Atlanta, Ga. — Key issues of interest to the property and casualty insurance industry were explored in depth in 50 different seminars during the four-day Chartered Property Casualty Underwriters Annual Meeting held in Atlanta Oct. 22-25. With topics as varied as women's issues and fraud in personal line claims, more than 100 nationally known speakers led more than 1,000 attendees, including hundreds of new CPCU designees, in the quest for professionalism in the industry.
In opening remarks by 2004-2005 CPCU Society President Donald J. Hurzeler and Executive Vice President James R. Marks, attendees were encouraged to continue their professional development through society activities and continuing education, including local CPCU-sponsored symposia and membership in the growing number of specialty section groups.
The keynote address was a one-hour presentation by CNN's Lou Dobbs, a Harvard-trained economist and television journalist. Dobbs examined the benefits and dangers of globalization, including the outsourcing of the American economy. "We import electronics and computers, and export scrap metal and soybeans," he noted, adding that 90 percent of our clothing is now foreign-made, along with nearly 20 percent of our food.
Dobbs focused on the dangers confronting the United States and its current political leadership, saying that now is not the time to be politically correct. "If there were ever a time for freedom of expression, it is today," he said referring to the media. "Fair and balanced is an absurdity when reporting the truth. Truth is seldom fair and balanced. Truth stands by itself."
Although Dobbs said that he is bullish on the future of the United States, he is concerned about factors such as our national educational system, the outsourcing of American jobs, and the dangers of out-of-control illegal immigration, creating terrorism risks.
Hurricane Topics Added
Following this year's active hurricane season, the convention's planners added an unscheduled seminar, Hurricane Katrina: Lessons Learned. Millicent W. Workman, CPCU, a risk management consultant in Memphis, moderated the session, and panelists included James D. Klauke, CPCU, chairman of the CPCU Claims Section and an executive general adjuster for Crawford Technical Services in Littleton, Colo., and Eric C. Nordman, CPCU, director of research for the National Association of Insurance Commissioners. The discussion focused on a variety of problems arising out of a multi-peril disaster such as Katrina, which combined windstorm with flooding, and its impact on both government and the insurance industry.
The CPCU Claim Section also developed a seminar on Perspectives in Financial Investigations, presented by Thomas D. Martin, of Swift Curry McGhee & Hiers, an Atlanta law firm; Tony Nix, CPCU, a special investigation unit specialist for State Farm; and Howard A. Zandman, an Atlanta-based accountant with Tauber & Balser. The panelists presented tips on recognizing key financial issues and using financial information in evaluating claims at various stages in developing fraud investigations. They stressed the importance of reconciling conflicting legal, managerial, and accounting perspectives in such investigations.
Coverage Issues
A number of seminars addressed issues arising out of the commercial general liability policy and some of the changes in the 2004 ISO edition. In a double session, CPCU textbook author and coverage specialist Donald S. Malecki, CPCU, and R. Bryan Tilden, CPCU, an insurance lecturer and coverage specialist, discussed contractual risk transfer under CGL coverages. Risk transfer is a common method of switching the exposure to loss from one party to another through contractual agreements, such as hold harmless or indemnity agreements, exculpatory clauses, or waivers of subrogation.
The speakers pointed out that there are three types of such transfer. These include limited, in which the indemnitor agrees to accept liability on behalf of the indemnitee for only loss that arises from the indemnitor's own sole negligence; a modified agreement in which the indemnitor accepts risk caused in whole or in part by the indemnitee; and a broad agreement in which the indemnitor accepts risk which may be the sole negligence of the indemnitee or even others.
Such agreements, they pointed out, often are subject to state statutes, and these laws vary among those that prohibit broad indemnification agreements entirely, those that prohibit such agreements except where insurance may apply, and those with no such statutes at all. Older CGL forms limited contractual liability except by endorsement, but the more recent forms include contractual liability as a covered peril in many cases, and such coverage can be extended through the use of additional insured endorsements.
These, Malecki and Tilden advise, can create a variety of problems, or solutions to problems, depending on how the underlying contracts read. Tilden began his comments by admonishing, "Never read the contracts." By this, he meant that if an agent or broker were to assist an insured in arranging for coverage to comply with the contractual agreements and the contract either had not been not read in full or had been misunderstood, the agent or broker could become liable for any coverage lapses. Such contracts, therefore, should be reviewed by counsel, as no two contracts are identical.
The same is not true, however, for underwriters or claim adjusters, who always must obtain copies of contracts and fully understand them before proceeding, the speakers warned. When he reviews contracts, Malecki said, if the entire document is not furnished to him, he will not comment on it until he receives the complete contract. The insurance representative cannot simply look at the insurance or liability clauses in a contract or lease and limit the examination to those parts alone, as other factors also may be involved and require attention.
The CPCU Society is now in its 61st year of providing a professional basis for the property casualty insurance industry, including all aspects from production, technology, underwriting, risk management, and claims. Next year's convention will be held in Nashville, Tenn.
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