MetLife Agent Gets 21 Months

St. Louis, MO. A life insurance agent was sentenced to jail time for diverting $159k from life insurance premiums into her personal account. She plead guilty to a felony mail fraud charge.

Hear What the Plaintiff's Bar is Saying: Truck Accidents

A recent blog collected statements from a couple of sources regarding road accidents involving trucks. In them, plaintiffs' attorneys apparently give tips on dealing with accidents and insurance carriers. The blogger then goes on to suggest trucks have on-board computers that store GPS and other data, as a means of protecting themselves should lawsuits occur. It's interesting, and you can read it here.

Homeowners Sue Title Insurers

A group of New York homeowners has sued the major title insurers, alleging price fixing, claiming that title insurance rates are too high in NY state. They allege prices are 67% higher than the national average.

Cyber-liability and Cloud Computing

Many people are predicting that computing will move off your PC and onto the Net; this is also called "cloud computing." The idea being that you have your software and data residing out on the Internet. Google has provided these tools for free with it's Google Documents service. Amazon provides a paid service for storage and retrieval of data with its S3 service.

The problem from an insurance perspective is that companies that rely upon outsourced data storage services present a new twist for insurance: if the company does not handle it's own data integrity, who does, and is this fact considered when a cyber risk is underwritten? Does cloud computing actually make the data realm more safe, say, by putting data storage in the hands of "professionals"? Does it open up the possibilities of suits against the data storage companies for outages, notwithstanding their contract terms?

On Friday, Amazon's S3 service was disrupted for several hours. Clients include the NY Times and Twitter. A WSJ blog gives some details and discussion here.

11th Circuit Breathes Life into Insurer's Case for Recission of Policy

In a case based on Alabama law, the 11th Circuit Court of Appeals (in MEGA Life v. Pieniozek) overturned a lower court's decision to grant a summary judgment for the beneficiary of a life insurance policy. The carrier tried to rescind the policy because the decedent overstated her income on the application and swore to the application's veracity. The appeals court ruled that the lower court must look into whether the insurer would have, in good faith, issued the policy at that rate or limits if true facts had been known to the carrier at the time of the application(paraphrasing Alabama Code sec. 27-14-7(a)). It's an interesting case because the case seems to hinge on the carrier's internal rules of underwriting (i.e., would the policy limits have been as high for the correct income of the applicant), as opposed to an argument that misstating income on a life insurance policy application changes the risk involved.

Best is Reviewing AIG and Transatlantic

According to Business Insurance, Best announced that American International Group Inc's domestic operations and Transatlantic Holdings Inc's ratings of A+ are under review with negative implications, due to their February 11, 2008, SEC filing statements about their credit default swaps portfolios.

Subprime Litigation Increasing

Here's a WSJ blogpost about increasing litigation in the subprime area. Bottom line: 278 new federal suits were filed in 2007, with the pace doubling in the second quarter. And, "40% of the cases were filed by home-loan borrowers against lenders, mortgage brokers and many others, alleging discriminatory lending practices, improper charges or inadequate disclosures, among other issues." The source for the post info is here, from Navigant Consulting.

Insurance Agent Faces Up to 10 Years for Fraud and Theft

North Dakota insurance agent David A. Skjerven, head of Skjerven Financial Services, faces a lengthy jail sentence for selling unregistered securities (promissory notes) in a kind of Ponzi scheme, after his recent guilty plea. The plea requires restitution of $1.3m to 21 investors, as well as a $10,000 fine. He faces investigation in Minnesota as well.

Flood Insurance Info

The Massachusetts Department of Insurance is trying to educate people about flood insurance; mainly that they have to specially purchase, rather than assume they're covered. Their tips were featured on Boston's ABC affiliate today.

Life Settlements Law Should Become More Uniform

While not binding on any state, the National Conference on Insurance Regulators (NCOIL) has unanimously adopted the Life Settlements Model Act, which can be found here. This endorsement should help legislatures to enact either the model act, or something close to it.

Insurance agent's license revoked for pressuring the elderly

Broome County, NY. The NY State Insurance Superintendant suspended the license of an insurance agent who apparently pressured elderly people into buying a type of Medicare supplemental coverage. Tactics included door to door solicitations (which are not allowed for Medicare Advantage sales: prior appointments are required to prevent pressure sales) and offering $25 referral bonuses.

Toyota Pavilion roof collapse not covered

Scranton, PA. It's been revealed that the policy on the Toyota Pavilion at Montage Mountain and Montage Ski Resort had been canceled prior to last year's roof collapse. A blizzard caused the collapse last February. According to the Times-Tribune, the finger-pointing is beginning between insurance agents and officials.

Welcome to MMO Pro!

Welcome to the inaugural post of our blog. Watch this space for news items and interesting tidbits about professional liability insurance.