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February 2008 U.S. LABOR DEPARTMENT'S OSHA PROPOSES $192,000 IN FINES
AGAINST ATTLEBORO, MASS., MANUFACTURER FOR 29 SAFETY AND HEALTH VIOLATIONS BRAINTREE, Mass. -- An Attleboro, Mass., manufacturer of industrial and pharmaceutical food coatings, faces $192,000 in proposed fines from the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA). The company was cited for a total of 29 alleged repeat, willful and serious violations of safety and health standards at its plant following a July 17, 2007, incident in which an employee lost his hand when it became caught in an unguarded rotating valve of a dust collection hopper. Because the plant was cited for a similar hazard in April 2005, this lack of machine guarding resulted in OSHA issuing the company a repeat citation with a proposed fine of $35,000. Two other repeat citations, carrying $25,000 in fines, were issued for unguarded work platforms and an emergency exit door that could not be opened. A repeat citation is issued when an employer previously has been cited for a substantially similar hazard and that citation has become final. OSHA's inspection also found that the plant had not developed and implemented required procedures to shut down machines and lock out their power sources to prevent their unintended startup. This situation resulted in the issuance of one willful citation carrying a proposed fine of $70,000. OSHA defines a willful violation as one committed with plain indifference to or intentional disregard for employee safety and health. Additionally, 25 serious citations, with $62,000 in fines, were issued for hazards involving blocked, obstructed and unmarked emergency exit doors and routes; lack of lockout/tagout devices and training; trip and fall hazards; fire extinguishers not being readily available; deficiencies in respirator training and fitting; confined space hazards; a defective powered pallet jack; unlabeled containers of chemicals; unapproved containers for flammable liquid; and lack of written procedures, training and other elements of the plant's process safety management program. OSHA issues a serious citation when death or serious physical harm is likely to result from a hazard about which the employer knew or should have known. "The number of citations reflects the wide array of hazards found during our inspection as well as the employer's knowledge of the lockout hazard and the recurrence of conditions cited during an earlier OSHA inspection," said Brenda Gordon, OSHA's area director in Braintree. "As demonstrated in this case, continued failure to adhere to safety and health standards exposes employees to serious injuries and potentially fatal fire, chemical, mechanical, fall, confined space and machine guarding hazards." Source:
www.osha.gov COMPUTER CONSULTANT ARRESTED FOR INSURANCE FRAUD A self-employed computer consultant was arrested Tuesday on charges that he used a client’s computer system to obtain a fraudulent insurance certificate for his part-time snowplowing business, the New York State Insurance Department reported. The consultant of Fishkill, NY, was charged with insurance fraud and criminal possession of a forged instrument. He was arrested by the Insurance Department’s Frauds Bureau, assisted by the Dutchess County Sheriff’s Department. According to Frauds Bureau Senior Investigator John J. Toucher, the consultant was alleged to have remotely gained access to the computer system of an insurance agency in Wappingers Falls to print an insurance certificate required for a snowplowing job. Toucher said it is alleged the consultant used the system to obtain a blank insurance certificate, upon which he fraudulently entered the name and address of his business. The use of the agency’s computer system was discovered by two of the insurance agency employees working overtime, he said. The individual reportedly worked as a computer consultant for the agency for approximately 10 years. Aside from allegedly printing the certificate, no evidence was uncovered that he tampered with other agency computer files, Toucher said. The consultant was issued a desk appearance ticket and ordered to report to the Village of Fishkill Justice Court on Jan. 28. If convicted, he could be sentenced to up to seven years in prison for the forged instrument charge, a felony. The misdemeanor insurance fraud charge could result in a sentence of up to one year in jail. Dutchess County Assistant District Attorney Anthony Parisi is prosecuting the case. Source:
www.ins.state.ny.us U.S. LABOR DEPARTMENT'S OSHA PROPOSES NEARLY $43,000 IN FINES AGAINST STRATFORD, CONN., MANUFACTURER FOLLOWING CHEMICAL SPILL AND INJURY BRIDGEPORT, Conn. -- The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited a Stratford, Conn., chemical products manufacturer, for 32 alleged serious and other-than-serious violations of safety and health standards at its plant. The company faces a total of $42,750 in proposed fines. On Aug. 9, 2007, an employee suffered burns while attempting to clean up a chemical spill caused by a forklift that hit a barrel containing thionyl chloride. "OSHA's inspection found that the plant's plan and procedures for responding to chemical spills were inadequate and incomplete, needlessly exposing responders to injury," said Robert Kowalski, OSHA's area director in Bridgeport. "We also identified other safety and health hazards associated with a chemical manufacturing environment. All of these conditions must be promptly, thoroughly and effectively addressed and corrected to safeguard employees." Regarding the spill and cleanup, OSHA found that the company did not: conduct evaluations to determine cleanup hazards; assess the controls and protective equipment needed for responders and the capabilities of the responders; obtain appropriate information about the spilled chemical; establish and implement a decontamination procedure; or make proper respiratory protection available. Additional hazards identified at the plant include: deficiencies in its respiratory protection, hazardous energy control, chemical process safety management and hazard communication programs; tripping and fall hazards; not verifying employees' abilities to safely operate fork trucks; unsafe means for dispensing flammable liquid from a 55-gallon drum; unguarded moving machine parts; and failure to establish a regulated area and take air samples for employees working with methylene chloride. These conditions resulted in the issuance of 26 serious citations with $41,750 in proposed fines. OSHA issues a serious citation when death or serious physical harm is likely to result from a hazard about which the employer knew or should have known. The company also was issued six other-than-serious citations, with $1,000 in proposed fines, primarily for incomplete recording of occupational injuries and illnesses. Source:
www.osha.gov COMMISSIONER POIZNER FINES PALOS VERDES-BASED COMPANY FOR ILLEGALLY ADJUSTING INSURANCE CLAIMS IN SOUTH LAKE TAHOE Company to Pay $275,000 Penalty; Cease Operating as Public Insurance Adjusters in California SACRAMENTO ― Today Insurance Commissioner Steve Poizner announced a settlement with a California corporation based in Palos Verdes, its CEO, and two other employees, in which the collective group will pay a $200,000 penalty, reimburse the State of California $75,000 for litigation costs, and refrain from operating as unlicensed insurance claims adjusters in California. "I am pleased that we could take these unscrupulous characters out of the post-disaster marketplace," stated Commissioner Poizner. "Working as an unlicensed public insurance adjuster victimizes fire survivors twice and is, frankly, unfair to reputable public insurance adjusters." On August 2, 2007, the company and employees were served with a cease-and-desist order (Order) for allegedly posing and operating as public insurance adjusters. Two employees on behalf of the company, were purportedly securing insurance jobs from Angora (South Lake Tahoe) Fire survivors trying to rebuild in the wake of that disaster. The investigation leading to the Order was conducted by the California Department of Insurance's (CDI's) Investigation Division. Neither the company or the employees were licensed by CDI to act in the capacity of a public insurance adjuster. The lack of such a license means they have not demonstrated the proper training, possession of surety bonds, or knowledge of rules of solicitation, such as waiting seven calendar days after access is granted to a disaster site before soliciting homeowners. These requirements are designed to protect the public, particularly in times of crisis, from being exploited by unscrupulous actors. The group did not admit or deny the facts contained in the Order, which was upheld by the settlement and specifically alleges that in at least two cases the employees represented the company in the solicitation of South Lake Tahoe property owners within the seven calendar day waiting period to estimate the homeowners' loss from the Angora Fire, negotiated settlements with the homeowners' insurance company, and entered into contracts with the homeowners for public insurance adjusting services. The contract entered into by the homeowners guaranteed the company 20 percent "of the total full amount of the loss settlement negotiated with and agreed to by the Client's Insurance Company" if they did not perform the work they recommended. This arrangement clearly places the company’s financial interests ahead of the insureds' interests. By comparison, licensed public insurance adjusters are not permitted to build or repair the properties, thus removing the inherent conflict of interest. Source
www.insurane.ca.gov McCOLLUM, SINK AND McCARTY ANNOUNCE $12.5 MILLION AIG
INSURANCE SETTLEMENT TALLAHASSEE, Fla. - Attorney General Bill McCollum, Chief Financial Officer Alex Sink and Insurance Commissioner Kevin McCarty today announced that Florida has reached a settlement with a large insurance carrier involved in a "pay-to-play" tactic used by Marsh & McLennan and other insurance brokers. American International Group Inc. (AIG) will pay $12.5 million to Florida and eight other states as well as the District of Columbia to resolve allegations that some of its insurance subsidiaries engaged in bid-rigging and price-fixing in the commercial insurance market. These actions purportedly caused Florida public entities and private organizations to pay higher premiums. "We will continue to hold insurance companies accountable for the manner in which they treat their customers," said Attorney General McCollum. "I am pleased that we have been able to reach resolution for the affected policyholders in this set of circumstances, and I look forward to continuing this accountability for our state in the insurance industry." AIG and several of its insurance subsidiaries allegedly conspired with Marsh and other brokers by submitting fake bids to create the illusion of a competitive bidding process in the excess casualty commercial insurance market. Investigators determined that despite the appearance of a fair bidding process, the broker had already decided which insurer would receive a particular policyholder's business. As part of the scheme, AIG paid the brokers "contingent commissions" which were not disclosed to policyholders and in return received other lucrative business. The Florida Attorney General's Office, Department of Financial Services and Office of Insurance Regulation will receive approximately $3 million of the settlement which will fund a reimbursement pool for affected policyholders. The settlement funds will also repay the state agencies' investigative costs. "It's wrong that governments and businesses paid inflated insurance rates because they were led to believe there was competition when there wasn't," said CFO Sink, who oversees the Department of Financial Services which served a lead role in the multi-state investigation along with the Attorney General's Office and the Office of Insurance Regulation. "I applaud today's settlement, because policyholders deserve to know exactly what they are paying for and that they are paying a fair price for it." "Full disclosure in all insurance transactions is a must, and Florida consumers deserve nothing less," said Florida Insurance Commissioner Kevin McCarty. "My office is committed to protecting Floridians, and this settlement further demonstrates the progress Florida is making toward establishing a national standard for transparency in insurance transactions.” AIG has agreed to a consent decree and final judgment in Leon County Circuit Court which will provide comprehensive injunctive relief, including enhanced disclosure to consumers of the compensation AIG pays to insurance brokers. AIG will also be required to abide by those reforms and to fully disclose the nature and range of payments made to insurance brokers on specific lines of coverage in the prior year. Prior to the settlement, AIG provided reimbursement to a nationwide group of policyholders and adopted significant business reforms that govern its bidding and underwriting practices. This settlement marks the fourth agreement Florida has reached with insurance carriers that were involved with Marsh's "pay-to-play" tactics. AIG has cooperated with the multi-state task force and will provide assistance to the states as they continue their investigation of insurance brokers and other insurers. In addition to Florida and the District of Columbia, the following states participated in the investigation and settlement: Hawaii, Maryland, Massachusetts, Michigan, Oregon, Pennsylvania, Texas and West Virginia. A copy of AIG's Consent Decree and Final Judgment is
available online at: Source:
www.floir.com U.S. DEPARTMENT OF LABOR'S OSHA CITES GAINESVILLE, GA.-BASED GENERAL CONTRACTOR FOLLOWING FATALITY AT ELLIJAY, GA., CONSTRUCTION JOBSITE ATLANTA -- The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited a construction company in Gainesville, Ga., for one willful and two serious safety violations carrying $54,950 in proposed penalties following a fatality at a church construction site in Ellijay, Ga., in August 2007. "This needless death occurred because the contractor put speed ahead of safety," said Gei-Thae Breezley, director of OSHA's Atlanta-East Area Office. OSHA has cited the construction company for one willful safety violation, with a proposed penalty of $49,000, for not properly bracing the building's roof trusses. The site superintendent knew the proper procedures but was focused on saving time. The fatality occurred when the trusses collapsed, causing one employee to fall to his death. Citations for two serious citations, with proposed penalties totaling $5,950, also have been issued against the company for not providing fall protection to its employees and storing roof trusses on the ground, exposing the material to moisture that could compromise its structural integrity. Source:
www.osha.gov PEMBROKE, N.H., CONTRACTOR FACES $76,500 IN FINES FROM U.S. LABOR DEPARTMENT'S OSHA FOR CAVE-IN HAZARD AT HILLSBOROUGH, N.H., JOBSITE CONCORD, N.H. -- An unprotected excavation and other hazards at a Hillsborough, N.H., jobsite have resulted in the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) proposing $76,500 in fines against a Pembroke, N.H., contractor. The contractor was cited for alleged willful and serious violations of safety standards at a sewer line installation site located at the intersection of West Main and School Streets. OSHA opened its inspection on July 23, 2007, after agency inspectors spotted an employee entering an apparent unprotected excavation. The inspection revealed that employees working in an excavation that ranged from 8 feet, 5 inches to 11 feet, 6 inches in depth lacked adequate protection against a potential collapse of its walls. OSHA standards require that all excavations 5 feet or deeper be protected against collapse. As a result, OSHA issued the company one willful citation, with a proposed fine of $70,000, for the lack of cave-in protection. OSHA defines a willful violation as one committed with plain indifference to or intentional disregard for employee safety and health. "An unprotected excavation can collapse in moments, burying employees beneath tons of soil and debris before they have a chance to react or escape," said Francis Pagliuca, OSHA's acting area director in Concord. "The hazard is so severe that OSHA inspectors will stop and open an inspection on the spot whenever they observe an unprotected excavation, as happened in this case.” Three serious citations, carrying an additional $6,500 in fines, were issued for other hazards identified during the inspection. These included an excavator and a section of concrete curbing located within 2 feet of the excavation's edge; a ladder that did not extend at least 3 feet above the edge of the excavation; and a backhoe that lacked a backup alarm or a spotter to warn employees. "Left uncorrected, these conditions expose employees to the hazards of engulfment, crushing, falls and being struck by the backhoe," said Pagliuca, who explained that a serious citation is issued when death or serious physical harm is likely to result from a hazard about which the employer knew or should have known. Source:
www.osha.gov FLORIDA INSURANCE COMMISSIONER SUSPENDS ALLSTATE INSURANCE CO. TALLAHASSEE, Fla. - Florida Insurance Commissioner Kevin McCarty today announced that he is suspending the certificate of authority of Allstate Companies to write new insurance in Florida until they fully comply with the subpoenas served Oct. 16 by the Office of Insurance Regulation (Office). Today's decision by the commissioner follows Tuesday's action when he abruptly halted the scheduled two-day hearing into the Allstate Companies’ reinsurance program, their relationships with risk modeling companies, insurance rating organizations and insurance trade associations. "In view of Allstate's ongoing, blatant disregard of our subpoenas, I have little choice but to take an action that will send a clear message about how seriously I am taking this issue," said Commissioner McCarty. "Suspending their certificate of authority to write new business in our state should make my point. "If Allstate is willing to pay $25,000 per day in fines to a Missouri court for its ongoing failure to provide similar documents, it's obvious to me that it will take more than a monetary sanction to get them to comply with our subpoenas." Allstate was to have provided all appropriate company documents related to the above topics at or before Tuesday’s hearing, but failed to do so. Instead, the Office received 51 pages of objections to the subpoenas. The suspension applies to Allstate Insurance Co., Allstate Indemnity Co. and Allstate Property and Casualty Co., and it only suspends the companies from writing new business in Florida. Existing policyholders will not be affected. Allstate must continue to service them and the companies must make all required statutory filings including, but not limited to, audited annual financial statements, quarterly financial statements and rate filings. "The duration of the suspension is up to them," added McCarty. "It will be lifted when I am satisfied that we have received each and every document we need to properly investigate the important issues before us. "It continues to trouble me that Allstate has not complied with our subpoenas and is not willing to explain to us their relationships with rating agencies, modeling companies and trade groups and how these relationships might have influenced the huge rate increases they have requested. This clearly cannot be in the best interests of Florida consumers." Source:
www.floir.com INSURANCE AGENT’S LICENSE REVOKED FOR ILLEGAL USE OF HIGH-PRESSURE SALES TACTICS AGAINST SENIOR CITIZENS Seniors Warned to be Cautious Through March 31 Open Enrollment Period The license of a Broome County insurance agent has been revoked because he illegally pressured senior citizens into buying Medicare Advantage insurance plans, New York State Insurance Superintendent Eric R. Dinallo announced today. The agent from Vestal, NY was barred from selling insurance after admitting he engaged in high-pressure sales tactics that included door-to-door sales solicitations. Formerly employed by an insurance agency in Rome, he also admitted offering $25 cash rewards for referrals of prospective Medicare Supplemental purchasers. Both practices are prohibited by law. “The Insurance Department’s Senior Protection Unit is committed to protecting senior citizens who may be vulnerable to deceptive sales practices. We will target any unscrupulous sales people who think they can make a quick sale by engaging in unfair sales tactics aimed at seniors,” Superintendent Dinallo said. Superintendent Dinallo said seniors should be particularly cautious of high-pressure or misleading sales practices at this time of year. Seniors are eligible to change between traditional Medicare and Medicare Advantage plans during the open enrollment period which runs through March 31. “Seniors who change their Medicare coverage are locked into that decision until the next open enrollment period. They should be very careful and make certain that any changes in their coverage are beneficial and suitable for their individual needs. For example, seniors should contact their health care providers prior to enrolling in a Medicare Advantage plan to make sure they will accept the plan," the Superintendent said. The Insurance Department revoked the individual’s license to sell as an agent – and denied an application he had filed to sell as an insurance broker -- after receiving numerous complaints. The complaints originated from Binghamton area senior citizens and a local group, the Broome County Action for Older Persons, an organization that offers insurance counseling and assistance to seniors. The individual engaged in illegal solicitations between November 2006 and May 2007 when he went door-to-door ostensibly trying to sell Medicare Supplemental policies. Once inside homes, he would suggest individuals make appointments for a short time – virtually seconds -- later. He would then go to his car, retrieve information and go back into homes to conduct Medicare Advantage sales pitches. It is illegal for insurance agents or brokers to solicit Medicare Advantages sales without making prior appointments with potential customers. Designed to prevent predatory sales practices, prior appointments are required so seniors can better understand their choices and perhaps have a family member or friend present before making a decision. Under the terms of his license revocation, he is prohibited from selling insurance in New York State. The revocation of his license is the second time in less than a year that the Department has taken action in connection with misleading insurance sales involving senior citizens. In May, a Warren County insurance agency was fined for targeting elderly residents. In September, Superintendent Dinallo announced the formation of a special unit to provide support and protection to senior citizens dealing with insurance issues. The Senior Protection Unit is engaged in numerous activities designed to protect senior citizens, including working closely with the New York State Office for the Aging and other senior citizen-focused organizations to educate consumers. Source: www.ins.state.ny.us
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