Homeowners Policies

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My background and expertise as to homeowners insurance is set out immediately below, which should be read together with my CV and related material on this website.

1. Homeowners Insurance Policies, Expertise.

A. Homeowners Insurance Policy Expertise as an Insurance Regulator. I have had extensive and substantive experience relating directly to homeowners insurance policies including interpreting policy language and determining the insurer’s obligations under such policies. As a regulator for eight years in three positions ((i) Assistant Attorney General assigned to the Department of Insurance (Iowa), (ii) First Deputy Commissioner of Insurance and (iii) Commissioner of Insurance), along with my staff, I approved (or disapproved) of the language of homeowners insurance policies used by each of the 1,000 property casualty insurance companies (many of whom sold homeowners insurance) doing business in the state. This regulatory action also included the approval of policy application forms like that at issue in many homeowners insurance cases. In addition, I regularly served as an Administrative Law Judge in matters relating directly to homeowners insurance policies. Homeowners insurance is conducted in a similar manner throughout the U.S.

B. Homeowners Insurance Policy Expertise: NAIC. While Commissioner, I also served as a member of the National Association of Insurance Commissioners (“NAIC”), (including membership on its Executive Committee), the nationwide organization of all state insurance commissioners and those of U.S. territories. That organization has responsibilities for establishing model insurance administrative regulations and model statutes for consideration by all of the states. While with the NAIC, I served among others as: a member of the Executive Committee, which had oversight over the so-called “C” Committee, the Property and Casualty Insurance Committee, which in turn has jurisdiction over homeowners insurance.

The mission of the Property and Casualty Insurance Committee is to monitor and respond to problems associated with the products, delivery and cost in the property/casualty insurance market and the surplus lines market including homeowners insurance as they operate with respect to individual persons and businesses. The Committee also is to monitor and respond to problems associated with financial reporting matters for property/casualty insurers that are of interest to regulatory actuaries and analysts and to monitor and respond to problems associated with the financial aspects of the surplus lines market.

C. Homeowners Insurance Policy Expertise: American Academy of Actuaries. Along these same lines, I served as general counsel and chief lobbyist to the American Academy of Actuaries, Washington D.C. The Academy is the national professional association for actuaries. These professionals establish premium levels for homeowner policies. In addition, because policy language dictates premium levels, actuaries are also active in determining policy language.

D. Homeowners Insurance Policy Expertise: CEO of A Major US Property Casualty Insurance Entity. After serving as a regulator, I served as President and Chief Executive Officer for the National Council on Compensation Insurance (“NCCI”), a nationwide industry owned organization with about 1,500 employees with annual revenues of about $150 million that did (and does) business in about 40 states. NCCI was domiciled in Florida and did business throughout the U.S.

Among my responsibilities at NCCI was (together with my staff) to formulate all workers compensation insurance policy forms as used in our 40 states and territories of operation. This work included drafting all policy language (tailored to the specific state’s insurance code) as well as drafting all endorsements and all other policy forms. In addition, my responsibilities included gaining state insurance department approval of all such policy forms as a condition precedent to their use as submitted by some 600 insurance companies. I am very familiar with the meaning and relevance of specific state approval of policy forms, endorsements and applications and related documents.

E. Homeowners Insurance Policy Expertise: Reinsurance Arbitrator. I am also one of about 200 certified reinsurance arbitrators (by ARIAS-US) and have sat as an arbitrator on homeowners insurance issues in disputes about policy language between reinsurers and their insurers .

2. Claims: Expertise as to Duties of Homeowners Insurance Companies - Including Claim Settlement Obligations.

A. Expertise as to Claim Duties of Homeowners Insurance Companies As Commissioner of Insurance. I have also had significant experience and responsibility in connection with determining and passing judgment on insurers’ responsibilities as to insurance agents and as to applicants and insureds. In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 1,000 property casualty insurers for their related obligations. I did so through a series of action steps and tools. The action steps and tools included the following:

1. NAIC Market Regulation Handbook: Claims. As Commissioner, I had as an available tool, the NAIC Market Regulation Handbook (“Examiners Handbook” or “Handbook”). Among other things, this Handbook sets forth standards to assess homeowners insurer behavior relating to (i) policy application, (ii) policy issuance, (iii) responsibilities relating to their agents and (iv) their claim handling obligations. The Handbook also sets forth standards of review as to agent contracts and appointments by insurers of agents. The Handbook is used by every department of insurance in the United States. The standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Handbook are universally recognized as appropriate standards against which to judge homeowners insurer behavior.

2. Market Conduct Examinations: Claims. On a regular basis, my regulatory agency conducted Market Conduct Examinations of homeowners insurers utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others, including claims obligations. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate policy behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

3. NAIC Financial Examiners Handbook: Claims. As Commissioner, I had available another tool, namely the NAIC Financial Examiners Handbook (“Financial Examiners Handbook”). Among other things, the Financial Examiners Handbook sets forth standards to assess homeowners insurer claims duties and solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are agent contracts and policyholder claims matters. As with the Market Conduct Examiners Handbook, the Financial Examiners Handbook is used by every department of insurance in the United States. Similarly, these standards have been universally agreed to by all of the nation’s Commissioners of Insurance as adopted formally by them through the NAIC. The standards of the Financial Examiners Handbook are universally recognized as appropriate standards against which to judge homeowners insurer behavior.

4. Financial Examinations: Claims. On a regular basis, my Department conducted financial examinations of homeowners insurers utilizing the Financial Examiners Handbook to determine whether in fact the insurer was meeting its claims obligations and was likely to remain solvent. As with market conduct exams, financial examinations entailed physically going into the insurers’ operations and studying, among others, files to (i) assure compliance with agent and policyholder duties - including claims - and (ii) to assure that financial reporting as to agent and policyholder matters were properly carried out. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

5. Complaints From the Public: Claims. On a daily basis, my Department received incoming consumer complaints as to homeowners insurance company practices. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those lawyers also determined whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to the homeowners insurance company’s potential behavior across the board.

6. Prosecution - Claims. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such homeowners insurers under the state’s civil Administrative Procedures Act. In connection with such prosecutions, I served in various capacities during my eight years as a regulator, including serving as (i) prosecutor (as Assistant Attorney General), (ii) as the decision maker as to whether to initiate prosecution in the first instance (while First Deputy and Commissioner of Insurance) and (iii) as the Administrative Law Judge (“ALJ”) who presided over the prosecution and entered findings of fact and conclusions of law as to insurer coverage determinations and claim settlement practices. I have served as an ALJ in scores of such cases where the homeowners insurer’s (i) agent, (ii) policy form, (iii) policy application and (iv) overall conduct were the primary issues and I entered final decisions and orders in such matters.

B. Claims - Expertise As to Duties of Homeowners Insurance Companies as an Insurance Industry Executive: CEO of a Major US Insurance Organization. I discuss my executive experience at NCCI under this section because in addition to expertise as to policies (discussed above), my experience at NCCI also resulted in expertise as to insurer responsibilities as to applications, policy issuance and their agents.

I am very familiar with the duties of agents/brokers and insurers relating to their obligations and responsibilities and the regulatory scheme in place in most every state as to such matters.

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 including the homeowners insurance community in that any number of those insurers had homeowners insurance operations.

C. Expertise as to Duties of Homeowners Insurance Companies: General Counsel to the American Academy of Actuaries. As stated above, I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. I mention it again here in connection with insurer agent and policy obligations because Academy members included affiliation with virtually every homeowners insurance company in America. Among other things, such actuaries had duties relating to policy language and policy pricing. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such homeowners insurance companies.

D. Expertise as to Duties of Homeowners Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of agent and insurer interests and became familiar with applicable homeowners industry standards of practice, including insurer responsibilities toward their agents. Those interests also included intimate involvement with insurance forms as counsel to the (i) Professional Insurance Agents of Iowa (ii) the Iowa Association of Life Underwriters (life, health and annuity insurance agents) and (iii) the Property Casualty Insurance Association of America (“PCIAA”) whose members sold most of the homeowners coverage in the state.

3. Expertise as to Homeowners Insurance Underwriting.

A. Expertise as to Underwriting Duties and Responsibilities of Homeowners Insurance Companies As Commissioner of Insurance. Consistent with the discussion immediately above, I have also had significant experience and responsibility in connection with determining and passing judgment on homeowners insurance companies’ underwriting duties and responsibilities.

In particular, in my three regulatory positions previously described, I had daily responsibility to assure and to hold accountable all of the state’s 1,000 property casualty insurance companies for their underwriting obligations including that accompanying policy issuance and obligations relating to policy issuance such as notification of coverages and policy limits and changes from coverage provided by prior insurers. As I did in connection with the general duties of homeowners companies (discussed above), I did so as well as to underwriting through a series of action steps and tools. The action steps and tools included the following:

1. Underwriting: NAIC Market Regulation Handbook. As Commissioner, consistent with the prior discussion, I also utilized the NAIC Examiners Handbook in that it sets forth standards to assess the underwriting behavior of insurance companies relating to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time. As discussed above, the standards are utilized by every state department of insurance and the standards of the Examiners Handbook are universally recognized as appropriate standards against which to judge the underwriting duties and responsibilities of homeowners insurance companies.

2. Underwriting: Market Conduct Examinations. Also as discussed above, on a regular basis, Market Conduct Examinations of homeowners insurers were conducted utilizing the Examiners Handbook to determine whether in fact the target insurer was meeting all of their obligations to their insureds and others as to underwriting issues. This action entailed physically going into the insurers’ application and policy issuance files to determine any errant action or inappropriate underwriting behavior. As further discussed below, errant insurers were warned, disciplined and prosecuted as required.

3. Underwriting: NAIC Financial Examiners Handbook. As above, I had available another tool, namely the Financial Examiners Handbook, which (parallel to the above discussion) sets forth standards to assess homeowners insurer solvency on a triennial basis. Among other documents reviewed by examiners in reaching financial conclusions are insurer underwriting files and matters. These standards have been universally agreed to by all of the nation’s Commissioners of Insurance including as adopted formally by them through the NAIC and are universally recognized as appropriate standards against which to judge homeowners insurer behavior, including underwriting.

4. Underwriting: Financial Examinations. As above, my Department conducted financial examinations of homeowners insurers utilizing the Financial Examiners Handbook to determine, as with market conduct exams, among others things, (i) assurance of compliance underwriting duties and (ii) assurance that financial reporting matters were properly carried out. As further discussed below (and above), errant insurers were warned, disciplined and prosecuted as required.

5. Underwriting: Complaints From the Public. On a daily basis, my Department received incoming consumer complaints as to underwriting practices of homeowners insurance companies. This Consumer Protection Division was staffed by Department lawyers who resolved the individual complaint and also, equally important, those same lawyers also were trained to determine whether an insurer evidenced unacceptable practices — that is to say, whether the incoming consumer complaints in fact constituted a red flag as to an insurance company’s potential underwriting behavior across the board.

6. Underwriting: Prosecution. To the extent insurer behavior required formal action (whether as a result of complaints from the public or as a result of Department investigation through a Market Conduct Examination or the Financial Examination), my Department prosecuted such insurance companies under the state’s civil Administrative Procedures Act consistent with the discussion in the prior section.

B. Expertise As to Underwriting Duties and Responsibilities of Insurance Companies as an Insurance Industry Executive: CEO of a Major U.S. Insurance Organization with major underwriting duties. I discuss my executive experience at NCCI under this section because my experience at NCCI also resulted in expertise as to insurer responsibilities as to (i) underwriting during the policy application process, (ii) underwriting during the time of policy issuance, (iii) underwriting responsibilities relating to the insurance company’s agents and (iv) underwriting matters that arise subsequent to policy issuance, for example during claim settlement time.

The Gold Standard of Underwriting. While I was CEO, NCCI had the responsibility to formulate and submit for approval to most all of the Insurance Commissioners in the U.S., the underwriting standards used for underwriting most all of the workers compensation policies in this nation. Underwriting for workers compensation is routinely recognized throughout the industry as involving the most intense underwriting of all lines of insurance. This is so because there are over 600 officially designated workers compensation classification codes an employee may be placed in based on their principal job duties.

NCCI authored and maintained a detailed, word-by-word, phrase by phrase description as to each of these 600 classification codes, as to which insurers was required to adhere. That entire intense underwriting process inclusive of its classifications is encompassed in an industry wide recognized and used document called the Scopes Manual and is recognized as the Gold Standard for underwriting workers compensation insurance. Furthermore, the underwriting process, regardless of the line of insurance is fundamentally the same. This is because most all insurers (including homeowners insurers) are about the business in the underwriting process of selecting the most favorable risks and rejecting the least favorable risks, regardless of the line of insurance. As such, it is the same process brought to bear on different lines of insurance - always with the same goal: identifying good risks and rejecting bad risks.

C. Expertise as to the Underwriting Duties of Homeowners Insurance Companies: General Counsel to the American Academy of Actuaries. I served as General Counsel and Director of Government Relations for the American Academy of Actuaries. Academy members included affiliation with virtually every insurance company in America. Among other things, such actuaries had duties relating to the underwriting duties and responsibilities of insurance companies. The Academy’s Board of Directors was likewise made up of leading insurance company executives from such insurance companies.

D. Expertise as to the Underwriting Duties and Responsibilities of Homeowners Insurance Companies: Attorney in Private Practice Iowa. As an attorney in private practice, I represented a number of insurer interests and became familiar with applicable homeowners industry standards of practice, including insurer responsibilities toward the underwriting process, including working directly with the Iowa Association of Life Underwriters (whose duties included among others, the first line of underwriting).

4. Expertise As to Homeowners Insurance Agents and Brokers. 

A. Expertise as to Insurance Agents as a Regulator: Licensure. I have had extensive and substantive experience relating directly to the duty of care that comes to bear on insurance agents and agencies in their various relationships with homeowners insurance companies. As an Assistant Attorney General (see above), I have prosecuted homeowners insurance agents for violations relating to their duty of care. As an insurance regulator (see above), along with my staff, I have screened hundreds of thousands of agents for character and background (separate and apart from subject matter testing). As to subject matter, I have formulated agent-licensing exams in the first instance. Upon passage of the exam, I have licensed hundreds of thousands of insurance agents.

B. Expertise as to Insurance Agents as a Regulator: Prosecution and CE. I have had full responsibility for continuing education for licensed homeowners insurance agents (approving CE courses in the first instance for acceptable content; overseeing the administration of such courses and granting and denying credit for such courses). I have initiated agent revocation actions and prosecuted those actions to completion.

C. Expertise as to Insurance Agents as a Regulator: ALJ. I have sat as the Administrative Law Judge in such actions and entered findings of facts and conclusions of law in scores of cases in which agents were prosecuted for violations relating to standards of care in connection with homeowners insurance matters and I have had direct responsibility for the appointment process by homeowners insurance companies (some 1,000 property casualty insurance companies) of all of their homeowners agents. I have supervised as well the ongoing relationship of all homeowners insurance companies in the state with all of their appointed agents.

D. Expertise as to Insurance Agents: Legal Representation. As a lawyer, I have defended homeowners insurance agents and brokers against allegations (in administrative law forums) of violations of their duty of care.

E. Expertise as to Insurance Agents: Industry CEO. As President and Chief Executive Officer of a major Florida domiciled and licensed insurance entity (NCCI) doing business in some 40 states, I have had substantial working relationships with the U.S. insurance agent and agency community.

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

William D. Hager - Insurance and Reinsurance Expert and Arbitrator

William D. Hager

Insurance and Reinsurance
Expert and Arbitrator

561-306-5072


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