Tort Reform Works for Docs

A mind-blowing stat: a member of the board of the American Medical Association claims that NY OB-GYN's pay around $180k for their malpractice insurance, while those in TX pay only $60k.

This in a letter following a WSJ article "Why Doctors are Heading for Texas," which says that the medical examiners' board is getting so many new applications to enter the state that it's facing a backlog of over 3,000. The reason? Tort reforms in 2003 and '05, wherein Texas has capped non-economic damages at $250,000, put all asbestos and silicosis cases in front of one judge pre-trial, and upped the burden of proof in emergency-room cases (to "willful and wanton" from simple negligence). This all lead to an increase of insurers willing to write medical malpractice there. The competition drove prices down. Pretty simple.

Marsh Hit for Failing to Procure Insurance: Appellate Court Upholds Big Verdict

The U.S. Circuit Court of Appeals for the Fifth Circuit just upheld a $7.8m verdict against Marsh wherein the broker was found liable by a trial court for failing to procure a design professional liability policy, as part of wrap-up coverage, for a Nevada steel engineering subcontractor working on the Aladdin Hotel. The case is here.

Waste Management Sues SAP, Alleging Misreps and Fraud in Software Sale

Waste Management is seeking over $100m from SAP for the money it spent trying to implement SAP software, plus punitive damages. Waste Management claims the billing, logistics, and mobile-computing software was a "complete failure" and was based on a fraud. The lawsuit was filed in Harris County, TX, and it comes after mediation and 20 months of negotiations failed.

Book Authors Sue to Block Movie Production

In a move that could make expectant J.R.R. Tolkien movie fans unhappy, the author's estate is suing over royalties from the Lord of the Rings movies. This potentially implicates insurance called Film Producers Indemnity coverage, and the issue will be whether the movie makers have all of the legal rights to make those movies. Interestingly, the lawsuit focuses on contracts made back in 1969 over the movie rights, and asks for $150m in damages.

MMO Pro and Spirit Team Up

Press Release: NYMAGIC, INC. Announces the Acquisition of a Book of Professional Liability Insurance Business Covering Insurance Agents, Brokers and Related Professionals.

Life Settlement Providers in the Hotseat?

Life settlements are a useful financial tool for people who hold life insurance policies and would like to cash them out before their intended expiration date (which, ghastly enough, would be their death), and get more than they would if they simply surrendered the policy back to the issuer. Those policy holders might want to cash these policies in early for a number of reasons: to get some quick cash, perhaps to invest some in the market, or for medical costs.



In any case, the brokers who help effectuate these transactions are known as life settlement brokers. They essentially look for life insurance policyholders who want to cash out their policies, and match them with life settlement "providers." Providers are those professionals who have investors desiring to use life settlements as a financial investment tool. Essentially, those investors are betting that the former policyholders are likely to die before the maturation of the policy, thus making a profit.



Lately, there have been a number of cases in which criminal activity has been alleged against life settlement providers. One life settlement provider is being held on $1M in bail for allegedly running a "Ponzi" scheme involving life settlements.

How to Avoid Claims

The current issue of Agent & Broker magazine has a great article: How to avoid being a target for E&O claims. They're preaching what everyone should learn, know, understand, implement: documentation is critical for good internal systems. Coherent, consistent documentation of important contact, decisions, changes, and issues will help you avoid problems, and make your case stronger if you do get into problems.

Streamlined Broker Licensing Coming?

The National Conference of Insurance Legislators' Executive Committee has come out in support of a National Insurance Producer Registry (NIPR--a non-profit affiliate of the National Association of Insurance Commissioners, aka the NAIC). Part of this will be an online, one-stop licensing resource for insurance agents and brokers nationwide. Here is the press release.

Lloyd's insures winemaker's nose

This is fun stuff: Ilja Gort, the Dutch owner of Chateau de la Garde in Bordeaux, will have his nose insured by Lloyd's. Why? Gort can allegedly tell millions of different scents apart and relies upon his nose for business.

It's not the first time. Lloyd's also insured the nose of Jimmy Durante.

NYS Presses Mortgage Lenders to Spin Off Appraisal Units

According to the NY Times, NYS A.G. Cuomo has gotten Fannie Mae and Freddie Mac to agree that independent or outside appraisal firms will be used on the mortgages they buy in the future.

This is a big deal for some mortgage brokers that have used their in-house appraisers to work on the loans they originated. It could force these firms, like Countrywide Financial, to spin off their appraisal units. Previously, many mortgage brokers used their own appraisers on deals. The National Association of Mortgage Brokers claims this development will hamper their competitiveness.