Fiduciary Liability & EBL - They are not the same
-
Upload
insurancecommunitycenter -
Category
Economy & Finance
-
view
1.647 -
download
0
description
Transcript of Fiduciary Liability & EBL - They are not the same
![Page 1: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/1.jpg)
Community Webinar
Fiduciary Liability and EBLWhat You Need To Know
![Page 2: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/2.jpg)
www.InsuranceCommunityUniversity.com
Insurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions;
and state jurisdiction. The instructional materials provided by The Insurance Community Center and its authors is intended as
a general guideline and any interpretations provided by The Community do not modify or revise insurance policy language. Information which is copyrighted and proprietary to Insurance
Services Office, Inc. (“ISO Material”) is included in this publication. Use of the ISO Material is limited to ISO
Participating Insurers and their Authorized Representatives. The Insurance Community Center assumes neither liability nor responsibility to any person or business with respect to any loss that is alleged to be caused directly or indirectly as a result of
the instructional materials provided. Insight Insurance Consulting
[email protected]@insuranceacommunitycenter.com www.insuranceacommunitycenter.com
Copyright 2011©
2
![Page 3: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/3.jpg)
www.InsuranceCommunityUniversity.com
Presents Monthly Webinars Free to Community Members.
Community webinars are archived on the Community homepage under the right hand tab titled: Webinar Archive
3
![Page 4: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/4.jpg)
www.InsuranceCommunityUniversity.com
In addition the community has unique business networking opportunities.
Enjoy the Weekly Newsletter on a specific topic with a tip of the week; claim; quiz flash and articles
4
![Page 5: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/5.jpg)
www.InsuranceCommunityUniversity.com
One Flat Fee per Office includes Monthly webinars approved for CE in
California for a total of 28 hours Test and Learn Audio Presentations on insurance topics Checklists Power point presentations for client
and/or peer training
5
![Page 6: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/6.jpg)
Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR
Insurance Community Center, LLCDirector of Education6
![Page 7: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/7.jpg)
They are not the same
![Page 8: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/8.jpg)
www.InsuranceCommunityUniversity.com
EBL coverageFiduciary Liability coverageERISA requirements
8
![Page 9: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/9.jpg)
www.InsuranceCommunityUniversity.com9
![Page 10: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/10.jpg)
www.InsuranceCommunityUniversity.com10
![Page 11: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/11.jpg)
www.InsuranceCommunityUniversity.com11
![Page 12: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/12.jpg)
www.InsuranceCommunityUniversity.com12
![Page 13: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/13.jpg)
www.InsuranceCommunityUniversity.com13
![Page 14: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/14.jpg)
www.InsuranceCommunityUniversity.com14
![Page 15: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/15.jpg)
www.InsuranceCommunityUniversity.com15
![Page 16: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/16.jpg)
www.InsuranceCommunityUniversity.com16
![Page 17: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/17.jpg)
www.InsuranceCommunityUniversity.com17
![Page 18: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/18.jpg)
www.InsuranceCommunityUniversity.com18
![Page 19: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/19.jpg)
www.InsuranceCommunityUniversity.com19
![Page 20: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/20.jpg)
www.InsuranceCommunityUniversity.com
Welfare benefit plan includes Medical plans Disability benefit plans Vacation plans
Pension benefit plan is any plan that Provides retirement income to employee Defers income to periods beyond
termination
20
![Page 21: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/21.jpg)
www.InsuranceCommunityUniversity.com
Frequent loss Denial of benefits Improper reimbursement Miscalculation of benefits Surviving spouse did not receive proper
benefits
21
![Page 22: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/22.jpg)
www.InsuranceCommunityUniversity.com
Severe loss Plan fiduciaries imprudently offered
employer stock and/or misrepresented risk of investment
Excessive plan fees Promised benefits were cut Change in post-retirement medical benefits Premiums charged for insurance were excess Fiduciaries failed to scrutinize cost vs.
benefit ratio properly
22
![Page 23: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/23.jpg)
23
![Page 24: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/24.jpg)
24
![Page 25: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/25.jpg)
www.InsuranceCommunityUniversity.com25
![Page 26: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/26.jpg)
www.InsuranceCommunityUniversity.com26
![Page 27: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/27.jpg)
www.InsuranceCommunityUniversity.com27
![Page 28: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/28.jpg)
This is ISO’s language - most insurers’ forms follow similar language
28
![Page 29: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/29.jpg)
www.InsuranceCommunityUniversity.com
1. Insuring Agreementa. We will pay those sums that the insured becomes legally obligated to pay as damages because of any act, error or omission, of the insured, or of any other person for whose acts the insured is legally liable, to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages.
29
![Page 30: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/30.jpg)
www.InsuranceCommunityUniversity.com
b.This insurance applies to damages only if:(1)The act, error or omission, is negligently committed in the "administration" of your "employee benefit program";
30
![Page 31: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/31.jpg)
www.InsuranceCommunityUniversity.com
The amount paid shall not exceed, and will be subject to, the limits and restrictions that apply to the payment of benefits in any plan included in the "employee benefit program".
This is a critical restriction and can leave a gap between the financial loss to the employee and the coverage amount
31
![Page 32: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/32.jpg)
32
![Page 33: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/33.jpg)
www.InsuranceCommunityUniversity.com33
![Page 34: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/34.jpg)
www.InsuranceCommunityUniversity.com
Broad definition of insuredBroad definition of employees Broad definition of “administration”Broad definition of “employee
benefit plan” Group life and medical expense plans, as
well as pension and retirement plans, are within the scope of the law
34
![Page 35: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/35.jpg)
35
![Page 36: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/36.jpg)
www.InsuranceCommunityUniversity.com
“Insured” is variously defined as a trust or employee benefit plan, any trustee, officer or employee of the trust or employee benefit plan
The employer (company)Any other individual or organization
designated as a fiduciary
36
![Page 37: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/37.jpg)
www.InsuranceCommunityUniversity.com
Definition of employees include Full-time Part-time Temporary Leased Volunteers / Interns Contract employees
37
![Page 38: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/38.jpg)
www.InsuranceCommunityUniversity.com
AdvisingCounselingGiving notice to employeesProviding plan interpretationsHandling recordsEffecting enrollmentTerminating or canceling employees,
participants, or beneficiaries under any plan
38
![Page 39: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/39.jpg)
www.InsuranceCommunityUniversity.com
Any benefit plan, whether or not subject to ERISA sponsored for the sole benefit of the “employees”
Fringe benefits and excess benefit plans
New or proposed plans – automatic coverage
All plans – US or foreign
39
![Page 40: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/40.jpg)
www.InsuranceCommunityUniversity.com
To include written demand for monetary or non-monetary or injunctive relief
A criminal proceedingA formal administrative or regulatory
proceedingsA fact-finding investigation by the
DOL, USPBGC, or any similar authority located outside the US
40
![Page 41: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/41.jpg)
www.InsuranceCommunityUniversity.com
Duty to defend In addition to limit Some policies include within the limit
Twelve-month or longer discovery period The cost for an ERP should be shown in
the policy The discovery clause should be bilateral
41
![Page 42: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/42.jpg)
www.InsuranceCommunityUniversity.com
Specific language extending coverage to managed care liability claims
Specific language extending coverage to HIPAA claims, fines and penalties and COBRA claims
Punitive damages and exemplary damages where permitted by law
42
![Page 43: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/43.jpg)
www.InsuranceCommunityUniversity.com
Automatic coverage for voluntary settlement Often a sub-limit
Pollution coverage extension Waiver of recourse provisions (no
provision for recourse by insurer against fiduciary)
Non-cancelable except for non-payment of premium
90 Days notice of non-renewal43
![Page 44: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/44.jpg)
44
![Page 45: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/45.jpg)
www.InsuranceCommunityUniversity.com45
Damages and defense costs
arising out of a “wrongful act”
Employee Benefit Liability
Covers
Fiduciary Liability Covers
A mistake, error or omission in
handling of administrative
matters
![Page 46: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/46.jpg)
www.InsuranceCommunityUniversity.com46
![Page 47: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/47.jpg)
www.InsuranceCommunityUniversity.com
The Federal Code refers to the necessity of a fidelity bond to cover the employee plan assets against fraud or theft
An ERISA Bond may be provided separately or the plan may be listed as a Named Insured on the Employee Dishonesty Insurance Policy
![Page 48: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/48.jpg)
www.InsuranceCommunityUniversity.com
Federal law requires the plan sponsor to carry employee dishonesty coverage that extends to protect the plan assets from any person handling the plan assets. A TPA providing employee dishonesty
coverage for their employees should be viewed as a contractual obligation and not fulfillment of the above obligations
![Page 49: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/49.jpg)
www.InsuranceCommunityUniversity.com
$1,000 minimum limit per plan10% of plan assets up to$500,000 coverage
$1,000,000 coverage if the plan contains the plan sponsor’s stock
No deductibleOne year discovery period for loss
![Page 50: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/50.jpg)
www.InsuranceCommunityUniversity.com
ERISA requires the fidelity coverage to be purchased and reported
ERISA does NOT require the purchase of Fiduciary Liability insurance, but the law allows the purchase of this coverage
Fiduciary Liability can include the EBL administrative coverage
EBL will NEVER include the Fiduciary Liability coverage
50
![Page 51: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/51.jpg)
www.InsuranceCommunityUniversity.com
This area is developing law around the country in both state and federal courts
Help your client understand that their risk is great and growing
ALWAYS offer Fiduciary Liability IN WRITING Get a rejection signed
Give them insurance guidance but don’t step over the line into the area of law
51
![Page 52: Fiduciary Liability & EBL - They are not the same](https://reader036.fdocuments.us/reader036/viewer/2022081413/5464484eb4af9f493f8b48d3/html5/thumbnails/52.jpg)
www.InsuranceCommunityUniversity.com
Laurie Infantino [email protected] 714 803 5830
Marjorie Segale [email protected]
m 714 206 9583
52