February 2016

What is D-1 Disclosure Form in Insurance

What-is-D-1-Disclosure-Form-in-InsuranceSeeing the words “not licensed”, “insolvency” and “payment of claims may not be guaranteed” on an insurance policy can, understandably, cause concern with insureds, especially those with little to no experience with the excess and surplus (E&S) marketplace. Let’s take a closer look at required disclosure wording used on surplus lines policies so when your insureds have questions, you can put them at ease.

What is D-1 Disclosure Form in Insurance

Prior to binding insurance coverage with a non-admitted carrier, you are required to sign the Disclosure Form (D-1 Form), formally making you aware of the insurance policy being issued by the non-admitted insurance company.

1. “The insurance policy that you are applying to purchase is being issued by an insurer that is not licensed by the state of California.”

Wording on a policy that references an unlicensed carrier means that the policy was issued by a non-admitted insurance company. A non-admitted insurance company is not licensed in the state where the risk or insured is domiciled and does not file rates in that state. “Not licensed as an admitted carrier” does not mean unregulated. Each insurer must meet certain criteria to be an eligible non-admitted market, including regulations for solvency. It does mean that the carrier has the ability to set their own rates for the classes of business they write, leading to the flexibility in rate and form that is a key differentiator in the E&S marketplace.Read More »What is D-1 Disclosure Form in Insurance

Liability Gaps with K-12 Schools Student Accident Coverage

While more than 1.35 million kids suffer a sport-related injury that requires emergency room treatment each year, at an estimated cost of $935 million, student accident coverage is what can help to mitigate the “out of pocket” losses. At K-12 schools, these accidents are frequent and sometimes severe. In today’s rapidly changing health insurance landscape, out of pocket medical expenses… Read More »Liability Gaps with K-12 Schools Student Accident Coverage

Cyber Coverage for Bank Assessments: What Merchants Need to Know

Cyber Coverage for Bank Assessments What Merchants Need to KnowCoverage under a cyber liability insurance policy with respect to assessments levied on behalf of a financial institution or payment processing entity varies quite significantly throughout the marketplace. The nuances of the coverage differences will continue to grow as more and more companies begin to recognize the exposure inherent in electronic payment processing.

Monetary fines are levied by the card brands against merchants as a result of non-compliance with the payment card industry data security standards (PCI-DSS) which are set by the payment card industry security standards council (PCI SSC). A very important distinction lies within the definition of fines, costs or expenses as respects common cyber policy language. “Fines” are often merely reserved for costs levied directly against an insured for the breach of PCI standards set by the PCI SSC. The fines, which are punitive in nature, result from failing to comply with the standards. On the other hand, “assessments” are costs specifically associated with liabilities arising out of a Merchant Service Agreement (MSA). The card brands are looking to recoup expenses that resulted from a security breach by the merchant. Assessments can be costs resulting from a breach of the card brand rules, costs passed along to the merchant through the withholding of funds by a merchant bank, card reissuance expenses, fraud losses and a number of other liabilities arising out of obligations under an MSA.
Read More »Cyber Coverage for Bank Assessments: What Merchants Need to Know