Archive
Potential impact of Oklahoma tornado on property insurance market
The tragedy in Moore, Oklahoma is the latest in a series of massive tornadoes that have ripped through the U.S. in the last two years, causing billions of dollars in losses. While property damage continues to be assessed, insurance companies initially believe this week’s storm caused at least $2 billion in insured losses, based on preliminary estimates from other big tornadoes and analysts at Morgan Stanley. Replacement value of property within a mile of where the tornado struck is around $6 billion, according to AIR Worldwide.
The trend is a major cause for concern among business and homeowners in hard-hit areas who may not be able to afford repairs due to changes in storm policy coverage. Consumer activists say that due to the increase in severe weather and storms, insurers have raised deductibles and reduced coverage amounts, along with other changes to Read more…
El Nino and La Nina – are you prepared for hurricane season?
Over the past decade there’s been a lot of debate over the topic of global warming and how much of an impact it may have on weather patterns, and how it may impact weather phenomena. Recently, Hurricane Sandy has been correlated to a hurricane on steroids by some, while other scientists and meteorological professionals have a slightly different view. Gerald North, climate professor at Texas A&M University states, “mostly it’s natural, I’d say it’s 80, 90 percent natural. These things do happen, like the drought, it’s a natural thing.” A lot of debate and a lot of questions remain when it comes to global warming. Over the years, as scientists are able to gather more data, hopefully more questions will be answered.
One thing scientists do have more certainty about is two atmospheric and oceanic phenomena called El Nino and La Nina. The former of the two is primarily associated to the warming of the water in the Read more…
Social media use as a means to communicate with investors is on the rise at banks and financial firms: beware the risks
With the release of the Securities and Exchange Commission’s new rules governing disclosure of social media use, an increasing number of companies are using sites like Facebook and Twitter to communicate with customers. Financial firms and banks are among those that are allowing employees to use social media sites on the job to post market updates and communicate with investors through tweets and status updates. Bank of America, Morgan Stanley, Citigroup Inc, and Goldman Sachs are among those on Wall Street incorporating social media use into their corporate communication strategies, granting stock analysts and traders use of Facebook, Twitter and LinkedIn in order to follow market trends and release financial information.
Despite the A.P.’s Twitter hoax last month, (which caused a brief drop in the Dow Jones Industrial Average after a false report about a bomb at the White House), social media use continues to expand Read more…
Terrorism coverage and understanding TRIPRA
Two weeks after the Boston Marathon bombings, questions surrounding terrorism coverage have become a cause for concern for many businesses impacted by the tragedy. Some are confused over whether or not their policies offer protection from business interruption and property losses related to terrorist attacks. Although the event has yet to be determined as an official act of terror, it’s important for businesses to become familiar with the current version of the Terrorism Risk Insurance Act (TRIA) (now known as the Terrorism Risk Insurance Program Reauthorization Act, or TRIPRA, of 2007) as well as to review the specific language of their policies.
Following September 11, 2001, terrorism losses were widely excluded from business interruption policies in order to protect insurers from exorbitant costs in the event of future terrorist attacks. In response, U.S. Federal lawmakers passed the Terrorism Risk Insurance Act (TRIA) of 2002 in order Read more…
Zip codes added to Massachusetts Consumer Protection Law
The Massachusetts Supreme Judicial Court (SJC) recently ruled that retailers may now be sued if they record consumer zip codes during credit card transactions and use the information for business purposes. The decision stems from a recent case, Tyler v. Michaels Stores, Inc. in which the plaintiff claimed the retailer (Michael’s) used her zip code to find her address and telephone number and send her unsolicited marketing materials. The woman said she was told she needed to provide her zip code when making a credit card purchase at the store, when in fact it was not required by the credit card issuer. In the case’s final ruling, the Court asserted that zip codes are “personal identification information” subject to the restrictions of The Massachusetts Consumer Protection Law governing credit card and check transactions. Chapter 93, Section 105(a) of the law states Read more…
FDA asks medical device developers for feedback on new draft guidance
“Recall” or “product enhancement” – the distinction between the two terms can be tricky, especially for medical device manufacturers aiming to comply with current industry codes and regulations. In the case of a recall, developers face serious financial and reputational damage; product enhancements, on the other hand, rarely cause bad publicity and tend to only involve improvements made to a product.
The U.S. Food and Drug Administration (FDA) recently issued draft guidance to help clarify when a change to a product constitutes a recall or a product enhancement, and the difference between the two. The FDA has asked companies to review the draft guidance and submit feedback by May 23, 2013. Read more…
NY employers see expansion of anti-discrimination law to protect unemployed
The New York City Council passed a new anti-discrimination earlier this month that prohibits employers from discriminating against the unemployed. The new statute, which will go into effect June 11, 2013, gives unemployed individuals the right to sue in court and recover damages and legal fees if they feel they have been discriminated against on the basis of their employment. This New York ruling is the broadest version of the nation’s current anti-discrimination law to date, expanding upon other anti-discrimination laws that recently passed in New Jersey, Oregon and Washington, D.C.
Among the new regulations, the law prohibits New York employers and employment agencies from basing hiring decisions and other employment terms and conditions on an applicant’s unemployment status, or from posting job advertisements that list current employment as a requirement or qualification for the job. The law does, however, list certain exceptions Read more…
Attention bankers: are you at risk for cybercrime?
Cyber breaches for banking institutions have been a significant peril since computers entered the banking sphere a generation ago. Unfortunately, today the threat has been multiplied in complexity and magnitude. Last year, cyber thieves, disguised as a commercial customer, submitted nearly $700,000 worth in files of ACH credits to a large bank, using the proper ID and password information to authorize the transactions. Despite the bank’s own sophisticated scoring model used to validate the payment, it failed to catch the fraudulent activity; by the time the issue was discovered, the bank’s customer had lost a majority of the funds.
Kenneth Proctor, Managing Director, Risk Management and Compliance of Abound Resources, a leading risk control consultant to financial institutions, outlines many of risks and defensive practices Read more…
D&O premiums jump as small banks feel pressure from FDIC
Many small banks have been heavily hit with rising D&O insurance premiums, as federal regulators seek to recover some of the $86.8 billion it paid out to community bank lenders during the financial crisis. The Federal Deposit Insurance Corporation (FDIC), has filed 19 suits against former executives and directors of collapsed banks since October. That number is expected to increase, as the agency has also authorized 94 lawsuits – the initial step regulators take immediately following a bank’s failure and prior to filing an actual claim. The FDIC then has three years from the time the bank closes to file suit. FDIC officials say the agency collected around $337 million in settlements last year and nearly $232 million in 2011.
The lawsuits primarily target directors and officers of small banks accused of approving loans that later contributed to the bank’s collapse. Insurance experts say D&O rates for small banks Read more…
Survey shows small to midsize business not prepared to handle consequences of a data breach
New research shows that smaller companies are especially vulnerable to data breaches, according to a Poneman Institute survey released last week. The survey found that more than half of U.S. small and mid-sized businesses have experienced data breaches caused by issues such as employee mistakes, lost or stolen laptops and smart phones and procedural mistakes. While 46 states have enacted legislation requiring notification of security breaches involving personal information, the study found that only 33% of companies experiencing data breaches have done so.
Experts say many small companies are not prepared to handle data breaches, leaving them subject to legal penalties for failing to respond in a timely and effective manner. Outsourcing may be one reason data breaches can be such a big problem Read more…
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