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Things That Would Be Helpful To Know In My New Position As In-House Counsel Of A Medical Liability Insurer - By Robert Wortelboer
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Things That Would Be Helpful To Know In My New Position As In-House Counsel Of A Medical Liability Insurer - By Robert Wortelboer


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This presentation will provide valuable insight to those who are relatively new in their role as in-house counsel for a medical professional liability insurer through the identification and resolution …

This presentation will provide valuable insight to those who are relatively new in their role as in-house counsel for a medical professional liability insurer through the identification and resolution of legal issues that are uniquely relevant to property and casualty insurers that write medical professional liability insurance.

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  • 1. Things That Would Be Helpful to Know in My New Position as In-House Counsel of a Medical Professional Liability Insurer Robert L. Wortelboer Jr., Esq. General Counsel, Vice President, & Secretary, First Professionals Insurance Company, Inc. PIAA Corporate Counsel Workshop Hotel Solamar San Diego, California November 4, 2010 10:45 a.m. – Noon
  • 2. 1. KNOW (AND DEVELOP) YOUR ROLE WITHIN YOUR COMPANY A. Look Beyond Your Formal Job Description B. Make A List of Key Duties And Develop Your Knowledge In Those Areas C. Are There Exclusions To Your Responsibilities? Example: Employment Matters, Coverage Issues, Reinsurance D. Don’t Be Afraid Take On New Responsibilities Where There Are Gaps Example: Handling Letters of Credit
  • 3. 2. INTERACTING WITH MANAGEMENT AND STAFF IN YOUR ROLE AS GENERAL COUNSEL A. Sit Down With Each Department Head i. Find out what each would like to see in the way of legal support ii. Identify immediate and long term issues iii. Identify pending issues already being worked on iv. Develop an overall plan to address issues raised in such meetings B. Establish Good Relationship With Your Predecessor In-House Counsel
  • 4. C. Work As A Team NOT Independently i. Private Practice – May Have Operated Independently (Without Much Input Except For Your Client Contact) ii. In House Counsel – Must Work As A Team (Considering The Perspectives and Insight Of All Relevant Management and Staff)Example: Make Sure IT Department Can Produce Data RequiredPursuant To A Proposed Reporting Requirement Related To ANew Business RelationshipD. Market Yourself And Your Role To The Rest Of The Company.E. Attitude
  • 5. 3. WHAT WORK SHOULD I ASSUME AND WHAT SHOULD I SEND OUT? A. Common Sense Judgment i. Small Bridge (Small Knowledge Gap To Close) ii. Large Bridge (Large Knowledge/Experience Gap To Close) Large bridge Examples: Antitrust Issues Intellectual Property Issues Bankruptcy Issues Tax Issues Litigation B. Can It Be Done Timely? C. Is It Non-Legal Work That Can Or Should Be Done By Someone Else In The Company?
  • 6. 4. WHERE CAN I TURN TO FIND OUTSIDE COUNSEL? A. Federation Of Regulatory Counsel The Federation of Regulatory Counsel is a nation-wide association of attorneys specialized in the arena of insurance regulatory law. In order to be considered for membership, an applicant must be a lawyer in good standing, with at least seven years of experience in insurance regulatory law, and must bill more than fifty percent of his or her time to insurance regulatory matters. Each member is recommended in writing by three insurance industry executives from unrelated companies who have attested to their skill and competency. B. Fellow In-House Counsel of PIAA Companies
  • 7. 5. HOW CAN I LEARN MORE ABOUT THE MPL INSURANCE INDUSTRY? A. PIAA Newsbriefs (Weekly Email) PIAA Physician Insurer Magazine B. Crittenden’s Medical Insurance News Newsletter C. Medical Liability Monitor
  • 8. D. Annual Med Mal Reports Produced By State Regulators Example: See State Insurance Regulator Web Sites (Florida) (Missouri) (Connecticut) (West Virginia) 3D&t%20abid=207&mid=798 (Washington) United States General Accounting Office (GAO Reports) Example: Medical Malpractice Insurance, Multiple Factors Have Contributed to Increased Premium Rates
  • 9. F. Review The Websites Of MPL Company’sG. Learn About The Interesting And Creative Projects Of Other MPL CompaniesExample: 3R Program (COPIC)Programs Dedicated to Mental Health of Physician Involved in SuitMandatory Orientation for New PhysiciansH. Learn Basics Of Insurance Related Tax And Accounting Issues i. GAPP vs Statutory Accounting ii. Tax Issues Relevant to Insurance IndustryExample: Deductibility of ReservesHow Premium Tax Is CollectedApplication of Municipal Tax
  • 10. 6. HOW CAN I LEARN MORE ABOUT MY OWN COMPANY? A. Review Key Documents i. Articles of Incorporation and any amendments ii. Bylaws iii. Audit Committee Charter (Other Committees) iv. Description of Risk Factors Affecting Business (MD&A) v. Key Employment Contracts vi. Press Releases for last three to five years vii. Litigation Report viii. Code of Ethics and Conflicts of Interest Policies ix. Key Reinsurance Agreements x. Model Insurance Agency Agreement xi. Endorsement and Sponsorship Agreements xii. Managing General Agency Agreements xiii. Confidentiality and Non-Compete Agreements xiv. Related Party Transactions -Management Agreements -Tax Allocation Agreements -Intercompany Pooling Agreements -Cost Sharing Agreements
  • 11. B. Review Your Company’s Web SiteC. Where Does Your Company Derive Its Revenue? Example Solo Doctors Large Physician Group Practices Facilities Excess and Surplus Lines Non-Standard Physicians Fronting Arrangements Insurance Management Fees What States or States Make Up 80% of Your PremiumD. Direct Writer vs. Writing Business Through Agents Example Can be Both or One or the Other Depending Upon the StateE. Talk to Your President to Get an Understanding of Your Company’s Goals as well as the Key Issues Facing the Company Example Viability of Tort Reform in a key Revenue State Competitive Forces Regulatory Environment
  • 12. 7. SOME HELPFUL WEBSITES (Develop Your List of Favorites) A. Summary of Medical Malpractice Laws In United States and Territories B. Brokers & Reinsurance Markets Association (Reinsurance Agreement Provisions Accepted within Insurance Industry) (White Papers – Example: 9 Month Rule) C. American Tort Reform Association (Wealth of Information Regarding Past and Future Tort Reform) (Judicial Hellhole Report) D. Federal and State Government Information E. The Health Insurance Portability and Accountability Act of (HIPAA) F. Link to All State Insurance Departments
  • 13. H. Overview of All Patient Compensation Funds Compensation_FundsProcedures.docI. National Practitioner Data Bank www.npdb-hipdb.comJ. Glossary of Reinsurance Terms State Web Pages Dedicated to Form and Rate Filings (Florida)L. State Web Pages Dedicated to Corporate Records (Florida)M. Phone Numbers and Addresses www.zabasearch.comN. American Corporate Counsel Association
  • 14. 8. THE BENEFITS OF MODEL CONTRACTS A. Do Not Reinvent The Wheel B. Develop Model Agreements Of Your Own Example Agency Agreements Endorsement Agreements Confidentiality Agreements Model Managing General Agent Agreements Model Reinsurance Agreements C. Develop A Database Of Model Contract Provisions Example Non-Compete Clauses Ownership of Business Arbitration Causes Confidentiality Obligations Indemnification Requirements
  • 15. Model Letter of Credit [Letter Head of Issuing Financial Institution] DATE:_______CLEAN, IRREVOCABLE & UNCONDITIONALLETTER OF CREDIT No. _________________________Beneficiary: Your Insurance Company Name HereLetter of Credit Amount:Dear Sir or Madam,We hereby establish this clean, irrevocable and unconditional Letter of Credit in favor of Your Insurance Company Name Here, asBeneficiary, for drawings up to U.S. $_______________, effective immediately. This Letter of Credit is issued, presentable andpayable at our office at ____________________________, and expires with our close of business on ____________, 20____. Exceptwhen the amount of this Letter of Credit is increased, this Credit cannot be modified or revoked without your consent.The term “Beneficiary” includes any successor by operation of law of the named Beneficiary, including, without limitation, anyliquidator, rehabilitator, receiver or conservator. Drawings by any liquidator, rehabilitator, receiver or conservator shall be for thebenefit of all of the Beneficiary’s policyholders.We hereby undertake to promptly honor your sight draft(s) drawn on us, indicating our Credit number ___________, for all or anypart of this Credit upon presentation of your draft drawn on us at our office specified in paragraph one, on or before the expirationdate hereof, or any automatically extended expiry date.Except as expressly stated herein, this undertaking is not subject to any agreement, requirement or qualification. The obligation of_______________________(issuing financial institution) under this Credit is the individual obligation of ___________________(issuing financial institution) and is in no way contingent upon reimbursement with respect thereto, or upon our ability to perfectany lien, security interest or any reimbursement.This Letter of Credit is deemed to be automatically extended without amendment for one year from the expiration date or any futureexpiration date, unless (60) sixty days prior to such expiration date, we notify you by registered mail that this Letter of Credit willnot be renewed for any such additional period.This Letter of Credit is subject to and governed by the Laws of the State of Florida and the 1993 Revision of the Uniform Customs andPractice for Documentary Credits of the International Chamber of Commerce (Publication 500) and, in the event of any conflict, the Laws ofthe State of Florida will control. It this Credit expires during an interruption of business as described in Article 17 of said Publication500, ______________ (issuing financial institution) hereby specifically agrees to effect payment if this Credit is drawn against withinthirty days after the resumption of our business.
  • 16. 9. GIVING EMPLOYEES LEGAL ADVICE ABOUT PERSONAL PROBLEMS A. Academic Articles Say Don’t Do It, Even On Behalf Of Friends B. Want to Be Helpful – But Your Not An Expert in Family Law, Real Estate Criminal Law etc. C. May Not Be Covered By Legal Malpractice Insurance Carrier D. May Not Be Covered By Indemnification Provisions Of Your Company Bylaws E. Express Genuinely Want To Help – But May Be In Best Interest To Simply Help Them Find Counsel F. Keep List Of Lawyers i. Wills ii. Real Estate iii. Family Law (Especially Divorce) iv. Criminal Matters v. Traffic Violations vi. Drunk Driving G. Make Clear You Are Companies Lawyer – Not Their Lawyer (e.g. Departing Employee Wants To Know About Contractual Duties Under Employment Agreement)
  • 17. 10. Communicating Legal Advice A. Short, Plain Spoken, and to the Point B. Identify the Issue, Answer the Question, Give Supporting Details C. Don’t Tell Them What They Want to Hear (Remain Objective) D. Distinguish Between Business Decisions and Legal Decisions
  • 18. 11. ADVICE FOR BOARD MEETINGSA. Put Together Contact List Of Board of Directors i. Identify Communication Preferences of Individual Board Members ii. Develop a Process to Effectively Communicate with the BoardB. Establish A Simple Meeting Routine That Works (And Stick To It) i. Keep the Same General Format for Preparing for the Meeting ii. Keep the Same General Format for the Meetings iii. Pre-Draft Board Minutes So You Can Concentrate on the Meeting and then Finish them Immediately Thereafter iv. Look Over the Minutes for Routine Items and Be Sure To Include Such Matters in Future Meetings Example: Approval of Independent Auditor Each March v. Keep Tracking of Prior Open Actions Items
  • 19. C. Prepare, Prepare, PrepareD. Not The Time To Bring Up New IssuesE. Maintain The Corporate Seal And BooksF. Develop Committee Charters (Define The Purpose And Scope of The Committee)G. Common Resolutions or Board Unanimous Written Consents i. Approval of Bank Signatories ii. Approval of Investment Transactions iii. Approval of Directors and Officers iv. Approval of Actuarial Services v. Approval of Independent Auditor vi. Approval of Dividends vii. Approval of Contracts Above Certain Monetary Threshold viii. Approval of Changes to Corporate Documents -Articles and Bylaws -Committee Charters
  • 20. 12. DEVELOP A FILING SYSTEM A. Filing System Should be Logical, Organized, Updated and Understandable by Anyone Accessing the System B. Legal Issues Will Reoccur – Archive Should Enable You to Quickly Revisit Old Work Product for Guidance
  • 21. 13. MANAGING LITIGATION A. Make Reasonable Estimate Of Costs And Risk Of Litigation Up Front B. Agree In Advance About Cost, Fees And Payments With Litigation Counsel C. Do You Need To Invoke A Litigation Hold? D. Make Sure You Are The Designated Person To Receive Legal Papers With All State Regulators And With The Secretary of State E. You Can Sue Anyone for Anything at Any Time – Winning Is another Matter, But, Just Because Your Right Doesn’t Mean You Will Win F. Develop Process For Handling Subpoenas
  • 22. 14. COORDINATE THE KNOWLEDGE AND EXPERIENCE OFOUTSIDE COUNSEL A. Annual Med Mal Defense Counsel Meeting B. Annual Administrative Defense Counsel Meeting
  • 23. 15. INTELLECTUAL PROPERTY A. Hire And Consult With An Experienced Intellectual Property Law Firm B. Make Sure Your Company Name(s), Servicemarks and Slogans Are Protected C. Create Chart Showing Renewal Deadlines For Registration Renewals D. Before Using Any New Name in Business Perform An Intellectual property Search E. Domain Names F. Patents - Business Processes G. Copyrights
  • 24. 16. GENERAL LAWS (OUTSIDE THE INSURANCE CODE ANDREGULATIONS) THAT HAVE AN IMPACT ON INSURANCECOMPANIES A. OFAC Office Of Foreign Asset Control Rules (Federal) B. Violent Crime Control And Law Enforcement Act (Federal) It is a federal crime for “any individual who is engaged in the business of insurance whose activities affect interstate commerce and who willfully permits the participation”, of another individual to engage in the business of insurance or otherwise to participate in such business, if such an individual has been “convicted of any criminal felony involving dishonesty or a breach of trust”. C. Minimum Requirements For Medical Professional Liability Insurance (State by State) D. Three Strikes Law (Florida) E. Soldiers And Sailors Civil Relief Act
  • 25. 17. “DESK DRAWER RULES” AND HOW TO DEAL WITH THEM” A. What Is A “Desk Drawer Rule”? B. Steps For Dealing With Desk Drawer Rules i. First Option - Try to Reason with the Regulator ii. Second Option - Look For Compromises That Will Still Give You What You Need iii. Third Option - Go Above The Person To Argue The Issue iv. Fourth Option - Take Legal Action (Rare)
  • 26. 18. USE THE NAIC AS A RESOURCE A. Role Of The NAIC
  • 27. B. UCAA State Charts ( i. Addresses for Submission of Application ii. Amended Articles-Bylaws iii. Change in Control of Foreign (Non-Domestic) Insurers iv. Communication Between Applicant and Agency v. Deleting Lines of Business vi. Filing Fees – Corporate Amendments vii. Filing Fees Matrix – Corporate Amendments viii. Filing Fees – Primary or Expansion Application ix. Fingerprints and Biographical Affidavit Requirements x. Lines of Business Matrix xi. Minimum Capital and Surplus xii. Name Approval xiii. Public Records Package xiv. Redomestication xv. Reports of Examination xvi. Seasoning Requirements xvii. Signature Requirements – Biographical Affidavits and Uniform Consent to Service of Process xviii. Statutory Deposits xix. Statutory Membership xx. Use of Fictitious Names
  • 28. (UCAA) Uniform Certificate Of Authority Application Forms ( i. 1P Primary Checklist ii. 1E Expansion Checklist iii. 1C Corporate Amendments Checklist iv. 2P Primary Application v. 2E Expansion Application vi. 2C Corporate Amendments Applications vii. 3 Lines of Insurance viii. 6 Certificate of Compliance ix. 7 Certificate of Deposit x. 8 Questionnaire (Primary and Expansion) xi. 8C Questionnaire (Corporate Amendments) xii. 11 NAIC Biographical Affidavit xiii. 12 Uniform Consent to Service of Process (Expansion and Corporate Amendments Only) xiv. 13 ProForma Financial Statements(Property/Casualty Companies) xv. 14 Change of Address/ Contact Notification Form xvi. 15 Affidavit of Lost Certificate of Authority xvii. 16 Statement of Voluntary Dissolution xviii. 17 Statement of Withdrawal
  • 29. D. Other Important Reference Information ( i. Training Guides Market Conduct Examiners Handbook Financial Analysis Handbook Company Licensing Best Practices Handbook ii. Third Party Vendors for Background Reports iii. FAQ – Various Topics
  • 30. 19. MANAGING YOUR LEGAL DEPARTMENT A. Go Paperless (Except For Original Signed Documents) B. Schedule Time For Projects C. Implement A Contract Review And Signature Policy (All Contracts Go Through the Legal Department) D. Train Managers To Return All Original Signed Contracts To The Legal Department for Archiving E. Lay Out A Daily, Weekly, Monthly Or Annual Plan - Communicate It To Your Staff - Instruct Them As To How To Meet the Goals F. Don’t Just Be A Problem Identifier – Be A Problem Solver G. Budgets
  • 31. 20. TIPS FOR DRAFTING POLICY FORMS A. Develop a Policy Numbering System that is Logical Example: FPIC MPL-100 - FL (10/10) and FPIC MPL-106-FL (10/10) B. Use The NAIC Product Requirements Locator Property and Casualty Search Results Product Requirements Search Results Date: 10/08/2010Product Name Requirement Jurisdictio Requireme Referenc Form Rate, Rule Category n nt e Indicator Indicator Item Citation Medical Applications Arizona Fraud Must ARS § Y N Malpractice Be Material Statements in 20-463(Commercial) (A) the Application that would Preclude Recovery for Fraudulent Activity Must Restrict
  • 32. Product Name Requirement Jurisdictio Requirement Reference Form Rate, Category n Item Citation Indic Rule ator Indicator STATEMENTS AS REPRESENTATIOMedical Malpractice ARS 20- Applications Arizona NS, NOT Y N(Commercial) 1109 WARRANTIES (04/28/2010) ARS 20- REFERENCED INMedical Malpractice 398(A) Applications Arizona POLICY Y N(Commercial) ARS 20- (04/28/2010) 1102 INVALIDATIONMedical Malpractice ARS § 20- Countersignature Arizona OF THE POLICY Y N(Commercial) 229(C) (04/29/2010)
  • 33. 21. MAKE A REPORTING REQUIREMENTS CHECKLIST (Exclusive from Financial Reporting) A. Form “B” Filings (Review Your Applicable Holding Company Registration Statute) i. Changes in Corporate or Capital Structure ii. Changes in Directors or Officers iii. Changes in Ownership of More than 10% iv. Payment of Dividends v. Related Party Transactions vi. Certain Defined Business Transactions vii. Certain Defined Legal Actions B. Withdrawal From A Line or State i. How is it Triggered and What is Generally Required? ii. Formal Plan vs Minor or No Requirements
  • 34. C. Unclaimed Property (Escheat Laws)D. Annual Med Mal FilingE. Other i. Changes to Articles and Bylaws ii. Medical Professional Liability Closed Claims iii. Reporting to Board of Medicine iv. NPDB Reporting v. Material Transactions vi. Individually Rated Risks (A-Rating) vii. Lobbyists Disclosure Regulation viii. OFAC Compliance ix. Computer Security Breaches x. Medicare Beneficiary Reporting to CMS
  • 35. 22. ROUTINE ELECTRONIC DOCUMENTS THAT PROVE TO BE USEFUL A. Write a History of Your Company FPIC was formed and incorporated on October 10, 1985 by the conversion of Florida Physicians Insurance Reciprocal (FPIR) into a stock company. FPIR was organized in 1976 as a Florida insurance reciprocal through the conversion of the FMA-PLI Trust, which was formed in 1975 to provide professional liability insurance to members of the Florida Medical Association (FMA). Because of financial difficulties, FPIR was placed in receivership in 1984. The receivership was terminated on January 3, 1985. FPIR was recapitalized by policyholders and merged into FPIC, a policyholder owned stock company on January 1, 1986. FPIC and FPIR were managed by Physicians Management Company (PMC) from October 1984 to May 1988. On May 1, 1988, the contract with PMC was canceled and the PMC employees were hired by FPIC. A reorganization was approved by the shareholders on June 11, 1996, and a holding company was formed under the name FPIC Insurance Group, Inc. (FIG). On May 8, 2001, FPICs name (Florida Physicians Insurance Company, Inc.) was changed to First Professionals Insurance Company, Inc.
  • 36. B. Other Electronic Documents to Have At Your Fingertips i. Signatures of Your President and Yourself ii. Current Bios On All Directors and Officers iii. Company Related Servicemarks & Logos iv. Updated Corporate Chart v. Master List of All Your Passwords and User Names vi. File For All Travel Related Information vii. Contact Info for Insurance Industry Professionals viii. Insurance Policies Covering Your Own Company ix. Disaster Recovery Plan
  • 37. 23. LICENSURE IS DEFINED DIFFERENTLY FROM STATE TO STATE A. States Vary In How They Define Licensure (See UCAA (NAIC) Form 3) B. Broad Definitions Have Unintended Consequences i. Roped into Paying Things You Never Expected Example – (AIPSO) Auto Insurance Plan Service Office Annual Fee ii. Licensed to Do Things You Never Intended to WriteAlabama Authorized to Transact Currently Transacting Applying forLife (Sec. 27-5-2)Disability (Sec. 27-5-4)Property (Sec. 27-5-5) XMiscellaneous Casualty (Sec. 27-5-6, 27-5-7, 27-5-8, 27-5- X9)Title (Sec. 27-5-10)
  • 38. Florida Authorized to Transact Currently Transacting Applying forProperty & Casualty Insurers 0010 Fire 0020 Allied Lines 0030 Farmowners Multi Peril 0040 Homeowners Multi Peril 0050 Commercial Multi Peril 0080 Ocean Marine 0090 Inland Marine 0100 Financial Guaranty* 0106 Auto Warranties 0110 Medical Malpractice X X 0120 Earthquake 0160 Workers Compensation 0170 Other Liability X X* 0173 Prepaid Legal 0192 Private Passenger Auto Liability 0194 Commercial Auto Liability
  • 39. 0211 Private Passenger Auto PhysicalDamage 0212 Commercial Auto Physical Damage 0220 Aircraft 0230 Fidelity 0240 Surety* 0245 Bail Bonds 0250 Glass 0260 Burglary and Theft 0270 Boiler and Machinery 0280 Credit* 0285 Title (Title Companies Only)* 0290 Livestock 0300 Industrial Fire* 0310 Mortgage Guaranty 0441 Credit Disability* 0450 Accident and Health
  • 40. * 0520 Industrial Extended Coverage* 0540 Mobile Home Multi Peril* 0550 Mobile Home Physical Damage* 0570 Crop Hail* 0607 Home Warranties* 0608 Service Warranties* 0610 Other Warranty* 0620 Miscellaneous CasualtyProperty & Casualty Insurers (Reinsurance Only) R010 Fire R020 Allied Lines R030 Farmowners Multi Peril R040 Homeowners Multi Peril R050 Commercial Multi Peril R080 Ocean Marine R090 Inland Marine
  • 41. R100 Financial Guaranty* R106 Auto Warranties R110 Medical Malpractice R120 Earthquake R160 Workers Compensation R170 Other Liability* R173 Prepaid Legal R192 Private Passenger Auto Liability R194 Commercial Auto Liability R211 Private Passenger Auto PhysicalDamage R212 Commercial Auto PhysicalDamage R220 Aircraft R230 Fidelity R240 Surety* R245 Bail Bonds
  • 42. R250 Glass R260 Burglary and Theft R270 Boiler and Machinery R280 Credit* R285 Title (Title Companies Only)* R290 Livestock R300 Industrial Fire* R310 Mortgage Guaranty R441 Credit Disability* R450 Accident and Health* R520 Industrial Extended Coverage* R540 Mobile Home Multi Peril* R550 Home Physical Damage* R570 Crop Hail* R607 Home Warranties* R608 Service Warranties
  • 43. * R610 Other Warranty* R620 Miscellaneous CasualtyLife, Accident and Health Insurers0400 Ordinary Life Endowment Term Life Industrial Life Individual Annuities Universal Life0405 Individual Variable Annuities Group Variable Annuities0410 Group Life and Annuities0420 Variable Life0425 Fraternal Life0430 Fraternal Health0440 Credit Life
  • 44. 0441 Credit Disability0450 Accident and HealthR400 Reinsurance - Ordinary Life and AnnuityR405 Reinsurance - Individual/Group VariableAnnuitiesR410 Reinsurance - Group Life and AnnuityR420 Reinsurance - Variable LifeR440 Reinsurance - Credit LifeR441 Reinsurance - Credit DisabilityR450 Reinsurance - Accident and Health
  • 45. 24. CONTRACTS AND TRANSACTIONS THAT REQUIRE REGULATORY COUNSEL A. Related Party Agreements i. Management Agreements ii. Reinsurance Agreements iii. Cost Sharing Agreements B. Managing General Agency Agreements C. Custodial Agreements Will Need Approval or Will Be Review at Time of Financial Exam D. Acquisition of 5% or 10% of Controlling Stock of Insurer i. Form A - (Disclaimer of Control May Avoid Filing) ii. Material Transactions Involving Exchange of Assets
  • 46. 25. PREMIUM RATES A. File and Use vs. Use and File B. Cannot Deviate From Your Approved Rates/Underwriting Guidelines Exception - Individually Rated or “A” Rated Accounts Exception - Consent to Rate or Excess Rated Accounts -Each Generally Have Filing and Limitation Requirements -Some States Don’t Allow these Exceptions
  • 47. 26. PUBLIC RECORDS REQUESTS A. Generally Can Be Done Via E-mail i. Centralized Process (Florida) ii. Decentralized Process (Texas) B. Protection of Proprietary Information (Trade Secrets) i. Laws May Require You to Label Info Propriety and Confidential ii. Label Triggers Notice to Filer if Requested Via Public Records Request iii. Filer Then Seeks Protection From the Courts C. Is A Public Records Requests Necessary? Example: Access to Filed Forms and Rates (Florida)
  • 48. 27. PAYMENT OF DIVIDENDS A. Seek and Document the Approval of Your Board (Approval May be Contingent Upon Regulator Approval) B. Dividends Paid Without Approval (Ordinary Dividend) i. Qualitative Analysis – e.g.10% or less of Surplus ii. May Require Notice (even though approval is not necessary) iii. May Require Notice and/or Approval from Third Parties (Lenders) C. Dividends Paid With Approval (Extraordinary Dividend) i. Based Upon Subjective Analysis ii. May Require Notice and/or Approval from Third Parties (Lenders)
  • 49. 28. CONSUMER COMPLAINTS A. List Your Name With All Government Agencies As The Contact Person to Receive Consumer Complaints B. Timely Respond to All Complaints and Keep a Permanent Record C. Develop A Complaint Log by Year For Regulator Review
  • 50. 29. CONTRACT DRAFTING AND NEGOTIATION TIPS A. The Less Pages the Better (from Management’s Perspective) B. Always be Courteous In Contract Negotiations C. Look for Win-Win and Work Toward Clarity of Intent D. Use Charts and Table Instead of Long Narrative Language E. Don’t Over-Lawyer it F. Avoid Rewriting Language without Substantive Changes G. Pick and Choose Your Battles H. Always have the Support of Boss Before Taking A Position I. Identify Objectives (Make Sure You Clearly Achieve These Goals)
  • 51. J. Identify Deal Breakers and Make Known Up FrontK. How Long Should A Contract be? Answer: Long EnoughL. Anticipate Problems and Build in Ability to Ward Off Such HarmM. Include Ability to Terminate in Addition to Remedies Example: Temporary Injunction, Liquidated DamagesN. Rights that Survive Termination of ContractO. Avoid Ambiguities by Spelling Out Intent of the Parties
  • 52. 30. FINAL THOUGHTS A. Use The Unofficial PIAA Corporate Counsel Section Email Hotline B. Be Friendly To Your Assigned Regulatory Analyst C. If The Plaintiff’s Bar Hates It, You Will Love It!