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 coastal 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 website.
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
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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