News Briefs

MASSACHUSETTS

CAR NAMES COMMERCIAL CARRIERS: Commonwealth Auto Reinsurers has advanced its new commercial auto limited servicing carrier program by selecting the six carriers that will service this residual market business beginning next January. The six carriers are St. Paul Travelers, Hanover, Arbella, Commerce, Pilgrim and Safety.

All producers should be notified by July 1, 2005, of their servicing carrier assignments. CAR officials hope that the assignment distribution will equitably assign producers to servicing carriers in terms of volume, loss ratio and major classification type while minimizing market disruption. For voluntary agents who currently have multiple servicing carrier relationships, assignments will be made based on the largest volume of ceded premium where possible. Exclusive Representative Producers assigned to non-servicing carriers will be assigned to servicing carriers with the goal of improving equity. Voluntary agents representing only one servicing carrier and ERPs assigned to servicing carriers will be assigned to those carriers in most instances to minimize market disruption while maintaining equity.

Producers will not be able to request a particular carrier, although a producer may file an appeal of an assignment only for a legitimate business purpose.

CONN. RESTRICTS CELL PHONES: Connecticut is slated to become the third state to prohibit drivers from using hand-held phones, under a bill that has been given final legislative approval by the state Senate. The Senate voted 32-4 in favor of the ban and sent the legislation to Gov. M. Jodi Rell, who was expected to sign it into a law that would take effect Oct. 1.

The bill was first introduced in 1999 but stumbled in the Senate over the years. But because of new technology-phones can now send videos, play music and send e-mail and text messages-a top lawmaker gave the bill unexpected momentum this year when he changed his mind. “Many of you know two years ago I was one of the strongest opponents of this bill,” said Sen. Billy Ciotto, D-Wethersfield, co-chairman of the legislature’s transportation committee. “The cell phone that I knew two, three years ago is no longer the cell phone I know today.”

When the bill was first introduced, there were 500,000 cell phones in use, lawmakers said. Today, there are more than 2 million. Connecticut would join New York, New Jersey and Washington, D.C., as the only areas in the country with bans on the use of hand-held phones in automobiles.

RHODE ISLAND

Nightclub Victims’ Benefits Cleared: The Rhode Island Supreme Court has lifted a stay on the payment of about $180,000 in death benefits to the families of four employees killed in The Station nightclub fire.

The owners of the club, Jeffrey and Michael Derderian, had been ordered by state Workers Compensation Court Judge Bruce Morin to pay the benefits because they did not carry the required workers’ compensation insurance at the West Warwick club. Their lawyers asked the Supreme Court for the stay, and also to review a separate Workers Compensation Court order that the Derderians were personally responsible for the employees’ injuries and deaths. The high court declined to review that order.

The Supreme Court action means the issue of whether the Derderians were personally responsible will go back to Workers Compensation Court for trial, said Dyana Koelsch, spokeswoman for the state courts system.

A fire, sparked by a band’s pyrotechnics, swept through the club on Feb. 20, 2003, killing 100 people and injuring more than 200 others. If the Derderians had the insurance for their employees, the families would have received a death benefit. The Derderians are each charged with 200 counts of voluntary manslaughter in connection with the deaths of 100 people in the blaze.

VERMONT

NEW YORK

SENATE TIGHTENS ‘DO NOT CALL’ LAW: The New York State Senate gave final legislative approval to legislation (S.4180), sponsored by Senator Charles Fuschillo (R-C, Merrick), chairman of the Senate Consumer Protection Committee, that reworks the state’s “Do Not Call” Registry to eliminate more telemarketing calls.

“This would clearly define what is and what is not acceptable under the guidelines of the New York State registry and allow the consumer more opportunity to protect their privacy,” said Senator Fuschillo. “This would make the state and federal “Do Not Call” laws more consistent, and help avoid any confusion over the rights afforded to consumers.”

The changes close a loophole in current law that allows telemarketers to make unsolicited calls to ask consumers for a “face-to-face” meeting or sales presentation to discuss an offer, as long as the consumer is not required to pay for any goods or services until after the sales meeting or presentation.

In addition, the legislation amends the state law permitting businesses to make unsolicited telemarketing calls to customers with whom they have an existing business relationship. Under this proposal, businesses would not be allowed to make telemarketing calls to consumers with whom they have an established business relationship, if those customers have asked not to receive them.

More than four million phone numbers have been registered with the state call blocking registry since its inception in 2000. The legislation has been sent to Governor George Pataki for his consideration.

CLAIM FROM 9-11 OPPOSED: Responding to a new claim by the Port Authority of New York and New Jersey that it is separately insured for a $2.1 billion “shortfall” in Silverstein property insurance following the Sept. 11, 2001, terrorist attack, a group of insurers has filed a complaint in federal court contending the claim is without merit.

The Port Authority sold much of the World Trade Center complex in July 2001 to a group of investors led by Larry Silverstein under 99-year lease agreements. The Silverstein interests are required to rebuild the destroyed property, and they also insured the property for $3.546 billion-more than twice the amount of insurance previously maintained on the property.

The Port Authority joined the Silverstein interests in litigating in the New York federal court for more than three years their rights to coverage under the Silverstein insurance. Citing the outcome of that litigation, the Port Authority recently stated that there is at least a $2.1 billion “shortfall” in the amount necessary to rebuild 10 million square feet of commercial space at the World Trade Center.

The group of insurance underwriters opposing the claim includes Underwriters at Lloyd’s, Axa Global Risks Ltd., Copenhagen Reinsurance Company, Great Lakes Reinsurance (UK) Ltd.; Houston Casualty Company, QBE International Insurance, Sirius International Insurance Corp., Wurttembergische Versicherung AG and Zurich Specialties London Ltd.

The Port Authority maintained its own insurance on other property at the site and throughout the New York metropolitan area and has already received payments of $950 million from its insurers for damage on 9/11 to WTC property not controlled by the Silverstein interests, according to lawyers for the insurers. The Port Authority now claims, however, that this insurance separately covers its interest in the supposed “shortfall” in the Silverstein property insurance and that it is entitled to double the $1.5 billion limit of its insurance-or a total of $3 billion.

NEW JERSEY

FRAUD UNIT UNDER SCRUTINY: New Jersey’s award-winning office created to root out insurance fraud is under scrutiny itself, with the state auditor probing allegations the insurance industry was billed about $4 million for employees who never worked on fraud cases.

The probe stems from a letter to a ranking state senator by a retired investigator from the state Division of Criminal Justice who said 43 employees had their salaries paid with insurance industry money but did little or no work on fraud cases. “We investigate doctors for submitting false bills to insurance companies, and we put doctors in jail for that. What’s the difference here?'” Edward Buttimore, the retired investigator, told The Star-Ledger of Newark.

Criminal Justice Director Vaughn McKoy, whose agency oversees the New Jersey Office of Insurance Fraud Prosecutor, denied the office misspent money.

State Auditor Richard Fair began investigating the insurance fraud prosecutor’s office in January at the behest of McKoy and the state attorney general after an anonymous letter that made claims similar to Buttimore’s was sent last fall to various government offices. Adler requested the auditor’s intervention after receiving Buttimore’s letter.

Buttimore included the names of the 43 employees, a list he said he compiled by cross-checking a criminal justice division roster with a list of names submitted to the insurance industry as working on fraud cases.

Criminal Justice spokesman John Hagerty said those employees could be providing services to the fraud prosecutor’s office that Buttimore is unaware of.

PENNSYLVANIA

DISASTER AID TOPS $3.4 MILLION: The Pennsylvania Emergency Management Agency and the Federal Emergency Management Agency announced that disaster assistance approved for residents of Bradford, Bucks, Columbia, Luzerne, Monroe, Northampton, Pike, Susquehanna, Wayne and Wyoming counties affected by the heavy rain and floods that occurred April 2-3, 2005, has topped $3.4 million.

Housing Assistance for homeowners and renters totals $2.95 million. Housing Assistance may include lodging expenses, repair assistance and temporary rental assistance. Other Needs Assistance reached $461,222. Other Needs Assistance may include medical, dental, and funeral expenses; furniture, clothing and certain appliances; vehicle costs; and other eligible expenses. The U.S. Small Business Administration approved $560,100 in low interest disaster loans for homeowners, renters and business owners.

The number of individuals who registered for assistance was 2,549. A total of 1,421 applications were approved.

MARYLAND

EHRLICH PULLS POLICE GOGGLES: Maryland state police will not be using night vision equipment to spy on motorists to see if they are wearing seat belts. Reacting quickly to complaints, Gov. Robert Ehrlich recently directed the state police to discontinue testing the effectiveness of the equipment.

“Gov. Ehrlich isn’t a fan of big brother tactics when it comes to law enforcement. That’s the very reason why he vetoed speed cameras,” said Shareese DeLeaver, a spokeswoman for Ehrlich. “The governor felt there is an appropriate time and place for the use of night vision equipment. However, he did not feel that seat belt enforcement rose to that level.”

Borrowed from the military, the equipment was used only during a test in Montgomery County. The equipment already has been returned, Greg Shipley, police spokesman said.

When the seat belt law was passed in 1986, police could only issue a citation if they stopped a vehicle for another violation, Shipley said. But the law was changed in 1997 to make it a primary violation, allowing police to stop a car if they see someone is not buckled up. Shipley said state police would continue to enforce the law when motorists are stopped for speeding and other violations.

Topics Carriers Auto New York Fraud Legislation Workers' Compensation Law Enforcement New Jersey Property Market