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  1. Condominium loss assessments—perils insured | Ask PIA

    If a condo association insures common property only for broad-form perils, how could the unit owner be protected for assessments made for damage caused by an unnamed peril?

    Loss Assessment coverage responds to any peril insuring Coverage A property. The ISO Homeowners 6—Unit-Owners Form insures Coverage A property on a broad-form basis, so the unit owner would be limited to the same perils as the association policy, and loss assessments for other perils would not be covered. The...

  2. Condominium assessments—common property perils | Ask PIA

    If the condo association insures common property only for broad-form perils, how could the unit owner be protected for assessments made for damage caused by an unnamed peril?

    Since Loss Assessment coverage responds to any peril insuring Coverage A property (except earthquakes and volcanic land shocks), adding special-form coverage under the HO 17 32 endorsement will provide loss-assessment protection for all perils not excluded in that endorsement. However, most association policies will have special-form coverage.

  3. Noncompete agreements | Ask PIA

    I’d like to have some of my key employees sign noncompete agreements. Is an agreement extending five years past employment too long?

    Yes, it probably is. It’s easy for an employer to develop a noncompete agreement, but the hard part is drafting an agreement that will be enforceable. Courts generally will enforce a noncompete agreement if it is reasonable in all respects. Specifically, courts scrutinize length of time, geographic area, impact on...

  4. Adverse underwriting experience | Ask PIA

    Can an insurance company cite adverse underwriting experience as a reason to terminate my agency agreement?

    Not if it’s the only reason given by the company. Conn. Gen. Stat. Section 38a-710 generally states that companies shall not cancel or amend an independent insurance producer’s contract for property/casualty insurance solely because of adverse underwriting experience for the two preceding years. This is provided, however, that the producer...

  5. Excess-line tax filings | Ask PIA

    Do excess-line brokers have to file premium tax statements if they have placed no business?

    Yes. New York Insurance Regulation 41, Section 27.8—Annual Premium Tax, states: (b) The annual premium tax statement shall: 1) report excess-line premiums on a written basis (and not on a cash-received basis), or indicate that there are no excess-line premiums to report.

  6. Offsets—premium-financed policy nonpayment cancellation | Ask PIA

    An insured paid a deposit premium with his personal check and premium financed the balance. The premium-finance company subsequently canceled the policy for nonpayment, in accordance with Section 576 of the New York Banking Law. May the insurer retain (offset) money owed by the insured on a prior year’s policy...

    No. New York Insurance Law Section 3428(d) requires an insurer to return the gross unearned premium due under the policy to the premium-finance agency for the benefit of the insured. The statute does not differentiate between financed and nonfinanced portions of the premium. Accordingly, the premium-finance agency has an unconditional...

  7. Midterm imposition of surcharge | Ask PIA

    In Connecticut, can a personal auto insurer impose a surcharge midterm? In this case, the insurer discovered a Driving While Intoxicated charge against the daughter, whose vehicle is insured on the household policy. The personal auto policy, written on an annual basis, renewed in April. In July, the DWI was...

    The Connecticut Insurance Department has advised PIACT that, in general, the company cannot re-rate the policy until renewal. The exception would be if the insured had made a misrepresentation in obtaining the policy, or in completing a renewal questionnaire. If there was no misrepresentation, and the company simply missed the...

  8. Cancellation for nonpayment of audit premium, prior-year endorsements | Ask PIA

    Is it permissible for an insurance company to cancel a current policy for nonpayment of an audit premium on a prior policy?

    Yes. PIANJ previously posed this question to the New Jersey Department of Banking and Insurance and received the following reply from an investigator: ... there are no existing statutes or regulations that address this issue. However, it is this department’s position that if a policy is subject to an audit,...

  9. Referral fees to unlicensed persons | Ask PIA

    Can we pay someone who is not licensed a referral fee? We have two situations. First, we have a life insurance agent who works out of our office and we want him to refer his life insurance clients to our agency for their property/casualty business. Also, we employ a part-time...

    You can pay these individuals a referral fee, but it cannot be based on whether their referral leads to a sale of insurance. So, sharing a percentage of your commission would be illegal. For purposes of Insurance Law, there is no difference between these scenarios because neither individual holds a...

  10. Nonowned auto coverage—employee’s auto | Ask PIA

    Is there an exclusion on a commercial auto policy for the business owner/employee who uses his own vehicle to travel between offices, or uses his vehicle for other office errands, and then has an accident that causes a liability suit naming the business entity?

    In the scenario you described, coverage will be provided as follows: Primary coverage The employee’s personal auto policy is primary and automatically covers the business entity. B. "Insured" as used in this part means: 1. You or any...

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