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Broker news

A library of insurance regulatory news for brokers and agencies.

2014

Foreign account tax compliance act update

As you are aware, a new U.S. tax law known as the Foreign Account Tax Compliance Act or FATCA took effect in 2014. This new law, along with corresponding regulations issued by the Internal Revenue Service, impact payments by U.S. businesses to both U.S. and foreign payees.

This new law may require U.S. businesses to document the U.S. or foreign taxpayer status of payees. Zurich may require one of the IRS forms described below prior to issuing payment. Zurich can also provide the IRS forms needed to document the status of Zurich legal entities upon the request of a broker, vendor, or other business party.

U.S. payees can provide documentation of their U.S. taxpayer status by providing Form W-9, "Request for Taxpayer Identification Number and Certification." Foreign payees can provide documentation of their foreign taxpayer status by providing a form from the Form W-8 series.

Should you require a Form W-9 from a Zurich U.S. entity, you can acquire one via email by contacting
usz.w-9@zurichna.com. If you require a Form W-8 from a Zurich non-U.S. entity, you can acquire one via email by contacting usz.fatca.requests@zurichna.com.

We thank you for your continued support and for trusting us to serve our mutual customers' insurance needs.

This communication does not constitute legal or tax advice.  Accordingly, persons requiring advice should consult independent advisors when developing programs and policies.

Urgent info for agents with licenses in Montana

Due to the rules and regulations that we currently operate under in Montana, as well as the recent Montana Supreme Court decision (American Zurich Insurance Company vs. Montana 13th Judicial District Court, 2012 MT 61, 364 Mont. 299, 304, 280 P.3d 240, 246), we would like to reiterate and further clarify what information we can legally share with our insureds. The goal is to share what is allowed, while at the same time adhere to, and not violate, pertinent Montana case law, statutes, regulations, and the Montana State Constitution.

Items we can communicate:

  • Receipt of a File: We can acknowledge that we have received a claim.
  • Initial Investigation: We can communicate on the investigation as it pertains to: 1) the course and scope; 2) identifying and reporting fraud; and 3) witness identification.
  • Return to Work Accommodations: Full vs. Limited Duty information.
  • Non-Private Medical (NPM): This information includes last and next Medical appointment dates, MMI, and RTW restrictions.
  • Discovery Proceedings: We can communicate in order to respond to discovery. This includes securing the assistance of employees to respond to discovery requests.
  • Trial Notifications: We will advise the employer of a trial being set in the event an employee is needed to testify as a witness.
  • File Closure: We can advise customers of a file closing.
  • Administrative Communications: Those communications necessary to opening claims and coordinating discovery or trial testimony.
  • Items we cannot communicate:

    • Reserves: This includes reserve information of any kind.
    • Settlement Amount: Employers shall not have access to or input regarding settlement amounts offered on claims.
    • Litigation Information: This item is very broad, including any and all legal strategy and settlement positions.
    • Private Medical Information: Any medical information protected by HIPAA shall not be shared.

    As a matter or practice, we also need to block access to file information on all litigated files. We must also ensure that all claim notes not included in the list of acceptable communication items above, are marked confidential and cannot be shared.

    Despite these legally mandated changes, you can rest assured that Zurich will continue to handle Montana workers compensation claims in a professional manner. We will continue to work with you in the investigation of the facts of the claim while also ensuring we comply with our obligations under Montana law.

    2013

    Terrorism Risk Insurance Act of 2002 Expiration

    The Terrorism Risk Insurance Act of 2002, as extended by the Terrorism Risk Insurance Extension Act of 2005 (TRIA), and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA) is scheduled to expire at midnight on December 31, 2014. It is possible that next year the United States Congress will extend, modify or replace TRIA/TRIPRA prior to or even after its scheduled expiration. It is also possible that TRIA/TRIPRA will simply expire.

    In light of this uncertainty, we are introducing new disclosure notices that provide information regarding the scheduled termination of TRIA/TRIPRA and its potential extension along with the federally required disclosures. You should begin seeing these new forms for policies with effective dates after January 1, 2014. We have made every effort to ensure that these forms are simple and straightforward.

    For workers compensation policies with effective dates after January 1, 2014, you should expect:

    • The replacement of our quote disclosure form WC 99 06 93 (07/06) with the WC 99 06 93 A (07/13) that contains the required federal disclosures and explains the impact of the potential expiration of TRIA/TRIPRA.

    At this time neither the NCCI nor the state workers compensation bureaus have made filings that address the transition other than item P-1410 effective January 1 2014 by which WC00 01 14 (Notification Endorsement of Pending Law Change to Terrorism Risk Insurance Program Reauthorization Act of 2007) is to be attached to the policy.

    For other policies subject to TRIA with effective dates after January 1, 2014, you should expect:

    • The replacement of our quote disclosure form (U-GU-632-C) with a new quote disclosure form (U-GU-693-C) that contains the required federal disclosures and explains the impact of the potential expiration or modification of TRIA/TRIPRA.
    • The replacement of our policy disclosure endorsement (U-GU-630-C) with a new disclosure endorsement (U-GU-692-C) that also contains the required federal disclosures and explains the impact of the potential expiration or modification of TRIA/TRIPRA including any change in premium, if applicable.
    • For those policies that exclude or limit terrorism during the 2014 part of the policy period, a conditional exclusion will normally be attached as well. A conditional endorsement becomes effective for the 2015 part of the policy period but only if TRIA expires or if there are certain major changes to the program./li>

    We hope the attached Questions and Answers will help you respond to the needs of your customers. If you have any additional questions, please contact a member of your Zurich team.

    Compliance Issue Relating to Montana Workers' Compensation Claims

    With the recent Montana Supreme Court decision (American Zurich Insurance Company vs. Montana 13th Judicial District Court, 2012 MT 61, 364 Mont. 299, 304, 280 P.3d 240, 246.), Zurich North America has taken a number of actions to protect legal privileges in Montana workers' compensation cases.

    In this recent decision it was determined that communications between a carrier or carrier’s defense counsel and the employer concerning workers' compensation claims are not privileged. Therefore, such communications are subject to discovery. The Montana Supreme Court ruled in a bad faith lawsuit filed by an injured worker that the entire file of the carrier’s defense counsel must be produced on the basis that the privilege was waived. The waiver occurred when defense counsel and the adjuster shared claims and legal communications with the insured/employer.

    Recognizing the effort to maintain as confidential defense communications in litigated claims, it is critical that communication between defense counsel and Zurich North America remain privileged. Montana law requires Zurich North America to restrict access to legal documentation specific to Montana workers' compensation claims.

    Zurich North America will not provide the following information to the insured/employer and/or their broker:

    • Communication from defense counsel or the claim handlers' notes summarizing those communications
    • Private healthcare information
    • Evaluative reports
    • Information or reports regarding settlement positions or claim reserves

    Furthermore, Zurich North America will not allow the insured/employer to direct, influence, or control the adjustment of the claim. Restricted access to the information above includes print, electronic documents, and claim notes related to the litigation of these claims.

    With respect to Zurich’s Risk Intelligence system, this will require that Zurich prevent access to all claim file notes and correspondence. However, insureds and authorized brokers will continue to have access to claims financial data.

    Zurich North America customer protocols and/or account instructions are modified to comply with Montana law. Zurich will continue to provide relevant communication to its insured/employer, which may include:

    • Certain limited administrative communications
    • Course and scope inquiries seeking information regarding the facts of the claim
    • Back-to-work inquires, job availability, and information regarding physical accommodations
    • Coordinating and responding to insured/employer oriented discovery
    • Trial notification and requests for insured/employer testimony
    • Fraud investigations (in appropriate cases)

    Upon request, and at the direction of Zurich North America, defense counsel can provide documentation subject to these restrictions.

    Please be assured that Zurich North America will continue to handle your workers' compensation claims professionally and will work with you in the investigation of the facts of the claim consistent with Montana law.

    Compliance Issue Relating to Texas Workers' Compensation Claims

    With the recent Texas Supreme Court (In Re XL Specialty Insurance Company, No. 10-0960 (Tex. June 29, 2012) decision, Zurich North America has taken a number of actions to protect our legal privilege on Texas workers' compensation cases.

    In this recent holding it was determined that communications between a carrier or carrier’s attorney and the employer concerning those claims are not privileged and therefore are subject to discovery. In a later suit filed by the injured worker, the communication provided by defense counsel was requested by the plaintiff and the Court ordered the production on the basis that the communication was not privileged since it had been previously shared with the employer.

    Recognizing the effort to maintain appropriate defense of litigated claims, it is critical that communication between defense counsel and the workers’ compensation carrier remain protected. Zurich North America will restrict access to legal documentation specific to Texas workers compensation claims.

    Zurich North America will not:

    • Release communications from defense counsel or the claim handlers' notes summarizing those communications to the named insured employers and/or their brokers.
    • Provide evaluative reports containing privileged and confidential information.

    This restricted access includes print, electronic documents, and claim notes related to the litigation of these claims.

    With respects to Zurich’s Risk Intelligence system, this will require that Zurich North America prevent access to all claim file notes and correspondence. However, insureds and authorized brokers will continue to have access to claims financial data.

    All Zurich North America customer protocols and/or account instructions are modified to comply with this policy. Zurich North America will continue to provide relevant communication, which may include:

    • Certain limited administrative communication
    • Forwarding employer oriented or directed discovery
    • Requests for back-to-work inquiries, job availability and physical requirements
    • Insurance/claim fraud (in appropriate cases)
    • Inquiries regarding course and scope seeking information regarding the facts of the claim.

    Upon request and at the direction of Zurich North America, defense counsel can provide documentation, subject to these same restrictions

    Despite such necessary change, you may be assured that Zurich North America will continue to handle Texas workers' compensation claims professionally and to work with you in the investigation of the facts of the claim, consistent with the obligations we all have under the Texas Labor Code.

    2012

    Info for Agents with Licenses in Virginia

    In accordance with legislation enacted by the Virginia General Assembly during its 2012 legislative session, (House Bill 867 and Senate Bill 47), the Bureau of Insurance (Bureau) will, effective July 1, 2012, enforce the provisions of a new statute within Title 38.2 of the Code of Virginia relating to certificates of insurance. Virginia Code § 38.2-518 prohibits unfair trade practices relating to the issuance of false or misleading certificates of insurance. The language in § 38.2-518 extends the Bureau’s authority to any person involved with the issuance of a false or misleading certificate of insurance, including certificate holders, policyholders, insurers, and insurance producers.

    In an attempt to help ensure that Zurich appointed agents who hold a Virginia insurance license are aware of new requirements, we are asking that you please read the Administrative Letter 2012-07 from the Virginia Bureau of Insurance.

    The letter may also be accessed through the Bureau of Insurance web site at: http://www.scc.virginia.gov/boi/adminlets/index.aspx