Forced Placed Insurance Expertise

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I. Summary of Forced Placed Insurance Expertise
Among other things, expertise as to forced placed insurance (sometimes, “lender placed insurance”) relies on knowledge of (i) forced placed insurance and those that sell or “place” the coverage, generally lending institutions, (ii) the regulation of these matters and (iii) homeowners insurance (simply because it is the most common line of insurance that forced placed insurance applies to, though other forms of property insurance can be involved, such as commercial property coverage).

Forced placed insurance simply described – is insurance that a lien holder places on a property, to provide coverage in the event the borrower allows coverage to lapse. Forced placed insurance is intended to ensure that the property remains insured, protecting both the homeowner and the lien holder. The costs associated with forced placed insurance are paid upfront by the lien holder, but added to the balance of the lien.

Watch insurance expert Bill Hager discuss forced placed and lender placed insurance issues.

Set out below is my specific expertise as to key aspects of forced placed insurance.

Forced Placed Insurance: Regulatory Expertise. My expertise as to these matters can be found as follows:

  • I am a former Commissioner of Insurance (Iowa);
  • First Deputy Commissioner of Insurance;
  • Assistant Attorney General assigned on a full time basis to the Department of Insurance (Iowa).

In those capacities, on a daily basis, I had full regulatory oversight and responsibility for and I dealt directly with (i) forced placed insurance, (ii) its regulations and (iii) homeowners insurance.

Forced Placed Insurance: Other than Regulatory Expertise. In addition to my regulatory background, I have served or am serving in the following capacities, each of which included daily knowledge of and interaction with (i) forced placed insurance, (ii) its regulations and (iii) homeowners insurance:

  • General Counsel and Chief Lobbyist for the American Academy of Actuaries,
  • Chief of Staff at the U.S. House of Representatives,
  • President and Chief Executive Officer of the National Council on Compensation Insurance (“NCCI”), a major U.S. property casualty insurance entity doing business in some 40 states,
  • Elected Member of the Florida House of Representatives (currently) where I serve as Vice Chairman of the Insurance Committee (among other committees), which has legislative oversight over all insurance operations in the state (as administered by the Florida Office of Insurance Regulation) including issues relating to forced placed insurance,
  • Nationally certified Reinsurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between (among others) professional liability insurers and their reinsurers,
  • Attorney admitted to practice in Florida, Illinois and Iowa (all by examination) with an insurance practice and
  • Past Member of the Executive Committee of the National Association of Insurance Commissioners (“NAIC”).

Homeowners Insurance. Click on the link to see my background and expertise as to homeowners insurance.

My expertise as to homeowners insurance and for that matter, property insurance overall is relevant to forced placed insurance because most all forced placed insurance is applied to property circumstances and the policies typically forced into place are either coverage for homeowners coverage or commercial property coverage.

II. Additional Expertise to Render these Opinions

Among my positions and experiences, the following should be read together with my Curriculum Vitae.

A. Insurance Expert.

1. Expert Witness. I have served as an expert witness in a number of cases throughout the U.S. and have been qualified in open court as an expert witness in about 20 states.

2. Consultant to the U.S. Attorney. By way of example of my various assignments, I have been retained by the U.S. Attorney, the Middle District of Florida, as an insurance consultant in a complex civil insurance matter.

3. Consultant to the U.S. Department of Justice. Similarly, I have also been retained by the U.S. Department of Justice as an insurance consultant in a complex insurance case.

4. Expert Witness: U.S. Attorney and U.S. Air Force. Along these same lines, I have been retained as an insurance expert by the U.S. Attorney, Central Division of Florida as an expert witness and likewise I have been retained by the U.S. Air Force as their expert witness in a commercial general liability matter relating to pollution exclusions.

5. Expert Witness: State Insurance Departments. I have also been retained by the Liquidation Division of the Florida Department of Financial Services as an expert witness and testified on their behalf in both state and federal court in complex matters. I have similarly been retained by and testified on behalf of the Arizona Department of Insurance. I have also testified as an insurance expert before the following Departments of Insurance: Florida, Texas, South Dakota, Nevada and Oklahoma.

B. Formal Education.

5. Bachelor’s Degree in Mathematics. I hold a B.A. degree in secondary mathematics education from the University of Northern Iowa;

6. Master’s Degree. I hold an M.Ed. degree from the University of Hawaii;

7. Law Degree. I hold a Juris Doctor degree from the University of Illinois.

C. Legal Background. 

8. Lawyer. I am a member of the Florida, Iowa and Illinois (inactive) Bars and have been an insurance lawyer since 1975. I am also licensed to practice before the U.S. Supreme Court.

D. Reinsurance Arbitrator: Property Casualty Treaties/ Forced Placed Insurance.

9. Forced Placed Insurance: Reinsurance Arbitrator: Property Casualty Insurance Cases. November 2003 to Present. My background includes extensive exposure to the various reinsurance mechanisms and relationships. I am a certified ARIAS-US reinsurance arbitrator (see immediately below) and have sat as an arbitrator in cases between property casualty insurers and their reinsurers. The relevance of this experience is that the reinsurance process ultimately influences much of the direct property casualty insurance business.

As of November 2003, I was certified by AIDA Reinsurance and Insurance Arbitration Society, United States (“ARIAS-US”) as an arbitrator for reinsurance and insurance matters. Today, there are about 200 individuals so certified by ARIAS in the United States.

ARIAS-US certifies knowledgeable and reputable professionals for service as panel members in reinsurance and insurance arbitration matters. The organization’s criteria for certification are as follows:

  • 10 years of significant specialization in the insurance/reinsurance industry;
  • Arbitration experience – must have completed appropriate credited ARIAS seminars;
  • A member in good standing of ARIAS-US;
  • Appropriate endorsement from existing members.

E. Industry Background

10. CEO of a Major Property Casualty Insurance Regulated Organization. President and Chief Executive Office of the National Council on Compensation Insurance (NCCI; New York City and Boca Raton, Florida), 1990 – 1998. NCCI is one of the larger and more pervasive U.S. insurance organizations. During my tenure as CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 – $15 billion of workers compensation insurance in 39 states throughout the U.S. NCCI prepared proposed premium filings for regulators to approve by extracting key data from its 600 member insurance companies and then used that data to project necessary premium changes. NCCI accomplished this mission through some 1,000 employees of which approximately 600 were professionals, and had an annual revenues of $140 million.

Most of the U.S. While I was President and CEO of NCCI, it was licensed to do business in about 40 states including and provided the underwriting, rating and classification format for workers compensation.

Casualty Insurance Program. As CEO, I had daily exposure and responsibilities to the U.S. workers compensation program as administered by the various states, which constitutes one of the largest casualty insurance programs in the world with some 100 million worker lives insured (in addition, of course, other important coverages are provided through workers compensation, most notably wage replacement and medical coverage).

Sales Practices. In addition, NCCI had a vested interest in member insurer sales practices in that the industry’s reputation for fair sales practices ultimately impacted regulatory attitudes toward NCCI’s premium approval process.

Broker Practices. All workers compensation products are sold through agents and brokers and as such, as CEO of NCCI, my responsibilities included creating and sustaining liaison with all of the operative US agent associations and communities. I have had extensive exposure to agent and insurer practices and procedures.

Industry Standards of Practice. While President and CEO of NCCI, I visited and physically toured and reviewed in excess of 400 insurance companies and gained direct exposure to the procedures and processes and standard industry practices of the U.S. insurance community and its agents. I am very familiar with the custom and practice in the US insurance industry, including that relating to forced placed insurance.

11. General Counsel and Director of Government Relations to the American Academy of Actuaries: Property Casualty Insurance (Washington D.C.), 1980 – 1983. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries, including advising on admissions, discipline, federal antitrust and general corporate law. I represented the 10,000-member professional organization before Congress (e.g., Senate Committees on Banking, Commerce, Finance and Labor, and House committees on Education, Labor, Energy, and Ways and Means) and the various federal regulatory agencies.

Forced Placed Insurance: Property Casualty Insurance Companies. The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers, including insurers who sold forced placed insurance. Academy members included affiliation with virtually every property casualty insurance company in America. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such companies, including those that sell forced placed insurance. The pertinence of this and other experience is my knowledge of reasonable rates.

12. Risk Metrics Corporation. I co-founded this Florida based information company in 1998. Risk Metrics (including Datalister, Inc.) gathers and sells public data to a wide range of insurance oriented customers, including insurance agents. I sold my interest in this corporation several years ago.

13. Forced Placed Insurance: Attorney in Private Practice. As an attorney in private practice, I represented a number of agent and insurer interests and became familiar with regulatory and industry standards of practice. Those interests included the position of Iowa Counsel to the Property Casualty Insurance Association of America (“PCIAA”).

Forced Placed Insurance: Property Casualty Insurance Issues. Those interests also included intimate involvement with the agent and property casualty insurance communities, including matters relating to forced placed insurance as counsel to the:

  • Professional Insurance Agents of Iowa (the statewide property casualty agents association);
  • Iowa Association of Life Underwriters (the statewide life and disability insurance agents association) and
  • Property Casualty Insurance Association of America (“PCIAA”); Iowa counsel to this national property casualty trade association);

Specific duties as counsel at the Professional Insurance Agents of Iowa, the Iowa Association of Life Underwriters (life insurance agents) and the PCIAA included in-depth familiarity with forced placed insurance and insurance agents and brokers and their insurers. A number of the PCIAA members sold forced placed insurance.

F. Regulatory

14. Commissioner of Insurance, Iowa 1986 – 1990. As Insurance Commissioner appointed by Governor Terry Branstad in July 1986, I was responsible for the regulatory oversight of all insurance companies, agents and brokers authorized to conduct business in the state of Iowa. My agency was responsible for solvency oversight, insurance company examinations, financial and accounting matters of insurance companies, consumer protection, agent and broker licensing, and oversight of the property and casualty insurance company practices, including transactions with forced placed insurance. In addition, that oversight included the responsibility of overseeing practices of insurance agents and brokers. In addition, I oversaw the state regulation of the securities industry with Iowa’s Superintendent of Securities reporting directly to me.

Forced Placed Insurance: Regulatory Oversight: Property Casualty Insurer Practices: In addition to expertise as to policy forms and coverage issues, as Insurance Commissioner, my responsibilities included oversight of the education, licensing, discipline and general supervision of all property casualty insurance companies in the state. I am very familiar with the responsibilities and applicable duty of care that comes to bear upon insurance companies, including those selling forced placed insurance.

Forced Placed Insurance: Regulatory Oversight: Property Casualty Insurance Broker Practices. As Insurance Commissioner, I also had day-to-day responsibility to assure that all relationships carried out by insurance companies doing business in the state met all of their duties, obligations and statutory and regulatory responsibilities as they conducted business with their brokers, including all activities relating to forced placed insurance.

Forced Placed Insurance: Financial Examination of Property Casualty Insurance Companies: As Insurance Commissioner, I directed and oversaw the examination of all insurance companies authorized to do business in the State of Iowa, including those engaged in forced placed insurance. Those examinations included focus on both financial matters (so called triennial examinations of insurers – of which well over 100 such examinations were conducted while I was Commissioner) and examinations of specific complaints about insurers (so called Market Conduct Examinations – well over 50 such exams were conducted while I was Commissioner).

Forced Placed Insurance: Market Conduct Examinations of Property Casualty Insurers: Market Conduct Examinations focused on marketplace issues such as those involving forced placed or lender placed insurance, specifically examining property casualty insurance companies as to compliance with their duties, including duties of forced placed insurers. Concurrent with such exams, I personally reviewed and approved the final Examination Reports before they were issued. In addition, in many of these instances, I visited the subject insurer before the Examination Report was issue, including walking the floors of such insurance companies – reviewing their effected operations first hand.

Forced Placed Insurance: Approval of Policy Forms and Rates: As Commissioner of Insurance, I had responsibility to approve (and as appropriate, disapprove) virtually every property casualty policy form and rate used in the state including policy forms at issue here. I am familiar with these policy forms and their construction and application and proper rates.

Forced Placed Insurance: Prosecution of Property Casualty Insurance Companies for Violations of Standard of Care. As Insurance Commissioner, I employed a full time team of lawyers who fielded consumer complaints relating to all areas of property casualty insurance companies. Indeed, many of these complaints as well as results of Market Conduct Examinations resulted in formal action under the state’s Administrative Procedures Act with the insurer’s license to conduct business in the state at risk for failing to adhere to their duties. From time to time, I served as the Hearing Officer as to such matters.

Forced Placed Insurance: Prosecution of Property Insurance Agents for Violations of Standard of Care. As Insurance Commissioner, I employed a full time team of lawyers who fielded consumer complaints relating insurance agents. Indeed, many of these complaints resulted in formal action under the state’s Administrative Procedures Act with the insurance agent’s license to conduct business in the state at risk for failing to adhere to their duties. From time to time, I served as the Hearing Officer as to such matters, including forced placed insurance matters.

Major Insurance State. Iowa has about 1,000 authorized property and casualty insurance companies and over 500 life insurance companies and an unusually large number of domestic insurance companies and as such insurance regulation in that state is a serious job.

15. National Association of Insurance Commissioners (NAIC), 1986 – 1990. Concurrent with my service as Iowa Insurance Commissioner, I served as a member of the NAIC. The NAIC is an organization of the Insurance Commissioners of all 50 states and U.S. territories and meets quarterly in locations throughout the U.S. to consider and evaluate national insurance issues. Further, the organization is professionally staffed with more than one hundred personnel. The organization is based in Kansas City, Missouri. The NAIC considers all major insurance issues and then promulgates model insurance laws and regulations, which are then routinely (but optionally) adopted at the individual state level.

NAIC Chairmanships – Chairman of the Midwest Zone. I was elected by my fellow Insurance Commissioners from the Midwest Zone (composed of the Midwest states, constituting about one quarter of all of the states) to provide leadership and representation of the Midwest before the balance of the states. This position included a position on the Executive Committee of the NAIC as well as major responsibilities relating to the assignment of states (and their related examiners) to specific examinations, both triennial and Market Conduct.

Forced Placed Insurance: NAIC Leadership: Member of the Executive Committee. I also served as an elected member of the Executive Committee of the NAIC, the body that served as the-e steering committee of the organization, providing leadership between full membership meetings and providing recommendations to the full membership as to complex or politically charged issues within the organization. Executive Committee oversight included that of the so-called NAIC “C” Committee, namely the Property Casualty Insurance Committee. That Committee in turn had full jurisdiction over homeowners insurance matters such as those present in forced placed insurance cases.

Other NAIC Chairmanships: I also served in a number of NAIC capacities including Chairman of the Financial Services and Insurance Regulation Task Force.

Forced Placed Insurance: Member: Commercial Lines Committee. In addition, I served as a member of the NAIC Commercial Lines Committee. This committee considered all issues relating to commercial lines policies, namely forced placed insurance or lender placed insurance issues.

Member, International Insurance Relations Committee. This Committee had responsibility to reconcile relationships between US and foreign insurers and the US marketplace and the international marketplace. During the period of time of my service, this Committee was very active in laying the groundwork for greater: (i) standardization of rules and regulations in the various states for all insurers, both domestic and foreign and (ii) access to international markets by US based insurers.

In addition, my service on the following NAIC Committees was also helpful in this regard:

  • Member, the Blanks Committee;
  • Member, Guarantee Fund Committee;
  • Member, Rehabilitator and Liquidators Committee;
  • Member, Casualty Actuarial Committee;
  • Member, Commercial Lines Committee;
  • Member, Valuation of Securities Committee;
  • Member, International Insurance Relations Committee;
  • Member, Accounting Practices and Procedures Committee; and
  • Member, State and Federal Legislative Committee.

Ongoing Regulatory Involvement. In the years since leaving the regulatory ranks, I have continued to be closely involved with the NAIC and the regulatory community. As President and CEO of NCCI, I was in regular attendance at meetings of the NAIC and continue to attend these meetings and to be actively engaged with the regulatory process. Included in this attendance were my observations at the NAIC of the regulation of the life industry.

16. First Deputy Iowa Insurance Commissioner, 1976 – 1978. As First Deputy Insurance Commissioner, I had oversight responsibility over all facets of insurance regulation, including oversight of the property casualty division, the life insurance division, agent licensing, consumer complaints and premium finance companies. As First Deputy Commissioner, the functions of overseeing all aspects of life insurers reported to me.

In this position, I had extensive exposure to and direct responsibility for all facets of insurer’s activity including oversight over insurer’s relationships with their brokers and others.

Forced Placed Insurance: Prosecution of Property Insurance Agents for Violations of Standard of Care. As Insurance Commissioner, I employed a full time team of lawyers who fielded consumer complaints relating insurance agents. Indeed, many of these complaints resulted in formal action under the state’s Administrative Procedures Act with the insurance agent’s license to conduct business in the state at risk for failing to adhere to their duties. From time to time, I served as the Hearing Officer as to such matters.

Forced Placed Insurance: Regulatory Oversight: Overall Regulation of Property Casualty Insurer Practices. In addition to expertise as to policy forms and coverage issues, as First Deputy Insurance Commissioner, my responsibilities included oversight of the education, licensing, discipline and general supervision of all insurance companies in the state. I am very familiar with the responsibilities and applicable duty of care that comes to bear upon insurance companies, including those who sell forced placed insurance.

Forced Placed Insurance: Financial Examinations of Property Casualty Insurance Companies. As First Deputy Insurance Commissioner, I directed and oversaw the financial examination of all insurance companies authorized to do business in the State of Iowa. Those examinations included focus on financial matters (so called triennial examinations of insurers – of which well over 100 such examinations were conducted while I was Commissioner), including examination of insurers providing forced placed insurance coverage.

Forced Placed Insurance: Approval of Policy Forms. As First Deputy Commissioner of Insurance, I had responsibility to approve (and as appropriate, disapprove) every property casualty policy form used in the state including the policy forms at issue in many forced placed insurance cases. I am familiar with these policy forms and their construction and application.

Forced Placed Insurance: Market Conduct Examinations of Property Casualty Insurers. Market Conduct Examinations focused on marketplace issues such as those at issue in many forced placed insurance cases, specifically examining insurance companies as to compliance with their various duties as to their agent/brokers and to the extent they provided coverage, to the forced placed insurance clients. Concurrent with such exams, I personally reviewed and approved the final Examination Reports before they were issued. In addition, in many of these instances, I visited the subject life insurer before the Examination Report was issue, including walking the floors of such insurance companies – reviewing their effected operations first hand.

Forced Placed Insurance: Prosecution of Property Casualty Insurance Companies for Violations of Standard of Care. As First Deputy Insurance Commissioner, I employed a full time team of lawyers who fielded consumer complaints relating to all areas of property casualty insurance. Indeed, many of these complaints as well as results of Market Conduct Examinations resulted in formal action under the state’s Administrative Procedures Act with the insurer’s license to conduct business in the state at risk for failing to adhere to their duties, including duties relating to forced placed insurance. From time to time, I served as the Hearing Officer as to such matters.

Forced Placed Insurance: Prosecution of Property Insurance Agents for Violations of Standard of Care. As First Deputy Insurance Commissioner, I employed a full time team of lawyers who fielded consumer complaints relating insurance agents. Indeed, many of these complaints resulted in formal action under the state’s Administrative Procedures Act with the insurance agent’s license to conduct business in the state at risk for failing to adhere to their duties, including those relating to forced placed insurance. From time to time, I served as the Hearing Officer as to such matters.

17. Iowa Assistant Attorney General Assigned to the Insurance Department, 1975-1976; serving as the Department’s General Counsel. As Assistant Attorney General, I had departmental prosecutorial responsibilities for violations of the Insurance Code under the state’s APA act including those committed by property casualty insurance companies and their agents and brokers in connection with forced placed insurance. The Attorney General responsibility also included issuing Attorney General Opinions as to the construction of insurance laws and regulations.

18. Legal Counsel to House of Representatives. As legal counsel to the Iowa House of Representative (1975 session), I provided counsel on all relevant caucus issues and provided the following support:

  • Researched pending legislation,
  • Prepared memorandums in support of proposed legislation,
  • Provided legal advice, and
  • Participated in bill drafting, including that relating to property casualty insurance.

19. Lecturer at the Bar Review School, authoring and delivering the Insurance Course to students studying for the Iowa Bar Exam (@ 1985- 1991). I was invited to provide the insurance content review material and lecture for the insurance section of the bar review course in Iowa. Included in this lecture was extensive law applicable to the interpretation and construction of laws and regulations applicable to property casualty insurance companies, including their brokerage practices. I authored this material and provided this lecture to students studying to pass the bar for about six years, until accepting the position of CEO of NCCI in Florida.

20. Chief of Staff to the U.S. Congress. I served as an Administrative Assistant to the U.S. Congress in Washington D.C. to an Iowa Congressman for about a year. Among other things, I participated in legislative drafting of insurance and reinsurance legislation.

21. Elected Member of the Florida House of Representatives/ Vice Chair: Insurance Committee. I am currently an elected Member of the Florida House of Representatives (From HD #89 – Delray Beach) and among other things, serve as a Member of and Vice Chairman of the House Insurance Committee which has legislative authority over the very matters at issue here, namely Lloyds, agents and brokers, homeowners insurance and forced placed insurance.

You can read more about forced placed insurance here.

Contact Bill Hager at 561-306-5072 or via email to discuss your case.