FAPEO is Right Around the Corner!

FAPEO’s annual business meeting is next Wednesday (8/4).

Click here to access the agenda. If you haven’t registered yet, you can email Suzanne Hurst at suzanne@helpmembers.org

In addition to the important legislative updates, we are certain that cyber security for PEOs will be a hot topic. Below is an overview of how we at Libertate look at cyber coverage. We will be available at FAPEO and would love to discuss further.

Paul HughesSharlie ReynoldsDavid Burgess
321.217.7477305.495.5173321.436.8214
phughes@libertateins.comsreynolds@libertateins.comdburgess@libertateins.com  

Parent Company of PEO Carrier Key Risk Reports Another Strong Quarter!

Kudos to our friends at W.R. Berkley for a stellar Q2! So happy they are a part of our PEO community.

W.R. Berkley Corp. reported net premium growth exceeding 27 percent and a combined ratio under 90 for the 2021 second quarter, positive results the commercial lines insurer and reinsurer attributed to rate adequacy and an improving economy.

Consolidated net premiums written during Q2 surpassed $2.2 billion, up from $1.7 billion in the 2020 second quarter.

The company booked net income of more than $237 million in Q2 versus $71.2 million a year ago.

Additionally, net investment income jumped nearly 97 percent to $169.2 million during the quarter.

The company said that its rate increases continue to outpace loss costs, with new products also helping to achieve or exceed its targeted rate levels. During the quarter, W.R. Berkley focused on exposure growth and business expansion, and it said the strategy should help lead to additional underwriting profits down the line.

W.R. Berkley’s consolidated combined ratio was 89.7 during the quarter, compared to 98.7 a year ago.

W.R. Berkley even produced gains for workers’ compensation, which had average rate increases of just under 10 percent.

Commercial auto and casualty reinsurance also saw large premium increases. Professional liability was among the largest gainers, jumping to $287 million in net premiums written during Q2, versus $174.2 million the year before.

Current accident year insurance losses from catastrophes, including COVID-related losses, landed at $36.8 billion during the quarter, improved from $114 million in the 2020 second quarter. Reinsurance and monoline excess losses were just under $7.2 million, compared to $31.8 million a year ago.

Source: W.R. Berkley

AM Best Assigns Credit Rating to Sunz Insurance Company

Congrats to our friends at Sunz for the A- (Excellent) rating!

Sunz Insurance

OLDWICK, N.J., July 16, 2021–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to SUNZ Insurance Company (SUNZ) (Bradenton, FL). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect SUNZ’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

SUNZ was formed in 2005 and primarily writes high deductible worker’s compensation coverage utilizing its proprietary technology-driven platform focused on collateral management for its medium and small business clients.

SUNZ’s balance sheet assessment is supported by its risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR) in current periods, projected future scores, and under stress scenarios. SUNZ balance sheet assessment also considers the capital contributions in support of recent premium growth, improved reserving patterns exhibited during the recent five-year period, its comprehensive reinsurance program diversified among highly rated participants, and a conservative investment portfolio that matches assets with liabilities.

SUNZ’s operating performance is assessed as adequate as evidenced by average pre-tax return on revenue measures that trail AM Best’s workers’ compensation industry composite over the recent five- and 10-year timeframe. SUNZ’s business profile assessment is limited as 49.9% of premiums are written in two states, California and Florida, when considering both direct and assumed premiums. Operating as a single line workers’ compensation insurer, SUNZ’s limited business profile exposes the company to the potential legislative, regulatory or judicial changes occurring within these states. SUNZ’s ERM approach is considered appropriate for the scale, scope and complexity of the organization.

While positive rating actions are unlikely over the near term, positive rating actions could be taken on SUNZ’s ratings should operating performance improve and be sustained at a level that is in line with peers with stronger operating performance assessments.

Key factors that could result in negative rating actions on SUNZ’s ratings and outlooks include a weakening in operating earnings to a level that is not supportive of the adequate operating performance assessment.

Negative rating actions could occur should adverse reserve development or strong premium growth result in a weakening in risk-adjusted capitalization that falls short of supporting the very strong balance sheet assessment.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210716005296/en/

Contacts

Gordon McLean
Senior Financial Analyst

+1 908 439 2200, ext. 5304
gordon.mclean@ambest.com

Robert Raber
Director
+1 908 439 2200, ext. 5696
robert.raber@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

EEO-1 Deadline For 2019 & 2020 Now Extended to August 23, 2021

Employers now have some extra time to submit equal employment opportunity (EEO-1) workforce data from 2019 and 2020, the U.S. Equal Employment Opportunity Commission (EEOC) announced on June 28, 2021. These reports were previously due by July 19, 2021. Employers now have until Aug. 23, 2021, to complete their submissions.

The EEOC’s collection of this data, the portal for which opened on April 26, 2021, had been delayed numerous other times due to the coronavirus pandemic. Under Title VII of the Civil Rights Act, the EEO-1 Report is usually due by March 31 every year.

EEO-1 Reporting Background

The EEO-1 Report is an annual survey that requires certain employers to submit data about their workforces by race or ethnicity, gender and job category. The EEOC uses this data to enforce federal anti-discrimination laws.

Employers Subject to EEO-1

Reporting In general, a private-sector employer is subject to EEO-1 reporting if it:

  • Has 100 or more employees;
  • Has 15-99 employees and is part of a group of employers with 100 or more employees; or
  • Is a federal contractor with 50 or more employees and a contract of $50,000 or more.

Employers that are subject to EEO-1 reporting now have until Aug. 23, 2021, to submit data from 2019 and 2020.

Employer Action Items

Employers subject to EEO-1 reporting requirements should ensure that they complete their EEO-1 submissions by Aug. 23, 2021. These employers should also review the EEOC’s home page and website dedicated to EEO data collections for additional information.

Important Dates

  • July 19, 2021: Prior deadline for submission of 2019 and 2020 workforce data.
  • Aug. 23, 2021: New deadline for employers subject to EEO-1 reporting to submit 2019 and 2020 workforce data.
  • March 31, 2022: Deadline for submission of EEO-1 data from 2021.

California Senate Rejects Workers’ Compensation Proposal

Close one!

SACRAMENTO, Calif. (AP) — The California Senate on Thursday rejected a bill aimed at making it easier for health care employees to have hospitals pay their medical bills related to COVID-19 and other diseases that may have been contracted on the job — a move business groups said would have cost them too much money.

Companies pay their workers’ medical bills if they get sick or injured while on the job. In some cases, workers must prove their injury or illness is work-related to get the benefits. Last year, the California Legislature passed a law that assumed COVID-19 was work-related, shifting the burden to employers to prove it wasn’t.

Photo by Hush Naidoo on Unsplash

That law is scheduled to expire in 2023. A bill by Sen. Dave Cortese, a Democrat from San Jose, would have made it permanent. It would have also added other presumptions to the workers’ compensation law for hospital workers, including cancer under some circumstances, post traumatic stress disorder, certain respiratory diseases and muscle or ligament injuries.

The bill had to pass the Senate by Friday to have a chance at becoming law this year. But it fell short on Thursday before the Senate adjourned for the week. Lawmakers are not meeting Friday.

Cortese on Thursday agreed to change the bill to remove respiratory illnesses such as asthma and chronic obstructive pulmonary disease (COPD). But it wasn’t enough to get the bill passed.

Cortese said his goal was to give hospital workers, of whom he says 90% are women, the same protections as other medical professions, including emergency medical technicians.

“It really comes down to equal work, equal compensation,” he said.

Business groups, led by the California Chamber of Commerce, opposed the bill, labeling it a “job killer.”

“Such a drastic shift in the law will create an astronomical financial burden on healthcare employers and the system, creating an appreciable pact on the cost of healthcare at a time when we are trying to make healthcare more affordable,” Ashley Hoffman, policy advocate for the California Chamber of Commerce, wrote in a letter to lawmakers that was signed by 35 other groups.

The bill is part of a broader discussion in California about which coronavirus modifications should continue. Gov. Gavin Newsom said he will lift most of the state’s coronavirus rules on June 15.

The state Senate passed a bill earlier this week that would let restaurants continue to serve alcohol outside. The state Assembly passed a bill that would require local governments to keep letting people comment during their meetings by telephone or the internet. Both bills still must pass the other legislative chamber and be signed by the governor before becoming law.

Written by Adam Beam, Associated Press (June 3, 2021)

https://www.westport-news.com/news/article/California-Senate-rejects-workers-compensation-16223712.php

Moody’s Says COVID Impact on Insurance was ‘Moderate’

Moody’s opinion echos that of NCCI regarding the impact of COVID on the Workers’ Compensation system. More rate decreases to come???

Neither COVID-19 nor legislation enacted because of it has seriously harmed the creditworthiness of the property and casualty insurance sector, according to a report released by Moody’s Investors Service on Friday.

Businesses have filed about 1,700 business-interruption claims because of COVID-19 shutdowns, but those cases are largely being decided in favor of insurers, Moody’s said.

“US property policies typically require direct physical loss or damage to the property for business interruption losses to be compensated,” Moody’s said. “Moreover, most policies specifically exclude coverage for losses caused by a virus or communicable disease.”

But the battle for coverage, of course, is far from over. Only 20% of the cases filed have been resolved so far.

“A handful of courts have recently ruled in favor of insured parties despite standard policy wordings,” the report says. “Additionally, court decisions are subject to appeal, a process that could take years to resolve.”

Moody’s says it believes that ultimately, policy provisions will limit insurers’ business-interruption losses is the United States.

Photo by Nick Fewings on Unsplash

“Nevertheless, we expect the ongoing litigation will lead to inconsistent outcomes, appeals to higher courts, elevated legal costs, and some uncertainty on this matter for the next couple of years,” the report says.

For workers’ compensation, which makes up 14% of commercial line P&C premiums, the coronavirus pandemic has had only a “moderate” impact on claim costs, the report says. Moody’s echoed a report by the National Council on Compensation Insurance released earlier this month that said total COVID-19 workers’ comp losses amounted to $260 million in the US.

“The severity of these claims was generally low with 95% of the claims less than $10,000,” Moody’s said. “With more states enacting presumption laws in 2021, insurers will see additional claims but we expect them to be moderate.”

While the passage of presumption laws led to more claims for work comp, state lawmakers also enacted laws that limit exposure for commercial liability. Moody’s said the coronavirus liability protection for businesses that was adopted by most states is a “credit positive” for insurers.

The report says eventually, government might step in to create a public-private risk sharing agreement to cover business interruptions caused by future pandemics. Moody’s said bills were introduced in a number of states last year that would have required insurers to pay COVID-19 business-interruption claims, but none passed.

“With an eye toward future pandemics, some insurers and US legislators are considering public-private risk sharing arrangements to compensate small and large businesses for business interruption caused by pandemics,” the report says. “Common elements of these proposals are that P&C insurers would administer the coverage and assume a limited portion of the risk, while the US government would assume the bulk of the risk.”