December 2021


December 13, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

In Big Florida Ponzi Scheme Fallout, Security National Sues Firm’s Lawyers

December 13, 2021 Email This Subscribe to Newsletter Email to a friend Facebook Tweet LinkedIn Print Article

Finger-pointing in one of the largest Ponzi schemes to hit Florida has spilled over into the legal and insurance industries.

Security National Insurance Co. has filed suit against a Miami law firm, alleging the lawyers failed to divulge their previous involvement with the investment firm at the heart of the $155 million Biscayne Capital scheme, which collapsed in 2018 and led to the arrest of its principals in September.

In the lawsuit filed in U.S. District Court in Miami, Dallas-based Security National asks the court to declare its lawyers’ professional liability policies void and absolve it of any obligation to defend the Avila Law firm. The firm, formally known as Avila, Rodriguez Hernandez Mena & Garro LLP, based in Coral Gables, has already cost Security National more than $150,000, the insurer said.

The two insurance policies, written in 2019 for $4 million each, excluded claims “based upon or arising out of any actual or alleged dishonest, criminal, intentional, malicious or fraudulent act, error or omission or any willful violation of any statute or regulation by an Insured, if a final adjudication adverse to such insured establishes such a dishonest, criminal, intentional, malicious or fraudulent act, error or omission or willful violation,” the lawsuit complaint said.

Security National, part of the AmTrust Financial family of insurers, said in its complaint that it would not have insured the law firm and would not have renewed the policies if Avila had answered truthfully to questions in its policy application.

Avila Law has denied that it had prior knowledge of the Ponzi scheme and plans to defend the federal lawsuit.

Avila, a 22-lawyer firm founded in 2007, has specialized in banking and finance law, mergers and acquisitions, and real estate matters. The attorneys’ purported knowledge of the trouble brewing at Biscayne Capital came to light in legal actions taken against the alleged perpetrators of the Ponzi scheme.

One suit by investors in the scheme, filed in 2020, contends that Avila served as counsel to the Biscayne Group and its principals in 2014-2016. A second suit, by the liquidator overseeing the assets of Biscayne, asked for Avila’s insurance coverage information and charged that the law firm failed to inform lenders of offshore bank accounts.

The investors’ complaint argues that the Avila firmed assisted the Ponzi schemers in forming trusts to separate assets from liabilities, avoid restrictions placed by the U.S. Securities and Exchange Commission, and hide the extent of the fund’s losses.

Security National has also sued a Miami securities firm, contending that the insurer had no duty to defend the firm in the investor lawsuit because the securities firm issued notes that facilitated the Ponzi scheme.

TOPICS LAWSUITS FLORIDA

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December 10, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

No Appraisal on Hail Damage When Coverage Is in Question, Appeals Court Says

December 10, 2021

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A property insurer has, for now, dodged an $18 million bullet on hail damage coverage for a South Florida condominium complex, after a state appeals court ruled partly in the carrier’s favor.

In American Coastal Insurance Co. vs. Hanson’s Landing Association, Florida’s 4th District Court of Appeal found that an appraisal of the property was not authorized because the insurer had denied the claim. The circuit court in Martin County must now review the case again.

“Because American Coastal has pled denial of coverage under the policy, and because the trial court must resolve the extent of coverage under the policy prior to ordering an appraisal, we reverse and remand for further proceedings consistent with this opinion,” the appeals court wrote last week.

The condo complex in Port Salerno, on Florida’s southeast coast, suffered through a hailstorm in April 2015. More than two years later, the condo association filed a claim for roof damage, arguing it had only then become aware of the damage.

American Coastal, part of United Property and Casualty Insurance, Florida’s largest private insurer of property, sent an adjuster, who determined a replacement cost of $1.1 million, the court explained. The condo association countered with its own estimate of $6.8 million to replace all the roofs in the complex, but it did not provide supporting documentation.

Seven months later, in 2019, Hanson’s Landing submitted a revised claim, this one for $18.3 million, along with an engineer’s report.

American Coastal denied the claim altogether, contending that the condo association did not provide prompt notice of damage and did not provide adequate documentation. The insurer also charged that Hanson’s Landing violated the policy by inflating the amount of the claim and misrepresenting the facts.

The condo association filed suit for breach of contract. The Martin County trial judge, Gary Sweet, granted the condo’s motion to compel an appraisal on the property. And that’s what was at issue on appeal.

Sponsored by SIAA

The appellate court opinion, written by Chief Judge Burton Conner, said that the Florida Supreme Court had decided in 2002 and 2010 that an appraisal is appropriate only when an insurer has admitted a covered loss but the amount is in dispute. In the Hanson’s Landing case, the insurer said it had denied the claim outright. At the least, a question remained over coverage, the appeals court wrote.

“We have required that coverage disputes be resolved prior to appraisal ‘because a finding of liability necessarily precedes a determination of damages,’” Conner wrote, quoting from previous court rulings.

The condo association’s case may have been complicated by the fact that at one point in the trial court proceedings, the association’s president testified that he was not aware of any significant damage to the property after the hailstorm.

December 9, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

For the first time in almost a decade, a new insurance carrier is wading into the troubled Florida waters, and is expected to make take-out offers to more than 42,000 Citizens Property Insurance policyholders.

David Howard

VYRD Insurance Co., based in St. Petersburg, is a joint venture of SiriusPoint Ltd., a Bermuda specialty insurer and reinsurer, and Bolttech, an insurtech firm, according to the South Florida Sun Sentinel newspaper and Florida regulators. VYRD will be led by David Howard, formerly with Lighthouse Property Insurance and Edison Property Insurance, both based in Florida.

The Florida Office of Insurance Regulation granted VYRD a certificate of authority in late November. The selected policies taken from Citizens will be transferred starting in February, according to a consent order that authorized the move, the newspaper reported.

The startup and takeouts are being hailed as good news for Florida and for Citizens, the state-backed insurer of last resort that has seen rapid growth and has become one of the largest homeowners’ insurance companies in the state. Four carriers in Florida have become insolvent in the last few years and others have pulled out of the market altogether, despite steady rate increases for consumers.

Florida Insurance Commissioner David Altmaier said that VYRD officials noted that the launch of the carrier was “directly attributable to the passage of Senate Bill 76.”

SB 76, approved by the Florida Legislature early this year, made a number of reforms designed to reduce insurance claims litigation, attorneys’ fees, and solicitation of homeowners by contractors promising that insurers will pay for all-new roofs.

“Hopefully we can continue momentum and forward progress on initiatives like that and continue to demonstrate that Florida has some challenges that we need to work through, but we are willing as an industry and as policy leaders to work through those things,” Altmaier said last week at the Florida Chamber of Commerce Insurance Summit.

He noted that VYRD has raised almost $50 million in capital.

Sponsored by SIAA

VYRD’s joint venture with Bolttech comes three months after Bolttech announced it had raised $210 million in capital and to expand its technology-based services. The firm, with offices in the U.S., Europe and Asia, calls itself one of the fastest-growing international insurtech firms, serving 150 carriers. Its platform is designed to help carriers mitigate risk in property coverage.

News outlets have reported that a subsidiary of China-based Minsheng Investment Corp. owns 35% of SiriusPoint. The ownership has raised questions in Florida, where top elected officials have taken measurers to dampen the influence of countries considered hostile to the United States, including China.

On the takeout of Citizens’ policies, it’s too soon to known how many policyholders will accept the offer. Under Florida law, VYRD will have to notify homeowners, who can opt to stay with Citizens. Citizens’ officials are hoping for legislation next month that will bar policyholders from refusing takeout offers if the offer is expected premiums are less than 20% higher than Citizen’s prices.

TOPICS CARRIERS FLORIDA

A study by The Coalition reveals many professionals have little faith in their organizations’ power to recognize and combat organized fraud. Property and casualty at 40 Billion!

By Brittney Meredith-Miller

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Fraudulent claims can have a monumental financial impact, with the FBI estimating non-health insurance fraud costs over $40 billion per year. (Credit: BillionPhotos.com/ stock.adobe.com)

The Coalition Against Insurance Fraud recently released their Globalization of Insurance Fraud Study, which found that many insurance organizations may not be prepared to deal with the growing threat of global fraud rings.

The study was conducted in partnership with IBM and Luxoft. Researchers surveyed fraud-fighting pros across 33 countries in North America, Europe, Asia, Africa and the Middle East in an attempt to understand how these experts are handling organized international fraud.

Fraudulent claims can have a monumental financial impact, with the FBI estimating property and casualty insurance fraud costs over $40 billion per year. That translates to the average American family paying between $400-$700 more in annual premiums. The Coalition estimates there are $80 billion per year in losses due to fraud across all lines of insurance in the United States.

“We’ve seen organized scammers exploit the telehealth system, intercept personal information through phishing scams and other data-harvesting schemes, carry out ransomware attacks, and run a number of insurance scams using stolen or synthetic IDs off the dark web,” Coalition Co-Chair David Rioux of Erie Insurance said in a release. “These are all attacks that can be launched from anywhere in the world with a decent internet connection.”

Despite these looming threats, the Coalition’s research found that globalized insurance fraud is only a high priority for 14.9% of respondents. Nearly 28% said it was not a priority at all, and 57.5% said it was a low-to-medium priority, with the surveyed North American professionals assigning it a lower priority. However, 48.5% of respondents said they were either very or extremely concerned about the future threat of global insurance fraud.

According to the report, the most common type of organized fraud involved staged accidents in auto claims. North American professionals who were surveyed reported they experience the most organized fraud with property claims.

Fraud fighters surveyed stated a common issue was a lack of dedicated resources or fraud departments within their organizations, with 56.8% reporting they didn’t have those resources at all, and fewer than half saying they felt somewhat confident their organization was equipped to handle these threats. The Coalition reasons this displays a lack of resources and time being invested in this kind of fraud.https://tpc.googlesyndication.com/safeframe/1-0-35/html/container.html

The Coalition’s study predicts insurance fraud will continue to increase with the expansion of technology and encourages organizations to make changes now to address this ever-growing problem; including conducting more in-depth research, improving awareness and training about globalized fraud, conducting internal threat and gap analyses in domestic companies, and educating legislators, regulators and others on the economic impact of global insurance fraud.

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December 7, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Florida’s Citizens Property Insurance Corp. is reminding agents and policyholders that rates for most commercial and residential policies will rise a bit each year, starting Feb. 1, 2022.

The change to the insurer’s glidepath, as it’s known, was authorized by Senate Bill 76, which was approved earlier this year to address a number of issues in Florida’s troubled property insurance market. Citizens’ rate increases had been capped at 10% per year but will now climb 1% per year until the cap reaches 15%, Citizens said in a bulletin to agents.

“The rate increase varies by line, product type and territory,” the Dec. 3 bulletin reads. “Individual rate changes exclude coverage changes, mitigation adjustments, rate changes for Sinkhole Loss coverage, assessments and surcharges, and a required rapid cash build-up provision for the Florida Hurricane Catastrophe Fund, if applicable.

Citizens, the state-backed insurer of last resort, also will require four-point inspections on residential properties that are more than 20 years old. Until now, the inspections were required only for homes more than 30 years old.

The changes are part of Citizens’ plan to reduce its exposure and number of policyholders. The insurer has seen rapid growth in the past two years as private insurance carriers in Florida have become insolvent, have pulled out of the state, non-renewed policies, and have raised rates significantly.

TOPICS FLORIDA

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By William Rabb

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Citizens Property Insurance Corp. officials have spoken extensively about the need to depopulate the insurer’s rolls and reduce its dramatic growth rate, and the measures Florida lawmakers can take to help with that.

Ideas discussed in recent months include allowing Citizens, the state-backed property insurer of last resort, to raise premiums more than what the statutory 10% annual cap now provides; and to bar policyholders from sticking with Citizens if a private insurer will write the policy at premiums that are up to 20% higher.

At the Florida Chamber of Commerce Insurance Summit last week in Tampa, Citizens’ chief of legislative and external affairs underscored those legislative goals but also threw out a few other ideas – ideas that are sure to ruffle the feathers of snowbirds who own thousands of second homes in the Sunshine State.

Christine Ashburn

“One idea has been, ‘Why don’t you get rid of the rate cap on second homes?’” Citizens’ Christine Ashburn said at a summit panel.

Such a plan is workable, but in some cases, Citizens’ rates need to be adjusted downward for a number of reasons, she said. So, a concept, endorsed in a bill sponsored last year by state Sen. Jeff Brandes, R-St. Petersburg, is to place a 20% surcharge on policies for homes that are not primary residences.

Brandes, chair of the Senate Governmental Oversight and Accountability Committee, and others have spoken out about the inequity of Florida taxpayers subsidizing second homes for wealthy people who reside out of state most of the year.

Ashburn noted that about 33% of Citizens’ policies — some 208,000 — are for non-primary residences. And about 8% or 59,000 policyholders reside outside Florida for much of the year. Roughly 2% are foreign nationals, mostly Canadians, who are often referred to as “snowbirds” when they flock to Florida at the beginning of winter.

“I think there is some discussion about, ‘Should we make it available to non-U.S. citizens at all,” she said.

One drawback to a foreigner tax is that some Florida owners may have out-of-state mailing addresses and could face the surcharge unfairly. Another concern is that a second-home surcharge would also hit renters who can’t afford to buy homes in a pricey market. The landlord will probably pass the fee on in the form of higher rents.

“That is a risk that is maybe worth taking. I don’t know,” Ashburn said. A surcharge would be “easy to implement; it’s a disincentive. It probably makes them more attractive for depopulation,” Ashburn said.

Michael Carlson, president of the Personal Insurance Federation of Florida, said a surcharge might also be opposed by tourism officials, real estate agents and their snowbird clientele, who have enjoyed lower Citizens’ rates through the years.

“But I think it’s a good concept that’s worthy of discussion, so I hope they’ll take that up,” he said.

Another idea that Citizens’ chairman has floated recently is letting policyholders of an insolvent carrier to remain at the carrier’s higher premium when they are moved to Citizens. Citizens’ policy premiums are often significantly lower than private insurers in some parts of the state.

When Florida Specialty Insurance Co. went under in 2019, for example, some homeowners were paying $3,000 in premiums, about $500 more than Citizens charged for a comparable policy, Ashburn said.

“If that person was comfortable paying $3,000, why should they get a discount to come to Citizens,” she said. “It makes some sense, but we’re not sure if the juice is worth the squeeze on that.”

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By William Rabb | December 6, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

With good news comes bad, and vice-versa in Florida’s growing but rapidly deteriorating property insurance market, industry analysts said at a two-day Florida Chamber of Commerce Insurance Summit last week.

First, some of the good news: Florida is on track to add another 4 million people and 2 million more jobs by 2030, a stated goal of the Florida Chamber and a boon for most businesses in the state, said Mark Wilson, president of the chamber.

And the bad news: Most of that growth will be in the state’s metropolitan areas, which will greatly concentrate risk for property and casualty insurers. One or two major hurricanes could bring unprecedented losses.

John Seo (Linkedin)

“If you achieve your economic development goals, which I have no doubt you will, you will have a nearly $1 trillion insured loss exposure,” said John Seo, co-founder and managing director of Fermat Capital Management, an international firm that finances alternative investments, including reinsurance.

And if Florida’s current climate of storm losses, excessive litigation, fraud and limits on rate increases continues, insurers simply will not be able to cover those losses, industry veterans warned.

“Can the supply of insurance keep up with the growth? The answer is ‘no,’ currently, in the private market,” said Chris Dittman, senior managing director at Aon, the multinational insurance provider.

Without higher rates, more insurers are likely to stay out of the Florida market, he said. While Floridians have seen property insurance premiums climb steadily in recent years, those have not been enough to provide the returns wanted by investors in insurance and reinsurance companies, Dittman said. Four insurers have become insolvent in recent years and others have pulled out of the state or have stopped writing new policies, leaving a growing insurance gap.

“The premium levels still seem insufficient,” he said.

Florida is considered to be five times riskier than the rest of the country, but the average homeowner’s premium is just 1.6 times the nationwide average, Dittman said, pointing to data compiled by the National Association of Insurance Commissioners.

Suzanne Williams-Charles

“Although the rates have been increasing … they would still have to increase quite significantly for us to reach rate adequacy,” said Suzanne Williams-Charles, director of policy and regulation for the Association of Bermuda Insurers and Reinsurers.

President Biden’s proposed global corporate minimum tax, if finalized, will hit reinsurers who have enjoyed low offshore tax rates for decades. That cost will be passed on to insurers and ultimately to policyholders, particularly in the storm-prone coastal states of Florida and Texas, Williams-Charles said. Bermuda-based reinsurers now provide more than 60% of reinsurance and catastrophe insurance in Florida, she noted.

The good news on the reinsurance front is that plenty of global capital exists to fund catastrophe recovery through the bond market, and innovations are being developed, Williams-Charles and Seo said. Conventional reinsurance has a “table limit,” to use a casino analogy, of about $50 billion per geographic zone or region, Seo explained.

“If you look at what we’re doing on the cat fund side, we’re providing another $50 billion,” he added. “We’re basically doubling the size of the reinsurance market.”

Worldwide, with the rise of the cryptocurrency market and the “froth” from that, “there’s an extra $20 trillion in capital in the world now that has no useful place to go,” Seo said. The catastrophe fund market will benefit from that.

Another potential bright spot: Some top Florida lawmakers plan another round of bills that they hope will help reduce insurance litigation and loss adjustment expenses, at least on a limited basis. At a panel discussion Friday, state Sen. Jim Boyd, chairman of the Senate Banking and Insurance Committee made his strongest commitment yet to making changes to Senate Bill 76, which passed in the 2021 legislative session.

That bill made a number of reforms, which some reports suggest have already reduced claims litigation in the state. But a state court has temporarily struck down a key part – limits on roofing contractors’ ability to solicit homeowners who may not need a new roof.

Sen. Jim Boyd

“I believe SB 76 will have an impact, but there’s still work to do,” said Boyd, who also is the owner of an insurance agency in Bradenton. “It’s something that we can’t wait another year to tackle.”

Roofing vendors have doubled down on solicitations and “direction to pay” agreements as a way around 2019 legislative restrictions on assignments of benefits.

“We’ve got to do something,” Boyd said. “They’re putting their finger up to us now.”

On the other hand, Boyd and others on the panel said there appears to be little appetite in the upcoming session for lowering the threshold on the state’s $17 billion Hurricane Catastrophe Fund. Some insurance industry advocates have called for the cat fund to be available to insurers when industry losses in a single year reach about half of what the threshold is now.

Lawmakers, who will be busy during the 60-day session dealing with election redistricting and other issues, also will have little appetite to revisit automobile insurance laws. The Legislature last year repealed Florida’s personal injury protection requirement, but Gov. Ron DeSantis vetoed it. The 2022 session begins Jan. 11.

Addressing the issue of bad-faith claims also will have to wait until next year, lawmakers said. Insurance attorneys have said Florida law encourages plaintiffs’ lawyers to file bad-faith claims much too quickly, even when claims have been legitimately denied, costing insurers millions in litigation costs and attorneys’ fees.

And no one on the lawmaker panel brought up a change that the residential property insurance industry has called for in recent years: Allowing more policies to pay the actual cash value when roofs are damaged, instead of the full replacement cost that Florida law now requires in many cases. Insurers have charged that unscrupulous adjusters and contractors often talk homeowners into filing claims on older roofs, even when the roof damage is mostly from wear and tear.

“It’s incumbent upon us now to get some reform on the actual-cash-value problem,” Bob Ritchie, president of American Integrity Insurance Group, said during an earlier summit panel.

Laws and regulations in some 40 other states have made it clear that homeowner policies, unless specified, do not cover normal maintenance and wear and tear, he said, adding that the governor and Florida House and Senate leaders must address the ACV issue in the upcoming session. “We also need to be in a position of convincing (Insurance Commissioner David) Altmaier that we can get an appropriate actual-cash-value solution,” Ritchie said.

Sen. Jeff Brandes

Sen. Jeff Brandes, R-St. Petersburg, made it clear that the insurance industry has done a terrible job of explaining to consumers how dire the market is now and how out of control lawsuits are. And few members of the Legislature are knowledgeable enough or are willing to help.

“We have real problems and the leadership in the Legislature is not coming to the sound of your guns,” he said. “You’re on your own until things get radically worse.”

 Sunil Dhawan

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

Term Plan Premium Increase News: If you are looking to buy a term insurance plan, you might have to hurry up if you also want to save on cost. The premium of term insurance plans may soon witness a hike if the global reinsurers increase their rates. “Yes, it is true. Some re-insurers are expected to increase the rates. However, such information is kept confidential and only made available to the public once it is finalized and rolled-out,” informs Varun Gupta, Chief & Appointed Actuary, Bharti AXA Life Insurance.

The term plan premium increase is attributed to an impending hike in the re-insurance rates by the global re-insurers. Some portion of the lives underwritten by life insurance companies is passed on to the re-insurers who bear the risk for which the insurers pay a premium to them. When reinsurers hike the reinsurance rates, there is a subsequent increase in the premium rates that they have to offer to the potential buyers of term plans.

The impact of Covid-19 led claims could be one of the reasons for term plan rates to be revised by the insurers. “Due to multiple factors including Covid-19, the actual amount of claims settled has been higher than expected. Hence, keeping in mind future macroeconomic factors, the underlying mortality rate, along with other criteria, some reinsurers have decided to revise the rates,” adds Gupta.

However, after the re-insurers hike their rates, there may not be an immediate or corresponding impact on the term insurance premium rates in India. “The decision to increase the premium rates depends on a company’s strategy. Insurers can increase the premiums, absorb the increase in premiums by reducing their margins and can also refile the product to achieve the business outcomes basis their strategy. The range of change in the premium hence will depend from insurer to insurer,” says Gupta.

A term insurance plan provides life cover till the period chosen by the policyholder. On death anytime during the policy term, the sum assured (life coverage amount) is paid to the nominee, while on surviving the policy term, there is no maturity value. Being a pure protection cover, the term plans are low-cost, high cover plans.

“Term insurance is mostly taken for a longer duration of 25 years to 40 years as the policy term. In such a scenario it makes a lot of sense to avail the plan at lower premiums in case you are planning to buy a cover for yourself. Once you purchase a term insurance policy, the premiums do not change for the duration of the policy. The monetary savings can be quite substantial over a period of 25 to 40 years. I would strongly advise a term insurance cover of up to 20 times your current annual income at the earliest,” says Deepak Yohannan, CEO, MyInsuranceClub

If at all the term insurance premium rate gets revised, it may not be the same across all strata, as the actual revised premium rates will differ across age-groups, gender, sum assured chosen etc. Importantly, even if there is a hike, there will not be any impact on the existing policyholders. “Life insurance premiums are locked from the day one purchases the insurance policy. Hence, existing customers or customers who are looking to buy insurance in the next few days, need not worry about the increase in premiums as their premiums amount they are currently paying will remain locked and not be impacted by the reinsurers decision to increase premiums,” says Gupta.

Once purchased the premium remains fixed for the entire tenure of the policy. Any future changes on premium does not impact the outgo for the policyholder. Buying a term insurance plan early on before the increased rates comes into effect will let you lock-in to the rates for the entire policy term.

Term plan coverage is a must for anyone with financial dependents and one should avoid procrastination in buying them. Ideally, one should get a life cover of at around 15 times of one’s annual take-home pay and keep reviewing it every five years. Only once you have adequate term insurance cover, start saving for your long term goals for a worry-free financial planning.

December 3, 2021

Please call  Lee from  USAsurance Powered by WeInsure & Calle Financial. 954-270-7966 or 833-USAssure at the office. My email is lee@myUSAssurance.com . I am Your Insurance Consultant  about Home Insurance, Auto, Flood, Private Flood, Car, Life Insurance, Mortgage protection, Financial Products, Business  & Commercial Policies, & Group Products for business owners to give Employees benefits at no cost to the employer. My email is lee@myUSAssurance.com

A Florida judge said that lawsuits over the collapsed condominium tower in Surfside will likely go to trial by summer. But thousands of dollars in cash found in the rubble could be distributed to former residents within weeks.

And the cause of the collapse could take two years to determine, a building official said at an insurance conference Thursday.

A court-appointed receiver said this week that about $750,000 discovered in the debris will be sent to the U.S. Treasury, where it will be cleaned up and counted. Then a check will be sent to the receiver so the money can be distributed.

More than likely, the receiver and the judge will create a system to let the surviving Champlain Tower South residents who believe they lost cash to file a claim, said local news reports. Some of the money was found in purses and wallets and can be assigned to former condo residents.

The receiver, Michael Goldberg, told the judge overseeing the matter that he also is working with county officials to develop a plan for condominium residents to claim personal belongings.

Also on Wednesday, Miami-Dade Circuit Judge Michael Hanzman said at a hearing that he will move expeditiously toward a summer trial date in the lawsuits. When the tower collapsed in June, more than 98 people died, and dozens of family members and condo owners have filed suits. A mediator is also working to find a way to allocate damages, money from the sale of the condo site, and insurance proceeds between families who lost loved ones and condo owners who lost property.

At the Florida Chamber of Commerce’s annual insurance summit Thursday, the chair of the Florida Building Commission said it could take as long as two years for engineering experts to determine the causes of the collapse.

The south Florida attorney who chaired a Florida Bar task force that has recommended sweeping statutory changes to help prevent future collapses, said at the summit that part of the problem is that Florida requires no maintenance standards for condominiums.

Sponsored by SIAA

“This hotel we’re in now and the office building you work in, they all have maintenance standards. Condominiums don’t,” said Bill Sklar, a condominium law attorney who represents developers and lenders. “They have a duty to maintain, but no standards.”

William Sklar (University of Miami School of Law)

Meanwhile, almost every condominium in Florida is underinsured by at least 20%, thanks to increased replacement value due to rising cost of furnishings and construction materials, said Adam Lopatin, senior vice president of commercial lines for USI Insurance Services.

Lopatin, who also spoke Thursday at the Chamber summit, said the Champlain Towers collapse has prompted many carriers to pull back from writing condo coverage. “The market is terrible now,” he said.

The squeeze will likely cause many condo associations and owners to turn to Citizens Property Insurance, the state-backed insurer of last resort. But while a misconception exists that Citizens will have to accept the properties, Citizens is now refusing to write some policies as it moves to reduce its exposure and number of policyholders.

The speakers on the panel said they expect the Florida Legislature, which convenes in five weeks, to pass new condo laws that will require more inspections, new maintenance standards and a prohibition against allowing condo associations to defer needed maintenance.

December 2, 2021

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Thanks in part to higher surplus levels and favorable risk-adjusted capitalization at the start of 2021, the U.S. personal lines insurance segment has managed to navigate the challenges of this year including above-average catastrophe activity, a return to pre-pandemic frequency trends, and increased loss cost severity.

Looking ahead to 2022, ratings agency AM Best is maintaining a stable market segment outlook on the U.S. personal lines insurance industry. AM Best analysts point to the segment’s strong risk-adjusted capitalization, underwriting actions limiting volatility in the homeowners line and the acceleration of the use of technology in the pandemic environment as reasons for the outlook.

Best’s Market Segment Report, “Market Segment Outlook: U.S. Personal Lines,” finds that the segment’s risk-adjusted capitalization levels remain robust, with positive cash flows and favorable liquidity further supporting the position.

Although many companies held off on pricing increases early in the pandemic, they resumed rate actions in late 2020 and continued throughout 2021. Higher pricing was needed, as catastrophe activity spiked in 2020 and remained above average in 2021. Along with other various underwriting actions such as exposure management and enhanced reinsurance, carriers were able to limit the impact of catastrophe losses in 2021.

Technology initiatives to improve personal lines insurers’ underwriting and pricing tools picked up significantly during the pandemic, according to the report. Insurers are seeing auto claims frequency rebound alongside adverse severity trends at the same time that the industry is facing major supply chain disruptions and higher inflation, which are resulting in higher costs for materials and parts.

“In recent years, the best-performing auto and homeowners’ insurers have invested significant amounts of resources into technology to improve their underwriting and pricing tools. Advances in predictive modeling and pricing analytics, as well as the use of third-party data, have provided carriers greater opportunities to pursue profitable growth,” the report says.

AM Best advises that innovative use of technology and data analytics to strengthen underwriting, claims handling and ratemaking remain key to reaching profitability targets. The analysts predict that insurtech in both the auto and homeowners markets will continue to grow.

While a number of factors favor the segment, personal lines writers also face challenges heading into 2022. These include auto loss frequency returning to pre-COVID levels and severity increasing while having premium trends keep pace. Insurers also face the likelihood of a greater number of potentially worse catastrophe events and increasingly problematic claims from secondary perils.

Another challenge is rising reinsurance costs, which the report warns can pressure operating performance as well as balance sheet strength. “Primary carriers may struggle to pass these higher costs through to their customers for fear of losing market share and due to hurdles from regulatory restrictions in certain states,” AM Best concludes.

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