Our weekly roundup of updates and additional items of interest to the insurance industry
Middlesex District Attorney’s Office Receives Grant for Insurance Fraud Investigations
The Middlesex District Attorney’s Office has been awarded a $50,000 grant from the Insurance Fraud Bureau of Massachusetts, in coordination with the Commissioner of Insurance, to fund investigations and prosecutions of automobile insurance fraud, Middlesex District Attorney Marian Ryan announced today.
The grant was presented to District Attorney Ryan by Daniel Johnston, Executive Director of the Insurance Fraud Bureau of Massachusetts. The $50,000 grant is funded by Arbella Mutual Insurance Company, as part of a program in coordination with the Commissioner of Insurance and the Insurance Fraud Bureau which has been used to fund insurance fraud investigations across the state since 2003.
The Middlesex District Attorney’s Office Special Investigations Unit investigates cases of fraud, embezzlement, drug trafficking, white collar crimes and related illegal activity. The Unit includes a team of Assistant District Attorneys, Financial Analysts, Forensic Examiners, Paralegals and State Police detectives.
The grant money received yesterday will pay for continued investigations by prosecutors in the Special Investigations Unit of the Middlesex District Attorney’s Office.
Connecticut Governor Malloy and AG Jepsen announced agreements with The Hartford and Liberty Mutual with regards to Crumbling Foundations
In Agency Checklists December 2018 article entitled, “Will Massachusetts Insurers Be Next To Deal With Crumbling Foundation Claims?” we noted that Connecticut was in the midst of growing problem with houses involving crumbling foundations. In fact, in December of 2018, the Connecticut Supreme Court was slated to hear arguments involving three suits over whether homeowner policies provide coverage for crumbling foundations caused concrete containing pyrrhotite, an iron sulfide that has reacted naturally with oxygen and water over the decades.
While it still remains to be seen whether this will become an issue in Massachusetts, we thought our readers should know that on January 8, 2019, the Governor of Connecticut Dannel P. Malloy and Attorney General George Jepsen announced two separate agreements involving a memoranda of understanding with The Hartford and Liberty Mutual Insurance to provide supplemental financial assistance to current and former policyholders who file claims and receive awards to remediate their crumbling concrete foundations through the state’s new captive insurance program. The follow are some excerpts from the official announcement:
Under its agreement, The Hartford will establish and administer The Hartford Benefit Program and commit $3.5 million to the program. Connecticut homeowners who are current or past policyholders of The Hartford, who are experiencing deterioration of their foundation due to the presence of pyrrhotite in the concrete aggregate, and who have also opted to participate in the assistance program launching through the Connecticut Foundations Solutions Indemnity Company (CFSIC) will be eligible for this supplement.
Under its separate agreement, Liberty Mutual will establish and administer the Liberty Benefit Program and commit $7 million to the program. Connecticut homeowners who are current or past policyholders of Liberty Mutual, who are experiencing deterioration of their foundation due to the presence of pyrrhotite in the concrete aggregate, and who have also opted to participate in the assistance program launching through the CFSIC will be eligible for this supplement.
Homeowner participation in these programs will be voluntary. Supplemental assistance will be available to qualifying homeowners, but is not required for homeowners to receive general assistance through CFSIC….
…“We believe that providing additional funding is the right thing for The Hartford to do for our customers and communities,” The Hartford spokesperson Michelle Loxton said. “While most homeowners policies do not cover these damages, we recognize the highly unusual nature of this issue and the impact it is having on families in Connecticut. The Hartford applauds the ongoing efforts of the state to address the crumbling foundations crisis. We will continue to advocate for a holistic and comprehensive solution to this crisis that appropriately involves both federal and state resources.”
“We continue to empathize with our customers who have been impacted by crumbling foundations due to defective concrete,” Jim MacPhee, president and chief operating officer of Liberty Mutual Global Retail Markets (U.S.), said. “This has been a particularly complex issue, and we applaud the State for establishing a fund to assist Connecticut homeowners in this unfortunate situation when the policy does not provide coverage. We believe it’s the right thing for us to provide additional assistance to our customers who would have no other avenue for relief if their repair costs exceed their CFSIC benefit.”
Under the terms of the agreement the “maximum per-home benefit” paid will be $25,000 for current insureds and $10,000 for past insureds; any supplemental benefit is in addition to the benefit paid by CFSIC. Benefits involving CFSIC will likely be capped at $175,000, while the costs of repairing some homes are likely to exceed that amount. The Hartford and Liberty Benefit programs will help current and past insured to make up the difference between what CFSIC will pay and the remaining costs of fixing the foundations.
Enrollment in CFSIC is required, as is demonstration of current or past policy enrollment with either The Hartford or Liberty Mutual. Pursuant to the agreement, the Connecticut Insurance Department will monitor the companies’ participation and administration of the programs.
Plymouth Rock Receives Approval to Acquire MAPFRE Insurance Company of New York
The New York Department of Financial Services has approved the sale of the MAPFRE Insurance Company of New York by the Plymouth Rock Assurance Company. The two Massachusetts-based insurers had first announced the sale in June of this year, pending all of the regulatory approvals.
“We’re very pleased to have received approval from the New York Department of Financial Services to close this transaction,” said Hal Belodoff, President of The Plymouth Rock Company. “We look forward to welcoming a new group of customers into the Plymouth Rock family. Those customers can expect exceptional customer service, a commitment to continuously improving their insurance experience, and a host of innovative products and features, like the Get Home Safe taxi and rideshare benefit and one of the fastest ways to buy home insurance in the industry.”
2018 saw Plymouth Rock make a major move into the mid-Altlantic Region, making it the sixth state in which Plymouth Rock has expanded its geographic footprint. In addition to acquiring MAPFRE’s New York business, 2018 also saw Plymouth Rock acquire all of 21st Century’s New York private passenger auto business in April. According to the Plymouth Rock’s company announcement of the finalization of the deal, “Each transaction is part of the company’s overall plan to become a leading auto and home insurance provider in New York.”