Miscellaneous Errors & Omissions. Processing Guidelines

Transcription

1 Miscellaneous Errors & Omissions Processing Guidelines

2 E&O PROCESSING SERVICES GUIDELINES TABLE OF CONTENTS I. REGULATORY COMPLIANCE...1 A. COMPLAINTS...1 B. WRITING SURPLUS LINES BUSINESS AS A NON-RESIDENT BROKER...1 C. WRITING ADMITTED BUSINESS...1 D. STATE REPORTING REQUIREMENTS...1 II. FORMS... 2 A. MANDATORY FORMS USED ON ALL POLICIES...2 B. MANDATORY FORMS USED ON COMBINED - GL/E&O POLICIES...2 C. OPTIONAL FORMS USED ON MONOLINE E&O OR COMBINED - GL/E&O POLICIES...3 D. CANCELLATION & NON-RENEWAL FORMS USED ON E&O POLICIES...3 E. CANCELLATION & NON-RENEWAL FORMS USED ON COMBINED - GL/E&O POLICIES 4 F. MANDATORY STATE SPECIFIC FORMS...4 III. POLICY PROCESSING PROCEDURES FOR NONADMITTED E&O BUSINESS. 5 A. POLICY ISSUANCE...5 B. INSPECTIONS...7 C. MIDTERM ENDORSEMENTS...7 D. CERTIFICATES OF INSURANCE AND ADDITIONAL INSURED ENDORSEMENTS...7 E. POLICY/RENEWAL CONTROL & NUMBERING...8 F. PREMIUM PAYMENT...8 G. AUDITS...8 H. CANCELLATION PROCESSING...8 I. REINSTATEMENT PROCESSING...9 J. GUIDELINES FOR PREMIUM FINANCE COMPANY CANCELLATIONS AND NOTICE REQUIREMENTS...10 K. GUIDELINES FOR PREMIUM FINANCE COMPANY REINSTATEMENTS...11 IV. AGENT OR BROKER OF RECORD PROCEDURES V. ATTACHMENTS TO THIS SECTION

3 I. REGULATORY COMPLIANCE A. COMPLAINTS E&O PROCESSING SERVICES GUIDELINES Complaints you receive from the Department of Insurance involving any of the Colony and Argonaut Group companies must be referred to the Company prior to response. Please fax a copy of the complaint and a draft response with all attachments to our Regulatory Compliance Department, which will review your response and advise you upon approval (804) B. WRITING SURPLUS LINES BUSINESS AS A NON-RESIDENT BROKER State laws require that Colony accept business only from properly licensed surplus lines brokers in the states where risks are located. If you are uncertain about a state s requirements, we ask that you contact the applicable Department of Insurance before placement of coverage with the company. C. WRITING ADMITTED BUSINESS If you are an Agent with binding authority to write business with a licensed Argonaut Group company, in addition to holding the required P & C license, you will need to maintain an appointment by the company with the State Department of Insurance. D. STATE REPORTING REQUIREMENTS The Departments of Insurance in approximately 15 states require that our companies file an annual report of written premiums by broker, with an indication of the name, address and license number of the broker who paid the surplus lines tax on each policy. If you place business in one of these states, each year in January our Compliance Division will send you a listing of your policies and request that you indicate through whom the taxes were paid. Most states set a March 1 deadline for this report. It is important that you respond to our request for this information as soon as you can. If we report that your agency paid the taxes, when in fact they were paid by another broker, the Department of Insurance will no doubt, be contacting you to resolve the discrepancy

4 II. FORMS A. MANDATORY FORMS USED ON ALL POLICIES Form Number Ed. Date Form Title MPLDEC 0607 E&O Declarations Page (Used only on Monoline PL policies) ZPJCG 0408 Policy Jacket Privacy Notice 0408 Privacy Notice MPL Professional Liability Policy Form U Minimum Earned Premium ME Punitive Damages Exclusion U Service of Suit AP War Liability Exclusion MPL Amendatory-Copyright, Trade Dress, Trade SLB Form 0408 Surplus Lines Broker Data (If Applicable) B. MANDATORY FORMS USED ON COMBINED - GL/E&O POLICIES Form Number Ed. Date Form Title DCJ Common Policy Declarations DCJ6553AM 0607 Commercial GL Coverage Part Dec Page DCJ6553PROF 0607 PL Coverage Part Dec Page (Used only on Combined GL/E&O policies) U Schedule of Forms CG Commercial General Liability Cov Form U Miscellaneous Exclusion Endt U Exclusion Professional Services CG Fungi or Bacteria Exclusion U Employment Related Practices Excl CG Contractual Liability Limitation AP Additional General Liability Excl AP Multiple Coverage Parts Endt AP Hazardous Materials Exclusion AP Limit of Covg to Desg Operations U Deductible Liability Insurance U Punitive, Exemp, Mult Dmgs Excl U Multiple Coverages Limitation If the policy is MONOLINE PROFESSIONAL: Form Number Ed. Date Form Title AP041B 0108 Cert. Act & Other Acts of Terrorism Excl

5 If the policy is COMBINED GL/E&O: Form Number Ed. Date Form Title TRIA2002Notice 0108 Policyholder Disclosure (Acceptance/Rejection Form) UCG Cert Acts & Other Acts of Terrorism Excl (Attach if Terrorism Coverage is REJECTED) -OR- UCG Ltd Terrorism Excl (Other Than Cert Acts) (Attach if Terrorism Coverage is ACCEPTED) AP041B AP041A AND Cert. Act & Other Acts of Terrorism Excl (Attach if Terrorism Coverage is REJECTED) -OR- Ltd. Terrorism Excl (Other Than Cert Acts) (Attach if Terrorism Coverage is ACCEPTED) C. OPTIONAL FORMS USED ON MONOLINE E&O OR COMBINED - GL/E&O POLICIES Form Number Ed. Date Form Title AP Loaned Employee Exclusion (used on staff) ME Additional Insured Endt (E&O Only) ME Defense Costs Outside Limits of Insurance ME Waiver of Transfer of Rights of Recovery ME Printers Errors & Omissions Liability MPL Limited Exclusion Contingent PD Endt MPL Limited Exclusion Contingent BI Endt MPL Exclusion-Infringement of Copyright Trade D. CANCELLATION & NON-RENEWAL FORMS USED ON E&O POLICIES Note: The below forms apply to E&O coverage only. Form Number Ed. Date Form Title MEAK 0903 Cancellation & Non-Renewal Alaska MEAR 0903 Cancellation & Non-Renewal Arkansas MECT 0903 Cancellation & Non-Renewal Connecticut MEFL 0903 Cancellation & Non-Renewal Florida MEIA 0903 Cancellation & Non-Renewal Iowa MEIN 0903 Cancellation & Non-Renewal Indiana MEKS 0903 Cancellation & Non-Renewal Kansas MEME 0903 Cancellation & Non-Renewal Maine MEMT 0204 Cancellation & Non-Renewal Montana MENH 0108 Cancellation & Non-Renewal New Hampshire MENM 0903 Cancellation & Non-Renewal New Mexico MENV 0903 Cancellation & Non-Renewal Nevada MEOK 0903 Cancellation & Non-Renewal Oklahoma MEPA 0903 Cancellation & Non-Renewal Pennsylvania

6 Form Number Ed. Date Form Title MESC 0907 Cancellation & Non-Renewal South Carolina MEVT 0903 Cancellation & Non-Renewal Vermont MEWA 0903 Cancellation & Non-Renewal Washington MEWY 0903 Cancellation & Non-Renewal Wyoming E. CANCELLATION & NON-RENEWAL FORMS USED ON COMBINED - GL/E&O POLICIES Note: The below forms apply to General Liability coverage only. Form Number Ed. Date Form Title U Cancellation & Non-Renewal (Mandatory if there is no applicable state specific form) UIL New Hampshire Changes Cancellation & Non-Renewal UIL Cancellation And Non-Renewal Washington UIL Vermont Changes Cancel & Non-Renewal UIL Arkansas Changes Cancel & Non-Renewal UIL Oklahoma Changes Cancel & Non-Renewal UIL /07 Montana Cancellation & Non-Renewal UIL Pennsylvania Changes Cancel & Non-Renewal UIL Cancellation & Non-Renewal Maine UIL South Carolina Changes Cancel & Non-Renewal UIL Nevada Changes Cancel & Non-Renewal UIL Wyoming Changes Cancel & Non-Renewal UIL Florida Changes Cancel & Non-Renewal UIL Connecticut Changes Cancel & Non-Renewal UIL Kansas Changes Cancel & Non-Renewal UIL Indiana Changes Cancel & Non-Renewal UIL Iowa Changes Cancel & Non-Renewal UIL Alaska Changes Cancel & Non-Renewal UIL New Mexico Changes Cancel & Non-Renewal F. MANDATORY STATE SPECIFIC FORMS Note: Forms apply to General Liability and E&O unless otherwise indicated. Form Number Ed. Date Form Title U Alaska Changes Attorney s Fees AKAttyFee 0407 Alaska Policyholder Notice CG California Changes (General Liability only) TXNotice 0507 Texas Notice IL Wyoming Changes Defense Costs IL Illinois Changes Defense Costs

7 III. POLICY PROCESSING PROCEDURES FOR NONADMITTED E&O BUSINESS This Section provides instructions on policy issuance, endorsements, certificates of insurance and Additional Insureds Endorsements, policy numbers, audits, and cancellation processing procedures. Attached to the end of this section, you ll find specimen policies, the underwriting file checklists, and an order form. A. POLICY ISSUANCE 1. What information is mandatory on all policies? See specimen policies at the end of this Section. In addition to the standard information requested, we require the following additional information on all policies: Colony Insurance Company All States (except Virginia/New Jersey) Non-Admitted policies; Colony Specialty Insurance Company Virginia only Non-Admitted policies; Colony National Insurance Company New Jersey only Non-Admitted policies; Under Producer list your address; Under Producer list your five digit agency code; Under Policy Number list the nine-digit policy number; Program code A47 is mandatory to be listed on the common declaration page, underneath the policy/renewal number; Under 4. Forms Applicable to all Coverage Parts: indicate U001 (not applicable to Formmaker clients.) The Surplus Lines Broker Data (SLB Data-0804) form is a requirement of policy issuance (see instructions below). All policies, including renewals, must include this form in its entirety, if required. The SLB Data form must only be completed if: The risk state is outside of your agency s home state (eg., your office is located in VA, the risk is in FL); The SL Broker of record is a person or corporation other than the principal licensee for your office; The premium will be allocated among multiple states, and the taxes will be paid using different licensees. The SLB data form must be sent to the Company with the policy and all other required forms

8 2. Which Declarations Page should I use? A monoline E&O policy should be issued using form MPLDEC A Combined - GL/E&O policy is issued under one policy number, having one policy jacket with a common declaration page, a declaration page for PL and a declaration page for GL. Corresponding forms should be placed behind their respective declaration pages. On a Combined GL/E&O policy, the agent should issue E&O using form DCJ6553 Prof 0607 rather than MPLDEC What edition date of a form do I use? Always use current Colony Management Services., Inc. forms. Please be aware that new forms published by ISO must FIRST BE APPROVED by Colony prior to use. Please do not use new editions of ISO forms until you receive notice of approval from Colony. 4. What is the U001? The U001 is a mandatory, convenient, one-page form that schedules all forms applicable to the policy, and it is to be attached to all non-admitted policies in lieu of listing all applicable forms on the declaration page and coverage parts. All coverage parts and endorsements attached at the time of policy issuance should be referenced on the U001. All forms indicated on the U001 must be attached to the policy, and the U001 must have the policy number on it. 5. What is the maximum policy term? All Policies are to be written on an annual basis only. All requests for short or extended term policies should be referred to the Company. 6. What documents should I include with each policy sent to the Company? One copy of the completed policy; The appropriate completed, signed and dated Colony E&O application. Other company applications are acceptable if they address all required information; A complete Rating Worksheet showing all rate information; A complete Underwriting File Checklist is preferred but not mandatory; If risk required prior approval from Colony, state so or send copy of quote; Signed TRIA Notice; SLB Form if meets requirements (see paragraphs below). 7. What is the Underwriting File Checklist? This page provides a policy issuance checklist. You may use this form by attaching it to all policies you issue (see Attachments at the end of this Section). 8. When are policies due to the Company? Policies are to be issued and sent to the Company within 20 working days after the effective date of the policy

9 B. INSPECTIONS Inspections are not required for any E&O or E&O/GL policy. C. MIDTERM ENDORSEMENTS Process and send to the Company all endorsements and cancellations within 30 days of the effective date. Endorsements must not be back-dated from the date the agent receives and approves the request. Attach documentation that explains the reason for the endorsement. D. CERTIFICATES OF INSURANCE AND ADDITIONAL INSURED ENDORSEMENTS 1. What procedures do I follow when issuing Certificates and Additional Insured Endorsements? Certificates of Insurance are tools used to inform a third party of the types of coverages or limits in force for our insureds. They are not to be used as endorsement requests. Certificates cannot be used to change, add or bind coverage. Any such changes should be made using an endorsement request. Please contact your Underwriter for approval to offer blanket additional insured (wording & cost) & if you have more than 10 Additional Insureds per policy. We request that you do not send us copies of Certificates of Insurance. This allows both of us to eliminate unnecessary paperwork and help us mutually reduce overall handling costs. Certificates of Insurance received in our office will not be reviewed and will not remain a part of the insured s file. 2. Certificate Requirements Be sure the certificate reflects only the terms and conditions of our actual policy. Any language that differs from policy language (or non-standard forms), must be approved by our underwriters prior to policy issuance. Certificates must not reflect changes not yet made to the policy. The policy must first be endorsed then the certificate issued. Brokerage Certificates that require endorsement to policies must be submitted to Company for approval and processing of the endorsement. Additional Insureds must be shown on certificates along with the endorsement form. Example: Additional Insured City of Charlottesville see End. CG Charge In most cases a flat (fully earned) charge of $100 is adequate for additional insured. Be certain to include reason for the additional insured. Contact your underwriter for approval for blanket additional insured endorsement (wording and cost). 4. Waiver of Subrogation Waiver of Subrogation requests must have prior Company approval, and will only be issued on form U

10 E. POLICY/RENEWAL CONTROL & NUMBERING 1. How do I assign a policy number? All policy numbers will have eight digits. The first two digits (policy prefix) will be EO. The remaining six digits are assigned from the block of policy numbers allotted to you by the Company. Example: If your block of policy numbers is , then the professional liability policy number would read EO Do not assign the same seven digits to more than one policy. 2. Who do I call for a block of policy numbers? Contact Carol Barry for a new block of policy numbers. Each agent is assigned a block of policy numbers to assign to policies they issue, and it is important that you do not assign numbers beyond your block. Carol can be reached at or CBARRY@COLONYINS.COM. 3. Am I responsible for keeping track of policy numbers issued? Agents are expected to maintain a policy register that identifies the named insured, policy number assigned and other pertinent information. This information should be entered in the Agent s policy register when the policy number is assigned. 4. Do policy numbers change at renewal? A policy number does not change at renewal. Should a policy be canceled and rewritten, a new policy number is assigned. F. PREMIUM PAYMENT See General Information Section at the beginning of the Manual. G. AUDITS E&O business is quoted Flat and is not subject to audit. H. CANCELLATION PROCESSING 1. How do I cancel a policy? Agents are to process cancellations on ALL policies they issue, unless directed otherwise by the Company. The agent will send Direct Notice of Cancellation, calculate the return premium, and transmit the original company copy of the notice, the original copy of the proof of mailing, together with the cancellation endorsement to the Company within 30 working days. Notices of non-renewals should be handled similarly

11 Some states require that surplus lines policies follow cancellation and non-renewal laws and regulations. Please refer to the chart at the end of this Section, which outlines specific state requirements for cancellation and non-renewal. This chart is also located on Colony s internet. If a state is not listed in this chart, there is no state-mandated requirement, but the cancellation or non-renewal must conform with policy provisions. Please note that state laws require that notices of termination include a specific reason for the termination. State specific Cancellation & Nonrenewal forms (where applicable) can be found in the Forms Section of this manual and are recognized by the form prefix ME. 2. How long do I have to process a cancellation? Cancellations must be processed within 30 days of the requested effective date of cancellation. 3. Which policies are subject to the Minimum Premium Endorsement? All non-admitted policies are to be canceled in accordance with the Minimum Premium Endorsement. 4. What method of cancellation do I use if the policy premium is financed? See Below. 5. What method of cancellation do I use if the policy is canceled for underwriting reasons? Policies canceled for underwriting reasons are to be canceled Pro Rata. The Minimum Earned Premium shall not apply. Cancellations at the request of the insured should be cancelled short rate. 6. Under what circumstances can I cancel a policy flat? Flat cancellations require Colony approval. Flat cancellations are generally not approved. I. REINSTATEMENT PROCESSING 1. How often can a policy be reinstated? The agent may reinstate a policy canceled for non-payment no more than two times per policy period. If subsequent requests are received, the policy may not be reinstated or rewritten without prior underwriter approval. The agent will provide notification necessary to reinstate a policy to the Company. 2. Can a policy be reinstated after the effective date of cancellation? No. Policies must be reinstated before the effective date of cancellation occurs. 3. Can I backdate coverage? No. Backdating coverage is absolutely prohibited. Flat cancellations require Colony approval. Flat cancellations are generally not approved. Colony quotes should reflect that flat cancellations are prohibited

12 4. Can I backdate a cancellation? Only with the approval of your Colony Underwriter. 5. How does the Company define Short Rate? Short Rate is defined as 90% of Pro Rata Premium Return. 6. When does the Company cancel a policy? The Company retains the right to send DNOC, determine cancellation dates, and calculate return premium in the event of non-performance by the agent or disagreement between the involved parties. 7. What information should be sent to the Company? For Cancellations, send the Company copies of all Notices of Intent to Cancel, Notices of Cancellation, the original copy of the Proof of Mailing, Reinstatement Notices, Cancellation Endorsements and calculations of Return Premiums. For Non-Renewals, send the Company copies of the Notices of Non-Renewal and original copy of the Proof of Mailing. 8. Does the Company honor finance companies request to cancel for non-payment of premium? All cancellation provisions are to be in accordance with individual state rules, regulations and laws regarding cancellations. See the following Premium Finance Company Cancellation Guidelines. J. GUIDELINES FOR PREMIUM FINANCE COMPANY CANCELLATIONS AND NOTICE REQUIREMENTS 1. Cancellations All finance company cancellations and requests for reinstatements must be given priority handling; The policy must be cancelled as of the date specified in the finance company notice, since the finance company has the insured s power of attorney to cancel the policy; The unearned premium must be calculated on a pro rata basis, subject to the policies minimum earned premium provision (with one exception in New York, only a minimum earned premium amount up to 25% can be retained for the TRIA portion of the policy). 2. Notice Requirements Upon receipt of a finance company cancellation notice, additional notice may be required: To the Insured: No additional notice is required. To a mortgagee or loss payee: A separate notice is required providing an additional 10 days + 3 days mailing. However, a notice is not required to the insured

13 Coverage under the policy will be extended to the mortgagee or loss payee only. The policy cancellation date will be the finance company date of cancellation, not the extended date given the mortgagee or loss payee. Copies of the cancellation endorsement and the notice to the mortgagee or loss payee must be forwarded to the company for processing within 30 days. To an additional insured: Additional notice is NOT required, except: Where the Additional Insured endorsement specifically states that notice is required. As with mortgagees and loss payees, the Additional Insured is provided additional time, not the Insured. The policy must be canceled effective on the date specified in the finance company notice. Where the policy specifically requires notice to third parties, such as government agencies. In those instances, additional notice must be given to the insured and the third party or to the third party only depending on the policy provision. For example, additional notice must be provided the ICC on motor truck cargo policies. K. GUIDELINES FOR PREMIUM FINANCE COMPANY REINSTATEMENTS The Company is not required to reinstate a policy at the request of the finance company. Reinstatement is at the sole discretion of the Company and/or our authorized agents. Before any decision to reinstate is made, the file must be reviewed. A reinstatement should not be granted if there is adverse underwriting information or if the policy has been set up for non-renewal. If payment to the finance company was received prior to the effective date of cancellation, coverage may be reinstated after review of the file. If the cancellation endorsement has already been sent to the company for processing, the agent must contact the underwriter for authority to issue a reinstatement endorsement. If payment to the finance company was not received before the effective date of the finance company s cancellation, coverage may only be reinstated with a no loss letter and authorization from the company underwriter. The underwriter may decide not to reinstate or may require a new submission. Generally, policies will not be reinstated if payment was received eight or more days after the effective date of cancellation. Reinstatement with a lapse in coverage is not permitted. Generally, a policy should not be reinstated more than twice. Since you are underwriting on behalf of the company, we expect you to use your best judgment when determining whether to reinstate coverage. Requests for third reinstatement must be submitted to the Company for prior approval. In all cases, your underwriting file must be documented to reflect the actions taken, with appropriate documentation provided to the Company

14 IV. AGENT OR BROKER OF RECORD PROCEDURES New business and renewal business will be processed as follows, whenever more than one Colony producer is trying to assume control of the same risk: 1. The first producer from whom we receive a written submission for new business will be our recognized agent/broker of record. This can be changed upon receipt of an acceptable Agent/Broker of Record Letter. 2. The producer on existing business will control the renewal. This can be changed upon receipt of an acceptable Agent/Broker of Record Letter. 3. Mid-term Agent/Broker of Record Letters will not be accepted. 4. Requirements for an Agent/Broker of Record Letter to be accepted are as follows: Must be on insured s or applicant s company stationary reflecting policy number, effective date, and the signature of an officer (if a corporation), partner or an owner; The letter must name the retail agent and the wholesale agent/broker; Must be received 15 days prior to the policy s inception date. The existing Agent of Record will be allowed 5 working days to obtain a rescinding letter from the insured or applicant; A new Agent of Record will be required to make a full submission to the company. If the submission is acceptable, a quote based on the new submission will be released. V. ATTACHMENTS TO THIS SECTION Sample Policy Forms including: Common Policy Declarations Page Underwriting File Checklist - This page may be attached to all policies you issue but is not required. NOTE: NOTE: THE AGENT IS RESPONSIBLE FOR PURCHASING AND ORDERING ALL NECESSARY ISO FORMS. THE AGENT IS RESPONSIBLE FOR COPYING COLONY U FORMS

15 Colony Management Services, Inc. UNDERWRITING FILE CHECKLIST ATTENTION: FROM: (Colony Underwriter) (Agency Personnel) POLICYNUMBER: NAMED INSURED: IF THIS RISK WAS SUBMITTED TO A COMPANY UNDERWRITER, PLEASE CHECK THE APPROPRIATE BOX: Colony Quoted/Approved (Attach copy of the fax or verifying that the risk received prior approval) Verbal/Phone Approval (Please document which Colony Underwriter provided prior approval) THE FOLLOWING ITEMS ARE ATTACHED TO THE COMPANY COPY OF THE POLICY: Signed E&O Applications & appropriate supplements Rating Worksheet/ISO Rating Worksheets Signed TRIA Notice (War/Terrorism) SLB Form (if applicable) THE FOLLOWING ITEMS ARE ATTACHED FOR COMPANY PROCESSING: Endorsement Number(s): Endorsement Rating Worksheet Signed TRIA Notice (War/Terrorism) Other:

16 Policy declaration example to go here