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The
latest insurance disciplinary action report from the New York State Department of Financial Services is out. Most of it is not particularly noteworthy. There were 27 actions taken against agents and/or brokers, and 17 were for failure to report or disclose various run-ins with the law or regulatory authorities. Only 9 actions were taken against New York resident agents and/or brokers, and 3 of them were in the failure to report/disclose category. The six other actions against New York resident producers were: -
$1,000 fine for running two Facebook ads that referred to insurers without including the name of the city where they are headquartered.
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$2,000 fine for putting false premium payment information on four applications for condominium insurance policies.
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$45,000 fine for acting as an insurance producer without a license for seven and a half months in 2023. The maximum fine is $500 per offense, so this person must have written 90 new policies without a license.
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$3,000 against a captive agent for forming an unapproved new agency and shifting business to it to qualify for a larger performance bonus.
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$10,500 fine for collecting service fees from insureds without obtaining their written consent; sitting on an insured's premium payment too long without sending it to the carrier; and for submitting false information to the department.
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$9,500 fine for acting as an insurance producer without a license for six weeks in 2023 and doing business under an unapproved agency name.
Non-residents got far stiffer penalties: -
There were two license revocations. One was for lying to an insured, enrolling an insured in a medical plan without her consent; ignoring department investigatory letters; and failing to report disciplinary actions taken by two other states. The other was for not reporting a guilty plea in criminal court.
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A Massachusetts agency/adjusting firm and two of its sublicensees were fined $1.5 million for operating for three and a half years without broker or independent adjuster licenses, permitting unlicensed individuals to act as adjusters and brokers, and compensating someone for acting as an adjuster without a license.
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A Utah brokerage paid $85,990 for failing to make filings on time to the Excess Line Association of New York over a five-year period.
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Finally, a Texas independent adjusting firm was fined $800,000 for acting without a license and paying three unlicensed individuals who acted as adjusters.
I think the actions that are most relevant to Big I New York members are the ones regarding the Facebook posts, the charging of service fees, and acting without licenses. -
We regularly get questions about service fees, so before you charge them, visit the Service Fees page in the Answer Center of our website.
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It's also not unusual for members to simply forget to renew their licenses. Remember that your license = your livelihood. If it expires, the law forbids you from selling new policies, so please don't forget to take care of it.
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Lastly, it is still the law in New York that a producer's advertisement that mentions an insurer must provide the insurer's full name and the name of the city, town, or village in which it has its principal office. I think that law is antiquated, but while it is in effect the DFS may enforce it. Take care with your ads, including social media posts and websites.
I will now reveal my age by quoting an old favorite TV show,
Hill Street Blues:
“Let's be careful out there."
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| The New York Compensation Insurance Rating Board has announced that the maximum payroll for calculating Workers Compensation insurance premiums for construction employers will increase to $1,757.19 per week. The change takes effect on July 1.
State insurance law requires that the payroll for certain construction classifications be limited to a percentage of the Statewide Average Weekly Wage for the previous calendar year. The adjustment occurs annually on July 1.
Read the Board's announcement
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| The New York State Workers Compensation Board has announced that the maximum weekly disability benefit will increase to $1,171.46. The change takes effect on July 1 and applies to injuries occurring on that date and before July 1, 2025.
State Workers' Compensation Law requires the maximum weekly benefit to equal two-thirds of the Statewide Average Weekly Wage (SAWW) for the previous calendar year. The level is reset annually on July 1. The state Labor Department reported that the 2023 SAWW was $1,757.19.
The rate for July 1, 2023 to June 30, 2024 is $1,145.43.
Read the Board's announcement
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|  Big I NY's Photo Inspection Law Now Effective
On May 15th, our law to allow carriers to waive CARCO inspections went into effect. From now until October 2027, carriers doing business in NY may waive any or all CARCO inspections. Already, many carriers have announced they are waiving inspections, including Safeco, Travelers, Plymouth Rock, National General, and New York Central Mutual. We expect more carriers to follow suit. Big I NY Calls for Lawsuit Lending Divestment This week, Big I NY joined groups representing businesses, municipalities, and insurers, in urging the New York State and New York City pension funds to investigate and divest from third party litigation financing (TPLF). In a letter to New York State Comptroller Tom DiNapoli and New York City Comptroller Brad Lander, which was covered by the New York Post, we wrote, “With no regulatory framework or disclosure requirements, TPLF is a substantial threat to the state's civil justice system and consumers. The offer by lenders to plaintiffs of easy, up-front cash increases the occurrence of filing of dubious claims, including against local and state governments. TPLF also deters a rational settlement process; compromises the attorney-client relationship by prioritizing their own profits over plaintiffs' best interest; and contributes to skyrocketing insurance premiums." Big I NY Urges Lawmakers to Reject Unfair Business Practices Expansion On May 14th, Big I NY and over 30 other groups issued a letter to state lawmakers urging them to reject a disastrous expansion of the state's unfair business practices law. New Yorkers already face the highest risk of litigation and the highest litigation costs. This proposal will make the Empire State even more litigious, burdening companies with increased risk of catastrophic liability. While the bill purports to offer remedies to small businesses, local firms already have a vast body of contract law to protect against misrepresentations and unfair practices. The potential for excessive damages and increased litigation costs will not only harm these businesses but lead to higher prices for consumers. This is particularly concerning for small businesses that operate on narrow margins and are still recovering from the economic impact of the pandemic. We urge agents to contact their lawmakers and register their opposition. This bill, if enacted, would be disastrous to the state's business climate, further destabilize the insurance market, and expose independent insurance agencies to considerable liability and shakedown lawsuits.
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|  The New York State Department of Financial Services (DFS) this week unveiled a new model Cybersecurity Program Template for use by small businesses including insurance agencies. All independent insurance agencies should consider using this template as the model for their cybersecurity programs. New York's financial services cybersecurity regulation requires all agencies to implement cybersecurity programs.
In a guidance letter dated May 13, 2024, the department stated that the model "prompts licensees to carefully consider and address the core concepts of a cybersecurity program in order to help create a program that complies with the requirements of the Cybersecurity Regulation." It also includes frameworks for developing and tracking:
- Asset inventories
- Risk assessments
- Multi-factor authentication exceptions, and
- Third-party service providers.
The template is available for you to download from the DFS website and at www.biginy.org/cyber.
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ENERGAGE NAMES PREFERRED MUTUAL INSURANCE COMPANY A WINNER OF THE 2024 TOP WORKPLACES USA
New Berlin, New York, March 20, 2024 Preferred Mutual Insurance Company has announced it has earned the 2024 Top Workplaces USA award, issued by Energage, a purpose-driven organization that develops solutions to build and brand Top Workplaces. The Top Workplaces program has a 15-year history of surveying more than 20 million employees and recognizing the top organizations across 60 markets for regional Top Workplaces awards.
"At Preferred Mutual, we are committed to maintaining a people-first culture," said Preferred Mutual Insurance Company President & CEO R. Benedikt Sander. "We are honored our commitment to putting people first is recognized."
Top Workplaces USA celebrates organizations with 150 or more employees that have built great cultures. Over 42,000 organizations were invited to participate in the Top Workplaces USA survey. Winners of the Top Workplaces USA list are chosen based solely on employee feedback gathered through an employee engagement survey, issued by Energage.
Results are calculated by comparing the survey's research-based statements, including 15 Culture Drivers that are proven to predict high performance against industry benchmarks.
“Earning a Top Workplaces award is a badge of honor for companies, especially because it comes authentically from their employees," said Eric Rubino, Energage CEO. “That's something to be proud of. In today's market, leaders must ensure they're allowing employees to have a voice and be heard. That's paramount. Top Workplaces do this, and it pays dividends."
About Preferred Mutual Insurance Preferred Mutual Insurance Company provides property and casualty insurance coverage to more than 232,000 individual and business customers through a network of more than 560 independent agents located throughout New York, New Jersey, Massachusetts, and New Hampshire. In business since 1896, Preferred Mutual is rated “A" by AM Best Company and is headquartered in New Berlin, New York. Learn more at www.preferredmutual.com.
Company Contact Grady Thompson corporate.communications@preferredmutual.com 607.847.1616 https://www.preferredmutual.com
About Energage Making the world a better place to work together.TM Energage is a purpose-driven company that helps organizations turn employee feedback into useful business intelligence and credible employer recognition through Top Workplaces. Built on 18 years of culture research and the results from 27 million employees surveyed across more than 70,000 organizations, Energage delivers the most accurate competitive benchmark available. With access to a unique combination of patented analytic tools and expert guidance, Energage customers lead the competition with an engaged workforce and an opportunity to gain recognition for their people-first approach to culture. For more information or to nominate your organization, visit energage.com or topworkplaces.com.
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| The insurance industry is dedicated to assisting people in times of need. As such, the industry is uniquely suited to be a philanthropic leader, adapting its skill-set to charitable endeavors. On behalf of the Insurance Industry Charitable Foundation , Big I NY is pleased to invite your company or agency to nominate a charitable organization for a local grant. IICF helps communities and enriches lives by combining the collective strengths of the industry to provide grants, volunteer service, and leadership. In an effort to expand the reach of IICF across communities in New York, New Jersey and Connecticut, the foundation is offering a variety of grants in the amount of at least $2,500. All charities awarded a grant must be sponsored by an insurance entity, so this your chance to nominate a worthy organization your company or agency supports or is familiar with in your community. The application process is simple. Please communicate with your chosen nonprofit that you are nominating them to apply and ask the charity you are sponsoring to complete this application. They must provide the requested corroborating documentation and submit all items electronically to Rachel Boulton at rboulton@iicf.org by 5:00 PM on June 7, 2024. Read guidelines here.
We appreciate your help in recognizing outstanding charities in New York, New Jersey and Connecticut.
Formed in 1994, the Insurance Industry Charitable Foundation (IICF) is a 501(c)(3) tax exempt public charity funded and directed by insurance industry professionals representing a broad spectrum of the industry. Since its inception, IICF has contributed over $40 million in local community grants, over 300,000 hours of volunteer service, and the leadership of over 100,000 industry volunteers.
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| Big I New York's members elected David Bodenstein as Chair of the board for the 2024-2025 term. Bodenstein was sworn in during a ceremony at our Annual Business Meeting during Go Big, held at Turning Stone Resort Casino in Verona, on May 13th. Bodenstein is the President of Mike Preis Inc. Insurance Agency, in Jeffersonville, NY. Bodenstein was elected to the Big I NY Board in 2017 and previously held the Vice-Chair and Secretary/Treasurer position, and has also chaired the group's finance committee. He is Vice-President/Director of Calicoon Co-Op Insurance Company and Chairman of the Jeffersonville Planning Board. Bodenstein says he is honored to assume the leadership role at Big I NY.
 David Bodenstein shared:
"Over the past year, we have achieved many major milestones. Members are benefiting from our incredibly successful legislative, regulatory, and carrier advocacy efforts. Harnessing the momentum created, this coming year we will strengthen all these critical relationships while providing the resources agencies need to serve customers best. I am honored to represent all Big I New York members as their new Chairman of the Board."
Kelly Gonyo of Blue Line Insurance Agency in Lake Placid was elected to a one-year term as Vice-Chair and Secretary-Treasurer.
Big I New York members also elected the following regional directors: Deena Giltz McCullough of Northern Insuring in Plattsburgh, to a two-year term representing the east-north region;
Robert Bowen, Jr. of Patriotic Insurance Group in Chester, to a two-year term representing the west-central region;
Emmanuel Osuyah of Alpha Direct Agency in New York City, to a two-year term representing the metro-suburban region
The Big I New York Board of Directors also elected the following at-large directors to a two-year term: |
| (Dewitt, New York, May 16, 2024) - Top member agents and company partners of Big I NY, an insurance agency trade organization, were recognized this week for their achievements. Seven awards were announced at the association's Annual Business Meeting on May 13 and Go Big event on May 14 at the Turning Stone Resort Casino in Verona, NY.
The awards are decided by the Chair of the Board and the Executive Committee based on specific criteria for each honored.
The following recipients were honored at the Annual Business Meeting:
Big I Western NY was named the Local Association of the Year. The association was recognized for its member and community engagement, providing outstanding programs for young insurance professionals, and working with students to attract them to our industry. This local excels at public relations with social media ads and local television commercials enhancing the image of independent agents. This group is always in force at local, state, and national legislative events, sending numerous members to advocate on behalf of Big I NY members.
Yuliya Karpov of NBT Insurance received the Joel S. Pollack NextGen Young Agent of the Year award. This honor is given to an agent (under the age of 40) who has displayed an outstanding commitment to their clients, agency, and industry, much like Joel S. Pollack before he was tragically killed by a drunk driver 25 years ago. Yulia has more than seven years of experience in the insurance industry, has a passion for community invovement, and serves on several committees, including the NextGen CNY committee where she has shined and helped them expand their reach through social media. Yuliya immigrated to the U.S. from the Ukraine when she was 10 years old and is well-positioned to be a successful female insurance producer.
 Doug Benz of New Buffalo Insurance Agency, was recognized for his dedication and longtime support of the association's advocacy efforts with the Vincent Alba award. Benz is a staunch advocate who facilitates communication with elected officials in his area, helps coordinate his local association's annual legislative breakfast, and always participates in Big I NY legislative events on the state and national level. He supports the PACs and is articulate and well-versed on issues impacting independent insurance agents. He is also an active and thoughtful member of the Big I NY Board.
(Not pictured)
Scott Hobson, MPA received the Distinguished Service Award. This award recognizes an individual's outstanding and lasting contributions to Big I NY. Scott is at the helm of our legislative and government affairs team and has earned incredible respect from the industry. His tireless dedication is key to the many legislative successes Big I NY achieved in 2023. The photo inspection reform was finally signed into law and we defeated legislation that would have banned non-compete agreements and expansion of the wrongful death law. We met with leaders at the Department of Financial Services to draw attention to the need to stabilize the insurance market and set political fundraising records for both IAPAC and InsurPAC, along with the largest member participation at the National Legislative Conference.
Big I NY's highest honor is the 1882 Fellow Award, which recognizes significant contributions made to the association, the industry, and community. This year's recipient is Ron Brunell. Ron has so much passion for Big I NY and his local association, his enthusiasm is infectious and impactful. He bleeds for Big I NY and our members, as his father did before him. He is at a point in his life where he could kick back and let others step in, but not Ron - he is all in 100% of the time. The number of committees he has served on are too numerious to count, but legislative issues are his passion. He moved up the ranks on the Big I NY board to serve as Chair from 2021-2022 and is now the Big I New York National Director.
The following awards were presented at Big I NY's Go Big on May 14, 2024. For the third year in a row, New York Central Mutual was nominated by the majority of our local associations for Big I NY Top Personal Lines Carrier. They place great value on relationships with independent agents and offer competitive products and outstanding service.
The top carrier partner for Commercial Lines went to Cincinnati. Their underwriters have deep knowledge and are empowered to make decisions to provide competitive insurance programs for a wide range of businesses. They treat the agency/company relationship as a partnership.
Ron Martin of Preferred Mutual was honored with the Thom McDaniel award. This award is a reflection of Ron' dedication and unwavering support of the Independent Agency system by their words, deeds, and actions. Ron puts his heart and soul into impacting issues that affect agents in New York and offers valuable input to promot collaboration and industry partnership on matters of importance to our industry.
Congratulations to each recipient for representing the best of the insurance industry!
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|  It's been awhile since I added to my list of examples of subtle but possibly significant differences between insurance policies of the same type issued by different insurers. This one does not involve a loss (that I know of,) but I thought it was interesting enough to cite as another example of why it's important to have copies of coverage forms on hand to review.
A member wrote in the other day about a client who owns a piece of vacant land with her daughter. They're going to have a house built on the land, and the daughter will live there. The member had questions about liability coverage for both mother and daughter.
Every Homeowners insurance policy that I've reviewed has a particular exclusion in the Liability Coverage section. This exclusion states that the Personal Liability and Medical Expenses Coverages do not apply to bodily injury or property damage arising out of a premises an insured owns, rents, or rents to others if that premises is not an "insured location." The term "insured location" (or a term very similar to it) is described in the policy's definitions. We have to read that definition to know whether a specific site is an insured location. That's where our example gets interesting.
The member sent me a copy of the definitions from his client's policy. I compared it to the definitions in the Insurance Services Office Homeowners 3 - Special Form, HO 00 03 03 22. The good news is that both forms would cover his client and her daughter for an injury or property damage occurring on the site of the future home. However, there was still a difference:
ISO
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COMPANY X
| 6. "Insured location" means: …
f. Land owned by or rented to an "insured" on which a one-, two-, three- or four-family dwelling is being built as a residence for an "insured"; …
| 6. "Insured location" means: …
f. Land owned by or rented to an "insured" on which a one- or two-family dwelling is being built as a residence for an "insured"; …
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The member's client's policy provides Liability Coverage on a premises where a one- or two-family residence is being built. The ISO form provides Liability Coverage on a premises where a residence with up to four units is being built. If this insured was building a four-family home on the site, a carrier using the ISO form would provide Liability Coverage, but this particular carrier would not. There's nothing illegal or necessarily wrong about what this carrier has written into its form. It's just a small detail that would most likely not be noticed unless and until a loss happened where coverage would hinge on how many units were in the home being constructed. A Homeowners policy is a contract and both parties (insurer and insured) must abide by its terms. If an insured pays a premium for a policy that covers vacant land where a house is going up, but only if the house has no more than two units, the insured must live with that.
And this is yet more reason why no one should assume that all policies are the same. Never ask, "Does a homeowners policy cover this loss?" Ask, "Does this Homeowners policy cover this loss?"
I'm sure I'll be back with more examples. There are always more.
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