Marine Insurance Expert

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WILLIAM D. HAGER

MARINE INSURANCE BACKGROUND 

Marine insurance has three common forms of coverage, namely (1) Hull; (2) Cargo, and (3) Protection and Indemnity (P&I).  In connection with marine insurance, it is important to understand that there is not a standard marine insurance policy and not all marine policies with the same name or characterization or type – insure against the same risks.  Many marine insurers use their own forms and/or append form of industry groups like the American Institute of Marine Underwriters.  

Hull Insurance.  Hull insurance in the main provides coverage for physical loss of or damage to the vessel.  Having said so, there are different types of hull insurance policies including those for yachts, fishing vessels, tugboats, passenger carrying vessels and others.  Coverage can be provided under these policies for a set policy period or for a particular voyage.  

Coverage is either that of all risk (risks of physical loss or damage to the vessel, often as a result of externally caused damage/collision; with exclusions often those of wear and tear, and inadequate maintenance) or of a named peril type (coverage for physical loss/damage to a vessel for those perils named in the policy, such as weather, fire, pirate actions; Inchmaree clause coverage for such things as negligence of the crew; charters and repairs; latent defects et al.).  These policies may contain navigational limits; and may also contain port risk coverage, that is, coverage only when the vessel is in port.  Coverage is often provided under the sue and labor expense provision, providing coverage for expenses to prevent further damage after a casualty.  Limits are stated in the policy based on the value of the vessel, which is what is paid under a total loss.  

Cargo Insurance.  This insurance provides coverage for physical loss or damage to goods in transit, with the coverage generally available from when the goods leave the point of departure (often where the goods are stored prior to pick up) through their destination, even if trucks and rail transportation is involved.  Coverage, as with hull, is provided on either an all risk basis or a named perils basis.

These policies can provide coverage for multiple shipments or a single shipment and the cargo is typically insured for its value and the policies often contain sue and labor coverage for expenses required to preclude further loss, once a covered event has occurred.  And these policies can have navigation restrictions, with coverage limited, for example, by country (e.g., exclusion for Iran et al.).  

Protection and Indemnity Insurance.  This is liability coverage for the owner of the vessel for bodily injury or death of persons aboard including typically, stevedores, passengers or crew members and for on shore persons where the liable party is for example, a crew member.  

The coverage also covers damage to docks, bridges and damage to other vessels, except where the covered vessel is the cause of the collision, that coverage would be provided under hull insurance.  Coverage is also available for removal of a wrecked vessel where required by law.  Coverage may also be available for pollution liability.   P&I policies are available in the marketplace and also through so-called P&I Clubs, which are essentially member owned mutual insurers.  

My expertise as to Marine Insurance – in connection with the above three forms of marine coverage –  is set out below. 

I.   SUMMARY OF MOST RELEVANT EXPERTISE.

In connection with Marine  opinions, I drawn on my expertise as (i) summarized immediately below this Section I and later in Section II, and (ii) as set forth in my Curriculum Vitae and (iii) as set forth in my related websites as follows:

Marine cases often call for expertise as to, among other things, the following matters: (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims. 

Marine  Insurance Expertise:  State Insurance Regulation.  My expertise as to these matters can be found as follows: I am a former:

  • Commissioner of Insurance (Iowa), as appointed by the Governor of Iowa;
  • First Deputy Commissioner of Insurance, as appointed by the Commissioner of Insurance;
  • Administrative Law Judge (“ALJ”), f/k/a Hearing Officer, to the Department of Insurance, as appointed by the Commissioner of Insurance; 
  • Assistant Attorney General assigned on a full-time basis to the Department of Insurance, as appointed by the Attorney General of Iowa. 

In those capacities, on a daily basis, I had full regulatory oversight and responsibility for, and I dealt directly with (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims.    

Marine Insurance Expertise:  Multi-State Insurance Regulation.  My expertise as to these matters can be found as follows: I am a former:

  • Member of the National Association of Insurance Commissioners (“NAIC”); 
  • Elected Chair of the Midwest Zone of the NAIC; 
  • Elected Member of the NAIC’s Executive Committee.  

As an Elected Member of the Executive Committee, that oversight included responsibility for the so-called “C Committee” relating to Property and Casualty Insurance, which included oversight of marine insurance, including Marine  and the obligations of insurers selling the coverage and the insurers’ claim obligations and included my obligation to carry knowledge of (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims. 

Marine Insurance Expertise: Most Recent LegislativeIn 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) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims. 

Elected Member of the Florida House of Representatives (Most Recent Past – I was first elected in 2010 and re-elected in 2012 and 2014 and 2016 and served until January of 2019, due to term limits) where I have served as a Member and Vice Chairman of the Insurance Committee as well as its upstream parent committee, the Commerce Committee, which collectively have legislative oversight over all insurance issues in the state (as administered by the Florida Office of Insurance Regulation) including Marine insurance.  Florida’s Marine statutory and regulatory framework parallels in most ways, of most other states. 

In addition, while serving in the Legislature, I sat as Vice Chairman of the Civil Justice Subcommittee of the Florida House, which has responsibilities as to Florida laws that establish (among other things) liability as to civil matters.

Marine Insurance Expertise: Other LegislativeIn addition to my state and national insurance regulatory background and my current legislative background, I have served in the past in the following capacities, each of which included daily knowledge of and interaction (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims. 

  • Legal Counsel to the Iowa House of Representatives; 
  • Chief of Staff, f/k/a Administrative Assistant, at the U.S. House of Representatives, 
  • Deputy Mayor and Council Member of the Boca Raton City Council, where I served as the Council’s lead on insurance issues. 

Marine Insurance Expertise:  Actuarial. In addition to my regulatory background at both the state and national levels and my legislative background as to Marine insurance matters, I have served or am serving in the following capacities, each of which included knowledge of and interaction with Marine insurance companies and their personnel as follows: 

  • American Academy of Actuaries, Washington D.C.  General Counsel and Chief Lobbyist for the American Academy of Actuaries, Washington, D.C., whose members establish the rates for Marine insurance at both the primary and reinsurance levels; 
  • Actuarial Standards Board (ASB), Washington D.C.  I served as counsel to the forerunner of ASB, namely the Interim Actuarial Standards Board.  ASB promulgates professional standards for the actuarial profession such as rate making including that applicable to marine insurance – and runs parallel to Financial Accounting Standards Board (FASB), which does the same work on the accounting side relating to accounting for American business. 
  • National Council on Compensation Insurance (see below).  As President and CEO of this workers’ compensation company, I had responsibility for some 1,500 employees, of whom about 150 were in the Actuarial Division.  NCCI had responsibility to formulate and then file for approval, some $15 billion of proposed workers’ comp premium annually.  During my tenure at NCCI, I had the responsibility for the formulation of such rates and their submission and approval by state Departments of Insurance throughout the U.S. of about $100 billion of premium filings.  
  • Commissioner of Insurance.  As Commissioner, I approved and disapproved Marine proposed rates and did so by applying actuarial methodologies to the proposed rates.  In addition, I had responsibility to approve or disapprove most all proposed personal and commercial property and casualty premiums used by most of the insurers in the state.   
  • First Deputy Commissioner of Insurance.  As First Deputy Commissioner of Insurance, like the Commissioner, I also approved and disapproved Marine proposed rates and did so by applying actuarial methodologies to the proposed rates.  In addition, I had responsibility to approve or disapprove all prior approval rates, which at that time, included most all personal and commercial property and casualty premiums used by most of the insurers in the state.   
  • Degree in Mathematics.  I hold a B.A. in mathematics, the intellectual foundation of actuarial science.  

Marine Insurance Expertise: Industry.  In addition to my regulatory background at both the state and national levels and my legislative background and my actuarial background as to Marine Insurance matters, I served in the following capacity, 

  • President and Chief Executive Officer of the National Council on Compensation Insurance (NCCI), whose daily responsibilities included responsibility to formulate workers’ comp policies in the first instance, prepare underwriting manuals (covering some 600 or so job categories) and related descriptions thereof via the classification system (the so-called “Scopes Manual”); prepare e-mods for insureds throughout much of the U.S.; prepare rates for approval to the Commissioners of Insurance throughout most of the U.S.; prepare reinsurance materials for reinsurers of workers’ compensation and make NCCI’s expertise available to regulators and legislators throughout the U.S.  My point here is that I am familiar with the regulatory schemes in place in the various states and worked with them during my decade or so time as CEO and President of NCCI.  My point also is that I am familiar with the structure of property casualty policies and related issues.  

Marine Insurance Expertise: Insurance Arbitration. In addition to my regulatory background and my legislative and my industry background as to Marine matters, I have served or am serving in the following capacities.  

  • Nationally Certified Insurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between (among others) property casualty insurers and other insurers or insurer’s agents.  In all of this, I am familiar with the mechanisms for dispute resolution that often comes to bear on matters relating to marine insurers and other insurers, for example in subrogation.   

Marine Insurance Expertise: Reinsurance Arbitration. In addition to my regulatory background and my legislative and my industry background as to Marine matters, I have served or am serving in the following capacities: 

  • Nationally Certified Reinsurance Arbitrator (ARIAS-US), where I sit as an arbitrator on disputes between insurers and their reinsurers.  In all of this, I am familiar with the mechanisms for dispute resolution that often comes to bear on matters relating to marine insurers and their upstream reinsurers.   

Marine Insurance Expertise: Current Practice: Insurance and Reinsurance Lawyer.  In addition to my regulatory background and my legislative background and my industry background and my reinsurance arbitration background and my actuarial background as to Marine matters, I have served or am serving in the following legal capacities, each of which included daily knowledge of and interaction with (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims as follows. 

  • I am currently a practicing Florida insurance lawyer, at the Hager Law Firm, Boca Raton, Florida, in private practice; 

Marine Insurance Expertise: Prior Practice: Insurance and Reinsurance Lawyer.  In addition to my regulatory background and my legislative background and my industry background and my reinsurance arbitration background and current practice of law as to Marine matters, I have served in the prior practice of law in the following legal capacities, each of which included daily knowledge of and interaction with (i) marine insurance policies, including Hull; Cargo; and Protection and Indemnity policies; (ii) marine  insurance companies and their obligations and responsibilities as to claims; (iii) the regulation of marine insurers and their policies and actions; and (iv) the obligations and responsibilities of such insurers’ adjusters and surveyors to insureds and insurers as to claims. 

  • Legal Counsel to the Iowa House of Representatives; 
  • Iowa Assistant Attorney General;
  • Counsel to the Professional Insurance Agents Association (IA), many of whose members as agents sold Marine insurance; 
  • Iowa Counsel to the Property Casualty Insurance Association of America (PCIAA), an organization of smaller stock property casualty insurers, a few – but not all of whom – sold Marine insurance;  
  • Insurance and reinsurance lawyer with the firm of Hager and Schachterle; 
  • General Counsel to the American Academy of Actuaries, Washington D.C.; 

Marine Insurance Expertise: Undergraduate Educational Background.  In addition to my regulatory background and my legislative background and my industry background and my actuarial background and my reinsurance arbitration background and my legal background as to Marine matters, my undergraduate education was helpful in this matter:

  • Bachelor’s degree (B.A.) in mathematics (University of Northern Iowa);

Marine Insurance Expertise: Graduate Educational Background.  In addition to my regulatory background and my legislative background and my industry background and my actuarial background and my reinsurance arbitration background and my legal background as to Marine matters, my graduate education was helpful in this matter:

  • Master’s degree (M.Ed.) in education (University of Hawaii);

Marine Insurance Expertise: Law Background.  In addition to my regulatory background and my legislative background and my industry background and my actuarial background and my reinsurance arbitration background and my undergraduate and graduate degrees, my legal education was helpful in this matter:

  • Juris Doctorate: (J.D.) University of Illinois, Champaign Urbana; 

Marine Insurance Expertise: Licenses.  In addition, the following licenses also support my expertise in these matters. Members of the following bars, all by examination: Illinois, Iowa; and Florida; Admitted to practice before the U.S. Supreme Court; 

Marine Expertise: Insurance Certifications and Memberships.  In addition to my regulatory experience at the state and national level, my legislative, industry, actuarial, arbitration and legal background and my educational background – my insurance certifications and appointments also show applicable expertise as follows:

  • Reinsurance Arbitrator certified by ARIAS-US; 
  • Insurance Arbitrator certified by ARIAS-US; 
  • Graduate, the National Association of Insurance Commissioners (NAIC) –  Commissioners School;
  • Member of the Organization of Past U.S. Insurance Commissioners, the Passé Club; 
  • Member of the NAIC;
  • Elected Chair of the NAIC Midwest Zone; 
  • Elected Member of the Executive Committee of the NAIC; 
  • Appointed Commissioner of Insurance by the Governor of Iowa
  • Appointed Assistant Attorney General for the State of Iowa, Assigned to the Department of Insurance, by the Attorney General of Iowa; 
  • Appointed Chief Deputy Commissioner of Insurance, by the Commissioner of Insurance; 
  • Appointed Administrative Law Judge, f/k/ Hearing Officer, by the Commissioner of Insurance;
  • Appointed Legal Counsel to the Minority of the Iowa House of Representatives, by the House Minority Caucus; 
  • Appointed Chief of Staff , f/k/a Administrative Assistant, at the United States Congress by Congressman Tauke;
  • Appointed President and Chief Executive Officer of NCCI, by its Board of Directors; 

Elections to Public Office as a Basis for Expertise. 

  • Elected Member of the West Des Moines, Iowa Board of Education;
  • Elected Member of the City Council of Boca Raton Florida, 
  • Elected: 2002; 
  • Re-elected in 2004; and 
  • Re-elected in 2006.  
  • Elected Deputy Mayor of the City of Boca Raton, Florida;
  • Elected Member of the Florida House of Representatives for Palm Beach County:
  • Elected 2010; 
  • Re-elected in 2012; 
  • Re-elected in 2014; and 
  • Re-elected in 2016.  
  • Term limited as of January 1, 2019. 
  • Appointed Chair of the Florida House Judiciary Appropriations Committee, with annual appropriations of some $5 billion with appropriation jurisdiction over Florida’s Court System including Florida’s District Courts, Court of Appeals and Supreme Court; and the Attorney General’s Office; the Offices of District Prosecutors; the Offices of the Public Defenders; and the Florida Prison System and others.   

In the aggregate, these experiences have given me a significant grounding to provide expert Marine insurance testimony.  

Other Expertise. The above expertise should be read together with the balance of my background as set forth in my attached CV, Section I of this document and as set forth in the various websites, previously described, and as immediately below.  

II.   MORE GENERAL EXPERTISE TO RENDER THESE EXPERT OPINIONS

In addition to my specific expertise relating to this case and set out above under Section I of this Report, I set out below my more general expertise against which I enter the expert opinions in this these matters.  

A.  Formal Education.

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

2.  Master’s Degree in Psychology. I hold a master’s degree in educational psychology from the University of Hawaii; and 

3.   Juris Doctor’s Degree.   I hold a J.D. degree from the University of Illinois. 

B.  Licensure and Certification.

4.   Certified Reinsurance Arbitrator.  I am certified by ARIAS as one of about 400 U.S. certified reinsurance arbitrators; 

Certified Insurance Arbitrator.  I am also certified by ARIAS as one of about 400 insurance arbitrators, where I sit in disputes in matters of insurer versus insurer. 

Graduate: NAIC Commissioner’s School, as conducted by the National Association of Insurance Commissioners; 

Member, Prior U.S. Insurance Commissioners Organization (Passé Organization); as administered by the National Association of Insurance Commissioners (NAIC); 

5.  Admitted to Practice Law.  I am licensed and admitted to practice law upon examination in the states of Iowa, Illinois and Florida; and

6.  Admitted to Practice before the U.S. Supreme Court.  I am also admitted to practice before the U.S. Supreme Court.  

C.   Insurance Expert.  

7.  Expert Witness.   I have served as an expert witness in several cases throughout the U.S. and have been qualified at trial as an expert witness in about 20 states. 

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

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

10.  Expert Witness: The United States Air Force.  I have also been retained and testified as an expert witness for the United States Air Force in a complex CGL matter in connection with pollution liability.  

11.    Expert Witness: on Behalf of or Before Various Departments of Insurance.  I have also been retained as an expert witness by the: (i) FL OIR/Liquidation Division, and (ii) the Arizona Department of Insurance/ Division of Liquidations and testified on their behalf.  In addition, I have testified as an expert before the Florida, Nevada, Oklahoma, South Dakota, Wisconsin and Texas Departments of Insurance.   

D.   Industry Background:  Reinsurance Arbitrator.  

12.  Reinsurance Arbitrator: Marine Cases.  November 2003 to Present.  My background includes extensive exposure to the various reinsurance mechanisms and relationships.  Along these same lines and as indicated above, I am a certified ARIAS-US reinsurance arbitrator (see immediately below) and have sat as an arbitrator in cases between insurers and their reinsurers.  The relevance of this experience to this case is that reinsurers have substantial influence on their underlying insurers.   

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 400+ individuals so certified by ARIAS in the United States.  

ARIASUS 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; and 
  • Appropriate endorsement from existing members.

E.    Industry Background in General

13.  CEO of a Major US Insurance Organization, Regulated Throughout the US; President and Chief Executive Office of the National Council on Compensation Insurance (NCCI; Boca Raton, Florida), 1990 – 1998.  NCCI is one of the larger and more pervasive U.S. insurance organizations.  During my tenure as President and CEO, NCCI had (and continues to have) responsibility to accurately price and file pricing for some $12 – $15 billion of workers’ compensation insurance in about 40 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.  NCCI had annual revenues of $140 million. 

Insurance Program.  As CEO, I had daily exposure and responsibilities to the U.S. workers’ compensation program as administered by the various states. The U.S. workers compensation system provides protection for some 100 million+ worker lives.  In addition, the workers’ compensation policy contains employer liability coverage for certain non-statutory workers’ compensation exposures. 

Underwriting and Claim Practices.  In addition, NCCI had a vested interest in member insurer underwriting and claim practices in that the industry’s reputation for fair underwriting and defense and coverage practices ultimately impacted regulatory attitudes toward NCCI’s premium approval process. 

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 claim practices.  I have had extensive exposure to insurer practices and procedures.     

Familiar with the Various State’s Insurance Regulatory Scheme.  While CEO of NCCI, it was (and remains) licensed to do business throughout the U.S.  In that capacity, my company, NCCI was subject as well to the regulatory scrutiny of the various state DOIs – as well as being subject to all applicable provisions of each state’s Insurance Code.  NCCI was also subject to the jurisdiction of the state and federal courts of each state.  I am familiar with the regulatory and statutory scheme that is brought to bear on the Marine insurance matters throughout the U.S. 

14.  General Counsel and Director of Government Relations to the American Academy of Actuaries (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 20,000-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.   

Marine Insurance Companies and the Academy.  The Academy is the professional organization of actuaries and includes qualified actuaries from all disciplines and all forms of insurers.  Academy members included affiliation with virtually every Marine insurance company in America.  The Academy’s Board of Directors was likewise made up of leading insurance company executives from such Marine insurance companies.  

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

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

Marine Insurance Issues.  Those interests also included intimate involvement with Marine insurance, as counsel to the:

Property Casualty Insurers Association of America (PCIAA – IA); 

Professional Insurance Agents of Iowa and  

Iowa Association of Life Underwriters (life, health and annuity insurance agents).  

Specific duties as counsel at the PCIAA (a few of whose members wrote Marine coverage) and the Professional Insurance Agents of Iowa (who sold, among other coverages, Marine insurance) and the Iowa Association of Life Underwriters (life, health and annuity insurance agents) included in-depth familiarity with Marine insurers, their agents and their defense and coverage practices.

F.  Regulatory

17.  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 Marine insurance company practices, including defense and coverage and pricing practices.  In particular, that oversight included the responsibility of overseeing practices of Marine insurer defense and coverage and claim and rate making practices.  In addition, I oversaw the state regulation of the securities industry with Iowa’s Superintendent of Securities reporting directly to me.

Regulatory Oversight:  Marine Insurer Practices.  In addition, as Insurance Commissioner, my responsibilities included oversight over the education, licensing, discipline and general supervision of all Marine insurance companies in the state.  I am very familiar with the responsibilities and applicable obligations that come to bear upon Marine insurance companies. 

Regulatory Oversight:  Marine Insurance Claims Settlement, Including Defense and Coverage issues.  As Insurance Commissioner, I also had day-to-day responsibility to assure that all underwriting and defense and coverage practices carried out by Marine insurance companies doing business in the state met their duties, obligations and statutory and regulatory responsibilities as they priced their policies and underwrote policies and settled cases, including obligations as to providing a defense and coverage matters. 

Financial Examination of Marine Insurance Companies.  As Insurance Commissioner, I directed and oversaw the examination of all insurance companies authorized to do business in the State of Iowa.  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).  These exams were carried out applying the criteria set forth in the Financial Examiner’s Handbook, as authored by all the Commissioners of Insurance throughout the U.S.  The Handbook is used by every DOI in the U.S.  

Market Conduct Examinations of Marine Insurer Pricing and Defense and Coverage Practices.  Market Conduct Examinations focused on marketplace issues such as those at issue in this case, specifically examining Marine insurance companies as to compliance with their pricing and defense and coverage practices.  Concurrent with such exams, I personally reviewed and approved the final Examination Reports before they were issued.  These exams were carried out applying the criteria set forth in the Market Regulation Handbook, as authored by all the Commissioners of Insurance throughout the U.S.  The Handbook is used by every DOI in the U.S.  

Prosecution of Marine Insurance Companies.  As Insurance Commissioner, I employed a full-time team of lawyers who fielded consumer complaints relating to all areas of Marine insurance company operations.  Indeed, a few of these complaints, as well as results of Market Conduct Examinations, resulted in formal action under the state’s Administrative Procedures Act.  From time to time, I served as the Hearing Officer as to such matters.

Major Insurance State.  Iowa has about 1,000 authorized property and casualty insurance companies, some of whom write Marine insurance.  Insurance regulation in that state is a serious job.  

Familiarity with State Insurance Regulation.  As Insurance Commissioner in Iowa with interaction with the balance of U.S. insurance regulators, and as a member of the NAIC, I had frequent interactions with the balance of U.S. regulators.  

18.  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 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.  

NAIC Leadership:  Member of the Executive Committee: Oversight over the Property Casualty (so-called “C” Committee).  I also served as an elected member of the Executive Committee of the NAIC, the body that served as the 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.  

Property Casualty Committee.  This position included oversight over the Property Casualty – Committee (so called “C” Committee), which had nationwide responsibility over most all aspects of Marine policies and their insurers.  That Committee’s mission statement is as follows:

“ …  to monitor and respond to problems associated with the products, delivery and cost in the property/casualty insurance market and the surplus lines market 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.”

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

Member: Commercial Lines Committee.  Among the many committees, I chaired or was a member of, was the Commercial Lines Committee, which had responsibility to set national policy with respect to commercial lines insurers and their products such as property insurance.  

In addition, my service on the following committees has been helpful in this matter:

  • 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 industry.  

19.  First Deputy Commissioner of Insurance, Iowa 1976 – 1978.  As First Deputy Insurance Commissioner, I was responsible for the regulatory oversight of all insurance companies, agents and brokers authorized to conduct business in the state of Iowa.  I was responsible for solvency oversight, insurance company examinations, financial and accounting matters of insurance companies, consumer protection, agent and broker licensing, and oversight of Marine insurance company practices, including defense and coverage practices.  In particular, that oversight included the responsibility of overseeing practices of Marine insurer defense and coverage practices.

Regulatory Oversight:  Marine Insurer Practices.  In addition, as First Deputy Insurance Commissioner, my responsibilities included oversight over the education, licensing, discipline and general supervision of all Marine insurance companies in the state.  I am very familiar with the responsibilities and applicable obligations that come to bear upon Marine insurance companies. 

Regulatory Oversight: Marine Insurance Claims Practices, including Coverage and Defense Issues.  As First Deputy Insurance Commissioner, I also had day-to-day responsibility to assure that all defense and coverage practices carried out by Marine insurance companies doing business in the state met their duties, obligations and statutory and regulatory responsibilities as they settled cases. 

Financial Examination of Marine Insurance Companies.  As First Deputy Insurance Commissioner, I directed and oversaw the examination of all insurance companies authorized to do business in the State of Iowa, including Marine insurers.  Those examinations included focus on both financial matters (so called triennial examinations of insurers – of which well over 50 such examinations were conducted while I was First Deputy Insurance Commissioner) and examinations of specific complaints about insurers (so called Market Conduct Examinations – well over 50 such exams were conducted while I was First Deputy Insurance Commissioner; see the discussion that follows).  The balance of the states use the same Financial Examiners Handbook as Iowa and applies the same criteria in judging insurers admitted in their states.  

Market Conduct Examinations of Marine Insurer Defense and coverage Practices.  Market Conduct Examinations focused on marketplace issues such as those at issue in this case, specifically examining Marine insurance companies as to compliance with their defense and coverage practices.  Concurrent with such exams, along with the Commissioner, I personally reviewed the final Examination Reports before they were issued.  In addition, in many of these instances, I visited the subject Marine insurer before the Examination Report was issue, reviewing their effected operations firsthand.  

Prosecution of Marine Insurance Companies.  As First Deputy Insurance Commissioner, I oversaw a full-time team of lawyers who fielded consumer complaints relating to all areas of Marine insurance company operations.  Indeed, a few of these complaints, as well as results of Market Conduct Examinations, resulted in formal action under the state’s Administrative Procedures Act.  From time to time, I served as the Hearing Officer as to such matters.

20.  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 Marine insurance companies.  The Attorney General responsibility also included issuing Attorney General Opinions as to the construction of insurance laws and regulations.  

21.  Marine Insurance: 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 Marine insurance. 

22.  Marine Insurance: Lecturer at the Bar Review School, authoring and delivering the Insurance Course to students studying for the Iowa Bar Exam (from about 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 Marine insurance companies, including their underwriting 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 President and CEO of NCCI in Florida.  

23.  Chief of Staff:   U.S. Congress.  I served as Chief of Staff at the U.S. Congress in Washington D.C. to an Iowa Congressman for about a year.  Among others, I participated in legislative drafting of insurance and reinsurance legislation.  

24.  Expertise:  Elected Member of the Florida House of Representatives:  Vice Chairman and Member of the Insurance and Banking Committee; Vice Chair of the Civil Justice SubcommitteeIn addition, I have gained background as to insurance policy matters during my service as an elected member of the Florida House of Representatives (elected in 2010 and re-elected in 2012 and 2014 and 2016).  In particular, I currently serve as Vice Chairman and as a member of the House Insurance Committee, whose jurisdiction includes legislative oversight over all of the insurance transactions in the state, including issues relating to among others, policy language and insurer defense and coverage and pricing practices of Marine insurers and their products.  

25.  Expertise:  Vice Chairman and Past Member of the Florida House Civil Justice SubcommitteeIn addition, I have gained background as to insurance policy matters during my service as an elected member of the Florida House, where in past, I have served as Vice Chairman and as a member of the House Civil Justice Subcommittee, whose jurisdiction includes the law as it relates to insurer good faith (and bad faith) among other related matters.  

26. Insurance Lecturer: Florida State University College of Law.  For a number of years, I have lectured at the Florida State University College of Law’s Insurance Course, providing content as to the Florida Legislature’s insurance legislation along with overall insurance and insurance regulation information.