<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" > <channel> <title>June 18 | Insurance Advocate</title> <atom:link href="https://www.insurance-advocate.com/category/2012/june-18/feed/" rel="self" type="application/rss+xml" /> <link>https://www.insurance-advocate.com</link> <description>Since 1889</description> <lastBuildDate>Fri, 12 Jun 2015 10:56:50 +0000</lastBuildDate> <language>en-US</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=6.7.2</generator> <item> <title>June 18, 2012 Cover</title> <link>https://www.insurance-advocate.com/2012/06/18/june-18-2012-cover/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Mon, 18 Jun 2012 10:54:59 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Covers]]></category> <guid isPermaLink="false">http://gator4211.hostgator.com/~cinnww/insurance-advocate.com/?p=3624</guid> <description><![CDATA[<p><img width="569" height="783" src="https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover.jpg" class="attachment-full size-full wp-post-image" alt="" decoding="async" fetchpriority="high" srcset="https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover.jpg 569w, https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover-218x300.jpg 218w, https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover-720x990.jpg 720w" sizes="(max-width: 569px) 100vw, 569px" /></p>]]></description> <content:encoded><![CDATA[<p><img width="569" height="783" src="https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover.jpg" class="attachment-full size-full wp-post-image" alt="" decoding="async" srcset="https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover.jpg 569w, https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover-218x300.jpg 218w, https://www.insurance-advocate.com/wp-content/uploads/2015/06/06182012-cover-720x990.jpg 720w" sizes="(max-width: 569px) 100vw, 569px" /></p>]]></content:encoded> </item> <item> <title>A Lesson in a Tragic Loss</title> <link>https://www.insurance-advocate.com/2012/06/18/a-lesson-in-a-tragic-loss/</link> <dc:creator><![CDATA[Jamie Deapo]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:22:03 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[On the Level]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=437</guid> <description><![CDATA[<p>Several weeks ago my family and I lost a very important person. Joe was a big part of our family growing up with my sons and we lost him at 30 years old. After 2 years of fighting a rare form of leukemia his body just couldn’t go on. I remember 2 years ago when […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/a-lesson-in-a-tragic-loss/">A Lesson in a Tragic Loss</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p><strong>S</strong>everal weeks ago my family and I lost a very important person. Joe was a big part of our family growing up with my sons and we lost him at 30 years old. After 2 years of fighting a rare form of leukemia his body just couldn’t go on. I remember 2 years ago when Joe was diagnosed and hospitalized just 3 days before his first child, a son, was born. Now his wife and child are without a husband and father; worst of all his wife was left with a mountain of bills and no income. On top of the deep loss I feel with him gone, I feel guilty about the terrible financial mess his family is left to handle like the extraordinary medical bills that couldn’t be anticipated or insured against. The need for final expenses, future income and money for his son to go to college could have been anticipated and handled with life insurance. I have offered his parents any and all help I can provide with trying to clear up the financial issues that are left. He had a small life insurance policy but that will be gone quickly.</p> <p>You might be wondering why I feel guilty and a little ashamed. It’s because I cheated Joe out of the knowledge I had to keep his family protected against his unexpected death. There were plenty of opportunities to have this conversation. I could have discussed it when he got married, or when he became self-employed or better yet when he told me the exciting news that his wife was pregnant and they were going to have their first child. So why didn’t I? I wrote quite a bit of life insurance when I was an agent and I certainly was aware of the importance of it. I also knew how easy it was to get a large amount of term life insurance very inexpensively. I knew Joe didn’t have too much disposable income to spend but he had enough to buy protection. When I honestly search for the reason I realize I was concerned that Joe would think I was trying to talk him into something he didn’t really need just like every other “life insurance salesman.” I figured he didn’t see a need because at the time he was a healthy young guy in his late 20’s. So rather than make sure a very important person in my life was well informed and properly protected, I caved into my own lack of commitment, insecurity and unfounded beliefs.</p> <p>Have you ever felt like this? Not just with life insurance but with any coverage recommendation you might be making for a client. Have you ever avoided advising a friend, family member or client to seriously consider purchasing insurance coverage because you were afraid they would think you were acting like the textbook “insurance salesperson.”</p> <p>How often do we avoid offering good advice or addressing a necessary coverage becuase we feel our actions will be misinterpreted? How many times during a sale do you avoid or gloss over a recommendation because you don’t want to nix a sale. I think for some people the fear of being seen as the stereotypical insurance salesperson lies in the back of their mind. Don’t let it! If you’re sincere in offering the best advice for protecting your client, friend or family you should never hesitate to recommend coverage. It’s your duty, it’s your responsibility and, most of all, it’s what actually sets you apart from the stereotypical insurance salesperson.</p> <p>I believe this same fear is what makes it so hard for some service staff to transition into selling. That little voice in the back of their head makes them question whether they are promoting coverage for their own personal gain (or the agency’s) instead of what’s best for the client. It’s that little voice–that fear the client may think they are insincere–that makes them not want to sell.</p> <p>I sincerely regret letting my foolish insecurity keep me from strongly recommending important insurance protection for Joe and his family. There is no guarantee that he would have purchased what I recommended because ultimately he was the final decision maker. It may have been an issue of affordability and we could have dealt with that problem. It might have meant buying less coverage initially but some protection would have been better than no coverage.</p> <p>I hope by being honest in this column I can spare some of you from making the same foolish mistake I did. You don’t want to feel guilty about letting someone or their family down. I know during the recent E&O seminars you were told you’re not a professional and are only responsible to provide the coverage the client asks you to purchase. That might protect you in a New York court but it won’t make your personal guilt go away.</p> <p>You are a professional! You want and need to recommend the correct protection. Don’t be afraid to do so. If your client knew everything he needed to properly protect himself, his family and his business, he wouldn’t need you. You’re the one with the knowledge, be committed to strongly recommending the best protection and do your best to make sure the client gets what they need!</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/a-lesson-in-a-tragic-loss/">A Lesson in a Tragic Loss</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>First Rehab Life's "Quintessentials" EAP Breaks the Mold</title> <link>https://www.insurance-advocate.com/2012/06/18/first-rehab-lifes-quintessentials-eap-breaks-the-mold/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:20:29 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[markets]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=434</guid> <description><![CDATA[<p>Great Neck, NY – First Rehab Life (The First Rehabilitation Life Insurance Company of America) is now offering Employee Assistance Programs (EAP) services for employer groups of 2 or more employees. While EAPs are nothing new in the world of employee benefits, Quintessentials (First Rehab Life’s non-insurance small group EAP) breaks the mold: The level […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/first-rehab-lifes-quintessentials-eap-breaks-the-mold/">First Rehab Life's "Quintessentials" EAP Breaks the Mold</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p><strong>G</strong>reat Neck, NY – First Rehab Life (The First Rehabilitation Life Insurance Company of America) is now offering Employee Assistance Programs (EAP) services for employer groups of 2 or more employees.</p> <p>While EAPs are nothing new in the world of employee benefits, Quintessentials (First Rehab Life’s non-insurance small group EAP) breaks the mold: The level of support, advice, and expertise provided by an EAP used to be an advantage only large companies had – but with Quintessentials, this type of program is now available and affordable even for the small business owner.</p> <p>With the small business owner in mind, Quintessentials comes with a strong focus on targeted features for employers and managers. Since First Rehab Life’s primary client base consists of small groups, the company is in close touch with pain points as well as needs of small business owners. First Rehab Life understands that running and building a small business is hard work.</p> <p>Constantine Lappas, COO overseeing Product Development, explains the context: “The upkeep of products and services alone is a full-time job for a small business. Many small businesses don’t have the resources and tools to properly address other issues that affect their bottom line – the people issues that arise, such as addressing employee concerns, HR policies, and help with management, legal, and financial issues. We are aware that owners of small businesses need tools to make their lives easier while improving their employees’ productivity.” This is why First Rehab Life partnered with Harris, Rothenberg International, Inc. (HRI) to design Quintessentials. It gives business owners and managers access to knowledge and experts for their HR and business issues while providing employees support through Employee Assistance and Work/Life Programs.</p> <p>Quintessentials, First Rehab Life’s small group EAP, includes five core components:</p> <p>1. HR & Business Advisor</p> <p>2. Management Consultant</p> <p>3. Employee Confidant (EAP)</p> <p>4. Research Assistant</p> <p>5. LifeCoach</p> <p>While resources and information are always available through an online portal, the Quintessentials program puts a strong focus on the human and interpersonal aspect:</p> <p>• The EAP provides 24/7 live access through a dedicated toll-free phone number or via Skype; sessions can even be face-to-face (up to 3 sessions per issue for an unlimited number of issues).</p> <p>• The Work/Life Research Assistant Program comes with 24/7 live access through a dedicated toll-free phone number to experts in their field. This allows HRI to provide a more personalized experience for members and to dedicate a high level of attention to every case or inquiry they receive. One of the reasons why First Rehab Life chose to partner with HRI is the quality of service they can provide. HRI does not use customer service representatives and members benefit from the expertise and depth of knowledge of their counselors at all times. All their EAP counselors hold doctoral-level or Master’s Degrees.</p> <p>“We are honored to partner with First Rehab Life to provide our best-in-class services to the small business owner and their employees,” says Beatrice Harris, HRI’s Managing Director, “The Quintessentials program is unique because it focuses on small business owners and their employees, giving them low-cost access to resources they typically don’t have, including legal/financial guidance, HR and policy support, as well as confidential counseling services to help with any issues related to daily life challenges.”</p> <p>Quintessentials is available at a flat fee of $3.00 per employee.</p> <p>Initially, Quintessentials is only available with First Rehab Life’s BenePaks, a suite of packaged insurance products (Dental, Vision, Hospital Cash, Term Life, and AD&D) sold at flat rates. BenePaks is available for groups of two or more participating employees in Pennsylvania and, effective July, in New York.</p> <p>First Rehab Life is planning to make Quintessentials available in conjunction with its other group insurance products, in more states, and on a stand-alone basis in the near future.</p> <p>Quintessentials is not insurance!</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/first-rehab-lifes-quintessentials-eap-breaks-the-mold/">First Rehab Life's "Quintessentials" EAP Breaks the Mold</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>DFS Report: Size and Content May Send Message</title> <link>https://www.insurance-advocate.com/2012/06/18/dfs-report-size-and-content-may-send-message/</link> <dc:creator><![CDATA[Peter Bickford]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:17:56 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[Insight]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=431</guid> <description><![CDATA[<p>As a history buff and insurance business fan, one of my favorite features of Insurance Advocate has always been the “Looking Back” page, with its reminders of what we were reading about our industry 25 years ago or more. It helps provide perspective, continuity and understanding of the issues that we faced then and that […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/dfs-report-size-and-content-may-send-message/">DFS Report: Size and Content May Send Message</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p><strong>A</strong>s a history buff and insurance business fan, one of my favorite features of <strong><em>Insurance Advocate </em></strong>has always been the “Looking Back” page, with its reminders of what we were reading about our industry 25 years ago or more. It helps provide perspective, continuity and understanding of the issues that we faced then and that often are still with us now. I have also had a fondness for the annual report of the superintendent of insurance filed with the legislature every spring, which has always been chuck-full of information and data about the business of insurance, its companies, brokers and agents. While it never varied much in form or the extent of its content, the report was always an interesting way to see shifts and trends in the business set out in a readable, understandable format. <em>Historically the superintendent’s annual report has been the regulator’s paean to the importance of the business of insurance to the state! </em>Of course, because of the merger of the insurance department into the new department of financial services, last year’s report — the 152nd — was the last stand-alone report by the superintendent of insurance. The statutory requirement for such a report, however, has not changed. NY Insurance Law §206 requires the superintendent (now the superintendent of financial services) to file a report providing “a general review of the insurance business” for the preceding year. The law also has some very specific requirements — including such items as lists of reports on examination, a summary of regulations and circular letters issued, changes in the law, receipts and disbursements by the “department,” and lists of insurers “organized, admitted, merged, withdrawn, or placed in liquidation, conservation or rehabilitation,” to identify just a few — all designed to give the legislature and the public a full and complete review of the insurance business in NY.</p> <p>The Banking Law has its own requirement for an annual report (Banking Law §43), also with very specific required content. So it was with some interest to see how the combined report would look, including its content, length, approach, scope and organization. The first annual report of the superintendent of financial services (DFS #1) is now available from the DFS website at www.dfs.ny.gov along with archived copies of past reports by the separate insurance and banking departments.</p> <p>You might think that a report with specific statutory requirements for content, combining two formerly separate agencies, would be at least as comprehensive and full of information about the two businesses as the separate agency reports in the past. For the insurance business it most definitely is not!</p> <p>DFS #1 is a slim 118 pages (compared to the 235 pages of DOI #152), of which roughly one-third relates specifically to insurance, one-third to banking and onethird to the combined services of the DFS. In other words, the report covering both banking and insurance is half the size as last year’s report on insurance alone, and only a third of that relates to insurance. We all know that size does not necessarily matter, and as explained in the “Overview” section of the report:</p> <p>NOTE: This annual report is organized differently than prior reports by the Insurance and Banking Departments. It begins with text describing the major accomplishments and responsibilities <em>of the Department</em>. The data tables included in prior reports have all been combined in a single appendix, which follows the text section. In addition, to reduce reproduction costs, data that is posted on the Department website in the normal course of business, and that has been included in prior reports, is referenced with a link to its location on the Department website, www.dfs.ny.gov. [<em>italics </em>added]</p> <p>Fair enough, but reducing the annual report on the insurance business to roughly 1/5th of its former size while ostensibly maintaining the specific statutory requirements, seems like more than just economy of presentation, particularly where the banking part of the report is substantially the same in length and content as prior reports.</p> <p>What has been eliminated? First and foremost, absent is anything but a perfunctory “general review of the insurance business,” and gone – even after considering the links referred to in the note — are all of the descriptions and supporting data for each element of the business regulated by the major insurance bureaus: life, health and p/c. The extent of this downsizing is readily confirmed by a brief side-by-side review of DFS #1 v. DOI #152.</p> <p>The narrative about the insurance division in DFS #1 is three pages short, including a grand total of 4 paragraphs on the property bureau, 7 paragraphs on the health bureau and 6 paragraphs on the life bureau, plus about 40 separate pages of statistical charts and tables. Compare these 3 pages to DOI #152’s more than 110 pages of narrative on the activities of these three bureaus including over 55 pages on the property bureau alone, plus the charts and tables included as aides to understanding and enhancing the topical narratives.</p> <p>Also, here are a few examples of items that I was unable to find anywhere in DFS #1 or its links that were regular features in DOI #152 and prior reports:</p> <p>• Chart of insurance department staffing;</p> <p>• Schedules of broker, agent and other licenses issued, examinations taken or renewed;</p> <p>• Changes in authorized insurers (i.e., new licensees, changes in names, mergers, withdrawals, etc.);</p> <p>• Examination Reports filed;</p> <p>• Any discussion or data on excess lines;</p> <p>• Any discussion or data on special risk insurance (Free Trade Zone).</p> <p>Of course, it is possible that I could have missed some of these and other topics buried in one of the charts, tables or links. It would be interesting to hear from others that may have noticed any significant topic that they also note is missing from the new report. Ultimately it is up to the recipient of the report and the body that sets its standards and requirements – the state legislature – to determine whether or not the report satisfies the statutory requirements and purpose. But I believe that the perspective brought by past reports has been invaluable, and the reports have traditionally provided one of the few places where anyone could go to get a current, comprehensive and meaningful assessment of our industry in the state.</p> <p>I am sure there are many who would find that the emaciation of the report to be of little importance – who reads it anyhow? However, I believe it is yet another example of the continuing diminution of the status of the insurance business in the state. I sincerely hope that this long-standing window on the value and importance of the insurance industry to the state’s economy and well being of its residents will not become another dusty relic lost in the name of efficiency and progress.</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/dfs-report-size-and-content-may-send-message/">DFS Report: Size and Content May Send Message</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>What is Shawangunk?</title> <link>https://www.insurance-advocate.com/2012/06/18/what-is-shawangunk/</link> <dc:creator><![CDATA[Steve Acunto]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:16:35 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[Foreword]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=428</guid> <description><![CDATA[<p>The “pilgrimage” up to New Paltz, New York, to the formidable Mohonk Mountain Hotel and Resort in the Shawangunk mountains, was truly worth the trip, particularly as the NYIA gave its principal award this year to Cecilia Norat, a great favorite to this writer and a well-known person on these pages. I have said enough […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/what-is-shawangunk/">What is Shawangunk?</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p><strong>T</strong>he “pilgrimage” up to New Paltz, New York, to the formidable Mohonk Mountain Hotel and Resort in the Shawangunk mountains, was truly worth the trip, particularly as the <strong>NYIA </strong>gave its principal award this year to <strong>Cecilia Norat</strong>, a great favorite to this writer and a well-known person on these pages. I have said enough nice things about Cecilia in this column over the past several years for people to start to wonder, but every nice thing I have said is warranted, as this dynamic woman- a woman among women – has distinguished herself again and again with dedicated, committed, and bright service as a sign of her total devotion to the betterment of the business. Cecilia has joined many people together to achieve goals that are good for the entire insuring business and, as a consequence, its constituents, the policyholders. Congratulations, Cecilia, <strong>Ellen Melchionni</strong>, NYIA President, <strong>Cassandra Anderson, CAE</strong>, Director of Communications for NYIA, and the whole team at NYIA. They continue to deserve our applause, as well, for the assembly of speakers and topics they brought to the Shawangunk Mountains (who thought of that name? Sounds like a high powered cleanser). We were delighted to see DFS leaders <strong>Benjamin Lawsky </strong>on the program as well as <strong>Rob Easton, </strong>former New York State Department of Insurance Superintendants <strong>Howard Mills </strong>and <strong>Eric Dinallo</strong>. The channels of communication seem to be open and functioning. This is a good sign for the industry. It is something that people like Cecilia have encouraged for many years.… In the same breath, <strong>Peter Bickford </strong>observes in this issue that the weight and scope of recent reporting from the Department deserves a second look. I think Peter expresses even handedly concern over the recent DFS annual report’s relatively proportioned focus on insurance. In any case, recent events demonstrate that the Department is talking to the industry without being either “too cozy on the one hand or aloof on the other.”… Also in this issue, <strong>Jamie Deapo </strong>asks of agents “How do we avoid offering good advice or addressing necessary coverage, because we feel our action will be misinterpreted?” It’s a good question, one that agents face daily in giving advice. Jamie’s column like Steve Ruchman’s with which it alternates gets regular responses, mostly favorable, and deserves a good reading, as does the article about a third circuit decision for UM as uninsured motorist coverage continues to plague the courts and purveyors of insurance. All in all, our second issue of June 2012 is worth taking to the beach or to the pool or on the airplane for a good read. See you in July… remember we have one issue in July and one issue in August so that our staff here can rest up for the Fall. Our star columnist <strong>Michael Loguercio</strong>, regional sales manager for <strong>Webcetera- EZ Lynx </strong>and past President of the <strong>New York Young Insurance Professionals</strong>, was recognized with the <strong>NY-YIP Lifetime Achievement Award </strong>at the New York & New Jersey Professional Insurance Agents annual business conference, held at the Trump Taj Mahal Casino Resort in Atlantic City. This is only the fourth time in the association’s history that an individual has received this honor. In 2009, Michael was honored with the <strong>NY-YIP Insurance Professional of the Year</strong>. This award is given to an individual who has furthered the education and career advancement of young people within the insurance industry. CONGRATS, Mike… well deserved! [<strong>I</strong><strong>A</strong>]</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/what-is-shawangunk/">What is Shawangunk?</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>50 Shades of Insurance</title> <link>https://www.insurance-advocate.com/2012/06/18/50-shades-of-insurance/</link> <dc:creator><![CDATA[Michael Loguercio]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:15:00 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[Face to Face]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=424</guid> <description><![CDATA[<p>BYOD: “Bring Your Own Device” to work. So…how many times have you thought of doing it…by yourself… in your office…all alone? What about your employees…do they ever go at it alone in your office? Do they ever do it with other employees? Do they ever do it alone, with their own “personal devices”? No? Are […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/50-shades-of-insurance/">50 Shades of Insurance</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<h3>BYOD: “Bring Your Own Device” to work. <strong></strong></h3> <p><strong>S</strong>o…how many times have you thought of doing it…by yourself… in your office…all alone? What about your employees…do they ever go at it alone in your office? Do they ever do it with other employees? Do they ever do it alone, with their own “personal devices”?</p> <p>No? Are you sure? Maybe you should install cameras, as you may be surprised as to what you might discover!</p> <p>In case you’re thinking something else, I’m talking about the times where employees increasingly expect to be able to use their own, personal, smart phones, tablets, and PCs, to access business applications and systems proprietary to your agency. The following is a piece written by <strong>Danielle Johnson, VP & Director of Information Technology </strong>at InsurBanc, which <strong>IIABA </strong>and the <strong>W.R. Berkley Corporation </strong>established to assist independent agencies with their specific banking needs. It addresses this latest office phenomenon, where employees are using their own personal devices (smartphones, tablets, etc.) to provide new coverage and to service existing policies of agencies that they are not a principal of.</p> <p>In addition, it was also written to assist agencies in formulating their policies and security strategies when agencies authorize employees to use their own personal devices for business use. Thank you to ACT and the IIAA for allowing me to share this with you:</p> <p><strong>“Bring Your Own Device” Opportunities & Risks Employees expect it; but employers need to manage the risks </strong><em>The consumer ization of IT revolution — sparked by the iPhone — has shifted the IT culture so that the users are the ones getting the latest, cutting edge technologies first, and they want to bring those devices to work. </em>— <strong><em>PC World Magazine</em></strong>, Dec. 20, 2011, <strong>Tom Bradley </strong>“Pros and Cons of Bringing Your Own Device to Work” What Is BYOD?</p> <p>Many workers today expect the companies they work for to allow them to use their personal mobile devices and personal computers at the office, and/or to provide remote connectivity to the office via personal devices. Technologists dub this trend “BYOD” (bring your own device).</p> <p>Why is BYOD Important?</p> <p>Mobile devices — along with their applications and on-the-go Internet access — provide attractive options for speed, connectivity and productivity. Many people wouldn’t think of spending their workday without a Blackberry, iPhone, Android, iPad or other device to access company systems and data. Most important, senior managers want to use these devices and are using their organization’s technology more because of them.</p> <p>Many employees see their own personal devices as superior to those provided by their employers. Employees also tend to believe they are more productive if allowed to use their own devices for work and data syncing between office and home. Thus, BYOD is significant because employee-owned devices are now accessing company systems and being used for work purposes presenting security and privacy concerns to the employer.2</p> <p>Employers see the inherent value in a more mobile, more connected and more productive workforce. Many employees and managers have no problem connecting and addressing work issues after hours and/or on the weekends. It can be considered a motivational strategy.</p> <p>What Are the Security Risks?</p> <p>BYOD mobility offers access to enterprise data, systems and corporate email. Employees can store and process data and connect to networks.</p> <p>While BYOD may be considered necessary and convenient, this type of connectivity can raise significant data security and privacy concerns which lead to potential legal and liability risks.</p> <p>Consider:</p> <p>1. The device gets lost or stolen with access to company data and systems.</p> <p>2. The device contracts a virus or has malware installed that can obtain company logins and data from that device.</p> <p>3. The personal device user — however good his/her intentions are — can in effect be circumventing company security standards.</p> <p>4. The company cannot control the use of the personal device should the employee allow children or friends to use the device.</p> <p>5. The employee may use the device to place files in personal applications in the cloud which may not be secure.</p> <p>6. The employee plugs a mobile device into the USB port of his or her office computer thereby transmitting a virus to the office desktop. Here are some facts to consider when trying to balance personal device access with security:</p> <p><strong>Employees don’t perceive the risk.</strong></p> <p>Many employees perceive the use of their own devices at work as placing no extra burden on technical support. But dealing with any data or system security issue requires know-how and technical resources.</p> <p><strong>Executives perceive the risk, but aren’t fully ready</strong>. In August of 2011, a Deloitte webcast poll of more than 1,000 U.S. information technology and business executives found that 28 percent of respondents believe there are unauthorized personal digital assistants (PDAs) and/or tablets connecting to company systems, especially to email servers. About 87 percent of respondents think their systems are at risk for a cyber attack originating from a mobile security lapse, the poll reported. The same poll found 40 percent of respondents are unaware of whether their organizations have strategies or controls to enforce mobile security. Further, it found that only 24 percent of respondents believe that “all devices connecting to my intranet are authorized.” Only 17 percent reported that they monitor for rogue connections. <strong>Malware is on the move</strong>. Malware that targets mobile devices is increasing, reported IBM Security Solutions researchers in a fall 2011 whitepaper. Citing an IBM security research report, the whitepaper presented statistics showing that mobile operating systems vulnerabilities tripled from 60 to a projected 180+ from 2009 to 2011.</p> <p><strong>Enterprise systems and mobile systems are catching up with each other</strong>.</p> <p>While many corporations have for years allowed Blackberry-based access to email and other company systems, users are now demanding that iPhone/Android-based smartphones and tablet computers be provided access to these same services. How do you proceed once BYOD is determined necessary?</p> <p>Since there are risks to the mingling of personal devices and work systems, companies must take the lead in assessing and managing the risks so as to safeguard their systems and data. Some simple steps include:</p> <p>1. Institute a strong written BYOD Policy that is consistent with the organization’s Employee Handbook policies such as the IT Policy and Acceptable Use Policy.</p> <p>2. Determine which data to protect.</p> <p>3. Define what devices will be supported.</p> <p>4. Determine which employees need remote access via personal devices. Do not open BYOD participation beyond those employees that have a strong business reason for mobile access.</p> <p>5. Define security requirements.</p> <p>6. Train and educate employees concerning policy and BYOD use.</p> <p>7. Monitor employee mobile devices for compliance with your organization’s policy.</p> <p>8. Secure employee’s authorization to “wipe” the employee’s mobile device remotely (restore to the original factory state), as a condition of giving access to any of the business’s systems.</p> <p>9. Place controls over access to and use of the company’s wireless internet. For example: do not broadcast your wireless SSID, restrict access to employees only using MAC address filtering in the router and invoke WPA 2 on the router.</p> <p>Security Solutions</p> <p>If an enterprise is allowing employees to use their own mobile devices, the following security measures should be implemented.</p> <p>1. Require strong phone startup PIN which is at least 6 – 8 characters long. If not supported, use the maximum allowed. Reduce the PIN required timeout setting to no longer than 10 minutes.</p> <p>2. Require specified encryption and anti-malware software on each device.</p> <p>3. Require and install mobile tracking software/applications which allow online access to track the location of a lost/stolen phone and the ability to perform a lock/scream and/or remote data wipe. Secure employee’s authorization to take these actions on the device if the device is misplaced, lost or stolen, as a condition to giving the employee access to the business’s systems and data.</p> <p>4. Do not allow “broken”/”rooted”/ “jailbroken” devices on your network. These phones have removed limitations installed on the phone by the carrier allowing the user to run apps and files not approved by carriers. This process opens the device up to security risks.</p> <p>5. Large enterprises monitoring multiple devices and platforms should consider Mobile Device Management (MDM) software. MDM software centrally controls and protects the data and configuration settings for all mobile devices in the network. MDM can also provide a secure document delivery platform and end to end data transmission encryption.</p> <p>The opportunities of BYOD are present — and here to stay. As an analogy, home security is more complex for a bigger house with more entrances and windows. So too is systems security more complicated as smartphones and other remote devices present new entry points to be analyzed and protected.</p> <p><em>Please understand that all of the security tips presented here are simply guidelines to aid agencies in diminishing security and privacy risks and managing them. However, none can be guaranteed 100% effective.</em></p> <p>Recently the <strong>Professional Insurance Agents of NY and NJ </strong>had their annual conference at the <strong>Trump Taj Mahal </strong>in Atlantic City, NJ. Among a sold out trade show and a conference of 2000 attendees, a number of awards were presented that I would be remiss if I did not mention. In New Jersey, <strong>Natalie Bruno</strong>, of <strong>The D’Agostino Agency </strong>in Hammonton, N.J. was named <strong>Young Insurance Professional of the Year</strong>. <strong>Donald F. LaPenna Jr</strong>., of Cranford, N.J. was named the Professional Insurance Agents of New Jersey Inc. <strong>Director of the Year</strong>.</p> <p>The <strong>New York Young Insurance Professionals </strong>named my dear friend and fellow YIP <strong>Dina </strong>“imagine you’re a deer” <strong>Bruno</strong>, the NY-YIP <strong>Insurance Professional of the Year</strong>. Dina is Regional Sales Manager for <strong>MetLife Auto & Home</strong>, in Wantagh, NY, and is so very deserving of this award! Thanks for ALL that you do! In addition, I was totally surprised and incredibly shocked when presented with a NY-YIP <strong>Lifetime Achievement Award </strong>at the PIA of NY & NJ conference…so shocked that I forgot to give an acceptance speech when I went up to the stage to collect my plaque! Those of you who know me well, know that I am never at a loss for words, although when my dear friend and President of <strong>The New York Young Insurance Professionals, Michael Plafker</strong>, of <strong>Member Brokerage </strong>in Queens, NY, presented me with the award, I didn’t even say anything other than, “Thank You!”…which is all that I could say behind the emotion that I felt from receiving an award from my friends and peers…thank you so VERY much!</p> <p>Well, that’s what’s happening around town, and to all the fathers out there in this thing of ours, “Happy Father’s Day!” Ciao for now!</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/50-shades-of-insurance/">50 Shades of Insurance</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>Norat Honored at New York Insurance Association Annual Conference</title> <link>https://www.insurance-advocate.com/2012/06/18/norat-honored-at-new-york-insurance-association-annual-conference/</link> <dc:creator><![CDATA[Insurance Advocate]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:13:04 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[Cover Story]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=422</guid> <description><![CDATA[<p>NEW PALTZ, N.Y.—The New York Insurance Association, Inc. (NYIA) honored Cecilia E. Norat, Esq. with the Chair’s Distinguished Service Award at the association’s annual conference May 31 in New Paltz, N.Y. Norat is a past chair of NYIA and deputy general counsel and director of state relations and Global Regulatory Group for American International Group, […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/norat-honored-at-new-york-insurance-association-annual-conference/">Norat Honored at New York Insurance Association Annual Conference</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<p><strong>N</strong>EW PALTZ, N.Y.—The New York Insurance Association, Inc. (NYIA) honored Cecilia E. Norat, Esq. with the Chair’s Distinguished Service Award at the association’s annual conference May 31 in New Paltz, N.Y. Norat is a past chair of NYIA and deputy general counsel and director of state relations and Global Regulatory Group for American International Group, Inc. (AIG).</p> <p>“Cecilia is truly legendary in both insurance and government affairs circles,” NYIA chair and Wayne Cooperative Insurance Company president and CEO, Jeffrey Rice said. “She has been a tremendous supporter of NYIA and the New York insurance industry during her distinguished career. There is no one more deserving of this recognition.”</p> <p>Norat served as NYIA’s chair in 2008 and 2009. She was first elected to the association’s board of directors in 2000. She has also served on various association committees during her more than ten years of involvement in NYIA.</p> <p>In Norat’s current position, she oversees the Office of State Relations, which is part of the AIG Corporate Law Department and is responsible for relationships with state insurance supervisors and for state legislative developments. In addition, Norat supervises regulatory relationships worldwide for all AIG companies. Norat joined AIG in 1996 and first served as senior vice president of AIG Claim Services, Inc., overseeing the workers compensation line of business. Norat was also president of AIG Vendor Services and was responsible for managing the services provided by third party claim administrators. Prior to joining AIG, Norat was executive director of the New York State Insurance Fund from 1990 to 1996 and deputy executive director from 1986 to 1990. Previously, Norat served in a variety of positions with major carriers.</p> <p>A <em>summa cum laude </em>graduate of Fordham University with a Bachelor of Arts in economics, Norat also holds a Juris Doctor from Fordham University School of Law. She is admitted to practice law in New York and in the southern and eastern districts of the Federal Courts. Norat is also a member of the New York City Bar Association. She has been recognized with numerous professional awards, including: the Social Issues Award of the Public Employee Federation – AFL-CIO, the Hispanic Executive Award from the Wall Street Chapter of Image, Inc., the 1996 Insurance Woman of the Year by the Association of Professional Insurance Women, and the Helen M. Garvin Outstanding Achiever Award sponsored by the New York Chapter of National Association of Insurance Women. Norat has served in a variety of industry and civic volunteer roles. She is immediate past chair of the board of the Insurance Federation of New York. Norat was appointed by Mayor Michael Bloomberg, to serve as vice chair of the 2003 Charter Revision Commission, and in 2004, Mayor Bloomberg appointed her to be a member of the board of directors of New York City Health and Hospitals Corporation.</p>The post <a href="https://www.insurance-advocate.com/2012/06/18/norat-honored-at-new-york-insurance-association-annual-conference/">Norat Honored at New York Insurance Association Annual Conference</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> <item> <title>County Defaults on Bonds Sold to Insurer, Then Calls Them a "Stupid, Lousy Investment"</title> <link>https://www.insurance-advocate.com/2012/06/18/county-defaults-on-bonds-sold-to-insurer-then-calls-them-a-stupid-lousy-investment/</link> <dc:creator><![CDATA[Lawrence Rogak]]></dc:creator> <pubDate>Mon, 18 Jun 2012 17:11:35 +0000</pubDate> <category><![CDATA[2012]]></category> <category><![CDATA[June 18]]></category> <category><![CDATA[Past Issues]]></category> <category><![CDATA[Courtside]]></category> <guid isPermaLink="false">http://insuranceadvocate.tv/?p=419</guid> <description><![CDATA[<p>Frankenmuth Mut. Ins. Co. v Waste Mgt. of NY, L.L.C. Frankenmuth Mutual Insurance Company, Plaintiff, against Waste Management of New York, L.L.C. and SANITARY DISTRICT NO. 1, TOWN OF HEMPSTEAD, Defendants. Counsel for Plaintiff: Fox Rothschild, LLP Counsel for Defendant (Waste Management): Schnader Harrison Segal & Lewis LLP Counsel for Defendant (Sanitary District): Law Offices […]</p> The post <a href="https://www.insurance-advocate.com/2012/06/18/county-defaults-on-bonds-sold-to-insurer-then-calls-them-a-stupid-lousy-investment/">County Defaults on Bonds Sold to Insurer, Then Calls Them a "Stupid, Lousy Investment"</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description> <content:encoded><![CDATA[<h3><em> <em>Frankenmuth Mut. Ins. Co. v Waste Mgt. of </em> NY, L.L.C. </em><strong>Frankenmuth Mutual Insurance Company, Plaintiff,</strong></h3> <p><strong><em>against</em></strong></p> <p><strong>Waste Management of New York, L.L.C. and SANITARY DISTRICT NO. 1, TOWN OF HEMPSTEAD, Defendants.</strong></p> <p>Counsel for Plaintiff:</p> <p>Fox Rothschild, LLP</p> <p>Counsel for Defendant</p> <p>(Waste Management):</p> <p>Schnader Harrison Segal & Lewis LLP</p> <p>Counsel for Defendant</p> <p>(Sanitary District): Law Offices of Nathaniel M. Swergold</p> <p>Timothy S. Driscoll, J.</p> <p>This action was commenced by plaintiff Frankenmuth Mutual Insurance Company (“Plaintiff ” or “Frankenmuth”) against defendants Waste Management of New York, L.L.C. (“Waste Management”) and Sanitary District No. 1, Town of Hempstead (“District” or “Defendant”). Plaintiff’s action against Waste Management, as well as an earlier action filed by Waste Management against Plaintiff and other entities, was settled before trial. Thus, the trial before this Court addressed the only remaining allegations, which are Frankenmuth’s claims against the District for (1) breach of contract, (2) unjust enrichment, and (3) promissory estoppel. The action was tried before the Court on November 14, 15 and December 15, 2011. The parties then submitted post-trial memoranda in March 2012.</p> <p>Plaintiff ‘s case at trial consisted of the testimony of Nathaniel Swergold and Brian McLeod. The defense case consisted of the testimony of John Cameron. Each witness was subject to cross-examination, and various documents were admitted in evidence both by stipulation and during the course of the testimony.</p> <p><strong><em>FINDINGS OF FACT AND CONCLUSIONS OF LAW</em></strong></p> <p>In approximately 1992, the District, which is a municipal entity within the Town of Hempstead (“Town”), reached an agreement with the New York State Department of Environmental Conservation in which the District would build a new recycling facility to treat the solid waste generated by the 18,000 homes and commercial properties in the District. In order to finance the project, some $3.6 million in bonds were issued in 1994 by the Nassau County Industrial Development Agency (“IDA”).</p> <p>Cameron is a licensed professional engineer whose company worked on retrofitting the District’s old solid waste operation to become a recycling facility. He was also a principal of Five Towns, which operated the recycling facility until 1997. Since 1999, his engineering firm, Cameron Engineering, has served as a consulting engineer to the District. He testified about the process by which the IDA issued bonds to finance the development of the recycling facility. According to Cameron, the IDA became involved because neither Cameron nor his business partner nor the District was willing to guarantee the debt for the facility, and conventional banks would not make a loan without such a guarantee. The bonds were issued pursuant to a limited offering memorandum (“LOM”). It is the obligations of the LOM that are the focus of this case. Based on representations in the LOM, Frankenmuth believed the bonds to be investment grade securities when it purchased the bonds for its investment portfolio in 2004.</p> <p>Frankenmuth points to various provisions in the LOM that, it asserts, impose upon the District an obligation to seek appropriation from the Town to pay for the bonds. Among these provisions is the following language:</p> <p><em>The District has covenanted to use its best efforts to include in each budget submitted to the Town of Hempstead, beginning with the budget to be submitted for the year beginning January 1, 1995, an amount designated to and sufficient for the purpose of paying the full amount of District rent due in the next succeeding fiscal year of the District.</em></p> <p>As further support for its claim, Frankenmuth cites to the November 1, 1994 Lease Agreement between the District and the IDA. That agreement includes the following provisions:</p> <p><em>District reasonably believes that funds will be available to make all lease payments during the lease term and hereby represents that it intends to do all things lawfully within its power to obtain, maintain and properly request and pursue funds from which the lease payments may be made, including requesting funds from the Town for such payment in the District budget. District shall use its best efforts to include in each proposed District budget submitted to the Town’s board an amount designated to and sufficient for the purpose of paying the full amount of the base rent and additional rent payable during the applicable fiscal year of the District. District shall notify the agency and the trustee on or before the business day next succeeding (1) any date on which the District submits a proposed District budget to the Town’s board that does not include an amount designated to appear sufficient for the purpose of paying base rent and additional rent, if any, payable during the applicable fiscal year of the District, or (2) any date on which the Town adopts a budget that does not include such an amount. In the event that the District submits a proposed District budget to the Town’s board that does not include an amount designated to and sufficient for the purpose of paying base rent and additional rent if any payable during the applicable fiscal year of the District, the District shall include in such budget a conspicuous statement as to the amount of base rent and additional rent if </em><em>any that has been omitted therefrom and the possible consequences of such omission.</em></p> <p>The District never prepared, much less submitted, a budget that sought an appropriation for payment of the bonds. It never notified Frankenmuth of its failure to do so, but nevertheless maintains that Frankenmuth was informed by its investment adviser that the District was not obligated to make bond payments as suggested by Frankenmuth.</p> <p>The District relies on Section 24 of the LOM as support for its position that it had no obligation to seek any appropriations for the bonds:</p> <p><em>Notwithstanding any other provision of this Agreement . . . this Agreement shall be deemed executory only to the extent of the moneys budgeted and appropriated and available for the purpose of this Agreement . . . and it is understood that neither this Agreement nor any representation by any public employee or officer creates any legal or moral obligation to request, budget, appropriate or make available moneys for the purpose of this Agreement.</em></p> <p>The District further relies on Section 5 of the LOM, which is captioned “Nonappropriation of Funds.” That provision states that, upon nonappropriation, “This agreement shall terminate without penalty or expense to the District of any kind whatsoever.”</p> <p>Swergold is the general counsel for the District, and has been employed by the District since May 1972. As general counsel, he draws up and interprets contracts, prepares bid documents, and advises the District’s board. Swergold testified that he continuously believed that the District would never be liable for payment on the bonds. He maintained that Section 24, by its very terms, vitiates any other presumed obligation by the District to pay any amount due on the bonds. Indeed, he characterized the bonds as a “stupid, lousy investment.” He stated that he did not have concern that the public might be misled about any obligations by the District to fund the bonds because “anybody who would be buying these bonds I presumed would have the advice of people who knew what they’re doing.” He characterized the provisions cited by Frankenmuth as “magic language” to assuage the underwriters, and maintained that all of the relevant documents, taken together, did not impose an obligation on the District to seek any funding. In sum, Swergold described Frankenmuth’s purchase of the bonds as a “mere gamble” that Frankenmuth had “won” for many years.</p> <p>Swergold further stated that “everybody knew” that the “escape clauses” in Section 24 and 5 of the LOM meant that the bonds were risky. He noted that, in addition to the plain language of these clauses, the interest rate on the bonds (7.9 percent per annum) was higher than prevailing interest rates. Swergold testified credibly that, at the time the bonds were prepared, he told bond counsel Hawkins Delafield that the “District has no interest in going forward in any way unless it’s absolutely clear that they have no liability on the bonds.” Swergold noted that although Frankenmuth paid $3.6 million for the bonds, they recovered in excess of $5 million. In sum, he said that the bonds were a “risky investment . . .you take a risk because there was the higher interest rate at the time.”</p> <p>In a non-jury trial, “evaluating the credibility of witnesses is a matter committed to the discretion of the trial court.” <em>Cameron Eng’g & Assoc., LLP v. JMS Architect & Planner, P.C</em>., 903 N.Y.S.2d 755 (2d Dept. 2010). The Court was able to evaluate the demeanor and temperament of Swergold, as well as the manner in which he responded to questions on direct and cross examination, and fully credits Swergold’s testimony. Swergold responded to all questions posed to him in a clear and instructive manner, and was able to refer to specific provisions in relevant documents, as well as relevant conversations, in support of his testimony.</p> <p>The original operator of the facility was an entity known as “Five Towns.” The agreement between the District and Five Towns required the District to pay Five Towns a certain dollar amount for each ton of refuse that passed through the facility. This fee is known as a “tipping fee.” Five Towns would become the owner of the waste material collected in the District, and in turn could resell the recyclables extracted from the material.This arrangement was not economically advantageous to Five Towns, however, because of the fluctuations of the recyclable market. Five Towns thus could not meet its obligations under the bonds, and went into default. Cameron confirmed that Five Towns was unable to continue to operate the facility in a financially viable manner, and thus could not meet its obligations under the bonds. Five Towns ultimately obtained a modification of its agreement with the District. Under that modification, the District would deduct from the operator’s fee that portion which was due to the bondholders, and pay that amount directly to the bondholders.That modification, along with all of Five Towns’ other obligations, was eventually transferred to Waste Services Inc. (“WSI”).WSI was acquired by Eastern Waste, which was in turn acquired by Waste Management.</p> <p>Cameron stated that he understood that payment of the bonds “would most likely stop” if Waste Management defaulted, and that the “responsibility for repayment of the bonds was with the operator.” He corroborated Swergold’s testimony that “The District would never agree to guarantee the bonds from day one, which is why we could not finance with the bank, and with the IDA that was always an issue.” Cameron did, however, acknowledge that nowhere in the bonds does it say that the District did not guarantee payment if the operator defaulted.</p> <p>The Court also fully credits all of Cameron’s testimony. Like Swergold, Cameron responded to all questions posed to him in a clear manner, and his credible testimony buttresses Swergold’s assertion that it was never the intention of the parties that the District would be obligated to make bond payments.</p> <p>In 2006, Waste Management approached the District about renegotiating its arrangement with the District. Those discussions are memorialized in Px 33. In sum and substance, Waste Management advised the District that the financial results achieved under Waste Management’s contract with the District were not acceptable to Waste Management, and sought modification of the contract. Among the modifications sought by Waste Management were that the District should assume responsibility for the monthly payments of approximately $37,000 on the bonds. According to the District, this provides further support for the conclusion that Waste Management, as operator, was solely responsible for payment on the bonds because there would be no basis for Waste Management to seek a modification in which the District would be responsible for the bonds if the District were in fact responsible all along.</p> <p>Brian McLeod, who is the treasurer of Frankenmuth, testified as to plaintiff ‘s alleged damages. He testified that Plaintiff did not receive payment due of approximately $432,000 on November 1, 2008. Moreover, an interest payment of approximately $16,000 was not made on May 1, 2009. Finally, on November 1, 2009, a payment of principal and interest of approximately $416,000 was not made. There was no credible evidence to the contrary regarding Frankenmuth’s damages. The District counters that it was not required to pay the bonds. Moreover, it claims that it has never received any of the proceeds of the sale of the bonds, and thus has not been unjustly enriched. Finally, it states that because it never promised to pay the bonds, it should not be liable under promissory estoppel.</p> <p>The Court concludes that Frankenmuth is not entitled to recover on its breach of contract claim. A party seeking to recover for breach of contract must establish (1) formation of a contract between the parties, (2) performance by the plaintiff, (3) failure to perform by the defendant, and (4) resulting damages. <em>See, e.g., JP Morgan Chase v. J.H. Elec</em>., 69 AD3d 802 (2d Dept. 2010); <em>Brualdi v. Iberia</em>, 79 AD3d 959 (2d Dept. 2010). Here, the District did not have the obligation to seek appropriations for, much less pay any amounts on, the bonds at issue. That is apparent from the plain language of Section 24 of the LOM. That section expressly provides that the LOM is executory “only to the extent of the moneys budgeted and appropriated and available for the purpose of this Agreement,” and further provides that the District did not have any “legal or moral obligation to request, budget, appropriate or make available moneys for the purpose of this Agreement.”It further states that the limitations in Section 24 are effective “[n]otwithstanding any other provision” of the LOM. Accordingly, not only does Section 24 eliminate any requirement that the District seek, much less pay, any amount on the bonds, but it also expressly states that its terms are effective regardless of any other language in the LOM. Frankenmuth’s interpretation of the LOM would thus impermissibly render Section 24 meaningless. <em>Two Guys from Harrison- N.Y., Inc. v. S.F.R. Realty Associates</em>, 63 NY2d 396, 403 (1984), citing <em>Corhill Corp. v. S.D. Plants, Inc</em>., 9 NY2d 595, 599 (1961) and <em>Muazk Corp. v. Hotel Taft Corp</em>., 1 NY2d 42, 46 (1956) (court must avoid contractual interpretation that renders clauses of the agreement meaningless). The Court’s conclusion is buttressed by the testimony of Swergold and Cameron, which the Court has credited in its entirety. Both Swergold and Cameron stated that the District had no intention of being liable for payment on the bonds. Swergold further testified that sentiment was expressed to bond counsel throughout the drafting process. Section 24 thus reflects the undisputed testimony regarding the intent of the parties at the time that the documents at issue were drafted.</p> <p>The Court rejects Frankenmuth’s argument that the Third Department’s decision in <em>Rochester Fund Municipals v. Amsterdam Muncipal Leasing Corp</em>., 296 AD2d 785 (3d Dept. 2002) requires the District to have sought appropriations for the bonds or paid any amount due on the bonds. In that case, the City of Amsterdam contracted to construct and finance a sludge maintenance facility. Although the City was required to appropriate funds to make the necessary finance payments, it elected not to appropriate funds and terminate the lease. Plaintiff then sued the City, claiming that the City had breached its agreement with plaintiff by failing to appropriate necessary funds. The City moved for summary judgment, which the trial court denied.The Third Department affirmed the denial of summary judgment, ruling that the City had failed to demonstrate that the funds were unavailable throught the ordinary budget process. The Third Department further held that the City had failed to demonstrate that the funds “were not available in the course of ordinary budget procedures” and further noted:</p> <p>Stated another way, “any unavailability of funds must not have been the result of any improper act or omission by the [municipality]”, nor may the municipality make such funds “unavailable” as a matter of convenience [citations omitted]. Significantly, the contractual language in <em>Rochester Fund </em>differs markedly from that in the present case. Specifically, the City in Rochester Fund agreed to “use all reasonable and lawful means at its disposal to ensure the appropriation of money for such Fiscal Year sufficient to pay the Lease Payments coming due therein.” By contrast, Section 24 of the LOM expressly provides that the District had no “legal or moral obligation to request, budget, appropriate or make available moneys for the purpose of this Agreement.” That alone distinguishes <em>Rochester Fund </em>from the present case.</p> <p>Moreover, <em>Rochester Fund </em>did not grant judgment as a matter of law against the City, and thus does not support Frankenmuth’s claim that judgment as a matter of law is somehow appropriate against the District here.</p> <p>Nor is the District liable on Frankenmuth’s promissory estoppel claim. The elements of a cause of action for promissory estoppel are: (1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the party to whom the promise is made, and (3) an injury sustained in reliance on that promise. <em>Agress v. Clarkstown Central School Dist</em>., 69 AD3d 769, 771 (2d Dept. 2010). Here, there is not a “clear and unambiguous promise” by the District to pay the bonds. Indeed, Section 24 states clearly to the contrary, and is corroborated by the credible testimony of both Swergold and Cameron that the District never made any promise that it intended to be liable on the bonds. Finally, the District is not liable to Frankenmuth under an unjust enrichment theory. To prevail on a cause of action for unjust enrichment, a party must show that “(1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what ought to be recovered.” <em>Anesthesia Assocs. Of Mt. Kisco, LLP v. Northern Westchester Hosp. Center</em>, 59 AD3d 473, 481 (2d Dept. 2009). The essence of unjust enrichment is that “one party has received money or a benefit at the expense of another.” <em>Wolf v. National Council of Young Israel</em>, 264 AD2d 416, 417 (2d Dept. 2009). Here, there is no evidence that the District received any benefit at Frankenmuth’s expense. But even if this was the case, it is hardly “against equity and good conscience” for the District to retain any of these benefits when Frankenmuth earned a not-insignificant rate of return on the bonds, and indeed the bondholders received in excess of the face value of the bonds. Nor is it “against equity and good conscience” for the District to have acted, without exception, in a manner consistent with its intention that the operator, and not the District, would be liable on the bonds. Settle judgment on ten days notice.</p> <p><strong>Comment</strong>: From reading this decision, it appears that the bonds issued by the Nassau County IDA said, in effect, we promise to do this, we promise to do that, but if we don’t do what we promised, we don’t owe you anything. The fact that the District’s attorney called these bonds a “stupid, lousy investment” and a “gamble” doesn’t do much for my confidence in municipal bonds. Not that I have much confidence in the securities markets anyway — look what they did to our economy in 2008. In a way, this is just a microcosm of the mortgage derivatives that are responsible for our current economic Depression (yes, I call it a Depression — the official economic numbers don’t reflect the reality of our true economic state. Among other things, the “official” unemployment rate is 8.1% but the “real” unemployment rate, which includes people who have given up looking for work, is 15%). One really must ask why our government permits the securities industry to put worthless paper on the market.</p> <p><em>2012 NY Slip Op 50994(U)</em></p> <p><em>Decided on May 15, 2012</em></p> <p><em>Supreme Court, Nassau County</em></p> <p><em>Driscoll, J.</em></p> <p><em>Decided on May 15, 2012</em></p>The post <a href="https://www.insurance-advocate.com/2012/06/18/county-defaults-on-bonds-sold-to-insurer-then-calls-them-a-stupid-lousy-investment/">County Defaults on Bonds Sold to Insurer, Then Calls Them a "Stupid, Lousy Investment"</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded> </item> </channel> </rss>