This recall involves the power supply and charger included exclusively with the HobbyZone Super Cub S Ready-To-Fly aircraft, model number HBZ8100 and the HobbyZone Super Cub S Bind-N-Fly model number HBZ8180. Aircraft model numbers are located on the packaging. The power supply is 2 ½ inches by 1 ¾ inches by 1 ¼ inches and is black with a blue label that reads “HobbyZone” and model “HBZ1004.” The DC auxiliary charger is 5 inches by 2 ½ inches by 1 ¾ inches and is black with a blue label that reads, “HobbyZone” and model “HBZ1003.”
Read the full details at CPSC
The recall involves PowerPact J-frame molded case circuit breakers with thermal-magnetic trip units. The circuit breakers are made of black plastic and have a three-position breaker handle that indicates whether the breaker is off, on or tripped. The recalled circuit breakers are rated for 150 to 250 amps, have interruption ratings of D, G, J, L and R. They were manufactured in two pole and three pole configurations with either lug-in/lug-out or plug-in (I-Line) style connectors.
See the full details at CPSC
This recall involves all models of single- and dual-purpose Coaire and Quietside brand tankless gas water heaters. The recalled water heaters heat either 4 or 7.2 gallons of water per minute. They are white and come in the following dimension ranges: 25-28 inches tall x 15-19 inches wide x 8-14 inches thick. The words “S-Line Condensing” are on the top front and brand names “Coaire” or “Quietside” are on the bottom front of the recalled water heaters.
Read the full article at CPSC
In the new issue of NFPA Journal®, President Jim Shannon said the Association will focus on the leading causes of home fires, including cooking. "We also need to continue to push hard for home fire sprinklers. That's still a large priority for NFPA, and we plan to work very aggressively in 2014 on our residential sprinkler initiative," he said.
This recall involves air exchangers with and without heat recovery sold underdifferent brands that are used to circulate air in and out of the home. The metal air exchangers are painted blue or grey. Air exchangers with heat recovery included in this recall were manufactured from January 2002 through May 2008 and have brand and model information written on a silver or black label on the outside panel. Air exchangers without heat recovery included in this recall were manufactured from January 2002 through July 2009 and have brand and model information printed on the unit's rating plate or imprinted on the side of the unit.
This recall involves Cool Draft misting mid pressure and high pressure mistingfans. The misting fans fit on top of 15 gallon yellow or orange round Igloo coolers or on top of gray 40 gallon water tanks. Cool Draft by Ventamatic is printed on a sticker on the fan’s water tank and www.cooldraft.com is printed on a sticker in the center of all of fans.
See the full article at CPSC
Watch the short picture tour of the
November 2014 Training Seminar
by: Larry Arnold
Faced with growing losses, insurance companies are focusing on fraud management and implementing risk mitigation controls, while at the same time remaining cognizant of their duty of good faith to policyholders. So what happens when an insurer makes good faith payments on legitimate elements of an insurance claim but subsequently uncovers fraud in other elements of the claim? Is the insurer entitled to recover all monies paid as part of the claim? Or only the amount paid in reliance on the insured's misrepresentations?
Previously, there was no clear answer. It was safe to assume that an insurer could recover monies paid on a claim under the right circumstances – the difficulty occurred when trying to recover payments made prior to the established fraud date. For example, in California, the insurance code states, “If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time the representation becomes false.”
Recent trial court rulings in favor of insurance companies, however, are changing the claims landscape. These rulings will impact the way insurance companies handle genuine claims that are subsequently tainted by fraud, encouraging them to be proactive in recouping good faith payments.
Steps for Recouping
What options do insurance companies have to recoup these payments? There are several avenues available.
Deny the Claim. When the SIU has completed a claims investigation and determined that an insured has breached the policy by materially misrepresenting facts, the claim can be denied – even the legitimate part. Appropriate cases should be referred to law enforcement for prosecution. In addition, the insured has a duty to present and prove the merits of the claim. Failure to cooperate with insurance company representatives can independently result in denial of the claim. This includes an examination under oath (EUO), which plays a key role in obtaining information. Typically, the named insured (or others, as dictated by the policy) is required to submit to an EUO as a precondition for claims settlement. Failure to do so can result in denial of the claim.
Void the Policy. An insurer may void or cancel its policy in the event of material misrepresentation or concealment of facts by the insured. This includes fraudulent claims.
Litigation. If a policy is voided for fraudulent claims, insurers must then decide whether to sue the insured to recoup payments - even legitimate ones. One advantage with litigation is that it allows for pretrial discovery process, including depositions and the ability to subpoena documents previously unavailable during the claims process.
A Case in Point
A recent case illustrates that insurance companies are entitled to recoup good faith payments when fraud is uncovered. Here is some background on the case.
An insurer issued a fire insurance policy to the owner of a dry cleaning business located in Southern California. A fire destroyed the business, so the owner submitted claims for replacement equipment, debris removal, damage to customer goods and loss of business income. Based on these claims, the insurance company paid the owner $527,000.
However, during the insurance company’s investigation of additional claims, a forensic accountant uncovered inconsistencies in a laundry services contract submitted as part of the owner’s claim for loss of business income. As a result, the owner was asked to sit for an EUO. The owner declined and withdrew his pending claim. The insurer then declined the claim, rescinded the policy and sued the business owner to recoup all loss payments.
At trial, evidence and witness testimony was presented that showed the owner had falsified the laundry contract and also inflated amounts paid for replacement equipment, debris removal, and payroll, among other items. Attorneys argued that the insurer was entitled to full recovery (payments made before the fraud occurred) for several novel reasons, including:
Though portions of the claim were legitimate, the judge ruled in favor of the insurer and its decision to rescind the fire insurance policy. The insured was ordered to repay $452,064, which represented all payments less monies paid to customers who lost clothing in the fire and the policy premium.
Implications for Insurers
This decision is important as it reinforces the rights of insurance companies not only to decline a claim when fraud is uncovered but also to rescind a policy and sue the insured to collect good faith payments. Previously, the law was not clear about what happens to monies paid as part of a legitimate claim, when fraud is discovered in a separate area. It is now clear that fraud in part of a claim translates to fraud in the entire claim.
Claims managers should have an open discussion with claims adjusters and SIU team members, with the goal of establishing a claims review protocol that outlines what to look for and what to do if fraud is suspected. This is critical, as claim adjusters are the first line of defense against fraud. Once fraud is uncovered, insurance companies should not hesitate to consult with an attorney and pursue the insured in order to recover monies already paid. In the end, both insurance companies and policyholders will benefit by reducing the high cost of fraud.
Larry M. Arnold, P.C., is a senior partner at Cummins & White, LLP. He can be reached at (949) 852-1800,
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