News & Events
Profax 7/19/2010 - 7/26/2010
ND INS. DEPT FRAUD UNIT BUSY AND EFFECTIVE: Insurance fraud in excess of $5000 is a Class C Felony in North
Dakota, which is serious. All parties involved in insurance fraud face the same penalty whether it be a body shop
owner/employee, an insurance agent or a doctor---fraud is fraud. The North Dakota DOI has employed a fraud
investigator and already results are showing. A father and son from Fargo are the latest to be charged with insurance
fraud, theft and illegally conducting an enterprise. 42-year-old Sead Mustafic and his son Senad, age 24, are being
prosecuted in Cass County. They allegedly caused over 30 auto accidents in a two-year period. An insurance company
reported the suspected fraud. Anyone suspecting fraud needs to contact the DOI with details. Agents sit on the “front
line” of being able to identify activities that might lead to insurance fraud. Since the ND DOI has employed a full time
fraud investigator, over 59 open investigations are pending. An average of 1-2 fraud reports per week [mostly
property/casualty] are now being reported to fraud investigator Dale Pittman at the DOI. “Insurance fraud raises the
yearly cost of premiums by about $300 for the average household” according to Insurance Commissioner Adam Hamm.
If you suspect insurance fraud, please contact the Insurance Department at 1-800-247-0560. Keep this number.
FIRST QUARTER NUMBERS OUT: According to a report released by A.M. Best, the combined loss ratio for the P/C
industry as of March 31 was 101.1% compared to 101.3% for the same period in 2009. However, net premiums fell for
an unprecedented 10th consecutive quarter [30 months]. Policyholder surplus increased by 24.4% and reported net
profit rose due to realized capital gains in the first quarter.
SRA SIGNING A DONE DEAL: All 16 Approved Insurance Providers for crop insurance have signed Draft #3 of the fiveyear
SRA contract. So what’s next? The headlines in The Bloomberg read “The crop insurance industry will be forced to
consolidate by a U.S. government plan to spend $6 billion less on subsidizing farmer policies”. “The deal, which
companies had to sign to continue to receive subsidies will drive some companies out of business within two years”, said
Bob Parkerson, the head of NCIS. The handwriting is on the wall as the USDA/RMA restricts the private partnership on
the crop insurance program. In the early ‘80s, over 85 companies wrote crop insurance for farmers. It has slowly
dropped to 16 with only really 4-5 major writers. The new 5-year SRA agreement will undoubtedly force consolidation in
the industry. How much? We’ll have to wait and see.
WHO NEEDS ETHICS CE? PIAND will again offer a “caravan” of Ethics seminars around the state in August beginning in
Lisbon and Williston [Aug 10th]; Jamestown and Dickinson [Aug 11th]; Devils Lake [Aug 12th]; Grafton [Aug 14]; Bismarck
[Aug 17th], Minot [Aug 18]; Grand Forks [Aug 19th] and Fargo [Aug 20th]. Agents are required to obtain 3.0 hours of
“ethics” within their two-year CE reporting period. Agents with last names L-Z and birth months this past January
through the current month have reported their required 24 CE hours including ethics. Those agents can attend these
seminars and have their ethics requirement completed for their next reporting cycle. The remaining L-Z agents whose
birth months are this coming August through December can still earn their ethics hours at these seminars and report in
their birth month. Agents with last names A-K will be reporting their 24 hours including the 3.0 hours of ethics during
their birth month in 2011. They have more time but can get their ethics hours now if they have not yet done so. Some
in this group may have already earned their 3.0 hours of ethics since last reporting and need not worry about the
mandate. However these CE hours still qualify for regular CE hours. Registration forms are posted on-line at the PIAND
website and have been mailed by USPO.
E&O SEMINARS SET: Don’t miss these top-notch E&O Loss Control Seminars designed to prevent E&O claims, assist an
agency when a claim is presented and SAVE on your agency E&O premium. Risk Management Consultant Curtis Pearsall,
a former VP of Utica National Insurance, will lead the 3.0 hour seminar at four locations in North Dakota. Register early
for a location near you: August 17th [Bismarck]; August 18 [Minot]; August 19 [Grand Forks]; or August 20th [Fargo]. All
E&O sessions begin at 9:00am until noon and coordinate with the “Ethics Seminars” at the same locations for 3.0 hours
from 1:00 until 4:00. Register for both seminars and save time and money [$15 discount if attending both sessions at
one location] and earn 6.0 hours of needed CE.
