VALUE OF A RISK…

June 19, 2012

VALUE OF A RISK MANAGEMENT CONSULTANT AUDIT

Over my thirty nine years as a risk manager and risk management consultant (in addition to my past sixteen years as an attorney) I have learned that when a company has a long harmonious relationship with their broker the company may feel that the broker is part of the corporate family, and as part of the corporate family may not be able to render a truly impartial, objective verdict on the insurance programs. As a matter of fact, I have had agents and brokers recommend the use of an independent consultant to either get a fresh slant on a problem or opportunity, or to get an endorsement or critique on the way the broker is handling the program so that the brokers recommendations can be validated or improved upon.

That is why insurance and risk management audits are performed by individuals such as myself or companies that are engaged exclusively in risk management consulting activities.

An independent risk management consultant does not steer programs to any one broker and should never taken a commission on any insurance program they recommend.

A full scale audit should:

• analyze exposures to loss and determine what risks should be eliminated, reduced, insured, self-insured or not insured at all;
• independently evaluate the effectiveness of the present insurance program in terms of the protection afforded, services provided and cost;
• consider possible alternatives such as deductibles, retrospective rating, self-insurance and other methods of improving cash flow:
• evaluate management’s attitude toward loss control and the effectiveness of current loss control programs;
• review the administration of the risk management function and insurance program;
• help establish a formal risk management policy;
• provide a written report indicating my findings and making recommendations relative to the areas that appear to be in need of attention.

The information required by a risk management consultant will include information related to:

• corporate structure – subsidiaries, divisions, etc.
• structure of management – scope of responsibility, authority, etc.
• management philosophies, polices, procedures, etc.
• risk management policy
• types of operations other than hotels if they exist
• significant events involving risk management in recent years
• loss prevention programs
• loss control programs
• prior loss experience – insured and uninsured
• copies of contracts affecting risk management
• administration of the risk management function.

In addition a risk management consultant will need copies of all current insurance policies, endorsements, pertinent correspondence, rating plans, premium adjustments, etc.

The Law Offices of Lawrence H. Nemirow can provide risk management audits for legal or insurance matters.

Contact me by calling 562-799-1379 or send me an email at nemirow@aol.com

Duties Of Agents And Brokers

April 13, 2012

Are you aware of the legal duties of your insurance agent or broker?

Your insurance agent has to perform the following duties on your behalf:

• When you notify your agent or broker that you or your business acquired a new vehicle he or she may be liable for failure to advise you that the vehicle may not be covered by your insurance

• Your broker may be personally liable for failing to recognize and correct gaps between your primary and excess policies.

• Your broker has a duty to call your attention to any clauses in claims made policies if you give notice of a potential claim occurring during the policy period.

• Your agent or broker has a special duty to respond to your inquires regarding sufficiency of insurance coverage.

• Your agent or broker is liable to you if he or she misrepresents the nature, extent or scope of coverage, especially if he or she held themselves out to you as having expertise in the type of insurance you are seeking.

• Your agent or broker may be liable to you or your business for failure to advise you about cancellation or renewal of policies except where non-payment of premium is involved.

• Your agent or broker may be liable to you or your business for failure to obtain coverage requested by you.

• Your agent or broker has a duty to investigate a non-admitted insurers financial strength
before recommending placement of insurance with that insurer.

Contact your insurance attorney, business attorney or risk manager if you believe your agent or broker breached any of these duties.

California Corporation Annual Minutes

April 13, 2012

California Corporations Do not Have To File Annual Minutes With The Secretary Of State

Have you been receiving official looking notices advising you that you have prepare and file your annual minutes with requests that you pay them a fee to do so?

My wife is a CPA and we share offices and sometimes clients. Several times a year we get calls from clients asking if mailings they received from Corporate Compliance Center, Corporation Compliance Recorder, California Corporation Services and similar businesses.

Sound familiar?

What each of these solicitations have in common is that they may contain wording stating that “this is not a government document”, however the wording is in fine print and may be missed.

These solicitations correctly cite California Corporations Code sections 600, 1500, and 9510(a) to make the solicitations look like a government document. All of the codes are correctly cited.

Section 600 provides in pertinent part, “An annual meeting of shareholders shall be held for the election of directors on a date and at a time stated in or fixed in accordance with the bylaws.”

Section 1500: “Each corporation shall keep adequate and correct books and records of account and shall keep minutes of the proceedings of its shareholders, board and committees of the board and shall keep at its principal executive office, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each. Those minutes and other books and records shall be kept either in written form or in another form capable of being converted into clearly legible tangible form or in any combination of the foregoing. When minutes and other books and records are kept in a form capable of being converted into clearly legible paper form, the clearly legible paper form into which those minutes and other books and records are converted shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper record of the same information would have been, provided that the paper form accurately portrays the record.”

Section 9510(a) relates to record-keeping requirements for non-profit corporations.

These mailings are correct when they state that annual meeting minutes must be prepared, but neither your company or the service companies file the minutes with the Secretary of State.
It is important that these minutes be keep in a corporate minute book for your own use and protection of the corporation.

These services are offering to prepare your annual corporate minutes for a fee, but in my opinion these minutes are best prepared either by corporate officers/directors, if they know how to do so, or by your business attorney (who can also review the corporations’s prior meeting minutes and bylaws for potential areas for improvement, changes, and the like).

Review your minute books now. Make sure that any major decisions made during the current or immediately past fiscal year are recorded in the minutes.

Ask your business attorney or myself as to what important decisions should be placed in the minutes.

THE ESSENTIALS OF ESTATE PLANNING

August 26, 2011

EXPLANATIONS OF WILLS AND TRUSTS

WHAT IS A WILL?

A will is quite simply a legal declaration that enables you to direct the disposition of your assets upon your death. You can divide your assets any way you want, as long as guidelines are presented clearly in writing. The portion of your estate covered by a will includes both tangible assets such as your home or your car, and intangible assets, such as bank accounts and mutual fund shares. Other rights and benefits, like pension rights and life insurance proceeds, are normally handled outside of your will. In most cases, those benefits are paid directly to your designated beneficiaries. While the cost of creating a will can vary depending on the complexity of your estate, most range in price from $150 to $500.

WHAT IS A TRUST?

A trust is a three-part agreement in which the owner of an estate, or the trust’s “grantor”, transfers the legal title to that estate to somebody else (the trustee) for the purpose of benefitting one or more third parties (the beneficiaries). Trusts may be revocable or irrevocable and may be included in a will to take effect after death.

Revocable trust’s can be changed or revoked at any time. For this reason, the government considers the specified assets to still be included in the grantor’s taxable estate. Therefore, you must pay income taxes on revenue generated by the trust and possibly estate taxes on those assets remaining after your death.

Irrevocable trusts cannot be changed once they are set up. The assets placed into an irrevocable trust are permanently removed from the grantor’s estate and transferred to the trust. Income and capital gains taxes on assets in the trust are paid by the trust. Upon a grantor’s death, the assets in the trust are not considered party of the estate and are not subject to estate taxes.

Most revocable trusts become irrevocable at the death or disability of the grantor.

BENEFITS OF A TRUST

Although trust can be used in many ways for estate planning, they are most commonly used to:

•    provide expert management of estates
•    provide security for both the grantor and the beneficiaries
•    protect real estate holdings for a business
•    provide for beneficiaries who are minors or require expert assistance managing money.
•    avoid estate or income taxes
•    avoid probate expenses
•    maintain privacy

COMPARING DIFFERENCES BETWEEN WILLS AND TRUSTS

WILLS

•    Allow you to determine how your assets are distributed
•    Provide specific direction for the care of minor children
•    Must go through probate

TRUSTS

•    Preserve assets for beneficiaries
•    Manage taxes
•    Provide expert management
•    Maintain privacy
•    Avoid probate

For more information on my services as an Orange County Estate Planning Attorney and a Los Angeles County Estate Planning Attorney, contact me. My contact information can be found on my website a http://www.nemlawyer.com

Estate Planning and Long Term Care

August 26, 2011

Did You Know:

People reaching the age 65 have an average life expectancy of an additional 18.5 years (19.8 years for females and 16.8 years for males)?

The population 65 and over will increase from 35 million in 2000 to 40 million in 2010 (a 15% increase) and then to 55 million in 2020 (a 36% increase for that decade)?

About 60 percent of individuals over age 65 will require at lease some type of long-term care services during their lifetime?

Medicare, the federal health insurance program for those over 65+, paid only 13% of U.S. long-term care bills in 2002.?

A nursing home costs between $60,000 and $80,000 per year? (national average for a private room is approximately $70,000 per year)

From 1990 to 1995, nursing home costs rose 6.25% a year? A government study forecasts that home-health care and nursing home costs will rise 5.8% per year through 2020.

37% of all persons in need of nursing home care are 64 years of age and younger?

Nearly three in ten (28%) adults are saying they are “very” worried that they won’t be able to pay for nursing home and home care services?

Nearly one-third (32%) of people without long term care insurance say it’s just something they’ve thought about?

44.4 million caregivers (or one out of every five households) are involved in caregiving to persons aged 18 or over?

As an Estate Planning Attorney located in Los Alamitos, California servicing Orange County and Los Angeles County I try to ensure that I inform my clients of the need for long term care planning either in their Trusts or Wills, or through the purchase of insurance.

For contact information, see my website at http://www.nemlawyer.com or call me at 562-799-1379.

 

 

 

 

Many think Medicare pays for all long-term care needs for the elderly: in fact, its nursing home coverage is limited mainly to short-term patients recovering from hospital stays.

 

 

 

 

Estate Family Battles

July 10, 2010

No matter how close the family, money problems of a family member could upset an entire estate plan.

For example, the Settlor wants to leave the remainder of the estate to her children to be divided equally upon her death.

However, one of the children during the Settlor’s lifetime runs into financial difficulties.  The child turns to the only source he or she can think of to get out of the jam, the Settlor.

In most cases the Settlor is elderly, loves the children equally, but the Settlor does not have the heart to tell this needy child no.

Creative trust drafting can solve this problem.

For example, the trust can be written to provide loans to a beneficiary who needs the money now, versus later. The trust can provide for either a no interest payback or early distribution if the estate funds are sufficient.

If you are concerned about this type of problem, or if you have other concerns, contact the Law Offices of Lawrence H. Nemirow at 562-799-1379 or visit our website at  www. nemirowlaw.com or contact your local trust attorney.

It is always better to anticipate and minimize future problems now to avoid a family battles in the future.

Understanding Probate Law in Orange County

March 3, 2010

Probate law can be very confusing.  I often get calls from clients or potential clients asking when a probate attorney is necessary.  The best way to avoid probate is to have your affairs in order prior to death.  While it can be a very unpleasant thing to think about, not addressing the issue can create problems down the road for family and loved ones.  Talking to an estate planning attorney and having these issues handled before something happens is always the best practice.

When probate is needed can be very confusing so I have decided to address the issue with an article which you can find on our website.  I am also happy to address any questions you might have over the phone.  Give me a call at 562-799-1379.

WHAT IS AN ESTATE PLAN AND WHY DO I NEED IT?

July 23, 2009

An estate plan is designed to conserve your assets and to develop a strategy for distributing your assets according to your wishes at your death.

The estate planning tools include wills, trusts, gifts, life insurance and joint ownership of property.

Without an estate plan, someone else will decide what happens to your assets. More likely than not, your assets will be distributed by the probate court according to your states laws regarding intestate succession.

The Law Offices of Lawrence H. Nemirow, PC is prepared to assist you with your estate planning questions and provide you with recommendations as to the estate plan that best meets with your needs.

Contact us by calling us at (562)799-1379, Emailing us at nemirow@aol.com. For more information regarding our practice, visit us at our website www.nemlawyer.com.

WHAT YOU CAN DO IF AN INSURER IMPROPERLY REFUSES TO PAY

July 22, 2009

You faithfully pay your premiums on time. Each year you renew your policy praying that you will never have to file a claim.

Then something awful happens that requires you to notify your insurance company of a covered loss that could cause  you to lose all of your hard earned assets. You rightfully expect the insurance company to honor the policy provisions and pay your losses or defend you in court.

Instead of paying right away, the insurance company refuses to pay, or delays in making payment. You may be forced to pay out of your pocket for legal fees and judgments that should have been paid by the insurer. Worst case is that you can be forced into bankruptcy or lose a substantial part of your assets.

Earlier in this century the only remedy against the insurance company was to file a breach of contract claim against the insurer. The insured, if the insured were to win, would be to receive only what the insurer promised to pay in the policy. The insurer was not responsible for punitive damages or liability for the insured’s emotional distress.

Today, the courts of California treat these unfair claim practices as a tort and give the insured the opportunity of recovering tort remedies against the insurer for breach of the implied covenant of good faith and fair dealing.

While most causes for breach of the covenant still lies in contracts, an exception can be made under contracts involving a “special relationship”, characterized by elements of public interest, adhesion, and fiduciary responsibility. The insurance contact contains all of these elements.

At the first sign that your insurer is improperly refusing to pay, or is delaying retaining an attorney  on your behalf, consult with an attorney who practices in insurance law. The faster you advise your insurer that you are willing to pursue your legal remedies, the faster your insurer will honor its obligations under the contract.

To contact me, you may email me at nemirow@aol.com, find me at www.nemlawyer.com, or call me at 562-799-1379, to discuss the particulars of your concerns or case.

Insurance Law Updates To Be Added To Blog

July 15, 2009

In addition to providing you with information on Estate Planning, Probate and Business Law, I will be providing timely information with regards to Insurance Law.