News Briefs

ALABAMA

Insurers Offering Grace Periods

Some insurance companies are suspending billings or offering grace periods for payments from Alabama customers affected by Hurricane Katrina, according to Walter Bell, Insurance Commissioner.

AFLAC, Alfa, Allstate, Farmers, Nationwide and State Farm are instituting plans, and Blue Cross Blue Shield of Alabama has suspended billings statewide, Bell said.

“It is imperative that Alabamians who live in affected areas-particularly where there is no mail service-to make contact with their insurance company to see what relief is available,” Bell said.

Bell’s department plans to offer a grace period to insurance agents whose licenses and company appointments are about to expire.

The commissioner said agents who live in Baldwin, Mobile and Washington counties are eligible, as are agents from coastal Mississippi and southeastern Louisiana who have nonresident licenses.

Vesta Predicts Its Katrina Losses

Preliminary gross income losses of from $500,000 to $1.2 million have been predicted by the Vesta Insurance Group of Birmingham, Ala. for damages caused by Hurricane Katrina.

Vesta’s Florida Select unit has about 3,500 in-force windstorm policies in South Florida where the hurricane first made landfall.

A company spokesperson said Vesta does not have any exposure on policies in Louisiana or Mississippi and only expects to have minimal claims in surrounding states.

Vesta’s Units include Florida Select, Texas Select, California Select and the Shelby and Vesta Insurance Companies. The company specializes in home and auto products.

FLORIDA

Rule Caps Adjuster Fees at 10 Percent

An emergency rule capping adjuster fees at 10 percent of the claim payment has been issued in Florida to prevent Hurricane Katrina’s victims from becoming “gouged” by public insurance adjusters.

In addition to limiting fees, the rule contains other consumer protections for victims who consider contracting with public adjusters. It gives consumers 14 days to cancel a contract made with a public adjuster without penalty and prohibits public adjusters from demanding any up-front payments or compensation prior to final settlement of the claim.

Florida’s Chief Financial Officer Tom Gallagher found the need to impose the rules after Hurricane Charley hit in August 2004 and there were reports of adjusters demanding fees of up to 25 percent.

FEMA Denies Katrina Victims Aid

South Floridians whose homes were destroyed or heavily damaged by Hurricane Katrina have to look elsewhere for someone to pay their lodging and repair expenses as the Federal Emergency Management Agency has refused their requests.

The same day FEMA denied individual assistance, the agency expanded the amount it plans to reimburse local governments for repairs to public property in Miami-Dade, Broward and Monroe counties. The assistance to local governments will probably amount to more than $100 million.

FEMA spokeswoman Frances Marine said the agency relied on a combination of factors to determine that South Florida was not hit hard enough to receive the aid, including the fact that about half the damaged properties in Miami-Dade were insured and that damage in Broward was mostly minor.

FEMA’s individual assistance program would have provided up to $26,200 per household to pay for long-term rentals, repairs and temporary stays in hotels. In some cases, FEMA also pays for funerals for storm victims.

Local and state emergency managers said they were told by FEMA officials that the agency denied the aid because the state did not have 800 homes destroyed or severely damaged.

S. Fla. Assistance Offices

Four South Florida locations where consumer service professionals will be assisting victims of Hurricane Katrina have been announced by Tom Gallagher, Florida’s CFO.

Department of Financial Service specialists will be at: Publix Shopping Center, 12850 Biscayne Blvd. N. Miami; and Home Depot, 13501 S. Dixie Hwy., Kendall.

Specialists will also be at Miami-Dade disaster assistance sites located at: Caleb Center, 5400 NW 22nd Ave, Miami; and South Dade Government Center, 10710 SW 211 St, Miami.

Insurance specialists will be available to help Floridians from 8 a.m. to 6 p.m.

DFS hurricane insurance assistance in Broward County will be available at 499 NW 70th Ave., Room 301B, Plantation or by calling (954) 797-8325.

In Pensacola, the DFS Consumer Services office is located on 610 E. Burgess Road, phone (850) 453-7800.

Gallagher said his director of the Division of the State Fire Marshal was deployed to Mississippi to help oversee search and rescue efforts. Law enforcement detectives will join six teams from Florida to aid in law enforcement and search and rescue efforts. These efforts presently are concentrated in six lower Mississippi counties and along the Gulf Coast. Ambulances and fire engines will also be provided to impacted areas.

Aflac Announces 90-Day Grace Period

Columbus, Ga.-based Aflac Insurance has announced it will allow a 90-day grace period for premiums due from its policyholders in counties and parishes proclaimed disaster areas by the Federal Emergency Management Agency due to Hurricane Katrina.

Aflac said it had extended the grace period to assist the many families displaced by the recent catastrophe. FEMA declared counties in Alabama, Florida, Mississippi and parishes in Louisiana as disaster areas.

Nationwide Cuts Back

The Nationwide Mutual Insurance Company has announced it is taking steps to reduce its property exposure in Florida. After these reductions, Nationwide said it will continue to serve more than 570,000 policies in Florida, including 240,000 homeowners. Nationwide will increase its focus on auto lines, commercial casualty lines and financial services offerings.

“As we continue to analyze our business strategy, it has become increasingly apparent that we are not comfortable with our current exposure in the Florida property market. While these are difficult decisions, we have an obligation to act in a responsible and thoughtful manner to ensure long-term stability for Nationwide policyholders in Florida and across the country,” Jeff Rommel, regional vice president of Florida Operations, said. “These efforts will not impact Nationwide policyholders in Florida this hurricane season.”

Nationwide Insurance Company of Florida will reduce its personal and commercial lines exposure in Florida by taking the following actions: It will not renew approximately 35,000 homeowners and 4,800 mobile home policies beginning March 1, 2006.

Nationwide will continue to serve more than 240,000 personal lines property policyholders after these reductions are implemented. It will no longer write mobile home policies or new personal property policies beginning Sept. 1, 2005. It will not renew approximately 12,000 commercial policies primarily consisting of condominiums, apartments and rental properties beginning March 1, 2006.

Nationwide will work with agents to move impacted policies to other property carriers over the next several months.

NCCI Request Reduced WC Rates

An overall 4.5 percent decrease for workers’ compensation in Florida in five major industrial classifications has been requested by the National Council on Compensation Insurance Inc. of Boca Raton, Fla.

This is the third time since major reform legislation was passed in 2003 that NCCI has filed to decrease rates. The filing is under review by the Florida Office of Insurance Regulation in Tallahassee, and if approved, will take effect Jan. 1.

The latest cuts would bring rates in manufacturing down 1.3 percent, in contracting down 2 percent, in office and clerical down 5.5 percent, in goods and services down 5.2 percent and in all other industrial classes down 8.5 percent.

Finite Reinsurance Requirements Ended

The Florida Office of Insurance Regulation has withdrawn proposed state-specific requirements regarding the accounting treatment of finite reinsurance, making it the second state to do so. The office has opted instead to implement the uniform standards that the National Association of Insurance Commissioners is in the process of adopting.

“PCI is pleased with the actions of Commissioner Kevin McCarty and the OIR for its withdrawal of the proposed additional state-specific finite reinsurance requirements,” William Stander, Property Casualty Insurers of America regional manager, said. “PCI strongly supports insurer compliance with all reinsurance accounting guidance, and supports additional disclosures with respect to reinsurance contracts with “finite” characteristics so that regulators can determine the contracts that they need to examine more carefully.”

The OIR issued a withdrawal notice to the finite reinsurance rule proposed earlier this year. This withdrawal appears to recognize that the NAIC is near final adoption of additional disclosures regarding finite reinsurance in the NAIC’s annual statement, including a CEO and CFO attestation.

Insurers to Pay $50M in Jacksonville Incinerator Cleanup

Insurance companies formerly insuring Jacksonville, Fla. will pay $50 million, while the city will pay $25 million, in the $75 million settlement of a class-action lawsuit filed in 2003 by local residents. The city settled the lawsuit claiming residents were exposed to lead, arsenic, mercury and other toxins, including toxic ash produced by municipal trash incinerators the city operated from the 1910s to the 1960s.

The suit also sought damages for civil rights violations because the incinerators and ash dump burial sites were in predominantly black neighborhoods. The city agreed to expedite portions of a plan to replace contaminated soil at four ash sites.

Provisions of the settlement include expediting portions of a plan to replace contaminated soil at four ash sites and relocating some residents from the most polluted sites.

NORTH CAROLINA

N.C. Farmers Receive Assistance

North Carolina farmers who suffered flooding losses from last year’s hurricanes will soon receive disaster-assistance grants from the North Carolina Department of Agriculture and Consumer Services. The checks issued to date will help farmers with the cost of removing debris from farmland, repairing fences and conservation structures, and restoring damaged farmland. The assistance is going to farmers who received aid through the U.S. Department of Agriculture’s Emergency Conservation Program.

The General Assembly earmarked a total of $11.7 million for agriculture-related losses as part of the state’s overall hurricane-relief effort, known as Operation Brighter Day. Fifty counties are eligible for assistance.

Discount Health Insurance Plan Warning

Seven North Carolina Better Business Bureaus and 148 Chambers of Commerce are receiving letters of caution from Insurance Commissioner Jim Long urging them to warn their members and citizens about the differences between legitimate health insurance and the increasingly common “discount plan,” a product often is marketed almost as if it is insurance, offering benefits at a low monthly rate.

While some of these plans are legal, they are significantly different from actual insurance and provide drastically different benefits. Many consumers, however, are fooled into thinking they are purchasing insurance at a low price, and are surprised to learn the discount plan may cost them more in the long run.