Alexis Tertulianni


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Alexis Tertulianni

  1. 1. 2007 General Meeting ● Assemblée générale 2007 Montréal Canadian Institute of Actuaries L’Institut canadien des actuaires
  2. 2. Who is Morris & Mackenzie <ul><li>Offering a full array of Insurance and Risk Management services </li></ul><ul><ul><li>Property </li></ul></ul><ul><ul><li>Casualty </li></ul></ul><ul><ul><li>Director’s and Officer’s Liability </li></ul></ul><ul><ul><li>Professional Liability </li></ul></ul><ul><ul><li>Engineering </li></ul></ul><ul><ul><li>Risk Modeling </li></ul></ul><ul><ul><li>Alternative Risk Financing </li></ul></ul><ul><ul><li>Group Home & Auto </li></ul></ul><ul><ul><li>Group Benefits </li></ul></ul>2007 General Meeting Assemblée générale 2007
  3. 3. Who is Morris & Mackenzie <ul><li>Holistic approach to Risk Management </li></ul><ul><ul><li>Needs and goals analysis </li></ul></ul><ul><ul><li>Traditional Insurance only one of the available options to transfer risk </li></ul></ul><ul><ul><li>Alternative Risk Management solutions </li></ul></ul><ul><li>Risk Management with emphasis on Control, Transfer and Financing of Risk </li></ul><ul><li>Claims settlement for Insurers and Clients (S.I.R) </li></ul><ul><li>Implementation and analysis of databases for clients </li></ul><ul><li>Proven track record with impressive client loyalty </li></ul>2007 General Meeting Assemblée générale 2007
  4. 4. CIA and Professional Liability Insurance: A Brief History <ul><li>CIA’s 1 st guiding principle </li></ul><ul><ul><li>“ In carrying on its activities and programs, the Institute holds the duty of the profession to the public above the needs of the profession and its members” </li></ul></ul><ul><li>Dual role of Insurance </li></ul><ul><ul><li>Protect public interest </li></ul></ul><ul><ul><li>Protect actuaries </li></ul></ul><ul><li>Insurance market position relative to Actuarial Professional Liability </li></ul><ul><ul><li>Difficult to obtain insurance </li></ul></ul><ul><ul><li>High premiums </li></ul></ul><ul><ul><li>Limited scope of coverage </li></ul></ul><ul><ul><li>Questionable exclusions </li></ul></ul><ul><ul><li>Inadequate limits of insurance </li></ul></ul><ul><ul><li>Few insurers with in-depth knowledge of Actuarial activities </li></ul></ul>2007 General Meeting Assemblée générale 2007
  5. 5. ProAct: A Brief History <ul><li>RFP sent to six (6) brokers – Morris & Mackenzie appointed </li></ul><ul><li>M&M and PLIAC create presentation to insurers </li></ul><ul><li>Proposals received from four (4) leading and reputable insurance markets </li></ul><ul><ul><li>AIG </li></ul></ul><ul><ul><li>Aviva </li></ul></ul><ul><ul><li>Axa </li></ul></ul><ul><ul><li>Lloyd’s </li></ul></ul><ul><li>Lloyd’s proposal selected unanimously </li></ul><ul><li>January 2007 official ProAct launch </li></ul><ul><li>Step 1: Creation of Voluntary Professional Liability Insurance Program COMPLETED </li></ul>2007 General Meeting Assemblée générale 2007
  6. 6. ProAct: A Brief History <ul><li>Obstacles in developing the program </li></ul><ul><ul><li>Generally unfavorable insurance market position in regards to Actuarial Professional Liability </li></ul></ul><ul><ul><ul><li>Actuarial activities under heavy scrutiny </li></ul></ul></ul><ul><ul><ul><li>Increasingly litigious environment </li></ul></ul></ul><ul><ul><ul><li>Increasing damages sought/awarded </li></ul></ul></ul><ul><ul><li>New program – no predecessor </li></ul></ul><ul><ul><li>Accurate claims information and loss data for Canadian Actuaries is unavailable </li></ul></ul><ul><ul><ul><li>M&M mandates law firm to prepare litigation and jurisprudence report </li></ul></ul></ul><ul><ul><li>Difficult to forecast level of CIA member participation </li></ul></ul>2007 General Meeting Assemblée générale 2007
  7. 7. ProAct: A Brief History <ul><li>Mandate </li></ul><ul><ul><li>Protect Public Interest </li></ul></ul><ul><ul><li>Protect Actuaries </li></ul></ul><ul><ul><li>Develop sustainable Professional Liability Insurance Program </li></ul></ul><ul><ul><li>Professional Liability Insurance accessible to all </li></ul></ul><ul><ul><li>Broad terms and conditions of coverage tailored to Actuarial Activities </li></ul></ul><ul><ul><li>Uniform policy wording </li></ul></ul><ul><ul><li>Cost efficient and competitive program </li></ul></ul><ul><ul><li>Flexible limit and deductible options </li></ul></ul>2007 General Meeting Assemblée générale 2007
  8. 8. Professional Liability Insurance <ul><li>Coverage </li></ul><ul><ul><li>Damages arising out of negligent acts, errors or omissions of the Insured </li></ul></ul><ul><li>Key components </li></ul><ul><ul><li>Claims made </li></ul></ul><ul><ul><li>Retroactive date </li></ul></ul><ul><ul><li>Deductible </li></ul></ul><ul><ul><li>Defense costs and legal expenses </li></ul></ul><ul><ul><li>Occurrence limit </li></ul></ul><ul><ul><li>Aggregate limit </li></ul></ul><ul><ul><li>Extended reporting period </li></ul></ul><ul><ul><li>Policy terms and scope of coverage </li></ul></ul><ul><ul><ul><li>Insuring agreements </li></ul></ul></ul><ul><ul><ul><li>Territory </li></ul></ul></ul>2007 General Meeting Assemblée générale 2007
  9. 9. ProAct: The PL Solution <ul><li>ProAct advantages </li></ul><ul><ul><li>Purchasing and negotiating power </li></ul></ul><ul><ul><ul><li>Product accessibility </li></ul></ul></ul><ul><ul><ul><li>Competitive terms & conditions </li></ul></ul></ul><ul><ul><ul><li>Credible statistics to enhance Risk Management </li></ul></ul></ul><ul><ul><ul><ul><li>Common causes of claims </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Preventative measures </li></ul></ul></ul></ul><ul><ul><li>Sustainability </li></ul></ul><ul><ul><ul><li>Uninterrupted coverage </li></ul></ul></ul><ul><ul><ul><li>Stability in terms of coverage </li></ul></ul></ul><ul><ul><ul><li>Ongoing client contract requirements </li></ul></ul></ul><ul><ul><ul><li>Enhanced credibility </li></ul></ul></ul>2007 General Meeting Assemblée générale 2007
  10. 10. ProAct: The PL Solution <ul><li>ProAct advantages </li></ul><ul><ul><li>Enhanced coverage </li></ul></ul><ul><ul><ul><li>Primary limits up to $5M </li></ul></ul></ul><ul><ul><ul><li>Excess liability limits available </li></ul></ul></ul><ul><ul><ul><li>Aggregate limit = two (2) occurrence limit (up to $5M) </li></ul></ul></ul><ul><ul><ul><li>Accessible to all Areas of Practice </li></ul></ul></ul><ul><ul><ul><li>Broad coverage for Actuarial Professional Activities </li></ul></ul></ul><ul><ul><ul><li>Extended Reporting Period Options </li></ul></ul></ul><ul><ul><ul><li>Defense cost reimbursement for CIA CPC inquiry </li></ul></ul></ul><ul><ul><ul><li>Worldwide coverage: claims brought in Canada / U.S. </li></ul></ul></ul><ul><ul><ul><li>Coverage for TPA activities </li></ul></ul></ul><ul><ul><ul><li>Retroactive date to match prior insurance </li></ul></ul></ul><ul><ul><ul><li>Various deductible options </li></ul></ul></ul><ul><ul><ul><li>Ability to customize and adapt to specific activities / needs </li></ul></ul></ul>2007 General Meeting Assemblée générale 2007
  11. 11. ProAct: The PL Solution <ul><li>ProAct advantages </li></ul><ul><ul><li>Safety blanket </li></ul></ul><ul><ul><ul><li>Policy standard </li></ul></ul></ul><ul><ul><ul><li>Absence of questionable exclusions </li></ul></ul></ul><ul><ul><ul><li>Claims management </li></ul></ul></ul><ul><ul><ul><li>Continuous program review, evolution and enhancement </li></ul></ul></ul><ul><ul><ul><li>CIA involvement </li></ul></ul></ul><ul><ul><li>Simple process </li></ul></ul><ul><ul><ul><li>Standard application </li></ul></ul></ul><ul><ul><ul><li>Standard policy form </li></ul></ul></ul><ul><ul><ul><li>Proposals typically available within 10 days of submission </li></ul></ul></ul><ul><ul><ul><li>Insurance Binder issued upon receipt of coverage confirmation </li></ul></ul></ul><ul><ul><ul><li>Policy issued shortly thereafter </li></ul></ul></ul><ul><ul><ul><li>One point of contact: submission and service </li></ul></ul></ul>2007 General Meeting Assemblée générale 2007
  12. 12. ProAct: The PL Solution <ul><li>ProAct advantages </li></ul><ul><ul><li>Sound Risk Management and Insurance Program are essential to long-term success and protection </li></ul></ul><ul><ul><li>Enables CIA members and firms to voluntarily contract insurance </li></ul></ul><ul><ul><ul><li>Increase credibility </li></ul></ul></ul><ul><ul><ul><li>Increase client confidence </li></ul></ul></ul><ul><ul><ul><li>Expand client base </li></ul></ul></ul><ul><ul><ul><li>Create a level playing field among competitors </li></ul></ul></ul><ul><ul><ul><li>Secure financial and operational stability </li></ul></ul></ul><ul><ul><ul><li>Protect personal assets </li></ul></ul></ul><ul><ul><li>1 st step in enhancing Public Protection and advancing the Actuarial Profession </li></ul></ul>2007 General Meeting Assemblée générale 2007
  13. 13. Risk Management Issues <ul><li>Personal Liability of Actuaries </li></ul><ul><ul><li>Actuaries are personally exposed to professional liability lawsuits </li></ul></ul><ul><ul><ul><li>Financial burden of defense costs and damages (if awarded) </li></ul></ul></ul><ul><ul><ul><li>Personal assets exposed </li></ul></ul></ul><ul><ul><li>Employers often have no legal obligation to defend employees </li></ul></ul><ul><ul><li>Many situations where employers will not defend employees: </li></ul></ul><ul><ul><ul><li>Company no longer exists </li></ul></ul></ul><ul><ul><ul><li>Bankruptcy </li></ul></ul></ul><ul><ul><ul><li>Lack of adequate insurance coverage </li></ul></ul></ul><ul><li>Loss Control </li></ul><ul><ul><li>Best Practices & Standards of Practice </li></ul></ul><ul><ul><li>Professional Development </li></ul></ul><ul><ul><li>Peer review </li></ul></ul><ul><ul><li>Due diligence in choice of clients </li></ul></ul>2007 General Meeting Assemblée générale 2007
  14. 14. Risk Management Issues <ul><li>Contracts </li></ul><ul><ul><li>Clearly defined scope of work performed </li></ul></ul><ul><ul><li>Clearly defined scope of work not performed </li></ul></ul><ul><ul><li>Limitation of Liability </li></ul></ul><ul><ul><li>Hold Harmless & Indemnity clauses </li></ul></ul><ul><ul><li>Dispute Resolution </li></ul></ul><ul><ul><li>IMPORTANT: Insured must not contractually assume any liability other than liability imposed by statutory law, nor promise to exceed the generally accepted standard of care </li></ul></ul><ul><li>Reliance on work of others </li></ul><ul><ul><li>Responsible to review work to determine possibility of errors </li></ul></ul><ul><ul><li>Identify information and data provided by client that may impact your ability to provide an opinion </li></ul></ul>2007 General Meeting Assemblée générale 2007
  15. 15. Risk Management Issues <ul><li>Documentation and reports </li></ul><ul><ul><li>Put recommendations in writing, including the risk from not following the recommendations </li></ul></ul><ul><ul><li>Get written response/acknowledgment regarding your recommendations </li></ul></ul><ul><ul><li>Records might be appropriately purged from your files and destroyed as part of your standard business practices </li></ul></ul><ul><ul><li>E-Mail </li></ul></ul><ul><ul><ul><li>Be careful what your write and review before sending </li></ul></ul></ul><ul><ul><ul><li>Organize e-mail into electronic folders – keep paper copies as needed for physical files </li></ul></ul></ul><ul><ul><ul><li>Do not delete e-mails that may be subject to discovery requests in claim situations </li></ul></ul></ul><ul><li>Don’t try to be everything to everyone </li></ul><ul><ul><li>Focus on core competencies </li></ul></ul><ul><ul><li>Client needs / expectations in line with you area of expertise </li></ul></ul>2007 General Meeting Assemblée générale 2007
  16. 16. Claims & Litigation <ul><li>What constitutes a claim? </li></ul><ul><ul><li>Receipt of written or verbal demand for damages </li></ul></ul><ul><ul><li>Becoming aware of an intention to make such a demand </li></ul></ul><ul><ul><li>Becoming aware of fact, circumstances, or events which could reasonably be anticipated to give rise to such a demand </li></ul></ul><ul><li>What to do in case of a claim? </li></ul><ul><ul><li>Report the claim as soon as possible! </li></ul></ul><ul><ul><li>Report to broker/insurer should contain: </li></ul></ul><ul><ul><ul><li>Copy of initial legal process (Declaration, Motion, etc.) </li></ul></ul></ul><ul><ul><ul><li>Copy of demand letter and details surrounding receipt of the letter </li></ul></ul></ul><ul><ul><ul><li>Circumstances, alleged damages, claimant names, etc. </li></ul></ul></ul><ul><ul><li>Do not discuss the claim with anyone </li></ul></ul><ul><ul><li>Gather as much information / documentation as possible </li></ul></ul>2007 General Meeting Assemblée générale 2007
  17. 17. Claims Process <ul><li>Claim notification received </li></ul><ul><li>Adjustor / legal counsel appointed </li></ul><ul><ul><li>Review claim </li></ul></ul><ul><ul><li>Advise coverage provided by policy </li></ul></ul><ul><ul><li>Evaluate claim / request for damages </li></ul></ul><ul><ul><li>Work with Insured to: </li></ul></ul><ul><ul><ul><li>gather information and circumstances surrounding claim </li></ul></ul></ul><ul><ul><ul><li>determine optimal claim resolution strategy </li></ul></ul></ul><ul><li>Stages of legal proceeding </li></ul><ul><ul><li>Examination for Discovery </li></ul></ul><ul><ul><li>Interlocutory Motions </li></ul></ul><ul><ul><li>Pre-Trial Settlement Conference </li></ul></ul><ul><ul><li>Mediation / Arbitration </li></ul></ul><ul><ul><li>Trial </li></ul></ul>2007 General Meeting Assemblée générale 2007
  18. 18. Claims Process <ul><li>Special attention devoted to: </li></ul><ul><ul><li>Mitigating impact of a claim on the client’s operations and business continuity </li></ul></ul><ul><ul><li>Reputation </li></ul></ul><ul><ul><li>Maintaining open lines of communication between all parties involved </li></ul></ul><ul><ul><li>Coordinate claims process in a timely manner </li></ul></ul>2007 General Meeting Assemblée générale 2007
  19. 19. Next Steps: Key Components of Program Success <ul><li>Long term commitment by all parties involved </li></ul><ul><li>Membership response </li></ul><ul><ul><li>Higher participation = better insurance terms & conditions </li></ul></ul><ul><ul><li>Feedback extremely valuable to program advancement </li></ul></ul><ul><li>Data monitoring and analysis </li></ul><ul><li>Open communication </li></ul><ul><li>Coverage modifications and enhancements as Profession and member needs evolve </li></ul><ul><li>Added value for members </li></ul><ul><li>Step 2: Basic personal liability coverage for all members </li></ul>2007 General Meeting Assemblée générale 2007
  20. 20. Questions? 2007 General Meeting Assemblée générale 2007