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Bank of America Settles Forced-Place Insurance Claims for $228M

I’m glad to see this issue has finally been given the attention it deserves, as many home buyers were subjected to illegal “forced placed” coverage when mortgage companies constantly “sold” mortgages (with tax/insurance escrow accounts) to each other. It seems like everything but the insurance information would be provided to the new lender so they would automatically issued the forced placed coverage. When a home buyer would call the mortgage company he would always be told their monthly increases was because of the insurance costs. And he would never be told it was forced placed coverage. In the state of Main, these costs, for instance, often were in the range of $2,700 to $3,500 per year causing monthly increases of $200-400.

On November 10, 2010, American Banker published an article describing major mortgage lenders’ and servicers’ questionable and often illegal practices related to force-placed
insurance. The article revealed for the first time the exceptionally profitable exclusive relationships, collusive activities, and circular arrangements among the mortgage lenders and
servicers, their affiliates, and their cooperating insurers, most of which are Defendants here.
Lenders and servicers force place insurance when a borrower fails to obtain or maintain proper hazard or flood insurance coverage on property that secures a loan. Under the
typical mortgage agreement, if the insurance policy lapses or provides insufficient coverage, the lender has the right to “force place” a new policy on the property and then charge the premiums
to the borrower.
The arrangements revealed by American Banker comprise an extremely lucrative profit-making scheme in the hundreds of millions of dollars. There are just two insurance companies that control the entire market for forced-placed policies in the country — Assurant and QBE.
Assurant works through its subsidiaries Voyager Indemnity Insurance Company and American Security Insurance Company. These companies and their affiliates enter into exclusive relationships with the major mortgage lenders and servicers to provide the policies. The top four servicers that work with Assurant are Wells Fargo Bank, Citi, HSBC, and Chase. The top servicer that works with QBE/Balboa is Bank of America.
To maintain their exclusive relationships with these lenders, the insurers pay unearned “kickbacks” of a percentage of the force-placed premiums ultimately charged to the borrower, offer them subsidized administrative services, and/or enter into lucrative captive reinsurance deals with them.

Although force-placed insurance is designed to protect the lender’s interest in the property that secures the loan and thus should not exceed that interest, lenders often purchase
coverage from their exclusive insurers in excess of that required to cover their own risk. And, as a matter of practice, the major lenders and servicers collude with the two major force-placed
insurers to manipulate the force-placed insurance market and artificially inflate the premiums charged consumers, resulting in premiums up to ten times greater than those available to the
consumer in the open market. American Banker reported that “Though part of the extra expense can be explained by the higher risks associated with insuring the homes of delinquent borrowers,
force-placed policies generate profit margins unheard of elsewhere in the insurance industry even after accounting for the generous commissions and other payments that servicers demand.”

But finally Bank of America Corp. agreed to pay $228 million to settle claims the bank overcharged for insurance homeowners were forced to accept when their regular policies lapsed. The amount was disclosed in a document requesting approval for the accord filed yesterday in Miami federal court. Lawyers for homeowners told a federal judge in February that the Charlotte, North Carolina-based bank had agreed to a deal without providing further information.

The deal is an “extraordinary settlement” that provides “prospective relief that would effectively end the lender- placed insurance practices at issue in this case,” lawyers for plaintiffs said in the Bank of America case.
Read More »Bank of America Settles Forced-Place Insurance Claims for $228M

Frozen 2

The California 2nd District Court of Appeal overturned a lower court ruling that the lawsuit against White Memorial Hospital was filed too late, the ABC News reported on 4/3/2014. M.A. was declared dead in July 2010 after suffering a heart attack and was placed in a freezer at the Boyle Heights hospital. Morticians who received her body a few days later discovered that it was face down and the woman had a broken nose and disfiguring cuts and bruises to her face, according to court papers. One year later a pathologist concluded the woman had been frozen alive, “eventually woke up”… Read More »Frozen 2

Top 10 States and Cities for Job Growth

According to Arizona State University W.P. Carey School of Business that provides rankings and analysis of the winners and losers based on the latest figures from the U.S. Bureau of Labor Statistics – overall, 12 states showed job growth of at least two percent last year, the same pace as in 2012. The number of jobs added nationwide last year was 2.26 million. Final, revised numbers on state and city job growth for the year 2013 shows top 10 states for non-agricultural job growth, comparing 2013 to 2012:

1. North Dakota – up 3.6%
2. Utah – up 3.2%
3. California – up 3%
4, 5. Texas and Colorado– 2.9%
6. Nevada – up 2.7%
7. Idaho – up 2.6%
8. Florida – up 2.5%
9. Washington – up 2.2%
10. Arizona – up 2.1%Read More »Top 10 States and Cities for Job Growth

April is National Safe Digging Month

Safe DiggingCall 811 before you dig. Whether you’re planting a garden, building a fence or remodeling your home, no project is too small to call 811. Damage from digging is a common cause of pipeline accidents. One easy, free call to 811 Underground Service Alert (USA) at least two working days before you dig gets your utility lines marked so you can dig safely. This free service will notify underground utility operators in the area of your planned work.

Safe digging tips:Read More »April is National Safe Digging Month

How to Reduce Liabilities and Lower Health Plan Expenses for Public Entities

Public Entities Struggle to Meet Obligations
From the local to the state level, the days when governments could hike taxes to raise needed funds are mostly a memory. In the wake of the Great Recession, entities from school districts to cities and counties continue to struggle, and governments are finding it difficult to ask more from a shrinking tax base. In this environment, almost three dozen municipalities haved filed for bankruptcy since 2010. The latest filing was the largest.

In late February, officials in Detroit detailed a plan to exit the largest municipal bankruptcy in U.S. history, looking to restructure $18 billion in debt. According to The Wall Street Journal, employee and retiree pension and healthcare obligations accounted for about $7 billion of that debt — almost 40 percent of the city’s total. Short of bailing on these obligations —The Journal estimates Detroit’s public employees will have to settle for as little as 30 percent of what was initially promised — there are still ways to survive in this environment.Read More »How to Reduce Liabilities and Lower Health Plan Expenses for Public Entities

New California Auto Insurance Payment Plans

Effective April 1, 2014, we have made updates to our California personal auto pay plan options. 6 month plans: – 16.7% down with 5 installments (electronic funds transfer) – 20% down with 4 installments – 20% down with 5 installments – 20% down with 5 installments (electronic funds transfer) – 50% down with 1 installment – Paid In Full 12 month plans: – 10% down with 10 installments (electronic funds transfer) – 12.5% down with 10 installments – 20% down with 10 installments – 20% down with 11 installments (electronic funds transfer) – Paid In Full If you have questions… Read More »New California Auto Insurance Payment Plans

Office Ergonomics – Working Comfortably

Introduction

Office ergonomicsOffice ergonomic improvements involve the application of basic workplace principles to address a worker’s discomfort, chronic pain or repetitive motion injuries. Good ergonomics does not always mean obtaining new furniture and equipment. A large part of ergonomics and comfort involves workstation organization, equipment orientation and work habits. This bulletin reviews equipment and materials that typically are used in a computer workstation and provides suggestions to minimize the risk of injuries.
Musculoskeletal disorders such as tendonitis and carpal tunnel syndrome can result from improperly positioned equipment that creates stressful working postures. Symptoms can include pain and swelling, numbness and tingling (hands “falling asleep”), loss of muscle strength, and reduced range of joint motion. If you have any of these symptoms, report them to your supervisor as soon as possible. If these symptoms are not treated early, they may result in discomfort in the affected area, chronic pain or injury.

Chair

Chairs can be crucial in preventing back pain, as well as in improving employee performance in office work. As the majority of office workers spend most of their time sitting, a properly designed and adjustable chair is critical.

Features of a good chair:

1. Seat pan adjusts up and down quickly and easily. The chair height is correct when the entire sole of the foot can rest on the floor or footrest and the back of the knee is slightly higher than the seat of the chair.
2. Seat pan should be slightly concave with a softly padded, rounded or “waterfall” front edge. Select alternate seat pan and seat back sizes for large or small employees.
3. Seat back easily adjusts forward and back and up and down, with full lumbar contour. The fullest part of the contour should be positioned in the small of the back, near the waistline.
4. Chair arms adjust up and down and in and out from body. Position chair arms so they support forearms in and near the sides, with elbows only slightly forward from the hipbones. If both features are not an option, eliminate armrests.
5. Five legs or casters for stable support.Read More »Office Ergonomics – Working Comfortably

Product Recall Insurance Explained

Product Recall Insurance Explained

Product Recall Insurance

Product Recall History and Overview

The coverage has been around since the 80’s  of  XX’s Century. The first type of product recall insurance was called malicious product tampering, which only responded to malicious incidents. The limits were $3 million, with six-figure premiums. That’s the way it was for a couple of years. Slowly the book of business grew which allowed larger capacity and to sell higher limits of insurance as well as to expand the coverage. Because it’s catastrophic insurance in nature, when losses occurred, they are generally major. Businesses are not concerned with the smaller losses they can handle financially in-house. What they are looking for is protection from the large losses. So today, it’s financially plausible for small companies as well. When coverage first came out, because of the price tags and the minimum deductibles required, it was accessible only to large, multinational food companies. But now almost every insurer has a strategy to go after smaller businesses. Products Recall is designed to help the insurance manage the crisis of such an occurrence and help protect against product degradation and third party lawsuits.

Most Commercial General Liability policies do not provide coverage for the cost to recall products. Stand alone Product Recall insurance fills this gap because it provides coverage to the cost to recall, withdraw and dispose of the insured’s products and it also can cover loss of income and the extra expenses incurred when a product has to be withdrawn from the marketplace.
Recalls can happen because of mislabeling, malicious tampering, accidental contamination or for a variety of other reasons. Now due to new legislation. the FDA can mandate insured’s conduct recalls in some cases.

Coverage Parameters

Products Recall offers insurance protection in the event of a recall of an insured’s product. This protection includes coverage for the insured’s product recall expenses and liability to third parties kidnapping; bodily injury extortion; property extortion; product contamination extortion; trade secret/computer virus extortion; wrongful detention and hijacking.

Endorsements available to extend coverage include:

Read More »Product Recall Insurance Explained

2014 Affordable Care Act Compliance Checklist

[highlight type=”dark”]This Compliance Checklist is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.[/highlight]

The Affordable Care Act (ACA) was signed into law in March 2010 and installs a horde of health coverage reforms with effective dates stretched primarily over a period of four to five years. Many ACA reforms are already in effect for employers and their group health plans, but many of ACA’s key reforms will become effective in 2014.
Key ACA reforms that will affect employers in 2014 include health plan design changes, increased wellness program incentives, and a new transitional reinsurance fee. The employer “pay or play” mandate and accompanying additional reporting requirements previously scheduled for 2014 have been delayed for a 2015 implementation. In preparation for 2014 ACA reforms, employers should review upcoming requirements and ensure they have an action plan in place.

Read More »2014 Affordable Care Act Compliance Checklist

Professional Liability Exposures for Home Care Business

Home Care BusinessImagine yourself as one of the more than 10,000 Baby Boomers turning 65 every day. Now imagine having to choose between a nursing home and at-home care. And consider this: 20 hours of in-home services (a week) costs about $18,000 a year versus an average of $70,000 a year for a nursing home.

For many aging Baby Boomers today, this is no hypothetical situation. It is very real.  That is why, according to the Bureau of Labor Statistics, the number of in-home health and personal care aides is expected to reach 1.3 million by 2020 – a 70% increase from 2010. In comparison, the growth rate for the U.S. job market as a whole during that period is 14%.

Explaining this growth spurt for non-medical services is fairly straightforward. Entering the field of unskilled at-home care is easy in that it requires less education with little to no medical qualifications. Consequently, carriers like Atain Insurance Companies have taken steps to address this trend by breaking down home health into two pieces: skilled medical care where you have a nurse or therapist come in and take care of the client, and unskilled non-medical care where people go in and do basic services like cooking, cleaning and grooming. That’s the area where we’ll see a good amount of growth. Typically insurance policy for home care covers skilled and unskilled workers, and if you only provide an unskilled workers services, your insurance premium will be lower.

How to lower your professional liability exposures:
Read More »Professional Liability Exposures for Home Care Business