This White Paper is written by Paul J. Smith, AIF and Gary Sutherland, CIC, MLIS from NAPLIA.
The paper discusses E&O Coverages basic procedures and how the industry has arrived at this point.
Divided Tax Court Rules Against IRS in Rent-A-Center Captive CaseBrown Smith Wallace
In January, a long-awaited decision in the court case Rent-A-Center v. Commissioner addressed the deductibility for federal income tax purposes of premium payments made by brother/sister entities to a commonly controlled captive insurance company. Alan Fine, Partner, Insurance Advisory Services, discusses the lessons learned and remaining unanswered questions in the linked Captive Insurance Times article.
This one-day Masterclass with Maria Todd covers tactics and strategies to avoid and eliminate unauthorized discounting by non-contracted payers and rental networks. Learn how to Learn what to look for and how to eliminate these financial risks from your contract portfolios. Take home a 16-point checklist of contract terms and conditions to avoid oversights in boilerplate agreements and learn how to push back if the plan won’t remove the objectionable contract terms.
Divided Tax Court Rules Against IRS in Rent-A-Center Captive CaseBrown Smith Wallace
In January, a long-awaited decision in the court case Rent-A-Center v. Commissioner addressed the deductibility for federal income tax purposes of premium payments made by brother/sister entities to a commonly controlled captive insurance company. Alan Fine, Partner, Insurance Advisory Services, discusses the lessons learned and remaining unanswered questions in the linked Captive Insurance Times article.
This one-day Masterclass with Maria Todd covers tactics and strategies to avoid and eliminate unauthorized discounting by non-contracted payers and rental networks. Learn how to Learn what to look for and how to eliminate these financial risks from your contract portfolios. Take home a 16-point checklist of contract terms and conditions to avoid oversights in boilerplate agreements and learn how to push back if the plan won’t remove the objectionable contract terms.
Connecticut Automotive Retailers Webinar November 8th, 2016
In late September, the Federal Trade Commission announced what is likely the most substantial auto dealer enforcement action in the agency’s history. While most of the FTC’s earlier cases have focused solely on dealer advertising, this action alleges over a dozen different types of violations. And unlike previous cases where there were no initial monetary penalties, this time it looks like they’re seeking massive financial consequences for the dealers involved.
In this informative presentation we’ll examine each of the FTC’s latest claims in detail and discuss best practices on how your dealership can avoid being targeted by federal and state regulators. The game is changing and it pays to be prepared.
Enterprise Act 2016 and its impact on the insurance sectorBrowne Jacobson LLP
We recently carried out a survey of insurance market participants to assess the likely impact of the Enterprise Act 2016 and to understand any concerns in relation to it. We are delighted to share the results.
Our report is based on the results of the survey and our own analysis of the Act.
If you have any concerns or queries around the Enterprise Act, please get in touch -
https://www.brownejacobson.com/insurance/training-and-resources/legal-updates/2017/04/enterprise-act-2016-and-its-impact-on-the-insurance-sector
Defining Terms in an Insurance Policy Exclusion: What the "Eight Corners" Ru...NationalUnderwriter
Defining Terms in an Insurance Policy Exclusion: What the "Eight Corners" Rule Does Not Require by Kelly M. Lippincott and Katherine C. Ondeck (from FC&S Legal: The Insurance Coverage Law Information Center)
In Carlyle Investment Management, LLC v. Ace American Ins. Co.,[1] the District of Columbia Superior Court held that when an insurance contract’s definitions of relevant terms brings a claim within the scope of an exclusion within the
policies, it does not matter whether those same terms might mean something else in the context of a different case or a different contract. The contract definitions of the terms control.
KPC Personal Injury Lawyer
18 Robb Blvd #7,
Orangeville, Ontario L9W 3L2
(800) 292-1223
http://www.kpcinjurylaw.ca/Orangeville.html
If you are looking for a team of dedicated personal injury professionals that can help you get the compensation you deserve, our team has a proven track record of getting results. KPC Law has helped thousands of accident victims get on their feet after a life-changing event. Don’t hesitate to contact us.
Asset Protection: Reducing Risk, Promoting Peace of Mind HayesLaw
Every American adult shares a dubious characteristiceach is a walking litigation target. Part of your birthright is that you may be sued at any time, for any reason, and for any amount.
DEBT RELIEF SERVICES & THE TELEMARKETING SALES RULE: A Guide for Business- Mark - Fullbright
All information, data, and material contained, presented, or provided on is for educational purposes only.
Company names mentioned herein are the property of, and may be trademarks of, their respective owners.
Protect yourself and your family now at the same time be in control with your finances. Check this slideshow and I am sure it will change your view about your life.
Connecticut Automotive Retailers Webinar November 8th, 2016
In late September, the Federal Trade Commission announced what is likely the most substantial auto dealer enforcement action in the agency’s history. While most of the FTC’s earlier cases have focused solely on dealer advertising, this action alleges over a dozen different types of violations. And unlike previous cases where there were no initial monetary penalties, this time it looks like they’re seeking massive financial consequences for the dealers involved.
In this informative presentation we’ll examine each of the FTC’s latest claims in detail and discuss best practices on how your dealership can avoid being targeted by federal and state regulators. The game is changing and it pays to be prepared.
Enterprise Act 2016 and its impact on the insurance sectorBrowne Jacobson LLP
We recently carried out a survey of insurance market participants to assess the likely impact of the Enterprise Act 2016 and to understand any concerns in relation to it. We are delighted to share the results.
Our report is based on the results of the survey and our own analysis of the Act.
If you have any concerns or queries around the Enterprise Act, please get in touch -
https://www.brownejacobson.com/insurance/training-and-resources/legal-updates/2017/04/enterprise-act-2016-and-its-impact-on-the-insurance-sector
Defining Terms in an Insurance Policy Exclusion: What the "Eight Corners" Ru...NationalUnderwriter
Defining Terms in an Insurance Policy Exclusion: What the "Eight Corners" Rule Does Not Require by Kelly M. Lippincott and Katherine C. Ondeck (from FC&S Legal: The Insurance Coverage Law Information Center)
In Carlyle Investment Management, LLC v. Ace American Ins. Co.,[1] the District of Columbia Superior Court held that when an insurance contract’s definitions of relevant terms brings a claim within the scope of an exclusion within the
policies, it does not matter whether those same terms might mean something else in the context of a different case or a different contract. The contract definitions of the terms control.
KPC Personal Injury Lawyer
18 Robb Blvd #7,
Orangeville, Ontario L9W 3L2
(800) 292-1223
http://www.kpcinjurylaw.ca/Orangeville.html
If you are looking for a team of dedicated personal injury professionals that can help you get the compensation you deserve, our team has a proven track record of getting results. KPC Law has helped thousands of accident victims get on their feet after a life-changing event. Don’t hesitate to contact us.
Asset Protection: Reducing Risk, Promoting Peace of Mind HayesLaw
Every American adult shares a dubious characteristiceach is a walking litigation target. Part of your birthright is that you may be sued at any time, for any reason, and for any amount.
DEBT RELIEF SERVICES & THE TELEMARKETING SALES RULE: A Guide for Business- Mark - Fullbright
All information, data, and material contained, presented, or provided on is for educational purposes only.
Company names mentioned herein are the property of, and may be trademarks of, their respective owners.
Protect yourself and your family now at the same time be in control with your finances. Check this slideshow and I am sure it will change your view about your life.
The Insurance Act 2015 has introduced the most significant reform to insurance law in over 100 years. The Act impacts all those involved in the insurance sector. In this report we review key markets' response to the Act and outline the practical steps you should have addressed ahead of the Act coming into force.
Visit our hub to access information and resources tailored to brokers: www.brownejacobson.com/brokers
Commercial insurance risk and liability review, February 2016Browne Jacobson LLP
Our annual review provides a comprehensive review of some of the most important judgments and legal developments during 2015 and our analysis of some of the changes on the horizon for 2016 and beyond. We have covered a lot of ground this year so I hope you will be able to find a number of updates that are relevant and useful to you.
If you would like to know more about any of the topics, please feel free to contact any of the authors of the articles.
https://www.brownejacobson.com/insurance/training-and-resources/legal-updates/2016/01/commercial-insurance-risk-and-liability-review-2015-2016
Strategies for Proposing Law Frm Rate Increases Richard Brzakala
This article examines various strategies that a law firm can utilize when approaching corporate clients for rate increases, including how to manage client rate freezes and refusals for rate increases.
The Insurance Act 2015 comes into effect today, meaning that any insurance or reinsurance contract entered into or varied from today will be governed by the Act.
The effects of the Act are far reaching: changing insurance legislation that has been in place for over a century, and impacting on any transaction governed by the laws of England, Wales, Scotland and Northern Ireland, with a potential to affect organisations across the world.
Defined contribution (DC) plan sponsors face increasingly complex issues. Russell Investments has developed a priority list of eight ideas and actions to help plan sponsors guide their participants toward better decision-making as they save for retirement.
Today’s increasingly complex investment and regulatory landscape places greater pressure on the plan sponsors and fiduciaries overseeing defined contribution plans. Fiduciaries are not only re-examining their current investment decision-making practices, they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation.
Central to the idea of a well-managed program, a clearly articulated investment policy statement (IPS) serves as the foundation of sound governance and a robust oversight process
By 2025, many DC plan sponsors will likely adopt characteristics of the most successful pension plans to help put them on a path to create a fully funded retirement income stream for plan participants. Here are ten considerations
Ever ask: “How does our retirement plan compare to others?” Learn what Russell Investments believes all excellent DC plans share and actions you can take to help position your plan for excellence.
While many assume the greatest source of retirement plan liability is the plan’s investments, in reality, the vast
majority of lawsuits and regulatory actions involve failures in administration.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
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#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Greek trade a pillar of dynamic economic growth - European Business Review
A 408(b)(2) Claim: Now What?
1. INVESTMENT ADVISOR SERIES
A 408(b)(2) Claim: Now What?
Paul J. Smith, AIF
Gary Sutherland, CIC, MLIS
North American Professional Liability Insurance Agency, LLC (NAPLIA)
PART 1: Will my E&O Insurance Policy Provide Coverage?
WWW.NAPLIA.COM161 Worcester Road, Suite 504, Framingham, MA 01701 Tel 866.262.7542 Fax 508.656.1399
2. Copyright 2013 by North American Professional Liability Insurance Agency, LLC. All rights reserved.
You have just been served under 408(b)(2) and are trying to understand what it all means. The suit
alleges excessive fees and seeks damages of $800,000 from one of your larger 401k plan clients.
Multiple parties are listed. You skip to the pages that specifically reference your firm and read: breach of
fiduciary duty, unreasonable fees, and engorged profits. Will your errors and omissions insurance policy
cover the claim?
You make several calls. One to your partner on vacation, one to your lawyer, and one to your
professional liability insurance agent.
Copies of the suit papers are quickly scanned and sent via e-mail to the appropriate parties, and now
you wait.
Your agent explains that they will send it your E&O insurance company, and tells you to give them a few
days to process the paperwork, and they will notify you in writing about the next steps.
Skip ahead to later in the week and an official looking letter arrives. It is not the simple, supportive letter
you hoped for, but a letter saying, "We are reserving our rights under the policy and there may not be
coverage under the following conditions."
The Insuring Agreement of your policy states:
Subject to all terms and conditions of this policy, we will pay on your behalf those sums in excess of the
Deductible stated in the Declarations that you become legally obligated to pay as Damages and Defense
Expenses, including Cost of Corrections, arising out of a Claim first made against you and reported to us
during the Policy Period, or Extended Reporting Period, if applicable, as a result of a Covered Act,
provided that:
You report the Claim in writing to us as soon as practicable, but in no event later than sixty (60)
days after expiration or termination of this policy as further set forth in Clause 6.1 of this policy,
or during an Optional Extended Reporting Period, if applicable; and
The Covered Act was committed on or after the Retroactive Date and before the end of the
Policy Period; and prior to the inception date of this policy you did not know, or have a
reasonable basis to believe, that such Covered Act might give rise to a Claim.
Please note your policy contains the following exclusions:
Any criminal, dishonest, fraudulent or malicious act or omission, deliberate misrepresentation,
or any intentional or knowing violation of law, including the use of, for any purpose, non-public
information.
Disputes over the amount of, return of, restitution, disgorgement, forfeiture or rescission of any
of the following: profit, fees, commission, remuneration or other monies to which an Insured
was not entitled, including any actual or alleged commingling of funds.
Please note your policy contains the following definitions:
3. Copyright 2013 by North American Professional Liability Insurance Agency, LLC. All rights reserved.
Damages means a monetary judgment or award which you are legally obligated to pay, or a
monetary settlement to which we agree on your behalf, but does not include fines, penalties,
court imposed sanctions or return of commissions or other fees.
You start to panic, quickly dialing for your insurance agent. They are not going to cover my claim. You
begin to have serious concerns. I have been paying premiums for 10 years and now this letter says:
sorry, possibly no coverage.
Letters like this are becoming increasingly more common. The insurance company is trying to say it pays
claims "but not for all claims." There may be restrictions in your policy that make excessive fee suits
difficult to secure defense and damages coverage.
Let's break down this reservation of rights letter into three salient points that may support denial of
your claim.
Knowledge that you or any members of your firm were aware of the possibility that this incident could
turn into a claim prior to binding or renewing coverage with your current insurance company.
Did you or any member of your firm commit fraud or an intentional violation of an ERISA law?
Lastly, we may defend you and your firm, but return of fees are not considered payable damages.
Excessive fee claims are increasing. And as case law builds and successful suits lead to copycat claims, it
is only a matter of time before lawyers begin looking at smaller plans.
Next: What you and your firm can do to avoid these types of claims?
The path we recommend is that you immediately benchmark all your fees against the industry standard
(for asset levels of equal size). Then share that benchmarking with the Plan Sponsor or Plan Committee,
and have them sign off on a Reasonableness Agreement.
There are several high quality, independent benchmarking firms you can engage. Or there are
independent providers of software that will benchmark the cost of the total package of services you are
bringing to the relationship against industry standards. Be sure to break out the different services where
you are providing value in your written contract with the client, and have them sign off on the
arrangement on an annual basis.
The key is to make sure the cost of your services is never an issue. There are a multitude of areas where
mistakes can be made (errors and omissions) and clients harmed. Most of these will be covered in your
Errors and Omissions Policy (if well designed), but it's incumbent on you to avoid a fee-based claim
where the return of excessive fees is the sole basis of the claim.
PART 2: How did we get here?
4. Copyright 2013 by North American Professional Liability Insurance Agency, LLC. All rights reserved.
The common return of fee exclusion in E&O policies makes sense when viewed from a historic
perspective. The insurance carrier’s position is easily understood: we’ll pay for errors and omissions
(wrongful acts) in the delivery of your Professional Services that caused harm to others, but “let’s all
agree that the return of your compensation (fee) for those services is not covered, and is not part of
‘damages.’”
In a retail relationship this exclusion made even more sense. In most cases the wrongful act or harm
done was not the ‘fee itself’, but the sale of an unsuitable product resulting in client loss of capital or
liquidity, and the client was demonstrably harmed by your unprofessional delivery of service and
product. It was never assumed — or even considered — that your commission or fee would be
reimbursed by the insurance company.
Many readers will not recall or were not practicing yet when commissions were regulated on Wall
Street. In the 1960s there was no discussion or negotiation of fees; they were set by regulation and were
not an issue. Participants managing their own pension assets were not yet commonplace with the
advent of the 401(k) Plan, and life on Wall Street was in many ways much simpler. There was no
‘fiduciary’ status in the client-broker relationship, and barring the sale of a “clearly unsuitable”
investment product, there appeared to be little room for client claims.
The world has changed significantly since then. Advisors and Registered Representatives routinely
negotiate fees and commissions with clients, and they have significant leeway to set the cost of services
— often engagement by engagement — either by the use of share classes or the fee itself. The advent of
participant-directed (managed) Defined Contribution Plans has exploded this unregulated moving part
of both the retail and institutional relationship.
Additional uncertainty has been inserted into the mix, with fee-based IARs moving into the ERISA space
and taking on a fiduciary role. This development brings the fee issue front and center, creating a
significant contrast to their commissioned colleagues where the revenue stream is significantly more
opaque and internally complex.
Prior to the introduction of required 408(b)(2) disclosures in the qualified plan space, The Pension
Protection Act (PPA) addressed the built-in existence of Prohibited Transactions in the qualified plan
world (ERISA), driven by unclear and uneven income streams. It allowed Advisors and Registered Reps to
arrange differing levels of income, depending on their specific investment recommendations – a clear
violation of their “fiduciary status” requirement to always act in the clients ‘best interest’. And as
important, it compromised the fiduciary status of the Plan Sponsor that hired them.
Prior to PPA, this inherent contradiction or violation was the elephant in the room that went
unaddressed for years, until PPA put the fee issue front and center. However, following the Act, there
were clear guidelines for structuring fees in a fiduciary/qualified plan relationship. The portfolio had to
be computer-model driven and/or the fee had to be flat, with all Advisor recommendations paying the
same compensation to the Advisor/Rep. And they had to be reasonable.
The requirement that fees be reasonable is nothing new to ERISA, but prior to PPA and the 408(b)(2)
disclosure law, plan sponsors had no way of benchmarking the fees their participants were paying, and
getting their arms around the ‘what’s fair’ challenge seemed insurmountable to a business owner with
little or no experience with investments.
5. Copyright 2013 by North American Professional Liability Insurance Agency, LLC. All rights reserved.
Now that the focus and law has abruptly shifted to ‘full disclosure’ of fees in the qualified plan space, for
the first time we are seeing ‘the fees’ become the harm or wrongful act driving claims. In effect, the now
disclosed fees themselves have become the single driver of claims against the Plan Advisor/Rep and
others connected to the perceived fiduciary breach of excessive compensation.
This change has put the ‘return of fee’ exclusion in the Professional Liability Policy in a much different
light. No longer is it an incidental exclusion — but a significant gap in coverage — as the fee-based
claims start adding up. Complexity is added when the claim is characterized as a fiduciary breach (which
is not excluded in a quality IAR Policy), but the underlying issue is ‘excessive fees’.
A somewhat simplified example might look like this: your team has managed the assets of a pension
trust for the last 20 years and achieved market rate returns for the entire period, less your 1% flat asset
based fee. On the 21st year of the engagement the participants sue the Plan/Trustees for a fiduciary
breach based on your unreasonable fees.
The participants claim the Plan could have achieved the same returns by investing in a no-load index
fund. The plaintiffs ask that your unreasonable fee be returned to the trust. Given the average balance
of $10 million over the last 20 years, that’s a $2 million claim in a return of fee case that the E&O carrier
may fight paying.
It’s easy to see how a standard exclusion in your Professional Liability Policy could turn into a nightmare
in today’s fee-focused qualified plan space. Removing the exclusion is unlikely as the fee-based claims
pile up.
6. Copyright 2013 by North American Professional Liability Insurance Agency, LLC. All rights reserved.
North American Professional Liability Insurance Agency, LLC – NAPLIA
About Gary Sutherland, CIC, MLIS
Gary B. Sutherland has nearly 30 years of insurance industry
experience and founded North American Professional Liability
Insurance Agency, LLC (NAPLIA) in 1998. NAPLIA has grown to be one
of the leading writers of professional liability insurance, specializing in
financial professionals.
Mr. Sutherland holds the prestigious designation of Certified
Insurance Counselor (CIC), an honor attained by only 2% of all
insurance brokers, as well as certification as a Management Liability
Insurance Specialist (MLIS). He previously held the position of National
Sales Manager for a leading provider of professional liability
insurance.
Mr. Sutherland’s expertise is well acknowledged and he regularly speaks at national conferences,
including fi360 and Center for Due Diligence programs, and for large accounting firms.
About Paul Smith, AIF
Paul Smith is a seasoned investment professional working with
Financial Advisors, TPAs, RIAs, BDs and corporate clients to build
fiduciary risk management strategies via professional liability
insurance and appropriate bonding.
At NAPLIA, Paul heads up the firm’s Fiduciary and Professional Liability
E&O insurance programs, focusing on RIAs, Advisors, TPAs,
Broker/Dealers and Plan Sponsors, in addition to Advisor and Plan
Sponsor Bonding.
Paul has earned the Accredited Investment Fiduciary® (AIF®)
professional designation, awarded by the Center for Fiduciary Studies,
which is associated with the University of Pittsburgh's Center for Executive Education.
Paul earned the Accredited Retirement Plan Consultant® (ARPC®) designation from the Society of
Professional Asset-Managers and Record Keepers (SPARK) and holds Series 6.7, 63 and 65 licenses.