July 10, 2014
In this Issue ...
MAIA News: • We‘reLookingfora FewGreatAgents 1
projectcap News: •Lock-InYourAdvantage SubscriptionPriceNow 1
Comp. Corner: 1 •VikkiA.ThomasNamed OutstandingCSRoftheYear
Member Milestones: 2 •VermontMutual‘sJoyce McCutcheonNamedClaims ProfessionaloftheYear
Education News: • ProjectInVestUpdate2
State House News: • ProjectInVestUpdate 2
• E&O Update WhichPositionWould YouRatherTake? 3-4
Industry News • MCOwnerstoReceive RefundsfromCommerce4
DOI News • DOItoHoldHearingonCAR PerformanceStandards 5
Thanks Company 5 Partners
MAIA News:We‘re Looking for a Few Great Agents ...
MAIAislookingforagentsinterestedinjoiningtheAssociation‘sBoardof Directors.AcoupleofBoardvacanciesareexpectedthisfall.
Ifyouareinterested,pleaseforwardabriefresumeofyouraccomplishmentsforconsideration.FeelfreetocontactMAIAPresidentandCEOFrankMancinibyemailatfmancini@massagent.comorbyphoneat800.972.9312or508.634.2900ifyouhavequestionsaboutwhatbeingamemberoftheBoardentails.
News:
Lock-In Your Advantage Subscription Price Now ...
ThepriceoftheAdvantagesubscriptiontoTrustedChoice.comwillincreasefrom$39permonthto$49permonthonJuly18th.So,ifyou‘vebeenwaitingtosignup,now‘sthetimetodoit.Trafficisincreasingatanamazingrate:|
• TrustedChoice.comhasbrokenitsowntrafficrecordtenmonthsinarowwithover152,000consumersvisitinginMayalone.
• TrustedChoice.comgenerated3009exclusivesalesleadsinMay.Two-thirdsofthoseleads(2102)wenttoagenciesparticipatingintheAdvantageprogram.
Sign up todayandlockinthecurrentrateof$39permonthforthenextyear!
Contactprojectcap directlytolockinyourmonthlysubscriptionfeeforoneyearortakeadvantageofthemulti-locationdiscountbycalling855.372.0070.
Comp. Corner:
DIA Assessment Announced ...
TheDepartmentofIndustrialAccidents(DIA)hasreleasedaletteroutliningthe officialassessmentratestobeappliedtopolicieseffectiveJuly1,2014and thereafter.Hereisthetextoftheletter:
PursuanttoM.G.L.c.152,§65(4)&(5),theDepartmentofIndustrialAccidentshasestablishedtheinsuredassessmentratestobecalculatedforallpolicieseffectiveJuly1,2014.Theinsuredassessmentratesareasfollows:
Employer Insured Self-Insured Assessment Rate Assessment RatePrivate 0.058 0.058Privateopt-out N/A 0.017Public 0.000 0.000Publicopt-out N/A N/A
Theletteralsoincludedalistofbothpublicandprivateemployersthathaveexercisedtheirrighttoopt-outofTrustFundassessments.Toreviewtheopt-outlist,clickhere.
2 July 10, 2014
Member Milestones:Vermont Mutual‘s Joyce McCutcheon Named Claims Professional of the Year ...
VermontMutualInsuranceGrouphasannouncedthattheInternationalAssociationofInsuranceProfessionals(IAIP)hasnamedJoyceMcCutcheonClaimsProfessionaloftheYear.
Theawardrecognizestheclaimsprofessionalwhohasdemonstratedsuperiorknowledgeoftheclaimsfield,experiencedprofessionaladvancementthrougheducationalpursuits,demonstrated leadershipinthefield,andisanactiveparticipantinIAIPactivities.
Joyceisa25yearinsuranceprofessionalandholdsthefollowingdesignationsCCLA,ACLA,SCLA,CPIW,shehasbeenwithVermontMutualforfiveyears.
Pictured L - R: Daniel C. Bridge, Executive Vice President, David N. DeLuca, Vice President Claims, Joyce N. McCutcheon, Senior Claim Representative and William A. Catto, President & CEO
Education News:Project InVest Update ...
MAIA‘sVicePresidentofTraining,HeatherKramer,wasrecentlyinterviewedbyACORDregardingMAIA‘sProjectInVestatJosephP.KeefeRegionalTechnicalSchool.TohearabouttheProjectInVestProgram,ingeneral,andtheKeefeTechprogram,inparticular,clickhere.
InVEST,aschool-to-workinsuranceprogram,teamswithhighschoolandcollege educatorstoprovideausefulinsurancecurriculumforstudents.WiththehelpofInVest
liaisons(insuranceprofessionals),studentscouldhavetheopportunityforjobshadowdays,internshipsorevencareersaftergraduatingfromInVEST.GuestspeakersduringanInVESTclassprovidefirsthandknowledgeofwhatit’sliketoworkintheinsurancefield,andstudentshaveanewappreciationfortheindustryafterahearingaprofessionalspeak.And,beforeyou’veevenenteredtheroomtheyalreadyareexcitedtohavesomeoneotherthantheirteacherspeakingtothem!What’smore?InVESTprovidesallthematerialsneededtospeakinaclassroomforyou.PowerPointpresentations,quizzes,discussionquestionsandmore!InVESTmakesiteasyandseamlesstoenteraclassroomand impactthenextgenerationofinsuranceprofessionals.Topicscanincluderating,claims,whattolookforinapolicy,howyouhavesucceededintheindustryorevenexplainingspecificinsuranceroles,likeinvestigationsandfraud.
State House News Service:“Baker:AfterSiteProblems,RMVShouldDelayFeeIncreasesAftertheRegistryofMotorVehiclestookdownitswebsiteforperiodsofthelastweekendinJune,preventing consumerfromconductingtransactionsonlineasfeeincreaseswereplannedtogointoeffect,Republican gubernatorialcandidateCharlieBakercalledontheRMVonMondaymorningtodelaythefeeincreasesuntiltheendoftheweek.ThoughRMVofficialssaidthenewfeesarealreadyinplaceandwouldnotbechanged,theagencyislookingtorefundasmallnumberofcustomerswhoweredetectedbythesystemtobeattemptingtoperforma transactionwhenthewebsitewasunavailable.AtthestartofthenewfiscalyearonJuly1,thepriceofvehicle registrationsrosefrom$50to$60,inspectionsjumpedfrom$29to$35anddrivingtestfeesroseby$15to$35. Drivershopingtorenewtheirregistrationsonlinebeforethefeeincreasewentintoeffecthadtroubleattimes accessingthesiteduetoscheduledmaintenance.SaraLavoie,thenewchiefofstaffattheRMV,saidthewebsitewastakendownforperiodsinthedaysbeforethefeeincreaseswentintoeffecttoinstallsecuritysoftwareandprogramthenewfeesandconducttests.“Wehaveheardfromsixcustomerswhoattemptedtoperformatransactionjustpriorto12amonTuesday,July1.TheRMVwillbereviewingtheindividualcustomercasestodetermineeligibilityfora refundbasedontheirtransactiontime,”Lavoiesaid.Bakersaiddriversshouldbegivenuntiltheendoftheweektotakeadvantageoflowerpricing."Delayingthefeeincreasesuntiltheendofthisweekisthefairthingtodobecausethestatescrewedup,“Bakersaidinastatement."ThepeopleofMassachusettsdeservewebsitesthatwork,arealsenseofcustomerservice,andastategovernmentthatownsitsmistakes,ratherthanpassingthemontoits constituents.WithglitchesanderrorsplaguingtheHealthConnectorsite,theunemploymentbenefitssystem,andnowtheRMVsite,itisnotfairforMassachusettsfamiliestopickupthetaborenduretheheadacheofessential servicesthatjustdon‘twork.“TheRMVsaid35,370customerswereabletomakeonlinetransactionstheweekendofJune28andJune29,anuptickof6,484fromthepreviousweekend.ThewebsitewasunavailableforscheduledupgradesonMonday,June30,thedaybeforethefeeincreasestookeffect,from11p.m.tomidnight,accordingtotheRMV,whiletheautomatedphonesystemwastakendownthatdayfrom6p.m.to7:45p.m.tochangethemessagecontentandfrom11p.m.throughTuesday,July1at6:48a.m.formaintenanceandtestingforself-servicetransactions.ThewebsitewasalsodownonthemorningofSaturday,June28fortheinstallationofanewfirewallandsecurity upgrades.“–M.Murphy/SHNS
3
E&O Update:Which Position Would You Rather Take?
byCurtisM.Pearsall,CPCU,AIAF,CPIAPresident–PearsallAssociates,Inc andSpecialConsultanttotheUtica NationalE&OProgram
Whenanerrors-and-omissionsclaimagainstaninsuranceagencydevelops,anobjectiveoftheE&Ocarrierandtheattorneyitassignstohandlethematteristoreviewthefileinquestionanddeterminethedegreeofliability,ifany. Numerousdefensescanbeappliedbasedonthefactsofthespecificcase.Defensesinclude,butarenotlimitedto:
• plaintifffailedtogiveaccurateinformationtotheagent
• plaintiffmisrepresentedcertainfactstoagent• plaintifffailedtoreadhisorherpolicy• plaintiffsignedapolicyapplicationcontaining
incorrectinformation• lackofduty
Iftheagency’scustomerhadbeenmadeawareofaspecificcoveragebutrejectedit,generally,onewouldhopethiswouldpositiontheagencyinapositivelight.Butwhatiftheagency’scustomerwasnotmadeawareof,say,umbrellacoverage,includingwhatitdoesandhowitworks?Towhatdegreewouldthishurttheagency’sdefense?
Some Positive E&O InitiativesLet’stakethefollowingscenarioandlookatthevariouspositions.Imagineyouarethejuryandwillbeaskedto renderaverdict.Theagencywritesahomeownerspolicyforacustomerin2000.Theagencyincludesacoverletterwiththepolicyrequestingthatthecustomerreadthe policyandcontacttheagencyifthereareanyquestions.Thecoverletterincludesastatementnotingthatthe agencyisafull-serviceagencyandencouragesthe customertocontacttheagencyifthereisanychangeinthecustomer’sexposure.
ThesearesomepositiveE&Oinitiativesfromtheagency,sofar.However,forthenext10years,theagencysimplysendsthepolicywithnocoverletter.Inessence,theagencyhasacustomerforwhomitwritesonelineofbusiness,homeowners.Theagencyneverreachedouttothe customerinquiringaboutwherethecustomer’sautoinsuranceisplaced,whetherthecustomerhasanumbrellapolicy,anynewexposures,etc.
Inthat10-yearperiod,thecustomerpurchasesadogforhisorherkids.Thedoglaterbitestheneighbor’schild,resultinginalawsuitrequestingdamagesinexcessoftheliabilityportionofthehomeownerspolicy.Theagencyissuedduetothelackofsufficientcoverage.
WhileE&Ocaseswilltypicallybevery“factsensitive”andnottotally“cutanddry,”considerthefollowingdefensepositions.
In the Agency’s FavorInmost,butnotall,states,theagentisoftenreferredtoas“anordertaker.”Inotherwords,itisuptothecustomertospecificallyrequestcoverage.Generally,aninsuredmustmakeaspecificrequestforaparticulartypeofinsurancecoveragetoimposeadutyontheagenttoprocurethatparticularcoverage.Inaddition,aninsuranceagentisnotrequiredto:
• provideaninsurancepolicythatwouldcoverall possiblecontingencies
• adviseaninsuredwithrespecttocoverageoptions• advisetheinsuredastoeveryexclusioncontainedin
thepolicy
Indefenseoftheagency,itsecuredthecoveragetheclientrequested.Thecustomernevercontactedtheagencyforadditionalcoveragesortolettheagencyknowaboutthe“changeintheexposure.”Bottomline,theagencyfulfilleditsduty.A“specialrelationship”willbedifficulttoprovebecausetheagencyonlywroteonelineofbusiness. Therefore,isthereagoodchancetheagencywillprevailonthislegalmatter?Theoddsareintheagency’sfavor.
Not in the Agency’s FavorThecustomerprobablywillcontendthatheorsheisnotinsurancesavvyandreliedontheagency’sknowledgeandexpertise.Thecustomerwasnotawareofumbrellacoverage,butbecauseofthepurchaseofthedog,hadanumbrellabeensuggested,thecustomerwoulddefinitelyhavepurchasedit.(Thisisalwayswhatthecustomerwillsayaftertheloss.)
Inaddition,thattheagencysimplyrenewedtheaccount“asis,”withaslightincreaseinCoverageAfortenyears,andnevercontactedthecustomertodiscussothercoverageoptionsorchangesinexposure,doesnotpositiontheagencywell.
Whiletheagencymayprevail,theseareexactlythe typesofsituationsE&Ocarriersareseeingwithsignificantfrequency.Arecentindustrystudyindicatedtheaveragenumberofpoliciesanagencyhasforeachpersonallinescustomerisinthe1.6area.Whenconsideringallpotential“sellingopportunities,”itcertainlyseemslikesomemissedopportunitiesexist.So,eveniftheagencydoesprevail,thisscenarioisresultinginsignificantdefensedollarstodefendtheagency,whichareobviouslyfactoredintothepriceoftheE&Oproduct.
What to Do DifferentlyWhatcouldorshouldtheagencyhavedonedifferently?OneinitiativethatcouldhaveeasilyhelpedavoidthetypeofE&Oclaimaboveinvolvestheagencyactively undertakingacross-sellingcampaign.Someapproachestoconsider:
• Useyouragencymanagementsystemtoidentifyscenariosliketheoneabove–withhomeowners,butnoauto(orviceversa)oryouhavetheautoandhomeowners,butnoumbrella.Developaletter
4
Industry News: Motorcycle Owners to Receive $14.6 Million in Refunds Through Settlement with Commerce Insurance ...
Total of $57.4 Million Recovered for Massachusetts Motorcycle Owners to Date; Commerce is Largest Settling Carrier in AG Coakley’s Industry-wide Investigation
TheofficeofAttorneyGeneralMarthaCoakleyreleasedthefollowingpressreleaseonJuly7,2014:
ThousandsofMassachusettsmotorcycleownerswillreceiveatotalof$14.6millionininsurancerefundsasaresultofasettlementwithCommerceInsuranceCompanyafterallegedlybeingoverchargedontheirpolicies,AttorneyGeneralMarthaCoakleyannouncedtoday.
TheAG’sOfficehasnowobtainedatotalof$57.4millionforconsumersasaresultofitsfour-yearmotorcycle insuranceinvestigation.Theinvestigation,whichbeganwithasingleconsumercomplaint,hasledtosettlementswith19 insurance companiessince2010,andgeneratedrefundsonmorethan150,000Massachusettspolicies.Today’ssettlementwithCommerceisthelargestmotorcyclesettlementreachedbytheAG’sOfficeandwillproviderefundstomorethan40,000policyholders.Commerce,whichwasacquiredbyMAPFREin2008,ispresentlythelargestwriterofautomobileinsuranceinMassachusetts.
“OurextensiveinvestigationintotheseinsurancecompanieshasresultedinthereturnofmillionsofdollarstothousandsofMassachusettsmotorcycleowners,”AGCoakleysaid.“Identifyingthesetroublingovercharges continuestounderscoretheneedfortransparencyinautoinsuranceratingpractices,andwearepleasedtohave facilitatedrefundsforconsumersstatewide.”
UnderthetermsofthesettlementwithCommerce,whichwasfiledtodayinSuffolkSuperiorCourt,Commercewillpay$14.6millioninrefundsonover40,000insurancepolicies,and$325,000totheCommonwealth.Laterthismonth,Commercewillbeginsendingoutrefundchecksrangingfromlessthan$50tomorethan$12,000per consumer,withanaveragecheckaround$360.
Accordingtothesettlement,Commerceallegedlyoverchargedcertaincustomersbetween2002and2011byusinginflatedandun-depreciatedmotorcyclevaluestocalculateinsurancepremiums.AlthoughCommercechangeditsbusinesspracticesin2005,inanefforttocomplywithrequiredratingprocedures,theAG’sinvestigationfoundthatsomeoverchargesoccurredevenafter2006.
All19motorcyclesettlementsstemfromaconsumercomplaintthattheAG’sOfficereceivedfromtheownerofa1999Harley-DavidsonRoadKingClassic.Ineachyearbetween2003and2008,theconsumer’sinsurancecompanyhadcalculatedpremiumsforhismotorcycleasifitwerebrandnew,resultinginmorethan$1,500inovercharges.Afteridentifyingthisproblematoneinsurancecompany,theAG’sOfficebeganinvestigatingmotorcycleratingpracticesacrosstheMassachusettsautoinsuranceindustry,andfoundtheunlawfulratingpracticetobewidespread.
InordertobeeligibleforarefundunderoneormoreofAGCoakley’ssettlements,consumersmusthavepurchasedComprehensive,Collision,and/orLimitedCollisioncoverageforamotorcycleduringcertaintimeperiods(typicallybetween2002and2010),andtheirmotorcyclemusthavebeenovervaluedbytheirinsurancecompany.Commercepolicyholderswillbeabletodeterminetheirrefundeligibilityusingthe Attorney General’s Motorcycle Refund Lookup Applicationlaterthismonth.
• bringingthespecificsubject/issuetothecustomer’sattention.Thelettershouldbeeducationalandincludeinformationonwhysecuringtheadditionalcoverageisimportant.Claimexamplesareagreatwaytomakethepoint.
• Whenacustomercallsin,makeiteasyfortheCSRtoidentifywhatcoveragesthecustomerdoesanddoesn’thave.Thisisagreattimetobringtheseadditi-onalcoveragestothecustomer’sattention.
• Inbothofthesescenarios,ifacustomerrejectsthecoverageyouarediscussing,youmustdocument,documentanddocument.Thisdocumentationshouldnotonlybeinthefile/system,butalsoinane-mailbackthecustomerofficiallynotinghisorherdecision.
• Makeitapointtotouchbasewithyourcustomertodeterminewhethertherehasbeenanychangein
hisorherexposures,andthenactonwhatyouareadvised.
Now,taketheE&Oclaimscenarioaboveandaddthefol-lowingtothelettertheagencysent:askthecustomerforanupdateonhisorherexposuresand/orbringumbrellacoverage(whatitdoesandhowitworks)tothecustomer’sattention.Now,imagineifthiscommunicationwasignoredbythecustomer.ThereisthestrongpossibilitytheE&Oclaimwouldhaveneverevendeveloped.
Anotherbenefitoftheseadditional“touches”involvesthechancethatyoumayjustsellsomeinsurancealongtheway.So,ifyouwanttogrowyouragency,enhanceyourE&Ocommitment.Doingthiswilltrulygiveyourbusinessthe“bestofbothworlds.”
E&O Upate ... continued from page 3
5
Industry News ... continued from page 4
ConsumerswhohavequestionsaboutthesettlementsortheirrefundsmayvisittheAttorney General’s Motorcycle Insurance Settlements FAQorcalltheAttorneyGeneral’sInsurance&FinancialServicesDivisionat1-888-830-6277.
ThismatterwashandledbyMathematicianBurtFeinberg,InvestigationsSupervisorArwenThoman,andGlennKaplan,ChiefoftheInsurance&FinancialServicesDivision.
DOI News:DOI to Hold Hearing on Proposed Changed to CAR Performance Standards ...
TheDivisionofInsurancehasannouncedthatitwillholdapublichearingonproposedamendmentstotheCAR PerformanceStandardsfortheHandlingandPaymentofPrivatePassengerMotorVehicleInsuranceClaimsby AssignedRiskCompaniesandtoPerformanceStandardsfortheHandlingandPaymentofCommercialMotorVehicleInsuranceClaimsByServicingCarriers.ThehearingwillbeheldonAugust7,2014,at10a.m.attheofficesofthe DivisionofInsurance,1000WashingtonStreet,Boston,MA.
Thepurposeofthehearingsistoaffordallinterestedpersonsanopportunitytoprovideoraland/orwrittencommentregardingproposedamendmentstothePerformanceStandardsfortheHandlingandPaymentofPrivatePassengerClaimsbyAssignedRiskCompaniesandtoPerformanceStandardsfortheHandlingandPaymentofCommercialClaimsbyServicingCarriers(collectively,“PerformanceStandards”)adoptedbyCommonwealthAutomobileReinsurers(“CAR”).OnJune18,2014,theCARGoverningCommitteevotedtoamendthePerformanceStandards.PursuanttoG.L.c.175,§113H,theCommissionermustreview,andapproveormodify,theproposedamendmentstothe PerformanceStandards.TheproposedamendmentstothePerformanceStandardsmaybeexaminedattheofficesoftheDivisionofInsuranceduringregularbusinesshours.
ThisproceedinghasbeendesignatedasDocketNo.C2014-01.Anypersonwhowishestoprovideoralcomment concerningtheproposedamendmentstothePerformanceStandardsisrequestedtosubmittotheDivisionof InsuranceaNoticeofIntenttoCommentnolaterthanAugust5,2014.AllotherinterestedpersonswillbeheardafterthosewhonotifytheDivisioninadvanceofthehearing.AllnoticesandsubmissionsmustbesenttotheDocketClerk,HearingsandAppeals,DivisionofInsurance,1000 WashingtonStreet,Suite810,Boston,Massachusetts02118-6200,[email protected].