TDCI Encourages Investors to Know the Risks of Financial “Unicorns”

(Nashville, TN – Insurance News 360) – On March 14, the Tennessee Department of Commerce and Insurance’s Securities Division cautioned investors to be sure they do their research before investing in “unicorn” start up companies. The warning came after the North American Securities Administrators Association (NASAA) issued an advisory on the topic.

When it comes to financing businesses and start up companies, a “unicorn”  is a privately held company that is estimated to be valued at more than $1 billion. Privately held companies cannot sell shares to the public and has a limited number of investors. They can raise capital to fund business endeavors, and recent changes in securities laws have given them more options to do so. The investors in these types of companies are typically private funds, like private equity, hedge funds, or venture capital; they may also include wealthy individuals, owners and employees of the company itself.  SEC-registered mutual funds, exchange-traded funds (ETFs) and business development companies (BDCs) also may invest in unicorns.

Putting your money into this type of company carries big risk, especially when there is a direct investment. Because they are privately held, there is no public market to trade the securities, and these securities are not easily sold or exchanged for cash. This is why the market valuations may not accurately reflect the actual value of the company. Also, public disclosures may not be up to the level of what is required of publicly traded companies.

“Rushing into an investment that you don’t fully understand can be bad for your bottom line,” said TDCI Assistant Commissioner Frank Borger-Gilligan. “We encourage Tennesseans to always conduct thorough research to learn the risks associated with the investments they are considering.”


What are Some Risks of Investing in pre-IPO Shares?

Fraud: weak internal controls and corporate governance infrastructure may lead to fraudulent practices by a unicorn. For example, a company could create false sales and shipping documents to artificially increase sales numbers.

Disclosure: since the securities of unicorns will not be registered at the state or federal level, investors may lack important information to make an investment decision.

Liquidity: there is no guarantee shares can be resold after purchase.

Valuation: the valuation on a unicorn pre-IPO may not reflect the intrinsic value of the enterprise. In addition, even if the unicorn eventually holds an IPO, there is no guarantee the stock price will rise. Some IPOs are unsuccessful, and shares fall after the company goes public.

Remember, before making any decisions with your money, ask questions, make sure you understand the risks, and contact the Tennessee Securities Division for detailed background information about those who sell securities or give investment advice, as well as about the products being offered.

The Tennessee Securities Division can be reached at 615-741-2947.

Source: Tennessee Department of Commerce & Insurance (TDCI).

Customer Satisfaction with Original Equipment Tires Shows Significant Improvement

(Costa Mesa, CA – Insurance News 360) – The J.D. Power 2018 U.S. Original Equipment Tire Customer Satisfaction Study reveals that overall customer satisfaction with original equipment tires has shown great improvement since 2015

The study, conducted each year, looks at tire owner satisfaction in tire wear, tire ride, tire appearance, and tire handling. The study ranks luxury vehicles, passenger cars, performance sport and truck

Michelin tires earned a 765 in the luxury segment, 753 in passenger, 774 in performance and 731 in truck/utility.

“The rise in satisfaction helps validate tire manufacturers’ efforts to meet the demands of OEMs while simultaneously improving the customer experience,” said Brent Gruber, Senior Director, Automotive Quality Practice at J.D. Power. “The fact that there is little difference in satisfaction between run-flat and traditional tires is a great example. Many OEMs have been replacing spare tires with run-flats to help reduce vehicle weight and improve fuel efficiency. Just a few years ago run-flat tires were a detriment to customer satisfaction but the experience is much more positive now.”

The 2018 U.S. Original Equipment Tire Customer Satisfaction Study is based on responses from 30,477 owners of 2016 and 2017 model-year vehicles, and was fielded in October-December 2017.

Source: J.D. Power.

JD Power Study Reveals Greater Customer Satisfaction with Punctual Telecommunications Technicians

(Costa Mesa, CA – Insurance News 360) – Consumers are happier with their telecommunications services when service technicians are on time for appointments and provide more precise service windows. The results of the inaugural J.D. Power U.S. Telecom In-Home Service Technician Study, released on March 22.

Longer service windows and early or late arrivals negatively impact customer satisfaction.

The study looked at consumer perceptions of on-site service technician visits for high speed data, phone and TV service installation and service. There were six attributes examined in this study:   quality of work; timeliness of completing work; knowledge of technician; courtesy of technician; professionalism of technician; and scheduling an appointment.

“The more flexible telecom companies can be with offering service windows that work with their customers’ schedules and the more precise they are at hitting those target times, the higher levels of customer satisfaction they can realize,” said Peter Cunningham, Technology, Media, and Telecommunications Practice Lead at J.D. Power. “Though this may seem like common sense, there are huge performance gaps among the different providers. Those that are getting it right have developed strong skill sets in both managing customer expectations and delivering on them.”

The study revealed the following things:

Shorter service windows are associated with higher satisfaction: Scheduling an appointment satisfaction is 49 points higher among customers with service windows of one hour or less than among those with a two-hour window. That gap jumps to 104 points when customers are given a four-hour window.

Customers are happier when technicians arrive on the right day, on time. Although overall satisfaction for punctual technicians was 871, it dropped to 819 when technicians were early and 683 when they were late (and this includes technicians who come on the wrong day).

Customers are happier when technicians fix problems on a single visit. Those whose issues require multiple visits are more likely to indicate that they will switch services.

Customers appreciate contact prior to technician arrival. According to the survey, customer satisfaction is 138 points higher when a technician contacted them prior to arrival.

Customers are happier when they can schedule appointments online. Use of digital channels to schedule appointments leads to greater customer satisfaction than when customers must use the telephone.

Study Rankings

DISH Network ranks highest in telecommunications in-home service technician satisfaction with a score of 885. Charter Spectrum ranks second (860), AT&T/DIRECTV (859) ranks third and Verizon (856) ranks fourth. The industry average is 853.

The 2018 U.S. Telecom In-Home Service Technician Study was fielded in December 2017-January 2018, collecting 3,744 responses. To be eligible to participate, respondents needed to have an in-home telecom service technician visit in the past six months.

For more information about the 2018 U.S. Telecom In-Home Service Technician Study, visit http://www.jdpower.com/resource/us-telecom-home-service-technician-study.

Source: J.D. Power.

Federal Motor Carrier Safety Administration announces new ELD waiver

(Washington, DC – Insurance News 360) – The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration has implemented a 90-day temporary waiver to the Congressionally-mandated electronic logging device rule in order to address the needs of the agricultural industries in the U.S.

The agency is also publishing final guidance on the agricultural 150-air-miles-of-service exemption and personal conveyance.

“We continue to see strong compliance rates across the country that improve weekly, but we are mindful of the unique work our agriculture community does and will use the following 90 days to ensure we publish more helpful guidance that all operators will benefit from,” said FMCSA Administrator Ray Martinez.

Roadside compliance with the record keeping reuirements for hours of service have been increasing (including the ELD rule) since 2017. Compliance is as high as 96 percent, with more than 330 separate self-certified devices on the registration list.

On April 1, full enforcement of the rule began. Carriers that did not have an electronic logging device as required were placed out of service and would remain out of service for 10 hours, in accordance with the Commercial Vehicle Safety Alliance criteria.

Source: U.S. Department of Transportation

Access Insurance Company liquidation announced, consumers need new insurance coverage

(Harrisburg, PA – Insurance News 360) – On March 22, Pennsylvania Insurance Commissioner Jessica Altman announced that Texas-based auto insurer Access Insurance Company has been issued an order of liquidation by a Texas court. In Pennsylvania, there are more than 42,000 policies affected.

Those affected by this liquidation can legally drive, but need to find new insurance by April 13, or when their current policy expires, whichever date comes first. The company’s policies will expire at 11:59 p.m. on April 12.

“Pennsylvania drivers who have coverage through Access Insurance Company should file any claims that may arise at www.access.com, or by calling 1-866-747-6931, until their current policy expires or until April 12,” Altman said.  Claims filed during this period will be paid through the Pennsylvania Property and Casualty Insurance Guaranty Association.

The Special Deputy Receiver in this case is Cantilo & Bennett, L.L.P. of Austin, Texas and will manage the liquidation.  Policyholders with questions can contact them at www.accessinsurancesdr.com, or by calling 512-478-6000.

“Pre-paid premiums will be refunded to policyholders as soon as practical.  Policyholders do not need to take any action to receive refunds,” Altman said.

Consumers with questions may also call the Pennsylvania Insurance Department Consumer Services Bureau at 1-877-881-6388, or use the link on the department’s homepage, www.insurance.pa.gov, to ask a question.

Source: Pennsylvania Insurance Department.

The Ohio Department of Insurance urges parents to assess insurance coverage before college starts

(Columbus, OH – Insurance News 360) – With students of all ages headed back to the classroom, parents of college students in particular have one more thing to do: Assess insurance policies to ensure that a college-age student has adequate coverage.

“It’s important for parents to talk with their insurance agent about options available for college-aged children,” said Lt. Governor Mary Taylor, also director of the Ohio Department of Insurance. “Parents should review their healthcare coverage, auto insurance and homeowners insurance policies to ensure adequate coverage is in place.”

Students are often required to have health insurance, through a private plan or a college-sponsored plan. It is important that parents understand the limitations of the student health insurance plan if their child is enrolling in a college-sponsored plan. Some have more limits and exclusions than one might expect.  It is important to ensure that students moving away from home have copies of insurance cards, and to know whether your student’s location is considered in network or out. This applies whether insurance is through a health maintenance organization or a preferred provider organization.

Renters Insurance

Whether a student lives in the dorms or off campus, it’s important to protect their personal belongings. For students under the age of 26 who live on campus, it may be easier to cover their items – they may be covered under their parents’ homeowners insurance. Off campus housing is a different story and parents’ insurance may not extend to a rental property. Then it’s time to look at a separate renters insurance policy.

Auto Insurance

Parents, check into auto insurance rates for a student’s city and state as you discuss whether  to keep a student’s car on the family policy. There may be discounts for those students who show academic progress.

Identity Theft

A student’s belongings and vehicle aren’t the only things that need protection. Have you thought about identity theft protection? College students are targets for these thieves because they are often busy and filling out dozens of documents with sensitive information.

There are a few things to know about ID theft insurance though:

This type of insurance does not prevent ID theft, but allows for coverage of the costs to undo the damage – attorney’s fees, costs of mailing documents, making copies and making phone calls.  Some homeowners insurance policies include identity theft protection. Ask if this extends to a student living away from home. Also, check into whether renters insurance covers ID theft or if it could be added on to the policy.

For more information about auto, home, life and health insurance options, as well as tips for choosing the coverage, that is right for you and your family, call the Ohio Department of Insurance consumer hotline at 1-800-686-1526. Insurance information is available at www.insurance.ohio.gov and you can follow the department on twitter @OHInsurance and at www.facebook.com/OhioDepartmentofInsurance.

Source: Ohio Insurance Department.

Legislators should fund driver’s education, says NC Insurance Commissioner Wayne Goodwin

(Raleigh, NC – Insurance News 360) – As the North Carolina legislators negotiate a state budget, Insurance Commissioner Wayne Goodwin is urging the Senate and House of Representatives to keep funding for driver education in the budget.

“North Carolina currently has some of the lowest car insurance costs in the country,” Goodwin said. “In addition to the public safety concerns that come with eliminating driver’s education programs, more untrained drivers on the road could ultimately lead to higher insurance rates for all drivers.”

For drivers, insurance rates are based on claims experience of the insurance companies. If companies pay more for claims over time, it is likely that rates would increase. As it is, teen drivers pay more for car insurance than those who have more experience, and they would see rate increases that are in line with the Safe Driver Incentive plan if theyare charged points for convictions are at-fault accidents.

“It is to everyone’s benefit to have skilled and safe drivers on the road,” said Goodwin.

Learn more about teens and car insurance at www.ncdoi.com/teendrivers or by calling the North Carolina Department of Insurance at 855-408-1212.

Source: North Carolina Insurance Department.

Wisconsin reminds parents to assess insurance coverage with the start of school

(Madison, WI – Insurance News 360) – Wisconsin Insurance Commissioner Ted Nickel urges parents and students to assess their insurance needs as students hit the books this fall.

“Signing up for classes and buying your books is important,” said Nickel, “but so is making sure you’re adequately covered by insurance.” Nickel continues, “Students should keep in mind the importance of having the right type of auto, renter’s and health insurance before they need to access the coverage because of an unexpected event.”

Major life events are good times to examine insurance coverage. Students and parents should examine health insurance requirements to determine whether college students qualify for coverage under parents’ plans for health, auto and homeowner’s insurance or if they need to get their own policies.

Wisconsin drivers must have an auto insurance policy in place that includes liability insurance, whether they are involved in an accident or are pulled over for a traffic violation. Students who drive their parents’ cars may be covered under their parents’ policies, but if they purchase their own vehicle, they will need their own insurance.

Renters’ insurance will help to protect a young adult’s belongings in a variety of situations. Those living in the dorms may have coverage under mom and dad’s homeowner’s insurance, but living off campus can mean that a student needs their own renter’s insurance policy. These policies cover all belongings, whether they are stolen, burned or destroyed in a tornado or flood.

“I cannot stress enough the level of protection and peace of mind that renter’s insurance can give young adults,” said Nickel.

When it comes to health insurance, adult children through age 26 can stay on their parents’ health insurance if they are students.

Those who are not eligible for coverage as a dependent could potentially continue group coverage under the COBRA law, but colleges and universities often offer student insurance.

Source: Wisconsin’s Office of the Commissioner of Insurance (OCI)

Florida Office of Insurance Regulation approves removal of 184,000 policies from Citizens

(Tallahassee, FL – Insurance News 360) – The Citizens Property Insurance Corporation (Citizens) has been allowed to remove up to 184, 500 policies from  six companies. These policies include 181,909 personal residential insurance policies and 2,591 commercial residential/nonresidential policies.

The six companies allowed to remove policies include Anchor Property & Casualty Insurance Company, Heritage Property and Casualty Insurance Company, Safepoint Insurance Company, Southern Oak Insurnace Company, United Property and Casualty Insurnace Company and Weston Insurance Company.

Anchor has been allowed to  remove up to 20,000 personal residential policies; Heritage is allowed to remove up to 50,000 personal residential policies and up to 500 commercial residential policies; Safepoint is approved to remove up to 20,000 personal residential policies; Southern Oak Insurance Company can remove up to 15,000 personal residential policies; United Property and Casualty Insurance can remove up to 50,500 personal residential policies and up to 1,000 commercial residential policies. Weston Insurance Company is approved to remove up to 26,409 personal residential policies, 1,064 commercial nonresidential policies and 27 commercial residential policies.

The take-out periods are November 24, 2015 for personal residential impacting both the Personal Lines/Coastal Account policies and November 17, 2015 for commercial residential/non-residential impacting both the Commercial Lines/Coastal Account policies. This is part of the state’s ongoing depopulation effort to reduce the number of policies in the state-created Citizens and transfer them to the private insurance market.

Source: Florida Office of Insurance Regulation.

Ohio Budget bill includes new Health Insurance Options for Employers

(Columbus, OH – Insurance News 360) – The Ohio budget bill provides new employee health insurance options for business owners who seek employee insurance through Multiple Employer Welfare Arrangements (MEWAs). These arrangements allow different employers to join in purchasing health insurance. These arrangements are not new to the state of Ohio.

The newly approved state budget bill modernized statutes for MEWAs. Some of the changes include that these arrangements must have additional capital and surplus and an addition of disclosure requirements for employers. Legislators also approved consumer protection provisions, including who can sponsor a MEWA.

“We broadened the definition of who can sponsor a MEWA in order to give Ohio businesses more options,” said Lt. Governor Mary Taylor. “At the same time we have enhanced financial requirements for MEWAs to strengthen consumer protections to ensure common sense regulation.”

Taylor serves as Director of the Ohio Department of Insurance.

MEWA provisions in the budget bill include:

Expansion of types of entities allowed to sponsor MEWAs

Strengthened consumer safeguards require financial reserves for each MEWA. The minimum surplus is now $500,000. MEWAs must meet the same risk-based capital requirements as life and health insurers.

Requirement that annual certification of premium rates are filed with and approved by the Ohio Department of Insurance.

Representatives of eligible entities interested in forming a MEWA and business owners who want to learn more about MEWAs can call the Ohio Department of Insurance at 614-728-1074.

Source: Ohio Department of Insurance.