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PIA Western Alliance knows you want to be the best in the field, and the best way to stay on top is to stay informed. PIA Weekly Industry News Brief is an informative e-news brief that delivers the most relevant industry content.

 

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You don't have to be a PIA Member to take advantage of saving 15-20% on E&O

Posted By staff reporter, Tuesday, February 19, 2019

 

Need to renew your E&O policy?

Insurance professionals needing to renew their policy have been saving an average of 15 - 20% on E&O quotes from Kim Cottrell, PIA Western Alliance,  E&O Agent

 

 

PIA Members + Non PIA Members

Take advantage of E&O policy discounts with 3 reliable carriers.

 

Utica Libery Mutual CITA

- Download an east estimate form for a quick quote from Kim Cottrell - 

 

Tags:  E&O insurance  new E&O policy  PIA E&O policy  who offers E&O insurance 

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Golf, anyone? 2019 OR/ID Conference & Tradeshow

Posted By staff reporter, Tuesday, February 19, 2019

In memory of Dave Iwata, PIA will be memorializing the spirit of a great contributor to the industry.

1st Annual

Dave Iwata Memorial Golf Tournament

2019 PIA of Oregon and Idaho

Conference and Trade Show

- Tap here for info -

We will kick off our new program at the beautifully restored Salishan Lodge, Glenden Beach Oregon. Located just a few miles south of Lincoln City beautiful Oregon Coast.

We will make it worth your while with great networking, golf, fantastic education and trade show. 

We hope you consider joining us for all or part of this program. We'll see you at Salishan!

 

- tap here for conference & trade show information -

 

Tags:  2019 pia or/id conference and trade show  insurance conference salishan  insurance industry events 2019  insurance seminar salishan 

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VIDEO: More Utilities at Risk in California

Posted By staff reporter, Tuesday, February 19, 2019

 

What's going to happen?  Tap the image to watch this 1:20 video.

 

Pacific Gas & Electric (PG&E) — as you know — has filed for bankruptcy. Losses because of wildfires has put PG&E some $30 billion in the hole. That figure is expected to grow. So PG&E has filed for Chapter 11 bankruptcy.

 

It turns out other utilities in California are facing the same fate.

 

S&P Global Ratings has reduced the credit rating of the state’s two other utilities Sempra Energy and Edison International. That rating is so low it is almost junk status. Investors and other financial gurus worry that rating can even go lower.

 

This has legislators and consumer advocates around the state worried.

 

Inverse condemnation is the reason for the utility concern. It’s what PG&E has been battling in the California Legislature. The rule says a utility is responsible for all fire losses even if the company followed all the safety rules and the fire is more or less an act of God.

 

Edison International’s CEO Pedro Pizarro is worried. Experts say his company is one wildfire away from joining PG&E in bankruptcy. “This is a really serious issue that could absolutely impair the health of utilities in this state,” he said. “I don’t want to speculate about bankruptcy, but this is serious. And the current approach is just not sustainable.”

 

He’s not alone in his worry. While PG&E didn’t prevail in the Legislature, when it came to inverse condemnation, it did have the support of former governor Jerry Brown and there are many in that body looking for a fix.

 

A bill did pass last year that says utilities can pass losses onto ratepayers.

 

In January of this year, Republican Assemblyman Chad Mayes put forth a bill that creates a California Wildfire Catastrophe Fund. Utilities — via fees — put dollars into the fund and that money will be used to back bonds. Proceeds from the bonds can be used to settle wildfire claims.

 

Mayes said the details still need refining. Questions exist like how much of those costs can be passed onto consumers. However, the point — Mayes says — is to keep the lights on.

 

“The idea is to pre-fund the disaster, not post-fund the disaster,” he said.

 

California’s new governor, Gavin Newsom has put together an advisory panel with orders to put a solution on the fast-track. He wants something from the panel by July. Experts doubt anything it comes up will be much in the way of a solution because of the inverse condemnation rule. It is in California’s constitution so it will take a two-thirds positive vote in the Legislature to get it done away with.

 

That said, utilities don’t want it gone, they just want — as Pizarro says — the rule applied differently and there is a precedent to do that from a 1997 water district case.

 

What the utilities want is a less strict application. If a utility has acted in a reasonable manner then it ought not apply.

 

We’ve actually looked at this really closely, and we believe that under the law, yes, the legislature has the power to change that standard,” Pizarro said. “We’re not looking to get off the hook here if we’re negligent. If we’re negligent, we should be held accountable.”

 

Source link: Insurance Journal

Tags:  bankruptcy  Chapter 11  Pacific Gas & Electric  PGE 

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Download the study: Employee Embezzlement — As You Know, it’s a Problem ​

Posted By staff reporter, Tuesday, February 19, 2019


- Tap the image to download or read the study -

 

The study is titled An Insider’s View of Employee Theft. It was done last year by the business insurer Hiscox. The insurer interviewed chief financial officers, accountant and controllers whose companies were victims of theft.

 

The point was to get some insight on the who, how and why employees steal.

 

The study conclusions are fascinating. Surprisingly, it found in 79% of the cases involved two or more people in collusion. Typically the number is three.

 

Billing fraud was the most common method of theft. Also on the list is:

 

  Cash theft

  The stealing of company property or employee property

  Check tampering

  Payroll scheme

  The skimming from the top via the use of credit cards

 

The bigger the company, the larger the thefts. The study pointed to a CFO of a state agency who — with their son — stole over $1 million.

 

Hiscox’s study also found the majority crimes — 70% — are committed by people who have been employed for a year or more. The average is eight years, and the most common thefts are done by people at the manager level or above. Most often they are in the accounting or financing departments.

 

The survey respondents noted these thefts are not rare and 39% said they’ve seen more than one such scheme or schemes during their careers.

 

Embezzlement is the most common crime. Those losses — on average — are large. The average is $357,650. Just half of the companies affected were able to recover the lost funds. And of the firms that were able to collect, just 39% say the received the whole amount.

 

Companies are penalized in other ways as well. Even though the thieving employee or employees are terminated, 29% say they ended up having to pay fees for increased auditing.

 

It gets worse. A percentage point over a quarter of the employers — 26% — say they lost customers or could not attract new customers because of the crimes. Many lost business partners and the company’s reputation suffered.

 

Doug Karpp heads up the Hiscox crime and fidelity product. He said, “This is a pervasive issue for companies of all sizes, and the goal of our study is to underscore the importance of having a plan in place to protect a business, its employees and its customers from the far-reaching repercussions of embezzlement.”

 

With that he offered some insights:

 

Familiarity: People don’t often start stealing until they’re really familiar with the company and how things work. Once they’re set in the job, then they go to work and many times will find those willing or able to help.

 

Motive: This varies but usually it comes about when the employee has a financial crisis, or if they’re in desperate need for money. Many will consider the theft a “loan” that they will pay back. Of course, most do not. Then there is the group that feel slighted by the company and think the theft is justified and owed to them.

 

Encouragement: Usually when stealing is easy an employee will steal again. That often leads to groups stealing and plotting together.

 

Exposure: In 65% of thefts, a person in a company will notice that something is wrong. Usually it takes about two-years to discover and that discovery is often associated with a co-conspirator leaving the company. Sometimes it is discovered because the employee or employees have stolen too much.

 

Punishment: In 45% of cases the thief or thieves are not prosecuted. Even when caught and moving on to another company, embezzlers — since they are not outed — will likely try again with the new employer.

 

Uncovering a thieving employee or employees is not easy. Hiscox’s study offered some advice on stopping employee theft:

 

1.    Financial responsibility needs to be in the hands of more than one employee. A fellow employee is most likely to spot embezzlement. Plus, you need to train financial employees on how to spot the irregularities, key signs and motivations that might be theft.

2.    Background checks are critical. They are allowed by law and it is especially important for employees that are handling money.

3.    You need to pay attention to employees that display a lifestyle that seems out of range of their salary. Sudden changes in spending habits are another clue.

4.    When you spot a theft, Hiscox’s study says you need to press charges. This will send a message to other employees that you take crimes — like embezzlement — seriously. It also says you won’t let anyone leave quietly.

5.    And since we are insurance agents or involved in the insurance industry, we know that insurance is a key to staying whole if large sums of cash are taken.

 

What most surprised Hiscox, Karpp and those doing the study is the number of companies and people that do not have financial loss insurance that covers embezzlement and other crimes.

 

The figure — at 75% — is huge.

 

Source link: Risk & Insurance

Tags:  An Insider’s View of Employee Theft  Hiscox report 

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Changes at FEMA — Brock Long Resigns

Posted By staff reporter, Tuesday, February 19, 2019

 

Like many of President Donald Trump’s appointees, Federal Emergency Management Agency head Brock Long has left his post. While he and his agency had to address some of the worst weather disasters in this country’s history, he could not weather the disaster of the misuse of official agency vehicles.

 

It is alleged that he often used official cars to go between Washington D.C. and his home in North Carolina. Long has since repaid the agency for the use of the vehicles but the incidents — rumor says — caused a rift between Long and his boss, Homeland Security Secretary Kirstjen Nielsen.

 

At this point no one is sure as to whether Brock resigned on his own or if Nielsen forced his hand. She did — however — issue a positive comment when Brock announced his resignation.

 

“Over the last two years, Administrator Long has admirably led the men and women of FEMA during very difficult, historic and complex times,” she said. “I appreciate his tireless dedication to FEMA and his commitment to fostering a culture of preparedness across the nation.”

 

In his statement outlining the resignation, Brock said,

“While this has been the opportunity of the lifetime, it is time for me to go home to my family — my beautiful wife and two incredible boys. As a career emergency management professional, I could not be prouder to have worked alongside the devoted, hardworking men and women of FEMA for the past two years.”

 

That work includes two huge hurricanes and major wildfires in California. His — and the administration’s — lack of response in helping the victims of Hurricane Maria was also very controversial.

 

Democrats were quick to pounce on Long’s departure. House Homeland Security Committee Chairman Rep. Bennie Thompson of Mississippi said, “I hope the Administration will be forthcoming with Congress as to the reason for Mr. Long’s abrupt departure. I also hope that the President will quickly nominate a capable replacement who has proven track record of emergency management.”

 

He did. The president immediately announced Long’s replacement. Jeffrey Byard — FEMA’s associate administrator for Response and Recovery — is the new head of the agency. He is FEMA’s most senior employee in the overseeing of disaster response, logistics and field operations.

 

He will still need to be confirmed by the U.S. Senate.

 

Source links: Politico, NPR, NBC, The Hill

Tags:  Brock Long Resigns  Federal Emergency Management Agency  FEMA  Secretary Kirstjen Nielsen 

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California Considers its Own Fire Insurance

Posted By staff reporter, Tuesday, February 19, 2019


 

Wildfire losses for the last few years have cost insurers billions and consumers billions on top of that. Losses are so great for one insurer — Merced Property & Casualty Company — that it is insolvent and now in the hands of the California Department of Insurance.

 

Insurers — stung by huge losses themselves — are rethinking how they insure homes and businesses. California — like other wildfire prone states — also finds wildfire to be a huge money-losing proposition.

 

By the way, no one is blaming insurers for their growing caution. Drought is said to be the biggest problem. Another one is forest management. The U.S. Forest Service said it just completed an aerial survey of federal, state and private land in California and found 18 million trees died in 2018.

 

That means California now has more than 147 million dead trees that potentially could fuel wildfires.

 

Even more reason — says California Insurance Commissioner Ricardo Lara — for the state to purchase its own insurance. Oregon already has its own disaster insurance. In the last 40-years Oregon has spent $61 million in premiums. Payments have been $102 million.

 

Recently the Federal Emergency Management Agency (FEMA) followed the same strategy. And picked up $1 billion in flood insurance. It paid off when $4 billion in bills came in after floods.

 

California has overspent its emergency fund for seven of the last 10-years. Two years ago the state spent close to $950 million. That’s about $450 million more than was budgeted. Last year the state spent $677 million battling fires.

 

That led Lara and California Treasurer Fiona Ma to suggest that the state ought to follow Oregon’s lead and that of FEMA. So instead of self-insuring, the governor, the state treasurer and insurance commissioner can negotiate for rates from private insurers.

 

Lara said, “It works just like your home insurance, but for our actual state.” He noted if the premiums aren’t what the state wants, it can walk away and do something different.

 

The commissioner thinks taking out bonds to pay for the cost of fighting fire will also be a way of giving the budget come relief. Lara also noted the state needs to be part of a bigger conversation about how to respond to wildfire.

 

A bill — SB 290 — has been introduced in the Legislature to allow the state to purchase that kind of insurance. It is sponsored by Democrat Sen. Bill Dodd of Napa.

 

“Rising wildfire suppression costs can strain California’s financial resources and threaten cuts to critical programs. As climate change continues to contribute to devastating infernos, we need a strategy to reduce the pressure on state and community coffers,” Dodd said. “This bill would do just that, allowing the state to invest in an insurance policy to ensure budget predictability and reduce taxpayers’ exposure to increasing costs associated with disasters, especially wildfires.”

 

The idea isn’t resonating with everyone. The Howard Jarvis Taxpayers Association doesn’t think the state ought to be buying insurance. Jon Coupal — who is the association’s president — said it puts the state in the position of subsidizing the insurance costs of those living in dangerous, at risk areas.

 

“If it’s not putting taxpayers at risk and it’s a way to spread the risk, it might make sense, but we’d have to see the details,” he said.

 

Source links: California Department of Insurance, Vox, Associated Press, Insurance Business America

Tags:  california fire insurance  california wildfires  Merced Property & Casualty 

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Sign up now to try AVYST eForms Wizard and receive Gold-Level Access through March 31, 2019

Posted By Joey Leffel, Tuesday, February 19, 2019

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The Financial Tragedy of the U.S. Government Shutdown

Posted By staff reporter, Tuesday, February 19, 2019

Prudential Financial took a long look at the financial damage of the recent U.S. federal government. It was — as you know — the longest shutdown ever. Prudential’s survey was given to 352 federal workers, contractors and spouses.

 

It offers few surprises:

 

  25% of federal employees missed a mortgage or rent payment

  49% fell behind on bills

  Many have emergency savings and those savings are depleted

 

Prudential Group Insurance President Jamie Kalamarides said, “Boy, this is really tough — it is really a wake-up call for them, and for everybody else, that emergency savings matter. It really shines a spotlight on the financial distress that a majority of American workers have, because they lack the tools to withstand a brief disruption of income.’”

 

Here are other findings from the survey:

 

  Over 40% of federal employees and contractors say the shutdown increased their debt load

  26% had to access retirement savings

  Close to 40% delayed major purchases or vacations

  33% grabbed a temporary job to make ends meet

  25% went to a food bank for food

  23% cut medical spending

 

Kalamarides said some of the actions the federal employees had to take will have a lasting effect on them.

 

“When they miss their payment or when they postpone their health, they not only get sicker, but they affect their credit scores as well, so that future borrowing is going to be more expensive,” he said and pointed out the need to have emergency savings or disability insurance in place when unexpected events happen.

 

“People who have been vulnerable are even more so when they go through these challenges,” Kalamarides concluded.

 

Source link: Insurance Business America

Tags:  financial tragedy  Prudential Financial article  US government shutdown 2019 

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IRS — Audit Red Flags

Posted By staff reporter, Tuesday, February 19, 2019

 

It’s that time of year. Taxes. Some of us have already done them but most of us are getting into the groove now. Many PIA Western Alliance members are — fortunately — pass through businesses. In other words — and to quote investinganswers.com — “Sole proprietorship, partnerships, LLCs and S corporations are pass-through entities for federal income tax purposes. This means these entities are not subject to income tax. Rather, the owners are directly taxed individually on the income, taking into account their share of the profits and losses.”

 

The profits and losses is the focus these days of the IRS. It has a new software program that randomly selects someone and compares this year’s return to previous returns. The IRS is looking for anomalies. A person tied to someone being audited can also end up being audited themselves.

 

Legally the IRS can audit a return that is up to three-years old. If found in error, the IRS can give you a 20% penalty. Or a $5,000 penalty can be assessed if the return is considered frivolous.

 

While that sounds dire, the IRS audited less that 1% of the returns from 2017. Kiplinger’s Joy Taylor is a tax expert and she says that number will probably be lower this year. However, she — and other tax experts — are pointing out some red flags and what you need to avoid.

 

The first is being too generous. If you are taking higher-than-average deductions in areas like more charitable contributions, or real estate interest or student loan interest. A fair amount of deductions is ignored by the IRS but when that figure rises a lot compared to the year before, it’s a red flag.

 

Taylor said — for example — someone earning $120,000 a year donating $50,000 in charitable contributions is definitely going to be noticed. So if you’re heading that direction save your receipts.

 

Hobby losses. Taylor said it’s important to know the difference between a hobby and a business. Hobby expenses can be allowed up to the amount of income generated by that hobby. Anything above that is a red flag.

 

Taking money from a retirement account early is also — Taylor noted — a red flag. There are exceptions — like buying a home — but you could get a 10% penalty when none of those exceptions are present with the deduction. Taylor and Kiplinger note that 40% of us using that withdrawal tactic did not report it to the IRS.

 

 That is reportable income that the IRS knows about but many of us don’t report it. Not reporting that income could end up getting you tagged.

 

Source link: MSN Money

Tags:  audit red flags  IRS  taxes  what can be red flagged from the IRS 

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Ever lose a direct appointment because you didn't meet the minimum premium requirement?

Posted By staff reporter, Tuesday, February 19, 2019

 

Through the PIA Market Access Program, PIA members receive an

exclusively discounted monthly rate for the use

of the InsureZone technology and market access.

 

PIA Market Access is available to PIA members in all 50 states and the

District of Columbia. Carrier availability varies by state.

 

How does market access help you?

 

PIA members who enroll have access to over 50 national and specialty personal and commercial lines markets from a number of admitted “A” or better-rated companies.

 

PIA Market Access can help you remarket, shop policies, and assist with book rollovers.

 
Agents submitting applications through the platform can receive quotes from most of these companies through a technologically advanced personal and commercial lines rater.
 
 
PIA has negotiated an exclusive low monthly rate for the use of our partner InsureZone’s technology and market access.
 
 
Agents who enroll in the PIA Market Access Program will receive the first two months free. Agents can expect to see competitive commission rates.
 
 
PIA members participating in the PIA Market Access Program will retain ownership of their book of business, and if they should choose to leave the program, there are no exit fees.
 
 
InsureZone is a full-service provider that is fully staffed with underwriters to answer agents’ questions and make the sales process as smooth as possible. The program provides insurance CSRs to make requested policy changes and the standard of service is to begin processing all requests the same business day.
 
For a current list of carriers available in each state, visit our Carrier page.

Tags:  appointment loss  direct appointment  MAP  PIA Market Access  PIA Western Alliance 

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