2019 FPL Binding Authority Narrative
Attorney/Client Privileged Communication
Thanks to the support of underwriters at Atrium, Dominion's binding authority, renewing October 1st of each year, continues to enjoy wide acceptance across the United States. This is due in part to key partnerships with professional associations such as the National Guardianship Association (NGA) and the Professional Fiduciaries Association of California (PFAC) through which Fiduciary Professional Liability (FPL) insurance is offered, as well as the American Association of Daily Money Managers (AADMM), which offers our Daily Money Manager Liability (MML) policy to its members. Although these programs remain on a trajectory of continued growth and profitability, we believe that trend can be accelerated by means of enhancing existing offerings, introducing new lines of coverage, and improving claims handling practices as outlined below. Because this document delves into issues surrounding litigation strategies, and includes counsel's observations, we assert attorney/client privilege to its contents.
Dominion currently writes nearly $2.5 million in premium in its FPL program and just under $250k in the MML program. Total written premium during the 2017-2018 contract period for all lines was $2,645,408.97. As of July 1, 2019, gross written premium for the 2018-2019 binding authority contract period sits at $2,065,759.34, with three months of business left in the pipeline.
The total policy count for the program currently stands at 750, up from 700 last year, with the average premium per risk having increased by more than $100 to $3,636.90 in comparison to last year's figure of $3,527.21. The current averge FPL premium is $5,529 compared to the prior period average of $5,300.44. MML average pricing is up as well from $852.38 to $871.71.
Fiduciary Professional Liability (FPL)
Premium Volume
The FPL section currently accounts for $2,498,854 in booked premium. The prior contract closed out with $2,390,496.97. Thus FPL writings are projected to close out the contract period in excess of $100,000 over last year.
Competition
There has been growing pressure from competing brokers to shop our fiduciary accounts widely. Nevertheless, we are always sure to highlight Lloyd's advantages over the competition. This has been made easier by policy improvements over the past few years. In addition, the ease of renewal using the new short-form renewal application approved by underwriters has been very well received by the insureds and undoubtedly has contributed to higher retention rates.
Claims Experience
This year we undertook a thorough review of Claims activity from the inception of the program. The following table details our findings. Please note that the loss ratios are based on gross written premium since we do not have access to the data necessary to calculate net written premium. MLR stands for monitoring costs as a percentage of gross written premium. DLR and ILR represent the same calculation for defense costs and indemnity payments, respectively, and TLR is the total loss ratio based on gross written premium.
Monitor
MLR
Reserve
Defense
DLR
Indemnity
ILR
Total
Claims
Premium
Policies
TLR
ST
124,898.00
216
513,984.59
156,708.82
271
121,756.34
211
917,347.75
4
57,808.00
18
1587
CT
643,948.09
253
12,175.04
200,887.24
79
362,500.00
143
1,219,510.37
10
254,259.00
74
480
NV
61,973.98
57
0.00
88,765.71
81
38,599.00
35
189,338.69
6
109,180.00
35
173
OH
68,072.43
17
283,251.66
93,064.69
23
148,500.00
36
592,888.78
12
410,375.00
103
144
AZ
6,579.50
143
0.00
0.00
0
0.00
0
6,579.50
1
4,590.00
4
143
AL
281,730.59
17
124,832.68
452,732.15
27
1,030,000.00
61
1,889,295.42
49
1,678,054.00
515
113
WA
54,390.50
62
0.00
15,561.30
18
25,000.00
28
94,951.80
8
88,341.00
20
107
ND
34,346.97
13
5,000.00
71,110.22
28
49,500.00
19
159,957.19
9
258,438.92
67
62
MI
1,214,006.47
12
602,293.03
2,858,854.94
28
1,505,351.44
15
6,180,505.88
199
10,136,745.92
2095
61
CA
52,050.59
19
0.00
76,189.90
27
30,085.23
11
158,325.72
4
277,580.00
83
57
TX
56,564.70
13
0.00
46,767.96
11
130,000.00
30
233,332.66
9
437,479.00
135
53
NM
58,911.81
12
3,659.00
105,646.59
21
52,500.00
11
220,717.40
6
492,351.34
142
45
PA
28,889.00
38
0.00
0.00
0
0.00
0
28,889.00
3
76,962.00
26
38
UT
45,065.53
16
0.00
48,402.91
17
0.00
0
93,468.44
11
285,934.00
109
33
OR
4,323.50
5
19,508.08
4,168.42
5
0.00
0
28,000.00
1
88,731.00
31
32
AK
11,129.00
18
7,405.50
0.00
0
0.00
0
18,534.50
3
61,232.00
7
30
HI
22,962.49
10
0.00
13,752.93
6
25,500.00
12
62,215.42
5
220,485.00
65
28
MA
51,971.50
7
13,990.50
128,271.54
16
0.00
0
194,233.54
10
779,445.00
228
25
FL
4,402.50
4
0.00
19,216.00
17
2,500.00
2
26,118.50
3
112,832.00
60
23
NH
3,620.00
14
0.00
0.00
0
0.00
0
3,620.00
1
26,270.00
12
14
MT
18,136.67
7
168.00
0.00
0
0.00
0
18,304.67
4
242,284.00
67
8
ID
24,407.50
7
0.00
2,415.50
1
0.00
0
26,823.00
3
365,558.05
136
7
CO
14,883.50
7
0.00
0.00
0
0.00
0
14,883.50
4
209,928.00
55
7
NY
2,370.50
5
0.00
0.00
0
0.00
0
2,370.50
1
48,988.00
7
5
DC
2,139.50
4
0.00
0.00
0
0.00
0
2,139.50
1
52,922.00
21
4
VT
2,928.00
3
0.00
0.00
0
0.00
0
2,928.00
1
95,379.00
48
3
IN
6,098.50
2
0.00
0.00
0
0.00
0
6,098.50
3
266,136.00
77
2
WI
0.00
0
0.00
0.00
0
0.00
0
0.00
0
112,817.00
41
0
IL
0.00
0
0.00
0.00
0
0.00
0
0.00
0
108,885.00
49
0
VA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
91,359.00
35
0
IA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
69,698.00
12
0
LA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
66,611.00
18
0
NJ
0.00
0
0.00
0.00
0
0.00
0
0.00
0
55,714.00
18
0
SC
0.00
0
0.00
0.00
0
0.00
0
0.00
0
48,541.00
17
0
MN
0.00
0
0.00
0.00
0
0.00
0
0.00
0
37,741.00
23
0
MD
0.00
0
0.00
0.00
0
0.00
0
0.00
0
28,826.00
14
0
MO
0.00
0
0.00
0.00
0
0.00
0
0.00
0
28,386.00
13
0
TN
0.00
0
0.00
0.00
0
0.00
0
0.00
0
24,778.00
11
0
NC
0.00
0
0.00
0.00
0
0.00
0
0.00
0
19,921.00
11
0
GA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
17,003.00
7
0
KY
0.00
0
0.00
0.00
0
0.00
0
0.00
0
15,189.00
7
0
DE
0.00
0
0.00
0.00
0
0.00
0
0.00
0
10,603.00
4
0
WY
0.00
0
0.00
0.00
0
0.00
0
0.00
0
10,541.00
7
0
RI
0.00
0
0.00
0.00
0
0.00
0
0.00
0
6,558.00
4
0
ME
0.00
0
0.00
0.00
0
0.00
0
0.00
0
2,067.00
1
0
KS
2,900,801.32
16
1,586,268.08
4,382,516.82
24
3,521,792.01
19
12,391,378.23
371
18,178,802.23
4532
68
ALL
Note that the combined loss ratio for the FPL program based on gross written premium from inception sits at 68%. Of this figure, monitoring costs account for 16%, defense for 24% and indemnity for 19%. In analyzing the data we noted some anonmalies in the largest dozen claims. These all have total incurred/reserved expenses in excess of $200,000. All remaining claims fall below that mark.
Monitor
Reserve
Defense
Indemnity
Total
TLR
Limit
Year
CF
Insured
608,965.09
6,115.04
182,580.13
362,500.00
1,160,160.26
1mil+
500k
2015
1.00
April Parks
0.00
0.00
161,006.00
900,000.00
1,061,006.00
636
2mil
2008
1.50
Guardianship Services of Seattle
80,386.47
0.00
339,079.81
325,000.00
744,466.28
561
1mil
2010
1.57
PMR Fiduciary Services (Pat McVey-Ritsick)
71,946.11
0.00
569,738.92
70,000.00
711,685.03
1132
1mil
2011
1.20
Hersh & Associates Fiduciary Services
88,647.52
513,984.59
18,111.55
87,756.34
708,500.00
2503
1mil
2016
1.35
Barbara H. Hance
63,101.81
0.00
200,764.47
49,235.53
313,101.81
256
250k
2012
1.25
Sally Cicerone
19,363.29
0.00
104,420.92
187,500.00
311,284.21
1775
1mil
2016
1.00
Mark Watson Fiduciary
10,453.88
264,546.12
0.00
35,000.00
310,000.00
1074
500k
2018
1.25
Compass Fiduciary Group (Jeanne Drabiak)
5,000.00
0.00
250,000.00
0.00
255,000.00
398
500k
2019
1.00
Atkinson Professional Fiduciary Services
10,516.00
62,182.68
167,301.32
0.00
240,000.00
651
1mil
2015
1.15
Tracy A. Raymond
45,976.97
0.00
74,830.59
110,000.00
230,807.56
444
1mil
2012
1.50
Trusted Solutions Los Gatos Corporation
32,415.33
0.00
138,597.27
34,000.00
205,012.60
2503
1mil
2011
1.35
Barbara H. Hance
Out of the foregoing list, the April Parks matter is particularly noteworthy. All told, well over $1mil was expended on this claim, which was reported under a policy having a $500k limit. Strikingly, the combined defense and indemnity figure exceeds the per claim limit by more that $45k. Adding in the remaining reserves, boosts that figure to more than $50k.
The monitoring costs alone (which include fees for the declaratory relief action) exceed the policy limit by over $100k. You may recall that our initial response was to invoke policy rescission based on misrepresentation in the application. If memory serves, the declaratory relief action was to be a simple, low cost measure in support that course of action. In the end, however, filing the dec relief action may have signaled a lack of confidence in our position, thus emboldening, not discouraging the claimants.
Similar to Parks, the Cicerone claim resulted in a $313,101.81 total payout against a 250k per claim limit. While monitoring costs do not techincally apply to exhaust limits, from a claims management point of view, they should certainly be accounted for on an ongoing basis. In hindsight, simply tendering policy limits early on may well have been the better course for either or both of these claims. Careful further analysis will doubtlessly yield helpful insights with important claims handling implications for the viability of the FPL program going forward.
Inconsistencies in the application of Claim Factors (CF) also emerges from the foregoing data. For example, PMR Fiduciary carries the highest CF loading based on a single 2010 claim. By contrast, Barbara Hance who has the distinction of two claims in the top dozen, has only a 1.35 CF. A cursory review reveals that claims at or approaching the decade mark carry the highest loading, and new claims the lowest, when logically the reverse should be true. Ultimately, such loading should drop off. A more uniform approach based on perhaps the insured's loss ratio should be considered.
Eliminating these top dozen claims from consideration of program results, yields some interesting insights:
Monitor
MLR
Reserve
Defense
DLR
Indemnity
ILR
Total
Claims
Premium
Policies
TLR
ST
61,973.98
57
0.00
88,765.71
81
38,599.00
35
189,338.69
6
109,180.00
35
173
OH
6,579.50
143
0.00
0.00
0
0.00
0
6,579.50
1
4,590.00
4
143
AL
54,390.50
62
0.00
15,561.30
18
25,000.00
28
94,951.80
8
88,341.00
20
107
ND
42,912.55
11
16,804.54
83,064.69
22
113,500.00
30
256,281.78
8
379,047.00
94
68
AZ
34,346.97
13
5,000.00
71,110.22
28
49,500.00
19
159,957.19
9
258,438.92
67
62
MI
52,050.59
19
0.00
76,189.90
27
30,085.23
11
158,325.72
4
277,580.00
83
57
TX
56,564.70
13
0.00
46,767.96
11
130,000.00
30
233,332.66
9
437,479.00
135
53
NM
58,911.81
12
3,659.00
105,646.59
21
52,500.00
11
220,717.40
6
492,351.34
142
45
PA
260,744.09
18
62,040.50
116,689.83
8
130,000.00
9
569,474.42
40
1,471,472.00
492
39
WA
28,889.00
38
0.00
0.00
0
0.00
0
28,889.00
3
76,962.00
26
38
UT
890,486.93
9
422,756.53
1,269,718.29
13
761,402.91
8
3,344,364.66
185
9,642,997.92
2023
35
CA
45,065.53
16
0.00
48,402.91
17
0.00
0
93,468.44
11
285,934.00
109
33
OR
4,323.50
5
19,508.08
4,168.42
5
0.00
0
28,000.00
1
88,731.00
31
32
AK
11,129.00
18
7,405.50
0.00
0
0.00
0
18,534.50
3
61,232.00
7
30
HI
22,962.49
10
0.00
13,752.93
6
25,500.00
12
62,215.42
5
220,485.00
65
28
MA
51,971.50
7
13,990.50
128,271.54
16
0.00
0
194,233.54
10
779,445.00
228
25
FL
34,983.00
14
6,060.00
18,307.11
7
0.00
0
59,350.11
9
254,259.00
72
23
NV
4,402.50
4
0.00
19,216.00
17
2,500.00
2
26,118.50
3
112,832.00
60
23
NH
3,620.00
14
0.00
0.00
0
0.00
0
3,620.00
1
26,270.00
12
14
MT
18,136.67
7
168.00
0.00
0
0.00
0
18,304.67
4
242,284.00
67
8
ID
24,407.50
7
0.00
2,415.50
1
0.00
0
26,823.00
3
365,558.05
136
7
CO
14,883.50
7
0.00
0.00
0
0.00
0
14,883.50
4
209,928.00
55
7
NY
2,370.50
5
0.00
0.00
0
0.00
0
2,370.50
1
48,988.00
7
5
DC
2,139.50
4
0.00
0.00
0
0.00
0
2,139.50
1
52,922.00
21
4
VT
2,928.00
3
0.00
0.00
0
0.00
0
2,928.00
1
95,379.00
48
3
IN
6,098.50
2
0.00
0.00
0
0.00
0
6,098.50
3
266,136.00
77
2
WI
0.00
0
0.00
0.00
0
0.00
0
0.00
0
112,817.00
41
0
IL
0.00
0
0.00
0.00
0
0.00
0
0.00
0
108,885.00
49
0
VA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
91,359.00
35
0
IA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
69,698.00
12
0
LA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
66,611.00
18
0
NJ
0.00
0
0.00
0.00
0
0.00
0
0.00
0
55,714.00
18
0
SC
0.00
0
0.00
0.00
0
0.00
0
0.00
0
48,541.00
17
0
MN
0.00
0
0.00
0.00
0
0.00
0
0.00
0
37,741.00
23
0
MD
0.00
0
0.00
0.00
0
0.00
0
0.00
0
28,826.00
14
0
MO
0.00
0
0.00
0.00
0
0.00
0
0.00
0
28,386.00
13
0
TN
0.00
0
0.00
0.00
0
0.00
0
0.00
0
24,778.00
11
0
NC
0.00
0
0.00
0.00
0
0.00
0
0.00
0
21,159.00
9
0
CT
0.00
0
0.00
0.00
0
0.00
0
0.00
0
19,921.00
11
0
GA
0.00
0
0.00
0.00
0
0.00
0
0.00
0
17,003.00
7
0
KY
0.00
0
0.00
0.00
0
0.00
0
0.00
0
15,189.00
7
0
DE
0.00
0
0.00
0.00
0
0.00
0
0.00
0
10,603.00
4
0
WY
0.00
0
0.00
0.00
0
0.00
0
0.00
0
10,541.00
7
0
RI
0.00
0
0.00
0.00
0
0.00
0
0.00
0
6,558.00
4
0
ME
0.00
0
0.00
0.00
0
0.00
0
0.00
0
2,067.00
1
0
KS
1,797,272.31
10
557,392.65
2,108,048.90
12
1,358,587.14
8
5,821,301.00
339
17,410,495.23
4417
33
ALL
In terms of state ranking, not considering the impact of the top twelve claims, moves Connecticut and Nevada from the first and second slots to postions 38 and 17, respectively. As to the loss ratios, Monitoring drops from 16 to 10, Defense is halved and Indemnity drops more than that. The total loss ratio based on gross written premium falls from 68 to 33. So the challenge is to develop claims handling strategies that can yeild these kind of results on the entire book.
Claims Handling
Improved claims handling will necessarily aim to reduce monitoring and defense costs, while containing indemnity payments. The fact that the elimination of the most costly 12 claims essentially cut these loss ratios in half, tends to focus our attention on large claim handling. Nevertheless, an overall claims strategy should be comprehensive in nature. Of course, being able to identify large claims early on and streamline their processing remains a major priority in any claims handling approach.
Generally speaking, each time a new lawyer is introduced into the claims handling mix additional charges accrue to bring that new counsel up to speed and also as a result of the tendancy of firms to "work the case" enough to realize an often unspoken minimum fee per file. Ideally, the first attorney to touch the file would work it through to conclusion whenever possible. Furman, Kornfeld and Brennan (FKB) in its role as claims/monitoring counsel for the programs since 2007, functions as the gatekeeper to all claims, and should resolve as many claims as possible.
As I have previously suggested, it makes sense to have FKB work towards resolution from the outset, rather than simply analyzing the case for coverage and the appointing defense counsel as deemed necessary. When FKB first receives a claim, the regular coverage analysis should be combined with a resolution analysis and plan of action. In most cases, our insured, the defendant, will be in the best position to establish the facts of the case based on first-hand knowledge. Accordingly, beginning with the initial intake of a claim, the aim should be to marshall those facts in support of an expedited resolution, either by way of a motion to dismiss for failure to state a claim (MTD) or motion for summary judgment (MSJ) for litigated matters. In most jurisdictions an MTD can be brought immediately after service and an MSJ once 21 days after the commencement of an action as elapsed. This is even before discovery commences or a party answers. For pre-litigation claims, a letter setting forth the same arguments should be prepared and sent.
Appointment of outside defense counsel should be deferred as long as reasonably possible. In appropriate cases, an offer of settlement should be extended to the claimant simultaneously with whatever dismissal efforts are deemed appropriate. Not only would this tend to create a carrot/stick incentive toward resolution, but if the offer is made pursuant to the appropriate statute, it can expose the claimant to potential liability for attorney fees, depending upon the ultimate outcome, which creates a further incentive for settlement.
In most cases, these initial pleadings should be handled by FKB. Outside defense counsel should only be appointed after this approach fails to bear fruit. Even then, the cost of defense should be significantly reduced as the MTD/MSJ or equivalent letter will provide a cost saving road map for further handling of the matter.
Andrew Jones of FKB has expressed a willingness to explore the possibility of handling claims on a flat fee or monthly retainer basis. At this point in time with more than a decade of claims handling experience in the program, establishing a fair compensation schedule, not based on hourly billing, should be achieveable. In addition, under FKB's direction on a flat or reduced fee basis, Legal Tender Services PLLC (LTS), working with EquityLaw PLLC (ELP), both colocated in our Alpine building, would be able to handle motion drafting, filing, and appearances in the Western region (which to date has accounted for 78% of total claims).
One potential problem with this approach, would be actual or perceived conflicts in the event of a coverage dispute. However, it may be possible to obtain an appropriate limited waiver so long as "in-house" defense counsel's role is limited to the intial pleading stage. As an incentive to comply, consideration should perhaps be given to deferring the insured's deductible payment obligation until the appointment of outside defense counsel or settlement. We may want to consider some policy wording changes to support this revised claims handling strategy. In addition, we should give greater scrutiny to reserved rights so as not unnecessarily to create conflict situations.
Underwriting Issues
Rate Adequacy
FPL average rates are still more than double the most popular domestic competition. As the revised claims handling strategy outlined above offers great potential for cost savings, implementing yet another rate increase this year should not be necessary. Moreover, the additional premium flow that will likely be generated by the individual trust/estate policy option discussed below will act as an imbedded, organic rate increase.
Consideration should, however, be given to increasing and standardizing the application of claim loadings. Such surcharges should be applied based upon the insured's per claim loss ratio calculated gross premium, net of any deductible paid, against the all defense and indemnity payments, not including monitoring expenses. In this regard, we would suggest that once the loss ratio breaches 100 the loading would be set at 10%, 200 would be 20%, and so on up to 100% for a loss ratio of 1,000 or more. Thereafter, the loading would reduce by 5% per year from 25% down, 10% per year from 50% down and 20% per year from 100% down, until entirely eliminated. Loadings and loss ratios would be calculated and applied separately for each claim. This approach will ensure that those who have claims pay an appropriate surcharge, but will not discourage insureds from reporting circumstances for fear of being hit with a surcharge for a frivolous matter. Currently, 82 claims which are less than 5 years involve an insured with a loss ratio of more than 100.
Policy Wording
We suggest consideration of the following policy revisions:
Amend section I.B.1 to read as follows:
The Underwriters shall have the right and duty to defend, subject to the Limits of Liability , any Claim against the Assured seeking Damages which are payable under the terms of this Insurance , even if any of the allegations of the Claim are groundless, false or fraudulent. Underwriters may appoint temporary defense counsel to conduct initial investigation into the Claim and file appropriate responsive pleadings with respect to any complaint filed in connection therewith. However, Underwriters shall not formally appoint permanent defense counsel (which appointment shall trigger the Assured's Deductible obligation) without the consent of the Named Assured , such consent not to be unreasonably withheld.
Amend section I.B.3 to read as follows:
The Underwriters shall have the right to make any investigation they deem necessary, including, without limitation, any investigation or examination of the Assured under oath with respect to the application and statements made in the application and with respect to coverage.
Eliminate Exclusion L which is overly broad and duplicative of Exclusion P.
Delete the phrase "independent third party escrow agent" from exclusion O.
Add the following covered capacities:
Escrow Agent,
Interpleader Administrator,
Co-Fiduciary,
Court Visitor,
Court Facilitator, and
Trust Protector.
Modify the following definitions:
" Claim " means a demand received by any Assured for Damages money or services outside the Ordinary Course of Business including the service of suit or institution of arbitration proceedings against the Assured .
" Damages " means a monetary judgment, award or settlement, and shall include:
compensatory damages;
damages calculated as a multiple of compensatory damages (where insurable by law);
punitive or exemplary damages (where insurable by law);
pre-judgment interest; and
post-judgment interest that accrues after entry of judgment and before we have paid, offered to pay or deposited in court that part of judgment within the applicable Limit of Liability .
However, Damages shall not include any amounts for which the Assured is not financially liable or for which there is no legal recourse against the Assured , the costs and expenses of complying with any injunctive or other form of equitable relief, the reimbursement of fees, the payment of sanctions, surcharges, criminal penalties or any other matters that may be deemed uninsurable under the law.
Revise section VIII. INNOCENT ASSURED to read as follows:
Whenever coverage under this Insurance would be excluded, suspended or lost:
because of any exclusion relating to criminal, dishonest, fraudulent or malicious acts, errors or omissions by any Assured , and with respect to which any other Assured did not personally participate or personally acquiesce or remain passive after having personal knowledge thereof, or
because of non-compliance with Clause XI Notice of Claim or Circumstance that may lead to a Claim , with respect to which any other Assured shall be in default solely because of the failure to give such notice or concealment of such failure by one or more Assureds responsible for the loss or damage otherwise insured hereunder,
the Underwriters agree that such insurance as would otherwise be afforded under this Policy shall cover and be paid with respect to those Assureds who did not personally commit or personally participate in committing or personally acquiesce in or remain passive after having personal knowledge of (a) one or more of the acts, errors or omissions described in any such exclusion; or (b) such failure to give notice, provided that if the condition be one with which such Assured can comply, after receiving knowledge thereof, the Assured entitled to the benefit of Clause VIII shall comply with such condition promptly after obtaining knowledge of the failure of any other Assured hereunder to comply therewith.
With respect to this provision, the Underwriters' obligation to pay in such event shall be in excess of the Deductible and in excess of the full extent of any assets of any Assured to whom the exclusion applies. Coverage under this Innocent Assured section shall only apply to Claims not otherwise subject to coverage under any crime bond endorsement offered to the Named Assured by Underwriters , whether purchased or not. However, subject to the terms and conditions of the Policy the Innocent Assured section will apply to criminal, dishonest, fraudulent or malicious acts, errors or omissions by any Assured not subject to coverage under any crime bond endorsement offered to the NamedAssured by Underwriters . In no event shall the Underwriters' obligation to pay exceed the Limit of Liability stated in Item 3 of the Declarations. Additionally, in no event shall the Underwriters' obligation to pay Claim Expenses exceed the Limit of Liability stated in Clause VI.D of the Policy .
Amend Q. Theft Coverage. in the Crime Endorsement to read as follows:
To pay on behalf of any Assured not complicit in any alleged Theft perpetrated with the alleged complicity of any other Assured , Damages and Claims Expenses , in excess of the "per Claim" Deductible , and in excess of the full extent of the recoverable assets of any complicit Assured , which any non-complicit Assured shall become legally obligated to pay because of any Claim first made against an Assured and reported in writing to Underwriters during the Period of Insurance or Extended Reporting Period (if applicable) arising out of any alleged Theft perpetrated with the alleged complicity of any Assured during the Ordinary Course of Business on or after the Retroactive Date set forth in Item 6 of the Declarations and before the end of the Period of Insurance .
Add the following item 5 to the Crime Endorsement:
Underwriters agree to issue a $10,000 Business Services Bond Endorsement (11/10) to the Named Assured for no additional premium.
FPL competitors have been steadily improving their policy forms. We have worked to position our Lloyd's offering as the preeminent program for professional fiduciaries—differentiating ourselves on quality rather than price. Steady, prudent program improvement is important to maintaining that claim.
High Revenue Accounts
As discussed in prior years, the premium levels for Lloyd's and competing carriers diverge significantly at higher levels of firm revenue. Consequently, in order to attract and retain larger accounts, we agreed to consider additional credits for firms with
premiums in excess of $7,500 annually. Typically, these larger practices have more experienced fiduciaries, better internal policies and procedures, and better trained staff. These are the accounts we want to retain. The flexibility underwriters have extended in the past with respect to these accounts has translated into higher retention rates. Accordingly, we suggest that we continue this practice of rate relief for large accounts.