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<title>March 8 | Insurance Advocate</title>
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<title>March 8 Cover</title>
<link>https://www.insurance-advocate.com/2021/03/08/march-8-cover/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 17:10:33 +0000</pubDate>
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<title>The rise of the exponential underwriter</title>
<link>https://www.insurance-advocate.com/2021/03/08/the-rise-of-the-exponential-underwriter/</link>
<dc:creator><![CDATA[Guest Author]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 16:02:14 +0000</pubDate>
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<description><![CDATA[<p>Leveraging a convergence of data, technology, and human capital to transform underwriting in insurance: As the insurance industry adapts to shifting market conditions, some roles will likely need to be transformed as well. Learn how insurers could multiply value creation by modernizing the underwriting function now</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/the-rise-of-the-exponential-underwriter/">The rise of the exponential underwriter</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<h2 class="p1"><span class="s1">Leveraging a convergence of data, technology, and human capital to transform underwriting in insurance</span></h2>
<p class="p2"><strong>By Britton Van Dalen</strong></p>
<p class="p1">Driven by the need for efficiency and evolving customer expectations, most insurers have been moving steadily toward greater digitization. Underwriting has been a key focus area: Most insurers have actively been upgrading their underwriting capabilities with more advanced technology and expanded data sources.</p>
<p class="p1">To understand insurers’ long-term plans and to envision the future of underwriting and those working in the function, we interviewed the chief underwriting officers (CUOs) or equivalent business leaders of several large life and property-casualty (P&C) insurers.</p>
<p class="p1">Three trends stood out that should fast-track the case for underwriting modernization. First, underwriters are being challenged to move from hindsight, where underwriting decisions are evaluated after the fact, to foresight, where portfolios are actively monitored, to understand the impacts of risks added to their books of business in real time. In the future, historical data alone may not be enough to underwrite an evolving set of risks, particularly in commercial lines. Take cyber insurance, for example, where threat actors are constantly evolving their tools and techniques, making rearview-mirror underwriting less than reliable.</p>
<p class="p1">Meanwhile, the customers’ world is changing, becoming more digital and interconnected via global supply chains. And with rapid digitization, the availability of alternative and predictive data is increasing, which makes risk selection increasingly competitive and facilitates more rapid adjustments to underwriting strategies. Underwriters will likely need to upgrade their tools and skill sets to thrive in this dynamic, forward-thinking world.</p>
<p class="p1">Second, underwriters are being asked to bring more science to the art of underwriting. Underwriting will always be partly judgment-driven; otherwise, the role could be fully automated. Indeed, there are still gaps between rules-based underwriting and what’s actually happening in the market—shifts in capacity, emergence of new risks, and a subsequent need for coverage and price adjustments—that only a human underwriter can manage. Underwriters need to be able to thrive in both realms—as data pioneers and technology trailblazers. They also need to remain agile and flexible, and use their experience and judgment to manage portfolios, adapt to changing market conditions, maintain broker and client relationships, and keep coverage and pricing realistic in a competitive market.</p>
<p class="p1">Last, but not least, the nature of risk itself is changing. Underwriters will need to adapt to the evolution of risk to remain relevant and stay competitive. With mixed-use vehicles, the lines are often blurring between personal and commercial auto insurance. Workers’ compensation and homeowners’ coverage boundaries are overlapping, now that millions are working from home. Sensors are proliferating, generating huge volumes of new, real-time data to digest and monetize. And ecosystems can evolve beyond insurance and risk transfer to risk mitigation and broader financial management. Insurers are working with auto manufacturers to encourage safer driving using factory-installed telematic sensors and working with cyber risk management companies to provide comprehensive solutions beyond risk transfer. Given these sweeping trends and shifts, what role can the underwriter play to ensure they (and their products and processes) are not rendered obsolete?</p>
<p class="p1">Achieving this transformation will not be easy or quick. It will likely require insurers to integrate new data and technology companywide. True transformation could also require a shift in organizational mindset and culture, as well as the skill sets and roles of underwriters themselves.</p>
<p class="p1">As machine learning, virtual reality, and other digital advances increasingly automate the underwriting function, more evolved underwriters can take advantage of technology and newly developed skill sets to become more valuable to both their clients and employers. Leveraging real-time data, industry insights, and market-sensing capabilities, they could be better equipped to not just help customers manage risk, but also provide insight on how to avoid and prevent exposures.</p>
<p class="p1">Underwriters should be able to focus on more complex challenges, crafting custom policies faster, while improving their price-setting accuracy and boosting customer satisfaction. Such transformation should be spearheaded by the emergence of the exponential underwriter2—a multiskilled professional who will take the use of alternative data and advanced technology to a whole new level while enhancing their role and becoming more strategic (see sidebar, “Definition”).</p>
<p class="p1">Informed by our discussions with CUOs, as well as advanced text analytics of detailed job profiles from Deloitte’s Human Capital Data Lake, this report offers insights on how insurers could take a structured approach to achieve this transformation and elevate the underwriter role exponentially.</p>
<p class="p1">New data and technology is expected to drive underwriting transformation—a likelihood recognized by 200 insurance executives from around the world surveyed for Deloitte’s 2021 insurance outlook.3 Respondents cited greater use of automation, alternative data, and artificial intelligence (AI) as the top three changes they need to make in the underwriting process to stay resilient through 2021 and set the stage for growth in future years (figure 1).4</p>
<p class="p1">Together, these foundational elements will likely form the building blocks of any underwriting modernization program.</p>
<p class="p3"><b>Enabling new data sources and analysis</b></p>
<p class="p1">Traditionally, underwriters have utilized decades of static, historical information to develop rules and guidelines to assess risks. However, if the relevance of historical data diminishes over time, it may not accurately predict future trends and exposures. This could result in poor risk selection, ambiguous coverage language, and inaccurate pricing. For example, relying on historical loss experience to write natural catastrophe risks used to be considered adequate. But it may be insufficient in the future: Changing climate, urbanization, and increased asset concentration in climate-exposed areas could significantly alter risk patterns.5</p>
<p class="p1">Augmenting climate change models with curated content can significantly broaden risk assessment considerations. Liberty Mutual, for example, has collaborated with Jupiter, an InsurTech that offers weather and climate analytics, to leverage its data and analytics, in an effort to better meet the risk management needs of commercial insurance clients.6</p>
<p class="p1">In life insurance, while historical health records would continue to be essential, insurers may get a more comprehensive and current assessment by tracking predictive data variables via fitness wearables and social media.</p>
<p class="p3"><b>Utilizing technology to augment underwriters</b></p>
<p class="p1">Underwriters using legacy platforms are increasingly weighed down with several unproductive tasks, such as manually compiling information from disparate sources and interfacing with multiple systems. The result is often lost productivity and higher costs.</p>
<p class="p1">Solutions utilizing intelligent automation, including AI, can process repetitive tasks more efficiently, while freeing up underwriters’ time and supporting them to perform more value-added tasks.</p>
<p class="p1">Automation opportunities span the entire value chain of underwriting, from early product evaluations/illustrations, to processing applications, to policy issuance. For example, intelligent solutions can help data collection by quickly and automatically gathering specific information related to applicants from both internal and external sites, reducing response times considerably.7</p>
<p class="p1">Insurers can also use a conversational AI agent to assist communications between different stakeholders. Machine learning can analyze historical information from that requestor and determine the next best action. Other AI solutions can utilize techniques, such as behavioral analytics and machine learning, to help identify misrepresentation or fraud and to improve the speed and accuracy of underwriting.</p>
<p class="p1">Nationwide, for example, uses data extraction and recognition from unstructured sources, such as free-form text fields, to improve model input accuracy in real time, which is helping the company make faster and better decisions.8</p>
<p class="p1">At the same time, solutions based on cloud-native architecture may enable faster IT development and end-to-end digital workflows, creating a more seamless experience for underwriters. Supported by a user-friendly underwriting workbench, they offer a one-stop platform to access, merge, and generate insights from data drawn from multiple sources, which streamlines processes and boosts productivity.</p>
<p class="p3"><b>Reimagining the underwriting value chain</b></p>
<p class="p1">Collectively, these enablers are giving insurers an opportunity to reimagine the underwriting value chain, from data intake to policy issuance (figure 2). They can help companies achieve operational excellence, meet evolving customer expectations, and improve risk selection.</p>
<p class="p1">With an end-to-end understanding of the value chain, underwriters have a ringside view of how individual improvement initiatives can build on one another to ultimately realize an insurer’s vision of underwriting transformation. And while data and technology are critical components of that vision, underwriters who master higher-level skill sets and roles can become indispensable.</p>
<p class="p3"><b>A role-based look at becoming exponential</b></p>
<p class="p1">Let’s address the elephant in the room: Professionals are often concerned that their employers will use emerging technologies as a way to replace them, resulting in fears about job security.9 However, this belief is likely not fully justified as applied to underwriting transformation, simply because with or without new technology, the buck would still stop at the underwriter’s desk.</p>
<p class="p1">Yes, it may be true that the roles of underwriters are likely to change as a result of new data and technology. Traditional activities such as data collection, risk estimation, price quoting, and policy issuance could take a back seat as automation takes on an increasing proportion of the workflow for routine and lower-complexity risks.</p>
<p class="p1">This does not mean underwriters will have no role to play in the future of risk assessment, pricing, and new business decisions. Quite the contrary.</p>
<p class="p1">As insurers move from hindsight to foresight, underwriters are likely to play an integral part in developing, implementing, running, and refining advanced data models and automation solutions. They would have more time to focus on processing complex, high-value cases that require experience and professional judgment, and to monitor the overall profitability and strength of line-of-business portfolios. And they will likely be tasked with interpreting, communicating, and defending underwriting decisions (both fully automated and those augmented by AI) to multiple stakeholders, while working closely with leadership to execute strategic initiatives.</p>
<p class="p1">David Swaim, senior director, underwriting automation at Transamerica, a large US life insurer, believes underwriting is moving quickly in this direction: “The underwriter of the future is going to look very different. They’re going to have to be very targeted and focused in their understanding of complex risk selection. They’re going to have to be more sales focused, selling their decisions and creating understanding of the decisions that they’re making while educating external distributors on the processes themselves. Additionally, underwriters have to become much more analytically focused than what they are currently.”</p>
<p class="p1">Ultimately then, underwriters who embrace and adapt to transformation demands and enhance their core skills and overall expertise have an opportunity to widen their career paths and become champions of the technologies that will likely make their jobs easier yet more challenging and satisfying.</p>
<p class="p1">Based on our discussions with CUOs, we identified key areas in which underwriters should elevate their capabilities in the near future. From this, we created five personas to explain the new potential roles and how they could be cultivated (figure 3). Each role has a unique set of responsibilities, requiring specific skills. An underwriter could assume one or multiple personas as per the action plan of individual insurers.</p>
<p class="p3"><b>1. Technology trailblazer</b></p>
<p class="p1">Exponential underwriters would likely be in charge of managing the digital workflow. They would be owners and supervisors of automation programs, tweaking them regularly to optimize performance and improve operational efficiency. As Heather Milligan, senior vice president, life underwriting at Lincoln Financial Group, explains, “Underwriters are starting to own implementation of AI programs and are driving automation priorities by working on rule engines and their interfaces. This progression is likely to continue as real-time underwriting decisions become more important.”</p>
<p class="p1">Underwriters should collaborate closely with IT teams to refine underwriting platforms, automate rule sets, and test the automation’s performance. And with the emergence of no-code/low-code development platforms, such as Mendix and Unqork, exponential underwriters will likely become more involved in the software development process itself, further reducing time to market and cost.10</p>
<p class="p3"><b>2. Data pioneer</b></p>
<p class="p1">With increased use of predictive datasets, such as electronic health records and pharmacy scans in life insurance and telematics and industrial sensor data in P&C, underwriters should closely collaborate with data scientists to design, develop, and implement analytic and predictive models to improve underwriting and pricing accuracy. Tim Ranfranz, head of risk selection strategy at Northwestern Mutual, said he sees “underwriters working with data scientists and data engineers and helping them understand the data, how it is coming in, and why we use data in the way we use it for our traditional underwriting. I think there’s a healthy partnership there.”</p>
<p class="p1">Data pioneer underwriters will likely need to master how models select or price risks to ensure decisions are defensible to challenges from distributors, clients, and regulators. This knowledge could also be used to train front-line underwriting peers on how to provide data-driven advice to clients. In addition, data pioneers could monitor model outputs and rule sets, identifying when to update rules to reflect realities of market conditions and stay ahead of the competition.</p>
<p class="p1">Data pioneers should also be at the forefront of developments in the InsurTech and data provider space within underwriting. Working with data scientists, they can scout for and experiment with new datasets that could help refine models in a cost-effective manner.</p>
<p class="p1">Finally, as the human face for an increasingly automated underwriting function, they could also engage with regulators early in the development of models and their underlying data sources. This could create more transparency and alleviate any regulatory concerns.</p>
<p class="p3"><b>3. Deal-maker</b></p>
<p class="p1">As insurers increasingly use predictive models to assess risk and price policies, underwriters will likely be called upon more often to partner with sales teams to explain the rationales behind their decisions to agents and brokers as well as applicants. They will also likely be called upon to help negotiate alternative terms and conditions to close sales rather than present their determinations as “take it or leave it” deals.</p>
<p class="p1">As Heather Milligan at Lincoln Financial explains, “You’ve got to get on the phone and be personable with the producer and explain why you did what you did.”</p>
<p class="p1">Finally, they could also help account managers identify attractive risk segments and develop go-to-market strategies with producers. In their role as a deal-maker, exponential underwriters will also likely be tasked with cross- and up-selling activities.</p>
<p class="p3"><b>4. Portfolio optimizer</b></p>
<p class="p1">Underwriters could also take a lead role in developing a robust market-sensing mechanism to provide real-time monitoring of the business environment. This market intelligence would help them make rapid changes in overall risk portfolios in response to market trends, which should ultimately boost profitability.</p>
<p class="p1">“The underwriter of the future is going to be a great portfolio manager and will have the tools and the analytics for that and will be able to spend more time in that capacity,” said Michael Harnett, CUO, North America at Everest Insurance. “The underwriters with a more granular understanding of margin analysis and how to optimize portfolios—that’s where we are heading. And I think that’s where the industry will probably be forced to head in order to maximize the efficiency around capital and capital allocation.”</p>
<p class="p1">At the same time, this market intelligence could be utilized to help develop modular products or enhance product sophistication, which could give companies a competitive advantage.</p>
<p class="p3"><b>5. Risk detective</b></p>
<p class="p1">In this role, underwriters would likely dedicate a significant portion of their time to assessing exposure probabilities at a case level in exceptional and complex situations and for high-priority clients. Being a risk detective would require underwriters to develop a deep business understanding, risk assessment expertise, and exemplary communication skills. “The complexity of what [exponential underwriters] are going to do when it comes to risk assessment will be increased, because that easier stuff—maybe the lower face amount, the younger ages, the more healthy population—that will be running through our accelerated model or our straight-through processing,” said Erin Corrao, head of new business development at Northwestern Mutual. “That leaves the complex work for the human risk assessment.”</p>
<p class="p1">Risk detectives would also focus on developing and providing exposure foresight to clients, by identifying signals that could predict a potential event that could be avoided or at least mitigated.</p>
<p class="p1">Finally, exponential professionals could be called upon to shepherd new underwriters identified for this persona by sharing their tacit knowledge gained through experience. In fact, this knowledge exchange would have to be reimagined; as vanilla cases get automated, it could be harder for new underwriters to acquire investigative skills on the job. Risk detectives may have to develop their own expertise and that of their teams in different ways than they do today, such as getting involved with industry groups at a younger age and implementing innovative apprenticeship models.</p>
<p class="p3"><b>What is the right mix of exponential underwriter personas?</b></p>
<p class="p1">Should insurers focus their resources more heavily on developing an underwriting workforce that thrives as portfolio optimizers but not as much on data pioneers? Or should they be more heavily skewed toward a workforce that thrives as deal-makers, or equally balanced across all personas?</p>
<p class="p1">There is no “right” combination as needs will vary company to company. Insurers should identify the unique mix of personas that their underwriting workforce will likely require based on factors that drive their underwriting strategy, such as their lines of business, the composition of their customers, the demands of their distribution channels, and overall market strategies.</p>
<p class="p1">Are insurers recruiting people who have the skills needed to become exponential underwriters?</p>
<p class="p1">Our CUO conversations helped us uncover specific skills that future underwriters would likely need to cultivate to take on each of the exponential personas. Many of those skills can be developed by upgrading capabilities that underwriters likely already possess in their current roles. However, to upskill their workforce and develop multidimensional exponential professionals, insurers should also cultivate skills and expertise in domains that are typically not considered traditional to underwriting (figure 4).</p>
<p class="p1">Have insurers actively started recruiting professionals with the skills needed to become exponential underwriters?</p>
<p class="p1">To answer this question, we performed advanced text analytics on more than 25,000 detailed job descriptions advertised by various global insurers over the past three years. (See sidebar, “Deloitte’s Human Capital Data Lake analysis.”)</p>
<p class="p1">Our analysis showed that most insurers are already seeking several skills that would be needed in exponential underwriting roles. But it also found potential gaps in the skills currently being sought in underwriter candidates (figure 5).</p>
<p class="p1">The high level of focus on traditional underwriter skills, such as basic data analysis and risk management, are in line with future needs. There also has been heightened demand for underwriters with top-notch people skills, such as collaboration, staff development, emotional intelligence, and stakeholder management, which are also essential for an exponential underwriter.</p>
<p class="p1">The biggest gap in capabilities, however, seems to be in emerging data skills (data strategy and management and advanced data analytics) and new technology capabilities (intelligent automation, emerging technology, and accelerated underwriting).</p>
<p class="p1">At an industry level, our analysis revealed that underwriters today are closer to becoming deal-makers, risk detectives, and, to some extent, portfolio optimizers than they are technology trailblazers or data pioneers.</p>
<p class="p1">Winning the war for talent</p>
<p class="p1">As competition for talent intensifies, insurers should be very intentional about their strategies around attracting, retaining, and enabling exponential underwriters. In particular, as insurers try to fill the technology trailblazer and data pioneer roles, they will be competing not only with other insurers but also other industries for the best talent.</p>
<p class="p1">Insurers should have a clear, multidimensional human capital recruitment plan to secure these capabilities. They should also look at nontraditional approaches (such as alternative workforce models) to ensure access to hard-to-find skills.</p>
<p class="p5"><b>Mapping the exponential underwriter journey</b></p>
<p class="p1">The transformation to exponential underwriters will likely be a multiyear journey with several interconnected and interdependent parts. Having clearly articulated business objectives, stakeholder alignment, and a clear road map should be considered major components to the transformation’s success.</p>
<p class="p1">This will likely require insurers to move forward while synching up transformation initiatives in four major areas: strategy and governance, data and analytics, technology, and culture and talent (figure 6).</p>
<p class="p1">Exponential underwriter journey through different stages</p>
<p class="p1"><span class="s2"><b>Stage 1: </b></span>The insurer isaware of exponential opportunities in underwriting but lacks a clear vision to drive multifaceted improvement initiatives. Most likely, underwriters need to sift through data across disparate systems to get the information they need, which is time consuming and undermines their productivity and effectiveness. Companies in this stage likely lack the skills required in-house to launch their exponential journey.</p>
<p class="p1"><span class="s2"><b>Stage 2: </b></span>The insurer is developing some exponential capabilities with a high-level plan in place, but initiatives are largely implemented in silos. They likely have an exponential underwriting vision, but one which is not consistently understood or adopted companywide. Improvement initiatives tend to be one-off and siloed, limiting the ability to scale up pilots or proofs of concept. However, with the implementation of some enhanced core underwriting platforms, data strategy has improved. This has augmented the capabilities and experience of underwriters to some extent.</p>
<p class="p1"><span class="s2"><b>Stage 3: </b></span>The insurer is scaling exponential initiatives with a focus on the broader vision and receives strong support from a highly trained and enabled underwriting staff. The biggest difference in this stage is that the new responsibilities required to develop exponential underwriters are widely understood and accepted. With greater availability of exponential skills, carriers can start accelerating initiatives across the underwriting function, freeing up underwriters to play a more multidimensional and strategic role.</p>
<p class="p1"><span class="s2"><b>Stage 4:</b></span> The insurer is transforming and becoming a risk management adviser for customers, rather than just a steward of risk-transfer mechanisms. In this stage, underwriters are fully skilled to fulfill their new exponential roles. They do not feel threatened by technology—rather, they trust and embrace alternative data, more advanced predictive models, and pricing decisions produced by AI solutions. They can play an active part in explaining, justifying, and refining AI-driven decisions, creating a virtuous cycle.</p>
<p class="p1">Underwriters have reinvented themselves; they are providing risk prevention services and strategic insights to clients, thereby monetizing the insurer’s overall risk intelligence capabilities. Companies at this level enjoy significant differentiation from the competition. They may not need to compromise on pricing to win and retain business.</p>
<p class="p3"><b>Maturity is tied to the weakest link</b></p>
<p class="p1">Overall maturity will likely depend on the weakest link across all four areas. For example, carriers could install the latest technologies and data sources into their underwriting operations, but if their underwriters dismiss the solutions or lack the skills to generate value from those tools, they will not be able to reach higher maturity stages.</p>
<p class="p1">Likewise, without a clear strategy, business case, and involvement from forward-thinking talent, technology and data investments will likely not be appropriately focused and designed to achieve sustainable business value creation. Underwriting leaders should therefore ensure that transformation initiatives span all four areas, given their interdependent nature.</p>
<p class="p1">The price of inaction</p>
<p class="p1">All of this begs the question, “why now?” Insurers that continue to rely on traditional, tried-and-true ways of underwriting, or that take too long to transition to a more exponential approach, could have much to lose in both the short and long term.</p>
<p class="p1">Adverse selection is an increasing risk of inaction. Competitors could get ahead with wider, deeper datasets, the technology to generate the most value from the data, and the talent to manage and communicate it internally and externally. Before long, laggards could drop off preferred lists of distribution partners and see their higher-skilled talent recruited by more proactive competitors, within and outside the insurance industry. This could create a negative spiral that would be difficult to reverse.</p>
<p class="p1">On the other hand, insurers that invest in modernizing their underwriting function with new data and technology, while equipping their talent with exponential skills, could experience a virtuous cycle. They could garner the most profitable business, gain loyal customers, and have a more energized underwriting workforce that contributes to the organization in a more strategic way—in short, a competitive advantage that is hard to emulate.</p>
<p class="p1">Our global outlook survey revealed that, despite heightened expense management pressures during the pandemic, most insurers are not cutting projects and budgets across the board. Instead, most are postponing or eliminating nonessential expenditures to free up capital so they can increase investment in priority initiatives. This strategy can help in creating and sustaining a nimbler organization and talent composition that can quickly adapt to continued uncertainty.</p>
<p class="p1">For the reasons outlined in this report, transforming the underwriting function—and making underwriters exponentially more valuable—should be placed on the high priority list. The tools are there. The potential is there. Now is the time.</p>
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<title>Tax Hikes Will Hit Hard</title>
<link>https://www.insurance-advocate.com/2021/03/08/tax-hikes-will-hit-hard/</link>
<dc:creator><![CDATA[Steve Acunto]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 09:09:42 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[Foreword]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12691</guid>
<description><![CDATA[<p>The New York State Legislature should avoid major tax hikes in this year’s state budget, including a three-year surcharge on multimillion-dollar incomes proposed by Governor Cuomo. The Empire Center’s senior fellow, E.J. McMahon, made a cogent case against the hikes in testimony offered recently in Albany. “Raising taxes on the highest incomes to raise revenues […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/tax-hikes-will-hit-hard/">Tax Hikes Will Hit Hard</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p>The New York State Legislature should avoid major tax hikes in this year’s state budget, including a three-year surcharge on multimillion-dollar incomes proposed by Governor Cuomo. The Empire Center’s senior fellow,<span class="Apple-converted-space"> </span>E.J. McMahon,<span class="Apple-converted-space"> </span>made a cogent case against the hikes in testimony offered recently in Albany.</p>
<p class="p2">“Raising taxes on the highest incomes to raise revenues in the short term will only accelerate the erosion of our tax base in the long run, ultimately undermining funding for the very programs the Legislature wants to protect,” McMahon testified. “Even worse, as New York’s economy struggles to recover from the pandemic, enacting any one of the significant ‘millionaire and billionaire’ tax increases now being promoted as a package could turn that erosion into a full-scale landslide.”</p>
<p class="p2">McMahon said New York’s tax revenues have recovered more strongly than those of other states—thanks to its reliance on an income tax that, in turn, is disproportionately paid by the state’s highest earners.</p>
<p class="p2">“The economies of New York City and State will recover eventually—but how strongly, and how soon, are open questions. In the meantime, the Legislature’s guiding principal can be summed up in five words: don’t push more taxpayers away.”</p>
<p class="p2">McMahon’s specific recommendations were:</p>
<p class="p2">• Reject Cuomo’s proposed tax increase. McMahon noted that the latest tax receipts show Cuomo’s budget can be balanced without the revenue the tax hike would generate, not even counting billions in additional temporary federal aid the state is likely to receive under an impending stimulus bill.</p>
<p class="p2">• Postpone scheduled middle-class income tax cuts for up to four years, which will save $2 billion. The cuts are “desirable but not essential at the moment,” McMahon said, recommending that the scheduled tax brackets be annually adjusted for inflation to preserve their value to taxpayers during the period in which the cuts are suspended.</p>
<p class="p2">• Repeal the Film Production Credit. The credit, which functions as an outright subsidy to the entertainment industry, costs $420 million a year, he noted.</p>
<p class="p2">In addition, McMahon recommended that the Legislature repeal the sales tax exemption on small clothing and footwear purchases, saving $800 million a year, and devote half of the $800 million in revenue savings to increase in the Empire State Child Credit. This, he said, will “provide larger savings for families with children—the original intended beneficiaries of this overly broad, poorly targeted exemption.”</p>
<p class="p2">McMahon said revenue raised by extending the postponement of tax cuts, eliminating the film credit and repealing the small sales tax exemption should be kept in reserve and used “to help finance a transition to a sustainable budget in the longer term” once an expected infusion of federal aid is exhausted over the next few years.</p>
<p class="p2">Rebutting claims by advocates of various sweeping proposals for higher taxes on “millionaires and billionaires,” McMahon presented data showing that New York’s income tax code is steeply progressive, relying on the highest-earning 1 percent to generate 44 percent of taxes paid by state residents, and that the New York’s relative share of the nation’s income millionaires has declined since the current “millionaire tax” was first enacted in the depths of the Great Recession in 2009. <b><i>SA</i></b></p>
<p class="p2">
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<title>Big ‘I’ Praises Reintroduction of Main Street Tax Certainty Act</title>
<link>https://www.insurance-advocate.com/2021/03/08/big-i-praises-reintroduction-of-main-street-tax-certainty-act/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 08:09:01 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[In The Associations]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12689</guid>
<description><![CDATA[<p>The Independent Insurance Agents & Brokers of America (the Big “I”) is grateful for the reintroduction of the “Main Street Tax Certainty Act” in the U.S. House of Representatives by Reps. Jason Smith (R-Missouri) and Henry Cuellar (D-Texas) and in the U.S. Senate by Sen. Steve Daines (R-Montana). The legislation would make permanent a 20% […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/big-i-praises-reintroduction-of-main-street-tax-certainty-act/">Big ‘I’ Praises Reintroduction of Main Street Tax Certainty Act</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">The Independent Insurance Agents & Brokers of America (the Big “I”) is grateful for the reintroduction of the “Main Street Tax Certainty Act” in the U.S. House of Representatives by Reps. Jason Smith (R-Missouri) and Henry Cuellar (D-Texas) and in the U.S. Senate by Sen. Steve Daines (R-Montana). The legislation would make permanent a 20% deduction on qualified business income for some owners and shareholders of pass-through businesses.</p>
<p class="p1">“The Big ‘I’ thanks Reps. Smith and Cuellar and Sen. Daines for their work to reintroduce the Main Street Tax Certainty Act,” says Charles Symington, Big “I” senior vice president of external, industry and government affairs. “More than two-thirds of the insurance agencies and brokerages the Big ‘I’ represents are organized as pass-through entities and are currently seeing significant benefits from this deduction. These agencies and brokerages employ millions of people across the U.S. and occupy numerous retail locations in every state. This crucial deduction has allowed insurance agency and brokerage owners to reinvest and grow their businesses, hire new employees and better serve their customers.”</p>
<p class="p1">A provision of the 2017 Tax Cuts and Jobs Act added a section to the individual tax code (26 U.S.C. §199A) that created the 20% deduction on “qualified business income” for some owners and shareholders of pass-through businesses, such as subchapter S corporations, partnerships and sole proprietorships. On Jan. 18, 2019, the IRS issued final regulations implementing Section 199A of the tax code, ensuring that a greater number of owners and shareholders of insurance agencies and brokerages organized as pass-through entities are eligible for the new deduction.</p>
<p class="p1">However, unlike the C corporation rate reduction in the 2017 tax reform law, the 20% deduction for small businesses was not made permanent. Currently, the deduction is only available through the end of 2025. For the deduction to be available in 2026, Congress must extend Section 199A of the tax code for an additional amount of time or make the deduction permanent.</p>
<p class="p1">“Making the small business deduction permanent is crucial to enabling Main Street insurance agencies and brokerages across the country to compete with their C corporation counterparts,” says Wyatt Stewart, Big “I” assistant vice president of federal government affairs. “A permanent small business tax deduction will allow insurance agencies and brokerages to continue to compete with larger employers of all industries for the best talent. To avoid an unlevel playing field in the future, this inequity must be rectified by making the 20% deduction for small businesses permanent.”</p>
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<title>Big I Presents Selective’s Greg Murphy with Jeff Yates Lifetime Achievement Award</title>
<link>https://www.insurance-advocate.com/2021/03/08/big-i-presents-selectives-greg-murphy-with-jeff-yates-lifetime-achievement-award/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 07:08:16 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[In The Associations]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12687</guid>
<description><![CDATA[<p>The Big “I” presented Greg Murphy, executive chairman of the board of directors for Selective Insurance Group, Inc., with the Jeff Yates Lifetime Achievement Award. The Jeff Yates Lifetime Achievement Award, named in honor of former Big “I” CEO Jeff Yates, recognizes individuals beyond the agent community who contribute to the vitality and strength of […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/big-i-presents-selectives-greg-murphy-with-jeff-yates-lifetime-achievement-award/">Big I Presents Selective’s Greg Murphy with Jeff Yates Lifetime Achievement Award</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">The Big “I” presented Greg Murphy, executive chairman of the board of directors for Selective Insurance Group, Inc., with the Jeff Yates Lifetime Achievement Award.</p>
<p class="p1"> The Jeff Yates Lifetime Achievement Award, named in honor of former Big “I” CEO Jeff Yates, recognizes individuals beyond the agent community who contribute to the vitality and strength of the independent agency system. It is the highest recognition in the nation a non-agent can receive for a lifetime of work dedicated to furthering independent agencies.</p>
<p class="p1"> “Greg has spent a lifetime helping agents and, frankly, everyone he can, and the Big ‘I’ is honored to present him with this distinguished service award,” says Bob Rusbuldt, Big “I” president & CEO. “His impact on the independent agency system is incredible. We are thankful for his leadership, support and work as he continues to be a dedicated friend to the Big ‘I’ and the independent agent community.”</p>
<p class="p1">Murphy joined Selective in 1980 in the finance department, becoming senior vice president of finance in 1994 and chief financial officer in 1995. In 1997, he was named president and chief operating officer, and two years later he became president and CEO. He assumed the role of chairman in 2000. In 2013, he transitioned to chairman of the board and CEO, and in February 2020, was appointed executive chairman of the board of directors. On February 2, 2021, Murphy will become non-executive chairperson of the board.</p>
<p class="p1">Murphy led Selective to unprecedented financial success while expanding the company’s reach to 27 states. Under his leadership, Selective implemented commercial lines predictive modeling and enhanced safety management tools and resources. Murphy spearheaded a multitude of customer experience innovations and enhancements, and advanced diversity and inclusion initiatives. He also helped establish the Selective Insurance Group Foundation, which supports nonprofits in various communities where Selective is active.</p>
<p class="p1">“As insurance industry professionals, we have a responsibility to serve communities, help make them safer, and help put customers’ lives and businesses back together after a loss. Doing exactly this at Selective for four decades, alongside a team of talented employees and best-in-class independent insurance agents, has given me a fulfilling and rewarding career,” said Murphy.</p>
<p class="p1"> In addition to his roles at Selective, Murphy has served as a member of the board of directors of the American Property Casualty Insurance Association and member of the board of overseers at St. John’s University School of Risk Management, Insurance and Actuarial Science. Murphy was one of the first company CEOs to join Trusted Choice® and invest in TrustedChoice.com. In addition, he has long supported Project Self Sufficiency and the Newton Medical Center Foundation.</p>
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<title>Protect Property from Weather-Related Damage</title>
<link>https://www.insurance-advocate.com/2021/03/08/protect-property-from-weather-related-damage/</link>
<dc:creator><![CDATA[Guest Author]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 06:07:17 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[MSO Inc.]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12684</guid>
<description><![CDATA[<p>By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Assistant Vice President/Media Editor Winter weather takes a toll on houses, commercial buildings and other outdoor property, including fences, patios, pools and sheds. According to the Insurance Information Institute (III), winter storm damages exceeded $2.1 billion in 2019, down from $3 billion the year before. […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/protect-property-from-weather-related-damage/">Protect Property from Weather-Related Damage</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1"><strong>By Sue C. Quimby, CPCU, AU, CIC, CPIW, DAE – Assistant Vice President/Media Editor</strong></p>
<p class="p1">Winter weather takes a toll on houses, commercial buildings and other outdoor property, including fences, patios, pools and sheds. According to the Insurance Information Institute (III), winter storm damages exceeded $2.1 billion in 2019, down from $3 billion the year before. Weather-related damage may not be covered under a homeowners or commercial policy, making it even more important to prevent damage as much as possible. Helping clients with sound weatherproofing practices is another value-added service of the professional insurance agent.</p>
<p class="p1">There are many preventative measures that can be taken – preferably before the cold weather arrives. Outdoor plumbing and irrigation systems should be drained and insulated where feasible. Remove and drain all hoses. Most outdoor faucets have a local shutoff valve in the house, which should be closed, and the faucet turned on to get rid of the water. Shut off the faucet after draining – or at least before the shutoff valve is opened again in the spring as water in the pipes and faucet can freeze and expand, cracking the pipe or faucet. In the spring, check all outdoor faucets. Even if care has been taken to prevent freezing, cracks can still happen and may not be apparent until water is turned on again.</p>
<p class="p1"><span class="s1">Tree limbs and shrubs that could break or fall under the weight of ice and snow and damage property should be pruned. This is especially important when property of others is in danger of being damaged. If a neighbor’s property is damaged and the insurance company determines that proper maintenance and care could have prevented the loss, the claim might be denied. Pruning must be done at the proper time of year to avoid injuring the plant. Weather and other damage to trees and shrubs is generally excluded under insurance policies, so proper care is important to protect the investment. Mulch and burlap or other wrap can protect plants from the cold. Fencing and repellents can keep animals from destroying prized plants. </span></p>
<p class="p1">Weather damage to in ground pools is generally not covered under insurance. Heavy snow and ice can destroy the cover. When possible, use a broom to remove the snow. A shovel can tear the liner creating a bigger problem. If there is standing water on the cover, a sump pump can be used to keep the water from freezing.</p>
<p class="p1">While some wooden or metal furniture is designed to be left outdoors, not everything should be. Plastic furniture, for example, can become brittle so it should be brought inside during colder months. Aluminum and wrought iron equipment can be coated to prevent rust.</p>
<p class="p1">Melting snow puts added strain on sump pumps. Care should be taken to ensure that the discharge end of the pipe is free of obstructions. Back up of sewers and drains and sump pump overflow are optional coverages and must usually be specifically added to the policy.</p>
<p class="p1">Gutters and drains should be checked and maintained at least annually to be sure they are secure and working properly. Annual roof inspections for all structures are also important. In areas with significant snowfall, it may be necessary to clear the roof. This must be done carefully to avoid damage to the roof or injury from falling snow and ice, or falling off the roof. A snow rake with an extendable handle can clear the roof and gutters and prevent ice damming. It can also be used to knock down icicles to avoid injury to passersby. Heating coils can help melt snow from roofs and gutters. Proper attic insulation can also prevent ice buildup on roofs and gutters.</p>
<p class="p1">Clearing walks, driveways, patios and decks can also be a challenge. Salt is commonly used to melt the ice, but it can damage concrete and wood. In addition, the salt may be harmful to the environment as well as pets.</p>
<p class="p1">Storm losses not covered by insurance may still be tax deductible. Proper documentation is essential in the event of any property loss. Pictures of the damage as well as receipts or appraisals are a big help. Of course, everyone should maintain an inventory of their possessions that can be used as documentation in the event of any type of loss.</p>
<p class="p1">Proper maintenance is essential for any home or business owner to prevent or at least reduce damage from weather and other causes. Helping insureds understand the need for and develop such a plan is another value-added service of the true insurance professional.</p>
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<title>Susan Preston Promoted to Vice President, Director of Program Development for Specialty Program Group, LLC</title>
<link>https://www.insurance-advocate.com/2021/03/08/susan-preston-promoted-to-vice-president-director-of-program-development-for-specialty-program-group-llc/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 05:06:35 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[In The News]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12681</guid>
<description><![CDATA[<p>Summit, New Jersey–Specialty Program Group LLC (SPG), a leading operator of specialty insurance brokerages and underwriting facilities, announced the promotion of Susan Preston to Vice President, Director of Program Development for SPG. Susan has been President of Professional Program Insurance Brokerage in Novato California since 1993. She has put more than 15 programs together over […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/susan-preston-promoted-to-vice-president-director-of-program-development-for-specialty-program-group-llc/">Susan Preston Promoted to Vice President, Director of Program Development for Specialty Program Group, LLC</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">Summit, New Jersey–Specialty Program Group LLC (SPG), a leading operator of specialty insurance brokerages and underwriting facilities, announced the promotion of Susan Preston to Vice President, Director of Program Development for SPG.</p>
<p class="p1">Susan has been President of Professional Program Insurance Brokerage in Novato California since 1993. She has put more than 15 programs together over the years mostly within the London market. Preston will now focus her full energies on developing programs for brokers where there are market holes.</p>
<p class="p1"> Susan is a well-known public speaker for industry programs and conventions as well as being a writer for Demotech. She is in the Insurance Industry Hall of Fame and has been recognized as an Elite Woman in Insurance in four different years.</p>
<p class="p1">“We are thrilled to have Susan join our team. She has a long track record of developing innovative new products and programs. Her creativity and expertise will help the entire organization as we look to continue to expand our offerings.” says Chris Treanor, President & CEO of Specialty Program Group.</p>
<p class="p1"> Headquartered in Summit, NJ, Specialty Program Group is a fully licensed holding company established to acquire and scale best-in-class insurance underwriting facilities and specialty businesses throughout North America. SPG has 12 portfolio companies and is over one billion in premium. For more information, please visit www.specialtyprogramgroup.com.</p>
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<title>Specialty Insurer and Reinsurer SiriusPoint Launches with Over $3bn in Capital</title>
<link>https://www.insurance-advocate.com/2021/03/08/specialty-insurer-and-reinsurer-siriuspoint-launches-with-over-3bn-in-capital/</link>
<dc:creator><![CDATA[Insurance Advocate]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 04:05:23 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[In The News]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12678</guid>
<description><![CDATA[<p>SiriusPoint Ltd. (NYSE: SPNT) (“SiriusPoint” or the “Company”), an international specialty insurance and reinsurance company, has launched with over $3 billion in initial capital. The Bermuda-based Company has been formed as the result of the previously announced merger between Third Point Reinsurance Ltd. (NYSE: TPRE) (“Third Point Re”), a specialty reinsurer, and Sirius International Insurance […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/specialty-insurer-and-reinsurer-siriuspoint-launches-with-over-3bn-in-capital/">Specialty Insurer and Reinsurer SiriusPoint Launches with Over $3bn in Capital</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">SiriusPoint Ltd. (NYSE: SPNT) (“SiriusPoint” or the “Company”), an international specialty insurance and reinsurance company, has launched with over $3 billion in initial capital.</p>
<p class="p1">The Bermuda-based Company has been formed as the result of the previously announced merger between Third Point Reinsurance Ltd. (NYSE: TPRE) (“Third Point Re”), a specialty reinsurer, and Sirius International Insurance Group, Ltd. (Nasdaq: SG) (“Sirius Group”), a global multi-line insurer and reinsurer. SiriusPoint’s operating companies have a financial strength rating of A- (Excellent) from AM Best, S&P and Fitch, and are licensed to operate in Bermuda, the U.S., Sweden, the U.K., Belgium, Switzerland, Canada and Singapore.</p>
<p class="p1">The Company has launched as one of the first substantial re/insurers of the Class of 2020, with a robust capital structure, global platform, underwriting talent, and long-standing client and broker relationships already in place.</p>
<p class="p1">“I am delighted to announce the launch of SiriusPoint,” said Sid Sankaran, Chief Executive Officer and Chairman of SiriusPoint. “This is a strategic union of two highly complementary organizations. SiriusPoint is an opportunity to leverage our combined strengths and re-focus our organization on profitability, innovative partnerships, and solutions. Our breadth of footprint combined with the ability to be nimble and responsive will be truly differentiating.</p>
<p class="p1">“We aspire to be a disruptive force in the industry and drive technology innovation – with skilled underwriting at the core of everything we do. We have set a goal to challenge the status quo and define new ways of conducting business with diversity of thought and expertise. I am very excited about our future. We are building a company and a culture we can be proud of.”</p>
<p class="p1">SiriusPoint is built around a global platform that provides insurance and reinsurance solutions services to clients and brokers in almost 150 countries with access to admitted and non-admitted paper in Europe, the U.S., Bermuda, and Lloyd’s of London. A new division, Insurance and Services, has been formed to seek out strategic investment and partnership opportunities.</p>
<p class="p1">SiriusPoint’s insurance lines include: Environmental, Property, Energy, Workers’ Compensation, and Aviation and Space, while the company’s reinsurance lines include: Life, Accident and Health, Property, Marine and Energy, Casualty, Aviation and Space, and Credit and Bond. SiriusPoint also offers Runoff solutions.</p>
<p class="p1">SiriusPoint also announced today the appointment of two new members to its board of directors. Franklin (Tad) Montross is the former Chairman and Chief Executive Officer of General Reinsurance, a Berkshire Hathaway owned company, and held responsibility until 2016 for global underwriting policies, practices and protocols, as well as its Actuarial and Risk Management areas. Sharon M. Ludlow is a seasoned C-suite executive and corporate director, with more than 25 years’ of experience in the Life and Health, and Property and Casualty re-insurance industries. During the course of her career, Ms. Ludlow served as President and CEO of the Canadian operations of Swiss Re and as President of Aviva Insurance Company of Canada.</p>
<p class="p1">As previously announced, Rachelle Keller, previously a director of Sirius Group, and Peter W. H. Tan from CM Bermuda Limited, are also joining SiriusPoint’s board of directors. The remaining members of the board will transition from their equivalent roles at Third Point Re.</p>
<p class="p1"> SiriusPoint Ltd. (SiriusPoint) is a top 20 global insurer and reinsurer providing solutions to clients and brokers in almost 150 countries. Bermuda-headquartered with offices around the world, and is listed on the New York Stock Exchange (SPNT).</p>
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<title>COVID-19: The 2021 Landscape for Surgeons</title>
<link>https://www.insurance-advocate.com/2021/03/08/covid-19-the-2021-landscape-for-surgeons/</link>
<dc:creator><![CDATA[Guest Author]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 03:04:04 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[Covid-19]]></category>
<category><![CDATA[trends]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12675</guid>
<description><![CDATA[<p>By Max Schloemann According to reports, this year is looking to be one of changes and big possibilities for surgeons. While 2020 brought declines in surgical revenue and drops in patient intake, the COVID-19 pandemic caused a paradigm shift. Adaptations and innovations designed to cope with the pandemic could be a boon for the surgical […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/covid-19-the-2021-landscape-for-surgeons/">COVID-19: The 2021 Landscape for Surgeons</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1"><strong>By <span class="s2">Max Schloemann</span></strong></p>
<p class="p1">According to reports, this year is looking to be one of changes and big possibilities for surgeons. While 2020 brought declines in surgical revenue and drops in patient intake, the COVID-19 pandemic caused a paradigm shift. Adaptations and innovations designed to cope with the pandemic could be a boon for the surgical field in 2021, and changes in malpractice coverage could impact how surgeons conduct business this year.</p>
<p class="p3"><b>Here are some things to look for as we move through the year:</b></p>
<p class="p1"> The comeback of elective surgery. The COVID-19 pandemic put a stop to most elective surgeries across the country. In March of 2020, the Centers for Medicare and Medicaid Services (CMS) released guidelines that recommended postponing or cancelling elective and non-essential surgical procedures. When stay-at-home mandates went into effect shortly thereafter, it further complicated physicians’ abilities to provide elective care. The result was an overall 35% drop in surgical volumes from March 2020-July 2020.</p>
<p class="p1">However, with the decrease in new COVID-19 cases, the rollout of the vaccine, relaxation of stay-at-home orders, and adaptations in healthcare to make surgical environments safer, elective surgeries are on an astronomical upswing. Part of this rise is from the backlog of surgeries not performed during the pandemic (it’s suspected that there is a backlog of over 1 million orthopedic surgeries in the United States). With this news, surgical revenues are expected to jump and get back to pre-pandemic numbers, but surgeons should beware of burnout when trying to keep pace with surgical demands. Burnout is a leading cause of medical mistakes that can result in a malpractice claim.</p>
<p class="p1">Medical malpractice insurance rates aren’t going down – but they aren’t going up either. Many insurance providers for other verticals (auto, homeowners) offered discounts to their customers to help cope with the 2020 pandemic. This was not the case for medical malpractice insurance. Rates for neurosurgeons, orthopedic surgeons, plastic surgeons and bariatric surgeons maintained at their pre-pandemic prices. However, the onslaught of elective surgeries did not cause a rise in rates for surgical coverage, and rates are expected to be flat over the first two quarters of 2021.</p>
<p class="p1">Surgical specialty coverage. Certain types of surgery are more high-risk than others, making them less lucrative for medical malpractice insurance companies to cover. Bariatric surgery is one type that is sometimes excluded from a surgical medical malpractice policy. With the rise in elective surgery, it is now more crucial than ever for bariatric surgeons and all surgical specialists to check their medical malpractice coverage and make sure they are protected.</p>
<p class="p1">The future of robotic surgery in the wake of the pandemic. The COVID-19 pandemic caused a rise in the use of telemedicine and telehealth, and it demonstrated a need for remote treatment options across all specialties. Robotic surgical tools like the da Vinci and Ion are providing new avenues for surgical teams to remotely perform surgery. Though advancements in remote surgical technology and processes are needed before telesurgery becomes mainstream, the advent of telemedicine in the wake of the COVID-19 pandemic is a harbinger for what’s to come with surgery. Expect telemedicine to play a larger role in the surgeon-patient relationship in 2021.</p>
<p class="p5"><em><span class="s5">Max Schloemann is a 12-year medical malpractice insurance industry veteran and the founder of MEDPLI, a national medical malpractice insurance brokerage. The company’s clients include hundreds of doctors and surgeons, as well as Physician Assistants, Nurse Practitioners, and healthcare entrepreneurs. Mr. Schloemann is a Magna cum Laude graduate of the College of Business at Southern Illinois University and was named Outstanding Management Senior by the faculty of the college.</span></em></p>
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<title>Famous Lawyer’s Assets Frozen by Federal Court</title>
<link>https://www.insurance-advocate.com/2021/03/08/famous-lawyers-assets-frozen-by-federal-court/</link>
<dc:creator><![CDATA[Barry Zalma]]></dc:creator>
<pubDate>Mon, 08 Mar 2021 02:00:09 +0000</pubDate>
<category><![CDATA[2021]]></category>
<category><![CDATA[March 8]]></category>
<category><![CDATA[On My Radar]]></category>
<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12669</guid>
<description><![CDATA[<p>Thomas Girardi, a prominent Los Angeles attorney faced a federal judge in Chicago who froze the assets of his firm after finding that he misappropriated at least $2 million in client funds that were due to the families of those killed in the crash of a Boeing jet in Indonesia. Girardi is one of the […]</p>
The post <a href="https://www.insurance-advocate.com/2021/03/08/famous-lawyers-assets-frozen-by-federal-court/">Famous Lawyer’s Assets Frozen by Federal Court</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
<content:encoded><![CDATA[<p class="p1">Thomas Girardi, a prominent Los Angeles attorney faced a federal judge in Chicago who froze the assets of his firm after finding that he misappropriated at least $2 million in client funds that were due to the families of those killed in the crash of a Boeing jet in Indonesia.</p>
<p class="p1">Girardi is one of the nation’s leading civil lawyers, and gained notoriety in 1993 for his role in a lawsuit against the Pacific Gas and Electric Company of California that went on to inspire the 2000 movie Erin Brockovich.</p>
<p class="p1">At a contempt hearing U.S. District Judge Thomas M. Durkin called Girardi’s conduct “unconscionable” and said he was referring him to the U.S. attorney’s office for criminal investigation. Judge Durkin said to Girardi: “No matter what your personal financial situation is, no matter what kind of pressures you are under, if you touch client money, you are going to be disbarred and quite possibly charged criminally.” The judge called the need to hold clients money inviolable “ethics 101.”</p>
<p class="p1">Girardi, 81, is one of the nation’s preeminent civil lawyers and gained fame for his recent appearances on “The Real Housewives of Beverly Hills” alongside his now-estranged third wife, a 49-year-old pop singer known as Erika Jayne.</p>
<p class="p1">During the hearing, two attorneys representing Girardi said he did not currently possess the $2 million owed his clients. Los Angeles attorney Evan Jenness told the judge her client’s firm, Girardi Keese, had about $15,000 in its operating accounts and that: “They were unable to make payroll more recently.” The lawyer also cited “obligations and debts,” as well as an anticipated family court battle with Jayne over their assets. She filed for divorce last month after more than 20 years of marriage.</p>
<p class="p1">Girardi attended the court hearing by phone but did not speak beyond acknowledging his presence. His lawyers, who were hired in recent days, said Girardi had not been able to assist them in preparing a defense for the hearing. They said they had concerns about his mental competency. Meanwhile, Keith Griffin, an attorney at Girardi’s firm, told the court he “could not elaborate on why such an amount was still owed to certain clients or what the status of the remaining settlement proceeds was because Girardi is the sole equity owner of [his firm Girardi Kesse] with sole and exclusive control over the firm’s bank accounts, including its client trust accounts.”</p>
<p class="p1">Griffin then claimed that Tom was”unavailable in recent weeks due to a serious illness that caused him to be hospitalized for which he sought treatment”amid his fraud case.</p>
<p class="p1">Attorney Jay Edelson, a lawyer for the plane crash victims’ families called those assertions “a sham.” Edelson’s firm alerted the judge to the misappropriated funds and told Durkin that Girardi was offering him money in an attempt to stave off the contempt hearing.</p>
<p class="p1">Judge Durkin also ordered that a trustee be appointed to oversee whatever assets remained to Girardi and his firm. The priority, he said, was for Girardi’s clients to receive their entire settlement. “These are widows and orphans,” he said, noting each was due about $500,000. “Half a million dollars for any one of these families is significant money, life-changing given the tragedy they have been through and trying to carry on in the aftermath.”</p>
<p class="p1">The settlements at issue stem from the crash of Lion Air Flight 610, which plunged into the ocean off Indonesia, killing all 189 people on board. The plane was a 737 Max, the jet that Boeing subsequently grounded because of problems with its anti-stall software.</p>
<p class="p1">On Dec. 2, attorney Jay Edelson and his firm, Edelson P.C., filed suit in Chicago federal court against Girardi, Jayne, Girardi’s fim, Girardi Keese, and a number of other defendants.In the complaint, Edelson claims Girardi embezzled much of those funds, preventing much of the settlement from being paid to the crash victims’ families and to the Edelson firm for its services in securing the payment from Boeing.</p>
<p class="p1">The missing money is part of the amount Girardi and his firm negotiated from Boeing for four families, and the federal judge was overseeing the litigation and the payouts. The terms of the settlement are confidential, but based on remarks in court, each client was to have been paid $2 million but had only received about 75% of the money owed to them.</p>
<p class="p1">Edelson’s law firm filed a separate lawsuit against Girardi, accusing him of diverting the Lion Air settlement money to finance his “public image of obscene wealth” for him and his wife.</p>
<p class="p1">Edelson’s multiple attempts to find out whether clients had been paid, received mixed responses. He also accused Girardi and his wife of leading opulent and notoriously lavish lifestyles, pointing out that $ 40,000 a month Erika Jayne reportedly spent on her look and Thomas Girardis daily booking and exclusive table at Mortons The Steakhouse in Los Angeles. He claims the couple face increasing pressure to repay their debts and allege their publicly declared divorce is a sham process designed to protect creditors’ assets. It also states that Girardi and Jayne siphoned off large amounts of money from lenders and customers and removed them from Girardi Keese’s bank accounts for personal use.</p>
<p class="p1">To further increase their available cash, Edelson claims the Girardis have begun converting settlement funds, including the funds from the Lion Air settlement, for their own personal use, which, if proved would be a clear and notorious violation of the ABA and California rules of professional conduct. Edelson claims the Girardis have then taken various finance and legal measures to shield those funds from being claimed by the courts. Edelson said, for instance, Girardi has transferred funds from his firm through various “loans” to a company owned by Jayne.</p>
<p class="p1">Edelson also claims Girardi has reached deals with certain creditors, some of whom are named as defendants in the complaint, to use Lion Air settlement funds to pay down some of those loans, “in a Madoff-inspired attempt to protect his own wealth and appease his aggressive well-heeled lenders.”</p>
<p class="p1">A fifth client also may not have been paid, the judge noted.</p>
<p class="p1">Girardi’s law firm partner, Robert Keese, is reportedly suing to dissolve their business venture known as 1126 Wilshire Partnership. Keese, joined by Robert Finnerty and Jill O’Callahan, allege Girardi never paid them the approximately $315,000 in income from the partnership, claiming he took the money “for his own personal gain.”</p>
<p class="p1">The three plaintiffs also claim in the documents that Girardi took out loans against the property valued up to $7,460,000 million without their knowledge for Girardi’s “own personal gain, benefit and use” and not for the benefit of the partnership. As a result, the plaintiffs allege they’ve suffered a loss in equity of approximately $442,500 each. Keese and the group want to dissolve the partnership and liquidate the assets, including 1126 Wilshire Blvd. They’re also looking to receive the money they were previously owed and want to be awarded punitive and compensatory damages.</p>
<p class="p1">According to court documents Girardi also owes court reporters Veritext $548,941.28 in unpaid invoices. The legal filing comes a month after the divorce from the attorney. The Veritext lawsuit is one of many cases against Girardi making headlines.</p>
<p class="p1">In In re Girardi, a case from 2019 the Ninth Circuit Court of Appeal issued an order to show cause why Girardi & Keese, Engstrom Lipscomb & Lack, Thomas Girardi, and Walter Lack should not be suspended, disbarred, or otherwise sanctioned as a result of the massive fraud which took place in litigation pursued by them against Dole Food Company. On July 13, 2010, the Ninth Circuit issued an order suspending Walter Lack for a period of six months and reprimanding Girardi; the order also imposed almost $500,000 in monetary sanctions against the two attorneys.</p>
<p class="p3"><b>The Ninth Circuit concluded:</b></p>
<p class="p1">On March 21, 2008, JudgeTashima filed a detailed report addressing the motion for sanctions, in which he concluded that Girardi had “recklessly “made false statements to the Ninth Circuit.</p>
<p class="p1">***</p>
<p class="p1">Girardi’s practice of authorizing the Lack firm to sign his name on briefs that turned out to contain falsehoods may raise separate ethical questions, but with respect to the specific misrepresentations identified in the order to show cause, Girardi’s proven conduct is at most reck-less, and the recklessness inheres in his mode of practice, not in any specific action he took in the enforcement action or the appeal. We will therefore formally reprimand Girardi for his recklessness in determining whether statements or documents central to an action on which his name appears are false.</p>
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