand.
In response to the plaintiffs’ submission that the true nature of the loss from the 2005 slip and fall was not knowable until after the second incident, Justice Mackinnon held that the plaintiff clearly had a claim arising from the first incident and “the facts learned subsequently that the injury was permanent and contributed to her current severe condition may have been a basis to increase the quantum of damages sought but is not a new or different claim”.
Lastly, the plaintiffs attempted to rely on cases that extended the running of the limitation period because a medical opinion was required in order to know whether a cause of action existed. Justice Mackinnon pointed out that in all of these cases, the court had referred to the requirement that the plaintiff acted with due diligence in acquiring facts in order to be fully apprised of all material facts upon which a negligence claim can be based, including being diligent in requesting and receiving a medical opinion, if required. The plaintiffs in this case did not provide evidence as to why they did not seek out the medical reports sooner that were ultimately obtained in 2009. Also, there was evidence to suggest that there was an operative report available in March of 2007 that the plaintiffs did not request until later.
It was held that there was no genuine issue requiring a trial.
- Kristen Dearlove, Student-at-Law
Pardons for Criminals??
PARDONS FOR CRIMINALS?
As Governor Haley Barbour of Mississippi stepped down, he issued a boatload of pardons. In his state, a full pardon is basically equivalent to saying that the underlying crime did not ever happen. Even for a convicted murderer, his rights to vote are restored. He will even be able to buy and own guns! No convicted felon is allowed to do those things normally. Even non-violent felonies like tax evasion or illegally trading stocks usually have those restrictions. But, with a Mississippi-style pardon, it is all washed away.
That got me to wondering what the rules are in Tennessee. Since I only do injury law, I had to research this a bit. According to noted Nashville attorney Nathan Moore, in Tennessee, the pardon process is lengthy and difficult. Pardon is also known as “clemency.” Reasons for seeking a pardon here can include wanting to go to school to further one's education or needing to get a professional certification. Unlike our southern neighbor, Tennessee’s pardon does not erase the conviction from a record, but it shows that forgiveness of sort granted by the state.
They are hard to obtain here as well. The Board of Probation and Parole, who is responsible for offering pardon recommendations to the governor, rejects two-thirds of pardon applications outright. The Board can have a hearing for the worthy candidates. It can make sense that a productive citizen for thirty years who had a youthful felony could be allowed to obtain a pardon and finally hunt or vote.
But, there seems to be another difference as well. While most of the pardons granted in Mississippi were for people who had long ago finished their sentence, a few were granted to murderers still actually serving in prison. Several were released! There appears to be little to no consultation with the victims’ family, many of who are frightened at the idea of their families’ murderer walking the streets when they had previously been sentenced to life in prison.
The instructions for the Tennessee pardon application lists a few bare minimum requirements: 1) five personal recommendations, 2) you must have fully completed your sentence, and 3) you must have stayed out of trouble since completing your sentence. These are, in fact, the bare minimums. Your chances are helped by the quality and quantity of your recommendations as well as your resume, so to speak, of self-betterment and community involvement. The more you can show the Board that you "deserve" the pardon, the more likely you will be successful.
Sounds like we have a very different system from Mississippi. Of that, I think we can all be pleased. I think I will stick with injury law.
Mr. Peel seeks justice for those injured in car accidents, work place incidents, medical malpractice, and nursing homes. He often addresses churches, clubs and groups without charge. Mr. Peel may be reached though PeelLawFirm.com wherein other articles may be accessed.
Having some phone system problems this morning
Just fyi: We're having some trouble with our telephone network this morning. Callers may get just a steady busy signal or will hear the phone ringing but the call won't go to voicemail.
This affects many of our lines, including our consumer hotline (1-800-562-6900) and our main number (360-725-7000).
The folks who maintain the network are aware of the problem and are working to fix it now.
Update (11:30 a.m.) We believe everything's fixed and working now. Thanks for your patience.
This affects many of our lines, including our consumer hotline (1-800-562-6900) and our main number (360-725-7000).
The folks who maintain the network are aware of the problem and are working to fix it now.
Update (11:30 a.m.) We believe everything's fixed and working now. Thanks for your patience.
Sensible Home Warranty ordered to stop selling insurance in WA
A New York-based home warranty company has been ordered to stop selling insurance in Washington state.
Sensible Home Warranty LLC, formerly known as CHW, LLC, sold Washington consumers approximately 142 home warranty service contracts since 2009. The contracts were for parts and labor necessary to fix major systems and appliances that failed in a consumer's home. The company solicits customers through telemarketing and through a website: http://www.sensiblehomewarranty.com/.
In Washington, service contracts like the ones sold by Sensible Home Warranty are considered insurance. But neither the company nor its principals, Harrison Gindi and Elliot Dabah, are authorized to transact insurance in Washington state. Nor are they registered as service contract providers.
Nothing in the order, which took effect immediately Jan. 6, 2012, prevents the company from fulfilling the terms of its contracts or providing a refund to Washington consumers who ask for one.
The company has the right to demand a hearing.
Note: The company's registered office address is in Sparks, Nev., but its principal place of business and sales office is 1724 E. 12th St., Brooklyn, NY.
Sensible Home Warranty LLC, formerly known as CHW, LLC, sold Washington consumers approximately 142 home warranty service contracts since 2009. The contracts were for parts and labor necessary to fix major systems and appliances that failed in a consumer's home. The company solicits customers through telemarketing and through a website: http://www.sensiblehomewarranty.com/.
In Washington, service contracts like the ones sold by Sensible Home Warranty are considered insurance. But neither the company nor its principals, Harrison Gindi and Elliot Dabah, are authorized to transact insurance in Washington state. Nor are they registered as service contract providers.
Nothing in the order, which took effect immediately Jan. 6, 2012, prevents the company from fulfilling the terms of its contracts or providing a refund to Washington consumers who ask for one.
The company has the right to demand a hearing.
Note: The company's registered office address is in Sparks, Nev., but its principal place of business and sales office is 1724 E. 12th St., Brooklyn, NY.
Kreidler on nonprofit health insurer surpluses: "How much is enough?"
Commissioner Kreidler recently had an op-ed in the Seattle Times, talking about the large surpluses that have been built up by non-profit health insurers in recent years. From it:
We're working on a web page that explains this issue in more detail, and includes charts of the major insurers' surpluses over the past decade. Stay tuned...
In Washington, the three major health insurers — Premera Blue Cross, Regence BlueShield and Group Health Cooperative — are sitting on a total of more than $2.4 billion above and beyond what they expect to ever pay out in claims. All of them are not-for-profits. And they continue to propose substantial rate increases.He is proposing legislation that would give the insurance commissioner's office explicit authority to consider those surpluses when reviewing rate requests.
We're working on a web page that explains this issue in more detail, and includes charts of the major insurers' surpluses over the past decade. Stay tuned...
Upcoming changes to insurance law
Van Mayhall at Insurance Regulatory Law has posted an informative article on upcoming federal and state changes to liability insurance regulations.
Summary Judgment - Costs
We continue our discussion of the Court of Appeal's decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764.
The former r. 20 provided that a party that was unsuccessful on a summary judgment motion was liable to pay substantial indemnity costs. The 2010 amendments eliminated the presumption of substantial indemnity costs.
The Court of Appeal commented on the costs rule as follows:
[67] As a result of the amendments to rule 20.06, the onus is now on the party seeking substantial indemnity costs to convince the court that the other side acted unreasonably or in bad faith for the purpose of delay in bringing or responding to a motion for summary judgment. This amendment removes a disincentive to litigants from using Rule 20 by eliminating the presumption that they will face substantial indemnity costs for bringing an unsuccessful motion for summary judgment. However, as the jurisprudence becomes more settled on when it is appropriate to move for summary judgment, the reasonableness of the decision to move for summary judgment or to resist such a motion will be more closely scrutinized by the court in imposing cost orders under rule 20.06.
It seems that this paragraph suggests that courts will revert back to substantial indemnity costs as a body of case law develops. This will be an important consideration when deciding whether to bring a summary judgment motion or not.
- Tara Pollitt
The former r. 20 provided that a party that was unsuccessful on a summary judgment motion was liable to pay substantial indemnity costs. The 2010 amendments eliminated the presumption of substantial indemnity costs.
The Court of Appeal commented on the costs rule as follows:
[67] As a result of the amendments to rule 20.06, the onus is now on the party seeking substantial indemnity costs to convince the court that the other side acted unreasonably or in bad faith for the purpose of delay in bringing or responding to a motion for summary judgment. This amendment removes a disincentive to litigants from using Rule 20 by eliminating the presumption that they will face substantial indemnity costs for bringing an unsuccessful motion for summary judgment. However, as the jurisprudence becomes more settled on when it is appropriate to move for summary judgment, the reasonableness of the decision to move for summary judgment or to resist such a motion will be more closely scrutinized by the court in imposing cost orders under rule 20.06.
It seems that this paragraph suggests that courts will revert back to substantial indemnity costs as a body of case law develops. This will be an important consideration when deciding whether to bring a summary judgment motion or not.
- Tara Pollitt
Insurers Must Disclose Limits Before Suit is Filed
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| Post by Jack Griffeth |
As part of the newly-enacted South Carolina Fairness in Civil Justice Act of 2011, which became effective January 1, 2012, insurance companies must now, under certain conditions, disclose the automobile coverage limits to a plaintiff’s lawyer prior to the lawyer filing suit. This has been a controversy in our state for a number of years, and this provision is tucked away into this somewhat comprehensive legislative bill at Section 38-77-250.
It provides that every insurer that provides automobile insurance coverage in South Carolina, which is or may be liable to pay for all or any part of any claim, shall provide “within 30 days of receiving a written request from the claimant’s attorney, a statement, under oath, of a corporate officer, or the insurer’s claims manager, stating with regard to each known policy of non-fleet private passenger insurance issued by it, the name of the insurer, the name of the insured, and the limits of coverage.”
This request must be initiated by the plaintiff’s lawyer, and the reply must be “under oath” either by a corporate officer or the insurer’s claims manager.
The statute goes on to say, however, that the insurer “may provide a copy of the declarations page of each policy in lieu of providing such information.” The statute does not specifically say the declarations page must be certified “under oath” to be a true and accurate copy of the coverage as requested. A safe course of action might be to provide such a notarized affirmation.
The plaintiff’s lawyer or claimant’s lawyer also has certain hoops to jump through in making the request. The Act provides the initial request shall set forth “under oath” the specific nature of the claim asserted and shall be mailed to the insurer by certified mail or statutory overnight delivery. The request must also state the attorneys are authorized to make such a request and must be accompanied by a copy of the incident report by which the claim is derived.
This is unexplored territory for insurers in South Carolina
Additional protection is afforded to the insurance company by other provisions of this law, which provide that this law does not create a waiver of any defenses to coverage available to the insurer, and it is not admissible as evidence. There is a continuing duty to amend if additional information is obtained and, as noted above, the provisions do not apply to the disclosure of limits from fleet policy limits, umbrella coverage, or excess coverage. Moreover, the information received is regarded as “confidential and must not be disclosed to any outside party.” The claimant’s attorney or plaintiff’s attorney must destroy all of the information received pursuant to this Section upon final disposition of the case.
Finally, the court may impose sanctions for violations.
A full review of this law bears close scrutiny by all companies writing automobile insurance in South Carolina
- Jack
Director of South Carolina Department of Insurance Resigns; New Acting Director Appointed
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| Post by Logan Wells |
On December 28, 2011, David Black resigned as director of the South Carolina Department of Insurance. Governor Nikki Haley had nominated Black to the position 11 months earlier. His appointment was confirmed by the South Carolina Senate in February 2011.
Governor Haley has named Gwen Fuller McGriff as acting director of the South Carolina Department of Insurance. McGriff has been with the Department for 16 years. Prior to her recent appointment she acted as the Department’s Director of Legal, Legislative and External Affairs.
For more information on this story, click here.
New Punitive Damages now in Effect
The new year brings new changes regarding punitive damages. Effective January 1, 2012, there are significant changes to the law concerning punitive damage awards in South Carolina
The changes are a result of the South Carolina Fairness in Civil Justice Act of 2011, which was signed into law on June 14, 2011.
Generally, under the Act, no award of punitive damages may exceed the greater of three times the compensatory damage awarded to each plaintiff or the sum of $500,000.00. However, the cap may be increased to the greater of four times the amount of compensatory damages awarded to each claimant or $2 million. To learn more about the provisions and exceptions under the Act, read our original blog post. You can find it here.
Should you have any questions, you can call any member of the Collins & Lacy Insurance Team.
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| Post by Logan Wells |
Generally, under the Act, no award of punitive damages may exceed the greater of three times the compensatory damage awarded to each plaintiff or the sum of $500,000.00. However, the cap may be increased to the greater of four times the amount of compensatory damages awarded to each claimant or $2 million. To learn more about the provisions and exceptions under the Act, read our original blog post. You can find it here.
Should you have any questions, you can call any member of the Collins & Lacy Insurance Team.
- Logan
STARS: Another thought
WISHING UPON A STAR?
If you have not taken a moment recently to go out a look at the stars on one of these cool dark nights, I encourage you to.
Scripture has a lot to say about stars:
“When I consider your heavens, the work of your fingers, the moon and the stars, which you have set in place . . . “(Psalm 8:3, NIV)
He made the stars with a purpose, both as signs and light: And God said, "Let there be lights in the expanse of the sky to separate the day from the night, and let them serve as signs to mark seasons and days and years, and let them be lights in the expanse of the sky to give light on the earth." (Gen 1:14-15).
. “He determines the number of the stars and calls them each by name.” (Psalm 147:4). “Lift your eyes and look to the heavens: Who created all these? He who brings out the starry host one by one, and calls them each by name. Because of his great power and mighty strength, not one of them is missing.” (Isaiah 40:26).
The Bible names some constellations: “Can you bind the beautiful Pleiades? Can you loose the cords of Orion? Can you bring forth the constellations in their seasons or lead out the Bear with its cubs? Do you know the laws of the heavens?” (Job 38:31-32. See also Amos 5:8)
The stars have an order or procession. “Who is this that appears like the dawn, fair as the moon, bright as the sun, majestic as the stars in procession?” (Song of Solomon, 6:10).
In Genesis 9:12-13, God said, "This is the sign of the covenant I am making between me and you and every living creature with you, a covenant for all generations to come: I have set my rainbow in the clouds, and it will be the sign of the covenant between me and the earth.”
But, there is a perceived problem with the distant stars He made in Genesis on Day 4. Many point out that the light could not reach here in the 6,000-10,000 years of Biblical history.
To think through this issue, understand that light is currently believed to travel at 186,000 miles per second. A “light year” is traveling at this unimaginable speed for a whole year!
The closest star (other than our sun) is Proxima Centauri, which is 4.22 light years away. That is 24,800,000,000,000 miles (or about the length of the line at Walmart when I am in a hurry.
This distance is used by old earth proponents to argue for an ancient universe approaching 13 billons years old or more. Given their assumptions, that is not unreasonable.
However, notice the assumptions that are made: 1) The speed of light is constant; 2) the distance is fixed and unchanged for billions of years; 3) processes have always been exactly as they are right now. (this is called “uniformitarianism”).
If you suspend just one of these assumptions, everything changes. For instance, what if many of the visible stars were created quite close to the earth and accelerated away at great speed? Their light would remain visible now. It would be like having a flashlight and throwing it. The light is visible as it leaves.
There is some reason to suspect something like this might just be the case. In at least 11 places, the Scriptures speak of God ‘stretching out the heavens’ (e.g. Job 9:8, Isaiah 40:22 and 42:5, Jeremiah 10:12, Zechariah 12:1) and in Genesis 1:15 the words ‘And it was so.’ are recorded in connection with the events of Day 4 of Creation Week, implying the completion of the events described on that Day. It is a reasonable conclusion to draw that God stretched out the heavens to the vast extent of the observable universe in just one 24-hour day and then ceased the action of ‘stretching out’.
It is interesting to discuss, but the only one that was there was God. One must chose to trust in an ever-changing science book or the unchanging Bible. I choose Scripture.
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Mr. Peel star gazes from his Arlington area home, and seeks justice for those injured in car accidents, work place incidents, medical malpractice, and nursing homes. He often addresses churches, clubs and groups without charge. Mr. Peel may be reached though PeelLawFirm.com wherein other articles may be accessed.
Summary Judgment - Simplified Rules
This is our third post on the Court of Appeal's decision in Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764.
The Court seems to suggest that summary judgment may not be appropriate generally in Simplified Rules actions. The Court stated that although in appropriate cases, a motion for summary judgment in a r. 76 action may be a useful tool to promote the efficient disposition of cases, "it will often be the case that bringing a motion for summary judgment will conflict with the efficiency that can be achieved by simply following the abridged procedures in Rule 76." The Court held that summary judgment in r. 76 cases should be discouraged where there is competing evidence from multiple witnesses, the evaluation of which would benefit from cross-examination, or where oral evidence is clearly needed to decide certain issues. In many cases, the better course is to proceed to a speedy trial.
The Court did qualify its comments by indicating that it was not stating that summary judgment could never be used in Simplified Rules actions; in a document driven case, or in a case where there is limited contested evidence, both the full appreciation test and the efficiency rationale may be served by granting summary judgment in a simplified procedure action.
Given the Court's comments, it would seem that few summary judgment motions will be brought in Simplified Procedure actions.
- Tara Pollitt
The Court seems to suggest that summary judgment may not be appropriate generally in Simplified Rules actions. The Court stated that although in appropriate cases, a motion for summary judgment in a r. 76 action may be a useful tool to promote the efficient disposition of cases, "it will often be the case that bringing a motion for summary judgment will conflict with the efficiency that can be achieved by simply following the abridged procedures in Rule 76." The Court held that summary judgment in r. 76 cases should be discouraged where there is competing evidence from multiple witnesses, the evaluation of which would benefit from cross-examination, or where oral evidence is clearly needed to decide certain issues. In many cases, the better course is to proceed to a speedy trial.
The Court did qualify its comments by indicating that it was not stating that summary judgment could never be used in Simplified Rules actions; in a document driven case, or in a case where there is limited contested evidence, both the full appreciation test and the efficiency rationale may be served by granting summary judgment in a simplified procedure action.
Given the Court's comments, it would seem that few summary judgment motions will be brought in Simplified Procedure actions.
- Tara Pollitt
U.S. District Court finds coverage for Pring-Wilson under umbrella policy but not homeowner's policy
I have posted previously here and here about the declaratory judgment action over insurance coverage issues in the civil wrongful death case against Alexander Pring-Wilson. Pring-Wilson was a Harvard graduate student who was in a drunken street fight with Michael Colono, resulting in Colono's death. Pring-Wilson pleaded guilty to involuntary manslaughter. Colono's estate filed a civil wrongful death suit against him, resulting in a judgment of $260,000 which is currently under appeal.
Pring-Wilson sought coverage for the wrongful death suit under a homeowner's policy issued by Fire Insurance and an umbrella policy issued by Farmers Insurance to his mother, Cynthia Pring, in Colorado. The insurers filed a declaratory judgment action in the United States District Court for the District of Massachusetts.
After a bench trial, in Fire Ins. Exchange v. Pring-Wilson, __ F. Supp. 2d __, 2011 WL 6396518, Judge Saris ruled that under Colorado law the Fire Insurance policy is not required to indemnify Pring-Wilson, but the Farmers policy must indemnify him.
The Fire Insurance policy defined "insured" as a "permanent resident" of the policyholder's household under the age of 21 or a relative of the policyholder. The Farmers policy covers "the following residents of your household . . . (1) your relatives." "Relative" is defined in the policy as "persons living with you who are related to you by blood, marriage, or adoption."
The judge had ruled earlier that under the Fire Insurance policy Pring-Wilson was a permanent resident of his mother's household.
Farmers argued that Pring-Wilson is not covered under the umbrella policy because he was not "living with" his mother, the policyholder.
The court disagreed, "Pring-Wilson was not physically living with his mother on the date of the accident because he was away at school, but he was living with her in the sense that his school addresses were all temporary and he was a resident of [his mother's] home. He was not yet formally engaged and planned to move home within weeks."
The court held that under Colorado law coverage was excluded in the Fire Insurance policy by an exclusion for damages that resulted "for any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable."
The Farmers policy did not contain that exclusion. Rather, it excluded coverage for damages that are "expected or intended from the standpoint of the insured." The court held that Farmers failed to establish that Pring-Wilson subjectively expected or intended any harm to Colono.
The court finally held that the umbrella policy would drop down to cover the loss where the primary policy did not provide coverage.
Pring-Wilson sought coverage for the wrongful death suit under a homeowner's policy issued by Fire Insurance and an umbrella policy issued by Farmers Insurance to his mother, Cynthia Pring, in Colorado. The insurers filed a declaratory judgment action in the United States District Court for the District of Massachusetts.
After a bench trial, in Fire Ins. Exchange v. Pring-Wilson, __ F. Supp. 2d __, 2011 WL 6396518, Judge Saris ruled that under Colorado law the Fire Insurance policy is not required to indemnify Pring-Wilson, but the Farmers policy must indemnify him.
The Fire Insurance policy defined "insured" as a "permanent resident" of the policyholder's household under the age of 21 or a relative of the policyholder. The Farmers policy covers "the following residents of your household . . . (1) your relatives." "Relative" is defined in the policy as "persons living with you who are related to you by blood, marriage, or adoption."
The judge had ruled earlier that under the Fire Insurance policy Pring-Wilson was a permanent resident of his mother's household.
Farmers argued that Pring-Wilson is not covered under the umbrella policy because he was not "living with" his mother, the policyholder.
The court disagreed, "Pring-Wilson was not physically living with his mother on the date of the accident because he was away at school, but he was living with her in the sense that his school addresses were all temporary and he was a resident of [his mother's] home. He was not yet formally engaged and planned to move home within weeks."
The court held that under Colorado law coverage was excluded in the Fire Insurance policy by an exclusion for damages that resulted "for any occurrence caused by an intentional act of any insured where the results are reasonably foreseeable."
The Farmers policy did not contain that exclusion. Rather, it excluded coverage for damages that are "expected or intended from the standpoint of the insured." The court held that Farmers failed to establish that Pring-Wilson subjectively expected or intended any harm to Colono.
The court finally held that the umbrella policy would drop down to cover the loss where the primary policy did not provide coverage.