Weekly Dispatch: Sept. 29, 2022

September 29, 2022


Conn.: CID allows DWL for fiduciary and cyber liability policies

The Connecticut Insurance Department issued a notice to allow commercial insurers to include “defense within limits” provisions to fiduciary and cyber liability policies. Currently, DWL provisions have only been permitted in directors & officers, errors & omissions, cyberliability, and employment practices and professional liability claims-made liability policies. DWL provisions include legal defense costs under the policy’s liability coverage limit, which may lead to nothing in the policy being left for damages should defense costs exceed the policy limits. The CID strictly limits such provisions due to the potential exposure. For policies that include DWL provisions, the CID requests insurers provide a clear disclosure in the policy application and declarations pages, as well as informing insureds of additional defense coverage or “defense outside of limits” policy options.

Connecticut offers cannabis consumption resources

Gov. Ned Lamont last week announced that Connecticut is launching an education campaign to promote responsible cannabis use by adults. The campaign contains a collection of materials that cover how to safely store and dispose of cannabis and cannabis waste, and what to do in case someone, such as a child or pet, accidently ingests cannabis. The materials, which include videos, brochures, flyers, and social-media graphics, are available for anyone to use and can be downloaded for free on the state’s adult-use cannabis website. Possession of small amounts of cannabis among adults age 21 and over became legal in the state beginning July 1, 2021. Retail sales of adult-use cannabis, which also became legal in the state under that law, is anticipated to begin in the coming months.

New York to crack down on unemployment insurance fraud

Gov. Kathy Hochul this week announced actions to crack down on unemployment insurance fraud after a New York State Department of Labor investigation found that insurance fraud accounted for more than $11 million in benefits payments in August. These benefits were paid almost exclusively to those working while also collecting unemployment insurance payments during the pandemic. Following the DOL’s investigation, the governor announced that the state would seek repayment for fraudulent benefits payments and refer nonpayment to state law enforcement. Based on this investigation, the DOL Office of Special Investigations is on pace to uncover $110 million in fraudulently attained benefits this year.

Vt.: Court allows novel COVID-19 theory to proceed

Recently, the Vermont Supreme Court ruled in the case of Huntington Ingalls Industries v. Ace American Insurance Co., that a policyholder could proceed with a business interruption claim that alleges that the COVID-19 virus caused physical damage to property when it adhered to the surface of the insured property. The court found that Huntington had sufficiently plead that the COVID-19 virus caused direct physical damage or loss. In looking at Huntington’s complaint, the court found it sufficient that Huntington had alleged that COVID-19 has been continuously present at insured’s shipbuilding facilities, that the virus could adhere to surfaces, that process caused detrimental physical effects that changed or impaired the insured property, and that Huntington took, and continues to take, steps to mitigate the effects of the virus in its facilities. Further, since the Huntington policy did not have a virus exclusion, the court allowed the inventive argument for physical damage to continue.


N.J.: DOBI issues order on policy disclosure law

The Department of Banking and Insurance issued an order last week requiring all insurers that write auto insurance in the state to provide the DOBI with email addresses. This order is an effort to enforce the parameters of a new law that went into effect earlier this year. Public Law 2022, Chapter 95 requires insurers that write auto insurance in the state to disclose policy limits in certain circumstances. Under the law, if an insurer receives a request from an attorney—who is admitted to practice law in New Jersey—to disclose of the policy limits of a specific policy, the insurer must provide the disclosure within 30 days. For the purposes of receiving requests for policy limits, the law requires the DOBI to publish the email address of each insurer (as supplied by each insurer) on its website, within 60 days of the enactment of the law, which occurred on Aug. 5, 2022. This order is the DOBI’s attempt to effectuate that requirement. While a nuisance for insurers, this law and the DOBI order should have little to no impact on insurance producers.


N.J.: Photo inspection bill introduced in state Assembly

A bill (A-4643) that would amend the law related to physical damage inspections—often referred to as photo inspections—was introduced in the state Assembly last week. Currently, insurers are prohibited from providing physical damage coverage for an automobile prior to conducting an inspection of the vehicle. This bill, sponsored by Assemblyman Raj Mukherji, D-33, would amend the current law in several ways. First, it would waive inspections in certain circumstances, including for new automobiles, vehicles older than seven years, short-term leases, and when an insurance producer is transferring a book of business from one insurer to another insurer. Second, the bill would introduce a new section of photo inspection law.


Do carrier ratings really matter?

In a word: Yes. There are organizations that rate the financial condition of insurance companies, such as Demotech, Moody’s and S&P Global Ratings. However, AM Best is probably the most prominent. The agent role and how PIA can help. Your clients trust you to place their coverage with carriers that will be there to honor their obligations. How can you meet this level of trust if you don’t know the financial condition of your markets? Knowing the ratings of your companies is simple. Sign up for PIA’s Company Rating Tracking Service—which is available exclusively to PIA Northeast members. Once you sign up for this service, you will receive an email from PIA when one of your represented carrier’s AM Best rating changes. To participate, contact PIA’s Industry Resource Center by phone at (800) 424-4244 or by email with a listing of the carriers your agency represents. Please note: This alert is a product of PIA and is not affiliated with any service provided by AM Best. Additionally, if you are a PIA Northeast member, you should have received your PIA Company Representation Survey in the mail. If you haven’t done so already, take a few minutes to complete the survey and email it back to PIA’s Industry Resource Center or fax it to (888) 225-6935.

N.H.: NCCI 2023 WC loss cost decrease of 7% approved

The New Hampshire Insurance Department approved the original workers’ compensation voluntary loss cost filing made by the National Council on Compensation Insurance, consisting of an overall 7% decrease. In addition, a decrease of 7% of the overall assigned risk rates was approved as filed. These loss costs and rates will take effect Jan. 1, 2023. For more on the NHID approval, see the related article on PIA Northeast News & Media.

NYCIRB posts workers’ compensation documents

To examine the recent decreases in New York workers’ compensation loss development factors, the New York Compensation Insurance Rating Board has posted the following documents: 2022 Annual Letter, 2022 State of the System Report and 2022 Research Brief.

Educating insurance agents

N.Y.: New classes that meet the New York State Department of Financial Services’ new CE requirements are available online and in private on-site sessions.

Conn./N.H./N.J./N.Y.: 2022 CIC LH: Life and Health Institute

The 2022 CIC LH: Life and Health Institute, which will be held online Oct. 12-13, 2022, will provide the basic, essential background, knowledge, and confidence to succeed in the life/health market. The institute is taught by Richard Goolsby, CIC, and Thomas Sanders, CIC, CPIA, For continuing-education credit information, access your applicable state: Connecticut, New Jersey or New York. In New Hampshire, contact the Massachusetts Association of Insurance Agents at (508) 634-2900.


Industry’s Week of Giving, Oct. 8-15

Every PIA member knows community service is a cornerstone of the professional independent agency. However, that is rarely recognized when media or others discuss insurance. Help PIA and the Insurance Industry Charitable Foundation quantify and publicize our industry’s enormous community contribution. This year, the IICF’s annual Week of Giving takes place Oct. 8-15. If you have a team that would like to participate in an IICF project, fill out the IICF team form.

Be a part of CTYIP’s Fall Reception

Join CTYIP for its Fall Reception, Thursday, Oct. 27, 2022, at the Dockside Brewery in Milford, Conn., starting at 5 p.m. During the event, the association will present awards to the 2022 YIP of the Year, Director of the Year, and MGA of the Year. You can network with your industry colleagues, celebrate with the award winners, and enjoy an evening on the water. The cost is $75 for CTYIP members; $90 for nonmembers. Register today.

N.Y.: Register for the all-new Capital RAP today

Get ready for the newest premier insurance event in Albany—Capital RAP, Tuesday, Oct. 25, 2022, at the Capital Center, Albany, N.Y., starting at 7 a.m. Dive into relevant and informative education topics, including classes on ethics and risk assessment; and E&O and recommending at least full coverage, which will be taught by John Fear, CISR, CPIA. Explore the latest services and tech at the trade show. And, network with the best in the industry at the keynote/awards luncheon. You can hear from retired Navy SEAL Darren McBurnett; newly elected PIANY President David L. Sidle, CIC, CPIA; and Distinguished Insurance Service award winner Ed Gentile III, CPRM, AINS, from Emery & Webb Inc. More information, view the sales kit or register here.


N.Y.: Revised WC loss costs take effect Oct. 1, 2022

In May, an application for an overall loss cost decrease of 8.7% was submitted to the New York Department of Financial Services by the NYCIRB. The DFS approved the application as filed with an effective date of Saturday, Oct. 1, 2022. There is no change in deductible premium credits and the Workers’ Compensation Security Fund surcharge (remaining at 0%). However, the United States Longshore and Harbor Workers’ coverage percentage is changed from 75.1% to 76.6%.

Register now

TONIGHT: Thursday, Sept. 29, 2022: PIANH Symposium—Register at the door

Wednesday, Oct. 19, 2022: PIANJ Women’s Leadership Alliance Golf Clinic

Tuesday, Oct. 25, 2022: Capital RAP

Thursday, Oct. 27, 2022: CTYIP Fall Reception

Thursday, Nov. 3, 2022: Save the date: PIWA Fall Reception

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