IRMI Update—Issue #147
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
October 25, 2006
In This Issue
Colleague,
The IRMI research analysts spent much of the month of August discussing the
insurance marketplace with their many industry contacts to prepare our annual
insurance market update (published in The Risk
Report in September). In general, we concluded that favorable insurance
industry financial results have translated into a more competitive market than
we saw this time last year for some lines of insurance, and a stable market
for many other lines. However, underwriters have not thrown caution to the wind,
and there are a number of exceptions to this general statement with respect
to certain industries and certain lines of coverage. In particular, organizations
with significant property values exposed to earthquake or costal windstorms
are experiencing difficult property renewals.
Thus, while the commercial lines marketplace continues to be competitive,
it has not become irrational. We see nothing comparable to the "write anything
you can" mentality of the 1990s as underwriters continue to assess risk and
try to charge appropriate premiums while holding onto their books of business.
All signs point to a continuation of the current market conditions well into
2007, particularly if we do not experience any significant frequency of manmade
or natural catastrophes in the remainder of the year.
What is your assessment of the marketplace? Do you agree it will remain competitive
for most lines and most insureds well into next year? Even though competitive,
are insurers still being rational in their underwriting and pricing decisions?
Or are your underwriters (or competitors) making some questionable calls? [See reader responses.]
If you were one of the 1500+ attendees at the 26th IRMI Construction Risk
Conference two weeks ago, I hope you enjoyed all the learning and networking
opportunities. All the movers and shakers in construction risk management and
insurance were there. Please mark your calendar now to reserve October 29 through
November 1, 2007 for next year's conference, which will be in Orlando. As an
IRMI Update subscriber you will be among the first to be notified when the agenda
is available on our web site.
Have a great day.
Jack
Jack P. Gibson, CPCU, CRIS, ARM
President
IRMI
Who Pays for Fines and Penalties Incurred by the WC
Carrier?—Some state jurisdictions issue fines and penalties if state
forms are not filed timely, if lost time benefits are not issued timely, or
for frivolous litigation, etc. Many insurers charge these fines directly to
the file as an expense. These fines and penalties should be paid directly by
the insurer or third-party administrator if they were charged due to their lack
of adherence to the state's rules and regulations. The insurer or third-party
administrator should cover these costs under their errors and omissions coverage
and not charge the costs to the file. If you are reviewing a workers compensation
(WC) file, look in the expense payouts for payments made directly to a WC Board
or a Department of Insurance. We see this often in our WC file reviews for employers.
By: James Moore, President, AIC, MBA, ChFC, ARM
J&L Risk Mgmt. Consultants, Inc.
Raleigh, NC
jmoore@cutcompcosts.com
www.cutcompcosts.com
Suggest a Risk Tip. Send us a practical tip (less than 300 words) for identifying and managing risks,
buying insurance, managing claims, or filling gaps in insurance coverages. Submit your tips. We'll
acknowledge your contribution as we did for James.
There are now over 800 risk management and insurance articles on IRMI.com.
Below you'll find summaries of some recent additions with links to the articles.
Alan J. Ruben of DRI Companies received the Gary E. Bird Horizon Award at
the 26th Construction Risk Conference in San Diego. Mr. Ruben completely restructured
the loss prevention and control techniques for a workers compensation program,
leading to a patented tool to make the workplace safer. Jeffrey A Segall was
also honored with the 17th Words of Wisdom Award for his commitment to improving
our industry. See handouts from this year's Conference, how to become a sponsor,
plus future dates and locations at the Conference section of IRMI.com.
Learn more about the awards and this year's winners here.
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