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EXPO: PIA Oregon’s Revolutionary EXPO

Posted By Administration, Tuesday, May 30, 2017

PIA Oregon’s EXPO is coming. It’s the largest event of its kind in the Northwest and features a trade show that combines the latest industry products, services and innovation with personal contact.

The focus of PIA’s one of a kind event is:

Wednesday, June 21
Sheraton Portland Airport

But there is more to EXPO than just a one day trade show. Also happening at the Sheraton Portland Airport on June 20th is not-to-be-missed continuing education and all but the Oregon law class gives CE credits to agents in Oregon, Washington and Idaho.

If you’re a Washington or Idaho agent, why not combine a wonderful trip to beautiful Portland, Oregon with some education, a look at the latest in insurance and some quality networking?

Plus, the day of education includes a not-to-be missed Cyber Boot Camp. After the WannaCry cyber-attack that hit 150 countries, the Cyber Boot Camp is just in time.

At the Cyber Boot Camp Session, you’ll receive 3 CE to Oregon, Washington and Idaho agents and the course reveals comprehensive insight into the emerging and critical subject to Network Security and Privacy “Cyber” insurance. The agents and brokers attending this class will leave with a basic understanding of:

  Cyber exposures and threats

  Key elements of protection and prevention

  Cyber underwriting and evaluation criteria

  Unique claims challenges and how these are handled

  Detailed analysis of Cyber forms

  Current state of the cyber market

  Future trends

EXPO’s Education Classes and CE credits:

  Oregon Law & Administrative Rules — 3 CE Oregon agents only

  Cyber Boot Camp — 3 CE Oregon, Washington & Idaho

  Ethical Issues for Insurance Professionals — 3 CE Oregon, Washington & Idaho

  Business Income Insurance — 3 CE Oregon, Washington & Idaho

While there are fees for non-members in the CE classes on Tuesday, June 20th, the trade show and the keynote presentation on the 21st is free to anyone actively working for a licensed agency.

Monday, June 19th, EXPO includes the annual golf tournament. It’s at Creekside Golf Club in Salem, Oregon. A beautiful private that we have all to ourselves. The shotgun start is at 12:00 p.m.  followed by dinner and awards.

The $75 fee includes the golf, a golf cart, range balls and a drink ticket.

EXPO is all this and more!
Learn More: Click

Tags:  EXPO  EXPO: PIA Oregon’s Revolutionary EXPO  Insurance Content  Insurance Industry  Insurance news  PIA EXPO  PIA Oregon/Idaho’s EXPO!  Weekly Industry News 

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Carrier Ratings: Do You Have the Necessary Process in Place?

Posted By Administration, Tuesday, May 30, 2017

by Curtis M. Pearsall, CPCU, AIAF, CPIA, President. Pearsall Associates Inc. and Special Consultant to the Utica National E&O Program

Over the next few months, rating agencies such as A.M. Best, Demotech, S&P, etc., will be carefully dissecting the financials for nearly every insurance carrier in the marketplace. Based on these reviews, there is the potential that some carriers’ ratings could change. Does your agency have a process in place to manage this key issue?

Managing Carrier Ratings
Every agency should have an established minimum financial rating for the carriers they do business with. While a minimum rating of “A-,” using the A.M Best rating approach, is common among agencies, how your E&O carrier addresses insolvency in the policy form should be a consideration.

As rating agencies begin to publish their findings, it is vital for your agency to have a process to secure the most up-to-date information. There are many approaches. Based on the number of carriers your agency does business with, including carriers used by the wholesalers you do business with, identifying carriers’ ratings can be a time-consuming process. It is suggested that agencies look for an automated approach to secure this key information.

A.M. Best has a tool that is part of its Key Rating Guide that provides email alerts on important information pertaining to various carriers. There is a fee for this service, but the information is timely. Visit www.ambest.com/sales/krg to learn more. The website includes a video demonstrating the guide’s capabilities and functionality to help determine if this approach is right for your agency.

Get It in Writing
Not many carriers are downgraded each year. For example, an agency could have a carrier going from “A+” to “A.” While agency management may want to examine the situation more closely, there will probably not be any further action needed. But what would your agency process be if one of your carriers was downgraded from “A-” to “B”?

If this happens, identify the clients with those carriers. If the carrier is used by a wholesaler, the wholesaler should be able to provide this information unless that information was captured in your agency system.

It is then suggested to give those clients a written notice. The document should explain the situation advising the client that the coverage was placed with an insurance carrier that was recently downgraded. The explanation of the rating as provided by the rating agency should be included. For example, in the A.M. Best methodology, a “B” rating is defined as “Fair,” a “B+” is “Good,” etc.

Inform your client that you are not in a position to attest to the carrier’s future status and that there is the potential for the carrier to be unable to satisfy its obligation to pay claims. A primary goal of this written document is to educate the client to enable

them to make an informed decision on whether they want to continue or discontinue coverage with the current carrier. Include language advising the client that the agency would be willing to remarket the account to a carrier with a higher rating. In addition, tell the client that there is no guarantee that the premium will be equal to or less than what the client is currently paying or that the coverage will be identical.

The client must make a decision and communicate that decision in writing to the agency. In essence, what direction does the client want the agency to take? Some agencies have the choices noted on a document and require the client to check the box that indicates their decision.

Be Ready
There may not be many carriers whose rating changes in 2017, but what if one of those carriers is one you do business with? Make sure you have the necessary process in place.

Tags:  Carrier Ratings: Do You Have the Necessary Process  Curtis M Pearsall  E&O  Errors and Ommissions  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Update: WannaCry Virus and More

Posted By Administration, Tuesday, May 30, 2017

Experts are still trying to find out who launched the WannaCry ransomware attack a couple of weeks ago. Researchers at cyber security firms Symantec and FireEye say evidence they’ve uncovered says the attack came from North Korea’s hacking group Lazarus.

Ben Read of FireEye said, “The shared code likely means that, at a minimum, WannaCry operators share software development resources with North Korean espionage operators.”

North Korea denies involvement.

The WannaCry virus and other recent ransomware attacks has impacted insurance. And that impact is both negative and positive.

Aon Benfield and Beazley did a study of ransomware attacks. It is titled Aon Benfield’s Cyber Update: 2016 Cyber Insurance Profits and Performance and the study found the number of ransomware attacks quadrupled from 2015 to 2016. In their report, Aon researchers Jon Laux and Craig Kerman said this has led cyber insurers to see a jump in the loss ratio to 57.7. That’s a 16% rise from 2015.

On the other side of the coin, the study found cyber insurance premiums grew roughly 30% to $1.34 billion between 2015 and 2016

“For insurers providing cyber insurance, these results illustrate the potential for both extremely good and extremely bad underwriting outcomes, and underscore the importance of managing limits,” they wrote.

Aon Risk Solutions Senior Vice President Jim Trainor also commented on the study. He said it includes data from 138 insurers in the U.S. “One of the challenges of cyber is that it is a very complex environment. Bad actors use and exploit infrastructure both in and out of the United States. A lot of groups who conduct such criminal activity don’t reside in the U.S. This makes it increasingly challenging for both government and companies to protect themselves because those attacking them don’t actually reside in the locations in which they operate,” he said.

Ken Crerar of the Council of Insurance Agents and Brokers said the CIAB has released its current cyber study. The Council of Insurance Agents & Brokers’ Cyber Insurance Market Watch Survey said clients are now more up to speed on the type — and how much — insurance they need. The conclusion is insurers selling cyber insurance can, and should, anticipate growth in policy purchases.

Other survey conclusions:

  32% have purchased at least some form of cyber coverage

  In the last six-months 27% purchased that insurance for the first time

  44% increased coverage in the last six-months

  76% with cyber insurance have stand alone policies

“As brokers become more experienced with cyber exposures, they are growing their knowledge of this new breed of risk. This is a good sign, as brokers play an increasingly crucial role in both cyber risk mitigation and post-event response. The globally-launched WannaCry/WannaCrypt ransomware file encryption exploit is a prime example. Brokers are actively advising clients on the preventative steps to take now to increase the chance of escaping the virus, which has infected hundreds of thousands of systems,” Crerar said.

And on those preventative steps, James Gow — the senior vice president of the Property & Casualty Practice at Corporate Synergies — said a big part of the problem business has with ransomware attacks is uneducated employees and suggests employers set up an education program. It should contain:

  Instructions for employees to regularly change their passwords for software, email and other programs.

  A standard framework on how information is shared within the company.

  A policy for how sensitive information is asked for and given. Not everyone in the company needs to have sensitive information.

  An employee identification policy.

  A safe document management system and disposal services.

  Regular employee testing on security policies to make sure they understand social engineering and hacking scams so confidential and sensitive information is not handed out.

Two last items. The electronic signature service DocuSign has admitted that hackers gained temporary access to its database. It contained the email addresses of customers which is why there was a surge in phishing emails sent to DocuSign users. Those emails encouraged recipients to open a Microsoft Word doc that contained malicious software.

If you are a user, updates on the hack are available by clicking here.

And last. Target has settled its multistate hack from Christmas of 2013 for $18.5 million. In December of that year and January of 2014, over 40 million credit and debit card users had their information stolen. 


Source links: PropertyCasualty360.com — link 1, link 2, Insurance Business America — link 1, link 2, Insurance Journal

Tags:  Cyber Breach  Cyber Insurance  Insurance Content  Insurance Industry  Insurance News  Special Report: The WannaCry Virus Aftermath  Update: WannaCry Virus and More  virusCyber Security  Weekly Industry News 

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The First Quarter of 2017: An Insurance Loss

Posted By Administration, Tuesday, May 30, 2017

The A.M. Best First Look—1Qtr 2017 U.S. Property/Casualty Financial Results report said the first quarter of 2017 is the first first quarter in five-years that the insurance industry has shown a net underwriting loss.

The loss is $841.5 million and is a far cry from the $2 billion net profit in underwriting in the first quarter of 2016.

According to A.M. Best:

  Net income dropped to $7.3 billion — a 45% decline from 2016’s first quarter

  Net investment income rose 9.5% to $11.9 billion

  Half of that was offset by a $5.9 billion loss in other income

  The industry surplus hit a record $696.9 billion driven by $8.5 billion in unrealized gains, surplus gains and a reduction in stockholder dividends

A.M. Best said the P&C industry combined ratio for the first quarter is 99.7 compared to 97.7 in the first quarter of last year.

Another impact is catastrophe losses. They came in at $7.6 billion. That’s up 48% from a year ago and accounted for 6 points on the combined ratio.

A.M. Best also noted that the results — of course — will vary depending on the insurer. AIG, Allstate, CNA, The Hartford and Chubb all had a better quarter one than a year ago.

Liberty Mutual and Travelers saw profits fall from storm losses.


Source link: Insurance Journal

Tags:  Insurance Content  Insurance Industry  Insurance News  The First Quarter of 2017: An Insurance Loss  Weekly Industry News 

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Trump Cuts Crop Insurance: PIA Opposed

Posted By Administration, Tuesday, May 30, 2017

President Trump’s just proposed budget has a cut of $46.54 billion for agriculture programs and $855 million in the budget for the Department of Agriculture. One of the cuts — and one that concerns PIA National, independent insurance agents and many others in insurance — is in crop insurance.

That cut is a 36% over the next 10-years.

PIA is opposed to the cuts and calls them too “steep.” Jon Gentile — vice president of government relations for PIA National — said the administration’s budget proposes a $28.56 billion cut to crop insurance over the next 10 years. The cuts come in the form of premium assistance caps at $40,000, an adjusted gross income (AGI) limit for crop insurance of $500,000 and elimination of the harvest price option (HPO) for crop insurance.

“These proposed cuts and caps would not only hurt farmers and the agricultural community, but they would also harm the independent insurance agents who work diligently to sell and service crop insurance policies on behalf of the Federal Crop Insurance Program. Attacking farmers' most important risk management tool only weakens the farm safety net and threatens our nation's economic and agricultural stability,” he said.

PIA urges members of Congress to oppose cuts to crop insurance during the appropriations and legislative process.

What’s surprising to many in the industry is Trump’s cuts being even more draconian than those offered up by the Obama administration. And it is unacceptable to National Farmers Union president Roger Johnson whose membership enthusiastically supported candidate Donald Trump for his support of ethanol-based corn growing and other agriculture issues important to the group.

“The president’s proposed budget is an assault on the programs and personnel that provide vital services, research, and a safety net to America’s family farmers, rural residents and consumers,” Johnson said.

American Soybean Association President Ron Moore put it this way. “It’s clear that this budget was written without input from farmers who would be severely affected,” he said.

Agriculture.com estimates the cost of crop insurance at about $8 billion a year. It also says the Trump cuts will do away with the USDA’s rural economic development program and will “streamline” conservation programs. The savings will total — as noted earlier — $46.54 billion in a decade.

The crop insurance cuts will be $16.2 billion with $11.9 billion coming from the elimination of the harvest price option. It comes into play if the harvest-time price is lower than when the crop is planted.

About 80% of crop insurance policies contain that option.

As it stands now, the federal government takes care of .62 cents of every $1 in crop insurance policies. As noted earlier by PIA National, the Trump plan limits the total to $40,000 per year. It also changes subsidies and says those with an adjusted gross income of more than $500,000 a year will not be able to get subsidized crop insurance.

What it effectively does is do away with subsidies for large, wealthy growers.

The Department of Agriculture will see the elimination of 5,263 jobs. Department Secretary Sonny Perdue said there’s no “sugarcoating” that the cuts are needed and it will impact 5% of the workforce.

The agriculture budget failed to resonate with farmers groups, insurers and the PIA and it also failed to resonate in Congress. The Senate Agriculture Committee’s Chairman Pat Roberts and House Agriculture Committee Chairman K. Michael Conway — both Republicans — issued a joint statement saying they “will fight to ensure farmers have a strong safety net.”

The Senate Agriculture Committee’s ranking Democrat Sen. Debbie Stabenow said the cuts will “leave our farmers, families, and rural communities vulnerable in tough times.”


Source links: PIA National, The Hill, Insurance Business America, Carrier Management

Tags:  crop insurance  Insurance Content  Insurance Industry  Insurance News  Trump  Trump Cuts Crop Insurance: PIA Opposed  Weekly Industry News 

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Scammers Scamming Insurance Call Centers

Posted By Administration, Tuesday, May 30, 2017

Cyber attacks are problem enough but insurers are also now targets for call center fraud. Pindrop is a telephone security firm and it finds, believe it or not, these people are successful.

The process — by the way — now has a name. It’s “social engineering” says Pindrop’s David Dewey as he commented to Insurance Business America about his company’s report called the 2017 Call Center Fraud Report.

It found insurers are taking huge hits from phone fraud. Life insurance policies and policies for mobile phones are the most targeted. Dewey said:

  One in every 12,000 calls to life insurers is fraudulent and of those 20% are successful

  One in every 200 calls for mobile devices is fraudulent and 20% of those are successful

The problem is centered in the sheer volume of calls. Determining who is the real deal among often disgruntled callers is a monumental task.

Dewey said one of the most devious and costly life insurance scams is when a caller tricks the call center employee into giving a loan on a policy or claim some cash from the policy. “And a lot of times these things can go unnoticed for years, because how often do you really look at your life insurance policy? It happens a lot more frequently than we would think,” he said.

How is it possible to scam trained call center employees? Easy, Dewey said. They will target a customer and then do background research on where they live, where they went to school, family connections, what things look like where they live and so on. These are things that might be asked in security questions.

A bunch of correct answers and the call center operator may end up thinking they’re talking to the real person.

“The major failing is in the knowledge-based authentication questions. The problem is they just don’t work. It’s very often that the legitimate customer doesn’t know the correct answers to the questions. And those call centre operators are used to dealing with legitimate customers who don’t know the answers. They’ll oftentimes help them [the customers] work through it,” Dewey said.

The Pindrop report also points out that scammers know all about how automatic phone systems work. They can call again and again and again until they have the answers they need and then can ask for a live phone operator.

“By far, the highest fraud rate of any single industry is seen in the device insurance sector. For companies that provide payments to consumers whose mobile phones are lost or stolen, one in every 194 calls is fraudulent. That rate increased 55% over 2015, when device insurance already had the highest phone fraud rate of any vertical,” the report said.

Dewey said the solution to phone fraudsters is employing phone security technology. That technology often features voice recognition or what Pindrop calls “phone printing” in which the system identifies the phone’s signature.

If that signature doesn’t match what’s on file, then it will let call center employees know that a fraudulent call is in progress. 


Source link: Insurance Business America

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  Scammers Scamming Insurance Call Centers  Weekly Industry News 

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Huge: California’s Single Payer System Price Tag

Posted By Administration, Tuesday, May 30, 2017

Democratic California Sen. Ricardo Lara — Bell Gardens — wants California to do away with health insurance companies and put together a government-run health care system. He proposed it a few weeks ago and it is being pushed by the California Nurses Association.

Late last week the price tag became clear. It’s $400 billion a year.

Lara says the plan is to have much of that cost to be offset by state, federal and private spending but the rest will have to come via significant tax increases. And then there’s the prediction of annual health care costs jumping by $50 billion to $100 billion a year. These figures are massive and the task daunting when you consider the yearly California state budget for the entire general fund is $125 billion.

Here’s how Lara’s plan works. Health coverage with absolutely no out-of-pocket costs will be provided to all living in California and that’s including those here illegally. The state then contracts with doctors, hospitals and other health care providers for prices and then pays all the bills.

This is much how the federal government does Medicare.

All public money spent on healthcare — from Medicare, Medicaid and other federal public health funds and ObamaCare subsidy dollars will go into the pot to pay the bills.

The current estimate is that’s about half of what is needed to support Lara’s single payer system. The rest will have to come from higher taxes on business and a 15% payroll tax.

Tax increases? No problem Lara said. He, the California Nurses Association and other liberal supporters are totally energized by the idea and a tax plan to pay for the system is currently on the drawing board. The good news — they say — is we’ll be doing away with insurance company profits and the administrative costs of insurers. That will mean more money can be spent on the care of patients.

Republicans like Sen. Jim Nielsen of Gerber and business groups and health insurers aren’t too keen on the idea. “The impact on employers I think is going to be absolutely astounding. How can you possibly say this is going to be fiscally prudent for the state of California, not a burden for the state?” Nielsen said.

Businesses say — if this passes and is enacted — it will be much harder to expand their workforce.

For the tax increases to be implemented, two-thirds of the Assembly and two-thirds of the Senate must approve. That’s a daunting task. Even if it does pass, it must pass muster with Governor Jerry Brown. He’s a Democrat but has expressed skepticism at the logistics of the plan and the high cost.

Then if by some miracle the Legislature gets the two-thirds vote and Brown signs it into law, California will need to convince the Trump administration to waive the rules about how Medicaid and Medicare dollars are spent in California.

By the way, if you’re curious, Lara’s bill is SB562.


Source link: Insurance Journal

Tags:  Healthcare  HealthCare.gov  Huge: California’s Single Payer System Price Tag  Insurance Content  Insurance Industry  Insurance News  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Keeping Up with ObamaCare Repeal & Replace

Posted By Administration, Tuesday, May 30, 2017

It used to be we tried to keep up with the Joneses. These days it’s trying to keep up with the latest developments in the Republican attempt to repeal the Affordable Care Act and replace it with something “better” is a much harder task.

Senate Majority Leader Mitch McConnell said he’s being pressured by Department of Health and Human Services Secretary Tom Price and leaders in the House to get something done by the end of summer. They at least want something to consider by the end of July when Congress goes on its annual August recess.

Apparently both fail to remember how slow the U.S. Senate moves. All McConnell would say is the Senate is “all about healthcare these days ... which we will move forward sometime in the near future.”

Others in Senate leadership think they’ll have something by then.

Meanwhile, while most of us took the Memorial Day weekend off, Senate staff began — says Sen. Ron Johnson of Wisconsin — drafting a bill.


Source links: The Hill — link 1, link 2

Tags:  Healthcare  HealthCare.gov  Insurance Content  Insurance Industry  Insurance News  Keeping Up with ObamaCare Repeal & Replace  ObamaCare  The Affordable Care Act  Weekly Industry News 

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Around the PIA Western Alliance States

Posted By Administration, Tuesday, May 30, 2017

Alaska — Plate Tectonics Research
Earthquake-wise Alaska is a busy state. It has around 40,000 of them a year. Alaska also has the highest rated quakes on the Richter Scale than any of the other states.

The state has so many that the National Science Foundation — a consortium of U.S. universities — is completing the installation of a huge array of seismometers to help map just what is happening under the North American crust.

It all started in 1964 after the 9.2 quake dubbed the Great Alaska Earthquake. At the time, there were just two seismometers in the state. By the end of the summer there will be 260. 

Alaska state seismologist Michael West calls it a “big freaking deal. This footprint of instrumentation rolled across the country and is now wrapping up this grand, 15-year project.”

Source link: Insurance Journal


California — Cannabis & Insurance
Insurance Commissioner Dave Jones convened 63 insurance-related stakeholders to make sure they have time to comment on cannabis-related regulations with insurance provisions currently under consideration by other state agencies.

"As Insurance Commissioner, my goal to make sure all Californians, including emerging cannabis businesses, have insurance protection," said Commissioner Jones. "The department has an important role to play as new industries emerge and the market adapts to meet the changing needs of all insurance consumers."

Jones is working to identify ways in which the department may help the insurance and cannabis industries by providing insurance-related regulatory guidance and resources.

California has recently grappled with insurance requirements for other emerging industries - notably ridesharing services like Uber and Lyft and autonomous vehicles. With so many agencies working to develop regulations and oversight on the emerging cannabis market, the Department of Insurance has found it useful to inform insurance stakeholders about the insurance-related provisions under consideration by other state agencies, and provide stakeholders with details about how to formally comment on those proposed regulations.

"Cannabis businesses need to insure property, crops, vehicles and employees, just like any other business. They have the same insurance needs," Jones added.


California — Work Comp Pure Premium
California Insurance Commissioner Dave Jones has dropped the state’s workers’ compensation pure premium rate. As of July 1st, it will be $2.02 per $100 of payroll. That’s 16.5% less than the average rate of $2.42 filed by California insurers on January 1st.

Jones said while he has no power to require a reduction, he thinks it is a good idea. “A reduction in the pure premium rate reflects a reduction in the cost to insurers of providing workers’ compensation insurance, which benefits California’s business economy if insurers lower their pricing. However, there is no legal requirement that these insurers pass these cost savings onto employers, so workers’ compensation insurers continue to file pure premium rates that are higher than the pure premium rate warranted by their costs,” Jones said.

The commissioner based his decision on the data provided to his department by insurers and they indicate medical costs were lower in 2016 than predicted so lower rates are in order.

Meanwhile, Jones said data from the National Association of Insurance Commissioners (NAIC) says California work comp insurers wrote $12.96 billion in direct written premium in 2016. That’s up $628 million or 5.1%.

Source links: Insurance Journal — link 1, link 2


California — W.R. Berkley Settlement
Insurance Commissioner Dave Jones said the enforcement action taken against W.R. Berkley Corporation entities and operating units has resulted in a $12 million settlement.

Admiral Insurance Company, Admiral Risk Insurance Services, Inc. nka BXM Insurance Services, Inc., and other self-disclosed entities agreed to settlements for licensing violations and unlawfully transacting surplus line insurance in California.

"Businesses and individual consumers should have confidence that companies selling insurance in California are doing so in compliance with our consumer protection laws," said Insurance Commissioner Dave Jones. "Our enforcement action has resulted in Admiral and W.R. Berkley Corporation paying a substantial monetary settlement for their licensing violations and ensures that they are now complying with all of California's insurance laws and regulations. Failure to continue compliance will result in additional automatic penalties and sanctions."

The case came to the California Department of Insurance as a referral from the Surplus Line Association of California (SLA). The original parties involved Admiral Insurance Company, an operating unit of W.R. Berkley Corporation; Admiral Risk Insurance Services, Inc.; and, three of Admiral Risk's now-former employees. The department began its investigation in 2011 and found that Admiral Risk and its employees transacted surplus line insurance without holding requisite surplus line broker licenses from approximately November 2003 through June 2011. Further, Admiral Risk impermissibly acted as a managing general agent for affiliated company Admiral Insurance Company, an insurer not admitted transacting business in California.

After the department began its investigation, Admiral Risk and its employees obtained the necessary licensing. W.R. Berkley Corporation later hired outside counsel to conduct an independent review of its operations, and self-disclosed compliance issues to the Department.

"As California's largest consumer protection agency, we must ensure that consumer protections laws are followed," added Jones. "The department's duties also include helping companies come into compliance. W.R. Berkley Corporation has taken the right steps toward remediating its former practices."

The settlement agreement specifies that Admiral Risk Insurance Services, Inc. nka BXM Insurance Services, Inc., in lieu of license suspension, will pay a monetary settlement of $1.5 million and pay a cost recovery fee of $42,500 to reimburse the Department for expenses incurred. Admiral Insurance Company will pay the same monetary settlement and cost recovery fees for its actions.

W.R. Berkley Corporation has also agreed to pay a $9 million settlement and $15,000 for cost recovery. In recognition of the self-reporting and remedial actions already implemented by W.R. Berkley Corporation, the settlement provides that $6 million of the settlement is suspended.

Tags:  Around the PIA Western Alliance States  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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Special Report: The WannaCry Virus Aftermath

Posted By Administration, Wednesday, May 24, 2017

In what seems now to be a prophetic move, on May 11th Kansas Insurance Commissioner Ken Selzer put out a list of tips to help businesses and individuals protect themselves from a cyber attack. The next day the WannaCry virus hit the world and demands of $300 or more per user was demanded to release control of a computer back to the user.

According to White House Homeland Security Advisor Tom Bossert, 300,000 people in 150 countries were impacted.

In his news release that went with the list, Selzer said, “It is important that cyber vigilance begins at home. Knowing some common-sense precautions can keep you and your personal information safer.”

Too little, too late.

The Internet research agency Statistica says insurance and the financial sector are very vulnerable. And it put this chart together to show you just how vulnerable your business is:

Who’s affected most by ransomeware and why starting with infections by industry:

  Services — 38%

  Manufacturing — 17%

  Public administration — 10%

  Insurance, finance & real estate — 10%

  Wholesale trade — 9%

The leading cause of those infections:

  Spam/ phishing emails — 46%

  Lack of employee training — 36%

  Malicious websites / web ads — 12%

  Other — 5%

  Lack of security — 1%

Lots of quotes from experts and lots of advice starting with Michael Kaiser — the executive director of the non-profit National Cyber Security Alliance — who put what we all need to do now the best. “It is of utmost importance that cybersecurity ... be a top priority of businesses and organizations large and small,” he said.

Kathy Brown the Internet Society’s president and CEO added, “Law enforcement, IT professionals, consumers, business, and the public sector all have responsibility to act to keep enabling the good that the Internet brings. We have a shared responsibility to collaboratively get this under control.”

How bad is it? Bad. Researchers say 6% of the people of the world have been impacted by this or other malware. Brown said most people are ill-equipped to deal with ransomware and whopping 25% say they have no idea what to do if their computer was attacked.

Fen Osler Hampson is the director of global security at CIGI. He said, “Ransomware attackers have discovered that they don't have to steal or destroy your data to enrich themselves, they just have to hold it hostage. Our survey data shows that many people are willing to pay to get their data back, which makes such attacks highly profitable.”

Dan Burke heads Hiscox USA. His firm’s Hiscox Cyber Readiness Report 2017 checked with 3,000 businesses in the United States, the United Kingdom and Germany. He said it found, “In the US alone, 63% of firms reported experiencing a cyber incident in the past year, and 47% said they had two or more.”

And Burke and the report said those attacks and all cyber crime cost the global economy $450 billion last year. “Larger companies (250+ employees) had a somewhat higher risk, with 72% reporting one or more incidents, compared to 60% of smaller firms (less than 249 employees).”

Kaiser added, “When we see whole systems like the National Health System in the United Kingdom directly targeted, it reinforces how dependent we have become on our data-driven networks.”

Back to Selzer. These are his wise words of wisdom:

  Set strong passwords and don’t share them with anyone. Set them with at least eight characters, including letters, numbers and symbols.

  When using unfamiliar websites, be sure the URL begins with "https." The "s" at the end indicates it is a secure site.

  Keep your operating system, browser, and other critical software optimized by installing updates, including antivirus and anti-spyware updates.

  Maintain an open dialogue with your family, friends and community about Internet safety. Let them know you take it seriously.

  Limit the amount of personal information you post online, and use privacy settings to avoid sharing information widely.

  Be cautious about what you receive or read online — if it sounds too good to be true, it probably is. Also, if a message sounds out of character for the sender, or includes nothing but a link in the body of the email, it may be suspicious. Check with the person who purportedly sent you the message to make sure it is legitimate.

  Cyber attackers often take advantage of current events to conduct "phishing" attacks, where they will attempt to obtain personal information by posing as a trustworthy organization. Verify the legitimacy of the organization’s request by contacting the company by another means.

  Limit the type of business you conduct on public Wi-Fi networks. Don’t do your online shopping from an internet café. Do business with credible companies, and devote one credit card with a small credit line to online purchases.

  Password-protect your smart phone.

  Finally, and maybe most importantly, check your homeowners or identity theft insurance policies for the level of coverage you have in case of a cyberattack on your devices.

“The continual increase in cyber traffic means that home computer networks and smart devices are more vulnerable" than ever. We need to be vigilant in making sure our personal information is kept secure,” Selzer said.

NAS chief underwriter Mike Palotay agreed and said the attack also points out how small and medium businesses are woefully short of cyber insurance. He says these businesses need to take note and get insured.

“This has been an indiscriminate attack. It’s not targeted. You don’t have a hacker behind each attack on each company — it’s really more of an automated thing. It’s basically just spray and pray, really. You’ve got small companies who are experiencing outages and disruptions and having to pay extortions. And then you’ve got FedEx and the National Health Service [in the UK] and a bunch of much larger organizations experiencing problems,” he said.

But the bottom-line, Palotay said is, “Small and medium-sized business are very, very underinsured. The last figures I saw for small businesses that buy cyber insurance were in the single digits. This might be a wake-up call.”

By the way, Microsoft has a malware link to keep you posted on WannaCry. You can access it here.


Source links: PropertyCasualty360.com, Insurance Business America

Tags:  Cyber Breach  Cyber Insurance  Cyber Security  Insurance Content  Insurance Industry  Insurance News  Special Report: The WannaCry Virus Aftermath  Weekly Industry News 

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