TAGA

Congratulations to our Workers Compensation carriers.

2009-09-08T08:52:00.000-07:00

Two of our Workers Compensation carriers were ranked as High Tier Performers by the Texas Department of Insurance Division of Workers’ Compensation. These carriers are Rochdale Insurance Co and Service Lloyds Co, who scored a 95.82 and 97.22 respectively. A score of 95 or better was required to qualify as a High Tier Performer.

For this PBO assessment, TDI-DWC evaluated insurance carriers' performance in the following areas:

Timeliness of processing medical bills
Timeliness of submitting medical billing data electronically to TDI-DWC
Timeliness of initiating temporary income benefits (TIBs)
Timeliness of submitting initial TIBs data electronically to TDI-DWC

As a managing general agency, we’re proud to offer you these markets, coupled with the fast friendly service you’ve come to expect from TAGA. TAGA’s underwriting authority and years of experience means we provide quotes and indications usually within 24 hours. For questions regarding these or our other Workers Compensation markets, please contact any one of our Workers Compensation Underwriters at 888-999-8242.
For more information on this report by TDI, check out this Insurance Journal article

Class Codes: Key to Accurate Underwriting

2009-08-11T07:38:00.000-07:00

By Hank Beck, TAGA Workers Compensation Underwriter

A problem with workers compensation submissions that seems to stump many people is choosing correct class codes. Choosing the correct codes can be a difficult task due to the complexity of the system used. In Texas, class codes are governed by TDI. Texas licenses much of the NCCI system, but makes significant variations in specific classification rules. The system has over 700 possible workers compensation codes to choose from to correctly classify your risk. So why is it important to spend the time to correctly identify the proper code? For many reasons, including accurate premiums and good customer service.

Why a Class Code System?
The classification system exists to group employers so that each classification reflects exposures common to that type of employer. It is designed to simplify the process for employers seeking to obtain workers compensation insurance. By using standard class codes, employers can effectively shop rates and coverage.

Correctly Identifying Class Codes
An incorrect class code can cost your insured thousands of extra dollars each year.
Correctly identifying class codes at the inception of the policy can eliminate problems and additional premiums at the policy’s final audit.

The first thing to consider is what is the governing class code? Or in other words, what activity is the primary business occupation and includes the most payroll? The easiest way to get this information is by understanding fully what it is that your insured does. Ask qualifying questions of the employers to make sure that you or anyone else who looks at the submission and policy will understand fully what it is they do.
Documenting this and providing this to your underwriter at your MGA or carrier, will ensure that the insured is classified correctly.

Next, you can locate a listing of Texas class codes on the Workers’ Compensation Classifications page of the TDI website. Using this information, you can determine what the correct class code is and make the suggestion to your underwriter, along with the document you recorded from the insured.

Standard Exemptions
Another thing to look at are standard exemptions, these include Clerical Office Employees, Drafting Employees, Drivers, Chauffeurs (and Their Helpers), Salespersons, Collectors or Messengers, and Executive Officers. Making sure that employees who engage exclusively in these activities are correctly classified will save your insureds money.

General Inclusions and Exclusions
Some operations within a business may appear to be separate, but are actually included in the scope of the governing class code. Examples of these are restaurants solely for the use of employees, manufacturing of containers for use by the employer, and printing by the insured for their own products.

Exclusions, because they may be higher risk, do not fall under the governing class code. Examples of this could include aircraft operation and new construction by the insured’s employees. It is best to check TDI’s “Texas Workers’ Compenstion and Employers’ Liability Manual” for a complete list and details on inclusions and exclusions.

Resolving a Dispute
Once an insured has been classified with a class code, they will earn and loose points on their experience modifications, based on losses and participation in programs such as stop-loss. Should it be discovered after years of use of the same class code that it is an incorrect one, TDI must become involved to change the code.

If a carrier or insured disputes, they can file for a ruling with TDI, wherein many cases TDI will investigate the company with an audit that may include a visit to the insured’s place of business to determine exactly what it is they do. TDI can also be contacted informally for a suggestion for a class code when it is ambiguous what it is they do.

Fortunately, a process exists for applying the experience mod to the corrected class code if it was discovered to be incorrect. However, the extra time and energy involved in getting it corrected serves as a good point for getting it correct the first time.

Do it Right
Class codes can be difficult to get right each and every time. But with correct documentation it’s very attainable; especially when you consider that the insured has you, your MGA, carrier and TDI looking out for them.

Interpretation and assumptions are usually the biggest mistakes when it comes to identifying correct class codes. By taking the guesswork out of all the steps, your insured will end up with the policy they need and reduce the chance of being hit at audit.

Remember that TDI is the ruling body on class codes, and as such the primary resource for class code information. TDI’s workers compensation website is http://www.tdi.state.tx.us/wc and contains a wealth of information.

By taking the extra time to make sure they are correctly classified, you will have a client who always turns to you at renewal time and for all their insurance needs.

Hank Beck is a Senior Workers Compensation Underwriter with Tejas American General Insurance Agency (TAGA.) He has over 26 years experience as a Workers Compensation Underwriter with TAGA, Texas Mutual, AETNA, Paula Insurance and Kemper Insurance. He can be contacted at Hank@taga1.com.

This article appeared in the July 30, 2009 edition of The Insurance Record

Professional Claim Scenario

2009-08-06T11:53:00.000-07:00

Recently one of our underwriters, Connie, was asked to provide a claim scenario for a firm that does property tax consulting, which also includes some involvement in litigation on their client’s behalf. Connie turned to her underwriter, Michelle Duffet at Insight Insurance Services, for a detailed explanation for this particular risk. We thought Michelle’s response contained some valuable, insightful information and are happy to share it with you with her permission.

Hi Michelle,

I was asked by our agent to provide claims scenarios for this type of risk. I went to your website for that, but I can’t see where this risk fits in any of your categories. I appreciate your help and look forward to hearing from you.

Best Regards,
Connie Hatch
TAGA Professional Liability Underwriter

Hi Connie,

First and foremost, it is an absolute truth that you need not do anything wrong to get sued. We estimate that more than half (and maybe as much as 75%) of all professional liability claims arise out of situations where the Insured professional has conducted their business properly. However, that doesn't stop clients from claiming that they misunderstood possible outcomes, or they were purposely mislead, or they paid for services and didn't receive any value in return.

For this firm (Company Z) in particular, these all seem to be very real possibilities. Unless all clients receive the full property tax relief that was sought, it can be expected that at some time, a disappointed client will sue out of anger and resentment of the fee paid to Company Z. Assuming Company Z has a good contract in place and performed the services promised, these factors will aid in the defense of such a professional liability suit but they won’t necessarily prevent a lawsuit nor will they allow for an automatic, quick dismissal of a lawsuit.

It is also possible for the firm to make an error. Even the best run companies occasionally miss an appeal or filing deadline, file the wrong form which stops an appeal or protest from further consideration, overlook a small piece of information in identifying issues, or misinterpret a change in tax law. Sometimes these events result from an internal error; sometimes they result from a personal emergency (such as illness or a death in the family). Even a seemingly small, insignificant error can provide the spark to ignite a client dispute. And again, while most clients are reasonable, there is no guarantee that all clients will be considerate.

One other point of consideration; it has been illustrated across all types of professional liability insurance that claims increase in a tough economy. On an overall basis, clients are much more demanding of receiving a measurable value for the fee paid and expect perfection in professional services when money is tight. When the economy is booming and clients are feeling wealthy and hopeful, claims activity decreases. In the current economic climate, the firm should expect that clients will be tougher to please. The law of averages will eventually result in a professional liability claim.

I hope this is helpful. Please let me know if you have other questions.

Thanks

Michelle A Duffett
Insight Insurance Services

Going, Going Green

2009-07-27T06:48:00.001-07:00

Lisa Reynolds, TAGA Brokerage Underwriter

With a drop in fuel prices, we’ve seen a decline in the number of policies for traditional energy contractors, manufacturers and distributors, such as oil & gas. In contrast to this, we’ve seen a surge in green industry applications and policies, such as solar, wind, bio-diesel, geothermal manufacturers & distributors.

In a recent NY Times article, the growth of the “clean-energy economy” is reported to have grown 9.1 percent between 1998 and 2007, which translates to 777,000 new jobs. While that is just half a percent of all U.S. jobs, the clean-energy economy is poised to grow significantly with financial support from the public and private sectors, the report concludes.

Texas ranked second in the nation, in terms of workers in clean-energy jobs, with 11.7 million workers.

The report defines the clean-energy economy as including 16 sectors: energy generation, energy transmission, energy storage, energy efficiency, transportation, manufacturing/industrial, construction, agriculture, energy production, materials, air and environment, recycling and waste, water and wastewater, business services, finance/investment, and research and advocacy. The authors of the article counted only companies and jobs on the supply side, not the demand side.

Although traditional energy sources are far from obsolete, in fact we would expect a good resurgence in polices when fuel prices rise, we know that we expect a lot of business to come in the way of clean-energy risks.

Portions sourced from the NY Times.

2009-06-29T12:09:00.000-07:00

5 Things to Remember for Farm and Ranch Customers in a Soft Economy
By Anita Herzog, Farm and Ranch Department Manager

1. Make sure your clients are covered.
Have they added new activities recently? In many cases, farmers will implement agritourism or retail outlets in order to generate additional revenue. These should have separate coverages to protect their total interests.

2. Do they have proper coverage?
If they’ve liquidated or added some of their assets, such as additional tractor and other equipment, now’s a good time to look at their coverage. Are structures adequately covered for their rebuild costs? Are there times of the year when additional coverage may be needed? Keep in mind, TAGA can also package personal umbrellas for your farm and ranch clients.

3. Are you sure they’re getting the best rate?
TAGA shops your submission between up to five A Rated Admitted markets, getting you the best value possible with no extra effort on your part. Also, we’re happy to provide various options for you, for example, deductible options, valuations and operations.

4. Don’t sacrifice service for price.
At TAGA, we believe in combining competitive pricing with quality service and we only work with markets that provide the same standards. We pride ourselves on our quick turnaround, giving you the answers you need when you need them.

5. Work with an MGA and Carriers who know Farm and Ranch
We pride ourselves on our vast knowledge of Farm and Ranch products, and have the markets to provide you with options. What this means for you is that if you have a situation that seems out of the ordinary, chances are we’ve seen it and can provide you with the best option out there.

New stats show employment lawsuits rising

2009-06-05T07:54:00.000-07:00

The Equal Employment Opportunity Commission (EEOC) just released statistics on complaints filed with them in 2008. Given the unemployment rate is at its highest level in 25 years, it's no wonder employment litigation is soaring.

In fact, the past year has been tumultuous for employers and employees alike across virtually all industries. The EEOC report showed there were over 95,000 charges filed last year, the most ever reported.

The new report states that complaints in all categories increased over 2007, including:
15% increase in discrimination complaints overall29% increase in age discrimination complaints23% increase in retaliation complaints14% increase in sex discrimination complaints13% increase in national origin discrimination complaints11% increase in race discrimination complaints10% increase in disability discrimination complaints

To learn how you can help your clients protect themselves from costly employment litigation, please contact your TAGA Professional Experts

Debbie Stacks - debbie@taga1.com or Connie Hatch - connie@taga1.com

A Silver Lining For Non Profit Directors and Officers

2009-06-04T09:34:00.000-07:00

Uncertain funding due to a weak economy calls for federal action, possible employee layoffs and insurer bailouts. After showers of April gloom, has there ever been a better time than now for non profit organizations to seek Directors and Officers and Employment Practices Liability Insurance?

Tax time also brought the IRS’ biggest changes for the tax-exempt sector in 30 years. Non profits could see claims by donors or governmental agencies that fund them due to a lack of transparency, accountability and tax compliance.

They must now answer whether they have:

Implemented the IRS’ Best Practice Policies for Whistle-blowers, Conflicts of Interest and Document Retention and Destruction
Engaged in lobbying or political campaign activities, transactions with interested persons or major dispositions of assets
Complicated compensation arrangements, funding grants, non-cash contributions or tax-exempt bonds

Moreover, the government, plan administrators and participants or their beneficiaries may also file claims under Fiduciary Liability against those who:
Exercise discretionary authority or control in managing or disposing the assets of plans covered by the Employee Retirement Income Security Act (ERISA)
Render investment advice for a fee or other compensation with respect to monies or property belonging to those plans

Even before these latest concerns, Directors and Officers were not immune from claims. Non profits remain more likely to have an Employment Practices claim than one resulting from General Liability. Rainy day funds are not the answer to these woes: the annual budgets of 85% of non profits are less than the average cost to defend a claim closed by litigation.

There has never been a better time to grow your Professional Lines book of business with our Non Profit Directors and Officers and Employment Practices Liability product.