Monday, October 5, 2009

Ohio warns of check scam...

Ohio's Department of Insurance is trying to spread the word about an international check scam that's issuing fake checks that seem to be from big-name insurance companies, including Nationwide.

Here's how it works: You get a letter with what looks like a $4,500 check from a reputable company. The letter congratulates you and says you've won $150,000 in a contest. You need only pay off the "non-resident government tax" to a British tax officer. You're told to cash the check and then wire most of the money to an address in the U.K. And to tell no one.

You can guess the rest. The wired money's gone, the bogus check doesn't cash, and of course there is no $150k waiting for you in some British shopping contest that you never entered.

Our investigators say that we haven't run into this one yet, but that it's just another variation on ever-popular "advance fee fraud," also known as the Nigerian scam, which in various forms dates back to at least the 1920s.

If you're looking for a smaller jackpot, however, punch your name into Washington state's unclaimed property site, run by the state's Department of Revenue. If you forgot an insurance deposit, last paycheck, utility deposit or bank safe deposit box, that's where all those things end up. The state-run site is legitimate. In fact, one of the biggest problems that the unclaimed property folks run into is trying to return money to skeptical residents who think it's some kind of scam.

(Never lived in Washington? Click here for other state's unclaimed property websites.)

What's the petition filed to liquidate Penn Treaty mean in Washington?

The Pennsylvania Insurance Department filed petitions on Oct. 2 to liquidate both Penn Treaty Network America and its subsidiary, American Network. Pennsylvania Insurance Commissioner Joel Ario said that based on his office's analysis, the companies "do not have the ability to pay future claims without significant rate increases that would have to be requested and approved in all 50 states."

Together, the companies provide long-term care insurance to more than 120,000 policyholders in all states and the District of Columbia.

Washington state has about 3,700 Penn Treaty policyholders and no known American Network policyholders.

Ario's office says that if the court approves the petition, any active long-term care policies "will not be canceled, except by the policyholder" and will instead be transitioned to state guaranty funds, which cover policyholder claims up to coverage, which varies by state.
The details are spelled out in the liquidation petition memos (Here's Penn Treaty's, and here's American Network's). Penn Treaty's, for example, says that further efforts to rehabilitate the company's finances "would substantially increase the risk of loss to policyholders" and would, in fact, "be futile."
Here in Washington, we put up this web page to talk about the effects on Washington policyholders, how the liquidation process works, and what policyholders can do.

Why not to throw water on a cooking oil fire...

This video, which we noticed via State Farm's Twitter feed, illustrates pretty graphically why it's a very bad idea to try to put out a kitchen grease fire by throwing water on it.

The video recommends snuffing out a pan fire by soaking a wet towel, wringing it out, and then laying it on top of the pan. And this apparently works, as you'll see in the video. As State Farm noted, many firefighters recommend a simpler move: covering the burning pan with a lid.

The key lesson of the video, however is this: DO NOT THROW WATER on an oil fire.

Happy Fire Safety Week.

With large-value flood insurance scarce in the Green River Valley, OIC considers revisiting joint underwriting association legislation...

As businesses in the Green River Valley find it very hard indeed to find coverage above the $500,000 building/$500,000 contents maximum for federal flood insurance, our office is considering revisiting a proposal that would have given us broader powers to help.

In 2003, the insurance commissioner’s office asked the state Legislature for broader powers to create “joint underwriting associations” in cases where coverage effectively disappears. More than two dozen states have comprehensive JUA laws.

Here’s how they work: When coverage dries up, such laws allow the insurance commissioner to intervene and order insurers to band together to provide start-up financing and guarantee solvency for a joint underwriting association. The JUA then functions as a not-for-profit insurer of last resort. The coverage may be expensive, but at least it will be available. (Mostly, that is. Such associations can refuse to cover the very few applicants who present extraordinary risks.)

As things stand now, state law requires that the insurance commissioner get approval from the state legislature before establishing such an association. The 2003 legislation – House Bill 1582 – would have allowed the Office of the Insurance Commissioner to move ahead, under certain conditions, to directly order creation of such groups.

Insurers in 2003 opposed the bill, which died in committee. But with business owners struggling to find coverage in the Green River Valley and many millions of dollars in uninsured property in the potential flooding area, it may be time to revisit the issue.

(Note: I modified this post to clarify and describe a bit more about how JUAs work.)