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All across the United States, Canada, and beyond, deeply controversial “smart meters” for electricity have been catching on fire and even exploding, sparking a major scandal that in at least one Canadian province has forced authorities to start removing all of the more than 100,000 devices. In Oregon, utility officials also announced that tens of thousands of smart meters were being replaced following numerous reports of fires. With the manufacturer saying the problems are systemic in the industry, experts predict more disasters to come as governments continue foisting the “smart grid” on the world in the face of growing opposition.

With the latest news of fires and explosions, it now seems to critics and politicians that in the frantic rush to impose the "smart" electric meters in defiance of public resistance, serious safety concerns were pushed aside — along with growing fears about the health and privacy implications surrounding the technology. With the latest news about the potentially deadly consequences, officials across the continent are scrambling for answers, and taxpayers are likely to be stuck with a massive bill.


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Description

This recall involves Giggles International Animated Sing-Along Monkey toys. The monkey is made of brown and beige plush material and is about 9 inches tall. The toy is designed to hold a song book titled "5 Little Monkeys" and to sing the song when activated. A red music note is on the bottom of the monkey's right foot and the face of a child with its hands covering its eyes are on the bottom of the money's left foot. Recalled sing-along monkeys were manufactured between 6/7/2014 and 7/5/2014 and have batch code GP1410028.  The manufacture date in the M/D/YYYY format and batch code are printed on the bottom of a white fabric label attached near the base of the monkey's tail. The monkey toys came in a tan colored box with words "Animated Sing-Along Monkey," "Sing along with me!" and "I play peek-a-boo with you!" on the front. The age advisory "For ages 3+" and the warning that batteries are included are also on the front of the box.


See the full details at CPSC.

Description

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.

Brand name “Schneider Electric” or “Square D” is on a yellow sticker above the breaker handle and on the top of a label on the side of the circuit breaker.  A label on the front of the circuit breaker to the left of the breaker handle has the catalog number at the top.  The number also appears on a label on the side of the breaker.  Schneider Electric catalog numbers begin with “NJ” and Square D catalog numbers begin with “J.”

A label on the front of the circuit breaker to the right of the breaker handle has the date code in the lower right corner.  Recalled circuit breakers were manufactured from March 26, 2014 through September 26, 2014 and have date codes 14131 through 14395. The date codes are in the YYWWD format (example: 14131 = year 2014, week 13, day of the work week 1/ Monday).

See the full details 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.

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Fire Protection Research Foundation report: "Development of Standardized Cooking Fires for Evaluation of Prevention Technologies: Data Analysis"
Authors: Joshua Dinaburg, Daniel Gottuk – Hughes Associates, Inc.

July 2014 report

Beginning in 2010, the Foundation began a program to review the potential effectiveness of various technologies potentially capable of preventing cooking range top fires. A workshop conducted as part of that project considered the emergence of commercial products on the market and identified the need to develop standardized tests and criteria to evaluate the performance and effectiveness of such devices. This report summarizes and analyzes the results of two live fire test series conducted to form the basis for such a test protocol.

Download the report. (PDF, 5 MB) Download the executive summary. (PDF, 20 KB) October 2013 report

Cooking-equipment related fires are a leading cause of U.S. fire loss. Beginning in the mid 1980’s, the National Institute of Standards and Technology, Consumer Product Safety Commission, and home appliance industry undertook a comprehensive review of strategies to mitigate death, injury and property loss from cooking fires. All strategies were engineering strategies defined by a condition to be detected (e.g., overheat of pan or food in pan, absence of person actively engaged in cooking process, early-stage fire on stovetop) and an action to be taken (e.g., shut off cooking heat, sound alarm, suppress fire). As part of this study, a comprehensive review of existing technologies was done.

In 2010, the Foundation conducted a study supported by NIST to develop this action plan. The study focused particularly on prevention technologies suitable for use on or with home cooking appliances. and consisted of a literature and technology review; the development of an enhanced technology evaluation methodology based on an in-depth review of cooking fire statistics; and the evaluation of currently available technologies using this methodology. The project culminated with a one day workshop of 35 leaders from the kitchen appliance, fire service, and user communities who met to review the above findings and identify gaps in information. The highest priority action item identified at that workshop toward implementation of commercially available cooking fire mitigation technologies was: "Develop standard fire scenarios and create test methods and performance criteria which can feed into standards development"

This report presents the results of a follow on project sponsored by NIST to gather data towards this goal.

Download the report. (PDF, 2 MB)

SUMMARY:

Kia Motors America (Kia) is recalling certain model year 2014 Kia Forte vehicles manufactured December 5, 2012, to April 17, 2014. In the affected vehicles, the cooling fan resistor may overheat and melt.

See full details at NHTSA

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Practical Approaches for Recouping Good Faith Payments

Larry-Arnold-article

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:

  • The outcome in Perovich v. Glen Falls Insurance Co. (9th Cir. 1968), where the court ruled that an insurer “may recover money paid in reasonable reliance on its insured’s fraudulent claim.”  The court held that the insurer was entitled to recover the full payment made under the policy.
  • Compelling the insured to return only a portion of the money would circumvent the purpose of the fraud statutes and create bad public policy.  The insured’s fear of losing even the legitimate claim payments should deter him from committing fraud.  An insured who knew he could recover the “honest” claims would be incentivized to calculate the risk of getting caught into his claims submission, determining that some things are worth lying about.

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, This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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