What's New—October 2008

Nine reference manual updates and new issues of The Risk Report and Captive Insurance Company Reports (CICR) have been added to the IRMI infobases. We have also updated the home page and job function dashboards to facilitate navigation in the site.

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Newsletters & Journals

Standard and Poor's announced that starting in late 2008, it will begin assessing enterprise risk management as part of its debt rating analysis. The October issue of The Risk Report, "Preparing for S&P Integration of ERM," outlines what S&P will be looking for and what you can do to show your firm's risk management program in the best light possible.

The October issue of Captive Insurance Company Reports features two case studies: "Raffles Epitomizes Group Captive Evolution" features Raffles, the largest heterogeneous group captive in the world, and "Captive for Protecting Bonus Plans" on how Adidas AG has used its captive to protect its operating businesses from unexpected prize money payouts.

Reference Manuals

Canadian Coverage Caselaw features a total of 18 cases from four Canadian provinces, as well as the Supreme Court of Canada. The Canadian Coverage Caselaw Bulletin provides brief descriptive information and links to the case discussions.

Contractual Risk Transfer updates the state-by-state summary of the current status of the determination of employer and the application of exclusive remedy as respects employee leasing. The summary of state construction contract anti-indemnity statutes has been revised and reformatted. The most widely used standard form construction contract, the American Institute of Architects’ ("AIA") "General Conditions of the Contract for Construction (A201), was revised in 2007. The examination of how the A201 allocates various elements of risk has been updated and expanded. Where applicable, the updated analysis notes key differences between the 2007 edition and the prior 1997 edition.  "Anti-Indemnity Statutes and Insurance Requirements" in section XI.C is also updated.

D&O MAPS has been expanded to include the following policies and analyses.

IRMI Insurance Cancellation Guide has been updated with the most recent information and Web sites concerning laws and regulations that govern the cancellation and nonrenewal of commercial and personal lines insurance policies.

IRMI Workers Comp contains the first part of a complete update of the state law section of the manual. The updated summaries reflect the changes that resulted from the 2008 state legislative sessions. Also included in this supplement are updated state benefit summaries, a revision of the workers compensation checklist, and an amendment to the small deductible chart to reflect the addition of Vermont as a jurisdiction allowing its use. The supplement also contains the addition of a table of legal cases that are cited throughout the manual.

Pollution Coverage Issues added 27 cases to the chart on post-1986 pollution exclusions. Additionally, summaries were added to several discussions and PDFs for most of the cases were added to the caselaw library. (See the bulletin for more information.) IRMI's Environmental Insurance Reporter examines the Fifth Circuit's recent decision in Noble Energy, Inc. v. Bituminous Cas. Co., 529 F.3d 642 (5th Cir. 2008). which held that a nonstandard Total Pollution Exclusion in a 2002-2003 CGL issued to a waste liquid hauler barred coverage for an incident where a "pollutant" caught fire at a liquid waste disposal facility, and the fire killed three workers and injured four others. The decision upsets traditional risk management and risk transfer theories commonly employed in the oil and gas industry for dealing with the fire hazard associated with flammable liquids, and may pose serious challenges in the years to come.

Practical Risk Management updates one topic on surplus lines and adds a new topic on terrorism. Topic C-5 has been updated to provide current information about the surplus lines market and state requirements for surplus lines filings. New Topic E-11, Terrorism, reviews the history of terrorism coverage, the Terrorism Risk Insurance Act and its extensions, coverage available in various insurance policy forms, and stand-alone terrorism coverage. Lastly, this issue of Risk Management Notes looks at the risks of teleworking and the risks of a component of teleworking, using USB flash drives. "Marketplace Musings" looks at the state of the insurance market compiled from IRMI’s "Insurance Market Report 2008." The issue also summarizes some items of interest in the news.

Professional Liability Insurance features a revision of the fiduciary liability insurance coverage section. Since this section was last updated, fiduciary liability policy forms have undergone a number of important changes, the nature of which are discussed in this supplement. This section also includes updated, detailed analyses of three other key conditions found in fiduciary liability policy forms: recourse provisions, severability clauses, and managed care exception endorsements (that apply to the bodily injury/property damage exclusion). The topical index is also updated in this supplement.

Risk Financing features two new discussions and updates to a number of sections in the manual. The new discussion of "Loss Simulation Analysis" is co-authored by Chuck Nyce of IIA and Marcin Plonka of SAP America. "An Enterprise Risk Management Approach to Risk Quantification" is co-authored by Mike Giacobbe, Jay Gotelaere, and Christopher Bond, all of Aon Global Risk Consulting. Updates to the loss development factors, workers compensation benefit level changes, payout profiles, and U.S. Claims Cost Indexes are provided in Appendix F. The loss development factors (LDFs) and benefit level adjustments are based on information published in the NCCI Annual Statistical Bulletin. LDFs for general liability and automobile liability risks are updated annually by SIGMA Actuarial Group. U.S. Claims Cost Indexes updates are provided by Jeremy Pecora and Coty Hallay of Towers Perrin. Several applications of the factors are described in updates to the discussions in sections II.A, II.B, II.C, and II.M. The discussion on "Capital Market Reinsurance Initiatives" has been updated by Don Riggin of J.H. Albert International Advisors. This supplement’s issue of Risk Financing Perspectives presents a brief discussion of the updates to the U.S. claims cost indexes. Also in this month’s Perspectives is our regular "Market Corner" column, which provides quarterly updates on current property and casualty insurance market conditions.

Forms

This month 135 forms and endorsements have been added to the Forms manuals. These include ISO state-specific commercial general forms, state-specific medical professional liability forms, state-specific commercial excess forms, and state-specific commercial auto forms. The Forms manuals now include more than 21,110 sample policy forms.